Regional Council Agenda - Annual Plan Deliberations

NOTICE IS GIVEN that the next meeting of the Regional Council will be held in Council Chambers, Regional House, 1 Elizabeth Street, Tauranga and via Zoom (Audio Visual Meeting) on:

Wednesday 18 May 2022 COMMENCING AT 9.30 am

This meeting will be livestreamed and recorded.

The Public section of this meeting will be livestreamed and recorded and uploaded to Bay of Plenty Regional Council’s website.  Further details on this can be found after the Terms of Reference within the Agenda. Bay of Plenty Regional Council - YouTube

 

Fiona McTavish

Chief Executive, Bay of Plenty Regional Council Toi Moana

10 May 2022

 


 

Council

Membership

Chairperson

Chairman Doug Leeder

Deputy Chairperson

Cr Jane Nees

Members

All Councillors

Quorum

Seven members, consisting of half the number of members

Meeting frequency

Six weekly or as required for Annual Plan, Long Term Plan and other relevant legislative requirements

Purpose

·            Enable democratic local decision-making and action by, and on behalf of, Bay of Plenty communities.

·            Meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.

·            Set the overarching strategic direction for Bay of Plenty Regional Council as an organisation.

·            Hold ultimate responsibility for allocating financial resources across the Council.

Role

·            Address Local Electoral Act matters and Local Government Rating Act matters.

·            Oversee all matters relating to identifying and contributing to community outcomes.

·            Consider and agree on matters relating to significant new activities or areas of involvement such as infrastructure which are not the responsibility of a specific committee.

·            Provide regional leadership on key issues that require a collaborative approach between a number of parties.

·            Review and decide the Council’s electoral and representation arrangements.

·            Consider issues of regional significance which are not the responsibility of any specific standing committee or that are of such regional significance/high public interest that the full Council needs to decide on them.

·            Adopt Council’s Policy on Significance and Engagement Policy.

·            Develop, adopt and implement the Triennial Agreement, Code of Conduct and Standing Orders.

·            Consider and agree on matters relating to elected members’ remuneration.

·            Appoint the Chief Executive, and review their contract, performance and remuneration at least annually.

·            Approve all delegations to the Chief Executive, including the authority for further delegation to staff.

·            Oversee the work of all committees and subcommittees.

·            Receive and consider recommendations and matters referred to it by its committees, joint committees, subcommittees and working parties.

·            Approve membership to external bodies and organisations, including Council Controlled Organisations.

·            Develop, adopt and review policies for, and monitor the performance of, Council Controlled Organisations.

·            Monitor and review the achievement of outcomes for the Bay of Plenty Community.

·            Review and approve strategic matters relating to the sale, acquisition and development of property for the purposes of meeting Council’s organisational requirements and implement Regional Council policy.

·            Address strategic corporate matters including property and accommodation.

·            Consider and agree on the process to develop the Long Term Plan, Annual Plan and Annual Report.

·            Adopt the Long Term Plan, Annual Plan and budgets variations, and Annual Report.

·            Adopt Council policies as required by statute (for example Regional Policy Statement and Regional Land Transport Strategy) to be decided by Council or outside of committee delegations (for example infrastructure policy).

·            Develop, review and approve Council’s Financial Strategy and funding and financial policies and frameworks.

·            Institute any proceedings in the High Court that are not injunctive proceedings.

·            Exercise the powers and duties conferred or imposed on Council by the Public Works Act 1981.

Delegations from Council to committees

·            Council has a role to monitor the functioning of all committees.

·            Council will consider matters not within the delegation of any one Council committee.

·            Council may at any time, revoke or modify a delegation to a Council committee, either permanently, for a specified time or to address a specific matter, if it considers there is good reason to do so.

·            The delegations provided to committees may be further delegated to subcommittees unless the power of further delegation is restricted by Council or by statute.

·            It is accepted in making these delegations that:

·            The committees, in performing their delegated functions, powers or duties, may, without confirmation by the Council, exercise or perform them in a like manner and with the same effect as the Council itself could have exercised or performed them.

·            The delegated powers given shall at all times be subject to their current policies and principles or directions, as given by the Council from time to time.

·            The chairperson of each committee shall have the authority to exercise their discretion, as to whether or not the delegated authority of the committee be used where, in the opinion of the chairperson, circumstances warrant it.

Powers that cannot be delegated

Under Clause 32 Schedule 7 of the Local Government Act 2002, Council must make the following decisions:

·            Make a rate.

·            Make a bylaw.

·            Borrow money or purchase or dispose of assets, other than in accordance with the long-term plan.

·            Adopt the long-term plan, annual plan, or annual report.

·            Appoint a chief executive.

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

·            Adopt a remuneration and employment policy.


 

Livestreaming and Recording of Meetings

Please note the Public section of this meeting is being recorded and streamed live on Bay of Plenty Regional Council’s website in accordance with Council's Live Streaming and Recording of Meetings Protocols which can be viewed on Council’s website. The recording will be archived and made publicly available on Council's website within two working days after the meeting on www.boprc.govt.nz for a period of three years (or as otherwise agreed to by Council).

All care is taken to maintain your privacy; however, as a visitor in the public gallery or as a participant at the meeting, your presence may be recorded. By remaining in the public gallery, it is understood your consent is given if your image is inadvertently broadcast.

Opinions expressed or statements made by individual persons during a meeting are not the opinions or statements of the Bay of Plenty Regional Council. Council accepts no liability for any opinions or statements made during a meeting.

 


Bay of Plenty Regional Council - Toi Moana

Governance Commitment

mō te taiao, mō ngā tāngata - our environment and our people go hand-in-hand.

 

 

We provide excellent governance when, individually and collectively, we:

·        Trust and respect each other

·        Stay strategic and focused

·        Are courageous and challenge the status quo in all we do

·        Listen to our stakeholders and value their input

·        Listen to each other to understand various perspectives

·        Act as a team who can challenge, change and add value

·        Continually evaluate what we do

 

 

TREAD LIGHTLY, THINK DEEPLY,
ACT WISELY, SPEAK KINDLY.


Regional Council                                                                              18 May 2022

Recommendations in reports are not to be construed as Council policy until adopted by Council.

Agenda

E te Atua nui tonu, ko mātau ēnei e inoi atu nei ki a koe, kia tau mai te māramatanga ki a mātau whakarite mō tēnei rā, arahina hoki mātau, e eke ai te ōranga tonu ki ngā āhuatanga katoa a ngā tangata ki tō mātau rohe whānui tonu. Āmine.

 

 

“Almighty God we ask that you give us wisdom in the decisions we make here today and give us guidance in working with our regional communities to promote their social, economic, environmental and cultural well-being.  Amen”.

1.      Opening Karakia

2.      Apologies

3.      Public Forum

4.      Items not on the Agenda

5.      Order of Business

6.      Declaration of Conflicts of Interest

7.      Verbal Presentations

Representatives from various agencies will attend the meeting to speak to agenda item 8.2: Improving Safety and Security of Bus Services.

8.      Reports

8.1      AP 2022/23 Deliberations: Overview of Annual Plan Deliberations Process          3

8.2      AP 2022/23 Deliberations: Improving Safety and Security of Bus Services

This item will be distributed under a separate cover.

8.3      AP 2022/23 Deliberations: Transport and Urban Planning Reprioritisation               3

8.4      AP 2022/23 Deliberations: Statements of Proposal                                                   3

8.5      AP 2022/23 Deliberations: Financial Overview and Implications                      3

Attachment 1 - DAP 2022-2023 - Capital Projects                                                                                   3

Attachment 2 - DAP 2022-2023 - Rates by TA   3

Attachment 3 - DAP 2022-2023 - Pump budgets Proposed                                                                  3

9.      Annua Plan Deliberations Summing Up and Next Steps

10.    Consideration of Items not on the Agenda

10.    Closing Karakia


 

 

 

Report To:

Regional Council

Meeting Date:

18 May 2022

Report Writer:

Zhivan Alach, Organisational Performance Manager

Report Authoriser:

Karen Aspey, Director, People & Leadership

Purpose:

To provide Councillors with an overview of the meeting, the guidance sought, and the methods proposed.

 

 

AP 2022/23 Deliberations: Overview of Annual Plan Deliberations Process

 

Executive Summary

This paper provides an overview of the Annual Plan 2022/23 deliberations process and provides information on the context within which Council is making decisions.

There are four accompanying papers:

1.     Financial Overview;

2.     Statements of Proposal;

3.     Transport and Urban Planning Reprioritisation.

4.     Improving Safety and Security of Bus Services

Based on the decisions made today, the final Annual Plan 2022/23 budget, document, and associated policies will be compiled. Council will then meet on (21/22) 29 June 2022 to adopt the final Annual Plan 2022/23 and associated policies, including setting fees and charges for 2022/23, and set the rates for 2022/23.

 

Recommendations

That the Regional Council:

1       Receives the report, AP 2022/23 Deliberations: Overview of Annual Plan Deliberations Process.

 

1.        Introduction

Council has been engaged in the Annual Plan process for some time, with a number of workshops in the period since September 2021. During those workshops, Councillors provided guidance on a range of matters, including new investment proposals and preferred financial mixes.

Alongside the Annual Plan, Regional Council also consulted on changes to several core policies, which will in turn have implications on the revenue received by Regional Council through this Annual Plan year.

This Annual Plan, as with the Long Term Plan, has been developed in the context of a changing operating environment. COVID-19 had significant effects on Regional Council operations during 2021/22, but it is likely that its effects on this Annual Plan year will be reduced. There is still evolving central government direction on the roles and responsibilities of local government. There are still substantial unknowns, particularly around changes to resource management legislation and potential planning requirements.

1.1      Legislative Framework

Council is required to have an Annual Plan under section 95 of the Local Government Act 2002.

1.2      Alignment with Strategic Framework

 

A Healthy Environment

 

Freshwater for Life

 

Safe and Resilient Communities

 

A Vibrant Region

 

The Way We Work

We deliver value to our ratepayers and our customers.

This paper by enabling the delivery of the Annual Plan indirectly contributes to all of them.

1.2.1    Community Well-beings Assessment

Dominant Well-Beings Affected

þ Environmental

Low - Positive

þ Cultural

Low - Positive

þ Social

Low - Positive

þ Economic

Low - Positive

 

 

2.        Annual Plan Process

2.1      Annual Plan Workshop 1 – 29 September 2021

This workshop sought Councillor guidance on key principles relating to the new Rates Remission and Postponement Policy. Specific guidance was received on whenua Māori, incentivising outcomes, and affordability.

2.2      Annual Plan Workshop 2 – 24 November 2021

This workshop sought Councillor guidance on a range of topics. These included key risks relating to the funding approach for the Annual Plan, uncertainty around the activity budgets relating to transport, a range of New Investment Proposals, planned engagement, and the Future for Local Government Review.

2.2.1    Key Guidance from Councillors at Annual Plan Workshop Nov 2021

·      Provide funding to Te Mania Focus Catchments ($130k per annum)

·      Provide funding to Kōhī Marae OSET project ($200k over three years)

2.3      Annual Plan Workshop 3 – 9 March 2022

This workshop sought Councillor guidance on a range of topics. These included a range of New Investment Proposals, updates to financial policies and associated statements of proposal, and the likely increase of 1% in general rates.

2.3.1    Key Guidance from Councillors

·      Funding for Whakatāne-Kawerau urban growth spatial planning ($50k one-off)

·      Funding for Rotorua urban growth future development strategy ($50k one-off)

·      Funding for Western Bay SmartGrowth ($14k per annum)

·      Funding for Rotorua Catchments Environmental Programmes ($330k per annum)

·      To reprioritise existing baselines to fund a Transport Emissions Reduction Plan ($250k) and diesel bus conversion ($50k opex, $200k capex), with no change to total expenditure

·      Funding for Stage Three PFAS work ($80k)

·      Funding for the Lower Rangitāiki River Stopbank Upgrade ($1.8m capex, $96k opex)

·      Funding for Whakatāne River Urban Flood Seepage Control ($3.9m capex, $256k opex)

2.4      Annual Plan Workshop 4 – 27 April 2022

This workshop was held in partnership with a briefing on Regional Council’s financial fundamentals. Papers included information about the process to date, efficiencies and further investment proposals.

2.4.1    Key Guidance from Councillors

·      Funding for additional election costs related to the 2022 local government elections ($285k one-off)

3.        Summary of Papers

3.1      Financial Overview and Implications

This summarises Regional Council’s current and anticipated financial positions. This includes future general and targeted rates, other revenue, and borrowing. It also includes reserve positions.

3.2      Statements of Proposal

This summarises feedback received against the four topics subjected to special consultation, namely:

·      Fees and Charges Policy;

·      Revenue and Financing Policy;

·      Rates Remissions and Postponement Policy; and

·      Joining a regional sector shared-services organisation.

While none of these is strictly an Annual Plan issue, their adoption has implications for the Annual Plan, specifically in terms of anticipated revenue.

3.3      Transportation and Urban Planning Reprioritisation

This paper seeks confirmation on the re-prioritisation of existing Transport and Urban Planning funding to new projects. These are:

·      Transport Emissions Reduction Plan;

·      Hydrogen bus conversion;

·      On-demand bus services.

3.4      Improving Safety and Security of Bus Services

This paper considers items relating to the safety and security of bus services in Tauranga and the WBOP. These include:

·      Security Arrangements at the Tauranga Central Business District bus interchange;

·      Temporary relocation of the Central Business District bus interchange;

·      Options to scale back or remove the current fare free bus travel trial for School Children.

4.        Considerations

4.1      Risks and Mitigations

If Councillors do not provide direction on the issues noted above, then the material presented for adoption may not reflect the most recent guidance. In such a case, the budget prepared today, and the existing policies, will be presented for adoption.

4.2      Climate Change

Individual papers considered implications for climate change in relation to specific decisions.

4.3      Implications for Māori

Individual papers considered implications for Māori in relation to specific decisions.

4.4      Community Engagement

 

Adobe Systems

CONSULT

Whakauiuia

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

The policy changes and potential joining of a regional sector shared services organisation were subjected to a formal Special Consultative Procedure.

 

4.5      Financial Implications

Detailed information on the financial implications is presented in the accompanying Financial Overview report.

5.        Next Steps

At the conclusion of deliberations, staff will update all text and financial information in the draft Annual Plan 2022/23 and associated documents. The final drafts will then be presented to Council for adoption on 29 June 2022, together with the setting of rates for 2022/23.

 


 

 

 

Report To:

Regional Council

Meeting Date:

18 May 2022

Report Writer:

James Llewellyn, Transport & Urban Planning Manager; Graeme Howard, Corporate Planning Lead; Mereana Toroa, Finance Support Team Lead and Zhivan Alach, Organisational Performance Manager

Report Authoriser:

Namouta Poutasi, General Manager, Strategy & Science

Purpose:

This paper seeks Council confirmation of several budget reprioritisations for projects in the Transport and Urban Planning Group of Activities through the Annual Plan 2022/23.

 

 

AP 2022/23 Deliberations: Transport and Urban Planning reprioritisation

 

Executive Summary

A number of proposals for increased investment in the Transport and Urban Planning Group of Activities have been considered at Council workshops through the development of the Annual Plan 2022/23. Councillors provided guidance for several of these proposals to be funded through existing budgets:

·     Bay of Plenty Transport Emissions Reduction Plan (TERP);

·     Hydrogen bus trial; and

·     Tauranga South On-demand Public Transport Trial.

This paper confirms the status of these proposals, whether they have been included in the draft Annual Plan budget for 2022/23 and provides information on how these have been funded to enable their inclusion in the budget.

This paper seeks Council confirmation of the budget reprioritisations as set out in this paper and seeks confirmation to extend fare free trials for SuperGold, and School children in Whakatāne and Rotorua.

 

Recommendations

That the Regional Council:

1       Receives the report, AP 2022/23 Deliberations: Transport and Urban Planning reprioritisation.

2       Confirms the reprioritisation of funding for the following items, as set out in this paper.

(a)  Bay of Plenty Transport Emissions Reduction Plan (TERP);

(b)  Hydrogen bus trial;

(c)  Tauranga South On Demand Public Transport Trial;

3       Confirms Passenger Transport Fare Free Trial extensions – SuperGold Card, Fare Free School Children in Rotorua and Whakatāne.

 

1.        Introduction

A number of proposals for increased investment in the Transport and Urban Planning Group of Activities have been considered at Council workshops through the development of the Annual Plan 2022/23. Councillors provided guidance for several of these proposals to be funded through reprioritisation of existing budgets.

This paper confirms the status of these proposals, whether funding has been included in the draft Annual Plan budget for 2022/23 and provides information on how these have been funded to enable their inclusion in the budget.

1.1      Legislative Framework

Council is required to have an Annual Plan under section 95 of the Local Government Act 2002. Information in this paper contributes to the development of the Annual Plan 2022/23.

1.2      Alignment with Strategic Framework

 

A Healthy Environment

 

Freshwater for Life

 

Safe and Resilient Communities

 

A Vibrant Region

We lead regional transport strategy and system planning, working with others to deliver a safe and reliable public transport system.

The Way We Work

 

 

1.2.1    Community Well-beings Assessment

Dominant Well-Beings Affected

þ Environmental

Medium - Positive

¨ Cultural

Low - Positive

¨ Social

Low - Positive

þ Economic

Medium - Positive

https://objective.envbop.net/id:A3542587/document/versions/latest

 

2.        Transport and Urban Planning Reprioritisation

The table below provides a summary of proposals that have been considered by Councillors through Annual Plan workshops and where guidance has been provided to fund the items though existing budgets.

Para #

Project Title

Description

2022/23

Reprioritisation Funding Source

OPEX

CAPEX

2.2.1

Bay of Plenty Transport Emissions Reduction Plan (TERP)

A plan for a costed and deliverable programme of greenhouse gas emission reduction activities to meet our obligations.

$250,000

 

Consultancy budget - includes savings from Tauranga Refresh

2.2.2

Hydrogen bus trial

 

Undertake a trial to purchase and retrofit an existing diesel bus with hydrogen powered battery technology (subject to EECA funding request).

$50,000

$200,000

OPEX Climate Change Budget, CAPEX, borrowings

2.2.4

Tauranga South On Demand PT Trial

Proposed on demand trial for Tauranga South including Pyes Pā, subject to further PTC consideration in 2022/23.

N/A

N/A

On Hold - Further scoping underway

 

2.1.     Bay of Plenty Transport Emissions Reduction Plan (TERP)

Following guidance at the Annual Plan workshop in March, $250,000 has been reprioritised to produce a Transport Emissions Reduction Plan (TERP). The TERP will provide a costed and deliverable programme of greenhouse gas emission reduction activities for funding through the Regional Land Transport Plan (RLTP) and climate change investment programmes.  The TERP will further develop proposals set out in strategic documents such as the Urban Form and Transport Initiative (UFTI), Transport System Plan (TSP) and Travel Demand Management / Behaviour Change reports for the three sub-regions.

2.2      Hydrogen bus trial

Following guidance at the Annual Plan workshop in March, $50,000 OPEX and $200,000 CAPEX has been allocated from the Climate Change OPEX budget to enable the retrofit of a second hand diesel bus with hydrogen fuel technology, and to run it in service for a period of at least 18 months. The CAPEX portion will be funded from borrowings. The funding covers bus purchase, project management and operational costs. The project aligns with and supports several aspects of Council’s Strategic Framework.

As discussed at the March Annual Plan workshop, the project is also subject to additional funding being confirmed from Central Government. Priority One are leading the process to secure additional funding, this may be through a funding application to the Energy Efficiency and Conservation Authority (EECA), Additional funding is required to complete the retrofit conversion, undertake staff training, provide any specialist equipment and potentially project management costs.  

2.3      Tauranga South On Demand Public Transport Trial Service

This proposal for an on-Demand Public Transport (ODPT) was considered at Council Annual Plan workshop in March 2022. Council Guidance was to refer to the Public Transport Committee to consider and refine the proposal. Following the March Annual Plan workshop a further discussion occurred and the intention is to begin delivering in late 2022/23.

Additional work is occurring to re-scope this project (as per Councillor guidance) including seeking Public Transport Committee direction. The work is scheduled for early 2022/23 and associated funding for this project is on hold until this rescoping has been completed. Costs for implementation of any trial in 2022/23 would be met through TSP funding held in the Regional Fund Reserve.  

2.4      Transport Proposal Funding

Funding for each item is summarised in the table below. Staff have carefully reviewed existing budgets to identify areas where funding reprioritisations take advantage of savings that have been identified e.g. following the Tauranga bus network refresh, and/or where the alignment of the project fits with the purpose of another budget  e.g. the Hydrogen bus trial and climate change budget.   

Project Title

2022/23

Funding Source

OPEX

CAPEX

Bay of Plenty Transport Emissions Reduction Plan (TERP)

$250,000

 

Consultancy budget - includes savings from Tauranga Refresh

Hydrogen bus trial

 

$50,000

$200,000

Climate Change Budget OPEX

Capital funded via borrowings

Tauranga South On Demand PT Trial

N/A

N/A

On Hold - Further scoping underway in 2022/23

 

3.        Super Gold Card, Fare Free School Children Rotorua & Whakatāne Trial Extensions

Through the Long Term Plan 2021-2031, Council reviewed and confirmed a number of fare free trials including SuperGold Card, Fare Free School Children in Rotorua and Whakatāne.  Funding to continue these trials for 2022/23 is included in the Annual Plan budget for 2022/23.

Staff will seek to review these through the Public Transport Committee in line with the Fare Review.  Any funding changes will be considered through future Annual or Long Term Plans.

4.        Considerations

4.1      Risks and Mitigations

Risks and mitigations were considered when projects were considered through the Annual Plan Workshop in March 2022.

 

4.2      Climate Change

An efficient and effective public transport network is an essential ingredient in the ability to mitigate the impacts of climate change.  Implications for climate change were considered when projects were considered through the Annual Plan Workshop in March 2022.

4.3      Implications for Māori

Implications for Māori were considered when projects were considered through the Annual Plan Workshop in March 2022.

4.4      Community Engagement

 

Adobe Systems

INFORM

Whakamōhio

To provide affected communities with balanced and objective information to assist them in understanding the problems, alternatives and/or solutions.

 

4.5      Financial Implications

Financial implications are set out under the relevant sections of this paper.

 

5.        Next Steps

Direction from Council at this meeting will be incorporated into the final draft Annual Plan 2022/23 that is planned to be presented to Council for adoption in June 2022.

 


 

 

 

Report To:

Regional Council

Meeting Date:

18 May 2022

Report Writer:

Mark Le Comte, Principal Advisor, Finance and Matthew Searle, Corporate Planner

Report Authoriser:

Mat Taylor, General Manager, Corporate

Sarah Omundsen, General Manager, Regulatory Services

Purpose:

To provide direction on the preparation of the Fees and Charges Policy, Rates Remissions and Postponements Policy and Revenue and Financing Policy for adoption.

 

 

AP 2022/23 Deliberations: Statements of Proposal

 

Executive Summary

Council adopted four Statements of Proposal for public consultation from 4 April to 4 May 2022. These were:

·     Fees and Charges Policy

·     Revenue and Financing Policy

·     Rates Remissions and Postponement Policy

·     Joining Regional Shared Service Council Controlled Organisation

Council received 28 submissions on 17 May 2022 including hearing from those that wished to present their views verbally. Following consideration of these submissions and other relevant information, Council is requested to make key decisions to enable staff to prepare the policies for adoption.

Council received one general submission from the Tauranga Business Chamber. This covers topics that cannot be effectively addressed in this policy cycle and will need to be considered in future planning processes.

 

Recommendations

That the Regional Council:

1       Receives the report, AP 2022/23 Deliberations: Statements of Proposal.

2       Directs staff to prepare the following for adoption:

(a)  Fees and Charges Policy with no changes from consultation;

(b)  Revenue and Financing Policy with no changes from consultation;

(c)  Rates Remission Policy with no changes from consultation;

Or:

(d)  direct specific changes to be prepared;

3       Approves that the Regional Council becomes a shareholder of the Regional Shared Services (RSS) Council Controlled Organisation and delegates to the Chief Executive to take all appropriate steps required to join the CCO.

 

1.        Introduction

Council adopted four Statements of Proposal for public consultation from 4 April to 4 May 2022. These were:

•      Fees and Charges Policy

•      Revenue and Financing Policy

•      Rates Remissions and Postponement Policy

•      Joining Regional Shared Service Council Controlled Organisation

Council received 28 submissions on 17 May 2022 including hearing from those that wished to present their views verbally. Following consideration of these submissions and other relevant information, Council is requested to make key decisions to enable staff to prepare the policies for adoption.

1.1      Legislative Framework

Consultation on the four Statements of Proposal is being conducted under the Local Government Act section 82 Principles of Consultation and 83 Special Consultative Procedure.

1.2      Alignment with Strategic Framework

 

A Healthy Environment

 

Freshwater for Life

 

Safe and Resilient Communities

 

A Vibrant Region

 

The Way We Work

We deliver value to our ratepayers and our customers.

1.2.1    Community Well-beings Assessment

Dominant Well-Beings Affected

¨ Environmental

 

¨ Cultural

 

¨ Social

 

þ Economic

Low - Positive

 

 

2.        Fees and Charges Policy

There were three main changes to the Fees and Charges Policy that were consulted on:

·     Rotorua Plan Change 10 (PC10) compliance charges changing from actual and reasonable charges to fixed fees.

·     An increase of approximately 8% to most charges and a lower deposit for minor consent variations.

·     Waiving OSET charges for Marae.

2.1      Summary of Submissions

Feedback on PC10 charges moving to fixed fees was mixed with some submitters in support of the proposal and other preferring actual costs. Increases to fees were not supported by submitters, with most submitters including commentary that they do not see value for money in the compliance monitoring charges and/or do not understand the cost. Council received submissions that did not support waiving OSET fees for Marae, with several statements that this was favouring one part of the community over others and the same treatment should be extended to other community facilities.

Other general comments included topics like:

·     Consideration that businesses can reclaim GST whereas homeowners cannot

·     Differing circumstances of individual consent holders need to be taken into account e.g. affordability or level of resource use

Council also received a detailed submission relating to the costs of a specific geothermal consent. The submitter, Mr Turner, outlines that his geothermal bore produces less benefit than other nearby geothermal bores and that therefore his resource consent should be less expensive to monitor than the general fixed fees for this type of consent. However, resource consent monitoring is charged based on cost recovery of Council staff time, not a charge for resource use.

2.2      Recommendations

The proposed change to fixed fee for PC10 consents is intended to make payment of fees and charges easier with a lower and more frequent bill rather than a larger infrequent bill. Submitters have raised the issue of compliant consent holders effectively subsidising non-compliant consent holders; however, this is not the case.

If non-compliant consent holders require extra inspections or monitoring these can be scheduled in addition to fixed fee inspections and charges actual and reasonable costs.

The proposed increase of 8% for most fees and charges was based on inflation expectations at the time. Inflation has increased faster than expected and this level of increase is required to maintain the funding ratios set in the Revenue and Financing Policy. Council could choose to set a lower percentage increase, however, this would require either a corresponding increase in general rates to cover costs or a reduction in compliance monitoring work with consequentially higher environmental risk.

The proposal to waive OSET fees for Marae is based on the wider Marae OSET programme. This recognises that many Marae across the region require OSET systems and are being supported to upgrade to compliant systems. This waiver only applies to OSET charges, not any other fees and charges. Staff are empowered to remit charges in part or in full on a case by case basis.

It is recommended that the proposed Fees and Charges Policy is prepared to be adopted as drafted including the 8% average fee increase.

3.        Revenue and Financing Policy

The Statement of Proposal identified two changes to enable targeted rates for the Sustainable Homes programme and Regional Infrastructure. It is not proposed to set or collect a targeted rate for either of these in 2022/23.

The Sustainable Homes targeted rate is intended to be used as a repayment mechanism for homes that take out a Sustainable Homes loan. This is likely to result in targeted rates being set for 2023/24.

The Regional Infrastructure targeted rate is intended to be a mechanism to fund regionally (or sub-regionally) important infrastructure. This is potentially an important tool for delivery of Spatial Plans and to assist city/district councils. Before any targeted rate is actually set and collected, further work is required to define the conditions and criteria for funding, select projects that best deliver on the criteria, agree the amount of funding support and consult on the amount of any targeted rate that is proposed to be set.

3.1      Summary of Submissions

Council received three submissions, which all supported the proposed changes.

3.2      Recommendations

It is recommended that the proposed Revenue and Financing Policy is prepared to be adopted as drafted.

4.        Rates Remissions Policy

The proposed Rates Remission Policy is an important change required by the Rates Collection project. Currently, Council uses the policies of each of the City/District Councils and this proposal moves to one standard policy.

Due to the potential impact of this change, Council decided to adopt a transition period. Council will apply remission to any ratepayers that currently receive a remission under a city/district Council remission policy and have this remission extended to 2022/23. This ensures that currently receives a remission is affected until another full policy review with more detailed information is completed.

The transition period also allows for Council to gain a better understanding of the relevant issues and data through the new in-house rates function. Another full Policy review is intended to be completed in 2022/23.

4.1      Summary of Submissions

Council asked the public for comments on the proposed remissions, and for any other categories of remissions that should be considered. Some of the key points raised were:

·     Rates remissions for all protected areas of native bush

·     Remissions should be able to be applied to Trusts and not just natural persons

·     Remission for land subject to flooding

·     Wider definition of Māori Freehold land

Further research is required into some of the points raised and to ensure that there are no unintended consequences. Further, some of the issues raised may not have been ‘reasonably foreseeable’ and may require further consultation.

For these reasons it is recommended that the comments from this submissions process are incorporated into the list of issues for consideration in the next round of policy development.

4.2      Recommendations

It is recommended that the proposed Rates Remission Policy is prepared to be adopted as drafted as no one that currently receives a remission will be affected in 2022/23.

It is recommended that the comments from this submissions process are incorporated into the list of issues for consideration in the next round of policy development.

5.        Joining Regional Shared Service CCO

Council received two submissions on this topic which were both in support of the proposal. Staff intend to proceed with the decision-making process to become a shareholder of this CCO including bringing the proposed Statement of Intent to Council and confirming that other new shareholders have agreed to join.

6.        Submission from Tauranga Business Chamber

Council received one general submission from the Tauranga Business Chamber. This covers topics including:

·     The use of the Port dividend,

·     Future of Bay of Connections, and

·     Delivery entity for passenger transport.

Each of these are major issues that could impact rates and levels of service to a significant or material level and require full consideration and possible wider consultation.

Due to the level of analysis required these issues cannot be effectively addressed in this policy cycle and will be referred to the next Annual Plan/Long Term Plan cycle.

7.        Considerations

7.1      Risks and Mitigations

There are no significant risks associated with this matter/subject/project/initiative.

7.2      Climate Change

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

7.3      Implications for Māori

Māori have had the opportunity to provide submissions on the Statements of Proposal. The proposed policy changes include provision for rates remissions on Māori Freehold Land and waiving OSET fees for Marae.

7.4      Community Engagement

 

Adobe Systems

CONSULT

Whakauiuia

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

 

7.5      Financial Implications

There are no material unbudgeted financial implications and this fits within the allocated budget.

8.        Next Steps

Following decisions made at this meeting, the final draft Policies will be prepared for adoption with Annual Plan 2022/23.

Responses will be prepared to all submitters that outline the general decisions and address the specific points they have raised.

 


 

 

 

 

Report To:

Regional Council

Meeting Date:

18 May 2022

Report Writer:

Kumaren Perumal, Chief Financial Officer and Mereana Toroa, Finance Support Team Lead

Report Authoriser:

Mat Taylor, General Manager, Corporate

Purpose:

This report sets out the updated financial estimates for the Draft Annual Plan 2022/23.

 

 

AP 2022/23 Deliberations: Financial Overview and Implications

 

Executive Summary

Council’s draft Annual Plan 2022/23 identifies operating expenditure of $178 million and capital expenditure of $34 million.

The current estimate of the total real rates revenue increase for 2022/23 is 3.8% comprising of:

·          a general rates increase of 5.8%

·          a targeted rates increase of 2.0%

These are figures are based on guidance provided by Council at Annual Plan 2022/23 Workshops in November 2021, March, and April 2022.

Key assumptions within the current Draft Annual Plan 2022/23 (DAP) are:

·          Inflation at 6.9%

·          Staff inflation at 7.9% (CPI + 1%) in accordance with the current CEA

·          Public Transport TSP and Rotorua Initiatives moving to later years

·          New investments for various community projects and activities.

 

Recommendations

That the Regional Council:

1       Receives the report, AP 2022/23 Deliberations: Financial Overview and Implications.

2       Includes the proposed targeted rates for the minor river schemes in the draft Annual Plan 2022/23 budget for adoption on 23 June 2022.

 

1.        Introduction

Council’s draft Annual Plan 2022/23 anticipates operating expenditure of $178 million and capital expenditure of $34 million.

The DAP capital expenditure has undergone a further deliverability review, following the April 2022 Annual Plan workshop, and has been reduced by $11 million.

The current estimate of the total real rates revenue increase for 2022/23 is 3.8% comprising of:

·     a general real rates increase of 5.8%

·     a targeted real rates increase of 2%

These increases result from the guidance and direction given at the DAP Workshops in November 2021, March and April 2022.

The Long Term Plan 2021–2031 included the use of reserves to fund operating expenditure, including $13 million for regional infrastructure, and set general rates in 2022/23 to achieve regional rates affordability.

The funding of the DAP 2022/23 requires $5 million use of the Regional Fund Reserve to maintain a general rates increase of 5.8%.

Alignment with Strategic Framework

 

A Healthy Environment

 

Freshwater for Life

 

Safe and Resilient Communities

 

A Vibrant Region

 

The Way We Work

We deliver value to our ratepayers and our customers.

 

         

2.        Draft Annual Plan 2022-2023

2.1      Strategic Financial Context

2.1.1    Key Financial Issues, Risks, and Assumptions

Some of the key risks, issues, and assumptions in the current financial environment and DAP 2022/23 include:

·     General inflation has increased faster than expected and to a higher level (CPI currently at 6.9% and has been included in the DAP 2022/23 at this rate).

·     Interest rate increases to curb inflation will place further pressure on borrowers.

·     Unemployment is lower than expected, and filling jobs with suitably qualified and experienced staff is becoming more difficult and may lead to higher wage inflation.

·     Increased costs for international shipping and reduced availability of some goods/supplies.

·     Low unemployment and reduced availability of some goods/supplies may lead to more difficulty in securing contractors and consultants for work programmes. An allowance for vacant positions and significant resourcing requirements has been included in the DAP.

2.1.2    Financial Levers 2022/23

The Bay of Plenty Regional Council Group Financial Framework Review identified the key funding and balance sheet levers available to Council which it can apply to achieve the best possible outcomes for the community and the region. The LTP 2021-2031 Financial Strategy sets out general principles which can help guide the evaluation of alternative options.

Council has considered all financial levers, and the potential impact of applying each lever on Council’s community outcomes and community wellbeing, the current position for the DAP 2022/23 is as follows:

·     There has been a reprioritisation of budgets, particularly within Public Transport to accommodate new cost pressures,

·     An estimated increase of $2.4 million in Quayside dividend has been signalled,

·     A real general rates rise of 5.8% (which is 2.8% higher than that proposed in LTP 2021-2031 Year 2),

·     Use of available Regional Fund reserves to limit rates rises, particularly for one-off costs.

2.2      Draft Annual Plan 2022/23 Budget

Underpinning the development of the DAP 2022/23 Budget is Council’s strategic priority of making the best use of resources to deliver on its community outcomes and to promote wellbeing and supporting others to deliver.

The updated DAP 2022/23 budget includes estimated operating expenditure of $178 million.

Council has carefully accumulated reserves over time which allows it to assist others to fund infrastructure, support our region’s recovery and adaptation to COVID-19, and charge lower rates to every property.

The key areas where reserves will be used to fund operating expenditure in 2022/23 include grants for the Ōpōtiki Harbour and Rotorua Museum projects ($13 million), Rotorua Lakes land use change incentives to improve lake water quality ($2 million) and lowering general rates ($5 million). A summary of the forecast reserves balances to 30 June 2022 is shown separately.

The following Table 1 summarises the changes from Year 2 of LTP 2021-2031 to the DAP 2022/23 Budget.

 

Table 1: Draft AP 2022/23 Budget compared to Year 2 of LTP 2021-2031

 

         

2.2.1    Estimated Capital Expenditure 2022/23

Council is estimating capital expenditure of $34 million in 2022/23. This estimate is supported by pre-existing third-party contractual arrangements in key areas including Council’s rivers and drainage and engineering activities.

It is intended to fund capital works from funding that has already been borrowed from the Local Government Funding Agency (LGFA) and from the accumulated funds in the Asset Replacement Reserve.

Attachment 1 provides a list of estimated capital expenditure for key 2022/23 projects in the DAP.

2.2.2    Forecast Rates 2022/23

The planned rates increases over the next two years reflect Council’s ongoing commitment to deliver regional rates affordability through prudent financial management and sustainability.

Presently the updated 2022/23 DAP Budget includes a forecast total real rates revenue increase of approximately 3.8% (after allowing for the effects of growth and inflation). This figure is 1% higher than the forecast for Year 2 of LTP 2021-2031 (2.8%).

The forecast real general rates revenue increase in the DAP is currently 5.8%, this is the equivalent of $21 including GST for an average property (the average increase per district ranges from $11 - $23). This general rate increase is 2.8% higher than forecast in Year 2 of LTP 2021-2031 for the reasons noted above.

In addition, Council is forecasting a targeted rates revenue increase of 2% which is 0.2% higher than the forecast in year 2 of the LTP 2021-2031.

As part of the Arotake (Council’s performance monitoring report) and informal financial briefing processes, staff and Councillors will continue to monitor the impact on forecast rates associated with financial and other risks. This is with a view to the organisation remaining agile in response to unforeseen events arising during the financial year.

Attachment 2 summarises the changes in forecast rates per district from Year 2 of LTP 2021-2031 to the DAP 2022/23 Budget by rating category.

2.2.3    Forecast General Reserves

Council decided in the 2021 – 2031 LTP to use reserves to fund specific work in years one to three to reduce the impact on ratepayers ($5 million was originally earmarked for LTP year 2). Based on the current DAP financial forecasts, applying Council’s financial levers including the Quayside dividend changes, rate increases and reprioritisation of existing budgets, the Regional Fund reserve use to fund council general operating expenditure continues to be estimated at $5 million.

The forecast balances of Council’s general operating reserves as at 30 June 2022 are discussed below.

The purpose of Equalisation Reserve is to record surpluses/deficits from all General Funded activities. One of the purposes of the Regional Fund is to fund third party infrastructure projects. It is replenished through budgeted contributions from activities, and is available for use by all activities.

The opening balance of the Regional Fund reserve for the 2021/22 financial year was $36.3 million. The forecast for the 2021/22 financial year shows the anticipated Regional Fund reserve balance at 30 June 2022 to be $23.6 million.

The latest estimate of the expenditure funded from the Regional Fund reserve in the DAP 2022/23 budget (LTP Year 2):

·     Ōpōtiki District Council Harbour Transformation Project - $10 million (total $20 million across LTP years 1-2).

·     Rotorua Museum - $3.6 million ($3.9 million in total across LTP years 2-3). Project delays have occurred during consultation on design. Likely timing is being confirmed with Rotorua Lakes Council and should result part of the budget being rephased.

·     Rotorua Lakes Land Use Change Incentives - $1.8 million (Total $14.7 million in LTP Years 1-6).

·     Tauranga City Council CBD Bus Interchange operating costs - $0.3 million.

·     Western Bay of Plenty Transport Systems Plan - $70k ($6.3 million in total).

Taking into account the level of forecast contributions and spend affecting the combined position of the Equalisation Reserves and Regional Project Fund over the next three years, the uncommitted reserve balance as at 30 June 2022/23 is expected to be $1 million.

Toi Moana Fund

The Toi Moana Reserve, with an initial investment of $45 million, is a general reserve which generates investment income.

 

Investment returns on this reserve have been included in the DAP estimates, and there is no anticipated spend against the reserve in the DAP. A further $25 million is anticipated to be invested in the fund early in 2022/23 from the Asset Replacement Reserve.

 

3.        Submission for the minor Rivers and Drainage Schemes

In line with annual practice, a submission has been received relating to the Minor Rivers and Drainage Schemes, this is in Attachment 3. This sets out an updated table of recommended rates for the Minor Rivers and Drainage Schemes and is developed in consultation between, and with, the liaison person and/or caretaker from each of the communal pumping schemes (100% funded by targeted rates), who have agreed to the amended budgets for 2022/23.

Overall, proposed targeted rates for 2022/23 are considerably higher than 2021/22. This is due to significant insurance recoveries on three Schemes being received in the 2021/22 year related to the 2017 flood events. The 2022/23 budgets are in line with the targeted rates from 2020/21, and some schemes have sufficient balances at year end to negate a targeted rate for 2022/23.

Staff recommend the proposed targeted rates for the 37 minor schemes are included in the draft Annual Plan 2022/23 budget for adoption on 23 June 2022.

4.        Considerations

4.1      Risks and Mitigations

There are no significant risks associated with this matter/subject/project/initiative.

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 matters addressed in this report are of a procedural nature and there is no need to consider implications for Māori.

4.4      Community Engagement

Adobe Systems

INFORM

Whakamōhio

To provide affected communities with balanced and objective information to assist them in understanding the problems, alternatives and/or solutions.

 

4.5      Financial Implications

Please refer to the relevant analysis in the options paper attached.

5.        Next Steps

Following deliberations on 18 May, staff will make any final updates approved by Councillors to the DAP 2022/23, and prepare the Annual Plan for adoption on 23 June 2022.

 

Attachments

Attachment 1 - DAP 2022-2023 - Capital Projects

Attachment 2 - DAP 2022-2023 - Rates by TA

Attachment 3 - DAP 2022-2023 - Pump budgets Proposed  

 

 

 

 


Regional Council                                                                       18 May 2022

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Regional Council                                                                       18 May 2022

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Regional Council                                                                       18 May 2022

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