Under Separate Cover Agenda of Regional Council

Appendix 1



Report To:	Regional Council
Meeting Date:	14 December 2023
Report Writer:	Kumaren Perumal, Chief Financial Officer; Mark Le Comte, Principal Advisor, Finance; Angela Foster, Communications and Engagement Manager; AJ Prinsloo, Finance Manager; Graeme Howard, Corporate Planning Lead; Gillian Payne, Principal Advisor and Olive McVicker, Corporate Performance Team Lead
Report Authoriser:	Mat Taylor, General Manager, Corporate
Purpose:	To obtain approval to provide the draft Long Term Plan 2024 – 2034 Consultation Document and supporting documents to Audit NZ.

Adoption for Audit of Draft LTP 2024 - 2034 Consultation Document and Supporting Material

Executive Summary

This report recommends adoption of the draft 2024-2034 Long Term Plan Consultation Document (the Consultation Document) and supporting material to permit the audit of the draft Consultation Document and supporting material.

This will enable progress towards the adoption of the audited Consultation Document in early 2024 which is essential for the Special Consultative Procedure required by legislation for consultation on the draft 2024-2034 Long Term Plan (LTP).

Key content of this report includes:

· The draft Consultation Document (Attachment 1)

· Draft Volume One, the updated Strategic Framework, Activity Structure and Activity Summaries setting out performance goals and budgets, development of Māori Capacity to contribute to Decision Making and Implementation of the Regional Spatial Strategy (Attachment 2).

· Draft Volume Two setting out the Financial Strategy, Infrastructure Strategy, financial statements, analysis, and policies (Attachment 3)

· Draft Financial Policies and Other Policies (Attachment 4)

· Draft Asset Management Plans (Attachment 5), Asset Management Plans on a page (Attachment 6) and Rivers and Drainage Asset Management Plan executive summary.

· Quayside Holdings Limited consultation topic background information (Attachments 7 and 8)

These documents have been prepared based on guidance received from Councillors at workshops throughout 2023. They must be made available to Audit New Zealand as part of their statutory audit of the LTP.

The results of this LTP audit will be provided to the Bay of Plenty Regional Council (Council) on 28 February 2024. The Council will be requested to approve a LTP document (updated with amendments arising from the audit process) for consultation on 6 March 2024. In March to April 2024, Council will receive public submissions and then hold hearing and deliberation in May 2024.

Recommendations

That the Regional Council:

1 Receives the report, Adoption for Audit of Draft LTP 2024 - 2034 Consultation Document and Supporting Material.

2 Adopts the Draft Volume One as a supporting document for submission to Audit New Zealand, incorporating the following documents:

a. Strategic Direction

b. Activity Structure

c. Draft Levels of Service / Performance Measure summary

d. Draft Development of Māori capacity to contribute to decision-making processes

e. Draft Implementation of Regional Spatial Strategy

f. Draft Groups of Activities – Activity Summaries incorporating levels of service (performance goals), and draft financial estimates for operating and capital expenditure for years one through ten for each activity.

3 Adopts the Draft Volume Two as a supporting document for submission to Audit New Zealand, incorporating the following strategies, analysis and policies:

(a) Draft Financial Strategy

(b) Draft Infrastructure Strategy

(c) Draft Prospective Financial Statements

(d) Draft Accounting Policies

(e) Draft Council Controlled Organisations

(f) Draft Funding Impact Statement

(g) Draft Rates Funding Impact Statement

(h) Draft Significant Forecasting Assumptions

(i) Draft Significant Negative Effects

4 Adopts the Draft Financial Policies and Other Policies as a supporting document for submission to Audit New Zealand, incorporating the following policies:

(a) Draft Revenue and Financing Funding Needs Analysis

(b) Draft Revenue and Financing Policy

(c) Draft Development or Environmental Contributions Policy

(d) Draft Remission and Postponement of Rates Policy

(e) Draft Remission and Postponement of Rates on Māori Freehold Land Policy

(f) Draft Fees and Charges Policy

(g) Draft Significance and Engagement Policy

5 Notes that draft policies will be adopted in March 2024 together with full Statements of Proposal for concurrent consultation with the Long Term Plan 2024-2034. These policies, which will be finalised after Council consideration of submissions, are intended to be effective from 1 July 2024 are:

(a) Draft Revenue and Financing Policy

(b) Draft Development or Environmental Contributions Policy

(c) Draft Remission and Postponement of Rates Policy

(d) Draft Remission and Postponement of Rates on Māori Freehold Land Policy

(e) Draft Fees and Charges Policy

(f) Draft Significance and Engagement Policy

6 Adopts the Draft Strategic Asset Management Plan and Draft Asset Management Plans, Draft Asset Management Plans on a page and the Rivers and Drainage Asset Management Plan executive summary for submission to Audit New Zealand, incorporating the following plans:

(a) Draft Rivers and Drainage Asset Management Plan 2024-2074

(b) Draft Rotorua Te Arawa Lakes Asset Management Plan 2024-2034

(c) Draft Maritime Operations Asset Management Plan 2024-2034

(d) Draft Regional Parks and Catchments Asset Management Plan 2024-2034

(e) Draft Property Asset Management Plan 2024-2034.

7 Adopts the Climate Change Position Statement.

8 Approves the content of the Long Term Plan Consultation Document 2024-2034 – Draft for Audit New Zealand for the purposes of submitting it to Audit New Zealand for the audit process.

9 Delegates authority to the Chief Executive to make editorial and technical amendments to the draft Long Term Plan Consultation Document 2024-2034 – Draft for Audit New Zealand and supporting documents, if required, prior to being submitted to Audit New Zealand.

10 Directs the Chief Executive to progress work on a potential new regional infrastructure fund and report back to Council after the adoption of the 2024-2034 Long Term Plan in June 2024, noting that prior to making any decision on any new fund, Council will consider the significance of the decision in terms of Council’s Significance and Engagement Policy.

11 Notes the final version of the Long Term Plan Consultation Document 2024-2034, draft Supporting Documents and draft Financial and Other Policies; following any amendments required by Audit New Zealand and for graphic design purposes, will be provided to Council for its approval in March 2024.

12 Confirms the decision has a medium level of significance as determined by the Council’s Significance and Engagement Policy. Council has identified and assessed different options and considered community views as part of making the decision, in proportion to the level of significance.

1. Introduction

The Consultation Document is a significant part of the LTP as it seeks to communicate and engage with communities. It provides details on Council’s direction for the next ten years with a focus on the first three years, providing information on costs and the effects of the proposals. The Consultation Document is the legal basis for consultation on the LTP, and as a result it must be audited by Audit New Zealand.

This report seeks Council adoption of the draft Consultation Document and the relevant draft supporting documents required for audit. These include various financial strategies, statements, and policies; activity plans; asset management plans; and the infrastructure strategy.

These documents have been prepared based on the guidance given by councillors at various workshops and meetings over the past year (refer Attachment 9 LTP 2024-2034 Workshops and Contents for details). The Consultation Document itself provides an overarching summary of the environment within which Council will operate and the areas deemed of the greatest importance.

1.1 Legislative Framework

Council is required to have a Long Term Plan under s93 of the Local Government Act. As part of this, it is required to utilise the Special Consultative Procedure, which at s93(c)(4) requires audit of the draft Consultation Document.

1.2 Alignment with Strategic Framework

The LTP gives effect to all five Community Outcomes. It also seeks endorsement of a revised Strategic Framework.

1.2.1 Community Well-beings Assessment

Dominant Well-Beings Affected

þ Environmental

High - Positive

þ Cultural

High - Positive

þ Social

High - Positive

þ Economic

High - Positive

The Long Term Plan aims to achieve positive outcomes across all well-beings.

1.3 Significance

The recommended proposal/decision has been assessed against the criteria and thresholds in Council’s Significance and Engagement Policy, and can be considered:

Medium

The decision is not within existing budgets and does not implement the current long term plan or annual plan.

2. LTP Material for Adoption for Audit

2.1 Consultation Document (Attachment 1)

The draft Consultation Document (refer Attachment 1) sets out our broad direction over the next ten years with a focus on the next three years. It identifies costs and the impacts of proposals. It is the mechanism to ask the public to provide their views on the key issues. As it is the legal basis for consultation on the LTP, it must be audited by Audit New Zealand.

The Consultation Document needs to be concise and easily understood, while achieving its purpose. It must not be a draft LTP, nor must it include a full version of any of the draft supporting documents. It must clearly show to affected communities what is changing, with a particular focus on rates and debt levels.

For all consultation topics Council must include a preferred option on which it is seeking community views. The draft budget should be based on the preferred option. Councillors will be asked to adopt the Consultation Document only after all the supporting information has been adopted.

2.2 Quayside Holdings Limited Consultation Topic (Attachments 7 and 8)

Councillors have provided guidance to include in the draft Consultation Document a proposal to enable Quayside Holdings Limited (Quayside) to reduce its shareholding in the Port of Tauranga Limited to a specified minimum amount. Additional information previously presented to and discussed by Council in relation to this consultation topic is attached to this report, including advice from Council’s independent advisers PwC (Attachment 7) and Quayside’s advisers, Cameron Partners (Attachment 8).

This consultation item mentions a future decision (separate to the consultation on the LTP) regarding a potential new Regional Infrastructure Fund. For information, a 2022 document entitled “Delivering Regional Benefit” is attached (Attachment 10) to provide context.

2.3 Draft LTP Volume One (Attachment 2)

2.3.1 Strategic Framework

During 2023, Council revised and reviewed the Regional Council’s Strategic Framework. A revised version identified five community outcomes and a number of goals specific to each.

This new Strategic Direction was endorsed by Council at a meeting on the 25^th May 2023 (refer Attachment 2).

2.3.2 Activity Structure

The activity structure includes 23 activities organised into 8 Groups of Activities. There has been some rationalisation of existing activities, and the addition of activities that align with the new strategic direction. This was endorsed by Council at a workshop on 23 August 2023.

2.3.3 Draft Levels of Service and Performance Measures Summary

Staff have compiled a summary of all the levels of service, performance measures and targets for Council’s activities.

2.3.4 Draft Partnerships with Māori

Schedule 10 Part 1 (1A) of the LGA requires the inclusion of information pertaining to the development of Māori capacity to contribute to decision-making processes over the term of the LTP.

2.3.5 Draft Implementation of Regional Spatial Strategy

Schedule 10 Part 1 (8) of the LGA requires council to identify an implementation plan or key actions for which Council is a lead under the Spatial Planning Act 2023. The key actions are to cover the period covered by the Long Term Plan.

The incoming government has indicated that the Spatial Planning Act 2023 is likely to be repealed. The LTP will be updated to reflect schedule 10 requirements should this occur.

2.3.6 Draft Activity Plans

Activity Plans identify the activity’s alignment with Council’s Strategic Framework, performance goals (levels of service), key projects and programmes, and draft financial estimates for operating and capital expenditure for the duration of the LTP.

Since the activity plans were considered at the September and October 2023 workshops there has been further review of some of the level of service measures which has resulted in changes. All activity plans and a full listing of the performance measures is contained in Attachment 2.

2.4 Draft Volume Two (Attachment 3)

The LTP will consist of two volumes. Volume Two will contain detailed financial information, including the following:

2.4.1 Draft Financial Strategy

Council is required to adopt a Financial Strategy pursuant to Local Government Act 2002 (LGA) s101A. The purpose of the Financial Strategy is to facilitate prudent financial management and provide a guide against which to consider proposals for funding and spending.

The strategy also provides a framework for engaging with the community on the impact of the proposals. It includes statements on factors that could have significant impact on Council; quantified limits on rates and debt; and an assessment of Council’s ability to provide and maintain levels of service.

2.4.2 Draft Infrastructure Strategy

Council is required by LGA s101B to prepare and adopt an Infrastructure Strategy, covering a period of at least 30 years, for its flood protection and control schemes. The strategy identifies significant infrastructure issues and options for managing these, including estimating costs. Council considered a draft Infrastructure Strategy at the November 2023 workshop.

2.4.3 Draft Prospective Financial Statements

Council is required by LGA Schedule 10 to include Prospective Financial Statements for at least a ten year period. LGA s96 requires them to be audited, and as part of this, they must be prepared in accordance with the Tier 1 Public Benefit Entity accounting standards to meet Generally Accepted Accounting Practice.

The Prospective Financial Statements consist of:

• Prospective Statement of Comprehensive Income and Expense

• Prospective Statement of Financial Position

• Prospective Statement of Cashflow

• Prospective Notes to the Accounts

The Prospective Financial Statements provide financial forecast information for the period beginning 1 July 2024 to 30 June 2034.

2.4.4 Draft Accounting Policies

There are no substantive changes proposed to Draft Accounting Policies.

2.4.5 Council Controlled Organisations

Council is required by the LGA Schedule 10 section 7 to describe the Council Controlled Organisations in which Council is a shareholder.

2.4.6 Draft Funding Impact Statements

Council is required by LGA Schedule 10 to include Funding Impact Statements for each Group of Activities. These statements identify the amount and sources of funding and how the funds will be applied.

The LTP must include a Funding Impact Statement for the Council as a whole, and Funding Impact Statements for each group of activity. The Funding Impact Statements must be presented in accordance with the layout specified in the Local Government (Financial Reporting and Prudent) Regulations 2014 (Forms 2 & 3 of Schedule 2).

The Funding Impact Statements show sources and uses of funds in delivery of both the operating and capital programmes within an activity, or Council as a whole, over the term of the LTP.

The Draft Funding Impact Statements have been fully reconciled to the draft budget presented to Council at workshops, and are included in Draft Volume Two.

2.4.7 Draft Rates Funding Impact Statement

Council is required by the LGA Schedule 10 to include the details of how general and targeted rates are set and how liability is calculated, including examples for a range of properties. The Rates Funding Impact Statement is also required for setting rates under the Local Government (Rating) Act.

2.4.8 Draft Revenue and Financing Policy

The Revenue and Financing Policy will have a separate Statement of Proposal to facilitate consultation and for this reason it is included in section 2.7 of this report.

2.4.9 Draft Forecasting Assumptions

Council is required by the LGA Schedule 10 to include Significant Forecasting Assumptions in its Long Term Plan.

2.4.10 Draft Significant Negative Effects

Council is required by the LGA Schedule 10 section 2 (1) (c) to outline any significant negative effects of its activities on well-being of the community.

2.5 Draft Financial Policies and Other Policies (Attachment 4)

Council requires a set of supporting financial and other policies. Audit may request any currently adopted policies that are not currently proposed to be updated. The policies that have been reviewed and updated are listed below.

2.5.1 Draft Fees and Charges Policy

The Draft Fees and Charges Policy includes:

· All the Resource Management Act section 36 fees and charges

· All applicable Building Act charges

· All fees and charges for the Floodway and Drainage ByLaw

· Navigation Safety Bylaw charges

· Gravel management charges

· General charge out rates for any other cost recoverable work

Navigation & Safety Bylaw 2017 has been included for the first time. This will enable the fees to be reviewed in cycle with the Fees and Charges policy rather than the five yearly cycle of the Navigation Safety Bylaw review. These fees include, Mooring licences, Commercial Navigation and Safety licences, public notices and other duties, powers, functions, or services. This is permitted under LGA s150(3)(b).

The compliance monitoring charges have been updated to include definitions and categories updated or added for Consumptive Water Use.

The policy also includes reference to charges under the Natural and Built Environment Act 2023 (NBEA). Due to the uncertainty around the regulatory reform with the new incoming government, these will be removed from the policy if the relevant provisions are repealed. They are:

· Permitted activities under Natural and Built Environment Act (NBEA)

· Compliance monitoring charges

· National Environmental Standards Commercial Forestry cost recovery charges

A full Statement of Proposal will be prepared for concurrent consultation with the LTP.

2.5.2 Draft Revenue and Financing Policy and draft Funding Needs Analysis

Council is required by LGA s102 and s103 to adopt a Revenue and Financing Policy. It presents Council’s policies for financing its planned groups of activities, including proposed funding sources. It is guided by the financial principles documented in the Draft Financial Strategy.

The Draft Revenue and Financing Policy has been updated based on guidance from Council at its workshops during 2023. It is supported by a Draft Funding Needs Analysis providing the background and analysis to explain Council’s funding proposals, which are the subject of consultation alongside the LTP proposals

2.5.3 Draft Development Contributions or Environmental Contributions Policy

Under LGA s102(2)(d), Council is required to have a policy on development contributions or environmental contributions. This policy has been drafted under current legislation, noting that the Government intends to repeal the Natural and Built Environment Act (NBEA). If the NBEA is repealed, this draft policy will need to:

· Have its name changed to “Development or Financial Contributions Policy”

· Have references to environmental contributions under the NBEA removed or altered to refer to financial contributions under the Resource Management Act.

2.5.4 Draft Remission and Postponement of Rates Policies

Council may remit rates in accordance with a rates remission policy as set out in LGA s102 (3) and Section 85 of the Local Government (Rating) Act 2002. It must state the objectives sought to be achieved by the remission/postponement, and the conditions and criteria for rates to be remitted/postponed.

During LTP workshops held in 2023 to consider the development of a new policy to replace the interim policy adopted in June 2022, Council gave staff direction to split the policy into two separate policies, one relating to all land and another relating only to Māori Freehold Land.

The Draft Remission and Postponement of Rates Policy (All Land) and Draft Remission and Postponement of Rates on Māori Freehold Land Policy have been drafted accordingly.

2.5.5 Draft Significance and Engagement Policy (SEP)

Through the LTP process, Council have included a proposal to enable a divestment of Port of Tauranga Limited (POTL) shares by Quayside to a minimum of 28%.

Council’s Significance and Engagement Policy (SEP) lists Council’s shareholding in POTL as a strategic asset. The listing also includes the requirement to maintain a majority shareholding in the POTL. To enable Quayside to reduce its shareholding in POTL below a majority, as proposed in the Consultation Document, the SEP will need to be amended.

There is no obligation in the LGA to refer to a specific shareholding percentage for a strategic asset, therefore, BOPRC could amend the SEP as follows:

FROM: Council’s majority shareholding in Port of Tauranga Limited, which is held through Quayside Holdings Limited

TO: Council’s equity securities in Port of Tauranga Limited, which is held through Quayside Holdings Limited

Councils SEP, including the updated wording is attached to this report and is intended to be included as a supporting document for Consultation on the LTP.

2.6 Draft Asset Management Plans and Summaries (Attachment 5 and 6)

Asset Management Plans (Attachment 5) set out Council’s approach to the long term management of capital assets, including approaches to acquisition, renewal, and disposal. Council has five tactical Asset Management Plans and a draft Strategic Asset Management Plan. The tactical Asset Management Plans are:

• Draft Rivers and Drainage Asset Management Plan 2024-2074

• Draft Rotorua Te Arawa Lakes Asset Management Plan 2024-2034

• Draft Maritime Operations Asset Management Plan 2024-2034

• Draft Regional Parks and Catchments Asset Management Plan 2024-2034

• Draft Property Asset Management Plan 2024-2034

Attachment 6 contains Asset Management Summaries for the asset management plans listed above. These provide high level information pertaining to the asset category to engage the community.

3. Related Material

3.1 Climate Change Position Statement

Council at the LTP workshop on 8 November 2023 considered a revised Climate Change Position Statement to guide Council’s advocacy activities and ensure consistency across council-led initiatives.

The Climate Change Position Statement is included in the Consultation Document with the full Climate Change Action Plan (Attachment 11) as a supporting document.

4. Considerations

4.1 Risks and Mitigations

If the recommendations of this paper are not accepted by Council, there may be consequent delays in the LTP process. This will increase the risk of delivering the final LTP within the legislative deadline.

4.2 Climate Change

The matters addressed in this report are of a procedural nature and there is no need to consider climate change impacts.

4.3 Implications for Māori

The Revenue and Financing Policy, Development or Environmental Contributions Policy and the two Rates Remission and Postponement policies are required by legislation to support the principles in the Preamble to the Te Ture Whenua Māori Act 1993. This has been noted in the draft policies themselves and consideration of the relevant matters took place during public workshops in 2023 which provided Council direction to develop the draft policies.

Consultation and engagement will incorporate a focus on iwi/Māori to ensure their views are incorporated into the final Long Term Plan and relevant policies. More detailed implications for Māori are covered in specific supporting documents where appropriate.

4.4 Community Engagement

CONSULT

Whakauiuia

To obtain input or feedback from affected communities about our analysis, alternatives, and /or proposed decisions.

Following the audit process, the Consultation Document will be revised. It will then be presented to Council for adoption in March 2024. Once adopted, the document will be the basis for community consultation over a period of not less than one month that will meet all legislative requirements for a Special Consultative Procedure.

The Consultation Document and supporting material have been prepared under the current Significance and Engagement Policy. It is noted that the Significance and Engagement Policy is also under review.

4.5 Financial Implications

The financial implications of adoption are covered in detail in the Prospective Financial Statements contained in Draft Volume Two (Attachment 3) of the LTP. Adoption of the Consultation Document has no financial implications for the current year’s budget.

5. Next Steps

Once adopted, the Consultation Document and supporting material will be provided to Audit New Zealand to commence the audit process.

Once that audit is completed, the Consultation Document will be revised and presented to Council for adoption in March 2024, along with separate Statements of Proposal for:

· Draft Fees and Charges Policy

· Draft Revenue and Financing Policy

· Draft Rates Remission and Postponement Policy

· Draft Rates Remission and Postponement on Māori Freehold Land.

· Draft Development or Environmental Contributions Policy

· Draft Significance and Engagement Policy.

If adopted, the Consultation Document and Statement of Proposal for the Draft Fees and Charges Policy will be used for the Special Consultative Procedure required by the Local Government Act. The other policies listed above could use a simpler consultation process, but it is more efficient and simpler for the public to use the same consultation and process and timelines being used for the Long Term Plan Consultation Document.

Attachments

Attachment 1 - Draft LTP 2024-2034 Consultation Document ⇩

Attachment 2 - Draft Volume One: Strategic Framework, Activity Structure and Activity Summaries ⇩

Attachment 3 - Draft Volume Two: Additional Documents ⇩

Attachment 4 - Draft Financial Policies and Other Policies ⇩

Attachment 5 - Supporting Document 1 - Combined Asset Management Plans

PLEASE NOTE: Due to the size of this document, Attachment 5 will be distributed as a separate Supporting Document 1

Attachment 6 - Asset Management Plan Summaries ⇩

Attachment 7 - PwC Divestment Case Background Information ⇩

Attachment 8 - Cameron Partners Advice ⇩

Attachment 9 - LTP 2024-2034 Workshops and Contents ⇩

Attachment 10 Delivering Regional Benefits ⇩