Agenda of Environment and Climate Committee

Item	General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Particular interests protected (where applicable)
1	Environment and Climate Committee Meeting - Confidential Minutes - 15 February 2022	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.	The withholding of the information is necessary: · Section 7(2)(a) To protect the privacy of natural persons, including that of a deceased person

Environment and Climate Committee Minutes - 15 February 2022

Minutes of a meeting of the

Environment and Climate Committee

Te Kōmiti Taiao / Āhuarangi

Held via Zoom on Tuesday 15 February 2022, commencing at 9.00 am.

Present: Cr K Fulton (Chairperson), Her Worship the Mayor R Reese, Councillors Y Bowater, T Brand, M Courtney (Deputy Chairperson), M Lawrey, B McGurk (Deputy Chairperson), R O'Neill-Stevens, P Rainey, R Sanson, T Skinner and Ms G Paine

In Attendance: Kaumātua (M McGregor, R Katu), Group Manager Environmental Management (C Barton), Group Manager Strategy and Communications (N McDonald), Kaihautū (P Lee), Team Leader Governance Services (R Byrne), Governance Adviser (K Redgrove) and Youth Councillors (S Lloyd and S Thang)

Apologies: Councillors J Edgar and G Noonan

Karakia and Mihi Timatanga

1. Apologies

Resolved EC/2022/001

That the Environment and Climate Committee

1. Receives and accepts the apologies from Councillors Edgar and Noonan for attendance.

Fulton/Bowater Carried

The meeting was adjourned from 9.06 am until 9.14 am.

2. Confirmation of Order of Business

There were no changes to the scheduled order of business. The Chairperson welcomed Youth Councillors to the meeting.

3. Interests

There were no updates to the Interests Register, and no interests with items on the agenda were declared.

4. Public Forum

There was no public forum.

5. Confirmation of Minutes

5.1 4 November 2021

Document number M19049, agenda pages 6 - 21 refer.

Resolved EC/2022/002

That the Environment and Climate Committee

1. Confirms the minutes of the meeting of the Environment and Climate Committee, held on 4 November 2021, as a true and correct record.

Courtney/McGurk Carried

Resolved EC/2022/003

That the Environment and Climate Committee

1. Confirms the minutes of the meeting of the Environment and Climate Committee, held on 9 November 2021, as a true and correct record.

McGurk/Courtney Carried

6. Te Mana O Te Wai - Te Tauihu Iwi Collaboration Project

Document number R26516, agenda pages 22 - 116 refer.

Attendance: Kaumātua and representatives from Te Rūnanga o Ngāti Rārua, the Te Ātiawa Trust, Ngati Tama ki te Pounamu, Te Rūnanga o Ngāti Toa and Te Rūnanga o Ngāti Kuia Trust joined the meeting at 9.20 am.

The meeting adjourned from 9.20 am until 9.26 am

The Chairperson acknowledged and welcomed representatives of Te Tau Ihu iwi who were to speak to the Te Mana o Te Wai report and Te Rūnanga o Ngāti Rārua representatives who were to present the Ngāti Rārua Environmental Strategy – Poipoia Te Ao Tūroa 2021.

A mihi whakatau was led by Te Tau Ihu iwi, a supporting waiata followed and the Council kaumātua tāne responded to mana whenua.

The Manager Environmental Planning, Maxine Day spoke to the report, noting its importance in seeking to improve waterways in many of the catchments in Nelson. She described this as a collaborative project involving eight iwi which would also assist with the development of freshwater provisions of the draft Nelson Plan.

Representatives of Te Tau Ihu iwi spoke to a Powerpoint presentation (attached A2836172), confirming this piece of work was one of three national case study reports that informed the national project and represented collective priorities.

The meeting adjourned at 10.28 am until 10.43 am during which time Cr Rainey left the meeting.

Senior Freshwater Planner, Sonya Leusink-Sladen, advised there would be resourcing challenges for both iwi and Councils.

In response to a questions raised, Ms Day explained that many of the frameworks could be shared with other Councils, which could assist with resourcing. She said that the budgets for the work, included in the Annual Plan, should be sufficient although further funding needs would be highlighted as work progressed.

Attendance: Cr Rainey returned to the meeting and Cr Bowater left the meeting at 10.55 am.

Resolved EC/2022/004
	*That the Environment and Climate Committee* *1. Receives the report Te Mana O Te Wai - Te Tauihu Iwi Collaboration Project (R26516) and its attachments (A2788198 and A2823931); and* 2. Approves ongoing collaboration with Te Tauihu iwi and the Top of the South councils in implementing the requirements of the National Policy Statement for Freshwater Management 2020.
Sanson/McGurk Carried
Attachments 1 A2836172 Powerpoint Te Mana o Te Wai

7. Environmental Management Quarterly Report - 1 October - 31 December 2021

Document number R26517, agenda pages 117 - 258 refer.

A Powerpoint presentation was presented (attached A2846544) to the meeting and te Tau Ihu iwi representatives described how workstreams within the project were allocated between iwi, central government and councils. They outlined the key recommendations, project stages, funding and structure of project teams and responded to questions raised.

Te Rūnanga o Ngāti Rārua representatives presented their Environmental Strategy to the meeting and acknowledged the work and effort of those involved in its preparation. They explained it helped to contextualise environmental issues from the iwi’s point of view and sought to align with their priorities, values and aspirations.

This part of the meeting concluded with a karakia and waiata.

Resolved EC/2022/005
	*That the Environment and Climate Committee* *1. Receives the* *Ngāti Rārua Environmental Strategy – Poipoia Te Ao Tūroa 2021 (A2822912).*
Fulton/Courtney Carried
Attachments 1 A2846544 Powerpoint Poipoia Te Ao Turoa

The meeting adjourned from 11.35 am until 11.52 am, during which time the Kaumātua and Te Tau Ihu iwi representatives left.

The Quarterly Report was presented by Manager Environmental Planning, Maxine Day; Manager Climate Change, Rachel Pemberton; and Manager Science and Environment, Jo Martin . They answered questions on a number of central government initiatives and the national issue of cat management,

Attendance: Ms G Paine left the meeting at 12.09 pm.

Group Manager Environment Management, Clare Barton, confirmed that officers would continue to provide updates on the many Central Government proposals. She anticipated these would likely create a high risk to delivery of any of the ongoing Resource Management Act workstreams.

Resolved EC/2022/006

That the Environment and Climate Committee

1. Receives the report Environmental Management Quarterly Report - 1 October - 31 December 2021 (R26517) and its attachments (A2833041, A2817202, A2822912, A2824418, A2805041, A2829247 and A2821144).

McGurk/Fulton Carried

Attendance: Councillor Bowater joined the meeting at 12.20 pm.

8. Exclusion of the Public

Resolved EC/2022/007

That the Environment and Climate Committee

1. Excludes the public from the following parts of the proceedings of this meeting.

2. The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

Bowater/O'Neill-Stevens Carried

Item	General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Particular interests protected (where applicable)
1	Environment and Climate Committee Meeting - Confidential Minutes - 4 November 2021	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.	The withholding of the information is necessary: · Section 7(2)(i) To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)
2	Environment and Climate Committee Status Report - Confidential	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7	The withholding of the information is necessary: · Section 7(2)(a) To protect the privacy of natural persons, including that of a deceased person

Item

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Particular interests protected (where applicable)

Environment and Climate Committee Meeting - Confidential Minutes - 4 November 2021

Section 48(1)(a)

The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.

The withholding of the information is necessary:

· Section 7(2)(i)

To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)

Environment and Climate Committee Status Report - Confidential

Section 48(1)(a)

The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7

The withholding of the information is necessary:

· Section 7(2)(a)

To protect the privacy of natural persons, including that of a deceased person

The meeting went into confidential session at 12.21 pm and resumed in public session at 12.30 pm.

Karakia Whakamutanga

There being no further business the meeting ended at 12.31 pm.

Confirmed as a correct record of proceedings by resolution on (date)

Resolved

Item 6: Housing Plan Change (Plan Change 29)

Environment and Climate Committee

7 April 2022

REPORT R26654

Housing Plan Change (Plan Change 29)

1. Purpose of Report

1.1 The purpose of this report is to decide on a preferred ‘planning track’ for the Nelson Resource Management Plan – Housing Plan Change 29.

2. Summary

2.1 The Housing Plan Change 29 is being developed to enable more housing supply and housing options in Nelson’s residential and commercial zones.

2.2 The Resource Management Act provides various ‘planning tracks’ that can be used for plan changes, including the standard Schedule 1 process; Streamlined Planning Process (SPP); or new Intensification Streamlined Planning Process (ISPP) recently created via the Resource Management Amendment Act – Enabling Housing Supply and Other Matters.

2.3 This report recommends the Streamlined Planning Process for Housing Plan Change 29.

3. Recommendation

That the Environment and Climate Committee

1. Receives the report Housing Plan Change (Plan Change 29) (R26654) and its attachment (A2852288); and

2. Authorises officers to initiate the Streamlined Planning Process for Housing Plan Change 29.

4. Background

4.1 In November 2021, Council passed a resolution to progress a Housing Choice Plan Change to the Nelson Resource Management Plan. Plan Change 29 is being developed to enable more housing supply and housing options in Nelson’s residential and commercial zones. The scope of changes are anticipated to be broadly consistent with provisions contained in the Draft Whakamahere Whakatū Nelson Plan consulted on in 2020 and 2021. The Plan Change is also anticipated to give effect to the National Policy Statement on Urban Development (NPS UD); implement relevant provisions of the Future Development Strategy 2022 (FDS); and implement relevant aspects of the Te Ara o Whakatu – City Centre Spatial Plan 2021.

4.2 In February 2022 the Environment and Climate Committee report R26517 included an update on the Resource Management (Enabling Housing Supply and Other Matters) Amendment Act 2021 (RMAA 21), that had recently been passed into law. That report noted a future decision would be required for applying to use the new RMAA 21 legislation. Now that Nelson City Council is preparing a Housing Plan Change, it is timely to consider the new legislation.

5. Discussion

5.1 Resource Management Amendment Act – Enabling Housing Supply and Other Matters

5.2 RMAA 21 amended the Resource Management Act 1991 (RMA) to require Tier 1 territorial authorities to implement land use requirements aimed at rapidly accelerating the supply of housing in residential and urban areas. This is done in two main ways:

- Introducing a new Intensification Streamlined Planning Process (ISPP) to enable specified councils to implement the National Policy Statement on Urban Development 2020 (NPS-UD) more quickly.

- Requiring specified councils to adopt specified height, density and other standards for residential zones (Medium Density Residential Standards or MDRS). A copy of the Standards is included as Attachment 1 or can be accessed online at: https://www.legislation.govt.nz/act/public/2021/0059/latest/LMS566213.html

5.3 The RMAA 21 also introduces new process steps, activity status of developments and notification rules, among others, aimed at speeding up the plan-making and consenting processes. A full copy of the RMAA 21 can be found online:

https://www.legislation.govt.nz/act/public/2021/0059/latest/LMS566049.html

5.4 NCC is not automatically required to implement the RMAA 21 legislation as it is a Tier 2 Council (as defined under the NPS UD). Tier 2 councils can be directed by the Governor-General, upon recommendation by the Minister for the Environment, to prepare and notify a plan change using the ISPP. This direction would be in the form of an Order in Council.

5.5 Before making a recommendation to the Governor-General, the Minister for the Environment would need to be satisfied that the district is experiencing an acute housing need and have consulted with the Minister of Housing and the Minister for Māori Crown Relations— Te Arawhiti.

5.6 A Tier 2 council may also request to use the new legislation by application to the Minister for the Environment.

5.7 Planning Track for Housing Plan Change 29

5.8 As officers prepare the Plan Change, it is necessary to have a direction from Council about the preferred planning track, as this affects subsequent content and process decisions. The three planning track options are presented below.

i) Intensification Streamlined Planning Process (ISPP) under the Resource Management (Enabling Housing Supply and Other Matters) Amendment Act 2021 (RMAA). This option can provide a fast-track response to providing more housing opportunity as rules have immediate legal effect, meaning more intensification can happen sooner (estimated within 12 months); and costs for plan changes are lower as there are no appeal rights.

ii) The streamlined planning process (SPP). Under the SPP, Council applications to the Minister must be made where specified criteria apply. In this case, the criteria that apply are:

· Implements a national direction

· Public policy reason for urgent preparation.

· Meets a significant community need.

The SPP enables a custom-made Nelson response to housing rules, informed by community engagement undertaken as part of the Draft Nelson Plan process. The SPP speeds up the plan making process by limiting appeal rights, with estimated timeframe of 18-24 months for rules to become operative.

iii) Standard Schedule 1 process. The process steps involve submissions on a proposed plan, hearings and appeal rights. This format is familiar to the public, and enables Council to direct the process (until the appeals stage).

5.9 Each planning option enables public submissions on proposed changes. Analysis of the options is provided in section 6 of this report.

6. Options

6.1 The advantages and disadvantages of the three options are summarised below. Option 2 – SPP is recommended.

Option 1: Intensification Streamline Planning Instrument
Advantages	· Fastest option for enabling housing supply opportunities (assuming Ministerial steps occur quickly) – estimate rules will have legal effect within 12 months. · Lowest cost option for Council, due to lack of appeal costs and shortest process timeframe. · Many of the Medium Density Residential Standards (MDRS) standards are similar or consistent with Draft Nelson Plan standards (refer Appendix 1 for MDRS standards). Examples of where the MDRS standards are inconsistent with the Draft Nelson Plan include: - No permeable surface requirement in MDRS, whereas 20% of site was proposed under the Draft Nelson Plan - Requirement for 20% landscaping in MDRS, whereas no such rule in Draft Nelson Plan - 20% of the street façade to be in glazing in MDRS, whereas no such rule in Draft Nelson Plan - Smaller outlooks space (3x3m in MDRS rather than 4x4m in Draft Nelson Plan) - Daylight rule: 4m high +60 degree angle in MDRS for all residential zones rather than 3m and 45 degree angle in draft Nelson Plan for General Residential zone. - 11m height across all residential zones in MDRS rather than 8m in General Residential zone and 11m in Medium Density zone in Draft Nelson Plan - Smaller outdoor living court at 15m² and 3 m in MDRS rather than 20m²and 4m. - Site density at 50% in all residential zones in MDRS, rather than 40% in General Residential Zone.
Risks and Disadvantages	· Defined Scope - limited ability to customise. · MDRS will apply to all urban zones (unless there is a qualifying matter) and greenfield development. · Limited ability to differentiate between General and Medium Density Residential Zones. · Submissions enabled, but MDRS will have immediate legal effect on notification and national standards cannot be altered unless qualifying matters apply. · No appeal process. · Need to apply (to the Minister for the Environment) to use this process. · Decision Maker – Minister for the Environment. · Council decision to adopt option 1 may require community consultation under the Significance and Engagement Policy.
Option 2: Streamlined Planning Process (SPP) – Recommended
Advantages	· Second fastest option – estimate rules will have legal effect in 18-24 months. · Able to fully customise content (can help give effect to the FDS and Spatial Plan). · Ability to have General residential and Medium Density Residential zones. · Public input can be enabled via submissions. · Carries forward work/input from Draft Nelson Plan. · Able to increase housing supply in the short-medium term. · Limited appeal process reduces costs and shortens timeframes (appeals can only be lodged on decisions of a requiring authority or heritage protection authority relating to designations, heritage orders and notices of requirement).
Risks and Disadvantages	· Need to apply to the Minister for the Environment to use this process. · Timeframes largely determined by the Minister for the Environment · Limited appeals process for public · Decision Maker – Minister for the Environment.
Option 3: Standard Schedule 1 Process
Advantages	· Able to customise content to give effect to the FDS and Spatial Plan. · Ability to differentiate between General residential and Medium Density Residential zones. · Public engagement required. · Carries forward work/input from Draft Nelson Plan.
Risks and Disadvantages	· Slowest option, as risk of appeals delaying the rules becoming operative, and therefore delaying opportunities for increased housing supply. Estimate some rules may have legal effect within 12 months, but risk that others or all are appealed and do not have effect for 2+ years. · Highest potential cost due to appeal opportunity and associated legal costs.

7. Conclusion

7.1 Nelson City Council is preparing a Housing Plan Change to increase housing supply opportunities. The Resource Management Act sets up different options or planning tracks for plans to be prepared, notified, and decided.

7.2 This report contains a recommendation to use the SPP. The SPP is flexible and can be tailored to meet Nelson’s needs, while taking advantage of legislative opportunities to speed up the plan-making process and enabling meaningful public input. The SPP option builds on the work already undertaken via the Draft Nelson Plan and helps deliver anticipated intensification housing opportunities.

8. Next Steps

8.1 Following a decision to use the SPP, officers will initiate the process with the Minister for the Environment.

Author: Maxine Day, Manager Environmental Planning

Attachments

Attachment 1: A2852288 Medium Density Residential Standards in RMAA 21 ⇩

Important considerations for decision making

Ø Fit with Purpose of Local Government

The development of Resource Management Plans is a responsibility for local government under the Resource Management Act 1991. The work contributes to promoting the social, economic, environmental, and cultural well-being of communities in the present and for the future.

Ø Consistency with Community Outcomes and Council Policy

The decision in this report addresses the following community outcomes:

· Our urban and rural environments are people friendly, well planned and sustainably managed.

Ø Risk

The decision in this report is low risk, as it does not involve levels of service, budget changes, people’s health and safety or the environment.

There are risks to Council’s reputation by choosing a planning track that does not enable local input on planning rules that they may be affected by. However, there are other risks to Council’s reputation if it does not act to make planning changes to address the region’s pressing housing issue.

If Council chooses Option 1, there may be risks to timeframes and outcomes as consultation with the community may be required under the Council’s Significance and Engagement policy.

Ø Financial impact

The recommended option’s costs can be funded through existing budget for Environmental Planning in the Long Term Plan 2021-2031.

Ø Degree of significance and level of engagement

The recommended option 2 (SPP) is of low significance because it does not involve the sale of strategic assets, change levels of service, or have significant financial implications. Options for community engagement on the substance of the plan change will be enabled through the Streamlined Planning process as submissions and a hearing can be included in that process.

If Council preferred option 1 (ISPP), then it would be appropriate to reconsider the criteria set out in Schedule 1 of the Significance and Engagement Policy. In particular, Council may want to consider the impact on the community, whether community views are already known, and the extent of interest before determining whether consultation on this matter should be undertaken.

Ø Climate Impact

The recommended option sets up a process that will enable Council to include plan provisions relating to climate change adaptation and mitigation.

Ø Inclusion of Māori in the decision making process

Limited engagement with Māori has been undertaken in preparing this report. The Housing Plan Change process has involved discussions with iwi representatives via the Nelson Plan Iwi Working Group. An outline of the recommended option was presented with indications of how iwi could be further involved in the plan change process - including formal opportunities for feedback on the Draft Plan Change, and submission on the Notified Plan Change.

Ø Delegations

The Environment and Climate Committee has the following delegations to consider process steps for Housing Plan Change 29:

Areas of Responsibility:

· The Regional Policy Statement, District and Regional Plans, including the Nelson Plan

· Planning documents or policies, including (but not limited to) the Land Development Manual

Delegations:

· Developing, approving, monitoring and reviewing policies and Plans

· The committee has all of the responsibilities, powers, functions and duties of Council in relation to governance matters within its areas of responsibility, except where they have been retained by Council, or have been referred to other committees, subcommittees or subordinate decision-making bodies.

Powers to Recommend to Council:

· Approval of notification of any statutory resource management plan, including the Nelson Plan or any Plan Changes.

Item 8: 2022 Environmental Management Fees and Charges review

Environment and Climate Committee

7 April 2022

REPORT R26520

2022 Environmental Management Fees and Charges review

1. Purpose of Report

1.1 To approve statements of proposal for proposed fees and charges for public consultation, using the Special Consultative Procedure for the following:

1.1.1 Resource Management activities.

1.1.2 Building Unit activities.

1.1.3 Activities under the Food Act.

2. Summary

2.1 Current regulatory fees and charges have been reviewed and changes proposed, where required, to:

· Better achieve the funding targets in Council’s Revenue and Financing Policy

· More accurately reflect staff time to provide services

· Ensure reasonable cost recovery goals are met and to meet increased national legislative and reporting requirements

2.2 The main changes proposed are as follows:

Activity	2021/22 charge (current charge)	2022/23 proposed charge	% increase (CPI 4.9)
Resource Management Act – resource consents hourly rate Deemed permitted activity fixed charge Annual swing mooring charge	$162 $480 $75	$190 $520 $85	17 8.3 13
Dog Control Act –increase by CPI eg: Urban registration	$97	$102	4.9
Food Act – increase by CPI eg: Registration national programme/ food control plan	$162/$255	$170/$267	4.9
Building Act – Officer hourly rate (residential) Officer hourly rate (commercial, other changes see attachment 2) Fixed fee for wood burners: Freestanding In built Introduce $250 deposit for historic Building Consent review Increase Building Consent amendment deposit	$164 $200 $430 $595 New deposit $125	$172 $210 $450 $625 $250 $450	4.9 4.9 4.9 4.9 360
LIMS -residential -commercial -multiple titles	$300 $460 $164 hourly rate	$315 $483 $172 hourly rate	4.9
Hairdressers	$162	$170	4.9
Offensive trades	$243	$255	4.9
Camping grounds	$270	$283	4.9
Funeral directors	$170	$178	4.9
Animal Control (other than dogs) - hourly charge out rate	$162	$170	4.9
Processing Site Marine Contingency Plans – hourly charge out rate	$162	$170	4.9
Pollution response – hourly charge out rate	$162	$170	4.9
Alcohol licensing - set by statute, can use discretion to lower activity rating and fees	No change	No change	0

3. Recommendation

That the Environment and Climate Committee

1. Receives the report 2022 Environmental Management Fees and Charges review (R26520) and its attachments (A2824715, A2829788, A2824623, A2825558 and A2825557); and

2. Agrees the preferred option is to increase Resource Consent Fees and Charges to recover 43% of Council costs for these services; and

3. Adopts the Statement of Proposal for the Amendments to the Charges under the Resource Management Act 1991 commencing 1 July 2022 as detailed in Attachment 1 (A2824715) to Report (R26520); and

4. Agrees a summary of information contained in the Statement of Proposal Amendments to the Charges under the Resource Management Act 1991 is not necessary to enable public understanding of the proposal; and

5. Agrees the preferred option is to increase Building Act Fees and Charges to recover 75% of Council costs for these services; and

6. Adopts the Statement of Proposal for the Building Act 2014 and Property Information Fees and Charges as detailed in Attachment 2 (A2829788) to Report (R26520); and

7. Agrees a summary of information contained in the Statement of Proposal for the Building Act 2014 and Property Information fees and charges is not necessary to enable public understanding of the proposal; and

8. Agrees the preferred option is to increase Food Act fees and charges to recover 47% of Council costs for these services; and

9. Adopts the Statement of Proposal for the Amendments to the Charges under the Food Act 2014 commencing 1 July 2022 as detailed in Attachment 3 (A2824623) to Report (R26520); and

10. Agrees a summary of information contained in the Statement of Proposal Amendments to the Charges under the Food Act 2014 is not necessary to enable public understanding of the proposal; and

11. Notes the CPI increases for the Building and LIM activities, Dog Control and Environmental Health services fees and charges do not require public consultation, and as identified in Attachments 4 and 5 (A2825558 and A2825557) of Report (R26520) will take effect from 1 July 2022; and

12. Notes no change will be made to the discretion to lower the rating of particular activities under the Sale and Supply of Alcohol Act; and

13. Approves the consultation approach (set out in section 6 of this report) and agrees:

a) the approach includes sufficient steps to ensure the Statements of Proposal will be reasonably accessible to the public and will be publicised in a manner appropriate to its purpose and significance; and

b) the approach will result in the Statements of Proposal being as widely publicised as is reasonably practicable as a basis for consultation.

4. Background

4.1 The Environmental Management Group fees and charges cover:

4.1.1 Resource consent processing and monitoring.

4.1.2 Building unit related fees and charges.

4.1.3 Food businesses.

4.1.4 Environmental health licensing - including animal control, hairdressers, mortuaries and maritime activities.

4.1.5 Dog control.

4.1.6 Alcohol licensing.

4.2 Fees and charges contribute towards Council’s costs and administration of its regulatory functions. Section 101(3) of the LGA requires funding to be from those sources determined to be appropriate following consideration of factors including the distribution of benefits between the community as a whole and those individuals undertaking the activity, the period of when those benefits are expected to occur and contributions to community outcomes by the activity.

4.3 The private benefit gained from regulatory services is often greater than the public benefit. The costs of providing the service then need to be met by individuals, owners or operators to a greater degree than the general rate.

4.4 The Revenue and Financing policy requires:

4.4.1 40-60% of resource consent activity costs are to be recovered from charges. The activities include consent processing, monitoring, enforcement and responding to public enquiries;

4.4.2 60-80% of Building Unit costs are to be met by charges;

4.4.3 40-60% of food premises and environmental health costs are to be met by fees and charges;

4.4.4 Dog control activities are to recover 90-100% of costs through registration and other charges;

4.4.5 40-60% of pollution response costs are met by the polluter where they have been identified; and

4.4.6 10-20% of the enforcing bylaw costs are met by the offender where they have been identified.

4.5 Council resolved to increase fees and charges at the Environment and Climate Committee meeting held on 10 June 2021 (R24824) for the activities under the following legislation:

4.5.1 Resource Management Act 1991 and Housing Accords and Special Housing Areas Act 2013;

4.5.2 Building Act 2004;

4.5.3 Food Act 2014 (to commence from 1 December 2021); and

4.5.4 Public Health Act.

4.6 The current and proposed fees and charges are contained in the statements of proposals in attachments 1 to 3 for Resource Management, Building and Food Act activities. The current and proposed Dog Control and Environmental Health fees are contained in attachments 4 and 5.

5. Discussion

Resource consents

Setting charges

5.1 Section 36(4) of the RMA in force on 4 September 2013 provides:

(4) When fixing charges referred to in this section, a local authority shall have regard to the following criteria:

(a) the sole purpose of a charge is to recover the reasonable costs incurred by the local authority in respect of the activity to which the charge relates:

(b) a particular person or persons should only be required to pay a charge—

(i) to the extent that the benefit of the local authority's actions to which the charge relates is obtained by those persons as distinct from the community of the local authority as a whole; or

(ii) where the need for the local authority's actions to which the charge relates is occasioned by the actions of those persons; or

(iii) in a case where the charge is in respect of the local authority's monitoring functions under section 35(2)(a) (which relates to monitoring the state of the whole or part of the environment), to the extent that the monitoring relates to the likely effects on the environment of those persons' activities, or to the extent that the likely benefit to those persons of the monitoring exceeds the likely benefit of the monitoring to the community of the local authority as a whole,—

and the local authority may fix different charges for different costs it incurs in the performance of its various functions, powers, and duties under this Act—

(c) in relation to different areas or different classes of applicant, consent holder, requiring authority, or heritage protection authority; or

(d) where any activity undertaken by the persons liable to pay any charge reduces the cost to the local authority of carrying out any of its functions, powers, and duties.

Current charges

5.2 In the 2018/19 financial year, resource consent charges recovered 46% of the Council’s costs. In 2019/20 43% were recovered from charges and last financial year (2020/21) 39% was recovered. This year a similar number of applications compared to last year have been received.

5.3 40-60% of total resource consent costs are to be recovered to meet the Revenue and Financing Policy in the Long Term Plan (LTP). The main factors influencing the level of income received from charges are the hourly charge out rate and the number of complex resource consent applications. Overall consent numbers have been similar for the last two years but income from fees and charges has decreased since 2018/19. The income for 2021/22 is on track to be similar to last year.

5.4 Costs for the resource consent services have been higher in the last couple of years due to a higher reliance on consultants to assist with consent processing while there are staff vacancies. Actual consultant costs are only on-charged to the applicant where there is a conflict of interest. When consultants are engaged due to high workloads and/or staff vacancies the Council charge out rate is applied, and this is usually $20 to $30 per hour lower than consultant rates.

5.5 It is anticipated that the use of consultants is unlikely to decrease significantly with the existing vacancies. There is a tight labour market and difficulty in recruiting planners is being experienced nationwide.

5.6 Other costs in providing this service are increasing by at least CPI. Training for staff, IT overheads and externally contracted expertise are examples of the types of costs that increase annually.

Proposed charges

5.7 The total expenses for the resource consent activity for the 2022/23 financial year are expected to be $2,691,000 GST exclusive. These expenses include costs that cannot be on charged to customers such as staff time responding to public enquiries and consent holder objections and appeals. Current charges at current levels of activity will recover approximately 38% of total costs. Note this is below the Revenue and Financing Policy range of 40 to 60% recovery of costs through fees and charges.

5.8 It is proposed to increase the hourly charge out rate by 17% to $190 which will cover 43% of the costs. Increasing the 2020/21 actual income from fees and charges by 17% provides an income of $1,145,200. The draft annual plan income budget for fees and charges is $1,150,700. The budgeted amount is based on fees and activity levels increasing.

5.9 The income after increasing the fees by CPI will be $1,026,800. This will not meet the revenue and financing target and there’ll be a budget shortfall. To recover 50% of the costs the hourly charge out rate would need to increase by 37% to $223.

5.10 To provide some comparison the hourly rates of other neighbouring councils and councils of similar sizes are included in the table below. Tasman District Council’s current hourly rate is $164 and is proposed to increase to $170 per hour.

	Hourly rate	Cost recovery policy from fees and charges
Nelson	$162 (proposed to be $190)	40 – 60%
Tasman	$164 (proposed to be $170)	15 – 45% (includes other activities such as plan making and state of the environment)
Marlborough	$155 planner $185 senior	60%
Napier	$166 planner $186 senior	40-59%
New Plymouth	$192 planner $211 senior	60-80%
Palmerston North	$194 planner $207 senior	80-100% consent processing 0-19% public advice, monitoring and enforcement

5.11 The average charge out rate for a planner of the councils (excluding Nelson) in the above table is $175, the average senior rate is $192. The average planner charge out rate from four planning consultants is $181, the average senior rate is $210. The average of these four figures is $189.50.

5.12 The table below identifies the percentage cost recovery from charges for various hourly rates and identifies the impacts on rates for the different level of charges increases. Keeping fees the same is not considered an option as the income would not meet the Revenue and Financing Policy requirement to recover between 40 and 60% of costs.

Hourly rate Options	Income from charges (draft AP budget is $1,150,700)	% of 2022/23 costs from fees	Rates component (draft AP budget is $1,540,300)	% increase in charges
Option 1 $170 (current plus CPI)	$1,026,800	38	$1,664,200	4.9
Option 2 $190 (preferred option, increase rate to average of consultant and other Council rates)	$1,145,200	43	$1,545,800	17
Option 3 $223 (rate required to meet 50% of costs)	$1,345,500	50	$1,345,500	37

5.13 The issuing of notices for permitted activities on average takes, on average, 2.75 hours of staff time to complete. The fixed charge is proposed to increase to better reflect this time at the proposed hourly rate. The current charge of $480 is proposed to increase to $520 for these activities.

5.14 The annual charge for swing moorings has not increased since 2010 and is additional to the monitoring of specific consent conditions. The annual charge contributes to the cost of reviewing and updating information on the general areas within the coastal environment that are suitable to accommodate the mooring activity. It is proposed to increase the annual charge from $75 to $85 to better reflect the total cost that is spread evenly among the swing mooring owners.

Options

5.15 The Council must have regard to criteria listed in section 36AAA of the RMA when fixing charges. The proposed changes as set out in 5.8 above have met this criteria as follows:

5.15.1 The proposed charges recovers reasonable costs that will be incurred by the Council to which the charge relates;

5.15.2 The proposed charges are proportionally better met by the applicant compared to the community. It is fair the applicant pay the reasonable costs incurred by the Council in processing and monitoring since the applicants and consent holders receive the majority of the benefits of the consented development;

5.15.3 The processing and monitoring actions directly relate to, and are as a result of, the actions of the applicant;

5.15.4 Monitoring charges reflect the degree of compliance of consent conditions or specific permitted standards. The consent holder or person undertaking the activity is in control of the level of compliance and are therefore required to meet the costs of the associated monitoring; and

5.15.5 Overall, the proposed increased charges have been set at levels that will recover approximately 43% of the reasonable anticipated costs incurred by the consent authority.

5.16 Of the options to increase the current charges by CPI or amend the charges to recover 43% of the costs or increase the charges to recover 50% of the costs, the preferred option is option 2 – amend the charges as proposed in Attachment 1 (A2824715). Option 2 aligns with the draft annual plan budget for income received for fees and charges.

Option 1: Increase the current fees and charges by CPI (4.9%)
Advantages	· Applicants and consent holders do not face a significant increase in charges · No public consultation would be required saving officer time to manage this process · Council is unlikely to receive criticism for increasing fees by CPI
Risks and Disadvantages	· The cost of the activity is not sufficiently covered by income from charges · The disparity between Council and consultant charge out rates result in higher activity costs when there are staff vacancies (only the Council charge out rate, not the actual consultant rate, is charged to applicants where there is no conflict of interest) · A more significant increase to charges may be needed at a later date · There would be an additional rates burden of $123,900 compared to the draft annual plan budget if expected costs are not better met by applicants
Option 2: Increase the charges by 17% to recover 43% of the costs as proposed in Attachment 1 – RECOMMENDED OPTION
Advantages	· The proportional cost of the services is better met by applicants and consent holders than ratepayers · The costs of using consultants to assist in high workloads or staff vacancies are better met by the applicant · Prevents a larger increase at a later date · Less rates requirement
Risks and Disadvantages	· Dissatisfaction by applicants and consent holders for the 17% increase in charges that could increase the occurrence of querying about or objecting to the charges
Option 3: Increase the charges by 37% to recover 50% of the costs
Advantages	· The proportional cost of the service will be met by applicants and consent holders · Prevents a larger increase at a later date
Risks and Disadvantages	· Dissatisfaction by applicants and consent holders for the 37% increase in charges where the hourly rate is above most other comparative rates · The large increase is not considered reasonable · Higher charges could deter developments or achieve poorer environmental outcomes · The charges may not meet the criteria in section 36AAA of the RMA

Building consents

5.17 Building consent fees and charges are based on applications and their processing costs. A comprehensive review was undertaken in early 2020 and new fees and charges set. These applied from 1 July 2020. For 2022/23 only minor adjustments to the existing fees are proposed to be introduced with most charges increasing by CPI.

5.18 Under section 219 of the Building Act 2004, Council is permitted to impose fees and charges for many of the services the Building Unit is responsible for as a Building Consent Authority (BCA) including issuing building consents, inspecting building work and issuing property information (e.g. project information memoranda). Under section 281A of the Building Act 2004, Council has a discretion as to how the fee or charge is set and how it may be paid or collected.

5.19 Council must act reasonably when imposing fees and charges under the Building Act 2004. This means that Council should generally not make a profit out of performing its functions under the Building Act 2004. Council is not required to carry out consultation before imposing fees and charges.

5.20 Under Council’s Revenue and Financing Policy, the Building Unit is required to recover 60-80% of the total costs. For the 2018/19 financial year the recovery was 78% and in 2019/20 the recovery was 65%. For 2020/21 84% of costs were recovered. This financial year is tracking at 71% to date. The level of building activity has remained steady over the last couple of years but costs to provide the service to meet audit standards, contractor services and training of new staff are escalating. Due to limited processing capacity and experienced inspection staff leaving or retiring, contractors are required to cover the gaps created in competencies and training costs will increase as new staff are trained.

5.21 It is proposed to fix the fee for the solid fuel burners at $450 (or $625 if an extra cavity inspection is required). Currently there is an existing deposit of $430 (or $595) with additional charges invoiced based on the time to process the application at the hourly charge out rate. The actual costs of completing these consents, is significantly more costly. To keep these costs affordable to homeowners, it is proposed to fix these fees, except where unreasonable time is required to complete the process, where the addition time would be charged at the appropriate hourly rate.

5.22 A deposit of $250 is proposed to be introduced for the historic consents. A historic consent is one that five years or more has elapsed since the consent was issued or since the last inspection and no CCC has been issued. These consents are higher risk, there’s a separate process involved and a file review is mandatory. This deposit will generally cover the cost of the file review. In the event this is completed, and the owner decides not to continue with the process, Council has recovered its costs by introducing this deposit.

5.23 The deposit for amendments to existing Building Consents, is proposed to increase from $125 to $450. As most amendment costs are greater than $450 it is appropriate to require a deposit that better reflects the actual final cost. The level of deposit has increased to better reflect actual costs of the service, reducing the need for larger invoices at the issuing of the amendment. This is anticipated to reduce the amount of customer enquiries regarding the invoice amounts received at the time of issuing the amendment.

5.24 The hourly rates for building unit staff are proposed to increase by CPI from $164 to $172, which is similar to Tasman District Council’s proposed increase for 2022/23. A comparison of current hourly rates with other similar sized councils is shown in the table below:

Council	Residential	Commercial
Tasman	(proposed) 170	(proposed) 170
New Plymouth	176	197
Napier	174	174
Hastings	209	230
Invercargill	189	189
Whangarei	224	290
Palmerston North	194	212
average	191	209
NCC current	164	200
NCC proposed	172	210

5.25 See Attachment 2 for the full proposed building fee and property information charges.

5.26 The total expenses for the building activity for the 2022/23 financial year are estimated to be $3,980,885 GST exclusive. Higher training costs are anticipated in 2022/23 with trainees completing the required competency/qualification courses. Additional contracting resource is anticipated while consent numbers are high and until we can get Building Officers competencies increased. Next year’s budgeted Annual Plan income currently assumes a similar level of market activity to this year, and it is anticipated to recover approximately 74% of costs.

Options

5.27 The options are to retain the current fees and charges, increase the fees and charges in line with CPI at 4.9% (with some increases higher or are a new fee), or increase the charges at a higher rate to better cover foreseeable increases in costs. The recommended option is Option 2 to approve the fees and charges as proposed in Attachment 2. Option 2 achieves the draft annual plan budgeted income from fees and charges however due to current market pressures, there may be a reduction in market activity which could impact our income. Building fees and charges can be reviewed at any time.

Option 1: Retain the current fees and charges
Advantages	· Applicants and consent holders do not face increased charges · Would not receive any criticism from increasing fees
Risks and Disadvantages	· The fees do not reflect the actual time taken for the anticipated activity/costs to Council · Fees and charges continue to not align with local and national industry levels · Increases to charges may need to be bigger at a later date
Option 2: Increase the fees and charges largely by CPI at 4.9% (RECOMMENDED OPTION)
Advantages	· The fees better reflect the actual time taken to perform functions · The increased charges will better cover the increasing costs of attaining and meeting national quality assurance requirements · Help cover the costs of addition resource · Increases provide less dependence on rates
Risks and Disadvantages	· May receive criticism from applicants for increasing fees in the current economic context · Could increase cost challenges or queries requiring more officer time to follow up
Option 3: Increase the fees and charges by 14%
Advantages	· The fees better reflect the actual time taken to perform functions · The increased charges will cover most of the costs of attaining and meeting national quality assurance requirements · Increases provide less dependence on rates subsidy of the Building Unit · Prevents a larger increase at a later date · Less dependence on rates
Risks and Disadvantages	· May receive criticism from applicants for significantly increasing fees in the current economic context · Could increase cost challenges or queries requiring more officer time to follow up

LIMs

5.28 Land Information Memoranda (LIMs) application fees increased last financial year and recovered 69% of costs. This financial year the recovery is tracking at 64%. It is proposed to increase the fees by CPI (4.9%) to better reflect the costs of providing the services. The revenue and finance policy requires 60 – 80% of costs to be covered by fees.

LIMs	NCC 21/22	NCC 22/23	Tasman	MDC	PNCC	New Plymouth^*		Napier
Residential	$300	$315	$279	$322	$455	Standard	$280	$316
						Urgent	$400
Commercial/ Industrial	$460	$483	$420	$557	$455	Standard	$380	$471
						Urgent	$530
Properties involving multiple titles	$164 hourly rate	$172 hourly rate	Quote for work

*NPDC all applications have an allowance of 2.5 hours, any additional processing time is calculated at $120.00 per hour

Options

5.29 The options are to retain the current fees and charges, increase the fees and charges in line with CPI at 4.9% or increase the charges at a higher rate to better cover foreseeable increases in costs. The recommended option is Option 2 to approve the fees and charges as proposed in Attachment 2. Option 2 will meet the income budget in the draft annual plan, however due to current market pressures, there may be a reduction in market activity which could impact our income. Building fees and charges can be reviewed at any time.

Option 1: Retain the current fees and charges
Advantages	· Applicants and consent holders do not face increased charges · Would not receive any criticism from increasing fees
Risks and Disadvantages	· The fees do not reflect the actual time taken for the anticipated activity/costs to Council · Fees and charges continue to not align with local and national industry levels · Increases to charges may need to be bigger at a later date
Option 2: Increase the fees and charges by CPI at 4.9% (RECOMMENDED OPTION)
Advantages	· The fees better reflect the actual time taken to perform functions · The increased charges will better cover the increasing costs of attaining and meeting national quality assurance requirements · Help cover the costs of addition resource · Increases provide less dependence on rates
Risks and Disadvantages	· May receive criticism from applicants for increasing fees in the current economic context · Could increase cost challenges or queries requiring more officer time to follow up
Option 3: Increase the fees and charges by 14%
Advantages	· The fees better reflect the actual time taken to perform functions · The increased charges will cover most of the costs of attaining and meeting national quality assurance requirements · Increases provide less dependence on rates subsidy of the Building Unit · Prevents a larger increase at a later date · Less dependence on rates
Risks and Disadvantages	· May receive criticism from applicants for significantly increasing fees in the current economic context · Could increase cost challenges or queries requiring more officer time to follow up

Food businesses

Setting Food fees

5.30 Section 205 of the Food Act 2014 enables Council to set its fees to recover the direct and indirect costs of any registration, verification, compliance and monitoring functions. The territorial authority must use the special consultative procedure when setting its fees (section 205(2)) and the new fees are to take effect at the commencement of the financial year. The current fee structure was based on the estimates of officers at the time and advice received from the Ministry of Primary Industries (MPI).

5.31 When fixing fees Council must not provide for the recovery of more than the reasonable costs incurred by it in performing the function and it must take into account the matters outlined in section 198(2) of the Food Act, which are:

5.31.1 Equity – funding for services should generally, and to the extent practicable be sourced from the users or beneficiaries of those services at a level commensurate with their use; and

5.31.2 Efficiency – costs should generally be allocated and recovered to ensure maximum benefits are delivered at minimum cost; and

5.31.3 Justifiability – cost should be collected only to meet the actual and reasonable costs (including indirect costs) of the service; and

5.31.4 Transparency – costs are identified and allocated as closely as practicable to tangible service provisions.

Current fees

5.32 The fees under the Food Act 2014 increased from 1 December 2021. The fees are a mixture of an initial fee for registrations and suspensions and an hourly charge for other functions.

5.33 The current initial fees for new and renewing registrations are based on an estimated time to undertake the activity at an hourly charge out rate of $162. On average, the actual staff time required is more than estimated for each registration.

5.34 Verifications involve visiting the site, determining compliance and reporting. The time to complete this task ranges greatly depending on the complexity of the business and level of compliance. Charging at an hourly rate for verifications and compliance activities is considered a fair method to accommodate the variability.

5.35 The Revenue and Financing funding target for the food and public health activity for 2022/23 is 40-60% of costs recovered from fees and charges. This recognises the public benefits from healthy premises to the general community and that at least a third of officer time is spent responding to enquiries and other activities not able to be charged to an application. The community is assured minimum health standards apply to food businesses through verification and enforcement.

5.36 However, there is a significant private benefit arising from individual licences that certify individuals and owners of premises. These businesses create the need for inspections and enforcement activity. Ensuring businesses meet minimum standards is by user pays through fees and charges.

5.37 In 2018/19, 56% of costs were met by fees and charges and 45% of costs were recovered in 2019/20. 47% of costs were recovered in 2020/21.

Proposed fees

5.38 The total expenses for the food activity for the 2022/23 financial year are expected to be $212,000 GST exclusive. It is proposed to increase the initial fees and the hourly charge out rate by CPI to help ensure the income received from charges meets the projected increase in costs of providing the services which will recover 47% of costs.

5.39 Another option is to increase charges to reflect the actual time for the process at the proposed charge out rate. This change would be another noticeable increase compared to the level of current charges and there could be some criticism received for such a significant increase in the current economic context and soon after the increase that became effective from 1 December 2021. The options and fee changes for 2022/23 are identified in the table below:

Food premises	Option 1 - Current charge (45% recovery)	Option 2 – 47% recovery (increasing charges by CPI)	Option 3 – 60% recovery (charges to cover actual time at CPI adjusted rate)
New Registration Food control plan	$255 initial fee Plus $162 per hour after the first 1½ hours	$267 initial fee Plus $170 per hour after the first 1½ hours	$297 initial fee Plus $170 per hour after the first 1.75 hours
New Registration National programme	$162 initial fee Plus $162 per hour after the first hour	$170 initial fee Plus $170 per hour after the first hour	$297 initial fee Plus $170 per hour after the first 1.75 hours
Renewal	$81 initial fee Plus $162 per hour after the first ½ hour	$85 initial fee Plus $170 per hour after the first ½ hour	$170 initial fee Plus $170 per hour after the first hour
Amendment to Registration	$81 initial fee Plus $162 per hour after the first ½ hour	$85 initial fee Plus $170 per hour after the first ½ hour	$170 initial fee Plus $170 per hour after the first hour
Voluntary suspension	$81 initial fee Plus $162 per hour after the first ½ hour	$85 initial fee Plus $170 per hour after the first ½ hour	$85 initial fee Plus $170 per hour after the first ½ hour
Verification	$162 per hour	$170 per hour	$170 per hour
Compliance	$162 per hour	$170 per hour	$170 per hour
Monitoring (when compliant)	No charge	No charge	No charge

5.40 The table below compares rates with other councils:

Fee	NCC current	NCC proposed	TDC	MDC	PNCC	NPDC	Napier
Registration FCP	$255	$267	$248	$254	$281	$307	$242
Registration NP	$162	$170	$150	$254	$281	$307	$242
Renewal	$81	$85	$101	$108	$281	$153	$106
Amendment	$81	$85	$101	$108		$153	$190
Suspension	$81	$85	$164	$108		$153
Verification – hourly charge out rate	$162	$170	$164	$145	$174	$613+ hourly rate	$474 fixed fee
Compliance - hourly charge out rate	$162	$170	$174+ $164 p/h	$145		$153	$166

5.41 The following table identifies the percentage cost recovery from charges for various hourly rates and identifies the impacts on rates for the different level of charges increases:

Option	Income from charges (draft annual plan budget is $116,000 incl GST)	% of 2022/23 costs from fees	Rates component (draft annual plan budget is $138,700 incl GST, also covers environmental health)	% increase in charges
Option 1 $162 (current)	$110,000	45	$102,000	0
Option 2 (preferred option, increase charges by CPI)	$115,500	47	$128,300	4.9
Option 3 (charge actual time at proposed hourly rate)	$146,000	59	$97,800	0 – 100

Options

5.42 The recommended option is option 2 – increase the fees and charges as proposed by CPI (4.9%) to recover 47% of the costs. These fees and charges will better reflect the cost recovery requirement of the Food Act than retaining the current fees as detailed in Attachment 3 (A2824623). Option 2 will meet the draft annual plan budgeted income for fees and charges.

Option 1: Retain the current fees and charges
Advantages	· Operators do not face increased fees · Would not receive criticism
Risks and Disadvantages	· The cost of the food registration, verification and compliance functions is not sufficiently covered by income from fees and charges · Some fees do not reflect the actual time for the activity · Does not meet the cost recovery requirements of the Food Act 2014 · Increases to fees and charges will be required at a later date and potentially greater. · More imposition on rates
Option 2: Increase fees and charges by CPI (4.9%) to recover 47% of the costs as proposed in Attachment 3 (RECOMMENDED OPTION)
Advantages	· The proportional cost of services is better met by food operators than ratepayers · Better meets the cost recovery requirements of the Food Act 2014 · Prevents a significantly larger increase at a later date · Hourly rates are more consistent with other regulatory functions · Recognises food operators have recently had an increase from 1 December 2021
Risks and Disadvantages	· Some dissatisfaction by operators for the increase in costs · Could increase costs following non-payments requiring more staff follow up time · Could receive criticism from food businesses for increasing fees in the current economic context
Option 3: Increase fees and charges to recover 59% of the costs
Advantages	· The proportional cost of the services are better met by operators than ratepayers compared to the existing rate and increases over time · The registration costs will better reflect the actual time taken to perform the function · The rates component is reduced · Prevents a significantly larger increase at a later date
Risks and Disadvantages	· Likely to receive criticism from operators (particularly those under the National programme regime) for increasing fees in the current economic context · Could increase costs following non-payments requiring more staff follow up time

Environmental health

5.43 Environmental Health fees and charges for activities such as animal control, registration of hairdressers, offensive trades, and oil spill contingency plan approval costs are authorised under the Local Government Act 2002 (LGA), Health Act 1956 (and associated Regulations), Impounding Act 1955 and the Maritime Transport Act 1994. Criteria for fixing these fees and charges is not set in this legislation but the charges should be appropriate, reasonable and relate to the costs for providing the service.

5.44 Most of the environmental health fees and charges were increased for this financial year to reflect the time taken for officers to perform the service at the increased hourly rate. For 2020/21 the public health income from fees met 50% of the costs. The Revenue and Financing Policy requires 40-60% of costs are met by fees. Officers have reviewed the charges and propose to increase charges by CPI to ensure income levels remain within the Revenue and Financing Policy targets and are also comparable with other councils’ fees as identified in the table below:

Licence and Activity Fees	NCC current	NCC proposed	TDC	MDC	PNCC	NPDC	Napier
Hairdressers	$162	$170	$188	$178	$170	$158	$195
Offensive trades	$243	$255	$271	$108	$430	$160	$190-$348
Camping grounds	$270	$283	$292 +	$262	$430	$317	$348
Funeral directors	$170	$178	$292	$200	$430	$158	$248
Animal Control - hourly charge out rate	$162	$170	$164	$145	$132 +	$171 +	$166 +
Processing Site Marine Contingency Plans – hourly charge out rate	$162	$170	Not listed	Not listed	Not listed	Not listed	Not listed
Pollution response - hourly charge out rate - disbursements	$162 cost	$170 cost	Not listed	Not listed	Not listed	Not listed	Not listed

Options

5.45 The recommended option is option 2 – increase the fees and charges as proposed by CPI (4.9%) (see Attachment 4, A2825558). Fees and charges better reflect the costs incurred, will meet the draft annual plan budgeted income and can be reviewed at any time.

Option 1: Retain the current fees and charges
Advantages	· Operators do not face increased fees · Unlikely to receive any criticism from operators
Risks and Disadvantages	· Increases to fees and charges will be required at a later date and potentially be greater. · The hourly rate is inconsistent across regulatory services · No rates savings are realised for these activities
Option 2: Increase fees and charges by CPI (4.9%) as proposed in Attachment 4 (RECOMMENDED OPTION)
Advantages	· The proportional cost of services is better met by operators than ratepayers · Restricts a larger increase at a later date · Hourly rates are consistent with most other regulatory functions · The rates component is slightly reduced
Risks and Disadvantages	· Dissatisfaction by operators · Could increase costs following non-payments requiring more staff follow up time · Could receive criticism from the business community given the effects of Covid-19

Dog control

Setting Dog Control fees

5.46 Section 37 of the Dog Control Act 1996 (the Act) gives territorial authorities the power to set fees for the registration and control of dogs under the Act. Section 37(4) requires the territorial authority to have regard to the relative costs of the registration and control of dogs in the various categories set out in section 37(2). Section 37(8) states any increase in fees can only take effect at the commencement of that year (being 1 July 2022).

5.47 Dog control fees and charges underwent a comprehensive review in 2020 in tandem with the review of the Dog Control Bylaw and Policy. Increases and changes were set from 1 July 2020 after public consultation. Council received approximately 80 complaints from dog owners after the fee increase, with many not happy with the large increase and they commented they did not believe they were getting any benefit from paying this registration fee. No changes were made to the fees for this current financial year.

5.48 Dog control fees and other charges met 77% of the costs in 2018/19 and 64% in 2019/20. For 2020/21 a rates portion was added to the activity to fairly cover costs associated with education programmes and other activities with a public good element. Income from current registrations and other charges recovered 89% of costs in 2020/21 and are on track to recover 90% of costs this year. The Revenue and Financing Policy requires 90 to 100% of costs to be met by fees and charges.

Proposed fees

5.49 The expected costs for the dog control service in 2022/23 is $623,200 excluding GST. The current charges would recover 89% of these costs (when combined with the anticipated income from fines and other enforcement activity).

5.50 Increasing the current charges by CPI recovers 93% of expected costs. To recover 96% of costs the current fees would need to be increase by 8.5%. The table below identifies the percentage cost recovery from fees and charges and identifies the impacts on rates for the different level of charges increases:

Option	Income from charges (draft annual plan budget is $614,490 incl GST)	% of 2022/23 costs from fees (costs are $716,700 incl GST)	Rates component (LTP budget is $102,210 incl GST)	% increase in charges
Option 1 no increase to charges (current)	$638,000	89	$78,700	0
Option 2 (preferred option, increase charges by CPI)	$667,500	93	$49,200	4.9
Option 3 increase by 8.5%	$686,500	96	$30,200	8.5

5.51 Officers propose to increase charges by CPI to ensure income levels remain within the Revenue and Financing policy targets while keeping the increase to dog owners at a low level (see Attachment 5 for details of the proposed fees and charges, A2825557). The Dog Control Act does not require a public consultation process to occur when fixing fees and charges. The table below compares the standard registration fee with other councils. Note: Tasman has nearly double the number of dogs as Nelson so can spread the costs of the service at a lower level to more dog owners.

Dog registration type	NCC current	NCC proposed	TDC	MDC	PNCC	NPDC	Napier
Standard	$97	$102	$50	$90	$148	$160	$115

Options

5.52 The recommended option is option 2 – increase the fees by CPI. All options will exceed the draft annual plan income budget but option one may not meet the revenue and financing target rate. Fees can be reviewed at any time but can only come into force at the commencement of the registration year.

Option 1: Retain the current fees (this will meet the budget but not the revenue and financing target)
Advantages	· Dog owners do not face an increase to fees (no changes were made last year)
Risks and Disadvantages	· The increasing cost of the dog control functions may not be sufficiently covered by income from fees and charges · The fees do not reflect the actual time taken for the activity/costs to Council · The increase to fees may need to be larger at a later date
Option 2: Increase fees by CPI (4.9%) as proposed in Attachment 5 (RECOMMENDED OPTION, this will exceed the budget and meet the revenue and financing target)
Advantages	· The proportional cost of the Dog Control services is better met by dog owners than ratepayers · The fees better reflect the actual time taken to perform functions · Some income may pay back some of the internal loan raised in previous years · Prevents a larger increase at a later date
Risks and Disadvantages	· Dissatisfaction by dog owners · Criticism levelled at Council for again increasing fees following the increase last year · Could increase costs following non-payments requiring more staff follow up time
Option 3: Increase fees to recover 96% of the costs
Advantages	· The cost of the services is met by dog owners and any surplus contributes to paying back the internal loan raised · Prevents a larger increase at a later date
Risks and Disadvantages	· Some services have a wider public benefit so it is not reasonable to apportion this to dog owners alone · Dissatisfaction by dog owners · Criticism levelled at Council for again increasing fees by a large amount · Could increase costs following non-payments requiring more staff follow up time

Alcohol licensing

5.53 Alcohol licensing fees and charges are set by the Sale and Supply of Alcohol (Fees) Regulations 2013. Local authorities can only use discretion to lower the rating of particular activities by one rating (from a low category to a very low category for example), which will in turn lower both the application fee and the annual fee. Reductions are only applied if there have been no enforcement actions.

5.54 Council has applied lower ratings to specified activities since 2014. Additional lower ratings were applied in 2016 as income from licencing fees was exceeding costs at that time. In the last three financial years the costs of providing the service has exceeded the income from licencing fees therefore no change to the current list of lower ratings is proposed.

6. Consultation

6.1 Under section 78 of the Local Government Act 2002, a local authority must, in the course of its decision-making processes give consideration to the views and preferences of persons likely to be affected by, or have an interest in, the matter. Council’s Significance and Engagement Policy identifies criteria to assess proposals for their degree of significance and therefore the appropriate form of community engagement.

6.2 The most relevant criteria for this proposal is e) impacting a significant number of the community. Any potential changes are also likely to affect the Revenue and Financing Policy and any rates contribution.

6.3 Section 36(3) of the RMA provides that charges may be fixed under section 36 only in the manner set out in s 150 of the LGA, using the special consultative procedure (SCP) set out in section 83 of the LGA, and in accordance with s 36AAA.

6.4 Section 205 of the Food Act 2014 gives territorial authorities the power to set fees for registration, verification and compliance and monitoring activities under this Act. The territorial authority must use the SCP when setting its fees (section 205(2)) and the new fees are to take effect at the commencement of the financial year.

6.5 The other Environmental Management regulatory fees and charges that can be set by Council do not require a SCP under their legislation. The proposed changes for these activities are considered minor (mostly increasing by CPI) so no public consultation is proposed for these activities. No change is proposed for the lowering of ratings for alcohol licensing.

6.6 While the setting of fees under the Building Act does not require a SCP, it is proposed to publicly consult on the proposed changes as there are new elements to the charging schedule:

· The fixing of the fee for the solid fuel burners is a change from the current deposit approach;

· The deposit for historic consents is new; and

· The deposit for amendments is proposed to increase four times the current deposit.

6.7 Officers consider consultation is appropriate for these proposed changes.

6.8 In undertaking a SCP the Local Government Act 2002 requires the territorial authority to make the statement of proposal publicly available, along with a description of how persons interested in the proposal will be provided with an opportunity to present their views and the period during which those views may be provided to the Council.

6.9 Under section 87(3) of the Local Government Act 2002 a Statement of Proposal must include:

6.9.1 the proposed changes;

6.9.2 the reasons for the changes;

6.9.3 what alternatives to the changes are reasonably available; and

6.9.4 any other information that the local authority identifies as relevant.

6.10 Section 83 of the Local Government Act 2002 requires Council to consider whether a summary of the Statement of Proposal “is necessary to enable public understanding of the proposal.” The proposed Statement of Proposal is not unduly complicated and therefore, a summary is not considered necessary to assist with the public’s understanding of it.

6.11 The public consultation process provides an opportunity for the public and other stakeholders to engage in the process and a structured way in which Council can respond to any concerns that may be raised. The proposed timeframe is outlined below and will run alongside the Annual Plan.

Proposed Consultation Process and Timeline
Council approves the release of the Statement of Proposals to the public for consultation (SCP)	7 April
Statement of Proposal publicly notified and open for submissions	11 April
Consultation closes	13 May
Environment and Climate Committee – Hearing of Submissions	26 May
Environment and Climate Committee – Deliberation of submissions and adoption of changes	16 June

6.12 The following are the key methods proposed to raise public awareness of the consultation process and to encourage those who may be affected or have an interest in this proposal to present their views, but these may be amended as the consultation process progresses:

6.12.1 Information and key dates advertised in Our Nelson prior to, and near the end of the consultation period.

6.12.2 Nelson City Council website, web page and web app.

6.12.3 Media release outlining the proposal and the key issues also to be sent to relevant industry associations.

6.12.4 Copies of the Statement of Proposal will be available from the Customer Services Centre and Council libraries and also available on the Council website.

7. Conclusion

7.1 The proposal is that Environmental Management fees and charges increase to better meet the actual costs of providing the services.

7.2 Only two activities require public consultation by legislation, Resource Management and Food Act activities. The proposed changes to the environmental health and dog control fees are a CPI increase only and public consultation is not required or proposed given the minor impact of the changes on a limited number of people.

7.3 The building activity charges are mainly proposed to increase by CPI but there are some changes that have a higher level of increase or are new. Public consultation is considered warranted for these activities to provide transparency for the number of people potentially impacted by the proposed changes.

8. Next Steps

8.1 Proceed to public consultation on the proposed changes for the Resource Management, Building and Food Act activities and follow a special consultative procedure. Once public comments have been received and considered then Council can confirm the changes to the fees and charges.

Author: Mandy Bishop, Manager Consents and Compliance

Attachments

Attachment 1: A2824715 RMA proposed fees and charges - Statement of Proposal ⇩

Attachment 2: A2829788 Building Unit fees and charges - Statement of Proposal ⇩

Attachment 3: A2824623 Food Act proposed fees and charges - Statement of Proposal ⇩

Attachment 4: A2825558 Environmental Health proposed fees and charges ⇩

Attachment 5: A2825557 Dog Control proposed fees and charges ⇩

Important considerations for decision making

1. Fit with Purpose of Local Government

The recommendations in the report provide for the cost-effective delivery of regulatory services that protect the environmental, cultural and social wellbeing of the community.

2. Consistency with Community Outcomes and Council Policy

The recommended charges assist with achieving the stated funding outcomes in the Long Term Plan. The fully resourced regulatory activities also contribute to our natural environment being healthy and protected, ensuring our communities are healthy and safe and communities have access to social and recreational activities.

3. Risk

The do nothing option will not be consistent with the criteria for fixing charges specified in the various legislation. It will also likely to lead to far greater increases in the future. Increasing fees and charges by too high a level however could result in dissatisfaction by those impacted by the increase even if that increase is potentially justified. Proposed increases minimise the risk of dissatisfaction by increasing fees at a reasonable rate compared to other councils and consultant fees.

4. Financial impact

The proposed increases in charges will better enable costs for the services to be met in the medium to long-term at an appropriate proportion between applicants/consent holders and ratepayers. The changes outlined will better meet the Revenue and Financing policy requirements.

5. Degree of significance and level of engagement

This matter is of medium significance because proposed increases while justified will impact on a number of resource consent applicants and consent holders. The Food Act and RMA require a special consultative procedure to occur when fixing charges.

6. Climate Impact

This matter has not been considered in the preparation of this report.

7. Inclusion of Māori in the decision making process

No engagement with Māori has been undertaken in preparing this report.

8. Delegations

The Environment and Climate Committee has the following delegations to consider the regulatory fees and charges:

Areas of Responsibility:

· Building control matters, including earthquake-prone buildings and the fencing of swimming pools

· Environmental regulatory and non-regulatory matters including (but not limited to) animals and dogs, amusement devices, alcohol licensing (except where delegated to the Alcohol Regulatory and Licensing Authority), food premises, gambling, sugar-sweetened beverages and smokefree environments, and other public health issues

· Maritime and Harbour Safety and Control

· Regulatory enforcement and monitoring

Delegations:

· Undertaking community engagement, including all steps relating to Special Consultative Procedures or other formal consultation processes other than final approval

· Approval of increases in fees and charges over the Consumer Price Index (CPI)

Resolved EC/2022/012
	*That the Environment and Climate Committee* 1. Receives the submissions to the Urban Environment Bylaw (2804250).
Edgar/McGurk Carried
Attachments 1 (A2840488) Tabled Document Blind Citizens NZ Nelson Branch NCC Footpath obstacle count 9-2-22 2 (A2840497) Tabled Document Current Alcohol Ban area Central City

Resolved EC/2022/013
	*That the Environment and Climate Committee* 1. Receives the late submission from Angela Mockett (A2837377) be received.
McGurk/Edgar Carried
Attachments 1 (A2837377) Angela Mockett - Tabled Document - Late Submission

Excerpt from Nelson City Council Delegations Register (A11833061)

Environment and Climate Committee

Areas of Responsibility:

Delegations:

Powers to Recommend to Council: