HuttCity_TeAwaKairangi_BLACK_AGENDA_COVER

 

 

 

25 June 2020

 

 

 

Order Paper for Council meeting to be held in the

Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt

on:

 

 

Tuesday 30 June 2020 commencing at 5.00pm

 

 

 

Membership

 

 

Mayor C Barry (Chair)

Deputy Mayor T Lewis

Cr D Bassett

Cr J Briggs

Cr K Brown

Cr B Dyer

Cr S Edwards

Cr D Hislop

Cr C Milne

Cr A Mitchell

Cr S Rasheed

Cr N Shaw

Cr L Sutton

 

 

 

 

 

For the dates and times of Council Meetings please visit www.huttcity.govt.nz

 

Have your say

You can speak under public comment to items on the agenda to the Mayor and Councillors at this meeting. Please let us know by noon the working day before the meeting. You can do this by emailing DemocraticServicesTeam@huttcity.govt.nz or calling the Democratic Services Team on 04 570 6666 | 0800 HUTT CITY


HuttCity_TeAwaKairangi_SCREEN_MEDRES
 

 

 

 


COUNCIL

 

Membership:

13 

Meeting Cycle:

Council meets on a six weekly basis (Extraordinary Meetings can be called following a resolution of Council; or on the requisition of the Chair or one third of the total membership of Council)

POWER TO (BEING A POWER THAT IS NOT CAPABLE OF BEING DELEGATED)1:

        Make a rate.

       Make bylaws.

       Borrow money other than in accordance with the Long Term Plan (LTP).

        Purchase or dispose of assets other than in accordance with the LTP.

        Purchase or dispose of Council land and property other than in accordance with the LTP.

        Adopt the LTP, Annual Plan and Annual Report.

        Adopt policies required to be adopted and consulted on under the Local Government Act 2002 in association with the LTP or developed for the purpose of the Local Governance Statement.

        Appoint the Chief Executive.

        Exercise any powers and duties conferred or imposed on the local authority by the Local Government Act 1974, the Public Works Act 1981, or the Resource Management Act 1991, that are unable to be delegated.

        Undertake all other actions which are by law not capable of being delegated.

        The power to adopt a Remuneration and Employment Policy for Council employees.

 

DECIDE ON:

Policy issues

       Adoption of all policy required by legislation.

       Adoption of strategies, and policies with a city-wide or strategic focus.

 

District Plan

       Approval to call for submissions on any Proposed District Plan, Plan Changes and Variations.

       Prior to public notification, approval of recommendations of District Plan Hearings Subcommittees on any Proposed Plan, Plan Changes (including private Plan Changes) and Variations, on the recommendation of the Regulatory Committee.

 

1       Work required prior to the making of any of these decisions may be delegated.

       The withdrawal of Plan Changes in accordance with clause 8D, Part 1, Schedule 1 of the Resource Management Act 1991.

       Approval, to make operative, District Plan and Plan Changes (in accordance with clause 17, Part 1, Schedule 1 of the Resource Management Act 1991).

       Acceptance, adoption or rejection of private Plan Changes.

 

Representation, electoral and governance matters

        The method of voting for the Triennial elections.

        Representation reviews.

        Council’s Code of Conduct for elected members

        Local Governance Statement.

        Elected Members’ Remuneration.

        The outcome of any extraordinary vacancies on Council.

        Any other matters for which a local authority decision is required under the Local Electoral Act 2001.

        Appointment and discharge of members of committees when not appointed by the Mayor.

        All matters identified in these Terms of Reference as delegated to Council Committees (or otherwise delegated by the Council) and oversee those delegations.

        Council‘s delegations to officers and community boards.

 

Delegations and employment of the Chief Executive

Review and negotiation of the contract, performance agreement and remuneration of the Chief Executive.

 

Meetings and committees

        Standing Orders for Council and its committees.

        Council’s annual meeting schedule.

 

Long Term and Annual Plans

        The adoption of the budgetary parameters for the LTP and Annual Plans.

        Determination of rating levels and policies required as part of the LTP.

        Adoption of Consultation Documents, proposed and final LTPs and proposed and final Annual Plans.

 

Council Controlled Organisations

        The establishment and disposal of any Council Controlled Organisation or Council Controlled Trading Organisation.

        Approval of annual Statements of Corporate Intent for Council Controlled Organisations and Council Controlled Trading Organisations.

 

Community Engagement and Advocacy

        Receive reports from the Council’s Advisory Groups.

        Monitor engagement with the city’s communities.

 

Operational Matters

        National Emergency Management Agency matters requiring Council’s  input.

        Road closing and road stopping matters.

        Approval of overseas travel for elected members.

        All other matters for which final authority is not delegated.

 

Appoint:

        The non-elected members of the Standing Committees, including extraordinary vacancies of non- elected representatives.

        The Directors of Council Controlled Organisations and Council Controlled Trading Organisations.

        Council’s nominee on any Trust.

        Council representatives on any outside organisations (where applicable and time permits, recommendations for the appointment may be sought from the appropriate Standing Committee and/or outside organisations).

        The Chief Executive of Hutt City Council.

        Council’s Electoral Officer, Principal Rural Fire Officer and any other appointments required by statute.

        The recipients of the annual Civic Honours awards.

 

    


HUTT CITY COUNCIL

 

Ordinary meeting to be held in the Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt on

 Tuesday 30 June 2020 commencing at 5.00pm

 

ORDER PAPER

 

Public Business

 

 

 

 

1.       OPENING FORMALITIES - Karakia Timatanga 

Kia hora te marino

Kia whakapapa pounamu te moana

He huarahi mā tātou i te rangi nei

Aroha atu, aroha mai

Tātou i a tātou katoa

Hui e Tāiki e!

May peace be wide spread

May the sea be like greenstone

A pathway for us all this day

Let us show respect for each other

For one another

Bind us together!

 

2.       APOLOGIES 

3.       PUBLIC COMMENT

Generally up to 30 minutes is set aside for public comment (three minutes per speaker on items appearing on the agenda). Speakers may be asked questions on the matters they raise.

4.       Mayor's Statement (20/399)

5.       Chief Executive's Statement (20/400)

6.       CONFLICT OF INTEREST DECLARATIONS

With reference to section 32 of Standing Orders, before putting a question a member shall endeavour to obtain the information. Questions shall be concise and in writing and handed to the Chair prior to the commencement of the meeting.   

7.       Adoption of Annual Plan 2020/21 (20/634)

Report No. HCC2020/4/150 by the Budgeting and Reporting Manager         10

Mayor’s Recommendation:

“That the recommendations contained in the report be endorsed.”  

 

 

 

8.       Setting of rates for 2020/21 (20/635)

Report No. HCC2020/4/148 by the Financial Transaction Services Manager 18

Mayor’s Recommendation:

“That the recommendation contained in the report be endorsed.”  

9.       Community Funding Panels (20/656)

Report No. HCC2020/4/151 by the Head of Strategy and Planning                38

Mayor’s Recommendation:

“That the recommendations contained in the report be endorsed.”  

10.     QUESTIONS

With reference to section 32 of Standing Orders, before putting a question a member shall endeavour to obtain the information. Questions shall be concise and in writing and handed to the Chair prior to the commencement of the meeting. 

11.     EXCLUSION OF THE PUBLIC

MAYOR'S RECOMMENDATION:

 

“That the public be excluded from the following parts of the proceedings of this meeting, namely:

12.     Recommendation from the Audit and Risk Subcommittee - Further Information on Agreement to Lease Events Centre and Develop a Hotel (20/650)

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

 

(A)

(B)

(C)

 

 

 

General subject of the matter to be considered.

Reason for passing this resolution in relation to each matter.

Ground under section 48(1) for the passing of this resolution.

 

 

 

 

 

 

Recommendation from the Audit and Risk Subcommittee - Further Information on Agreement to Lease Events Centre and Develop a Hotel.

The withholding of the information is necessary to protect the privacy of natural persons. (s7(2)(a)).

The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities (s7(2)(h)).

The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) (s7(2)(i)).

That the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding exist.

 

This resolution is made in reliance on section 48(1) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as specified in Column (B) above.”

13.     CLOSING FORMALITIES - Karakia WHAKAMUTUNGA

Whakataka te hau ki te uru

Whakataka te hau ki te tonga

Kia mākinakina ki uta

Kia mātaratara ki tai

E hī ake ana te atakura

He tio, he huka, he hau hū

Tīhei mauri ora.

Cease the winds from the west
Cease the winds from the south
Let the breeze blow over the land
Let the breeze blow over the ocean
Let the red-tipped dawn come with a sharpened air. 
A touch of frost, a promise of a glorious day.

 

 

 

 

 

 

 

Kathryn Stannard

HEAD OF DEMOCRATIC SERVICES

 

 

                         


                                                                                      17                                                            30 June 2020

Hutt City Council

19 June 2020

 

 

 

File: (20/634)

 

 

 

 

Report no: HCC2020/4/150

 

Adoption of Annual Plan 2020/21

 

Purpose of Report

1.    The purpose of this report is to present the final Annual Plan 2020/21 to the Council for adoption.

Recommendations

That Council:

(i)    receives the information;

(ii)   notes that the Annual Plan 2020/21, attached as Appendix 1, has been prepared based on the decisions and recommendations of the Long Term Plan/Annual Plan Subcommittee and Council meeting of 18 June 2020;

(iii)  resolves that it is financially prudent to have an unbalanced budget in 2020/21 as detailed in paragraphs 14 to 24;

(iv) adopts the amended Revenue and Financing Policy;

(v)  adopts the Annual Plan 2020/21; and

(vi) delegates authority to the Mayor, Deputy Mayor and the Chairpersons of the Committees to make any editorial changes that may arise as part of the Annual Plan 2020/21 publication process.  

 

Acronyms

LTP – Long Term Plan 2018-2028

DAP – Draft Annual Plan 2020/21

FAP – Final Annual Plan 2020/21

Capex – Capital expenditure

Opex – Operational expenditure.

Background

Legal context for the Annual Plan 2020/21

2.    Once every three years, Council is required to adopt a Long Term Plan (LTP) and in the intervening years an Annual Plan. These plans set out the service levels, work plans and budgets for the coming year, and provide the basis on which Council’s rates are set.

3.    The Local Government Act 2002 (LGA) requires the adoption of an Annual Plan prior to the start of each financial year. This means that Council is required to adopt an Annual Plan for 2020/21 on or before 30 June 2020. If the Council does not adopt an Annual Plan, it may not set rates for that year. The rates resolution is included as a separate report on this agenda, to be considered once the Annual Plan has been adopted. Failing to adopt the budgets for 2020/21 could impact Council’s ability to continue to deliver services and projects for Lower Hutt.

Legal context of the balanced budget requirement and financial prudence

4.    Section 101 of the LGA requires all local authorities to “manage its revenues, expenses, assets, liabilities, investments, and general financial dealings prudently and in a manner that promotes the current and future interests of the community.”

5.    Section 100 subsection 1 of the LGA states:

A local authority must ensure that each year’s projected operating revenues are set at a level sufficient to meet that year’s projected operating expenses.

Section 100, then goes on to say:

2) Despite subsection (1), a local authority may set projected operating revenues at a different level from that required by that subsection if the local authority resolves that it is financially prudent to do so, having regard to—

(a) the estimated expenses of achieving and maintaining the predicted levels of service provision set out in the long-term plan, including the estimated expenses associated with maintaining the service capacity and integrity of assets throughout their useful life; and

(b) the projected revenue available to fund the estimated expenses associated with maintaining the service capacity and integrity of assets throughout their useful life; and

(c) the equitable allocation of responsibility for funding the provision and maintenance of assets and facilities throughout their useful life; and

(d) the funding and financial policies adopted under section 102.

Summary of the process to prepare the FAP and LTP Amendment

6.    Work to revise the 2020/21 annual budgets commenced in October 2019.  The Council decided to develop a LTP Amendment in December 2019 in order to progress important longer term decisions across the capital works programme (including Three Waters investment, Naenae Pool, Cycleways Programme etc.), proposed changes to services for refuse and recycling, rating policy changes impacting the Revenue and Financing Policy together with associated financial strategy changes.

7.    The LTP amendment was prepared and an external audit completed. The Council approved the Consultation Document on the 18 March 2020.  Preparation for the public consultation was well progressed when the Covid-19 lockdown occurred.

8.    At the Council meeting of 9 April, various options were considered. The Council decided in response to Covid-19 to develop a one year “Emergency Budget” draft Annual Plan 2020/21 (DAP). The LTP amendment was not progressed further. A Covid-19 response plan was implemented which included a range of initiatives, including community welfare support and rating relief initiatives.

9.    At the Council meeting of 7 May, the Council adopted the DAP. A public engagement process then proceeded. The DAP included a reduced rates revenue increase of 3.8%, down from the 7.9% included in the LTP amendment. The DAP included proposed changes to the Revenue and Financing Policy in relation to rating policy.

10.  At the LTP/Annual Plan subcommittee meeting of 29 May, the Council considered the public submissions and analysis of the results of the public engagement process.  The subcommittee met again on 18 June and finalised decisions for the Annual Plan 2020/21. This included some budget changes to operating and capital expenditure, and retaining the rates revenue level at the same level as per the DAP. A decision was made on the rating policy which impacts the Revenue and Financing Policy.  The financial impact of Covid-19 on 2019/20 was estimated at a cost of $3M with further financial risks reported for 2020/21.

11.  An extract of a selection of the resolutions from this Council meeting follow (refer HCC2020/4/56):

 (ii)     notes Council’s proactive response to Covid-19 with a wide range of initiatives delivered to support the Lower Hutt community;

(iii)     notes the financial impact of Covid-19 on the 2019/20 financial results is an approximate net impact of $3 million and that there are further related financial risks and uncertainties in 2020/21;

(iv)     notes that Council agreed on 9 April 2020 not to progress the Amendment to the Long Term Plan due to the Covid-19 pandemic; 

(v)      notes that Council approved on 7 May 2020 an “Emergency Budget” Draft Annual Plan 2020/21 for public engagement, which included a proposed rates revenue increase of 3.8%;

(vi)     notes that the “Emergency Budget” with the reduced rates revenue as directed by Council included $3 million of operational savings;

 (x)     endorses the proposed changes to the fees and charges included in the Draft Annual Plan;

(xi)     notes the long term projected debt shows that debt will exceed the limits set in the financial strategy from 2022/23 onwards;

(xii)    agrees that all projects from 2021/22 and beyond are in principle placed on hold pending reprioritisation and funding solutions through the development of the LTP 2021-2031; and

(xiii)   approves a rates revenue increase of 3.8% in the “Emergency Budget” Annual Plan 2020/21, noting that there is an allowance for additional rates revenue of approximately 1% from growth in the city’s rating bases, as a result of new builds and property investment.”

Balanced budget requirement and financial prudence

12.  Sections 100 and 101 of the Local Government Act 2002 (LGA) are the relevant legislation to be considered.  The overarching requirement in this legislation is to act prudently and in a manner that promotes the current and future interests of the community.

13.  Financial prudence is not defined in the Act. In the standard dictionary sense prudence means ‘careful’, ‘sensible’, or ‘habit of acting with careful deliberation’.

14.  The “Emergency Budget” Annual Plan 2020/21 was prepared in the context of the Covid-19 pandemic and a large degree of uncertainty as to the impacts on the community.  Whilst the alert levels have been reduced over the last few weeks, there is still uncertainty into the future as to the full impacts of Covid-19 on the community.

15.  The Council in preparing the plan for 2020/21 and the rates revenue has worked to find a pragmatic balance between managing the pressures on current ratepayers and ensuring the Council remains financially sustainable into the future, whereby the actions of today do not significantly impact unfairly on ratepayers in the future.

16.  The reduction in the rates revenue in the Annual Plan 2020/21 compared to the proposed level in the LTP Amendment (7.9% reduced to 3.8%), can be seen as a one-off funding adjustment in response to Covid-19 which is met through additional borrowings.  It can be resolved that it is financially prudent due to the one off nature, with revenues recovering and repayment of the debt occurring over the medium term to avoid significant impact on future ratepayers. This one off adjustment does not impact on Council’s ability to maintain its levels of services, undertake asset renewals and is consistent with the Revenue and Financing Policy.

17.  Through the preparation of the LTP 2021-2031 the Council will look to review strategic priorities and complete a full review of the Infrastructure Strategy and Financial Strategy.

Further detailed analysis

18.  Included in the Annual Plan is a section entitled “Prudence Reporting”. This section covers the requirement to include a statement in accordance with the Local Government (Financial Reporting and Prudence) Regulations 2014 (the regulations). The purpose of this statement is to disclose the council’s planned financial performance in relation to various benchmarks to enable the assessment of whether the council is prudently managing its revenues, expenses, assets, liabilities, and general financial dealings.

Table 1: Comparison of LTP and FAP financial projections

 

Net surplus or deficit 2020/21

Balanced budget benchmark 2020/21*

FAP 2020/21

Deficit $9.7M

93%

LTP year 3,  2020/21

Surplus $4.4M

101%

*Extracted from “Prudence Reporting” section of the LTP and FAP

19.  The balanced budget benchmark is met if the Council’s revenue equals or is greater than its operating expenses. In the FAP the planned revenue falls below the planned operating expenses, meaning the balanced budget benchmark will be at 93%, or 7% below the 100% benchmark. 

20.  The LTP 2018-2028 projected 101% in 2020/21. The three years prior to this did not achieve the 100% target in the LTP and the explanation provided was “grants paid to Community Facilities Trust (CFT) which are being treated as an operating expense but are being used to create community assets that would normally be treated as a capital expense”. In the FAP there are no CFT grants of this nature.

21.  Whilst the LTP projected a $4.4M surplus in 2020/21, the FAP projects a deficit of $9.7M. This is largely due to a range of risks and new cost pressures which have eventuated together with decisions by Council to progress priority initiatives.

Included here are the Development Stimulus Package $4M (LTP budgeted as capex not opex), Naenae Pool $1.5M (due to recent seismic structural issue) , District Plan $1.3M (legislative requirement unbudgeted in the LTP), refuse and recycling collection cost increases $0.8M, Three Waters  increased investment $1.8M (includes $0.6M of additional bulk water costs), higher insurance costs $1M, Hutt Valley Tennis $0.5M, Gym Sport $0.5M, Homelessness Strategy $0.5M, biodiversity assistance for private landowners $0.2M, community engagement $0.15M, climate change $0.2M, and higher depreciation $3.3M, with some offsets such as reduced interest expense (Refer HCC2020/3/98 for further details).

22.  The Balanced budget benchmark does not take balance sheet funding into account, for example NZTA revenue received towards capital improvement works. As part of the preparation of the Council’s LTP amendment, the Council was carefully considering the long term balanced budget projection, alongside both debt projections and rating revenue.  Graph 1 provides the latest FAP projections based on this assessment and shows a balanced budget position being achieved in 2027/28. The LTP amendment projected achieving a balanced budget position much earlier in 2023/24, and included higher revenue levels in order to achieve this.  

Graph 1: Projected balanced budget target

Note: Graph 1 is based on the HCC Balanced Budget definition which is the Local Government (Financial Reporting and Prudence) Regulations 2014 definition for the balanced budget benchmark (Clause 19) [Council Revenue excluding development contributions, vested assets, gains on derivatives and revaluations of property, plant and equipment…and  operating expenses excluding losses on derivatives and revaluations of property, plant and equipment” modified to exclude the NZTA “ring fenced” capital subsidies for capital improvement works from revenue.  Refer to Council report 18 March 2020 LTPAP2020/2/31.

23.  Capital expenditure: The FAP includes $81M of funding for capital expenditure, with $25M allocated to asset renewals. The increase in funding for renewals compared to the LTP is largely due to three waters which has increased from $4.5M in the LTP to $10.1M in the FAP.

Table 2: Comparison of LTP and FAP capital expenditure

 

Total Capital expenditure

Split of capital expenditure

Improvements

Additional demand

Renewals

FAP 2020/21

$80.7M

$43.7M

$12.3M

$24.6M

LTP year 3,  2020/21

$74.3M

$36.8M

$20.2M

$17.3M

 

 

24.  Through the LTP 2021-2031, the investment priorities and financial strategy of the Council Group will be reviewed. Whilst there is a net deficit projected for the “emergency budget” in 2020/21 and this does not meet the S100(i) balanced budget provision of the Local Government Act, it can be resolved as financially prudent due to the one off nature, with revenues recovering and repayment of the debt occurring over the medium term to avoid a significant impact on future ratepayers. This one off adjustment does not impact on Council’s ability to maintain its levels of services, undertake asset renewals and is consistent with the Revenue and Financing Policy.

Revenue and Financing Policy

25.  The Council decision to revise the rating policy has been updated in the Revenue and Financing Policy. Further details about this change in policy are included in a separate report in the agenda relating to the setting of rates in 2020/21.

Fees and charges

26.  The following minor amendments  required to fees and charges have been identified during the preparation of the FAP:

a.       Littering infringement fees – major littering has been added and all wording updated.

b.       Environmental Health – additional charges for National Programme guidance and record blanks. Fee increased to $30.00 in line with other increases.

The major littering fee was omitted in error, and the fee for National Programme guidance missed being increased when other similar fees were increased. These fees are not required to be consulted on under section 150 of the LGA as they do not relate to the provision of a certificate, authority, approval, permit, consent or inspection. The revised text has been included in the FAP

 

Preparation of the Annual Plan document

27.  The final Annual Plan 2020/21 (FAP) has been updated to reflect the decisions made by the Council on 18 June 2020 – Refer Appendix 1.

28.  The FAP document will be published on the Council’s website once complete. It is required to be made available on the Council website no later than the 30 July 2020.

29.  Due to the tight timelines involved in preparing information for this report there may be the need for minor editorial changes as part of the publication process of the Annual Plan document. The Council is requested to appoint a subcommittee to sign off the final document. It is recommended that the subcommittee comprise the Mayor, Deputy Mayor and Chairpersons of the Committees.

Consultation

30.  Reports considered at the 18 June meeting addressed matters related to consultation. 

Legal Considerations

31.  The requirements of the Local Government Act have been followed in respect of the Annual Plan 2020/21.

Financial Considerations

32.  Reports considered at the 18 June meeting addressed financial considerations in detail and can be referenced for further information.

NB – Please note that Appendix 1 is the full detailed Annual plan 2020/21 document and is to be circulated separately. 

 

 

Author: Philip Benseman

Budgeting and Reporting Manager

 

 

 

Reviewed By: Bradley Cato

Chief Legal Officer

 

 

 

Reviewed By: Jenny Livschitz

Chief Financial Officer

 

 

 

Approved By: Jo Miller

Chief Executive

 


                                                                                      26                                                            30 June 2020

Hutt City Council

22 June 2020

 

 

 

File: (20/635)

 

 

 

 

Report no: HCC2020/4/148

 

Setting of rates for 2020/21

 

Purpose of Report

1.    To set the rates for the year commencing 1 July 2020 and ending 30 June 2021, under the Local Government (Rating)Act 2002.

Recommendations

That Council resolves to set the rates and add penalties to unpaid rates during the 2020/21 rating year by passing the resolution attached as Appendix 1 to the report.

 

Acronyms:

DAP – Draft Annual Plan 2020/21

FAP – Final Annual Plan 2020/21

LTP – Long Term Plan 2018-2028

Background

2.    At the Long Term Plan/Annual Plan Subcommittee and Council meeting of 18 June 2020, there were two reports considered in relation to the setting of rates for 2020/21. Firstly a report on rating policy decisions and then a report on the overall Annual Plan 2020/21 budget decisions which included the rates revenue aspects.

3.    Subject to Council first adopting the Annual Plan 2020/21 at the meeting of 30 June 2020, Council can then set the rates for the 2020/21 rating year. Attached to this report are the detailed rating resolutions (Appendix 1) and the Funding Impact Statement including rates for 2020/21(Appendix2). Both these appendices have been prepared based on the Council decisions from 18 June 2020.

Rating policy and system

4.    Council has a relatively simple rating system, that includes:

-     a general rate, based on the capital value of a property,

-     targeted rates for water supply, wastewater, recycling and the Jackson Street Programme, all based on a fixed charge per property (known as a rating unit).

Further details are provided in Appendix 2, the Funding Impact Statement including rates for 2020/21.

Targeted rates

5.    Table 1 that follows provides a summary of the changes in the targeted rate charges for 2020/21 compared to 2019/20.

Table 1: Targeted rates for 2020/21

Differential

2019/20

2020/21

Change since 2019/20

Wastewater – per rating unit

$478.50

$519.00

$40.50    8.5%

Water supply rate – per rating unit

$448.50

$489.00

$40.50    9.0%

Recycling – per residential rating unit

$40.00

$40.00

$0.00    0.0%

 

Water supply targeted rate

6.    The water supply targeted rate is a fixed charge applied to each rating unit or separately used or inhabited part of a rating unit. Any property, regardless of its rateable value, pays the same fixed rates before the general rate in the dollar is applied to the property’s rateable value.

7.    The increase to the overall water supply targeted rate is 8.5%, being a $40.50 increase (from $448.50 in 2019/20 per separately used or inhabited part of a rating unit to $489.00 in 2020/21).

8.    In the development of the FAP the Council agreed a range of decisions in support of increased investment in the Water Supply activity. In summary the main reasons for increasing the water supply targeted rate include an increase in funding for upgrade works for the Naenae Reservoir, increased funding to address water supply leaks, increased costs for bulk water supply and increased funding for the construction of key renewals for water supply.


 

 

Wastewater targeted rate

9.    The wastewater targeted rate is a fixed charge applied to a rating unit’s toilet or urinal. Any property, regardless of its rateable value, pays fixed rates before the general rate in the dollar is applied to the property’s rateable value.

10.  The increase to the overall wastewater targeted rate is 9%, being a $40.50 increase (from $478.50 for the first water closet or urinal rating unit to $519.00).

11.  In the development of the FAP the Council agreed a range of decisions in support of increased investment in the Wastewater activity. In summary the main reasons for increasing the wastewater targeted rate include increased costs for seismic strengthening of the Seaview plant, an increase in funding to address infiltration issues with the wastewater network, additional funding for critical asset condition assessment and increased funding for the construction of key renewals for wastewater collection and treatment.

Recycling targeted rate

12.  A targeted rate for residential properties to cover the cost of recycling collection services. This is fixed amount per separately or used or inhabited part of each rating unit in a residential category. There is no change to the fee for 2020/21.

General rate differential

13.  The general rate is a rate in the dollar levied against the rateable value of each property.

14.  In 2012 Council commenced a 10 year shift in the differentials with an overall aim to reduce the share of general rates paid by businesses and increase the share paid by residential properties. This rating differential policy has been progressively implemented since this time. For example, in the rates setting process in 2019/20 the general rate differential for the Business Central Property category was reduced from 2.86 down to 2.72. This effectively resulted in a higher share of rates being charged to residential properties.

15.  The September 2019 three yearly revaluation in Lower Hutt resulted in residential property values increase substantially more than business property values:

residential property increase of 31.8%

commercial property increase of 16.9%.

Within the residential property increases, there were suburbs with very significant increases, such as Wainuiomata average increase of 55% and Naenae average increase of 46%. This raised concerns about the rating impact for 2020/21 and affordability. Further to this, Council policy on rating differentials would exacerbate the impact.

16.  Through the Draft Annual Plan 2020/21 three options on rating policy change were presented for public feedback. Following the public submission process, and some further refinement to the preferred option, the Council agreed a change to rating policy for 2020/21.

17.  At the Council meeting 18 June 2020, the Council resolved as follows (refer HCC2020/4/60):

(i)       Notes that the overall Revenue and Financing Policy, including the differential factors, will be reviewed from a first principles approach as part of the 2021-2031 Long Term Plan process;

(ii)      Notes the significant changes between and within the different categories in the capital values in the 2019 rating revaluation;

(iii)     Notes the options developed and included in the draft Annual Plan 2020/21;

(iv)     Notes the overall strong support for the preferred option 1;

(v)      Notes that option 1 has been further refined following feedback through the public submission process;

(vi)     Agrees that option 1C is the preferred option for 2020/21;

(vii)    Instructs officers to prepare the final Annual Plan 2020/21 for adoption based on option 1C; and

(viii)   Instructs officers to prepare the rating resolution to be presented at the Council meeting on 30 June 2020 based on option 1C.

 

18.  In summary the option approved by Council for the Annual Plan 2020/21 is a “holding position” for one year ahead of the full review being undertaken as part of the 2021-2031 LTP. The allocation of general rates is kept at the same percentage levels between all property categories as was the case in 2019/20.  From an affordability perspective this was considered the most reasonable and equitable approach for 2020/21.  Post the public submission process, a specific adjustment has been made for Queensgate Mall to reflect the $10M decrease in value for this property. The revised rating differentials are summarised below.


 

 

Table 2: Summary of rating differentials for 2020/21

Property category

Differential

Residential

1.000

Business accommodation

2.687

Business central

2.946

Business Queensgate

3.165

Business suburban

2.614

Rural

0.747

Utility networks

2.803

 

19.  Graph 1 provides a summary of the allocation of general rates across the property categories in 2020/21.  

 

Graph 1: General rates allocation by property category


 

 

Rates revenue increase

20.  At the Council meeting 18 June 2020, the Council resolved the following in regards to the Annual Plan 2020/21 decisions relating to the rates revenue increase (refer HCC2020/4/56).

“That the Council approves a rates revenue increase of 3.8% in the “Emergency Budget” Annual Plan 2020/21, noting that there is an allowance for additional rates revenue of approximately 1% from growth in the city’s rating bases, as a result of new builds and property investment.”

21.  Whilst the full 1% growth in the rating base had not been fully achieved by early June, it is expected that by the time the rates is struck at the start of the new financial year for 2020/21, that this will be largely achieved. If there is any shortfall in rates revenue Officers expect this to be very minor and will look to offset this by achieving savings.

22.  The Annual Plan 2020/21 total rates revenue (excluding GST) totals $113.3M which includes $38.4M of targeted rates for the year. This includes a 3.8% rates revenue rise for existing ratepayers and a further 1% rates revenue from growth in the rating base.

Rating impact

23.  The rating analysis and impact that follows was prepared in mid-June and is indicative. There is further growth in the rating database expected and the final numbers are likely to differ slightly from these presented. The change is likely to see a slight reduction in average costs depending on which areas have further growth.

24.  Based on Annual Plan 2020/21 budgets, the changes in average property rates for 2020/21 compared to 2019/20 levels are summarised in table 3.  These are shown including GST but excluding Greater Wellington Regional Council (GWRC) rates. Targeted rates are included in this table. Further analysis is also available in Appendix 3. Note that these average property values have been updated to reflect the revised rating database information.


 

 

Table 3: Indicative rating impact for 2020/21

 

2019/20 rates

2020/21

Property category

Average value as at 1 July 2019

Average rates

Average value as at 1 July 2020

Average rates 

Change per annum

Change per week

Average residential

$476,000

$2,477

$625,042

$2,599

$122

$2.35

Average business accommodation

$2,387,286

$22,561

$3,127,121

$24,711

$2,150

$41.34

Average business central

$1,380,448

$13,074

$1,690,799

$13,628

$554

$10.65

Business Queensgate

$250,0000

$2,176,112

$240,0000

$1,906,376

($269,736)

($5,187)

Average business suburban

$1,222,386

$11,361

$1,625,545

$11,812

$451

$8.68

Average rural

$650,932

$1,548

$867,386

$1,608

$60

$1.16

Utilities

$2,370,000

$17,738

$2,630,700

$18,294

$556

$10.70

 

25.  Note that the average residential property value has dropped slightly from $627,000 published in the DAP to $625,042 due to updates in the rating database. This has in turn resulted in the average rates change adjusting to be a $122 increase per annum or $2.35 per week. There will be further minor movements ahead of the final rates being set for the year. Graph 2 shows the movement in rates for the average residential property from 2019/20 to 2020/21 and the key drivers of the change being the targeted rates for water supply and wastewater.

 


 

Graph 2: Average residential property rates change 

26.  Table 4 provides the indicative rating impact for the average residential property in a selection of suburbs across the city.

Table 4: Average residential property rates per suburb

Consultation

27.  The public engagement process on the Draft Annual Plan 2020/21 took place in May 2020. The proposed changes to rating policy were included in this process.

28.  The next public consultation will take place as part of the development of the Long Term Plan 2021-2031.

Legal Considerations

29.  The rates are to be set in accordance with the Local Government (Rating) Act 2002, the requirements of which include the following:

a.    after setting the rates, sending each ratepayer:

i.     an assessment showing full details of rates on each rating unit, including how each rate is calculated and what activities are funded by the rate.

ii.    a brief description of Council’s rates remission and postponement policies.

b.    sending a copy of the resolution setting the rates to the Secretary of Local Government within 20 working days of it being passed.

30.  As in previous years, the rating resolution (Appendix 1 to the report), includes authority to charge late payment penalties of 10 per cent on rates instalments not paid by the due date. In addition it also provides for additional 10 per cent penalties to be charged each six months on rates remaining outstanding from previous years.

Financial Considerations

31.  There are no financial considerations in addition to those already outlined in this report.

Appendices

No.

Title

Page

1

Appendix 1: Rates Resolution 2020/21

27

2

Appendix 2: Funding Impact Statement including rates for 2020-2021

29

3

Appendix 3: Rating analysis, includes property categories and suburbs

36

 

Author: Helen Stringer, Financial Transaction Services Manager

 

Reviewed By: Bradley Cato, Chief Legal Officer

 

Reviewed By: Jenny Livschitz, Chief Financial Officer

 

Approved By: Jo Miller, Chief Executive

 


Attachment 1

Appendix 1: Rates Resolution 2020/21

 

 

SETTING THE RATES FOR THE YEAR ENDED 30 JUNE 2021
Targeted and General Rates

 

1.     In accordance with the relevant provisions of the 2018-28 Long Term Plan and the Funding Impact Statement including Rates for 2020-2021, the Council hereby resolves, pursuant to Section 23 of the Local Government (Rating) Act 2002, to set and assess the following Hutt City Council rates for the year commencing 1 July 2020 and ending 30 June 2021. All amounts are inclusive of Councils GST obligations.

 

(a)   A Targeted Rate (Water Supply Rate) set and assessed under sections 16 to 18 of the Local Government (Rating) Act 2002. The water supply charges for the 2020-2021 rating year are as follows:

 

 

The targeted rate for water supply is set on the basis of the following factors:

1.     A charge of $489.00 per separately used or inhabited part of a rating unit which is connected to the water reticulation system.

2.     A charge of $244.50 per separately used or inhabited part of a rating unit that is not connected to, but is able to be connected to, the water reticulation system.

(b)   A Targeted Rate (Wastewater Rate) set and assessed under sections 16 and 17 of the Local Government (Rating) Act 2002. The wastewater charges for the 2020-2021 rating year are as follows:

 

The targeted rate for the wastewater is set on the basis of the following factors:

1.     Rating units in the residential category will only be charged for one water closet or urinal, regardless of the actual number.

2.     Rating units in the business categories will be charged $519.00 for the first water closet or urinal connected to the wastewater system from each rating unit; and

3.     $259.50 for the second and each subsequent water closets or urinal connected to the wastewater system from each rating unit.

(c)    A Targeted Rate (Recycling Charge) set and assessed under sections 16 and 17 of the Local Government (Rating) Act 2002. The recycling charge for the 2020-2021 rating year is as follows:

CATEGORY

CHARGE

Only rating units in the Residential category receiving or able to use the recycling collection service

$40.00 per separately used or inhabited part of each rating unit

 

(d)   A Targeted Rate (Jackson Street Programme Rate) set and assessed under sections 16 and 17 of the Local Government (Rating) Act 2002. The Jackson Street Programme charge for the 2020-2021 rating year is as follows:

 

CATEGORY

CHARGE PER $ OF CAPITAL VALUE

Rating units in any business category having frontage to Jackson Street, Petone, between Hutt Road and Cuba Street

0.0007130per $ of capital value per rating unit

 

 

(e)   A General Rate set and assessed under sections 13 and 14 of the Local Government (Rating) Act 2002. The general rate charge for the 2020-2021 rating year is as follows:

 

CATEGORY

 

DIFFERENTIAL

CHARGE PER $ OF CAPITAL VALUE

 

Residential (RES)

1.000

0.248141 cents

Rural (RUR)

0.747

0.185440 cents

Business Accommodation (BUA)

2.687

0.666680 cents

Business Central (BUC)

2.946

0.731013 cents

Business Queensgate (BUQ)

3.165

0.785422 cents

Business Suburban (BUS)

2.614

0.648668 cents

Utility Networks (UTN)

2.803

0.695423 cents

Community Facilities 1 (CF1)

1.028

0.255142 cents

Community Facilities 2 (CF2)

0.497

0.123423 cents

Community Facilities 3 (CF3)

2.344

0.581715 cents 

Rates Instalments

 

2.     The targeted rates and the general rate for the financial year ending 30 June 2021, as set out above, are payable in six equal instalments by the following due dates:

 

Instalment Number

Due Date

One

20 August 2020

Two

21 October 2020

Three

21 December 2020

Four

22 February 2021

Five

20 April 2021

Six

21 June 2021

 

Penalties on unpaid rates

3.     The Council resolves, pursuant to sections 57 and 58 of the Local Government (Rating) Act 2002, except as stated in 4 below, that:

 

a)     A penalty of 10% will be added to the amount of any instalment remaining unpaid by the relevant due date above.

b)    A penalty of 10% will be added to the amount of any rates assessed in previous years remaining unpaid on 20th August 2020.

c)     A further penalty of 10% will be added to the amount of any rates to which a penalty has been added under b) above and which remain unpaid on 20th February 2021.

 

4.     No penalty shall be added to any rate account if:

·      A direct debit authority is in place for payment of the rates by regular weekly, fortnightly or monthly installments, and payment in full is made by the end of the rating year.

·      Any other satisfactory arrangement has been reached for payment of the current rates by regular installments by the end of the rating year.


Attachment 2

Appendix 2: Funding Impact Statement including rates for 2020-2021

 


 


 


 


 


 


 


Attachment 3

Appendix 3: Rating analysis, includes property categories and suburbs

 

Detailed rating analysis information

Table A: By Property category

 


Table B: Average residential property by suburb

Residential Suburbs

Capital Value July 2019

2019-2020 Rates

Capital Value July 2020

% Change in Property Value

2020-2021 Rates

$ Change Annual

$ Change Weekly

ALICETOWN

$529,000

$2,645

$660,000

25%

$2,686

$41

$0.79

AVALON

$459,000

$2,423

$605,000

32%

$2,549

$127

$2.44

BELMONT

$546,000

$2,699

$710,000

30%

$2,810

$111

$2.14

BOULCOTT

$589,000

$2,835

$730,000

24%

$2,859

$25

$0.47

EASTBOURNE

$747,000

$3,336

$925,000

24%

$3,343

$7

$0.14

EPUNI

$521,000

$2,619

$660,000

27%

$2,686

$66

$1.28

FAIRFIELD

$474,000

$2,470

$615,000

30%

$2,574

$104

$2.00

HARBOUR VIEW

$542,000

$2,686

$685,000

26%

$2,748

$62

$1.19

HAYWARDS

$312,000

$1,956

$405,000

30%

$2,053

$97

$1.86

HUTT CENTRAL

$689,000

$3,152

$855,000

24%

$3,170

$18

$0.34

KOROKORO

$584,000

$2,819

$785,000

34%

$2,996

$177

$3.40

MAUNGARAKI

$543,000

$2,689

$685,000

26%

$2,748

$59

$1.13

MELLING

$414,000

$2,280

$540,000

30%

$2,388

$108

$2.08

MOERA

$382,000

$2,178

$505,000

32%

$2,301

$123

$2.36

NAENAE

$336,000

$2,033

$490,000

46%

$2,264

$231

$4.45

NORMANDALE

$520,000

$2,616

$660,000

27%

$2,686

$70

$1.34

PETONE

$629,000

$2,962

$750,000

19%

$2,909

($53)

($1.01)

STOKES VALLEY

$344,000

$2,058

$480,000

40%

$2,239

$181

$3.48

TAITA

$343,000

$2,055

$485,000

41%

$2,251

$197

$3.78

WAINUIOMATA

$297,000

$1,909

$455,000

53%

$2,177

$268

$5.16

WAIWHETU

$477,000

$2,480

$620,000

30%

$2,586

$107

$2.05

WATERLOO

$553,000

$2,721

$695,000

26%

$2,773

$52

$1.00

WOBURN

$769,000

$3,406

$950,000

24%

$3,405

($0)

($0.01)

 


Hutt City Council

24 June 2020

 

 

File: (20/656)

 

 

Report no: HCC2020/4/151

 

Community Funding Panels

Purpose of Report

 

1.        The purpose of this report is to ask Council to agree to the appointment process for Community funding Panels for the 2019-2022 triennium.

 

Recommendations

That Council:

(i)      notes that Council agreed to establish Community Funding Panels on 26 May 2020;

(ii)     agrees to using SnapHire (Council’s automated recruitment platform) to advertise the positions and make the expressions of interest form available;

(iii)    notes there are no costs associated with using SnapHire;

(iv)    notes that the expression of interest approach will give people an opportunity to talk about their background and interest in the position, along with a request for two letters of support rather than using a CV approach;

(v)     agrees to the suggested process including the Terms of Reference attached as Appendix 1; and

(vi)    agrees that Community Funding Panel members will receive an annual honorarium of $750;

(vii)   agrees that each Community Funding Panel will comprise of five members plus the relevant ward Councillor and a city-wide councillor with alternate city wide members appointed to attend Community Funding Panel meetings as required or in the absence of the sitting city wide member;

(viii)  agrees to establish a Community Funding Panel Subcommittee (the subcommittee) comprising the Mayor, Deputy Mayor, Councillor Briggs and the relevant ward councillor to that subcommittee;

(ix)    agrees to delegate to the subcommittee full responsibility for the appointment of Community Funding Panel members for the 2019-2022 triennium.

For the reasons outlined in the report

 

Background

 

2.        On 26 May 2020, Council agreed:

·         to establish Community Funding Panels for the 2019-2020 triennium

·         that the role of Community Funding Panels will be that of community funders focused on supporting local projects and initiatives and that the terms of reference would be amended to reflect this;

·         that the process for appointing Community Funding Panel members would include:

a)      advertising for expressions of interest – applicants will need to provide two letters of support with support from the community they are wanting to work for (references/support can be written or in person, not formal though);

b)      candidates will be asked to to talk about their background and interest in the position;

c)      short list by a subcommittee of Council comprised of two city wide and two ward Councillors and the Deputy Mayor supported officers as required;

d)     recommendations to Council OR the subcommittee could be given decision making powers and required to report to Council to explain the decisions made; and

e)      that Community Funding Panel members be appointed by full Council with a powhiri.

3.        During the 2016-2019 triennium, Community Panel members received an honorarium of $750 per annum.  Officers recommend that the same approach is taken with Community Funding Panels.

Discussion

 

4.        Following this decision, officers were directed to circulate the previous Community Funding Panels Terms of Reference to members.  This was completed on 6 June 2020 through the elected members request channel.  The Mayor also requested a discussion with the Head of Strategy and Planning regarding the process for appointing Community Funding Panel members and the Head of Democratic Services was directed to incorporate the actions decided in the corporate agenda. These actions are complete.

Expressions of interest and interview panel approach

 

5.        Following this initial work officers discussed the previous approach to appointing Community Panels (now Community Funding Panels).  That approach included asking for expressions of interest and the approach taken by the interview panel.  The focused is ensuring the new purpose/role of Community Funding Panels is clearly stated for applicants.

Advertising vacancies

 

6.        The People and Capability team have confirmed that the automated system for advertising can be used to:

7.        If Council decides to go ahead with approach it is essential that the completed notice/advert and form is with PC as soon as possible so they can begin to work with the SnapHire provider to create the notice/advert for the website.  There are no costs associated with this work.

Climate Change Impact and Considerations

8.        There are no climate change implications from this work.   

Consultation

9.        Not applicable.

Legal Considerations

10.    Three are no legal considerations at this stage.

Financial Considerations

11.    There will be a cost associated with providing Community Funding Panel with a $750 per annum honorarium.  This can be covered by the budget for Community Funding Panels.

Do not delete this line

Appendices

No.

Title

Page

1

Community Panels functions and responsibilities, Guidelines and Criteria 2020-2022

41

 

 

Wendy Moore

Head of Strategy and Planning

 

 

Anna Welanyk

Director Transformation and Resources

 

 


Attachment 1

Community Panels functions and responsibilities, Guidelines and Criteria 2020-2022

 

Community Funding Panels Delegations, Guidelines and Criteria 2020-2022

 

Membership:  6

 

5 community representatives and 1 Ward Councillors 1 City wide councillor and alternate City wide councillors as required

 

Quorum:                              4 (to include one Ward Councillor)

Meeting Cycle:                  When required

Reports to:                         Community and Environment Committee (yearly)

 

This document records functions and responsibilities of Community Funding Panels (‘the Panels’). 

 

Purpose

 

The role of the Panels is that of community funders focused on supporting local projects and initiatives in their communities.

 

Function

 

·          Allocate and manage a Local Community Projects Fund.  

·          Allocate and manage the local Community Engagement Fund for the Central, Eastern, Northern and Western Wards to assist and support local community events and initiatives. L

 

Guidelines and criteria for local community projects funds:

 

·    To be used to fund one or more local community projects per triennium.

·    Projects are to develop community assets that are not able to be funded in Council’s Long Term Plan and/or Annual Plan.  

·    Community assets include, but are not limited to, playgrounds, street furniture, public art, tree planting, lighting, safety improvements, way finding, signage, improvements to existing public places and facilities.  These community assets should be in public spaces.

·    The development of new assets needs to be in accordance with Council strategies, policies and plans.

·    Where on-going maintenance and or other costs are required after completion, these need to be provided for.  This may be by way of formal agreement with the relevant division of Council.

·    Approval of spending must be by resolution of the Panels.

·    A report must be submitted, at the end of each financial year, to the Community and Environment Committee, detailing expenditure over the year.


 

Criteria for the panels to manage the local community projects fund:

·    See attached Appendix 1 for the internal process that must be followed to ensure appropriate officers receive information on projects and can provide feedback.

·    Projects must be supported by officers if there are on-going maintenance or other costs post completion.

·    Each Panel will agree and determine a process for determining how projects will be identified and how funding decisions will be made.

Criteria for the panels to manage the community engagement fund

·    The fund is for local activities and events that directly benefit the communities concerned. 

·    To be eligible for funding the organisation must be a charitable trust or an incorporated society and the activity must take place within the Hutt. 

·    Panels may choose to allocate the entire fund in one funding round or they can have two funding rounds per annum.   An appropriate assessment sheet is used by members when determining which organisation(s) should receive funding.

·    The funds can be used towards the hireage of equipment, advertising costs, purchasing food for a specific event.  Operational costs cannot be applied for.   

·    Council’s Community Funding Advisor is available to support and assist community groups when making applications through the Council’s online grants system.

Standing orders:

 

Hutt City Council’s Standing Orders apply, subject to the provisions for meeting quorum and decision making required to allocate and manage the Local Community Projects fund and Community Engagement fund.

 

Informal meetings and administration:

·    Where funding decisions are not being made, the Panels are encouraged to meet informally. 

·    Council’s Democratic Services Services Division will support each Panel by way of formal meeting administration, co-ordination and governance advice.

·    A senior member of Council’s staff  will support each Panel.

CHAIRS

Chairs will be recommended to Council at the beginning of the triennium, for a 12 month period.  At which point, the Panel will elect its Chair for the remaining term.  It is preferred that Ward Councillors are not Chairs, although this is possible should no other panel member be able to commit to the role.

Organisations that are granted funding are responsible for completing an accountability form to report on the funds spent.

Appendix 1 - Checklist for Local Community Projects Fund

Attach project description/application to this checklist and email to relevant Managers.

 

Council Managers to complete:

 

1.      Do you support this project?  Yes or No (please circle)

2.      Do you have any initial concerns with this project?

3.      What needs to be taken into account when the panel is considering this project for funding? (bylaws, consents):

4.      Do you deem this to be a new asset? Yes or No (please circle)

If yes, does it align with Council’s strategic, policies or plans?

If no, why not?

 

5.            Is there budget set aside for this project?  Yes or No (please circle)

If yes, please state what year this funding will be made available:

Can you liaise with this group in your planning stages of this project, for their input
Yes or No (please circle)

If no, why not?

6.      Can this project be funded through Council’s Long Term Plan? Yes or No (please circle)

If no, why not:

7.      Will there be a maintenance budget or other costs post completed that need to be factored into this project? Yes or No (please circle)

If yes, please advise the amount required: