Agenda of Report to Tasman District Council Meeting

Tasman District Council Agenda – 13 December 2023

7 Reports

7.1 Directions to inform the Long Term Plan 2024-2034 consultation document and supporting information and approval of proposed Rates Remission Policy for consultation

Decision Required

Report To:	Tasman District Council
Meeting Date:	13 December 2023
Report Author:	Alan Bywater, Team Leader - Community Policy; Matthew McGlinchey, Finance Manager; David Arseneau, Senior Infrastructure Planning Advisor - Stormwater, Rivers & Coasts; Dwayne Fletcher, Strategic Policy Manager; David Stephenson, Team Leader - Stormwater & Waste Management; Mike Schruer, Waters and Wastes Manager; Brylee Wayman, Senior Community Policy Advisor - Data Analyst; Margie French, Senior Revenue Accountant; Mike Drummond, Group Manager - Finance; Bill Rice, Senior Infrastructure Planning Advisor - Transportation; Grant Reburn, Reserves and Facilities Manager
Report Authorisers:	Dwayne Fletcher, Strategic Policy Manager
Report Number:	RCN23-12-7

1. Purpose of the Report / Te Take mō te Pūrongo

1.1 The purpose of this report is for the Council to confirm direction on what is to be included in draft documents in its proposed Long Term Plan 2024-2034 (LTP) and for its LTP process. This direction from the Council will enable staff to include the Council’s proposals and changes in the draft LTP Consultation Document, supporting information, LTP-related policies and Activity Management Plans.

1.2 The report also seeks the Council’s approval of the proposed Rates Remission Policy, being amendments to its current policy, for consultation in parallel with the LTP consultation.

2. Summary / Te Tuhinga Whakarāpoto

2.1 The Council is required to adopt a new Long Term Plan (LTP) by 30 June 2024 and is required to consult on a Consultation Document based on its proposed LTP.

2.2 The Council and staff have discussed multiple aspects of the LTP 2024-2034 in workshops. This report seeks to formalise key parts of those discussions in decisions to inform the consultation document, supporting information, LTP related policies, and the LTP process. These decisions will inform the drafting of the Consultation Document and the other documents that are either relied upon by the content of the Consultation Document or are necessary for the auditor to carry out the audit (collectively referred to as ‘supporting information’ in this report).

2.3 This report covers the following key proposals for the purposes of the development of the LTP 2024-34:

· Financial Strategy and proposed rating changes

· Overall Programme, Financials and Financial Strategy; and

· Confirming the vision and community outcomes; and

· River Rating – change from land value to capital value; and

· Harmonisation of funding for water schemes – intention to develop this and consult in 2024/2025; and

· Richmond Office Building – placeholder budget for LTP; and

· Waste Management and Minimisation - general rate contribution, food scrap kerbside collection and Collingwood Resource Recovery Centre; and

· Speed Management – resources for implementation; and

· Libraries – resourcing and loan charges; and

· Community Facilities – funding of Motueka Swimming Pool, South Waimea Community Facilities, Tapawera Community Hub and Murchison Recreation and Cultural Centre – Stage 2; and

· Community Partnerships – resourcing; and

· Economic Development – funding of external organisations; and

· Uniform Annual General Charge – level; and

· Rates Remission Policy

2.4 Over the next few months staff will draft the Consultation Document, supporting information, and related LTP policies. A further workshop for councillors to review these is programmed for 1 February 2024. A decision is sought through this report on the key issues to include in the LTP consultation document.

2.5 The audit of the Consultation Document and supporting information is scheduled for
4 February to 15 March 2024.

2.6 The adoption of the Consultation Document and supporting information is scheduled for
25 March 2024.

3. Recommendation/s / Ngā Tūtohunga

That the Tasman District Council

1. receives the Directions to inform the Long Term Plan 2024-2034 consultation document and supporting information and approval of proposed Rates Remission Policy for consultation report RCN23-12-7; and

Vision, Purpose and Community Outcomes

2. agrees to retain the mission, vision, purpose, community outcomes and strategic priorities (Attachment 1 to the agenda report) from the Council’s Long Term Plan 2021-2031 for the proposed Long Term Plan 2024-2034; and

Overall Long Term Plan 2024-2034 programme

3. agrees to use the overall expenditure programme, as summarised in paragraphs 5.5 to 5.7 of the agenda report as the basis for the Long Term Plan 2024-2034 Consultation Document and supporting information, modified as required, by any resolutions below; and

4. notes the continuing uncertainty about how the three waters should be treated in the consultation document and supporting information; and

5. notes that the proposed Long Term Plan programme referred to in clause 3 is based on a scenario where three waters remain the responsibility of the Council for the whole Long Term Plan 2024-2034 period; and

6. agrees that the consultation document and supporting information provide high level information on two scenarios:

a) where three waters continue to be managed by the Council; and

b) where responsibility for three waters is transferred to a Water Service Entity, as contemplated in legislation currently, from 1 July 2026; and

7. notes that staff may vary this approach to the three waters in the consultation document and supporting document, at a later stage, depending on legislative changes and legal and other professional advice received; and

River Rating

8. agrees to consult on the proposal to change the basis of rating for Rivers X and Rivers Y from land value to capital value through the Long Term Plan 2024-2034; and

Harmonisation of funding for water schemes

9. notes an intention to carry out policy and financial analysis to consider options to address the affordability issues with the rural water schemes, develop a proposal and carry out consultation during the 2024/2025 year, subject to the direction of the affordable waters reforms from the Government; and

10. agrees that the Council’s intention in clause 9. above be communicated, but not consulted on through the Long Term Plan 2024-2034 Consultation Document, subject to the direction of the affordable waters reforms from the Government prior to the consultation commencing; and

11. agrees that in the meantime the existing funding mechanisms for the Council’s water supplies remain in place; and

Richmond Office Building

12. agrees to include ‘placeholder’ financial provision in the proposed Long Term Plan 2024-2034 in accordance with Option C in paragraph 5.34 of the agenda report to address the inadequate earthquake resilience in the Richmond office building; and

13. notes the intention to develop a firm proposal to address the inadequate earthquake resilience in the Richmond office building for consultation in or before the Long Term Plan 2027-2037; and

Overall Financials and Financial Strategy

14. agrees not to collect rates to build up the Emergency Funds in advance of emergency events in the proposed Long Term Plan 2024-2034;

15. agrees to manage the provision and funding for emergency events by maintaining suitable headroom between projected debt and our maximum prudential debt levels in the proposed Long Term Plan 2024-2034, and through reprioritising expenditure, if and when events occur; and

16. agrees that the goal of fully funding depreciation is moved out by five years to 2029/2030 in the proposed Long Term Plan 2024-2034; and

17. agrees to two dynamic financial caps for the proposed Long Term Plan 2024-2034 and Financial Strategy being;

a) a rates cap (excluding growth) based on Business and Economic Research Limited operating inflation plus 3% for levels of service adjustments, noting that the Council will breach this cap in Year 1 and 2 of the proposed Long Term Plan 2024-2034;

b) a net debt cap based on net debt not exceeding 150% of operating revenue, noting that the Council will breach this cap in Year 9 and 10 of the proposed Long Term Plan 2024-2034, as a result of funding the construction of two new wastewater treatment plants; and

18. notes the Net Debt level is forecast to increase from the current $204 million (30 June 2023) to $445 million in year 10 of the proposed Long Term Plan 2024-2034; and

19. agrees to propose an increase in fees and charges of 10% from 2024/2025, noting there will be exceptions to this approach to be considered when the Draft Schedule of Fees and Charges is adopted for public consultation; and

20. agrees to retain its shares in Infrastructure Holdings Limited and not propose selling some or all of these shares in the proposed Long Term Plan 2024-2034; and

21. agrees to propose the sale of unencumbered emissions trading scheme (ETS) credits up to the value of approximately $400,000 per annum in the proposed Long Term Plan 2024-2034, to offset the interest and loan repayment costs for legacy debt for Port Tarakohe; and

22. notes the planned overall rates increase for year one (2024/2025) is 9.56% after an allowance for growth, and on average 4.5% after an allowance for growth for the 10 years of the proposed Long Term Plan 2024-2034; and

23. notes the use of reserves to offset rates and to repay opening deficits from the 2022/2023 financial year, and

Waste Management and Minimisation

24. agrees to remove the general rate contribution to the funding of Resource Recovery Centres in the proposed Long Term Plan 2024-2034, noting this results in a substantial increase in gate charges; and

25. agrees not to budget for food scrap kerbside collection in the proposed Long Term Plan 2024-2034; and

26. agrees to continue to fund the Collingwood Resource Recovery Centre in the proposed Long Term Plan 2024-2034;

Speed Management

27. agrees to a budget of $500,000 per annum in the proposed Long Term Plan 2024-2034 for the implementation of the Speed Management Plan: and

Libraries

28. notes that the provision of libraries is an activity with strong support from our communities; and

29. agrees to continue to fund library services in the proposed Long Term Plan 2024-2034 with service levels comparable to now; and

30. agrees to continue charging for the loan of new adult books and magazines and DVDs in the proposed Long Term Plan 2024-2034; and

Community Facilities

31. agrees that the development of Waimea South Community Facilities be included to commence in Year 2 (2025/2026) in the proposed Long Term Plan 2024-2034, with uninflated capital costs totalling $12.7 million across the 2025/2026-2027/2028 years; and

32. agrees that the capital cost of the Waimea South Community Facilities in the proposed Long Term Plan 2024-2034 be funded from the sources presented in the table in paragraph 5.87 of the agenda report: and

33. agrees that the development of the Motueka Swimming Pool be included to commence in Year 3 (2026/2027) in the proposed Long Term Plan 2024-2034 with uninflated capital costs of $20 million across the 2026/2027-2028/2029 years; and

34. agrees that the capital costs of the Motueka Swimming Pool in the proposed Long Term Plan 2024-2034 be funded from the sources presented in the table in paragraph 5.94 of the agenda report: and

35. agrees that the development of the Tapawera Hub be included to commence in Year 2 (2025/2026) in the proposed Long Term Plan 2024-2034, with uninflated capital costs of $2.5 million included across the 2025/2026 to 2026/2027 years; and

36. agrees that the capital costs of the Tapawera Hub be funded in the proposed Long Term Plan 2024-2034 from the sources presented in the table in paragraph 5.101 of the agenda report: and

37. agrees that the Stage Two improvements to the Murchison Recreation and Cultural Centre be included to commence in Year 8 (2031/2032) of the proposed Long Term Plan 2024-2034, with uninflated capital costs of $4.5 million across the 2031/2032-2033/2034 years; and

38. agrees that the capital costs of the improvements to the Murchison Recreation and Cultural Centre be funded in the proposed Long Term Plan 2024-2034 from the sources presented in the table in paragraph 5.107 of the agenda report: and

Community Partnerships

39. notes that provision of community partnership services is an important way in which the Council builds relationships with its community and leverages significant volunteer work; and

40. agrees to continue to fund community partnership services through the proposed Long Term Plan 2024-2034 with service levels comparable to now; and

Economic Development

41. that the funding of economic development organisations recognises the benefits this funding has for the economic wellbeing of the region; and

42. agrees to fund the following economic development organisations at the corresponding amounts with annual inflationary adjustments in the proposed Long Term Plan 2024-2034:

· Nelson Regional Development Agency: $325,000 per annum;

· Golden Bay Promotions (Tākaka Visitor Centre): $30,000 per annum;

· Tasman Bay Promotions Association (Motueka Visitor Centre): $40,000 per annum;

· Nelson Tasman Business Trust: $25,000 per annum; and

Uniform Annual General Charge

43. agrees to consult on the proposal to change the basis of the Uniform Annual General Charge to be 15% (rounded up to nearest dollar) of the general rate take through the Long Term Plan 2024-2034; and

Remission Policies

44. approves the Draft Rates Remission Policy for public consultation through the Long Term Plan 2024-2034 in accordance with sections 102, 109, 82 and 82A of the Local Government Act 2002: and

45. agrees that the Chief Executive Officer be delegated authority to approve any minor amendments required to the Draft Rates Remission Policy prior to it being made available for public consultation; and

46. notes that the low value property remission threshold will be adjusted from $7,500 once the three yearly property revaluation is complete; and

Issues for inclusion in the Consultation Document

47. agrees that the key issues for inclusion in the Long Term Plan consultation document are:

1) _______________________

2) _______________________

3) _______________________

Climate Change

48. agrees to include budgets to implement the Tasman Climate Action Plan in accordance with Attachment 3 of the agenda report in the proposed Long Term Plan 2024-2034.

4. Background / Horopaki

4.1 The Council is required by the Local Government Act (2002) to adopt an LTP and review it every three years. The LTP sets out the Council’s activities, plans, budgets, and policies and must be adopted before the beginning of the first financial year it relates to (in this case 30 June 2024).

4.2 The Council is required to develop a Consultation Document for the LTP and to adopt the information (referred to as supporting information in this report) that is relied upon to develop the content of the Consultation Document. The LTP supporting information will be made available to the community with the Consultation Document when it opens for submissions in March 2024.

4.3 As part of the LTP 2024-2034 process all budgets have been analysed using a risk/opportunity assessment based on our cooperate risks management framework. This considered risk and opportunity related to:

· service delivery; and

· potential for loss of external funding or significant increase in cost; and

· asset condition; and

· reputation, legal and regulatory; and

· health and safety of staff, contractors and the public; and

· security and information management; and

· business continuity and resilience.

4.4 Using the scores from this detailed analysis, planned expenditure was categorised as something that the Council must do, something that it should do or something that it could do. The initial assessments carried out by individual managers were moderated, tested and checked for consistency by an LTP team.

4.5 Staff have discussed the results of this analysis with councillors at workshops. In some cases, budget areas that are something the Council should do have been included in the proposed LTP programme and budget where staff and councillors considered that these services were of high priority. This report includes resolutions on three areas where this is the case: library services, community partnerships and economic development.

4.6 The following is a list of the supporting information that staff anticipate being relied on to develop the content of the LTP 2024-2034 Consultation Document:

a) Draft accounting information (including inflation adjusted forecast accounts, reserve funds and financial regulation benchmarks); and

b) Draft forecasting assumptions; and

c) Vision, Community Outcomes and Strategic Priorities; and

d) Draft Financial Strategy; and

e) Draft Infrastructure Strategy; and

f) Draft Statement on Fostering Māori Participation in Council Decision Making; and

g) 2023 Treasury Risk Management Policy (including Investment Policy and Liability Management Policy) – (already adopted); and

h) Significance and Engagement Policy (already adopted); and

i) Draft Activity Management Plans; and

j) Draft Group of Activities Summary Information; and

k) Housing and Business Assessment; and

l) Draft Revenue and Financing Policy; and

m) Draft Financial Impact Statement including rates impact example properties.

4.7 Subject to decisions the Council makes, consultation is likely to be undertaken on changes to several LTP- related policies, as well as the draft schedule of fees and charges, at the same time and in parallel with the LTP Consultation Document. These parallel consultations are on the following:

A. Draft Rates Remission Policy; and

B. Draft Policy on the Remission and Postponement of Rates on Māori Land; and

C. Draft Development and Financial Contributions Policy; and

D. Draft Community Facilities Funding Policy; and

E. Changes to the Revenue and Financing Policy – River Rating and Uniform Annual General Charge.

4.8 The Consultation Document and supporting information that has not already been adopted, is scheduled to be adopted on 25 March 2024. On that date, staff will also seek consultation approval of the draft policies B, C, and E above.

4.9 A range of aspects of the LTP have been discussed at workshops during 2023. This report seeks decisions on key aspects of the proposed LTP programme to enable staff to draft the Consultation Document and supporting information ready for audit in early February 2024.

5. Analysis and Advice / Tātaritanga me ngā tohutohu

Vision, Community Outcomes and Priorities

5.1 One of the purposes of the LTP is to describe the Council’s community outcomes for the District. As part of the early engagement for the LTP 2021-2031 the Council proposed some new priorities and sought feedback on these, alongside the vision and community outcomes.

5.2 Given the vision, community outcomes and priorities are high level descriptions of aspirations for the Council and District they tend to remain fairly consistent for an extended period. It is recommended that the Vision, Community Outcomes and Priorities from the LTP 2021-2031 (see Attachment 1) be retained.

Options:

Option	Advantage	Disadvantage
1.	Retain the existing vision, community outcomes and priorities. Preferred Option	Retains a consistent picture of what the Council is working with the community to achieve. Minimises the staff time and resources required.	If the vision, community outcomes and priorities do not adequately describe the Council’s intentions, it would be misleading not to amend them.
2.	Amend the vision, community outcomes and priorities.	If the Council’s view on its vision, community outcomes and priorities has changed since the LTP 2021-2031 it would be most transparent to amend them.	Frequent changes to the vision, community outcomes and priorities may cause confusion and uncertainty. Changing the vision, community outcomes and priorities will require significant staff time and resources (including for consultation on the changes).

Option

Advantage

Disadvantage

Retain the existing vision, community outcomes and priorities. Preferred Option

Retains a consistent picture of what the Council is working with the community to achieve.

Minimises the staff time and resources required.

If the vision, community outcomes and priorities do not adequately describe the Council’s intentions, it would be misleading not to amend them.

Amend the vision, community outcomes and priorities.

If the Council’s view on its vision, community outcomes and priorities has changed since the LTP 2021-2031 it would be most transparent to amend them.

Frequent changes to the vision, community outcomes and priorities may cause confusion and uncertainty.

Changing the vision, community outcomes and priorities will require significant staff time and resources (including for consultation on the changes).

Overall budgets, rates increases, debt and capital programme size

5.3 The Council has discussed an overall financial programme for the purpose of producing a consultation document to take to the community. The three key areas are:

5.3.1 Net Debt

5.3.2 Rate Increase

5.3.3 Capital programme

5.4 Across the ten years of the LTP the Net Debt figure increases by 120% from $202 million as at 30 June 2023 to $444 million in 2033/2034.

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5.5 The rate increase (excluding growth) will peak in 2024/2025 at 9.56%. Across the ten years the average per annum increase (excluding growth) is 4.5%.

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5.6 The capital programme has an average spend across the ten years of the LTP of $90.5 million excluding Joint venture expenditure, such as the Nelson Regional Sewerage Business Unit. This average is significantly influenced by the market increased in capital expenditure near the end of the 10 years associated with the construction of new wastewater treatment plants in Motueka and Golden Bay.

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Options:

Option	Advantage	Disadvantage
1.	Agree with the overall financial programme proposed. Preferred Option	Staff are able to prepare the consultation document and meet all statutory obligations.
2.	Further changes are made to the presented financial programme	Decisions may better reflect a programme that all Councillors are comfortable with.	Staff will not have time to produce a Consultation Document in time for it to be audited which will mean delays in the preparation of the Long-Term Plan

Option

Advantage

Disadvantage

Agree with the overall financial programme proposed.

Preferred Option

Staff are able to prepare the consultation document and meet all statutory obligations.

Further changes are made to the presented financial programme

Decisions may better reflect a programme that all Councillors are comfortable with.

Staff will not have time to produce a Consultation Document in time for it to be audited which will mean delays in the preparation of the Long-Term Plan

Three waters in the proposed LTP, Consultation Document and Supporting Information

5.9 The question of how to manage three waters in the LTP programme and what to communicate about the three waters in the consultation document has been and remains a difficult issue given the current legislation and the intentions of the political parties that make up the new Government.

5.10 The existing legislation requires the Council to exclude the three waters from its LTP from 1 July 2026. However, it is likely that the new Government will repeal this legislation, although the timing of this move is unclear.

5.11 This issue applies to most of the territorial authorities across New Zealand. Taituāra is working with the Department of Internal Affairs to try to expedite a legal change to provide clarity to councils across the country.

5.12 The guidance at this stage is that the new Government’s intention to change the legislation does not override the existing legislation. Therefore, if we include the three waters in our proposed LTP programme, consultation document and supporting information, there is a legal risk of challenge through judicial review. However, the likely remedy if the Council lost a judicial review on this matter is likely to be quite mild, depending a bit on what legislation the Government puts in place in the meantime.

5.13 Advice provided by the Auditor General is that we should prepare our consultation document and supporting documents on the ‘best information’ we have at the time of drafting. This would imply including the three waters in these documents and therefore our overall LTP programme.

5.14 At this stage staff recommend that the proposed LTP include 3 waters and that the consultation document and supporting information is prepared to provide high-level financial information on both scenarios i.e. three waters included for the full ten years, and three waters included only for the first two years. By doing so we hope to provide good information to and enable the right conversation with the community through the consultation. At the same time attempting to mitigate the legal risk of challenge as much as possible.

5.15 This situation remains fluid and we will continue to actively seek the best advice and remain flexible about how to deal with the three waters as long as possible through this process.

River Rates

5.16 The Council funds river management works using the targeted Regional River Works Rates. The rate is charged on the basis of land value, with 50% of funding from rating units in the River X and Y rating areas and the remaining 50% from properties outside the X and Y areas (River Z areas). It is recommended that the Council consults with the community on changing the basis for charging river rates in X and Y rating areas from land value to capital value. The basis of rating for River Z areas would remain land value.

5.17 The rationale for changing to charging by capital value is that the ratepayers whose properties have higher capital value as a result of investment in building or plant for example receive greater benefits from the river protection works than ratepayers with lower valued rating units.

Options:

Option	Advantage	Disadvantage
1.	Charge river rates to rating units in the River X and Y rating areas based on capital value. Preferred Option	More equitable charging for rates. Property owners with greater investment and capital value will contribute funding proportionate to the level of their investment, reflecting the value of protection provided and the priority that gets placed on protecting these properties. This may deter capital investment in higher risk areas, which is beneficial for long-term risk management.	Some ratepayers whose rates increase as a result may oppose the proposed change. There are increased costs for carrying out consultation to make this change although these are minimised by being part of the LTP consultation.
2.	Continue to charge river rates to rating units in the River X and Y rating areas based on land value	Lower cost of consultation.	No deterrent to capital investment in higher flood risk areas. Not as equitable as proposed capital valuation system.

Option

Advantage

Disadvantage

Charge river rates to rating units in the River X and Y rating areas based on capital value. Preferred Option

More equitable charging for rates.

Property owners with greater investment and capital value will contribute funding proportionate to the level of their investment, reflecting the value of protection provided and the priority that gets placed on protecting these properties.

This may deter capital investment in higher risk areas, which is beneficial for long-term risk management.

Some ratepayers whose rates increase as a result may oppose the proposed change.

There are increased costs for carrying out consultation to make this change although these are minimised by being part of the LTP consultation.

Continue to charge river rates to rating units in the River X and Y rating areas based on land value

Lower cost of consultation.

No deterrent to capital investment in higher flood risk areas.

Not as equitable as proposed capital valuation system.

Water Rates Harmonisation

5.18 The existing fees/charges for the provision of water supply services to Council’s three rural water supply schemes (Dovedale, Eighty-Eight Valley and Redwood Valley) are unaffordable and unsustainable into the future.

5.19 The existing fee structures and charging mechanisms for the three rural supplies and Motueka are misaligned with the way other Council services are charged and harmonised, for example, wastewater.

5.20 The Motueka water supply, and each rural water supply, has a separate account and has a bespoke charging mechanism related to how much it costs to operate that individual supply. This results in inconsistencies and inefficiencies in operating the charging model and administering rates. The urban extension restricted supplies in the Urban Water Club include a discount to account for the reduced level of service (water quality, pressure, flow, fire-fighting capacity) compared to the on demand urban water supplies.

5.21 The separate accounts for rural water supply in some cases carry significant accumulated and growing deficits. These deficits will need to be addressed in the financial modelling and future funding options.

5.22 The Dovedale, Eight-Eight Valley and Redwood Valley schemes require significant infrastructure upgrades to provide safe and reliable water, and to comply with Taumata Arowai rules and regulations.

5.23 The affordability issue will be further exacerbated by these planned upgrades for these schemes.

5.24 Further work is required to assess the financial implications of harmonising the way some or all the water schemes are funded with the remaining water schemes (including Motueka) to create a more equitable and affordable charging regime across the district. There are several options available to how and when this is carried out.

5.25 Significant policy analysis and financial modelling is required to fully explore and understand the implications of the various options. There is insufficient capacity and time to properly carry out the necessary work ahead of consultation on the LTP 2024-2034. However, these problems are too urgent to leave until the next LTP. In addition, there remains substantial uncertainty about the direction of the affordable waters reforms given the General Election result. In addition, the financial impact of changes in these funding arrangements are likely to be difficult for individual ratepayers to understand amongst the other budget and funding changes taking place through the LTP 2024-2034, as well as property revaluations.

5.26 It is recommended that the policy and financial analysis required to consider options to address these affordability issues is carried out, a proposal developed and consultation carried out during the 2024/2025 year. The intention would be that any new funding arrangements could commence from 1 July 2025. This planned approach and timing is subject to the direction of the affordable waters reforms from the Government.

5.27 In the meantime. it is recommended that the existing funding mechanisms for the water schemes remain in place.

5.28 It is further recommended that these water scheme affordability issues, the Council’s intention to develop options and to consult on them during the 2024/2025 year, subject to the direction of the affordable waters reforms from the Government, be communicated through the LTP 2024-2034 Consultation Document. This matter would be for information in the LTP Consultation Document, rather than an issue being consulted on in the LTP process.

Options:

Option		Advantage	Disadvantage
1.	Address the harmonisation of water schemes during the 2024/2025 year. Preferred Option.	Enables the affordability issues to be addressed in a reasonably timely manner. Provides suitable time for the Council to analyse the options and model their financial impacts before carrying out consultation. Enables some opportunity for the new Government to provide direction on the affordable waters reforms. Enables ratepayers to clearly see the financial impacts of the proposals for them, without this being complicated by other financial changes in the LTP.	Means the current funding arrangements, including General Rates subsidy for two rural schemes, to continue for another year. Deficits in the two rural water schemes increase before the affordability issues are addressed.
2.	Address the harmonisation of water schemes in the LTP 2024-2034	The affordability issues with the water schemes will be addressed at the earliest opportunity. Means the current funding arrangements including General Rates subsidy for two rural schemes will not need to continue for another year.	Does not provide suitable time for the Council to analyse the options and model their financial impacts before carrying out consultation. Provides little opportunity for the new Government to provide direction on the affordable waters reforms. Would not enable ratepayers to clearly see the financial impacts of the proposals for them, without this being complicated by other financial changes in the LTP.
3.	Address the harmonisation of water schemes later than 2024/2025 year.	Provides sufficient time for the Council to analyse the options and model their financial impacts before carrying out consultation. Enables sufficient opportunity for the new Government to provide direction on the affordable waters reforms. Enables ratepayers to clearly see the financial impacts of the proposals for them, without this being complicated by other financial changes in the LTP.	Does not enable the affordability issues to be addressed in a reasonably timely manner. This issue has already been around for over a decade and keeps on being deferred due to resourcing issues. Increasing numbers of users will likely either leave the rural water schemes or reduce their water units, which will increase the costs for the remaining users. Current funding arrangements including General Rates subsidy for two rural schemes to continue for a longer period. Deficits in the two rural water schemes increase before the affordability issues are addressed.
4.	Do not address the affordability of rural water schemes	Does not require the Council to carry out the policy analysis, financial modelling and consultation involved in making a change. No impact on water users outside the schemes directly affected.	Does not enable the affordability issues to be addressed in a reasonably timely manner. Water supply will become very expensive for users of these water schemes. Increasing numbers of users will likely to either leave the rural water schemes or reduce their water units, which will increase the costs for the remaining users. Current funding arrangements including General Rates subsidy for two rural schemes to continue for a longer period. Deficits in the two rural water schemes will increase or have to be paid off through higher rates and user fees.

Budgetary provision for the Richmond Office Building

5.29 The current Council offices in Richmond have low seismic rating. Some parts of the building are below 35% of the National Building Standards. Under current policy settings this means that the building in its current state is not legally useable as an office after June 2033. The building has several operational limitations including non-contiguous spaces, inadequate amenities, toilets and meeting spaces and poor heating, cooling and ventilation. Fire egress constraints limit the buildings capacity with a maximum capacity of 260 if the Council’s design manual and fit out is applied.

5.30 Given this situation that the Council will need to address the issues with the Richmond building prior to June 2033 and make suitable financial provision in the LTP 2024-2034 to do so. At this stage the Council is undecided about the course of action to take with broad options including investing significantly to retrofit and expand the existing building, developing a new building on the current or a different site or leasing a building.

5.31 The environment in which to decide on major investment in office accommodation is currently fluid with rapidly changing office work norms, the impact of the Future for Local Government report not yet known and the potential for local government amalgamation to be considered in the region.

5.32 During the next three years the Council will need to develop a firm proposal and to consult on that before or as part of the LTP 2027-2037.

5.33 In the meantime, the Council needs to make a ‘placeholder’ financial provision in its LTP 2024-2034. The primary options are to assume that the Council:

A. Strengthens and expands the existing building ($25m). Strengthening the existing building and doing the minimum to continue to occupy it would require capital expenditure of approximately $13.3 million in Years 8-9 of the LTP 2024-2034. In addition, building expansion would be required to accommodate the forecast staff numbers. Based on providing an additional 1,190 m² of floor space on the current site the cost of this expansion is estimated at $11.5 million in Year 11 or later.

B. Construct a new building with floor area of 4,500m² either on the current site or on another site with subsequent disposal of the current site. The expected capital cost of this option is approximately $55 million.

C. Leases a building from another party with a floor area of 4,500m² either on the current site or on another site with subsequent disposal of the current site. A one-off capital cost of $1.7 million (uninflated) in Year 7 would be required mainly to fit out a new building plus increased operational costs of $3.4 million per annum (uninflated), commencing in Year 8.

5.34 It is recommended that the Council include a ‘placeholder’ financial provision in the LTP 2024-2034 in accordance with Option (C) above.

Options:

Option		Advantage	Disadvantage
1.	Make placeholder financial provision based on option (C) above with a firm decision to be made later. Preferred option.	Acknowledges the earthquake vulnerability of the existing building and then need to address it during the LTP period. Makes reasonable financial provision in the LTP based on one of the practicable options. Enables the Council to better understand the changing context, the options available to develop a firm proposal for consultation.	The financial placeholder is at the lower end of the potential costs for a new building and may prove to be lower than the amount required for other options.
2.	Make placeholder provision based on an alternative option with a firm decision to be made later.	Acknowledges the earthquake vulnerability of the existing building and the need to address it during the LTP period. An alternative option may have a higher cost estimate and more realistically reflect what the Council may need to spend. Enables the Council to better understand the changing context, the options available to develop a firm proposal for consultation.	There are a number of different alternatives available, and all have differing cost estimates with any proposed solution having the potential not to be the one the Council ultimately decides on. The placeholder financial provision may prove to be higher or lower than the option the Council ultimately chooses.
3.	Consult on a firm proposal for the Richmond Office Building in the LTP 2024-2034.	Acknowledges the earthquake vulnerability of the existing building and the need to address it during the LTP period. Provides increased time to implement the decision once made through the LTP 2024-2034.	The context may change significantly after the decision is made, requiring a revision or reversal of the decision or the Council proceeding with a less-than-optimal or overly costly solution. There is insufficient time to fully explore, develop and cost the options available to a level where consultation can be carried out and a firm decision can be made.
4.	Make no placeholder provision with a firm decision to be made at a later date.	Lower impact on rates and debt levels in the LTP 2024-2034.	Does not acknowledge the earthquake vulnerability of the existing building and the need to address it during the LTP period. Presents an unrealistic picture of the Council’s finances compared with its liabilities and risks in the LTP 2024-2034. Unlikely to be acceptable to the auditor.

Emergency Funds

5.35 In the LTP 2021-2031 the Council decided not to collect rates to contribute to the emergency fund reserves for the first four years of the LTP. The Council decided to rely on using the remaining funds existing in the reserves and debt headroom to be able to fund the recovery from emergency events.

5.36 As part of the LTP 2024-2034 it is recommended not collecting rates to contribute to the emergency fund reserves to help moderate the proposed rates increases.

5.37 The Council can expect a level of Central Government support to assist in recovery from emergency events similarly to other councils following recent events. To fund recovery following an emergency event the Council could re-prioritise planned work programmes and services and borrow to fund recovery. The Draft Financial Strategy plans for modest debt headroom to be maintained (above the self-imposed debt cap) to enable the Council to borrow in these circumstances. In the years following an emergency event, it will be necessary to increase rates (and other forms of revenue) to service the loans used to fund the recovery.

Options:

Option	Advantage	Disadvantage
1.	Do not collect rates to contribute to emergency funds and rely on reprioritisation and debt headroom to fund recovery from emergency events. Preferred Option	Helps limit rates revenue increases prior to an emergency event.	Relies on debt and reprioritisation to respond after an event has taken place, which is likely to increase rates in the years after an emergency event.
2.	Collect rates to contribute to emergency funds and rely on debt headroom to fund recovery from emergency events.	Less reliance on debt and reprioritisation to respond after an event. Reserves built up before an emergency event can be used to reduce debt levels until the funds are required.	Rates increases will be higher prior to an emergency event. It is unlikely that reserves could be built up to a level to fund all recovery expenses so programme reprioritisation and borrowing headroom would be required as well.

Option

Advantage

Disadvantage

Do not collect rates to contribute to emergency funds and rely on reprioritisation and debt headroom to fund recovery from emergency events. Preferred Option

Helps limit rates revenue increases prior to an emergency event.

Relies on debt and reprioritisation to respond after an event has taken place, which is likely to increase rates in the years after an emergency event.

Collect rates to contribute to emergency funds and rely on debt headroom to fund recovery from emergency events.

Less reliance on debt and reprioritisation to respond after an event.

Reserves built up before an emergency event can be used to reduce debt levels until the funds are required.

Rates increases will be higher prior to an emergency event.

It is unlikely that reserves could be built up to a level to fund all recovery expenses so programme reprioritisation and borrowing headroom would be required as well.

Funding depreciation

5.38 In previous LTP’s the Council had agreed to move to fully fund depreciation over 10 years i.e. by 2024/2025. The Council had steadily been moving to this goal over the last eight years.

5.39 However, because of the recent economic climate including very high inflation, the Council has had significant valuation increases. This has resulted in material increases to the depreciation expense. To help ease the rates increases in the LTP 2024-2034 the option of moving this goal out by a further five years to 2029/2030 has been discussed and is recommended.

Options:

Option	Advantage	Disadvantage
1.	Agree to move out fully funding depreciation by 5 years.	The rates increase will not be as high in the first 5 years of the LTP and thus more affordable.	By pushing out the requirement to fully fund depreciation it will result in more debt being held by Council across those 5 years. This in turn may delay some capital programme work and increased rates in future years.
2.	Agrees to leave it as the status quo.	Lower net debt levels which limit exposure to interest rate movements.	Higher rates increase which contributes to affordability issues with some ratepayers of Tasman District Council.

Option

Advantage

Disadvantage

Agree to move out fully funding depreciation by 5 years.

The rates increase will not be as high in the first 5 years of the LTP and thus more affordable.

By pushing out the requirement to fully fund depreciation it will result in more debt being held by Council across those 5 years.

This in turn may delay some capital programme work and increased rates in future years.

Agrees to leave it as the status quo.

Lower net debt levels which limit exposure to interest rate movements.

Higher rates increase which contributes to affordability issues with some ratepayers of Tasman District Council.

Financial Caps

5.40 In previous LTPs the Council has established static caps for the percentage rates increase and net debt levels. Over the last two years we have exceeded the percentage rates increase caps in the LTP 2021-2031 and largely as a result, have consulted on the Annual Plan in each case.

5.41 Through workshops we have considered the option of changing from these static financial caps to more dynamic ones i.e. caps that change as underlying financial metrics move.

5.42 It is recommended that the Council adopts a dynamic rates increase cap (excluding growth) made up of the following components:

· An allowance for inflation based on the forecast operating Local Government Cost Index; and

· A service change allowance (that acknowledges that the services the Council provides may change over time as a result of the needs in the District and/or mandates from Central Government). This is set at 3.0% for the draft LTP.

5.43 The dynamic rates increase cap will operate in addition to any increase in rates revenue generated by the growth in rating units. The growth in rating units increases rates collected but also increases the cost of providing services.

5.44 It is recommended that the Council adopts a dynamic net debt cap of 150% of operating revenue.

Options:

Option		Advantage	Disadvantage
1.	Adopt the dynamic rates increase and net debt caps recommended. Preferred Option	The financial caps auto- adjust as the other financial metrics change over time. Acknowledge cost increases for providing services. Acknowledge growth increases the Council’s cost base. Allows movement in the debt cap as Council revenue increases. Ratings agencies will assess the Council’s debt in relation to its revenue	Revenue tends to track upwards and the debt cap will increase with this. Potential perverse incentive to increase costs and revenue as a means of increasing debt cap but this is moderated by pressure to moderate revenue increases. Lack of certainty the caps change annually as the underlying metrics change. Net debt cap does not account for the cost of servicing debt.
2.	Adopt the dynamic rates increase and net debt caps of the type recommended but alter their levels.	Advantages depend on the specific dynamic caps selected.	Risk of creating caps that are either so high as not to be meaningful or so low that the Council is likely to exceed them on a regular basis.
3.	Adopt static financial caps or alternative dynamic caps (i.e. using different underlying financial metrics)	The Council would consciously adjust the caps periodically and could deliberately use them to apply downward pressure on rates and debt	The financial caps do not auto-adjust as the other financial metrics change over time and would need to be manually adjusted periodically. Caps don’t automatically acknowledge growth increases the Council’s cost base and inflation meaning that adjustments for these would have to be done manually and could potentially lag. There is a risk that the caps manually selected get exceeded relatively frequently undermining their value. The level of the static caps are established with not real rationale.

General 10% inflation increase for fees and charges

5.45 Fees and charges are an important source of revenue for the Council and are generally charged where there is private benefit from the provision of a service and it is practical to impose a charge.

5.46 The proportion of revenue we raise through rates, fees and other sources for each activity is established in the Revenue and Funding Policy.

5.47 To keep pace with rising costs and maintain the proportion of the costs of services being funded by fees and charges, it is proposed that in general these be increased by 10% from the 2024/2025 year.

5.48 This is a general rule and will not apply to every fee in the Council’s schedule of fees and charges. In some cases, fees are set by Government regulation and in some cases an increase of this size will be inappropriate for one reason or another. The fees and charges for commercial and semicommercial activities are influenced by prevailing market rates. The Council will consider the full schedule of fees and charges prior to consultation on it being carried out.

Options:

Option		Advantage	Disadvantage
1.	10% increase in the Council’s fees and charges in general. Preferred Option	Enables revenue from fees and charges to keep pace with costs and rates increases. Enables compliance with Revenue and Financing Policy percentages.	Increases costs for people to use the Council’s services and in some cases, people will choose not to do so because of the price. Increases the incentive for some people to choose not to follow regulations due to the cost of complying.
2.	Increase fees and charges by more than 10% in general	May generate additional revenue for the Council.	Increases costs for people to use the Council’s services and in some cases, people will choose not to do so because of the price. Increases the incentive for some people to choose not to follow regulations due to the cost of complying. May not be justified by the increase in costs for providing the service i.e. not real and reasonable. May lead to a higher proportion of revenue coming from fees than indicated in the Revenue and Financing Policy.
3.	Increase fees and charges by less than 10% in general	Lower increases in costs for people to use the Council’s services and people will be less likely to choose not to use them because of the price. Less of an incentive for some people to choose not to follow regulations due to the cost of complying. Less likely to lead to a higher proportion of revenue coming from fees than indicated in the Revenue and Financing Policy.	May reduce revenue for the Council. May lead to a lower proportion of revenue coming from fees than indicated in the Revenue and Financing Policy. Less cost recovery with further costs being met by rates.

Not sell Infrastructure Holdings Limited shares

5.49 On 1 July 2023 Council exchanged its 50% shareholding in Port Nelson Ltd and Nelson Airport Ltd for a 50% stake in Infrastructure Holdings Limited (IHL). The other 50% is held by Nelson City Council. The arrangements include a shareholder’s agreement that provides for Nelson City Council to have the first right of refusal on any share sale by this Council. Any purchase by Nelson City Council would result in it having a controlling interest in the port and airport and enhanced influence of the port and airport’s direction and dividend policy.

5.50 The Council's investment in IHL is considered a strategic Investment and any sale would require a consultative process with the community. There is likely to be a range of views within the community on.

5.51 IHL provides a steady income stream to the Council which is used to offset Council expenditure therefore reducing overall rates. A sale or part sale of IHL shares would provide an immediate cash benefit to the Council at the expense of the longer-term and ongoing dividend stream.

Options

Option	Advantage	Disadvantage
1.	Retain Current investment in IHL. Preferred Option	Retains current dividend streams. Retains current governance arrangements.	No immediate cash injection into Council.
2.	Sell all or a part of Council’s stake in IHL	An Immediate cash benefit from the net proceeds of the sale.	Will require the cost and resources for consultation and engagement with the community. Could effectively hand control of IHL to NCC with a resultant loss of influence over future direction and dividend policies. Reduced flow of income from dividends.

Option

Advantage

Disadvantage

Retain Current investment in IHL.

Preferred Option

Retains current dividend streams.

Retains current governance arrangements.

No immediate cash injection into Council.

Sell all or a part of Council’s stake in IHL

An Immediate cash benefit from the net proceeds of the sale.

Will require the cost and resources for consultation and engagement with the community.

Could effectively hand control of IHL to NCC with a resultant loss of influence over future direction and dividend policies.

Reduced flow of income from dividends.

Use of Emissions Trading Scheme (ETS) credits for Port Tarakohe

5.52 Currently Council has as part of its forestry activity unencumbered ETS credits. The value of these credits moves markedly as they are traded on a volatile market. These unencumbered credits are available for sale as they are not required to be surrendered for future forestry harvesting.

5.53 Port Tarakohe continues to operate at a loss. All efforts to reduce the ongoing operational losses at Port Tarakohe have not been effective. The Port lacks the scale and other income streams that other ports have. The Port is a key strategic asset for Golden Bay to support resilience, recreational users and commercial users (primarily marine farming).

5.54 To reduce the financial pressure on the Port it is proposed to use the proceeds of ETS credit sales over the next 10 years to cover all or part of the interest and loan repayments on current debt that has accumulated for the Port. The proposed sales of ETS credits would be made annually. This approach will reduce the price risks inherent in a volatile market.

5.55 The value of interest and loan repayments to be funded by receipts from the sale of ETS credits in the proposed LTP programme for consultation is in the order of $400,000 per annum.

Option	Advantage	Disadvantage
1.	Annual ETS credit sale. Preferred Option	Releases cash over time to meet servicing of legacy debt in relation to Port Tarakohe. Does not directly increase rates as the alternative funding from rates would. Is consistent with cross-subsidisation between Enterprise activities.	Funds are not available for other purposes or the credits available for future carbon offsets. Is inconsistent with the Council's previous position that Port Tarakohe must operate as a stand-alone self-funding business.
2.	No ETS credits sale	Current ETS credits are retained for future carbon offsets or future sale.	An alternative funding source like rates will need to be found. If that does not occur the debt against the port will continue to grow. Allowing the debt to grow is not a sustainable strategy in the medium term.

Option

Advantage

Disadvantage

Annual ETS credit sale.

Preferred Option

Releases cash over time to meet servicing of legacy debt in relation to Port Tarakohe.

Does not directly increase rates as the alternative funding from rates would.

Is consistent with cross-subsidisation between Enterprise activities.

Funds are not available for other purposes or the credits available for future carbon offsets.

Is inconsistent with the Council's previous position that Port Tarakohe must operate as a stand-alone self-funding business.

No ETS credits sale

Current ETS credits are retained for future carbon offsets or future sale.

An alternative funding source like rates will need to be found. If that does not occur the debt against the port will continue to grow. Allowing the debt to grow is not a sustainable strategy in the medium term.

Waste Management and Minimisation

5.58 In March 2023, the previous government announced a new range of waste minimisation proposals, as part of an update to the New Zealand Waste Strategy. Included in this strategy was an intention for regulations and performance standards requiring all councils to provide food waste collections to urban areas by January 2030. For Tasman District, this would require collections in Richmond, Hope, Brightwater, Wakefield, Motueka and Tākaka. At the time of writing, while regulations had been published regulating the food waste materials there was not yet a performance requirement for us to provide food waste collections.

5.59 Our initial estimates indicated that the earliest that food waste collections could feasibly commence would be 2027/2028. In 2024 we will be starting work with staff at Nelson City Council on a detailed business case for food waste collection, to confirm the strategic case, and determine the feasibility of a service. Results are expected in 2025. In parallel with this we will be working on a review of the Nelson-Tasman Waste Management and Minimisation Plan.

5.60 At this stage we are not proposing to budget for food waste collections, as they are not yet mandatory, and the community is facing cost of living pressures. There will be an opportunity to review this position in the LTP 2027-2037, following the results of the business case and when the Nelson Tasman Waste Management and Minimisation Plan has been updated.

Options:

Option	Advantage	Disadvantage
1.	Do not include a budget for food waste collections. Preferred Option	Reduces financial pressure in later years of LTP and does not introduce a budget with a high level of uncertainty. Allows for further consideration through waste plan.	No financial provision for food waste collections should they be required in the future. Does not align with intention to reduce organic waste from landfill.
2.	Include a budget for food waste collections from 2029-2030.	Makes financial provision for a service that is likely to be required to meet waste reduction and climate objectives.	High level of uncertainty around scope and timing of service. Some questions around cost-effectiveness of service have not yet been answered.

Option

Advantage

Disadvantage

Do not include a budget for food waste collections.

Preferred Option

Reduces financial pressure in later years of LTP and does not introduce a budget with a high level of uncertainty. Allows for further consideration through waste plan.

No financial provision for food waste collections should they be required in the future. Does not align with intention to reduce organic waste from landfill.

Include a budget for food waste collections from 2029-2030.

Makes financial provision for a service that is likely to be required to meet waste reduction and climate objectives.

High level of uncertainty around scope and timing of service. Some questions around cost-effectiveness of service have not yet been answered.

Remove general rate contribution to waste management

5.61 In developing operating budgets for Resource Recovery Centres, we have considered the balance of funding between fees and charges and general rates. Waste disposal and transport make up around 80% of our direct external costs, and historically our fees at the Resource Recovery Centres have covered these expenses, with general rates covering the remaining external and internal costs.

5.62 In 2024/2025 we are expecting landfill fees at the York Valley landfill to increase by just under $44 per tonne, an 18% increase. In our budgeting, we initially planned to increase Resource Recovery Centre gate charges by $44 per tonne (from $282.90 to $326.60 incl. GST, a 15% increase).

5.63 Following feedback at Council workshops, and considering the pressure on general rates, we have increased the proposed fees and charges to largely eliminate the need for general rate funding for the remaining external and financing costs for Resource Recovery Centres. This results in a substantial increase in Resource Recovery Centre gate charges in 2024/2025, from $282.90 to $360.16 per tonne, an increase of 27%. In the following three years the proposed gate charges would increase between 0.3% and 3.3%, and then decrease until 2031/2032, when charges would again increase (Attachment 5).

Options:

Option		Advantage	Disadvantage
1.	Budget for an increase of $77 per tonne in 2024/2025, to largely eliminate general rate requirement for RRCs. Preferred Option	Reduces general rate requirement and moves to a user pays approach for waste disposal. May also incentivise large commercial customers in Richmond to haul direct to landfill, reducing maintenance costs.	Likely to be unpopular. May reduce affordability of waste disposal and risk of increased illegal dumping.
2.	Budget for an increase RRC gate charges in 2024/2025 of $44 per tonne of waste, to match York Valley increase. (Status quo)	Minimises price increase for customers at Resource Recovery Centres.	Increased general rate requirement for Resource Recovery Centre activities.
3.	Budget for an increase of $60 per tonne in 2024/2025, and a further increase of $18 per tonne in 2025/2026 to eliminate general rate in 2025/2026.	Moves to a user pays approach but smooths increase over two years. Impact of cost increase can be monitored in 2024/2025.	Maintains a general rate requirement for the activity.

Collingwood Resource Recovery Centre

5.64 In considering potential cost savings for the Waste Management activity staff considered whether the Collingwood Resource Recovery Centre (RRC) should remain open.

5.65 The Collingwood RRC provides waste disposal, recycling, greenwaste disposal and a reuse shop. It is normally open three days a week (9 am to 12 noon) but opens seven days a week for an eight-week period over summer.

5.66 The Collingwood site handles around 1800 transactions per annum - around 1.7% of the Council’s RRC transactions and just under 0.5% of the district’s waste materials. Most of the transactions are for domestic customers.

5.67 If we chose to close the site we would see savings in the order of $35,000 per annum. This saving excludes maintenance and other holding costs which would still be required as long as we own the site.

Options:

Option	Advantage	Disadvantage
1.	Continue to provide Collingwood RRC. Preferred Option	Continues to provide services for Collingwood, including recycling services for Aorere Valley, where there is no kerbside recycling service.	Cost of approximately $35,000 per annum.
2.	Close the Collingwood Resource Recovery Centre	Savings of approximately $35,000 per annum.	Likely to be very unpopular with Collingwood residents. Customers would need to drive around 30km to the Tākaka Resource Recovery Centre or purchase commercial waste services.

Option

Advantage

Disadvantage

Continue to provide Collingwood RRC.

Preferred Option

Continues to provide services for Collingwood, including recycling services for Aorere Valley, where there is no kerbside recycling service.

Cost of approximately $35,000 per annum.

Close the Collingwood Resource Recovery Centre

Savings of approximately $35,000 per annum.

Likely to be very unpopular with Collingwood residents. Customers would need to drive around 30km to the Tākaka Resource Recovery Centre or purchase commercial waste services.

Speed Management

5.68 A placeholder budget for providing signs, changes to road structures etc. to implement the Speed Management Plan was developed by staff at $700,000 per annum for each year of the LTP 2024-2034. However, the Speed Management Plan is still under development, so it is difficult to be accurate about the costs to implement it.

5.69 Following discussion at a workshop it is recommended that this budget be set at the lower level of $500,000 per annum.

Options:

Option		Advantage	Disadvantage
1.	Provide implementation budget at $500,000 per annum. Preferred option.	The resources for implementation may well be adequate at this level. Decisions are less likely to be made to reduce the resources for other services/activities in the LTP unnecessarily to manage the rates increases.	It is possible that the resources for implementation will not be sufficient in some or all years and additional budgets sought through subsequent Annual Plans.
2.	Provide implementation budget at $700,000 per annum	Based on estimates the resources for implementation should be at least adequate.	The resources being budgeted for implementation may be in excess of what will actually be required and risks unnecessarily impacting rates increases through the LTP period. Decisions may be made to reduce the resources for other services/activities in the LTP unnecessarily to manage the rates increases.
3.	Provide budget needed to meet only the ‘do minimum’ requirements in regulations.	Minimizes cost associated with spend management. Circa $1m mostly in the first 2-3 years of the LTP period.	Provides no scope to implement the final speed management plan if it entails more than the ‘do minimum’. Council is consulting on four options for urban and four options for rural communities, and most of these options require investment to progressively change the roading environment to match any future speed limits.

Libraries

5.70 Following the application of the risk/opportunity matrix funding for the continued provision of library services across the District was rated as something the Council should do, rather than something it must do i.e. funding of library services is not mandatory.

5.71 Libraries provide important and highly valued services in our communities. This is evidenced in the 2023 Residents’ Survey with 86% of all respondents being satisfied of very satisfied with libraries and 100% of users satisfied or very satisfied. We anticipate that there would be significant opposition to a proposal to discontinue these services through the consultation.

5.72 Libraries have a range of benefits including providing access to books and other material regardless of ability to pay; access to computers and contributing to bridging the digital divide, providing a conduit to disseminate public information; contributing to literacy, providing safe community spaces and meeting space and providing access to free programmes and events. Libraries help to provide a focus for the community and there are several benefits from people being able read for pleasure.

5.73 It is recommended that the funding of library services be retained in the LTP 2024-2034.

Options:

Option		Advantage	Disadvantage
1.	Continue to fund libraries. Preferred Option.	See list of benefits in paragraph 5.76. The Council has invested substantially in libraries over a number of years and not continuing to fund them would see this investment wasted.	Higher rates revenue required.
2.	Discontinue funding for libraries	Lower rates revenue required.	The benefits listed in paragraph 5.76 would be lost. The Council’s previous investment in libraries would not provide benefits to the community.
3.	Substantially reduce funding for libraries	Lower rates revenue required to some degree.	The benefits listed in paragraph 5.76 would be reduced or lost to some degree

5.74 Some material (new adult books, magazines in the adult section and DVDs) currently have fees applied to them. Annually these generate approximately $100,000 but also generate additional administrative costs of approximately $50,000 per annum.

5.75 To make this material more widely accessible (particularly for young people moving into borrowing adult material) and to be consistent with no charges being made for electronic versions of the same books, there is an option to remove these charges.

5.76 It is recommended that fees for the loan of these specific categories of material be retained to help moderate the increase in rates.

Options:

Option	Advantage	Disadvantage
1.	Continue to charge for the loan of new adult books, magazines in the adult section and DVDs. Preferred option.	Helps to limit the increase in rates.	Maintains the existing costs barriers for this material for some users. Maintains the existing inconsistency between the charges for physical books and no charges for electronic versions of books.
2.	Discontinue loan fees for new adult books, magazines in the adult section and DVDs	Removes cost barriers for use of this material. Removes the inconsistency between the charges for physical books and no charges for electronic versions of books.	Adds to rate increases.

Option

Advantage

Disadvantage

Continue to charge for the loan of new adult books, magazines in the adult section and DVDs. Preferred option.

Helps to limit the increase in rates.

Maintains the existing costs barriers for this material for some users.

Maintains the existing inconsistency between the charges for physical books and no charges for electronic versions of books.

Discontinue loan fees for new adult books, magazines in the adult section and DVDs

Removes cost barriers for use of this material.

Removes the inconsistency between the charges for physical books and no charges for electronic versions of books.

Adds to rate increases.

Waimea South Community Facilities

5.77 Investigations and feasibility work has been carried out on the development of community facilities in South Waimea.

5.78 A new facility is being considered at Wakefield Recreation Reserve to cater for community, recreation and arts-based groups. In Brightwater at the Brightwater Recreation Reserve, it is proposed to extend/upgrade an existing facility to better meet community needs.

5.79 The best current estimate of costs for these facilities is $12.7 million (uninflated). Note at this stage concept designs have not been developed, nor have the costs been estimated by a quantity surveyor.

5.80 It is recommended that the development of the Waimea Community Facilities be included to commence in Year 2 (2025/2026) in the proposed LTP 2024-2034, with capital costs across the 2025/2026-2027/2028 years.

5.81 It is recommended that the capital costs of these facilities be funded as follows:

Source	%	$	Rationale
Community contribution	23%	$2.9m	Consistent with the Draft Community Facilities Funding Policy
Reserve and community faciality financial contributions (RFCs).	58%	$7.4m	75% of Council's contribution
Rates funded loans	19%	$2.4m	25% of Council's contribution
Total		$12.7m

5.82 Under this proposal operating costs would start from the 2028/2029 year reaching a full year’s operating costs in 2029/2030. The operational costs will be funded through the District Facilities Rate.

Options:

Option		Advantage	Disadvantage
1.	Plan for the facilities to commence in Year 2 with the mix of funding sources in paragraph 5.87. Preferred Option.	Clear commitment from the Council to support and provide significant funding for these community facilities. Appropriate mix of funding sources. Consistent with the Draft Community Facilities Funding Policy. Provides a level of certainty to the community about the timing and expected community fundraising requirement.	The proportion of the capital costs funded through loans contribute to rates increases. Opportunity costs for the use of Reserve and Community Facilities Financial Contributions. Operational costs impact rates from 2028/2029 onwards. Substantial community fundraising is required over a relatively short period.
2.	Do not include these facilities in the proposed LTP	Lower impact on rates levels. Reserve and Community Facilities Financial Contributions could be used on alternative projects.	No commitment from the Council to these facilities would disappoint local residents. Lower standard of community facilities in the area would persist. The current earthquake-prone community centre would have to be addressed in another way. Social and cultural wellbeing in the area may be impaired by the lack of good-quality community facilities.
3.	Plan for the facilities to commence later than Year 2	Including a plan for the facilities in the LTP would signal commitment from the Council. More time available for community fundraising to take place. Some Reserve and Community Facilities Financial Contributions may be able to be used on alternative projects in the meantime.	Lower standard of community facilities in the area would persist for longer. The current earthquake-prone community centre continues to be used for longer. Social and cultural wellbeing in the area may be impaired for longer by the lack of good-quality community facilities.
4.	Use an alternative mix of funding sources for the capital	Reducing the use of Reserve and Community Facilities Financial Contributions means they could be used on alternative projects. Reducing the funding from rates-funded loans would reduce the increase in rates. Reducing the level of community fundraising would mean less fundraising stress on the community and may enable the project to take place earlier.	Increasing the use of Reserve and Community Facilities Financial Contributions may be inconsistent with the purpose for which they are collected. Increasing the use of rates funded loans will further increase rates. Requiring a greater level of community fundraising would be inconsistent with the Draft Community Facilities Funding Policy and the funding of other community facilities, and potentially increase the pressure on the community to raise funds.

Motueka Swimming Pool

5.83 The provision of a public swimming pool has been a long-held community aspiration in Motueka. Investigations and feasibility work has been carried out on the development of a pool. The Council has purchased land in Motueka with the intention of providing a swimming pool.

5.84 At this stage the concept for the Motueka Pool includes:

· A 25-metre pool with 6 lanes (8 lanes if this can be accommodated within available funding)

· Learners and leisure pool

· Hydrotherapy pool

· Splash pad and toddlers pool

· Spa pool

5.85 The best current estimate of costs for the swimming pool in Motueka is $20 million (uninflated). Note at this stage concept designs have not been developed, nor have the costs been estimated by a quantity surveyor.

5.86 It is recommended that the development of the Motueka Swimming Pool be included to commence in Year 3 (2026/2027) in the proposed LTP 2024-2034, with capital costs across the 2026/2027-2028/2029 years.

5.87 It is recommended that the capital costs of these facilities be funded as follows:

Source	%	$	Rationale
Community contribution	22%	$4.4m	Following proposed policy on community contributions
RFCs	59%	$11.8m	75% of Council's contribution
Rates funded loans	19%	$3.8m	25% of Council's contribution
Total		$20.0m

5.88 Under this proposal operating costs would start from the 2028/2029 year reaching a full year’s operating costs in 2029/2030. The operational costs will be funded through the District Facilities Rate.

Options:

Option		Advantage	Disadvantage
1.	Plan for the facilities to commence in Year 3 with the mix of funding sources in paragraph 5.94. Preferred Option.	Clear commitment from the Council to support and provide significant funding for the Motueka Swimming Pool. Appropriate mix of funding sources. Consistent with the Draft Community Facilities Funding Policy. Provides a level of certainty to the community about the timing and expected community fundraising requirement.	The proportion of the capital costs funded through loans contribute to rates increases. Opportunity costs for the use of Reserve Financial and Community Facilities Contributions. Operational costs impact rates from 2029/2030 onwards. Substantial community fundraising is required over a relatively short period.
2.	Do not include the Motueka Swimming Pool in the proposed LTP	Lower impact on rates levels. Reserve Financial and Community Facilities Contributions could be used on alternative projects. Land purchased could be used for alternative purposes or sold.	No commitment from the Council to the Motueka Swimming Pool would disappoint local residents. No public swimming pool in Motueka with residents having to travel to Richmond to the nearest public pool. Social well being in the area may be impaired by the lack of a public swimming pool. Potentially higher rates of water-related accidents and deaths due to the lower access to opportunities to learn to swim and develop water confidence.
3.	Plan for the facilities to commence later than Year 3	Including a plan for the facilities in the proposed LTP and having purchased land would signal commitment from the Council. More time available for community fundraising to take place.	No public swimming pool available in the area for longer. Social well-being benefits of a public swimming pool will be delayed. The benefits of additional water safety through opportunities to learn to swim and develop water confidence will be delayed.
4.	Use an alternative mix of funding sources for the capital	Reducing the funding from rates-funded loans would reduce the increase in rates. Reducing the level of community fundraising would mean less fundraising stress on the community and may enable the project to take place earlier.	Increasing the use of Reserve and Community Facilities Financial Contributions may be inconsistent with the purpose for which they are collected. Increasing the use of rates-funded loans will further increase rates. Requiring a greater level of community fundraising would be inconsistent with the Draft Community Facilities Funding Policy and the funding of other community facilities, and potentially increase the pressure on the community to raise funds.

Tapawera Community Hub

5.89 A new community hub building is proposed which will provide for community meetings, workshops, office space and community health services. Tapawera Connect and Tapawera and Districts Community Council (TDCC) support the proposal and TDCC would provide the land.

5.90 Preliminary design and costings for the hub have been obtained.

5.91 The best current estimate of costs for these facilities is $2.5million (uninflated),

5.92 It is recommended that the development of the Tapawera Hub be included to commence in Year 2 (2025/2026) in the proposed LTP 2024-2034, with capital costs included across the 2025/2026 to 2026/2027 years.

5.93 It is recommended that the capital costs of these facilities be funded as follows:

Source	%	$	Rationale
Community contribution	33%	$1.3m	Following proposed policy on community contributions
RFCs	50%	$0.8m	75% of Council's contribution
Rates funded loans	17%	$0.4m	25% of Council's contribution
Total		$2.5m

5.94 Under this proposal operating costs would start from the 2027/2028. The operational costs will be funded through the District Facilities Rate.

Options:

Option		Advantage	Disadvantage
1.	Plan for the Tapawera Community Hub to commence in Year 2 with the mix of funding sources in paragraph 5.101. Preferred Option.	Clear commitment from the Council to support and provide significant funding for this facility. Appropriate mix of funding sources. Consistent with the Draft Community Facilities Funding Policy. Provides a level of certainty to the community about the timing and expected community fundraising requirement.	The proportion of the capital costs funded through loans contribute to rates increases. Opportunity costs for the use of Reserve and Community Facilities Financial Contributions. Operational costs impact rates from 2027/2028 onwards. Substantial community fundraising is required.
2.	Do not include Tapawera Community Hub in the proposed LTP	Lower impact on rates levels. Reserve and Community Facilities Financial Contributions could be used on alternative projects.	No commitment from the Council to this facility would disappoint local residents. Lower standard of community facilities in the area would persist. Social, economic and cultural wellbeing in the area may be impaired by the lack of this facility.
3.	Plan for the Tapawera Community Hub to commence later than Year 2.	Including a plan for the Tapawera Community Hub in the LTP would signal commitment from the Council. More time available for community fundraising to take place. Some Reserve and Community Facilities Financial Contributions may be able to be used on alternative projects in the meantime.	Lower standard of community facilities in the area would persist for longer. Social, economic and cultural wellbeing in the area may be impaired for longer by the lack the Tapawera Community Hub.
4.	Use an alternative mix of funding sources for the capital	Reducing the use of Reserve and Community Facilities Financial Contributions means they could be used on alternative projects. Reducing the funding from rates-funded loans would reduce the increase in rates. Reducing the level of community fundraising would mean less fundraising stress on the community and may enable the project to take place earlier.	Increasing the use of Reserve and Community Facilities Financial Contributions may be inconsistent with the purpose for which they are collected. Increasing the use of rates funded loans will further increase rates. Requiring a greater level of community fundraising would be inconsistent with the Draft Community Facilities Funding Policy and the funding of other community facilities, and potentially increase the pressure on the community to raise funds.

Murchison Sport, Recreation and Cultural Centre - Stage 2

5.95 The Murchison Sport, Recreation and Cultural Centre is proposed to be extended to include the following features:

§ Large meeting room

§ Community room

§ Squash Court and mezzanine floor

§ Gym

§ Changing Rooms

5.96 The best current estimate of costs for these facilities is $4.5million (uninflated). Note at this stage concept designs have not been developed, nor have the costs been estimated by a quantity surveyor.

5.97 It is recommended that the improvements to the Murchison Sport, Recreation and Cultural Centre be included to commence in Year 8 (2031/2032) in the proposed LTP 2024-2034, with capital costs across the 2031/2032-2033/2034 years.

5.98 It is recommended that the capital costs of these facilities be funded as follows:

Source	%	$	Rationale
Community contribution	29%	$1.3m	Following proposed policy on community contributions
RFCs	53%	$2.4m	75% of Council's contribution
Rates funded loans	18%	$0.8m	25% of Council's contribution
		$4.5m

5.99 Under this proposal operating costs would start from the 2031/2032 year reaching a full year’s operating costs in 2032/2033. The operational costs will be funded through the District Facilities Rate.

Options:

Option		Advantage	Disadvantage
1.	Plan for the facilities to commence in Year 8 with the mix of funding sources in paragraph 5.107. Preferred Option.	Clear commitment from the Council to support and provide significant funding for this facility improvement. Appropriate mix of funding sources. Consistent with the Draft Community Facilities Funding Policy. Provides a level of certainty to the community about the timing and expected community fundraising requirement.	The proportion of the capital costs funded through loans contribute to rates increases. Opportunity costs for the use of Reserve and Community Facilities Financial Contributions. Operational costs impact rates from 2031/2032 onwards. Substantial community fundraising is required. Community members may be disappointed by having to wait several years for the facility improvements.
2.	Do not include these facilities in the proposed LTP	Lower impact on rates levels. Reserve and Community Facilities Financial Contributions could be used on alternative projects.	No commitment from the Council to this facility improvement would disappoint local residents. Current limitations with the existing facility would persist. Social and cultural well being in the area may be impaired by the range and quality of facilities provided.
3.	Plan for the facilities to commence later than Year 8.	Including a plan for the facilities in the LTP would signal commitment from the Council. More time available for community fundraising to take place. Appropriate mix of funding sources. Some Reserve and Community Facilities Financial Contributions may be able to be used on alternative projects in the meantime.	Lower standard of community facilities in the area would persist for longer. Social and cultural well being in the area may be impaired for longer by the lack of good-quality community facilities. Community members may be disappointed by having to wait additional years for the facility improvements
4.	Plan for the facilities to commence earlier than Year 8.	Including a plan for the facilities in the proposed LTP would signal commitment from the Council. A shorter timeframe may give community fundraising more impetus. Appropriate mix of funding sources.	Less time for the community to raise its share of the project costs. Earlier impact on rates increases through interest and repayment of loans, as well as operational costs.
5.	Use an alternative mix of funding sources for the capital	Reducing the use of Reserve and Community Facilities Financial Contributions means they could be used on alternative projects. Reducing the funding from rates-funded loans would reduce the increase in rates. Reducing the level of community fundraising would mean less fundraising stress on the community.	Increasing the use of Reserve and Community Facilities Financial Contributions may be inconsistent with the purpose for which they are collected. Increasing the use of rates funded loans will further increase rates. Requiring a greater level of community fundraising would be inconsistent with the Draft Community Facilities Funding Policy and the funding of other community facilities, and potentially increase the pressure on the community to raise funds.

Community Partnerships

5.100 Following the application of the risk/opportunity matrix funding for the continued provision of community partnerships was rated as something the Council should do, rather than something it must do i.e. community partnerships are non-mandatory services.

5.101 The Council’s community partnerships function is an important part of the Council’s relationship with its communities. It contributes particularly to the social, cultural and environmental aspects of well being for our community. Through its partnership approach and community grants community partnerships leverages substantial volunteer work and benefits for the Council and wider community. The Community Partnerships service also provides a range of free events which are accessible to everyone and help engender a sense of community.

5.102 It is recommended that the funding of community partnerships services be retained in the proposed LTP 2024-2034.

Options:

Option		Advantage	Disadvantage
1.	Continue to fund community partnerships. Preferred Option.	See list of benefits in paragraph 5.111. Valuable staff that have developed strong links with organisations in the community would be retained.	Continued rates revenue required.
2.	Discontinue funding for community partnerships.	Lower rates revenue required.	The benefits listed in paragraph 5.111 would be lost. Valuable staff that have developed strong links with organisations in the community would be lost.
3.	Substantially reduce funding for community partnerships.	Lower rates revenue required to some degree.	The benefits listed in paragraph 5.111 would be reduced or lost to a substantial degree

Economic Development services

5.103 Following the application of the risk/opportunity matrix, the continued funding of organisations that contribute the District’s economic development was rated as something the Council should do, rather than something it must do i.e. it is non-mandatory. This applied to funding to the Nelson Regional Development Agency, Golden Bay Promotions (for the operation of the Tākaka visitor centre), Tasman Bay Promotions Association (for the operation of the Motueka Visitor Centre) and Nelson Tasman Business Trust (for the provision of free mentoring and advice services to start up and existing businesses).

5.104 The Council is responsible for promoting economic wellbeing, as well as social, cultural and environmental wellbeing. The Council contributes to economic wellbeing in several ways including funding economic development organisations.

5.105 There are a range of benefits to the community from the Council funding economic development organisations. These include improving the understanding of the nature and performance of our regional economy and coordinating planning for its continued enhancement and expansion. This funding enables the facilitation of sector groupings of businesses working in the same industry to come together for their mutual benefit. It also provides for mentoring and professional development of business operators assisting them to start, expand and develop their businesses. It provides a vehicle to attract and administer funding from the Government and other sources for business and infrastructure development. It helps to attract visitors to the region, provides visitors with the information they need when in the region and facilitates visitors' use of accommodation and attraction businesses, as well as facilitating the social licence for tourism in the region.

5.106 It is recommended that the funding of economic development organisations be retained in the proposed LTP 2024-2034.

Option		Advantage	Disadvantage
1.	Continue to fund economic development organisations. Preferred Option.	See list of benefits in paragraph 5.116. Continuity of service that has developed strong links with businesses in the region would be retained.	Continued rates revenue required.
2.	Discontinue funding for economic development organisations.	Lower rates revenue required.	The benefits listed in paragraph 5.116 would be lost. Valuable staff that have developed strong links with businesses in the region would be lost to the region. The Council may have to provide some of these services in-house.
3.	Substantially reduce funding for economic development organisations.	Lower rates revenue required to some degree.	The benefits listed in paragraph 5.116 would be reduced or lost to a substantial degree.

Rates Remission Policy

5.107 The proposed updated rates remission policy is attached (Attachment 4).

5.108 The Council offers a range of rates remission policies to assist ratepayers with rates under certain agreed circumstances.

5.109 It is recommended there is an amendment to the Introduction section to meet the new legislative requirement to state how the policy supports the principles set out in the Preamble to Te Ture Whenua Māori Act 1993.

5.110 It is recommended minor editorial amendments to the following parts of the policy:

5.110.1 Uniform Charges on Non-Contiguous Rating Units Owned by the Same Owner

5.110.2 Rates on Low-Valued Properties

5.110.3 Rates for School Wastewater Charges

5.110.4 Rates on Abandoned Land

5.110.5 Land Subject to Council Initiated Zone Changes

5.111 It is proposed to add an additional policy for Social Housing and Papakāinga.

5.112 It is recommended that the following parts of the policy be amended along with other minor editorial amendments:

5.112.1 Land Occupied by a Dwelling that is Affected by Natural Disaster be updated to clarify what is meant by an uninhabited dwelling.

5.112.2 Sporting, Recreation or Community Organisations be updated to include association of persons (whether incorporated or not).

5.112.3 Low Valued Properties to be updated after the 3 yearly revaluation to reflect the new amount for low value properties.

5.112.4 Penalties be updated to include an additional two criteria for invoice not received and deceased sole ratepayer.

5.112.5 Excess Metered Water Rates be updated to reflect that a plumber is no longer required but recommend, clarify not for profit organisations s and charities can claim under the policy as residential and remove the requirement for monitoring water use for non-residentials.

Option		Advantage	Disadvantage
1.	Adopt the draft policies for consultation at the same time as the Long-Term Plan 2024-2034 consultation process. Preferred Option	Keeps policies current to legislation and operational requirements. Policies able to reflect community feedback. Meets the requirements of the LGA 2002.	Council would not have an opportunity to make major amendments to the draft policies, if it considers they are needed prior to public consultation.
2.	Amend the draft policies before consultation	If Council considers that the draft policies do not meet its needs or the needs of the community, Council can request staff to make further amendments before releasing them for public consultation.	Use of further staff time to undertake the amendments and report back to Council.
3.	Make no changes	Requires no staff time	Will not meet legislative requirements. May not meet the needs of the community. May not meet operational needs.

Uniform Annual General Charge

5.113 The Council funds general rates through a combination of Capital Value based rates, and the Uniform Annual General Charge (UAGC). The UAGC has been set at $290 per rating unit for several years. Consequently, its percentage of general rates has reduced (as the overall rates level has increased).

5.114 The demand on Council services funded by the UAGC does not generally increase with increasing value of the rating unit.

5.115 Increasing the level of the UAGC has the effect of increasing the proportion of rates revenue funded by lower-value rating units compared to higher-valued rating units compared to it staying at $290. Due to the UAGC not being increased for several years it has had the opposite effect of higher-valued rating units bearing more of the rates burden over time.

Option		Advantage	Disadvantage
1.	Modest change to 15% of the general rate take Preferred Option	Keeps the rates from the UAGC consistent to the total general rates take over time	The UAGC will change year on year.
2.	Change to a different fixed dollar amount, either higher or lower than the current $290 per rating unit.	Keeps per rating unit amount consistent	Would require regular review to ensure that the UAGC was set at an appropriate level. Could end up in similar situation where the UAGC is not changed for a number of years shifting the general rate, rates burden.
3.	Keep at $290 per rating Unit	Keeps per rating unit amount consistent	Changes the rates burden over time as income requirements increase

6. Options / Kōwhiringa

6.58 The options for each key items are outlined in the tables in section 5 above.

7. Legal / Ngā ture

7.58 Section 93 of the Local Government Act requires the Council to have an LTP, to adopt it prior to the first year to which it relates and identifies the purposes of an LTP. One of the purposes of the LTP is to describe the community outcomes of the District.

7.59 Under section 93A of the LGA, the Council is required to prepare a Consultation Document on its proposed LTP and consult on it using the Special Consultative Procedure. The LGA specifically prohibits the Council from consulting on a draft LTP, but requires, under Section 93G, that the Council must prepare and adopt information that is relied upon by the content of the Consultation Document, is necessary to enable the Auditor General to give an audit statement and provides the basis for the preparation of the LTP.

7.60 Sections 93B to 93G detail various other requirements about the LTP content, form and process.

7.61 Section 94 documents the requirement for the LTP to be audited by the Auditor-General.

7.62 Section 96 makes it clear that the effect of an LTP is to provide a formal and public statement of the Council’s intentions but does not constitute a decision to act on any specific matter included in the Plan. The Council can use the provisions in section 80 to diverge from what it planned in the LTP. One of the main purposes of the Annual Plan is to signal variation from the LTP for the year in question.

7.63 The only exceptions to this are if the Council is significantly altering the intended level of service for a significant activity or transferring ownership or control of a strategic asset. In these cases, the Council is required to make the changes via an LTP or LTP Amendment.

7.64 Schedule 10 provides more detail on the information to be included in Long Term Plans. This includes the significant forecasting assumptions and risks underlying the financial estimates.

8. Iwi Engagement / Whakawhitiwhiti ā-Hapori Māori

8.58 Manawhenua ki Mohua hosted and participated in one of the early engagement hui in May 2023. Representatives of Te Āwhina Marae attended and participated in the Motueka early engagement workshop.

8.59 We have made several invitations to Te Tauihu iwi to engage on the LTP. This took the form of several offers for the Trusts to provide advice on how they wanted to be engaged.

8.60 Staff analysed the iwi environmental plans and iwi trust’s strategic plans to identify the areas of priority that had a relationship to the LTP. We identified the connection to the LTP and asked some open questions to stimulate iwi thinking about the LTP. We circulated this information to the iwi trusts.

8.61 We held two online hui with iwi trust taiaio staff and general managers at which the LTP was explained, key linkages to areas of iwi interest were explained and discussion took place. Some iwi discussed specific matters as part of this hui. The opportunity to engage further with the Council was offered with the (then) Kaihautū offering herself and Te Kāhui Hononga as guides to connect iwi into the right people within the Council and processes to engage on matters of interest.

8.62 Subsequently, staff have carried out some engagement on Te Tare Whenua Act aspects of the Development and Financial Contributions Policy and the Remission and Postponement of Rates on Māori Land Policy. Some initial feedback was received from the iwi trusts on these matters.

8.63 The Kaihautū has sent a further memo to iwi general managers outlining the timeline for consultation and submissions and raising the following items with them from the LTP documentation:

· Te Ture Whenua Act; and

· Draft Statement on Fostering Māori Participation in Council Decision Making.

9. Significance and Engagement / Hiranga me te Whakawhitiwhiti ā-Hapori Whānui

9.58 Significance assessments have been carried out for each of the decisions sought in this report. The full significance assessments are provided in Attachment 2. The following table provides a summary of the overall level of significance identified for each decision by staff.

Decision/Issue	Assessed Level of Significance
Retaining the vision, purpose and community outcomes	Low/Medium
Change in river rating to capital value	Low significance for the general public, medium-high significance for affected landowners
Harmonisation of the Funding of Water Supply Schemes	High
Richmond Office Building Placeholder Financial provision in the LTP	Low
Emergency funding – rely on debt headroom	Medium/High
Slow down transition to fully funding depreciation	Low
Change to caps in financial strategy	Medium
General 10% increase in fees and charges	Medium/Low
Not to sell IHL Credits	Low
Sell unencumbered ETS credits to offset Port Tarakohe historic debt	Medium
Overall rates, debt and capital programme level	High
Removal of General Rates Contribution to Waste Management and Minimisation	Low/Medium
Not to budget for Kerbside Food Scrap Collection	Medium
Continue to fund and operate the Collingwood RRC	Low
Level of Funding for Implementing the Speed Management Plan	Low
Continue to fund libraries services	Medium
Retain loan fees for adult books, adult magazines and DVDs	Low
Funding Motueka Pool	High
Wakefield/Brightwater community facilities	Medium/High
Funding Tapawera Hub	Medium/Low
Funding Murchison Recreation and Cultural Centre - Stage 2	Medium/Low
Continue to Fund Community Partnerships – discretionary services	Medium
Continue to fund economic development activities (NRDA, local visitor centres and NTBT):	Low/Medium
Rates Remission Policy Changes	Low
Rates Remission Policy Changes: Introduction of new social housing and papakainga category	Low
Raising UAGC percentage	Low
Tasman Climate Action Plan – projects included and budgets	Medium/High

9.59 We intend to identify the issue for the harmonisation of the funding of water supply schemes but not decide on how to address this issue through the LTP 2024-2024. Rather, further analysis and consultation are scheduled for 2024/2025.

9.60 For the Richmond Office Building the intention is to include a placeholder budget in the LTP 2024-2034. The more substantive decisions on the form of the future office accommodation will be consulted on before or as part of the LTP 2027-2037. This intention will be noted in the LTP 2024-2034 consultation document.

9.61 We will be carrying out consultation in parallel with the LTP 2024-2034 consultation on the following:

· Development and Financial Contributions Policy

· Remission and Postponement of Rates on Māori Land Policy

· Rates Remission Policy

· Community Facilities Funding Policy

· Schedule of fees and charges 2024/2025.

9.62 From the remaining decisions several of those with higher significance scores will be included in the LTP consultation document as key issues. Others may also feature in the LTP consultation document in another way.

9.63 For the LTP 2024-2034 we will be using the Special Consultative Procedure, as required by legislation.

9.64 The parallel consultations will be carried out under section 82. but follow a similar process as the LTP (i.e. written submissions followed by hearings and deliberations).

10. Communication / Whakawhitiwhiti Kōrero

10.1 Early engagement on the LTP took place in April and May 2023 online through Shape Tasman and through a series of workshops across the District.

10.2 Since that time communication and engagement has continued at a lower level via Shape Tasman.

10.3 Following the decisions at this meeting staff anticipate increasing the communication through Shape Tasman and Newsline on LTP-related issues prior to formal consultation with the community in late March to late April.

10.4 Planning for the formal consultation process has commenced.

Issues to consult on through the Consultation Document

10.5 Under the Local Government Act we are required to include key issues that the Council determines having regards to the Significance and Engagement Policy and the importance of other issues to the district and communities.

10.6 For each of these issues identified in the consultation document we are required to identify the principal options and the implications of each option. We must state the Council’s proposal and the likely consequences of proceeding with the proposal on the Council’s rates, debt and level of service.

10.7 As should be apparent from this report, we intend to make a number of changes through the LTP and parallel consultations. However, it is best practice to limit the number of issues identified in the consultation document to a small number to focus the submissions received and make the consultation manageable for the public.

10.8 Staff’s assessment of the level of significance of the decisions included in this report are summarised in section 9 of this report.

10.9 There are several planned parallel consultations to take place alongside the LTP consultation document. These are about changes to policies closely associated with the LTP as noted in paragraph 4.7. Separate consultation documents will be developed for each of these. However, the key proposals from any of these policy changes could also be treated as an issue in the LTP consultation document which would raise their profile.

10.10 The Council’s investment in addressing climate change through the Tasman Climate Action Plan could be included in the LTP consultation document as an issue.

10.11 It is recommended that the Council identify the key issues it considers should be included in the LTP consultation document to enable staff to progress with drafting this document.

11. Financial or Budgetary Implications / Ngā Ritenga ā-Pūtea

11.1 Many of the areas for decisions in section 5 of this report effect the budgets in the LTP.

11.2 Paragraphs 5.5 to 5.47 refer to the overall financial impact of the proposed LTP 2024-2034 programme.

11.3 In 2022/2023 Council experienced a severe weather event and additional costs in certain activities as reported to Council in September 2023. These opening deficits are being rated for in the first five years of the LTP 2024-2034. Additionally, in some instances opening surplus positions have been used to offset rates if appropriate.

12. Risks / Ngā Tūraru

12.1 There are substantial risks around the new Government’s direction on affordable waters and Resource Management Act reform. The pre-election manifestos of the parties that now make up the new Government indicated intentions to depart markedly from the previous Government’s position which is currently enshrined in legislation.

12.2 The uncertainty and risks around the treatment of the three waters in the LTP are detailed in paragraphs 5.5 to 5.7.

12.3 Substantial legal and reputational risks to the Council remain around the treatment of the three waters in the LTP.

12.4 Between now and the time consultation is scheduled to commence in late March 2024, the position concerning affordable waters and the RMA reform may become clearer and we will attempt to make suitable changes as much as possible to these in consultation with the auditor.

13. Climate Change Considerations / Whakaaro Whakaaweawe Āhuarangi

13.1 Through our LTP 2024-2034, we intend to continue growing the Council’s response to climate change. The draft Tasman Climate Response Strategy and Action Plan charts a path for reducing emissions, increasing resilience and adapting to a changing environment.

13.2 The updated Tasman Climate Action Plan and new Strategy component have been developed in parallel with the LTP 2024-2034 to ensure that there is consistency between the stated aspirations to address climate change and the resourcing available to do so, as planned in the LTP.

13.3 The budgets that address climate change spread across several different activities in the LTP. A new column has been added to the Tasman Climate Action Plan, outlining the total expenditure planned over 10 years against each individual action. This provides the Council with a comprehensive picture of the planned actions to address climate change across all activities.

13.4 Through the application of the risk/opportunity assessment to proposed budgets several actions to address climate change initially identified were excluded from the LTP programme in order to improve affordability. Across the mitigation, adaptation, leadership and information actions the total initial, unconstrained budget for the Tasman Climate Action Plan was $145.6 million across the 10 years. Of that $56.7 million is included in the proposed LTP programme following the application of the risk/opportunity assessment. The details of the TCAP budgets included in the proposed programme following the risk/opportunity analysis are provided in Attachment 3.

13.5 During workshop discussions staff were asked to identify the priority additional TCAP actions they would recommend if the Council was to increase the programme and funding in this area. The actions recommended are summarised in the table below and total $1.5 million over the ten years.

	Tasman Climate Action Plan actions	$	Timing
Adaptation	Planning for resilient infrastructure (3 waters + roads + property + facilities)	$200,000 (x 2 years)	Years 4 and 5
Mitigation	Energy efficiency/solar initiatives for Council assets (3 waters + property)	$100,000 p.a. (ongoing)	Years 4-10
Leadership	Partnering with community and businesses on projects	$50,000 p.a. (ongoing)	Years 4-10
Information	A small budget to progress all relevant actions requiring funding for Years 2 and 3.	$50,000 (x 2 years)	Years 2 and 3

13.6 As noted in paragraph 10.10 the level of investment in Tasman Climate Action Plan could be selected as an issue for inclusion in the LTP consultation document, with the option of including the additional work noted in paragraph 13.5 as one of the options.

13.7 Staff anticipate the Council adopting the draft Tasman Climate Response Strategy and Action Plan in March 2024 as supporting information to the LTP Consultation Document and making this available to the public. A summary of the climate change actions will be included in the LTP Consultation Document providing a link to the draft Tasman Climate Response Strategy and Action Plan for those interested in reading more detail and/or making a submission.

14. Alignment with Policy and Strategic Plans / Te Hangai ki ngā aupapa Here me ngā Mahere Rautaki Tūraru

14.1 The LTP provides a broad plan for resourcing over the next ten years with greater certainty around the first three years. The inclusion of matters in the LTP states the Council’s intention but does not constitute a decision to act on any specific matter included in the Plan.

15. Conclusion / Kupu Whakatepe

15.1 A substantial amount of work has been discussed by the Council in workshops about multiple aspects of the LTP 2024-2034. This report seeks formal decisions on many of these matters to enable staff to draft the Consultation Document and supporting information with confidence that they reflect the Council’s intentions.

16. Next Steps and Timeline / Ngā Mahi Whai Ake

16.1 Staff will draft the LTP Consultation Document and supporting information.

16.2 A workshop is scheduled for 1 February 2024 to share the draft Consultation Document and key supporting information with the Council and provide a final opportunity for their feedback on these.

16.3 The audit on the Consultation Document and supporting information takes place between
5 February and 15 March 2024.

16.4 The Consultation Document and supporting information will be submitted for adoption at the Council meeting on 25 March 2024 with consultation scheduled to commence on 28 March 2024.

1. Attachments / Tuhinga tāpiri

1.⇩	Vision, Strategic Priorities and Community Outcomes for LTP 2024-2034	55
2.⇩	Significance Assessments	59
3.⇩	Tasman Climate Response Strategy and Action Plan - Strategy on a Page	103
4.⇩	Updated Draft Rates Remission Policy	105
5.⇩	Trend in Mixed Use Refuse Disposal Rate Per Tonne	123

Option

Advantage

Disadvantage

Renewal of all leases

This option allows the Council to have consistent lease terms and legal occupations of the sites. This also ensures all parties understand their risks and obligations.

Other than staff time and effort, there is no disadvantage

Renewal of only some leases

This option would see only some leases renewed. Elected members may have pertinent information affecting potential renewals. The Council would then request that Council staff further investigate any leases not recommended for renewal. This option is not recommended unless the Council is aware of issues.

This option could be interpreted as the Council exhibiting favouritism of one group over another.

Do not renew any leases

This would make the groups continue their occupations under the ‘hold-over’ clause in their expired leases. Advantage is no action required at all.

This is not recommended as groups would be nervous that their occupations could be terminated per their lease terms with just a month’s notice at any time.

Issue

Level of Significance

Explanation of Assessment

Is there a high level of public interest, or is decision likely to be controversial?

Low to Moderate

As these groups’ occupations were renewed five years ago without issue – and all have respected their contracts since - we anticipate no community concerns.

Are there impacts on the social, economic, environmental or cultural aspects of well-being of the community in the present or future?

Low

If some of these occupations were not renewed – the loss of amenity to the local community could have negative impact.

Is there a significant impact arising from duration of the effects from the decision?

Low

Standard occupation duration is five years - causing little to no public concern.

Does the decision relate to a strategic asset? (refer Significance and Engagement Policy for list of strategic assets)

Low

While most of these occupations are on various reserves – no individual reserve would be considered a ‘strategic asset’ on its own.

Does the decision create a substantial change in the level of service provided by Council?

Low

Once a contract is entered into, there is little service interaction required from Council.

Does the proposal, activity or decision substantially affect debt, rates or Council finances in any one year or more of the LTP?

Low

While there is an annual fee, the purpose is essentially to defray costs of Council staff time rather than to add to Council income.

Does the decision involve the sale of a substantial proportion or controlling interest in a CCO or CCTO?

There are no sales and no CCO’s or CCTO’s involved in this decision.

Does the proposal or decision involve entry into a private sector partnership or contract to carry out the deliver on any Council group of activities?

The contracts here are simply to quantify and clarify terms of each tenants occupation.

Does the proposal or decision involve Council exiting from or entering into a group of activities?

Low

The decision only involves offering legal occupation contracts to renewing tenants.

10.

Does the proposal require particular consideration of the obligations of Te Mana O Te Wai (TMOTW) relating to freshwater and Affordable Waters services?

Water supply/use is not really a factor with these previously existing occupation contracts.

Option

Advantage

Disadvantage

Renewal of all leases

This option allows the Council to have consistent lease terms and legal occupations of the sites. This also ensures all parties understand their risks and obligations.

Other than staff time and effort, there is no disadvantage.

Renewal of only some leases

This option could be interpreted as the Council exhibiting favouritism of one group over another.

Do not renew any leases

This would make the groups continue their occupations under the ‘hold-over’ clause in their expired leases. Advantage is no action required at all.

This is not recommended as groups would be nervous that their occupations could be terminated per their lease terms with just a month’s notice at any time.

Issue

Level of Significance

Explanation of Assessment

Is there a high level of public interest, or is decision likely to be controversial?

Low to moderate

As these groups’ occupations were renewed five years ago without issue – and all have respected their contracts since - we anticipate no community concerns.

Are there impacts on the social, economic, environmental or cultural aspects of well-being of the community in the present or future?

Low

If some of these occupations were not renewed – the loss of amenity to the local community could have negative impact.

Is there a significant impact arising from duration of the effects from the decision?

Low

Standard occupation duration is five years - causing little to no public concern.

Does the decision relate to a strategic asset? (refer Significance and Engagement Policy for list of strategic assets)

Low

While most of these occupations are on various reserves – no individual reserve would be considered a ‘strategic asset’ on its own.

Does the decision create a substantial change in the level of service provided by Council?

Low

Once a contract is entered into, there is little service interaction required from Council.

Does the proposal, activity or decision substantially affect debt, rates or Council finances in any one year or more of the LTP?

Low

While there is an annual fee, the purpose is essentially to defray costs of Council staff time rather than to add to Council income.

Does the decision involve the sale of a substantial proportion or controlling interest in a CCO or CCTO?

N/A

There are no sales and no CCO’s or CCTO’s involved in this decision.

Does the proposal or decision involve entry into a private sector partnership or contract to carry out the deliver on any Council group of activities?

N/A

The contracts here are simply to quantify and clarify terms of each tenant’s occupation.

Does the proposal or decision involve Council exiting from or entering into a group of activities?

Low

The decision only involves offering legal occupation contracts to renewing tenants.

10.

Does the proposal require particular consideration of the obligations of Te Mana O Te Wai (TMOTW) relating to freshwater and Affordable Waters services?

N/A

Water supply/use is not really a factor with these previously existing occupation contracts.

Option

Advantage

Disadvantage

Approve changes proposed in the report and in Attachment 1 with effect from 14 December 2023, or the date the traffic control device is installed, whichever is later.

This is the recommended option.

Improved function and safety of the road network at these locations.

Positive feedback from the community who raised some of the concerns and proposals with Council staff.

Some reduction in on-road parking and some residents may not prefer shared paths.

Approve some of the proposed changes

Some improved function and safety of the road network at these locations.

There would be some positive feedback from the community who raised concerns with some of the proposals from the Council.

There is some cost for the installation of the No Parking lines and extra signs, although this is minimal.

If changes are not approved, there could be safety issues and negative feedback from the community, particularly where proposals were consulted on.

Withdraw the proposed changes.

Nil identified.

There could be safety issues and negative community feedback from those already consulted with.

Issue

Level of Significance

Explanation of Assessment

Is there a high level of public interest, or is decision likely to be controversial?

Moderate

Changing road layouts can create a high level of interest, particularly on more highly trafficked roads.

This decision affects a relatively small number of roads in the District.

The changes associated with projects have had consultation undertaken on the proposed changes and a decision made to proceed with the project.

For non-project changes, Council staff have consulted with immediately adjacent landowners.

Several proposed changes have come from members of the community who are directly affected.

There will be improved road safety or function for many transport system users at the locations of the proposed changes.

Are there impacts on the social, economic, environmental or cultural aspects of well-being of the community in the present or future?

Low

Good management of traffic controls and parking can contribute towards the success of a place; poorly managed and designed traffic controls and parking can undermine efforts to create highly liveable urban areas.

The parking restrictions proposed are to address issues identified.

Is there a significant impact arising from duration of the effects from the decision?

Low

Traffic devices are not permanent and can be changed if required.

Does the decision relate to a strategic asset? (refer Significance and Engagement Policy for list of strategic assets)

Low

The Council’s roading network is considered a strategic asset. The changes are intended to improve safety and accessibility of our transport network to a variety of user types.

Does the decision create a substantial change in the level of service provided by Council?

Low

Does the proposal, activity or decision substantially affect debt, rates or Council finances in any one year or more of the LTP?

Low

Delivering some of the proposed traffic control devices now as part of the Streets for People and Transport Choices projects with external funding, may reduce planned expenditure to deliver these changes in future years.

Does the decision involve the sale of a substantial proportion or controlling interest in a CCO or CCTO?

Does the proposal or decision involve entry into a private sector partnership or contract to carry out the deliver on any Council group of activities?

Does the proposal or decision involve Council exiting from or entering into a group of activities?

10.

Does the proposal require particular consideration of the obligations of Te Mana O Te Wai (TMOTW) relating to freshwater and Affordable Waters services?

Option

Advantage

Disadvantage

Approve the proposed amendments to delegations.

Ensures that there are clear and specific delegations relating to the correct roles within the Finance Department.

None.

Do not approve the proposed amendments to delegations.

No changes required to the Delegations Register.

Does not ensure that there are clear and specific delegations relating to the documents and processes within the Finance Department.

Increases risk to the Council of challenges to the validity of documents and/or the Council processes.

Issue

Level of Significance

Explanation of Assessment

Is there a high level of public interest, or is decision likely to be controversial?

Low

Are there impacts on the social, economic, environmental or cultural aspects of well-being of the community in the present or future?

Low

Is there a significant impact arising from duration of the effects from the decision?

Low

The amendments address potential rather than actual risks.

Does the decision relate to a strategic asset? (refer Significance and Engagement Policy for list of strategic assets)

Does the decision create a substantial change in the level of service provided by Council?

Does the proposal, activity or decision substantially affect debt, rates or Council finances in any one year or more of the LTP?

Does the decision involve the sale of a substantial proportion or controlling interest in a CCO or CCTO?

Does the proposal or decision involve entry into a private sector partnership or contract to carry out the deliver on any Council group of activities?

Does the proposal or decision involve Council exiting from or entering into a group of activities?

10.

Does the proposal require particular consideration of the obligations of Te Mana O Te Wai (TMOTW) relating to freshwater and Affordable Waters services?

Mayor	Mayor T King
Deputy Mayor	Deputy Mayor S Bryant
Councillors	Councillor C Butler	Councillor M Kininmonth
	Councillor G Daikee	Councillor C Mackenzie
	Councillor B Dowler	Councillor K Maling
	Councillor J Ellis	Councillor B Maru
	Councillor M Greening	Councillor D Shallcrass
	Councillor C Hill	Councillor T Walker

1.⇨	Draft Nelson Tasman Regional Landfill Business Unit Annual Report 2022-2023 (Under Separate Cover)
2.⇨	Nelson Tasman Regional Landfill Business Unit Draft Financial Statements 2023 (Under Separate Cover)

1.⇨	NRSBU Annual Report 2022-2023 (Under Separate Cover)
2.⇨	NRSBU Annual Financial Statements 2022-2023 (Under Separate Cover)
3.⇨	Report to 1 September 2023 NRSBU meeting (Under Separate Cover)

Project Name	Work Description	Budget
		2023/24	2024/2025
Sportsfields		Includes proposed carried forward and addition funding requests.
Golden Bay Rec Park	Football training lights	40,000
Walkways/Esplanades
Sunbelt Crescent Esplanade	Pathway & interpretative signs	10,000	17,865
Tata Beach	Road and parking upgrades	11,471
Golden Bay walkways	Planting	5,000
Picnic Areas/Gardens
Ward general	Park furniture	16,516
Cemeteries
Golden Bay cemeteries	Beams	5,505
Coastcare
Coastcare	Planting & Protection	22,022	22,184
Playgrounds			88,736
Playgrounds General
Pōhara Campground		73,400
Ruataniwha Reserve		60,000
Upper Takaka Rec Reserve		63,200
Ward Totals		307,114	128,785

Mohua /Golden Bay	Project	Amount Requested	Priority
Collingwood Hall	External painting.	9,500	High
Pōhara Hall	Replace the roof.	70,000	High
Bainham Hall	Picnic table, blackout curtains and stage curtains.	8,500	Medium
Pakawau Hall	New kitchen and relocate water pump.	17,500	Medium
Total		105,500

1.⇩	Traffic Control Devices - Diagramatic Description	180
2.⇩	Motueka Community Board Wallace Street Bus Stop Report	191

CEO Office	Kaiāwhina Māori
Council Operations	Democracy Services Advisor
Environmental Assurance	Deckhand (fixed term)
Finance	Finance Advisor – Port Tarakohe (fixed term) Finance Winter Student (fixed term, part time)
Information, Science & Technology	Applications Support Administrator – 0365 Project Manager – DIP (fixed term)
Service & Strategy	Customer Services Officer (part time) Principal Planner – Strategic Policy (fixed term)

1.⇩	Letter from Golden Bay Cycle and Walkways Society	252
2.⇩	Letter to Te Tauihi Iwi Chairs - name for Māori Ward	253