HuttCity_TeAwaKairangi_SCREEN_MEDRES

OVERVIEW:

This Committee assists Council in setting the broad direction of the city, discharging statutory functions, and overseeing organisational performance.

The Committee is aligned with the Transformation & Resources, and Strategy & Engagement, Directorates.

Its areas of focus are:

§ Long term/high level strategic focus

§ Long Term Plan/Annual Plan oversight

§ District Plan oversight

§ Housing/homelessness

§ City growth/economic development

§ Financial and non-financial performance reporting

§ Oversight of Property Working Group

§ Oversight of strategies and policies

§ Bylaw development

§ Oversight of CCOs/approval of SOIs

PURPOSE:

To assist the Council in setting the broad vision and direction of the city in order to promote the social, economic, environmental and cultural wellbeing of the city’s communities in the present and for the future. This involves determining specific outcomes that need to be met to deliver on the vision for the city, and overseeing the development of strategies, policies, bylaws and work programmes to achieve those goals. This committee is also responsible for monitoring the overall financial management and performance of the Council Group.

DELEGATIONS FOR THE COMMITTEE’S AREAS OF FOCUS:

§ All powers necessary to perform the Committee’s responsibilities including the activities outlined below.

§ Develop required strategies and policies. Recommend draft and final versions to Council for adoption where they have a city-wide or strategic focus.

§ Implement, monitor and review strategies and policies.

§ Oversee the implementation of major projects provided for in the LTP or Annual Plan.

§ Oversee budgetary decisions provided for in the LTP or Annual Plan.

§ Recommend to Council the approval of any financial decisions required outside of the annual budgeting process.

§ Maintain an overview of work programmes carried out by the Council’s Transformation & Resources, and Strategy & Engagement, Directorates.

§ Conduct any consultation processes required on issues before the Committee.

§ Approval and forwarding of submissions.

§ Any other matters delegated to the Committee by Council in accordance with approved policies and bylaws.

§ The committee has the powers to perform the responsibilities of another committee where it is necessary to make a decision prior to the next meeting of that other committee. When exercised, the report/minutes of the meeting require a resolution noting that the committee has performed the responsibilities of another committee and the reason/s.

§ If a policy or project relates primarily to the responsibilities of the Policy, Finance & Strategy Committee, but aspects require additional decisions by the Communities Committee, Infrastructure & Regulatory Committee and/or Climate Change & Sustainability Committee, then the Policy, Finance & Strategy Committee has the powers to make associated decisions on behalf of those other committees. For the avoidance of doubt, this means that matters do not need to be taken to more than one of those committees for decisions.

District Plan Delegations:

§ Undertake a full review of the City of Lower Hutt District Plan, including oversight of the District Plan Review Subcommittee in establishing a District Plan work programme and monitoring its implementation.

§ Consideration of matters related to the preparation and ongoing monitoring of the City of Lower Hutt District Plan.

§ Preparation of required Changes and Variations to the City of Lower Hutt District Plan for Council approval to call for submissions.

§ Make recommendations to Council on private District Plan Change requests for Council to accept, adopt or reject.

§ The Chair of the Policy, Finance & Strategy Committee, in conjunction with the Chief Executive, is authorised to appoint a District Plan Hearings Subcommittee of suitably qualified persons to conduct hearings on behalf of the Committee.

Bylaw Delegations:

§ Develop and agree the Statement of Proposal for new or amended bylaws for consultation.

§ Recommend to Council the approval of draft bylaws prior to consultation.

§ The Chair of the Policy, Finance & Strategy Committee, in conjunction with the Chief Executive, is authorised to appoint a Subcommittee of suitably qualified persons to conduct hearings on draft bylaws on behalf of the Committee.

§ Recommend to Council new or amended bylaws for adoption.

Financial, Project and Performance Reporting Delegations:

§ Recommend to Council the budgetary parameters for preparation of the Council’s Long Term Plans (LTP) and Annual Plans.

§ Monitor progress towards achievement of budgets and objectives for the Council Group as set out in the LTP and Annual Plans, including associated matters around the scope, funding, prioritising and timing of projects.

§ Monitoring and oversight of significant city-wide or strategic projects including operational contracts, agreements, grants and funding, except where these are the responsibility of another standing committee.

§ Monitor progress towards achievement of the Council’s outcomes as set out in its overarching strategies for the city and their associated plans.

§ Oversee the activities of the Property Working Group in its implementation of the Purchase and Sale of Property for Advancing Strategic Projects Policy.

§ Oversee the acquisition and disposal of property in accordance with the LTP.

§ Monitor the integrity of reported performance information at the completion of Council’s Annual Report process.

§ Review and recommend to Council the adoption of the Annual Report.

§ Recommend to Council the approval of annual Statements of Corporate Intent for Council Controlled Organisations and Council Controlled Trading Organisations and granting shareholder approval of major transactions.

§ Monitor progress against the CCO and CCTO Statements of Intent and make recommendations to Council in the exercising of Council powers, as the shareholder, in relation to Council Controlled Organisations/Council Controlled Trading Organisations under sections 65 to 72 of the Local Government Act.

§ Oversee compliance with Council’s Treasury Risk Management Policy.

§ Consider and determine requests for rates remissions.

§ Consider and determine requests for loan guarantees from qualifying community organisations where the applications are within the approved guidelines and policy limits.

NOTE:

The Ministry for the Environment advocates that Councils offer specialist RMA training in areas of law which are difficult to grasp or where mistakes are commonly made. This is to complement the Good Decision Making RMA training that they run (which is an overview and basic summary of decision making, rather than an in-depth training in specific areas of the RMA). Therefore in order to facilitate this, the RMA training run for councillors that wish to be hearings commissioners is mandatory.

Reasons for the importance of the training:

1. Hearings commissioners are kept abreast of developments in the legislation.

2. Legal and technical errors that have been made previously are avoided (many of which have resulted in Environment Court action which is costly, time consuming and often creates unrealistic expectations for the community).

3. The reputation of Council as good and fair decision makers or judges (rather than legislators) is upheld.

Policy, Finance and Strategy Committee

15 June 2021

File: (21/935)

Report no: PFSC2021/3/150

Rates Remission Policy

Purpose of Report

1. The purpose of this report is to seek approval to add a new remission type to the Rates Remission Policy.

Recommendations

That the Committee recommends that Council:

(1) notes and receives the report; and

(2) approves an addition to the Rates Remission Policy, attached as Appendix 2 to the report.

Acronyms:

LGRA – Local Government (Rating) Act 2002

LGA - Local Government Act 2002

DLTP – Draft Long Term Plan 2021-2031

LTP – Long Term Plan 2021-2031

Section A - Introduction and background

2. Rates remission policies are a tool to moderate the impact of rates.

3. Adopting a Rates Remission Policy allows councils to reduce a rating unit’s liability if certain conditions and criteria are met – as set by Council.

4. Councils can only grant a remission of rates where it has provided a framework to do so.

5. Our Council has a Rates Remission Policy that includes specific scenarios where rates remissions can be considered and granted. However it is recognised that not all situations in which Council may wish to remit rates will necessarily be known about in advance and provided for in the specific policies.

6. This report provides information about the existing Rates Remission Policy and a recommended addition to that policy which will give Council the flexibility to grant a remission of rates where it is considered fair and reasonable to do so but has not been allowed for specifically in the Rates Remission Policy.

7. The existing Rates Remission Policy was consulted on through the Draft Long Term Plan (LTP) process on changes to support both the implementation of the new kerbside refuse and recycling service and changes to the Rating Policy.

8. Through the public submission process on the proposed changes to the rural differential rating category, some issues were identified for individual properties with exceptional circumstances that meant the incidence of rates for those properties may not be fair.

9. Due to time constraints in finalising the LTP at the time, officers advised that a separate report back to the Policy, Finance and Strategy Committee would be prepared to consider any further refinement of the Rates Remission Policy.

Section B – Legislation

10. Under Section 85(1) of the LGRA, a council may remit all or part of the rates on a rating unit (including penalties for unpaid rates) if the council has adopted a Rates Remission Policy under Section 109 of the LGA and the council is satisfied that the conditions and criteria in the policy are met.

11. Section 109 of the LGA states that a Rates Remission Policy that is adopted under Section 102(3) (a) of the LGA – Funding and Financial Policies, must state:

(a) the objectives sought to be achieved by the remission of rates; and

(b) the conditions and criteria to be met in order for rates to be remitted.

12. Councils have flexibility to use remissions to fine tune rates in ways that are not possible with the tools in the LGRA. This is because there are few rules limiting their use.

13. Rates remission policies are generally used by Councils to provide rates relief or to mitigate unintended consequences of the incidence of the rating policies.

Section C – Hutt City Council Rates Remission Policy

14. Our Council’s current Rates Remission Policy has ten scenarios under which a remission of rates will be granted. These scenarios are:

Part	Remission	Summary of criteria
1	Community, Sporting and other organisations	Land owned by Council or a charitable organisation and used for recreation purposes.
2	Penalties applied to unpaid rates	Good payment history; An extraordinary event; Full payment of the due rates or a satisfactory payment arrangement.
3	Targeted rates in certain circumstances	Residential property damaged by fire.
4	Land protected for natural, historic or cultural conservation purposes	Significant Natural Areas that have been protected.
5	Economic development	Commercial developments that are of strategic importance to Lower Hutt.
6	Residential land in commercial or industrial areas	Residentially used land in commercial or industrial areas under the District Plan.
7	Wastewater charges to schools	Educational establishments charged wastewater on actual number of toilet pans.
8	Land affected by natural calamity	Land affected by natural calamity where the buildings have become uninhabitable as a result.
9	Transition – Rural to Residential	Land moving from the Rural differential rating category to the Residential differential rating category.
10	Transition – Commercial Accommodation to Commercial Central	Land moving from the Commercial Accommodation differential rating category to the Commercial Central differential rating category.

15. These scenarios are the only ones where a rates remission can be granted. If there is a scenario that does not fit within these policies but it would be fair and reasonable to lower the ratepayer’s rates liability, there is no way to do this within the current policy.

16. Some Councils have built in a degree of flexibility to their Rates Remission Policy by having a miscellaneous policy type. A review of nine comparison councils’ Rates Remission Policies was completed and found that five out of nine have a miscellaneous policy in place. A summary of this review is attached to this report as Appendix 1.

17. The policies are similar across the five Councils. Policies refer to exceptions or special circumstances and reflect the desire of the councils to have the flexibility to grant a remission where they consider it is fair to do so.

18. One Council requires a council resolution to grant a remission and the others have delegated decisions to council officers.

Section E – Proposed Rates Remission Policy

19. The wording of our proposed amendment is attached as Appendix 2 to the report. This has been developed to allow for a degree of flexibility while ensuring that key aspects are taken into account, including:

· The rates payable on the property are disproportionate to those assessed on a comparable property; or

· Council has determined that the rating policy unfairly disadvantages the individual ratepayer; and

· Granting the remission must not set a precedent that disadvantages other ratepayers.

20. Appendix 3 attached to this report is the full Rates Remission Policy with the proposed addition added as Part 11.

21. It is recommended that applications for remission under this part of the policy will be determined by officers of Council, acting under delegated authority from Council as specified in the delegations register. This is in line with other similar parts of the existing rates remission policy.

Climate Change Impact and Considerations

22. There are no climate change impacts or considerations arising from this report.

Legal Considerations

23. The most relevant legislation includes the Local Government (Rating) Act 2002 and the Local Government Act 2002.

Financial Considerations

24. Rates remissions are a cost to Council and an allowance for remissions is provided for in the total rates set for the year.

Appendices

No.	Title	Page
1 ⇩	Appendix 1: Comparison Councils' Miscellaneous Rates Remission Policy	7
2 ⇩	Appendix 2: Proposed Addition to Rates Remission Policy	8
3 ⇩	Appendix 3: Proposed Full Rates Remission Policy	9

Author: Alicia Andrews

Business Analyst - Rates

Author: Helen Stringer

Financial Transaction Services Manager

Reviewed By: Jenny Livschitz

Group Chief Financial Officer

Approved By: Jo Miller

Chief Executive

RATES REMISSION POLICY

INTRODUCTION

In order to allow rates relief where it is considered fair and reasonable to do so, Council is required to adopt policies specifying the circumstances under which rates will be considered for remission. There are various types of remission, and the circumstances under which a remission will be considered for each type may be different. The conditions and criteria relating to each type of remission are therefore set out separately in the following pages, together with the objectives of the policy.

This policy is prepared under section 109 of the Local Government Act 2002 for consultation using the special consultative procedure laid down in section 83 of that Act.

1. PART 1 – REMISSION FOR COMMUNITY, SPORTING AND OTHER ORGANISATIONS

1.1 OBJECTIVES OF THE POLICY

• To facilitate the ongoing provision of non-commercial community services that meet the needs of the residents of the city

• To facilitate the ongoing provision of non-commercial recreational opportunities for the residents of the city

• To assist the organisations’ survival

• To make membership of the organisations more accessible to the general public; particularly disadvantaged groups. These include children, youth, young families, aged people and economically disadvantaged people

1.2 CONDITIONS AND CRITERIA

Council may remit rates where the application meets the following criteria:

• The policy will apply to land owned by Council or owned and occupied by a charitable organisation, which is used exclusively or principally for sporting, recreation or community purposes.

• The policy does not apply to organisations operated for private pecuniary profit.

• The policy will also not apply to groups or organisations whose primary purpose is to address the needs of adult members (over 18 years) for entertainment or social interaction, or who engage in recreational, sporting or community services as a secondary purpose only.

• Applications for remission must be made in writing to Council prior to the commencement of the rating year. Applications received during a rating year will be applicable from the commencement of the following rating year. Applications will not be backdated.

• Organisations making application should include the following documents in support of their application:

• statement of objectives

• financial accounts

• information on activities and programmes

• details of membership or clients.

• Any remission granted in relation to the general rate under this policy will be 50 per cent of the amount charged.

• Qualifying organisations rated in the Community Facilities differential 1 (CF1) and 2 (CF2) categories will be eligible for rates remission under this policy.

• The policy shall apply to such organisations as are approved by Council as meeting the relevant criteria.

• No remission will be granted on targeted rates for water supply under this policy.

• Remission of targeted rates for wastewater disposal under this policy will only be granted as follows, to the types of organisations specified:

• Places of religious worship will be charged for a maximum of two pans, except in circumstances where it is evident that there is regular weekday use of the building for non-worship purposes.

• Child care facilities will be charged for a maximum of two pans.

• Sports clubs will be charged for a maximum of two pans.

• No more than 200 pans are to be charged on any one property.

• Mārae and other similar meeting places are to be charged for a maximum of two pans.

1.3 DELEGATIONS

Council may delegate the authority to make such approvals to particular Council officers as specified by a resolution of Council.

2. PART 2 – REMISSION OF PENALTIES ADDED TO UNPAID RATES

2.1 OBJECTIVE OF THE POLICY

To enable Council to act fairly and reasonably in its consideration of penalties on rates which have not been paid by the due date.

2.2 CONDITIONS AND CRITERIA

Upon receipt of an application from the ratepayer, or if identified by Council, Council may remit a penalty where it considers that it is fair and equitable to do so. Matters that will be taken into consideration by Council include the following:

• the ratepayer’s payment history

• the impact on the ratepayer of extraordinary events

• the payment of the full amount of rates due

• the ratepayer entering into an agreement with Council for the payment of rates.

Council reserves the right to impose conditions on the remission of penalties.

2.3 DELEGATIONS

Decisions on the remission of penalties may be delegated to Council officers or a Committee of Council. All delegations will be recorded in Council’s delegations register.

3. PART 3 – REMISSION OF TARGETED RATES IN CERTAIN CIRCUMSTANCES

3.1 OBJECTIVE OF THE POLICY

The objective of this remission is to promote fairness in the application of rating by allowing the Council to remit targeted rates assessed as fixed charges in circumstances where it is equitable to do so.

3.2 CONDITIONS AND CRITERIA

A remission may be granted of all or part of a targeted rate set as a fixed charge per separately used or inhabited part (SUIP) where the application meets one of the following criteria:

• rating units used for residential purposes in separate ownership and contiguous (ie, sharing a boundary and in common usage, as that they should reasonably be treated as a single unit). This includes but is not limited to situations where the secondary unit is used solely as a private garden or for vehicle parking

• rating units used for residential purposes and that include a separately used or inhabited part occupied by a dependent member of the family of the owner

• for land classified as residential or rural under the council’s operative district plan, targeted rates for refuse and recycling may be remitted where the service is not provided to the rating unit

• rating units or an SUIP with a dwelling that has been damaged by fire and as a result is uninhabitable.

Owners wishing to claim a remission under this policy are required to make a written application and to supply such evidence as may be requested to verify that a remission should be granted under this policy. While a remission may be granted for the current year, no consideration will be given to applications relating to prior years.

3.3 DELEGATIONS

Council will delegate authority to consider and approve applications to Council officers.

4. PART 4 – REMISSION ON LAND PROTECTED FOR NATURAL, HISTORIC OR CULTURAL CONSERVATION PURPOSES

4.1 OBJECTIVE OF THE POLICY

To protect and promote significant natural areas, culturally significant sites, historic buildings, structures and places, and archaeological sites.

This policy will support the provisions of the District Plan where a number of these features have been identified.

4.2 CONDITIONS AND CRITERIA

Ratepayers who own rating units that include significant natural areas, culturally significant sites, historic buildings, structures and places, and archaeological sites, including those identified in the District Plan, and who have voluntarily protected these features, may qualify for remission of rates under this part of the policy.

Land that is non-rateable under section 8 of the Local Government (Rating) Act 2002 and is liable only for rates for water supply, wastewater disposal or refuse collection will not qualify for remission under this part of the policy.

Applications must be made in writing. Applications should be supported by documentary evidence of the protected status of the rating unit; eg, a copy of the covenant or other legal mechanism.

In considering any application for remission of rates under this part of the policy, Council will consider the following criteria:

• the extent to which the protection and promotion of significant natural areas, culturally significant sites, historic buildings, structures and places, and archaeological sites will be promoted by granting remission of rates on the rating unit

• the degree to which the significant natural areas, culturally significant sites, historic buildings, structures and places, and archaeological sites are present on the land

• the degree to which the significant natural areas, culturally significant sites, historic buildings, structures and places, and archaeological sites inhibit the economic utilisation of the land.

In granting remissions under this part of the policy, Council may specify certain conditions before granting remission. Applicants will be required to agree in writing to these conditions and to pay any remitted rates if the conditions are violated.

Council will decide what amount of rates will be remitted on a case-by-case basis, subject to a maximum amount of 50 per cent of rates owing per year.

Applications for the remission of rates for protection of heritage will be considered by a Committee of Council, acting under delegated authority from Council.

5. PART 5 – RATES REMISSION AND GRANTS FOR ECONOMIC DEVELOPMENT

5.1 OBJECTIVES OF THE POLICY

To promote employment and economic development within the city of Lower Hutt by offering rates remission and economic development grants to:

• encourage new businesses to become established in or relocate to the city

• encourage existing businesses in the city to expand and grow.

This policy is one of a number of initiatives for businesses that Council has in place to assist in achieving the outcomes set out in its Economic Development Plan 2015–2020.

RATES REMISSION FOR ECONOMIC DEVELOPMENT

5.2 CONDITIONS AND CRITERIA

This part of the policy applies to commercial and/or industrial developments that involve the construction, erection or alteration of any building or buildings, or other works intended to be used for industrial, commercial or administrative purposes. Residential developments will not qualify for remission under this part of the policy.

For an application for rates remission for economic development to be considered, applicants must meet all the criteria in either 5.3 or 5.4 (below).

Each application made under Part 5 of this policy will be considered on a case-by-case basis. Satisfaction of the criteria outlined in this policy does not guarantee a remission of rates. The final decision to grant a remission of rates will be at Council’s sole discretion.

5.3 General criteria

• The development must be of strategic importance for the future economic development of the city. This may be demonstrated by the scale, type or nature of the development.

• The development will create new employment opportunities. Generally a development targeted at a new business to the city would be expected to immediately create at least 50 new full-time-equivalent jobs in Lower Hutt, and developments that target an existing business would be expected to immediately increase its full-time equivalent staff numbers by:

• over 50 per cent of existing full-time equivalent jobs; or

• at least 50 new full-time equivalent jobs, whichever is the lesser.

• The development is unlikely to be in competition with existing businesses. Generally the applicant will be required to demonstrate that the development will create little or no competition with existing businesses, or that there is unfulfilled demand in the market for the type of business that will be targeted.

• The development will bring a significant amount of new capital investment into the city. The amount of new investment should be not less than $2,500,000 unless the business falls within the category identified in 2 below. Consideration will be given to the extent that the new development would increase the rating base.

5.4 Criteria regarding innovative or rare types of business for Lower Hutt using advanced science and/or advanced technology

Developments that attract new or grow existing innovative or rare types of business for Lower Hutt using advanced science and/or advanced technology are likely to be more favourably considered for remission. Where this type of business does not initially meet the criteria for employment creation or new capital investment as outlined above:

• The development must be of strategic importance for the future economic development of the city. This will be demonstrated by the advanced science and/or advanced technology nature of the development.

• The applicant must demonstrate, through recognised research and development programmes; and/or through ownership or access to recognised intellectual property rights, that it has a realistic future potential to meet the criteria for employment creation and new capital investment, as outlined above, within three years.

To further assist in considering applications for remission under this part of the policy, Council will also have regard to the extent applications meet all or some of the additional guidelines outlined in 5.7.

•

GRANTS FOR ECONOMIC DEVELOPMENT

5.5 CONDITIONS AND CRITERIA

This part of the policy applies to the establishment or relocation of commercial and/or industrial businesses new to Lower Hutt and the expansion of existing commercial and/or industrial businesses in Lower Hutt that does not involve the construction, erection or major alteration of any building or buildings intended to be used for industrial, commercial or administrative purposes.

Residential activity will not qualify for grants under this part of the policy.

For an application for economic development grants to be considered, applicants must meet all the criteria in 5.6.

Each application will be considered on a case-by-case basis. Satisfaction of the criteria outlined in 5.6 of this Policy does not guarantee an economic development grant. The final decision to approve an economic development grant will be at Council’s sole discretion.

5.6 General criteria

• The business must be of strategic importance for the future economic development of the city. This may be demonstrated by the scale, type or nature of the business.

• The business will create new employment opportunities. Generally a new business to the city would be expected to immediately create at least 50 new full-time-equivalent jobs in Lower Hutt. Existing business would be expected to immediately increase its full-time equivalent staff numbers by at least 50 new full-time equivalent jobs.

• The business is unlikely to be in direct competition with existing businesses. Generally the applicant will be required to demonstrate that the business will create little or no competition with existing businesses.

• The business demonstrates a long-term commitment to remain and operate in the city. Property ownership or a long-term lease of property (a minimum of six years) may be accepted as a proof of commitment.

To further assist in considering applications for economic development grants under this part of the policy, Council will also have regard to the extent applications meet all or some of the additional guidelines outlined in 5.7.

5.7 Additional guidelines

These additional guidelines have been developed to assist in assessing the suitability of an application for an economic development grant and in determining at what level, if any, an economic development grant should be set. Only when an application has been shown to meet the mandatory criteria outlined in 5.6 will the additional guidelines in 5.7 be applied (as applicable).

As additional considerations in considering an application for rates remission, Council will have regard to:

• the extent that the new or expanded business would increase economic activity in the city

• whether the business has minimal impact on the environment in terms of air, water or soil

• whether it is likely that any grant provided would encourage the business to proceed with establishment, relocation or expansion in the city.

5.8 APPLICATION PROCESS

Applications must be made in writing and received allowing sufficient time to be able to consider them prior to the commencement of construction or relocation or expansion of the business.

Commencement of construction will be deemed to have occurred when the activity for which a building consent has been issued is substantially under way and progressing.

Establishment, relocation or expansion of the business will be deemed to have occurred once occupancy of the business personnel has occurred.

For the purposes of this policy, a development is any project or group of projects requiring one or more building consents that, as a body of work, occurs within a similar timeframe, and that stands alone as a complete activity in and of itself.

This policy does not exclude the potential for more than one development to occur on the same site. Applications must be supported by:

• a description of the development or business

• a plan of the development or business premises (where possible)

• an estimate of costs of the development (for rates remission applications only)

• an indication of the businesses that will be attracted by the development

• an estimate of the likely number and type of jobs created by the development or business

• evidence that the jobs (positions) created are new to Lower Hutt

• an environmental impact report (if applicable)

• evidence of ownership or access to intellectual property rights (if applicable)

• evidence of future commercial potential of use of that intellectual property (if applicable).

Where the applicant is not the owner or the ratepayer of the property, the applicant must provide written proof of support from the property owner. If the applicant is a lessee then the lease expiry date should be stated, as well as any rights of renewal etc.

In considering applications, Council may seek independent verification of any information provided on an application.

Each application will be considered on a case-by-case basis. Satisfaction of the criteria outlined in 5.3, 5.4 and 5.6 does not guarantee a remission of rates or economic development grant. The final decision to approve a remission of rates or an economic development grant will be at Council’s sole discretion.

Remissions of rates approved will generally be not less than 50 per cent, and may be up to a maximum of 100 percent, of the rates assessed by Council on the capital value of the new investment only, and for up to a maximum remission period of three years. Rates to be paid to Greater Wellington Regional Council cannot be remitted under this policy.

Economic development grants approved will generally be for not less than 50 per cent, and may be up to a maximum of 100 per cent, of the equivalent value of the rates assessed by Council on the capital value of the premises occupied by the business, and for up to a maximum remission period of three years.

In approving rates remissions or economic development grants under this policy, Council may in its discretion specify certain conditions before granting the rates remission or economic development grant, having regard to the criteria and the application process specified in this policy. Applicants will be required to agree in writing to these conditions and to pay any remitted rates or economic development grants provided if the conditions are violated.

5.9 DELEGATIONS

Applications for remission of rates and economic development grants for economic development will be decided by the Policy, Finance and Strategy Committee, acting under delegated authority from Council.

5.10 APPEAL

Applicants may appeal against:

• a decision to decline a remission of rates or not approve a full remission of rates; or not approve an economic development grant;

• conditions imposed when a remission of rates or economic development grant has been approved.

• Appeals will be heard by the Policy, Finance and Strategy Committee of Council.

5.11 EXCLUSIONS

This policy does not apply to Council developments.

6. PART 6 – REMISSION FOR RESIDENTIAL LAND IN COMMERCIAL OR IN INDUSTRIAL AREAS

6.1 OBJECTIVE OF THE POLICY

To ensure that owners of residential rating units situated in commercial or industrial areas are not unduly penalised by the zoning decisions of this Council and previous local authorities.

6.2 CONDITIONS AND CRITERIA

To qualify for remission under this part of the policy the rating unit must:

• be situated within an area of land that has been zoned for commercial or industrial use. Ratepayers can determine the zoning of their property by inspecting the District Plan, copies of which are available at Council offices.

• be listed as a ‘residential’ property for differential rating purposes. Ratepayers wishing to ascertain whether their property is treated as a residential property may inspect Council’s rating information database at Council offices.

Those ratepayers wishing to claim remission under this part of the policy must make an application on the prescribed form (available from Council offices).

The application for rates remission must be made to Council prior to the commencement of the rating year. Applications received during a rating year will be applicable from the commencement of the following rating year. Applications will not be backdated.

If an application is approved, Council will direct its valuation service provider to inspect the rating unit and prepare a valuation that will treat the rating unit as if it were a comparable rating unit elsewhere in the district. The ratepayer may be asked to contribute to the cost of this valuation. Ratepayers should note that the valuation service provider’s decision is final and there are no statutory rights of objection or appeal for values done in this way.

The amount of remission granted under this part of the policy will be limited to the difference between the rates charged on the original value and the rates chargeable on the valuation of the rating unit as a house in a residential area.

6.3 DELEGATIONS

Applications for remission under this part of the policy will be determined by officers of Council, acting under delegated authority from Council as specified in the delegations register.

7. PART 7 – REMISSION OF WASTEWATER CHARGES TO SCHOOLS

7.1 OBJECTIVE OF THE POLICY

To provide relief and assistance to educational establishments as defined in Schedule 1 Part 1 clause 6 of the Local Government (Rating) Act 2002 in paying charges for wastewater services.

7.2 CONDITIONS AND CRITERIA

This part of the policy will apply only to educational establishments as defined in Schedule 1 Part 1 clause 6 of the Local Government (Rating) Act 2002.

The policy does not apply to any school house, or any part of a school used for residential purposes.

The wastewater charge to any educational establishment in any one year will be the lesser of either:

a. the amount of the targeted rate for wastewater, calculated based on the actual number of toilet pans in the establishment; or

b. the amount of the targeted rate for wastewater calculated based on a notional number of toilet pans in the establishment, determined according to the following formula:

Based on the establishment’s water consumption for the previous financial year, each 200m³ of water used, or part thereof, shall count as one toilet pan.

Where the charge made is based on the notional number of toilet pans, the amount of the remission allowed will amount to the difference between the calculations set out in a and b above.

8. PART 8 – REMISSION OF RATES AND CHARGES ON LAND AFFECTED BY NATURAL CALAMITY

8.1 OBJECTIVE OF THE POLICY

To provide relief and assistance to any ratepayer where the use that may be made of any rating unit has been detrimentally affected by erosion, subsidence, submersion or other natural calamity.

8.2 CONDITIONS AND CRITERIA

This part of the policy will apply to any rating unit affected by natural calamity.

In the case of residential rating units, up to 100 per cent of all rates and charges, including charges made for water and wastewater services, and refuse, recycling and green waste services, may be remitted for the period during which the buildings are uninhabitable.

In the case of all other rating units, up to 100 per cent of all rates and charges, including charges made for water and wastewater services may be remitted for the period during which the rating unit is unable to be fully utilised, or utilised to the same extent as it was prior to the occurrence of the natural calamity.

Applications are required to be made in writing by the ratepayer.

Applications will generally only be considered for assistance where the rating unit is uninhabitable or unusable for a period exceeding one month.

The application must describe the nature of the natural calamity, and outline the steps that the owner has taken, or will be taking, to return the rating unit to a usable state, and provide an estimate of the time the rating unit is expected to be affected.

The amount of remission granted in any individual case will be determined based on the severity of the damage to the rating unit, as well as the individual circumstances of the ratepayer and the financial circumstances of Council.

Applicants for a remission under this part of the policy will also be deemed eligible to be considered for a postponement of rates under the Rates Postponement Policy. Assistance granted may therefore be in the form of either a postponement or a remission of rates, or a combination of both; whichever is most appropriate in the individual circumstances.

Any rates postponed on rating units affected by natural calamity may at a later date be considered for a remission under this policy, when the full extent and duration of the event has become more clearly defined.

All applications must be made in writing by the ratepayer within three months of the event.

8.3 DELEGATIONS

Applications for remission under this part of the policy will be decided by a committee of Council, acting under delegated authority.

9. PART 9 – REMISSION OF RATES – TRANSITION

RURAL TO RESIDENTIAL

9.1 OBJECTIVE OF THE POLICY

A rates remission may be granted to phase in the increase to the Hutt City Council General Rate payable due to a rating unit moving from the Rural to the Residential differential rating category.

9.2 CONDITIONS AND CRITERIA

This policy applies to a rating unit where there is an increase in the Hutt City Council General rate due to the differential rating category of the rating unit changing from Rural to Residential as the result of the 2021–2031 Long Term Plan rating policy change to align the definition of the Rural differential rating category with the District Plan.

This policy will also apply to any rating unit where there is an increase in the General rate due to a District Plan change that results in the differential rating category reclassification of that rating unit changing from Rural to Residential.

If granted, this remission will last for one rating year, and will be calculated as follows:

• Rating value * 21/22 Residential differential rate in the dollar (x)

• Rating value * 21/22 Rural differential rate in the dollar (y)

• (x) – (y) / 2 = remission

10. PART 10 – REMISSION OF RATES – TRANSITION

COMMERCIAL ACCOMODATION TO COMMERCIAL CENTRAL

10.1 OBJECTIVE

A rates remission may be granted to phase in the increase to the Hutt City Council General Rate payable due to a rating unit moving from the Commercial Accommodation to the Commercial Central rating category.

10.2 CONDITIONS AND CRITERIA

This policy applies to a rating unit where there is an increase in the Hutt City Council General rate due to the differential rating category of the rating unit changing from Commercial Accommodation to Commercial Central as the result of the 2021–2031 Long Term Plan rating policy change to remove the Commercial Accommodation differential rating category.

If granted, this remission will last for one rating year, and will be calculated as follows:

• Rating value * 21/22 Commercial Central differential rate in the dollar (x)

• Rating value * 20/21 Commercial Accommodation differential rate in the dollar (y)

• (x) – (y) / 2 = remission.

•

11. PART 11 – REMISSION OF RATES – MISCELLANEOUS

11.1 OBJECTIVE

It is recognised that not all situations in which the Council may wish to remit rates will necessarily be known about in advance and provided for in the Council’s specific policies. This policy provides for the possibility of a rates remission in circumstances that have not been specifically addressed in other parts of the Council’s Rates Remission and Postponement Policies and where Council considers it fair and reasonable to remit rates.

11.2 CONDITIONS AND CRITERIA

The Council may remit part of or all of the current Hutt City Council rates on a rating unit where Council considers it fair and reasonable to do so because:

a. the rates, or a particular rate, assessed on that rating unit are disproportionate to those assessed in respect of comparable rating units; or

b. the rating policy is determined by the Council at its sole discretion to unfairly disadvantage an individual ratepayer.

The approval of this remission will not set a precedent that application of the usual rates unfairly disadvantages other ratepayers.

Approved applications will be considered from the rating year in which year they are received. Remission of prior year rates will not be considered. Council reserves the right to impose further conditions on a case by case basis.

11.3 DELEGATIONS

Applications for remission under this part of the policy will be determined by officers of Council, acting under delegated authority from Council as specified in the delegations register.

Policy, Finance and Strategy Committee

01 July 2021

File: (21/981)

Report no: PFSC2021/3/151

Procurement policy - proposed changes to financial thresholds

Purpose of Report

1. This report proposes that Council adopts new financial thresholds for the Procurement Policy.

Recommendation

That the Committee recommends that Council makes the following changes to procurement financial thresholds in Council’s Procurement Policy attached as Appendix 1 to the report.

Council Group (excluding Urban Plus Limited (UPL)

	Current policy	Proposed change to policy
Procurement activity	Total Value of Contracts (Good and Services)
Direct purchase	$0 - $20,000	$0 - $99,000
Closed tender	$20,000 - $99,999	$100,000 - $249,999
Open and competitive tender	>$100,000	>$250,000

	Current policy	Proposed change to policy
Procurement activity	Total Value of Contracts (Construction)
Direct purchase	$0 - $50,000	$0 - $99,000
Closed tender	$50,000 - $499,999	$100,000 - $749,999
Open and competitive tender	>$500,000	>$750,000

The reasons for this recommendation can be found in the body of this report.

Purpose of the Procurement Policy

2. The Procurement Policy ensures that Council is operating fairly and openly, while resources are being used efficiently to achieve Council’s goals. The current procurement thresholds do not reflect the current market or Council’s needs and are hindering the efficiency of Council’s work.

3. Procurement thresholds provide Council with a tool for determining which procurement method it should take to procure the resources or services needed to achieve required outcomes. Thresholds are one tool that Council uses to determine which method of procurement should be followed. The thresholds are not mandatory. However, where the thresholds are not adhered to this decision must be well reasoned and documented.

4. It is important to have thresholds guide Council because the higher the cost of a contract the more important it is that Council can show that an open, efficient and fair approach was taken to achieve outcomes. Open competition also ensures that Council receives the best price to achieve the outcome.

Background – Procurement Thresholds

5. Council’s procurement policy contains the following Procurement Thresholds:

6. The Corporate Leadership Team has reviewed the thresholds and recommends that changes be made.

Background – Long Term Plan 2021-2031 context

7. The Long Term Plan 2021-2031 (LTP) includes a significant capital investment programme of $1.5 billion (refer graph 1). This is more than double the investment programmes in the previous Long Term Plan 2018-2028.

8. The increase in the capital programme carries a level of uncertainty and risks to achievability. Delays to the programme may result in Council not meeting planned levels of service or result in greater costs in the long term. There are also additional uncertainties and risks in the COVID-19 environment, with delays and challenges in procuring and sourcing some materials and services.

Graph 1: Projected capital investment by year and Council activity

9. Council considered the risks of the delivery of the capital programme a number of times through the preparation of the LTP. Some of the actions noted to address these risks included:

- A Wellington Water review of capability and capacity resulted in a range of actions such as bringing forward the allocation of works across the consultant and contractor panels so that works can commence as soon as possible in 2021/22.

- Council’s organisational review includes both scaling up teams to support delivery and bringing specialist knowledge in-house.

- Changes were agreed to the timing of some projects to mitigate delivery risks.

10. The policy settings of the Financial Delegation Policy and Procurement Policy were reported to Council as areas which impact on the do-ability of the capital programme and that there were opportunities to make improvements (refer LTPAP2021/2/125, 24 May 2021). Council resolved as follows:

Notes the delivery risks of the capital investment programme and directs officers to review the policy settings of the Financial Delegation Policy and the Procurement Policy and report to the Policy, Finance and Strategy Committee in July 2021 with advice on changes that could be actioned to achieve improved capital delivery outcomes.

Reasons for increasing the procurement financial thresholds

11. The current procurement thresholds were put in place in 2016. At that time the financial thresholds allowed for the efficient, competitive and open procuring of goods and services. Five years later the thresholds do not reflect the market places where Council operates. The costs of goods and services have increased meaning that Council is required to follow more stringent procurement processes for lower risk projects. The low thresholds are making Council’s procurement inefficient.

12. Council is operating in an evolving environment, particularly in the context of the significant increase in investment planned in the LTP. The proposed changes to procurement thresholds reflect the evolving environment that Council operates in.

13. Council has evidence across a number of activities that tight market conditions are resulting in it being more difficult to secure the resources and services needed to deliver our work programmes. Open competitive tendering is an effective method for securing the appropriate services/resources where the market is open and active. Where the market is tight an open competitive tender is a prolonged and inefficient system for securing the right resources/services to achieve Council’s goals. By increasing the thresholds Council will be able to work towards these goals more efficiently but will still be operating fairly for high cost contracts.

14. Whilst raising the thresholds will increase the agility of purchasing activity within the new limits there is still be an expectation that the goods/services being procured are considered, by the person holding the appropriate financial delegation, to be value for money to Council. If there is sufficient uncertainty around value for money then the person/people responsible for the purchasing activity should seek further quotes for the goods/services in order to reduce conjecture.

15. The key factors for this recommendation are that the cost of construction is increasing, there is a smaller pool of good bids being made, and because Council has knowledge of construction companies there is little risk of poor prices and service.

Comparison with other Local Authorities

16. A table of other local authorities’ financial thresholds for goods/service contracts can be found in table 1^{^[1]}.

Table 1: Comparison of financial thresholds across a selection of Councils

	Hutt City Council (proposed values)	Greater Wellington Regional Council	Wellington City Council	Upper Hutt City Council	Porirua City Council	Hamilton City Council	Dunedin City Council
Direct Purchase	Less than $100,000.00	Less than $10,000.00	Less than $25,000.00	Less than $20,000.00	Less than $20,000.00	Less than $50,000.00	Less than $25,000.00
Closed Tender	Less than $250,000.00	Less than $60,000.00	Less than $100,000.00	Less than $100,000.00 (closed tender or 3 quotes)	Less than $100,000.00 (based on analyses of supplier capability and time/cost versus benefit of competition. May directly purchase)	Between $50,000.00 - $250,000.00 (can be public or private)	Less than $100,000.00
Open and Competitive Tender	Over $250,000.00	Between $60 -$200,000 open tender an expectation. Over $200,000 open tender required.	Over $100,000.00	Over $100,000.00	Over $100,000.00	Over $250,000.00	Over $100,000.00

17. While the proposed procurement thresholds are higher than most others shown in this comparison it is important to note:

a. Greater Wellington Regional Council bases its thresholds on the New Zealand Transport Authority (NZTA) funding policy because of the amount of funding it receives through the Public Transport area.

b. Wellington City Council and Porirua City Council are also discussing raising their thresholds.

c. Auckland Council does not specify thresholds for direct award, closed tenders or open tenders. Broadly speaking it allows the direct award of a contract up to $300,000.00. However, ultimately the decision is made based on what it knows of the market and the product/service it is procuring.

18. Hutt City Council and those Councils above are listed by the Ministry of Business Innovation and Employment (MBIE) as agencies encouraged to follow Government procurement rules. The procurement rules would require an open tender process for the purchase of goods/services where the total value of the contract is over $100,000.00. While the proposed thresholds for goods and services exceed the limit set by MBIE for Government agencies, Council’s policy is generally in line with their suggestions.

Options

19. Make no changes to the current thresholds.

20. Make the proposed changes to the thresholds.

Climate Change Impact and Considerations

21. The Head of Procurement is currently exploring options around how we integrate climate change considerations within our procurement processes.

Consultation

22. A report with this proposal was sent through to Council’s Corporate Leadership Team who agreed with the recommendation to increase the procurement thresholds.

Legal Considerations

23. Local authorities are not required to follow the Governmental Procurement Guidelines that set the threshold for open and competitive tender at $100,000.00, but it is recommended.

Financial Considerations

24. Financial considerations have been discussed in the body of the report.

Appendices

No.	Title	Page
1 ⇩	Procurement Policy	29

Author: Dominic Scott-Jones

Solicitor

Author: Peter Cameron

Head of Procurement

Reviewed By: Jenny Livschitz

Group Chief Financial Officer

Reviewed By: Peter Cameron

Head of Procurement

Approved By: Kara Puketapu-Dentice

Director Economy and Development

Policy, Finance and Strategy Committee

04 July 2021

File: (21/953)

Report no: PFSC2021/3/152

Three waters reform update, including financial analysis of potential impact

Purpose of Report

1. The purpose of this report is to provide an update on the recent Government announcements about the Three Waters Reform programme. The report also provides the latest financial analysis of the potential impact of the Three Waters Reform for Hutt City Council.

Recommendation

That the Committee notes and receives the information.

Background – Timeline

2. In July 2020, the Government launched the Three Waters Reform Programme- a three-year programme to reform local government three waters service delivery arrangements.

3. The reform timeline provided by the government in December 2020 is attached in Appendix 1 to the report. This provides a high level overview of the period from 2020 to 2023 and includes key actions and legislative changes.

4. In March 2021 there was Government engagement across the country about the proposed Three Waters Reform. The image that follows was presented at this time, and provides further detail about the shorter term timeline and key decision points. Of note is the ‘Late 2021 Council decisions about participation in reforms.’

5. The date for transition to the new entities has been communicated as no earlier than 1 July 2024.

Recent government announcements and new information released

6. There have been two tranches of information and announcements during June 2021.

- Tranche 1 on 2 June 2021

o The Department of Internal Affairs (DIA) released four evidence-based reports commissioned to inform the case for change for the Three Waters Reform Programme. Appendix 2 attached to the report provides an overview of this information.

o The National evidence base release of information includes a statement “the analysis and modelling advances the evidence base informing the case for change for the Three Waters Reform Programme…The report highlights the huge investment required over the next 30 years to ensure that New Zealanders have access to safe drinking water and our wastewater and stormwater networks achieve good environmental outcomes.”

- Tranche 2 on 30 June 2021

o The Minister of Local Government Three Waters Reform announcements included four proposed new entities to be established and proposed governance arrangements. Refer Appendix 3 and Appendix 4 to the report for an overview of the announcements. Further details provided are:

§ Water services entities overview, Appendix 5 to the report.

§ FAQs regarding transforming the system for delivering three waters, Appendix 6 to the report.

o A local dashboard with information for each Council was also released at this point. Appendix 7 to the report includes the key messages and FAQs in regard to the local dashboards. Appendix 8 to the report is an extract of the Hutt City Council dashboard.

§ Delivering cost savings to households is a key objective of the reform. The image that follows shows the comparison for Hutt City Council in FY51 of the average household costs with reform at $1,260 versus without reform $2,380.

PwC analysis of the potential financial impacts of Three Waters Reform

7. A Three Waters Reform briefing presented to Council on 24 February 2021 included a presentation by PwC on the potential financial impacts of the Three Waters Reform. This was based on information from the Long Term Plan 2018-2028. Officers advised that a follow up action was to update the analysis based on the Long Term Plan 2021-2031.

8. Since Council finalised decisions on the Long Term Plan 2021-2031, PwC has completed this work, and the analysis is attached as Appendix 9 to the report. This analysis was prepared ahead of Government decisions on 30 June 2021. PwC staff will be in attendance at this meeting to talk through the results.

9. The 30 June 2021 Government announcements were clear that the new water services entities will own and operate three waters infrastructure, which includes transferring ownership of three waters assets to the new entities. These entities will also have access to cost-effective borrowing from capital markets to make the required investment.

10. The Government has also indicated that a funding package is to be announced. Until such time as this is announced there is uncertainty for councils as to what the financial impact will be.

Next steps

11. The Government has indicated the following in regard to the transition process and areas for further work:

Implementing these reforms will be a highly complex and challenging process, involving a range of transition activities and tasks, and the management of a number of significant risks. The key activities relate to:

o establishing the new entities, including setting up governance and organisational structures.

o managing staff transfer and recruitment processes.

o ensuring the components of the reforms that recognise iwi/Māori rights and interests are implemented effectively – including in relation to the proposed role of the mana whenua representative group.

o ensuring local authorities are continuing to deliver water services (and to invest in those services and infrastructure) until the new entities become operational.

o managing the transfer of assets and liabilities between local authorities and the new entities – including identifying the assets and liabilities to be transferred.

o managing local authority transition activities that contribute to the establishment and operation.

o establishing technical structures, policies and procedures, which ensure there is no disruption to water services through transition (this includes policies relating to asset management/planning, operations management, regulatory functions and delivery/procurement).

o preparing the new entities to undertake communications, customer services and community engagement.

o preparing the new entities to have the necessary functions relating to financial and treasury, charging and pricing, legal, risk, insurance, data, digital and information technology systems and processes, to successfully deliver water services.

12. For Hutt City Council there is a range of transition planning and preparation to consider. At the next Policy, Finance and Strategy Committee, officers will report further on Government announcements and transition plans.

Climate Change Impact and Considerations

13. The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.

Consultation

14. Consultation requirements and associated plans for the Three Waters Reform programme are uncertain at this stage and will be considered at a later date when further information is available.

Legal Considerations

15. New legislation is being developed by the Government to support the Three Waters Reform programme.

Financial Considerations

16. Financial considerations are detailed in Appendix 9 to the report.

Appendices

No.	Title	Page
1 ⇩	Appendix 1 - Reform-timeline-published by DIA December-2020	41
2 ⇩	Appendix 2 - Three Waters Reform Programme Update – Evidence base release, DIA 2 June 2021	43
3 ⇩	Appendix 3 - Minister of Local Government three waters reform announcement 30 June 2021	46
4 ⇩	Appendix 4 - Three waters reform programme overview A3-issued by DIA 30 June 2021	48
5 ⇩	Appendix 5 - Water services entities overview, issued by DIA 30 June 2021	51
6 ⇩	Appendix 6 - FAQs transforming the system for delivering three waters, issued by DIA 30 June 2021	57
7 ⇩	Appendix 7 - Local dashboard key messages and FAQs 30 June 2021	61
8 ⇩	Appendix 8 - Extract of Hutt City Council dashboard issued by DIA 30 June 2021	64
9 ⇩	Appendix 9 - PwC report - Hutt City Council Three Waters analysis LTP 2021-2031	65

Author: Jenny Livschitz

Group Chief Financial Officer

Author: Bruce Hodgins

Strategic Advisor

Approved By: Jo Miller

Chief Executive

Minister of Local Government three waters reform announcement 30 June 2021

Extract from website: https://www.beehive.govt.nz/release/government-water-reforms-build-economic-resilience-and-save-ratepayers-money

Government water reforms to build economic resilience and save ratepayers money

The Government is proposing to establish four publicly-owned entities to take responsibility of drinking water, wastewater and stormwater infrastructure across New Zealand, saving ratepayers thousands of dollars and better ensuring the $120 to $185 billion investment in services can be made.

“The data shows the case for change is compelling. Without these changes DIA modelling shows that even at the more conservative end of estimates, the average household bill for water services could be as high as $1900 to $9000 by 2051, which would be unaffordable for many communities,” Local Government Minister Nanaia Mahuta said.

“Under our proposal for four providers those figures range from $800 to $1,640, saving households thousands of dollars.

“It’s estimated New Zealand will need to invest between $120 billion and $185 billion to maintain safe, sustainable and environmentally appropriate drinking water, wastewater and stormwater infrastructure over the next 30 years, costs that most local councils simply can’t shoulder on their own.

“The Government has considered the evidence and proposes that four large water entities will create an affordable system that ensures secure delivery of safe drinking water and resilient wastewater and stormwater systems.

“We have seen the effects of a system in crisis: fatalities from bacteria in drinking water, broken sewer pipes, poorly treated wastewater running into streams and rivers, no-swim notices at the beaches, regular boil-water notices, and lead contamination,” said Nanaia Mahuta.

Nanaia Mahuta also released information showing how the reforms will affect each council and the projected costs for their communities with and without three waters reform.

“As we undertake our economic recovery, these four entities will ensure the upgrade of infrastructure for our most precious natural resource, which will not only help reign in increasing costs for households but provide local jobs while contributing to regional economies,” Nanaia Mahuta said.

The reforms are indicated to grow New Zealand’s GDP by $14 billion to $23 billion over the next 30 years and generate 5,850 to 9,260 full-time equivalent jobs.

“Without this change, communities are going to either face very large bills for water services; or infrastructure will continue to degrade with ongoing health and environmental consequences. Both of these outcomes are unacceptable,” said Nanaia Mahuta.

At present, 67 councils provide most of the country’s three waters services, a system that is in too many cases ineffective, inefficient, and not fit for purpose.

“Underinvestment, including deferred maintenance and renewals expenditure, has left a legacy of impending costs and poor services for future generations,” said Nanaia Mahuta.

Today’s comprehensive release is part of a package of proposed reforms including the recent establishment of Taumata Arowai, the new water services regulator, and the planned introduction of economic regulation. It includes the proposed boundaries of the four water providers, further details on the proposed water services entities, including governance arrangements, the role of iwi, and how they would be regulated.

“The Government will continue to work with the sector, iwi and industry on some of the details to give these transformational reforms the best chance of success. We will be making further announcements in the coming weeks, including a three waters reform support package for councils and their communities,’’ Nanaia Mahuta said.

“Now that Councils have received this data they can now assess the impact of these proposed reforms. We now need to ensure that ratepayers and households understand the beneficial health, environmental and cost impacts so we can move forward with greater confidence,” said Nanaia Mahuta.

Policy, Finance and Strategy Committee

18 June 2021

File: (21/962)

Report no: PFSC2021/3/153

District Plan Review Update

Purpose of Report

1. The purpose of this report is to provide an update on progress with the District Plan Review.

Recommendation

That the Committee receives and notes the report.

For the reason that the Committee is kept up-to-date with progress and risks associated with the District Plan Review.

Background

2. At the 19 May 2019 Council meeting, Council resolved to undertake a full review of the District Plan. At the 10 December 2019 Council meeting, Council resolved to establish the District Plan Review Subcommittee to have primary responsibility for the full review of the District Plan. The District Plan Review Subcommittee reports to the Policy, Finance and Strategy Committee on this full review.

3. This report outlines progress with the District Plan Review, including research, engagement and risks associated with the review.

Discussion

Partnering with Mana Whenua

4. An objective of the District Plan Review was to develop the new Plan in partnership with mana whenua. To achieve this objective, two mana whenua representatives were appointed to the District Plan Review Subcommittee. Due to employment commitments, one of the mana whenua representatives recently resigned. We are currently liaising with iwi authorities for a replacement Subcommittee representative.

5. At an operational level, regular hui are being held with iwi authorities. These hui are discussing topics of interest to mana whenua, with discussions from these hui reported to the District Plan Review Subcommittee. A policy planner with knowledge and experience in tikanga Māori is currently being recruited.

Research and Technical Information

6. The District Plan Review is based on a robust evidence base. The District Plan Review Subcommittee has provided direction to officers on topics where specific research or technical information is sought. Below is a summary and update on technical information and research for the District Plan Review.

Commissioned Research/Technical Advice	Current Status
Heritage Assessment: Review of the current heritage schedule and identification of other sites, buildings, items with significant historic heritage values	Initial desktop research completed. Field work from public locations and preparation of draft assessment report currently underway. Initial contact made with owners of properties with potential heritage values. Draft assessment due in July, to be followed by engagement with property owners on draft findings.
Greenfield Residential Development Areas Assessment: Identify and assess at a high level potential areas for greenfield residential development.	Desktop assessment completed. Results of this assessment to be reported to District Plan Review Subcommittee meeting on 1July.
Land Instability Assessment: Identify and assess areas that are prone to land instability.	Desktop assessment due in July.
Ambient Noise Survey and Noise Assessment: Measure ambient noise levels in representative locations in the district. Analyse monitoring results and advice on appropriate noise limits.	Noise monitoring completed. Currently analysing results. Draft advice due in August.
Flood Hazard Assessments: Wellington Water and Greater Wellington Regional Council undertaking flood hazard modelling.	Final flood hazard maps for stormwater in urban Wainuiomata recently completed. Wainuiomata River flood hazard modelling about to commence, with results due mid-2022. Draft flood hazard maps for the Hutt Valley floor areas due in July.
Residential Character Assessment: Assess the character of the residential areas of Lower Hutt, including identify areas with distinct or special character.	Initial desktop research completed. Field work from public locations and preparation of draft assessment report currently underway. Draft assessment due in August.
Housing and Business Capacity Assessment: Update assessment required by National Policy Statement for Urban Development.	Initial modelling completed, including consideration of Plan Change 43 which was not part of the 2019 assessment. Final assessment to be completed in July.

Community and Stakeholder Engagement

7. In conjunction with community engagement on the Draft Long Term Plan 2021 – 2031 in April, engagement was undertaken on the District Plan Review. The purpose of this engagement was to raise the profile of the District Plan Review with the wider community as well as identify and confirm significant resource management issues to be addressed in the review. This engagement included community open days, online and paper based surveys, social media and one-on-one meetings.

8. The results of this engagement confirmed the following key issues for the District Plan Review:

a. Housing supply

b. Quality of development

c. Responding to the risks of natural hazards, including impacts of climate change.

9. These issues correlate with earlier engagement, monitoring and research.

Risks and Uncertainties

10. There are a few external factors which could significantly influence the District Plan Review, such as legislative change and new national policy direction.

11. The government is currently reforming the Resource Management Act. The timeframe for this reform of legislation is by the end of 2022. The messaging from the government at this time is that Councils should continue with plan review processes, particularly if they relate to the issues of housing and freshwater. A watching brief is being maintained on this reform, with potential implications for the District Plan Review to be regularly reviewed and determined.

12. Two new National Policy Statements have been in preparation which would influence the District Plan Review. Of particular relevance to Lower Hutt is the new National Policy Statement for Indigenous Biodiversity (NPS-IB). A draft NPS-IB was consulted on in March 2020, with the final NPS-IB to be gazetted by the end of 2020. In late 2020 the government advised the NPS-IB was to be gazetted by May 2021, and in early 2021 this date was revised to July 2021. Recently the government has announced the NPS-IB is now expected to be gazetted by the end of 2021. Officers are currently considering what impact this further delay may have on the District Plan Review.

13. The second new National Policy Statement under development relates to Highly Productive Land. This National Policy Statement is likely to have limited relevance to Lower Hutt as the majority of the highly productive land in Lower Hutt has already been developed for urban purposes.

14. There are a few internal risks associated with the District Plan Review. There has been a recent departure of a member of the District Plan team and a replacement is currently being recruited. A new Head of Planning and a policy planner with expertise in tikanga Māori is currently being recruited. If these positions are not filled in a timely manner, this reduced capacity may impact on the District Plan Review timeline.

15. The work programme for the District Plan Review involves an increasing quantum and detail of work in the second half of 2021. This work is focused on preparation of the new chapters of the District Plan. The District Plan Review Sub-Committee will likely need to meet more regularly to provide direction to officers. This increasing workload combined with the external factors increases the overall risks of meeting the review timeline.

Climate Change Impact and Considerations

16. Climate change is an important consideration for the District Plan Review. This consideration includes the impact of land use, subdivision and development on climate change, such as the location and form of urban development can influence transport. In addition, the impacts of climate change, such as sea level rise and more frequent and intensive rainfall and flooding, are being considered in the District Plan Review as part of the natural hazard topic.

Consultation

17. As summarised above, engagement with the community and stakeholders is ongoing. Upcoming community engagement relates to flood hazard and potential areas of urban intensification around the city centre and railway stations.

18. Targeted engagement with property owners of buildings/sites with potential heritage value will also commence shortly. In addition, engagement with stakeholders will continue, such as Greater Wellington Regional Council, network utility operators and biodiversity/landowner groups.

Legal Considerations

19. The review is being undertaken in accordance with the requirements of the Resource Management Act 1991 (RMA). As noted above, the RMA is currently being reformed, and a watching brief is being maintained.

Financial Considerations

20. The District Plan Review is currently tracking on budget. $0.9m has been spent of $1.1m 2020/21 budget. Expenditure will increase over the fourth quarter associated with increases in external technical advice and engagement activities – currently anticipated to be on-budget.

21. The cost implications of recent and future National Policy Statements (eg Urban Development and Indigenous Biodiversity) will significantly influence the budget. Similarly, the RMA reform could also influence the budget. These costs will be determined once details of the RMA reforms are announced.

Appendices

There are no appendices for this report.

Author: Hamish Wesney

Head of District Plan Policy

Approved By: Helen Oram

Director Environment and Sustainability

Policy, Finance and Strategy – Work Programme 2021-22

Description	Author	Cycle 4 14 Sep 2021	Cycle 4 5 Oct 2021	Cycle 4 28 Oct 2021	Cycle 5 16 Nov 2021	Cycle 1 Feb 2022	Cycle 2 Apr 2022	Cycle 3 July 2022	Nov 2022	Pending
Work Programme	Democracy Advisor	√			√	√	√	√	√
Council performance overview quarterly report (including health and safety update)	K Eagle/C Taylor/ R Vallabh/C Ellis/J Livschitz/J McCandish	√
Draft Parking Policy	J Pritchard	√
Interim Year End Performance Results	J Livschitz	√
2021 Standard and Poor’s credit rating	J Livschitz	√
Budget Update	P Benseman	√
LGFA Annual Report	J Livschitz	√
Homeless Strategy	J Pritchard	√
Naming Policy	M Jennings/J Pritchard/W Moore	√
Class IV Gambling Venue Policy	W Moore	√								√
Urban Form and Development – Greenfield Development	H Wesney/J Jeffries	√
Land sale proposal – Miromiro Road	T Kimbrell	√
Change to financial delegations policy	J Livschitz	√
Dangerous and Insanitary Buildings Policy	J Pritchard	√
Three Waters Reform	J Livschitz/B Hodgins	√			√
Wellington Water Half year Performance Annual Report	B Hodgins		√
CCO Annual Reports	D Newth/J Livschitz		√
HCC Group Annual Report	D Newth/J Livschitz		√	√
Encroachments Policy	W Moore/C Taylor/C Agate				√
District Plan Review Subcommittee Report Back	H Wesney				√
Review of Local Alcohol Policy	TBC					√
Housing Plan	J Pritchard					√
Te Reo Policy	M Jennings/J Pritchard/W Moore						√
Proposed Remits to LGNZ	W Moore/K Stannard							√
Parking Policy Review	J Pritchard/C Agate								√
Māori Freehold Land	J Pritchard/W Moore									√

[1] Various councils use different terminology for the methods of procurement or stages, some also have additional thresholds for less than $1000.00. The table reflects the Hutt City names to allow for easy comparison.

Cr S Edwards (Chair)

Mayor C Barry	Cr J Briggs
Cr K Brown (Deputy Chair)	Cr B Dyer
Cr D Hislop	Deputy Mayor T Lewis
Cr C Milne	Cr A Mitchell
Cr S Rasheed	Cr N Shaw
Cr L Sutton

Council	Conditions and Criteria
Tauranga City Council	Full or partial remission where characteristics of land use, location or special circumstances warrant a remission.
Christchurch City Council	Full or partial remission where Council by specific resolution considers it fair to do so.
New Plymouth City Council	Full or partial remission where the rates are disproportionate or where the circumstances are comparable to other remissions or under exceptional circumstances. Granting a remission under this policy must not set or create a precedent for other ratepayers to receive similar remissions.
Hamilton City Council	Full or partial remission where characteristics of land use, location or special circumstances warrant a remission.
Wellington City Council	Full or partial remission where the rates are disproportionate or where the rating policy unfairly disadvantages a specific ratepayer. Approval of the remission must not set a precedent that application of the usual rates unfairly disadvantages other ratepayers.