Agenda of Ordinary Council meeting - Monday, 21 August 2023

Ordinary Council meeting Agenda

21 August 2023

11 Business

11.1 2024-2034 Long-term Plan - Tauranga Community Stadium - update

File Number: A14891193

Author: Kelvin Eden, Capital Programme Manager: Major Community Amenity

Jeremy Boase, Manager: Strategy and Corporate Planning

Authoriser: Gareth Wallis, General Manager: City Development & Partnerships

Please note that this report contains confidential attachments.

Public Excluded Attachment	Reason why Public Excluded
Item 11.1 - 2024-2034 Long-term Plan - Tauranga Community Stadium - update - Attachment 4 - High level funding assessment June 2023	s7(2)(i) - The withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

Purpose of the Report

1. To provide an update on the Tauranga Community Stadium project since Council considered the preliminary business case, and to seek direction on the manner of any inclusion of the project in the draft Long-Term Plan 2024-2034 budgets and consultation document.

Recommendations

That the Council:

(a) Receives the report "2024-2034 Long-term Plan - Tauranga Community Stadium - update".

(b) Approves Option 2 – Staged Implementation Plan for inclusion in the draft 2024-2034 Long-term Plan, and budgets and consultation document. Current details of this option include:

(i) Staged delivery of the stadium commencing in 2029/30.

(ii) Capital expenditure of $70 million for the first stage of which $40 million is financed for budgeting purposes from rates-funded loans and $30 million from other sources.

(iii) Balance of the capital expenditure budget to be incurred beyond the term of the 2024-2034 Long-term Plan.

(iv) Operating costs of $1 million per annum, plus appropriate debt servicing and depreciation allocations.

(v) Continuation of work with existing users of the Tauranga Domain to explore alternative site options (e.g. athletics, bowls and croquet).

(vi) Continuation of efforts to secure non-council funding for the capital costs of the community stadium.

(c) Notes that further details of the ‘staged implementation plan’ approach will be established prior to the adoption of the final 2024-2034 Long-term Plan, currently scheduled for April 2024.

(d) Approves unbudgeted expenditure of a maximum of $900,000 in 2023/24 to further develop and cost the ‘staged implementation plan’ option, and to seek funding contributions from other project partners to share these costs. Council’s share of the expenditure to be loan-funded operating expenditure, based on the expenditure offering long-term benefit associated with the proposed investment. Rate funded debt retirement over ten years should be included in the budgets from 2024/25 onwards.

(e) Attachment 4 can be transferred into the open when all funding negotiations have been completed.

Executive Summary

2. Work on a proposed community stadium has been underway for several years, led by Priority One in a project partnership including Council. A needs assessment and a pre-feasibility study have been completed, a detailed assessment process identified the Tauranga Domain as the preferred location, and earlier this year a comprehensive preliminary business case was completed and reported to Council.

3. That preliminary business case supported a boutique multi-use community stadium including flexible seating arrangements, a light exhibition centre, a function centre and other ancillary facilities.

4. Following Council’s receipt of the preliminary business case, project staff undertook a significant community engagement exercise and simultaneously continued investigating various aspects of the project in accordance with Council’s direction. This report provides the outcome of the community engagement exercise and also provides updates on other work undertaken.

5. In a demographically representative community survey, 49% of people strongly supported or somewhat supported the proposed community stadium while 43% strongly opposed or somewhat opposed it. When asked about a proportion of the funding of the proposed community stadium coming from annual rates, support dropped and opposition increased.

6. When considered across age-groups, support for the stadium was significantly greater in the 25-54 age-groups while opposition was significantly greater in the 55+ age-groups.

7. In recognition of Council’s financial position and considering the interests of existing users of the Tauranga Domain, a staged implementation plan has started to be explored. This would enable the start of construction of the proposed community stadium to be delayed until the current athletics track reaches the end of its planned useful life and therefore, needs replacement. This staged implementation approach is recommended for inclusion in the draft 2024-2034 Long-term Plan for the purposes of further community consultation.

8. In recognising that the development of this approach is in its early stages, further funding is sought in this financial year to better develop a practical implementation plan for the staged approach. The results of this extra work will enable detailed consideration of the approach by Council prior to the adoption of the final 2024-2034 Long-term Plan, scheduled for April 2024.

Background

Recent project history

9. Since late 2018, work has been underway regarding the potential for establishing a sub-regional stadium. This work has been led by a project partnership including Priority One, Tauranga City Council, Bay of Plenty Regional Council and Sport New Zealand. Between 2019 and 2022 the project partnership commissioned and received reports titled:

· Needs assessment report

· Pre-feasibility study

· Site selection report

· Feasibility study.

10. When the feasibility study was presented to Council (23 May 2022), Council agreed in principle that the Tauranga Domain is the suitable site for a community stadium and approved Council’s participation in the project’s next steps, including development of a business case, further design work, and ongoing engagement with mana whenua and affected parties.

11. Over the following 12 months, the project partners commissioned a team of consultants, led by Visitor Solutions Ltd and Tuhura Consulting, to prepare a preliminary business case.

12. On 1 May 2023, Council considered a report titled Tauranga Community Stadium – preliminary business case.

13. The preliminary business case recommended an option for a new multi-use community stadium with the following elements:

· Boutique community stadium with 7,000 permanent seats and provision for 8,000 temporary seats (circa 5,000 being prefabricated seating modules).

· Light exhibition centre (circa 2,000m² exhibition space plus support facilities).

· Function centre (circa 1,300m²).

· Community multi-sport facility (circa 400m² of changing room and lounge space).

· Waikato University Sports Science / Physiotherapy facility (circa 250m² dedicated space and shared spaces).

14. Following consideration of the 1 May 2023 report and the attached final preliminary business case, Council resolved to:

(a) Receive the report

(b) Note that further consultation and any decisions regarding future Council participation and funding of the Tauranga Community Stadium could occur via the 2024-2034 Long-term Plan Process, with ongoing community engagement (including city, regional and subregional wide communities) occurring in addition to formal consultation processes as appropriate.

(c) Refer the Preliminary Business case to Tauranga Domain User Groups and any other relevant groups for their information.

(d) Request a report back from Tauranga City Council staff on funding and affordability considerations including operational costs and the likely relocation costs of existing groups so a comprehensive funding picture is provided prior to consideration for inclusion in the 2024/2034 Long-term Plan.

(e) Ensure that the region wide social and economic benefits are clearly enunciated in the business case along with direct benefits and costs.

(f) Request Tauranga City Council staff continue to engage with sporting groups on identifying future options for relocation if the stadium project progresses.

(g) Report back on potential ownership and operational delivery structure.

(h) Report back on the likely costs of undertaking the above work and how it would be funded.

Response to May 2023 resolutions

15. This report provides an update on progress against the 1 May 2023 resolutions, including the outcome of recent widespread community engagement, and seeks direction on how, if at all, the project should be included in the 2024-2034 Long-term Plan consultation document.

16. Resolution (a) from 1 May 2023 needs no further action.

17. Resolution (c) was actioned following the 1 May 2023 meeting by provision of the final preliminary business case document to all relevant groups as part of ongoing engagement between council and those groups.

18. Resolution (f) has been actioned through the continuation of extensive engagement with stakeholders that has been underway since Council endorsed a preliminary masterplan for the Tauranga and Wharepai Domains in October 2022 (alongside similar preliminary masterplans for Blake Park and Baypark). The outcome of that engagement is scheduled to be presented to the Council meeting on 4 September 2023 in a separate report titled Active Reserves Masterplans.

19. With regard to resolution (h), the work undertaken since May 2023 has largely been led by Priority One on behalf of the project partners and has been funded from the original funding provided to the project by the partners in 2022 (Council provided $100,000 in 2021/22 as its share of the feasibility study and a further $200,000 in 2022/23 as its share of the preliminary business case). In addition to this, council has incurred approximately $34,000 of costs in regard to the community survey described below and associated media costs.

20. The other resolutions from 1 May 2023 are considered in the following sections.

Community engagement process (1 May 2023 resolution (b))

21. Commencing on 26 June 2023, council undertook a significant community engagement exercise seeking to determine the likely level of support for the proposed community stadium at the Tauranga Domain. This engagement exercise was supported by printed press adverts and articles, radio advertising, and online advertising.

22. The engagement exercise was split into two strands:

(a) a demographically representative market research survey managed by Key Research Limited; and

(b) a self-select survey managed by council.

23. Both surveys asked exactly the same questions. These were:

(i) To what extent do you support or oppose the proposed community stadium at Tauranga Domain? (responses on a five-point scale)

(ii) To what extent do you support or oppose a proportion of the funding of the proposed community stadium to come from annual rates? (responses on a five-point scale)

(iii) What economic benefits, if any, do you think the construction and the use of the proposed community stadium could bring to Tauranga? (free text responses)

(iv) What community or social well-being benefits, if any, do you think the proposed community stadium could bring to Tauranga? (free text responses)

(v) An invitation to provide any further comments or feedback. (free text responses)

(vi) Demographic questions.

24. People completing both surveys were directed to project information on council’s website before being invited to complete the survey. Both surveys opened on 26 June 2023 and closed on 21 July 2023.

25. The only difference in the surveys was in the methodology used to generate responses.

26. Key Research operated a postal-to-online survey, sending invitations to take part to 10,000 people randomly selected from the electoral roll in the Tauranga City area. The objective was to generate 1,000 responses from this approach. By the time the survey closed, 1,198 responses were received. Once data had been received, Key Research weighted the sample to ensure reporting is exactly representative of key population demographics per the 2018 census. The sample of 1,198 respondents has an expected 95% confidence interval (margin of error) of +/- 2.8%.

27. The council-managed survey was available to all through council’s website. In total 3,318 responses were received to the self-select survey. A self-select survey has an inherently higher margin of error than a demographically representative survey of similar size.

28. Taken together, 4,516 responses to the two surveys were received.

Community engagement results – demographically representative market research survey

29. A copy of the Key Research report titled Proposed Community Stadium Survey 2023 is included as Attachment 1 to this report.

30. The key findings are summarised on pages 4 and 5 of the Key Research report and are further summarised here in the interests of brevity.

Community stadium

· 49% of people strongly support or somewhat support the proposed community stadium.

· 43% of people strongly oppose or somewhat oppose the proposed community stadium.

· Strong support for the proposed community stadium was greater among males (34% strongly supporting) than females (21% strongly supporting).

· People in the 25-54 age-group are more likely to strongly support the proposed community stadium than people in other age-groups.

· People in the 55+ age-group are more likely to strongly oppose the proposed community stadium than people in other age-groups.

Funding

· Overall, 30% of people strongly support or somewhat support a proportion of the funding of the proposed community stadium coming from annual rates.

· Overall, 57% or people strongly oppose or somewhat oppose a proportion of the funding of the proposed community stadium coming from annual rates.

· Of the 49% of people who support the proposed community stadium, 58% supported a proportion of the funding of the proposed community stadium coming from annual rates, while 24% opposed such funding.

· Of all respondents, 50% of females strongly oppose a proportion of the funding of the proposed community stadium coming from annual rates.

Economic benefits

· The most common positive responses were:

o Increased tourism / visitation (19%).

o Positive impact on business / hospitality (17%).

o Bring performers / different events to the city (17%).

· In addition, a proportion stated that there would be no economic benefits (19%) or that we already have Baypark / could upgrade Baypark / don’t need another stadium (13%).

Community or social well-being benefits

· The most common positive responses were:

o A place for social groups to meet / social events / bringing the community together (15%).

o More activities or events to do / attend in and around Tauranga (10%).

o More sports / greater variety of sports available (9%).

· In addition, a proportion stated that there would be no community or social well-being benefits (23%) or that the project was not a priority or that funds could be used better (12%).

Further comments question

· 589 respondents took the opportunity to provide further comments.

· Of these, 22% of respondents left a general comment in support of the proposed community stadium.

· Of those providing negative comments, the most common related to traffic and parking (10% and 15% of respondents respectively), the stadium not being a priority (14%) or there being other priorities for spending money (11%), and reference to Baypark being upgraded instead (12%).

Community engagement results – self-select survey

31. A summary of the council-managed self-select survey results are included as Attachment 2 to this report.

32. The self-select survey was able to be completed by anyone with an interest in the matter. Because it is not focused on a random sample of the population in the way that the demographically representative market research survey was, the self-select survey is more likely to be completed by people with strong views for or against the proposed community stadium.

33. Of the 3,318 respondents, 2,949 (89%) were from people identifying as residents of Tauranga.

34. It should be noted that during the survey period, a number of organisations distributed and published information encouraging their members or the wider public to take part in the survey. Some of the information published as part of this encouragement was misleading or simply incorrect. For example, claims that the proposed stadium ‘will be closed to the public except on a paid basis a few times a year’ or that the costs of relocating existing users ‘are touted to double the cost of the stadium’ are manifestly wrong.

35. Overall, the results of the self-select survey are less supportive of the proposed community stadium and less supportive of a proportion of funding coming from annual rates than the demographically representative survey.

36. Key findings from the unweighted data include the following:

· 35% of all respondents strongly or somewhat support the proposed community stadium while 63% strongly or somewhat oppose it.

· 27% of all respondents strongly or somewhat support a proportion of rates funding, while 66% strongly or somewhat opposed a proportion of rates funding.

· the self-select survey had a much higher proportion of strong opinions than the demographically representative survey. For example, on the question of stadium support, the demographically representative survey showed 41% in the bracket of ‘somewhat support / neither / somewhat oppose’ while the self-select survey only showed 15% in this range.

37. Consistent with the demographically representative survey, the self-select survey shows:

· Greater support for the proposed community stadium among males compared to females.

· Greater support for the proposed community stadium among those 44 and younger compared to those 45 and older (a slightly younger split than in the demographic survey).

· Greater opposition to a proportion of rates funding among females (67% strongly oppose) compared to males.

Community engagement results – other feedback

38. In addition to the online surveys, council has also received, via Priority One, letters of support from a number of Bay of Plenty Rugby partners including Bayleys and Eves Realty, the Urban Task Force, Craigs Investment Partners, Uzabus, Central Demolition, LinkUp Paints Bay of Plenty, Kaleprint, Ceilings Unlimited, R-Line Limited, and Foundation Sports & Rehabilitation Clinic.

39. Common themes in these letters of support are the balance of 90% community use and 10% professional events; the social, economic and long-term strategic benefits to the city; and the diverse range of events and users that the proposed community stadium will support.

40. Letters of support have also been received from a number of sporting organisations and potential users of the proposed community stadium.

41. Te Whatu Ora – Health New Zealand have noted that while they support in principle any multi-use stadium that contributes to community health and wellbeing, they do not support the preferred location at the Tauranga Domain. This is because they feel the site selection process and business case has not taken sufficient account of noise emissions from the site, and that the risk of noise restrictions on potential events has not been rated highly enough. Te Whatu Ora – Health New Zealand recommend that Council conducts a health impact assessment of the proposed community stadium.

Region-wide social and economic benefits (1 May 2023 resolution (e))

42. Council and Priority One commissioned Market Economics Consulting, with support from Visitor Solutions, to assess the anticipated social and community impacts of the proposed community stadium. Their report (“the Market Economics report”) is included as Attachment 3 to this report.

43. The Market Economics report identifies core effects of the proposed community stadium under the following headings:

· Health and wellbeing

· Urban form uplift

· Way of life

· Community

· Environment and amenity

· Culture

· Fears and aspirations.

44. There is also a section on employment effects and income.

45. The Market Economic report concludes:

‘The wider social and community impacts of the proposed community multi-use stadium are complex and multifaceted, and they are expected to be positive. This is in large part due to the stadium precinct’s unique operating model with community access and use, with a periodic commercial event overlay.’

46. Among the positive benefits that the Market Economics report identifies are the following.

· An expanded range of high-profile sporting matches, festivals, concerts and community events will create opportunities for social interaction and will lift community wellbeing.

· The availability of social amenity contributes to a better quality of life through reduced stress, improved physical and mental health, and a sense of community support.

· The exhibition centre will result in increased court hours being freed up at the Mercury Arena, thereby allowing for more community sport access for basketball, volleyball, netball, futsal, and pickleball.

· The proposed community stadium supports the creation of a compact, high-amenity urban form which is consistent with urban intensification.

· The proposed community stadium supports other regeneration and development projects in the central city.

· The capacity and use of the proposed community stadium supports an increasing diversity of patrons and an increasing diversity of cultural experiences.

· The proposed community stadium helps to build an increased sense of pride and sense of place, factors which support community resilience and community environmental stewardship.

47. Among the risks, fears, and negative impacts that the Market Economics report identifies are:

· Disruption, noise and other temporary impacts during the construction phase.

· Displacement of existing users leading to a loss of connection with the site, and a diminishment of any sporting heritage and history associated with the site.

· Negative impacts of large events such as increased traffic, noise, congestion and crime.

· The cost and funding of the project and the distribution of benefits across the community.

48. The Market Economics report identifies that impacts (positive and negative) occur predominantly within the Tauranga city but that there are also benefits that affect the wider sub-region. The report also assesses that there are small benefits across the wider region.

Funding, affordability and operating costs (1 May 2023 resolution (d))

Capital costs

49. The estimated total capital cost for the stadium per the preliminary business case presented on 1 May 2023 was $220,272,000. That figure included a contingency allowance of 20% and escalation costs to 2026 (assuming a construction period of the 2026 and 2027 financial years).

50. At the time that report was written, it was noted that ‘these costs are based on the high-level concept design for the Stadium, and as a result do not have detailed engineering input (e.g. geotechnical investigations have not yet been completed for the site)’.

51. The only update to these capital costs since May relates to further consideration of pile design and ground stabilisation. This work has been undertaken by Maltbys NZ, quantity surveyors, who were also involved in the development of the preliminary business case.

52. There are two elements to the update. Firstly, the original costing in the preliminary business case included $11.1 million for piling and ground beams, based on early sketch designs for the western stand only. Following a draft preliminary geotech report prepared by Beca in late May 2023, this figure has been adjusted to $20.1 million.

53. Further on-site testing is scheduled to occur later in 2023. After this testing, the draft preliminary geotech report will be finalised. The results of this testing should indicate whether the additional $9m risk allowance is needed.

54. Secondly, there is the possibility that further embankment stabilisation may need to occur. If this is the case, an additional risk-related budget of $19.1 million has been calculated as being appropriate. Further work on design and alignment on the site will help to determine whether this additional budget is necessary.

Operating costs

55. There has been no further work on operating costs since the preparation of the preliminary business case. Only once further substantive work has been completed on the design will there be meaningful information upon which to update the operating costs. If the ‘deferred stadium option’ identified below is further explored, operating costs will need to be updated to reflect this.

Funding

56. An initial and high-level funding assessment has been prepared and is included as Confidential Attachment 4. That assessment includes assumptions relating to funding from the Lottery Grants Board, key funding partners, gaming and community trusts, and corporate and philanthropic sponsors. These assumptions currently amount to a minority of the total funding required. The balance would likely be needed to be sourced from further fundraising, central government, local government, and/or loans.

57. Led by Priority One, investigations have commenced regarding the establishment of a fundraising charitable trust. Such a charitable trust would have tax benefits for potential donors and as such may help generate additional external funds for community amenity projects such as Te Manawataki o Te Papa, as well as the proposed community stadium.

58. Priority One and council staff are also actively seeking commercial and external funding opportunities that will benefit the construction and ongoing operation of the proposed community stadium.

Relocation costs

59. An assessment of potential relocation costs has been completed by Stellar Projects (consultants who are supporting the active reserves master planning process). This assessment includes:

· Construction costs for the relocation of the athletics track (once it has reached end-of-life) and associated infrastructure (including a shared-use pavilion, ablution block, and seating) to Baypark.

· Construction costs of the relocation of the bowls lawns and associated infrastructure (including parking and an ablution block) to Tauranga South.

· Construction costs of the relocation of the croquet lawn (site selection currently under investigation), including an ablution block.

· Additional work at the Tauranga Domain associated with re-working the site. This includes relocating the cricket nets, developing a cultural trail, developing a community walking/running track, establishing a new playground, and improvements to the cricket oval (collectively referred to below as ‘Tauranga Domain Sundries’).

· Allowances for preliminary and general contract costs, planning costs, design costs and so on for each of the above projects.

· A 35% contingency allowance on all of the above costs.

· An overall allowance for optimism bias and a quantified probable risk allowance (covering elements such as unknown ground conditions, unknown constructability etc.), calculated using council’s capital project cost estimation tool (the largest element of the risk allowance relates to the construction of the athletics track at Baypark as that is where the largest number of unknowns arise).

· The purchase (already completed) of a property in Tutchen Street to facilitate the bowls move.

60. The total relocation costs identified above have been estimated as follows.

	$million
Relocate athletics track and build associated infrastructure	14.884
Relocate bowls lawns and build associated infrastructure	0.728
Relocate croquet lawn and build associated infrastructure	3.085
Tauranga Domain sundries	4.853
Optimism bias and quantified probable risk allowance	5.600
Property purchase (completed)	3.000
Total	32.150

61. Current draft Long-term Plan budgets include some provision for the athletics track and bowls moves as part of the wider master-planning of active reserves.

Potential ownership and delivery structures (1 May 2023 resolution (g))

62. Work is ongoing regarding both ownership and delivery structures.

Operating model

63. The assumption in the preliminary business case is that Bay Venues Limited are best placed to operate the proposed community stadium once built. That assumption remains.

64. Bay Venues Limited have a team of skilled and experienced professionals that currently work in planning, developing, and delivering events and providing for extensive community use of facilities. The in-house Bay Catering, Bay AudioVisual, ticketing relationships, and facilities team have successfully managed indoor and outdoor events at Mercury Baypark, Baywave Aquatic Centre and other venues for many years.

65. Bay Venues limited have strong existing relationships with promoters, event organisers, council’s events team, and key local partners all of which position them well to operate the proposed community stadium within the wider network of sporting and community facilities that they currently operate.

Project delivery

66. Te Manawataki o Te Papa Limited has now been established to deliver the Te Manawataki o Te Papa (the heartbeat of Te Papa, the redevelopment of the civic precinct) capital projects. Discussions will continue with the Te Manawataki o Te Papa Limited Board regarding the suitability of that company also leading the delivery of the construction of the proposed community stadium, if and when that occurs.

67. Other options for project delivery include in-house by council or contracted out to another entity.

Ownership

68. No formal discussions have commenced regarding the long-term ownership of the proposed community stadium. Options that will need to be further explored include:

· Direct ownership by council.

· Indirect ownership by council through Bay Venues Limited (a council-controlled organisation).

· Ownership by a not-for-profit third party, potentially a community-led charitable trust.

· Independent commercial ownership.

· Other ownership models.

69. Once direction is received on the likely timing of construction and therefore future operations, discussions regarding ownership are likely to commence.

Deferred stadium option

70. As part of ongoing stakeholder engagement on the masterplan for the Tauranga and Wharepai Domains, an alternative approach to the re-development of the Domains and the development of the proposed community stadium is emerging. [A report titled Active Reserves Masterplans and including the Deferred Stadium Option concept is scheduled to be included on the agenda of the Council meeting of 4 September 2023.]

71. The vision for the Tauranga Domains is that they become a premier events space, as well as continuing to provide for community sport and recreation. The current preliminary masterplan positions the proposed community stadium as the centrepiece of that transition. However, if the Community Stadium were to be deferred, there are still worthwhile changes that can occur to enable the site to evolve, enabling greater use for events, and enabling more effective use of the space by community sports groups.

72. The alternative ‘Deferred Stadium Option’ masterplan seeks to capture this transition, rather than being a fixed view of the future. It proposes the following key changes to the site over the next few years.

(a) The athletics track relocated to Baypark, albeit at a later date than envisaged at the time of the preliminary masterplan. With the track reaching its need for renewal around the end of this decade, a decision will need to be taken as to its future no later than 2028. Irrespective of the proposed community stadium, a relocated athletics facility is considered to be beneficial for the athletics community in the medium-term and for the use of the Domains by other sports groups, casual users of the space, and as events space.

(b) The Tauranga Lawn Bowls club relocated, with the building becoming available to other sports user groups, noting that the alternative masterplan continues to propose demolition of the buildings behind the current stand. Dialogue with Tauranga Lawn Bowls is underway in respect of opportunities for relocation.

(c) Tauranga Croquet Club retained on the site, at least until the end of the current lease period to 2029, unless a suitable alternative site for the relocation of the club can be agreed with the club prior to that date. Alternative sites are under active investigation.

(d) Retention of the Tauranga Lawn Tennis Club as it is currently, without moving the two courts proposed through the preliminary masterplan. The tennis club would benefit from additional parking onsite during regular use periods.

(e) Improvements to site access and movement through the site for vehicles servicing events, including additional hardstand spaces where the bowls greens, and buildings behind and beside the grandstand are located. This is expected to be available for regular site users outside of events.

(f) Improvements to the Wharepai Domain and building to enable more community sport use and events use.

73. The above proposed approach opens the possibility of a staged approach to constructing the proposed community stadium. As other moves occur on the site, building may be able to commence on aspects of the stadium. Further work needs to be undertaken on what this staging may look like.

74. No detailed costings have yet been undertaken on the concept of deferring and staging the development of a proposed community stadium. Such work would need to be undertaken before final decisions are made regarding including such an approach in the Long-term Plan 2024-2034. It is likely that this work would show that staging the development of the proposed community stadium would result in overall higher capital costs, but that those costs could be spread out over a longer time period and therefore, be more able to be accommodated in Council’s financially constrained Long-term Plan 2024-2034 (and potentially in years beyond 2034).

75. To this end, if the ‘Deferred Stadium Option’ is preferred by Council, approval for unbudgeted loan-funded operating expenditure will be sought in this (2023/24) financial year of a maximum $900,000 to further progress design concepts, and to better understand construction, operation, and financial impacts under this approach. Such information would be made available to Council before the 2024-2034 Long-term Plan is adopted in April 2024.

Strategic / Statutory Context

76. The proposed community stadium aligns and supports key Tauranga City Council strategic planning documents, including:

· Our Direction – Tauranga 2050 (including the City Vision)

· Tauranga City Council Community Outcomes

· Sport and Activity Living Strategy (2012)

· Te Papa Spatial Plan 2020

· City Centre Action and Investment Plan 2022-2032

· Tauranga Events Action and Investment Plan 2022-2032

· Our Public Places Strategic Plan 2023

· Play, Active Recreation, and Sport Action and Investment Plan 2023-2033

· Masterplans for Wharepai and Tauranga Domains, Baypark and Blake Park 2022.

77. It also aligns with sub-regional, regional and national strategies, most notably the Urban Form and Transport Initiative, SmartGrowth, the Bay of Plenty Spaces and Places Strategy, the Living Standards Framework, and Sport New Zealand’s Strategy Plan 2020-2024.

78. Delivery of the proposed community stadium could support the strategies and plans above by:

· Contributing to the vibrancy of the city centre, complementing and enhancing other proposed city centre initiatives such as Te Manawataki o Te Papa and the Memorial Park to city centre coastal connection.

· Addressing the city’s growing demand for open space by optimising the use of the Domain. The proposed Stadium project forms part of Council’s wider work to consider the future use of shared green spaces across the city.

· Complementing the overall city facility network by providing light exhibition space which frees up Mercury Baypark for increased community use.

· Providing a sub-regional facility in a central location, connecting in with public transport routes to minimise the need to travel via car to the stadium for events, and maximising the population catchment serviced by the stadium (rather than locating it on the outskirts of the city).

79. For a more detailed discussion of how the proposed community stadium could deliver on strategic objectives for the city and the region, refer to the Strategic Case included within the preliminary business case^{^[1]}.

Options Analysis

80. In considering the matters covered in this report there are several interconnected issues that need to be considered when developing options. These issues are:

(a) Whether Council supports the concept of the proposed community stadium for Tauranga.

(b) If so, whether Council supports inclusion of funding for the proposed community stadium in the draft Long-term Plan (and how much that funding should be).

(c) If so, whether Council supports the single-stage approach to development contemplated in the programme business case, or whether a staged approach is preferred.

(d) Whether the timing of any construction is as per the preliminary business case or deferred.

(e) Whether limited funding should be allocated in the draft Long-term Plan (or earlier) to enable continued work on the project to develop concept options, which would then enable staging and cost opportunities to be explored further with all user groups.

81. Consideration of these various issues leads to the development of the following key options for consideration (recognising that within options there are potential sub-options regarding timing):

· Option 1 – include the proposed community stadium in the draft Long-term Plan and budgets and consult (per the preliminary business case approach, to be completed by 2027).

o Sub-option 1a – same but with later timing.

· Option 2 – include the proposed community stadium in the draft Long-term Plan and budgets as a staged development and consult (with timing to be determined).

· Option 3 – do nothing – do not include the proposed community stadium in the Long-term Plan and do not consult on it through the Long-term Plan Consultation Document.

Option 1 – Single stage construction proposed in the draft Long-term Plan and budgets

82. This option involves taking the approach included in the preliminary business case and working towards an immediate start to construction. Key elements include:

· Single-stage development of a community stadium at the Tauranga Domain including:

o a boutique community stadium with 7,000 permanent seats and provision for 8,000 temporary seats (circa 5,000 being prefabricated seating modules)

o a light exhibition centre (circa 2,000m² exhibition space plus support facilities)

o a function centre (circa 1,300m²)

o a community multi-sport facility (circa 400m² of changing room and lounge space)

o a sports science / physiotherapy facility (circa 250m² dedicated space and shared spaces).

· Relocation of existing athletics, bowls and croquet facilities as quickly as possible.

· Construction predominantly in the 2026/27 and 2027/28 financial years^{^[2]}.

· Operations commencing in the 2028/29 financial year.

· Capex budget of $220 million, plus $9 – $28 million of additional risk-related budget for pile design and ground stabilisation.

· Additional costs of approximately $32 million to relocate existing users to new facilities on alternate sites (some of which is already budgeted).

· An annual rating contribution of approximately $15 million to cover debt servicing and depreciation (per the preliminary business case the proposed community stadium generates a small – circa $1 – $2m – operating surplus in each of the first 10 years of operation).

83. Advantages and disadvantages of this option include:

Advantages of Option 1

Disadvantages of Option 1

· Responds to those in the community who support a community stadium and the additional amenity it will provide for the city.

· Maintains momentum in a project with strong stakeholder support.

· Positive signal of intent to future funding partners in public, private, and charitable sectors.

· Provides the community a clear proposal to consider through the 2024-2034 Long-term Plan consultation period.

· Further prioritisation of council’s capital programme will be required to create the financial capacity to support this project alongside all other competing priorities.

· Potential further disruption to the city centre area at the same time as Te Manawataki o Te Papa, and other public and private development initiatives are taking place in the vicinity.

· Significant additional rating impost from 2028/29 onwards.

84. Risks associated with this option are as included in the preliminary business case and summarised below in the ‘legal implications / risks’ section of this report.

85. This option is not recommended.

Option 1a – Single stage construction but with a deferred start date

86. This option involves the same approach as Option 1 but with a further delayed start date. This is to avoid the extreme pressure on council’s balance sheet currently evident in the first four years of the 2024-2034 Long-term Plan period, and to allow more time to seek alternative funding sources.

87. For the purposes of this paper, a construction period of 2029/30 to 2031/32 has been identified as a potential timeframe (a four-year delay compared to Option 1), but other deferred start dates could equally be considered. This timing is consistent with the expectation that the existing athletics track at the Tauranga Domain will be end-of-life by the end of this decade and that a replacement will have been constructed at Mercury Baypark by then.

88. Under this option, budget for design fees of $20 million (approximately 10% of total capital expenditure) is sought to be spread equally across the 2024/25 and 2025/26 years to enable current progress to continue on the project, and to ensure detailed designs are ready when the construction funding is available.

89. Advantages and disadvantages of this option include:

Advantages of Option 1a

Disadvantages of Option 1a

· Responds to those in the community who support a community stadium and the additional amenity it will provide for the city, albeit in a delayed manner.

· Provides additional time to establish fundraising opportunities.

· Provides the community a clear proposal to consider through the 2024-2034 Long-term Plan consultation period, albeit in a timeframe that is less urgent.

· Provides additional time to further prioritise council’s long-term capital programme to ensure financial capacity.

· Construction from 2029/30 avoids cross-over with the Te Manawataki o Te Papa project.

· Additional timeframe allows for a more measured relocation process for existing facilities, including enabling the existing athletics track to reach end-of-life stage before being removed.

· Slows momentum in a project with strong stakeholder support.

· Weaker signal of intent to future funding partners in public, private, and charitable sectors.

· Significant additional rating impost from 2032/33 onwards.

· Cost escalation implications of delaying construction by four years.

90. Additional risks associated with this option (comparted to Option 1) include increases to the risk of future political change affecting the project, and increased risk of cost escalations significantly affecting the business case.

91. This option is not recommended.

Option 2 – Staged implementation plan for the community stadium

92. This option involves the potential staged development of the community stadium in a manner that ultimately achieves the ambition championed in the preliminary business case, but executed in a staged manner rather than as a single-stage project.

93. The details of such a staged implementation process are not yet available. However, it is possible, for instance, that the three main elements of the proposed stadium (the east stand including food and beverage, admin, broadcast, and public facilities; the south stand and concourse; and the west stand including exhibition and function spaces as well as player facilities) could be built in separate construction phases.

94. Very early estimates for a staged implementation plan approach indicate the following possible scenario:

· A stand-by-stand approach, starting with the east stand (plus necessary ancillary work).

· Staged relocations of existing users consistent with the approach proposed under the section of this report above titled ‘Deferred Stadium Option’.

· Construction of the first stage to occur between 2029/30 and 2031/32.

· Construction of further stages to be beyond the 2024-2034 Long-term Plan period (i.e. in years 2034/35 and onwards).

· Reduced capital expenditure in the 2024-2034 period of approximately $70 million (plus the relocation costs separately identified in this report).

· The $70 million of capital expenditure to be funded $40 million from rates-funded loans and $30 million from other sources.

· An increased overall project cost due to the staged nature of design and delivery.

· Additional operating costs in the period before the stadium is fully complete and operational (the facility is thought to be less likely to be able to meet its operating costs when it is only partially complete).

· Reduced debt servicing and depreciation costs in the short term as a direct result of the reduced capital costs.

95. If this option is preferred, further work will be done on this in order to better inform Council when it deliberates on Long-term Plan submissions in the first quarter of 2024.

96. Under this option, budget of $900,000 (opex) is sought in the 2023/24 (current) financial year to enable further development of staged-delivery concept options, as well as additional design work, and then cost management opportunities and construction staging to be explored. Providing budget in 2023/24 would effectively be ‘unbudgeted expenditure’ (as the 2023/24 Annual Plan has already been adopted) and would therefore be required to be separately resolved by Council.

97. Advantages and disadvantages of this option include:

Advantages of Option 2

Disadvantages of Option 2

· Responds to those in the community who support a community stadium and the additional amenity it will provide for the city, albeit in a delayed and staged manner.

· Provides additional time to establish fundraising opportunities.

· Provides the community a proposal to consider through the 2024-2034 Long-term Plan consultation period, albeit in a timeframe that is less urgent.

· Reduced additional rating impost from 2032/33 onwards.

· Significantly reduced pressure on council’s long-term capital programme and financial capacity.

· Construction from 2029/30 avoids cross-over with the Te Manawataki o Te Papa project.

· Additional timeframe allows for a more measured relocation process for existing facilities, including enabling the existing athletics track to reach end-of-life stage before being removed.

· Slows momentum in a project with strong stakeholder support.

· Weaker signal of intent to future funding partners in public, private, and charitable sectors.

· Cost escalation implications of delaying construction by four years.

· Cost increase implications by staging the delivery of the project over an extended timeframe.

98. An additional challenge with this option is that at the time of writing, there are limited details as to what the programme of work for this option could look like. This will be addressed before the adoption of the 2024-2034 Long-term Plan, if resources are allocated to enable it.

99. Because of the balance between responding to momentum and community support for the project and fiscal prudence, this option is recommended for the purpose of public consultation through the 2024-2034 Long-term Plan process.

Option 3 – No further action at this stage

100. Under this option, and after carefully considering the preliminary business case, the results of the public engagement process, and other available information, Council would decide not to proceed with inclusion of any form of proposed community stadium project in the 2024-2034 Long-term Plan process and consultation document. From a council perspective, the project would stop and no further investment would be considered.

101. Note, however that even under this option, the proposed masterplan for the Tauranga and Wharepai Domains would still be considered by Council and any changes (other than the proposed community stadium) that are adopted would be actioned. This potentially includes many or all of the moves described under the section of this report above titled ‘Deferred Stadium Option’.

102. Advantages and disadvantages of this option include:

Advantages of Option 3

Disadvantages of Option 3

· No further pressure on council’s long-term capital programme and financial capacity.

· No additional rating impost in future years.

· No further significant construction disruption to city centre.

· No stadium development allows for a more measured relocation process for existing facilities.

· Does not respond to those in the community who support a community stadium and the additional amenity it will provide for the city.

· Halts momentum in a project with strong stakeholder support (or significantly slows momentum if other stakeholders continue without council’s support).

· Does not provide the community a clear proposal to consider through the 2024-2034 Long-term Plan consultation period.

103. There are few risks with this ‘do nothing’ option.

104. This option is not recommended.

Financial Considerations

105. Council is currently under significant financial pressure, both in terms of its balance sheet and borrowing capacity, and on the community’s ability to absorb increased rates. Council is committed to significant community amenity upgrades in the city centre via the Te Manawataki o Te Papa project, in its aquatic and indoor sport networks, and in its active reserves through the master planning work. The proposed community stadium complements all of these developments but imposes additional costs on council and ultimately the ratepayer.

106. As outlined above, the preliminary business case identified that the capital costs of a single-stage stadium development would be $220 million (based on construction in 2025/26 and 2026/27). In addition, further information suggests a risk allowance of between $9 – $28 million relating to ground stabilisation should be allowed for. Funding plans to date indicate that some of this may be met by third party funders but that the majority of capital costs would need to be met by central government, local government, and/or by further fundraising efforts.

107. The preliminary business case also identified that approximately $15 million per annum would need to be rates-funded to ensure debt servicing and depreciation costs for the stadium could be met.

108. The recommended option (Option 2 – staged implementation plan) was not contemplated within the preliminary business case and as such has had little exploration from a financial perspective. Details disclosed above about the option are very early-stage thinking. However, it is intuitive that a staged implementation will ultimately incur more capital expenditure than a single-stage delivery of the same facility (due to increased time-based escalation costs, additional site establishment / disestablishment costs, and so on).

109. Similarly, the preliminary business case did not contemplate the ongoing operational costs of a facility delivered in a stage manner over a number of years. As such, the information provided in the options section in this regard has a very low level of confidence attached to it.

110. To enable staff and the wider project team to provide better information for the Long-term Plan deliberations process in the first quarter of 2024, additional budget of $900,000 is sought in the 2023/24 year. Because this budget is not provided for in the 2023/24 Annual Plan (adopted by Council on 3 April 2023), additional budget needs to be considered through a separate resolution of Council. This is provided for in the Recommended Resolutions in this report.

Legal Implications / Risks

111. Project risks are comprehensively set out in the preliminary business case^{^[3]} and are managed on an ongoing basis by the project team. Risks identified in the preliminary business case with a ‘residual risk’ assessment (i.e. after known mitigation actions have occurred) of ‘medium’ (on a scale of very high, high, medium, low) are as follows:

· Lack of appropriate engagement with stakeholders during design phase

· Cost escalations pre-tender

· Cost escalations during construction

· Political changes reduce support for the project

· Contractor capacity

· Contractor capability

· Geotechnical conditions are worse than anticipated

· Disruption and traffic management during construction

· Club displacement

· Site is found to be susceptible to natural hazards

· Supply chain constraints.

112. There were no risks identified in the preliminary business case with a residual risk higher than ‘medium’.

Significance

113. 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.

114. 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 proposal; and

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

ENGAGEMENT

116. Taking into consideration the above assessment, that the proposal is of high significance, officers are of the opinion that any decision to contemplate funding in the Long-term Plan 2024-2034 for the proposed community stadium should be highlighted in the Long-term Plan Consultation Document and proceed to full public consultation in accordance with section 93A of the Local Government Act 2002.

Click here to view the TCC Significance and Engagement Policy

Next Steps

117. Decisions made on this report will be reflected in the Long-term Plan Consultation Document and ongoing Long-term Plan preparation as appropriate.

Attachments

1. Community Stadium Demographic Survey Final Report - A14942616 ⇩

2. Community Stadium Public Consulation Analysis - A14940775 ⇩

3. Tauranga Stadium Social Impact Assessment - Final Report - A14955967 ⇩

4. High level funding assessment June 2023 - A14940820 - Public Excluded

Ordinary Council meeting Agenda

21 August 2023

11.2 Draft Long Term Plan 2024-2034 - Memorial to Elizabeth Waterfront Recreation Connection \ Te Hononga ki Te Awanui

File Number: A14801550

Author: Kelvin Eden, Capital Programme Manager: Major Community Amenity

Authoriser: Gareth Wallis, General Manager: City Development & Partnerships

Purpose of the Report

1. The purpose of this report is to evaluate options and recommend a preferred option(s) for the provision of a recreation connection along the Tauranga Harbour waterfront between the city centre and Memorial Park.

Recommendations

That the Council:

(a) Receives the report "Draft Long Term Plan 2024-2034 - Memorial to Elizabeth Waterfront Recreation Connection \ Te Hononga ki Te Awanui ".

(b) Approves delivery of Option C as an achievable short/medium-term outcome, acknowledging that it does not achieve the accessible linear connection along the shoreline but does however, improve public access at the road ends to the harbour edge.

(c) Approves consultancy costs (see para 37 and 39) to progress the consenting, legal, planning and design work for short/medium-term Option C, the construction costs of which are currently included in the Draft Long-term Plan 2024-2034.

(d) Approves consultancy costs (see para 37 and 39) to progress the consenting, legal, planning and design work for long-term Option B, with construction costs to be considered as part of deliberations for the following long-term plan.

(e) Enter a Memorandum of Understanding with Mana Whenua.

Executive Summary

2. Three options have been short-listed and consulted on by the project team. These options have been modified in some respects, including in order to respond to direct landowner feedback. The updated versions of these options are summarised in the Options Analysis section, and in detail in Attachment 1 – Boffa Miskell Council Recommendations Report.

3. Option B provides a recreation connection against the coastline from Memorial Park to Elizabeth Street in the city centre, by incorporating reclamation, structural pathways and accessways, as well as sand deposition with an integrated pathway behind. Sand would need to be protected by several groyne structures, and these structures can be designed to accommodate recreational access and amenities.

4. Option B includes consolidation of riparian access, with improved small craft launching and docking facilities provided by jetty structures or groynes, and ensuring that existing coastal consents can be given effect to.

5. This option also includes improved access down some of the Avenues to Te Awanui Tauranga Harbour, and the development of ‘nodes’ on the coastal edge at the bottom of these improved Avenue links, providing improved recreational access and amenities.

6. Option C would see the delivery of some parts of the longer term Option B, including the development of ‘nodes’ on the coastal edge at the bottom of improved Avenue links, to provide for recreational access and amenities.

7. Option C also includes some sand deposition and replenishment, with the construction of groynes to entrap sand at the southern end of the project area between Sixth and Seventh Avenue, and at First Avenue.

8. Option C minimises some of the identified risks, notably those relating to riparian rights and consenting. It makes good use of existing public land, and provides some improved connection with the water, and increased recreational facility for public use.

9. It is recommended that Option C is progressed to developed design for landowner and public engagement, detailed design, resource consent and in turn, building consent. Noting that projects are staged and access to First Avenue, Second Avenue, and Fourth Avenue have been prioritised. Fifth Avenue East and existing access points shall be addressed should funding allow.

BackgrounD

10. A coastal connection between Memorial Park and the city centre has been formally included in a variety of TCC strategy and policy documents since 2004, with several objectives being, in summary to:

· provide a continuous city-cycle network;

· connect people with the water/the coastal edge;

· provide greater uniformity of harbour edge;

· contribute to public amenities offered in the city centre;

· provide a safer cycle route into the city centre as an alternative to Devonport Rd; and

· provide for safety and broad accessibility.

11. The coastal connection was gifted the name or ingoa “Te Hononga ki Te Awanui” by mana whenua representatives on 10May 2022. In te reo Māori, the kupu or word Hononga holds the meaning of union, connection, relationship or bond. Te Awanui is the traditional name for the Tauranga Harbour. In gifting the name the representatives said “the essence of the journey from Taiparirua to Mareanui, the Matapihi Railway Bridge and the Waterfront is the connection with the harbour”.

12. The ingoa Te Awanui in the project name is also a reference to the Te Awanui Waka, and the mana whenua aspiration to develop a Whare Waka and relocate the Te Awanui Waka to the waterfront.

13. Stage 1 of Te Hononga ki Te Awanui is underway. Stage 1 includes the construction of a railway underpass next to the Harbourside Restaurant (completed) and a new section of boardwalk that will join the underpass with the southern end of The Strand. This will link the waterfront boardwalk from The Strand through to Tunks Reserve at the eastern end of Elizabeth Street.

14. Stage 2 of Te Hononga ki Te Awanui, the subject of this report, is intended to provide an extended harbour-edge connection between Memorial Park and the city centre.

15. The location of the coastal connection and Stages 1 and 2 are shown in Figure 1 below.

Figure 1: Te Hononga ki Te Awanui – Stages Plan

Strategic / Statutory Context

16. The preliminary assessment is that all options, despite relatively significant complexities and risk, can with appropriate design, engagement and mitigation, have acceptable environmental effects and be consistent with most national, regional, and local planning instruments.

17. The Te Papa Spatial Plan 2020-2050 – Te Mahere ā-Takiwā o Te Papa (Spatial Plan) is the primary strategy and policy document that underpins current planning for the coastal connection.

18. Spatial Plan implementation includes a coastal pathway as part of the “Green necklace (7km walking and cycling route) implementation”.

19. The Green necklace is shown in the Spatial Plan on the maps in Figure 2 below.

Figure 2: Te Papa Spatial Plan Maps

20. The Tauranga City Centre Action and Investment Plan affirms Council’s vision for the city centre: ‘Te Rapunga Ora ki Te Papa – a great place to live, work, learn and play’. The coastal connection is identified on the City Centre Key Moves Plan. This document shows the broader intent to invest in this area, supporting intensification and befitting of a regional city centre.

21. Specific objectives for the coastal connection were confirmed at the Council Meeting on 25 July 2022. These are included the following, listed in descending order of priority:

· Tuatahi / First – Supporting urban intensification in the city centre and broader Te Papa Peninsula by offering high amenity public spaces and recreation options.

· Tuarua / Second – Creating a high quality, legible, and accessible water’s edge experience, and in doing so reconnecting the city centre to its waterfront heritage and landscape context.

· Tuatoru / Third – Providing a recreational connection that improves public enjoyment and accessibility to and along the harbour's edge.

Options Analysis

22. A short list of options was developed through the consideration of the project objectives, key stakeholder engagement, and the evaluation of typology options as described in Attachment 1 – Boffa Miskell Council Recommendations Report.

Option A – Reclamation

23. Option A includes reclamation with a pathway against the coastline extending along the City Fringe and Escarpment Link Zones, from Elizabeth Street to Fourth Avenue.

24. In the Residential Link Zone, from Fourth Avenue down to Memorial Park, Option A includes sand deposition with a formed pathway and hard surface behind. This would sit on either deposited sand or rock. The sand requires protection from scouring with several groyne structures, which would be designed to accommodate recreational access and amenities.

25. This option consolidates riparian access, with improved small craft launching and docking facilities provided by jetty structures or groynes, and also accommodates current coastal consents.

26. Option A integrates improved access to the Avenues and the development of ‘nodes’ on the coastal edge and on the foreshore, providing improved recreational access and amenities.

27. This option would provide all-abilities access along the length of the connection (in a north-to-south direction), as well as some steeper ramp/stepped access points to the Avenues (in an east-to-west direction).

Figure 3: Option A

Option B – Piled structure and reclamation

28. This option includes reclamation with a pathway against the coastline extending along the City Fringe Zone from Elizabeth Street to First Avenue.

29. In the Escarpment Link Zone from First Avenue to Fourth Ave, the option comprises a piled structure providing access and recreation opportunities.

30. In the Residential Link Zone, from Fourth Avenue to Memorial Park, the option includes sand deposition with a formed pathway and hard surface behind. This would sit on either deposited sand or rock. The sand requires protection from scouring with several groyne structures, which would be designed to accommodate recreational access and amenities.

31. Option B also integrates improved access to the Avenues and the development of ‘nodes’ on the coastal edge, on the foreshore, providing improved recreational access and amenities.

32. This option would provide all abilities access along the length of the project (in a north-to-south direction), as well as some steeper ramped/stepped access points from the Avenues down to Te Awanui (in an east-to-west direction).

Figure 4: Option B

Option C – Limited intervention

33. This option includes limited intervention in the City Fringe and Escarpment Link Zones, from Elizabeth Street to about Fourth Avenue.

34. In this area, reconnection to the coast is made via development of the ends of the Avenues with access down to Te Awanui, the development of ‘nodes’ on the coastal edge and at the bottom of these Avenue links, improved recreational access and amenities.

35. This option will improve access and amenity for those walking to and along the foreshore at mid- to low-tide (in a north-to-south direction). This would not be suitable for all physical abilities.

36. The short/medium-term development of Option C does not restrict future opportunities to proceed with the delivery of Option A or Option B.

Figure 5: Option C

Financial Considerations

37. Preliminary construction cost estimates for the three options are outlined in Appendix 6 of the Boffa Miskell Council Recommendation Report and based on current information, are as follows:

· Option A – $25,430,000.

· Option B – $28,230,000 – in addition, for the full delivery of Option B, it is recommended that a total of $1.65m is set aside for concept design, developed design and engagement ($1.4m), and legal fees ($250k) to obtain agreement on riparian rights.

· Option C – $6,000,000 – in addition, for the full delivery of Option C, it is recommended that a total of $585,000 is put aside for concept design and engagement ($240k), detailed design and MSQA ($240k), and preparation of resource consent and archaeological authority application ($105k).

38. Cost assumptions:

a. Construction cost estimates are high-level and based on programming options that are subject to developed and detailed design.

b. Includes a 50% contingency to account for the uncertainty at this stage of the project.

c. Estimates based on 2023 rates with no allowance for inflation.

39. Cashflow assumptions are outlined in the table below:

Financial year	Budget	Item
FY24	$940,000	Option C – Concept design and engagement costs Option B – Concept design and engagement costs
FY25	$1,295,000	Option C – Developed design, detailed design, engagement and consenting costs Option B – Developed design, engagement, consenting and legal costs
FY26	$3,000,000	Option C – Construction
FY27	$3,000,000	Option C – Construction

Legal Implications / Risks

40. Sixteen properties along the coastal connection route have riparian rights, as shown within the appendices of Attachment 1 – Boffa Miskell Council Recommendations Report.

41. Michael Wood from Simpson Grierson holds the view that riparian rights are the rights of access to and from the navigable water across the site boundary. This is a right that owners of the properties that directly bounder Te Awanui enjoy, in order to exercise the right to navigate along that water.

42. Most property owners who hold riparian rights have informed the project team through engagement that they are opposed to the project. Their position is that their riparian rights mean that they are entitled to an entirely unobstructed harbour access along the full length of their harbour frontage, for current and potential future boat access, and therefore even a minimal structure would have the effect of infringing those rights.

43. The Tauranga Harbour Protection Society (THPS) consider that any alteration of their current use or interface with the harbour would constitute “managing riparian rights” and would not be lawful. The THPS view is that this is a “fatal flaw” for the project.

44. The THPS have suggested a joint application to the High Court for a declaratory judgement to provide certainty before proceeding further with the consent process. Possible alternatives to a High Court declaratory judgment include an agreed reference to expert determination, for example by a retired High Court judge or other expert, or mediation.

45. The project team think that this suggestion has merit and is recommended to proceed as a precursor to the resource consent process. Early determination would give all parties certainty about the viability of the project and address a critical project risk factor early in the process.

46. Legal Counsel for the TCC has initiated engagement with THPS on this process.

Consultation / Engagement

Mana Whenua

47. Modification of Te Awanui is generally opposed by iwi and hapu, and is a critical issue for all three options. In this case, the project is supported because of its restorative and public access focus. However, it will be important for mana whenua to continue to be closely involved in the project as the design and consenting process proceeds. A Memorandum of Understanding is proposed to ensure that expectations are clearly understood and met.

Landowners

48. Individual and group engagement has taken place with all affected property owners. Detailed consultation will occur as part of the next design stages.

49. The management of riparian rights and related coastal consent rights is a critical issue for all options, but most significantly for Options A and B. The response to this issue will be to include measures in the developed design to maintain and enhance small boat access such that this will not significantly impede riparian rights.

50. To bring early certainty to this issue, it is recommended that a High Court Declaratory Judgement or an alternative agreed process be used to test the acceptability of a preferred design.

Significance AND ENGAGEMENT

51. 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.

52. 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 proposal; and

53. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the proposal is of medium significance.

54. Taking into consideration the above assessment, that the proposal is of medium significance, officers are of the opinion that the following consultation/engagement is suggested/required under the Local Government Act:

(a) A Memorandum of Understanding will be developed with Mana Whenua.

(b) Individual and group engagement has taken place with all affected property owners. Detailed consultation will occur as part of the next design stages.

Click here to view the TCC Significance and Engagement Policy

Next Steps

55. Proceed with developed design, engagement and consenting for Option C, with a view to construction in FY26 and FY27.

56. In parallel, proceed with concept, developed design and engagement for Option B.

57. Proceed with application for a high court declaratory judgement or other decision process regarding riparian rights.

58. Develop a Memorandum of Understanding with Mana Whenua.

Attachments

1. BM210881_July 2023_ Council Recommendations Report _20230811 - A14937450 (Separate Attachments 1)

Ordinary Council meeting Agenda

21 August 2023

11.3 Our Direction (Council's strategic framework) - adopt final action and investment plans and strategies

File Number: A14550992

Author: Anne Payne, Principal Strategic Advisor

Jeremy Boase, Manager: Strategy and Corporate Planning

Authoriser: Christine Jones, General Manager: Strategy, Growth & Governance

Purpose of the Report

1. To present for adoption eight new action and investment plans (“the plans”) and two new strategies, which have been updated following consultation feedback; and to supersede and/or rescind existing strategies that are no longer needed. The Tauranga Climate Action and Investment Plan is reported separately to this Council meeting.

Recommendations

That the Council:

(a) Receives the report "Our Direction (Council's strategic framework) - adopt final action and investment plans and strategies", including Attachments 1 to 5 to this report.

(b) Acknowledges and thanks Te Rangapū Mana Whenua o Tauranga Moana, particularly the appointed AIP representatives, for their valuable contribution to development of these plans and strategies.

(c) Acknowledges and thanks the many other groups, organisations and individuals from our communities who have also provided valuable contributions to development of these plans and strategies.

(d) Approves the eight Action and Investment Plan consultation feedback and proposed response summaries, July 2023, contained in Attachment 1, including the resultant proposed amendments to the draft plans.

(e) Adopts the eight Tauranga City Council Action and Investment Plans contained in Attachment 2 (Appendices A to H), and notes that the eight adopted plans will be:

(i) Updated to reflect final 2024-2034 Long-term Plan funding once the Long-term Plan is adopted in April 2024, and

(ii) Available online as designed documents in early October 2023, with printed copies available on request.

(f) Adopts Tauranga City Council’s Tauranga Mataraunui – Inclusive City Strategy, 2023-2033, contained in Attachment 3, noting the summary of final changes provided.

(g) Adopts Tauranga City Council’s Tauranga Taurikura – Environment Strategy, 2023–2033, contained in Attachment 4, noting the summary of final changes provided.

(h) Delegates the Group Manager: Strategy, Growth and Governance to approve minor amendments to the eight Action and Investment Plans and two strategies if required prior to publication.

(i) Formally supersedes or rescinds the ten existing strategies or plans as proposed in section C of this report, and notes that partners to any superseded joint strategies or plans will be advised accordingly.

(j) Notes that, subject to today’s decisions, Tauranga City Council’s strategic framework, Our Direction, has now been refreshed and is presented on Council’s Our Future / Our Direction webpages. A summary of where strategies and plans fit is contained in Attachment 5 of this report.

Executive Summary

2. Work to refresh the council’s strategic framework began in 2021, following community feedback about a lack of consolidated Council direction. Once the council’s high-level direction was clarified and articulated in mid-2022, we began to develop nine new action and investment plans (‘plans’) to fill the remaining gaps in our framework.

3. The plans identify the prioritised actions and investment needed to deliver on the aspirations of Our Direction. We worked with a range of interested individuals, groups and organisations from the outset to develop the nine plans, including appointed representatives from Te Rangapū Mana Whenua o Tauranga Moana.

4. The most recent version of each plan was open for wider community consultation during May and June 2023, and amendments, as summarised in this report, have been made to the plans to incorporate feedback received. Ten existing strategies or plans will be superseded by the new plans once adopted.

5. Council’s two new strategies, Tauranga Mataraunui – Inclusive City Strategy and Tauranga Taurikura – Environment Strategy, were retained in draft until the plans were completed, to ensure consistency across all levels of Our Direction framework.

6. It is proposed that Council adopts the eight plans and two strategies contained in this report and related attachments. The Tauranga Climate Action and Investment Plan is reported separately to this Council meeting. At the time of this report, most (but not all) Priority Actions in the plans have been included for funding in the 2024-2034 Long-term Plan.

7. Council’s strategic framework is available online at: Our Future / Our Direction.

Background

8. Council’s strategic framework refresh commenced in 2021. The first phase of the project developed a shared vision for Tauranga and clarified Council’s high-level direction, how it contributes to that vision. This included developing two new draft strategies, Tauranga Taurikura – Environment Strategy and Tauranga Mataraunui – Inclusive City Strategy, to fill gaps in our framework.

9. Since mid-2022, we have been working with interested people, groups and organisations from our communities to develop nine action and investment plans (plans) to fill the remaining gaps in our framework.

10. As a final step in developing our nine new plans, we consulted with our wider communities in May – June 2023, primarily focusing on whether we had our actions and their relative priorities ‘about right’. The consultation draft plans are available on the council’s Let’s Talk / Our Direction Project webpage, at: Our Direction Project.

11. We would like to acknowledge the significant contribution to this project from many staff across the organisation, and from many people, groups and organisations in our communities – all of whom have provided valuable input along the way.

12. We would like to also acknowledge Te Rangapū Mana Whenua o Tauranga Moana for their significant contribution to this project, particularly during development of te kupenga (the visual representation of our strategic framework), our two new strategies, and all nine new plans. We particularly acknowledge and thank the Te Rangapū representatives appointed to each plan for their additional time and input during the development process.

A: summary of action and investment plan feedback and proposed responses

Summary of May to June 2023 wider community consultation

13. This final consultation focused primarily on the Climate, Safer Communities, and Community Centres Plans. The consultation comprised one in-person ‘wise owls’ session for each of these three plans, as well as an online survey that focused on the three plans, but also enabled feedback on the remaining six new plans.

14. We received 157 online survey responses and a number of separate written submissions across all plans, with many respondents commenting on more than one plan.

15. Overall, feedback received was largely positive and supported the plans. Many useful improvement suggestions were received, which have been incorporated into the final draft plans.

16. A summary of feedback received and proposed responses for each of the eight plans is provided as the separate Attachment 1 to this report (Attachment 1: Consolidated Action and Investment Plan consultation feedback and proposed response summaries July 2023).

17. The table below provides the headline consultation feedback information for each plan, along with relevant page references from Attachment 1.

Action and Investment Plan	Page no.	Headline information
Accessible Tauranga	2	12 survey responses received, plus two written submissions/emails. Feedback identified a small number of concerns with the current document. The main concern was how older people are defined and ensuring that older people and the disability community are clearly defined as two separate groups. Other concerns around transport (roading projects and mobility parking) were also identified.
Safer Communities	5	30 survey responses received, plus 8 attendees at the in-person ‘Wise Owls’ engagement session. Feedback highlighted key concerns related to safety in Tauranga. Main areas of concern related to crime in the central city and other retail spaces, road safety and the design and maintenance of public spaces that can lead to unsafe behaviours.
Art, Culture and Heritage	10	4 survey responses received, plus one written submission/email. Feedback highlighted some minor concerns and potential gaps in the plan. Main areas of concern related to a lack of detail about community art, and about specific venues such as the Historic Village and Te Manawataki o Te Papa.
Our Public Places Strategic Plan (provides the direction for the three following plans)	12	10 survey responses received. Feedback was consistent with that for the other related plans with a key focus on maintenance of existing public places, protection/retention of open spaces, and affordability/value-for-money concerns.
Reserves and Open Space	15	14 survey responses received. Maintenance of our network of reserves and open spaces was the most common feedback received during the consultation.
Play, Active Recreation and Sport	18	27 survey responses received, including at least 13 from respondents associated with the roller sports/in-line skating community. Feedback was positive. Better acknowledging the importance of maintenance of our playful spaces was suggested and will be actioned. Other feedback tended to be comments about the things people would like to see, many of which were already included in the plan.
Community Centres	22	49 survey responses received (35 agreed with the actions, 7 agreed with some but not all actions, and 7 disagreed with the actions), plus two written submissions/emails, plus 8 attendees at the in-person ‘Wise Owls’ engagement session. Feedback was supportive, with comments tending to address specific matters rather than overall dissatisfaction with the draft plan. Maintenance and utilisation of existing facilities was the overwhelming theme identified.
Nature and Biodiversity	26	31 survey responses received, plus two written submissions/emails. Feedback was largely very supportive, with comments generally seeking more action than proposed or raising specific, localised matters to be addressed.

Final draft action and investment plans

18. The eight final draft plans reflect the proposed consultation responses, and are provided separately as Attachment 2 (Appendices A to H) to this report.

19. All consultation-related or substantive proposed changes are shown in green text within each AIP and are also clearly referenced in the summary of feedback, Attachment 1.

20. Each plan also includes several other updates that do not substantively change the direction or content of the plan. These updates are not specifically noted in our final draft documents but include changes such as adding a visual representation of our framework (te kupenga (a type of fishing net)), adding Te Reo Māori headings and definitions, completing the glossary sections, updating our measures where needed, and other minor text changes to improve clarity or readability.

21. The plans are being finalised at the same time as Council is developing the 2024-2034 Long-term Plan. We clarify the relationship between the two by describing our action and investment plans as our ‘roadmaps to deliver on Council’s strategic direction over time, which aren’t able to all be funded all at once’, while the Long-term Plan contains ‘what we will fund from our action and investment plans during this time period’.

22. The current funding status, as at July 2023, is clearly noted within each final draft plan. The plans will be updated as required to reflect final funding decisions once the 2024-2034 Long-term Plan is adopted in April 2024.

23. It is proposed that Council adopt the eight plans, for which the Group Manager: Community Services will have responsibility to ensure implementation and delivery over time. As at the time of this report most (but not all) Priority Actions in these plans have been included for funding in the 2024-2034 Long-term Plan.

B: Draft Tauranga City Council Strategies

24. On 5 September 2022, Council resolved to hold the two new strategies in draft until the action and investment plans were completed. This was to enable any final amendments to ensure consistency across all levels of the framework, and to incorporate 2022 and subsequent consultation feedback as required. This process has now been completed.

Tauranga City Council’s Tauranga Mataraunui – Inclusive City Strategy

25. No substantive amendments were required to this strategy. Minor wording updates have been made for clarification, readability, and consistency with the underpinning action and investment plans.

26. A summary of updates and the Final Draft Tauranga Mataraunui – Inclusive City Strategy 2023-2033 is included in the separate Attachment 3 to this report.

27. It is proposed that Council adopt the Tauranga Mataraunui – Inclusive City Strategy 2023-2033, for which the Executive Team will jointly have responsibility for implementing and delivery over time.

Tauranga City Council’s Tauranga Taurikura – Environment Strategy

28. No substantive amendments were required to this strategy. A Measures section has been added, building on the ‘what success looks like’ statements within each goal area. These measures will become part of the wider suite of city-wide measures and Council’s key performance indicators currently being developed through the Long-term Plan and related processes. Minor wording updates have also been made for clarification, readability, and consistency with the underpinning action and investment plans.

29. A summary of updates and the Final Draft Tauranga Taurikura - Environment Strategy 2023-2033 is included in the separate Attachment 4 to this report.

30. It is proposed that Council adopt the Tauranga Taurikura – Environment Strategy 2023-2033, for which the Executive Team will jointly have responsibility for implementing and delivery over time.

C: existing strategies and plans to be superseded And/or rescinded

31. Once the new strategies and plans contained in this report are adopted, ten existing strategies and plans will have been replaced and can be rescinded or superseded.

32. While Tauranga City Council strategies and plans can be formally rescinded, joint strategies and plans can only be formally superseded as Tauranga City Council cannot unilaterally rescind them. It is proposed that all partners to joint strategies or plans that are superseded will be advised accordingly.

33. It is proposed that, subject to adopting the new strategies and plans contained in this report, Council formally rescinds or supersedes the ten existing strategies and plans as outlined in the table below:

Existing strategies and plans	Supersede or Rescind	Replaced by
Tauranga Mataraunui (an inclusive city)
Age-Friendly Strategy 2013	Rescind	Accessible Tauranga Action & Investment Plan
Disability Strategy 2013	Rescind	Accessible Tauranga Action & Investment Plan
Tauranga Western Bay Safer Communities Strategic Plan 2020-2025 (joint: TCC & WBOPDC)	Supersede	Safer Communities Action & Investment Plan 2023-2033
City Safety Action Plan 2018	Rescind	Safer Communities Action & Investment Plan 2023-2033
Toi Moana Arts & Culture Strategy 2018-2021 (joint: TCC & Creative BoP)	Supersede	Art, Culture and Heritage Action & Investment Plan
Tauranga Taurikura (we value, protect and enhance our environment)
Vegetation Management Strategy (Growing Tauranga Green) 2006	Rescind	Nature and Biodiversity Action & Investment Plan
Tauranga – Tātai Whenua (a well-planned city)
Aquatic Network Strategy 2012	Rescind	Our Public Places Strategic Plan · Play, Active Recreation and Sport Action & Investment Plan · Reserves and Open Space Action & Investment Plan · Community Centres Action & Investment Plan
Open Space Strategy 2012	Rescind
Our Community Places Strategy 2008	Rescind
Sport & Active Living Strategy 2006	Rescind

34. Subject to today’s decisions, Tauranga City Council’s strategic framework, Our Direction, has now been refreshed and is presented on Council’s Our Future / Our Direction webpages. A summary of where strategies and plans fit is contained in Attachment 5 of this report.

Strategic / Statutory Context

35. The vision for Tauranga is ‘Tauranga – together we can prioritise nature, lift each other up, and fuel possibility’. Council’s contribution to achieving the vision is articulated by our strategic framework, called Our Direction.

36. Our Direction comprises Council’s five community outcomes (what we are aiming to achieve for our communities, now and in the future) with our three approaches (how we do everything). Our Direction is visually represented by te kupenga (a type of fishing net):

37. All of Council’s strategies and plans, and the work programmes to deliver them, contribute to delivering Our Direction for our communities.

38. The strategies and plans proposed for adoption within this report will fill the final gaps in Our Direction framework, which is available online at: https://www.tauranga.govt.nz/our-future/our-direction .

Financial Considerations

39. Most, but not all, Priority Actions are proposed to be fully or partially funded in the working draft 2024-2034 Long-term Plan, as at July 2023.

40. The funding status of each action within the nine new action and investment plans (including the Tauranga Climate Plan, reported separately to this Council meeting) is clearly identified within the action tables of each plan.

41. The action and investment plans will be reviewed in the year prior to development of each long-term plan, to ensure they appropriately inform its development.

Legal Implications / Risks

42. The primary risk is that the council may not be able to fund the actions identified in the plans and strategies over time and, as a result, may not be able to deliver on its aspirations articulated within Our Direction.

43. The council will apply its limited resources in the most efficient and effective way, and will also work with others to support delivery on its longer-term Our Direction aspirations.

Significance

44. 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.

45. 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 of Council’s strategies and plans.

46. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the issue of Council’s strategies and plans is of high significance, however the decisions proposed in this report, adopting the final strategies and plans, is of low significance as it is a natural consequence of previous decisions.

ENGAGEMENT

47. Taking into consideration the long period of extensive engagement with interested groups, organisations and individuals in our communities, as well as our wider communities as a whole, and the above assessment, that the decision is of low significance, officers are of the opinion that no further engagement is required prior to Council making a decision.

Next Steps

48. The adopted action and investment plans and strategies will be available on the council’s website as soon as possible. The current versions will be replaced by designed documents by early October 2023, and will also be available in hardcopy on request.

49. The Strategy, Finance and Risk Committee will receive a project close-out report on 18 September. The report will update on work planned and underway to embed Our Direction into the organisation and to monitor, report on and review progress over time.

Attachments

1. Consolidated Action and Investment Plan consultation feedback and proposed response summaries July 2023 - A14931884 (Separate Attachments 1)

2. Appendices A to H - Final Draft Action and Investment Plans, August 2023 - A14932998 (Separate Attachments 1)

3. Tauranga Mataraunui - Inclusive City Strategy, 2023-2033 - A14931811 (Separate Attachments 1)

4. Tauranga Taurikura - Environment Strategy, 2023-2033 - A14931772 (Separate Attachments 1)

5. Where our strategies and plans fit - 21 Aug 2023 - A14925103 ⇩

Ordinary Council meeting Agenda

21 August 2023

11.4 Tauranga Climate Action and Investment Plan - adoption

File Number: A14921330

Author: Sarah Searle, Principal Strategic Advisor

Jeremy Boase, Manager: Strategy and Corporate Planning

Authoriser: Christine Jones, General Manager: Strategy, Growth & Governance

Purpose of the Report

1. To present for adoption the Tauranga Climate Action and Investment Plan (“the Plan”) which has been updated following consultation feedback.

Recommendations

That the Council:

(a) Receives the report "Tauranga Climate Action and Investment Plan - adoption" including attachments 1 and 2.

(b) Acknowledges and thanks Te Rangapū Mana Whenua o Tauranga Moana for their valuable contribution to development of the Plan.

(c) Acknowledges and thanks the many other groups, organisations and individuals from our communities who have also provided valuable contributions to development of the Plan.

(d) Approves the Action and Investment Plan consultation feedback and proposed response summary, July 2023, contained in Attachment 1, including the resultant proposed amendments to the Plan.

(e) Approves the updated goal around mitigation as set out in this report.

(f) Adopts the Tauranga Climate Action and Investment Plan, 2023-2033, contained in Attachment 2, and notes that the adopted Plan will be:

(i) Updated to reflect final 2024-2034 Long-term Plan funding once the Long-term Plan is adopted in April 2024, and

(ii) Available online as a designed document in early October 2023, with printed copies available on request

(g) Delegates the Group Manager: Strategy, Growth and Governance to approve minor amendments to the Plan if required prior to publication

Executive Summary

2. Work on Tauranga’s first Climate Action and Investment Plan began in 2021. This followed both Council and community feedback around a lack of consolidated Council strategy addressing climate change and/or sustainability.

3. Development of the Plan has progressed in line with the Our Direction (strategic framework refresh) project outlined in the separate report to this Council meeting titled “Our Direction (Council’s strategic framework) – adopt final action and investment plans and strategies”.

4. Although the Plan has been developed by Council it sets out goals and actions on a city-wide basis and some actions are owned or jointly owned by other parties (such as Bay of Plenty Regional Council and Priority One).

5. The most recent version of the Plan was open for community consultation during May and June 2023 and amendments, as summarised in this report, have been made to the Plan to incorporate feedback received. This includes reducing the length and level of technical information in the Plan.

6. Input is sought from Council in relation to the goal around mitigation as set out below.

7. It is proposed that Council adopt the Plan, which the Group Manager: Infrastructure will have responsibility for implementing and delivering over time. As at the time of this report most (but not all) Priority Actions in the Plan had been included for funding in the 2024 Long Term Plan.

Background

Summary of May to June 2023 action and investment plan consultation

8. Feedback on the Plan comprised 32 responses from an online survey, one in-person “Wise Owl”) session with nine participants and an additional five written submissions from organisations.

9. The analysis of feedback also included a separate paper prepared by the Tauranga Carbon Reduction Group (“CRG”) on reducing Carbon Emissions in Tauranga (received 14 June 2023).

10. Feedback themes included –

(a) Mixed views on the need for the Plan and overarching level of ambition

(b) Dissatisfaction with the amended mitigation goal

(d) The importance of collaboration (especially with other Councils)

(e) Prioritisation of transport and urban development

(f) Exploration of funding and financing approaches for the Plan

(g) Sustainable / green buildings (both residential and commercial)

11. A more detailed overview of feedback and responses is included in Attachment 1.

Amendments made to the Plan

12. To address feedback received some parts of the Plan have been amended. These include –

(a) Proposed amendment to mitigation goal – see Issues and Options below

Wording / context

(b) Additional wording around exploration of funding sources

(c) Explanation of rail, ferry, light rail – where and how these have previously been considered (many submitters were interested in these)

Additional actions / actions amended

(d) New advocacy action

(e) New actions about exploring options around incentivising sustainable buildings

(f) New business actions owned by Priority One (around alternative transport modes, waste, Regional Energy Transition Accelerator, events)

(g) Extension of support to Mana Kai Mana Ora (WBoP Food Sovereignty & Food Security Plan) to explore other actions to encourage/educate around growing food and funding sources

(h) Incorporation of climate change into job roles and descriptions amended to upskilling staff more broadly around climate change (in line with Council’s Sustainability Approach)

(i) Extension of consideration of Nature Based Solutions i.e. using open spaces, wetlands and plantings to help mitigate and adapt to the effects of climate change

13. Outside of the feedback process, additional amendments have also been made to the Plan including –

(a) Edited to reduce length and improve clarity and readability

(b) Rewriting of actions to simplify (in accordance with community “Wise Owl” session feedback)

(d) Estimated costs within action tables updated to reflect current (July 2023) working draft 2024-2034 LTP funding

(e) Te Reo Māori headings and explanations added throughout the document.

(f) Glossary appendices completed

Strategic / Statutory Context

14. The Plan helps to progress our city vision and community outcomes. Council’s updated strategic framework – Our Direction – is outlined in the separate report to today’s meeting titled “Our Direction (Council’s strategic framework) – adopt final action and investment plans and strategies”.

15. The Plan helps to achieve Tauranga Taurikura – a city that values, protects and enhances our environment – but is also connected to almost every other Council strategy and plan given the breadth of focus areas (leadership, transport, land use and built environment, communities, business, natural environment).

Options Analysis

Mitigation goal

16. The Plan contains two overarching goals. The second of these, focussed on mitigation of Tauranga’s emissions, was modified following feedback by the SFR Committee on 27 March 2023 that the original goal of a net zero commitment would not be feasible due to the constraints Tauranga faces (such as rapid growth, emissions from the Port and physical constraints around how/where we can develop housing and transport infrastructure). There was concern that we did not want to set an overly ambitious / unachievable goal.

17. For version 4 of the Plan (which went out for the most recent round of consultation) the goal was amended as set out below. As noted in the feedback summary, multiple submitters were unhappy with the “watered down” new goal. Options and analysis around the goal are presented below.

Option one: Keep the amended (v4) goal

18. “As a City, and in partnership with our regional and national partners, we will work to reduce our greenhouse gas emissions while recognising the local practical realities of achieving a science-based target and national net-zero commitments”.

Advantages

Disadvantages

· Has already been consulted on

· Incorporates feedback from previous briefings

· Is realistic and takes into account constraints / challenges

· Less concise

· A number of submitters did not like the wording

· Less ambitious

· Less aligned to approach by other NZ cities

Option two: Revert to previous goal

20. “As a City, we will reduce our greenhouse gas emissions in line with a science based target and national net zero 2050 commitments.”

Advantages

Disadvantages

· Clearer

· More aligned with national approach

· Preferred by some submitters

· Does not take into account local constraints

· Net zero 2050 commitment may be unachievable

Option three: Adopt an alternative goal (recommended)

22. A hybrid version of the goal could balance the original goal with the amended version and feedback obtained.

23. For example – Option 3a – “As a City, we will work towards reducing our greenhouse gas emissions in line with a science-based target and national net zero 2050 commitments”

Advantages

Disadvantages

· More concise than v4 goal

· “Working towards” is more achievable than aiming to meet a specific target

· More in line with approach taken by other Councils

· Could be misleading if we don’t have an agreed upon target

· Does not caveat local constraints

· Has not been consulted on

Or – Option 3b – “As a City, we will reduce our greenhouse gas emissions” (recommended)

Advantages

Disadvantages

· More concise than v4 goal

· In line with the other (adaptation) goal in the Plan which is fairly high level

· Does not bind us to anything unachievable but is still an aspiration / improvement on current state

· Does not address feedback around lack of targets

· Has not been consulted on

· Does not set level of ambition

Financial Considerations

24. Most, but not all, Priority Actions are proposed to be fully or partially funded in the working draft 2024-2034 Long-term Plan, as at July 2023. The funding status of each action is clearly identified within the action tables of the Plan.

25. The action and investment plans will be reviewed in the year prior to development of each long-term plan, to ensure they appropriately inform its development.

Legal Implications / Risks

26. The primary risk is that the council may not be able to fund the actions identified in the Plan over time and, as a result, may not be able to deliver on its aspirations articulated within Our Direction.

27. Council will apply its limited resources in the most efficient and effective way and will also work with others to support delivery on its longer-term Our Direction aspirations and climate commitments.

28. The Plan also contains an action around alignment of climate change risks with the rollout of Council’s Risk Management Framework.

Consultation / Engagement

29. Taking into consideration the long period of extensive engagement with interested groups, organisations and individuals in our communities, as well as our wider communities as a whole, and the assessment below that the decision is of medium significance, officers are of the opinion that no further engagement is required prior to Council making a decision.

Significance

30. 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.

31. 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 Plan.

32. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the issue of the Plan is of high significance, however the decision proposed in this report, adopting the final version, is of medium significance as it is a follow on from previous Council decisions.

Next Steps

33. The adopted action and investment plans and strategies (including the Climate Plan) will be available on the council’s website as soon as possible. The current version will be replaced by a designed document by early October 2023 and will also be available in hardcopy on request.

34. The Strategy, Finance and Risk Committee will receive a project close-out report on 18 September. The report will update on work planned and underway to embed Our Direction into the organisation and to monitor, report on and review progress over time

Attachments

1. Community Feedback on Tauranga Climate AIP (for Council report 21 Aug) - A14930222 ⇩

2. Tauranga Climate Action and Investment Plan - Final draft August 2023 - A14930226 ⇩

Ordinary Council meeting Agenda

21 August 2023

11.5 Long-term Plan 2024 - 2034 Update

File Number: A14938754

Author: Kathryn Sharplin, Manager: Finance

Tracey Hughes, Financial Insights & Reporting Manager

Authoriser: Paul Davidson, Chief Financial Officer

Purpose of the Report

1. The Purpose of this report is to summarise the LTP investment priorities and approach to LTP budgets for the 2024-34 Long-term Plan. High level draft budgets will be provided at the meeting and further amended following Council decisions on the 21 August 2023.

Recommendations

That the Council:

(a) Receives the report developing LTP Budgets.

(b) Receives tabled draft financials based on continuation of the strategic direction set in the 2021-31 LTP for both capital and operational expenditure, to be further amended as decisions are made by Council at this meeting.

(c) Agrees to draft capital budgets for the LTP as summarised in Attachment A as the basis for LTP draft financials, and consultation which includes:

(i) updated projects from 2021-31 LTP with revisions to cost and timing

(ii) new projects and revised scope for projects from previous council decision or CE delegation for minor projects.

(d) Agrees to include the following funding decisions with respect to operational costs:

(i) the phasing in of funding of depreciation across activities of council and CCOs through the period of the LTP and other approaches to manage depreciation reserves back into balance

(ii) increasing debt retirement of unfunded liability and weathertight reserve deficits after year 3 of the long term plan

(iii) phasing further rates funding to the risk reserve over the period of the LTP

(iv) Renaming of the stormwater reserve to flood control reserve to remain with TCC in the new Flood Control activity after movement of three waters to a separate entity

(v) Increases in user fees and adoption of additional user fees

(vi) loan funding of operational costs associated with a portion of the increased expenditure on climate action and sustainability and of software as a service-related development, where this work provides benefit of a long-term nature

(vii) Phasing in of additional operational grant to Bay Venues Limited

(e) Agree to develop financials on the basis of using Infrastructure Funding and Financing through IFF levy to fund the ratepayer portion of Te Manawataki o te Papa.

(f) Note that full financials and funding impact statements by activity will be presented within the groups of activities to the September 11 Council meeting and financial statements in the supporting documentation.

Executive Summary

2. The 2024-34 LTP is proposed to be a continuation of the priorities of the previous LTP. Overall council capital and operational priorities remain as for the previous LTP.

3. Budgets are being finalised that reflect changes in costs, revenue, operational requirements and the timing and operational impacts of changes to the capital programme.

4. The draft budgets incorporate previous decisions of council in regard to further investment and expenditure.

5. Budgets also reflect the recommendations of SFRC in relation to reserves funding and repayment, and rating structure.

6. The draft LTP assumes three waters reform occurs from year 3 so that three waters revenue and expenditure from that point is carried out in a different organisation. A new activity Flood control is established.

7. The proposed capital programme in 2025 will be close to $450m after a delivery adjustment of $70m, which is a significant ongoing increase in capital delivery. Over the ten years the total capital programme is $3.4b, noting this excludes three waters capital from 2027 (year 3 of the LTP).

8. Draft LTP financials will be tabled at this meeting and after adjustments for decisions made at that meeting will be incorporated in the draft consultation document and supporting documentation adopted for consultation on 11 September 2023.

Background

10. Council is required to prepare an LTP every three years at a minimum. The 2021-31 LTP was amended in 2022 to include investment in the city centre (TMOTP) and to enable some of the capital programme to be financed through an Infrastructure Funding and Financing (IFF) levy which enables this debt to not be included on council’s balance sheet.

11. The draft 2024-34 LTP is a continuation of the priorities of the previous 2021-31 LTP. Priorities remain:

· Revitalising the city centre

· Growth in the West (Tauriko)

· Growth in existing zoned areas (including Te Papa/City Centre)

· Community facilities and amenity

· Transport network upgrades

· Sustainability and Resilience

12. Budgets have been updated and revised to reflect changes since the 2021-31 LTP in costs & revenue, timing of projects and to update operational impacts arising from changes to the capital programme and operational investments. A summary of the proposed capital programme is included as Attachment A. Draft financials will be presented at the meeting.

OPERATIONAL

13. Cost increases have been experienced across the business from high inflation particularly affecting contracts and operational costs, interest and depreciation. The latter are particularly high as ongoing increases in construction indices underlie very high asset revaluations.

14. Salaries and contractor costs have increased to deliver on the commitments set by Council.

15. Budgets also reflect the recommendations of SFR committee on 7 August 2023 in relation to depreciation and other reserves funding.

16. The draft LTP assumes three waters reform occurs from year 3 so that three waters revenue and expenditure from that point is carried out in a different organisation. A new activity Flood control is established. Aspects of flood control are budgeted to remain in TCC including the former “stormwater levy reserve” set up to fund works to prevent future significant flooding in established areas. The stormwater levy reserve will remain in Council and renamed flood control reserve.

17. Additional grants to Bay Venues Limited to cover operating costs are proposed to be phased in over the first three years of the LTP.

18. Revenue is impacted by demand and also by the level of user fees. A separate report is presented to this meeting on paying a fair share- approach to funding. New user fees to be considered in that report are not yet included in draft financials.1

CAPITAL

19. Changes to the capital programme from the 2021-31 LTP reflect:

(a) updates of 21-31 LTP projects to reflect revisions to scope, cost and revised timing of projects

(b) new projects that have been incorporated through council decision including from action and investment plans, and final decisions on TMOTP

(c) different funding and financing arrangements, specifically for Tauriko West transportation projects and financing of the ratepayer share of loans for TMOTP instead being through a proposed IFF levy which will be consulted on concurrently

(d) removal of three waters projects from year 3 of the LTP (noting that planned three waters expenditure excluded from the last 8 years of the LTP).

(e) The Stadium proposal will be presented at the meeting with financial impacts to be incorporated in the financials

Subsidy, Asset realisation and External Funding Assumptions

20. Across capital and operations a high level of external funding has been assumed to support the increased capital programme. The assumptions have been consistent with earlier long- term plans. If funding is not received as assumed this will affect the level of capital programme that may be delivered.

23. Council has identified assets suitable for realisation to support investment in the priorities of the LTP. As with external funding assumptions, changes in revenue received from asset sales would affect the level and timing of capital investment that can be delivered.

DEBT

24. The level of debt at the end of 2024 is estimated to be $1.2b. Waters reform would see $570m removed from Council’s balance sheet at the beginning of year 3 of the LTP (July 2027). After 2027, the debt to revenue ratio will continue to increase over the term of the LTP as more capital investment is undertaken but it is planned to remain at prudent levels within existing borrowing limits.

Strategic / Statutory Context

25. The draft budget is set as part of the supporting documentation for the consultation document for the LTP as direct under the Local Government Act 2002.

Options Analysis

26. There are no options presented in this report which is summarising the approach to LTP financials and previous decisions.

Financial Considerations

27. The LTP balances council spending to meet the needs and demands of the community against the ability of the community to afford this expenditure and identifies what is the fair share that members of the community should pay.

28. The proposed expenditure needs to balance services and infrastructure for a growing (future) population and the needs of the current population.

29. The proposed high level of capital expenditure over the ten years generates ongoing operating costs. Council’s borrowing limits mean that future borrowing capacity is constrained by the level of revenue from rates, user fees and external subsidies that Council can collect.

Legal Implications / Risks

30. There are no specific legal implications arising from this report which is presented consistent with the requirements of the LTP process set out in the Local Government Act 2002. The main risks within the proposed LTP relate to funding availability, in particular the large dependence on external funding sources to support the capital programme. The main response if funding does not eventuate would be to reduce the capital programme.

Consultation / Engagement

31. The summary financials will be included in the consultation document for the LTP. More detailed financial information will be included in the supporting documentation to the consultation document and made available on council’s website. The consultation on the LTP is proposed for November/December 2023.

Significance

32. 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.

33. 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 matter.

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

ENGAGEMENT

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

36. The financial data will be summarised as part of the consultation document prepared to support community consultation on the LTP.

Next Steps

37. The financial data will be summarised as part of the draft consultation document prepared for council on 11 September 2023. Supporting documentation showing full financial statements and funding impact statements and capital projects by activity will be prepared as attachments for the 11 September Council meeting.

38. The material will be audited by Audit new Zealand from mid-September through till the end of October before being finalised for community consultation.

Attachments

1. Attachment A - Capital Programme - A14958774 ⇩

Ordinary Council meeting Agenda

21 August 2023

11.6 Draft Revenue and Financing Policy Framework

File Number: A14866777

Author: Sarah Holmes, Corporate Planner

Jim Taylor, Manager: Rating Policy and Revenue

Authoriser: Paul Davidson, Chief Financial Officer

Purpose of the Report

1. To provide information on Council’s Revenue and Financing Policy.

2. Provides an opportunity for Council to amend/approve the Funding Needs Analysis and draft Revenue and Financing Policy prior to legal review, audit, and then public consultation.

Recommendations

That the Council:

(a) Receives the report "Draft Revenue and Financing Policy Framework".

(b) Approves (as amended) the draft Revenue and Financing Policy and Funding Needs Analysis, acknowledging that:

(i) The draft policy is subject to legal review, and

(ii) It will be presented back to Council on 11 September as part of the supporting information to the 2024-34 Long-term Plan Consultation Document, and

(iii) Public views will be sought through consultation alongside the 2024-34 Long-term Plan.

Executive Summary

3. Council is required to review and adopt a Revenue and Financing Policy (RFP) every three years. The purpose of the policy is to show how Council’s activities are funded - who pays for what, and why. The policy would come into effect from 1 July 2024 and must be included in the Council’s Long-term Plan (LTP).

4. The first step in the policy review process is reviewing Council activities and preparing the draft Funding Needs Analysis (FNA) (Attachment 2). The second step in the process is to review the overall impact of funding decisions, considering factors such as strategic direction, affordability, accessibility, sustainability of funding, and current and projected future economic conditions. Together, these steps result in the RFP.

5. Changes to the RFP from the 2021 policy are shown in Attachment 1 in tracked changes for operating expenditure, and the preferences for funding capital expenditure.

Background

6. The Local Government Act 2002 (LGA) requires Council to adopt a Revenue and Financing Policy (RFP), that must be included in the Long-term Plan (LTP).

7. The RFP sets out how Council plans to fund each of its activities and outlines how it has made these decisions.

8. The policy is an important step in the rate setting process, determining levels of development contributions, and setting fees and charges. A policy that has not been created following correct process or is unreasonable may result in decisions that flow out of the policy being invalid.

9. Two separate steps are required under the legislation to develop the draft RFP. The first step is the process prescribed in section 101(3)(a) of the LGA (see chart below).

10. Having completed the step one analysis for each activity - which is summarised in the FNA - the second step is to aggregate all of the results and consider the impact that these results might have on the community. This includes consideration of rating differentials, the level of rates set on a uniform basis, and the factors used to set targeted rates.

11. Note that following the transition of Water Supply, Stormwater, and Wastewater activities to the Water Services Entity, Council will need to carry out the second step again to consider the overall impact of allocation of liability for revenue. At that stage, any proposed amendments to the RFP will need to be consulted in a manner that gives effect to the requirements of section 82 of the Local Government Act 2002.

The two-step funding process.

Strategic / Statutory Context

12. The draft RFP (Attachment 1) brings together all funding considerations into a policy which states how we intend to fund our activities after the step two consideration. The FNA (Attachment 2) is the documentation of the step one analysis and informs the draft RFP.

13. Both documents will undergo a legal review before final adoption on 11 September 2023 for audit and subsequent consultation.

Provisional Changes

14. The RFP has been aligned to the most up to date draft financials, as presented in a separate report. The funding decisions set out in the RFP largely reflect the funding positions in the current policy, with the exception of the following changes.

Capital funding changes

15. The RFP includes Infrastructure Funding and Financing (IFF) as a second funding preference for new and growth-related capital expenditure.

16. Inclusion of depreciation reserves as a third funding preference where there is a renewal portion of capital projects.

17. Clarification that the third preference for new capital is funding by loans. The loans could be funded through general or targeted rates, user fees, activity surpluses. This allows for capital projects to be funded through income received from activities such as parking.

18. Addition to the third preference for growth related projects, to allow for targeted rates or general rates, user fees, or activity surpluses for the portion of capital that offers wider benefit, or where there has been an under collection in development contributions.

Operating funding changes

19. Introduce a Flood Protection activity, to ensure the continued flood protection services. This activity has been included in the FNA with an initial assessment completed. The new Flood Protection activity is proposed to be funded by a mix of general and targeted rates. It is important to note however that there are uncertainties around the new activity, with the Water Services Entities Amendment Bill currently at Committee of Whole House stage.

20. With the initiation of the IFF, the Transportation Targeted Rate has been removed as a funding source for transportation operating expenditure, however, the policy retains the potential for Transportation Targeted Rate funding to be used in the future.

21. Similarly, the Community Facilities Targeted Rate has been removed as a funding source, as the Draft LTP assumes that the large new investments would be funded by levy under the Infrastructure Funding and Financing legislation. The RFP retains the potential for a Community Facilities Targeted Rate to be used in the future for Spaces & Places, City Centre Development, Libraries, Venues & Events, and Art & Culture, as this is likely to be used should the IFF be unsuccessful.

22. Introduction of a targeted rate for required private pool inspections under the Building Act 2004. Inspections are required every three years, and a targeted rate spreads the cost burden over that period, ensuring future owners pay their fair share. Replacing the current three yearly fee with a targeted annual rate will reduce administration, allowing resources to be used in other areas of the Building Services activity.

23. The draft financials include Tauranga Convention Centre, hotel, and performance venue (Site B) and the proposed Stadium, as covered in a separate report. Revenue for rental, catering revenue and recoveries are included for Site B, which results in an operating funding percentage shift from General Rates to Fees and Charges for the City Centre Development activity from year 6 of the LTP. No operating costs or income have been allowed for the Stadium due to the timing sitting just outside the LTP period. Following construction, a decision may be made to transfer the assets related to these activities to another activity, which would mean the funding would change at that time.

24. Funding bands have been revised to reflect the additional revenue opportunities from fees and charges and other revenue sources with the ten-year LTP period. This is dependent on the decisions from the ‘Paying a Fair Share’ report being considered at this meeting. The RFP will be updated to reflect funding decisions as required.

25. Note that the Marine Precinct is included in both the FNA and the RFP, however it is council’s intention to dispose of this prior to the policy being in effect on 1 July 2024. In the case of disposal prior to this date, the activity will be removed.

Rating categories

26. The potential change to rating categories is addressed in a separate report. Following the approval of a preferred option, this will need to be reflected in the RFP.

Te Ture Whenua Māori Act Principles

27. The Revenue and Financing Policy must support the principles set out in the Preamble to Te Ture Whenua Māori Act 1993. Two key principles expressed in its Preamble are that land is a taonga tuku iho of special significance to Māori and as such we should avoid further loss of Māori land.

28. These principles were considered in detail by Council in March 2022 when it adopted the Remission and Postponement of Rates on Māori Freehold Land Policy.

29. The draft RFP includes a new section outlining the principles and recognising Council’s commitment to understand and apply key Māori concepts to enhance outcomes for our communities, thereby bringing to life the principles of Te Tiriti o Waitangi.

30. The Policy also includes a reference to the Papakāinga Housing Grant, which has the purpose of reducing the cost of the city-wide development contributions for housing on Māori land. The inclusion of this is subject to a decision being made on 14 August, and if required, will be updated to reflect the relevant decision. Information on this grant is included in the Grant for Development Contributions on Papakāinga Housing Policy, and it is funded from the proceeds of the sale of Council’s Elder Housing portfolio.

Options Analysis

31. The decision is whether to approve or amend the proposed draft RFP framework or not.

Option 1: Approve

Advantages		Disadvantages
· Meets the initial legislative requirements of developing an RFP · Enhances transparency in how Council has decided to fund its activities · Allows LTP funding considerations and impacts to progress.		· None.
Key Risk	There is no risk to adopting the proposed draft policy. Approval sets the framework and will be presented again before public consultation. A final policy will need to be adopted following consideration of public feedback and does not come into effect until 1 July 2024.
Recommended?	Yes. The approval of the proposed RFP framework attached will enable the LTP process to progress. It will also increase the transparency and accountability of Council’s funding decisions.

Option 2: Do not approve

Advantages		Disadvantages
· None.		· The LTP is likely to be delayed if the proposed RFP framework is not approved.
Key Risk	There is a risk that the LTP could be delayed because the funding decision process would be behind schedule.
Recommended?	No. Not approving the proposed draft RFP framework would put the LTP at risk by causing delays in the process.

Legal Implications / Risks

32. The preparation of the RFP is subject to Section 102 of the Local Government Act 2002 which states that Councils are required to adopt an RFP, and must consult on a draft policy before adopting it. Section 103 includes requirements on what is included in the policy, and Section 101(3) provides considerations that must be made when developing the RFP.

33. An external legal review will be completed on the draft RFP prior to being presented back to Council on 11 September 2023.

Consultation / Engagement

34. Public consultation is required on the draft RFP in accordance with section 82 of the Local Government Act 2002. Consultation is scheduled to occur between 15 November and 15 December 2023 in alignment with the LTP consultation.

Significance

35. 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.

36. 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 decision.

37. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the decision to adopt the draft policy framework is of low significance.

ENGAGEMENT

38. Taking into consideration the above assessment, that the decision is of low significance, officers are of the opinion that the following consultation/engagement is suggested/required under the Local Government Act 2002.

Next Steps

39. Legal review will be completed on RFP and Funding Needs Analysis and any necessary changes as a result will be made.

40. Adoption of RFP as supporting information to the 2024-34 LTP Consultation Document and associated statements of proposal for audit (11 September), followed by audit of the LTP and associated supporting documentation.

41. Consultation on the draft RFP (15 November – 15 December).

Attachments

1. DRAFT Revenue and Financing Policy 2024 - A14931958 ⇩

2. DRAFT Funding Needs Analysis 2024 - Revenue and Financing Policy - A14426953 ⇩

Ordinary Council meeting Agenda

21 August 2023

11.7 Paying a Fair Share - Approaches to Funding the draft 2024/34 Long-term Plan

File Number: A14888883

Author: Malcolm Gibb, Contractor - Rating Review

Kathryn Sharplin, Manager: Finance

Authoriser: Paul Davidson, Chief Financial Officer

Purpose of the Report

1. The report presents proposals and options which seek to provide, over time, a fairer and more transparent approach to the funding arrangements of some Council’s activities for the draft 2024-34 Long-term Plan (LTP).

2. The report proposes several new user fees to be introduced during the LTP to recognise specific beneficiaries of services or amenities and thereby reduce the extent to which general ratepayers must fund these services or amenities.

3. The report also identifies activities where charges need to significantly increase to cover the costs of the activity such that the activity remains financially sustainable.

Recommendations

That the Council:

(a) Receives the report "Paying a Fair Share - Approaches to Funding the draft 2024/34 Long-term Plan".

(b) Notes in areas requiring full or partial cost recovery fees are increased to cover costs consistent with the revenue and financing policy

(c) Approves the following specific funding recommendations for the draft 2024/34 Long-term Plan for community facilities:

(i) The introduction of new fees and charges for the use of boat ramps and active reserves (sport fields and cricket wickets for adult/seniors use only) to reduce the extent of general rate revenue needed to fund these activities,

(ii) Introduction of Boat Ramps charges at the Sulphur Point, Pilot Bay and Whareroa boat ramps, to park vehicles and trailers at the designated parking, to be charged at a rate of $20 per day (incl GST) or $200 per annum (incl GST).

(iii) Exclusive use of sport fields and cricket wickets at the rate of $225 (plus GST) per winter or summer season per pitch for adult/senior participants only.

(iv) Use of council land for a lease or licence or licence to occupy by commercial organisations at the zonal market rates currently valued at between $25.00 (plus GST) to $65.00 (plus GST) per m2 per annum subject to updated valuations.

(v) Use of council land for a lease or licence or licence to occupy by community organisations at a city average rate based on a 50% subsidy of the city-wide average of the zonal reserve rates. Including the subsidy this is currently valued at $6.05 (plus GST) per m2 per annum subject to current valuations

(vi) Note that negotiations will be undertaken with the bespoke community organisations who use large areas of council land for their activities to align their charges, over time, closer to the proposed levels for other community organisations.

(vii) Moving the range of Licence to Occupy fees for buildings at the Historic Village to one set fee for the different bands and using the mid-point independent valuation rate for most categories, with the exception of the retail and office LTOs which will be at the higher end of the valuation bands.

(i) Develop an engagement plan for these community fees for the draft 2024/34 Long-term Plan which provides sufficient resource and time to consult with user and stakeholder groups who may be impacted by these proposals.

(d) Notes a report will be considered by Council on 4 September on options for parking management and charging at Mount Maunganui and in other areas outside the city centre.

Executive Summary

4. The report provides proposals and options to ensure each of the activities in council can be funded appropriately and in accordance with the Revenue and Financing policy.

5. Several activities have been self-funding - able to generate sufficient revenue from fees and charges to cover their costs – and a review has been undertaken to bring these activities back to a self-funding status throughout the period of the LTP. This has been achieved by increasing fees and charges and/or the introduction of new fees and charges and/or by growing the volume of business activity along with reviewing and reducing costs.

6. The report also presents proposals and options for activities to charge a new fee and charge primarily to reduce their rate revenue requirement. The proposals and options presented in the report seek a more fair and equitable balance between revenue from rates and revenue from user fees and charges across council.

7. The financial impact of these proposals may not all be immediate, but over the period of the LTP will develop to reduce the extent of rate revenue which council needs to receive to ensure its activities are fully funded.

8. Council currently provides substantial lease and rent relief to community organisations which is not well understood and communicated to the community or the community organisations. The report recommends that this financial relief is clarified and assessed on an ongoing basis to ensure fairness and priority. It is noted that applying a discount percentage will provide more transparency and consistency over time.

Background

9. The Revenue and Financing Policy, guided by Funding Needs Analysis, sets out for the LTP the assessment of factors to consider when deciding how to fund various services and expenditure of council. Under the needs analysis the Council considers who (individual and groups) benefits from the activity, and how the benefit of an activity applies to households, businesses, and the community. Where Council considers the services provide a benefit to the community as a whole; or where Council is not able to identify a strong or direct relationship between users and the service the Council will consider general rates.

10. Where Council considers there is a clearly identified relationship between users and the services provided then Council will consider fees and charges or targeted rates. Some services Council must do because the actions or inactions of individuals or groups create the need to undertake the activity or increase the cost or frequency of a service being provided. Council may choose to target these people or organisations through fines, charges or rates.

Trends in Revenue from Use Fees and Charges and Rates Revenue

11. The following graph shows the trend in user fees and rates over time to fund council activities and includes current proposals through the draft LTP. Council has continued to operate most of the services it has offered in the past as well as introducing new services such as kerbside waste collection. Kerbside waste collection which replaced commercial collection services has clearly identifiable and readily chargeable users and Council uses a targeted rate charged under the Rating Act which in other respects is more akin to user fees.

12. Over the period from FY 2017 to the present, there has been a steady reduction in the percentage of revenue generated from user fees and charges related to the total revenue of council. After adjusting for the growth in water volumetric charging and the new kerbside service, rates revenue has assumed a greater percentage of the total revenue needed to fund the activities of Council. Rates is currently 75% of total revenue and based on the draft LTP this trend of rates increasing faster than user fees is continuing despite the specific changes proposed in this report.

13. From a corporate financial position, there is a need to close this widening gap and work has commenced on a number of initiatives to generate more revenue from fees and charges rather than defaulting to more rate revenue.

Revenue Strategy Principles

14 The recommended principles for the purposes of the draft LTP are

(a) User pays

(b) Fair and equitable

(d) Reflects capital investment

(e) Simple to administer and understand

(f) Captures non ratepayer users of TCC amenities

(g) Enables demand management

(h) Reflects “value” of assets and environment

15 These principles underpin the Revenue and Financing Policy and Funding Needs Analysis for each activity of council.

Strategic / Statutory Context

16. Each of the activities of council need to align with the Revenue and Financing policies and Funding Needs Analysis for the purposes of the Long-term Plan. The options analysis in the following section summarises a range of specific proposals and interventions to ensure the activities are appropriately funded.

17. A number of areas of user fee revenue such as parking and leasing of council land are covered under specific policies. At present the charges proposed are consistent with those policies and potential to increase charging and management outside the city centre will be considered by Council on 4 September 2023.

Options Analysis

18. The Options Analysis provides a range of initiatives to increase the revenue of council. These specific interventions are structured by Group with options and recommendations provided for activities in the Regulatory and Compliance Group, Infrastructure Group and the Community Services Group (primarily in Spaces and Places).

19. Fees are proposed to be increased to cover costs consistent with revenue and financing policy in areas requiring full or partial cost recovery. As costs have increased so have revenue requirements. Key areas of change are outlined below, with revised user fees presented for adoption for consultation on 11 September Council meeting.

20. Further supporting information is provided in Appendix 1.

Fees and Charges in partially or fully cost recovered activities

21 The draft budgets have aimed to recover costs according to the revenue and financing policy. The following user fee changes are identified where they are considered to involve increases above general cost inflation.

Animal Services

22. The Animal Services activity had some revenue challenges to cover its costs over the period of the 2024/34 Long-term Plan to be financially sustainable. The dog control responsibilities of this activity are funded 90% by user charges and 10% by rates recognising the public good benefit associated with dog control.

23. To cover cost increases in recent years, the current dog registration fees are proposed to increase from $100 per year to $121.50 and the penalty for not registering a dog from $150 to $182.25 in 2025.

24. The current standard fee in Hamilton is $170, Wellington $180, Napier and Matamata $120, Rotorua $110 and WBoPDC $100, so this proposal of $121.50 (incl GST) seems reasonable.

Building Services

25. The Building Services activity had some revenue challenges to cover its costs over the period of the 2024/34 Long-term Plan to be financially sustainable.

26. It is proposed that Building Services fees increase by 5% annually for FY25-FY29 to realign fee recovery. The proposed increases may result in TCC having relatively high fees in relation to some councils.

27. To illustrate the change, the following key fees are highlighted for the 2025 year, noting the comparison is with other councils’ 2024 year so these fees are also expected to increase in 2025:

28. By way of comparison the following table shows the fees of other nearby and comparable Councils for FY24:

Fees and Charges – Parking & Street Use

29. The Parking activity is developing its long-term approach to parking restrictions and charging across the city through its parking strategy development. This work is to align with the principles of user fees and in particular the opportunity to target funding of amenity improvements from the revenue collected, noting that parking charges provide an opportunity to collect revenue from non-resident users of council facilities.

30. The Parking activity had some revenue challenges to cover its costs over the period of the 2024/34 Long-term Plan to be financially sustainable.

31. The fees and charges are currently set by the council directly and generally follow a model of steady increases year on year without considering demand at any given time.

32. Areas outside the city centre have yet to have parking management plans implemented resulting in a situation where rate payers and those paying in the city centre are paying for free parking elsewhere in the city.

33. A more efficient and controlled use of citywide parking can help ensure our transport corridors are used efficiently getting people to businesses and their homes as efficiently as possible. With intensification and increased visitor numbers expected into the city over the coming years we are not able to continue with business-as-usual and drivers will not be able to continue to rely on our transport corridors as free for parking their vehicles.

34. Parking charging has a number of benefits for the city including to

· manage parking demand to ensure the supply of available spaces for visitors to Tauranga

· ensure people who don’t live in Tauranga pay for access to parking and other amenities

· manage traffic issues in and around areas of high visitor demand

· encourage the uptake in mode shift and more informed travel choices with a better grounding in the cost associated with these options

· match demand in the off-street carparks to ensure appropriate rates of charging for demand based on location and use.

35. The city centre and the Mount are the two primary areas being considered.

Parking Management - Parking in the CBD

36. The areas of parking management in the CBD will continue to expand every 6 months from the 1^st of November 2023 as outlined in the recent update on the implementation of the city centre parking management plan.

37. The financial forecast predicts a $316,000 per annum increase in revenue from the first stage of implementation taking effect on the 1^st of November 2023. Parking rates in the off-street carparks especially will require adjustment to match demand based on the utilisation levels which are being achieved. Locations like Dive Crescent will also need to be adjusted to reflect works that have taken place onsite and ultimately how this supply impacts demand.

38. Proposed increases in parking rates should be flexible to ensure they can be adjusted based on changes in demand for parking and to ensure council understands how the completed developments work and the level of increases in visitor and user numbers.

Parking Management - Parking at Mount Maunganui

39. Traffic is an issue at Mount Maunganui during the tourist season and on good weather days in the area most of the premium street front parking spaces are taken by workers parking all day who are willing to move their vehicles. Enforcement is not able to take place with the frequency required as increased enforcement for “free parking” incurs increased cost and more frequent health and safety incidents.

40. A Council report is scheduled for the meeting of the 4^th of September to begin consideration of paid parking in the Mount which will outline some of the key benefits for implementation to the public.

42. The parking arrangements at the Mount town centre are currently managed with time limitedparking. There are options for direct charging for time parked or extending the time limited parking which could be considered to be introduced over time.

o Time charged parking. If the city centre hourly parking charges in the city centre were applied at the Mount town centre it would achieve estimated revenue of $1.6 million - and beachfront parking bays would achieve estimated revenue of $0.2 million. Taking into account annual operating costs this could achieve a forecast surplus of up to $1.5 million, which could be used to fund services or additional investment at the mount. During the summer season much of this revenue is likely to come from visitors to Tauranga.

o Time limited parking is designed to manage the demand for parking to provide a fairer and more equitable outcome for all visitors. The level of revenue from fines is unlikely to cover the costs of enforcement. Furthermore, to encourage the required turn over in parking additional enforcement is likely. A large portion of parking tickets issued are likely to be given to visitors unaware of the parking rules or who would have been willing and able to pay for the parking up front.

43. Surpluses earned for time charged parking in the Mount could provide funding for amenities such as boardwalk and dune maintenance, beach grooming, beach ambassadors rather than these services be entirely rate funded.

Street Use

44. Street Use is a second area for fees and charges where licence to occupy areas could provide opportunity to recognise the value of amenity enhancements, e.g., around Te Manawataki o Te Papa. The policies and principles are being developed to guide future user fees in these areas and will likely align with LTOs on reserves which are discussed later in this report.

Fees and Charges Review of Community Services particularly Spaces and Places

45. There are around 190 separate fees and charges in the Community Services Group, many have had significant increases over the past few years to increase the level of revenue to contribute to cost recovery. The team are looking at all the fees to ensure they cover the actual cost to Council, meet the revenue and financing policy and consider benchmarking with other relevant councils/organisations.

46. These proposals will be included in the draft Fees and Charges schedule for the draft 2024/34 Long-term Plan to be presented on 11th September to Council.

47 A further recent review of these activities has identified several opportunities to further improve the revenue forecasts from existing fees and charges and to earn further revenue from the introduction new fees and charges to reduce the extent of the rate revenue requirement for these activities.

Use of Council Land

48. The use of Council land is a particular area of focus and is referenced in the Occupation of Council Land section of the current Fees and Charges Schedules but is also relevant to the Historic Village, events and markets on parks, camping at McLaren’s Falls Park, use of the athletics park at the Domain and other areas.

49. The Use of Council Land policy (adopted in December 2022) differentiates between

· Booking Council Land (exclusive and non-exclusive use, filming & photography, promotions, events, weddings, markets, stalls and sport competition, training and fixtures)

· Licence to Operate (mobile shops, commercial activities)

· Lease and Licence to Occupy Council land (lease of strategic and operational property, Early Childhood, community gardens, memorials, stormwater reserves, encroachments, signage and network operators)

50. The $/m2 rates used in the current fees and charges for use of council land start at $2.68/m2 and reduce as the land area gets larger. Additionally, a discount percentage of between 25-75% is available for community organisations with no clear criteria how this is to be applied. Currently charges are being reviewed to provide clarity and consistency across these charges. Advice has been received from valuers Telfar Young on the value of land and market rentals across the city to help inform consideration of options.

51. Telfer Young have provided valuations in 2021, summarised in the Table below, by zone across the city for land rents, based on a $/m2.

Table 1: Telfar Young Zone Charges

Zones	Market Land Value ($/m2)	Zoned Market Rent ($/m2)	Zoned Reserve Rent ($/m2) (Zoned Market Rent / 3)
1	2,000	65	21.50
2	900	30	10.00
3	750	25	8.00
4	1,100	35	12.00
5	850	27.50	9.00
Average	1,120	36.50	12.10

52. For community organisations, there is a large subsidy currently being provided when comparing the range of the Zoned Reserve Rent - $8 to $21.50 – to the current maximum charge of $2.68 m2.

53. The above information has been compared with the current schedule of leases council provides. This comparison using the Telfer Young reserve rent in column 3 by zone as a “market reserve rate” shows the extent of subsidy provided by council. The reserve rental rate above is estimated at $13m, compared with Council’s current charges which are less than $400,000 each year (excl GST). This indicates, over the whole property portfolio, the current lessors are benefitting from an estimated 98% rental subsidy.

54. The rent relief provided for golf courses ($4.7 million), horse sports ($4.5 million) and cricket ($1.2 million) makes up 80% of the $13 million total subsidy with around 95% provided to the sport and recreation sector and around 5% provided to community groups (Citizen Advice Bureau, St Johns, Nightshelter) and playgroups and Plunket. Bay Venues receives 100% relief for the land it’s facilities are located on ($591,000) as does the Marina Society at Sulphur Point ($499,000).

55. Over time, it is proposed to move council to a better position with a fairer and more reasonable balance of funding being provided to these community organisations and other community organisations who receive funding from other sources from council.

56. The Zoned Market Rent could be charged for community organisations and the extent of charge would be limited to an approved standard percentage to make this approach sustainable for the effected organisations.

Proposed options

Options Using Individual Reserve Zoned Areas (not preferred)

57. Four options are provided in Table 2 below. These are based on the zoned reserve rates below with forecast impacts on revenue to council. It is proposed to negotiate with the organisations listed in the bespoke category in the Table as they utilise large areas of land for their activities and the financial impact on them will likely be significant from a low base.

58. Advantages of the zonal approach is that charges reflect the value of land in different areas of the city. The disadvantage is that for community groups there is less consistency across the city.

Table 2: Options Based on Zoned Reserve Rates

59. Although this approach is not the preferred one the recommended option using this zoned reserve approach is Option 4, recognising the affordability challenges to community groups with potential to move to Option 3 over time.

Options Using One City-Wide Average Reserve Rate (Preferred Approach)

60. An alternative approach is to use the average Zoned Reserve Rent of $12.10 per m2 across the whole city instead of varying charges by geographic zone (see Table 1). This results in a higher potential total revenue of $18 million but this is largely driven by the bespoke category which use large areas of land.

61. The advantages of this approach include that it is clear and consistent for all community organisations. It also has less financial impact overall on the majority of community organisations compared to the zonal approach. The disadvantage for the large bespoke users is that their charges will generally be higher than at present.

62. Table 3 below summarises the financial forecasts of the four options using a city-wide approach.

Table 3: Options Based on City-Wide Average reserve Rate (Preferred Approach)

64. Using this approach, the Recommended Option would be Option 3 (a 50% subsidy on the city-wide reserve rate) to provide a suitable balance of funding with potential to move to Option 2 over time. Again, it is proposed to negotiate with the organisations listed in the bespoke category in the Table as they utilise large areas of land for their activities and the financial impact on them will likely be significant from a low base.

65. On balance the recommended approach is to use a city-wide rent valuation Option 3 which could be updated on three-year cycle to align with council’s Long-term Plans. This arrangement would apply for community organisations who meet approved criteria (provide community outcomes, no alternative funding sources, extent of public benefit provided by services, level of participation) and could be reviewed in time for the 2027/37 LTP.

66. It also seems reasonable to increase the rent percentage if the community organisation has a business operation – provides a bar, venue for rental, sub-leases or other revenue generating options.

67. Conversely, in exceptional circumstances where a community organisation faces a significant change, that staff have some limited delegation to review the amount proposed to be charged.

68. It would also be the intention of council staff to ensure the reasonable property administration and legal costs of licenses to occupy be recovered from the community groups over the period of their licences and to standardise the terms of these licences.

69. There are 77 entities of the 176 community organisations which have leases/licences which are due for renewal in the next three years so a plan for engagement with the entities will be important.

70. The remaining 99 agreements may take time to change as some of the leases are for many years ahead unless the break clauses are invoked. Most agreements have six months’ notice to give notice.

71. Commercial organisations will continue to be charged market rates for exclusive use of council land. It is proposed that the current 25-75% discount be dis-continued and only in exceptional circumstances should a proposed 20% discount be available to commercial organisations who provide measurable and significant community benefit.

72. It is proposed that commercial organisations pay the Zoned “Market” Rent, in paragraph 39, where they have exclusive use of the land and there is no significant community benefit. It would also be the intention of council staff to ensure the reasonable property administration and legal costs of licenses to occupy be recovered over the period of these licences.

73. In the case of community organisations or entities, it is proposed the average of the Zoned “Reserve” Rent, in paragraph 39, form the basis of the licence fee.

Licences to Occupy

74. There is also an opportunity to review how foreshore and reserve Licences – including prime locations at the Mount – are awarded. Presently the operators pay $300-$400 plus their tendered amount to commence their licence to occupy.

75. Council could seek a better financial outcome by setting a market related charge, consistent with the charged in paragraph 37, for operators who meet the operating criteria and conditions set by council.

76. This is the recommended approach to be included in the draft Fees and Charges schedule for the draft 2024/34 Long-term Plan.

Temporary Exclusive Use of Council Land

77. There is also an option to charge for flat space and wedding photography at McLaren’s Falls Park and other sought after council locations where there are managed and designated areas for temporary and exclusive use. This may need to be balanced with the cost of providing higher level of services and the associated operational and administration cost.

78. The current charges for Events on Parks are being reviewed to ensure they are consistent with the other proposals in this report and in particular that commercial events pay closer to the market value for exclusive us of council land. Benchmarking to other councils’ charges is important too, to ensure Tauranga attracts and retains key events.

79. These proposals will be included in the draft Fees and Charges schedule for the draft 2024/34 Long-term Plan.

Active Reserves

Sport Fields

80. Benchmarking of other councils’ fees and charges shows that sports fields fees are many and varied but there is a high incidence of councils charging sports clubs a contribution for costs. The charges are generally for adult sport in the winter and summer seasons and based a per field per annum fee and charge. The average is $1,000 per season for each rugby/soccer field and Hamilton City Council charge $1,363 per season per field.

81. The Active Reserves maintenance and improvements spend for FY2023 was $1.823 million. The demand information for both winter and summer codes are that they use around 40,000 hours of pitch playing time each year.

82. Based on the maintenance cost for FY2023 for the active reserve areas of $1.8 million, there is an opportunity to recover a per hour rate and charge this over a season equivalent.

83. Council could contemplate an hourly, pitch per season charge of

· (Option 1) $1,100 plus GST to total $1,265 per season for 100% recovery of the estimated adult/senior portion of the maintenance cost Forecast revenue $525,000 pa

· (Option 2)$550 plus GST to total $632.50 per season for 50% recovery of the estimated adult/senior portion of the maintenance cost Forecast revenue $262,000 pa

· (Option 3: Recommended) $225 plus GST to total $258.75 per season for 25% recovery of the estimated adult/senior portion of the maintenance cost in Year 1 and the $550 plus GST to total $632.50 per season in Year 2 Forecast revenue $131,000 pa.

84. If this level of fee is approved in the LTP, then the financial impact on two sport code examples is estimated to be

· Senior Soccer Club :

· Option 1 $24,750 per season (plus GST) or

· Option 2 $12,375 per season (plus GST) or

· Option 3 $6,188 per season (plus GST) in Year 1 rising to $12,375 per season in Year 2 \

· Senior Rugby Club :

· Option 1$13,200 per season (plus GST) or

· Option 2$6,600 per season (plus GST) or

· Option 3 $3,300 per season (plus GST) in Year 1 rising to $6,600 in Year 2.

85. The Casual Hire for Winter and Summer could also be based on a similar equivalent rate, say $50 plus GST per hour, given the intermittent use.

86. Council is about to build an artificial turf sports field. Based on a comprehensive model for that facility and benchmark charges, a fee of $1,000 per pitch per year is proposed but only for adult/senior participants. There is also a proposed 'advertising board' charge for this facility, at $1,000 per board per annum.

Cricket Wickets

87. There is also a possibility to charge a contribution for the wickets’ maintenance which is budgeted to cost $273,000 per annum (over and above the Oval wicket maintenance).

88. Based on the number of wickets and number of playable opportunities, a charge of $225 plus GST per season per wicket seems reasonable, as a contribution to the costs of the direct benefit being received.

89. This is the recommended approach to be consistent with other winter and summer sports codes.

Floodlighting

90. Floodlights are used by a number of sports codes which is provided currently as a free service for the booked time. A charge for floodlights based on a per hour rate could be initiated as a contribution to this cost.

91. There is a charge in the current schedule of fees and charges for “any other supply from parks and reserves” which is $0.22 per kWh. Staff will need to assess how much electricity is consumed per hour of use to create an hourly fee and charge but are not proposing to proceed with a fee proposal at this time.

Marine Activity

69. The Marine activity had some revenue challenges to cover its costs over the period of the 2024/34 Long-term Plan to be financially sustainable.

Boat Ramps

92. The proposal is to introduce fees for using the main boat ramps through a parking charge for vehicles and trailers. This charge is designed for the direct users of these facilities to contribute to the costs of operating the network of boat ramps rather being entirely funded by rate revenue.

94 There are identifiable direct beneficiaries and at many locations throughout NZ there is a fee and charge for the use of boat ramps and parking.

95. The proposal will need to be aligned with the Marine Facilities Framework which is integrated with the Marine Facilities strategy and the in-progress Sulphur Point and Marine Park Strategic Plan but this shouldn’t preclude the charging of this fee and charge.

Options

96. There are a range of options for a daily rate and full year fee. The example below is based on benchmarking which puts the charge towards the top end of benchmarks.

97. The table below presents 2 options $15 and $20 daily parking fee (incl GST) (for both residents of Tauranga and out of district) and at least $200 for an annual permit . That would only be for the three or four main boat ramps which offer a good level of service, Sulphur Point, Whareroa and Pilot Bay.

98. Two options are provided in the Table below with forecast impacts on revenue to council.

99. The recommended option is Option 2 at $20 daily parking fee. It is also proposed that the Annual Fee only be made available to Tauranga residents who are more likely to benefit from an Annual fee rather than numerous daily charges.

100. The parking charge could be administered under the Parking Bylaw. The cost of this option has still to be fully considered but is assessed at $50,000 per annum to operate and $20,000 for two pay machines.

101. A proposed further 6 lane boat ramp at Sulphur Point could also come under this fee and charge but extended parking arrangements will need to be provided as part of the Sulphur Point Strategic Plan.

Cemetery and Crematorium

102. The Cemetery and Crematorium activity had some revenue challenges to cover its costs over the period of the LTP to be financially sustainable.

103. Council cemetery and crematorium charges benchmark well with the other councils, having been increased by up to 40% during the 2021/31 LTP.

104. The Cemetery Master Plan is being implemented which has a capital investment programme of $18.4 million over the period of the Long-term Plan. This includes a chapel upgrade and refurbishment, a further cremator with more capacity and a building to accommodate the cremator, road improvements and a permanent staff office.

105. The operational costs consequently increase and to allow this activity to return to a cash positive position, these costs are anticipated to be funded by

o Increasing the cremation fees and charges by 10%

o Increasing market share to 100% for cremations

o Taking on the business opportunity to provide a service for the over 150kg market across the North Island (additional $358 on the standard cremation fee) and to develop a presence in the growing market for animal cremations ($350-$500 per cremation)

o Charge extra for out of district burials which most other council do. The average extra charge is $860, so $1,000 per burial is a reasonable proposal given the council’s investment in land.

106. These proposals are consistent with revenue and financing policy and would be included in the draft Fees and Charges schedule for the draft 2024/34 Long-term Plan.

Holiday and Recreational Park Network

a) Beachside Holiday Park

107. The Beachside Holiday Park is planned to continue to generate a cash surplus over the LTP to fund the planned capital investment and to provide a contribution of $300,000 per annum to the maintenance of Mauao.

108. Revenue from the cabins (to be increased by 4 in FY 2024) and between 10-20% higher fees and charges, a maximum number of night stays through the peak and shoulder seasons are all proposed to generate sufficient revenue to meet the planned financial projections.

109. The current accommodation rates appear to benchmark well with competitors and similar accommodation businesses and are consistent with existing approach and revenue and financing policy.

b) McLaren’s Falls Park

110. The Hostel charges line up with DOC’s charges, which have been simplified to $25 per adult per night and $15 for a child (5-18 years).

111. There is scope at McLaren’s Falls to charge for the exclusive use of the flat areas for events and for wedding photos etc. This will be based on a m2 rate for the flat areas and referenced to Events on Parks, the Historic Village outdoor venue hire rates and a modified Use of Council land fee schedule.

112. The revenue generated is not likely to be significant but the cost to administer these arrangements are likely to be minimal. There may be issues to be managed with expectations for higher levels of service and associated operational and administrative costs.

113. These proposals will be included in the draft Fees and Charges schedule for the draft 2024/34 Long-term Plan.

Historic Village

114. The Historic Village activity is receiving a level of rate funding which is increasing significantly. This is largely the consequence of a sustained capital expenditure programme to improve the condition of the buildings and surroundings at the Village, where interest and depreciation charges have become a large proportion of the Historic Village operational costs.

115. There are revenue opportunities from licences to occupy and hire of indoor and outdoor spaces. The current fees and charges schedule includes a variety of rates which are tailored to the unique situation and issues prevailing at the Village.

116. The Licence to Occupy (LTO) rates were reviewed in 2020 as part of the Strategic Plan to apply a level of consistency to user fees and charges to reflect the different types of community and commercial activity that operate in the village and the different characteristics of each user group.

117. The rates identified by The Property Group Ltd were considerably higher than current rental rates and a program to increase tenants rates started in 2021 as LTO’s where renewed. These saw significant increases for most tenants, so an incremental plan has been implemented to bring their rates up to the current levels in the fees and charges schedule.

118. At present 63% of tenants are still to reach the start of the band rates. Of this 63%, 9 community tenants have not yet had increases on their rates. All of these entities have indicated they are unable to pay the increased rate, so the Village Management team has held off progressing until the Community Funding Policy is completed to identify if the best option was for these organisations to apply for a funding grant to assist with their rent.

119. Currently community tenants with new LTO’s receive the 20% discount on their rate in recognition of their contribution to community wellbeing.

120. The Historic Village has made significant investment to bring the facilities up to be fit for purpose and be of a standard that attracts and retains tenants. It is also at the start of journey to promote the village and attract higher foot traffic making The Village more desirable for tenants. The goal is to then be able to increase rental rates to provide the revenue level needed to maintain the operations of The Village and service the debt needed to do the capital works.

The current LTO rates in the Annual Plan for 2023/24 year are:

	Rate 1	Rate 2	Rate 3
Retail	R1: $175 - $200	R2: $170 - $190	R3: $165 - $185
Office	O1: $150 - $170	O2: $135 - $150	O3: $120 - $140
Warehouse / Studio	W1: $135 - $155	W2: $120 - $140	W3: $110 - $125
Venue	V1: $135 - $155	V2: $120 - $140

Rate 1 = High quality space located in high traffic area
Rate 2 = Mid Quality space located in moderate traffic area
Rate 2 = Low quality Space located in low traffic area

121. The current market rates provided by Property Group in the last month are significantly higher especially in the Office space category. Noting our tenanted office spaces are not a corporate office standard.

	Rate 1	Rate 2	Rate 3
Retail	R1: $250	R2: $230	R3: $210
Office	O1: $300	O2: $260	O3: $220
Warehouse / Studio	W1: $180	W2: $160	W3: $130
Venue	V1: $145	V2: $130

123. The proposed options for the draft 2024/34 Long-term Plan are

Option 1

124. Increase all rates to the 2023 market rate. Based on the midpoint of the current rates this would see between 11% - 88% increase in fees with the majority around the 24% increase. Noting however most tenants’ current rental rates are not at the midpoint range the increase would be significantly higher.

125. The increase would result in potentially $400K of additional revenue, however these rates will likely be unaffordable for the current tenants so could result in an exodus from the village leaving facilities unoccupied thus reducing revenue levels.

Historic Village Licence to Occupy (LTO) Rates	Current Mid point sqm			2023 Markets rate sqm			% difference
Rates Per Square Meter Per Annum	Rate 1	Rate 2	Rate 3	Rate 1	Rate 2	Rate 3
Retail	$187	$180	$175	$250	$230	$210	33%	28%	20%
Office	$160	$142	$130	$300	$260	$220	88%	82%	69%
Workshop/Studio	$145	$130	$117	$180	$160	$130	24%	23%	11%
Venue (lease)	$145	$130		$180	$160		24%	23%

Option 2 – recommended

126. Moving the range of fees to one set fee for the different bands and using the mid-point rate for most categories. The only exception would be for Retail 1, which with very little differentiation between rates, recommend it at the top of the band bringing it closer to the current market rate and making all rates in the office category at the top of the band.

127. This will still be significant increases for all tenants with the current average rate being paid by commercial tenants at $130sqm and $74sqm for community tenants.

128. It is recommended to retain the 20% discount for community tenants. With several tenants, there will be a need to continue the progress plans while at the same time ensuring the rates are aligned with valuation changes at each annual review period.

Historic Village Licence to Occupy (LTO) Rates	Mid point sqm			2023 Market rate sqm			% difference
Rates Per Square Meter Per Annum	Rate 1	Rate 2	Rate 3	Rate 1	Rate 2	Rate 3
Retail	$200.00	$180.00	$175.00	$250.00	$230.00	$210.00	25%	28%	20%
Office	$170.00	$150.00	$140.00	$300.00	$260.00	$220.00	76%	73%	57%
Workshop/Studio	$145.00	$130.00	$117.50	$180.00	$160.00	$130.00	24%	23%	11%
Venue (lease)	$145.00	$130.00		$180.00	$160.00		24%	23%

129. These proposals will be included in the draft Fees and Charges schedule for the draft 2024/34 Long-term Plan.

Financial Considerations

130. The Revenue and Financing Policy, guided by Funding Needs Analysis, sets out for the Long-term Plan the assessment of factors to consider when deciding how to fund various services and expenditure of council.

131. This is legal requirement of the LGA in preparing a Long-term Plan.

132. The revenue assumptions in the draft LTP are based around the user fee proposals in this report.

Legal Implications / Risks

133. There are specific legislative requirements which are relevant to the activities being considered in this report, such as the Reserves Act, Building Act, Dog Control Act and Parking Bylaws.

Consultation / Engagement

134. An engagement plan will be developed for the draft 2024/34 Long-term Plan which provides sufficient resource and time to consult with user groups who may be impacted by these proposals.

Significance

135. 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.

137. 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 decision.

138. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the decision is of high significance to the community and will be consulted on in the draft 2024/34 Long-term Plan.

ENGAGEMENT

139. Taking into consideration the above assessment, that the decision is of high significance, officers are of the opinion that consultation/engagement will be carried out during the Long-term Plan process.

Next Steps

140. The funding option approved by council will be included in the draft 2024/34 Long-term Plan.

Attachments

Nil

Ordinary Council meeting Agenda

21 August 2023

11.8 Review of Rating Categories to Differentiate Industrial Ratepayers

File Number: A14896329

Author: Jim Taylor, Manager: Rating Policy and Revenue

Kathryn Sharplin, Manager: Finance

Malcolm Gibb, Contractor - Rating Review

Authoriser: Paul Davidson, Chief Financial Officer

Purpose of the Report

1. The report considers the recommendation of the Strategy Finance and Risk Committee to set a separate industrial rating category and further considers provisions under section 101(3)(b) regarding matters relevant to the consideration of further differentiation for rating purposes.

Recommendations

That the Council:

(a) Receives the council report "Review of Rating Categories to Differentiate Industrial Ratepayers".

(b) Approves the Recommendation from the Strategy, Finance and Risk Committee to introduce a new rating category for industrial properties (Option 1) in the development of the 2024-34 Long-term Plan.

(c) Agrees the evidence around roading costs and other wellbeing impacts including congestion and safety provides justification for considering a higher differential charge for the industrial category.

(d) Agrees to consult as part of the LTP on setting a rating differential for the industrial category at 2.7:1 (Option 1) over the residential rate.

(e) Agree to retain the commercial differential category to 2.1:1 (option 1) over the residential rate as previously resolved.

(f) Agree to phase in further differential changes over years 2 to 4 of the LTP to reach a percentage share of general rates by category of approximately 65% residential, 15% commercial and 20% industrial.

Executive Summary

2. Industrial companies are particularly significant to the city’s economy. They bring significant employment and wealth to the city and its community.

3. There are however costs and pressures on the city which come with this business activity. The planning and provision of infrastructure services is crucial to this sector as well as the need for housing and social, environmental and cultural amenity.

4. The Rating Policy was amended in the 2022/2023 Annual Plan to phase in commercial rating differential for the general rate and a transportation targeted rate to reflect a 50/50 funding split between commercial and residential rating units.

5. In submissions members of the commercial sector requested council to further differentiate the contributions of the commercial sector by separately recognising the benefits received and impacts of the industrial sector in the city.

6. There is a category within the district valuation role called industrial which TCC would use to create the industrial rating category. It includes industrial warehousing, manufacturing, transportation of goods and other industrial activity related to industrial properties.

7. At its meeting on 7 August 2023 the Strategy Finance and Risk committee recommended to Council to introduce a new rating category for industrial properties.

8. Further to the report provided to SFR, additional evidence of impacts of heavy vehicles, which are equated with industrial activity more than commercial has been summarised in this report. This includes economic, environmental and safety costs all of which impact community wellbeing.

9. A review across comparator councils of the commercial differential and share of rates paid by commercial ratepayers relative to residential ratepayers shows that TCC remains at the low end of rates differential and the share of rates paid by commercial/industrial compared with other councils.

10. Analysis of options have been included around increasing the industrial differential more than an increase in commercial differential and its impacts on rates requirement (Attachment A)

Background

CURRENT APPROACH

11. Currently council has two rating categories

· “Residential” which includes land whose primary use is residential, rural, educational, recreation, leisure, or conservation

· “Commercial” which includes land whose primary use is commercial, industrial, port, transportation or utilities networks, and any land not in the residential category.

12. During the 2022/23 Annual Plan process, council approved an increase in the commercial general rate differential from 1.6 in financial year 2021/22 to 1.9 in 2022/23 with a further increase to 2.1 in 2023/24. The commercial transport targeted rate was also approved to move from 1.6 in financial year 2021/22 to 3.33 in 2022/23 and with a further increase to 5 in 2023/24. The commercial transport targeted rate will be superseded by the IFF TSP levy when it commences in July 2024.

13. This decision was to ensure a fairer balance between the residential and commercial ratepayers in the city particularly noting the relative effect on council’s costs relating to transportation where the contribution was based on a 50:50 split.

14. The issue about whether the commercial rating category fairly reflected all the constituent activity, particularly by the Industrial sector, was raised by commissioners and other commercial ratepayers during the Long-Term Plan deliberations. At the time the reports from Insight Economics and Gray Matter concluded that there was insufficient information from the vehicle trip data to support disaggregating the commercial rating category.

15. Further work was undertaken by staff and supported by PJ & Associates from a council cost perspective to understand what information was contained around renewals in particular to demonstrate any differences in costs associated with predominantly industrial or commercial uses. This report along with a summary from the Road Control Authority on the cost of heavy vehicles were presented at the SFR meeting on 7 August 2023.

16. The PJ & Associates report to SFR noted that the current available information on renewals for TCC does not adequately separate commercial and industrial uses to draw conclusions on the direct cost basis for a different differential rate for commercial and industrial rates. The findings supported the current differentials. That reported recommended TCC improve its data collection going forward.

17. The PJ & Associates report noted the opportunity for council to consider section 101(3)(b) and the overall impacts on the community and particularly the four well beings. The social, economic, environmental and cultural impacts which could be considered include safety, congestion, noise and pollution.

18. SFR on 7 August recommended to Council to introduce an industrial category. There is a category within the district valuation role called industrial which TCC would use to create the industrial category.

19. Following this meeting further information has been researched on relative impacts of heavy vehicle use primarily associated with industrial activities and summarised in the following table.

20. In each comparator, the impact of heavy vehicles compared to light vehicles is considerably greater, as evidenced in the ratio of impact column in the Table.

21. The safety comparator is particularly significant to separate walking and cycling options from vehicle and particularly heavy vehicle traffic.

22. The ratio of impact could form the basis to establish a differential of between 3 or 4 to 1 compared lighter vehicles. Some of the vehicles classified as lighter vehicles would include vehicles typically used by the commercial sector but not the industrial sector. Similarly heavy vehicles are more commonly associated with the industrial sector.

Comparison of Differentials and Contribution of the Commercial /Industrial Sector

23. The table below shows that this council’s commercial differential, at 2.1, is the lowest compared with other metro councils that we benchmark against. It also confirms that the capital value of the industrial sector as percentage of the city’s total capital value, at 9%, is higher than these councils. This is consistent with the proximity of New Zealand’s busiest port to the centre of Tauranga.

24. Tauranga has 1,800 commercial rating units with a capital value $7.2b and 2,187 Industrial rating units with a capital value of $7b. There are 57,714 residential properties with a capital value of $68b.

25. The extent of rates revenue contributed by the commercial sector to total rates revenue is 26% for this council.

(a) Hamilton 34%

(b) Wellington 40%

(d) Christchurch 26%.

26. This provides further evidence that on balance the commercial/Industrial sector could contribute more to total rate revenue and further that this may be contributed by the industrial sector based on the analysis presented later in the report. No other metro council currently has a separate rating category for industrial properties.

Strategic / Statutory Context

27. This report considers the options to fund the activities of Council to be consulted on as part of the 2024/34 Long Term process.

Options Analysis

28. Having considered the factors in section 101(3)(a) of the Rating Act, council can then consider section 101(3)(b) and the overall impact of any allocation of liability for revenue needs on the current and future social, economic, environmental, and cultural wellbeing of the community.

29. Under section 101(3)(b) Council can consider what level of contribution and differential to apply to commercial and or industrial properties relative to residential users to provide a fair share of the costs of the city.

30. The level of general rates differential can be developed through the consultation process to ensure a fair and equitable balance is achieved. The financial impacts of a range of differential options are shown in “Attachment A – Funding impact of rates policy options”. For the purposes of presentation of advantages and disadvantages an indicative selection of options is shown below:^{^[4]}

31. A new rating category could be defined as “Industrial” which includes land whose primary use is industrial, port, transportation or utilities networks.

32. The options analysis below considers options in two parts. The first is the level of differential associated with the categories from 2025 (year 1 of LTP). The second matter is to consider the phasing of the introduction of higher differentials for industrial and/or commercial categories working towards an agreed proportion.

Introduction of new Industrial Category and Differential levels

33. Option 1: Introduce a separate Industrial rating category and increase the differential for industrial category at 2.7:1 while commercial remains lower at 2.1:1.

Advantages		Disadvantages
- Responds to the commercial sector’s concerns that they are paying a disproportionate rate. - Recognises the increasing volumes of heavy vehicle to Industrial related businesses in the city from journeys originating or finishing outside the city’s boundary. - Recognises the social and environmental impacts such as congestion, safety and pollution on the city of heavy vehicles and industrial activity. - The contribution of the combined commercial/industrial categories moves closer to that of comparable councils.		- Increase in rating distribution to the industrial sector noting the impacts of this sector and reasoning for the increases in differential

Key risks	The lack of direct empirical financial and asset management evidence could result in a challenge to the introduction of a new category, but this is mitigated by the recent Supreme Court judgement and council’s consideration of the four wellbeing’s as part of the rating process.
Recommended?	Yes

34. It is important council staff continue to develop the systems and processes capable of providing the financial and asset management information which is recommended in the PJ & Associates report.

35. This option would see rating proportions move to 67.7% residential, 13.4% commercial and 18.9% industrial.

36. Option 2: Include a proposal to introduce a new rating category for “Industrial” land as part of the draft 2024/2034 Long Term Plan.

37. Continue to monitor the fairness and equitable funding of the transportation activity and request staff to continue to develop systems and processes capable of providing the financial and asset management information which is recommended in the PJ & Associates’ report to enable clear measurements on the operational and capital expenditure. Keep differential for commercial and industrial at 2.1:1

Advantages		Disadvantages
- Delay a decision on whether to adjust the level of differential for industrial property above that of commercial until further information is known, and further work has been undertaken on projects and costs.		- The rating policy is not necessarily providing a fair and equitable outcome. - The differential does not consider reported impacts of heavy vehicles on the community.

Key risks	Some of the direct cost per category information is difficult to capture and measure and may take time and considerable resources to get to a position of more exact equivalence.
Recommended?	No

38. Option 3: Do not include a proposal to introduce a new rating category for Industrial property as part of the draft 2024/2034 Long Term Plan.

39. Continue to monitor the fairness and equitable funding of the transportation activity and request staff to continue to develop systems and processes capable of providing the financial and asset management information which is recommended in the PJ & Associates’ report to enable clear measurements on the operational and capital expenditure.

Advantages		Disadvantages
- Delay a decision until improved financial information is available to ensure there is a closer correlation between the benefit and the rate imposed.		- The rating policy is not necessarily providing a fair and equitable outcome. - The known impacts on community wellbeing of heavy vehicles are not recognised in the establishment of differentials

Key risks	Some of this information is difficult to capture and measure and may take time and considerable resources to get to a position of more exact equivalence.
Recommended?	No

Longer term phasing of increased differentials and change of approach.

40. The above comparison with other councils indicates that Tauranga City could increase the share of rates paid by the commercial and industrial categories relative to residential. Hamilton City is the most comparable council and approximately 34% of the rates share is paid by the commercial sector. Targeting a similar level of 35%, there are a range of options for Tauranga to apportion rates across the commercial and industrial categories.

41. Option 1: Phasing a proportional approach over a three year period. Set a percentage of the general rates to be collected from each rating category e.g., 65% residential 15% commercial and 20% industrial, which would give a result close to the proportional share of commercial and residential at Hamilton City Council. Note a range of options are presented in Attachment A.

42. If the 65% residential, 15% commercial and 20% industrial percentages were to apply on the current valuation the resulting differentials would be Industrial 2.98 and commercial 2.45. To reach these levels further phased increases in commercial and industrial rates would be required. These could be phased in over years 2 to 4 of the LTP. The overall outcome for these sectors would be a combined differential of 2.7, which is comparable with the above metro councils.

43. Under this option to meet the percentage target the differential may vary as valuations change.

Advantages		Disadvantages
- Removes the uncertainty of the revaluations as the differential is dependent on budget not valuations. - Recognises that the Industrial sector should contribute more. - Provides clear relativity in the overall allocation of revenue need over the whole community.		- Increase in rating distribution to the industrial sector noting the impacts of this sector and reasoning for the increases in differential - Timing of current economic conditions on the commercial sector may continue into the future - May not be affordable without phasing options over a period.

Key risks	Increases in costs to commercial and industrial sectors
Recommended?	Yes

Option 2: Do not introduce a proportional approach but phase in higher differentials in years 2 to 4.

44. This approach could also see a phased increase in differentials for industrial to 2.98 and commercial to 2.45 over years 2 to 4 of LTP. However, it would remain at those differential levels and the proportions of contribution would be impacted by capital revaluation.

Advantages		Disadvantages
- Recognises that the Industrial and commercial sectors should contribute more.		- Increase in rating distribution to the industrial sector noting the impacts of this sector and reasoning for the increases in differential - Timing of current economic conditions on the commercial sector may continue into the future - Revaluations will impact on the level of rating distribution across sectors which may not always be equitable

Key risks	Revaluations may create an inconsistent approach due to changes in capital value across sectors
Recommended?	No

45. In conjunction with rating differential options, council staff will continue to investigate other options to fund the transport activity, noting some options such as congestion pricing or variable road pricing may provide a long-term solution to help manage the demand on the network and provide funding including from users not owning property within council boundaries can contribute to the costs of road corridors.

Financial Considerations

46. If the recommendations are approved there will be financial impacts on the current rating base. There may some budget requirements to develop systems and processes to better measure who benefits from the activity expenditure in the city.

47. If Council decides to introduce a new rating category there will be implications on rating units that can be presented as part of the draft 2024/34 Long Term Plan

Legal Implications / Risks

48. The recent Judgement made by the Supreme Court of NZ (May 2023) in the successful appeal by Auckland Council, for a targeted rate on commercial accommodation providers, has provided some important principles in the setting of rates by a local authority.

49. The key principles are the extent to which a local authority needs to ensure a rational connection between the imposition of the rate and the benefits from the activity exist. This does not need to be an exact equivalence, or a close correlation and it is reasonable for the local authority to consider the intended or expected future benefits from an activity that is to be funded.

50. This Judgement is significant with regard to the matter being discussed in this report and given the opportunity provided by section 101(3)(b), council staff have developed options which can now be considered.

51. The Local Government Act requires Council to consult on any proposal to change the Rating Policy and this report forms part of this process.

Consultation / Engagement

52. This report is a continuation of the commissioners’ response to the community concerns received as part of the changes to the Rating Policy to ensure fair and equitable funding for the transportation activity.

Significance

53. 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.

54. 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 proposal.

55. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the proposal is of medium significance.

ENGAGEMENT

56. Taking into consideration the above assessment, that the proposal is of medium significance, staff are of the opinion that engagement is required following the Council making a decision and the draft 2024/34 LTP process will form an integral part of the engagement process.

57. Council may decide that given the nature of the topic that specific engagement with the industrial sector is warranted.

Next Steps

58. The decision of council will be included in the draft 2024-2034 Long term Plan.

Attachments

1. Attachment A - Funding Impact of rates policy options - A14957182 ⇩

[1] Pages 13-40 of Attachment 2 to the 1 May 2023 Council report, available here on council’s website

[2] Note that the preliminary business case suggested capital construction in 2025/26 and 2026/27 but that was predicated on project and funding approval in July 2023. With approval now not likely until the final Long-term Plan is adopted in April 2024, all dates have been pushed back by one financial year.

[3] See pages 117-122 of the preliminary business case included as Attachment 2 to the 1 May 2023 Council report, available here on council’s website

[4] noting that numbers are indicative only being based on 2021 rating valuations that may change with the revaluation in 2023, and the modelling assumed an overall rates increase of 9.7%.


AGENDA Ordinary Council meeting Monday, 21 August 2023
I hereby give notice that an Ordinary meeting of Council will be held on:
Date:	Monday, 21 August 2023
Time:	9.30am
Location:	Bay of Plenty Regional Council Chambers Regional House 1 Elizabeth 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	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

· 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.