Agenda of Ordinary Council Meeting

Ordinary Council Meeting Agenda

14 December 2020

10 Business

10.1 Draft Community Funding Policy

File Number: A11962891

Author: Ariell King, Team Leader: Policy

Anne Blakeway, Manager: CCO Relationships and Governance

Authoriser: Gareth Wallis, General Manager: Community Services

Purpose of the Report

1. For Council to consider and provide direction on a draft Community Funding Policy.

Recommendations

That the Council:

(a) Supports the draft Community Funding Policy (Attachment 2).

(b) Agrees to the following:

(i) The scope of the policy is limited to the Contestable Grant Fund, the Community Development Match Fund and partnership agreements.

(ii) The minimum grant amount for the Contestable Grant Fund be $10,001.

(iii) The maximum grant amount for the Contestable Grant Fund be $50,000.

(iv) Support the definition of community organisations.

(v) The general criteria to be used for assessing applications for community grant funding (set out in Schedule One of the draft policy).

(vi) The exclusions from community grant funding (set out in Schedule Two of the draft policy).

(vii) Council is a complementary funder and does not provide seed funding.

Background

2. At the 20 October 2020 Policy Committee meeting, the following recommendations were supported:

That the Committee:

(a) Agrees to include a proposal in the consultation document for the Long-term Plan 2021-2031 for a contestable grant fund, which would provide financial support to community organisations that aligned with Council’s strategic objectives and outcomes.

(b) Agrees that the Community Investment Policy is to be amended to reflect the proposal for a contestable grant fund, and that following adoption by the Policy Committee, consultation will be undertaken in conjunction with the consultation document for the Long-term Plan 2021-2031.

(c) Recommends the following scope and scale for a potential contestable grant fund:

(i) inclusion of requests for funding through the Annual Plan/Long-term Plan submission process (direct grants), and Level of Service subsidies;

(ii) the proposed level of funding for the proposed contestable grant fund is to be set at $1.81 million. This includes what is currently set aside for direct grants ($1.65 million) and Level of Service subsidies ($160,000);

(iii) two funding rounds per year, with up to 50% of the fund to be distributed per round;

(iv) allow grants to be confirmed for a maximum three-year period;

(v) set proposed minimum and maximum grant amounts; and

(vi) that an Assessment Panel is created as the decision-making body.

(d) Requests that the proposed eligibility, criteria and decision-making requirements are confirmed by the Policy Committee prior to inclusion in the consultation document for the Long-term Plan 2021-2031.

(e) Notes that these recommendations are subject to the prioritisation process required to prepare the draft Long-term Plan 2021-31.

3. A funding matrix was also requested to illustrate the prioritisation of funding and contribution to community outcomes, and the four well-beings (Attachment 1). The community grants analysed were those that align with the scope of the draft Community Funding Policy, which includes 24 grants. Each grant was assigned the community outcomes that it achieved and based on that assessment; the four well-beings achieved. Each grant can help achieve multiple outcomes and well-beings. The assessment was subjective, based on staff knowledge of the initiative/project/activity being funded, as a record of the contribution to the outcomes and well-beings has not been previously been a requirement of the application or auditing process.

Issues and options

4. Staff have prepared a draft policy for consideration (Attachment 2). The key issues for discussion regarding the draft policy are:

(a) Scope of the draft policy

(b) Who can apply for funding?

5. It is apparent that the scale of change between the draft policy and the current Community Investment policy is substantial. As such, it is recommended that the draft policy is considered a new policy and if adopted by the Council, that the Community Investment policy be revoked. It should be noted that the sentiment of the existing policy has been captured in the draft policy.

Scope of the draft policy

6. It is proposed that the following types of community grant funding are covered by the draft policy:

(a) Contestable Grant Fund

(i) The draft policy includes the 20 October 2020 recommendations for the Contestable Grant Fund that there are two funding rounds per year, with up to 50% of the fund to be distributed per round; that grants can be confirmed for a maximum three-year period; and that an Assessment Panel is to be created as the decision-making body.

(ii) This fund would include all those grants currently considered as a direct grant and the level of service subsidies (as agreed on 20 October 2020).

(iii) The draft policy suggests $10,001 be set as the minimum annual grant, as the maximum that can be awarded under the Community Development Match Fund is $10,000. The maximum annual amount of $50,000 is proposed as of the 17 direct grants awarded in 2020/21, 13 were $40,000 or under. Three were between $125,000 and $225,000 and there was one anomaly at $867,877 (Merivale Community Centre).

(b) Community Development Match Fund

(i) The draft policy includes the agreed purpose, eligibility and criteria for the Community Development Match Fund that was approved by Council on 6 October 2020.

(i) Partnership agreements are a new approach that is proposed in the draft policy. The policy includes the following definition for a partnership agreement:

Refers to non-contestable multi-year agreements with select community organisations with generally long-standing relationships with Council to deliver actions and programmes that align with community outcomes and council’s strategic priorities.

(ii) These agreements may, where appropriate, replace, over time, the current long-term funding approach offered by service level agreements.

(iii) Current agreements (via service level agreements) will remain in place in accordance with the individual agreements. Discussions will be undertaken with current agreement holders to determine if these can and should transition to a partnership agreement.

(iv) Some existing agreements may not be suitable as a partnership agreement. In these instances, a decision will be required as to whether the funding continues. If it is continued, it would not be subject to the provisions of the draft policy but include terms and conditions that acknowledge council’s reasons for providing direct support to an organisation, such as alignment to community outcomes.

Excluded from scope of the draft policy

7. It is proposed that the following types of community funding support are excluded from the draft policy due to their specific characteristics:

(i) Rates remissions (provided for under the Local Government (Rating) Act 2002, the Local Government Act 2002 and Te Ture Whenua Maori Act 1993).

(ii) Funds distributed on behalf of others (funding is provided to Council for a particular purpose e.g. Creative Communities). These funds have specific eligibility and criteria assigned to them by the funders.

(iii) Development Contribution grants.

(iv) Event funding (existing contestable framework, support is provided for a specific activity that aligns with Council’s Event Funding Framework outcomes).

(v) Stewart and Carruthers Trust Funds (specific deeds in place which provide the framework for the distribution of these funds).

What about requests or submissions that don’t fit within the scope of the draft policy?

8. Council may receive requests and submissions for projects or funding that require a substantial level of funding, above the proposed maximum $50,000 annual grant. Recent examples include funding for surf lifesaving and cricket facilities.

9. Council could consider including discretionary one-off grants within the scope of the draft policy. Funding for a discretionary grant would be allocated outside of the funding agreed to for the Contestable Grant Fund, the Community Development Match Fund and any potential partnership agreements.

10. A discretionary grant application would need to meet the general criteria in the draft policy. In addition, an application would be expected to provide a compelling reason for funding allocation, the intended funding would significantly achieve more than one of the council’s strategic priorities and community outcomes, and there would be evidence that non-supply would significantly impact upon one or more of the Council’s strategic priorities.

11. Requests for new capital projects on Council-owned land are not considered a grant. Rather, Council may decide to include, or not, these requests during deliberations on the Annual Plan or Long-term Plan, or at the time that the request is received.

Options – Policy scope

Options	Advantages	Disadvantages
Include the Contestable Grant Fund, Community Development Match Fund and Partnership Agreements. RECOMMENDED	A clear and transparent approach is provided for these three funding streams.	Nil
For a minimum grant amount of $10,001 and a maximum grant amount of $50,000 from the Contestable Grant Fund. RECOMMENDED	Provides clear guidance regarding the minimum and maximum grant amount in any one year.	No specific policy mechanism to manage requests for funding over $50,000
Exclude rates remissions, funds distributed on behalf of others, Development Contribution grants, event funding, Stewart and Carruthers Trust Funds. RECOMMENDED	These forms of community support retain their independence and specific characteristics separately from the draft Community Funding Policy.	Nil
Include discretionary one-off grants. NOT RECOMMENDED	Recognises that Council receives community funding requests for amounts greater than $50,000 through the annual plan and long-term plan process	Signals to community organisations that grants greater than $50,000 may be applied for. Potential budget implications if all one-off grants were approved.

Who can apply for funding?

12. The draft policy sets out who is eligible to apply to each of the three funding streams.

13. A community organisation shall be eligible to apply to all three funding streams. A community organisation is defined as follows:

A voluntary or not-for-profit organisation that serves a public benefit; and that relies on volunteers for at least its governance; and has values, purpose and objectives independent of government or commercial institutions. It must be a registered trust or incorporated society with IRD charitable status. Unless there are clearly justified reasons, membership or participation in its activities should be available to everyone who wishes to join.

14. This definition of community organisations has been taken from the existing Community Investment Policy.

15. Some Iwi and hapū organisations may not meet the definition of community organisations. As such, the draft policy has included an exception for these organisations so that they may apply for funding to deliver kaupapa Māori outcomes.

16. Eligibility for the Community Development Match Fund is wider than community organisations and allows not-for-profit groups, communities of interest and tangata whenua organisations to apply.

17. Social enterprises would not be eligible to apply for funding from any of the three funding streams. Social enterprises are ‘hybrid organisations that trade goods and services in order to achieve their social, environmental, economic or cultural goals’. In general, the draft policy notes that funding will be provided to projects that originate from the community. Many social enterprises are founded to deliver a specific purpose and may not be community driven.

Options – Who can apply?

Options	Advantages	Disadvantages
Allow community organisations (as defined in the draft policy) to apply for community grant funding. RECOMMENDED	Provides an opportunity for a wide range of organisations to potentially access funding from Council.	Definition of community organisations may not explicitly include iwi and hapū organisations. Note that the draft policy does still provide for these organisations to apply for funding.
Allow social enterprises to apply for community grant funding. NOT RECOMMENDED	A subset of groups with priorities and objectives that may support and achieve Council’s strategic priorities, and the community outcomes, would be able to potentially access funding from Council.	Social enterprises may not be community driven or deliver projects that originate from the community. As some social enterprises are set up with the intention to make a profit, Council could be seen to be providing funding to private enterprises.

Options

Advantages

Disadvantages

Allow community organisations (as defined in the draft policy) to apply for community grant funding.

RECOMMENDED

Provides an opportunity for a wide range of organisations to potentially access funding from Council.

Definition of community organisations may not explicitly include iwi and hapū organisations. Note that the draft policy does still provide for these organisations to apply for funding.

Allow social enterprises to apply for community grant funding.

NOT RECOMMENDED

A subset of groups with priorities and objectives that may support and achieve Council’s strategic priorities, and the community outcomes, would be able to potentially access funding from Council.

Social enterprises may not be community driven or deliver projects that originate from the community. As some social enterprises are set up with the intention to make a profit, Council could be seen to be providing funding to private enterprises.

What the funding can be used for and what it can’t be used for

18. The draft policy does not specify exactly what community grant funding can be used for, rather it sets out the general criteria to be considered when assessing applications (set out in Schedule One of the draft policy). This includes the following:

(a) alignment of the proposal to Council’s strategic priorities and community outcomes;

(b) clear outline of what is to be delivered;

(c) demonstrable capability, capacity and experience of the applicant to deliver the intended project, activity or service;

(d) evidence of community support for the project, activity or service; and

(e) disclosure of all other sources of funding sought, including funding already provided by Council.

19. Additional criteria or requirements which apply to the Community Development Match Fund will be considered when applications are made to that fund.

20. On adoption of the policy, an assessment form will be developed which covers the requirements set out in the policy.

21. The draft policy does, however, set out what the funding cannot be used for. There are slight differences between what cannot be funded between the Contestable Grant Fund and Partnership Agreements, and the Community Development Match Fund.

22. In general, it is intended that community grant funding cannot be used for the following (as set out in Schedule Two of the draft policy):

(a) debt servicing or repayment;

(b) legal expenses (for example, to defend an organisation in Court or to challenge a decision in the Environment Court);

(d) building consent fees and resource consent fees;

(e) activities that promote religious ministry, or political purposes and causes;

(f) medical expenses;

(g) public services that are the responsibility of central government (e.g. core education, healthcare, social work, whanau ora services etc.), except where Council has identified it as a strategic outcome e.g. homelessness, or it addresses a need in a priority community;

(h) physical works where relevant consent or permit has not yet been issued. Council may agree to a grant subject to consents or permits being granted. The funding would be released on receipt of the required consents or permits;

(i) purchase of tobacco, alcohol, vape supplies or other psychoactive substances; and

(j) development of clubrooms on active reserves (based on requirements in the Active Reserves Level of Service Policy).

23. The draft policy does not currently exclude the provision of funding for capital expenditure projects. From Council’s perspective, the funding would be operational expenditure as it would be funding provided directly to the applicant.

24. The draft policy currently states that Council is not a primary funder of community organisations and rather that it is a complementary funder. Council could choose to amend this to allow seed funding for projects or services.

Options – What can community grant funding be used for and what it can’t be used for

Options	Advantages	Disadvantages
Inclusion of general criteria as provided in Schedule One of the attached draft policy. RECOMMENDED	Provides for a standard and consistent approach to the assessment of applications.	Nil
Exclude items noted in Schedule Two of the attached draft policy. RECOMMENDED	Provides a clear understanding of what cannot be funded by a community grant.	Nil
Council is a complementary funder (i.e. does not provide seed funding). RECOMMENDED	As a complementary funder, Council has additional assurance that there is wider support for the project or initiative. Encourages community organisations to seek alternative sources of funding. Use of alternative sources of funding has the potential to leave more council funding available for other projects.	Council funding may be seen as implied community support for a project.

Strategic / Statutory Context

25. Council is mandated under the Local Government Act 2002 to “promote the social, economic, environmental, and cultural well-being of communities in the present and for the future”.

26. Council has a number of strategies and plans that, in conjunction with the Community Outcomes, set the overarching rationale for Council’s involvement in community development and support. These strategies and plans set out a range of outcomes including the following:

· increasing participation and inclusivity;

· Tauranga Moana iwi and hapū work together and are actively involved in restoring and enhancing the mauri of Tauranga Moana;

· attracting creative people;

· raising awareness and respect for minorities; and

· attractive city, quality environments.

27. The draft Community Funding Policy is intended to support Council and the community to achieve strategic priorities and community outcomes.

Financial Considerations

28. Council agreed to include $1.81 million in the draft Long-term Plan (LTP) for the proposed Contestable Grant Fund. This level of funding has been included in the draft budgets and is subject to the prioritisation process for the Long-term Plan.

29. Funding of $150,000 has been included for the Community Development Match Fund in the draft LTP.

30. Funding has been set aside to provide for the continuation of existing service level agreements based on the individual requirements of each. As noted above, some of these agreements may transition to partnership agreements.

31. Council could consider including further budget to provide for new partnership agreements that may eventuate over the next three years.

32. These budgets are subject to the prioritisation process required to develop the LTP.

Legal Implications / Risks

33. As noted previously, there are no immediate issues which may arise for Council as the recommendations do not require changes to current funding arrangements.

Consultation / Engagement

34. It was previously noted that consultation on an amended Community Investment Policy would be undertaken alongside the consultation on the LTP 2021-2031. This consultation is still recommended, noting that it will be a draft Community Funding Policy rather than an amended policy.

35. Following the 20 October Policy Committee meeting, further engagement has taken place with those that currently receive a direct grant from Council, or who have a service level agreement in place; and with the members of the Technical Working Group, including representatives from Te Rangapū Mana Whenua o Tauranga Moana Partnership. Engagement with key funders, including TECT, the Acorn Foundation and Bay Trust has also taken place.

Significance

36. The decisions that are recommended are considered to be of low significance. The decisions are intended to guide the direction of the draft Community Funding Policy prior to seeking a decision to adopt a draft policy for consultation.

Next Steps

37. Update the draft policy based on the recommendations approved by Council. A draft policy will then be brought back to Council for adoption for consultation alongside the LTP.

Attachments

1. Matrix of community grants against well-being’s and community outcomes - A12087473

2. Draft Community Funding Policy 2020 - A11962446 ⇩

Ordinary Council Meeting Agenda

14 December 2020

TAURANGA_CITY_LOGO Draft Community Funding Policy

Policy type	City
Authorised by	Council
First adopted	XXX	Minute reference	XXX
Revisions/amendments	NA	Minute references	NA
Review date	This policy will be reviewed every three years to align with the long-term plan.

1. PURPOSE

1.1 To ensure a structured, transparent, and fiscally prudent approach to the fair distribution of funding assistance to eligible entities for the contestable grants fund, the community development match fund, and partnership agreements.

2. SCOPE

2.1 This policy applies to community grant funding allocated by Tauranga City Council through the following methods:

· Contestable Grants Fund

· Community Development Match Fund

· Partnership Agreements

2.2 Events funding and the Stewart and Carruthers Funds are outside the scope of this policy.

2.3 All monies provided by central government for council to distribute (for example, Creative Communities) are outside the scope of this policy.

3. DEFINITIONS

Term	Definition
Community Development Match Fund	A sub-set of community grant funding and specifically refers to two funding windows of up to $1,000 (small grants) and up to $10,000 (medium grants) that aim to support community initiatives that promote social, cultural and environmental wellbeing. The match fund requires that the applicant match the funds provided by council with funds, volunteer contribution or in-kind contribution of at least equal value to the funds provided by council.
Community grant funding	Financial contribution to a community organisation, group or sector of the community to achieve a specified outcome. This includes the Contestable Grant Fund, the Community Development Match Fund and Partnership Agreements.
Community organisation	A voluntary or not-for-profit organisation that serves a public benefit; and that relies on volunteers for at least its governance; and has values, purpose and objectives independent of government or commercial institutions. It must be a registered trust or incorporated society with IRD charitable status. Unless there are clearly justified reasons, membership or participation in its activities should be available to everyone who wishes to join.
Contestable grant funding	Refers to the following: · Funding to support the delivery of a clearly defined activity, project or initiative · Monies awarded through a publicly contestable process · An assessment panel assesses funding applications and allocates limited funds as fairly and strategically as possible · Applications are invited through scheduled funding round(s), which are publicly advertised and have an opening and closing date · Eligible applicants have an equal opportunity to be considered for a grant · A clearly defined assessment process is applied to all applicants in a transparent manner · Financial allocation is discoverable and public
Partnership Agreement	Refers to non-contestable, multi-year agreements with select community organisations, with generally long-standing relationships with Council to deliver actions and programmes that align with community outcomes and council’s strategic priorities.

4. PRINCIPLES

4.1 The following policy principles will guide council’s decision-making process, and inform the design and implementation of council’s community grant funding programme:

· Transparency

· Equity

· Accountability; and

· Recognition of our partnership relationship with iwi and hapū from Tauranga Moana.

5. POLICY STATEMENT

5.1 General

5.1.1 Community organisations support council to promote the social, economic, cultural and environmental wellbeing of Tauranga residents.

5.1.2 Community grant funding will build upon and support community-led initiatives, which create positive change in the community, enhance the community’s ability to meet its own needs, and develop local community leadership.

5.1.3 Tauranga City Council allocates community grant funding from a limited pool of money.

5.1.4 Council is not a primary funder of community organisations. All grants will recognise council’s role as a complementary funder through prioritising those organisations that have actively sought other funding before approaching Council.

5.1.5 Grants will be targeted to achieve council’s strategic priorities, community outcomes, principles of support, and be appropriate to the purpose and role of a local authority.

5.1.6 The total financial assistance provided through the Contestable Grants Fund, Community Match Fund, and Partnership Agreements is agreed every three years through the Long-term Plan.

5.1.7 All requests for community grant funding received as a submission to the Annual Plan or Long-term Plan will be referred to the Contestable Grants Fund, Community Development Match Fund, or for discussion regarding a Partnership Agreement.

5.1.8 Council does not fund limited liability companies or incorporated societies that are not registered charities. The only exceptions to this are iwi or hapū organisations requesting funding to deliver kaupapa Māori outcomes.

5.1.9 An organisation yet to register as a trust with IRD charitable status or an incorporated society with IRD charitable status, may use an umbrella organisation to receive funds where there is clear evidence that the organisation intends to register as a trust or incorporated society with charitable status. This excludes small grants received through the Community Development Match Funds, which may be directly given to unregistered groups.

5.1.10 In general community funding will not be provided where delivery of the project is outside the Tauranga City Council area.

5.1.11 Any monies in the community grant funding budget not allocated at the end of the council financial year will not be carried forward.

5.2 General funding criteria

5.2.1 The general funding criteria are outlined in schedule one. These criteria will be considered when assessing applications to determine their relative merit and assist decision-makers to prioritise between applications of similar merit. Applicants must also have regard to the specific fund requirements in the schedules.

5.2.2 All applications for community grant funding must demonstrate how the activity promotes one or more of the well-beings (social, economic, environmental, cultural) of the local community, and the community outcomes included in the Long-term Plan applicable at the time of the application. Preference will be given to those organisations that demonstrate that funding will promote more than one of the well-beings and community outcomes.

5.2.3 Funding will not be provided for any of the goods, services or activities listed at schedule two to this policy. Council may specify additional exclusions for funding.

5.2.4 Council may amend the schedules at any time via resolution.

5.3 Contestable Grants Fund

5.3.1 The Contestable Grants Fund is open to applications from community organisations. Organisations, including iwi and hapū organisations, delivering kaupapa Māori outcomes may also apply to the fund.

5.3.2 The minimum funding amount for the Contestable Grants Fund is $10,001 and the maximum amount is $50,000.

5.3.3 Applications for amounts less than $10,000 will be referred to the Community Development Match Fund.

5.3.4 The Contestable Grants Fund will be distributed through two funding rounds in March and September, annually.

5.3.5 All decisions on applications for the Contestable Grant Fund will be made by an assessment panel consisting of two elected members, staff and an independent representative from one of the community philanthropic funding organisations, upon recommendations of Council staff.

5.3.6 Refer to schedule three of this policy for principles of support to be considered.

5.4 Community Development Match Fund

5.4.1 The Community Development Match Fund is open to applications from community organisations, not for profit groups, communities of interest, tangata whenua organisations, informal and grass root neighbourhood groups.

5.4.2 Groups with no formal legal structure may apply for grant funding when an umbrella organisation that meets this policy’s definition of a community organisation has been nominated and agreed to receive and administer the funds.

5.4.3 Community Development Match Fund medium grants of between $1,000 and $10,000 are distributed through two funding rounds in approximately June and December, annually.

5.4.4 Applicants need to provide a match of at least 50% of the total value of the project of in-kind support, volunteer time or money.

5.4.5 Small grants of up to $1,000 are distributed throughout the year. Decisions on applications for small grants are made by the Community Development Team.

5.4.6 Decisions on applications for the Community Development Match Fund will be made by an assessment panel of two elected members, representatives from community philanthropic funding organisations and at least two Council staff.

5.4.7 Refer to Schedule four for specific requirements.

5.5 Partnership agreements

5.5.1 Partnership agreements are a non-contestable community grant available for select community organisations with long-standing relationships with Council, to deliver actions and programmes that align with community outcomes and council’s strategic priorities.

5.5.2 Any funding provided to support a partnership agreement may not be used for any of the activities included at schedule two of this policy.

5.5.3 Council, or a community organisation, may initiate discussions to enter into a partnership agreement. All partnership agreements will meet the general criteria and eligibility for funding outlined in this policy.

5.6 Decisions on funding applications

5.6.1 The extent of the due diligence undertaken by Council staff and the amount of information requested from applicants will be relative to the amount of community grant funding being requested.

5.6.2 In a competitive funding environment, the following will be a lower priority for funding:

· Travel and accommodation outside Tauranga or the western Bay of Plenty sub-region, unless Council is convinced there will be a tangible benefit for Tauranga communities

· Retrospective costs (where the activity has already taken place), unless this is necessary as a condition of the grant or Council is satisfied there are other mitigating circumstances

· Any requests where the organisation currently receives or has previously received Council funding assistance, for example through reduced rent, occupancy of a council asset including land, any other subsidies, funding through an existing multi-year funding agreement or any previous grant funding.

5.6.3 Preference will be given to community-led or iwi/ hapū led organisations that demonstrate genuine engagement with local communities or tangata whenua and encourage participation across diverse communities.

5.7 Transparency and accountability

5.7.1 Council will ensure that all administrative and decision-making processes about community grant funding are presented in such a way that they can be easily understood by the community.

5.7.2 The extent of the due diligence undertaken by Council staff and the amount of information requested from applicants will be relative to the amount of community grant funding received.

5.7.3 Any form of community grant funding will be described in a funding agreement commensurate with the level of funding provided. The agreement will contain the roles and responsibilities that both the Council and the organisation receiving funding agree upon, and the project, activity or service that the organisation will provide to the community. The agreement may vary depending on the amount of support provided and the type of support.

5.7.4 Council is reminded of its requirement to be financially prudent and undertake transactions with good business practice. This applies to the distribution of community grant funding under this policy. Council upholds its statutory responsibility to ensure the lawful, transparent and prudent expenditure of public funds.

5.7.5 Community grant funding recipients are required to acknowledge publicly (at a scale commensurate with the level of funding received) the receipt of Tauranga City Council community grant funding by the following methods:

· Acknowledgment on publicity material, including use of the Tauranga City Council logo (mandatory for all community grant funding)

· Acknowledgment in the organisation’s annual report is mandatory (where an organisation prepares one)

· Acknowledgment by plaque or signage on equipment, building or vehicles where significant amounts of funding have been allocated

· Acknowledgment at events through the use of Tauranga City Council flags, banners, posters and/or logos, where appropriate.

5.7.6 All recipients of community grant funding must ensure that the funded activity remains compliant with all relevant legislation, regulations and terms and conditions, including health and safety legislation.

5.7.7 A failure to meet all relevant terms and conditions associated with Council community grant funding may result in all or one of the following:

· termination of funding

· decline of future funding

· repayment of part or all of the allocated funding.

5.7.8 All recipients of community grant funding are required to complete an accountability report (at a scale commensurate with the amount of funding provided) and provide any other funding expenditure or evaluation documentation requested by Council. These must be completed either as soon as the funds are spent, or within one calendar year of receipt of grants funding, whether allocated funds were spent or not.

5.7.9 A failure to return required funding accountability or evaluation documentation may result in a denial of funding in future grants applications.

5.7.10 Any unspent funds must be returned to Council within one year of receipt unless there is prior agreement with the Council to carry over such funds.

5.7.11 Any discrepancies in funding (e.g. funds spent on activities other than those specified in the approved grants funding application) may result in an audit of the recipient’s accounts and the funded activity, and the potential return to the Council of grants funding received.

5.7.12 Funding allocation may be reviewed on a case-by-case basis, in order to evaluate project outcomes, assess the extent to which the funding achieved Council’s strategic objectives, and ensure the grants programme continues to reflect community needs.

5.7.13 Conflicts of interest will be identified and appropriately managed.

5.7.14 Adequate records are kept at each stage of the funding ‘lifecycle’ to support internal and external audit requirements and evaluate the impact of the grants programme.

5.7.15 Methods of monitoring will be proportional to the amount of funding and the funding recipient and not impose an unnecessary burden on recipients.

6. DELEGATIONS

6.1 The implementation of this policy is delegated to the Chief Executive and their sub-delegates.

7. REFERENCES AND RELEVANT LEGISLATION

7.1 Local Government Act 2002

8. ASSOCIATED POLICIES/PROCEDURES

· Procurement Policy

· Stewart Trust and Carruthers Trust Funds Policy

· Events Funding Framework

· Active Reserves Level of Service Policy

9. SCHEDULES

Schedule one: General criteria to be considered in assessing applications for the Contestable Grants Fund, Community Development Match Fund, and Partnership Agreements

Has the application…….

Made a compelling case for how the proposal aligns to the funding priorities established?

Clearly defined the purpose, expected community outcomes, and expected achievement of social, economic, environmental and cultural wellbeing of the local community of the project, activity, or service, for example the need they are meeting and why this is important?

Clearly described the project, activity or service, what will be delivered, and satisfied council that it is viable?

Demonstrated the capability, capacity and experience to deliver the project, activity or service to an appropriate standard, evidenced by a relevant track record of successful delivery?

Presented a realistic, evidenced-based budget for the project, activity or service, and identified exactly how the council grant would be spent?

Given thought to how the community organisation will show the grant has benefited the community (or for larger grants, identifying how the organisation will evaluate the success of the project, activity or service)?

Identified who the project, activity or service will benefit and where in Tauranga City Council area these people are likely to come from?

Provided evidence of community support for, and/ or involvement in, the project, activity or service, and/or evidence of support from the recognised regional or national body (where relevant)?

Shown that the project, activity or service will support multiple funding priorities (this is not required, but may affect the relative merit of the project)?

Disclosed all council funding (financial or otherwise) e.g. current council funding, rental subsidies, previous grants, leases, licenses to occupy?

Schedule two: Activities that will not be funded through community grant funding

Debt servicing or repayment

Legal expenses (for example, to defend an organisation in Court or to challenge a decision in the Environment Court)

To contract individual persons

Building consent fees and resource consent fees

Activities that promote religious ministry, or political purposes and causes

Medical expenses

Public services that are the responsibility of central government (e.g. core education, healthcare, social work, whanau ora services) except where Council has identified it as a strategic outcome e.g. homelessness, or it addresses a need in a priority community.

Physical works where relevant consent or permit has not yet been issued. Council may agree to a grant subject to consents or permits being granted. The funding would be released on receipt of the required consents or permits.

Purchase of tobacco, alcohol, vape supplies or other psychoactive substances

Development of clubrooms on active reserves (based on requirements in the Active Reserves Level of Service Policy)

Schedule three: Principles of support to be considered when applying to the Contestable Grant Fund

Communities of need and social equity

We want to our city to be a great place to live for everyone. We are committed to ensuring that those who need support most receive it by providing financial and other support for initiatives focused on areas of high deprivation and priority communities of interest.

Encourage Kaupapa Māori Outcomes

We value the importance of strengthening and supporting Kaupapa Māori outcomes and acknowledge the need for nurturing strong relationships founded on Māori values, principles and practices.

Community pride and belonging

Celebrating identity, heritage and cultural diversity, and feeling of a sense of belonging and inclusion. We are committed to celebrating our diverse cultural identities and fostering the creative arts to enhance the wellbeing of our community.

Wellbeing and participation

So that Tauranga is an inclusive and accessible city that enables healthy living and recreation to support improved wellbeing. Note that this includes healthy and active communities - supporting healthy living and physical activity and having access to health services for all ages, cultures, and disabilities.

Safe and resilient communities

People are safe and feel safe in their homes, neighbourhoods and public places.

Environmental sustainability

Environmental restoration, helping minimise our impact on the environment and promoting sustainability of our resources in Tauranga Moana.

Schedule four: Community Development Match Fund

What can get funded?

• All Match Fund applications must demonstrate a contribution to at least one of the Principles of Support.

• Preference will be given to applications that benefit Priority Communities.

How much and when?

	Small grants	Medium grants
Funds available	Applications – up to $1,000	Applications – up to $10,000
When you can apply	Anytime	By 31 May and 10 November
When you will get a decision	Within three weeks of receipt of application	Within two weeks of the Match Fund Panel meeting

Who can apply?

The Community Development Match Fund is open to applications from community organisations, not for profit groups, communities of interest, tangata whenua organisations, informal and grass root neighbourhood groups.

Council will administer funds directly to unregistered groups for small grants. For medium grants, unregistered group applicants are required to identify a legally constituted organisation such as a charity, incorporated society or Trust to act as an “umbrella organisation” willing to receive and monitor funds on your behalf. You will need to obtain the umbrella organisation’s approval for this and provide details of the umbrella organisation in your application form.

Match Fund Principles of Support

The below Principles of Support demonstrate how Tauranga City Council understands and approaches community wellbeing. Any project must demonstrate that it contributes to at least one of the Principles of Support. The more and better that a project application aligns with Council’s Principles of Support, the more likely the project will be supported by the Match Fund.

1. Communities of need and social equity: We want to our city to be a great place to live for everyone. We are committed to ensuring that those who need support most receive it by providing financial and other support for initiatives focused on areas of high deprivation and priority communities of interest.

2. Encourage Kaupapa Māori Outcomes: We value the importance of strengthening and supporting Kaupapa Māori outcomes and acknowledge the need for nurturing strong relationships founded on Māori values, principles and practices.

3. Community pride and belonging: Celebrating identity, heritage and cultural diversity, and feeling of a sense of belonging and inclusion. We are committed to celebrating our diverse cultural identities and fostering the creative arts to enhance the wellbeing of our community.

4. Wellbeing and participation: So that Tauranga is an inclusive and accessible city that enables healthy living and recreation to support improved wellbeing. Note that this includes the principle of Healthy and active communities: Supporting healthy living and physical activity and having access to health services for all ages, cultures, and disabilities.

5. Safe and resilient communities: People are safe and feel safe in their homes, neighbourhoods and public places.

7. Environmental sustainability: Environmental restoration, helping minimise our impact on the environment and promoting sustainability of our resources in Tauranga Moana.

Priority Communities

The Match Fund recognises that, from a social wellbeing and equity perspective, some communities face higher need than others, require more support, and are less likely to access council or other support. We have identified the areas of interest that we recognise need priority support and funding – Priority Communities.

Note: Importantly, the Match Fund decision panel will not exclude any communities (not otherwise excluded – see below). However, in deciding to allocate limited funds, it will prioritise the below Priority Communities to be as effective as possible.

Match Fund decisions will be weighted towards these areas of interest and we recommend that all applicants take the time to meaningfully address the relevant areas in their application.

• Support in areas of high deprivation (those communities with a deprivation index of 7-10 or are otherwise identified as the communities of highest deprivation in Tauranga).

• Increase access to community facilities and services.

• Reduce homelessness.

• Decrease inequity by providing opportunities for everyone to participate and be included in programmes, services, events and initiatives.

• Welcome newcomers and embrace and celebrate cultural diversity.

• Encourage social connectiveness in order to reduce social isolation.

• Ensure our community has access to the history and stories of Tauranga.

• Provide infrastructure and services that support healthy and active living for all ages and abilities.

• Increase community resilience and preparedness.

• Improve safety – either family, home or community.

• Improve the level of engagement amongst community organisations operating for a similar purpose and their collective impact on the community.

• Tauranga values strong partnerships with community organisations which are sustainable and supporters of our community wellbeing outcomes. We encourage collaboration with and between organisations.

• Promote and improve youth engagement and advocacy.

• Improve tools and resources for community organisations to provide a better experience for our communities.

• Help minimise our impact on the environment and promote sustainability of our resources in Tauranga.

What we don’t fund

Support is not available to:

• Individuals

• Political parties

• Commercial entities

• Projects or programmes with any religious proselytization.

• Maintaining ongoing programmes, events or services

• Operating expenses of organisations including funding permanent staff

• Maintenance or deferred maintenance

• Purchase or improvement of privately-owned facilities

• Funding activities that involve any alcohol, tobacco, substances and gaming

• Professional fundraising services

• Activities/projects already completed

• Projects that have already been funded or part-funded by Council

• Projects, initiatives or programmes which could be deemed anti-competitive

• Internal applicants from Council

• Council-controlled organisations (CCOs)

• Other local authorities, government agencies or public sector entities

• Projects or programmes which are to be delivered ostensibly outside the geographic area of Tauranga City

Support will also not be granted to applicants that:

• are not aligned to Council’s Principles of Support

• require debt servicing assistance or have outstanding debt with Tauranga City Council

• whose activities or behaviour could be deemed discriminatory, racist or illegal

• have breached previous support agreements with Tauranga City Council, including post-event reporting requirements and where no commitment has been made to rectify this situation

Types of things we fund include:

• Professional Services such as consents; professional consultants (landscape architect, graphic designer, web designer, educators); artists (DJ, performing artists); services (translation, interpretation, printing, advertising, filming); insurance for project if required.

• Supplies and Materials such as landscape materials; tools; paint; books, appropriate manuals; facility rental; playgroup equipment; marketing material; equipment hireage; food; event and volunteer costs.

• Construction/Capital such as demolition, grading and other activities related to site preparation; utilities work (water retention, sewer connection); electrical work (site lighting, electrical service, transformer) concrete work (sidewalks, ramp, seat walls); irrigation (connections, piping, spray sprinklers).

Community contributions – the match

You need to provide at least 50% of the value of the project in in-kind support or volunteer time or money as your match.

• materials and supplies: valued at their retail or rental prices. Donors must document this value of the match.

• cash donations: from fundraising or donations with evidence such as a bank statement.

• professional services: valued at a maximum of $100 per hour. Donors must document on letterhead the value of the services being donated.

• volunteer labour: valued at 15% above the minimum wage per hour for participants over 16-years of age.

Match Fund – other information

• Events: Projects that are events must provide “free or low cost (i.e. $10 or under) admission to the public”

• Opportunity to Pitch: Applicants are welcome to pitch their projects to Panel representatives, please contact the Community Development Advisor for the Match Fund

• The Match Fund Panel has the discretion to fund projects that are ongoing programmes, events or services, however, this is only available for applications from unregistered organisations.

• An applicant is only eligible for one small grant and one medium grant in the same financial year (July to June).

Ordinary Council Meeting Agenda

14 December 2020

10.2 LTP 2021-2031 Potential Projects

File Number: A12064486

Author: Anne Payne, Strategic Advisor

Authoriser: Christine Jones, General Manager: Strategy & Growth

Purpose of the Report

1. This report provides summary information about several potential LTP projects that have not previously been specifically presented to Council for consideration.

Recommendations

That the Council:

(a) Receives the report “LTP 2021-2031 Potential Projects”; and

(b) Notes information provided and the proposed next steps.

Discussion

2. This report is for information only. It provides background information about several potential projects that Council may wish to consider for inclusion in, or exclusion from, the 2021-2031 LTP. Council’s consideration of these projects will occur during the LTP prioritisation process commencing in February 2021.

3. The potential projects are outlined below. The scenario[1] references and related narrative indicate whether each project is included in the working draft.

Waters

Growing Communities Smart Hub (Sustainability Centre): $3.11m capex (scenario D and not included in working draft)

4. The project is to develop a multi-purpose facility (the Hub) to provide the community with educational opportunities in sustainability, waste and three waters (drinking water, stormwater and wastewater). The Hub would initially build on existing education programmes delivered primarily to school aged children but is intended to grow and evolve as the needs of the city change. Initial thinking is that the Hub would be built at the Te Maunga wastewater site, subject to results from the feasibility work.

5. Feasibility work is being undertaken in partnership with TECT this financial year, with TCC’s 50% share being funded from existing opex budgets. The development, design and build for the facility is budgeted at $3.1million across 2023 and 2024 (years 2 and 3).

6. 60% of the capital cost is anticipated to be funded by TECT and other parties e.g. MfE, Lotto, BOPRC. TECT is strongly committed to this project, which would rely on local community partnerships and funding. It is envisaged that Council would help to build the building, and possibly move some existing staff to the Hub, but that to be successful the Hub would be run by community groups in the longer term.

7. As the city’s population grows, its natural environment is vulnerable to degradation and greater pressure is placed on the city’s infrastructure. As a result, there is a growing need for Tauranga’s communities, both residential and business, to adopt more sustainable water and waste behaviours. Education has been shown to be one of the key tools for changing sustainability behaviours, which would lead to more responsible water and waste decisions being made by individuals and organisations in our communities. This would help to build resilience, prevent further environmental degradation, and alleviate pressure placed on current infrastructure and levels of service.

8. The Hub aligns with multiple Council objectives and resource consent conditions. Council has responsibilities under its Waste Management and Minimisation Plan and the City Waters Management Plan to influence the behaviour of Tauranga residents through educational programmes at all levels.

9. The project was included in the previous 2018-2028 LTP as the Te Maunga Education Hub to the value of $1.1million, pending results from an initial feasibility study and funding commitments from key partners such as TECT.

Community Development

Tauranga Wellbeing Centre: $100k opex (included in working draft)

10. This is a partnership project, with the aim of Council contributing to the project but not owning or operating the Centre. The BOPDHB and Kainga Ora are two key partners for the project, alongside many local community providers.

11. The project is to develop a centralised space (the Centre) within the Te Papa peninsula that supports individuals or families through periods of crisis. On an everyday basis, the Centre is about responding to our community during moments of personal crisis. It is envisaged that front-line services would be co-located at the Centre, to support collaboration and client-centred support. During states of local, regional or national emergencies, the Centre would become the civil defence community response centre.

12. During the recent COVID-19 pandemic, Tauranga families and individuals emerged in crisis with unmet needs. These numbers are still increasing with new people seeking help through Levels 1-2. Currently, there is no centralised place to assist our Tauranga residents to navigate the myriad of support services available. Should levels increase to 3-4 in the future, or additional states of emergency arise, Tauranga needs to be prepared to provide a higher level of service to its residents.

13. Over the past six months a feasibility study has been undertaken in partnership with a wide range of community providers. This was to ensure the Centre is designed to meet the needs of individuals and families in crisis and does not duplicate or compete with existing service provision. The feasibility report is due in December 2020.

14. An initial $100k opex budget in 2022 (year 1) is to fund a full business case, incorporating concept planning (including architectural drawings and engagement testing). The site for the Centre would be determined during this phase, along with funding contributions from the key partners.

15. This project aligns with Council’s Kainga Tupu: Growing Homes Strategy and the Tauranga Western Bay Safer Communities Strategic Plan 2020-2025. It also aligns with the National Homelessness Action Plan, the National CDEM Plan Order 2015, the BOP CDEM Group Plan 2019/2024 and the BOP CDEM Group Welfare Plan 2019-2024.

Youth Initiative pilot programme / Youth Activations Hub: $100k opex (included in working draft)

16. The Vital Updates survey identified that our youth feel socially isolated. We are yet to understand the drivers behind this, however some of the feedback from youth was that there isn’t a place dedicated for young people in Tauranga.

17. The aim of this project is to provide a place for young people to connect, feel safe, feel vibrant and where they can be themselves. This would be an inviting place for young people to be creative, socialise and equip themselves with tools and skills to build confidence and connect. It would also provide a valuable way to engage with young people on any project or proposal and could be a place of connection for other organisations to engage with young people.

18. The budget of $100k opex in 2022 (year 1) is for engagement and feasibility work to identify how best to deliver the aims of this project and meet the needs of Tauranga youth, and what Council’s role should be in the short and long term. This is a partnership project working with local and national agencies and groups, including the BOPDHB, Sport BOP, Priority One, secondary schools and Te Ara Rau. The Tauranga Moana Rangatahi Youth Engagement Plan, currently under review, will provide a key reference point for this investigation work.

Spaces and Places

Mount Maunganui Visitor Information Centre (not included in working draft)

19. A report on this project was included in the 8 December 2020 Projects, Services and Operations Committee agenda, refer: 8.8 Long Term Plan - Mount Maunganui Visitor Information Centre

20. Specific funding for this project has not been included in the LTP at this stage.

Stadium: $120k opex (scenario A and included in working draft)

21. Consideration of a stadium is included within the Community Facilities Investment Plan, as part of development of masterplan for Baypark. This is referenced in a report to the 24 November 2020 Urban Form and Transport Development Committee, refer Attachment A, page 8 (page 74 of the agenda): 9.3 Long Term Plan 2012 - 2031: Community Facilities Investment Plan

22. Funds are available in existing budgets to contribute towards the development of a feasibility study and an investment case in years 2022 and 2023 (years 1 and 2) respectively. Using a regional partnership approach, costs will be split across the three Councils and other contributing organisations (e.g. Sport NZ, TECT, Priority One). Council’s portion of costs is an estimated $50k in 2022 (year 1) and $70k in 2023 (year 2).

Memorial Park to city centre pathway $17.24m capex (scenario D and not included in working draft)

23. This project is to develop a harbour-edge pathway from Memorial Park to the city centre waterfront park. The project cost is estimated at $17.24m capex, indicated for 2025-2026 (years 4-5) delivery.

24. Council resolution (27 August 2019 and 16 July 2020) has sought further public engagement as an input to the LTP process. A separate issues and options paper for this project will be provided to Council early in the New Year, as part of its LTP consideration.

Marine Parade boardwalk: $1.14m capex (scenario D and not included in working draft)

25. This project is an eastward extension of the existing boardwalk, which currently terminates at the Cenotaph (just east of Moturiki beach access).

26. Indicative budget is $1.14m capex, with design and engagement in 2023 (year 2) and delivery in 2024-2025 (years 3-4).

27. Strong support for this project was noted through the recent Innovating Streets engagement.

Accessibility ‘hotspots’: $150k opex + $1.4m capex (scenario D and not included in working draft)

28. Social isolation and exclusion came through strongly as issues within our community in the Disability and Age Friendly Vital Signs research. The project takes an innovative approach to removing disability barriers by encompassing a range of accessibility initiatives within one relatively small geographic area at a time, with the long-term view of joining up the ‘hotspots’ across the city. The aim is to make each ‘hotspot’ an area that disabled people can confidently go with the knowledge that their accessibility needs will be met, enabling them to play a full part in our city whether they are residents, cruise ship passengers or national/international visitors to the city. While an accessibility ‘hotspot’ project incorporates some physical delivery, a key element of this approach is to coordinate delivery of Council accessibility initiatives for each ‘hotspot’.

29. This project focuses on the Mount Maunganui area north of Banks Ave, as there are already a range of accessibility initiatives delivered or underway in that area. These include the Mount Drury accessible bathroom, Mauao trailrider access project, and beach access matting.

30. This project budget is $150k opex in 2022 (year 1) for engagement and business case development, followed by $1.4m estimated delivery cost in 2023 (year 2). The delivery cost would be largely determined during business case development. The types of initiatives envisaged for the delivery phase include: an all abilities playground, mobility scooter charging points, remedial work to footpaths and roads, accessible park furniture (e.g. barbeque tables) additional beach matting, upgrades to accessible bathrooms, additional accessible carparks, and potentially some storage options for accessible beach equipment.

31. This project aligns with TCC’s 2013 Disability Strategy, and the NZ Disability Strategy 2016-2026 and Disability Action Plan 2019-2023.

Shared club facility Gordon Spratt Reserve: $4.81m capex (scenario D and not included in working draft)

32. This project is to develop a shared club community facility on Gordon Spratt Reserve, which is to be constructed on top of the current changing rooms and toilets at the Reserve. A needs analysis and feasibility study have been completed.

33. The proposed project budget is $135k in 2022 (year 1) for planning, followed by $4.68m in 2023 (year 2) as Council’s contribution to the build.

Windemere Park development: $3.17m capex (scenario D and not included in working draft)

34. This project is to develop a boardwalk and pathways to link the Polytechnic campus around the Windermere peninsula, using the reserves and esplanades, through to Turret Road and the city network.

35. The proposed project budget is $3.17m capex in 2028 (year 7).

York Park development: $1.07m capex (scenario D and not included in working draft)

36. This project is to develop a boardwalk and pathways to link the Otumoetai network through the wetland area to Gordon Carmichael reserve and into the western city network.

37. The proposed project budget is $1.07m capex in 2029 (year 8).

Next Steps

38. Council will consider these potential projects as part of its LTP prioritisation process commencing in February 2021.

Attachments

Nil

Ordinary Council Meeting Agenda

14 December 2020

10.3 Long-Term Plan 2021/31 - Update and Working Draft

File Number: A12084870

Author: Jeremy Boase, Manager: Strategy and Corporate Planning

Kathryn Sharplin, Manager: Finance

Christine Jones, General Manager: Strategy & Growth

Authoriser: Paul Davidson, General Manager: Corporate Services

Purpose of the Report

1. This report provides an update on the process to develop the draft Long-Term Plan 2021-31 and includes details of the current working draft. It also seeks input from Council ahead of a refined draft being presented to Council in February 2021 for decision-making.

Recommendations

That the Council:

(a) Receive the report ‘Long-Term Plan 2021-31 – Update and Working Draft’.

(b) Request the Executive report back in February 2021 with an updated working draft Long-Term Plan for further detailed consideration.

Executive Summary

2. The process to develop the Long-Term Plan (“LTP”) 2021-31 has been underway for many months and draws on a number of critical workstreams that have been underway for, in some cases, years.

3. It has been previously reported to council that there is likely to be a significant fiscal shortfall between the needs of current and future communities and council’s ability to finance and fund the relevant expenditure. As part of the development of the LTP budgets have been prepared and collated which confirm this.

4. The Executive have considered the LTP by building a series of cumulative scenarios, starting with a ‘baseline’ scenario (identified as Scenario A in Attachment 1) which does not deliver on community needs in any meaningful way and steadily expanding the delivery of outcomes. From this a working draft has been prepared. This working draft forms the basis of this report’s consideration.

5. There are a number of aspects of the LTP that are still under detailed consideration. Feedback on these matters will be built into an updated working draft for consideration by Council in February 2021.

Background

Legislative background

6. The purpose of a Long-Term Plan is to:

(a) describe the activities of the local authority; and

(b) describe the community outcomes of the local authority’s district; and

(c) provide integrated decision-making and co-ordination of the resources of the local authority; and

(d) provide a long-term focus for the decisions and activities of the local authority; and

(e) provide a basis for accountability of the local authority to the community[2].

7. An LTP is prepared every three years, covers ten years (and includes an infrastructure strategy that covers 30 years), must include specific information described in the Local Government Act 2002, must be audited, and can only be adopted after a period of public consultation on a consultation document which itself also needs to be audited[3].

Previous reports

8. This report builds on a succession of other reports relating to both the process of developing an LTP and on individual components of the LTP.

9. Regarding the process of developing the LTP, these preceding reports include a report to Council on 11 August 2020 titled Long-Term Plan Workstreams which introduced (and received approval for) a number of workstreams under the following categories:

10. Using this framework, progress updates have been reported to the Policy Committee on 8 September 2020, 22 October 2020 and 1 December 2020.

11. On 22 September 2020 the Finance, Audit & Risk Committee considered a report titled Funding & Financing for the Long-Term Plan which recognised the key challenge for the LTP process as there being insufficient funding and financing capacity to meet the city’s infrastructure needs. In response to this challenge the report identified a series of workstreams to consider funding and financing issues.

12. In addition, on 17 November 2020 Council received a paper titled Long Term Plan 2021-2031 Update. This report provided an update on high-level financial issues emerging through the LTP development process, the scenario-based approach to considering the capital expenditure programme and broader budget, and the need to prepare a budget that meets prudent financial management requirements.

Financial management obligations

13. Section 101 of the Local Government Act 2002 sets out council’s financial management obligations. Of particular relevance to the development of this LTP are the following sub-clauses:

(1) 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.

(2) A local authority must make adequate and effective provision in its long-term plan and in its annual plan (where applicable) to meet the expenditure needs of the local authority identified in that long-term plan and annual plan.

14. The following sub-sections expand on the two key themes within these clauses.

‘Effective provision’ for the ‘current and future interests of the community’

15. The requirement to promote, and to provide the expenditure to meet, the current and future interests of the community gives effect to the purpose of local government, part of which is to “promote the social, economic, environmental, and cultural well-being of communities in the present and for the future.” [4]

16. Current and future interests of the community have been identified through:

· key strategic direction provided by national policy and significant sub-regional or city planning processes; and

· specific LTP workstreams progressed to address identified gaps and opportunities.

17. The LTP scenarios (described later in this report) incorporate (to varying degrees) the type of expenditure necessary to provide for the identified current and future interests of the community. Those strategic directives workstreams with significant financial implications include the:

(a) National Policy Statement on Urban Development 2020 which came into effect on 20 August 2020, replacing the National Policy Statement on Urban Development Capacity 2016. This requires sufficient infrastructure-ready housing and business land development capacity to meet expected needs.

(b) Urban Form and Transport Initiative (“UFTI”) Report, approved and endorsed for inclusion in the LTP process by Council on 1 July 2020. This is a programme business case setting out the integrated land use and transport programme and high-level delivery plan for the western Bay of Plenty sub-region over the next 30-70 years.

(c) Western Bay of Plenty Transport System Plan and the Transport System Operating Framework, approved for the purposes of the development of the LTP by Council on 28 October 2020. This framework is intended to guide the development and implementation of transport projects identified under the UFTI programme business case.

(d) Te Papa Spatial Plan and Implementation Plan, approved, with funding subject to the LTP process, by the Urban Form and Transport Development Committee on 13 October 2020. This provides a 30-year blueprint of the strategic direction for growth in the Te Papa peninsula, forming the basis for the co-ordination of decision making across multiple agencies in a growth context.

(e) Community Facilities Investment Plan, adopted as the basis for consideration of such facilities in the LTP by the Urban Form and Transport Development Committee on 24 November 2020. This builds on existing strategies and recent needs assessments to provide investment priorities across the library, community centre, indoor court, aquatic centre, and sports field networks.

(f) Infrastructure Resilience Projects report, approved for use in the development of the LTP by the Urban Form and Transport Development Committee on 24 November 2020. This report follows a three-year process of identifying natural hazard risks and asset vulnerabilities and identifies the priority projects needed to improve the resilience of city-wide infrastructure.

(g) Eastern Corridor Wastewater Study, endorsed in principle with delivery subject to LTP funding by the Urban Form and Transport Development Committee on 9 June 2020. This programme, supporting a strategy developed in 2018/19, provides for the network improvements needed to service existing areas of the corridor as well as the Wairakei and Te Tumu growth areas.

(h) Western Corridor Wastewater Study, endorsed in principle with delivery subject to LTP funding by Council on 5 May 2020. This strategy considers the requirements to be able to service not only short-term developments in the corridor but also longer-term areas identified for future growth.

(i) Urban Communities Programme – Spatial Planning and Neighbourhood Planning, both approved by the Urban Form and Transport Development Committee on 24 November 2020 with expenditure to be considered through the LTP process. These projects provide for high-level and then more detailed planning for growth in existing areas of the city.

(j) Community Grant Fund, approved in principle for inclusion in the LTP consultation document by the Policy Committee on 20 October 2020 (noting that a further report on the details of this proposal was also requested). This provides for a bulk fund for community grants with devolved decision-making subject to a Council-approved framework.

(k) proposed changes to the road resealing level of service, approved for inclusion in the LTP prioritisation process by the Policy Committee on 20 October 2020. This decision provides for like-for-like road resealing rather than the current level of service which provides for resurfacing which is fit-for-purpose in an asset management and engineering sense.

18. In addition, after a period of community consultation the Policy Committee adopted the following community outcomes and principles for the LTP on 8 September 2020.

Community outcomes

· We value and protect our environment - Tauranga is a city that values our natural environment and outdoor lifestyle, and actively works to protect and enhance it.

· We have a well-planned city - Tauranga is a city that is well planned with a variety of successful and thriving compact centres and resilient infrastructure.

· We can move around our city easily - Tauranga is a well-connected city, easy to move around in and with a range of sustainable transport choices.

· We support business and education - Tauranga is a city that attracts and supports a range of business and education opportunities, creating jobs and a skilled workforce.

· We are inclusive, and value our culture and diversity - Tauranga is a city that recognises and values culture and diversity, and where people of all ages and backgrounds are included, feel safe, connected and healthy.

Principles

· We deliver value for our communities through prudent financial management, ensuring we plan and provide affordable fit-for-purpose services.

· Sustainability and resilience underpin our decision making and service delivery, protecting the future of our city.

· We work in partnership with Tangata Whenua, our communities, sub-regional stakeholders and central government.

· We manage the balance between social, economic, cultural and environmental wellbeing of our communities.

· We listen to our communities and make transparent, evidence-based decisions.

Prudent financial management

19. As noted in paragraph 11 above, the key challenge for this LTP process is to provide the funding and financing capacity to meet the city’s infrastructure needs. Through the LTP process, work has been done on a number of fiscal scenarios in order to explore the challenge of prudent financial management in light of the needs identified above.

20. Importantly each of these scenarios reflects a balance between meeting the current and future needs of the community and prudent financial management. The outcomes that are achieved from each scenario are outlined at a high level together with the fiscal implications of each scenario.

21. Those scenarios, together with relevant assumptions, are detailed later in this report

Background to council’s financial position

22. The issue of insufficient funding and financing capacity to meet the city’s infrastructure needs has not occurred over the short-term. Rather the issue has been emerging, and has been highlighted, for many years in formal council reports, council briefings, and informal discussions with the mayor and councillors. Referring back ten years to the 2010/11 Annual Plan consultation document demonstrates the ongoing pressure that this Council has faced for many years:

“Growth demands continue to place significant pressure on the Council to find ways to fund our city’s needs. It has created a funding problem, as affordability restricts the Council from increasing rates sufficient to meet the full costs of providing the infrastructure required. Long-term debt, used to help minimise the impact on today’s ratepayers, will soon reach its prudent maximum level.”

23. In March 2020, as part of the development of the first, pre-Covid, 2020/21 Annual Plan, the Policy Committee considered a report[5] on budget options for that year (“the March report”). That report included a significant section headed ‘How we got here’ which identified four noteworthy factors. These factors are summarised and partially re-produced below. Full copies of the March report can be found on council’s website.

Systemic issues

24. The March report referenced reports from Infrastructure New Zealand and the Productivity Commission regarding systemic issues with local government funding models and highlighting the particular pressures for councils in high population growth areas. That report also noted that the government has recognised these pressures and responded with initiatives including the Housing Infrastructure Fund and what is now the Infrastructure Funding and Financing Act 2020.

Cumulative revenue deficits

25. The March report highlighted the impact of approving in an LTP higher rates increases in years 2 and 3 of an LTP cycle but then, through the subsequent Annual Plan processes, reducing the actual adopted rate increase.

26. An example was prepared for the March report showing the cumulative impact of lower-than-planned rates increases in 2019/20 (year 2 of the 2018-28 LTP) and proposed (at that stage) for 2020/21 (year 3). The eventual, Covid-responsive, rate rise was marginally lower than the 5.1% then assumed for 2020/21 so the actual cumulative revenue deficit compared to the 2018-28 LTP will be marginally higher than the $21 million shown in the graphs below (replicated from the March report).

27. The cumulative effect of these revenue deficits is that council’s base revenue for the 2021-31 LTP is significantly lower than it might have been if the 2018-28 LTP revenue expectations were implemented.

Debt funding operating expenditure

28. The March report noted that, in general, operating expenditure is funded from operating revenue. This is consistent with the legislative principle that “that each year’s projected operating revenues are set at a level sufficient to meet that year’s projected operating expenses”[6].

29. However, exceptions to this principle are permitted and in recent years council has resolved to finance a number of significant operating projects through rate-funded loans. This has the effect of spreading the rating burden of these projects across a number of years. Compared to rate-funding in the year costs are incurred, this has the effect of increasing debt and reducing revenue. In terms of council’s debt-to-revenue ration (and therefore future capacity to raise debt) the increase in debt and reduction in revenue are both negative pressures.

30. In addition, the pressure to lower rates has resulted in some activities with negative cash balances being debt funded due to inadequate cash funding (for example in the marine activity). This has further increased debt pressure and lowered revenue.

31. Higher than forecast drawdowns on council’s risk reserve have also resulted in higher debt balances. This has resulted in a risk reserve with a negative balance.

Tauranga is not unique

32. The March report noted that other councils faced similar issues and that a group of high-growth councils (including Tauranga) were actively engaging with central government agencies to build a common understanding of the financial challenges of managing growth.

developing the Long-Term Plan

33. The development of an LTP and the associated ten-year operational and capital budgets is a significant task. It involves considerable input from staff across the organisation, a large number of often co-dependent workstreams (including those highlighted earlier in this report), and significant review, quality assurance, and decision-making input from the Executive and from the mayor and councillors.

Progress

34. It should be noted that with regards to the planning for this LTP, the timing is behind normal expectations. This is because of the impacts of the Covid-19 pandemic and specifically the need to prepare and consult on a second 2020/21 Annual Plan to amend the initial approved draft to reflect the Covid impact on the council’s and the community’s projected financial positions. This required significant resourcing by staff who would otherwise have been advancing preparations for the LTP.

35. In addition, council introduced a new financial system during the year, implementation of which was also delayed due to Covid. This put further pressure on the resources needed to develop the LTP both within the finance team and in the wider organisation.

36. This means that this report and the stage of the LTP development process that it represents is several weeks behind where it would be under more normal circumstances. As such, this report is a precursor to a more detailed consideration of the contents of the draft LTP to be undertaken in February 2021.

37. In the meantime, feedback is sought on the general direction incorporated in the working draft information presented in and alongside this report.

Scenario-based approach

38. Recognising the fundamental challenge as being the lack of funding and financing capacity available to meet the city’s infrastructure needs, the Executive have endorsed and led a scenario-based approach to the LTP development process.

39. Initially two scenarios were identified but as the LTP development process continued that was further split so that four broad principles-based scenarios were contemplated. These scenarios are briefly described below. Each scenario builds on the base of previous ones. Further detail on the scenarios is included in Attachment 1 to this report, including a description of the outcomes each scenario delivers to the community.

Scenario A – Current base, committed, and completion of in-progress projects

40. This scenario was a baseline created as a way to understand the ‘starting point’ for capital expenditure, operating expenditure, and revenue requirements. It is not a viable delivery option as it does not deliver on community needs in any meaningful way. Regarding capital expenditure, it only includes renewals, current contractual commitments, physical works in existing zoned growth areas, and physical works to progress construction which would be sensible to complete.

41. Regarding operating expenditure, Scenario A only includes additional spending on new projects or resourcing that is already committed (including kerbside waste collection, for instance) or which is considered critical or regulatory in nature.

Scenario B – Scenario A plus critical / highest priority projects

42. Scenario B was built on Scenario A by including projects and additional resourcing critical to the continued delivery of services and the development of core infrastructure to the city. It includes expenditure on the highest priority areas in the Te Papa peninsula (being the city centre and Gate Pa/Pukehinahina areas) and the highest priority projects from the Transport System Plan, as well as necessary capacity upgrades across the horizontal infrastructure activities and active reserves and some investment in identified resilience projects.

43. It should be noted that both Scenario A and Scenario B assume that there will be no development in either Tauriko West or Te Tumu in the ten years of the LTP. Both scenarios also assume that 50% of the currently planned capacity in those two greenfield areas over the ten-year period will be absorbed in infill and intensification.

Scenario C – Scenario B plus partial implementation of approved strategic direction

44. Scenario C was again built on the previous scenarios and includes some stepped investment to progress towards the achievement of council’s approved strategic direction. It assumes that development will occur in Tauriko West by 2026 and therefore includes additional capital expenditure to facilitate this. This scenario also provides for further work under the Transport System Plan though debt limitations mean that agreed timeframes may not be met if this scenario were to be considered financially viable.

45. This scenario also provides for necessary capacity upgrades across all asset types, the highest priority projects under the Community Facilities Investment Plan, and further works to facilitate intensification in the Te Papa corridor, still focusing on the city centre and Gate Pa areas.

Scenario D – Scenario C plus substantial implementation of approved strategic direction

46. Scenario D built further on previous scenarios and enables substantive delivery on key approved strategic directions. It assumes that development will occur in both Tauriko West and Te Tumu from 2026. It therefore includes additional capital expenditure in the eastern corridor (including the Papamoa East Interchange, for instance) and in city-wide assets to facilitate this. Scenario D also includes additional expenditure on resilience, community facilities, digital delivery, parks and reserve development and for resourcing and projects across a number of internal and external delivery activities.

Broad outcomes under the four scenarios

47. The impact on city outcomes across the four scenarios is broadly consistent with the diagram below. Outcomes under the Scenario A ‘base line’ are negative. As investment levels increase, outcomes improve but in some important areas, notably traffic congestion and housing affordability, even the investment proposed under Scenario D is unlikely to make significant improvements. The outcomes shown in this diagram are high level and illustrative of the potential scenarios. While it is recognised that there are many other factors at play, this diagram recognises the critical role council plays in these outcomes.

Operating costs and rates movements depend on infrastructure decisions

48. The scenarios for capital expenditure identified above directly impact operating costs and the associated rates and user fee requirements. Higher capital expenditure drives higher ongoing debt servicing and depreciation costs as well as the costs of operating and maintaining the additional infrastructure and facilities.

49. Tauranga already has relatively high debt levels as a result of providing the infrastructure required to cater for growth over many years. Council can only continue to meet the ongoing infrastructure financing requirements by raising revenue to retire existing debt or by finding other parties able to finance this infrastructure. Both approaches are under consideration through this LTP.

Future years’ costs result from past decisions

50. Regardless of the capital investment scenario, the rates and revenue requirements for the 2021/22 year will need to increase substantially from the current year. There are a number of reasons for this, including:

(a) the reversal of temporary cost savings made through the 2020/21 Annual Plan process. This is consistent with the council resolution, unanimously carried during the Annual Plan deliberations meeting of 16 July 2020, which stated:

That the Council notes that where expenditure budget reductions are temporary, including putting a hold on the remuneration review and restricting new recruitment or where proposed savings are temporary in the list above, there will be a consequential increase in expenditure budgets in future years (likely in the range of 2-3% rates rise).

(b) depreciation on investments undertaken to date including new growth areas, the Waiāri water supply project, roading and three waters upgrades, and digital investment. In total there is an $11 million funded increase in depreciation, resulting in a general rates impact of over 5%. Further work is being undertaken to confirm the timing of likely new assets and how this will affect the final figure.

(c) significant increases in project-based costs in the city and infrastructure planning activity. Some costs relate to statutorily required projects such as preparations for and the delivery of the City Plan review over the next few years. Others are as a direct result of council decision-making, such as the spatial and neighbourhood planning projects approved by the Urban Form and Transport Development Committee on 24 November 2020

(d) all scenarios also assume a year one new rate to fund the new full kerbside service replacing the glass only service. This increases the kerbside collection targeted rate revenue by $10.4m (which is an additional 6.3% of total rates revenue, excluding water-by-meter charges).

Working draft developed

51. The Executive has reviewed and refined the four scenarios and from that has developed a working draft of the LTP capital and operational expenditure programmes.

52. The working draft assumes development in Tauriko West from 2026 but no development in Te Tumu during the ten years of the LTP.

53. The working draft capital expenditure budget (including separate identification of projects and programmes excluded from the working draft) is included as Attachment 2 to this report. In summary, the working draft capital expenditure budget includes:

	Yrs 1-3 ($m)	Yrs 4-10 ($m)	Total ($m)
Te Papa Intensification	99.5	364.5	464.0
Western Corridor – TBE & Tauriko West (two programmes)	116.2	65.8	182.0
Te Maunga WW Treatment Plant	88.4	92.9	181.3
Eastern Corridor - Trunk Wastewater	17.8	142.5	160.3
Waiari Water Treatment Plant Capital	70.2	74.5	144.7
Local Roads Renewals	42.2	82.4	124.6
WW Reticulation Upgrades & Renewals	26.7	97.8	124.5
Digital Services & IT Software (two programmes)	32.9	77.4	110.3
Infrastructure Resilience Capital Works	21.7	78.9	100.6
Transport Multi-Modal	11.4	84.8	96.2
Local Roads Upgrades and Improvements	47.4	47.9	95.3
Accessible Streets	41.2	47.1	88.3
Civic Rebuild Capital Programme	33.6	40.0	73.6
Bay Venues New Capital including Memorial Pool	11.4	55.7	67.1
All other programmes	309.8	586.5	896.3
Total in working draft	970.4	1938.7	2909.0

54. Note that current modelling shows that there will need to be some adjustment to the timing of some projects from years four to six into the later years to enable the council to remain within prudent financial limits throughout the LTP period. This timing review has not yet been undertaken.

55. In regard to operational costs, in addition to the matters identified in paragraph 50 above, the working draft includes the following significant aspects:

(a) depreciation and debt servicing on the capital programme

(b) increased staff requirements to meet workload requirements across the organisation, to provide for the planning requirements for the city, and to provide for infrastructure by improving capital programme delivery, risk management and quality assurance.

(c) increases in operational budgets associated with the capital programme. An increased need to coordinate planning and engagement for new infrastructure has resulted in costs that are operational in nature and therefore increase the potential rates requirement. Further consideration will be needed on the appropriate funding of this expenditure in the context of the revenue and financing policy as to whether it is rates or loan funded.

(d) increased costs of digital services to the business resulting from continued upgrades to old platforms, security, costs of licencing and software on the cloud, along with depreciation of new investments over relatively short timeframes.

56. The various components of increased rates identified above and in paragraph 50 are allocated across general rates and targeted rates including volumetric charging for water, the kerbside collection levy, and the wastewater uniform annual charge. Further work will be required to confirm the appropriate funding of costs as part of this LTP. It should be noted that a significant increase in the water by meter volumetric charge is needed to fully recover the costs of this activity.

57. Further detail on the operational costs and revenue (including rates) and debt over the long term is being prepared and will be presented along with further detail on the scenarios and their financial implications prior to the meeting.

58. The working draft is considered, from a balance sheet management perspective, to be broadly within the parameters of financial prudence subject to some further work on spreading the timing of capital costs and introducing a debt retirement levy. However, the year-on-year revenue increases associated with this working draft are substantial.

59. A debt retirement levy to help enable the working draft capital programme to be delivered (and assist with the management of unfunded liabilities as referred to below in paragraph 62) within prudent financial management constraints will be provided as part of the additional scenario-based information to be circulated prior to the meeting.

Issues to be further addressed

60. There are a number of issues that will need to be formally addressed prior to the adoption of an LTP consultation document for consideration by the community. These issues will be addressed in early 2021 but are included in this report for initial discussions as appropriate.

Risk reserve

61. As has been previously communicated[7] council’s risk reserve is significantly in deficit. Council will need to consider the measures that need to be taken to reverse the deficit and then will need to consider whether to provide funding to re-establish a genuine reserve.

62. Collecting rates to fund the unfunded liability of the in-deficit risk reserve would effectively reduce council’s total debt levels in the same way as more general debt retirement proposed below. The risk reserve deficit at June 2020 was $28m and this would increase if costs related to the Harington Street transport hub project, currently sitting in the parking account, are transferred in.

Development contributions shortfall

63. The Finance, Audit and Risk Committee considered a report on the cumulative shortfall of development contribution payments on 10 December 2020. Decisions made on that report will be reflected in the updated working draft to be considered by Council in early 2021.

Rating models

64. One of the LTP workstreams referred to earlier in this report is a review of the allocation of rates to different ratepayer groups. Through the 2018-28 LTP, council introduced a commercial differential and steadily moved that differential from 1 : 1 to 1.2 : 1 over three years. Also through the 2018-28 LTP a targeted rate for resilience expenditure was introduced.

65. The review of rating models for the 2021-31 LTP will include consideration of the commercial differential rate and the potential to introduce further targeted rates to help fund certain activities or programmes of work.

Debt retirement levy

66. A debt retirement levy was introduced in the 2009-19 LTP as a balance sheet management tool. Funding has also been applied to the risk reserve and this is currently $1 million per annum. Given council’s balance sheet capacity issues, consideration will need to be given to increasing the debt retirement levy and this will be reflected where applicable in the scenarios.

Activities in deficit

67. Under council’s Revenue and Financing Policy, a number of council activities or parts of those activities are intended to be self-funded. This means that non-rates revenues, through user fees and charges, grants or subsidies, are intended to be sufficient to cover all operating costs. However, some of these activities are currently in deficit and under existing settings are unlikely to return to a self-funded state. Activities in a deficit position include parking, the historic village, marine facilities, the marine precinct, and property management.

68. Note that rates funding was introduced to the historic village and marine facilities activities during the current LTP period to address current operational deficits. However, this funding is not sufficient to erase earlier deficits in those activities.

69. In all cases, consideration will need to be given to the deficits in these activities and action taken which may include some or all of: increasing user fees; introducing rates funding; or reducing levels of service.

Civic centre

70. Within the working draft are budgets related to the civic administration building (including demolition costs), civic plaza, and the central library. While the central library budget has been considered through the Community Facilities Investment Plan work, there is still work that needs to be undertaken on the quantum and timing of other civic centre projects. These will be updated for further consideration by council in February 2021.

Interim staff accommodation

71. There is currently work progressing on short- and medium-term solutions for accommodation for council’s city centre-based staff. This issue will be further reported to council in February 2021.

Elder housing

72. The working draft assumes a revenue flow in 2021/22 from the divestment of council’s elder housing portfolio (as consulted on through the last LTP process). If such a divestment is delayed, or if the sale value is different to expectations, there will be further financial impacts, including additional debt and the need to commit to additional maintenance expenditure if the assets continue in council ownership. Matters relating to the divestment of the elder housing portfolio will continue to be reported to Council and the likely financial impacts reflected in updated budgets prior to adoption of the LTP.

Approach to resilience

73. In November 2020, the Urban Form and Transport Delivery Committee approved the report from the Infrastructure Resilience Project as the basis for the development of the draft LTP. That report identified approximately $900 million of projects over a 30-year period. The extent to which council decides to implement these projects through this and subsequent LTPs depends upon council’s risk appetite.

74. The working draft currently includes $10 million per annum to implement projects identified through the infrastructure resilience project.

Assumption regarding waters reform

75. The government has signalled its intention to reform councils’ water supply, wastewater and potentially stormwater activities. While there is no firm proposal yet available for consideration, the likelihood of reform during the period of the 2021-31 LTP is high.

76. At this stage the working draft has been prepared under the assumption that council retains its waters’ activities. However, alternative working draft scenarios based on either two (water supply and wastewater) or all three activities being divested are being prepared. The impact of divestment, assuming both assets and debt are divested, will be to improve council’s balance sheet capacity enabling it to undertake other investments without the need for ongoing debt retirement levies.

Assumption regarding Infrastructure Funding and Financing (“IFF”) levies.

77. In August 2020 new legislation was introduced allowing the introduction of levies to fund new infrastructure investment. It is acknowledged that this still requires funding similar to a rating model however allows the use of off-balance sheet financing potentially reducing the need for debt retirement rates for balance sheet management. Staff continue to work with Crown Infrastructure Partners to investigate opportunities where this funding and financing may be applicable. As with water reform, scenarios will be prepared showing the implications of probable IFF levies where possible.

Sub-regional funding and financing.

78. On 1 July 2020 SmartGrowth Leadership Group approved a piece of work to be undertaken looking at possible sub-regional funding and financing options that may be available to support sub-regional outcomes. This work is planned to be completed in the first quarter of 2021 and any opportunities will be factored into the LTP. Given the timing of this work it may need to be shown as an additional scenario for the February meeting if sufficient information is available at that time. In the event that this work is not available for February it will be incorporated into future drafts or possibly the final LTP.

Delivery capacity

79. The working draft includes capital expenditure in the first three years of more than $300 million per annum. This is a level that has never before been achieved in the city. Organisationally, the response to this increased programme has seen significant changes in the current and future resourcing of capital project planning and delivery across the main infrastructure activities.

80. Externally, the capital projects delivery market is likely to be under pressure in the early years of the LTP. This is because of continued growth pressures in other North Island centres as well as significant additional infrastructure investment by central government on ‘shovel-ready’ and other Covid-recovery projects.

81. The preparation of a capital programme that meets the infrastructure needs of the community, is fiscally prudent, and which is also deliverable continues to be a focus.

Transport System Plan and Transport System Operating Framework

82. When adopted by Council and its funding partners[8], council’s commitment to the Transport System Plan in the first 10 years was in excess of $600 million. Despite this commitment to its partners, the working draft of the LTP does not include all of this planned work. The working draft includes the planned policy work, low cost low risk projects, business case development and only the top priority major physical works projects. There are $193 million of TSP projects in the first ten years of the LTP that are currently not included in the working draft.

Te Papa spatial plan

83. The Te Papa spatial plan was approved by the Urban Form and Transport Delivery Committee on 13 October 2020. At that time the estimated ten-year capital costs were shown as $536.3 million. While the investment in the working draft is substantial, it does not cover all of this amount. In preparing the working draft, the focus was on development activities in areas where other private and public sector funding was most likely to be realised. This means a focus on Cameron Road, the city centre and the Gate Pa/Pukehinahina area.

External funding assumptions

84. Within the working draft there are a number of projects which are only proposed to proceed if appropriate external funding is received. As is traditional, these items are included in the budget process but will be subject to ongoing review regarding such funding sources. Examples of projects include:

· the Papamoa East Interchange (planning in working draft but construction is not)

· Memorial Park aquatics upgrade (in working draft) and recreation hub (not in working draft)

· Kopurererua Valley development

· Tauranga Wellbeing Centre[9]

· Growing Communities Smart Hub (Sustainability Centre)⁸

85. Council may wish to consider a forward strategy to target more external funding for community amenity facilities and to consider the merits of ‘stretch targets’ to enable these projects to proceed.

Legal Implications / Risks

86. Legislative issues are considered in the Background section to this report.

Consultation / Engagement

87. The LTP consultation document is scheduled to be adopted in March 2021. After that adoption it will be consulted on with the community using the special consultative procedure outlined in section 93A of the Local Government Act 2002.

88. There is no intention to consult formally on the contents of this update report. However, staff have commenced pre-engagement with a number of key stakeholders on the general issues to be addressed through the LTP process.

89. In the event that the Minister of Local Government determines Commissioners are to be appointed, engagement and consultation will still be prioritised to ensure that:

· community views are gathered, considered and responded to

· these views are accessible to decision-makers

· the processes for decision-making remain transparent.

Significance

90. The matter considered by this report, the Long-Term Plan 2021-31, is considered of high significance in terms of council’s Significance and Engagement Policy. This is because it affects all residents, ratepayers and businesses in, and visitors to, the city, and because it involves council’s resource allocation decisions and rating decisions for the next three years.

91. However, the decisions to be made in response to this report are considered of low significance as they are just one interim step in the process of developing the LTP.

Click here to view the TCC Significance and Engagement Policy

Next Steps

92. A package of supporting information will be made available to councillors before Christmas. This package will include:

· draft activity area plans (detailing each activity and the important issues it is addressing)

· draft key performance indicators for each group of activities

· financial information for each activity

· detailed operational and capital expenditure schedules

93. In addition, further refinement of the working draft presented with this report will be undertaken, incorporating any feedback received during this meeting, and will be prepared for presentation to a Council meeting in February 2021.

Attachments

1. LTP Scenarios Approach (page 1 of A12065056) - A12100196 ⇩

2. Working draft capital programme as at 9 Dec 2020 - A12101544 ⇩

[1] Note that the LTP scenarios are further explained in a separate report to the 14 December 2020 Council meeting, titled ‘Long-Term Plan 2021-31 – Update and Working Draft’

[3] Sections 93(3), 93(7), 101B(1), 94, 93(2) and 93A(4), Local Government Act 2002 respectively.

[4] Section 10(1)(b), Local Government Act 2002

[5] Annual Plan 2020/21 – Draft 2020/21 Budget Options and Implications, Policy Committee, 4 March 2020 (available at Tauranga.govt.nz)

[7] Most notably in reports to Council on 10 December 2019 (Annual Plan 2020/21 – Indicative Budget) and the Policy Committee on 4 March 2020 (Annual Plan 2020/21 – Draft 2020/21 Budget Options and Implications) but also through the Finance, Audit and Risk Committee

[8] Waka Kotahi NZ Transport Agency, Bay of Plenty Regional Council, and Western Bay of Plenty District Council

[9] Further information about this project can be found in the report titled ‘LTP 2021-2031 Potential Projects on the same agenda as this report


AGENDA Ordinary Council Meeting Monday, 14 December 2020
I hereby give notice that an Ordinary Meeting of Council will be held on:
Date:	Monday, 14 December 2020
Time:	9.30am and 15 December 2020 at 9.30am
Location:	Tauranga City Council Council Chambers 91 Willow Street Tauranga
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.
Marty Grenfell Chief Executive

Chairperson	Deputy Mayor Tina Salisbury
Deputy chairperson
Members	Cr Larry Baldock Cr Kelvin Clout Cr Bill Grainger Cr Andrew Hollis Cr Heidi Hughes Cr Dawn Kiddie Cr Steve Morris Cr John Robson
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.
Meeting frequency	Six weekly or as required for Annual Plan, Long Term Plan and other relevant legislative requirements.

· To ensure the effective and efficient governance of the City

· To enable leadership of the City including advocacy and facilitation on behalf of the community.

· Oversee the work of all committees and subcommittees.

· Exercise all non-delegable and non-delegated functions and powers of the Council.