Agenda of Ordinary Council meeting - Monday, 11 September 2023

UNCONFIRMED Ordinary Council meeting minutes

21 August 2023

MINUTES

Ordinary Council meeting

Monday, 21 August 2023

Order of Business

1 Opening karakia. 3

2 Apologies. 3

3 Public forum.. 3

4 Acceptance of late items. 4

4.1 Acceptance of late item - Draft Long Term Plan Operational Financials. 4

5 Confidential business to be transferred into the open. 4

6 Change to the order of business. 4

7 Confirmation of minutes. 4

Nil

8 Declaration of conflicts of interest 4

9 Deputations, presentations, petitions. 4

10 Recommendations from other committees. 4

10.1 Review of Rating Categories to Differentiate Industrial Ratepayers. 4

10.2 Report - 2024 - 2034 Long-term Plan - Update - Funding and Reserves. 5

11 Business. 5

11.1 2024-2034 Long-term Plan - Tauranga Community Stadium - update. 5

11.2 Draft Long Term Plan 2024-2034 - Memorial to Elizabeth Waterfront Recreation Connection \ Te Hononga ki Te Awanui 8

11.3 Our Direction (Council's strategic framework) - adopt final action and investment plans and strategies. 10

11.4 Tauranga Climate Action and Investment Plan - adoption. 12

11.5 Long-term Plan 2024 - 2034 Update. 13

11.6 Draft Revenue and Financing Policy Framework. 15

11.7 Paying a Fair Share - Approaches to Funding the draft 2024/34 Long-term Plan. 16

11.8 Review of Rating Categories to Differentiate Industrial Ratepayers. 18

12 Discussion of late items. 19

13 Public excluded session. 19

14 Closing karakia. 20

MINUTES OF Tauranga City Council

Ordinary Council meeting

HELD AT THE Bay of Plenty Regional Council Chambers, Regional House,

1 Elizabeth Street, Tauranga

ON Monday, 21 August 2023 AT 9.30am

PRESENT: Commission Chair Anne Tolley, Commissioner Shadrach Rolleston, Commissioner Stephen Selwood, Commissioner Bill Wasley

IN ATTENDANCE: Marty Grenfell (Chief Executive), Paul Davidson (Chief Financial Officer - via Teams), Barbara Dempsey (General Manager: Community Services), James Woodward (Acting General Manager: Infrastructure), Jeremy Boase (Acting General Manager: Strategy, Growth & Governance), Sarah Omundsen (General Manager: Regulatory and Compliance), Gareth Wallis (General Manager: City Development & Partnerships), Kelvin Eden (Capital Programme Manager: Major Community Amenity), Anne Payne (Principal Strategic Advisor), Nick Chester (Principal Strategic Advisor), Sarah Searle (Principal Strategic Advisor), Kathryn Sharplin (Manager: Finance), Tracey Hughes (Financial Insights & Reporting Manager), Malcolm Gibb (Project Manager – Rating Review), Reece Wilkinson (Parking Strategy Manager), Coral Hair (Manager: Democracy & Governance Services), Sarah Drummond (Governance Advisor), Anahera Dinsdale (Governance Advisor), Janie Storey (Governance Advisor)

1 Opening karakia

Commissioner Shadrach Rolleston opened the meeting with a karakia.

2 Apologies

Nil

3 Public forum

Mr Murray Guy interjected from the public gallery and objected to not been given permission to speak in the public forum. Mr Guy was asked by the Chairperson to sit down. The Chairperson cautioned Mr Guy to stop disrupting the meeting or she may ask him to leave the meeting. Mr Guy continued to interject and refused to leave, and the Chairperson advised Mr Guy that he was required to withdraw immediately as his conduct was disorderly and creating a disturbance.

Mr Guy continued to interject, and the Chairperson advised Mr Guy that she was now requesting staff/security personnel to remove him from the meeting for the rest of the meeting as his conduct was disorderly and creating a disturbance.

The Chairperson adjourned the meeting at 9.37 am and Mr Guy left the room.

At 9.41am the meeting reconvened.

4 Acceptance of late items

4.1 Acceptance of late item - Draft Long Term Plan Operational Financials

Resolution CO14/23/1

Moved: Commissioner Shadrach Rolleston

Seconded: Commissioner Bill Wasley

That the Council:

(a) Accepts the late tabled item “Draft Long Term Plan Operational Financials” for consideration in the report “Long Term Plan 2024-2034 update at the meeting:

The above item was not included in the original report because it was not available at the time the agenda was issued, and discussion cannot be delayed until the next scheduled meeting of the Committee because a decision is required in regard to this item.

Carried

5 Confidential business to be transferred into the open

Nil

6 Change to the order of business

Nil

7 Confirmation of minutes

Nil

8 Declaration of conflicts of interest

Nil

9 Deputations, presentations, petitions

10 Recommendations from other committees

10.1 Review of Rating Categories to Differentiate Industrial Ratepayers

Staff Paul Davidson, Chief Financial Officer

Resolution CO14/23/2

Moved: Commissioner Stephen Selwood

Seconded: Commissioner Shadrach Rolleston

That the Council:

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

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

Carried

10.2 Report - 2024 - 2034 Long-term Plan - Update - Funding and Reserves

Staff Paul Davidson, Chief Financial Officer

Resolution CO14/23/3

Moved: Commissioner Bill Wasley

Seconded: Commissioner Shadrach Rolleston

That the Council:

(a) Receives the report "Report - 2024 - 2034 Long-term Plan - Update - Funding and Reserves".

(b) Approves the recommendations of the Strategy, Finance and Risk Committee that the following matters are considered in the LTP to address both the significant impacts of large asset revaluations on depreciation and the current risks and impacts on the depreciation reserves.

(i) Phasing in of increased funding of depreciation expense in the early years of the LTP to mitigate the otherwise significant up-front increases in rates arising from significant asset revaluation.

(ii) Restoring depreciation funding and the level of reserve balances within the ten years of the LTP.

(iii) Short term loan funding of capital renewals for activities where there are insufficient depreciation reserves.

(iv) additional rates funding to retire debt for those activities where there are insufficient depreciable assets to repay debt over time.

(c) Approves the recommendations of the Strategy, Finance and Risk Committee that the phased retirement of debt in the weathertight and unfunded liabilities reserve subject to rates affordability should aim to significantly reduce these reserve deficits through the period of the LTP.

(d) Approves the recommendations of the Strategy, Finance and Risk Committee to consider the value of risk reserve funded through the LTP taking into account both debt headroom maintained in the debt to revenue ratio below LGFA funding limits and the value of the reserve.

Carried

11 Business

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

Staff Gareth Wallis, General Manager: City Development & Partnerships

Kelvin Eden, Capital Programme Manager: Major Community Amenity

Jeremy Boase, Acting General Manager, Strategy, Growth and Governance

External Nigel Tutt – Priority One

Key points

· The work to date had been a team effort with a number of people involved.

· Public engagement had included a survey carried out by Key Research, which was a demographically representative view and resulted in more people in favour of the stadium than not in favour.

· There was more support with the younger age group and males but this diminished when the questions got to willingness to pay.

· A self-select survey was carried out via a link, however there were more negative comments and misinformation sent out by groups which coloured the results somewhat. Some support letters had been received from businesses and individuals who were generally in favour of the stadium.

· Benefits included the attraction of events and the alignment of the CBD rejuvenation with negative comments including parking and disruption.

· The social and economic benefits outlined by Market Economics was more comprehensive and outlined the many benefits that could be realised across the Western Bay of Plenty and the wider Bay of Plenty.

· The facility would take the load off Baypark as it was currently at capacity with more facilities needing to be provided. The economic development report outlined that the lack of investment in community amenities also led to poor attraction and retention of talent, and there was a need to ensure there was a good workforce into the future.

· Investigations had been commenced to set up a charitable trust to generate external funding for civic amenities.

· Key risks included ground conditions. Initial geotech reporting had been undertaken, based on the information to hand, showed an additional $9M would need to be included for the grandstand than what was included in the business case, but more borehole testing was needed on the site. There may be a possibility to decrease the length of the piles which would result in a lesser cost. There was also some slope stability and retaining work required on the western bank which could cost up to $19M in the worst-case scenario.

· Continued engagement was being undertaken with the athletic, bowls and croquet clubs and other users.

· Consideration was being given to the relocation of the athletic track to Baypark in the long term. The current track would need to be replaced in 2028 and had a useful lifespan up until then.

· The lawn bowls and croquet clubs’ leases were due to expire in 2029 and the team were working through some relocation options with them.

· The recommendation was to push out the development of the stadium in association with the wider masterplan to relocate users and the development of the Te Manawataki o Te Papa precinct.

· Option 2 was the preferred option, with a staged plan and thorough community consultation, with the project team continuing to work on funding mechanisms and staging the design and cost. Once the project was included in the 2024-34 Long Term Plan (LTP) for deliberation there would be more community feedback and more information to guide the decision making.

In response to questions

· In relation to a query regarding the cost, access to external funding and engagement with regional and sub-regional partners to share the costs, it was noted that the cost of developing the first stage was estimated at $70M, which was subject to what was to be built. The $30M relating to displacement costs was already in the budget as part of the Active Reserves Masterplan work.

Discussion points raised

Commissioners noted the following comments:

· There was a divided view within the community and the recommendations set a clear pathway for the need for further consultation.

· Option 2, the staged implementation plan, would be out for consultation as part of the LTP and would provide opportunities for all the community to express their views.

· The Commission was appointed to provide and focus on the long-term best interests of the city it serves. This included infrastructure and community amenities, of which sporting and wider community amenities and facilities were a key component of a great city.

· The proposal provided existing users to have their current needs met and provided opportunities for them to have better amenities as a result of the decision. Some clubs also had divided views.

· The proposal would have wider social and economic benefits across the city and would release the capacity at Bay Park which was not able to accommodate some indoor sports because of lack of space.

· Commissioners needed to consider both sides of the story based on the evidence and information before any decision was made. The process had started before the Commission commenced and it would do the community a disservice if the Commissioners did not follow through with this process and make a considered decision as part of the LTP 2024-34.

· The two surveys were helpful in terms of perspectives provided and understating the demographic of those inputting, and to get a full perspective of age groups across the city.

· There were 4,000 new residents entering the city each year and more coming into the Western Bay of Plenty, with a projected population for the sub-region in 2063 being 300,000. This was a 50% increase from 2018. Council needed to respond to the transformation, recognise that growth, listen to the needs of those coming to live here and provide for them.

· There had been a lot of misinformation of what the stadium was going to be and seeks to do for the community. It would not be locked up and unattainable on a daily basis, it would still be a community greenspace valued by the community and the public would continue to have access, there would be no restricted access to the Domain. Activities would include rugby, soccer, cricket, indoor sports, events and concerts and the proposed stadium would provide for all opportunities.

· Parking and noise were some of the concerns expressed, and while these needed to be carefully considered. The Council was exploring with the Bay of Plenty Regional Council better transport options and opportunities to move around the city more easily.

· The Commission would protect and look after the trees in the Domain during this process.

· Financially the city could not afford the stadium at present with the building of Te Manawataki o Te Papa. The proposal would not be included into the budget in the next few years.

· Working in with the athletic club to relocate their track by its use by date made sense. It would take time to move some of the existing users from the site and to make sure that they were well looked after and provided for with better facilities.

· Council was required by law to make room for more housing to cope with the growing population and had a responsibility to the young people to increase the economic activity in the city.

· Growth had not adequately been addressed in the last two decades which had overwhelmed the city but now it had to be managed. With the underinvestment in infrastructure and the city centre dying, Commissioners had to make hard decisions on what was best for the long-term interests of the city and make investments.

· There was a clear divide between the young and older residents, but Council needed to look at what was best for the city in next 30 years. The underinvestment in community facilities had been obvious and resulted in the Commission reviewing all community facilities. This including looking at The Domain which could take more use by more people on a regular basis.

Resolution CO14/23/4

Moved: Commissioner Stephen Selwood

Seconded: Commissioner Bill Wasley

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.

Carried

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

Staff Gareth Wallis, General Manager: City Development & Partnerships

Kelvin Eden, Capital Programme Manager: Major Community Amenity

External Rebecca Ryder – Boffa Miskell

Craig Batchelor – Independent Consultant

Rachel Wright – Boffa Miskell

Key points

· The work began in 2021 to consider a walkway from Memorial Park to the CBD in two parts, stage 2 of which was to provide an extended harbour edge connection between Memorial Park and the city centre.

· Objectives were adopted in July 2022 to understand the key priorities and became the focus for all of the project.

· Engagement was undertaken with tangata whenua and one on one meetings with landowners with waterfront-based properties to understand their needs, interests and issues on the recreation connection in front of their properties. A meeting was also held with the Tauranga Harbour Protection Society on 5 March 2023 where discussions were held in detail.

· There were 10 different topology options and 17 properties with riparian rights for which the property rights were investigated.

· Two workshops in May 2023 had also been held covering off the options and to get the three viable options that were noted within the report. These had been further informed from the workshops and focused to the public realm area and dropping some of the components that had been raised by landowners as a way of responding to them.

· Each of the three options had been considered against the planning framework requirements for district, regional and national coastal plans. Most came under the Regional Environmental Coastal Plan as they were all discretionary activities with lots of assessments required.

· While there were no critical issues to obtaining a resource consent, a real critical risk was around resolving the riparian rights, property and access rights with the property owners. The property owners’ legal advisor proposed that the Council look at a declaration from the High Court on the legality of what’s proposed. The view of the landowners was that any infringement of their access across their frontage was contrary to their legal rights, however the Council’s legal advice was that this could be managed and ensure that their rights could be provided for in a reasonable way. The intention is to develop design solutions and have those tested with evidence before a high court or other alternative. It was critical this be sorted before any resource consent process was undertaken.

· There were also issues around hazard management in the long term, as the area was affected by land instability and complications of a walkway, including mitigation and repair work, as some properties had structures close to the space.

· While the matters were complex, these were not insurmountable.

· The team was not in a position to recommend that the funding be put into the LTP but were seeking funds to proceed with the design and go through the legal processes. This highlighted the opportunity to use the $6M already included in the LTP and provide time to design avenue connections to allow public access to the waterfront and low tide access to the CBD. It would also allow proceeding with some capital works where they were able to achieve access.

· The team thanked all residents and landowners that they had engaged with, they had been welcomed into many homes and spent time with people who were passionate about their properties and had held some robust and challenging conversations.

In response to questions

· If Option C, limited intervention, was adopted it would remain as it was and no declaration from the court would be required.

· The use of the $6M would include creating the nodes, beach replenishment where it was a viable option and creating the walkway in areas that were not subject to riparian rights as included in the 2021-31 LTP for the years 2026-27. In parallel with that, work would be carried out to get the High Court determination and set up a Memorandum of Understanding with tangata whenua.

· Beach replenishment has been seen as a positive concept with a number of property owners, with an issue raised as to whether it would lead to accretion and if so, would landowners be able to claim the land. While this was not considered a risk, any claim would become a court process.

· The team were aware of pending iwi claims and potential changes around the sea floor and this had been part of the conversation with tangata whenua. Part of the process going forward was that they be included in each step to avoid any issues later. Engagement with mana whenua had been positive to date.

Discussion points raised

· Commissioners acknowledged the work done by Boffa Miskell and Tonkin and Taylor noting that the evidence-based information with the comprehensive engagement, analysis, range of issues and considerations had been helpful.

· Additions were made to the recommendations to include the amount of the consultancy costs in recommendaitons (c) and (d) and to provide a determination of the legal position regarding property right issues.

Resolution CO14/23/5

Moved: Commissioner Bill Wasley

Seconded: Commissioner Stephen Selwood

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, which is limited intervention of the city fringe and escarpment link zones from 1^st to 7^th Avenue, which may include some beach replenishment between 6^th and 7^th Avenues 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 of $585,000 to progress the consenting, legal, planning and design work for short/medium-term Option C, acknowledging the construction costs of $6M, which are currently included in the Draft Long-term Plan 2024-2034.

(d) Approves consultancy costs of $1.65M to progress the consenting, legal, planning and design work for long-term Option B, including determination of the legal position regarding property right issues. Any construction costs to be considered as part of deliberations for the following long-term plan.

(e) Enters into a Memorandum of Understanding with Mana Whenua.

Carried

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

Staff Anne Payne, Principal Strategic Advisor

Jeremy Boase, Manager: Strategy & Corporate Planning

Nick Chester, Principal Community Advisor

Key points

· The project work had begun in mid-2021 with action and investment plans being developed in 2022 to deliver on Council’s strategic directions.

· Eight plans were being presented as part of this report and the Tauranga Climate Action and Investment Plan would be presented in a separate report to this meeting.

· Two strategies had been held in draft until the Action and Investment Plans were completed to ensure consistency across the framework.

· As a result of the plans, 10 strategies could be superseded.

In response to questions

· In relation to beliefs being omitted from the Community Centres Action and Investment Plan opening statement it was noted that citizenship ceremonies were held every month with 70-80 people from a variety of denominations and religious beliefs becoming New Zealand residents and it was noted that the city needed to make room for those beliefs as they were a strong part of people’s cultures. Staff apologised for the miscommunication and agreed to add beliefs back into the opening statement.

Discussion points raised

· Commissioners acknowledged that the plans had been a huge amount of work and staff had been challenged at every step. They noted their appreciation for the work from all of the team for such a good and robust process.

· It was requested that if the framework for accessing the plans was on the website, was it possible to have a diagram as the link point to funding as this was important.

· It was suggested that an increased focus was needed on the use of grey water and the opportunities this would bring.

· It was requested that the names of the Action and Investment Plans be included in the recommendation (e), the inclusive city strategy added into recommendation (f) and the plans that were to be superseded in recommendation (i).

Resolution CO14/23/6

Moved: Commissioner Bill Wasley

Seconded: Commissioner Stephen Selwood

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), namely:

Accessible Tauranga,

Safer Communities,

Art, Culture and Heritage,

Our Public Places Strategic Plan,

Reserves and Open Space,

Play, Active Recreation and Sport,

Community Centres,

Nature and Biodiversity

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 and that the strategy’s opening aspiration statement is to be retained as:

We lift each other up. We are an inclusive city that celebrates our past, is connected in our present and invested in our future, where people of all ages, beliefs, abilities and backgrounds are included, feel safe, connected and healthy.

(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, namely

Age-Friendly Strategy 2013

Disability Strategy 2013

Tauranga Western Bay Safer Communities Strategic Plan 2020-2025

City Safety Action Plan 2018

Toi Moana Arts and Culture Strategy 2018-2021

Vegetation Management Strategy (Growing Tauranga Green) 2006

Aquatic Network Strategy 2012

Open Space Strategy 2012

Our Community Places Strategy 2008

Sport and Active Living Strategy 2006

(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.

Carried

11.4 Tauranga Climate Action and Investment Plan - adoption

Staff Sarah Searle, Strategic Advisor

Jeremy Boase, Manager: Strategy & Corporate Planning

Key points

· Working with dedicated interested group to create the first climate action plan which would continue to be updated and improved.

In response to questions

· In relation to priority actions 33 and 34 regarding sub-regional waste it was noted that the business case was currently being reworked, and funding was provided in the LTP. It was requested that regional input would also be sought.

· Staff would recheck priority 34 as to whether a community recovery and waste minimisation education centre was still proposed due to lack of room on the site.

· Additional information would be provided on the sources of funding for priority 56 – the Mana Kai Mana Ora - WBoP Food Sovereignty and Food Security Plan.

· In response to a comment regarding any meaningful change to reducing carbon emissions through road pricing, it was noted that the LTP needed to start that conversation for it to gain momentum across the city.

· Much of the feedback was challenging the concept of having alternative modes of transport available before changing the targets.

Discussion points raised

· While ambitious goals could be set there was no way they would ever be reached in the city, therefore the plan needed to be realistic to encapsulate that some targets would be met, but also acknowledging that there was no way to achieve some of the science-based targets as some of the changes needed were not ones that the Council could influence. The goal around mitigation was amended in resolution (e) - as a city we will work towards reducing our greenhouse gas emissions in line with national net zero 2050 commitments.

· Commissioners thanked the staff, Te Rangapū Mana Whenua o Tauranga Moana and others for the significant amount of the work done to provide the plan.

Resolution CO14/23/7

Moved: Commissioner Bill Wasley

Seconded: Commissioner Shadrach Rolleston

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 to “as a city we will work towards reducing our greenhouse gas emissions in line with national net zero 2050 commitments”

(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.

Carried

At 11.35am the meeting adjourned.

At 11.49am the meeting reconvened.

11.5 Long-term Plan 2024 - 2034 Update

Staff Paul Davidson, Chief Financial Officer

Kathryn Sharplin, Manager: Finance

Tracey Hughes, Financial Insights & Reporting Manager

Tabled were a copy of the Draft LTP Operational Financials prior to final decisions.

Key points

· The budget reflected the recommendations made by the Strategy, Finance and Risk Committee in relation to lessening the funding of depreciation in the early years and reversing it in later years and reflecting the size and scale of the revaluations that had occurred.

· The LTP increased debt requirement of unfunded liability and weathertightness reserves after year 3 of the LTP and sought resolution around long-term loan funding where there was a long-term benefit.

· It assumes that the infrastructure funding and financing (IFF) transactions for decisions on Te Manawataki o Te Papa were included but this would be separately consulted in the next month.

· No IFF levy had been added in the rates which would be an additional 2% in 2026 to reflect that transaction. All of the debt had been included in the budget.

· The financials reflect the priorities set for the LTP as a flow through from 2021-31 priorities

· The capital programme summaries were high level capital expenditure in the key priority areas of existing growth, intensification, growth in the west, the city centre and transportation. In total $3.4B over the 10 years.

· There was a programme of works was larger in the earlier years than Council expected to achieve, so debt and interest would not be rated. There was a capital ability adjustment to bring it to more realistic associated rate increases.

· Three waters had not been included from Year 3 and changes to the existing programme of funding for Te Manawataki o Te Papa and ongoing changes for Tauriko West funding .

· The operational financials were tabled. The capital programme and the flow through costs that come from interest were influenced by the expectation of external funding or asset realisation for Te Manawataki of Te Papa of $150M and Waka Kotahi supporting the transportation capital programme. If the funding was not realised the ratios would be worse and decisions would need to be made around timing of those projects.

· The revenue included those assumptions, and the growth was expected to be 1%.

· The medium rates increase modelling was based on the first year only and included the transport plan and the IFF which had already been agreed to.

In response to questions

· In response to a question regarding the Department of Internal Affairs (DIA) approval on the stormwater levy being renamed to the flood control reserve, it was noted that they would look at the draft. Discussions had been held with DIA staff around remediation of those areas and addressing future flooding, but it would be put through as part of the consultation process. Flood control activities were a legislative set activity for councils after movement of three waters to a separate entity.

· In relation to clarity around the funding of depreciation cost funding over the life of the LTP now and as new completed projects were brought in with messaging around addressing the inadequate funding previously. It was noted that would be included in the financial strategy and reserves identified for each activity over the ten years.

Resolution CO14/23/8

Moved: Commissioner Bill Wasley

Seconded: Commissioner Shadrach Rolleston

That the Council:

(a) Receives the report developing LTP Budgets.

(b) Receives the 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 Chief Executive 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 Tauranga City Council 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) Agrees 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) Notes 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.

Carried

Attachments

1 Tabled Document - Council - Draft LTP financials 21 Aug 2023

11.6 Draft Revenue and Financing Policy Framework

Staff Paul Davidson, Chief Financial Officer

Kathryn Sharplin, Manager: Finance

Key points

· All of paragraph 23 in the report was incorrect and should be removed as neither Site B nor the stadium were included in the draft financials.

· The policy incorporated IFF as a preferred option and would be looking at an industrial rating category as an option later in the meeting.

· A specific annual targeted rate was being considered for private pool inspections as an alternative to a user fee.

In response to questions

· In response to being able to revert back to a community facilities targeted rate if required, it was noted that this was being consulted on and staff would come back with any provisions that may come out of that process.

· The IFF would be consulted on separately to the LTP and as a result of that process it would allow either the IFF levy or a targeted rate based on the feedback.

· The proceeds from any asset sales would include the reserve fund for that asset.

· The asset realisation reserve would be an alternative funding source once the balance grew.

Resolution CO14/23/9

Moved: Commissioner Stephen Selwood

Seconded: Commissioner Bill Wasley

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.

Carried

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

Staff Paul Davidson, Chief Financial Officer

Kathryn Sharplin, Manager: Finance

Reece Wilkinson, Parking Strategy Manager

Malcolm Gibb, Contractor – Rating Review

Key points

· User Fees and Charges were part of paying a fair share, with the Funding and Financing Policy considering who benefits, which then flows into either charging user fees or rates.

· A solid review had been undertaken of activities and some areas identified as potential new user fees and areas where self-funding was more challenging and may result in some more significant increases in charges.

· Consistency across councils was a feature with some of the sporting codes charges.

· Reflecting capital investment, looking at how the Council funded new investments with opportunities to relate that to who was accessing and using them and a way to capture non-ratepayer users.

· Fees had helped with demand management, to reflect the value of the asset and the environment it was impacting.

· The animal and building services reflect assessments of costs against potential deficits over the 10 years and looked to model what the increase in fees and charges would be to balance out the deficit. The dog registration fees would see an increase of $21 a year to $121 and building services an increase in fees by 5% annually.

· There was a need to ensure that parking was applied throughout the city fairly and equitably.

· The expansion of paid parking would come in November to areas within a 15 minute walk to the city centre and domain.

· A Parking Management Plan for Mount Maunganui would be provided in the future. It was acknowledged that all of the same stresses from introducing paid parking years ago in the area still existed.

· A review was carried out of all the community services fees and charges and the team had been asked to go through their specific fees to understand if they were covering the cost of providing the service, whether they met the Revenue and Financing Policy and provide a benchmark. The information would be provided to the 11 September 2023 Council meeting.

· There were more complex areas that had not been charged and there were opportunities to pick up more fees so a direction was needed. Some of these would be picked up over time and some had contractual arrangements not to increase, but staff wished to deliver on principles, provide a clear direction to look at user pay, be consistent and to look at capital investment with activities. The holiday park and Historic Village were several examples of which Council had heavily invested in.

In response to questions

· In answer to a question in relation to any opportunity to encourage Western Bay of Plenty District Council to align their dog fees with Tauranga City Council’s it was noted that conversations were held with them regularly. They had a smaller dog pool with much of the animal control services in the rural area and dealt with other animals and had to be rated differently, so it was not the same comparison.

· The dog registration fees reflected a way of recovering the costs of the activity such as running the dog pound and the animal services teams rather than it being charged across the Council. It was only recently that they had been able to see that the deficit was larger than anticipated.

· Commissioners wanted to be sure that the parking spaces were being utilised well and to ensure there was parking for workers in the city and at Mount Maunganui. Information was requested on the difference between summer congestion to winter use, the turnover of parking and time limits and what provisions had been made for parking in the CBD for people coming into work each day. This would provide alternative options so that any resentment could be covered by offering good solutions. There were also a number of tensions and frustrations around Marine Parade and Pilot Bay by locals with much of the parking being used for accommodation. Given there was no requirement for parking provision for accommodation because of government policy direction, this information needed to be included in the report.

· The income from parking was ringfenced for the activity unless it was used on an investment supported by parking activity. It could be noted that any excess funds from parking at the Mount would only be used in the Mount.

· Telfer Young provided a valuation on reserve land which was discounted from a market value within the different zones providing a difference in valuation and square metre rate. Staff then looked at the charge rate to community organisations against these valuations. The rate currently started at $2.68 m² with the range going from $8 to $21.50m² at Mt Maunganui which was quite a big difference in what was being charged and what was a reasonable rate based on a reserve valuation. This showed a derived subsidy for use of Council reserve land.

· The report illustrated where the subsidy was invested in golf courses and land for horse sports, marine society etc. It gave a better understanding of where the subsidy was and whether it was fair and reasonable or whether it should be done differently as it segregates different groups that use that land. Over time the policy could put the Council in a better position financially.

· In response to a query relating to different areas of the city having different valuations, it was noted that the recommendation was to use an average across the city for community organisations where each sporting code would be treated the same.

· The Council had requested more public access to the land leased to the Racing and Golf Clubs at Greerton. It was noted that a percentage could be applied to incorporate a type of methodology that would take into account the added public use benefit and come up with a fair rate. Also taken into consideration would be the work done by an organisation on the upkeep and maintenance of the areas they used.

· The fees collected from community services activities countered the expenditure and offset the amount of rates needed to go towards that activity.

· Cemetery and Crematorium fees would be included in the report to the 11 September 2023 Council meeting. No general rates were currently applied to this activity.

· A further report with more information and detail on the user fees would be provided to the 11 September 2023 Council meeting.

Discussion points raised

· To make the recommendation clearer and to provide further detail prior to the adoption of the fees and charges, recommendation (c) was amended adding - to be included in the user fees and charges schedule to be adopted at the 11 September 2023 Council meeting

Resolution CO14/23/10

Moved: Commissioner Stephen Selwood

Seconded: Commissioner Bill Wasley

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 to be included in the user fees and charges schedule to be adopted at the 11 September 2023 Council meeting 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.

(viii) 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.

Carried

11.8 Review of Rating Categories to Differentiate Industrial Ratepayers

Staff Paul Davidson, Chief Financial Officer

Jim Taylor, Manager: Rating Policy and Revenue

Kathryn Sharplin, Manager: Finance

Malcolm Gibb, Contractor – Rating Review

Key points

· A new industrial rating category suggested moving to a 2.7:1 category in the first year of the LTP which was comparable to other authorities commercial rates given the amount of small and medium size enterprises.

· From Year 2 onwards the plan was to go away from a fixed differential and move to a percentage split, so that each time there was a general revaluation, the percentages could still be worked on these and was a consistent approach as opposed to the amount of money collected from each sector as it moved quite a lot with the valuation increases.

· The proposal was a continuation of the review the Commissioners commenced in the 2021-31 LTP, to ensure fairness and equity with all funding and to decide whether to split the commercial category into industrial and commercial categories.

· Non-financial impacts on heavy traffic on the whole community was provided in the report which also noted other impacts and a funding needs analysis. It provided three options to consider including the introduction of an industrial category at 2.7:1 and leaving the commercial at 2.1:1, or to introduce an industrial category but not change the differential as getting the information to show the impacts as it could take some time to collect. The third option was to retain the status quo.

· Definition of the possible industrial rating category included the Port, industrial related sites over the city and utilities which use the roading corridor substantially in their daily operation. With utilities it was difficult to get specific information on how much they used and what impact they had on the transportation and roading activity especially when digging up the road to get to their utilities on council land. This had not been fitted into the definition and did not have the same rationale as the overall benefits that the industrial and port related businesses got from all of Council’s activities. Further work could be done on this to get the link if required.

Discussion points raised

· Commissioners noted that it was a good report with the comparisons of light and heavy vehicles and the significance of the difference between the two and agreed that more work should be done on this and on the industrial category definition.

· There was a change to recommendation (b) to include - to propose the introduction of the new rating category.

· Add a further resolution (g) Agree staff continue further work on the appropriate definition of industrial category and the appropriate share of rates to be paid by each category.

Resolution CO14/23/11

Moved: Commissioner Bill Wasley

Seconded: Commissioner Stephen Selwood

That the Council:

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

(b) Approves the Recommendation from the Strategy, Finance and Risk Committee to propose the introduction of 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) Agrees to retain the commercial differential category to 2.1:1 (option 1) over the residential rate as previously resolved.

(f) Agrees 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.

(g) Agrees that staff continue further work on the appropriate definition of industrial category and the appropriate share of rates to be paid by each category

Carried

12 Discussion of late items

Nil

13 Public excluded session

A resolution to exclude the public was not required as the item had been dealt with in resolution (e) of Item 11.1 - 2024-2034 Long-term Plan - Tauranga Community Stadium – update.

14 Closing karakia

Commissioner Shad Rolleston closed the meeting with a karakia.

The meeting closed at 1.01 pm.

The minutes of this meeting were confirmed as a true and correct record at the Ordinary Council meeting held on 11 September 2023.

........................................................

CHAIRPERSON

Ordinary Council meeting Agenda

11 September 2023

11 Business

11.1 Mount Maunganui Parking Strategy

File Number: A14964754

Author: Reece Wilkinson, Parking Strategy Manager

Authoriser: Nic Johansson, General Manager: Infrastructure

Purpose of the Report

1. To request approval to begin the process of engaging with the public regarding the draft Mount Maunganui Parking Strategy.

Recommendations

That the Council:

(a) Receives the report "Mount Maunganui Parking Strategy".

(b) Approve engagement for finalisation and implementation of the Mount Maunganui Parking Management Plan to be undertaken with the affected community.

Executive Summary

2. With the approval and implementation of the Tauranga Parking Strategy (November 2021) and the following Tauranga Central City Parking Management Plan implemented in October 2022, we have seen the re-introduction of paid parking in the City Centre since November 2022. 5 key outcomes were outlined in the Tauranga Parking Strategy

(i) Improving vibrant centres and access to centres

(ii) Enabling multi-modal transport system

(iii) Enabling more attractive compact urban form

(iv) Supporting access for all

(v) Ensuring value for money and best use of resources

3. The central city parking plans have been adjusted as the implementation of paid parking has been underway to respond to changing economic situations for businesses and workers in the central city.

4. In late 2022 a draft Parking Management Plan (PMP) for Mount Maunganui was commissioned. The plan utilised the same methodology and goals as our wider Parking Strategy and the Tauranga Central City Parking Management Plan. This plan has highlighted issues associated with parking availability in the Mount area especially over the summer period. The plan seeks to provide better parking turnover to better cater for business needs, worker parking and to reduce the amount of traffic circling the area to locate a carpark in the peak times.

5. Staff are requesting approval to move forward with engagement for the Mount Maunganui PMP with the community to ensure assist in resolving the issues raised in the parking plan and to ensure a consistent parking strategy is applied Tauranga wide avoiding potential inequities from inconsistent application of our wider strategy.

Background

6. The Tauranga Parking Strategy was implemented in 2021 and while it applies across the city it also outlines the needs for a variety of tailored Parking Management Plans. Council has completed the central City and Mount plans and has commissioned a plan for the Greerton and hospital areas.

7. The parking strategy was developed to guide the provision of carparking across the city and to guide how it was provided and the aspects such as recovery of the costs for the provision of parking. In addition it linked how parking and parking provision influences aspects such as mode choice, housing intensification etc.

8. Some challenges faced in wider Tauranga area outlined in the Parking Strategy are:

(i) Strong growth and increasing demand for parking.

(ii) Availability of parking spaces.

(iii) Cost of providing parking for rate payers.

9. While Mount Maunganui is not the only area facing these challenges it is the busiest example outside of the City Centre due to the busy commercial area and the number of visitors going to the Mount to visit and holiday. It is preferrable to provide a tailored Parking Management Plan to key areas in the City to ensure local challenges and considerations are taken into account.

10. The plan developed by MRCagney is a technical piece of work and outlines what is required to balance the parking needs in the area. This needs to be tested with the community to ensure it aligns with their aspirations and views which is why staff would like to undertake community engagement on the plan. The final plan to be implemented will be influenced by the community views.

11. The Mount Maunganui area outlined below currently contains approximately 2600 parking spaces with 83% being uncontrolled. Occupancy in these areas is constrained during peak seasons and good weather days. It is not uncommon to be faced with vehicles moving around in circles as they wait for a space to be available further exasperating traffic woes in the area.

12. Limited parking controls do exist most notably along Maunganui Rd in the form of P60 time limits. Unfortunately, the P60 time limits are not fit for purpose during high demand days and seasons. Infrequent enforcement means it’s not uncommon for people to park well beyond the 60 minutes allotted along the main street. The 60-minute time frame also does not allow visitors long enough to be able to use the area as intended, a meal and some shopping will push most people beyond that time frame.

The map below outlines the time restriction currently in the Mount Maunganui Town Centre.

An initial survey conducted on the 19^th of August took place covering the Mount Area from Sutherland Ave up and showed the average length of stay was 2 hours, with approximately 859 vehicles parking out of 1907 parking longer than an hour (the area covered is shown below).

13. Parking frequently reaches capacity in the central residential area (north of Banks Ave) with people often being unable to find parking to visit destinations in the area, contributing to increasing traffic by circling the area waiting to find a carpark. The area is also known to handle many staff for the businesses located in the area who don’t want to risk overstaying the time limits on Maunganui Rd.

14. The situation in the outlined area results in an area that is difficult to access for all parties, customers visitors and tourists. Pedestrians find safety an issue as drivers lose patience waiting for spaces and are distracted while driving through tightly packed residential streets. Those with extra mobility requirements also often find vehicles parked across pavements and kerbs limiting their access to the area.

Strategic / Statutory Context

15. While the City Centre has had paid parking implemented for decades in various forms, paid parking outside of the central city is new to Tauranga. However, Mount Maunganui is now seeing more pressure for parking than the city centre was during the implementation of the City Centre parking management plan.

Peak occupancy is higher than was seen over most of the city centre.

16. Parking is a cost to Council who need to build the additional road space and then maintain the signage, road marking, street cleaning and renewal of the road surface. This cost is paid for via rates and ratepayers as part of the annual costs to provide a roading network.

For your information I have included the below costs for from both the City Centre Parking Management Plan and Mount Maunganui. Currently the rate payer is covering a higher annual resource cost for Mount Maunganui than it was when City Centre parking was free.

17. In the central city, the parking charges ensure that the costs of providing the infrastructure is partly covered by the direct users of the space. It is appropriate that a similar structure is implemented in other areas of the city to ensure the costs for the provision of carparking is appropriately split between ratepayers and users.

18. Parking for different types of users is a major consideration with parking in Mount Maunganui. In the Mount Maunganui Town Centre parking is split between workers, customers, and visitors.

In the City Centre workers are covered by our off-street parking sites while Visitors and Customers use the on-street parking facilities. In Mount Maunganui we are limited for off street parking facilities as free parking in the area has limited the ability for companies to establish off street parking sites.

The Mount Maunganui area is split between 4 precincts marked on the map below.

Over the medium term the beach front could be utilised during the off season, and the Suburban Residential area would remain uncontrolled allowing people to stay all day. Moving traffic away from high occupancy Town Centre and High-Density Residential Sites.

Over time we expect Town Centre businesses to utilise any carparks available along the back of the lanes for either paid parking or staff parking as required.

We could also institute workers passes during the tourist season that allow them to park in various zones (like the high density residential) at a reduced rate. Though we will have to monitor usage of these in the future.

19. Expected outcomes for the plan could vary based on engagement with the public. However, if we implemented a plan broadly similar to the city centre parking management plan we could expect the below outcomes.

(i) Higher turnover of town centre spaces with an average stay of less than 2 hours for on street.

Current break down of city centre parking times.

(ii) Lower occupancy allowing people to park outside their destination.

(iii) Less burden on ratepayer for parking in the Mount Maunganui Area.

(iv) Development of private off-street carparks over the long term.

20. Engagement will be a requirement when approaching the community regarding the proposed changes. The public will have valuable input into the issues at hand that will need to be considered.

Options Analysis

21. Options for creation and implementation of the Mount Parking Management Plan are relatively limited. Our recommendation is to begin engagement as the area has never had paid parking before. Other options include

(i) Informing the public without consultation or engagement (least preferred option as doesn’t allow for adjustment to the plan based on public feedback)

(ii) Consultation with the public

(iii) Engagement with the public (recommended)

22. Engagement with the public will allow Council to adjust paid parking zones and parking type throughout the engagement phase. While the initial plan is for the beach front areas to be seasonal and the town centre to be year-round for parking charges this could be adjusted accordingly. A plan will have to be established for all day parking to provide options for workers requiring all day parking.

Financial Considerations

23. Parking is not free. On-street parking is expensive to maintain and limits the ability for transport corridors to focus on moving people efficiently. When you consider car parks outside areas of high demand, the cost increases, as it limits the ability for customers to access stores add the increasing cost of land in higher density areas this problem is exasperated.

24. Currently Tauranga rate payers subsidise free parking through their rates. The increasing maintenance costs of the transport network is applicable nationwide and does apply to the road networks, parking spaces. We also need to keep in mind that the Mount faces parking pressures from visitors who may not be paying into maintaining our network.

25. Aggregate resource cost of parking as outlined in the first draft parking management plan is below.

26. Depending on how paid parking is introduced at the Mount we could see some major benefits to the local community.

· Paid parking – based on hourly parking charges in town centre – estimated revenue of $1.6 million - and beachfront parking bays – estimated revenue of $0.2 million - and total annual operating costs of $0.3 million. Forecast surplus of $1.5 million.

· Time limited parking – The level of revenue is unlikely to cover the costs of enforcement.

27. With the surpluses gained from implementing paid parking we limit the burden on the rate payer for subsidising parking in the area. We also have the opportunity to use the funds to cover further improvements such as boardwalk and dune maintenance, beach grooming, beach ambassadors rather than these services be entirely rate funded.

Legal Implications / Risks

28. A potential risk when engaging in public consultation is that we may not get support from all members of public included. A communications plan will be necessary to ensure public involvement from all perspectives.

Consultation / Engagement

29. Engagement for the Parking Management Plan is planned to take place in November with the wider LTP engagement ensuring time to include provisions with all stakeholders in the Mount Maunganui Area.

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 proposal.

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

ENGAGEMENT

33. Taking into consideration the above assessment, that the decision is of medium significance, officers are of the opinion that the following engagement is required.

Next Steps

34. TCC finalises the Mount Maunganui Parking Management Plan and begins public engagement on implementing our parking strategy in the area. We hope to begin the process by the end of the calendar year to get ready for implementation for the 2024 Tourist season.

Attachments

Nil

Ordinary Council meeting Agenda

11 September 2023

11.3 2024-2034 Long-Term Plan - Adoption for Audit of the Draft Infrastructure Strategy

File Number: A14990174

Author: Fiona Nalder, Principal Strategic Advisor

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

Purpose of the Report

1. To gain approval to provide the Draft Infrastructure Strategy, a supporting document for the 2024-2034 Long-Term Plan, to Audit New Zealand.

Recommendations

That the Council:

(a) Receives the report "2024-2034 Long-Term Plan - Adoption for Audit of the Draft Infrastructure Strategy".

(b) Adopts the draft Infrastructure Strategy, as set out in Attachment 1, as a supporting document for the draft 2024-2034 Long-Term Plan, for submission to Audit New Zealand.

(c) Delegates authority to the Chief Executive to make editorial amendments to the draft Infrastructure Strategy, if required, prior to it being submitted to Audit New Zealand.

(d) Notes a revised version of the Infrastructure Strategy, following any amendments required by Audit New Zealand and for graphic design purposes, will be provided to Council for its approval in early November 2023.

Executive Summary

2. This paper recommends adoption of the draft Infrastructure Strategy (Attachment 1), a supporting document for the 2024-34 Long-term Plan (LTP), to enable auditing of the Strategy. This is a key step in progressing towards the eventual adoption of the 2024-34 Long-term Plan.

3. The Infrastructure Strategy has been prepared based on guidance received from Commissioners at two LTP workshops in June and July 2023 and Council decisions throughout 2023 (to date). It must be available to Audit New Zealand as part of their statutory audit.

4. The results of this audit will be provided to Council in early November 2023, at which time Council will be requested to approve the revised Infrastructure Strategy for consultation, as part of the LTP consultation process. Council will receive public submissions between 15 November 2023 to 15 December 2023, and hold hearing and deliberations in February and March 2024, before adopting the final Infrastructure Strategy, as part of the LTP.

Background

5. The purpose of a Long-term Plan (LTP) is to:

· describe the activities of the local authority; and

· describe the community outcomes of the local authority’s district; and

· provide integrated decision-making and co-ordination of the resources of the local authority; and

· provide a long-term focus for the decisions and activities of the local authority; and

· provide a basis for accountability of the local authority to the community^{^[2]}.

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

7. This paper seeks Council adoption of the Infrastructure Strategy for the LTP, to enable audit.

Infrastructure Strategy

8. Section 101B of the Local Government Act 2002 requires Council to prepare and adopt an Infrastructure Strategy (Attachment 1), covering a period of at least 30 years. The Strategy identifies significant infrastructure issues, and options for managing these, including estimating costs.

9. At a strategic level, the Infrastructure Strategy is guided by Council’s Our Direction, which weaves together Council’s five community outcomes (what we are trying to achieve for our communities) and three approaches (how we will do everything). Council’s Our Direction outlines how Council will work towards delivering on the City Vision, Tauranga, together we can.

10. At an activity level, Council has a number of plans and strategies that provide the foundation for the Infrastructure Strategy. These include action and investment plans, asset management plans, Our Public Places Strategic Plan, the 30-year Water Supply, Wastewater and Stormwater Strategies, the Urban Form and Transport Initiative’s Connected Centres Programme, the Community Facilities Investment Plan, the Otumoetai and Te Papa Spatial Plans, and the Western Bay of Plenty Transport System Plan.

11. The investment budgets set out in the Infrastructure Strategy are summarised in the table below.

	Growth	Level of Service	Renewal	TOTAL
Water supply	$31,676,326 ($708,714,285)	$35,424,740 ($352,067,931)	$33,114,560 ($663,481,612)	$100,215,626 ($1,724,263,827)
Wastewater	$73,716,628 ($735,865,606)	$4,812,616 ($520,127,342)	$37,119,649 ($1,076,299,567)	$115,648,894 ($2,332,292,515)
Stormwater	$14,855,074 ($124,221,125)	$17,437,926 ($2,615,702,004)	$2,979,246 ($73,195,709)	$35,272,245 ($2,813,118,837)
Transport	$2,563,976,852	$1,352,465,734	$930,725,045	$4,847,167,632
Social and Civic Amenity	$372,172,687	$1,099,273,507	$405,621,619	$1,877,067,812
TOTAL	$3,056,397,567 ($4,504,950,555)	$2,509,414,523 ($5,939,636,517)	$1,409,650,118 ($3,149,323,511)	$6,975,372,209 ($13,593,910,623)

Note: figures in italics and brackets include the full 30 year estimates for water supply, wastewater and stormwater, otherwise only years 1 and 2 are included.

12. This investment is essential to ensure that our communities can enjoy what the city has to offer and rely on the services that Council provides.

13. Councils are not required to include the water supply, wastewater and stormwater activities in their Infrastructure Strategies for this LTP, as the Strategy covers 30 years and councils only have responsibility for water services for years 1 and 2. However, it was decided to still include these activities in Tauranga’s Infrastructure Strategy, to increase transparency regarding the service delivery of these essential activities for our communities, and to highlight the risks and challenges facing these activities over the coming 30 years. The Strategy clarifies throughout whether waters figures refer to years 1 and 2 only, or whether they refer to the full 30 year projections.

14. The Infrastructure Strategy addresses key issues for Tauranga.

Delivering for our existing communities

15. Underinvestment over a number of decades means that Tauranga is lacking in some of the infrastructure it needs to support its existing communities, and to build a sense of vibrancy and connectedness. This Infrastructure Strategy, alongside the LTP, has a focus on delivering much needed amenity and essential infrastructure for Tauranga’s people, including the revitalisation of the city centre via Te Manawataki o Te Papa and other intiativies.

Growth and infrastructure planning

16. A rapidly growing population means that Council needs to facilitate urban development with the right infrastructure at the right time. This includes infrastructure for new houses, intensification in existing urban areas, improved transport choices, and social infrastructure that supports our community to connect, learn, play and stay healthy. Financial constraints mean that Council needs to prioritise growth areas and schedule investment over time. The Infrastructure Strategy sets out Council’s approach to this.

Sustainability and resilience

17. The Bay of Plenty’s climate is changing, and these changes will continue for the foreseeable future. Additionally, Tauranga is vulnerable to a range of natural hazards that have the potential to affect our infrastructure. Understanding how we mitigate risk from natural hazards and respond to climate change is a key focus for Council, to ensure the sustainability of the City and to assist in protecting and enhancing its environment for future generations.

Water reform

18. Central government is working on water reforms, which will change how water services (drinking water, wastewater and stormwater) are delivered across New Zealand. These reforms propose removing the responsibility for water services from councils and transferring them to 10 publicly owned, specialised water service entities based around existing regions. The Bay of Plenty water entity will include the water services currently provided by the following councils: Rotorua Lakes, Kawerau District, Opotiki District, Tauranga City, Western Bay of Plenty District, and Whakatane District.

19. To reflect these proposed changes, detailed financial information for water services (drinking water, wastewater and stormwater) is only included for years 1 and 2 of the Infrastructure Strategy, with the assumption that Council will no longer be responsible for water infrastructure from 1 July 2026. However, the general strategic direction identified for water services over the next 30-years, including significant projects which Council has identified as required in the future, are still discussed in the Strategy.

20. A new activity, flood control, commences in year 3 of this Infrastructure Strategy. The flood control activity refers to all the work and investment by Council into managing water flows across land, before it enters the reticulated waters systems, e.g. overland flowpaths.

21. If New Zealand sees a change of government in the 2023 elections, it is possible that an alternative approach is taken towards ensuring sustainable delivery of water services by councils (i.e. not the water entity model). Council has developed 30-year strategies for water supply (drinking water), wastewater and stormwater, as well as 10-year asset management plans. These strategies and asset management plans will be relevant for whichever organisation manages waters services going forward and have informed content in this Infrastructure Strategy.

Strategic / Statutory Context

22. Section 93(G) LGA 2002, requires that before adopting a consultation document under s93(A) that a local authority must prepare and adopt the information that:

(a) is relied on by the content of the consultation document adopted under section 93A; and

(b) is necessary to enable the Auditor-General to give the reports required by sections 93C(4) and 93D(4); and

23. The Infrastructure Strategy forms part of the supporting documentation that underlies the consultation document and is part of the overall LTP package.

24. Additionally, the Infrastructure Strategy supports Council in delivering on the City Vision and Community Outcomes, primarily the Community Outcome ‘Tauranga Tātai Whenua: a well-planned City’.

Options Analysis

25. There are two options for consideration:

Option 1: Council adopts the draft Infrastructure Strategy for submission to Audit New Zealand for formal audit. (RECOMMENDED)

26. Council approves the draft Infrastructure Strategy (Attachment 1).

Advantages	Disadvantages
· Keeps within the current timeframes agreed to for the development of the LTP	· Does not allow for any significant amendments to the draft Infrastructure Strategy.

Option 2: Council does not adopt the draft Infrastructure Strategy for submission to Audit New Zealand for formal audit. (NOT RECOMMENDED)

27. Council does not approve the draft Infrastructure Strategy (Attachment 1).

Advantages	Disadvantages
· Potential for the Infrastructure Strategy to be amended and reconsidered.	· Delay in adopting the Infrastructure Strategy (depending on the duration) may delay preparation of the LTP.

Financial Considerations

28. There are no specific costs associated with adopting the Infrastructure Strategy for audit (costs form part of the overall LTP development project), however not adopting the Infrastructure Strategy for audit will lead to time delays and potentially additional costs.

Legal Implications / Risks

29. Legislative issues are considered in the Background, Infrastructure Strategy and Strategic/Statutory Context sections of this report.

Consultation / Engagement

30. The LTP Consultation Document and supporting documentation is scheduled to be adopted in early November 2023. After adoption it will be consulted on with the community using the special consultative procedure outlined in section 93A of the Local Government Act 2002.

Significance

31. 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.

32. 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.

33. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the LTP and its contents are of is of high significance. However, the decision proposed by this report is of low significance.

ENGAGEMENT

34. No engagement is required at this time (as the decision to adopt the Infrastructure Strategy for audit purposes is of low significance). Once the Infrastructure Strategy is adopted as supporting material alongside the LTP consultation document in early November 2023, it will be consulted on with the community in accordance with section 93A of the Local Government Act 2002.

Next Steps

35. If Council approves the recommendations of this report, the Infrastructure Strategy will be provided to Audit New Zealand for their audit.

36. Once that audit is completed, the Infrastructure Strategy will be revised as necessary and presented to Council for adoption in early November 2023, along with the draft consultation documentation and other supporting information for the LTP. If adopted at this point, the Infrastructure Strategy will be consulted on via the Special Consultative Procedure required by the LGA. Council decision making may require further changes through this process.

Attachments

1. DRAFT Infrastructure Strategy - 11 September 2023 - A15025210 ⇩

Ordinary Council meeting Agenda

11 September 2023

11.4 Draft User Fees and Charges Schedule for the draft 2024-34 Long-term Plan

File Number: A14928693

Author: Sarah Holmes, Corporate Planner

Malcolm Gibb, Contractor - Rating Review

Kathryn Sharplin, Manager: Finance

Jim Taylor, Manager: Rating Policy and Revenue

Authoriser: Paul Davidson, Chief Financial Officer

Purpose of the Report

1. The purpose of this report is to present the proposed draft User Fees and Charges Schedule for council to adopt as a draft for audit purposes.

Recommendations

That the Council:

(a) Receives the report ‘Draft User Fees and Charges Schedule for the draft 2024-34 Long-term Plan’.

(b) Adopts the draft user fees and charges in Attachment 2, for audit purposes, incorporating any amendments as approved by Council at this meeting.

(c) Delegates the Chief Financial Officer to approve the final wording of amendments (as per Council direction) prior to public consultation.

Background

2. User fees and charges are updated by staff on an annual basis. Changes may be necessitated by one or more of the following influences: changing costs of providing the product or service, inflationary adjustments, new or deleted fees, statutory requirements, or alignment with market prices.

3. Significant or material changes are usually consulted on annually alongside the Long-term Plan (LTP) or annual plan (as applicable in any given year). The financial implications of proposed fee and charge changes have been included in the draft 2024-2034 draft Long-term Plan revenue figures.

4. Council received a report on 21^st August titled Paying a Fair Share which presented proposals and options designed to provide, over time, a fairer and more transparent approach to the funding arrangements for some of council’s activities.

5. Council considered proposals for some new user fees and charges to recognise specific beneficiaries of services or amenities to help reduce the extent to which general ratepayers are required to fund these services or amenities.

6. Attachment 1 to this report sets out the key changes made to the fees and charges and provides an explanation for the significant changes and for the new proposed fees and charges.

7. Attachment 2 to this report sets out the current fees compared to the proposed fees and charges for year one of the draft 2024-2034 draft Long-term Plan.

8. Any subsequent decisions from the council report titled Mount Maunganui Parking Strategy presented at this meeting to consider the engagement for the finalisation and implementation of the Mount Maunganui Parking Management Plan will need to be considered at a later date.

Discussion

9. Council’s user fees and charges enable the actual and reasonable costs of council’s services to be suitably funded to by those who directly benefit from the service or amenity.

10. The draft revenue and financing policy guides the determination of funding sources for council activities. That policy includes five key principles:

Accessibility – that Council facilities and services should be accessible to as many people as possible.

Affordability – both that Council facilities and services should, wherever possible, be affordable to users and that rates should, to the extent possible, be affordable to ratepayers.

Benefit – that those who benefit from a Council facility or service should contribute to the costs of that facility or service, during the period in which the benefits are expected to occur.

Exacerbators – that those who contribute to the need for a Council facility or service should contribute to the costs of that facility or service.

Practicalities – the funding of operating and capital expenditure should take account of the practicalities and efficiencies of the available funding methods.

11. The council report - Paying a Fair Share – also recommended eight revenue strategy principles. These being that for council’s fees and charges

(a) User pays is appropriate

(b) Fairness and equity to users is essential

(d) Reflects capital investment

(e) Simple to administer and understand

(f) Captures non ratepayer users of council’s services and amenities

(g) Enables demand management

(h) Reflects the “value” of assets and environment

12. Council’s general approach to Paying a Fair Share is to reduce the burden on the ratepayer by utilising a ‘user pays’ approach. Therefore, where a service user can be identified, and efficiently charged, they should pay for that service through a user fee or charge. This approach would then enable a greater percentage of the costs of an activity to be recovered from service users.

13. Fees and charges forecast revenue is included in the ‘Draft Financial Information for the 2024-34 Long term Plan’ report.

14. The statement of proposal included as Attachment 1 contains the key changes to fees and charges, why these changes are being proposed, and how people can provide feedback. The full proposed user fee and charges schedule for the first year of the draft 2024-34 Long-term Plan (2024/25) is provided in Attachment 2. The fees schedule includes the proposed fees, with a comparison to the 2023/24 charges. Both of these documents will be updated as required following the audit process and published from 15 November 2023.

15. The new proposed fee for senior training on sports fields has been included in in Attachment 2, with the narrative explaining this change included in Attachment 1. This reflects council’s intent to phase charges for training and matches for seniors across a four year period, working towards a cost recovery of 50% in year four.

16. Council fees and charges are benchmarked to other councils and other relevant entities to gauge appropriate levels of fee and charge.

17. Inflation is a key assumption in proposing appropriate fee and charges. Many of the fees have increased around 6%, being a forecast for the 2023/24 financial year of 4% and a catch up from the prior year of 2%.

18. Actual inflation to December 2022 was 7.2%, not all of which was anticipated in the setting of the 2022/23 User Fees & Charges. The forecast for 2023/24 inflation is an average of the most recent forecasts from NZ’s major trading banks, Reserve Bank of NZ and NZ Institute of Economic Research.

19. Also, in some cases, the impact of COVID-19 on Council’s revenues has caused deficits in the previous and current year due to reduced volumes of business activity. Several activities are expecting a significant improvement in operating revenues as volumes return.

Strategic / Statutory Context

20. The setting of fees and charges at the correct level enables the funding of council’s activities. These activities help deliver our community outcomes and facilitate improved quality of life, quality of economy and sound city foundations.

21. The recommendation meets the requirements of the Local Government Act 2002.

22. Council is authorised to set fees and charges under specific legislation, including:

· Local Government Act 2002

· Resource Management Act 1991

· Dog Control Act 1996

· Building Act 2004

· Reserves Act 1977

· Waste Minimisation Act 2008

· Local Government Official Information and Meetings Act 1987

· Food Act 2014

· Food Hygiene Regulations 2015

· Impounding Act 1955

· Health Act 1956

· Sale of Alcohol Act 2012

Options Analysis

Option 1: Council approves the draft user fees and charges schedule and statement of proposal.

23. The Council approves the draft fees and charges as proposed in Attachment 2.

Advantages		Disadvantages
· Activity Managers have reviewed their fees and charges and have made recommendations based on actual and reasonable costs · Proposed fees and charges align with the current draft Long-term Plan budgets · Engagement and communications planning can be finalised · The Chief Financial Officer can be delegated to approve the final wording of any amendments (as per Council direction) prior to public consultation. · Audit timeframes can be met for the draft Long-term Plan		· Potential opportunities for other fees and charges may not have been considered.

Key risks	Further opportunities for fees and charges may have to delayed until the 2025/26 annual plan process but there is opportunity to make amendments to the proposed fees and charges through the Long-term consultation and decision-making process.
Recommended?	Yes

Option 2: Council does not approve the draft fees and charges schedule and statement of proposal and requests further changes to the draft user fees and charges schedule.

24. The Council does not approve the draft fees and charges and either rejects suggested changes or requests further analysis be undertaken.

Advantages		Disadvantages
· Potential opportunities for fees and charges may be raised and considered.		· Delays in finalising the draft Long-term Plan budgets. · Audit timeframes may not be met

Key risks	Potential delays in finalising the financial forecasts, completing the audit process and documentation for the 2024-34 Long-term plan.
Recommended?	No. This option may allow flexibility to consider variations to the fees noting that significant changes and the introduction of new fees may delay adoption of a draft fee schedule and the draft 2024-2034 Long-term Plan.

Financial Considerations

25. The financial implications of the proposed fees and charges are included in the draft 2024-2034 Long-term Plan.

Significance

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

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

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

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

28. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the decision to introduce a number of new fees is of high public interest and therefore high significance.

ENGAGEMENT

29. Taking into consideration the above assessment, that the decision is of high public interest, and the legal requirements for some of the user fees and charges, officers are of the opinion that one-month consultation is required under the section 83 of the Local Government Act.

30. Targeted engagement will occur prior to the legislated consultation period with affected user groups and leases to update them on what is being proposed, explain the LTP process, and how they can provide feedback.

31. In November 2023 the draft user fees and charges will be consulted on with the community alongside the 2024-34 Long-term Plan consultation document, in accordance with sections 83 and 150 of the Local Government Act.

Next Steps

32. The timeframes for the 2024/25 Fees and Charges Schedule align with the 2024-2034 Long-term Plan timeframes. The key steps are:

(a) 6 November: Draft 2024/25 Fees and Charges Schedule and Statement of Proposal presented for adoption following the audit process.

(b) 15 November to 15 December: Community feedback sought on the draft user fees and charges, alongside the Long-term Plan consultation document.

(c) December 2023 – January 2024: Staff analyse community feedback and compile options and recommendations to council.

(d) Early February 2024: Hearings to be held.

(e) Early March 2024: Deliberations and decisions on the final Fees and Charges Schedule.

(f) 22 April 2024: Fees and Charges Schedule adopted as part of the 2024-2034 Long-term Plan.

33. Once adopted and finalised, the fees and charges will come into effect on 1 July 2024.

Attachments

1. Statement of Proposal - Draft 2024-25 User Fees and Charges - A14984080 ⇩

2. 2024-25 Draft Fees and Charges Schedule - A14983268 (Separate Attachments 1)

Ordinary Council meeting Agenda

11 September 2023

11.6 Papamoa East / Wairakei / Te Tumu Investments: Strategic Considerations and Funding Approaches

File Number: A14856800

Author: Andy Mead, Manager: City Planning & Growth

Frazer Smith, Manager: Strategic Finance & Growth

Ana Blackwood, Senior Advisor: Growth Funding

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

Please note that this report contains confidential attachments.

Public Excluded Attachment	Reason why Public Excluded
Item 11.6 - Papamoa East / Wairakei / Te Tumu Investments: Strategic Considerations and Funding Approaches - Attachment 1 - Excerpt of Council Resolutions relating to PEI from Decemeber 2022	s7(2)(b)(ii) - The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.
Item 11.6 - Papamoa East / Wairakei / Te Tumu Investments: Strategic Considerations and Funding Approaches - Attachment 2 - Excerpt of key terms relating to the Papamoa East Interchange from Wairakei Development Agreement	s7(2)(b)(ii) - The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.
Item 11.6 - Papamoa East / Wairakei / Te Tumu Investments: Strategic Considerations and Funding Approaches - Attachment 3 - Confidential Legal Advice	s7(2)(g) - The withholding of the information is necessary to maintain legal professional privilege.
Item 11.6 - Papamoa East / Wairakei / Te Tumu Investments: Strategic Considerations and Funding Approaches - Attachment 5 - Detailed list of Te Tumu Funded Capex Projects	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 set out the broader strategic considerations to inform the Papamoa East Interchange and Opal Drive Pump Station reports on the same Council agenda.

2. To determine the funding approach to address the funding risks associated with the Te Tumu urban growth area for inclusion in the draft 2024-34 Long Term Plan.

Recommendations

That the Council:

a) Receives the report "Papamoa East / Wairakei / Te Tumu Investments: Strategic Considerations and Funding Approaches".

b) Notes for consideration the range of strategic issues relevant to progressing construction of infrastructure in the Eastern Corridor and specifically the Papamoa East Interchange and Opal Drive Wastewater Pump Station.

c) Agrees that Te Tumu transport funding risks will be proposed to be managed by a targeted rate based on:

i) 50% of the Te Tumu portion of the transport projects which have the majority of their expenditure in the first 3 years of the Long-Term Plan (including the Papamoa East Interchange).

ii) A flat charge (i.e. not based on CV) per ratepayer across the city with a higher charge (double) in the wider benefit area in Papamoa East and (triple) for those in the full benefit area in Papamoa East.

iii) A 20-year repayment period starting in Year 1 of the 2024-34 Long Term Plan period.

d) Consults with the community on the proposed Te Tumu transport related targeted rate through the draft 2024-2034 Long Term Plan.

e) Agrees not to propose a targeted rate for waters projects due to the proposed three waters reform and exclusion of waters activities after Year 2 of the 2024-34 Long Term Plan.

f) Retains attachments 1 and 2 in public excluded under section 7(2)(ii) of the Local Government Official Information and Meetings Act.

g) Retains attachment 3 in public excluded under section 7(2)(g) of the Local Government Official Information and Meetings Act

h) Retains attachment 5 in public excluded under s7(2)(i) of the Local Government Official Information and Meetings Act until the contractual negotiations associated with the Papamoa East Interchange construction contract are complete.

Executive Summary

3. The Long-Term Plan 2024-2034 includes significant investments in the Eastern Corridor which provide varying benefits to the urban growth areas of Papamoa, Wairakei and Te Tumu.

4. The Papamoa East Interchange is proposed to be constructed to support the existing community in Papamoa East including 5,700 homes east of Parton Road, as well as to enable development of the Wairakei town centre (including associated medium density housing). Significantly greater benefits could be attributed to the existing community and remaining growth in Papamoa and Wairakei compared to Te Tumu as they will utilise this asset long before development in Te Tumu occurs. The same is true for the Opal Drive Wastewater Pump Station.

5. The Interchange and the pump station would also support the future Te Tumu urban growth area. A significant amount of cost of both projects are allocated to Te Tumu development contribution funding as well as other transport and three waters projects.

6. These costs will initially be debt funded by TCC or in the case of three waters projects the assumption is that they will be the responsibility of the proposed new three waters entity for the Bay of Plenty from Year 3 of the 2024-34 period onward.

7. The timing of Te Tumu development is anticipated to be significantly delayed and likely to start in approximately 2040 based on the upcoming draft 2024-34 LTP. To manage rates and debt sustainably, construction costs for the Kaituna Stormwater Project will not be in the 2024-34 period. The Overflow is required before development can commence in Te Tumu.

8. Te Tumu also faces a range of other challenges to successfully rezone it for urban development. These relate to securing infrastructure corridors through Māori land, the wider views of Tangata Whenua on the scale and appropriateness of urban development, and the impacts of government freshwater and indigenous biodiversity policy on urban development and associated infrastructure delivery.

9. Given these risks there is substantial uncertainty around the Te Tumu funding share for the interchange and Opal Dr projects as well as other projects with a Te Tumu funding share. The report sets out these risks in further detail to enable them to be considered as part of decision-making regarding the interchange and Opal Drive reports on this Agenda.

10. Decisions are also required on how to address funding risks associated with the Te Tumu share of transport and waters projects as part of the draft 2024-34 Long Term Plan, including the potential for general and targeted rate funding. These options are assessed in the report, and it is recommended that 50% of the Te Tumu funding risk related to the transport projects is transferred to a mix of general rates and a Papamoa East targeted rate to keep Council debt at a sustainable level.

11. Due to three waters activities being out of the 2024-34 Long Term Plan from Year 3 onward there is limited ability to address waters funding risks at this point in time.

Background

12. This report should be considered alongside the reports on the same Council meeting agenda that addresses the Papamoa East Interchange and Opal Drive Wastewater Pump Station.

13. The report addresses issues which arise from:

· Level of uncertainty associated with Te Tumu proceeding and the timing of that development proceeding

· Timing of investment in infrastructure which benefits both existing zoned land and the future Te Tumu land.

14. The Pāpāmoa East Interchange (PEI) and the Opal Drive Wastewater Pump Station are key to unlocking investment to deliver much needed housing in Wairakei (and Te Tumu in the future). They will also bring many social, economic and environmental benefits for current and future Pāpāmoa East residents and businesses through the creation of a ‘Connected Centre’ in Papamoa East.

15. Connected Centres is the philosophy embedded throughout the Urban Form and Transport Initiative (UFTI) and the Transport System Plan (TSP). Its focus is on improved urban form and better transport choice to support people to travel less and travel differently - enabling people to live, work, learn, play and move locally. The Connected Centres concept applied in the Sands Town Centre and Te Tumu, supported by the PEI and the pump station, will enable higher density housing, trip containment and multi-modal transport opportunities which deliver carbon emission benefits.

16. Key housing development and associated outcomes are to:

· Accelerate the build of 750 medium and high-density homes currently zoned for development in and immediately around the Wairakei (Sands) town centre;

· Provide for a total of 3,030 currently zoned new homes in Wairakei; 6,000 future homes in Te Tumu; and 2,000 potential homes in Bell Road.

· Provide for a range of housing typologies.

· Unlock the creation of a new town centre, The Sands, with between 5,300 and 7,600 new FTE’s. This will deliver well located amenity in the east, therefore reducing the need to travel to the west.

· Support the Rangiuru Business Park Provincial Growth Fund project providing housing for 4,000 employees.

· Deliver positive carbon emissions outcomes through alleviating pressure on the transport network and by improving urban form that supports trip containment (residents can live, work, learn, play and move easily within their neighbourhood) and by encouraging mode shift towards more sustainable travel options.

· Support an accessible town centre; in Wairakei with approximately 3,000 dwellings accommodating 7,250 people within walkable catchment of town centre (800-1000m) and increasing to 10,000 plus people within the walkable catchment when Te Tumu is fully developed.

17. The PEI is not just about supporting growth, it will benefit the existing community in Papamoa East and transport modelling demonstrates that it will be well used by the existing community, especially those living to the east of Parton Road. There are currently 5,700 homes located east of Parton Road. Significantly greater benefits could be attributed to the existing community and remaining growth in Papamoa and Wairakei compared to Te Tumu as they will utilise this asset long before development in Te Tumu occurs. The same is true for the Opal Drive Wastewater Pump Station.

18. The PEI project is separated into three ‘phases.

· Phase 1 was earthworks and culverts – this stage is largely completed.

· Phase 2 is the extension of Te Okuroa Drive and the intersection with the future Sands Avenue – scheduled for completion by the end of this calendar year.

· Phase 3 is the budget for the rest of Sands Avenue and the core interchange structure.

19. At a Council meeting 12 December 2022, a report titled “Approval to enter into Wairakei Development Agreement” was considered in the public excluded session. Subsequently the Wairakei Developer Agreement was executed on 23 June 2023.

20. The resolutions from the 12 December meeting and terms of the Wairakei Development Agreement are relevant to decision-making around PEI construction. Given the commercially sensitive nature of these matters a copy of the relevant excerpts of each are included as Confidential Attachments 1 and 2.

TK14 TRUST

21. TCC and representatives of the TK14 Trust are in negotiations to agree suitable mechanisms to provide infrastructure through the TK14 Block which would support the urban development of the entire Te Tumu urban growth area. A majority of TK14 beneficiaries who voted, supported these negotiations proceeding.

22. The negotiations are proceeding well but will take some time to conclude given complex legal and land valuation issues (including the need to obtain Land Information New Zealand and Māori Land Court approval of the legal instruments that will be employed to secure TCC’s rights). Once suitable outcomes are agreed they will be presented back to the TK14 beneficiaries for a further vote. Until this process is complete and approved by Council, we will not have certainty of access and infrastructure arrangements to support the development of Te Tumu.

23. Development of Te Tumu cannot commence until infrastructure is delivered through the TK14 Block. While TCC is taking the lead on securing infrastructure corridors, the cost and responsibility for construction of infrastructure sits with the Te Tumu developers. This may require one of the developers to the east of the TK14 land to forward funding infrastructure through TK14 to enable housing and urban development to commence and development contributions to start flowing to Council. These matters have yet to be agreed between the landowners. Also is it possible that some Crown funding / financing may be available to the TK14 Māori Land Trust to assist with infrastructure investment.

24. TCC is currently progressing a business case with the aim of securing Waka Kotahi funding to assist with the cost of delivering the future Te Tumu transport network. Certainty of any potential funding will not be known for some time and cannot be relied upon at this time given future Waka Kotahi approval processes, funding constraints and the funding needs of other priority transport projects.

TE TUMU PLAN CHANGE

25. The structure planning and rezoning of Te Tumu has been underway since 2017, originally with the aim of housing development commencing in 2021. The project has faced a number of challenges and delays most notably in respect of:

· Differing aspirations of Māori landowners and their Trustees including the ability to deliver infrastructure through Māori land.

· The views of iwi and hapu on the appropriateness of urban development within Te Tumu.

26. Changes to national direction pursuant to the RMA in respect of freshwater management, especially wetlands, and the inability to progress the structure planning of the area with confidence while these national level policy changes were occurring.

27. While some progress has been made, the project continues to face on-going challenges in respect of these matters, especially as we now look to give effect to these operative national direction documents which impact existing technical work and key elements of the project.

28. Iwi and hapu engagement recently recommenced following an extensive pause, at their request while the TK14 Trust moved through internal processes with their landowners. Many Tangata Whenua continue to hold a strong view urban development within Te Tumu is not appropriate. This view is held despite the TK14 Trust gaining a majority mandate from its beneficial owners to negotiate the delivery of infrastructure corridors with TCC.

29. Despite recent amendments to the government’s freshwater policy adopting many of TCC’s recommended changes, not all suggested changes were adopted. Staff have been considering these outcomes further, particularly in regard to the delivery of the Kaituna Stormwater Overflow. The Overflow is a requirement of the existing comprehensive stormwater consent that Council holds and is essential to managing stormwater runoff from future urban development in Te Tumu and protecting existing development within the wider catchment of the Wairakei Stream in Papamoa and Wairakei. Refer to confidential attachment 3 for further information.

30. There are also judicial review proceedings against the Minister for the Environment seeking a move back to more stringent protection of freshwater environments as set out in the NPS-FM. If successful, this would likely have impacts on the Te Tumu urban growth area planning.

31. More recently the government enacted the National Policy Statement for Indigenous Biodiversity. In addition to the requirements now set out under the new freshwater policy directions, staff have also been considering how the new indigenous biodiversity national policy framework will impact on the delivery of key projects associated with progressing urban development within Te Tumu. Although many areas across Te Tumu are presently identified as having significant ecological value and are managed through existing rules in the City Plan, these areas, including any new areas that are identified using new assessment criteria set out in the policy statement, will now be required to be managed in accordance with this national policy. This requirement however includes ensuring that effects resulting from subdivision, use or development on these areas be avoided. This is an onerous requirement and one that will be likely be very difficult to achieve in reality. Further, it is noted that majority of the existing ecological areas in Te Tumu are also wetland areas and will be subject to both this new policy statement and the requirements of the new freshwater policy. This adds further complexities to successfully delivering key infrastructure and urban development within this growth areas.

32. Given the above matters, the planning process to assess and confirm acceptability of rezoning Te Tumu for urban development remains long, complex and uncertain. Combined with funding constrains for infrastructure we currently estimate that urban development of Te Tumu may commence around 2040 if a successful rezoning process can be completed. Staff are undertaking further work on these key issues to inform Council decision-making on the way forward for the Te Tumu project. This includes seeking independent legal and planning advice. This advice will be provided to Council in public excluded when available.

33. There is a risk that urban development within Te Tumu does not proceed. In that scenario capex costs attributed to Te Tumu development contribution funding would have to be funded by ratepayers.

funding and PROJECT cost

34. The total projected cost of the PEI as of August 2023 is $121M. Noting that this number is adjusted for expected inflation in the later years of delivery and so is higher than the amount noted in the report regarding the tender of the PEI but ultimately made up from the same budgets. This is made up as:

· $11.7M for land purchase and early works (spent)

· $14.7M for the cost of Phase 1 works (spent)

· $13.2M budgeted for Phase 2 works (committed)

· $81M budgeted for Phase 3 (tender award decision with Council).

35. 51% of the costs of the PEI, up to a maximum amount of $62M, will be funded from Waka Kotahi. The following table summarises the funding proportions based on the current budgets.

Funding Source	%	$
Waka Kotahi	50%^{^[4]}.	$60.1M
Wairakei DCs	21%	$24.6M
Te Tumu DCs	27%	$33.1
General rates	3%	$3M
Total	100%	$120.9M

36. If the actual spend is lower than the current budget, then we will not draw down the full $62M from Waka Kotahi as they will only fund a maximum of 51%.

37. If Te Tumu development does not proceed, then the Te Tumu cost share will need to be funded via alternative means – most likely becoming a ratepayer cost. However, there are a number of ways this risk could be mitigated for example:

· Divestment of surplus land acquired for the PEI project^{^[5]}

· Development of rural parts of Papamoa East is being investigated in the vicinity of Domain, Tara and Bell Roads. This could provide additional growth to contribute to infrastructure costs

· If infrastructure projects such as the PEI were delivered lower than current budgets this would reduce Te Tumu funding risks

· The transfer of infrastructure and funding responsibilities to a proposed Three Waters Entity (noting this would simply move the risk to another entity)

· Targeted rates across the Papamoa and Wairakei areas could meet part of a funding gap (as addressed in further detail later in this report).

38. The Wairakei funding share is currently on track to be fully recovered by development contributions with project cost increases being offset by external Waka Kotahi funding. This means there shouldn’t be a development contribution under-collection.

39. TCC secured a $96M, 10-year interest free loan via the Housing Infrastructure Fund (HIF) in relation to the PEI. $62M of this loan has been utilised by Waka Kotahi which unlocked their currently constrained funding capacity to ensure they could subsidise the PEI. The remaining $34M of the HIF loan is being used by TCC. This HIF loan was signed 30 June 2023 and TCC will begin drawing down on this loan facility this financial year. The HIF is a financing source only and does not directly fund the project – i.e., we still need to pay back the loan using development contribution revenue.

40. Despite the HIF loan, the PEI expenditure will still incur interest until the full cost has been repaid. This is because the loan does not cover the full value of the expenditure and the interest free benefit has been used in a way that it reduces TCC’s overall debt borrowing rate – rather than only reducing the interest for the PEI.

41. Funding of the Opal Drive pump station is set out in the separate Opal Dr report.

TE TUMU COST ALLOCATION

42. TCC has already spent nearly $12M on the PEI, wastewater infrastructure and other projects which are expected to be funded via Te Tumu. Another $228M of infrastructure investment is budgeted within the LTP period. By 2033/34 TCC will have incurred over $240 in capex to be funded via Te Tumu. Adding onto this investment outside the LTP period - then it is expected that approximately $309M of infrastructure investment will need to be funded via Te Tumu. Noting that the expectation is that the proposed new Bay of Plenty three waters entity would be responsible for a significant component of this investment.

43. Most of the infrastructure shown is being delivered within the next ten years because it also services the Wairakei and/or Papamoa catchments (i.e. it is shared infrastructure). Some of the cost is to pay for Te Tumu infrastructure being built into Wairakei road corridors^{^[6]} and a small portion is to fund early design work for the future Te Tumu infrastructure. Attachment 4 is a plan which shows the rough location of projects which are part funded via Te Tumu. Attachment 5 provides the specific details all the projects part funded by Te Tumu and their correlating capital infrastructure budget.

44. Table 1 below is a summary of those projects in Attachment 5 grouped by activity. It only shows the portion of those projects within the LTP period so does not sum to $309M.

Table 1: Te Tumu Funded Cashflow by year
	Actual	2023/24	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30	2030/31	2031/32	2032/33	2033/34
		$000	$000	$000	$000	$000	$000	$000	$000	$000	$000	$000
Water		65
Wastewater	2,099	5,460	8,692	13,674	15,838	13,609	18,003	13,012	14,698	14,180	16,405	17,927
Stormwater	1,068	17		92	180	4,897	470	1,453	7,817	3,663	3,754	3,859
3 Waters sub total	3,166	5,541	8,692	13,766	16,019	18,506	18,472	14,465	22,515	17,843	20,159	21,786
3 Water cumulative	3,166	8,708	17,400	31,166	47,184	65,690	84,163	98,628	121,143	138,986	159,145	180,931
Transport	8,787	8,171	17,194	12,193	2,971	9,083			934
Transport cumulative	8,787	16,958	34,153	46,345	49,316	58,399	58,399	58,399	59,333	59,333	59,333	59,333
Total annual	11,954	13,713	25,886	25,959	18,990	27,588	18,472	14,465	23,449	17,843	20,159	21,786
Total Cumulative	11,954	25,666	51,552	77,511	96,501	124,089	142,562	157,027	180,476	198,319	218,478	240,264

45. Consideration is being given to potential cost savings from rescoping three waters infrastructure projects such that they no longer provide capacity for growth in Te Tumu, and the consequential implications of this in respect of the further investment that would be required if Te Tumu did proceed in future. This is addressed in the Opal Drive report on this agenda and will be further reported back later in the LTP process for other relevant three waters projects. This work may provide options to reduce a portion of the financial risk Council is exposed to.

46. As stated above, most of the infrastructure being built now is not being driven by the need to provide for Te Tumu but is needed now because it also provides for development in Wairakei/Papamoa. This raises the issue of whether the current funding model should be adjusted.

47. The delay in the expected development of Te Tumu means that the debt relating to this infrastructure will compound significantly in the meantime. Table 1 below shows the likely impact on Te Tumu related debt if no action is taken.

Table 2: Likely Impact on Te Tumu debt if it is left to compound until 2045

48. This level of debt would lock up a significant portion of Councils restricted debt capacity. It would also increase the risk that Te Tumu Development Contributions, when they were eventually charged, would be so high that development would be severely restricted and so this debt may never be recovered. It is estimated that development contributions would exceed $100,000 per lot for transport and three waters infrastructure based on the current funding model.

Options to address te tumu related financial risks

49. Options exist to focus solely on the transport activity or to consider the three waters activities as well. As noted earlier the three waters activities are complicated by the Three Waters Reform process and the statutorily required assumption for the 2024-34 Long Term Plan that three waters activities are excluded from year 3 onward. Nonetheless staff have prepared information in regard to all activities.

50. In relation to the three waters activities, we will also advise the National Transition Unit of the issue.

51. Regardless of which activities are addressed the options are:

· Option 1: Status quo – based on assumption that Te Tumu will be developed and that costs will be recovered through development contributions.

1. This option is consistent with the philosophy of growth paying for growth, but may result in significant adverse debt and rate funding implications if Te Tumu risks materialise. Even if Te Tumu is developed, over $300M of TCC’s limited debt capacity will be utilised by Te Tumu costs and development contributions may be unsustainably high.

· Option 2: Amended status quo (Rate fund cost of capital) – As above but rate fund cost of capital on debt associated with Te Tumu. This option could involve full or partial rate funding of the cost of capital, most probably until the next LTP in the first instance when there will be more certainty on the future prospects for the Te Tumu urban growth area.

2. This option would ensure Te Tumu related debt does not increase at an unsustainable rate due to compounding interest costs, but would not address funding of the core debt to address risks associated with Te Tumu, although this could be addressed through future decision-making eg through the 2027-37 Long Term Plan by which time the future prospects for Te Tumu will be better understood.

· Option 3: General rate fund some or all of the Te Tumu capital costs.

3. This would address risks associated with the Te Tumu funding share by paying down debt but would impose a greater burden on ratepayers to do so which is not aligned with the growth pays for growth philosophy. The financial impact on each rateable property would be approximately $71 p.a. for 20 years for both transport and waters projects.

· Option 4: Targeted rate some or all of the Te Tumu capital costs.

4. A targeted rate would apply to Wairakei and the eastern part of Papamoa, probably from Domain Road eastward. The rate may be higher in Wairakei which is closer to the PEI and likely to receive greater benefit from its construction.

5. This would address risks associated with the Te Tumu project by paying down debt but would impose a greater burden on ratepayers in Wairakei and Papamoa that directly benefit from these projects. It is again not well aligned with the growth pays for growth philosophy given the transfer of some funding away from Te Tumu.

· Option 5: A mix of general and targeted rates to fund some or all of the Te Tumu capital costs.

Comments under options 3 and 4 apply to this option.

52. Further financial modelling and assessment of Options 3, 4 and 5 is covered in the section titled General and Targeted Rate Approach below. Option 2 is addressed further in the following paragraphs.

53. Table 3 below shows an estimate of the amount of interest that will accrue on the Te Tumu funded capex over the LTP period based on current budgets and a fixed interest rate of 6%.

Table 3: Te Tumu - interest cost of debt by year
	Actual	2023/24	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30	2030/31	2031/32	2032/33	2033/34
		$000	$000	$000	$000	$000	$000	$000	$000	$000	$000	$000
3 Waters	95	362	811	1,533	2,519	3,705	5,037	6,327	7,816	9,496	11,206	13,137
Transport	264	788	1,596	2,574	3,183	3,736	4,232	4,486	4,784	5,099	5,405	5,729
Total annual	359	1,150	2,407	4,107	5,702	7,441	9,269	10,814	12,600	14,595	16,611	18,866
Transport – cumulative	264	1,052	2,648	5,222	8,405	12,141	16,373	20,860	25,643	30,742	36,146	41,875
Total Cumulative	359	1,509	3,916	8,023	13,724	21,166	30,435	41,249	53,849	68,444	85,054	103,920

54. The approximate amount of Te Tumu related interest expected to be incurred for the transport activity up to the end of Year 3 of the 2024-34 period (i.e., 2026/27 financial period) period is $8M.

55. If this amount was fully transferred to rates funded debt, then this would most likely be managed through the unfunded liability reserve. This means that the interest cost would be retired through rates from Year 4 of the LTP and funded over a 20-year period. Based on the current capex budgets and the above estimate of $8.8M in interest costs – this would be roughly $720,000 per annum addition to rates. Although technically given that there is already rates budgeted into the liability reserve it will not add an additional rating impact but utilise the budgeted amounts from the reserve.

General & targeted rate Approach

56. In order to address Te Tumu funding risks, we have assessed a range of rating options. To do this we have examined the following key variables:

· Projects to be included

· Benefit areas

· Other key assumptions

Projects to be included

57. Staff established the following criteria to determine which projects should be included in a rating calculation.

· Projects that have the majority of their expenditure in the first 3 years of the LTP (i.e., a greater degree of certainty over design and costs).

· Excludes projects that are 100% Te Tumu funded (there must be some wider benefit)

· Addresses water projects separately from Transportation projects due to the uncertainty around legislative reform.

58. Table 4 summarises the projects that meet these criteria. The individual project values are not shown as some of these projects are currently undergoing commercial negotiations (refer confidential attachment 5). The list of projects that meets the criteria and is reflected in Table 4 is set out below:

Waters

· Main Wairakei Pump Station

· Opal Drive Pump Station

· Te Okuroa Dr and Papamoa East Interchange roading related stormwater

Transport

· Designations in Papamoa

· Sands Ave – Between Papamoa East Interchange and Te Okuroa Dr

· Te Okuroa Drive – Sands Ave to Te Tumu

· Papamoa East Interchange (land purchase, design, Phases 1-3)

· Sands Ave – The Boulevard to Te Okuroa Dr

· Intersection – Sands Av and The Boulevard

· The Boulevard – Stevenson Dr to Sands Ave

· The Boulevard – Sands Ave to Te Tumu

· Wairakei Town Centre Bus Facility

Table 4: Summary of projects selected to be included in the calculation of a targeted rate

Benefit areas

59. All of the projects are physically located within the Wairakei growth area. Most of these already have a benefit allocated to Wairakei and/ or Papamoa growth areas.

60. Reviewing the selected projects, we identified common geographic areas of benefit. These were based upon proximity to the physical projects and direct improvements to the level of service through reduced congestion and/ or security of service levels. These are shown in Figure 1 below as:

· Full Benefit area (Pink)

Directly benefit from projects

· Wider benefit area (Yellow)

Do receive some benefit, but this is less than those living closer to the infrastructure.

· Wider city (blank)

More limited benefit

Figure 1: Benefit areas identified

Other Key Assumptions

61. While the Te Tumu development has been considerably delayed, it is still expected to eventuate. It is therefore not considered appropriate to recover all of the debt costs and allow future Te Tumu developers and homeowners to have free access to this infrastructure. We have currently recommended that 50% of the Te Tumu funding is recovered from this targeted rate.

62. We have estimated the rates charge based on a 20-year timeframe until Te Tumu development is expected to commence. It is assumed that Te Tumu would not be subject to the targeted rate but would instead pay their residual share through development contributions.

63. The projects are all largely local infrastructure (as opposed to Citywide) and we have traditionally charged local infrastructure as a flat charge. This is because this infrastructure is required, whatever might be built upon a site. For this reason, we have calculated the rate as a flat charge per property, as opposed to being based on property values (ie CV). For the same reasons we are not recommending a commercial / industrial differential.

64. It is recommended that a targeted rate option is consulted upon as part of the 2024-34 LTP, for implementation in Year 1. The issue is known now, and it is recommended that Council proceed to address it.

65. Based on the criteria and assumptions outlined above we have calculated a targeted rate based upon:

· A targeted rate across everyone in the city

· A targeted rate across only the benefit area identified

· A targeted rate that is a combination of both of these.

66. Charging the targeted rate across the whole city.

Table 5: Charges spread evenly across the city

67. Charging the targeted rate only across areas that benefit from the projects (evenly charged between full and wider benefits)

Table 6: Charges spread evenly across benefit area

68. Charging the targeted rate only based on varying levels of benefit across areas (with double the rate charged to the full benefit area compared to the wider benefit area)

Table 7: Charges spread across benefit area, but double in full benefit catchment

69. Charging the targeted rate across the whole city based on varying levels of benefit (double in wider benefit area, and triple in full benefit area)

Table 8: Charges spread across city but double in wider benefit area, and triple in full benefit catchment

70. These are all estimated charges and would change based on changes to projects scope and costs, rates of growth compared to expected and changes in other assumptions.

recommended option

71. It is recommended that Council confirm the calculation of a targeted rate based upon:

· 50% of the Te Tumu portion of the selected projects

· Transport projects only given the uncertainty around the timing of proposed waters reform, noting that if this is significantly delayed we would look at options to include future water charges.

· A flat charge (ie not based on CV) per ratepayer across the city with a higher charge (double) for this in the wider benefit area and (triple) for those in the full benefit area

72. This equates to the transportation projects targeted rates outlined in Table 8 above.

Financial Considerations

73. As outlined above, the targeted rate calculated is not expected to remove all Te Tumu debt but will considerably reduce this. This financial impact is expected to have the following impact (compared to Table 2 above) as shown in the transportation projects row of Table 9. Waters project debt would transfer to a three waters entity.

Table 9: Likely Impact on Te Tumu debt through to 2045

74. All of the rating options set out in tables 5 to 8 have the same impact on Council debt. The options only change which ratepayers contribute to this repayment.

Strategic / Statutory Context

75. The Papamoa East Interchange, Opal Drive Wastewater Pump Station and other related transport and three waters projects are key infrastructure requirements to enable development of Wairakei and Te Tumu in accordance with SmartGrowth’s strategic growth strategy as agreed through the SmartGrowth Urban Form and Transport Initiative.

Legal Implications / Risks

76. There are a range of risks associated with the development of Te Tumu, especially financial risks and legal risks associated with planning processes. These are outlined earlier in the report.

77. Confidential Attachment 2 outlines the relevant commitments between TCC and Bluehaven.

78. The requirements around the establishing a new rate will need to be followed including consultation through the draft 2024-34 Long Term Plan.

Consultation / Engagement

79. Engagement with the developers of the Sands Town Centre in Wairakei is ongoing. As per the provisions of the Developer Agreement set out earlier in the report, the developer has strongly advocated for the Papamoa East Interchange as a catalyst for development of the town centre. TCC has entered into certain obligations to deliver the interchange which are subject to tender costs, broader financial risks and progress with the TTK14 Trust.

80. Engagement with the Te Tumu Landowner Group is also ongoing. This group is supportive of the delivery of the Papamoa East Interchange. This group’s key concern is around the financial implications of Te Tumu related interest costs on projects like the Papamoa East Interchange being incorporated into a future Te Tumu development contribution charge. A commitment was previously made to bring this matter to Commissioners for decision-making as part of the 24-34 LTP, and it is now addressed within this report.

81. Engagement on the recommended rating approach would occur through the draft 2024-34 LTP.

Significance

82. 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.

83. 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.

84. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the issue is of high significance. The ramifications of cumulative debt related to Te Tumu and funding approaches to address this matter are substantial.

ENGAGEMENT

85. Taking into consideration the above assessment, that the issue is of high significance, officers are of the opinion that no further engagement is required prior to Council making a decision due to the extensive amount of engagement that has already been undertaken. The views of the relevant parties are well understood. Any decision on how Te Tumu related financial risks will be addressed, including through general or targeted rates, would be consulted on through the draft 2024-2034 LTP.

Next Steps

86. Commissioners make decisions on whether to proceed with construction of the interchange and the pump station.

87. Staff to incorporate decisions on addressing Te Tumu related funding risks in the upcoming draft 2024-34 LTP for consultation.

88. Staff discuss this matter with the Waters Reform National Transitional Unit.

Attachments

1. Excerpt of Council Resolutions relating to PEI from Decemeber 2022 - A14921158 - Public Excluded

2. Excerpt of key terms relating to the Papamoa East Interchange from Wairakei Development Agreement - A14921152 - Public Excluded

3. Confidential Legal Advice - A14983677 - Public Excluded

4. Plan showing Te Tumu funded infrastructure in Wairakei - A14929803 ⇩

5. Detailed list of Te Tumu Funded Capex Projects - A14983661 - Public Excluded

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

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

[4] The Waka Kotahi subsidy will not equally exactly 51% of the total cost as some of the early expenditure (approximately $3M) is not eligible for the subsidy.

[5] The surplus land is currently set aside as part of the solution to securing access through Māori land in Te Tumu. Part of the surplus land may also be suitable for future TCC community facilities (pool, courts) and this option may be more cost effective than acquiring land within the Wairakei town centre itself for these purposes.

[6] Building this infrastructure into the road corridors now will reduce the overall cost of construction as retrofitting infrastructure, while possible, is much more costly than building it into new roads and creates significant inconvenience for residents and businesses.

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


AGENDA Ordinary Council meeting Monday, 11 September 2023
I hereby give notice that an Ordinary meeting of Council will be held on:
Date:	Monday, 11 September 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.

Advantages		Disadvantages
· Managers have reviewed the SFAs and have made recommendations based on reasonable expectations · The SFAs reflect best practice guidance · The SFAs provide clarity and certainty to council staff in preparing the LTP · The assumptions form the basis of planning and are auditable.		· There are no disadvantages, and limited risk to adopting the SFAs. The SFAs will undergo an audit before going through the public consultation process as part of the LTP.
Key risks	Some updating of assumption and re-work of elements of the LTP may be inevitable due to the ever-changing environment which it is being prepared in.
Recommended?	Yes

Advantages		Disadvantages
· Potential opportunities for SFAs to be amended and reconsidered.		· Will delay the Further staff time required to consider or reconsider SFAs · Delay in adopting the SFAs (depending on the duration) may delay preparation of the LTP.
Key risks	Delay in accepting the SFAs may jeopardise timely delivery of the LTP.
Recommended?	No

Advantages		Disadvantages
· Keeps within the current timeframes.		· Potential opportunities for amendments to the supporting documentation may not have been considered.
Recommended?	Yes

Advantages		Disadvantages
· Potential opportunities for supporting documents to be amended and reconsidered.		· Delay in adopting the supporting documentation (depending on the duration) may delay preparation of the LTP.
Recommended?	No

Advantages		Disadvantages
· Potential opportunities for consultation document to be amended and reconsidered.		· Delay in adopting the consultation document (depending on the duration) may delay preparation of the LTP.
Recommended?	No