Agenda of Council Meeting - Thursday, 28 March 2024

Council Meeting Agenda

28 March 2024

10.1 Adoption of Draft 2024-2034 Long-Term Plan Consultation Document and Supporting Information

Kaituhi | Author: Sheryl Gavin, Principal Advisor Corporate Services

Kaiwhakamana | Authoriser: Mark de Haast, Group Manager Corporate Services

Te pūtake | Purpose

1 To recommend the adoption of the Consultation Document (CD) and Supporting Information for the Long-Term Plan (LTP) 2024-34.

He whakarāpopoto | EXecutive summary

2 An Executive Summary is not required for this report.

Te tuku haepapa | Delegation

3 Only the Council may approve components of a Long-term Plan and the Long-term Plan consultation document as stated under Section A2(2) Council Mayoral Powers of the Governance Structure and Delegations:

“… only Council may perform the following: To lead the development of the LTP and Annual Plan, together with policies and budgets.”

Taunakitanga | RECOMMENDATIONS

That Council:

A. Adopts the supporting information as information that is relied upon by the content of the Consultation Document in accordance with section 95A(4) of the Local Government Act:

A.1 The proposed Financial Strategy for 2024-34

A.2 The proposed Infrastructure Strategy for 2024-54

A.3 The proposed Capital Works Programme

A.4 Forecast Financial Statements

A.5 Funding Impact Statements

A.6 Forecast Funding Impact Statement (Rates)

A.7 Significant Forecasting Assumptions

A.8 Proposed Rates Remission policy

A.9 Proposed Revenue and Financing policy

A.10 Proposed Development Contributions policy

A.11 Proposed Development Contributions Limited Remission policy

A.12 Proposed Significance and Engagement policy

A.13 Proposed Fees and Charges for 2024/25

B. Adopts the Consultation Document for the Long-term Plan 2024-34.

C. Delegates the Mayor and the Chief Executive the authority to approve minor editorial changes to the material adopted.

Tūāpapa | Background

4 The Local Government Act 2002 (LGA) requires councils to consult with their communities on their proposed LTPs through the special consultative procedure (SCP) in accordance with the requirements of sections 83 and 93.

5 A series of briefings were held from August 2023 through to March 2024 to agree Council’s direction on its financial and infrastructure strategies, proposed forecast financials, policies, levels of service and the content and messaging of the Consultation Document itself.

6 These briefings, along with what we heard from the community during Vision Kapiti engagement activities have driven the content of the attached CD.

He kōrerorero | Discussion

7 As required by the Local Government Act 2002, the Council has produced a CD setting out strategic direction, the proposed financial and infrastructure strategies, key change proposals and other important matters on which Council would like the community’s feedback on.

8 The description and analysis of options meets the requirements of legislation and have been through Council’s auditors Ernst & Young and the Office of the Auditor General (OAG) for review.

9 Ernst and Young are continuing their audit of Council’s draft CD and supporting information and have not yet issued their audit opinion at the time of publishing this agenda. The CD is scheduled to be considered by the Opinion Review Committee of the OAG on Tuesday 26 March 2024.

10 Ernst & Young will be joining the Council meeting via Zoom to update the Council on their audit of the CD.

He take | Issues

11 Subject to findings from Ernst & Young, this report seeks Council adoption of the CD and supporting information for public consultation to commence on the 28 March 2024.

Ngā kōwhiringa | Options

12 There are no options arising from this report.

Mana whenua

13. Mana whenua representatives were invited to Council workshops and briefings throughout the development of the CD for the 2024-34 Long-term Plan.

Panonitanga Āhuarangi me te Taiao | Climate change and Environment

14. There are no climate change issues in addition to those already covered in the Appendices of this report.

Ahumoni me ngā rawa | Financial and resourcing

15 There are no financial and resourcing considerations in addition to those already covered in the CD and supporting information.

Tūraru ā-Ture me te Whakahaere | Legal and Organisational Risk

16 By adopting the CD and supporting information Council meets its obligations under the Local Government Act 2002.

Ngā pānga ki ngā kaupapa here | Policy impact

17 The CD and supporting information form the basis for the 2024-34 Long-term Plan. Relevant policy impacts are consulted on as part of the Special Consultative Procedure (s83 of the Local Government Act 2002).

TE whakawhiti kōrero me te tūhono | Communications & engagement

18 Formal community consultation runs from 28 March to 28 April 2024.

Te mahere tūhono | Engagement planning

19 The CD and supporting information will be accessible online on Council’s website at haveyoursay.kapiticoast.govt.nz. Printed copies will be available at libraries and service centres from approximately 4 April 2024.

20 The community is invited to provide feedback through a range of channels. We encourage online submissions but also welcome submissions on a printed form, by email, or letter.

21 Throughout the consultation period several informal opportunities to speak to Elected Members have been arranged.

22 Submitters may speak to their submissions at hearings on 2 May from 9.30am.

Whakatairanga | Publicity

23 A communications plan has been developed to guide consultation activities for the 2024-34 Long-term Plan.

24 Promotion to encourage the community to make submissions will include media releases, local newspaper and radio advertising, a special edition of Everything Kapiti, a social media campaign, and planned Elected Member videos and Mayoral interviews.

Ngā āpitihanga | Attachments

1. Draft Financial Strategy 2024-34 (under separate cover)

2. Draft Infrastructure Strategy 2024-54 (under separate cover)

3. Draft Capital Works Programme 2024-34 (under separate cover)

4. Forecast Financial Statements 2024-34 (under separate cover)

5. Forecast Funding Impact Statements 2024-34 (under separate cover)

6. Draft Funding Impact Statement for Rates 2024/25 (under separate cover)

7. Draft Significant Forecasting Assumptions 2024-34 (under separate cover)

8. Draft Rates Remission Policy 2024 (under separate cover)

9. Draft Development Contributions Policy (under separate cover)

10. Draft Revenue & Financing Policy 2024 (under separate cover)

11. Draft Development Contributions Limited Remission Policy 2024 (under separate cover)

12. Draft Significance & Engagement Policy 2024 (under separate cover)

13. Draft Schedule of Fees and Charges for 2024/25 (under separate cover)

14. 2024-34 Long Term Plan Consultation Document (under separate cover)

Council Meeting Agenda

28 March 2024

10.2 Treasury Management Policy

Kaituhi | Author: Mark de Haast, Group Manager Corporate Services

Kaiwhakamana | Authoriser: Mark de Haast, Group Manager Corporate Services

Te pūtake | Purpose

1 The purpose of this report is to discuss the proposed changes to Council’s current Treasury Management Policy (TMP) and seek Council approval to adopt a revised TMP attached as Appendix 2 to this report.

He whakarāpopoto | EXecutive summary

2 Not required for this report.

Te tuku haepapa | Delegation

“…Adopt policies required under the Act in association with the LTP or the local governance statement”

Taunakitanga | RECOMMENDATIONS

A. That Council receives and notes this report including Appendices 1 and 2 to this report.

B. That Council approves the recommended changes from Bancorp Treasury Services Limited, as detailed in paragraphs 10 to 25 of this report and shown in Appendix 1 to this report.

C. The Council delegate authority to the Mayor and the Chief Executive to make further editorial changes to the Treasury Management Policy to remove the section on Managed Funds and the Glossary in Appendix 1 and 2 to this report

D. The Council delegate authority to the Mayor and the Chief Executive to make further minor editorial changes to reflect current Governance Structure and Delegations and as may be required by the Council auditors Ernst & Young and/or Bancorp Treasury Services limited.

Tūāpapa | Background

4 The current TMP was first adopted in 2017 as part of the 2018-2021 Long Term Plan process. The TMP incorporates the Liability Management Policy and the Investment Policy. This is attached as Appendix 2 to this report.

5 This review of the TMP is focused on developing appropriate recommendations for additions, deletions or amendments to the TMP to enable the treasury activities of Council to be carried out under a set of market best practice standards.

6 Council use Bancorp Treasury Services Limited as their independent treasury advisors. All treasury transactions, particularly new debt issuances and interest rate swap transactions, are first fully consulted on with Bancorp Treasury Services Limited.

7 This report details the changes recommended to Council’s TMP by Bancorp Treasury Services Limited (“Bancorp Treasury”) and Council Officers.

8 There are a number of minor editorial changes. These and the other more substantive changes are shown in “Track Change” format in the TMP attached as Appendix 1 to this report.

9 For convenience, all changes are shown a “No Mark Up” format in the TMP, attached as Appendix 2 to this report.

He kōrerorero | Discussion

10 The more substantive changes to the TMP, as recommended by Bancorp Treasury Services Limited, are discussed separately below. All section references refer to Appendix 1 to this report.

11 In Section 21 titled ‘’Borrowing Mechanisms” we recommend deleting the last bullet point which requires Council should give consideration to ‘’counterparty credit risk by spreading borrowings across a number of counterparties to avoid concentrations of credit exposure.’’ This is not practical as all of Council’s borrowings are from the Local Government Funding Agency (“LGFA”) which provides considerably cheaper funding than the banking sector and the capital markets which includes standalone bond issuance.

12 In Section 44 titled ‘’Financial Investments’’ we recommend that this section be deleted as it is superseded by the new investment matrix included in Appendix 3 which is commented on later in this letter.

13 In Section 59 titled “Liquidity/Funding Risk” we recommend a more extensive definition of liquidity which clarifies the management of liquidity risk.

14 In Section 63 (b) titled “Liquidity/Funding Risk” we recommend amending the provision relating to maintaining 110% of liquidity, to include projected external debt rather than external debt as this is the calculation that the LGFA uses i.e. projected external debt.

15 In Section 64 (c) titled “Liquidity/Funding Risk” which states “The Council has the ability to pre-fund up to 18 months forecast debt requirements including re-financings” we recommend that the 18 month restriction be deleted as it restricts KCDC from pre-funding past 18 months even if it is advantageous to do so.

16 In Section 64 (f) titled “Liquidity/Funding Risk” which details the Funding control limits we recommend that the four time buckets be deleted and replaced with a requirement that “No more than 40% of debt shall mature in any rolling 12 month period”. This amendment alleviates the need to micromanage exposures to merely comply with the policy, but which in reality may hinder the cost of compliance and add unnecessary complexity to the risk management process.

17 We recommend that Section 70 be deleted as a 181-day restriction on the types of investments is too restrictive and the provision is superseded by the new investment matrix in Appendix 4.

18 We recommend that the current Interest Rate Control Limits in Section 74 which refers to a Master / Floating Control Limit and parameters relating to a Swaps Maturity Profile in Section 74 (b) be deleted and replaced with the following Risk Control Limits.

Fixed/Floating Interest Rate Risk Control Limits
	Minimum Fixed Rate	Maximum Fixed Rate
0–2 years	40%	100%
2–4 years	20%	80%
4–10 years	0%	60%

We find the existing Risk Control Limits difficult to understand and from our interpretation, it appears that basing the level of cover on swap maturities is completely arbitrary and ignores the fundamental point of an interest rate swap, i.e. the duration of fixed cover it provides. For example, if an entity were to have $200 million of debt and 1x $25 million interest rate swap with a maturity in 8 years’ time, then we would view that swap as providing interest rate cover at 12.5% of total debt for 8 years. However, under the current policy, this swap would not count as cover in the 1-3 year and 3-5 year time buckets because there is no swap maturity in these buckets, it would only count in the 5-10 year time bucket. It would need to be split into smaller swaps that start when the previous one matures to be counted across all three time buckets.

We find the complexity of this policy type which incorporates the (‘Master Band’) as unnecessary and most of the policies like this we have come across aren’t completely understood by the people who are tasked with following them. We favour our approach because of its simplicity not only to understand but also to implement. We understand that the originator of the current bands no longer uses them and utilises Risk Control Limits that are very similar to the ones that we are proposing.

19 In Section 74 which is titled “Authorised Risk Management Instruments” we recommend deleting Forward Rate Agreements as these are no longer used and including Fixed Rate Bonds and Fixed Rate Term Loans as these are valid funding instruments that provide fixed rate cover as well.

20 In Section 74 which is titled Counterparty Credit Risk we recommend inserting the title Counterparty Credit Risk for Derivatives, which is what it is intended to manage. The risks associated with financial market investments are dealt with in Appendix 3. We recommend adding the methodology in the new Section 77 which details how exposures to derivatives are calculated.

21 We recommend deleting parts of the table in Section 79 as the differing types of exposures are dealt with in separate sections e.g. investments in Appendix 3 and derivatives in the new Section 77, but provisions relating to borrowing are continued.

22 In Section 89 (d) under the title “Treasury Performance” we recommend including the benchmarking matrix which provides an external and objective measurement of the way KCDC manages its debt. We recommend amending the table Section 79 as the differing types of exposures are dealt with in separate sections e.g. investments in Appendix 3 and derivatives in Section 78. Benchmarking the borrowing performance indicates the effectiveness of the current risk management parameters and the way that the actual debt exposures are being managed at an operational level.

23 We recommend deleting Appendix 1 Glossary of Terms in order to shorten the policy, with a glossary potentially being included in an Operations Manual.

24 In Appendix 2 titled “Current approved interest rate instruments” we recommend deleting Investments as these are dealt with in the new Appendix 3 and the interest rate risk management category as this is dealt with in Section 74.

25 We recommend the inclusion of a new Appendix 3 which is titled “Authorised Financial Market Investment Parameters”. This is a comprehensive matrix which incorporates five separate criteria as follows, Authorised Asset Classes, the limits for each of these classes, the approved investment instruments, the credit rating criteria and the limit for each issuer. With these criteria, KCDC has a wide investment horizon but also has multiple safeguards built in.

26 It is also recommended by Officers to accept the comments from Bancorp Treasury Services Limited to remove the Managed Funds and Glossary sections of the TMP, as shown in Appendix 1 and 2 to this report.

27 It is further recommended by Officers to make any subsequent changes to reflect current Governance Structure and Delegations in the TMP once Council has fully considered the change recommendations as detailed above by Bancorp Treasury Services Limited.

He take | Issues

28 There are no issues in addition to those already discussed arising from this report.

Ngā kōwhiringa | Options

29 There are no options arising directly from this report.

Mana whenua

30 There are no specific mana whenua considerations arising from this report.

Panonitanga Āhuarangi me te Taiao | Climate change and Environment

31 There are no specific climate change and environment considerations arising from this report.

Ahumoni me ngā rawa | Financial and resourcing

32 There are no financial considerations in addition to those already detailed arising from this report.

Tūraru ā-Ture me te Whakahaere | Legal and Organisational Risk

33 There are no legal and organisational risk considerations arising from this report.

Ngā pānga ki ngā kaupapa here | Policy impact

34 This report details proposed changes to the Council’s TMP. Track changes against the current policy are attached as Appendix 1 and 2 to this report. The revised TMP including all proposed changes are attached as Appendix 2 to this report.

35 There are no additional policy considerations arising from this report.

TE whakawhiti kōrero me te tūhono | Communications & engagement

36 There is no communications and engagement considerations arising directly from this report.

Te mahere tūhono | Engagement planning

Whakatairanga | Publicity

37 There is no media release or other publicity planned specifically for this report.

Ngā āpitihanga | Attachments

1. Council's Treasury Management Policy reviewed by Bancorp Treasury Services with track changes Dec 2023 ⇩

2. Council's current Treasury Management Policy July 2021 ⇩

Council Meeting Agenda

28 March 2024

10.3 Proposed Alcohol Licensing Fees Bylaw

Kaituhi | Author: Chris Worth, Principal Policy Advisor

Kaiwhakamana | Authoriser: Kris Pervan, Group Manager Strategy & Growth

Te pūtake | Purpose

1 This report seeks Council’s approval to consult on a draft proposed Alcohol Licensing Fees Bylaw to increase the fees taken to fund Council’s Alcohol Licencing function.

He whakarāpopoto | EXecutive summary

2 This proposed bylaw enables Council to prescribe its own alcohol licensing fees. The introduction of a bylaw would supersede current fees set out in the Sale and Supply of Alcohol Regulations 2013 for the Alcohol Licensing function. The Regulations must be reviewed every five years and were last reviewed in 2017. However, fees have not been increased since they were introduced in 2013.

3 Council is currently recovering approximately 70% of the cost of its Alcohol Licensing function and associated activities, with a growing gap between the costs to administer the Licensing functions and the income received from fees to support the activity.

4 It is proposed that fees for this function be increased to help recover increasing costs. This can only be done through a bylaw adopted under section 405 of the Sale and Supply of Alcohol Act 2012, and the Sale and Supply of Alcohol (Fee-setting Bylaws) Order 2013.

5 Under the Local Government Act, the funding needs of the local authority must be met from sources that the local authority determines appropriate. These sources include rates, and fees and charges, to reflect the public/private cost/benefit of Council’s functions or activities.

6 Consulting on a proposed bylaw alongside the proposed Long-term Plan 2024-2034 would enable new fees to be considered and if adopted, to come into effect from 1 July 2024 for the 2024/2025 financial year; alternatively, a bylaw could be progressed more slowly, subsequently adopted through the Annual Plan, and come into effect later in the triennium.

Te tuku haepapa | Delegation.

7 Section 405 of Sale and Supply of Alcohol Act 2012 gives Council the power to make a bylaw for the purposes of setting fees and Council has the delegation for making decisions on bylaws under the Governance Structure and Delegations for the 2022-2025 Triennium.

Taunakitanga | RECOMMENDATIONS

That the Council:

A. Receives the report “Proposed Alcohol Licensing Fees Bylaw” dated 28 March 2024.

B. Agrees to consult on a proposed Alcohol Licensing Fees Bylaw to prescribe fees for its Alcohol Licensing functions and activities on the basis of:

B.1 Level of cost recovery and fees change - Option 1, paragraph 29 of the report.

B.2 Timing of change – Option 1, paragraph 32 of the report.

B.3 Weighting of fees – Option 1, paragraph 37 of the report.

C. Approve the Consultation Document (Attachment 1) and draft Alcohol Licensing Fees Bylaw (Attachment 2) for consultation alongside the LTP 2024-2034 (Option 1, paragraph 41 of the report.).

D. Delegates power to the Mayor and Chief Executive to make amendments to the Consultation Document (Attachment 1) and draft Alcohol Licensing Fees Bylaw (Attachment 2) to incorporate any substantive feedback from the Committee.

Tūāpapa | Background

Sale and Supply of Alcohol Act 2012 and Council’s responsibilities

8 The Sale and Supply of Alcohol Act 2012 (the Act) puts in place a system of control for the sale, supply, and consumption of alcohol.

9 As the territorial local authority (TLA) for its district, Council is responsible for administering the operational and regulatory requirements of the Act. This includes the safe and responsible sale, supply and consumption of alcohol, and minimisation of harm caused by the excessive or inappropriate consumption of alcohol.

10 Council’s operational and regulatory functions under the Act include appointing and providing support to the District Licensing Committee (DLC). This support includes receiving and processing licence applications and manager’s certificates for DLC decision making, as well as preparing material for the DLC to meet their reporting requirements to the Alcohol Regulatory and Licensing Authority (ARLA).

11 Council also has monitoring and compliance responsibilities. These include inspections of premises and providing education to licensees to operate within the requirements of the Act. Both functions require Council staff to work closely with Police and the Medical Officer of Health and other regulatory agencies to meet the responsibilities and functions of the Act.

Prescribed licensing process and fees

12 Any person wanting to sell and supply alcohol for the purposes of consumption must have an alcohol licence^{^[1]}. There are four kinds of licences^{^[2]}: on-licences, off-licences, club licences, and special licences. Additionally, any licenced premises must be managed by a person holding a manager’s certificate.

13 Charges for a particular licence are set under the Sale and Supply of Alcohol Regulations 2013 (the Regulations) according to the risk category of the premises and apply to the initial licence fee and subsequent licence renewals. The five risk categories are based on assessment of three weighted risk factors:

· the type of premises (Restaurant/ Bottle Store/ Club etc.);

· the latest trading hour allowed by licence and type of licence. (Whether an on-licence finishes earlier or later than 2am, or off-licence finishes earlier or later than 10pm); and,

· the number of enforcement holdings^{^[3]} against the premises in last 18 months.

14 Licensees are aware of the risk category of their premises when their application for a licence is first assessed. Council currently has 144 Licensees, made up of 62 on-licences, 1 BYO, 30 club, and 51 off licences. The distribution of current licensees by risk category and fees under the Regulations are set out below in Table 1.

Table 1: Risk categories, licence numbers and fees set in regulation (GST Incl.)
Cost/risk fee category	Licence numbers	Application fee	Annual fee
Very Low	29	$368.00	$161.00
Low	61	$609.50	$391.00
Medium	49	$816.50	$632.50
High^{^[4]}	5	$1,023.50	$1,035.00
Very High	-	$1,207.50	$1,437.50

15 Special licences can also be issued for specific events in specified places/premises. They can cover one or more events and may apply for events over a period of up to twelve months. Special licenses and their fees are categorised into three classes based on their potential risk, reflecting the size of the event (number of attendees), the number of events covered by the special licence, and the type of premises.

The ability for Council’s to change alcohol licensing fees

16 Section 405 provides for Council to charge for any matter for which fees are payable to support it undertaking its functions under the Act. This ability is supported in the same section by providing for Councils to vary fees set under the Regulations by making an Alcohol Licensing Fees Bylaw.

17 A Council can use a bylaw to cover fees for licence applications (and renewals), annual licensing fees and special licence fees, but cannot alter the framework for determining cost/risk ratings and fees categories or change fees for manager’s certificates or temporary authorities.

He kōrerorero | Discussion

He take | Issues

The Issue and the Proposal

18 The current fees for Alcohol Licensing were set in 2013, and although reviewed in 2017, have not been increased since introduced. As a consequence, the level of recovery of (increased) costs by Council has steadily reduced over time.

19 To ensure appropriate cost recovery is in place, it is proposed that Council adopt an Alcohol Licensing Fees Bylaw which will introduce increased fees as per the amounts in Tables 2a to 2c (all figures GST inclusive. Note: figures are rounded to nearest $0.50)

Table 2a: Proposed Weighted Fee increase for Alcohol Licence Application Fees
	Current Fee (Default)	Year 1 Fee	Year 3 Fee	Year 5 Fee	Total incr. over 5 years
Very Low	368.00	486.00	486.00	510.00	142.00
Low	609.50	804.50	804.50	845.00	235.00
Medium	816.50	1,306.50	1,515.50	1,667.00	850.50
High	1,023.50	1,637.50	1,899.50	2,089.50	1,066.00
Very High	1,207.50	1,932.00	2,241.00	2,465.00	1,258.00

Table 2b: Proposed Weighted Fee Increase for Annual licensing
	Current Fee (Default)	New Fee	New Fee	New Fee	Total incr. over 5 years
Very Low	161.00	212.50	223.00	234.00	73.00
Low	391.00	516.00	542.00	569.00	178.00
Medium	632.00	1,011.00	1,112.00	1,223.50	591.50
High	1,035.00	1,656.00	1,821.60	2,004.00	969.00
Very High	1,437.50	2,300.00	2,530.00	2,783.00	1,345.50

Table 2c: Proposed Special Licence Fee changes
	Current Fee	Year 1 Fee	Year 3 Fee	Year 5 Fee	Total incr. over 5 years
Class 1	575.00	920.00	1,092.50	1,202.00	627.00
Class 2	207.00	331.00	393.00	432.00	225.00
Class 3	63.00	101.00	120.00	132.00	69.00

20 The proposed increases would bring in a further $387,000 over the five years and take cost recovery from the current 70% up to 90% by year five, reducing the level of subsidisation from the general rate. A full breakdown of the proposed fee increases can be found in the Consultation Document for the Proposed Alcohol Fees Bylaw 2024, at Attachment 2.

21 There are three questions that arise in considering whether to adopt an Alcohol Licensing Fees Bylaw to set higher fees:

· Level of cost recovery: that Council considers appropriate for the Alcohol Licensing function and its associated activities;

· Timeframe for implementation: three options have been considered:- a one-off ‘all at once’ increase; incremental increases each year out to year 5; or staged increases at years 1,3 and 5.

· Weighting of fees: how any increases are applied across the different fees (application and renewal fees) and shared across the regulated cost/risk categories (flat or weighted application).

22 There is also a further process timing issue that Council needs to be comfortable with. The proposal for an Alcohol Licensing Fees Bylaw is being put forward at this time so that it may be considered, and the proposed new fees included in the Long-term Plan’s (LTP) Fees and Charges Schedule. However, should Council prefer, the bylaw proposal can be undertaken on an independent track. Doing so would mean that any subsequent changes to Alcohol Licensing Fees would not be immediate and need to be progressed through subsequent Annual Plan processes.

Level of cost recovery

The issue

23 The Act provides for the recovery of fees for undertaking the alcohol licensing function. Without any changes to the Regulations, and with Councils increasing costs, current cost recovery levels have fallen to approximately 70%. With no adjustment in licensing fees revenue, recovery for alcohol licensing is forecast to reduce further to 60% within five years. In practical terms:

23.1 Council’s costs are expected to increase at 2.93% LGCI^{^[5]} per annum over the next five years.

23.2 Under current settings, with no increase in revenue over the same period, Council will potentially not recoup $633,000 of recoverable costs for the period.

23.3 Maintaining current arrangements would mean that this funding gap will need to be met through increasing the general rates subsidy.

24 Further to this, with current revenues from licence and manager certificates applications and renewals not covering the cost of the Alcohol Licensing function and its associated activities, the intent of section 405 of the Act, which anticipates a user pays framework, is not met.

25 The minimising of alcohol-related harm in our community is consistent with Council's responsibilities under the LGA to promote the wellbeing of its communities in the present and for the future. The two limbs of the Act's object infer a balancing between two of Council's community outcomes for strong communities and a vibrant economy.

26 Council can determine its mix and use of funding and fees to support its functions and levels of service. Choice of funding source(s) should be determined after considering community outcomes, distribution of benefits, the period over which those benefits accrue, and the extent that action or inaction by an individual or group may contribute to the need for the activity.

27 In making this assessment Council is assessing the relative levels of public/private cost/benefit of an activity. In having the alcohol licensing function and its activities funded by a mix of user fees and general rates income Council recognises:

27.1 that this function and its activities provide primary benefit to licensees to lawfully operate a business within a clear operating framework and level operating field;

27.2 with the public funding supporting health, safety, and wellbeing through:

27.2.1 the facilitation of amenity (the right of individuals to enjoy alcohol);

27.2.2 public involvement in licensing applications (the right of the public to have a say in what is happening in their community); and,

27.2.3 the minimisation of alcohol-related harm (the right of society to protect itself from the harms of alcohol)^{^[6]}.

28 This balance is reflected in a proposed increase of fees to recover 90% of the private benefits of the services and the public benefits reflected by the remaining 10%, supported through general rates.

The Options

29 There are three options Council can take in respect to the cost recovery amount issue. These are set out in Table 3 along with the effect of each option, its impact on licensees and on the community, and the mechanism to implement any change.

Table 3: Cost Recovery Options and Impacts
Option	Effect	Impact on licensees	Impact on community	Mechanism
Option 1: Change public/private split (increase fees through a new fees bylaw) (Recommended)	Maintains levels of service to at least those currently achieved.	· Small $ impact, fees differentially changed across years · Small $ increase for smaller premises/ low risk settings · Larger increases for larger premises/ higher risk settings. · Increases relative and minimal to premises’ turnover.	· Impact on general rate minimal and reducing over time · Licensing regime managed to ensure responsible sale, supply, and consumption of alcohol in district. · Alcohol-related harm minimised.	· Fees bylaw adopted under s.405 of the Act, and the Sale and Supply of Alcohol (Fee-setting Bylaws) Order 2013 · Long-term Plan Revenue & Financing Policy reflects change.
Option 2: Change public/private split (Increase rates funding)	Maintains levels of service to at least those currently achieved.	· Impact on licensees minimal and static	· Impact on general rate significant and increasing over time ($633k over 5 years) · Licensing regime managed to ensure responsible sale, supply, and consumption of alcohol in district · Alcohol-related harm minimised.	· Long-term Plan Revenue & Financing Policy.
Option 3: Reduce levels of service (to statutory minimum)	Levels of service are reduced to bare minimum required under the Act.	· Potential reduced compliance by licensees.	· On-going but lesser impact on general rate. · Reduced management of alcohol-related harm · Council is not implementing the Act responsibly · Potentially more DLC hearings (not directly recoverable), as other partners try to address the risk of harm.	· Long-term plan’s Levels of Service Statements.

30 Option 1 is recommended as, increasing the cost recovery level to 90% over five years:

30.1 reflects the intention of the national legislation to support Council to:

· carry out its functions under the Act, and to

· recover the cost of doing so, while

· ensuring a robust licencing system, and

· the better monitoring of licensees for compliance.

30.2 retains an element of public good funding from rates recognising Council role in minimising alcohol related harm in the district and administering the Act’s licensing regime for the benefit of the whole community; and,

30.3 reduces the significant level of rates subsidy of private businesses arising from the current under-recovery of costs.

Timing and staging of fees

The Issue

31 There are a number of timeframes over which the fees could be set and increased. Each has a differing impact on licensees and Council.

The Options

32 Implementation of any fees increases could be through:

Table 4: Timing of fees and Impacts
Option 1: A staged approach, with fees increases at years 1, 3, and 5 (a larger increase in year one, and smaller increases in years 3 and 5). (Recommended)	The year 1 increase to ‘catch-up’ on the historic underfunding and years 3 and 5 to progress to the 90% recovery mark.	· Smaller increment changes at years 2 and 4, provide businesses time to absorb the increased costs · Increases at years 3 and 5 are quite small in $ terms relative to the levels of turnover of the businesses in the risk categories. This option provides a middle ground in impact on licensees and on rates.	· Reducing the impact on general rates is slower · Perception that community is paying unfairly for business benefits.
Option 2: A one-off adjustment	An increase bridging the recovery gap to 90% is made in one step.	· A full one-off correction to the fees level would place an unnecessary burden on licensees, especially the smaller operators. · Perception that Council is making it harder to do business in Kapiti, for those operators who face significant cost increases.	· Existing impact on general rates is addressed immediately.
Option 3: Smoothing the increase evenly across the five years	Same $ increase each year until a 90% cost recovery is reached.	· It is likely the most manageable for licensees, especially smaller operations.	· Provides the slowest increase out to 90% recovery and has the greatest impact year-on-year on rates · Perception that community is paying unfairly for business benefits.

Table 4: Timing of fees and Impacts

Option

Effect

Impact on licensees

Impact on community

Option 1:

A staged approach, with fees increases at years 1, 3, and 5

(a larger increase in year one, and smaller increases in years 3 and 5). (Recommended)

The year 1 increase to ‘catch-up’ on the historic underfunding and years 3 and 5 to progress to the 90% recovery mark.

· Smaller increment changes at years 2 and 4, provide businesses time to absorb the increased costs

· Increases at years 3 and 5 are quite small in $ terms relative to the levels of turnover of the businesses in the risk categories. This option provides a middle ground in impact on licensees and on rates.

· Reducing the impact on general rates is slower

· Perception that community is paying unfairly for business benefits.

Option 2:

A one-off adjustment

An increase bridging the recovery gap to 90% is made in one step.

· A full one-off correction to the fees level would place an unnecessary burden on licensees, especially the smaller operators.

· Perception that Council is making it harder to do business in Kapiti, for those operators who face significant cost increases.

· Existing impact on general rates is addressed immediately.

Option 3:

Smoothing the increase evenly across the five years

Same $ increase each year until a 90% cost recovery is reached.

· It is likely the most manageable for licensees, especially smaller operations.

· Provides the slowest increase out to 90% recovery and has the greatest impact year-on-year on rates

· Perception that community is paying unfairly for business benefits.

33 A staged approach is recommended, with increases introduced over years 1, 3 and 5 to ensure a significant recover of the current deficit while managing the impacts of change on business over a more measured timeframe.

Weighting of fees

Issue

34 Currently under the Regulations, fee categories are tied to the risk profile of the premises. This approach to categorisation must be maintained in the bylaw. However, Council is not required to follow the same cost weightings between categories.

35 Premises that are in the medium, high, and very high categories are there because of higher risk factors, whether this is due to the overall level of activity (number of patrons/members), longer operating hours in the higher risk hours of the day, or past issues (Holdings) with operating within general requirements of the Act (e.g. host responsibility, serving underage persons etc.) or specific licence conditions (e.g. opening/trading hours).

36 Because of these risk factors, premises in the medium to very high categories require more complex considerations requiring more detailed assessments and greater levels of ongoing monitoring. To recognise this, and, in turn, recognise that small establishments in less risky environments require less time and resource in application assessment and compliance monitoring, weighted fees and fee increases could be applied. This has also been the approach from our neighbouring Councils.^{^[7]}

Options

37 Options for how fees could be weighted include:

Table 5: Weighting of fees and Impacts
Option	Effect	Impact on licensees	Impact on community
Option 1: A weighted increase between lower and higher risk licensees (Recommended)	Distributes costs on key criteria to ensure ‘fairness’ based on complexity and monitoring requirements.	· The fee reflects level of work for Council in processing less/more complex applications (including potential DLC hearings), and monitoring requirements. · Fees are aligned with size of premises and likely ability to pay, and the fees burden on smaller operators/safer environments is reduced in relative terms.	· Council is seen to apply rules fairly and to support business to operate in Kāpiti.
Option 2: Proportionate increases based on existing fees	Distributes overall costs across all risk categories.	· This would see a potentially higher increase of fees on smaller, lower risk licensees, that could have a more significant impact on their operation and business.	· Council is seen to make it harder to do business in Kāpiti, for those operators who can least afford it.

38 A weighted increase is recommended, as it reflects the size, turnover and risk of businesses as well as the supporting capacity required to undertake licensing functions.

Timing of consideration and adoption of a Fees Bylaw

39 The issue of the reducing level of cost recovery and its associated increase in rates funding became apparent as budgets were being developed for the upcoming 2024 to 2034 LTP.

40 Consultation is required if Council proceeds with proposing the Fees Bylaw, however there are two options for doing so:

40.1 With the LTP 2024-2034: there are some advantages for this consultation to be done at the same time as consultation on the LTP. This timing would allow the bylaw to be adopted in time for the new fees to be included in the 2024-2034 LTP Fees and Charges Schedule.

40.2 Consideration of the bylaw could be placed on a slower track, with consultation carried out separately from the LTP process.

41 The Impacts of these options is as follows:

Table 5: Timing of considering the introduction of the Fees Bylaw and Impacts
Option	Effect	Impact on licensees	Impact on community
Option 1: Take the bylaw out to consultation with the LTP. (Recommended)	The Fees Bylaw would apply for the LTP 2024-2034.	· Clarity on fee changes but shorter timeframe to prepare for impacts to business operations.	· The recovery gap is addressed immediately. · The new fees regime for Alcohol Licensing, if adopted, would apply immediately for the LTP 2024-34. · Lower costs of consultation.
Option 2: Consultation and adoption of the bylaw is a discrete process that Council undertakes separately from the LTP process	The Fees Bylaw would not immediately apply for the LTP 2024-34.	· Longer timeframe to prepare for the change to business operations.	· The recovery gap would take longer to address. · An amendment to the LTP could be required, which attracts additional undue cost. Or changes would be made at a later time through the 2025/26 Annual Plan delaying adoption of the new fees’ regime.

42 Should the adoption of the bylaw occur after the adoption of the 2024-2034 Long-term Plan and the fees and charges schedule, the new fees could be incorporated through amendment to the LTP and fees and charges schedule. This could occur as the bylaw would have been through a public consultation process including the issuing of a Statement of Proposal, as required for an amendment to the LTP. The Statement of Proposal would need to clearly indicate that the bylaw will amend the fees and changes schedule in the LTP.

43 Option 1 is recommended, enabling the proposed bylaw to go out and be consulted, and subject to decision, adopted for the new financial year.

Mana whenua

44 There are no specific or general impacts on mana whenua, or tangata whenua more broadly, from using an Alcohol Licensing Fees Bylaw as the mechanism for cost recovery of the Alcohol Licensing function. However, Council is aware of the interest our iwi partners have in alcohol licensing matters and in any initiatives that can help reduce alcohol related harm in the community. Maintaining a robust Alcohol Licensing inspectorate delivers on this.

Panonitanga Āhuarangi me te Taiao | Climate change and Environment

45 There are no climate change implications associated with implementing an Alcohol Licensing Fees Bylaw.

Ahumoni me ngā rawa | Financial and resourcing

46 The proposed bylaw implements new fee amounts and charging regime for existing functions and associated activities, replacing existing fees. The new fees will be included within any update of Council’s Fees and Charges Schedules for the new financial year (if to be included in the LTP). There may be a small operational cost in publicity for the fee changes which will be met within baselines.

Tūraru ā-Ture me te Whakahaere | Legal and Organisational Risk

47 The fees bylaw is being proposed in accordance with s.405 of the Act and the Sale and Supply of Alcohol (Fee-setting Bylaws) Order 2013.

48 A consultation document has been developed outlining the background issues and a proposed response, and the proposed increases in fees. In accordance with s.405(4) of the Act, officers will also directly contact affected parties (licensees) indicating where information on the proposed bylaw is available and the means through which they can have their say.

49 This consultation approach meets the principles for consultation in the LGA and specific requirements of the Act, covering Council’s obligations to consult with affected parties and provides an opportunity for members of the general public to have their say.

Ngā pānga ki ngā kaupapa here | Policy impact

50 As the fees will apply as new licence applications come in throughout the year and existing licences come up for renewal, an increase in cost recovery will unlikely exceed existing Revenue and Financing Policy splits. However, for the 2025-2026 Annual Plan, the Revenue and Financing Policy will need to be reviewed and potentially amended to adjust, if necessary, the public/private cost/benefit split.

51 The Act does not prescribe any particular review period for an Alcohol Licensing Fees Bylaw, although the fees regulations, which the bylaw supersedes within the district, must be reviewed every five years. The bylaw is proposing to set fees for the next five years, beginning 1 July 2024. A five-yearly review of the bylaw would therefore be appropriate.

TE whakawhiti kōrero me te tūhono | Communications & engagement

Te mahere tūhono | Engagement planning

52 Consultation for the proposed bylaw will meet the requirements of Section 405 of the Sale and Supply of Alcohol Act 2012 by consulting with affected persons affected by the changes proposed. As a matter of good practice, Council will also look to reflect the principles of consultation as outlined in the Local Government Act, providing for the opportunity to be heard through oral presentation of submission, in the making of the bylaw.

53 Currently it is proposed that the consultation period will run from 25 March to 28 April, in concert with the Long-Term Plan consultation. A consultation document along with the draft bylaw will be sent out to affected parties and made available through Council’s usual consultation channels, with submissions (via website, by email, mail and drop-box at service centres and libraries) invited during that period. Submitters will be provided an opportunity to speak to their submissions at a hearing.

54 A letter indicating Council’s consideration of a proposed Alcohol Licensing Fees Bylaws was sent to licensees on 14 March 2024.

Whakatairanga | Publicity

55 Subject to the decision to consult, the draft Alcohol Licensing Fees Bylaw will be publicised on the Council website and licensees will be notified.

Ngā āpitihanga | Attachments

1. Alcohol Fees Bylaw 2024 Consultation Document ⇩

2. Proposed Alcohol Fees Bylaw 2024 ⇩

Council Meeting Agenda

28 March 2024

10.4 Rates Remission for Land Protected for Natural or Cultural Conservation Purposes

Kaituhi | Author: Rachael Ashdown, Biodiversity Advisor

Kaiwhakamana | Authoriser: Sonja Williams, Acting Group Manager Customer and Community

Te pūtake | Purpose

1 This report tables the rates remission applications for Land Protected for Natural or Cultural Conservation Purposes for the 2023/24 year and seeks approval for recommended allocations.

He whakarāpopoto | EXecutive summary

Te tuku haepapa | Delegation

2 The Council has the delegation to make this decision.

Taunakitanga | RECOMMENDATIONS

A. That the Council approves the amounts of rates remission to the properties set out in Appendix 2 of this report in accordance with Council’s Policy for Rates Remission for Land Protected for Natural or Cultural Conservation Purposes.

Tūāpapa | Background

3 The Long Term Plan 2021-41 references a policy for Rates Remission for Land Protected for Natural or Cultural Conservation Purposes. The detail of this policy is included in the Long Term Plan as Part 7 of the Rates Remission Policy, and attached as Appendix 1 to this report.

4 Part 7 of the Rates Remission Policy supports the provisions of the Kāpiti Coast District Plan regarding incentives for heritage feature management and protection. It recognises that most heritage features are already protected by rules in the District Plan and encourages landowners to maintain, enhance and protect heritage features by offering a financial incentive.

5 The granting of a rates remission as an incentive for encouraging the protection and management of heritage features is consistent with Council’s responsibilities under the Resource Management Act 1991 and the Historic Places Act 1993.

6 The 2023/24 budget for Rates Remission for Land Protected for Natural or Cultural Conservation Purposes is $46,112.

7 A total of 108 ratepayers benefited from the policy in 2022/23. Having applied successfully for rates remission, ratepayers may continue receiving it, provided they meet the rates remission policy criteria. Each applicant has been reviewed and the owners of the properties listed in Appendix 2 are recommended to receive remission in 2023/24.

He kōrerorero | Discussion

8 The following paragraphs discuss the principles of rates remission, present the proposed amounts of remission in a table format (Table 1), and make a recommendation on which properties receive rates remission in 2023/24.

9 The rates remission programme’s guiding principle is recognition of the conservation efforts of ratepayers and the positive contribution their actions make to protecting the District’s cultural and biodiversity heritage.

10 The owners of these properties are often motivated solely by the desire to protect and manage their environment, and their actions are voluntary. Many are keen conservationists while others may fence off a bush remnant as the pasture gain is negligible or to better manage stock movement. Whatever their motivation, addressing significant pressures such as stock grazing or noxious pests has a positive impact on the Kāpiti Coast environment.

11 Landowners could use the rates remission for the upkeep of stock-proof fencing or pest animal and weed control. However, in most instances the amount of remission is far less than the true cost of these protective measures.

12 Rates remission is an added incentive for landowners to respect the conservation values of parts of their properties that have a feature of natural or cultural value. Further, rates remission is one of the non-regulatory incentives for protecting and maintaining sites of conservation value. The provision of rates remission also provides a good basis for on-going partnerships between Council and landowners.

13 Rates remission amounts are calculated according to the size of the heritage feature as shown in Table 1. This method is coarsely related to the level of contribution towards the environment as larger areas of forest or wetland are generally more significant. This does not take into account, however, the presence of rare and endangered species or the amount of time and effort put into management.

14 The rates remission amounts in Table 1 have been increased from the 2022/23 financial year by using a consumer price index (CPI) figure of 2.6%.

15 Table 1 – Rates Remission Amounts

Rate remission bracket	Size of protected area/feature (ha)	Rates Remission ($) 2023-24
1 1	Up to 1.0 ha	2 143
3 2	1.001 – 5.0 ha	4 285
5 3	5.001 – 10.0 ha	6 430
7 4	10.001 – 20.0 ha	8 570
9 5	20.001 – 30.0 ha	10 713
11 6	30.001 – 40.0 ha	12 857
13 7	40.001 – 50.0 ha	14 999
15 8	50.001 – 70.0 ha	16 1143
17 9	70.001 – 100.0 ha	18 1229
19 10	More than 100 ha	20 1432

He take | Issues

16 One new application for Rates Remission for Land Protected for Natural or Cultural Conservation Purposes was received for the 2023/24 financial year and is recommended for approval. This property is listed in Appendix 2, marked with an asterisk.

17 One property was incorrectly placed in remission bracket 2 in the 2022/23 year, the correct bracket for that property is remission bracket 3. The difference has been added to their remission amount for 2023/24, marked by a double asterisk in Appendix 2.

18 A total of 109 properties are recommended for remission.

Ngā kōwhiringa | Options

Mana whenua

19 Mana whenua have not been consulted as part of this report.

Panonitanga Āhuarangi me te Taiao | Climate change and Environment

20 By encouraging landowners to protect and enhance natural ecosystems, Rates Remission for Land Protected for Natural or Cultural Conservation Purposes contributes to the vision and principles of the Climate Emergency Action Framework by directly sequestering and storing carbon.

Ahumoni me ngā rawa | Financial and resourcing

21 The total amount of rates remission allocated in 2023/24 would be $33,208 (including GST), within the 2023/24 budget of $46,211 (excluding GST).

Tūraru ā-Ture me te Whakahaere | Legal and Organisational Risk

22 There are no legal considerations.

Ngā pānga ki ngā kaupapa here | Policy impact

23 The granting of Rates Remission for Land Protected for Natural or Cultural Conservation Purposes is in accordance with Part 7 of the Rates Remission Policy (Attachment 1) contained in the Long Term Plan 2021-41.

TE whakawhiti kōrero me te tūhono | Communications & engagement

24 This matter has a low level of significance under Council’s Significance and Engagement Policy.

Te mahere tūhono | Engagement planning

25 Engagement planning it not required for the contents of this report.

Whakatairanga | Publicity

26 Advertising and publicity channels will not be used to communicate the decisions in this report.

Ngā āpitihanga | Attachments

1. Rates Remission Policy ⇩

2. Properties recommended to receive Rates Remission for Land Protected for Natural or Cultural Conservation Purposes in 2023/24, and recommended amounts ⇩

Council Meeting Agenda

28 March 2024

10.5 Regional Collaboration on a Water Services Delivery Plan

Kaituhi | Author: Sean Mallon, Group Manager Infrastructure and Asset Management

Kaiwhakamana | Authoriser: Darren Edwards, Chief Executive

Te pūtake | Purpose

1 Provide an overview of the Government’s intended legislative changes to give effect to Local Water Done Well policy, including the requirement on councils to develop a water service delivery plan.

2 Ask the council to sign a Memorandum of Understanding (MoU) to collaboratively develop a water service delivery plan working including consideration of future delivery models with the other councils in the Wellington region.

3 Ask the council to nominate an elected member to be council’s representative on the Advisory Oversight Group for the joint water service delivery plan process.

He whakarāpopoto | EXecutive summary

Te tuku haepapa | Delegation

4 The Council has authority to make this decision.

Taunakitanga | RECOMMENDATIONS

That the Council:

a) Notes the Government’s intended legislative changes to give effect to Local Water Done Well policy, including the requirement on councils to develop a water service delivery plan

b) Approves signing of an MoU to jointly develop a water service delivery plan with the other councils in the Wellington region;

c) Agrees to delegate authority to the Chief Executive to finalise the MoU, consistent with discussions and any amendments made by the council;

d) Agrees to nominate …………………….as the elected member to be council’s representative on the Advisory Oversight Group for the joint water service delivery plan process.

Tūāpapa | Background

5 Change is coming to how water is regulated and managed by local authorities. The Government has repealed the Water Service Entities Act 2022 and set out the process and legislative changes required to give effect to their Local Water Done Well policy.

6 Local Water Done Well policy is based on a clear premise that change is required and will happen. The policy is still under development, but indicatively will be based on the following requirements:

7 Councils to develop a water services plan: Within a year, councils must develop a plan to transition to a new water service delivery model that can meet regulatory and investment requirements.

8 Increased regulation in relation

· Water quality regulation

· Infrastructure investment regulation

9 Financial sustainability – water services models must be financially sustainable, based on:

· Revenue sufficiency

· Ringfencing to fund investment

· Funding for growth

10 The Government has signalled that it intends to give effect to this policy through two further pieces of legislation (refer Figure 1 below).

Figure 1

A blue rectangular sign with white text

Description automatically generated

11 The first new bill (stage 2 in figure 1), is expected to be introduced and enacted mid-2024. This bill is being informed by an expert Technical Advisory Group. This legislation is expected to set out a clear framework for councils to develop a future water service delivery plan within 12 months of enactment. It is also expected to set out the foundations for economic regulation and streamline requirements for establishing council-controlled organisations under the Local Government Act. This will enable councils to move to different models, should they choose to do so.

12 The second bill (Stage 3 in figure 1), is expected to be introduced in late 2024 and enacted by mid-2025. This is expected to set out provisions relating to long-term requirements for financial sustainability, provide for a complete economic regulation regime, and a new range of structural and financing tools, including a new type of financially independent council-controlled organisation.

13 The second bill will also establish regulatory backstop powers, to be used when required to ensure effective delivery of financially sustainable or safe water services. In addition, it will make amendments to the water regulator’s legislation to be used to ensure delivery of financially sustainable or safe water services.

14 All legislation to support the implementation of Local Water Done Well is expected to be passed by mid-2025 – ahead of the local government elections in October 2025.

He kōrerorero | Discussion

15 The need for change to how water services are funded and delivered has been the subject of several major reviews, policy processes and legislative reform since at least 2016. Two major reviews (the Havelock North Drinking Water Inquiry 2016-2017, the Three Waters Review - 2017-2019), all concluded that councils were struggling to maintain and renew their ageing water infrastructure.

16 These reviews have confirmed that significant and sustained investment is required over the coming decades to ensure councils can continue to enable growth, provide safe drinking water, improve environmental water quality, and are resilient to future seismic and climate change events. This level of investment is not possible for local government under current borrowing settings and any attempts to increase expenditure through rates will be unaffordable for communities.

17 For council, the key issues being faced are:

17.1 Council has invested heavily in its 3 waters Infrastructure assets to ensure they are fit for purpose and provide a resilient and robust network for our community. This investment currently reflects a projected level of debt as at 30 June 2024 of close to $154 Million. This level of debt significantly limits Councils ability to continue to invest in the needs of the community in other critical services we provide.

17.2 The level of future investment required in our 3 waters under current council financial settings will continue to put pressure on Council borrowing limits and is not able to continue to load debt onto balance sheets. A new approach is needed that will address the balance sheet limitations for council.

17.3 Ongoing increases to rates will be unacceptable and unaffordable. Investment cannot be based on borrowing only and must also be based on a balance of funding between current and future users to ensure a fair share of the true cost of the service. To ensure long term financial sustainability, water investment for asset renewals must be structured on an equitable intergenerational basis.

17.4 The ability to meet increased regulatory requirements (both costs and processes), for environmental, drinking water and economic regulation will be challenging and costly.

18 Based on direction from Government to date and expected legislative change, council will be required to develop a water service delivery plan by around mid-2025. Council has options to develop this independently, or to work with other councils in the region.

19 Developing the plan independently would reduce some complexities of process and decision-making requirements.

20 Working with other councils in the region offers the opportunity to collectively engage in legislative process, to ensure a sustainable, workable future model is identified and can then be implemented. This may include a specific model for council or some form of joint model with other councils.

21 While there is no mandated future model, it is expected that the legislation will create a new type of CCO / COC (Council Owned Company). This indicates that the Government has a preferred model in mind.

22 In the context of other demands and pressures on council, there is value in considering a collective approach. This does not commit council to any particular model but allows for consideration of a collective approach in conjunction with other models.

He take | Issues

23 The water services plan and future models and options to be considered will need to respond to agreed objectives and consider future approaches that are workable, affordable, sustainable and meet the needs of communities and the environment.

24 The key deliverable from this joint process would be a joint water services plan for the region, including options for future delivery models based on strategic option selection and high-level design. This process and outputs do not preclude any council from choosing to develop its own water services plan.

25 Critical success factors are that the water services delivery plan and any future model:

25.1 Is supported by all councils and Iwi / Māori partners which are part of this process

25.2 Is supported by the Government and enabled through legislative change

25.3 Is based on a sustainable funding model

25.4 Enables commitment from councils and Government to move to subsequent phases to deliver the plan – detailed design and implementation

26 The high-level process and timing for this approach is shown in Figure 3. This is still being developed and would be tested and refined working with the AOG.

Figure 3

A screenshot of a computer screen

Description automatically generated

27 This process anticipates a staged approach to development of a water services plan aligned with the development of legislation. This would be focused on clear testing of options based on agreed outcomes by around mid-2024. This would inform the development of a high-level design for a future model to support any required engagement and decision-making happening around late 2024. This would enable the completion of the water services plan by early to mid-2025, aligned with the expected requirements of legislation.

Ngā kōwhiringa | Options

28 Informed on these considerations, an approach to enable regional collaboration on a water services plan has been developed for council’s consideration. This is based on a collaborative and non-binding partnership between councils in the Wellington region to work through this process robustly and efficiently.

29 Importantly, the process would not transfer any formal decision-making responsibilities or delegations from council. Any future decisions on a water service plan, preferred models or commitments to future change would remain with council.

30 A commitment to regional collaboration would be confirmed by signing a joint MoU. The draft MoU is attached see (Attachment 1).

31 As part of this approach, councils would establish a joint governance oversight group called the ‘Advisory Oversight Group’ (AOG) made up of elected members. Iwi / Māori partner representatives will also form part of this group, with the approach to be confirmed working with Iwi / Māori partners during the establishment phase.

32 The AOG would be chaired by an independent chair with suitable expertise in local government, financial models and large scale utility operations.

33 The draft terms of reference for the AOG is appended to the MoU, see Attachment 1. The AOG is not a formal joint committee and has no formal decision making rights. Support would be provided by Chief Executives and a joint project team.

34 Formation of the AOG and signing of the MoU would signal a commitment by councils and Iwi / Māori partners to work together through a collaborative and non-binding process. Council can choose to exit this process at any stage.

35 The proposed structure for a Wellington regional collaborative approach is shown below in Figure 2.

Figure 2

A diagram of a company

Description automatically generated

Mana whenua

36 Changes to water management will raise a range of significant issues for Iwi / Māori including water quality, priorities for investment and how to give effect to te mana o te wai.

37 As part of this process, council will need to confirm an approach of how to effectively work with Iwi / Māori partners. This approach would be confirmed working with Iwi / Māori partners during the establishment phase.

Panonitanga Āhuarangi me te Taiao | Climate change and Environment

38 The ongoing impacts of climate change on councils 3 waters assets has a significant potential impact both on operational costs associated with more frequent and intense rainfall events, and capital expenditure on increased network capacity and treatment plant improvements.

Ahumoni me ngā rawa | Financial and resourcing

39 There are no immediate financial implications of this paper.

40 The financial implications of committing to this process will be confirmed as part of the establishment phase of the project and are expected to be met using existing three waters transitional funding.

41 The medium to longer term implications of legislative change and any future water services plan are expected to be significant. These will be a key consideration for the process and any future decisions required of council.

Tūraru ā-Ture me te Whakahaere | Legal and Organisational Risk

42 The proposed legislative changes and water services plans will raise a range of legal issues and considerations for councils to work through. These are expected to be confirmed as part of the two proposed bills to be introduced during 2024 and enacted by mid-2025.

Ngā pānga ki ngā kaupapa here | Policy impact

43 At this early stage there are policy implications. As work progressing any policy related issues would need to be considered as part of the process. This would include councils current policy with regard to control and management of the Districts water supply assets.

TE whakawhiti kōrero me te tūhono | Communications & engagement

Te mahere tūhono | Engagement planning

44 It is expected that the proposed legislative changes and water services plans will be of considerable interest to communities, partners and other stakeholders.

45 The process will need to consider how this is effectively undertaken, including any statutory requirements for engagement in relation water services plans or future delivery models.

Whakatairanga | Publicity

46 It is proposed to release a media statement once council has made a decision on this paper.

Ngā āpitihanga | Attachments

1. Draft MOU Water Services Review ⇩

Council Meeting Agenda

28 March 2024

10.6 Reports and Recommendations from Standing Committees

Kaituhi | Author: Anna Smith, Senior Advisor, Democracy Services

Kaiwhakamana | Authoriser: Sean Mallon, Group Manager Infrastructure and Asset Management

Te pūtake | Purpose

1 This report presents any reports up and recommendations to Council made by Standing Committees from 17 November 2023 to 15 March 2024.

He whakarāpopoto | EXecutive summary

2 Due to the Christmas break, there were only a small number of Committee and Subcommittee meetings held during the period 17 November 2023 to 15 March 2024. There were no recommendations made to Council from Committees and Subcommittees during this period, though the topics covered are outlined in further detail below.

Te tuku haepapa | Delegation

3 The Council has the authority to consider recommendations made from Standing Committees to the Council.

Taunakitanga | RECOMMENDATIONS

A. That the Council receives this report.

Tūāpapa | Background

4 During the period of 17 November 2023 to 15 March 2024, Standing Committee and Subcommittee meetings took place on the following dates:

Strategy, Operations and Finance Committee	Thursday, 7 December 2023
Grants Allocation Committee (Waste Levy)	Thursday, 7 December 2023
Risk and Assurance Committee	Thursday, 15 February 2024
Strategy, Operations and Finance Committee	Thursday, 22 February 2024
Climate and Environment Subcommittee	Tuesday, 27 February 2024
Social Sustainability Subcommittee	Thursday, 7 March 2024

5 Items discussed at each of the meetings listed in paragraph 4 are noted below:

5.1 On Thursday, 7 December 2023 the Strategy, Operations and Finance Committee met to discuss:

· Kāpiti Health Advisory Group Terms of Reference

· Climate Change and Resilience Strategy – Direction of Travel

· Direction of Travel – Kapiti Coast Economic Development Strategy Refresh

· Elevate Ōtaki and Next Steps

5.2 On Thursday, 7 December 2023 the Grants Allocation Committee (Waste Levy) met to discuss:

· Waste Levy Grant Applications 2023/24 – Business Waste Reduction

· Waste Levy Grant Applications 2023/24 – Community Projects

5.3 On Thursday, 15 February 2024 the Risk and Assurance Committee met to discuss:

· An update and proposal from the Chair of the Risk and Assurance Committee

· Emergency Management 101

· Health and Safety Quarterly Report: 1 October 2023 – 31 December 2023

· Top 10 Organisational Risk Report

· Quarterly Treasury Compliance

· Progress Update Regarding Audit Control Findings 2022/23

· Internal Audit Work Programme – Progress Update

· Internal Audit 2023 Outcomes Report

· Internal Audit Work Programme 2024

· Legislative Compliance 1 October to 31 December 2023

· Forward Work Programme 2024 for Risk and Assurance Committee

· Litigations and External Investigations Report

5.4 On Thursday, 22 February 2024 the Strategy, Operations and Finance Committee met to discuss:

· Update on Operations Strategies: Economic Development, Climate Change and Resilience, Environment and Health

· Update on the Strategy, Operations and Finance Committee Work Programme

· Update on Resource Consents

· Health Strategy Direction of Travel for Consultation

5.5 On Tuesday, 27 February 2024 the Climate and Environment Subcommittee met to discuss:

· Update on Pest Control in the District

· Environment Strategy – Direction of Travel

· Climate Action Grants Progress Update and Recommendations

5.6 On Thursday, 7 March 2024 the Social Sustainability Subcommittee met to discuss:

· Kāpiti Health Advisory Group

· Rapid Rehousing Advocate Funding and Homelessness Issues

6 In addition, the following meeting took place:

Te Whakaminenga o Kapiti

Tuesday, 12 December 2023

7 Details with regards to the discussion items of the meetings listed in paragraph 6 are noted below:

7.1 On Tuesday, 12 December 2023 Te Whakaminenga o Kapiti met to discuss:

· Draft Calendar of Meetings 2024

· Waitangi Day Commemorations 2024

· Marae Grants

· Māori Economic Development Grants 2023/2024

· Update on Long-Term Plan 2024-2034

He kōrerorero | Discussion

He take | Issues

8 Within the reports and recommendations considered by Standing Committees from 16 November 2023 to 15 March 2024, there were no recommendations made to Council.

Ngā kōwhiringa | Options

9 Options are not required for this report.

Tangata whenua

10 Mana whenua were not specifically consulted for this report.

Panonitanga āhuarangi | Climate change

11 There are no climate change considerations relevant to this report.

Ahumoni me ngā rawa | Financial and resourcing

12 There are no direct financial and resourcing considerations relevant to this report.

Ture me ngā Tūraru | Legal and risk

13 There are no legal considerations relevant to this report.

Ngā pānga ki ngā kaupapa here | Policy impact

14 This report has no current or future impact on Council policies.

TE whakawhiti kōrero me te tūhono | Communications & engagement

Te mahere tūhono | Engagement planning

15 An engagement plan is not required for this report.

Whakatairanga | Publicity

16 No publicity is required with regards to this report.

Ngā āpitihanga | Attachments

Nil

^{^[1]} There are some specific exemptions to this: Certain sales by makers, importers, distributors, and wholesalers, and certain messes and canteens, are exempted. The latter must have a code of practice.

^{^[2]}For each of on- and off-licences, there are some sub-categories (e.g. BYO, direct delivery sales).

[4] The high-risk category includes supermarkets and other high-volume outlets.

[6] McEwan, B., Campbell, M., Lyons, A., and Swain, D. (2013) Pleasure, profit, and pain: Alcohol in New Zealand and the contemporary culture of intoxication. University of Waikato Faculty of Arts & Social Sciences. Hamilton (Available online at hp://researchcommons.waikato.ac.nz/handle/10289/8035)


RĀRANGI TAKE AGENDA Hui Kaunihera \| Council Meeting
I hereby give notice that a Meeting of the Kāpiti Coast District Council will be held on:
Te Rā \| Date:	Thursday, 28 March 2024
Te Wā \| Time:	9.30am
Te Wāhi \| Location:	Council Chamber Ground Floor, 175 Rimu Road Paraparaumu
Darren Edwards Chief Executive

Mayor Janet Holborow	Chair
Deputy Mayor Lawrence Kirby	Deputy
Cr Glen Cooper	Member
Cr Martin Halliday	Member
Cr Sophie Handford	Member
Cr Rob Kofoed	Member
Cr Liz Koh	Member
Cr Jocelyn Prvanov	Member
Cr Kathy Spiers	Member
Cr Shelly Warwick	Member
Cr Nigel Wilson	Member