Agenda of Ordinary Council Meeting

Membership

Chairperson	Commission Chair Anne Tolley
Members	Commissioner Shadrach Rolleston Commissioner Stephen Selwood Commissioner Bill Wasley
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	As required

Role

· 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.

Scope

· Oversee the work of all committees and subcommittees.

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

· The powers Council is legally prohibited from delegating include:

o Power to make a rate.

o Power to make a bylaw.

o Power to borrow money, or purchase or dispose of assets, other than in accordance with the long-term plan.

o Power to adopt a long-term plan, annual plan, or annual report

o Power to appoint a chief executive.

o Power to adopt policies required to be adopted and consulted on under the Local Government Act 2002 in association with the long-term plan or developed for the purpose of the local governance statement.

o All final decisions required to be made by resolution of the territorial authority/Council pursuant to relevant legislation (for example: the approval of the City Plan or City Plan changes as per section 34A Resource Management Act 1991).

· Council has chosen not to delegate the following:

o Power to compulsorily acquire land under the Public Works Act 1981.

· Make those decisions which are required by legislation to be made by resolution of the local authority.

· Authorise all expenditure not delegated to officers, Committees or other subordinate decision-making bodies of Council.

· Make appointments of members to the CCO Boards of Directors/Trustees and representatives of Council to external organisations.

· Consider any matters referred from any of the Standing or Special Committees, Joint Committees, Chief Executive or General Managers.

Procedural matters

· Delegation of Council powers to Council’s committees and other subordinate decision-making bodies.

· Adoption of Standing Orders.

· Receipt of Joint Committee minutes.

· Approval of Special Orders.

· Employment of Chief Executive.

· Other Delegations of Council’s powers, duties and responsibilities.

Regulatory matters

Administration, monitoring and enforcement of all regulatory matters that have not otherwise been delegated or that are referred to Council for determination (by a committee, subordinate decision-making body, Chief Executive or relevant General Manager).

Ordinary Council Meeting Agenda

4 May 2021

11 Business

11.1 Adoption of supporting documentation for the proposed Long-term Plan 2021-2031

File Number: A12467750

Author: Josh Logan, Team Leader: Corporate Planning

Authoriser: Christine Jones, General Manager: Strategy & Growth

Purpose of the Report

1. The adoption of the supporting documentation for the Long-term Plan (LTP) is a statutory requirement and provides the community with key components of the LTP for reference during consultation.

Recommendations

That the Council:

(a) Receives the report.

(b) Adopts the following for the purposes of public consultation through the Long-term Plan 2021-2031 consultation process:

(i) Statement of Proposal for the Draft Revenue and Financing Policy (Appendix 1)

(ii) Statement of Proposal for the Draft User Fees and Charges (Appendix 2)

(i) Draft Policies (including draft Revenue and Financing Policy) (Appendix 3)

(ii) Draft Groups of Activities (Appendix 4)

(iii) Draft Significant Forecasting Assumptions (Appendix 5)

(iv) Draft Underlying Financial Statements (Appendix 6)

(v) Draft Financial Strategy (Appendix 7)

(vi) Draft Infrastructure Strategy (Appendix 8)

(vii) Draft User Fees and Charges (Appendix 9)

(d) Authorises the Chief Executive to make minor amendments to the documentation to ensure accuracy and correct minor drafting errors.

Executive Summary

2. The supporting documentation that accompanies the Long-term plan consultation document is part of communicating the LTP’s proposed investments in Tauranga over the next ten years and inviting feedback on those proposals.

Background

3. The Local Government Act 2002 (LGA) requires Council to adopt the information that supports the development of the consultation document and the LTP. Schedule 10 of the LGA sets out the requirements for the final LTP document, this has been used to form the basis of the supporting documentation.

4. The Draft Revenue and Finance Policy has been prepared on the basis of prior discussions with Council, and key changes have been outlined in the Statement of Proposal. Council is required to consult on these policies under the LGA.

5. The supporting documentation has been discussed previously with Council, either through briefings or formal Council meetings. Any key changes have been outlined in this report.

6. The supporting documentation will be available on Council’s website during the consultation period for public reference, but the legislation makes it clear that other than the draft policies, Council should not be consulting on the supporting documentation.

Strategic / Statutory Context

7. The supporting documentation consists of key components that underpin the LTP, which as a whole, provides Council’s investment plan in support of the intention for Tauranga to make strides towards achieving its community outcomes.

Discussion

8. The supporting documentation for Council’s 2021-2031 LTP and draft policies for consultation through the LTP are appended to this report as follows:

9. Draft Policies (Appendix 3) This LTP we are not consulting on the following policies as they are still current and not due for review:

· Draft Rates Remission Policy

· Draft Policy on the Remission and Postponement of Rates on Maori Freehold Land

· Draft Rates Postponement Policy

· Significance and Engagement Policy

10. It should be noted that in the existing remissions policies there have been some minor amendments to some wording to reflect name changes for the following:

· Certificate of title is now called Record of title

· The position titles of staff who are authorised have changed and the policy has been updated to reflect this.

11. All of these have been included in the polices supporting document for completeness.

12. There is one draft policy in this document that is being consulted on as part of LTP consultation which is the Draft Revenue and Financing Policy. This document describes how each of Council’s activities will be funded. The review of the policy is a key part of developing the Long-term Plan and reflects the Council’s view on who benefits from each of the activities and who should pay. The draft policy was approved for public consultation by Council on 08 March 2021.

13. As a result of comments received from Audit New Zealand, the following minor amendment to the wording of Transport activity in both policy and needs analysis table have occurred:

· Inclusion of the words in brackets “(includes local roading and parking)” next to the heading of Transport.

14. Draft Groups of Activities (Appendix 4) - Council’s Groups of activities document which includes activity descriptors and non-financial performance measures have been reviewed to ensure the measures are up to date and relevant for the next ten years. Council were presented with the groups of activities in the 8 March 2021 meeting, in conjunction with capital/operational budgets. The resolution was passed to approve the activity descriptors and performance measures, with adjustments as discussed. Council was presented with the updated groups of activities on 29 March 2021 when draft was adopted for audit, with the amendments made as requested.

15. As a result of comments received at that time and separately from Audit New Zealand, a number of changes have been made to the document. The most significant changes and additions are the following:

· Each group of activities has had the Funding Impact Statement inflation adjusted

· All capital schedules within each group have also been inflation adjusted

· Removal of the un-inflated financial deck pages

· There have been slight wording amendments to the following groups non-financial performance indicators

o Transportation

o Water Supply

o Wastewater

o Stormwater

o Sustainability and Waste

o Community Services

16. Draft Significant Forecasting Assumptions (Appendix 5) - On 8 March 2021, Council approved Significant Forecasting Assumptions which represent the important trends and projections expected to affect the Council and the city, which form one of the essential building blocks in the development of the LTP. These key assumptions were used to provide a common set of data and direction for the organisation to use in its planning, to be used in conjunction with a wider set of corporate level assumptions and activity-specific assumptions.

17. Again, as a result of comments received at that time and separately from Audit New Zealand, a number of changes have been made to the document. The most significant changes and additions are the following:

· Assumptions 1-4 - regarding population and demographics have been updated to reflect new data released by Tatauranga Aotearoa Stats NZ on 31 March 2021.

· Assumption 18 - Sale of assets - had been updated to reflect the assumption of the sale of Te Tumu block will occur in the final years of this LTP period.

· Assumption 19 - Ownership of water infrastructure assets – has been updated with more information for greater clarity.

· Assumption 36 – Deliverability of the capital programme – has been updated with more information for greater clarity.

18. Underlying Financial Statements (Appendix 6) - underpin the summary financial information including rate and debt limits presented in the consultation document. The underlying financials include:

· Statement of financial position

· Statement of comprehensive income

· Whole of council funding impact statement

· Statement of movements in equity

· Statement of cash flows

· Funding impact statement – proposed rates

· Summary whole of council capital expenditure

· Individual activity funding impact statements

· Financial prudence disclosures

These are based on the detailed information presented to Council on 8 and 29 March 2021. Since March, these financials have been amended to incorporate:

· Inflation

· Amendments to timing of capital projects

· Re-categorisation of capital projects

· Revaluation of assets

· Amendments identified during the audit process

· Change to timing of resilience expenditure resulting from the identification of specific projects in the earlier years of the LTP.

19. Financial Strategy (Appendix 7) - prepared in accordance with s101A of the LGA. The strategy includes statements on quantified limits on rates, rates increases and borrowing, all of which are outlined in the consultation document. It also confirms Council’s ability to provide and maintain existing levels of service and to meet additional demands within these limits.

20. This financial strategy is underpinned by principles of:

Financial prudence - Ensuring that Council services and investment in infrastructure are cost efficient and are an effective way of achieving the identified community outcomes.

Financial sustainability - The Council’s activities must be financed and funded in a way that ensures Council’s financial sustainability over time, in the face of risks and uncertainty.

· Depreciation reserves will be regularly reviewed to ensure the level of funding is appropriate based on long term renewal profiles

· New funding and financing opportunities will be included within the strategy noting the impacts that these tools may have on both funding and financing.

Transparency - People who pay are aware of what they are paying for and can confirm that what is proposed has been provided.

· Targeted rates enable rates to be collected for specific services or purposes and revenue collected ring fenced to be spent for those purposes.

Affordability - Where services or costs of infrastructure are rates funded that the rates are affordable across the community. Council services and infrastructure that are funded by rates, user fees or through development contributions are affordable to people wanting to access these services or to develop and build here.

Fairness and equity - Consideration is given to who should pay for investments and services, recognising who benefits, creates the need for, or is affected by the service and where possible ensuring they contribute a reasonable share of the costs of that service. This includes:

· Growth pays for growth where practicable, acknowledging growth does not always pay for growth

· Existing ratepayers pay an equitable contribution for the costs of infrastructure

· Rates will be used where benefits can be attributable to wider areas of the community and user fees will be applied where an individual benefit accrues.

· Where benefits are attributable to specific areas or groups in the community targeted rates will be investigated (subject to timing and resourcing to allow this occur within this LTP)

· Debt will be used to fund projects that accrue benefits over multiple years i.e. intergenerational equity

· Relationships will be pursued to increase private investment or further investment from government or investments of regional or sub-regional benefit may be appropriately considered.

21. Infrastructure Strategy (Appendix 8) - Council’s 30-year Infrastructure Strategy is a requirement of the LGA. Since the draft Infrastructure Strategy was received to adopt for audit by Council on 29 March 2021, and as a result of comments received at that time and separately from Audit New Zealand, a number of changes have been made to the document. The most significant changes and additions are the following:

· Updated financial information and graphs to reflect changes made across the supporting information and consultation document

· Additional wording to reflect matters relating to engagement with Tangata Whenua, deliverability of the capital expenditure programme, affordability and the potential impact of COVID-19

· The addition of Option 2 from the consultation document to the Significant Capital Expenditure Decision section

· Comment relating to the potential impact on the renewals programme for transportation dependant on the level of Waka Kotahi funding

· Additional wording on the level of uncertainty regarding assumptions on the renewal of assets.

22. Draft User Fees and Charges (Appendix 9) – Council was presented with draft user fees and charges in the 15 March 2021 meeting, which were approved for consultation alongside the draft LTP.

23. However, in final review, a number of slight wording amendments in the document have been made but no fees have changed. The activities that the wording changed include:

· Baycourt

· Environmental Health and Licensing

· Land Information Fees

· Mount Maunganui Beachside Holiday Park

· Parking Fees

· Planning

· Sustainability & Waste

Financial Considerations

24. All costs associated with the production of the Long-term Plan and community engagement can be met within existing budgets.

Legal Implications / Risks

25. The Local Government Act 2002 sets the requirements for preparation of the LTP.

Significance

26. The Local Government Act 2002 requires an assessment of the significance of matters, issues, proposals and decisions in this report against Council’s Significance and Engagement Policy. Council acknowledges that in some instances a matter, issue, proposal or decision may have a high degree of importance to individuals, groups, or agencies affected by the report.

27. In making this assessment, consideration has been given to the likely impact, and likely consequences for:

(a) the current and future social, economic, environmental, or cultural well-being of the district or region

(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision, or matter

28. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the supporting documentation is of high significance as its implementation will have a large impact on a wide range of people.

ENGAGEMENT

29. Taking into consideration the above assessment, that the supporting documentation is of high significance, the supporting documentation will be made available alongside the LTP consultation document during the consultation period for public reference.

30. As stated above the legislation makes it clear that other than the draft policies, Council will not be consulting on the supporting documentation.

Next Steps

31. Once adopted for public consultation, the supporting documentation will be made available on the website for reference alongside the LTP consultation document from 7 May to 7 June 2021.

Attachments

1. Appendix 1 - Statement of Proposal - Draft Revenue and Financing Policy - A12500608 ⇩

2. Appendix 2 - Statement of Proposal - Draft 2021-22 User Fees and Charges - A12502987 ⇩

3. Appendix 3 - Draft - Policies - A12489260 ⇩

4. Appendix 4 - Draft - Groups of Activities - A12500288 ⇩

5. Appendix 5 - Draft - Significant Forecasting Assumptions - A12499283 ⇩

6. Appendix 6 - Draft Financials - A12503972 ⇩

7. Appendix 7 - Draft Financial Strategy - A12502951 ⇩

8. Appendix 8 - Draft Infrastructure Strategy - A12503081 ⇩

9. Appendix 9 - Draft - User Fees and Charges - A12491839 ⇩

Ordinary Council Meeting Agenda

4 May 2021

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Ordinary Council Meeting Agenda

4 May 2021

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Ordinary Council Meeting Agenda

4 May 2021

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Ordinary Council Meeting Agenda

4 May 2021

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Ordinary Council Meeting Agenda

4 May 2021

11.2 Long-term Plan 2021-2031 - Adoption of consultation document

File Number: A12483277

Author: Josh Logan, Team Leader: Corporate Planning

Authoriser: Christine Jones, General Manager: Strategy & Growth

Purpose of the Report

1. The consultation document is the means for consulting with the community on the proposed Long-term Plan 2021-2031 under the Local Government Act 2002 (LGA).

Recommendations

That the Council:

(a) Receives the report.

(b) Approves the Consultation Document for the proposed Long-term Plan 2021-2031.

(c) Receives the audit opinion on the consultation document for the proposed Long-term Plan 2021-2031, pursuant to s93C (4) of the Local Government Act 2002.

(d) Adopts the audited Consultation Document for public consultation for the proposed Long-term Plan 2021-2031, using the special consultative procedure pursuant to s93 and s93A of the Local Government Act 2002.

(e) Authorises the Chief Executive to make any necessary minor drafting or presentation amendments to the consultation document before going to print.

Executive Summary

2. The consultation document is the primary mechanism for communicating the LTP’s proposed investments in Tauranga over the next ten years and inviting feedback on those proposals.

Background

3. The Consultation Document summarises the key proposals approved by Council for the Long-term Plan 2021-2031, on which community feedback is sought. It also provides a summary of the key challenges facing the Council and the city.

4. The consultation topics reflect Council’s priority areas:

· Investing in our city now and for the future

· a greater use of targeted rates

· to increase the commercial differential from 1.2 to 1.6

· And other consultation topics:

o Sale of Pitau Road village and Hinau Street village

o Supporting community-led initiatives

o Our civic administration building

5. This document has been reviewed by Audit New Zealand as required by the LGA and feedback and changes have been incorporated to meet requirements.

Strategic / Statutory Context

6. The Consultation Document is a key contributor to the community’s understanding of Council’s strategic priorities and the community outcomes it is seeking for the city in the long-term.

Options Analysis

Option 1: Approve and adopt the LTP 2021-2031 Consultation Document

Advantages		Disadvantages
· Meets LGA requirements and provides the community with the opportunity to have their say on the LTP.		· n/a

Budget - Capex	n/a
Budget - Opex	n/a
Key risks
Recommended?	Yes

Option 2: Do not approve and adopt the LTP 2021-2031 Consultation Document

Advantages		Disadvantages
· n/a		· Failure to meet statutory obligations and deadlines (noting that Council has previously acknowledged the Long-term Plan will not be adopted within the statutory timeframes of June 30.

Budget - Capex	n/a
Budget - Opex	n/a
Key risks
Recommended?	No

Financial Considerations

7. All costs associated with the production of the Long-term Plan and community engagement can be met within existing budgets.

Legal Implications / Risks

8. The Local Government Act 2002 sets the requirements for preparation of the LTP.

Significance

9. The Local Government Act 2002 requires an assessment of the significance of matters, issues, proposals and decisions in this report against Council’s Significance and Engagement Policy. Council acknowledges that in some instances a matter, issue, proposal or decision may have a high degree of importance to individuals, groups, or agencies affected by the report.

10. In making this assessment, consideration has been given to the likely impact, and likely consequences for:

(a) the current and future social, economic, environmental, or cultural well-being of the district or region

(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision, or matter

11. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the consultation document for the 2021-2031 LTP is of high significance as it has high financial consequences, large consequences for the city and is of high public interest.

ENGAGEMENT

12. Taking into consideration the above assessment, that the Long-term plan is of high significance, the consultation document will go out for public consultation using the special consultative procedure under the LGA. This will be for a period of one month, from 07 May to 7 June 2021.

Next Steps

13. The consultation document will be published on 07 May 2021.

Attachments

1. Draft for adoption - 2021-31 LTP - Consultation Document - A12503018 ⇩

Ordinary Council Meeting Agenda

4 May 2021

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Ordinary Council Meeting Agenda

4 May 2021

11.3 Adoption of the Draft 2021/22 Development Contributions Policy

File Number: A12365584

Author: Ana Blackwood, Development Contributions Policy Analyst

Authoriser: Christine Jones, General Manager: Strategy & Growth

Purpose of the Report

1. To adopt the draft 2021/22 Development Contributions Policy for public consultation.

Recommendations

That the Council:

(a) Adopts the Statement of Proposal and Draft 2021/22 Development Contributions Policy for public consultation

(b) Authorises the Chief Executive to approve minor drafting, financial and presentation amendments to the Draft 2020/21 Development Contributions Policy prior to printing if necessary.

Executive Summary

2. Council uses Development Contributions to fund the cost of growth-related capital expenditure. The Council’s Development Contributions Policy (DCP) is updated annually to ensure that it reflects latest costing information and aligns with Councils decisions.

3. Before adopting a new Development Contributions Policy, Council must consult with the community on the contents of the policy. Staff have prepared a draft Development Contributions Policy and the attached Statement of Proposal which is designed to meet legislative requirements regarding consultation and highlights the key differences between the operative Development Contributions Policy and the proposed 2021/22 Development Contributions Policy.

4. The change that is expected to generate the most interest from the community is the increase in the citywide development contribution of circa 130%.

5. The main cause of this increase is Council is starting to collect for the Waiari Water Supply Scheme (WWSS). The WWSS is required to provide for and enable continued growth of the City. The total cost related to the WWSS and associated trunk mains is over $254 million. If the project was not funded via development contributions then it would most likely need to be funded via the ratepayer community, further increasing the rates.

6. From a comparative perspective the proposed total development contribution (including both citywide and local development contributions) are similar to those in other high growth areas like Auckland and Hamilton.

7. The proposed policy will be circulated for public consultation via a mixture of different methods with the goal being to contact all organisations and individuals that are likely to be impacted by the upcoming increase in the citywide contributions.

8. The operative DCP will continue to apply to all consents lodged with Council until a new development contribution policy is adopted. It is expected that the new policy and fee will become operative and thus will be applied to consents from 1 August 2021.

9. There are several other review projects underway in relation to development contribution matters that are likely to impact future policies. These matters have been summarised on page 13 of the Development Contributions Policy and discussed in this report.

Background

10. Tauranga City Council uses development contributions to fund growth-related capital expenditure. The Development Contributions Policy is reviewed on an annual basis. Before adopting a new policy, Council is required to consult on a draft policy in a manner that gives effect to the legislative requirements of the Local Government Act 2002.

11. The Draft 2021/22 Development Contributions Policy will be consulted on in conjunction with the Long-Term Plan. For the purposes of this consultation, staff have prepared the attached statement of proposal (Attachment A). The statement of proposal sets out the proposal to adopt the 2021/22 Development Contributions Policy, the reason for adopting the new policy, and includes an analysis of the reasonable practical options that Council could use to fund growth related capital expenditure. A copy of the proposed Draft 2021/22 Development Contributions Policy will be made available online and provided in hardcopy to anyone who requests it.

12. As with most years the topic expected to generate the most interest is the changes in the fees. While most local development contributions have not changed significantly (less than 2% increase or decrease), local development contributions for Wairakei and Pyes Pa West have continued to escalate by approximately 20% and 11% respectively.

13. These increases relate to costs for a few key infrastructure projects. In both catchments there are only small aeras of land remaining to be developed and only a few key developers that will be impacted by the increases. Staff can work with these landowners and developers to provide details on the specific projects for which costs have increased if they wish to have this information to be able to complete their submissions to Council.

14. The matter that is expected to generate the most interest in the draft policy is the increase in the citywide development contribution (CDC). The citywide development contribution is used to fund large infrastructure assets which benefit all developments in Tauranga regardless of which location the development is occurring. The CDC is usually charged on building consents for any growth-related developments – this includes new households and any other form of non-residential development such as industrial, commercial or retail premises.

15. The fee is charged on a building consent as the amount payable is related to development type occurring. For example, the fee paid by a 1-bedroom residential development is half that of the fee paid by someone building a 3-bedroom residential dwelling.

16. The citywide development contribution is increasing by circa 130%. The following table shows some examples of the proposed increases:

Development example	Current charge (including GST)	Proposed charge (including GST)
1-bedroom residential dwelling	$6,104	$14,074
3-bedroom residential dwelling	$12,208	$28,148
A non-residential development with 100m²gross floor area	$3,091	$6,764

17. The main cause of the increase in the citywide development contribution is that Council will start collecting development contributions for the works required to construct the Waiari Water Supply Scheme. The total costs of the WWSS and the trunk mains extending to Papamoa and Mount Maunganui (also funded via the citywide development contribution) is over $254 million.

18. The Council received a report on the 29 March 2021 which included further details regarding the increase in the citywide contribution and funding options for the WWSS.

19. The current funding for the WWSS is based on the causation factors – in that if no further growth was expected in the city – then the WWSS project would not have been required. Staff are undertaking further work to determine if any non-growth funding allocation should be appropriate. Any recommendations on this would be considered through deliberations alongside submission responses. Initial work would suggest that any non-growth allocation would be minimal (around 10%) and would not materially reduce the citywide development contribution.

20. Citywide development contributions are charged on building consents for all new households and non-residential developments within the City. Thus, an increase in the citywide development contributions will have a direct impact on the costs of getting a building consent from Tauranga City Council.

21. Currently the costs associated with getting a building consent issued for a new 3-bedroom dwelling are in the realm of $20,000-$22,000 including the citywide development contributions[1]. The building consent fees are not expected to increase materially but with the new citywide development contributions the fees payable upon the issue of the same building consent will be in the realm of $36,000-$38,000.

22. Other changes made to the development contributions policy are outlined in the attached Statement of Proposal and further details on specific aspects will be provided on Councils website once the draft policy has been adopted.

23. Staff are continuing work on several other aspects, related to development contributions which will likely impact the future development contributions policies. These are outlined on page 13 of the Development Contributions Policy and include:

(a) Potential to add a new Te Papa infill catchment to contribute towards the costs of infrastructure works being undertaken to enable intensification in Te Papa

(b) Potential changes to the definition of the term “household” to more closely align with definitions in the City Plan and/or Building Act

(d) Review of the way citywide development contributions are charged including the potential to add an additional category for residential dwellings with 4 or more bedrooms

(e) Reviewing funding methodology for planned community infrastructure including the Memorial Park aquatic facilities, community centres and swimming pools in the future growth areas

(f) Review of projects in the Transport System Plan to identify if any further costs should be funded using development contributions

Strategic / Statutory Context

24. The Local Government Act 2002 requires Council to have a Development Contributions Policy. Development contributions are a significant and strategic revenue source for Council and are critical to funding capital expenditure associated with providing for the growing city. Development contributions enable infrastructure to be built to unlock additional development.

Consultation / Engagement

25. The Draft 2021/22 Development Contributions Policy is consulted on in conjunction with the Long-Term Plan. The consultation documents for the Long-Term Plan includes a section which discusses the key changes to the DCP and provides an opportunity for the public to submit on matters related to the development contributions.

26. In addition to the consultation circulation achieved through the LTP engagement, the development contribution staff will contact key stakeholders involved in the development and building process to encourage feedback on the proposed DCP. The intention is that this will be achieved through use of known key stakeholders, as well as direct email to multiple parties and email address that we have identified through the building consent process.

Significance

27. The Local Government Act 2002 requires an assessment of the significance of matters, issues, proposals and decisions in this report against Council’s Significance and Engagement Policy. Council acknowledges that in some instances a matter, issue, proposal or decision may have a high degree of importance to individuals, groups, or agencies affected by the report.

28. In making this assessment, consideration has been given to the likely impact, and likely consequences for:

(a) the current and future social, economic, environmental, or cultural well-being of the district or region

(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision, or matter

29. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the matter is of high significance.

ENGAGEMENT

30. Taking into consideration the above assessment, that the matter is of high significance officers are of the opinion that the consultation is suggested/required under the Local Government Act 2002.

Next Steps

31. Once adopted by Council the draft policy will be circulated for public consultation via the means discussed in this report. The public will be able to submit to the Council regarding matters related to Development Contributions either through the Long-Term Plan process or as a separate submission only on the Development Contributions Policy. Any submissions received in relation to Development Contributions will be summarised by staff and presented to the Council along with any potential options for consideration.

32. A final version of the policy, incorporating any required budget or policy changes will be brought back to Council to adopt in July. The intent is that the new policy will be made operative by 1 August 2021 and new fees and rules applied to any consents accepted by the Council from that date.

Attachments

1. Draft 2021/22 DCP - Attachment A - Statement of Proposal - A12365599 ⇩

2. Draft 2021/22 Development Contributions Policy - A12465479 (supplementary document)

Ordinary Council Meeting Agenda

4 May 2021

Tauranga City Council is proposing the adoption of a new Development Contributions Policy.

We review the Development Contributions Policy on an annual basis. This is to ensure that the policy is kept up to date and aligns with funding decisions made by the Council when it reviews its annual/long term plan.

A copy of the draft 2021/22 Development Contributions Policy is available online at www.tauranga.govt.nz/development-contributions

The key changes proposed to the policy

Increase in citywide development contributions

As an example, the citywide development contribution currently charged for any residential dwelling with 3 or more bedrooms is $10,616 (plus GST). Under the proposed policy this fee will increase to $24,477 for the same household. Citywide development contributions for other form of residential and non-residential activities are also proposed to increase by a similar proportion.

The main cause of this increase is that the Council will start collecting development contributions to fund the new Waiari Water Supply Scheme (WWSS). The WWSS is required to ensure a reliable and adequate water supply is available for continued growth in the City.

Update to the maximum yield rules

The policy includes an update to the rules contained in Section 2 which specify when a local development contribution fee will be charged based on the maximum yield rule. The changes are made to further clarify when the maximum yield rule is applied and reflects the same intent for how the rule was always designed.

Grants for Papakāinga and community housing
Council has included two new grant funds of $250,000 per year for 3 years within the Draft Long-Term Plan. These grants are to support Papakāinga housing and developments by community housing providers by assisting with development contributions. Council is currently developing policies to guide allocation of these grant funds.

Updates to other development contribution charges

All the capital expenditure budgets funded using development contributions have been updated to align with budgets approved by Council. The full updated project costs are detailed within the draft Policy. Most of the local development contributions have increased by small amounts (less than 2%).

Local development contributions for Wairakei sub catchment B are proposed to increase by 20.5% due to increased capital expenditure costs for a few specific capital projects remaining to be delivered in this area.

Local development contribution for Pyes Pa West are proposed to increase by 10% due to increased capital expenditure costs for a few specific capital projects remaining to be delivered in this area.

A version of the draft policy showing tracked changes is available from Council upon request. Staff are also able to provide further details of the project costs changes if requested.

Have your say

We need your feedback before submissions close at 4pm on Monday 7 June 2021.

You can share your views with the Council by any of the methods below.

Submit about development contributions as part of a Long-Term Plan submission

www.nowforthefuture.co.nz

Send an email with your completed submission form and any attachments to

submissions@tauranga.govt.nz

Drop your submission form into our customer service centre at 91 Willow Street, Tauranga or to your local library.

Post your submission form to

Long Term Plan, Tauranga City Council,

Private Bag 12022, Tauranga 3143

Key dates

Consultation: 7 May – 7 June 2021

Feedback must be received Closes 4pm 7 June

Hearings: 14 – 18 June

Please indicate on your submission form if you wish to present to the commissioners in person

Deliberations: week starting 21 June 2021

The commissioners consider all the feedback from the community

2021/22 Development Contributions Adopted: Week starting 26 July 2021

New fees applied: 1 August 2021

Funding options available to the Council

The discussion below is an analysis of the reasonably practical funding options which Council could use to fund growth-related capital expenditures.

Option 1: Charge Development Contributions under the Local Government Act 2002

Population and urban growth of the city is the reason much of Council’s capital expenditure needs to be undertaken. As the cause of this expenditure, it is fair that a significant portion of this cost is recovered directly from the development community through the collection of development contributions. While this does create a significant upfront cost for development, if these costs were not funded by development, the main alternative would be to increase rates by a substantial amount. Council’s view is that this would impose an unfair financial burden on the ratepayers of the city.

Option 2: Financial contributions under the Resource Management Act 1991

Financial contributions are similar to development contributions but charged under the Resource Management Act 1991 through a condition of a resource consent. The financial contribution system, and each individual financial contribution charge, are open to appeal through the Environment Court. Use of financial contributions adds cost, time and creates high level of uncertainty for Council. For these reasons’ development contributions are preferred in most cases to financial contributions. TCC still uses financial contributions in a few limited circumstances which are specified within the development contributions policy and in the Council’s City Plan.

Option 3: Rates-funded loans

This would involve growth-related capital expenditure being funded in the same manner as most of Council’s other capital expenditure – through loans that are repaid through the collection of rates. This would impose the cost of growth-related capital expenditure on the whole community rather than targeting the funding of these costs at the growth community which have caused these costs to be incurred.

Option 4: Targeted rates

This would be similar to development or financial contributions in the sense that funding would still be targeted at the growth community. The primary difference is that development contributions are charged upfront whereas the targeted rate would recover the costs over a lengthy period of time. This option would increase rates on new properties by a significant amount for an extended period of time. For example, it could potentially double rates for a period of 20 years. This is unlikely to be popular and may cause Council difficulties in the future when properties are sold to new owners. This has been Council’s experience to date with a relatively modest targeted rate in The Lakes development. It should also be noted that Council has not fully explored the details associated with implementing this type of targeted rate under the Local Government (Rating) Act 2002, and some legal impediments may exist.

Option 4: Levies under the Infrastructure Funding and Financing Act

The new Infrastructure Funding and Financing Act introduces a new funding tool which Council is currently considering. It is possible that this funding method will be used as an additional method to fund growth related infrastructure costs in the future. The levies will work in a similar manner to targeted rates from a property owner’s perspective but the benefit to the Council is that the financing would be off Tauranga City Council’s balance sheet.


AGENDA Ordinary Council Meeting Tuesday, 4 May 2021
I hereby give notice that an Ordinary Meeting of Council will be held on:
Date:	Tuesday, 4 May 2021
Time:	10.30am
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