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AGENDA
Ordinary Council Meeting Thursday, 28 May 2020 |
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I hereby give notice that an Ordinary Meeting of Council will be held on: |
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Date: |
Thursday, 28 May 2020 |
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Time: |
1pm |
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Location: |
Tauranga City Council by Video Conference |
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Please note that this meeting will be livestreamed and the recording will be publicly available on Tauranga City Council's website: www.tauranga.govt.nz. |
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Marty Grenfell Chief Executive |
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Terms of reference – Council
Membership
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Chairperson |
Mayor Tenby Powell |
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Deputy chairperson |
Cr Larry Baldock |
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Members |
Cr Jako Abrie Cr Kelvin Clout Cr Bill Grainger Cr Andrew Hollis Cr Heidi Hughes Cr Dawn Kiddie Cr Steve Morris Cr John Robson Cr Tina Salisbury |
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Quorum |
Half of the members physically present, where the number of members (including vacancies) is even; and a majority of the members physically present, where the number of members (including vacancies) is odd. |
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Meeting frequency |
Six weekly or as required for Annual Plan, Long Term Plan and other relevant legislative requirements. |
Scope
· The powers Council is legally prohibited from delegating include:
o Power to make a rate.
o Power to make a bylaw.
o Power to borrow money, or purchase or dispose of assets, other than in accordance with the long-term plan.
o Power to adopt a long-term plan, annual plan, or annual report
o Power to appoint a chief executive.
o Power to adopt policies required to be adopted and consulted on under the Local Government Act 2002 in association with the long-term plan or developed for the purpose of the local governance statement.
o All final decisions required to be made by resolution of the territorial authority/Council pursuant to relevant legislation (for example: the approval of the City Plan or City Plan changes as per section 34A Resource Management Act 1991).
· Council has chosen not to delegate the following:
o Power to compulsorily acquire land under the Public Works Act 1981.
· Make those decisions which are required by legislation to be made by resolution of the local authority.
· Authorise all expenditure not delegated to officers, Committees or other subordinate decision-making bodies of Council.
· Make appointments of members to the CCO Boards of Directors/Trustees and representatives of Council to external organisations.
· Consider any matters referred from any of the Standing or Special Committees, Joint Committees, Chief Executive or General Managers.
· Delegation of Council powers to Council’s committees and other subordinate decision-making bodies.
· Adoption of Standing Orders.
· Receipt of Joint Committee minutes.
· Approval of Special Orders.
· Employment of Chief Executive.
· Other Delegations of Council’s powers, duties and responsibilities.
Regulatory matters
Administration, monitoring and enforcement of all regulatory matters that have not otherwise been delegated or that are referred to Council for determination (by a committee, subordinate decision-making body, Chief Executive or relevant General Manager).
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Ordinary Council Meeting Agenda |
28 May 2020 |
4 Confidential Business to be Transferred into the Open
5 Change to the Order of Business
6.1 Minutes of the Council Meeting held on 5 May 2020
7 Declaration of Conflicts of Interest
8 Deputations, Presentations, Petitions
9 Recommendations from Other Committees
10.1 Draft 2020/21 Annual Plan update
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28 May 2020 |
6.1 Minutes of the Council Meeting held on 5 May 2020
File Number: A11520011
Author: Jenny Teeuwen, Committee Advisor
Authoriser: Robyn Garrett, Team Leader: Committee Support
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That the Minutes of the Council Meeting held on 5 May 2020 be received and confirmed as a true and correct record.
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1. Minutes of the Council Meeting held on 5 May 2020
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5 May 2020 |
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MINUTES Ordinary Council Meeting Tuesday, 5 May 2020 |
Order Of Business
1 Apologies
2 Public Forum
3 Acceptance of Late Items
4 Confidential Business to be Transferred into the Open
5 Change to the Order of Business
6 Confirmation of Minutes
Nil
7 Declaration of Conflicts of Interest
8 Deputations, Presentations, Petitions
Nil
9 Recommendations from Other Committees
Nil
10 Business
10.1 Te Papa Indicative Business Case
10.2 Annual Plan Review Process
10.3 SmartGrowth Leadership Group Agreement and Memorandum of Understanding
10.4 Western Corridor Wastewater Study
10.5 Walking and Cycling Business Case
10.6 Innovating Streets
10.7 Deliberations on and adoption of the Coastal Structures Policy 2020
10.8 Deliberations and adoption of the Naming Policy 2020
11 Discussion of Late Items
12 Public Excluded Session
MINUTES OF Tauranga City Council
Ordinary Council Meeting
HELD AT THE Tauranga City Council, By
video conference
ON Tuesday, 5 May 2020 AT 9am
PRESENT: Mayor Tenby Powell (Chairperson), Cr Larry Baldock (Deputy Chairperson), Cr Jako Abrie, Cr Kelvin Clout, Cr Bill Grainger, Cr Andrew Hollis, Cr Heidi Hughes, Cr Dawn Kiddie, Cr Steve Morris, Cr John Robson, Cr Tina Salisbury
IN ATTENDANCE: Marty Grenfell (Chief Executive), Paul Davidson (General Manager: Corporate Services), Barbara Dempsey (General Manager: Regulatory & Compliance), Susan Jamieson (General Manager: People & Engagement), Nic Johansson (General Manager: Infrastructure), Christine Jones (General Manager: Strategy & Growth), Gareth Wallis (General Manager: Community Services), Jeremy Boase (Manager: Strategy & Corporate Planning), Andrew Mead (Manager: City and Infrastructure Planning), Karen Hay (Team Leader: Cycle Plan Implementation), Claudia Hellberg (Team Leader: Waters Strategy & Planning), Emma Joyce (Policy Analyst), Ariell King (Team Leader: Policy), Carl Lucca (Programme Director: Urban Communities), Doug Spittle (Team Leader: Urban Places), Coral Hair (Manager: Democracy Services), Robyn Garrett (Team Leader: Committee Support), Raj Naidu (Committee Advisor), Jenny Teeuwen (Committee Advisor)
1 Apologies
Nil
Nil
Nil
4 Confidential Business to be Transferred into the Open
Nil
5 Change to the Order of Business
Nil
7 Declaration of Conflicts of Interest
Nil
8 Deputations, Presentations, Petitions
9 Recommendations from Other Committees
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Staff Carl Lucca, Programme Director: Urban Communities Andy Mead, Manager: City and Infrastructure Planning
A copy of the staff presentation for this item can be viewed on Tauranga City Council’s website in the Minutes Attachments document for this council meeting. |
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Attachment 1 Te Papa Indicative Business Case - Presentation
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Key points · The Te Papa project was made up of two core deliverables – the Te Papa Spatial Plan and the Te Papa Indicative Business Case (IBC). · The staff presentation covered the purpose and importance of the Te Papa IBC. · The IBC delivered the Te Papa Integrated Land Use Transport Strategy that aligned with central government national policy directives and also with local strategic direction. · The IBC was integrated with the Urban Form and Transport Initiative (UFTI), the Transport Systems Plan (TSP), and the Housing Choice Plan Changes for Te Papa and the wider city. It also worked alongside the Cameron Road Short Term Multi Modal and the Tauranga Cycleways Programme business cases. · Indicative programme timings and costs were outlined. · The next steps included a programme of community and stakeholder engagement to gather understanding of their views and feedback on the proposed ideas. · The Mayor and Councillors thanked staff for their work on this item.
In response to questions · The basic investment option (do minimum option) would not deliver appropriate transport levels of service as the population grew. · Programme costs would be part of the 2021-2031 Long Term Plan (LTP) and would be presented to council over the next six to eight months. · The potential for up to 19,400 additional dwellings was based on 2063 target populations, however current projections for the next 30 years were more towards 13,500. · The city centre transport hub was included in the 10 year delivery programme for this project. · Tauranga City Council (TCC) would continue to be guided by central government for district plan amendments in regards to parking requirements in city centres and high growth areas. · Option 5: Hybrid (post design sprint further assessment version) combined the strongest themes from the four design sprints as well as elements from the National Policy Statement for Urban Development (NPS-UD). The four design sprints indicated TCC’s seriousness regarding intensification to TCC partners. · Population and transport modelling had been undertaken under several intensification levels. A multi modal corridor e.g. along Cameron Road would impact on traffic flow, and ongoing engagement and consultation would continue throughout the programme. · Whilst there was a focus on city centre ongoing regeneration, there was also opportunity to partner with significant landowners within the Gate Pa and Hospital areas. The Greerton area land holdings were more constrained so presented a longer term opportunity. · Various studies in New Zealand and in Australia indicated between $20,000-80,000 cost savings for infrastructure investment between greenfields and brownfields areas, but where the savings fell varied as well. These savings had not been included in the benefit cost ratios analysis but were included in the report as they were viewed as a benefit to all the partners. · TCC was currently working with Accessible Properties, Kāinga Ora, and Kiwibuild for partnering opportunities. · Early engagement with the racecourse landowners has been undertaken and would continue throughout the process. |
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Resolution CO8/20/13 Moved: Cr Larry Baldock Seconded: Cr Heidi Hughes That the Council: (a) Endorses the recommended Te Papa peninsula urban form option. (b) Agrees in principle to the Te Papa peninsula 30-year multi-modal transport programme to support the recommended urban form option, subject to further investigation and funding availability. (c) Approves the Te Papa Indicative Business Case be submitted to New Zealand Transport Agency for consideration and approval in May 2020. (d) Notes that investment timing, costs and cost sharing are subject to further investigations and agreement between the project partners and will come before Council for approvals as the programme progresses. Carried |
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Staff Jeremy Boase, Manager: Strategy & Corporate Planning
Key points · The report outlined workstreams underway to consider reducing the level of capital expenditure, reducing operating expenditure and arrangements for external funding. · Annual Plan (AP) hearings and deliberations had been put on hold pending the need for a second round of engagement. · Any new contracts would include non-penalty exit clauses and these would be considered on a case by case basis.
In response to questions · Working through the review of the 2020/2021 AP process would determine the degree of changes required to the AP and whether this would require a Long Term Plan (LTP) amendment. · The Treasury would give preference for support via revenue underwriting to high growth areas so it was expected that Tauranga City Council would be high on the list. · Further information had been requested for the Crown Infrastructure Partners (CIP) bid and this was due by the end of the week. There was no current timeline for outcome decisions. · Bids currently underway included the CIP (public and private sector) shovel ready projects application totalling $1 billion and the Ministry of Housing and Urban Development’s urban growth projects request, submitted through the SmartGrowth partnership, which was totalled at in excess of $3 billion for TCC related projects.
Discussion points raised · Staff were acknowledged for the process and work put in. · Councillors were in favour of more frequent communications (weekly) to ensure the community were kept updated.
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Resolution CO8/20/14 Moved: Cr John Robson Seconded: Cr Andrew Hollis That the Council: (a) Endorses the approach proposed through this report to review the draft 2020/21 Annual Plan. (b) Requests that staff report back on options for a revised draft 2020/21 Annual Plan once the review is substantively progressed. Carried |
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10.3 SmartGrowth Leadership Group Agreement and Memorandum of Understanding |
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Staff Christine Jones, General Manager: Strategy & Growth
An amendment to Attachment 2 – Memorandum of Understanding was tabled at the meeting and can be viewed on Tauranga City Council’s website in the Minutes Attachments document for this council meeting. |
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Attachment 1 Amendment to Attachment 2 - Memorandum of Understanding
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Key points · The SmartGrowth Leadership Group (SLG) would be comprised of three elected members from each local authority, three Ministers of the Crown, and four tangata whenua representatives. · The change to the structure of the leadership group was a reflection of the Crown wanting to work more closely with growth councils and a willingness to invest to achieve good urban form and multi modal transport outcomes.
In response to questions · The SLG was a more high level coordination and review forum. Policy and infrastructure decisions would still sit with respective councils. · Items for agendas were generally known a month in advance. Matters identified as needing more formal public debate by councillors beforehand would be decided on a case by case basis. The whole of council would have the opportunity to discuss any matters going to the SLG meeting, prior to that meeting. · SLG meetings will be quarterly going forward. · The amendments to the Memorandum of Understanding (as tabled) would be covered in the recommendations by the wording “approved in principle”. · Under the Local Government Act 2002, Ministers of the Crown would not be bound by SLG decisions. |
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Resolution CO8/20/15 Moved: Cr Larry Baldock Seconded: Cr Kelvin Clout That the Council: (a) Approves the updated SmartGrowth Leadership Group Agreement and associated Terms of Reference as per Attachment 1. (b) Authorises the Mayor to sign the agreement. (c) Approves in principle the Memorandum of Understanding between the SmartGrowth partners and Central Government, attached as Attachment 2 and authorise Mayor to make any minor amendments if required by the Government and to sign the MOU once it has been agreed by Central Government.
In Favour: Crs Tenby Powell, Larry Baldock, Jako Abrie, Kelvin Clout, Bill Grainger, Andrew Hollis, Heidi Hughes, Dawn Kiddie, Steve Morris and Tina Salisbury Against: Cr John Robson carried 10/1 Carried |
At 10.50am, the meeting adjourned.
At 11.05am, the meeting resumed.
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Staff Claudia Hellberg, Team Leader: Waters Strategy & Planning Andy Mead, Manager: City and Infrastructure Planning
Key points · The scope of the Western Corridor Wastewater Study was the masterplan for the areas out in the west which included the broader Tauriko/Pyes Pa growth area. · The implementation strategy divided infrastructure in to various stages; Interim – allowing for connection to the existing network to support some short term development areas, Stage 1 – identified infrastructure required for short term development, and Stage 3 – for longer term development. · Growth was happening quickly in the area and there were pressures and timelines that required that the move into the next design phase occurred without delay.
In response to questions · The funding amount to be re-allocated from existing budgets in the current financial year was outlined in the confidential section of the report. · There was currently no wastewater solution in place for Stage 3a of the Tauriko Business Estate (TBE). Without this solution being put in to place, approximately 50 hectares of pre-sold industrial land in that location could not be developed, which would affect the delivery of investment in jobs and possibly the sale and purchase agreements developers had already entered into. · The project was to be 100% development contributions funded, however the majority of the TBE had already been developed or consented so there were limitations to how much could now be collected in that particular development area. The amount for development contributions would more realistically be 80-90%. · The quantum for under collection of development contributions for the wastewater project was approximately $5 million but there were currently options for TCC to work with developers to substantially reduce that amount. · Initial planning for this project started 15 years ago. Work around the four well-beings would be addressed in the current planning for the project. |
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Resolution CO8/20/16 Moved: Cr Larry Baldock Seconded: Cr Kelvin Clout That the Council: a) Endorses the outcomes of the Western Corridor Wastewater study. c) Agrees in principle the completion of design and urgent delivery of construction for the interim stage subject to funding being available through 2020/21 Annual Plan or other processes as approved by Council. d) Notes that costs associated with future stage 1 and 2 will be considered through development of the 2021-31 LTP and associated 30-year infrastructure strategy. e) Approves exemption from open competition and direct appointment of the recommended contractor (as outlined in confidential Attachment 4) for the Western Corridor Wastewater preliminary and detailed design. f) Retains Attachment 4 (A11407716) in confidential on the grounds that withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations). The attachment and recommendation can be publicly released when negotiations and contract are finalised. Carried |
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Staff Karen Hay, Team Leader: Cycle Plan Implementation Andy Vuong, Programme Manager: Cycle Plan Implementation
A copy of the staff presentation for this item can be viewed on Tauranga City Council’s website in the Minutes Attachments document for this council meeting. Also included in the Minutes Attachments is the table on Page 110 of the agenda for this meeting that was inadvertently missed from paragraph 16 of this report. |
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Attachments 1 Walking and Cycling - Presentation 2 Walking and Cycling - Missing Table from Page 110 |
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Key points · The walking and cycling business case (Accessible Streets) was to be submitted to Waka Kotahi (New Zealand Transport Agency - NZTA) as part of the UFTI programme business case that supported multi modal outcomes for the city. · The focus of the business case included an overview of options considered, the recommended way forward, a summary of the recommended programme with indicative timings, and the potential benefits accrued from the programme. · The business case recognised that this cycle programme was only one component of a wider suite of initiatives being developed by TCC in partnership with other agencies to improve personal mobility, accessibility and travel choice in Tauranga.
In response to questions · The emphasis on commuting as opposed to recreation was around maximising the potential for government funding. · Outcome analysis and testing had been undertaken as part of the wider TCC transport model. TCC worked with Auckland and Christchurch council teams to gain information of their experiences and examples. The Tauranga Cycle Model Development Report that outlined this work would be circulated to councillors and would be published on TCC’s website following the Council meeting. · The programme needed to provide for all ages and abilities. Regulation of speeds for e-bikes would be considered in the design planning. · The Transport System Plan worked across all modes of transport across all the key corridors. Solutions and where cycleways would be were still unknown. It was too early to have any information on the correlation between cycleway usage and budget. · The investment of budget was for both a walking and cycling programme, not just cycleways. A holistic response was used as it would be too difficult to separate out the individual investment for walking and cycling. · This was an indicative business case; actual costs would form part of the detailed business case. |
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Resolution CO8/20/17 Moved: Cr Kelvin Clout Seconded: Cr Jako Abrie That the Council: (a) Endorses the recommended “Cycling Connections and Area Accessibility” as the preferred programme option, subject to funding availability. (b) Approves that the Walking and Cycling Business Case be submitted to New Zealand Transport Agency, as part of the UFTI programme business case, for consideration and approval in June 2020. (c) Notes investment timeframes, costs and cost sharing arrangements with project partners will come before Council for approvals as the programme progresses. Carried |
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Staff Gareth Wallis, General Manager: Community Services Doug Spittle, Team Leader: Urban Places
Appendix 1 to this report was tabled at the meeting and can be viewed on Tauranga City Council’s website in the Minutes Attachments document for this council meeting. |
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Attachments 1 Innovating Streets - Appendix 1
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Key points · Waka Kotahi - NZTA had made available an Innovating Streets fund which would provide a 90% funding assistance rate for successful projects. · The fund would consider projects that created safe and attractive streets for pedestrians, cyclists, and other non-car modes of transport. · The fund did not seek to fund permanent treatments but allowed for new ideas to be trialled to find out what could work in our city’s spaces. · There were two funding rounds for the fund, the first would close on 8 May 2020 and the second would close on 3 July 2020. · Four viable projects had been identified and approval was sought to put forward two of these. Councillors were requested to note that Pilot Bay and Marine Parade had been amalgamated into one project so three projects appeared in the recommendations.
In response to questions · Projects not selected for the first round to enable community consultation to take place could be considered for the second round. · Only two projects had been proposed to put forward as NZTA would be considering the availability of council resources and whether projects could be achieved when assessing projects for funding. Putting forward more than two projects was still an option. · Pilot Bay and Tay Street Marine Parade were kept as separate projects, as there was a $1 million limit per application, and this created more options if one or the other was approved. · The timeframe for applications to the fund had not enabled consideration of public/private partnerships at this point. · It was expected that NZTA would respond positively to projects where consultation had already being undertaken. · There was a risk that funding available for the second round could be diminished by over-subscription of the first round.
Discussion points raised · Projects that highlighted safety improvements should have priority. · Trials and therefore any permanent solutions could be compromised if community consultation and engagement had not occurred. · The ability to trial projects with community participation and feedback was welcomed. · The benefit of a trial (especially when 90% externally funded) was that the community could see how a project worked before any permanent solution was considered. · Staff were commended on their fast response to this opportunity to maximise a funding source for projects that would incur minimum cost to the city. |
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Motion Moved: Cr Steve Morris Seconded: Cr Andrew Hollis That the Council: (a) Receives Report – Innovating Streets (b) Approves two of the following projects to be included in applications to the first Innovating Streets funding round: (i) Bureta Village Safety Improvements (ii) Tay Street Marine Parade Safety Improvements (c) That further engagement be undertaken with Mount Maunganui residents and businesses and the wider community prior to submitting Pilot Bay/Marine Parade to the second funding round. (d) Delegates approval of Innovating Streets project applications to the General Manager: Infrastructure and General Manager: Community Services. In Favour: Crs Andrew Hollis, Dawn Kiddie and Steve Morris Against: Mayor Tenby Powell, Crs Larry Baldock, Jako Abrie, Kelvin Clout, Bill Grainger, Heidi Hughes, John Robson and Tina Salisbury lost 3/8 A new motion was then put. |
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Resolution CO8/20/18 Moved: Cr John Robson Seconded: Cr Kelvin Clout That the Council: (a) Receives the Report – Innovating Streets (b) Approves the following projects to be included in applications to the first Innovating Streets funding round: (i) Bureta Village Safety Improvements (ii) Tay Street Marine Parade Safety Improvements (iii) Pilot Bay and Marine Parade (c) Delegates approval of Innovating Streets project applications to the General Manager: Infrastructure and General Manager: Community Services. In Favour: Mayor Tenby Powell, Crs Larry Baldock, Jako Abrie, Kelvin Clout, Bill Grainger, Heidi Hughes, John Robson and Tina Salisbury Against: Crs Andrew Hollis, Dawn Kiddie and Steve Morris carried 8/3 Carried |
At 12.50pm, the meeting adjourned.
At 1.30pm, the meeting resumed.
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10.7 Deliberations on and adoption of the Coastal Structures Policy 2020 |
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Staff Christine Jones, General Manager: Strategy and Growth Emma Joyce, Policy Analyst
Key points · The review of the Coastal Structures Policy looked at how TCC could better manage assets and activities protected by a structure, and the role of council in protecting private property. · The draft policy was adopted by the Policy Committee in July 2019. · Public consultation on the draft policy occurred in October and November 2019. · 75 submissions were received - 39 in favour, 12 opposed and the remainder were neutral or commented on issues outside the scope of the policy review. · Submissions were heard in February 2020.
In response to questions · Landowners compromised by coastal erosion could build structures on their own property but not on to any adjoining council land; however landowners could approach council for an exemption. Exemptions would be considered on a case by case basis.
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Resolution CO8/20/19 Moved: Cr John Robson Seconded: Cr Heidi Hughes That the Council: (a) Adopts the Coastal Structures Policy 2020 (attachment 1) to replace the Coastal Structures Policy 2006, which includes the following changes from the draft consulted policy: (ii) replacing the provision allowing the construction of new protection structures on council land with a new clause that “no new private protection structures are permitted on council land” (iii) add “or fund” to draft clause 5.1.4 stating that council does not build or maintain structures where the primary benefit is promotion of private or commercial interests, or the protection of private property or commercial interests. (iv) retaining the current statement that any private protection structure built or maintained under this policy must be up to current council standard and at the sole cost of the private property owner (v) replacing “moving” with “relocating” in clause 5.2.4 relating to alternative options to hard protection structures (vi) moving reference to consideration of mana whenua values and connection to the area when making management decisions to a separate clause (vii) adding “effects on historic heritage sites and values” to schedule one and require schedule of criteria to be considered for both hard and soft protection options (viii) adding Heritage New Zealand Pouhere Taonga Act 2014 to the list of relevant legislation (ix) specifying in a policy note that resource consent is required from Bay of Plenty Regional Council and that all coastal structures need to consider regional coastal and environmental plans (x) specifying in a policy note that new hard protection structures may require building consent (xi) specifying in a policy note that council-owned protection structures are not adequate provision to protect private land from natural hazards as per section 71 of the Building Act 2004 (xii) add an additional criterion to schedule one requiring consideration of funding availability when making decisions on coastal structures (b) Notes that no changes are proposed to the overall intent of the policy purpose, scope and general principle to prioritise protection of significant council activity and assets. (c) Delegates authority to the General Manager Strategy and Growth to make minor editorial changes to the Coastal Structures Policy 2020 for correction or clarification. Carried |
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Staff Christine Jones, General Manager: Strategy and Growth Emma Joyce, Policy Analyst
Key points · The Naming Policy guided decisions on the naming of all public places (excluding beaches) and allowed for dual naming or re-naming of public places, prioritising the naming criteria to ensure names reflected Tauranga’s identity. · The draft policy was adopted by the Policy Committee in July 2019. · Public feedback was sought via survey in August 2019 and 843 responses were received. · Consultation via a submission process occurred in November and December 2019. · 96 submissions were received – 39 in support, 42 in opposition and the remainder were either neutral or had made comments that supported the intent of the policy or interpreted the draft policy as for changing street names only.
In response to questions · Street names could be changed following requests from mana whenua. · Council had delegations to change street names and could not re-delegate that to another group. · Street renaming could not be requested by an individual. · There was provision for streets to be dual named where there was both significant Māori and European history. · A council resolution was required to re-name a street. · All clauses of recommendation (a) needed to be approved to adopt the policy.
Discussion points raised · Discussion mainly centred around the implications and applicability of clause (a) (vi) as recommended in the report. · The impact of any street re-naming on businesses needed to be considered carefully.
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Motion Moved: Cr Larry Baldock Seconded: Cr Jako Abrie That the Council: (a) Adopts the Naming Policy 2020 (attachment 1) to replace the 2009 Naming of Streets, Reserves and Community Facilities Policy, which includes the following changes from the draft consulted policy: (i) adding “locally significant” to clause 1.3 (additional policy purpose) (ii) adding a new clause expressing support for te reo Māori names (iii) moving the statement on dual naming to a new section on dual naming (iv) adding a new clause that, where appropriate, relevant information is provided to aid understanding of a name (v) clarifying that for dual named streets only, the English name will be used for addressing purposes with the te reo Māori name appearing on the sign in a smaller size (vi) adding an additional clause allowing mana whenua from the Tauranga City Council area to request changes to street names for cultural reasons (vii) adding an additional clause noting support for working alongside the New Zealand Geographic Board where there is a request to officially name a suburb (viii) deleting “easy to spell” and “easy to pronounce” from the street naming criteria (ix) reserving the road type “way” for private roads and right of ways only (x) adding “ara” to the schedule of permitted road types for new streets (xi) deleting the specific reference to consultation from the draft policy (noting that this does not mean there would be no consultation to inform naming decisions) (xii) adding a new clause that council does not consult on names provided by mana whenua for the purpose of obtaining wider community approval (xiii) amending the delegations to state that the Chief Executive is responsible for decisions on the naming of new reserves and other public places (xiv) adding a new clause that street numbering be determined by national or Australasian standards. (b) Rescinds resolutions M83.16, M 88.4, M 20.14, and M 26.3 and revoke the 1990 Street Numbering Policy and 1992 Street Numbering of Freehold Infill Subdivisions Policy. (c) Delegates to the General Manager Strategy and Growth the authority to make final minor editorial changes to the Naming Policy 2020. |
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Amendment Moved: Cr Steve Morris Seconded: Cr John Robson That clause (a) (vi) be replaced with the below: (vi) Remove 5.3.2 from the policy and add a new 5.3.3 “Council will consider applications to amend street names where there are strong reasons for dual naming or renaming of existing streets.” In Favour: Mayor Tenby Powell, Crs Kelvin Clout, Bill Grainger, Andrew Hollis, Dawn Kiddie, Steve Morris and John Robson Against: Crs Larry Baldock, Jako Abrie, Heidi Hughes and Tina Salisbury carried 7/4 The substantive motion, as amended, was then put. |
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Resolution CO8/20/20 Moved: Cr Larry Baldock Seconded: Cr Jako Abrie That the Council: (a) Adopts the Naming Policy 2020 (attachment 1) to replace the 2009 Naming of Streets, Reserves and Community Facilities Policy, which includes the following changes from the draft consulted policy: (i) adding “locally significant” to clause 1.3 (additional policy purpose) (ii) adding a new clause expressing support for te reo Māori names (iii) moving the statement on dual naming to a new section on dual naming (iv) adding a new clause that, where appropriate, relevant information is provided to aid understanding of a name (v) clarifying that for dual named streets only, the English name will be used for addressing purposes with the te reo Māori name appearing on the sign in a smaller size (vi) Remove 5.3.2 from the policy and add a new 5.3.3 “Council will consider applications to amend street names where there are strong reasons for dual naming or renaming of existing streets.” (vii) adding an additional clause noting support for working alongside the New Zealand Geographic Board where there is a request to officially name a suburb (viii) deleting “easy to spell” and “easy to pronounce” from the street naming criteria (ix) reserving the road type “way” for private roads and right of ways only (x) adding “ara” to the schedule of permitted road types for new streets (xi) deleting the specific reference to consultation from the draft policy (noting that this does not mean there would be no consultation to inform naming decisions) (xii) adding a new clause that council does not consult on names provided by mana whenua for the purpose of obtaining wider community approval (xiii) amending the delegations to state that the Chief Executive is responsible for decisions on the naming of new reserves and other public places (xiv) adding a new clause that street numbering be determined by national or Australasian standards. (b) Rescinds resolutions M83.16, M 88.4, M 20.14, and M 26.3 and revoke the 1990 Street Numbering Policy and 1992 Street Numbering of Freehold Infill Subdivisions Policy. (c) Delegates to the General Manager Strategy and Growth the authority to make final minor editorial changes to the Naming Policy 2020. In Favour: Mayor Tenby Powell, Crs Larry Baldock, Kelvin Clout, Bill Grainger, Andrew Hollis, Heidi Hughes, Dawn Kiddie, Steve Morris, John Robson and Tina Salisbury Against: Cr Jako Abrie carried 10/1 Carried |
Nil
The meeting closed at 2.35pm.
The minutes of this meeting were confirmed at the Ordinary Council meeting held on 26 May 2020.
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CHAIRPERSON
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28 May 2020 |
7 Declaration of Conflicts of Interest
8 Deputations, Presentations, Petitions
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28 May 2020 |
10.1 Draft 2020/21 Annual Plan update
File Number: A11519176
Author: Jeremy Boase, Manager: Strategy and Corporate Planning
Christine Jones, General Manager: Strategy & Growth
Kathryn Sharplin, Manager: Finance
Authoriser: Paul Davidson, General Manager: Corporate Services
Purpose of the Report
1. To present options and recommendations regarding the development of a revised draft 2020/21 Annual Plan in response to social, economic and financial disruption caused by the COVID-19 pandemic.
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That the Council: (a) Approves a revised draft 2020/21 Annual Plan with the following criteria as a starting point: (i) Total capital budget of $225 million (including carry forwards) noting that $170 is planned to be financed in 2020/21 with $30m carried forward from the 2019/20 budget and $25m unfinanced (ii) Total rating requirement increase of 4.9% after growth (iii) Debt-to-revenue ratio of 239% Operating budgets (b) In addition to the above, supports the following changes to draft 2020/21 operating expenditure budgets as a result of service level reviews (see Attachment 7): (i) Reduction in Events Framework Funding of $200,000 (temporary) (ii) Reduction in New Year’s Eve event funding of $444,000 (note that of this, $40,000 has already been reduced in the recommendation (a) ‘base-case’) (permanent) (iii) Reduction in budget for other Council-organised events of $100,000 (note that all of this reduction has already been included in the recommendation (a) ‘base-case’) (temporary) (iv) Reduction in the functions and events budget at the Historic Village of $40,000 (note that of this, $15,000 has already been reduced in the recommendation (a) ‘base-case’) (temporary) (note non-rates funded) (v) Reduction in the Emergency Management community education budget of $45,000 (note that of this, $25,000 has already been reduced in the recommendation (a) ‘base-case’) (temporary) (vi) Reduction in the harbour encroachment budget of $50,000 (temporary) (vii) Removal of the $61,000 budget for the tropical display house in Robbins Park and withdrawal of that service (permanent) (viii) Removal of the $89,000 budget for hanging baskets in the city centre and withdrawal of that service (permanent) (ix) Reduction in potential budget for energy, carbon, and sustainability management and advisory services of $100,000 while a refreshed approach to these services is considered (temporary) (x) Reduction in budget for the Waterline education programme of $45,000 (temporary) (xi) Closure of the Our Place site (permanent) (c) Supports additional operating expenditure changes in the following areas: (i) Increase in the budget for feasibility and community engagement on the proposed Strand-to-Memorial walkway of $200,000 (temporary) (ii) Inclusion of $600,000 of cycle action plan implementation budget that is operational but was originally considered capital expenditure (temporary) (iii) Reduction of funding for the Bayfair Underpass of $1 million with an impact on loan-funded operating expenditure of $470,000 (and a reduction in NZTA subsidy of $530,000). Because the expenditure was loan-funded, the reduction in rates requirement is $33,000 per annum (permanent) (d) Notes that where expenditure budget reductions are temporary there will be a consequent increase in expenditure budgets in future years (likely in the range of 2-3% rates rise). (e) Supports the inclusion of additional revenue budgets for the new activity of boat ramp fees or associated parking charges of 2020/21 of $100,000 with future years’ budget revenue reviewed through the Long-Term Plan. (f) Confirms the recommended capex per Attachments 2 and 4 for inclusion in the revised draft Annual Plan, noting that the total projects planned total $225 million while only $200 million is budgeted for financing purposes. Other matters (g) Notes that, in preparing the revised draft 2020/21 Annual Plan, the commercial differential and the uniform annual general charge remain at the levels included in the originally adopted draft 2020/21 Annual Plan (of 1:1.2 and 10% respectively). (h) Requests advice from staff on whether the revised draft 2020/21 Annual Plan incorporating the decisions listed above requires re-consultation with the community in accordance with the Local Government Act 2002. |
Executive Summary
3. This report presents a summary of work done on both operating expenditure and capital expenditure in response to the financial pressures Council and the community are under.
4. The report notes significant savings in staff-related costs in 2020/21 and makes recommendations for further savings to operating expenditure following a comprehensive review of service levels for the coming year.
5. The report also includes the outcome of a full review of the capital expenditure programme. This has resulted in recommended reductions in the capital programme meaning that a number of projects included in the adopted draft Annual Plan are not now planned to proceed.
6. As a consequence of these changes and recommendations it is expected that the total rating requirement will be less than that in the adopted draft Annual Plan, while a prudent and sustainable debt-to-revenue ratio is maintained.
7. Following direction on this report, staff will advise whether the final extent of proposed changes meets statutory requirements to re-consult. If the changes do not meet this bar, Council will be invited to decide whether it chooses to re-consult with its community on a revised draft Annual Plan.
Background
Annual Plan process to date
8. On 24 March 2020, following work that started in the third quarter of 2019, Council adopted its draft 2020/21 Annual Plan for the purposes of public consultation. That date was one day after the government announced the nation had moved into COVID-19 Alert Level 3 and two days before the Alert Level 4 lockdown commenced.
9. The draft Annual Plan consultation document noted that, before the final Annual Plan is considered and adopted, further work would be undertaken to understand the impact of COVID-19 and Council’s appropriate response in that document.
10. Consultation on the draft Annual Plan commenced on Friday 3 April and closed on Sunday 3 May. To date, 291 submissions have been received from individuals and organisations. Hearings and deliberations on those submissions have been put on hold while Council re-considers the contents of the draft Annual Plan and determines whether a further period of re-consultation is warranted.
Previous post-adoption reports to Council relating to the draft Annual Plan
11. Council and the Finance, Audit & Risk Committee have received and considered a number of reports on the impact of COVID-19 on the draft Annual Plan since it was adopted.
12. On 21 April 2020, Council received a report titled Draft 2020/21 Annual Plan – COVID-19 update. That report identified a potentially significant revenue decline for Council in the 2020/21 year with consequential impacts on Council’s debt-to-revenue ratio and its proposed capital expenditure programme. The report outlined a potential process that Council could use to work through the many issues that the COVID-19 disruption had created.
13. In response to the 21 April report, Council resolved that it:
a) Recognises that the impacts of the COVID-19 pandemic … will require significant reconsideration of the draft 2020/21 Annual Plan prior to adoption by 30 June 2020 or later.
b) Recognises that the direct impact on Council of government stimulus package opportunities is currently unknown and that … further analysis and options beyond those covered by this report may need to be considered by Council prior to the adoption of the 2020/21 Annual Plan.
c) Notes that staff will conduct further work on planning scenarios relating to future disruption; assumptions to be brought to a subsequent Council or Committee meeting for endorsement.
14. A separate report on the 21 April 2020 Council agenda resulted in council supporting a number of short-term financial relief measures for various community groups and businesses.
15. On 28 April 2020, the Finance, Audit & Risk Committee received a report titled Financial Update – COVID-19. That report set out the latest understanding of the short-term financial impacts of COVID-19 (to 30 June 2020) and updated Council on scenarios for the 2020/21 Annual Plan.
16. In response to the 28 April report, the Finance, Audit & Risk Committee resolved that it:
(a) Recognises the need to significantly recast capital and operational expenditure budgets.
(b) Recognises the need to reconsult with the community based on any significant changes to the annual plan due to financial support being provided by government or in the absence of such support.
17. On 5 May 2020, Council received a report titled Annual Plan Review Process. That report provided a summary of the proposed framework for a revised approach to the 2020/21 Annual Plan taking into account the significantly altered financial scenarios that COVID-19 restrictions have resulted in.
18. The 5 May report introduced and spoke to the five ‘levers’ that were being explored as staff considered re-working the 2020/21 budget. These five levers were summarised as follows:
· Reducing the level of capital expenditure
To reduce cash outflow and therefore debt levels, and also to reduce consequent operating expenditure (‘pure’ operating expenditure as well as debt servicing and depreciation costs).
· Reducing operating expenditure
To reduce cash outflow and, with reduced revenue, any need to fund operations from debt.
· Arrangement of external funding or off-balance sheet financing
This could be an injection of funding for capital projects or for operating expenses or both and could ease the debt burden or the balanced budget burden or both.
· Non-Funding operational expenditure
This creates a short-term exemption from funding expenditure such as depreciation. However, it also reduces the cash available to balance against debt and therefore results in a net increase of debt. Legal requirements of prudent financial management would need to be considered.
· Amending the acceptable planning target for the debt-to-revenue ratio
A movement from the current target of 235% to the maximum allowable under debt covenants of 250% would provide some limited ability to increase debt (whether related to more capital projects, reduction of funded depreciation, or the need to fund operating expenditure) for the same amount of projected revenue.
19. With regard to these levers, the 5 May report in particular set out detailed processes for the review of both capital expenditure and operating expenditure[1]. That report also set out initial thinking on revised timelines for consultation on, and adoption of, a final 2020/21 Annual Plan.
20. In response to the 5 May report, Council resolved that it:
(a) Endorses the approach proposed through the report to review the draft 2020/21 Annual Plan.
(b) Requests that staff report back on options for a revised draft 2020/21 Annual Plan once the review is substantively progressed.
21. On 12 May 2020, the Finance, Audit & Risk Committee received a report titled Financial Update – COVID-19. That report updated information on the short-term impacts of COVID-19 (to 30 June 2020) as well as further updates regarding the 2020/21 Annual Plan process.
22. In relation to the fifth ‘lever’ introduced above, the report noted that the Local Government Funding Agency (“LGFA”) had announced that it was recommending to shareholders changes in maximum permissible debt-to-revenue ratios from the existing 250% to 300% (for two years) and then reducing gradually to 280%.
23. In response to the 12 May report, the Finance, Audit & Risk Committee noted that a formal report would be made to Council prior to the June special general meeting of the LGFA shareholders.
24. On 19 May 2020, Council received and considered a request from seven ratepayer groups for a referendum on matters related to the draft 2020/21 Annual Plan. Council declined the request for a referendum but resolved that it:
(c) Requests staff to report on the specific issues and options raised by the petitioners for possible inclusion in the Annual Plan consultation material.
This report
25. This report builds on the five levers identified in the 5 May 2020 report to Council. In particular it presents updated information on the first three listed levers:
· capital expenditure
· operating expenditure
· external arrangements and off-balance sheet funding.
26. This report outlines work that has been done to adapt the draft Annual Plan to a post-COVID environment. It builds on Council’s Recovery Plan three key elements of:
(a) Assist business and the community in the short term (largely in the 2019/20 year)
(b) Adapt services provided to and for our communities (through a reassessment of budgeted operating and capital expenditure)
(c) Stimulate Tauranga’s post-COVID recovery through strategic infrastructure investment (through a reassessment of the capital programme and ongoing discussions with central government regarding stimulus opportunities).
Our services What services are we delivering now, what do we need to focus on, and what can Council afford to support and help the community recover?
Our investment What is our best capital programme? How does this help to stimulate the economy? What debt levels do we want to maintain?
Recovery How does our Annual Plan support recovery? Is it the best mix of services, investment and affordability for the community?
Direction The environment is uncertain and changing; how do we ensure we build the best base for our long-term future in line with our direction and focus on housing, transport, and communities?
Affordability How do we maintain affordability so that those that can pay do, and relief is provided to those who cannot?
The implications of covid-19 on the draft annual plan
28. As a result of COVID-19, Council now needs to consider a changed environment in which to adopt its 2020/21 Annual Plan. This changed environment includes:
(a) significant revenue loss, impacting Council’s ability to operate normally and provide services to the community
(b) the community and businesses expecting to experience the impacts of an economic recession which will result in reduced economic activity, some business retrenchment and failures, and increased unemployment
(c) consequential impacts on some members of the community’s ability to pay for Council’s services
(d) the prospect of government economic stimulus packages which should provide funding and investment for our city, but which may also create greater competition for the services of the construction sector which may impact on that sector’s ability to deliver on Council projects.
29. Council will need to consider its role in the community and the local economy as a result of the impending recession. On this, economist Shamubeel Eaqub recently advised Council that:
(a) while recession sees private sector investment collapse, the public sector should look to maintain, grow and catalyse
(b) there is a trade-off between rates relief and funding capital investment. Many more jobs are provided by making capital investment than by reducing rates
(c) Council needs to look at leveraging many tools already in place in combination to address issues of affordability while also providing the needed stimulus of capital investment – solutions are a matter of “and not or”.
30. In response to the above, and Council’s direction provided at its 5 May 2020 meeting, staff have undertaken a number of actions to assist in the development of a revised draft Annual Plan. These actions include:
(a) remodelling the Annual Plan budgets based on revenue reduction assumptions
(b) identifying immediate cost reduction opportunities as well as new revenue sources and incorporating them in the revised budget
(c) identifying for Council consideration areas of service level review that could lead to greater cost reductions if a lower rating level is sought
(d) reviewing the capital programme in terms of priority with a view to reducing total spend to lower the required rates increase.
31. These actions are expanded upon in subsequent sections of this report.
32. The draft Annual Plan as previously approved for consultation is now considered to require a number of amendments due to the impacts of COVID-19.
Revenue assumptions
33. Staff have estimated reductions to revenue budgets based on both a ‘best-case’ economic impact scenario and a ‘worst-case’ economic impact scenario. These revenue assumptions are based on two factors:
· lower operating revenue and development contributions revenue based on a reduction in building-related investment in the economy. This flows through to Council’s relevant revenue streams as a reduction of 20% (best-case) or 40% (worst-case).
· expected lower activity for some Council services due to alert level restrictions for some (for instance, Baycourt and Bay Venues Limited revenue) and general recessionary impacts for others (such as airport parking user fees). Overall, budgets for such user fees reduced 18% from those in the draft Annual Plan in the best-case scenario, and 26% in the worst-case scenario.
34. User fee assumptions influence the revenue modelling. In forming the above assumptions, the dollar rate of user fees assumed is that which was proposed and consulted on, including parking fee increases. If Council wishes to amend the dollar rate of specific fees and charges this would require separate and specific decision-making, either prior to the adoption of a revised draft Annual Plan or during the deliberations on, and adoption of, the final Annual Plan.)
35. With regard to parking revenue, the current draft revenue assumptions in the parking activity show the same revenue reduction for best case and worse case scenarios, being a 30% reduction in revenue compared to the adopted draft budget. A more positive assumption of business recovery and paid parking use in the city centre in line with a favourable revenue scenario (volume increase) would see this revenue increase by $900k because of the higher parking charges proposed to be implemented in 2020/21. Alternatively, a decision to retain parking fees at current levels rather than at the levels of increase proposed in the draft user fees and charges schedule would support the currently budgeted levels, i.e., retaining the current charges would reduce the potential income increase by $900k. Parking revenue does not affect rates.
36. The modelling also takes into account a reduction in operating revenue to reflect specific decisions made by Council to assist the community in the areas of user fee assistance and rental relief. These were focused primarily on the 2019/20 year with only a few proposals flowing through to 2020/21.
Expenditure assumptions
37. The modelling assumes lower interest costs due to interest rate movements and a reduced capital programme ($3.6m reduction in interest costs).
38. The modelling also includes increases to budgeted expenditure to meet additional organisational work from home requirements ($0.4m). These are annual operating costs to provide for additional licences, contracts and network capacity. These budget increases have been offset by savings in other expenditure budgets including travel and accommodation and other operating costs to provide a net reduction overall of $0.5m.
39. Finally, the modelling includes short-term adjustments in employee-related expenditure to reduce costs immediately in response to immediate revenue loss ($5m less than adopted draft budget). Some of these costs may resume the following year with a consequential rates increase in 2021/22 of up to 2.5%.
40. Further details of the cost savings and capital prioritisation process are covered in later sections of this report and attachments.
Annual Plan revised budget
41. Staff have modelled budget revisions for the draft Annual Plan, taking into account the above matters. Using the best-case and worst-case revenue reduction scenarios effectively results in two alternative budgets.
42. The revised Annual Plan budget impact included in this report is based on the best-case revenue loss scenario. This is a relatively favourable option based on continued success in controlling COVID-19, and an expectation that Tauranga will continue to grow through the recession as it did during the Global Financial Crisis. Using this scenario for revenue and applying on top of that the cost savings and adjustments identified above, the rates requirement overall has reduced to 4.9% after growth (of 1.4%). This compares to the draft annual plan increase of 7.6% (after growth).
43. However, the worst-case revenue assumptions highlight a measure of financial risk. If revenue loss were to be at the level of the worst-case scenario, then the rates deficit based on the draft budget would be $0.9m. The lower revenue would also result in a larger increase in debt because most user fee revenue funds activities do not receive rate funding.
Capital programme and debt – framing and high-level modelling
44. As a growing city, Tauranga has significant infrastructure investment required over the next five to ten years to complete water supply and wastewater investments and open up new growth areas. The 2018/28 Long-Term Plan shows there is nearly $1 billion of infrastructure to complete. Based on revised information prepared during pre-planning for the 2021/31 Long-Term Plan, there is an additional $500 million to $1 billion of further investment yet to be included.
45. Therefore, as Council reviews the capital programme and associated debt in the 2020/21 Annual Plan it must also have regard to future years’ investment requirements and the impacts on rates over time.
46. The proposal by the LGFA to increase Council’s permissible debt-to-revenue ratio limit from 250% to 300% for the next two years creates capacity for Council to increase its capital programme and total debt levels higher than previously assumed.
47. High-level models have been prepared to indicate the potential capacity to increase capital spend each year up to a debt-to-revenue ratio level of 275% for each of the next five years. The model sets out the rate increases (after growth) required in later years to sustain the capex programme and debt-to-revenue ratio. The model assumes an increase of 5% in the rates requirement based on an average increase of $200m of capex. Where capex is higher than $200m in a year the rates would be higher and the base will be higher from then going forward. The increasing level of rates increase reflects the additional ongoing operating costs associated with an increase in capital expenditure and debt. Rates increases will be needed to fund borrowing costs, depreciation and operating and maintenance cost of additional assets (for new infrastructure assets, for every $100m of capex there is approximately a $5m increase in annual operating costs).
48. The modelled rates increases do not include the possible 2 to 3% of other increases that will eventuate when temporary savings in 2020/21 are reversed in 2021/22. See the section of this report below titled Medium-term impact of changes to operating expenditure for details.
49. The following graph shows the level of capital expenditure relative to debt and revenue over five years. It shows that Council could continue to deliver a capital programme above $200m while remaining below 275% debt to revenue ratio, providing that rates revenue continues to increase as shown in Attachment 1. An additional $100m to $130m of capital in the 2021/22 year could be supported within a higher debt to revenue ratio and with higher rates, but that higher level of spend would be a one-off and a reduction in later years’ capital would be required to stay within the ratio.
50. Note that the 2020/21 ‘cash capex’ budget of $170 million in Attachment 1 equates to the recommended $225 million total capital budget proposed for the year which includes $25 million of unfinanced expenditure and $30 million of projects carried forward from 2019/20 (and funded in that year).
51. This graph is replicated in a larger size in Attachment 1 to this report and is shown as ‘Scenario 1’. Attachment 1 also includes three other Scenarios showing different balances of capital expenditure, rates and the debt-to-revenue ratio.
Capital expenditure review
52. As endorsed by Council at its 5 May 2020 meeting, the Executive has led a comprehensive review of capital expenditure as relates to the draft 2020/21 Annual Plan.
53. The review was undertaken in two stages. First a project-by-project assessment, then a prioritisation ranking under different scenarios.
54. The review first assessed and rated all capital projects against the following criteria:
(a) Consequences of non-delivery
(i) Financial consequences
(ii) Non-financial consequences (including legal consequences, consequences under resource consent requirements, health and safety consequences, reputational consequences, and environmental consequences)
(b) Benefits of the project proceeding
(i) Benefits in terms of the LTP focus on land supply and housing
(ii) Benefits in terms of the LTP focus on transportation and travel choice
(iii) Benefits to social wellbeing
(iv) Benefits to economic wellbeing
(v) Benefits to environmental wellbeing
(vi) Benefits to cultural wellbeing
(vii) Benefits to Council’s own operating efficiencies
55. Consequences were ranked on a simple 1 to 3 scale (high negative consequences = 1). Benefits were ranked on a 0 to 3 scale (high benefits = 3).
56. In addition, during the assessment process projects which fit into the following categories were also identified:
(a) Projects required to deliver on essential services
(b) Projects required to allow residential and commercial development to continue in the short to medium term (1-3 years)
(c) Projects that have confirmed NZTA funding (typically being approximately 50% funded by NZTA).
57. Secondly those projects were ranked under the following scenarios:
· Scenario 1 – Default scenario,
o Projects ordered by consequence ratings then benefits ratings (with no weightings applied)
· Scenario 2 – Essential services scenario
o Projects split into essential services and other categories, then ordered by consequence ratings then benefits ratings (with no weightings applied)
· Scenario 3 – Development-facilitating scenario
o Projects split into those facilitating residential and commercial development and those not, then ordered by consequence ratings then benefits ratings (with no weightings applied)
· Scenario 4 – Multi-modal and community benefit scenario
o Projects ordered by benefits ratings first (with double-weighting of benefits to transportation and travel choice, social wellbeing, environmental wellbeing and cultural wellbeing), then by consequence ratings.
58. The capital expenditure programme in the current draft 2020/21 Annual Plan totalled $244 million[2]. With the addition of further expected budget carry-forwards on incomplete projects from the 2019/20 year (exacerbated by the COVID-19 shutdown of construction sites), and the Council decision on 19 May regarding Elizabeth Street, the total programme is now approximately $280 million. This figure includes approximately $30m of carried forward projects not delivered in 2019/20 as budgeted (noting that some other projects originally budgeted for 2019/20 are proposed to be re-budgeted into later years).
59. This level of expenditure could not be maintained over the next few years, and is considered challenging to deliver. Therefore, a reduction is proposed, to a total slightly below that included in the draft Annual Plan.
60. Across the four scenarios described above there are a number of programmes and projects that consistently rank highly. These programmes and projects may therefore be considered as close to ‘non-negotiable’ for the 2020/21 Annual Plan. Those programmes and projects are:
· the transportation model
· western corridor growth projects
· digital investment
· the renewals programme
· the Waiāri water treatment plant
· Te Maunga wastewater treatment plant upgrades
· Cameron Road corridor public transport and multi-modal.
61. With the inclusion of some other projects which are partially funded by NZTA, the total for these ‘non-negotiable’ programmes and projects budgeted for the 2020/21 year (including carry forwards from 2019/20) is approximately $189m. This list includes $17m of known NZTA funding which means the debt impact of these programmes and projects is $172m. However, the $170m capex limit includes the NZTA revenue assumption as part of the debt calculation, so the limit of $170m applies with this NZTA funding. As a result, the non-negotiable project total exceeds the limit of $170m.
63. This package of $189m of projects is shown in Attachment 2 to this report and is recommended for inclusion in the revised draft Annual Plan.
64. Once these $189m of projects are accounted for, the remaining capital projects are shown in their ranking order under each of the four scenarios described above. These rankings are provided in Attachment 3 to this report.
65. The tables in Attachment 3 are colour coded, identifying projects under each scenario that are able to be funded under different assumptions of the total available capital expenditure envelope. These are shown in $50m bands thus:
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$50m |
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$100m |
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$150m |
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$200m |
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$250m |
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$300m |
66. The Executive have reviewed the capital programme under all scenarios and have provided a recommendation of the additional capital projects that can be included in a $225m capex budget (including $30m of budget carried forward and $25m that is not funded). This recommendation is included as Attachment 4 to this report.
67. A number of beneficial projects are excluded under this proposed capital expenditure budget. To support a higher capital expenditure budget rates would need to be increased. In the absence of such an increase the Executive recommended that a further list of potential “bring forward” projects are identified that could be commenced during the year if there was sufficient slowdown or delay in the delivery of any of the budgeted projects. This bring forward list would be managed under delegation by the Chief Executive. Funding the full $225m would alleviate the need to non-fund a portion of the programme; however, would result in an increased rating level and may lead to a rates surplus in the event the capital programme at this level could not be fully delivered. The ‘bring forward’ list is included as Attachment 11 to this report.
68. The vast majority of capital expenditure considered for the revised draft 2020/21 Annual Plan was previously approved as part of the capital expenditure programme in the current draft 2020/21 Annual Plan (i.e. was in the $244 million discussed above).
69. However, a small number of new projects have been identified since the adoption of the original draft Annual Plan and have been included in the consideration of the revised capital budget. These projects are:
(a) Elizabeth Street streetscape
(b) Te Tumu infrastructure corridor planning
(c) Matapihi Bridge – safety improvements
70. The Elizabeth Street project was approved by Council at its meeting of 19 May 2020. Further details regarding the Te Tumu project are included in Attachment 5 to this report.
72. The Elizabeth Street and Te Tumu projects are included in the ‘non-negotiable’ projects in Attachment 2. The Matapihi Bridge project is in the recommended projects in Attachment 4.
Comparison of revised capital expenditure models to the original draft 2020/21 Annual Plan
73. The recommendations included in Attachments 2 and 4 result in a $225m capital expenditure budget. When compared to the $244m capital budget in the original draft Annual Plan, the change in investment across the three broad categories of growth projects, service level projects, and renewals projects is as shown below.
Strategic acquisitions fund
debt management
75. During the development of the original draft 2020/21 Annual Plan it was noted that Council’s risk reserve is projected to be in deficit. Currently the projected balance of Council’s risk reserve is negative $28.5m. This has been updated to reflect the amount of the latest leaky home settlements and estimated settlements.
76. The impact of a negative reserve balance recognises the need to use debt to fund operating expenditure with the bulk of this negative reserve created through leaky home settlements. Recommendations will be made to Council through the upcoming long-term plan process to address this negative balance.
77. Any funds flowing into this reserve through either the current financial year or the 2020/21 year will have a corresponding reduction in debt levels and will therefore provide for greater debt capacity for future investment.
78. In the pre-COVID development of the draft 2020/21 Annual Plan, Council decided to increase the rates requirement to better manage debt. This proposal was removed once the initial impact of COVID-19 was recognised, and prior to the formal adoption of the draft Annual Plan on 24 March 2020.
operating expenditure and service level reviews
79. As endorsed by Council at its 5 May 2020 meeting, the Executive has also led a comprehensive review of service levels among externally-focused services. Depending on the outcome of reviews into externally-focused services, a review of internally focused services will be initiated to ensure that such services are providing the appropriate support levels.
80. The review has comprised of three stages:
(a) An assessment of all services was undertaken by the Executive, categorising services into three categories:
(i) Essential services
(ii) Services recommended to continue
(iii) Services where a review is required
A summary of this assessment is included as Attachment 6 to this report.
(b) For all the services under category (iii), a brief review of the service was conducted by senior staff. These reviews were, by necessity, quick and brief. They sought to understand the key issues, opportunities and impacts of any changes in a post-COVID, financially-constrained environment. The 50+ reviews, each running to 4-8 pages, were considered by the Executive.
(c) A summary of those reviews, including the Executive’s recommendations, was prepared and is included as Attachment 7 to this report.
81. In considering the issues and recommendations in Attachment 7, if Council seek to reduce operating expenditure budgets, the Executive recommend the following hierarchy of rationale to aid decision-making:
(a) Identify options for permanent rather than temporary savings (temporarily halting a service to reduce budgets invariably creates an increase in budgets when the service is resumed) and options for permanent revenue increases.
(b) Identify options for temporary expenditure savings in services where there are temporary revenue reductions
(c) Consider temporary expenditure savings in services where there are no direct external revenue implications
Steps (a) to (c) relate to services listed in Category C and Category D.
(d) Consider the potential for expenditure savings in services listed in Category B
(e) Provide guidance on any other services where Council seeks further investigation of the potential for operating expenditure savings (or operating revenue increases) in the 2020/21 year.
82. Council is invited to consider the recommendations in Attachment 7 and provide direction. That direction will be actioned in the development of a revised draft 2020/21 Annual Plan for consideration.
83. At this stage, the recommendations in this section have not been fully incorporated in the budget modelling described elsewhere in this report. For some services, an element of the recommendations has been incorporated in the ‘base case’ model. Where this is the case it is recognised in the recommended resolutions accordingly. Any further increases or decreases to budgets, beyond those incorporated in the ‘base-case’, will have an impact on the overall financial model.
Staff costs and related matters
84. In addition to the service level reviews, the Executive has considered and, after consultation with staff, decided upon a number of issues relating to employment matters. These are outlined briefly below. The cost reductions have already been built into the budget modelling described elsewhere in this report.
Recruitment
85. All essential recruitment is to be subject to additional ‘gateway’ processes. This applies to all types of employment, be it casual, fixed-term or permanent and the engagement and extension of any contractors/consultants/agency temps. The intention is that only ‘essential recruitment’ occurs. This is expected to save $2 million during 2020/21.
86. Essential recruitment needs to be approved by the Chief Executive. To be approved, roles must meet at least one of the following criteria:
· resources required to support the delivery of essential services (being Cemeteries, City Waters, City Waste, Contact Centre, Communications, Emergency Management, Transport/TTOC, Animal Services, Digital Services, Property Services and Fleet Services)
· resources required to support the delivery of economic stimulus projects following confirmation of funding, including Crown Infrastructure Partnership (CIP) “Shovel Ready” projects and Ministry of Urban Housing Development (MHUD) projects.
· resources required to support the delivery of council projects that are deemed necessary to continue or which would otherwise have financial implications by not being completed (e.g. Strategic Finance Project).
Redeployment
87. The Executive will identify and match the people needed for key priority areas with people who are unable to work from home, or have capacity. This process was utilised under Alert Levels 4 and 3, with a number of staff redeployed, notably into the Emergency Operations Centre. At Alert Level 2 there will be fewer opportunities for redeployment as increasing numbers of staff are able to work fully in their substantive roles.
Annual leave
88. A process was introduced whereby staff unable to work from home or to be redeployed were required to take 20% of their time as annual leave. This process, with the appropriate amount of lead-time for all parties, is consistent with the Holidays Act and employment contracts. To date this has impacted 53 staff members.
89. For all staff, the Executive remain focused on reducing leave liabilities over the next six months, while also allowing for the appropriate rest and recreation for the many staff who have been unable to take leave through the initial stages of COVID disruption.
Training
90. Training plans for the remainder of FY 19/20, and FY 20/21 will not proceed, other than training required to meet legislative, technical and/or professional[3] requirements. A modest budget will be retained for training requests outside of these criteria.
91. For training that does occur, preference will be given to local or online options, with minimal travel or accommodation required.
92. This is expected to save $1 million during 2020/21, excluding any savings that relate to travel and accommodation.
Salary budget
93. Subject to the Annual Plan process, it is proposed that the salary budget be maintained at 2019/20 levels for the 2020/21 year. In addition to this wider principle, a 0% budget will be implemented for the annual 2020 remuneration review.
94. At an individual level there will be some exceptions to the above principles. These exceptions include:
· Where a salary increase would in effect, create an equivalent savings or efficiency of operation elsewhere. This will require a business case and relevant GM and CEO endorsement
· To execute on any of the government capital investment fund project outcomes, should these be endorsed, and funding received
· Council’s commitment to paying the ‘living wage’ which increases from $21.15 per hour to $22.10 per hour from 1 September 2020
· Contractual commitments made to a small number of staff on one of the collective employment agreements.
95. The 0% budget increase for salaries is expected to save $2 million in the 2020/21 year.
Further operating Cost Adjustments
96. As well as the changes and potential changes described in the two sections above, there are a number of other cost adjustments to be considered by Council before finalising a revised draft Annual Plan. These adjustments have not been incorporated in the budget modelling described elsewhere in this report. As such, any increases or decreases to budgets will have an impact on the overall financial model. If all items were included as rate funded opex this would increase rates by $1m, a rates increase of 0.6%.
97. Other items for consideration are:
(a) Memorial Park walkway consultation $400,000 rates funded (see below)
(b) Cycle action plan costs that were identified as capital but are operational in nature, e.g. consultation, $600,000 – rates funded
(c) Reduction of funding for the Bayfair underpass from $2m to $1m opex. This is currently 51% subsidised by NZTA with Council loan funding the balance of $470,000. The rates impact of this adjustment is a reduction of $33,000).
98. Note that digital support to the business community by Council was considered as a way to assist Tauranga businesses to become digitally enabled. This proposal has not been recommended as there is no funding available and the estimated cost would be $1-$2m rates funded.
Memorial Park walkway consultation
99. At its meeting of 27 August 2019, Council resolved to:
Approve a project in 2019/20 to gather sufficient information on the coastal pathway from Memorial Park to the Strand waterfront to inform a second round of public engagement, with a specific emphasis on providing the residents of Tauranga with clarity as to the outcomes sought by the project and an accurate assessment of the total costs and benefits; and that the Chief Executive be requested to take the necessary steps to provide a project budget not exceeding $400,000 to deliver such
100. Work on the above resolution has not progressed as staff have been waiting for the Cycle Plan’s implementation plan to be completed. An unintended advantage of this delay is that it has enabled further work to be done on the Te Papa Spatial Framework which further highlights the potential for walking and cycling links.
101. Staff have reviewed the potential scope of the project. At this stage, a focus on feasibility and community engagement as foreseen in the above resolution is considered to be deliverable within a $200,000 budget and existing staff resources. The inclusion of such a $200,000 budget is recommended by the Executive.
Medium-term impact of changes to operating expenditure
102. It should be recognised that many of the cost reductions included in the preceding sections are temporary rather than permanent savings. For example, recruitment costs are likely to return to normal levels in the medium term, as are training budgets. Similarly, temporary reductions in levels of service, if such recommendations are accepted by Council, will likely need to be reversed in the future.
103. The temporary nature of these changes means that any related cost decreases in 2020/21 are likely to result in cost increases in 2021/22 or subsequent years once the temporary savings unwind. This will have a direct upward impact on costs and therefore revenue requirements in the 2021/31 Long-Term Plan. For clarity, the capital and debt models included above do not specifically allow for any increase in rates as temporary savings are reintroduced. It is estimated that the reversal of temporary budget adjustments made in 2020/21 will be an increase in rates requirement of approximately 2% to 3% in 2021/22.
External funding and partnership opportunities
104. As reported to the 5 May 2020 Council meeting, there is significant effort being invested in progressing opportunities for external funding injections and/or off balance-sheet financing. These include:
· Ministry of Housing and Urban Development’s urban growth projects request submitted through the SmartGrowth partnership (in excess of $3 billion for TCC related projects)
· Crown Infrastructure Partners’ ‘shovel-ready’ projects application approved by Council for over $1 billion
· Growth Councils Consortium (TCC, Hamilton City and Queenstown District Council) engagement with central government raising issues and seeking investment
· Discussions with Treasury to identify areas for support including option of revenue under-write
· Exploring other opportunities to work with partners to hold infrastructure debt off balance sheet or attract external funding / financing.
105. At the time of writing, progress continues on all fronts but there is limited additional information that is available on many of the processes.
106. The exception to this relates to the Crown Infrastructure Partners (“CIP”)-led process. Council received a letter from Mark Binns, Chairman of CIP and of the Infrastructure Reference Group that is advising government outlining the process to date and next steps. That letter states:
The Infrastructure Reference Group (IRG) has received a lot of queries as to how the process is proceeding, so we wish to update all parties that provided information.
We are on track to deliver our report on the date agreed with Ministers in mid-May, so it is close.
As I initially indicated, we needed to move quickly given the volume of applications, so an initial review against the core criteria of a project being construction ready within 12 months and it having public or regional benefits was applied.
Additionally, most projects that had a value of less than $20m and that met the initial review criteria above, have been forwarded to the Provincial Growth Fund (PGF) for its consideration for funding.
Those projects which remain, are being further reviewed against criteria established by the IRG to aid the Government in making its selection of which projects to support. However the IRG is not making any specific recommendations on projects - that is a Government decision which will be made against the criteria that it thinks appropriate (e.g.: the Government may decide to support more projects in areas that have been more severely affected by Covid19 than others, or where the social impact is falling more heavily on under-privileged groups). The IRG’s criteria relate to the projects themselves not the wider considerations the Government may wish to apply.
So, for the sake of expectation management, please be aware that even if your project is included in the IRG’s report, this does not guarantee Government support.
The IRG will advise all applicants that have not been successful in having projects either included in the Report or referred onto the PGF within 72 hours of the report being submitted.
107. Subsequent to that letter, Council has received further advice on the projects that fit the criteria identified above. This does not guarantee that these projects will receive government support, rather it shows which projects have proceeded to the next level of consideration. Those projects are identified in Attachment 8 to this report.
108. Staff will update Council on any further information received as soon as possible.
109. The draft 2020/21 Annual Plan proposed rating structure changes for the year.
110. The first proposed change was the final stage of a phased increase in the commercial differential which was approved in the 2018-28 Long Term Plan (“LTP”) covering each of the first three years of that plan. The increase in the 2020/21 year is for a commercial differential of 1:1.2 from one of 1:1.34. This increase means that for a similarly valued property, commercial rates would be 20% higher than residential rates.
111. The second proposed change was to reduce the uniform annual general charge (UAGC) from 20% of rates to 10%. This movement was higher than the movement to 15% proposed in the LTP. This movement would mean that more of the increase in rates would be borne by higher value properties (both residential and commercial) than by lower value properties.
112. In preparing this report it is assumed that the rating structure as proposed in the daft 2020/21 Annual Plan will be retained in any revision of the draft Annual Plan. Final decisions on the rating structure will be made by Council during deliberations on the final Annual Plan.
Ratepayer support
113. Council will support ratepayers who are struggling to pay rates in 2020/2021 through existing rates remissions and postponements policies. Ratepayers who agree to a payment arrangement to pay rates at a later date, will have any penalties remitted for the period of the arrangement.
114. In addition to rates payments deferral council administers the central government rates rebates scheme which provides rates relief of up to $640 for those on incomes below a specified level.
115. Staff will also support ratepayers’ applications for central government’s Accommodation Supplement. This is the primary assistance for accommodation costs and can include help with rates payments. People do not need to receive a main benefit to be eligible.
matters raised by petitioners for a referendum
116. As noted above, on 19 May 2020, Council received and considered a request from seven ratepayer groups for a referendum on matters related to the draft 2020/21 Annual Plan. Council declined the request for a referendum but resolved that it:
Requests staff to report on the specific issues and options raised by the petitioners for possible inclusion in the Annual Plan consultation material.
117. The specific issues raised by the petitioners were:
· An average residential rates increase of 7.6%
· An average residential rates increase of 0%
· The commercial differential rate of 1.2 : 1
· The introduction of the kerbside rubbish collection at $400 + GST per annum
· A reduction of operating expenditure and the deferment of all capital expenditure for the 2020/21 year.
118. Given the time available since that meeting, the extent to which these matters have been considered in this report are noted below. Should Council decide to re-consult on a revised draft Annual Plan, further information on these topics will be included in the revised draft consultation document prepared for Council consideration and adoption in June 2020.
Average residential rates increase of 7.6%
119. First, it should be noted that the adopted draft 2020/21 Annual Plan included a proposal for a total rating requirement increase of 7.6%. This total rating requirement is different from the average residential rates increase. The median residential rates increase in the adopted draft Annual Plan was 4.4%.
120. The original total rating requirement of 7.6% is retained as one of the options for Council, but is not the option recommended by the Executive.
Average residential rates increase of 0%
121. The options identified in this report include one with a 0% median residential rates increase. To achieve this figure would require significant additional reductions in operating expenditure or capital expenditure to achieve. The 0% median residential rates increase is not the option recommended by the Executive.
Commercial differential of 1.2 : 1
122. In preparing this report and the modelling that underlies it, it has been assumed that the commercial differential remains at the 1.2 : 1 level included in the adopted draft Annual Plan. This is consistent with the changes made to the commercial differential through the 2018/28 Long-Term Plan process.
123. Matters relating to the commercial differential and its application to the 2020/21 budget were explored in reports to Council on 10 December 2019 and the Policy Committee on 4 March 2020. The latter of these reports noted that:
Staff recommendation is to undertake a complete review of the rating model as part of the 2021/31 Long-term Plan process. Matters to be assessed through such a review would be the extent to which the proportionate benefits and costs to the commercial sector, compared with the wider community, are reflected in the differential.
Kerbside rubbish and recycling service
124. The proposed introduction of a kerbside rubbish and recycling service is subject to a current Request for Proposal process with the industry. At this stage, Council has no information on the potential costs of such a service. Modelled costs, including those used in the 2018/28 Long-Term Plan consultation on the proposal, show average household costs at less than $300 per property. It is unclear where the petitioners’ claimed $400 plus GST figure has been obtained.
125. The proposed kerbside service has limited impact on the draft 2020/21 Annual Plan.
Reduction of operating expenditure and deferment of all capital expenditure
126. This report details some significant reductions in operating expenditure built into the financial modelling and provides Council with options and recommendations on further reductions.
127. A complete deferment of the capital expenditure programme is not considered appropriate. This would see no work undertaken on maintaining and renewing existing assets, no work on delivering assets to enable future residential and commercial land to be developed, and no work on other projects agreed with the community through the Long-Term Plan.
128. Delivering no capital expenditure would further reduce the city’s available land supply (and further reduce compliance with the mandatory National Policy Statement on Urban Development Capacity) and would significantly reduce the city’s likelihood of benefitting from the government’s economic stimulus package investments.
OPTIONS ANALYSIS
129. There are a number of variables described in this report that need to be considered when providing direction for the revised draft 2020/21 Annual Plan. These include operating expenditure, operating revenue, capital expenditure, debt levels, and rating levels.
130. In some areas, for example operating expenditure and capital expenditure, direction is sought at a specific level with alternate options expressed within the narrative of this report or in the attachments.
131. At a macro-level, the key decisions and therefore options for Council’s consideration relate to:
(a) the total capital expenditure budget
(b) the operating expenditure and revenue budgets
(c) the total rating requirement.
132. The debt levels and therefore debt-to-revenue ratio are then a consequence of those two decisions.
Overview of recommendation (for base-case)
|
|
Per adopted and consulted Draft AP |
Difference |
Revised draft Annual Plan May 20 |
|
Rates excl water by meter |
$169.9m |
-$4.5m |
$165.4m |
|
Water by meter rev |
$24.5m |
|
$24.5m |
|
Rates increase |
7.6% |
-2.7% |
4.9% |
|
Subsidies & Grants |
$32m |
-$4m |
$28m |
|
User fees & finance revenue |
$59m |
-$11m |
$48 |
|
Total Revenue excl DC & vested |
$286m |
-$20m |
$266m |
|
DC Revenue |
$23m |
-$5m |
$18m |
|
|
|||
|
Employee Costs |
$70m |
-$5m |
$65m |
|
Interest |
$25m |
-$4m |
$21m |
|
Depreciation |
$64m |
|
$64m |
|
Other operational costs |
$125.4m |
-0.5m |
$124.9m* |
|
Total Operating Costs |
$284m |
-$10m |
$274m |
|
* further savings depending on adoption of recommendations on service levels
|
|||
|
Debt-to-revenue ratio |
235% |
+4% |
239% |
|
Debt at year end |
$704m |
-$32m |
$672m |
|
Funded capex level |
$200m |
-$30m |
$170m |
|
Non-funded additional capex |
$44m |
-$19m |
$25m |
|
Assumed capex carried forward from 2019/20 year into 2020/21 year (remainder carried forward into later years) |
$30m |
|
$30m |
|
|
|||
Capital expenditure options
133. At a macro-level, this issue is simply about the level of capital expenditure, not necessarily the mix of that capital expenditure.
134. There are myriad options available to Council regarding the total capital expenditure programme, but for simplicity they are summarised into the following sample options:
|
Total capex budget |
Discussion |
Debt/revenue ratio |
|
$170m funded capex (excluding carry-forwards of $30m) Recommended |
A funded capital budget of $170m (plus an additional $25m non-funded) is sufficient to undertake the $189m of ‘non-negotiable’ capex projects discussed above. Combined with projects where budget is carried forward gives a total capital programme of $225m. This is considered to be a reasonable balance between delivering essential projects and maintaining an affordable debt-to-revenue ratio. It is also considered deliverable in the current circumstances. This capital level means that some projects necessary for the immediate supply of residential and commercial land, or to maintain existing assets, or to ensure essential services for housing will be delayed. It is proposed the most important of these be on the “bring forward if budgeted projects delayed” list – see Attachment 11. |
239% (assuming rates increase of 4.9%) |
|
$200m funded capex (excluding carry-forwards)
|
A $200m funded capex budget plus a further $20m unfunded would enable more of the capital programme that was in the draft to be undertaken. However, it would result in a rates increase above 4.9%. This level of capex is also considered to be a reasonable balance between delivering essential projects and maintaining an affordable debt-to-revenue ratio. It is also considered deliverable in the current circumstances. |
249% (assuming rates increase of 5.1%) |
|
$250m funded capex (excluding carry-forwards) |
The practicable deliverability of a $250m funded capex budget is questionable. That was recognised in the original draft 2020/21 Annual Plan where a $244m budget was included but only $200m was funded. Council has never delivered a $250m capital works programme in one year. With significant capital injections by central government in response to COVID-19, there is may be more competition for the available capacity in the construction market than previously thus creating doubt as to the deliverability of a $250m package. |
267% (assuming rates increase of 5.3%) |
Rates options
135. As with capital expenditure there are myriad potential options for setting a total rates requirement. The options provided below are representative and are for discussion purposes. These options all exclude volumetric water.
|
Option |
Description |
Residential median |
Commercial median |
|
1 |
Status quo. Draft Annual Plan – 7.6% budget increase |
4.1% $1.84 pw |
14% $11.86 pw |
|
2 |
0% general rates increase for median residential property; overall 5.2% budget increase |
1.7% $0.76 pw |
12% $9.89 pw |
|
3 |
As modelled; overall 4.9% budget increase (note the median general residential rate will reduce not increase) Recommended (as the base-case) |
1.3% $0.60pw |
11% $9.48 pw |
|
4 |
0% total rates increase for median residential property; overall 3.5% budget increase |
0.0% $0.00 pw |
10% $8.49 pw |
|
5 |
0% budget increase (only changes to individual rates due to policy changes re commercial differential and UAGC) |
(3.5%) ($1.57) pw |
7% $5.56 pw |
136. For each of these options, more detailed breakdowns of the impacts on sample residential and commercial properties is included in Attachment 9 to this report
Legal Implications / Risks
The role of the Annual Plan
137. The Annual Plan is Council’s resource-allocation document for the year ahead.
138. Legally, the purpose of the Annual Plan is set out in section 95(5) of the Local Government Act 2002 (“the Act”) as being to:
(a) contain the proposed annual budget and funding impact statement for the year to which the annual plan relates; and
(b) identify any variation from the financial statements and funding impact statement included in the local authority’s long-term plan in respect of the year; and
(c) provide integrated decision making and co-ordination of the resources of the local authority; and
(d) contribute to the accountability of the local authority to the community.
139. The Act also requires, at section 95(6), that the Annual Plan be prepared in accordance with the principles and procedures that apply to the 2018/28 Long-term Plan.
Other relevant legislative context
140. There are two key elements of the Act that need to be considered as Council consider the contents of the Annual Plan.
Prudent financial management
141. Section 101 of the Act addresses financial management and, at sub-section (1) explicitly refers to prudent financial management in relation to both the current and future communities.
‘A local authority must manage its revenues, expenses, assets, liabilities, investments, and general financial dealings prudently and in a manner that promotes the current and future interests of the community.’
142. This means that Council needs to find the balance between the short-term and long-term interests of its community when managing its finances.
Balanced budget
143. Section 100 of the Act requires that Council sets a balanced budget. This is explicitly stated in sub-section (1) thus:
‘A local authority must ensure that each year’s projected operating revenues are set at a level sufficient to meet that year’s projected operating expenses.’
144. Despite this requirement, sub-section (2) provides for Council to set a budget where projected operating revenues do not meet projected operating expenses if it considers it is financially prudent to do so. In setting an ‘unbalanced budget’ Council’s consideration of financial prudence needs to address four matters listed in the Act and paraphrased as:
(a) The costs of desired service levels and of maintaining the capacity and integrity of assets throughout their useful lives
(b) The revenues available to maintain the capacity and integrity of assets throughout their useful lives
(c) Inter-generational equity
(d) Council’s own Revenue & Financing Policy and other financial policies.
145. This means that Council needs to give due consideration to the financial prudence of long-term cost and funding issues before adopting an unbalanced budget in its Annual Plan.
Consultation / Engagement
146. Consultation on the original draft 2020/21 Annual Plan took place between 3 April and 3 May 2020.
147. Depending on the type and extent of changes to that draft which are proposed by Council, there may be a need to re-consult on the revised draft 2020/21 Annual Plan. Staff and, if required, Council’s legal advisors will provide advice on this once any changes are understood.
Significance
148. In terms of the Significance and Engagement Policy, the matters considered by this report are considered to have a high degree of significance. Depending on the decisions made, further engagement with the community (via a formal consultation process) is likely.
Next Steps
149. Direction provided in response to this report will be incorporated into a revised draft 2020/21 Annual Plan. An assessment will be made as to whether the changes to capital and operating budgets, rating levels, or service levels warrant further consultation with the community. There are two factors governing the decision to re-consult: whether re-consultation is required by the Local Government Act 2002, and whether Council wishes to re-consult to inform its community of its changed proposals and seek feedback that will aid its decision-making process. Council will ultimately make the decision as to whether re-consultation is required.
150. If re-consultation is required, a timetable for that process will be established prior to the adoption by Council of a revised consultation document.
151. If re-consultation is not required, then the current consultation process will be re-commenced. This means the arrangement of a Hearings meeting and then subsequent deliberations on the submissions received prior to adoption of the final 2020/21 Annual Plan.
1. Annual Plan scenarios
summary - A11536338 ⇩ 
2. Non-negotiable projects
- A11536371 ⇩
3. Negotiable capital
programme scenarios - A11536386 ⇩
4. Executive recommended
prioritisation - A11536372 ⇩
5. Te Tumu capital
expenditure - A11534646 ⇩
6. Essential and
non-essential services for review - A11534645 ⇩
7. Summary table of
service reviews - A11525775 ⇩
8. CIP shovel-ready
projects - A11534647 ⇩
9. Rates modelling
scenarios - A11535328 ⇩
10. Priority 1 proposals - A11534649 ⇩
11. Bring forward programmes -
A11536373 ⇩
|
Ordinary Council Meeting Agenda |
28 May 2020 |
Proposed new capital expenditure item
Te Tumu Infrastructure Corridor Planning
Technical, engagement/communication and legal expenditure to aid in the progression of the delivery of infrastructure corridors. May also include land-use planning delivery and sustainable funding sources in accordance with the drafted Te Tumu Structure Plan.
About the opportunity:
The Te Tumu Kaituna 14 Trust has been working with TCC (and other landowners) on the rezoning of Te Tumu. A structure plan, and zoning plan has been drafted. The structure plan provides for a range of uses within the Te Tumu Kaituna 14 block which will provide for the aspirations of the Trust and including those of TCC such as infrastructure corridors, sportsfields, employment lands, and jobs, cultural, landscape, ecological and heritage site protection, and housing delivery.
For the Te Tumu Urban Growth Area to be able to progress, infrastructure corridors need to be brought to and through the Te Tumu Kaituna 14 landholding, to enable the realisation of the opportunities present with the block, and the wider Te Tumu proposal. The Trust has been progressing an application to provide for a key infrastructure corridor through its block, along with an additional 50ha of land which it wishes to generalise to be able to borrow against (not sell). The Trust has not been successful in its approach with the application to the Maori Land Court being dismissed, and an appeal to the Maori Appellate Court being declined. The Trust has since appealed to the Court of Appeal.
TCC investment is supported by staff to assess options for a pathway forward to provide for an infrastructure corridor and to progress options. There may be an opportunity of Central Government funding to support the Trust to plan, engage, communicate and progress the Trust’s future aspirations for the land. Critical elements will include wider engagement/communication support and legal support for a potential new application can be provided which seeks to provide for all key infrastructure corridors, planning and land-use implementation and identification of sustainable funding sources, to provide for the long term delivery of this land-block within Te Tumu.
About the costs:
It is noted that there are a range of options that the Trust and TCC could pursue to progress the description of service, which range from 1 year to plus 24 months. Indicative costs for recommended processes which will need to be pursued are set at between $200,000 (20/21 FY) to $300,000 (for options which extend post the 20/21FY). As a result, whole-of-process costs could extend to plus $300,000 over two years. Ongoing communication support may be required post any process to ensure project outcomes are appropriately being communicated.
Budget sought in 2020/21: $200,000
|
28 May 2020 |
Framing
This paper is part of a seven-step process for reviewing operating expenditure as one of the ‘levers’ to address modelled scenarios of reduced revenue budgets for the 2020/21 year.
The seven steps of the review are:
1. Agree on disruption scenarios
2. Identify the ‘must do’ services that Council will delivery regardless of the disruption scenario
3. Identify services that are ‘recommended to continue’ and assess for savings that don’t negatively impact service delivery.
4. Identify criteria to assess other services against
5. Assess those other services against the criteria
6. Identified the budgeted cost of the services assessed
7. In parallel, undertake a similar exercise within the CCOs.
This paper
This paper addresses Step 2 above and expands upon it. Attached is a breakdown of externally-focused services provided across Council’s various activities (using the LTP classification of activities as a starting point).
We have broken down those externally focused activities into three categories:
· Essential services – these are the ‘must do’ activities referred to in Step 2 above.
· Recommended to continue – these are service that are not necessarily ‘must dos’ but which the Executive recommend be continued for reasons that are noted in the paper
· Review – these are services where a review of the service should be undertaken to determine what Council should be delivering and at what scale.
This paper builds on a similar one presented to the 29 April Executive meeting and incorporates feedback from that meeting and from members of the Executive separately.
Next steps
Once a final list is agreed staff will start to review the ‘Review’ category items using a template that is being developed.
|
Activity[4] |
Essential services[5] |
Recommended to continue |
Review |
|
Airport |
All flight-related services (including car-parking) |
|
|
|
|
Commercial property leasing (due to legally binding contracts and revenue generation nature) |
|
|
|
Animal Services |
Dog registration |
|
Educational programme into schools and community groups |
|
|
Response to animal behavioural issues and complaints where public in danger |
|
Response to animal behavioural issues and complaints where public not in danger |
|
Arts & Heritage |
|
Management and maintenance of the Tauranga Heritage Collection (ongoing management of an asset) |
Services funded by Council’s grant to Creative Bay of Plenty |
|
|
|
|
Services provided by the Tauranga Art Gallery (review to be undertaken separately as part of Step 7 – CCOs) |
|
|
|
|
Services funded by Council’s grant to the Elms Foundation |
|
|
|
|
Provision of ‘Hands On Tauranga’ service by the Heritage Collection into schools and community groups |
|
|
|
|
Short-term exhibitions or displays prepared by the Heritage Collection |
|
Baycourt |
|
|
Provision of the Addison Theatre space for shows and performances |
|
|
|
|
Provision of smaller conference / hospitality spaces (X-Space, Terrace Rooms) for external bookings |
|
|
|
|
Ticketing service (phone and in-person) |
|
|
|
|
Technical support to off-site shows and events |
|
Beachside |
|
Provision of cabins, caravans and camping sites for visitor accommodation (key to tourism economy recovery, plus strong revenue component) |
Provision of a visitor information centre |
|
Building Services |
All services |
|
|
|
Cemeteries |
Burial, cremation and chapel services at Pyes Pa |
Management and maintenance of denominational cemeteries (likely to be considered a core service by the community) |
|
|
City & Infrastructure Planning |
Development and implementation of Development Contributions policy |
Development and implementation of growth-planning framework for the city (key learning from GFC – do not step back on planning activities) |
|
|
|
|
Management and review of City Plan (statutory requirement to have reviewed the Plan by 2024) |
|
|
City Centre |
|
|
Provision of ‘Our Place’ |
|
City Events |
|
Booking and facilitation services to externally-organised events (alternative of Council having no control on use of reserves is not palatable) |
Financial support to events through the Event Funding Framework |
|
|
|
|
New Year’s Eve event |
|
|
|
|
Other events organised by Council for the community |
|
Community Development |
|
Graffiti removal service (maintenance of assets and promotion of perception of safety) |
Project facilitation services under the ‘Project Tauranga’ banner |
|
|
|
Commercial and community tenancies at the Historic Village (legally binding contracts and revenue generation nature) |
Services provided by the Safe City function |
|
|
|
|
Community development advisory services (youth, disability, age-friendly cities, vulnerable communities, welcoming communities) |
|
|
|
|
Provision of space for functions and events at the Historic Village |
|
|
|
|
Project management and support services for the Mayoral Taskforce on Homelessness |
|
Democracy Services |
Meeting management and administration |
|
|
|
|
Responses to LGOIMA requests |
|
|
|
Economic Development |
|
|
Services provided by Priority One |
|
|
|
|
Services provided by the Chamber of Commerce |
|
|
|
|
Services provided by Tourism Bay of Plenty (excl. VIC) (review to be undertaken separately as part of Step 7 – CCOs) |
|
|
|
|
Provision of the visitor information centre service (review to be undertaken separately as part of Step 7 – CCOs) |
|
|
|
|
Services funded by the four mainstreet targeted rates |
|
Elder Housing |
|
Provision of elder housing units (review not required as divestment process currently underway) |
|
|
Emergency Management |
Maintenance of capacity for, and training for, an emergency operations centre |
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Community education re preparedness for emergency events |
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Environmental Planning |
All services |
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Environmental Regulation |
All Environmental Health & Licensing services |
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Environmental Regulation – Regulation Monitoring |
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Parking enforcement (ensures safe movement of vehicles, plus strong revenue component) |
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Monitoring of freedom camping sites (basic regulatory function for public safety and reassurance) |
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Monitoring of other bylaw complaints (basic regulatory function for public safety and reassurance) |
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Libraries |
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Provision of central library |
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Provision of branch libraries |
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Provision of the mobile library service |
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Provision of free wi-fi |
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Provision of computer suites |
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Provision of education programmes to schools |
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Provision of community programmes |
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Provision of lending services (whether contact or contact-less) |
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Addition of new titles to the lending collection / removal of old items |
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Provision of on-line free-to-user catalogue and newspaper / magazine services |
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Provision of Ngā Wāhi Rangahau (NZ Room) research collection and services |
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Marine Facilities |
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Commercial leases on marine land (legally binding contracts and revenue generation nature) |
Provision of boat ramps and wharves |
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Marine Precinct |
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All services (due to commercial relationships in place and inter-connected nature of the services provided) |
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Spaces & Places |
Provision of public toilets |
Provision of asset-based services such as playgrounds, walkways, cycleways, etc (maintenance and management of core assets) |
Removal of coastal encroachments |
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Management and maintenance of Mauao (maintenance and management of core assets, and relationship management) |
Maintenance of street gardens |
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Provision of sportsfields for training and competitive use (failure to maintain fields will result in increased restoration costs in the medium term) |
Restoration of special ecological areas |
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Provision of cabin and camping services at McLaren Falls Park (key to tourism economy recovery) |
Booking services for passive recreation sites |
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Services provided by Council contract with Surf Lifesaving BoP (key public safety element) |
Tropical display house (Robbins Park) |
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Hanging baskets |
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Educational services (learning through discovery) at TECT Park |
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Services provided by Bay Venues Limited (review to be undertaken separately as part of Step 7 – CCOs) |
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Services provided by Council contract with Sport Bay of Plenty |
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Stormwater |
All flood protection, flood minimisation, and flood response services |
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Generic stormwater education services (usually relating to quality rather than quantity of stormwater) |
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Reactive pollution event response |
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Proactive pollution prevention services |
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Sustainability & Waste |
Operation of transfer stations |
Glass recycling service (consistent with strategic direction and difficult messaging when looking to introduce full kerbside service) |
Energy management services |
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Rubbish collection service (black bag) |
Street-cleaning services including CBD ‘janitor’ service (basic maintenance of the urban environment) |
Sustainability advocacy services |
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Responding to dumped rubbish complaints where a public health risk exists or could develop |
Litter collection services (basic maintenance of the urban environment) |
Sustainability and waste education programmes (Resource Wise) to schools, businesses, community groups and the wider community |
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Transportation |
All maintenance and safety aspects with regard to local roads, cycleways and footpaths |
24/7 monitoring of TTOC cameras (traffic management and crime prevention/detection role) |
Travel Safe educational programme into schools, businesses and the community |
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All road-related stormwater management services |
Maintenance of city centre ‘street furniture’, lighting, fountain, etc (basic maintenance of assets) |
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Operation of parking-related infrastructure |
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Temporary traffic management and corridor access services |
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Wastewater |
All collection, treatment and disposal of wastewater services |
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Management of any sewage overflow events |
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Trade waste management services |
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Water Supply |
All services relating to the direct provision of potable water (including the management of catchments and backflow prevention) |
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Waterline education services into schools, early childhood centres, businesses and community groups |
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Waterline advisory service (delivered to customers at their residence) |
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Support Services (selected externally-focused items only) |
Provision of Land Information Memoranda |
Strategic advisor services (important to support Council’s strategic response post-COVID and in the development of the LTP) |
Operation of the customer contact centre |
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Customer call centre |
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Policy development |
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Development engineering services |
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Management of external property leases |
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Corporate planning services (mostly legislatively driven) |
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Services provided by the Takawaenga Maori unit |
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Land development information and service connection administration |
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IDC management |
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Management of as-built information |
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Internally focused services
Note that once an understanding of the type and scale of any changes to externally-focused services has been obtained (as well as the parallel review of capital expenditure), a review of internally-focused services will be undertaken to ensure they are right-focused and right-sized to support the externally-focused services. This review will cover all internally-focused activities (listed in the LTP as Corporate Services). Those activities, translated for current activity headings, are:
· Asset Planning and Information
· Communications & Engagement
· Customer Services (partially addressed above)
· Digital Services
· Finance
· Human Resources
· Infrastructure Delivery
· Legal and Risk
· Procurement
· Property Management (partially addressed above)
· Strategy & Corporate Planning (addressed above)
· Takawaenga Maori Unit (addressed above)
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28 May 2020 |
OPEX Service Review Summary
Wellbeing Impact Rating
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High +ve |
Med +ve |
Low +ve |
Low -ve |
Med -ve |
High -ve |
Section A Continuation of services recommended
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|
Activity |
Description of service |
Wellbeing Assessment if service disrupted for 6 mths or more
|
Total Costs (Scenario 1 = full year service Scenario 2 = 6m service Scenario 3 = no service) |
Cost confidence rating |
Key impacts / implications |
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Soc |
Eco |
Env |
Cul |
Scenario 1 |
Scenario 2 |
Scenario 3 |
High / Med / Low |
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||
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A-1 |
Animal Services |
Response to animal behavioural issues and complaints where public is not in danger. 20% of complaints in this category relate to barking dogs, deemed important (essential) during lockdown as barking dog issues seem to trigger as much or more friction in the localised community than aggressive dog issues. Noted that Council has a legislative requirement to respond to dog complaints, which would need to be taken into account if looking at scaling back this service. |
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|
|
No specific budget – part of overall service provided by team |
N/A |
Potential knock-on impact on health and wellbeing; financials inter-mingled with other team services so savings may be difficult to ascertain. If disrupt service for 6 months or more would see increase in friction within localised communities experiencing barking dog issues. The key with barking dogs is getting in early to stop the habit forming, so would miss this opportunity with a number of animals. Potential reputational impacts for Council (seen as not attempting to prevent harm in this area). |
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A-2 |
Baycourt |
Provision of Addison Theatre space for shows and performances. The Addison Theatre is a key venue for a wide range of community events and the only suitable full-service theatre in the City. The Addison Theatre is the main venue at Baycourt, seating 580 pax. - Provides a diverse programme of arts, entertainment, community and commercial events to an annual audience of over 50,000 attendees. - Utilisation is a mix of commercial programming (35-45%) and community programming (55-65%). - Baycourt delivers a range of services associated with the provision of a performing arts venue. |
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|
- |
|
$1.13m |
$867k* |
$446k* |
Medium |
Difficult to resurrect full business model after Covid. Majority of programming is booked on long lead times, 12-18 months. Many clients have annual bookings, and key dates booked two years in advance. Supporting functions (marketing, ticketing, production etc.) work on minimum 12 week lead in time. If service was to be reactivated after prolonged disruption (six months or longer), this would likely take longer due to loss of bookings and loss of promoter confidence in the venue. Additional business risk that some national clients (RNZB, NZSO etc) would drop Tauranga entirely from touring plans and not return to the city. Many schools and community organisations would be impacted by not having access to the Addison Theatre. Many key cultural events for the city including the Jazz Festival and Arts Festival would be negatively impacted. A full-year’s revenue for the theatre under business-as-usual circumstances is $636k. Under AL2 restrictions, a full year’s revenue for the theatre is expected to be $127k. The extent to which revenue would be lost or simply deferred under an extended closure has yet to be determined. * Note that the disclosed costs include a factor for redundancies of $162k (which hasn’t been built into other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs. |
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A-3 |
Baycourt |
Provision of smaller conference spaces for external bookings This service includes the provision of the X-Space and Terrace Rooms that are smaller spaces operating as ancillary to the main Addison Theatre. |
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- |
|
$281k |
$202k* |
$97k* |
Medium |
Savings possible, but multiple opportunities for safe and innovative use of the facilities exist. Loss of key meeting and gathering space for community, particularly Tauranga's creative sector. Baycourt attendance contributes to hospitality and accommodation sector in the Tauranga CBD. Total revenue for a full year budgeted at $32k. * Note that the disclosed costs include a factor for redundancies of $28k (which hasn’t been built into all other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs. |
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A-4 |
Baycourt |
Ticketing services (phone and in-person) This service refers to the box office ticketing service by phone and in-person. It should be noted that the majority of Baycourt bookings are made through Ticketek online or phone services. |
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- |
- |
|
$95k |
$105k* |
$56k* |
Medium |
Services can be provided on-line but if the disruption is only short-term, the loss of revenue and cost of any redundancies is unlikely to outweigh opex savings. Minor impact - some customers would be disadvantaged by not being able to book in person There is a $50k rebate provided by Ticketek to maintain this service, effectively funding one FTE. This would be foregone if the service was halted. Also $9k of direct revenue. * Note that the disclosed costs include a factor for redundancies of $56k (which hasn’t been built into all other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs. |
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A-5 |
Community Development |
Project facilitation services under the ‘Project Tauranga’ banner Project Tauranga has one FTE facilitating relationships with 55 funding partners, a wide range of community organisations, including other activities within Council. Role also looks after the Match Fund ($150k), Mainstreet relationships, and managing grants to community organisations (reporting and KPI monitoring required). A recent report has estimated that Project Tauranga brings in $1M+ p.a. in cash (grants and funding) and in-kind contributions for Council and community initiatives. |
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|
|
$276k |
$276k |
$0** |
High
|
Future review of this service is in the planning stages. Service cannot be turned off temporarily – it is either delivered or not. Costs (including) staff costs would continue if no service delivered for six months to ensure continuity of relationships upon resumption. Reduced hours a possibility if savings sought. Note: reputational risk with partners. Significant potential opportunities for multi-agency funding if Project Tauranga is re-focused. ** No redundancy or re-instatement costs factored into this total.
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A-6 |
Economic Development |
Small business (including start-up) business advice service provided by the Chamber of Commerce |
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|
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$59k |
$39k |
$0 |
High |
Element of economic recovery package – reputational harm if cut.
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A-7 |
Economic Development |
Services provided under the contract with Priority One (Potential for changed or increased services also considered) |
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|
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$1,404k |
Not explored in depth |
Not explored in depth |
Medium |
Non-delivery of the service now would lead to local businesses not receiving much-needed advice in the current economic circumstances long-term impacts. However, the service could hypothetically be stopped and started again. Opportunity for increased spend with a focus on labour market rebuild; digital enablement; CBD development planning facilitation; marine precinct; ferry service; and Maori/Pasifika youth employment pathways (total estimated additional funding of $215k. Partially funded by reduction in international programme (-$75k). Funding source to be considered. See Attachment 10 for further details on these opportunities. |
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A-8 |
Libraries |
Library resources provided by opex funding (including newspapers, magazines and digital Library). Main services are learning and research databases and online learning, e-books and e-audiobooks, digital newspapers and magazines, and physical newspapers and magazines. |
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|
|
$537k |
$340k |
$142k |
High |
Supports a move to digital (excluding physical newspaper collection). Disruption to service may impact negatively on community wellbeing especially over a time when limiting physical contact / movement is encouraged – this would remove a source of contactless leisure, research etc Cost of renewing contracts with vendors needs consideration. Also, likely reputational damage in not embracing alternative (i.e. online) ways of lending and supporting the community to source leisure and information. |
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A-9 |
Libraries |
Provision of free wi-fi Provided in central library, branch libraries, and the mobile library. Managed by Digital Services. Predominantly capex funded. |
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$4.9k |
$2.5k |
$0 |
Medium |
Minimal cost savings; retention supports move to digital. High public expectation that free wifi is provided in all libraries. |
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A-10 |
Libraries |
Provision of computer suites. · Provided in central library, branch libraries. Managed by Digital Services (costs incurred for licencing) · Users have one hour free · Associated services include printing and scanning are provided. · Important source of connectivity - commonly used for research, internet browsing, social services, job seeking, housing and banking/lending applications, connecting with Government departments etc. |
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|
$48k |
$24k |
$0 |
Medium |
Minimal opex costs; potential positive benefits for job seekers Disruption of service may result in: · Potentially less uptake of the service (and library visitation generally) if people have found alternative places to go · Costs of breaking and resuming contract with tech provider may negate any savings but would not have long term impact · Loss of service to library customers and students accessing research and digital library (e.g. local history newspapers, databases) at the libraries. · Knock on impacts for those who might need the internet access e.g. travellers, job-seekers, children, homeless, etc. · Increase in the digital divide – we can assume a loss of income due to Covid-19 may see households choosing to reduce their paid internet provision. |
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A-11 |
Libraries |
Lending services (contact and contactless). Lending of physical books, magazines and audio-visual items Lending of physical books, magazines and audio-visual items (as opposed to e-books and e-audio books). Approximately 1.5 million books are loaned each year (one of the highest rates per capita for a public library in NZ). Survey of library users undertaken for Community Facilities Needs Analysis completed by Visitor Solutions in February 2020 (obj link A11187663) result “finding and withdrawing books was the main activity for 75% of respondents”. |
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|
$3.36m |
$2.94m |
$2.50m |
Med/Low |
Core library service; issue of ceasing or changing lending service was more relevant when a longer AL3 period was possible. The major impact of changes (reductions) to the lending service would be the significant time and cost to bring the collection back up to date if purchasing was also paused. This is a capex rather than opex issue and needs to be subject to separate consideration. Other impacts include: · Loss of engagement / reputation might take longer term to repair · Major social, cultural and educational impacts · Major reputation loss and impact on community wellbeing · Expectation that free membership of public library service is provided by local government (Local Govt Act Part 7, Subpart 4, 142.) Note the financial information is to some extent a duplication of other service reviews (all libraries’ salaries and other opex plus content team costs for new stock purchases) as it is difficult to quantify lending services without these other services. |
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A-12 |
Mt Beachside Holiday Park |
Visitor information centre services
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|
$7,850 |
$3,900 |
$0 |
Med/High |
Minimal opex opportunity – services delivered alongside normal reception services. If service disrupted there would be no major loss to the communities, but other avenues (online or from tourism operators themselves) available. Funded from user fees and tourist operator commissions |
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A-13 |
Spaces & Places |
Maintenance of street gardens Maintenance of the 13ha of street gardens is delivered as part of two large city-wide parks and reserves contracts. TCC’s design guides for developers constructing road corridors require creation of street gardens in residential areas – assets are then vested to Council for ownership and maintenance. |
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|
$548k |
Depends on ability to amend contracts |
Low |
Maintenance of an asset – potentially greater costs in future if left unmaintained; impact on traffic safety at some sites. If service disrupted, this would result in scruffy, unkempt street gardens that would have a negative impact on the overall look and feel of the city. Also, TCC may be liable to pay contractors for the service whether delivered or not (large multi-year contracts in place) – legal opinion / court decisions may be required on this. In addition, community and developer dissatisfaction may take a while to settle down. Some street garden maintenance will need to continue to ensure sightline safety at intersections To re-establish the service may take a period of time as street gardens would be in a poor state and contractors would first need to gear up to deliver. Gardens that will be overgrown, full of weeds with a lack of mulch etc., will take significant opex budget to reinstate to a serviceable condition. |
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A-14 |
Spaces & Places |
Booking services for passive recreation sites Booking services ensure sufficient open space is left for community access, enables the condition of reserves to be monitored, and ensures only permitted activities take place on these reserves. Service includes commercial activities involved in annual closed tender process for access to space in active and passive reserves and road corridor e.g. surf school, food vans, coffee carts etc.) – commercial activity tenders managed by Spaces & Places team. |
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|
|
No specific budget – part of overall service provided by team |
Low – specific costs not identified |
Minimal cost to Council to be able to manage controlled access to significant asset base If service disrupted for six months – those that had previously booked to run activities in passive reserves may have found alternative locations or no longer be running those activities, and be disinclined to return. If service never resumed – TCC would not have oversight on who was using the reserves and TCC would need to find another way to ascertain when repairs and maintenance were required (particularly for high wear and tear areas). |
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A-15 |
Spaces & Places |
Educational services (learning through discovery) at McLaren Falls Park, coast, wetlands and estuary
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|
|
|
|
$66k |
$33k |
$0 |
High |
Cost-neutral as 100% funded by MoE Lost opportunity for environmental awareness-raising within the younger community. Contract with MoE would need to be re-activated / new contract entered into – would need to re-establish trust with MoE. Difficult to justify rationale for wishing to break the contract with MOE, when the programmes are fully funded by MOE and therefore are cost-neutral to Council. |
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A-16 |
Spaces & Places |
Restoration of special ecological areas Special ecological areas (SEAs) – indigenous flora and/or habitat of indigenous fauna – have protection under TCC’s City Plan, requiring TCC to manage them. |
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|
|
$200k |
Depends on ability to amend contracts |
Medium |
Negative impact on city amenity values. Reputational damage. Requirement of both City Plan and Regional Pest Management Plan. Part of large, citywide multi-year contracts – potentially protracted legal discussions with contractors and compensation to be paid.
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A-17 |
Sustainability & Waste |
Sustainability and waste education programmes (Resource Wise) The Resource Wise programme aims to change behaviours amongst schools, businesses, homes and the wider community through dedicated waste auditing and behaviour change programmes, as well as through engagement in community workshops. These programmes are not funded by rates, they are funded by the Waste Levy, which is provided by the Ministry for the Environment. Some aspects of the programme are delivered by external contractors. |
|
|
|
|
$660k |
$378k** |
$96k** |
High |
Potential reputational damage to Council if services removed, particularly in the lead-up to the proposed roll-out of a kerbside waste and recycling service. Funding source includes $460k from the Waste Levy. Funding not required can be held in reserves until it is used (within a reasonable time period naturally) or can be applied to other actions in the Waste Management and Minimisation Plan. Services provided by external contractors may result in contract break-fees if services not required. ** Note that no redundancy or re-instatement costs factored into these totals. |
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A-18 |
Three Waters |
Proactive pollution prevention services and consents This service covers a range of components that give effect to the RMA through the management of TCC consents (200 active consents) in relation to three waters, including: · Monitoring consent conditions · Reporting to BOPRC (and others) on consent requirements · Regular ‘State of the Environment’ reporting to BOPRC / Iwi on conditions of consents (sometimes 50 conditions for 1 consent) · Enforcement action (i.e. delegated authority from BOPRC to halt activity due to a pollution issue)
|
|
|
|
|
$260K |
$130k** |
$0** |
High |
Core regulatory and regulatory-response service; possibly wrongly categorised in the first place. Long-term impacts of discontinuation of service are wide ranging and include: - Risk to public health (in relation to water supply, stormwater and sewage overflows) for example, limited monitoring of catchment supplying drinking water - Significant environmental impacts to waterways - Reputational impacts for Council with other agencies and the community for not proving essential services / safeguarding the environment or public health - Relationship issues with mana whenua and community over impacts to waterways Potential legal action through non-compliance with consents and the RMA, LGA, Health Act. Difficult to find and recruit highly skilled staff. ** Note that no redundancy or re-instatement costs factored into these totals. |
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|
A-19 |
Transportation |
Travel Safe educational programme into schools, businesses and the community Travel Safe programme is a joint Tauranga City and Western Bay of Plenty programme, working in partnership with Police, BOP RC, Schools, Preschools, Tertiary, Sport BOP, Age Concern, Ngāti Kahu and Clicksafe. All of these partners play a key part in us reaching our joint NZTA Road Safety/Active Travel Action Plan targets. Travel safe works towards the NZTA safer journeys outcomes and now the Vision Zero Strategy and aligns to National Bike Ready and NZTA National Road Safety outcomes. |
|
|
|
|
$813k |
$571k |
$329k*** |
High |
Very strong relationships with our community, schools and workplaces, elderly – if the service was discontinued even in the short-term, it would be difficult to re-establish relationships. Council has recently approved the Cycle Plan indicative business case. Subject to funding decisions yet to be made, the prospect of increasing funding for walking and cycling infrastructure while at the same time reducing investment in education programmes may be difficult for the community to understand. Funding for this activity includes approx. $390k from NZTA, $100k from other funders, and $330k of rates. *** Note that zero-delivery costs include 5 FTEs retained. |
||
|
|
|
Total direct costs of services in Category A (noting that some quoted costs under Scenarios B and C include provision for redundancy costs and others do not; and excluding A11 which is effectively a double-count of costs; and accounting for no increase or decrease in the Priority One contract) |
|
|
|
|
$6,390k |
$4,376k |
$2,570k |
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|
||
Wellbeing Impact Rating
|
|
|
|
|
|
|
|
High +ve |
Med +ve |
Low +ve |
Low -ve |
Med -ve |
High -ve |
Section B Continuation of services for consideration
|
|
Activity |
Description of service |
Wellbeing Assessment if service disrupted for 6 mths or more
|
Total Costs (Scenario 1 = full year service Scenario 2 = 6m service Scenario 3 = no service) |
Cost confidence rating |
Key impacts / implications |
|||||||||
|
|
|
|
Soc |
Eco |
Env |
Cul |
Scenario 1 |
Scenario 2 |
Scenario 3 |
High / Med / Low |
|
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B-1 |
Animal Services |
Educational programmes into schools and community groups Schools - Working with children to teach them how to act with dogs. Workplaces – teach those who interact with dogs in their work days (e.g. meter readers). Lesser part of role is creating & participating in public events – raising animal services’ profile in a positive way in community, normally events are in conjunction with WBOPDC). |
|
|
|
|
$38k |
$33k |
$28k |
Medium |
Minimal downside, but also minimal financial savings (and potentially funded by dog licence fees not rates) Disruption to service is not major – but potential for declining dog interactional awareness. People would miss out on the benefit of attending the education programmes, resulting in potential for more dog bite incidents for those people (during that time, and afterwards unless they later attend a programme). Reputational impacts for Council (seen as not attempting to prevent harm in this area). |
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|
B-2 |
Arts & Heritage |
Short-term exhibitions and displays TCC has a large collection of cultural and heritage items that are currently not displayed due to there being no museum. Some items are therefore loaned and occasionally (1-2 times a year) a short-term exhibition is set up for display. |
|
- |
- |
|
$10k |
$5k |
$0 |
High |
Small financial saving but easy-to-drop service. In the long-term this may result in a disconnection of place and negatively impact residents’ sense of belonging due to limited ways to showcase Tauranga’s history. |
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|
B-3 |
Arts & Heritage |
Provision of ‘Hands On Tauranga’ service by the Heritage Collection into schools and community groups. TCC has a collection of heritage items for school use that are ordered on-line and delivered to schools to support heritage and culture education programmes.
|
|
- |
- |
|
$8k |
$4k |
$0 |
High |
Minimal financial savings Opportunity missed in school programmes to tell our stories of Tauranga Moana. In the long term this may result in a disconnection of place and negatively impact students’ sense of belonging due to a limited foundation of knowledge of Tauranga’s history. It should be noted that there is limited access to heritage items/objects due to the lack of a museum for the city. For many young people, this may be the only access to heritage and cultural items that help in the telling of our stories that helps develop a sense of belonging to a place. |
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B-4 |
Community Development |
Advisory services (youth, disability, age-friendly cities, vulnerable communities, welcoming communities – also includes Tga/WBOP Safer Communities) Advisors work within portfolios, each identified as priority communities (due to size or vulnerability) –The service includes: facilitation; leading from behind; interface between communities and Council; making sure those communities get a say in Council planning and activity; advocating and linking various organisations together to ensure there aren’t lots of people/groups in the community trying to do the same thing but separately. This service has enabled Council to access some of these communities for the first time. It involves some funding, some helping to seek funding (not just from Council), and a lot of collaborative work particularly with central govt agencies – high level engagement, including MPs and regional managers/commissioners. Both the ‘Welcoming Communities’ and ‘Safer Communities’ programmes are sub-regional programmes, accredited by Immigration NZ and WHO respectively.
|
|
|
|
|
$857k |
$741k |
$625k |
High |
Trust broken and reputational damage for Council with government agencies, funders and communities that this service currently engages with. The issue of trust with vulnerable communities would need to be addressed up front. Would be extremely difficult to go back to those organisations and try to re-start after 6 - 12 months (could maybe survive 2-3 months’ close-down without major damage, if was well communicated). More difficult for sectors of the community currently supported to navigate their way into Council – we currently support organisations to find the right person/area in Council to engage with to get resolution on issues or concerns. Loss of opportunity for Council to make a difference in peoples’ lives, particularly those that are vulnerable in some way – showing care and empathy for all parts of its community. From a wider community perspective, people generally want to live somewhere where they feel a sense of belonging and that they are safe – many of the organisations and programmes supported by this service contribute to this outcome. Community advisors are expected to play a pivotal role in the social recovery of the community and city post-COVID. There is a potential opportunity to reduce investment in the Welcoming Communities portfolio if immigration drops for a sustained period, and potentially redirect funds to higher priority initiatives. Note though that currently 30%-50% of the Welcoming Communities role is funded by external agencies. |
||||
|
B-5 |
Community Development |
Services funded by Council’s grant to The Elms Foundation. Purpose of funding agreement relates to preservation of the site (including buildings, collections and grounds) as an historic property of national significance, a tourist destination, delivering education programmes through schools, outreach to community – displaying history of Tauranga. Grounds and buildings also host functions e.g. weddings and community events. The Elms has close to 14,000 visitors p.a. People visit primarily for history – few, if any alternatives available at present, other than Hands On Tauranga, Gate Pa. Also note the current shortage of boutique event space in the city centre. NB: Council is the major funder, but not the only source of funding for the Elms. |
|
|
|
|
$234k |
$117k |
$0 |
High |
Single biggest visitor block are cruise ships which are highly unlikely in next year. Against that, The Elms is highly regarded in the city and partial closure would impact the heritage sector hard. Asset maintenance costs still required. Discontinuation of service would impact: · Council reputational damage – in the community, with Iwi, with those that book services, with Heritage NZ. Loss of trust in Council as a supporter of, and provider of access to, the city’s heritage. · Damage to relationship with TECT who contributed a significant amount to establishment of newly opened Heritage Garden
|
||||
|
B-6 |
Community Development |
Services funded by Council’s grant to Creative Bay of Plenty. Creative Bay of Plenty (CBOP) is an umbrella organisation for the sub-regional arts sector. It’s about building capacity within the sector, nurturing the arts sector (equivalent to Sport BOP in recreation sector). CBOP is very much into collaboration and supporting artists and the arts sector. Council’s role is one of relationship management with CBOP. CBOP receives three sets of funding from Council: Annual operating grant $316k (KPIs associated); $78k for delivery of specific actions in the sector-led sub-regional Arts & Culture Strategy; and Creative NZ grant funding for Tauranga (Council sub-contracts CBOP to run this grants process). CBOP doesn’t seek funding other than from Council & WBOPDC as they don’t want to be competing with artists themselves. Creative Bay of Plenty’s financial statements show that for the 15 months to 30 June 2019, their revenue sources comprised: $492k Tauranga City Council (incl, one-off for strategy) $117k Western Bay of Plenty District Council $ 58k Simpson Grierson sponsorship $ 27k Other sponsorship and sundry income |
|
|
|
|
$490k |
$293k |
$96k |
High |
Long term impact of not continuing this service would fall on artists with lack of support and advocacy. Likely that some would move away or move to other occupations – temporarily or permanently. Most important services could potentially be brought in-house. Executive recommendation is for a review of funding and service levels to take place, including consideration of providing these services in-house, ahead of the 2021 Long-Term Plan.
|
||||
|
B-7 |
Customer Services |
Operation of the Customer Service Centre (Willow Street) – face-to-face service This service refers to the front-facing service delivery of the Customer Service Centre on Willow Street. It does not include the LIM and property file management service, nor the phone-based Customer Contact Centre. Services include land and property enquiries, general enquiries, reception services, and payment services. |
|
|
|
|
$310k |
$132k** |
$0** |
Low |
This service is the ‘open front door to Council’, which creates a lot of good will with those that engage with the Service Centre. If not provided in a single place, many of the services provided would need to be provided elsewhere in the organisation (i.e. reception, general enquiries) or outsourced if face-to-face channels are still required (i.e. payments services). Therefore, the true financial impact is unlikely to be as simple as stated. A reduction in operating hours of 25% would generate savings of approximately $55k per annum. ** Note that no redundancy or re-instatement costs factored into these totals. |
||||
|
B-8 |
Economic Development |
Mainstreets (Downtown, Mount, Papamoa, Greerton) Marketing, events etc. provided by Mainstreet organisations on behalf of retail centres |
|
|
|
|
$710k |
The cost of these services is determined by the members of each Mainstreet. Council is the collection agency. |
High |
Long-term impacts from discontinuing service temporarily are hard to determine but given that the retail and hospitality sectors – the primary beneficiaries of Mainstreet support – are severely hit by AL restrictions, a downstream negative effect is assumed. The funding issue lies with the rate-paying members of each Mainstreet areas. The question for them will be, is maintaining, increasing or decreasing the Mainstreet rate the best spend of their dollar? |
|||||
|
B-9 |
Libraries |
Central library Services captured as part of central library provision include: · Physical space o Used for relaxation, socialisation, leisure, study, and research o Neutral and safe meeting space often used for community and social services, including supervised child visits, meetings of social service providers and clients o Children, teen and adult areas · Physical collection of books, magazines, newspapers for browsing, research (see separate service reviews re lending and updating/removing titles) · Photocopying facilities (see also review re computer facilities) The Central Library has a wider range of resources (Maori, local, non-fiction etc) than the branch or mobile library, giving greater ability for study and research. |
|
|
|
|
$1.09m |
$880k* |
$414k* |
Medium |
Significant adverse impact on community wellbeing if library closed. Key finding of Community Facilities Needs Analysis is that the central library is important and needs to continue. Short-term closure presents an opportunity to deliver more digitally but does not replace the benefits of a physical meeting place.
An assessment of a reduction in operating hours represented by closing two days per week has identified potential average savings of $185k per annum. Note: closing on a weekend day saves ~$60k and closing on a mid-week day saves ~$105k.
* Note that the disclosed costs include a factor for redundancies of $255k (which hasn’t been built into other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs.
|
||||
|
B-10 |
Libraries |
Branch libraries. · Papamoa Library (co-located with Papamoa Community Centre) · Greerton Library · Mount Library (plus Mobile Library – reviewed separately) 2017-18 Visits: · Papamoa Library - 197,021 · Greerton Library - 196,263 · Mt Maunganui Library - 96,446 |
|
|
|
|
$1.52m |
$1.29m* |
$654k* |
Medium |
The major benefit of these libraries as distinct from the central library is accessibility for those who may not have access to transport and also their role as a gathering place for local communities.
An assessment of a reduction in operating hours represented by closing two days per week has identified potential savings of $286k per annum.
* Note that the disclosed costs include a factor for redundancies of $255k (which hasn’t been built into other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs. |
||||
|
B-11 |
Libraries |
Mobile library · Garaged at Mount Maunganui Library. · Children and Teens. · Adult browsing and lending collections. · Has two-week timetable of stops at various sites, including schools, pre-schools, and retirement centres · 2017/18 – 23,557 visits |
|
|
- |
|
$118k |
$117k* |
$65k* |
Medium |
Discretionary service, though with positive impacts on the people serviced. Possible adverse effects on mental wellbeing for isolated elderly/vulnerable and knock-on impacts.
An assessment of a reduction in operating hours represented by closing two days per week has identified potential savings of $27k per annum.
* Note that the disclosed costs include a factor for redundancies of $51k (which hasn’t been built into all other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs. |
||||
|
B-12 |
Libraries |
Provision of education programmes to schools. An interactive programme is run throughout the year in conjunction with the Tauranga Art Gallery and involves near daily visits to the Central Library by almost all schools across Tauranga (315 visits p/year). Outreach programmes (201 visits p/year) are also run, for example librarians visiting schools for story time/literacy programmes or reading programmes in low decile schools during term time. Total – 11,000 students involved per year. Other programmes are run by branch libraries e.g. frequent visits by local schools (Greerton in particular). In addition to schools, education programmes are also provided to early childhood centres, Kohanga Reo and tertiary to an extent (for example students coming in to interact around Fashion Week) |
|
- |
|
|
$152k |
$110k* |
$34k* |
High |
Impacts of reduced support around literacy for students and possible need for remediation. Need for schools to develop additional programmes/ resources to fill the gap. Accessing the public library is an important part of many schools’ curriculum – not only for resources but to support learning units and encourage connections with the wider community. The programmes often act as an introduction for families to the library so would mean less families visiting the CBD, reduced overall awareness/use of library, and a loss of relationship with schools.
* Note that the disclosed costs include a factor for redundancies of $34k (which hasn’t been built into other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs.
|
||||
|
B-13 |
Libraries |
Provision of community programmes. Community programmes are delivered for all ages. Some are large scale events in other venues (e.g. Matariki Kite Day). Most are for groups under 50 people and are held in libraries and community meeting rooms. · Digital: Digital Skills, Maker Space, Robotics and coding (837 events, 2947 participants) · Māori: Te Reo, Cultural knowledge, iwi collaborations, Matariki, Waitangi Day, Te Wiki o Te Reo Maori (86 events, 6384 participants) · General community engagement: Book clubs, author events, CV writing, maker clubs, collaborations with community partners (209 events, 5755 participants). |
|
|
|
|
$349k |
$276k* |
$102k* |
Low |
May be reduced engagement with / awareness of the library and its services as people may find alternative sources of engagement and entertainment. Loss of vitality of City, loss of recreational opportunities, detriment to relationships with Iwi, Tertiary, and the social services sector.
* Note that the disclosed costs include a factor for redundancies of $102k (which hasn’t been built into other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs.
|
||||
|
B-14 |
Libraries |
Ngā Wāhi Rangahau (NZ Room) research collection and services. Public access to research material and archives in Ngā Wāhi Rangahau/Research Collections (formerly known as the NZ Room). This includes books, magazines, microfilm, newspapers, government and local government resources, NZ Standards, electoral rolls, ephemera, online databases, Māori Land Court minutes and Waitangi Tribunal resources, historic images, archives, rare books, maps and various audio-visual resources (including recorded oral and video histories).
|
|
|
|
|
$562k |
$400k* |
$119k* |
High |
Distinct section of the library service with a small but passionate customer base; closure would impact on tangata whenua relationships disproportionately. Some items (for example photographic negatives) require digitisation and will not survive indefinitely in their physical form. A number of items (for example from Iwi groups) are accessed frequently and have been donated on the basis of being cared for and available. Donated items (and associated standards of care) are often subject to deeds of gift, MOUs, legal relationships etc. with the donors.
* Note that the disclosed costs include a factor for redundancies of $119k (which hasn’t been built into all other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs. |
||||
|
B-15 |
Strategy & Corporate Planning |
Policy and bylaw development and review Service covers Internal & external policy development & review; bylaw development & review. Reserve management plan development and implementation, and community facilities planning, while delivered from the same team, are excluded from this review. |
|
|
|
|
$445k |
$300k* |
$75k* |
Medium |
Delays to the policy and bylaw programme generally mean that the issues do not go away, they just remain and often grow in importance to those affected. The cumulative impact of these issues is important. Any long-term non-provision may impact on statutory requirements regarding bylaws and some policies (local alcohol plan, for instance). Multi-skilled generalist staff so possibility of redeployment high if opportunities exist, potentially reducing any redundancy costs. * Note that the disclosed costs include a factor for redundancies of $75k (which hasn’t been built into all other service review costs at this stage). However, it does not include re-instatement and re-recruitment costs. |
||||
|
|
|
Total direct costs of services in Category A (noting that some quoted costs under Scenarios B and C include provision for redundancy costs and others do not) |
|
|
|
|
$6,893k |
$4,698k |
$2,212k |
|
|
||||
Wellbeing Impact Rating
|
|
|
|
|
|
|
|
High +ve |
Med +ve |
Low +ve |
Low -ve |
Med -ve |
High -ve |
Section C Recommend temporary or full discontinuation / reduction in service
|
|
Activity |
Description of service |
Wellbeing Assessment if service disrupted for 6 mths or more
|
Total Costs (Scenario 1 = full year service Scenario 2 = 6m service Scenario 3 = no service) |
Cost confidence rating |
Key impacts / implications |
|||||
|
|
|
|
Soc |
Eco |
Env |
Cul |
Scenario 1 |
Scenario 2 |
Scenario 3 |
High / Med / Low |
|
|
C-1 |
City Events |
Financial support to events through the Event Funding Framework (EFF). The event funding framework consists of four funds outlined below: 1. Community event fund 2. Event Support fund 3. Legacy event fund 4. Major event fund There is a total of $618,350 already contractually committed for 2020/21. |
|
|
|
|
$1.23m |
$1.03m |
$770k |
Low |
Reputational impacts, impact of multi-year contracts, and the role of events in the community’s recovery all to be weighed against significant financial input. Without the support of TCCs EFF, the majority of events funded by the EFF (approx. 70 per annum) would not be able to proceed as they rely heavily on council support e.g. National Jazz Festival, Garden and Art Festival, Anchor AIMS Games, ICC Women’s Cricket World Cup 2021 etc. Mothballing the EFF will result in significant reputational risk in terms of the relationship we have with the local and national events industry. Financial support from local government and the sponsorship market will be essential to allow the events industry to restart/reinvent itself when mass gathering restrictions lift. Events are expected to play a key role in the post-COVID recovery phase and in particular, the stimulus and success of regional-focused tourism. In addition to economic and tourism factors, events can also help to improve social cohesion and build community spirit There is a potential opportunity to honour current contractual arrangements while also looking to reduce the scale of the event funding framework. Executive recommendation is an EFF budget reduction of $200,000. |
|
C-2 |
City Events |
Event delivery of Council’s New Year’s Eve (NYE) event and enhanced safety operations. This is planned to be made up of five community events across the city on New Year’s Eve with firework displays (9.30pm & midnight). A range of safety measures, such as traffic management, fencing, lighting, and increased security in the CBD and Mount Maunganui, is also part of this service. In 2019 events were held at four venues (Matua, Papamoa, City Centre, Greerton) and an estimated 9,500 attended. In 2020 a fifth venue is planned (Mount Maunganui) and total projected numbers are 14,500. Staff are unaware of any planned private NYE events in Tauranga at this point in time (seven months out). Based on what traditionally takes place on NYE, licensed venues in Mainstreet areas are likely to host “private” parties or ticketed events and apply for liquor licences that extend their trading for NYE. |
|
|
|
|
$494k |
$50k |
$50k |
Medium |
Long term impacts of ceasing this service would include: · Reputational risk from the communities that enjoy the free NYE events, and those that now expect and enjoy the fireworks that can be seen across the city at 9.30pm and midnight. · Additional minor economic impact on local event suppliers, entertainers, contractors, etc. The New Year’s Eve celebrations are a significant investment for an event that delivers across a very brief timeframe (approx. 6-30pm to 9-30pm and again from approx. midnight to 12-10am). Note: The version of the safety measures to support NZ Police will still be required. Risk and potential implications include that a lack of management of NYE could impact negatively on the community, public safety, and Police resources. Note: Police feedback has been requested and will be tabled as soon as staff have received it. Executive recommendation is to permanently cease funding New Year’s Eve celebrations. A $50k budget would be retained for safety management only. |
|
C-3 |
City Events |
Other events organised by Council for the community. Events currently organised by Council include a possible Americas Cup Fan Zone, Trophy Tour and post-event celebration, Charter parade(s), ICC Women’s Cricket World Cup commitments, and the annual ANZAC Day services across the city. |
|
|
|
|
$205k |
$105k |
$10k |
Medium |
ANZAC Day is a national event and the ability to mothball delivery would be challenging as it is a civic event expected of local government to deliver. The reputational impact would be perceived as disrespectful. Minor long-term impacts relating to Americas Cup, in terms of not being one of the host cities of an important major event for the country – Trophy Tour, Fan zone and potential victory event post. Executive recommendation is a $100,000 reduction in budget. |
|
C-4 |
Community Development |
Provision of space and services for functions and events at the Historic Village. Service includes catering, IT, additional banquet/function staff as required – all on-charged. Max indoor venue capacity around 200 (theatre style).
|
|
|
|
|
$135k |
$39k |
$0 |
High |
Add-on service that could be stopped. Demand/supply mix for venue space difficult to determine into the future. If this service was discontinued existing customers would find alternatives and likely to be disinclined to return (trust breached, feel messed around – driver to change from their new location). Reputational risk for Council. Loss of some of the character of the Village – venues and grounds would lose the current vibrancy in this unique space. Note that events role is currently vacant and will remain so until functions/ event levels pick up post-COVID. Executive recommendation is to retain the service but delay recruitment by six months, reducing budget expenditure by $40,000. |
|
C-5 |
Community Development |
Project management and support services for the Mayoral Taskforce on Homelessness. In the TCC area 3% ‘homeless’ (not just rough sleeping), which is around 4,000 people. Sub-regional Homelessness Strategy recently developed, linked into national strategy. Development was co-funded by TCC, WBOPDC, Acorn and TECT with high-level steering group governance – a significant collaborative process. Strategy and Action Plan now governed by Mayoral Taskforce, chaired by Mayor Powell. |
|
|
|
|
$0* |
$0 |
$0 |
Medium |
* Note that this is not currently an existing service nor is there funding in the draft 2020/21 budget. When the Policy Committee considered the draft Annual Plan on 4 March 2020 it was noted that the sub-regional Homelessness Strategy was being prepared. The Committee was advised to put aside funding in the draft Annual Plan to fund Council’s commitments under that strategy. This did not occur. At the same meeting the Committee was reminded that a ‘street ambassador’ had been approved in principle at the 27 February 2020 Council meeting and referred to the Annual Plan prioritisation meeting. This role was also not funded in the draft Annual Plan. In 2018 a proposal for four street ambassadors and a senior bylaws officer, two vehicles and uniforms and PPE was considered through the LTP process but not funded. That proposal amounted to approximately $300,000 p.a.. Impacts of not proceeding with this service include: · Would lose momentum and political will. · Sub-regional project, with central government involvement – expect Council would have some difficulty re-engaging all the involved parties. · Under AL4 all rough sleepers were housed, but as we move back down alert levels, they will move out of motels in which they’ve been housed. Task is to find sustainable long-term housing solutions; if they go back out on the street it will be much harder to encourage them back into housing – would also lose all the trust that’s been made. To get this far, multiple organisations have helped fund and providers, including volunteers, have given hours of their time. Council likely to suffer reputational damage if back out of the process after everyone has invested so much. Govt won’t step in and lead on this, happy to be a partner but see it as a local issue that needs to be led locally. Council would be better heard and supported by central government agencies if seen to be leading, having ‘skin in the game’. Executive recommendation is to dedicate staff resources from within the Community Development team, equivalent to 1 FTE, to support the Mayoral Taskforce on Homelessness. Therefore, no new budget is required. |
|
C-6 |
Emergency Management & Civil Defence |
Community education re: preparedness for emergency events. Readiness is a requirement under the CDEM Plan 2015, inclusive of public education and engagement. It is significantly linked to hazard research for which we must consult our communities within a timely manner. We are measured against hazard research being consulted to communities within six months of release. |
|
- |
|
|
$100k |
$55k |
$10k |
High |
Important and statutorily-required role, but current vacancy provides opportunity to consider different delivery options in the short-run. Not providing the engagement would mean greater digital reliance and could impact on future consultation processes for changes to policies that influence aspects such as climate change, sea level rise, tsunami risk management, ongoing development of greenfield sites. Recommend that public education be reduced or temporarily stayed for the immediate (AP21) period only, not a permanent change. Executive recommendation is a $45,000 reduction in budget. |
|
C-7 |
Libraries |
Lending collection – addition and removal of titles. There is a specialist team dedicated to maintaining our collection, which includes tracking current lending in order to purchase titles which will be of the most interest. We lend approximately 1.5m items per year – this is one of the highest rates per capita for a public library in NZ. Approximately 27,000 items are purchased and a similar number de-accessioned annually. |
|
|
|
|
$555k |
$379k |
$102k |
High |
Long-term impact on quality of collection if cease this service (akin to managing an asset). However, some reduction may be feasible in the short-term. There may be an opportunity to consider physical/digital split of resources though this is unlikely to significantly effect opex. Significant decrease in satisfaction with service and reduction of number of people using libraries which might persist longer term due to reputational and relationship damage Executive recommendation is to reduce the capital expenditure on new materials by 25% (current budget is $1.092m) and to identify and reflect any consequential opex budget savings. |
|
C-8 |
Spaces & Places |
Removal of Harbour encroachments on reserve land. Spaces & Places has an annual plan KPI of resolving 20 encroachments per year. All coastal encroachments have been resolved over the past 10 years, the focus is now on harbour encroachments. Most of these are onto esplanade reserve land acquired through the Reserves Act (through subdivision) for the purposes of public access along the harbour edge. TCC staff meet with residents and form a plan to resolve each encroachment issue, contractors are employed to implement that plan. |
|
|
|
|
$50k |
$25k |
$0 |
Medium |
Easily-partitioned service with minimal impact if not delivered for a period. Long term impacts if this service was not continued include: · Amendment to, or rescinding of, Council’s Encroachments onto Reserves Policy would be required. · Managing significant levels of community dissatisfaction with permanent inability to access public land along the harbour’s edge (esplanade reserve land). · Reputational damage – Council seen to be ‘going back on its word’ on resolving encroachments. Executive recommendation is to temporarily reduce this budget by $50,000 and to use the hiatus period to refresh the communications and engagement plan for this project. |
|
C-9 |
Spaces & Places |
Tropical display house (Robbins Park). This service is the maintenance and management of plants within the tropical display house and is delivered as part of the reserves maintenance contract. The display house is open to the public free of charge and, as part of the wider Robbins Park attractions, is one of the destinations for cruise ship passengers visiting Tauranga. A people counter at the site has recorded 25,000 visitors in the nine months to the end of March 2020. In that time, over 900 people have signed the visitors’ book.
|
|
|
|
|
$61k |
- |
- |
Medium |
If this service was temporarily discontinued this would result in: · Substantial expenditure required to replace the plants that would need to be disposed of when maintenance of the display house ceased. · Potential contract break-fees. In the long-term, impacts include: · Loss of city amenity. · Potentially would need to demolish the two buildings (pumphouse next door, contains heating equipment and storage) if not being used and no alternative use for it. Executive recommendation is to permanently cease this service and remove the $61,000 budget. |
|
C-10 |
Spaces & Places |
Hanging baskets. The hanging baskets service is delivered as part of the reserves maintenance contract. Plants grown in a separate nursery. Hanging baskets are provided only in the Tauranga CBD. |
|
|
|
|
$89k |
- |
- |
Medium |
Loss of city amenity. Some members of the community and visitors may be disappointed they are no longer provided. Potential contract break-fees, plus reinstatement costs if baskets required in the future. Executive recommendation is to permanently cease this service and remove the $89,000 budget. |
|
C-11 |
Spaces & Places |
Services provided by Council contract with Sport Bay of Plenty TCC has a five-year relationship contract with Sport Bay of Plenty (Sport BOP) for the period 2017-2022, with current funding of $423,000 p.a. (approx., 10% of Sport BoP revenue). Sport BOP is a region-wide service with all councils in the BOP contributing. The aim of the agreement is to ‘promote and provide opportunities for people to benefit from their involvement in sport, outdoor and active recreation and play.’ |
|
|
|
|
$423k |
Dependent on any negotiation of changes to contract |
Medium |
Potential reduction in support provided to the sector when that is most needed at a grassroots level. Getting and staying active has been a significant element of people’s coping mechanisms during Covid and is likely to remain so during the recovery and ‘new normal’ phase. Opportunity to reconsider deliverables and funding relevant to post-Covid world. |
|
|
C-12 |
Sustainability & Waste |
Energy, carbon and sustainability management and advisory services This energy and carbon service is largely internal TCC service and includes: - Monitoring and managing energy consumption, and costs across Council operations - Monitoring and managing carbon emissions, and costs across Council operations - Managing the relationship with EECA and agreements for funding for projects - Leading on internal carbon policy / commitment, and developing energy and carbon management strategies, action plans etc. The sustainability service seeks to lead and support Council in establishing a more strategic, consistent and coordinated approach to sustainability. This is to be achieved by integrating sustainability into council decision making, planning and practice. This includes managing key internal and external relationships. |
|
|
|
|
$200k* |
$100k** |
$0** |
Low |
* Note that the energy management service is currently not budgeted in the 2020/21 year. An internal submission has been made to amend this. ** Note that no redundancy or re-instatement costs factored into these totals. Through COVID-19 our community has recognised that changing the way they live and work is possible, and will likely increase wellbeing for both us and nature in the process. In this light, we have considered our current approach to sustainability, reflected on our slow progress to date, while reviewing the progress of other councils in this area. Sustainability should not be abandoned, but re-framed as a tool for positive change. The current set up in Council to tackle the organisations’ sustainability purpose isn’t working well. It has not been embedded and the argument has not been a convincing one. We suggest a re-set to ensure that our next move is a long-term one. With this in mind, we are proposing to: 1. Pause all operational work in the sustainability, energy and carbon space, and release current staff in the Sustainability and Waste Team. 2. For Executive to consider an initiation paper which proposes to develop a sustainability strategy. The Executive would consider whether the strategy should be city-wide, or for Council operations only (there is significant merit in developing a city-wide strategy that contains a vision, goals, objectives, and actions for the city, which the Council leads by example with, and implements itself). 3. Develop the sustainability strategy using the expertise of an external consultant. A governance structure would be established to oversee the work. The deadline for the completion of this work is September 2020 (to therefore influence the development of the draft 2021-31 LTP). The key actions to be undertaken between now and September would be: a. Establish a governance structure. b. Gather baseline data. c. Finalise a full business case for approval of the Executive. d. Develop project plan including scope, key steps, timeline, stakeholder engagement, etc. e. Present progress to Executive/Councillors. f. Undertake to prepare framework including vision, objectives, key principles, action plan, communication and engagement plan that would guide the development of the key considerations of the LTP 2021-31 (with sustainability being a key ‘pillar’ of the LTP). Executive recommendation is to refresh the approach to these services. This means halting the delivery aspects of these services while a clear strategy is developed (using other existing resources). Once the strategy approach is agreed, the delivery services will be reconsidered. Budget of $100,000 is recommended in 2020/21 |
|
C-13 |
Three Waters |
Waterline education programme and advisory services. This is an education programme and advisory service across three waters (water, wastewater and Stormwater) and includes: · Education programme delivered to Y5 & 6 students (primary school) across three waters · Home advisory service to all community members but targets those ‘in need’ particularly elderly and more vulnerable members of community (leak detection and minor fixes) · Campaigns across three waters (e.g. wet-wipe campaign) · Community stakeholder engagement on water related environmental and sustainable practices. |
|
|
|
|
$325k |
$162k** |
$0** |
Low |
Opportunity to refine the offering rather than cut completely (wet wipes, for instance should stay, but one year off general water conservation messaging might be acceptable). The loss or disruption of this service may result in: · Loss of connectivity between councils in the waters space and how we engage with the community to ensure consistent messaging across regions. · Loss of a reputation enhancing service. Waterline builds a positive image/reputation for the overall council both locally and nationally. Waterline is a good news story. · Financial consequences of non-delivery of education and awareness campaigns like Wet Wipes and Water Conservation, for example its estimated that nearly 40% of sewerage overflows were reduced directly as a result of Wet Wipe campaign (recorded in FY 2018/19). A 25% reduction in non-staff expenditure (totalling $45k) would result in Waterline stopping media advertising associated with water conservation, home show presence, and reduce planned campaigns as well as some education elements. ** Note that no redundancy or re-instatement costs factored into these totals. Executive recommendation is to reduced services as described above and budget by $45,000. |
|
C-14 |
Urban Spaces |
Our Place |
|
|
|
|
$0-$? + 0.5 FTE |
$100K + 0.25 FTE |
$100K + 0.25 FTE |
Medium |
If Our Place is continued there will always be risk that the business model is not self-sustaining and further opex support is required. The operator is looking at potential models going forward but it is not possible to eliminate all risk, and additional funding sources other than Council are yet to be confirmed. Current tenants of Our Place will need to find new premises if Our Place is decommissioned. Temporary discontinuation of this service - Cost of keeping physical assets on site prohibitive to a delay given overheads of ~$200k p.a. to lease containers from Royal Wolf and maintain site – debt could not be sustained by operator. If the site is shut down then alternative opportunities may open up. Ongoing management of Our Place has been resource intensive for staff and impacted on parking revenue to support previous business model shortcomings. Executive recommendation is that Our Place be closed down permanently. |
|
|
|
Total direct costs of services in Category A (noting that some quoted costs under Scenarios B and C include provision for redundancy costs and others do not) |
|
|
|
|
$3,867k |
$2,045k |
$1,042k |
|
|
Wellbeing Impact Rating
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|
|
|
|
|
|
|
High +ve |
Med +ve |
Low +ve |
Low -ve |
Med -ve |
High -ve |
Section D Revenue opportunities
|
|
Activity |
Description of service |
Wellbeing Assessment if service disrupted for 6 mths or more
|
Total Costs (Scenario 1 = full year service Scenario 2 = 6m service Scenario 3 = no service) |
Cost confidence rating |
Key impacts / implications |
|||||
|
|
|
|
Soc |
Eco |
Env |
Cul |
Scenario 1 |
Scenario 2 |
Scenario 3 |
High / Med / Low |
|
|
D-1 |
Marine Facilities |
Provision of boat ramps and wharves |
|
|
|
|
$49,511 |
|
|
High |
Previous documents suggested a potential revenue stream in the low six figures. These numbers have been revisited during this current review and full-year revenue of up to $400,000 per annum is feasible. Of this, Sulphur Point is assumed to provide the majority of that revenue. Parking machines cost $10,000 to $15,000 each to install. Depending on the number of ramps serviced, total capex costs for machines is estimated to be $50,000 to $100,000. There are no additional enforcement costs as staff are already rostered on seven days per week and monitor these areas during busy times.
Executive recommendation is to implement boat ramp / parking charges and to budget $100,000 revenue in 2020/21 (recognising that implementation will not cover the full year) and to consider full-year revenue budgets through the Long-Term Plan. |
|
28 May 2020 |
Priority One
(priorities ranked by ability to implement quickly and lead to early job-creation)
|
Projects for consideration |
Activity in 2019-20 |
Proposed Activity 2020-21 |
Outcomes sought |
Proposed change in TCC 2020/21 contribution |
Priority |
|
Covid Recovery & Rebuild
Labour market recovery
|
· Development of Covid Recovery & Rebuild Plan · Workfinder job matching service
· Instep programme initiatives · Future of Work programme · Maori employment strategy · Industry advisory group · Studio I programme initiatives · Tertiary strategy
|
· Implementation of plan: regional investment mechanisms, labour market response
· Employment hub, including increased job matching via Workfinder · Vocational pathways programme, leveraging increased government investment · Tertiary partnership – targeted upskilling and retraining packages
· Maori/Pasifika youth employment pathways programme
|
· Greater intra-regional public and private investment collaboration and access to inward investment by government and private sectors · Job opportunities · Vocational skills
|
+$75k
+$20k for Maori-specific engagement (BOPRC match funding sought)
|
1
6 |
|
Digital Enablement |
· Capability support · Digital divide · Smart city initiatives |
· Refocus all activity on digital transformation for small business via Powering On programme and expanded communication to business networks |
· Digitally enabled SMEs |
|
2 |
|
CBD planning facilitation |
· Development opportunity facilitation (early-stage and pan CBD focus) |
· More hands-on development project facilitation, getting priority projects to ‘investment ready’ · Additional planning/Council liaison capability
|
· Accelerated investment at greater scale · Construction sector jobs · More people living and working in CBD |
+$40k |
3 |
|
Marine precinct |
· Arms-length support to Vessel-works |
· Site development to stage 2 · Progress wharf investment case |
· Outcome is higher skilled job creation and uplift in marine sector · Business attraction / promotion campaign to attract business to the area. · Aligns with Ferry Service project |
+$50k |
4 |
|
Ferry Service
|
· Project development – demand and ability to run service |
· Wharf infrastructure – take through to investment proposition · Progress project through to single phase business case with NZTA, then operator agreement |
· Viable operating ferry service leading to better transport and environmental outcomes, better proposition for city living, increased tourism product
|
$20k (BOPRC will be approached to provide funding too) |
5 |
|
International Strategy
|
· Investor migrant attraction · Targeted sector based skilled migrant attraction · International education attraction (via Education Tauranga) · Exporter capability (via Export BOP) · TCC Sister cities programme |
· Bare maintenance on international programme but with focus in investor migrants (where there is still demand), international education (students still in NZ) and support for exporters. |
|
-$75k |
7 |
|
Total |
|
|
|
+$140k
|
|
|
28 May 2020 |
[1] Paragraphs 18 to 22, and paragraphs 23 to 47 of that report respectively
[2] Though only $224m was funded.
[3] Definitions:
[4] Per the LTP, together with external services provided by ‘support services’
[5] Based on a combination of ‘essential’ services identified during AL4, work done by the CPT and business continuity functions, advice from the Local Government Covid19 Response Unit, and Council’s legislative obligations
