The full council met on 19 February 2015. This meeting was not part of the normal cycle of full council meetings as it was dedicated to the long term plan (LTP) for 2015-25 and associated consultation document. Cr Mirfin submitted his apologies, otherwise all councillors were present.
The agenda considered the following items: (1) CEO briefing, (2) Waimea community dam, (3) rates remissions policy review, (4) commercial subcommittee terms of reference, (5) maori consultation processes, (6) other supporting documents for the LTP.
This meeting was then followed by a workshop on the content and layout of the consultation document.
In relation to the full council meeting the main areas of interest for me were the first three items and I intend to concentrate on these items.
The maori consultation process was confirmed, as was the publication of supporting documents for the LTP. Although I continue to have issues with a number of spending proposals in these documents (eg, William Street traffic lights proposal costing $1 million, and the timing of storm water work in the Richmond South area – more urgency is required).
Council were given a brief update on the following items:
- Finance: For the 6 month period, ended 31 December 2014, council produced an accounting adjusted surplus of $2.6 million (after adjusting for capital income, vested assets, development contributions and interest rate swap revaluations) against budget. Interestingly, revaluation of interest rate swaps (which total $147.78 million) provided an accounting loss of $1.8 million. By way of background, interest rate swaps are a hedge against higher interest rates (a bit like fixing your mortgage). This month our swap rate was higher than the market. Which is surprising given our average interest rate for swaps is 5.288%. So, if we had sold our interest rate swaps back to the bank at the current market rate this month, we would have made a loss. Conversely, if our swap rate is lower than the market then we would make a theoretical gain, although we would have to refinance our debt at higher rate. This fluctuation does not cost council any cash, as we are not selling them (although it might be a good time to buy more swaps, if we were in the market) – rather its done for accounting purposes, which we are required to report on. It’s likely that as current interest rates hold up (above our swap rate) council will continue to build up an accounting loss, until such time as the market interest rate trends back up.
- Jackett Island: the claim for future costs has been settled by agreement ending the environment court proceedings – the insurers are managing any civil claim.
- Building control: last year the IANZ accreditation audit identified an issue with TDC’s tracking system for responding to building consents approaching the 20 day limit. In the last month, no building consent application exceeded the 20 day limit, the backlog had been reduced, and compliance was now over 90%.
- Restructure: A new building control manager (tier three) position had been created which has taken over management of the building compliance function and will operate within the regulatory section of TDC.
- Port Tarakohe: The mussel industry has made a pricing compliant to the commerce commission alleging TDC is making super profits from its new commercial charges regime. In my opinion, the new weigh bridge and more timely and accurate billing is clearly having an impact on some operations bottom line.
- Best island access: Several meetings have been held with affected residents on a proposal for council to acquire land for a public road in order to address access issues for those residents.
- Nelson tourism and economic development agency: Meetings have been held to discuss work plans for both organisations. In my opinion, strategic activities (including more actively supporting the international education sector) and measurable performance outcomes need to be agreed.
The council wage bill
Council staff were also asked to provide information on council’s wage budget (currently round 18% of total expenditure) and how it compares to other authorities. Cr Inglis, Higgins, and myself have been pursuing this issue for sometime.
While there are few unitary councils to make comparisons with, and unitary council functions are broader than district or regional councils, the councils wage bill is still a percentage (or ratio) of its overall cost of performing its functions. If a council has more functions it will have more income and more expenditure, but wage expenditure should still be comparable.
In my opinion, benchmarking the councils operational activities and costs is important. Given unitary councils comprise both district and regional council functions, some detailed analysis separating out those separate functions, could be undertaken with a little effort (with shared services apportioned), to provide direct comparison with district or regional councils.
I understand the local government association (LGA), have on its agenda, the provision of benchmarking tools for council governance. If the government want to see local government costs come down, I would have thought they would have been a keen supporter (and potential funder) of such tools.
Note! As pointed out by one reader, Local authorities must disclose their performance in relation to identified statutory benchmarks (see section 9 of the Local Government (Financial Reporting and Prudence) Regulations 2014). I agree. However, these statutory benchmarks are very different to the type of benchmarking I am suggesting. I am talking about benchmarking “between” councils on information not currently required by statute to be benchmarked. The statutory benchmarks listed in section 10 of the Local Government (Financial Reporting and Prudence) Regulations 2014 are: rates affordability (reg 17), debt affordability (reg 18), balanced budget (reg 19), essential services (reg 20), debt servicing (reg 21), debt control (reg 22), and operations control (reg 23). These benchmarks are generally a high level comparison against quantified limits set by council or statute. For example, comparing the council’s planned rates increase with a quantified limit on rates increases contained in the council’s financial strategy.
I also believe its about time council was subject to an independent organisational review. As a governance body, council should regularly review if the council is operating efficiently. An independent review will either confirm the organisation is right sized and operating efficiently, or make suggestions for improvements.
Either way ratepayers would have greater confidence in the organisation of council and that their money is being spent wisely. Unfortunately, there appears to very little support around the council table (including the mayor) for such a review. Hopefully a wage comparison, might push them towards a much needed review.
Waimea community dam
There were two issues to be considered: (1) a revised structure of the arrangement, and (2) funding of a new private entity.
The suggested re-structure was not a surprise as we had been briefed at an earlier workshop. These days I tend to find the workshops more informative (and useful) than the actual committee meetings (that formally present the staff paper and recommendations).
This is because, much of the debate and councillors positions on the issue, have been worked through at the workshop. This means much of the debate around the table is often making a last argument for not supporting (or supporting) the staff recommendation.
A revised structure
In essence, the proposed arrangements confirmed at the earlier council meeting of 9 December 2014 has changed. At the December meeting it was proposed (and supported by the majority of council) that a CCO would be formed and it would co-ordinate external funding (amongst other tasks). That structure is outlined below.
Ironically, my opposition to forming a CCO and allowing the irrigators to form their own investment holding company (Waimea Community Dam Ltd, or “WCDL”) has now been taken up by the irrigators. They now proposed a revised structure whereby WCDL secures funding from the Crown and irrigators. This new structure is illustrated below.
This new structure reflects the fact that irrigators will now be the major financial contributors to the dam, as they look to secure funding from the Crown and irrigators.
By way of background, the council’s contribution to a dam is limited to $25 million – made up of urban water ($8 million) and environmental ($14 million), with the remaining $3 million for administration costs. This would suggest that WCDL has to secure the remainder ($50 million) from irrigators and the Crown.
I agree with this structure. Its very similar to what I suggested in my dissenting opinion in December. However, I maintain that a CCO does not yet need to be established, until a decision on whether we proceed with a dam (or not), is decided. If a dam is agreed, then the reasons for forming a CCO need to be considered at that time.
In my opinion, the cost of establishing and maintaining a CCO does not warrant its formation at this time. During the consultation phase on governance formation of a CCO was estimated to cost about $100,000 (plus ongoing costs, like directors fees). Establishing a company also invites tax, accounting, and company compliance costs that a “council” does not need to bother itself with. Council could quite easily enter into contractual negotiations with WCDL directly for the supply of water augmentation services. As it has done with NCC over the delivery of tourism services.
A reason to form a CCO is the benefit of skills and knowledge that directors could provide. However, in this instance, the CCO would not be managing the dam, unlike governance struture 1. Rather, it is a holding company for council investment. Furthermore, management and technical skills would be provided by TDC under contract. So there do not appear to be any benefits at this time in forming a CCO?
Given no government funding for urban or environmental contributions has been forthcoming, there seems little reason to form a CCO at this time. It might be that such funding is not contingent on a CCO being formed? Why jump the gun?
To date, the mayor has made no noise about securing government funding for the environmental contribution, or seeking government to underwrite any cost blow outs for the council’s contribution.
Having looked at a guide on when councils should form a CCO (see http://wellington.govt.nz/~/media/your-council/council-controlled-organisations/files/whatworks.pdf), I could find no compelling case for forming a CCO.
Given assurances during the consultation phase that cost blow outs were unlikely, I would have thought it would have been easy for the government to underwrite any cost blow outs above the $8 million urban water supply contribution. And given the broad public benefit of protecting the environment, the government should have come to the party on the environmental cost. Perhaps its time to write to Nick myself?
The other issue before council was the provision of “ongoing funding” for WCDL to engage with irrigators and the Crown. The source of this funding was proposed to come from the Waimea Water Augmentation Project surcharge which generates about $81,000 per year. This amount would be given to WCDL in the 2015-16 year.
I proposed loaning these funds (as an amendment to the resolution), rather than just handing them over to WCDL. Cr Canton seconded my motion, but no other councillors supported this change. In my mind, this was a private investment holding vehicle, not a council owned or controlled entity, and council had a duty to protect public funds.
Giving the money as a loan would provide security as a creditor should WCDL prove unsuccessful. Giving WCDL the money, provide no security at all. Further, when questioned, the CEO could see no reason why the funds could not be provided as a loan. Either way, WCDL would obtain funding. Although some councillors raised there own reasons for why it should not be a loaned during the debate.
Rates remissions policy review
At present, the council has a policy that remits rates on properties that have been subject to re-zoning. The policy provides the council a discretion in terms of how long the remission period will last.
To provide certainty (and transparent fairness) to the process it was raised during a workshop whether council should prescribe the length of the remission period. At that workshop it was suggested that a 10 year period be provided, with the last 3 years stepping down the remission towards the payment of the full rates bill. At that meeting other lengths of time were discussed, including 6 and 4 years. Some on council felt there should be no grace period, effectively rescinding the remission policy.
In my mind, a reasonable period of time should be provided. Through no fault of their own, but rather due to council’s actions of rezoning, they are placed in the very awkward financial position they find themselves in. Providing a reasonable period of time enables people to leave their land with dignity and without being pressured to sell for a low price. Alternatively, ratepayers should be given the opportunity to re-engineer their incomes so they can afford to stay or redevelop the land themselves. In my opinion, to do otherwise, only benefits the next purchaser.
The fundamental issue for me, is that council should not be in the business of forcing people off their land and out of their homes. This principle has strong support in the community – as evidenced by the submissions made on the governance and funding options for the proposed Waimea community dam.
This principle also had some support around the council table. Although there are a few councillors who adopt a more extreme utilitarian approach to the issue. That approach reared its head again during this debate.
Essentially the question before council was whether there should be a sunset clause added to the remission of rates on land that has increased in value due to re-zoning.
In such cases, re-zoning can exponentially increase the value of a property based on its new potential value. The Headingly Lane incident was apparently the driver for this remission policy. The increase in rates can be unsustainable for the property owner, and often they are forced to dispose of the land to a property developer or someone who can obtain more income from the land to afford the new rates bill.
Against this, is the need to ensure land is available for development. A key part of the housing shortage (and high values) is the supply of land. Although, whether this is a driver in the Tasman region, is a moot point.
I supported a 10 year period, comprising a 100% remission of the increase in rates for the first 6 years, and a stepped down remission (of 20%) for each of the next 4 years (eg, 6+4 year remission policy). I moved this motion as an amendment to the current policy, supported by Cr Bouillir.
No other councillors supported this motion, as they favoured a shorter period – either: 4+2 years (with the last 2 years remitted at 33%), or 1+3 years.
Cr Ensor questioned why I would support such a long time given the cost to council and given my drive to reduce costs for council. I explained, that my support of a longer remission period (the 6+4 year period) reflected the tension between saving costs and ensuring people were not force out of their homes. I also did not perceive there was any “real” cost to council. The increase in value did not affect the councils costs. In fact, remitting the rate just meant that council did not get an increase in income. Councils costs remained unchanged, whether the land increased in value or not.
On losing this amendment, I made it clear I could not support any shorter period as I considered it unfair and mean spirited, and would prefer council discretion (the current policy) to anything else.
Especially when placed in the context of the Tapu bay issue, where some councillors supported giving a life interest in a holiday bach (or crib if you are from the deep south) to the owner of the bach (that was not that person’s home), rather than enforce the councils policy of removing private bachs from public land, and yet were willing to force people out of their homes within a much shorter period.
On that basis I informed council I would be voting against both shorter remission periods.
Other councillors realising that a no vote on a 4+2 remission period, might force an even shorter period, asked to defer this item to the next full council meeting.
The full council meeting on 5 March will be deciding on the final state of this policy.
Agenda and minutes
The agenda and minutes for this meeting are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-02-19.
The community development committee met on 12 February 2015. All councillors were present, except for Cr King and the mayor who arrived after the start of the meeting.
The public forum received a very comprehensive presentation from Michael Rea on the motueka harbour and coastal works account. This topic was discussed at the corporate service committee meeting, held immediately after this meeting. A summary of the council’s deliberations and my thoughts are included in my post on that meeting.
The agenda included the following items: (1) Tapu Bay bach removal report, (2) community reserves expenditure program report, (3) various managers reports on the following topics, including: the aquatic centre, community events review, library usage, new online LIMs process, and a new online submissions process.
I will highlight the main items of interest for councillors (and myself) below.
New internet developments
In my mind, this was the big theme of the agenda. And no doubt will play out over the coming weeks as a good news story for the council. As it should be.
Many readers will already know I am very keen for council to automate many of the manual processes using online solutions that ratepayers (and other customers) can access from the internet. This improves council service levels and timeliness for customers, and keeps the increasing pressure on staff wages, down.
In my opinion, council is making some good first steps on utilising technology to generate efficiencies and improve service levels. I can only congratulate the IT staff on their latest effort and look forward to more initiatives.
The new online “submissions form” process is a great example of the new technology culture that is beginning to flourish. This new online form has an excellent user interface (UI) and will make it easier for ratepayers to make submissions, track progress, and receive active reminders of hearings.
From council’s perspective it removes all the manual work required to enter the hardcopy submissions into databases for sending letters and arranging times to attend hearings. This is a substantial cost (and time) saving for council. Staff also advised that the system is a modular (drop and play) system and is therefore easily transportable to other networks.
In my opinion, this is a piece of technology that could (and should) be shared with other councils (as well as its development costs). For example, Nelson City Council (NCC). This is a great win-win for everyone. I note that Wellington City Council (WCC) has already expressed interested in developing co-operate arrangements with other councils over the development of apps and other technology (see http://wellington.scoop.co.nz/?p=74752). Perhaps its time to talk with WCC too.
Note! For those who are not on the internet, or do not have email, or choose not to use the new online submission form, they can still use the post. I should also note that the new online changes are only in relation to communication from ratepayers to TDC – after TDC has first notified the public of a submission process (eg for the annual plan, special consultation, plan change, or consultation document). Initial communication notifying the public of a submission process (what ratepayers receive first) will remain unchanged. This will continue to be done primarily via hardcopy media (eg local newspapers and newline) – and including the TDC webpage.
Another IT development is the new online LIM’s and resource consent process. Staff have advised council that the new online LIM process has reduced processing of LIMs by one day’s worth of time. With much of the remaining time now taken up with checking data for accuracy. Clearly further improvements can be made and I look forward to seeing these come online.
Tapu Bay bach removal
In March 2011, the council established a policy on “private structures on esplanade reserves” which effectively provided that privately owned buildings, occupying council owned esplanade reserves, had to be removed by 31 March 2014. This policy has been consistently applied across the district, except for one instance, where an owner of a Bach was granted a life time license to occupy reserve land that they had donated to the council.
More recently, two baches at Tapu Bay were notified of the policy, with one owner removing their bach, and the other owner requesting they be permitted to stay on the reserve for the remainder of their life time. This owner, had been granted permission by the council in 1984 to occupy the esplanande “at the pleasure of the council”.
The bach had occupied the land since the 1930’s. Staff advised council that the Bach was built in 1894, but did not have any heritage protection and was unlikely to receive any.
The question before the council was whether there were sufficient grounds to grant an exception to the esplanade policy. The short answer was there was not. Accordingly, there was little support for the mayor’s proposal to grant an exception to the policy on “compassionate grounds”.
In my opinion, the policy was known to the community for some time and had already been widely applied. In some instances, people had already removed homes (where they had lived) from esplanade reserves.
In this case, the owner had not donated the reserve land on which their bach was located, and did not live in the bach. Rather, the bach was a family holiday home. While the owner may have donated their time and energy to community service, or was elderly, these facts were insufficient to award an exception on “compassionate” grounds. To do so would have set a very low bar (if any).
On the basis of fairness and consistency, and in the absence of justifiable compassionate grounds, the council had to apply the policy without bias or favour. The council had to be seen to be objective and neutral in its decision making. The rule of law had to be applied. To do otherwise could set a dangerous precedent for the application of other policies and rules.
Voting on this decision is recorded in the minutes of this meeting. The committee’s recommendation will now go before full council for approval. A question that was not addressed (or asked) at the meeting was whether the policy was fair (eg, that it required revisions).
Community reserves expenditure program report
Richmond ward councillors have been providing feedback on proposals for the community reserves expenditure programme for the next 20 years as part of the long term plan discussions. This outlines how money for public art, playgrounds, public toilets, and sports grounds will be spent and when. Two major changes to the reserves fund has been made. First, rather than spend anticipated income, expenditure will be based on what was received in the earlier year. This avoids overspending. Secondly, some of the fund is now allocated to the repayment of debt. For details refer to the agenda (pages 23 to 24).
In 2014, the patronage for the aquatic centre was 20,737 people (less 5,916 for gym membership and casual use or from concessions). This compares to: 22,687 (2013), 23,426 (2012), 20,935 (2011), 17407 (2010), and 17489 (2009).
Unfortunately, the aquatic centre continues to require council subsidisation. In my mind, to make the aquatic centre self sufficient, pricing concessions may have to be confined to residents, through the presentation of library cards or rates invoices.
The Skatepark tour has been run by council for several years. Staff now consider that it is now possible to hand the event over to community groups to run, allowing council to focus on establishing new events. I certainly welcome this indicated change.
The Jazz in the Park event was held in Washbourn Gardens in Richmond and was attended by nearly 3,000 people. In my opinion this is clearly a well supported event and one council should continue to support.
Cricket world cup kicks off from 16 February (including 19 February and 5 March) at Saxton oval. In my opinion, Tasman council support appears to be poorly promoted in contrast to NCC. I understand that the commentators allocated to the match for 16 Feb are: Michael Atherton, Ian Botham, David Lloyd, Alan Wilkins (all England), Ian Bishop (West Indies), and Russel Arnold (Sri Lanka).
The Trust power community awards open for submissions on 2 March and close 1 May. Awards will be made on 29 June.
Use of the libraries online resources show strong growth with use up 60% (26,119 downloads) from the same time last year. The tables below illustrate (1) the strong online growth trend from 2008, and (2) the general usage trend of the libraries in Motueka, Richmond, and Takaka since 2005.
Agenda and minutes
The agenda and minutes for this meeting are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/community-services-committee-meetings/?path=/EDMS/Public/Meetings/CommunityServicesCommittee/2015/2015-02-12.