We end this week (day 73 of lockdown) with some good news on vaccination rates for the Orakei Ward area. As of Tuesday 26 October, 93% have had their first dose, 85% are fully vaccinated and only 7% have not yet been vaccinated. If we break that down further, only two suburbs have not yet reached 90% for first dose: Mission Bay (89.7%) and the eastern part of Orakei (87.9%). If you know anyone in those areas, please give them a call and encourage them to get vaccinated. If they have any questions or concerns, I suggest they talk to a medical professional. Having said that, as a ward area we are doing very well. So to those that have, thank you for getting your vaccination (s) and in doing so helping to keep yourself, your friends, family, and our community safe.
Now the not so good news… This week the government announced that the proposed Three Waters reform will be mandated. This came as a surprise to many councils and elected members throughout the country. You will recall from my newsletter to you on 24 September that I did fear this would happen. Some of you may have seen my thoughts on the Minister’s decision in the media. I’m pretty annoyed (to put it mildly) and could rant and rave for hours about how the government has failed to recognise Auckland’s differences, both in terms of governance arrangements and the fact that we are already the most efficient and effective water supplier in New Zealand. There are in my opinion massive issues around the proposed governance and accountability. The ownership model proposed does not reflect the investment in water assets that have been made by Aucklanders and should. As for our investment , we have already resolved to invest $11 billion into our water infrastructure over the next ten years. Much of it in our Ward, and the sad point around that, is I cannot now guarantee the delivery of that investment( especially in latter years) with the new mandated model.
The big question on my mind, is what can we do about it? This morning I discussed with the mayor our options to deliver on our commitment to consult with Aucklanders, noting the government have no longer given us the option to opt out. I will update as soon as this has been confirmed. I am absolutely committed to making sure we hear from our communities, so that when Council presents to select committee, we can do so with evidence of the views of Aucklanders. The Minister has also indicated that a working group will be established to work through some of the common themes that have come up in the feedback from councils. We are yet to see any detail about this group or how it will operate, but I would absolutely be keen for Auckland Council to go into those discussions well-informed about the views of Aucklanders on this issue.
However, to end the week on a positive, Auckland Council has now raised in excess of $1 BILLION in green bonds. Green bonds can only be used to fund projects that will benefit the environment. We were the first organization in New Zealand to raise money this way and have proven ourselves to be not just an Auckland leader but a national leader in this space. In essence, it’s $1 billion that doesn’t come from ratepayers that has funded projects such as upgraded electric trains, LED street lighting, sustainable water management projects and public cycleways.
Stay safe and enjoy your weekend.
NEWSLETTER - 27th OCTOBER
Recent announcements have further emphasized the huge importance of vaccinations as part of our road out of lockdowns, and our recovery from this pandemic. The target is 90% and in the Orakei Ward, we’re doing pretty well. As of last week, parts of Stonefields, Mission Bay and Orakei were the only suburbs in our ward area slightly under 90% for first dose. It’s so important to me that our communities are well protected, so I will be monitoring our vaccination numbers closely and keeping you updated on Facebook and via newsletter as we approach that 90% fully vaccinated target. I know there is a lot of uncertainty about what the traffic light system will mean for us all, but we do know for sure that getting 90% of Aucklanders fully vaccinated is one of the fastest ways out of lockdown.
I know, like me, many of you are doing all you can to shop local and support businesses during this tough time. Assisting business recovery is important to me as currently, based on figures from last year we are looking at between 4-5Billion in lost GDP as a result of this lockdown. At Finance and Peformance Committee last week, I moved a number of recommendations to help businesses from across the council family including a commitment to do a number of regulatory changes needed to allow outdoor dining. We have had many requests for outdoor dining in our town centre streets over summer, to allow businesses a chance to start recovering from lockdown loss of trade, and to help ease the affects of any ongoing restrictions.-you may have spotted this Newshub story about St Heliers last week.In addition to regulatory measures, we have also waived application fees and street trading rents for new applications or extensions while in Alert Level 2 or higher, and all applications and extensions will be fast tracked. If you are worried about paying rates on your business property, please don’t hesitate to get in touch with Council on 09 301 0101. Ask to speak to our credit control team about the options available to you to make life a bit easier during this very stressful time. It is of course important to note that central government’s toolkit is significantly larger than ours. The $60 million business support package announced last week is a start, but my plea is for the government to keep looking at ways to enhance ongoing support for Auckland businesses, with urgency. If Auckland succeeds, New Zealand succeeds.
Our Finance and Performance Committee also looked at a draft submission on the Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill 2021. It’s not exactly an attention-grabbing piece of legislation, but their proposed changes would mean at least an additional $33 million in taxes for Auckland Council, a significant and unfair burden on Auckland ratepayers. This is yet another example of central government not understanding the Auckland context or at the very least talking to us first to understand the financial impacts for the biggest Council in NZ.
Lastly, on a more positive note, I wanted to highlight our decision to lift the last of the remaining water restrictions for the region, effective from 23 October 2021. It has been a long journey to get to this point, and Watercare has done significant work to reduce water consumption and increase supply since May 2020. Among many other steps taken to ensure Auckland’s water supply is resilient going forward, supply will have increased by 104 million litres per day by the first quarter of 2022, we have maximized use of river and aquifer sources during the winter, we continue to work to find and fix leaks in the metropolitan system and a smart meter programme has been introduced for commercial customers. Of course, Aucklanders and their willingness to save water over the past 18 months have played a really important role. Together, we saved over 20 billion litres of water. Thank you. Locally I know you will join with me to soon celebrate the removal of the fence around the Mission Bay Fountain and to see our iconic waterfront fountain ‘play’ again.
Stay safe,
Desley
PS JUST HEARD ABOUT THE MANDATE DECISION BY CENTRAL GOVERNMENT ON 3WATERS. I’ll update on that separately
Newsletter 20th October
Today marks 64 days in lockdown for Auckland, and on Monday the Prime Minister told us we had at least another two weeks at Level 3 to go. I know this is getting increasingly tough for everyone, so please continue to check in with friends and family to make sure everyone is doing okay. If you or someone you know is struggling, remember you can call or text 1737 at any time for support from a trained counsellor. On a positive note, I am immensely proud of the positive ways in which our Orakei Ward community have been working together to create joke stations, fairy cities (no housing crisis for fairies!), chalk messages, flower frames, spoon and fork villages and window displays bringing a smile to many. Thank you.
Last weekend’s Super Saturday was a great success, with 40,946 Aucklanders getting either their first or second dose. That means 89% of Aucklanders have now had their first dose, and 71% are fully vaccinated. I put up the weekly Orakei Ward suburb statistics on my Facebook page and will update these tomorrow. So far, we have among the highest vaccination rates in Auckland. This is a great effort, but we need to keep going. Please talk to people about why you got the vaccine and share reliable information. No bookings are needed at vaccination centres, and many of our local GPs and pharmacies are also doing vaccinations. The more people we get fully vaccinated, the safer we’ll all be and the sooner we can get out of lockdown. I am proud to say I have been fully vaccinated for some time and all your Orakei Local Board members are fully vaccinated too.
These lockdowns affect people and businesses, socially, emotionally, and financially in many different ways. They affect Council and our finances too. Yesterday I wrote an opinion piece for the Herald, Auckland Council balancing books in an unpredictable pandemic. In case you are not a premium subscriber, you can read it on my website. Happy to answer any questions around this if you would like.
As you’re probably aware, our playgrounds, skateparks and basketball courts have all reopened across the region, and it’s been great to see people make the most of our great facilities. Just a reminder however to keep your distance and wear a mask to keep everyone safe. Some playgrounds (fortunately none locally) have been listed as locations of interest this past week, so it pays to stay cautious.
With ‘picnicking’ being very popular especially with the weather as good as it has been, more public toilets have also opened. The full list is available here. If you were in Mission Bay over the weekend, you may have noticed that there were some issues with the public toilets in Selwyn Domain and they had to be closed. Nappies, disposable facemasks, sticks and sand are not to be flushed as they cause blockages. With Selwyn Reserve being so popular to ‘picnic on’, having to close toilets due to blockages is a serious issue and results in causing a whole new set of problems when people cannot access toilets when they need them. We understand the important need for toilet access and will be providing port-a-loos if these new toilets need to close again if they are blocked.
I’ve also had some queries regarding the community tennis courts at Selwyn College. The school is taking a cautious approach and the courts are not officially open for use. They will reopen when school returns (let’s hope that’s very soon!).
In non-COVID news, I’m still hearing from a lot of people about their concerns regarding the proposed Three Waters reform. Having submitted our feedback on the proposal last month, we are currently waiting for feedback to be collated and for Cabinet to make decisions later this month as to next steps. I will keep you updated as more detail becomes available, but again you are welcome to read my take on the proposed reforms here.
Lastly, something fun to do. The Songbird Project Bird Monitoring Campaign is taking place from 16 to 31 October. They are asking people to do a 5-minute bird count on any day in this period, as close as possible to 9am. This will help them to know if they are succeeding in their mission to bring back the birds and will help with planning and funding going forward. Visit the Songbird Project website for more information, and to download your bird ID guide, instruction sheet and recording form. Enjoy getting outside with your bubble, make the most of the sunshine, and contribute to a great cause.
Finally, it’s more important than ever that we stay cautious, support our local businesses, and if you haven’t already, please get vaccinated!
As always, don’t hesitate to get in touch.
Desley
Auckland Council planning for an unknown future
For many organisations, looking back at the books from the past financial year has them bracing for impact. Auckland Council was no different. Council should be able to demonstrate to ratepayers we are always striving for greater efficiencies and prove tangible improvements to our service delivery every year. In light of a once in a generation drought and a global pandemic, one may have expected our recent Annual Report to be full of bad news, but it wasn’t.
In our Annual Report 2020/2021, the council delivered more for Aucklanders and saved the most money we ever have. The council reported a $2.5 billion infrastructure investment, just $110 million short of its biggest spend ever. We delivered $1.1 billion in developing Auckland’s roads and public transport assets and $195 million on new water sources - delivering an extra 90 million litres per day to support our regions recovery from the drought. Home to around 1.7 million people, investments like this are necessary to support Auckland’s growing population. Infrastructure is the most crucial asset to support this growth, but also, the most expensive.
Sitting alongside this near-record capital investment, was delivery on an absolute record level of savings. Council has never set a savings target anywhere near $120 million yet achieved and exceeded that, delivering over $126m in just one year. To put this in context, this is greater than the rates collected last year from any one of 17 out of our 21 local board areas. These savings were made possible through a variety of means including hard won efficiencies in professional services and outsourcing work where possible. The council, and all but two of our CCOs, reduced staff numbers and kept core operating costs $50 million below the previous year. In essence we delivered more for less.
However, council’s finances do not exist in a vacuum. In some ways our books can be seen as a reflection of the health of the regional economy. In the early stages of recovery, Auckland’s economy fared better than many predicted. Increased demand for property gave us revenue from property development activities. Infrastructure growth charges, development contributions and consenting revenue exceeded the emergency budget by a total of $270 million.
As we move into our next recovery phase, many of the challenges we were preparing for with our Emergency Budget sadly remain. Border closures and COVID-19 lockdowns continue to see fee revenue from events, shows and festivals severely impacted and revenue from our cultural venues and community facilities such as the zoo, art gallery, pools and libraries have all been closed for extended periods. Public transport patronage remains extremely low, well below pre-COVID-19 levels and time can only tell how quickly Aucklanders will jump back on buses, ferries and trains once we start opening back up.
One could be forgiven for originally thinking 2020 was an isolated, tough battle. In reality 2021, for many organisations, has rivalled 2020 for its challenges and major uncertainty beyond this point remains. The emergence of new virus variants, the longest ever COVID-19 Alert Level 4 lockdown, continued border restrictions, skill shortages and challenges with importing infrastructure materials mean we must stay vigilant to future risks and maintain our ability to adapt.
Looking forward, the council and government must work together to support the city through the mounting economic and social costs of lockdowns as we work towards higher vaccination rates. The gradual lifting of level 3 restrictions will do wonders for the mental health of some but we know that for many Aucklanders, feelings of hopelessness are driven by the rapidly reducing viability of their businesses in these conditions. It’s our job to support businesses in surviving this season so they can thrive in the next. For as they grow, so does Auckland’s economy. We must provide the services that Aucklanders need in the most efficient way, to provide a solid platform for recovery.
The council has achieved savings in the ‘easy’ areas, and in some of the more challenging areas too. We continue to seek efficiencies and have locked in a further $90 million of ongoing savings each year for the next ten years. I want Aucklanders to have assurance that the resilience the council achieved with the Emergency Budget has paid off. Our COVID-19 impacts are deep, wide and ongoing so this may well be our most difficult phase yet.
Newsletter - 7th October
I hope the slight easing of restrictions has given your bubble a bit of a respite this week. It’s been a long seven weeks, and the small things can make a big difference at this stage, especially during the school holidays! I’ve had many queries over the past few days regarding the new rules, so wanted to provide a brief outline of the changes and the impact on council facilities.
Libraries and pools remain closed, but staff will be opening additional public toilets in places where people are most likely to gather over the coming days. The full updated list is available here. Picnic tables in our parks and open spaces are available for use, and playgrounds are definitely all open. Whilst guidelines now allow for this, there are some concerns about the ability to maintain the ten-person bubble rule, so please keep a close eye on your little ones and try and make sure they are keeping a safe distance from others. Pump tracks, basketball courts, and skate parks are also open, which should help further with school holiday recreation. Boat ramps are also open, and outdoor recreation activities like sailing, fishing and jetskiing are all now permitted. We still encourage you to walk your dog on a leash and the coned off areas for cyclists on Tamaki Drive will remain in place until Level 2, giving pedestrians more room on the footpath to assist with social distancing. It’s likely to be busy out there this weekend, so please do what you can to make sure you keep safe.
The school holidays are a great opportunity to make sure that everyone in your bubble (12 or over) is vaccinated. As of 5 October, 54% of Aucklanders are fully vaccinated, and a further 31% have had their first dose. This is great progress, but we need to keep going. 15% of Aucklanders are yet to receive their first dose. The Ministry of Health have advised that you can get your second dose three weeks after your first. If you have been waiting for your second dose, please have a look at moving your second appointment forward or visit one of our amazing local pharmacies doing walk-ins.
I also want to provide a brief update following the protest at Auckland Domain last Sunday. The Domain is in the Orakei Ward, and I want to clarify the following:
- As the landowner of the Auckland Domain grounds, Auckland Council did not permit, endorse or support the gathering organized by the Freedom and Rights Coalition on Saturday 2 October
- We wrote to the organisers and made our position on this clear
- While the council legally must respect people’s right to peaceful protest, we had serious concerns that the gathering may result in the spread of COVID-19 and risk the health of Aucklanders
- Outlined in the letter was our expectations around the Cenotaph and the Court of Honour in front of the Auckland War Memorial Museum. As consecrated ground this area was not to be used. It appears from reports that those requests were ignored.
- We also made it clear that any damage to the entire Domain site as a result of the event would not be tolerated. Thankfully, none has been reported.
- The Council was in touch with the Police prior to the event and will continue to support them with any enforcement action taken as a result of the event. You will have seen in the news that two people will appear in the Auckland District Court on charges which relate to breaching the COVID-19 Public Health Response Act 2020 and Alert Level 3 Order.
In other local non-COVID news, you may have spotted our contractors hard at work at Dingle Dell Reserve in St Heliers. A Dingle Road public stormwater upgrade is being delivered in coordination with the McArthur Stream stabilization project, which will reduce prolonged disruption to residents and the community, reduce the environmental impacts, and will be more cost efficient. The McArthur Stream project will stabilize steep stream banks along the watercourse and retaining walls to provide erosion protection for fences, walls and driveways that have potential to fall into the channel. This will reduce the risk of flooding to neighboring properties. The stormwater project at Dingle Road involves the installation of new stormwater pipes to improve the current flooding issues between 25-27 Woodside Crescent and 32-26 Dingle Road. The projects will temporarily occupy the site compound at the edge of Dingle Dell Reserve for no more than five months.
Finally, please keep checking in with friends and family to make sure everyone is doing okay, support our local businesses whenever you can, and stay safe.
As always, don’t hesitate to get in touch.
Desley
Newsletter - 30th September
After 44 days in lockdown, I hope this finds you still coping in your bubbles. No doubt like you, I’m waiting with bated breath to see what will be decided on Monday regarding Auckland Covid levels. While we all wish to keep safe, I do feel for business during this time as so many have been significantly impacted in different ways. I’m hoping for a shift to Alert Level 2 if it’s possible to do so safely.
If there has been one silver lining from these very challenging past 18 months, it has been our recent end of year results. On Tuesday this week, Auckland Council released its Annual Report to the New Zealand stock exchange. It showed an unprecedented level of savings ($126.4 million against our savings target of $120 million), a huge level of capital investment in infrastructure ($2.5 billion which is just $110 million short of our highest ever spend), and an operating budget some $50 million down on the past year. It also showed a reduction of staff across the board in all but two of our CCOs, Watercare and Auckland Transport. The Watercare increase was associated with delivering $1 billion of new water infrastructure, and AT in delivering $1.1 billion in new roads and public transport.
This was all wrapped up with us achieving debt at 17% of the value of our assets – a decrease of 1% compared to the prior year (even though we had a moderate increase in net borrowings) and a credit rating of AA and Aa2 with S&P Global Ratings and Moody's Investor Services respectively. It is worth noting that the Council has one of the highest credit ratings in New Zealand.
In summary, we have done what we said we would do, became more efficient and delivered more for less. If you want to read all this in more detail the full report is available on the Auckland Council website
In other news, I know that the government’s proposed Three Waters Reform is receiving a lot of media coverage and continues to be front of mind for a lot of people. I have had countless emails expressing serious concern around the government’s direction on this. I absolutely share those concerns and to be clear, I DO NOT support the government’s direction on Three Waters.
It’s important to note that we haven’t been asked to make an opt-in or opt-out decision at this stage. Councils are currently only being asked for initial feedback on the government’s proposal, to identify areas of concern and suggest ways to improve what has been proposed. Unfortunately, we have not been given a ‘status quo’ option, as a water regulator has already been established.
As part of Auckland Council’s formal INITIAL feedback, on Thursday September 23 we agreed in principle with the outcomes being sought nationally in terms of economies of scale, alternative funding arrangements, and the introduction of an economic regulator. We did not agree with the governance structure.
I am very concerned that the Minister may mandate this, so was keen to keep our discussion going with central government on important issues such as representation from and on behalf of mana whenua.
It is important for you to know that I am absolutely committed to asking Aucklanders for their views on the final Three Waters Reform proposal. To that end, I asked the mayor to amend the draft recommendations at our Governing Body meeting last week to reflect that, and he did. Consultation has come through as a major theme in a lot of the feedback I have received. I really feel very strongly that, given the implications of this reform, we must give our communities an opportunity to have their say. You can read more about my views on this, and decisions made to date here. I’ll keep you posted as to next steps.
Finally, I’m excited to share that our next major regionally funded environmental project has started in Portland Reserve in Remuera. This project was delayed due to COVID, but works have now commenced. The flood-prone stream is being desilted, a new stormwater pipe will be added to the end of Standen Ave, and 15,000 native plants will significantly improve the ecology of the area. In addition, we are planting 26 feature trees to replace the willows which are nearing their end of life and are now regularly taking down power lines when storms come through. Instead of removing the stream silt to landfill as usual, we will be using it to create a land feature in Waitaramoa Reserve, complete with a path and some educational material about the area and local climate matters 💚
As we enter our seventh week in lockdown, I know people are really feeling the impact. Be sure to look out for your bubble’s wellbeing, get out for some fresh air when you can, and please continue to support our local businesses during what is hopefully our last week at Level 3.
Be safe, stay cautious, and let’s support local.
Desley
Annual Report 2020/2021
On Tuesday this week, Auckland Council listed its Annual Report for 2020/2021 on the NZ Stock Exchange.
The full report is available on the Auckland Council website.
Key Messages
Read more on this in Vol. 1 p 14-15
· In light of significant threats, 2020/2021 saw a year of performance that was above expectations. The council has carefully managed its finances in response to these challenges, but ongoing uncertainty posed by future lockdowns and border closures and less water in our dams, means we must remain agile.
· Council’s priority must be to maintain its fiscally prudent approach while continuing to provide essential services and invest in critical infrastructure that Aucklanders need.
Sound financial management
Read more on this in Vol. 1 p 14-15
· Our prudent approach to managing our finances has helped us maintain our AA and Aa2 credit ratings with S&P Global Ratings and Moody’s Investor Services respectively. The Council has one of the highest credit ratings in New Zealand.
· We planned for a significant reduction in revenue in the Emergency Budget as a result of COVID-19 and the drought. The Auckland economy fared better than expectations and total revenue was $266 million ahead of budget.
· Total capital investment for the year across the group was $2.5 billion, just $110 million short of the highest spend ever.
Delivery – Value for Money
· Auckland Council’s savings for the year were an unprecedented $126 million, against the $120 million Emergency Budget savings target as a result of tight controls on discretionary spend and organisational efficiencies.
· A balance between prudent fiscal management and recovery meant the council group achieved a 95 per cent capital expenditure delivery rate for Aucklanders against the Emergency Budget.
· Auckland Council staff numbers went down by 3.2% (208), following on from the previous Annual Report where there was a reduction of 1% (78).
· Across the Auckland Council Group, staff numbers went down by 1.4% (154) with decreases across all the CCOs except Auckland Transport and Watercare as a result of contractors moving into permanent roles and drought response, respectively.
· We spent $1.1 billion developing and upgrading our roading and public transport assets, providing faster, more frequent, and easier connections across the region.
· We spent $408 million improving our water supply to help address water shortages. This included adding another $90 million litres a day, at a cost of $129 million.
· Reducing carbon emissions remained a focus. The Auckland bus fleet added 28 electric buses, a total of 33 low emission buses now in use.
3 Waters Reform
I have heard from a lot of people in our community who are very concerned about government’s Three Waters Reform proposal and I share their concern.
I do not support the proposal before us in its current form.
The infrastructure challenges we are experiencing in Auckland are not unique to our region. Ageing infrastructure, and the financial resources needed for renewals, is an issue throughout New Zealand. From my perspective, I acknowledge that reform is needed to lift the standards of water supply quality and the quality of wastewater treatment across the country. However, that’s not my problem. I am not an MP. My focus is on Auckland and when I look at what the government is proposing to do, I look at that through an Auckland lens. The question I ask myself is, “Is what is being proposed better for Auckland and its communities and residents?” The answer I have to date is NO.
What has concerned me from the very beginning is the real lack of local or regional variation. Auckland’s water services were already amalgamated as part of central government’s legislation that set up Auckland Council in 2010. We are already the most efficient and effective water supplier in New Zealand. In fact, we have already achieved the scale and professionalism in water supply being sought for the rest of the country. Watercare and the way it is governed, already provides a proven model and can provide a centre of excellence for other water service entities.
Watercare has approximately $10 billion in assets, and our 10-year budget includes a further $11 billion in water investment over the next 10 years. If the government’s current plan goes ahead, I cannot guarantee the delivery of that much needed $11 billion of vitally important infrastructure, particularly in the later years of the 10-year Budget, and that really concerns me. In the Government’s modelling, 94% of the assets of the proposed new entity would come from Auckland, and Auckland would have approximately 90% of the population served by that new entity but we only get very much less than 50% of the governance. In my opinion, that in itself doesn’t work for Auckland. Government modelling also suggests that there is an economic benefit for Auckland residents, and a larger economic benefit to residents of smaller councils. Again, it’s not my role to look after smaller councils. It’s about looking at the economic benefit for Auckland. I see flaws in some of the assumptions used and lack confidence in the conclusions drawn. I believe there are alternative models which could meet the Government’s objectives while also delivering benefits to Auckland, but this will require a willingness by government to be open to change and to date I haven’t seen that from the Minister.
My biggest concern is in relation to the governance model that has been proposed. It is overly complex with no direct democratic accountability. In fact, the current reform model effectively removes Auckland Council’s governance authority and influence over a significant portion of Auckland’s infrastructure assets. That means local communities, through their elected representatives, would have no direct control over the proposed services entities, removing the accountability measures we currently have over our CCOs, including Watercare. What Auckland deserves and needs before looking at any proposed reform is a genuine governance role for Auckland Council, and an ownership model that allows for democratic accountability.
Additionally, the inclusion of mana whenua as stated in the recommended governance structure needs more consideration as to why? Again, the proposal does not recognise that Auckland Council is different to other councils in New Zealand. We already have, by set legislation, an Independent Maori Statutory Board tasked with representing the views of Maori at the governance level. Like the position taken by Local Government New Zealand on behalf of its membership, I do not believe that the proposed approach would in any way drive a ‘Better Water for Everyone’ outcome.
So where are we with the three waters proposal and any formal decisions?
It’s important to note that we haven’t been asked to make an opt-in or opt-out decision at this stage. Councils are currently only being asked for initial feedback on the government’s proposal, identify areas of concern, and suggest ways to improve what has been proposed. Unfortunately, we have not been given a ‘status quo’ option, as a water regulator has already been established.
As part of Auckland Council’s formal INITIAL feedback, on Thursday September 23 we agreed in principle with the outcomes being sought nationally in terms of economies of scale, alternative funding arrangements, and the introduction of an economic regulator. We did not agree with the governance structure. I am very concerned the Minister may mandate this, so was keen to keep our discussion going on issues such as representation from and on behalf of mana whenua.
It is important for you to know that I am absolutely committed to asking Aucklanders for their views on the final Three Waters Reform proposal. To that end, I asked the mayor to amend the draft recommendations at our Governing Body meeting on Thursday to reflect that, and he did. Consultation has come through as a major theme in a lot of the feedback I have received. I really feel very strongly that, given the implications of this reform, we must give our communities an opportunity to have their say.
I will watch with interest and keep you informed as to the next steps from central government. These are expected to be announced after 30 September 2021, and I will ensure that they include timeframes and guidelines for community / public consultation.
Meanwhile, here are the resolutions passed yesterday:
Resolution number GB/2021/110
That the Governing Body:
a) note Auckland Council has been asked for initial feedback on the government’s three water reform proposal including identifying areas of concern, and to suggest ways to improve what has been proposed
b) support the following aspects of the government’s Three Water Reform proposal:
i) the need to reform the water sector in Aotearoa to lift the standards of water supply quality and wastewater treatment across New Zealand
ii) the need to genuinely partner with local government to achieve reform of the sector
iii) the need to introduce an economic regulator to improve efficiency and productivity and ensure there is appropriate oversight of the new WSE, but notes that this can apply to Watercare without amalgamation
iv) the need to develop alternative funding and financing arrangements to enable greater investment in water service infrastructure
v) the need outside of Auckland to achieve greater scale and capability in the delivery of water services
c) does not support the government’s proposed ownership and governance arrangements which remove democratic accountability and the loss of direct control by councils over water service entities
d) agree that there are alternative governance and financial models to that proposed which will achieve most of the government’s water reform outcomes
e) agree that Auckland Council continues to work with the government to consider these alternative options that meet both the government’s and council’s objectives and desired outcomes
f) agree that water service entities should have the same accountability mechanisms (e.g. ability to approve and modify Statement of Intents and directly appoint and remove directors) as provided under the Local Government Act 2002 and Local Government (Auckland Council) Act 2009 for council controlled organisations
g) agree that Auckland Council supports a water service entity model, like the CCO Watercare model, where real ownership continues to reside with Councils and where the WSE is required as Watercare is currently, to give effect to the relevant aspects of Councils’ long-term plan and growth strategies
h) agree that the governance arrangements of any Water Service Entity that includes Auckland reflect the proportionate investment in the assets made by the people of Auckland, liabilities, and the proportionate size of Auckland’s population resulting in Aucklanders, through their elected representatives, maintaining majority control over their assets and service delivery
i) agree that the set-up of the new entities should specify the requirements or principles for consultation, for example as they are set out in the Local Government Act 2002
j) seek further engagement and information on the following aspects of the water reform proposals
i) representation from and on behalf of mana whenua
ii) integration with other local government reform processes
iii) integration with spatial and local planning processes and growth
iv) the nature, role and timing of economic regulation
v) process for and decision-making regarding prioritisation of investment
vi) the transfer of benefits and disbenefits of stormwater integration and transfer assets and functions
vii) process for local authority decision-making on ‘opting in or out’ of the Three Waters Reform
viii) conditions associated with the Government’s package of funding for local government
ix) transition arrangements, including for the council group workforce, information sharing and due diligence for asset transfers
k) support local authorities being able to make the final decision on whether to ‘opt-in’ to or to ‘opt-out’ of the government’s final Three Water Reform proposal, and that the Reform is not made mandatory
l) delegate to the Mayor, Deputy Mayor, Environment and Climate Change Committee chair and Watercare liaison councillor, Cr L Cooper to approve Auckland Council’s initial feedback to government based on clauses b) to k) above
m) note that the final letter to the government outlining Auckland Council’s initial feedback will be provided to the Governing Body for information.
n) note these recommendations were formed with the government’s advice on stormwater yet to be received.
o) agree that when Auckland Council has received from Government its final three waters reform proposal, the Council will consult with Aucklanders on this proposal to inform Council’s response.
CARRIED BY OVERWHELMING MAJORITY
The full report and minutes are available on the Auckland Council website.
And here is a media article highlighting my push for Aucklanders to be consulted prior to Auckland Council decision making on the final 3 waters proposal from government
If you have any questions, comments or concerns, Please feel free to contact me
Kind regards
Desley
Development Contributions
Development Contributions
The amount of housing growth in Auckland is unprecedented. 10 years ago, fewer than 4000 dwellings were being consented in a year and in the last year we consented close to 20,000 dwellings. A lot of development is happening and all of this requires infrastructure to support it such as wastewater, stormwater, roads and community facilities.
Infrastructure is expensive.
Contributions are one of the ways the council recovers this cost. Charging development contributions enables us to recover costs from those who cause the need for, or will benefit from, the infrastructure Auckland needs to support our rapidly growing city. If we cannot recover a share of these costs from developers, the full cost will need to be recovered from ratepayers.
Currently we are consulting on an updated development contributions policy. To have your say please go to https://akhaveyoursay.aucklandcouncil.govt.nz/dc-policy before October 17.
To assist you with your feedback, here are some frequently asked questions
What are contributions?
The council uses a number of tools to recover the costs of investment from those that cause the need for or benefit from the investment. Development contributions (DCs) are one of these tools (alongside rates and charges for services) and they recover a share of the costs of the investment we make to support new developments from those developments.
The cost of infrastructure has to be funded somehow. If it is not being funded by the developer then it has to be paid for by all Auckland ratepayers or Government contributions will have to increase i.e. the taxpayer. The council cannot control Government funding decisions. We think it is fair that developers pay for an appropriate share of the infrastructure that their developments cause the need for and benefit from.
Why are we reviewing the policy?
The council has had a contributions policy since amalgamation and it is regularly updated to account for updates to projected growth, revision to the capital budgets and any relevant policy changes. We’ve made some big and exciting commitments in the 10-year Budget so we need to update our contributions policy in order to help fund these. We usually update the policy every three years following adoption of the 10-year Budget.
What is the process to finalise a new policy?
The Finance and Performance Committee is responsible for considering changes to the contributions policy. The committee considered the draft policy recommended by council staff on 16 September 2021 and approved the policy for consultation. Aucklanders are now able to have their say on the proposed policy from 20 September 2021 to 17 October 2021 Once the committee has considered the feedback from our communities and made any necessary changes, the final policy will be agreed in December and any changes will come into effect on 10 January 2022.
You can keep up with the progress by viewing agendas and committee meeting minutes on infocouncil.
What is being proposed?
The key changes to the policy being considered are as follows:
Updating for new information in the Recovery Budget
· The Recovery Budget (our 10-year Budget 2021-2031) commits significant investment to support growth across the next decade. The 10-year Budget made provision for the Contributions Policy to be updated for these decisions and includes an assumption of the revenue from development contributions. To ensure contribution levels remain fair and appropriate across the region, they need to be updated to reflect new projects and updated timing and cost of existing plans.
· Contribution levels are also updated to reflect latest projections for the pace and shape of Auckland’s development.
Inclusion of capital projects beyond ten years
· The 10-year Budget commits significant investment to support growth in priority areas. This investment funds projects that will build infrastructure. However, this is not enough to address the cumulative impact of growth. More infrastructure will be required to cope with the expected growth. Currently, contributions are charged to recover the growth share of the cost of infrastructure planned in the next ten years.
· The council plans for the delivery of these required investments through its 30-year Infrastructure Strategy. This ensures future development has the high-quality infrastructure Aucklanders expect and that we can better manage the impacts of growth, including climate change. It will also signal to developers the level of council investment and the impact this will have on their future plans.
· We propose that the growth share of the cost of all the investment in infrastructure to support growth (including that beyond 2031) is recovered through development contributions.
· All development over the next 30 years adds to the need for and will benefit from this. We consider its fair that development happening now pays an appropriate share of the costs of infrastructure that it will benefit from in the future.
· We plan to amend the contributions policy in stages for each investment priority area as sufficient information on infrastructure requirements becomes available, starting with Drury. The policy will apply to brownfield developments as well as greenfields.
· The cost of these projects may have a significant impact on the level of contributions in the areas where they are imposed.
Drury
· For the draft Contributions Policy 2021 we propose starting with Drury. Drury is the area where we have the best information in order to implement the changes. Other areas will follow as work progresses.
· The draft policy includes almost $2.5 billion of investment in local and arterial roads and parks in the Drury area. Under the new draft policy, the level of contribution would rise from between $11,000 and $18,300 currently, to $84,900 (taking into account the impact of the other proposed changes).
· Our proposal is to gradually update the contributions policy to include the infrastructure required to support growth in Auckland over 30 years, focussing first on the other investment priority areas:
Auckland Housing Programme (Mangere, Mt Roskill, Oranga, Northcote, Tāmaki)
Drury and the North-West (Red Hills, Westgate and Whenuapai)
CRL stations at Karangahape Rd and Mt Eden.
Payment timing
· We are proposing that payment of contributions required at building consent are payable at the grant of the consent. This will apply to all development (residential and non-residential). This is earlier than currently required and reverses the extension to payment timing we made for residential development in 2019. The council’s finances were significantly impacted by COVID-19. Requiring contributions to be paid earlier will mean council can recover the cost of infrastructure sooner.
Māori Land
· For Māori land we are proposing to continue to support the development of marae and papakāinga and Māori housing on Māori land through grants available through the Cultural Initiatives Fund.
· We propose an exemption for not-for-profit development on Māori land from reserve contributions.
· We propose retaining the current payment timing for contributions payable at building consent for non-commercial development on Māori land, if changes are otherwise made to payment timing.
Why is the council proposing an increase to contributions in some areas?
The 10-year Budget includes a substantial increase in investment in infrastructure to support growth and allow development to proceed. In the draft policy, contributions do not increase on average but across the region some areas will see increases depending on the level of investment we have committed to and the growth we are expecting in those areas. This allows us to fund investment.
Raising the level of contribution:
· better aligns contributions with the actual cost of infrastructure
· increases certainty that infrastructure will be delivered
· ensures ratepayers don’t bear the full cost of growth
· encourages developers to more accurately price land purchased for development to reflect future contribution costs
Who has to pay contributions?
Developments that require a subdivision consent, land use consent or building consent are assessed for contributions. This includes:
· new subdivisions
· new house builds
· student accommodation
· minor units (granny flat)
· Kainga Ora developments
· new retail space
· new office space
· commercial premises
· new apartments in old buildings.
Extensions to a house don’t have to pay contributions.
How are DCs calculated?
DCs are calculated by dividing the council’s capital expenditure for growth by the estimated number of new residential and non-residential developments.
To understand how the council calculates DCs, read How we set Development Contribution charges.
How does this affect house prices?
National and international evidence shows us that an increase in contributions fees does not cause house prices to rise.
The price of housing is not determined by the cost of land and building but by supply and demand for houses.
Over time, the development contribution costs are deducted from the price paid for land. Developers will adjust the price they are prepared to pay for land reflecting the price they can sell a house for less construction costs, development contributions, other costs and a margin for profit.
Can the payment of DCs be deferred?
DC payments can’t be deferred. The council seeks payment of DCs when they are due. The council funds its capital investment with borrowing. To keep borrowing within our debt limits we have had to constrain our investment. If we offered deferment of DC payments, ratepayers would be effectively providing a lending facility to developers, rather than borrowing funds to invest in building new assets.
Do all types of development pay the same price?
Different types of development pay different DCs. DCs are set at different levels depending on the demand they place on the need for the council to invest in infrastructure.
For example, a shopping centre will require more transport investment than a house. The transport contribution will therefore be higher. However, shopping centres don’t require investment in parks and community facilities. These are only charged to residential development.
The contributions policy includes a schedule showing different development types and the associated demand factors.
What are funding areas?
Funding areas are used to ensure the allocation of costs to areas reflect its demand on infrastructure.
We have funding areas that are Regional (everyone pays, e.g., Regional Parks), Sub-Regional (larger areas where projects benefit a larger area) and Local (small areas of targeted benefit).
‘How we set development contributions charges’ sets out additional information on how funding areas have been determined.
A new Drury-Opaheke funding area has been created for the local investments required to support Drury development. The contributions charges collected for the local investment in this funding area will be applied to the building of infrastructure in this area.
How is development in Auckland determined?
The Auckland Plan 2050 sets out our Development Strategy, which plans how we will manage growth over the next 30 years. It ensures we have enough capacity for growth and identifies development areas around the region where our planning and investment will be targeted.
Auckland Council’s 10-year budget includes a 30-year Infrastructure Strategy informed by the Development Strategy and sets out a capital programme of $31.8 billion.
Are DCs charged for affordable or social housing?
Central government is responsible for affordable and social housing.
The council supports affordable and social housing through the investments it makes in infrastructure.
Affordable and social housing are charged DCs as they place the same demand on the need for the council to invest in infrastructure as other developments.
The council may consider providing grants for some developments on a case-by-case basis.
Why does the policy not recover the full amount of capital required to fulfil all the infrastructure requirements in the Auckland Plan?
The council’s 30-year Infrastructure Strategy looks to address the big issues that impact our infrastructure and forecasts that this will require over $120 billion of capital investment over the 30 years. Our funding tools such as rates and development contributions can only pay back the investments we have made or are committed to making in the future. Our ability to invest is constrained in any particular time period by limits on our borrowing and intentions to keep general rates increases at affordable levels.
Development contributions are just one tool the council uses to fund our infrastructure investments and are limited to investments made to support growth. As growth investments also benefit existing properties, a fair share of the costs are funded by ratepayers and road users (via transport subsidies from Waka Kotahi funded by fuel taxes and road user charges).
Investments made to address other challenges such as climate change, natural hazards, or service level equity are funded through other sources such as rates or charges for services.
Why do Private Developer Agreements (PDA) not allow for a reduction in DCs to be paid?
A PDA is an agreement between the council and a developer(s) to provide for the provision of infrastructure in a development area. The Contributions Policy accounts for the level of infrastructure required in the 10-year Budget and sets funding levels to pay for this. If offsets are included in the Contributions Policy, then the amount of revenue to be received is reduced and budgets are mis-aligned.To ensure all developments are treated fairly under a PDA, the council will pay for any work developers undertake on behalf of Council (which doesn’t include any developer mitigation), and charge them and other benefiting developments development contributions for the relevant project.
Why are transport costs for locations that have little public transport links so high?
DCs do not just fund public transport, but the transport network as a whole. This includes arterial roads and connections to locations throughout the region. By servicing the network as a whole, council is maintaining the ability of all Aucklanders to move around the region.
Development benefits the entire region so why aren’t the costs more equally shared?
All productive economic activity benefits the Auckland region. Where only private investment is required all the costs are met by the producers and consumer of the products or services . However, development requires public investment to ensure new communities have access to the same high quality services enjoyed by all Aucklanders.
Public infrastructure investments allow the developer to realise a price for their development that couldn’t be matched without council investment. In addition, without these investments existing resident might incur costs indirectly e.g. through congestion in our transport system. These investments incur costs which the council needs to recover from either the developers or ratepayers.
Some of the investments the council makes benefit, or are caused by, development across the city, regional, or are wider than the local development area (sub-regional). These are charged for across all development in those areas.
Some investments are only required for, and only benefit, a local area. They are only charged for in those areas. If these local costs were spread across the city developers building in areas requiring less investment would be subsidising those who needed less investment. This would not send the right cost signals and result in wasted investment.
How can people have their say?
The Consultation Document will be live on the Auckland Council website, where people can register for Have Your Say events.
Is the level of contributions being increased everywhere in Auckland?
The weighted average contributions charge across urban Auckland will fall from $23,900 to $21,500. This is because the pace of growth we are forecasting exceeds our increases in capital expenditure. We have also adjusted the charges to reflect a fairer share of the costs of growth between the development we expect in this decade and the next. The actual change in different parts of the city may vary from this, higher or lower, depending on the scale of investment we are planning to make.
If longer-term infrastructure for other growth areas in Auckland will be added to the policy later, does this mean development in Drury will be subsidising other areas in the meantime?
No, the local charges in Drury will only fund investment in Drury. The regional and sub-regional charges in Drury are the same as applied in other areas.
Will this policy change see Drury having the highest development contributions in New Zealand?
No, for example the proposed contributions charge of $84,900 in Drury is lower than the $93,226 charge for Rotokauri in Hamilton.
What is the impact if we don't proceed with the proposal to include projects beyond 10 years for Drury?
Early development will proceed without making a contribution to the cost of the longer-term infrastructure they create a need for and will benefit from. This will make it more difficult for the council to provide this infrastructure in the future and place more of the future funding burden on ratepayers.
Won't the council receive rates from the new houses which could pay for the infrastructure?
Yes, the council will receive additional general rates. These will fund the operating costs of the new assets in Drury and a share of the operations of the rest of the city the Drury properties will then be part of and benefit from.
Given that landowners get a significant increase in value when land is rezoned for development, why doesn't the council just demand a fair share of infrastructure costs from them at that point?
While this approach is commonly used in some overseas jurisdictions, existing legislation and current resource management in New Zealand mean that approach is not straight-forward to implement here. The use of development contributions provides a kind of proxy for this approach, to the extent that the landowners when the land is rezoned are largely the same group as the landowners when the DC policy is implemented, which our information suggests is largely the case for Drury
How accurate are the council's estimates of future infrastructure costs, and what happens if cost estimates change?
Any cost estimate for future infrastructure projects necessarily involves a degree of uncertainty. For all the infrastructure costs that we are seeking to recover via the contributions policy we have used the best information presently available and applied a consistent approach to all asset budgeting decisions to estimate future costs. We will continue to update our estimates to ensure they are as accurate as possible. If the costs change over time the policy will be adjusted accordingly and if appropriate developers will be refunded.
Newsletter - 8th September
As we come to the end of our third week at Level 4, I hope you’re all still managing okay in your bubbles and staying safe. As I write this its pouring with rain, but we have been lucky overall with the weather during this lockdown. It’s been noticed that as people and families are looking to get out and about for fresh air and exercise, Tamaki Drive particularly is getting very busy. I’m working with the Orakei Local Board and Auckland Transport to look at the possibility of creating temporary separated areas for walkers and cyclists along Tamaki Drive from Ngapipi Road to Kohimarama Road, creating a bit of extra space for pedestrians so they can keep the 2 m distance and potentially a designated cycle lane so they would not need to share the footpath. AT are currently investigating options for this, with no loss of vehicle lanes and hopefully we’ll see something in place soon, for the remainder of Level 4 and throughout Level 3.
In non-Covid news, and for a change of pace, I wanted to provide an update on the great work happening in our area to improve water quality. You might recall that fast-tracking water quality improvements was an important part of the 10-year budget we signed off in June. The Water Quality Targeted Rate is enabling an additional $256 million of investment and has allowed us to get started on the Eastern Beaches from Parnell to Glendowie, Newmarket and the Tamaki Estuary, six years earlier than initially planned.
As with just about everything else, Level 4 restrictions have had an impact on planned works across the region and are causing delays for many of our projects. A major environmental enhancement project was due to start in Portland Road this month, starting with clearing the vegetation that restricts and blocks Portland Stream, and followed by removal of sediment in the stream channel. In autumn next year, we’ll be planting 15,000 native plants, which will significantly improve the ecology of the area. The silt from the stream will be used to create a land feature in Waitaramoa Reserve, reducing the carbon footprint of the project, and waste to landfill. In the Portland Road sub-catchment, 80% of stormwater network screening investigations have now been completed.
Another priority area is the Newmarket sub-catchment. In the commercial areas, the networks are deep and complex, so water sampling access can be very challenging for our teams. The high-tech solution is CCTV, used to conduct network investigations of public stormwater and wastewater networks to identify contaminants and track them to their source. Further investigations are underway in the wider catchment area.
At Hobson Bay, Hapua stream is the biggest concern, and is being prioritized for network investigations. Our teams are carrying out dye testing of private wastewater drainage in this area and CCTV investigations are nearing completion. Planning is underway to remove accumulated sediment and mangroves that cause water to hold in Hapua Stream in low tide.
Although Level 4 restrictions have been disruptive for our projects, council staff are working hard to make sure all of our core services are still ticking along throughout lockdown. Animal control are taking priority calls, our noise control officers are attending with health and safety measures in place, and building and resource consents are still being processed remotely.
If you have any areas of concern or feel I can assist in any way, please do not hesitate in contacting me.
Stay safe,
Desley