Agenda of Council - Thursday, 14 December 2023

Nelson City Council

14 December 2023

Page No.

Please note:

The number of reports and matters to be considered in this Agenda are extensive and will take longer than the time available on 14 December. Therefore, the meeting will adjourn at the end of the day and reconvene at 9.00am on Friday 15 December to complete any outstanding items.

1. Apologies

Nil

2. Confirmation of Order of Business

3. Interests

3.1 Updates to the Interests Register

3.2 Identify any conflicts of interest in the agenda

4. Public Forum

4.1 Relationship City of Portsmouth, New Hampshire

Councillor Rich Blalock from the City of Portsmouth, New Hampshire USA, will speak about establishing a Sister City relationship.

5. Confirmation of Minutes

5.1 9 November 2023 15 - 29

Document number M20350

Recommendation

That the Council

1. Confirms the minutes of the meeting of the Council, held on 9 November 2023, as a true and correct record.

6. Recommendations from Committees

6.1 Nelson Regional Sewerage Business Unit - 28 November 2023

Refer to Nelson Regional Sewerage Business Unit - 28 November 2023 for documentation

6.1.1 Nelson Regional Sewerage Business Unit - Business Plan 2024-25

Recommendation to Council

That the Nelson City Council and Tasman District Councils

1. Receive the Nelson Regional Sewerage Business Unit Business Plan 2024-25 (1080325921-756), and

2. Approves the Nelson Regional Sewerage Business Unit Business Plan 2024-25 (1080325921-756).

6.1.2 Nelson Regional Sewerage Business Unit - Activity Management Plan 2024-34

Recommendation to Council

That the Nelson City Council and Tasman District Councils

1. Receive the Nelson Regional Sewerage Business Unit Activity Management Plan 2024-34 (1080325921-753); and

2. Approves the Nelson Regional Sewerage Business Unit Activity Management Plan 2024-34 (1080325921-753) as the version to inform the development of the Long Term Plan 2024-34.

3. Notes that the Nelson Regional Sewerage Business Unit Activity Management Plan 2024-34 (1080325921-753) will be updated, and the final Activity Management Plan approved by Council after the adoption of the Long Term Plan 2024-2034.

6.2 Nelson Tasman Regional Landfill Business Unit - 1 December 2023

Refer to Nelson Tasman Regional Landfill Business Unit - 1 December 2023 for documentation

6.2.1 Nelson Tasman Regional Landfill Business Unit - Activity Management Plan 2024-34

Recommendation to Council

That the Nelson City Council and Tasman District Councils

1. Receive the Nelson Tasman Regional Landfill Business Unit Activity Management Plan 2024-34 (1399367370-8789); and

2. Approve the Nelson Tasman Regional Landfill Business Unit Activity Management Plan 2023-34 (1399367370-8789) as the version to inform the development of the Long Term Plan 2024-34.

3. Notes that the Nelson Tasman Regional Landfill Business Unit Activity Management Plan 2023-24 (1399367370-8789) will be updated, and the final Activity Management Plan approved by Council after the adoption of the Long Term Plan 2024-2034.

6.2.2 Nelson Tasman Regional Landfill Business Unit - Business Plan 2024-25

Recommendation to Council

That Nelson City Council and Tasman District Councils

1. Receive the Nelson Tasman Regional Landfill Business Unit Business Plan 2024-25 (1399367370-8784); and

2. Approve the Nelson Tasman Regional Landfill Business Unit Business Plan 2024-25 (1399367370-8784).

6.3 Regional Pest Management Joint Committee - 8 December 2023

Refer to Regional Pest Management Committee - 08Dec2023 for documentation

6.3.1 Regional Pest Management Plan 2019 – 2029 Partial Review Consultation report RRPMC23-12-1

Recommendation to Council

That the Nelson City Council and Tasman District Councils

1. Approves public notification of the draft Regional Pest Management Plan 2019 – 2029 Partial Review Consultation document for the partial review of the Tasman–Nelson Regional Pest Management Plan 2019-2029, commencing 23 February 2024, for a period of one month, closing on 23 March 2024.

7. Mayor's Report 30 - 53

Document number R28118

Recommendation

That the Council

1. Receives the report Mayor’s Report (R28118); and

2. Approves for consultation in the Long Term Plan 2024-34 Consultation Document that the expected net cost to Council of $59.8 million for recovery from the August 2022 storm be funded by a separate rate set on a uniform basis of $330 per rateable unit including GST for the ten year period 2024-25 to 2034-35; and

3. Approves for consultation in the Long Term Plan 2024-34 Consultation Document:

a. Separating the stormwater and flood protection activities into a uniform charge for the former and a rate based on land value for the latter;

b. Extending the flood protection rate across the region to include the Nelson North communities;

c. Changing the uniform charge for flood protection to a rate based on land value;

d. Retaining the charge for stormwater as a uniform charge and extending the exclusion to include properties in the rural zone; and

4. Requests that officers prepare the Long Term Plan 2024-34 Consultation Document on the basis that the Three Waters Reform does not proceed and continue, as with previous Long Term Plans, to include provision for the ongoing management and investment in Council’s drinking water, wastewater and stormwater assets; and

5. Approves including in the Long Term Plan 2024-34 Consultation Document the phasing in of a new Rates Cap Policy of CPI + growth from the current policy of Local Government Cost Index (LGCI) + 2.5% plus growth with LGCI + 2.5% plus growth in Year 1, LGCI + 2% plus growth in Year 2, LGCI + 1.5% plus growth in Year 3, LGCI + 1% plus growth in Year 4 and CPI + growth for Years 5-10; and

6. Approves for consultation in the Long Term Plan 2024-34 Consultation Document an increase of the Debt Cap Policy from the Long Term Plan 2021-31 of net external debt not exceeding 175% of Council revenue to a new debt cap of not exceeding 200% of Council revenue; and

7. * Approves for consultation in the Long Term Plan 2024-34 Consultation Document the proposed write-off of the Nelson Centre of Musical Arts’ debt to Council of $730,000 at $73,000 per year over the 10 years of the Long Term Plan; and

8. Approves for consultation in the Long Term Plan 2024-34 Consultation Document capital funding of $200,000 in Year 1 (2024-25) and $3.05 million in Year 2 (2025-26) to enable stage one and two of the Tāhunanui Beach upgrade to be progressed, noting the Nelson Surf Life Saving Club facility development requires a 50% contribution from the club of $1.6 million ;and

9. * Approves for consultation in the Long Term Plan 2024-34 Consultation Document that $1.6 million be allocated in Year 4 (2027-28) of the Plan for the development of a central city community arts hub; and

10. * Approves including in the Long Term Plan 2024-34 Consultation Document capital funding of $1.3250 million in Year 2 (2025-26) and $1.325 million in Year 3 (2026-27) for an all-weather sports turf, noting that sports clubs would be required to contribute 50% of the cost ($1.325m). and

11. Approves for consultation in the Long Term Plan 2024-34 Consultation Document that net capital funding $4 million per year in Years 4, 5 and 6 (2027-28, 2028-29 and 2029-30) be included for a new road link between Hill Street North and Suffolk Road, subject to NZ Transport Agency-Waka Kotahi subsidies, significant development contributions from adjoining developments and possible contributions from Tasman District Council; and

12. * Approves for consultation in the Long Term Plan 2024-34 Consultation Document capital funding for Council’s share of the east-west cycle link with $0.5 million in Year 2, $4 million in Year 3 and $0.9 million in Year 4, subject to receiving the 51% NZ Transport Agency-Waka Kotahi Funding Assistance Rate subsidy; and

13. Approves for consultation in the Long Term Plan 2024-34 Consultation Document removal of the kerbside kitchen waste collection service funding, provided for in the previous LTP 2021-31, resulting in savings of $75,000 in Year 1, $76,650 in Year 2, $104,550 in Year 3, $1.471 million in Year 4, $1.476 million in Year 5, $1.507 million in Year 6, $1.537 million in Year 7, $1.515 million in Year 8, $1.539 million in year 9 and $1.573 million in Year 10, totalling $10.875 million in savings; and

14. * Approves for consultation in the draft Long Term Plan 2024-34 budget sufficient funding, estimated at $100,000 per annum, to maintain the city hanging flower baskets; and

15. Approves for consultation in the Long Term Plan 2024-34 Consultation Document an events budget capped at $1.780 million (the current 2023-24 budget) for each year, resulting in savings over the current draft LTP of $60,000 in Year 1 (2024-25), $225,000 in Year 2 (2025-26), $180,000 in Year 3 (2026-27) and totalling $3 million over the 10-year LTP and for Council officers to review the proposed events programme and budgets including exploring greater sponsorship and partnering so as to achieve the optimum economic, community and cultural benefits within this capped budget.and

16. Agrees that the Chief Executive and His Worship the Mayor continue to work on refining the Long Term Plan budget so as to temper the rates increases, as long as any refinements are consistent with Council discussions or decisions, prior to the finalising of the LTP Consultation Document by Council in March.

8. Long Term Plan 2024-2034 Supporting Information and change to Rates Remission Policy 54 - 89

Document number R28167

Recommendation

That the Council

1. Receives the report Long Term Plan 2024-2034 Supporting Information and change to Rates Remission Policy (R28167) and its attachments (1852948764-433, 1852948764-460, 1852948764-398, 1852948764-399, 1852948764-265); and

2. Adopts the following documents as supporting information for Nelson’s Long Term Plan 2024-2034 Consultation Document as required by section 93G of the Local Government Act 2002:

2.1 Draft Vision and Priorities (1852948764-433)

2.2 Draft Community Outcomes (1852948764-460)

2.3 Draft Statement on Fostering Māori Participation in Council Decision Making (1852948764-398)

2.4 Draft Forecasting Assumptions (1852948764-399); and

3. Agrees that His Worship Mayor Hon Dr Smith and the Chief Executive be delegated authority to approve any minor amendments required to the supporting information included in Report R28167, prior to it being made available for public consultation, including any amendments necessary to address any legislative requirements prior to the consultation occurring; and

4. Adopts the revised Draft Rates Remission Policy (1852948764-265), updated to remove the Heritage Buildings remission, for public consultation in accordance with sections 102, 109, 82 and 82A of the Local Government Act 2002; and

5. Notes that Council has previously agreed to the consultation on the Draft Rates Remission Policy occurring at the same time as the Long Term Plan 2024-2034 consultation process, and that His Worship Mayor Hon Dr Smith and the Chief Executive may approve any minor amendments to the Policy prior to it being made publicly available.

9. Change in Marina Governance from Management CCO to Asset Owning CCO - Transfer of Marina Assets and Liabilities to CCO 90 - 119

Document number R28179

Recommendation

That the Council

1. Receives the report Change in Marina Governance from Management CCO to Asset Owning CCO - Transfer of Marina Assets and Liabilities to CCO (R28179) and its attachments (149934158-12067, 149934158-12069, 149934158-12071, and 149934158- 12096); and

2. Approves the establishment of an Asset Owning Council Controlled Organisation as the preferred governance model for Nelson Marina; and

3. Agrees, subject to consultation, to provide for the transfer of the Marina assets and liabilities to the Marina CCO in the Long Term Plan; and

4. Agrees to consult with the community through the Long Term Plan 2024-34 Consultation document on the change from a Management Council Controlled Organisation to an Asset Owning Council Controlled Organisation for Nelson Marina, and the transfer of the Council’s Marina assets to that CCO.

10. Nelson Tasman Business Trust Annual Report 2022/23 120 - 138

Document number R27944

Recommendation

That the Council

1. Receives the report Nelson Tasman Business Trust Annual Report 2022/23 (R27944) and its attachments (839498445-17977 and 839498445-17976).

11. Nelson Events Strategy implementation update 139 - 149

Document number R27953

Recommendation

That the Council

1. Receives the report Nelson Events Strategy implementation update (R27953) and its attachment (839498445-17987); and

2. Approves increasing the delegation levels for the Nelson Events Fund as outlined below:

a. The Events Development Committee may approve funding up to $45,000

b. The Chief Executive may approve funding between $45,001 and $99,999

c. Council may approve funding of $100,000 or above.

Confidential Business

12. Exclusion of the Public

Recommendation

That the Council

1. Confirms, in accordance with sections 48(5) and 48(6) of the Local Government Official Information and Meetings Act 1987, that name and name remain after the public has been excluded, for Item# of the Confidential agenda (item title), as he/she/they has/have knowledge relating to (description) that will assist the meeting.

Recommendation

That the Council

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:

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	Council Meeting - Confidential Minutes - 9 November 2023	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) · Section 7(2)(a) To protect the privacy of natural persons, including that of a deceased person · Section 7(2)(h) To enable the local authority to carry out, without prejudice or disadvantage, commercial activities
2	Kāinga Ora Social and Affordable Housing Development Achilles and Rutherford Streets	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)(g) To maintain legal professional privilege · Section 7(2)(h) To enable the local authority to carry out, without prejudice or disadvantage, commercial activities · Section 7(2)(i) To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)
3	Proposed Inner City Land Purchase and Sale	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)(g) To maintain legal professional privilege · Section 7(2)(i) To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)
4	The Brook Valley Holiday Park - Revision of Lease Process	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)(h) To enable the local authority to carry out, without prejudice or disadvantage, commercial activities
5	Plan Change 31 - Hearing Panel recommendations	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 48(1)(d) That the exclusion of the public from the whole or the relevant part of the proceedings of the meeting is necessary to enable the local authority to deliberate in private on its decision or recommendation in any proceedings to which this paragraph applies. Section 48(2) Paragraph (d) of subsection (1) applies to - (a) Any proceedings before a local authority where - (i) A right of appeal lies to any Court or tribunal against the final decision of the local authority in those proceedings; or (ii) The local authority is required, by any enactment, to make a recommendation in respect of the matter that is the subject of those proceedings; and c) Any proceedings of a local authority in relation to any application or objection under the Marine Farming Act 1971.
6	Visitor Information Services - proposed current and future approach	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 · Section 7(2)(i) To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)
7	August 2022 Extreme Weather Event Recovery - Land purchase	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)(g) To maintain legal professional privilege · Section 7(2)(i) To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)
8	Statement of Expectations 2024-2027 - Nelson Regional Development Agency	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)
9	Statement of Expectations 2024/25 - The Suter Art Gallery Te Aratoi o Whakatū Trust	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) · Section 7(2)(j) To prevent the disclosure or use of official information for improper gain or improper advantage
10	Statement of Expectations 2024/25 - Nelmac Limited	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)

Karakia Whakamutanga

Nelson City Council Minutes - 9 November 2023

Minutes of a meeting of the

Nelson City Council

Te Kaunihera o Whakatū

Held in the Council Chamber, Floor 2A, Civic House, 110 Trafalgar Street, Nelson on Thursday 9 November 2023, commencing at 9.03a.m.

Present: His Worship the Mayor N Smith (Chairperson), Councillors M Anderson, M Benge, T Brand, M Courtney, J Hodgson, Councillor R O'Neill-Stevens (Deputy Mayor), K Paki Paki, P Rainey, C Rollo, R Sanson, T Skinner and A Stallard

In Attendance: Chief Executive (N Philpott), Deputy Chief Executive/Group Manager Infrastructure (A Louverdis), Group Manager Environmental Management (M Bishop), Group Manager Community Services (A White), Group Manager Corporate Services (N Harrison), Group Manager Strategy and Communications (N McDonald) and Senior Governance Adviser (H Wagener) and Assistant Governance Adviser (A Bryce)

Apologies : Councillor Rollo for lateness

Karakia and Mihi Timatanga

1. Apologies

Apologies
Resolved CL/2023/248
	*That the Council* 1. Receives and accepts the apologies from Councillor Rollo for lateness.
His Worship the Mayor/Sanson Carried

2. Confirmation of Order of Business

There was no change to the order of business.

3. Interests

There were no updates to the Interests Register.

Councillor Sanson declared a non-pecuniary interest in Item 8. Nelson Regional Development Agency Annual Report 2022-23 of the Agenda and Councillor Hodgson declared a non-pecuniary interest in Item 5. Brook Valley Holiday Park - Approval of Lessee of the Confidential Agenda and took no part in discussion or voting on the matter.

4. Public Forum

4.1. The Regional Community Development Agency Establishment Group

Document number R28121

Penny Molner and Leigh Manson, representatives of the Regional Community Development Agency Establishment Group and Shane Graham, Chief Executive of Te Rūnanga o Ngāti Rārua, gave a PowerPoint presentation (1982984479-6774) and answered questions about the relationship between the Regional Community Development Agency Establishment Group and The Community & Whanau Nelson Network and access to resources.

Attachments

1 1982984479-6774 - Regional Community Development Agency Establishment Group Presentation

4.2. Matthew Kidson - What If Nelson Whakatu

Document number R28137

Matthew Kidson, representative of What If Nelson Whakatu, gave a PowerPoint presentation (1982984479-6779) and answered questions about the necessity of industrial building space and enabling collaboration at a science and technology precinct, the importance of establishing and maintaining high tech manufacturing capacity to enable growth and lessons learnt from the discontinuance of an earlier attempt at Port Nelson.

Attachments

1 1982984479-6779 - What If Nelson Whakatu Presentation

5. Confirmation of Minutes

5.1 19 October 2023

Document number M20318, agenda pages 12 - 31 refer.

Resolved CL/2023/249

That the Council

1. Confirms the minutes of the meeting of the Council, held on 19 October 2023, as a true and correct record.

His Worship the Mayor/Anderson Carried

5.2 26 October 2023

Document number M20333, agenda pages 32 - 37 refer.

Resolved CL/2023/250

That the Council

1. Confirms the minutes of the meeting of the Council, held on 26 October 2023, as a true and correct record.

O'Neill-Stevens/Skinner Carried

6 Recommendations from Committees

6.1 Nelson Tasman Regional Landfill Business Unit Meeting – 18 August 2023

6.1.1 Nelson Tasman Regional Landfill Business Unit Annual Report 2022/2023

Resolved CL/2023/251

That the Council

1. Receives the Nelson Tasman Regional Landfill Business Unit Annual Report 2022/23 (1995708647-51) and its attachments (749984575-1082).

Courtney/Stallard Carried

6.2 Nelson Regional Sewerage Business Unit Meeting – 1 September 2023

6.2.1 Nelson Regional Sewerage Business Unit Annual Report 2022/23 Summary

Resolved CL/2023/252

That the Nelson City Council and Tasman District Council

1. Receives the Nelson Regional Sewerage Business Unit Annual Report 2022/23 (1080325921-570) and Financial Statements (1080325921-577).

Skinner/Sanson Carried

6.3 Saxton Field Committee – 7 November 2023

6.3.1 Saxton Field Activity Management Plan 2024-34

Resolved CL/2023/253

That the Council

1. Approves the draft Saxton Field Activity Management Plan 2024-34 (NDOCS-196698121-297) as the version to inform the development of the Long Term Plan 2024-2034 for Nelson City Council and Tasman District Council.

Courtney/Stallard Carried

7. Mayor's Report

Document number R28071

His Worship the Mayor Hon Dr Smith provided a verbal update of his visit to the United States of America and Central America.

The meeting was adjourned from 10.06a.m. until 10.14a.m.

8. Nelson Centre of Musical Arts Strategic Presentation

Document number R27936

Chair Jan Trayes, Director, James Donaldson, Funding and Development Manager, Jessica St. Germain, Education Manager Myles Payne of the Nelson Centre of Musical Arts, gave a PowerPoint presentation (1982984479-6778) and answered questions on the launching of the Nelson Centre of Musical Arts Foundation.

Attachments

1 1982984479-6778 - Nelson Centre of Musical Arts Presentation

9. Nelson Regional Development Agency Annual Report 2022-23

Document number R27941, agenda pages 116 - 172 refer.

Attendance: Councillor Rollo joined the meeting at 10.47 a.m.

Chair, Sarah-Jane Weir, Chief Executive, Fiona Wilson Craig, and Visitor Destination Manager Boodee of the Nelson Regional Development Agency gave a PowerPoint presentation (1982984479-6769) and answered questions on the work done to rebuild funding of area promotion from the tourism operators and benefiting the retail and hospitality sectors through summer events.

Resolved CL/2023/254
	*That the Council* *1. Receives the report Nelson Regional Development Agency Annual Report 2022-23 (R27941) and its attachment (839498445-16866); and* *2. Notes the receipt of the Nelson Regional Development Agency’s Annual Report 2022-23 (839498445-16866) as required under the Local Government Act 2002*.
His Worship the Mayor/Courtney Carried
	Attachments 1 1982984479-6769 - Nelson Regional Development Agency Presentation

10. Right Tree Right Place Taskforce Recommendations

Document number R28013, agenda pages 173 - 394 refer.

Group Manager Infrastructure, Alec Louverdis, Strategic Advisor Infrastructure, Mark Macfarlane, Right Tree Right Place Taskforce members, Stuart Orme, Andrew Fenemor and John Hutton took the report as read and answered questions on inclusion of manu whenua in the taskforce, prioritisation of pest management measures and comparison with reserves managed by Department of Conservation, establishment of an independent community-based land management authority, appointment of a staff member responsible for forest management and prioritisation of implementation of recommendations.

Right Tree Right Place Taskforce member, Stuart Orme tabled supporting information (1982984479-6759).

The motion was put, and a division was called.

Resolved CL/2023/255

That the Council

1. Receives the report Right Tree Right Place Taskforce Recommendations (R28013) and its attachments (1833911234-251 and 1833911234-252); and

2. Adopts the Right Tree Right Place Taskforce Recommendations as set out in full in the Right Tree Right Place Taskforce Report (Attachment 1 1833911234-251) and summarised in Summary of Right Tree Right Place Taskforce Recommendations (Attachment 2 1833911234-252) for consultation through the Long Term Plan 2024-34; and

3. Notes that whilst a Forestry Activity Management Plan will not be produced for Council approval to guide the 2024-34 Long Term Plan, budgets will be included in the 2024-34 Long Term Plan (with a focus on the first three years) to give effect to the broader outcomes of the Right Tree Right Place Taskforce recommendations; and

4. Notes that the Right Tree Right Place Taskforce recommendations represent a significant change in direction for Council with respect to its commercial forestry that will require time for officers to work through and that in the interim officers and Council’s contracted commercial forestry manager will continue to monitor the commercial estate and undertake essential forestry operations as required.

The motion was put, and a division was called:

For

Cr Smith (Chairperson)

Cr Anderson

Cr Benge

Cr Brand

Cr Courtney

Cr Hodgson

Cr O'Neill-Stevens

Cr Paki Paki

Cr Rainey

Cr Rollo

Cr Sanson

Cr Stallard

Against

Nil

Absent

Cr Skinner

The motion was carried 12 - 0.

Sanson/Benge Carried

Attachments

1 1982984479-6759 - Right Tree Right Place Taskforce Recommendations - Updates to the Value of the NCC Forest Estate Paper

The meeting was adjourned from 12.05p.m.until 12.17p.m.

11. Nelson Biodiversity Forum membership

Document number R28067, agenda pages 395 - 429 refer.

Acting Group Manager Environmental Management, Michelle Joubert, Manager Science and Environment, Clive Appleton, and Team Leader Science and Environment, Leigh Marshall took the report as read.

.Resolved CL/2023/256

That the Council

1. Receives the report Nelson Biodiversity Forum membership (R28067) and its attachments (596364813-8039) and (596364813-9162); and

2. Approves Council as a signatory member of the Nelson Biodiversity Forum.

O'Neill-Stevens/Sanson Carried

12. Biosecurity Annual Report 2022/23 & Operational Plan 2023/24

Document number R28066, agenda pages 430 - 496 refer.

Acting Group Manager Environmental Management, Manager Science and Environment, Clive Appleton, Environmental Programmes Adviser, Richard Frizzell, took the report as read and answered a question about pest weed management along Waimea Inlet.

Resolved CL/2023/257

That the Council

1. Receives the report Biosecurity Annual Report 2022/23 & Operational Plan 2023/24 (R28066) and its attachments (596364813-9167 and 596364813-9168); and

2. Approves the Operational Plan 2023/24 (596364813-9168) for the Tasman Nelson Regional Pest Management Plan.

Sanson/Stallard Carried

13. National Policy Statement - Urban Development annual monitoring report 2022/2023

Document number R28038, agenda pages 497 - 519 refer.

Acting Group Manager Environmental Management, Michelle Joubert and Senior City Development Adviser, Martin Kozinsky took the report as read and answered questions on housing security, discussions with central government about migration setting and comparison with Tasman District Council on applications for consents for sections in greenfield developments.

Resolved CL/2023/258

That the Council

1. Receives the report National Policy Statement - Urban Development annual monitoring report 2022/2023 (R28038) and its attachment (336940202-7807); and

2. Approves publishing the report National Policy Statement on Urban Development, Nelson-Tasman Joint Monitoring Report, June 2023 (336940202-7807) on the Council’s website.

Sanson/O'Neill-Stevens Carried

14. Residents' Survey 2022/23

Document number R27937, agenda pages 520 - 567 refer.

Group Manager Strategy and Communications, Nicky McDonald and Senior Policy Adviser, Louis Dalziell took the report as read and answered questions on the number and constituency of questions in the survey in comparison with earlier surveys, learnings, inclusion of persons under 18 years old and the varying levels of satisfaction across issues and demographics.

Resolved CL/2023/259

That the Council

1. Receives the report Residents' Survey 2022/23 (R27937) and its attachment (1224871364-335); and

2. Notes that the results of the Residents’ Survey 2022/23 will be made available to the public on the Council website.

His Worship the Mayor/Skinner Carried

15. Draft 2024-2054 Infrastructure Strategy

Document number R27901, agenda pages 568 - 574 refer.

Group Manager Infrastructure, Alec Louverdis, Strategic Advisor Infrastructure, Mark Macfarlane, took the report as read and answered questions on the inclusion of nature-based solutions, Right Tree, Right Place Taskforce recommendations, flood management plans and three waters infrastructure.

Attendance: Councillor Rainey left the meeting at 12.02p.m.

Resolved CL/2023/260

That the Council

1. Receives the report Draft 2024-2054 Infrastructure Strategy (R27901) and its attachment (1530519604-11301); and

2. Approves the amended Draft 2024-2054 Infrastructure Strategy (1530519604-11301) as the version to inform the Long Term Plan 2024-2034 and all relevant Activity Management Plans; and

3. Notes that the amended Draft 2024-2054 Infrastructure Strategy (1530519604-11301) will be updated, and the final version will be approved by Council after the adoption of the Long Term Plan 2024-2034.

Sanson/Skinner Carried

16. Draft Community Partnerships Activity Management Plan 2024 - 2034

Document number R27927, agenda pages 575 - 580 refer.

Group Manager Community Services Andrew White and Manager Community Partnerships, Mark Preston-Thomas took the report as read and answered questions on the vulnerable housing support programme.

Resolved CL/2023/261

That the Council

1. Receives the report Draft Community Partnerships Activity Management Plan 2024 - 2034 (R27927) and its attachment (636019211-1680); and

2. Approves the Draft Community Partnerships Activity Management Plan 2024-2034 (636019211-1680) as the version to inform the development of the Long Term Plan 2024-2034; and

3. Notes that the financial tables in the Draft Community Partnerships Activity Management Plan 2024-2034 (636019211-1680) are subject to change as draft budgets are developed; and

4. Notes that the Draft Community Partnerships Activity Management Plan 2024-2034 (636019211-1682) will be updated, and the final Activity Management Plan approved by Council after the adoption of the Long Term Plan 2024-2034.

Brand/Rollo Carried

17. Draft Parks and Facilities Activity Management Plan 2024-2034

Document number R27900, agenda pages 581 - 589 refer.

Group Manager Community Services Andrew White, Manager Parks and Facilities, Hannah Curwood and Senior Parks and Facilities Activity Planner, Carol Stewart took the report as read and answered questions on inclusion of contaminated sawdust at Tāhunanui Beach in the Activity Management Plan, reduction of pest plant control measures, funding for adopt a spot programme, and the pop-up park in the Nelson Central Business District.

An additional motion was requested by Councillor Rollo, supported by Councillor Brand for a report, for consideration through the Long Term Plan process, on the development of an accessibility strategy and an accessibility audit of Council owned facilities.

The meeting was adjourned from 1.21p.m. until 1.30p.m.

With the agreement of members, the additional motion was taken separately.

Additional Motion
Resolved CL/2023/262
	*That the Council* 4. Requests a report, for consideration through the Long Term Plan process, on the development of an accessibility strategy and an accessibility audit of Council owned facilities.
Rollo/Brand Carried

Attendance: Councillor Rainey joined the meeting at 1.45p.m.

Resolved CL/2023/263

That the Council

1. Receives the report Draft Parks and Facilities Activity Management Plan 2024-2034 (R27900) and its attachment (196698121-52613); and

2. Approves the Draft Parks and Facilities Activity Management Plan 2024-2034 (196698121-52613) as the version to inform the development of the Long Term Plan 2024-2034; and

3. Notes that the Draft Parks and Facilities Activity Management Plan 2024-2034 (196698121-52613) will be updated, and the final Activity Management Plan approved by Council after the adoption of the Long Term Plan 2024-2034.

His Worship the Mayor/Rollo Carried

18. Draft Property Activity Management Plan 2024-2034

Document number R28068, agenda pages 590 - 596 refer.

Group Manager Corporate Services Nikki Harrison, Manager Property Services, Rebecca van Orden and Property Asset Planner, Tess Harvey took the report as read.

Resolved CL/2023/264

That the Council

1. Receives the report Draft Property Activity Management Plan 2024-2034 (R28068) and its attachment (714127617-20137); and

2. Approves the Draft Property Activity Management Plan 2024-2034 (714127617-20137) as the version to inform the development of the Long Term Plan 2024-2034; and

3. Notes that the Draft Property Activity Management Plan 2024-2034 (714127617-20137)will be updated, and the final Property Activity Management Plan approved by Council after the adoption of the Long Term Plan 2024-2034.

Skinner/Brand Carried

19. Exclusion of the Public

Sarah Holman, of Breeze Consulting Ltd, was in attendance for Item 5 of the Confidential agenda to answer questions and, accordingly, the following resolution is required to be passed:

Resolved CL/2023/265

That the Council

1. Confirms, in accordance with sections 48(5) and 48(6) of the Local Government Official Information and Meetings Act 1987, that Sarah Holman, a Consultant of Breeze Consulting Ltd, remain after the public has been excluded, for Item 5 of the Confidential agenda (Brook Valley Holiday Park - Approval of Lessee), as she has knowledge relating to Holiday Park that will assist the meeting.

Skinner/Brand Carried

Resolved CL/2023/266

That the Council

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

Skinner/Brand 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	Council Meeting - Confidential Minutes - 19 October 2023	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)(h) To enable the local authority to carry out, without prejudice or disadvantage, commercial activities · Section 7(2)(g) To maintain legal professional privilege · Section 7(2)(i) To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)
2	City of Nelson Civic Trust - Trustee Appointments	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
3	Nelson Regional Development Agency - Board remuneration	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)
4	Appointment of non-elected District Licensing Committee members	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
5	Brook Valley Holiday Park - Approval of Lessee Confidential until negotiations are finalised.	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)
6	Housing Reserve	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)(h) To enable the local authority to carry out, without prejudice or disadvantage, commercial activities

The meeting was adjourned 2.03p.m.

The meeting went into confidential session at 3.00p.m. and resumed in public session at 4.51p.m.

Karakia Whakamutanga

20. Restatements

It was resolved while the public was excluded:

1	City of Nelson Civic Trust - Trustee Appointments
	4. Agrees that the decision only be made publicly available once the trustees have been advised, and that the decision will then be made available at http://www.nelson.govt.nz/council/council-structure/council-organisations-2/city-of-nelson-civic-trust/civic-trust-trustees/.

2	Nelson Regional Development Agency - Board remuneration
	3. Agrees that report R27943 and the decision be made publicly available after negotiations have concluded.

Appointment of non-elected District Licensing Committee members

4. Agrees that the appointment be made publicly available on nelson.govt.nz, after the reappointment has been confirmed with the members; and

5. Agrees that report (R27428) remain confidential at this time.

5	Brook Valley Holiday Park - Approval of Lessee
	1. Leaves the Brook Valley Holiday Park - Approval of Lessee to lie on the table.

6	Housing Reserve
	7. Agrees that Report (R28054), Attachment (336940202-7778) and the decision be made publicly available following completion of negotiations.

There being no further business the meeting ended at 4.52p.m.

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

Resolved

Item 7: Mayor's Report

Council

14 December 2023

Report Title: Mayor's Report

Report Author: Hon Dr Nick Smith - Mayor

Report Number: R28223

1. Purpose of Report

1.1 To consider items for inclusion in the Consultation Document for the draft Long Term Plan 2024-34.

2. Recommendation

* Denotes proposals advocated by Councillors for debate and not necessarily supported by the Mayor.

That the Council

1. Receives the report (R28118); and

3. Approves for consultation in the Long Term Plan 2024-34 Consultation Document:

a. Separating the stormwater and flood protection activities into a uniform charge for the former and a rate based on land value for the latter;

b. Extending the flood protection rate across the region to include the Nelson North communities;

c. Changing the uniform charge for flood protection to a rate based on land value;

d. Retaining the charge for stormwater as a uniform charge and extending the exclusion to include properties in the rural zone; and

4. Requests that officers prepare the Long Term Plan 2024-34 Consultation Document on the basis that the Three Waters Reform does not proceed and continue, as with previous Long Term Plans, to include provision for the ongoing management and investment in Council’s drinking water, wastewater and stormwater assets; and

10. * Approves including in the Long Term Plan 2024-34 Consultation Document capital funding of $1.3250 million in Year 2 (2025-26) and $1.325 million in Year 3 (2026-27) for an all-weather sports turf, noting that sports clubs would be required to contribute 50% of the cost ($1.325m). and

11. Approves for consultation in the Long Term Plan 2024-34 Consultation Document that net capital funding $4 million per year in Years 4, 5 and 6 (2027-28, 2028-29 and 2029-30) be included for a new road link between Hill Street North and Suffolk Road, subject to NZ Transport Agency-Waka Kotahi subsidies, significant development contributions from adjoining developments and possible contributions from Tasman District Council; and

12. * Approves for consultation in the Long Term Plan 2024-34 Consultation Document capital funding for Council’s share of the east-west cycle link with $0.5 million in Year 2, $4 million in Year 3 and $0.9 million in Year 4, subject to receiving the 51% NZ Transport Agency-Waka Kotahi Funding Assistance Rate subsidy; and

13. Approves for consultation in the Long Term Plan 2024-34 Consultation Document removal of the kerbside kitchen waste collection service funding, provided for in the previous LTP 2021-31, resulting in savings of $75,000 in Year 1, $76,650 in Year 2, $104,550 in Year 3, $1.471 million in Year 4, $1.476 million in Year 5, $1.507 million in Year 6, $1.537 million in Year 7, $1.515 million in Year 8, $1.539 million in year 9 and $1.573 million in Year 10, totalling $10.875 million in savings; and

14. * Approves for consultation in the draft Long Term Plan 2024-34 budget sufficient funding, estimated at $100,000 per annum, to maintain the city hanging flower baskets; and

15. Approves for consultation in the Long Term Plan 2024-34 Consultation Document an events budget capped at $1.780 million (the current 2023-24 budget) for each year, resulting in savings over the current draft LTP of $60,000 in Year 1 (2024-25), $225,000 in Year 2 (2025-26), $180,000 in Year 3 (2026-27) and totalling $3 million over the 10-year LTP and for Council officers to review the proposed events programme and budgets including exploring greater sponsorship and partnering so as to achieve the optimum economic, community and cultural benefits within this capped budget.and

16. Agrees that the Chief Executive and His Worship the Mayor continue to work on refining the Long Term Plan budget so as to temper the rates increases, as long as any refinements are consistent with Council discussions or decisions, prior to the finalising of the LTP Consultation Document by Council in March.

3. Background

3.1 The development of a Long Term Plan is a requirement of the Local Government Act 2002.

4. Discussion

4.1 The development of Nelson City Council’s Long Term Plan 2024-34 is the most important and significant work for Elected Members during the triennium. It involves making decisions on Council priorities and rates amounting to approximately $1.4 billion of public funds.

4.2 Council has been receiving briefings on activity management plans over the past few months and has had a series of workshops on key issues. It now needs to make some decisions before Christmas on proposals to go into the Long Term Plan (LTP) Consultation Document. This is to enable a draft to go to the Auditor-General in February, for the Consultation Document to be adopted and published in March, for hearings and deliberations to occur in May and for Council to make final decisions in June. The Local Government Act defines my role as to lead the development of the Long Term Plan.

4.3 This LTP has been described by officers as the most challenging in decades with Council facing a perfect storm of the highest inflation in decades, sharply rising interest rates, tens of millions in damage from the extreme weather event in August 2022 and significant policy uncertainty. This is compounded by households and businesses being under acute financial pressure and unable to absorb the cost of significant rates increases. Council has struggled with these competing pressures and looks forward to constructively engaging with our community as we address these competing demands.

4.4 We are not the only Council facing these problems with others proposing large rate increases. These include proposed rate increases of 25.5% by Hamilton City Council, 16.5% by Hutt City Council, 13.3% by Christchurch City Council and 13.75% by Auckland Council – albeit these councils are also at the early stage of their rate-setting process.

4.5 The following are significant factors:

4.5.1 Storm recovery costs from the August 2022 event;

4.5.2 Depreciation and civil construction costs;

4.5.3 Interest rates;

4.5.4 Insurance;

4.5.5 Operational costs.

4.6 Council finances are also being adversely affected by reduced dividends from our trading entities such as Nelmac, Port Nelson Ltd and Nelson Airport Ltd since the last Long Term Plan due to the general economic downturn and difficult trading conditions. There is some upside in the benefits from Infrastructure Holdings Ltd that will offset the effect of lower dividends next year and throughout the Long Term Plan.

4.7 Council staff, in consultation with Elected Members, have been working hard over the past four months to find potential savings to reduce costs and temper the increased costs of rates for families and businesses. The latest proposals incorporate the following rate increases but are subject to change relative to the decisions being considered in this report – ie they do not include the extra spending or savings proposals by myself, as Mayor, or from Councillors. Each of the items are to be considered by Council on 14 December 2023 as part of this report.

4.8 Current draft LTP 2024-34 proposals (excluding items R7-R15 for consideration) have the following impacts on rates and debt[NM1] :

Year	1	2	3	4	5	6	7	8	9	10
Rate Increase (%)	8.2	5.4	4.1	5.8	3.5	5.0	2.8	2.8	1.2	3.1
Storm recovery levy per rateable unit ($)	330	330	330	330	330	330	330	330	330	330[NH2]
Debt (%)	137	135	135	146	179	184	189	193	196	198

R2 - August 2022 flood recovery levy

4.9 The first major problem is how Council meets its costs from the August 2022 extreme weather event. These include the cost of the emergency, repairs to the damaged infrastructure and facilities, and taking the approach of building back better to improve our resilience to future events. We had made a decision to complete these works over six years and fund them over 10.

4.10 In 2022, we only had rough estimates of the costs but we now have more reliable estimates. These costs can be summarised as: $2.3 million for the emergency response, $11.1 million for repairing water services, $19.3 million for repairing roads, $17.1 million for river works, $9.3 million for parks and streams, $27.4 million for Council landslides and $3 million for other landslides. This comes to a total of $89.5 million. This is offset by recovery from insurance of $2.3 million and government of $27.4 million, leaving a net cost to Council of $59.8 million. If the net cost is different to these estimates, including interest cost over the ten year period, then any variation will run through the general emergency fund.

4.11 The proposal I am recommending through the Long Term Plan is that this net cost to Council of $59.8 million is funded by a separate rate set on a uniform basis of $330 per rateable unit including GST, from 2024-25 to 2034-35. I note that this separate rate would have needed to be $500 per rateable unit for 2024-25 to 2034-35 if we had not secured government support.

4.12 I acknowledge this proposed $330 flood recovery rate for the next 10 years is a significant and additional burden for our community. The effect could be reduced by extending the period beyond 10 years but this increases Council’s debt and interest costs. The period of repayment is a balance between not wanting to impose an excessive cost today with the increasing risk of not having it paid off before the next natural disaster strikes.

4.13 I do not think it is prudent to extend the repayment period out by more than 10 years, particularly with the known increased risks of weather events from climate change.

Other Options

4.14 Council could choose not to create a separate rate but to include the cost of the recovery within the existing rates. The advantage of this would be a more straightforward rating system and reduce administration – it would not, however, acknowledge and highlight the significance of the event or the need to separately address the impact of such major natural disasters. Council could choose a longer or shorter repayment period as noted in para 4.12.

5. Recommendation

That the Council

Approves for consultation in the Long Term Plan 2024-34 Consultation Document that the expected net cost to Council of $59.8 million for recovery from the August 2022 storm be funded by a separate rate set on a uniform basis of $330 per rateable unit including GST for the ten year period 2024-25 to 2034-35.

R3 - Stormwater/river catchment spilt and extension

5.1 Council currently funds its stormwater and river works as a single uniform charge even though they are separate activities. Work has been prepared as part of the Three Waters Reform programme to separate this rate. There has been no rating of the Nelson North area for the Wakapuaka and Whangamoa rivers.

5.2 There is a good case for including a rate for the management of these Nelson North rivers, particularly given the expense of the August 2022 floods where extensive work was required. It would not be fair to extend the existing combined stormwater-river catchment rate to these properties as they do not have Council-provided stormwater services. It would also be fairer if the river catchment work was funded as a land-value rate rather than a uniform charge as larger property owners such as foresters would pay a fairer share.

5.3 The proposal is to split the stormwater and river catchment rates across the city. It is proposed to continue to rate for stormwater on the basis of a uniform charge but fund the river catchment work on a land-value basis.

Other Options

5.4 Council could choose to continue with the status quo but that would limit the ability of Council to respond to the residents experiencing flood impacts in the Nelson North area or provide the assistance they are looking for from Council. Council could consider charging the flood protection rate as a fixed charge or based on capital value but land value is a fairer method to allocate the rates.

6. Recommendation

That the Council

Approves for consultation in the draft Long Term Plan 2024-34 Consultation Document:

a. Separating the stormwater and flood protection activities into a uniform charge for the former and a rate based on land value for the latter;

b. Extending the flood protection rate across the region to include the Nelson North communities;

c. Changing the uniform charge for flood protection to a rate based on land value;

d. Retaining the charge for stormwater as a uniform charge and extending the exclusion to include properties in the rural zone.

R4 – Three Waters reform

6.1 Council faces the difficult issue of how to deal with the uncertainty of Three Waters Reform in its Long Term Plan 2024-34. We have had clear signals from the Government in its Coalition Agreements and 100 Day Plan that it will repeal the existing legislation that would have transferred our significant water infrastructure assets in 2026. This is essentially a timing issue as the repeal legislation is expected to be passed during the period that we are required to develop and consult on our Long Term Plan.

6.2 The exclusion of Council’s three waters assets, investment and maintenance from our LTP from year 3 would have a massive effect on all aspects of the plan relating to rates, debt and significant policies. It would be confusing for the public, disruptive to the process and a substantial demand on officers’ time. It would also do a disservice to the purpose of any Three Waters changes aimed at improving the planning and investment of quality infrastructure.

6.3 I believe we should take a common-sense approach to this issue in the development of the LTP by continuing to include three waters services.

6.4 There is some risk that the Auditor-General may adversely comment on this in his audit in February but I believe the Auditor-General will understand our dilemma. I would prefer an adverse comment rather than producing a Consultation Document that makes no sense to the public.

7. Recommendation

That the Council

Requests that officers prepare the Long Term Plan 2024-34 Consultation Document on the basis that the Three Waters Reform does not proceed and continue, as with previous Long Term Plans, to include provision for the ongoing management and investment in Council’s drinking water, wastewater and stormwater assets

R5 - Rates cap policy

7.1 Nelson City Council rates have been increasing much faster than the rate of inflation. In the decade 2010 to 2020, rate increases were 2.5 times greater with average rates increasing 37.7% compared with inflation, measured by the Consumers Price Index (CPI), of 15.2%.

7.2 Rate increases were deliberately curtailed during Covid with a zero increase in 202 0-21 followed by 5.6% in 2021-22 and 5.4% in 2022-23. The rate increase for 2023-24 was 7.2%, in line with inflation.

7.3 The rating cap policy in the current Long Term Plan 2021-31 is LGCI + 2.5% plus growth. LGCI is Local Government Cost Index. For the previous LTP 2018-28, the rating policy was LGCI + 2% plus growth.

7.4 In my view we should be aiming over the long term to constrain rate increases to no more than the average rate of inflation plus growth. If the rate increase is set higher than the CPI, we need to have exceptional circumstances and be able to justify a larger increase.

7.5 I do not consider that the Local Government Cost Index is the best tool for setting the rates cap. It is poorly understood by the public, quite volatile and the data on which it is based is not as robust as the Consumers Price Index. The changing activity areas of local government and the differences in activities between Councils also means it is not an accurate proxy for the costs Nelson City Council faces.

7.6 The CPI has the advantage of being officially recognised as the rate of inflation, is well understood by the public and is used to adjust pensions and benefits. This question of whether we use the LGCI or CPI is also one of whether we take an inward-looking view from a Council perspective or we focus on how rates have an impact on our wider community.

7.7 I also do not support the additional 2.5% on top of the LGCI. It is an arbitrary figure and signals that Council will grow its overall role in the community. The 2.5% extra per year compounds over the decade to an increase of 28%. The risk with such growth in costs is that we increase the burden on households and businesses and the share of local Gross Domestic Product (GDP) with an adverse effect on social and economic wellbeing.

7.8 I propose that Council’s future rating policy be to keep long-term overall rate increases to the CPI but allow for growth, ie the objective is that the cost of rates to households will increase by no more than the rate of inflation. The allowance for growth means that if our community grows by 300 households per year, or 1%, as it has typically, then this 1% should be added to the CPI in setting the total rates collected across the city.

7.9 It should be noted that having such a rating policy would not be so rigid as to prohibit increases that differ from this policy. Our rates increase in 2022 was different to the LTP policy. The difference had to be noted and explained. The significant storm costs are an example of where a difference could be justified.

7.10 The purpose of having the rates cap policy is to set out our long-term ambition for rates but will inevitably have to adapt to circumstances and changing rates of inflation.

7.11 The adoption of a policy of limiting rate increases to the CPI is the right response to the cost-of-living crisis. It is about Council recognising that we need to work hard at constraining costs in the foreseeable future to help our community and country get inflation in check.

7.12 The proposed change in rating policy from LGCI + 2.5% to CPI + growth represents a significant change in direction. I am recommending the change be phased in over a number of years. However, it is important to signal through the Long Term Plan Council’s intention to phase in a tighter constraint on Council expenditure and rate increases.

Other Options

7.13 Council could choose to continue with its current rates cap of LGCI +2.5% + growth. The advantage of this option is that it acknowledges that Council’s costs (particularly in relation to infrastructure) may escalate above the CPI level given the different basket of goods that drive Council costs, it would allow Council to fund growth driven projects despite the lag before development contributions are collected and it provides leeway for Council to choose to increase services to the community. The credit rating agency Standard and Poor’s will also view any further constraint on rates rises unfavourably. The disadvantage is that rates would not be kept as low as with a CPI linked rates cap.

8. Recommendation

That the Council

approves including in the Long Term Plan 2024-34 Consultation Document the phasing in of a new Rates Cap Policy of CPI + growth from the current policy of LGCI + 2.5% plus growth with LGCI + 2.5% plus growth in Year 1, LGCI + 2% plus growth in Year 2, LGCI + 1.5% plus growth in Year 3, LGCI + 1% plus growth in Year 4 and CPI + growth for Years 5-10.

R6 - Debt cap policy

8.1 Council will need to increase its debt cap to meet the programme of infrastructure works proposed and to fund the August 2022 flood recovery work. This work is to be undertaken over six years but paid for over 10 years, requiring interim borrowing.

8.2 The current debt cap (debt affordability benchmark) is that net external debt is not to exceed 175% of revenue. Net external debt is defined as total debt cash, term deposits and borrower notes. Revenue is defined as cash earnings from rates, government grants and subsidies, user chargers, interest, dividends, and excluding development contributions, financial contributions, vested assets, gains on derivative financial instruments and revaluations of property, plant or equipment.

8.3 The proposal to be included in the draft LTP for consultation is that this debt cap be increased to 200%. I believe this increase is affordable, noting that the Local Government Funding Agency (LGFA) sets a maximum of 280%.

8.4 Nelson’s net debt levels are moderate by comparison with other Councils and the Nelson City Council balance sheet and equity remains strong through the draft LTP. The risk in not increasing the debt cap is that we would have insufficient borrowing capacity to progress necessary investments in Nelson’s infrastructure without significantly higher rate increases. The decision on the debt cap and rate increase is an intergenerational debate about how much cost is met today and how much we ask future ratepayers to fund.

Other Options

8.5 Council could choose to continue with its current debt cap of 175% but this would require a significant reduction in the capital program over the 10 year period (of at least $65 million). Council could choose to increase the debt cap above 200% as the LGFA allow borrowing up to 280% but this may have an impact on the Council’s external credit rating.

9. Recommendation

That the Council

approves for consultation in the Long Term Plan 2024-34 Consultation Document an increase of the Debt Cap Policy from the Long Term Plan 2021-31 of net external debt not exceeding 175% of Council revenue to a new debt cap of not exceeding 200% of Council revenue.

R7 - NCMA debt write-off (Councillor proposal)

9.1 The 125-year-old Nelson Centre of Musical Arts (NCMA) went through a significant $9.5 million earthquake strengthening and upgrade last decade. The work was completed in 2018 with a mix of funds from Council, central government, charities and local fundraising. A cost overrun of $1 million occurred due to a lack of sufficient contingency around the costs of restoring such an intricate heritage building.

9.2 Council provided an interest-free loan that is being paid off at a rate of $33,000 per annum and now sits at $730,000. Council took a decision in July 2023 to allow a two-year pause on the repayments due to financial pressures being experienced by the NCMA.

9.3 The NCMA has been grateful for Council support and has not requested the write-off. It is fair to infer NCMA would welcome the write-off but the board members are also very conscious of their relationship with Council and the broader financial pressures in the community. The write-off has been advocated by some Councillors and Council agreed to consider it in the LTP process. The proposal is that the $730,000 be written off at the rate of $73,000 per annum over the next 10 years.

9.4 Nelson is very well served by its heritage arts institutions such as the Nelson Centre of Musical Arts. Council could have been more generous in its funding when the upgrade was undertaken and when the cost overrun occurred.

9.5 The counter consideration is that writing off the debt could set a precedent. It is likely to trigger requests for similar debt write-offs for the Theatre Royal ($1.862 million loan outstanding at 30 June 2023) and Tasman Bays Heritage Trust ($325,000 loan outstanding to both Nelson City Council and Tasman District Council). It may also not provide the right incentives for cost management on these sorts of community projects that Council may be involved with in future.

10. Recommendation

That the Council

Approves for consultation in the draft Long Term Plan 2024-34 Consultation Document the proposed write-off of the Nelson Centre of Musical Arts’ debt to Council of $730,000 at $73,000 per year over the 10 years of the LTP.

R8 - Tāhunanui Beach facilities (Mayor’s proposal)

10.1 Council has received a report by Breeze Consulting Ltd on the business case for a facility at Tāhunanui Reserve. It states that “there is a deficit in meeting levels of service there”, that there is a “compelling case” for investment and that “the most urgent need” relates to the surf lifesaving club’s inadequate facilities.

10.2 The report recommends a staged solution consisting of:

10.2.1 A new surf lifesaving facility near the beach;

10.2.2 Additional/upgraded changing facilities;

10.2.3 The old surf lifesaving building being modified/removed;

10.2.4 The planning of a new sports facility hub close to the sports field.

10.3 I propose that we provide sufficient resources to enable the first two stages of the recommendations to be advanced. The surf lifesaving facility is estimated in the report to cost $3.2 million. The upgrade of the sports field changing rooms is estimated to cost $50,000.

10.4 The proposal is dependent on the Nelson Surf Life Saving Club raising 50% of the capital cost ie $1.6m, but the Council meeting the full cost of the $50,000 upgrade to the existing sports field changing rooms and toilet block. This involves a capital allocation of $200,000 in Year 1 (2024-25) and $3.25m in Year 2 (2025-26).

10.5 Tāhunanui Beach is one of Nelson’s most precious jewels, hugely popular with locals and tourists alike. There is much about the Tāhunanui Reserve that is good but the surf lifesaving club’s facilities are amongst the worst in the country. It is very cumbersome for the club having its equipment stored in four different places and it’s unacceptable having shipping containers for storage on such an attractive beach.

10.6 The surf lifesaving club is more than a sports club. It provides an important public service with its volunteer patrols to help keep our beach safe. It also provides valuable opportunities for youth development. The club is well managed by President Noah Hosie, who received a Lifetime Achievement Award at the recent NZCT Whākatu Nelson Sport and Recreation Awards.

Other Options

10.7 Council could choose not to contribute to upgrading facilities at Tāhunanui Beach or to delay its contribution to upgrades to a later year. While that would reduce costs to the ratepayer it would not respond to the identified needs of the community.

11. Recommendation

That Council

approves for consultation in the Long Term Plan 2024-34 Consultation Document capital funding of $200,000 in Year 1 (2024-25) and $3.05 million in Year 2 (2025-26) to enable stage one and two of the Tāhunanui Beach upgrade to be progressed, noting the Nelson Surf Life Saving Club facility development requires a 50% contribution from the club of $1.6 million;

R9 - Arts hub capital funding (Councillor proposal)

11.1 Council agreed in 2022 on the He Tātai Whetū Arts & Creativity Strategy and received an accompanying gaps analysis of arts venues in the city. The strategy and the gaps analysis identified the need for an arts hub in the central city.

11.2 The building is to be the home for a proposed Arts Development Agency and would incorporate the existing activities of the Refinery ArtSpace as well as new opportunities, with an aim of providing access to the arts to anyone in the community. The old refinery in Rutherford Park would be expensive to earthquake strengthen and was not well located for the arts hub purpose. The proposed building would have spaces for a gallery, a variety of different workshop spaces for different art forms as well as shared offices for arts administration.

11.3 The Annual Plan 2023/24 allocated $100,000 funding to investigate opportunities for a new arts hub. A scoping document is under development, which will have sufficient detail to serve as the base for the development of a business case for such a facility. Preliminary work has been presented to the He Tātai Whetū Taskforce (Arts & Creativity Taskforce) recommending the funding proposal. The capital being sought would not be utilised without a successful business case being completed. Provision has been made for $20,000 per year of interim funds to lease a premise in the short term, starting in 2024/25. This $1.6m capital funding is to provide a longer-term solution by repurposing an existing centrally located venue with fit out from community fundraising.

Other options:

11.4 Council could choose to permanently support the Arts Development Agency in a rented space, potentially the existing Refinery space on Hardy Street. However, while that would reduce costs, the lack of a permanent home and freedom to alter and reconfigure the space, would hamper realisation of the vision for a flexible, inclusive community-led arts activity space. It could decide to advance the project by purchasing a home for the hub earlier in the Long Term Plan but this would not allow time for the new Arts Development Agency to test and grow the hub concept. Council could decide to fund a purpose-built hub, but this would come at significantly greater cost and push the project out further.

12. Recommendation

That the Council

approves for consultation in the draft Long Term Plan 2024-34 Consultation Document that $1.6 million be allocated in Year 4 (2027-28) of the Plan for the development of a central city community arts hub.

R10 - All-weather sports turf (Councillor proposal)

12.1 Nelson has the distinction of being New Zealand’s most active region in surveys of participation in sport and active recreation. This is supported by Council providing a good range of sports facilities and our region has many natural areas suitable for many types of outdoor recreation.

12.2 A gap in our sports facilities is the lack of an all-weather sports turf. Most similar-sized cities in New Zealand have such facilities including Invercargill, Dunedin, Christchurch, Lower Hutt, Upper Hutt, Masterton, Porirua, and others.

12.3 The lack of an all-weather turf means our sporting codes such as football have disruptions to their playing season as a consequence of sports grounds having to close for periods when it’s wet. Clubs advise that in a typical season football would lose between three and six rounds of play due to fields being too wet to play on. Clubs also restrict training in many other weeks to try and keep the fields in a fit playing condition for the weekend matches. This gap in our facilities adversely affects participation in these sports and our competitiveness nationally. An all-weather turf would also enable us to better rest and manage our other playing fields during wet winter conditions.

12.4 The other advantage of an all-weather turf is that it makes Nelson a more attractive venue for tournaments because organisers can have confidence that games will proceed regardless of weather or field conditions.

12.5 A counter consideration covered in a 2021 report on sports field capacity is that Nelson is not as constrained for space as major metropolitan areas. This report favoured the improvement of lighting and the quality of existing fields over a new artificial turf. However, a feasibility study by Recreation Sport and Leisure (RSL) Consultancy in May 2020 said a turf was feasible based on a model where users funding 10% maintenance and 100% depreciation.

12.6 Clubs have been advocating for an all-weather turf for many years. The proposal here is to provide for capital expenditure of $1.325 million, subject to 50% the funding being raised by sports clubs. This total budget of $2.65 million would provide for the artificial turf, fencing, lighting, and landscaping. This estimate is based on a 2022 report but adding 20% for subsequent inflation noting the project is intended for 2025-27.

Other Options

12.7 The main alternative to the recommendation below is to continue with the programme of improved grass turf maintenance and lighting upgrades developed following the 2021 external analysis of the optimum way to improve training capacity, following engagement with codes. This study built on a series of three previous investigations in 2017, 2018 and 2020 by different external providers into the best way to address sportsfield capacity in Nelson.

12.8 If the recommendation below is approved, funding risks to the ratepayer can be reduced by requiring that construction not commence until codes have demonstrated to the satisfaction of the Group Manager Corporate Services that they have raised 50% of the capital costs of the project and have the ability to meet on an ongoing basis the hire costs for use of the all weather turf necessary to cover depreciation of the asset and 10% of its annual maintenance. The programme of existing training light upgrades to playing fields instituted after the capacity review could also be reduced under this option, which would mean that existing conditions (some teams training in poor light) would remain. Other balancing options could also be investigated to reduce levels of service elsewhere, for example reviewing provision of a sand carpet turf at Trafalgar Park.

12.9 The other option Council can choose is to not make any improvements to capacity for its sports fields which would offer significant savings but would not address the shortfall in mid-week training capacity identified in previous studies.

13. Recommendation

That the Council

Approves including in the Long Term Plan 2024-34 Consultation Document capital funding of $1.3250 million in Year 2 (2025-26) and $1.325 million in Year 3 (2026-27) for an all-weather sports turf, noting that sports clubs would be required to contribute 50% of the cost ($1.325m).

R11 - Hill Street-Suffolk Road link (Mayor’s proposal)

13.1 Transport was rated in the latest Nelson City Council Annual Residents’ Survey as the issue of greatest concern and of highest importance to Nelsonians.

13.2 I am also influenced by an independent poll of Nelson residents that I had conducted prior to the 2022 Local Elections, in the aftermath of the August 2022 extreme weather event, when in response to the question of what the most important issue for Nelson was, 27% said transport, higher than 25% who said the recent storm. I am concerned that there is insufficient investment to address transport in the current draft Long Term Plan.

13.3 I am of the view that we need to be investing in all modes of transport to address these concerns including roads, public transport and cycleways. I note that the latest Census data from 2018 shows that 71% of journeys to work were by car, truck or van, 6% by bicycle, 7% by walking and 0.8% by public bus. We need to be investing in improving the roading network to address our region’s significant population and economic growth over recent decades.

13.4 A significant bottleneck for our network is between Richmond and Stoke where we have two links only – Whakatu Drive, managed by the NZ Transport Agency-Waka Kotahi, and Main Road Stoke. If either route is interrupted by road works, weather events, crashes or other emergencies, the area becomes gridlocked. This is a regular occurrence, happening two or three times a year, resulting in people not getting to hospital and missing flights as well as coming at significant economic cost.

13.5 The proposed link between Suffolk Road and Hill Street North will significantly improve the resilience of the network. It will also provide a major benefit for the growing population of eastern Stoke and eastern Richmond by providing a shorter link for access. It will benefit the wider community by reducing the traffic coming into the bottleneck and roundabouts on Main Road Stoke and Whakatu Drive.

13.6 This is a substantial project involving a number of bridges, property acquisition and upgrades of existing roads. There has also been discussion with Council from a property owner proposing development for housing and other purposes in the area. It is estimated the link would cost $37 million. It is expected Council would receive an NZTransport Agency-Waka Kotahi subsidy of 51%, amounting to $18 million and that there would be significant development contributions for any developer for their portion of expected use. There would also possibly be contributions from Tasman District Council, given the significant benefits to Richmond. It is proposed that the new link road would be designed to include safe access for cyclists and pedestrians, also improving these modes of transport.

Other Options

13.7 Council could wait for a developer to lodge a resource consent or request a private plan change to progress this project. This could save Council significant costs because it could enter into a private developer’s agreement to ensure that Council did not pay for the whole road costs but just the difference between a collector road (which the developer will want) and an arterial route (which would be Council’s preference). However, this may delay development and provision of the link and Council can, through development contributions, reclaim the growth element if this is in the Long Term Plan. The Council also benefits from the additional ratepayers if development proceeds.

13.8 Another option is that Council could include a portion of the funding, in anticipation of a partnership approach to the project with the developer.

14. Recommendation

That the Council

Approves for consultation in the Long Term Plan 2024-34 Consultation Document that net capital funding $4 million per year in Years 4, 5 and 6 (2027-28, 2028-29 and 2029-30) be included for a new road link between Hill Street North and Suffolk Road, subject to NZ Transport Agency-Waka Kotahi subsidies, significant development contributions from adjoining developments and possible contributions from Tasman District Council.

R12 - East-west cycleway (Councillor proposal)

14.1 The east-west cycle link is a package of work to create an active travel corridor that will connect the Maitai/Brook area in the east with the Railway Reserve corridor in the west. The route encompasses five schools and a tertiary institution and provides greater transport choices for those travelling east-west across Nelson, and would address a missing link in Nelson’s active travel network.

14.2 This link is essential to build on the work done by Council in expanding its cycleway network in a safe manner that will offer choice to those who wish to cycle (socially or to work). It builds on the work completed and underway in Nelson South and the hospital area as part of the Streets for People package.

14.3 The work will follow existing road corridors. It will require the reprioritisation of space for a separated facility along these roads and will mean the loss of some carparks. It is planned over two stages as follows:

Stage 1 – Focusing on Nile Street, between Collingwood and Domett Street. This will follow the upgrade of the Nile/Tasman in 2024 and Nile/Collingwood roundabouts planned for 2026-27.

Stage 2 – Waimea/Franklyn to Nile/Collingwood intersection.

14.4 This project was originally to be 100% funded by NZ Transport Agency-Waka Kotahi as part of the 2022 Transport Choices package. Nelson City Council and a number of other councils were not able to meet the unrealistic timeframes from NZ Transport Agency-Waka Kotahi. Nelson’s capacity issues were compounded by the August 2022 storm recovery works that were given priority. Representations were made to the previous government by me and others for an extension, but these were not successful on terms that could be reasonably achieved by the infrastructure team. The best prospect of the project now progressing is on a standard 51% NZ Transport AgencyWaka Kotahi Funding Assistance Rate (FAR).

14.5 This proposal is that an allocation of $5.4 million project be included in the draft Long Term Plan 2024-25 budget and that the project process in Years 2-4, subject to receiving the FAR subsidy, with Council’s share of funding at $0.25 million in Year 2, $2 million in Year 3 and $0.45 million in Year 4.

Other Options

14.6 Options include either not proceeding with or delaying work associated with this link. The first would not build on the work done to date and will leave a critical link between the hospital and Brook Street. The second will delay the safety benefits that will be part of the link work.

15. Recommendation

That the Council

approves for consultation in the Long Term Plan 2024-34 Consultation Document capital funding for Council’s share of the east-west cycle link with $0.5 million in Year 2, $4 million in Year 3 and $0.9 million in Year 4, subject to receiving the 51% NZ Transport Agency-Waka Kotahi Funding Assistance Rate subsidy.

R13 – Removal from previous LTP of kerbside kitchen waste collection service (Mayor’s proposal)

15.1 The draft LTP 2024-34 provides for kerbside kitchen waste collection of about $10.875 million, ramping up from $75,000 for preparatory work in 2024-25 to $1.46 million in 2027-28 when the collections contract is intended to start and then to $1.57 million in 2033-34 when it is fully implemented. The initial funding to start the scheme is to come from drawing down the reserves in the NCC solid waste account but rate funding will be required to sustain the significant cost of this new kerbside collection scheme in future years (years 9 onwards)

15.2 The purpose of the scheme is to reduce waste going to landfill and the resulting greenhouse gas emissions by providing a collection service for food scraps.

15.3 A trial was carried out in Nelson in 2021 of 130 households, costing $120,000 (or $923 per household) and averaged 5.5kg per household per week, equating to costs of $3200 per tonne. Economies of scale mean a city-wide scheme would be significantly less per household.

15.4 Auckland initiated a city-wide household food scrap collection scheme this year, costing $77.20 per property with the aim of reducing 40,000 tonnes of waste per year to landfill.

15.5 Recent reports from Auckland (10 October 2023) are that only 35%-40% of households who received the bins are consistently using them. The Auckland food scraps are transported 200km south to an Ecogas plant in Reporoa.

15.6 The previous government had proposed making it compulsory to collect household food scraps for urban areas of more than 1000 people from January 2027 (where an organics processing factory exists within 150km) and January 2030 for those without. The closest facility to Nelson is in Christchurch so the proposed regulation would have applied from January 2030. The previous government had stated the regulation requiring the food scraps collection would be introduced before the General Election but it was not. The indications from the new Government’s policies is that the compulsory requirement on councils to collect food waste will be unlikely to proceed but no formal announcement has yet been made.

15.7 A major issue for Nelson is that the scheme requires significant investment in a local biodigester. The facility handling the Auckland food waste cost $42 million.

15.8 The current costings of about $10.875 million in Nelson City Council’s proposed LTP were based on sharing the costs with Tasman District Council. We have been advised that Tasman is proposing not to proceed with the scheme for its LTP. It is very likely that the costs for a kitchen waste service for Nelson without TDC would be higher, given we would not benefit from economies of scale. That will invariably be tested by the market if this initiative proceeds.

15.9 There are six good reasons for removing the $10.875 million from Nelson City Council’s draft LTP:

15.9.1 The costs of the kerbside food scraps collection scheme are high relative to the benefits;

15.9.2 The Tasman District Council proposal not to proceed with the scheme makes a Nelson-only scheme less viable and will significantly increase the capital and operational costs for Nelson City Council;

15.9.3 The previous government did not meet its commitment to introduce new legislation prior to the General Election making it compulsory and it is unlikely to be a requirement of the new Government;

15.9.4 Council has just invested $2 million in methane collection wells at the York Valley Landfill, which enable these greenhouse gases to be collected and used for heating the hospital and is proposing a compressed bottled system to use the remainder. This is a more cost-efficient way of addressing greenhouse gases from food waste;

15.9.5 Many households already compost their food waste or use it to feed pets or chickens and it is unfair to impose a cost on them for a service they will not use;

15.9.6 Collecting food waste does not address the primary issue of households wasting excessive amounts of food.

15.10 Our community and nation face the problem of climate change and a cost-of-living crisis. Our approach needs to focus on those endeavours that will reduce emissions with the least cost. That is why I am such a strong supporter of the Emissions Trading Scheme (ETS) where the current market price is about $80/tonne. The problem with this initiative is that the cost per tonne of emissions reduction is very high. The nationally modelled figures of reductions of 45,000 tonnes per year and $80 a household equates to a cost per tonne of about $3500. Nor am I convinced that the reduction in materials going to landfill justifies the expense.

15.11 It should be noted that this proposal is part of a nationwide initiative that, according to the Ministry for the Environment, would reduce New Zealand’s greenhouse gas emissions by 45,000 tonnes per year out of a total of 77 million tonnes. This equates to a reduction of 0.06% and reinforces how small the greenhouse gas emissions are from household food scraps.

Other Options

15.12 Council could choose to continue with the kitchen waste scheme, retain the existing funding in the Long Term Plan and proceed with the project. There is a segment of the community that is supportive of this project proceeding and they would appreciate Council ongoing commitment to food waste collection.

15.13

16. Recommendation

That the Council

approves for consultation in the Long Term Plan 2024-34 Consultation Document removal of the kerbside kitchen waste collection service funding, provided for in the previous LTP 2021-31, resulting in savings of $75,000 in Year 1, $76,650 in Year 2, $104,550 in Year 3, $1.471 million in Year 4, $1.476 million in Year 5, $1.507 million in Year 6, $1.537 million in Year 7, $1.515 million in Year 8, $1.539 million in year 9 and $1.573 million in Year 10, totalling $10.875 million in savings.

R14 - Hanging flower baskets (Councillor proposal)

16.1 The current draft LTP does not include funding for the hanging flower baskets. These have been a feature of the central city since 2001 when they were initiated by the late Alan Drummond to add colour and greenery to the central city. The 650 flower baskets are provided by Nelmac with the support of dozens of volunteers who each spring assist with the preparation and planting of the baskets.

16.2 A proposal to remove the $100,000 per year funding from the draft LTP was made after most Councillors indicated at a workshop focusing on savings that the benefits were outweighed by the costs.

16.3 Some Elected Members took a different view. The sums involved are within the delegated powers of staff but given the likely public interest and the request of a Councillor, I believe the decision warrants consideration and a formal decision by Council whether to include the funding for the baskets. Council needs to decide whether the draft LTP going out for public consultation includes a continuation of the funding for the hanging flower baskets.

Other Options

16.4 Council could revert to the previous system where the hanging baskets were paid for by participating businesses. However, this was very time consuming for staff to organise and there was low participation from larger franchise/chain operators with headquarters based outside Nelson and overseas. There may be difficulty sourcing seeds for next summer given the uncertainty over continuing with the flower baskets.

17. Recommendation

That the Council

Approves for consultation in the draft Long Term Plan 2024-34 budget sufficient funding, estimated at $100,000 per annum, to maintain the city hanging flower baskets.

R15 – Events funding cap (Mayor’s proposal)

17.1 Nelson City Council invests significantly in events to provide the community with a rich events calendar, to support the economy, grow our sense of identity, build healthy partnerships with the events sector and to promote community wellbeing for a mix of economic, community and cultural purposes. The expenditure last year was $1.734 million, the budget this year is $1.780 million and the current draft LTP for consultation has this increasing to $1.839 million in 2024-25 and $2.006 million in 2025-26. This compares with similar-sized Marlborough and Tasman that spend $188,000 and $35,000, albeit other councils such as Queenstown, Tauranga and New Plymouth spend significantly more.

17.2 Major components of the current events budget include $400,000 for the Economic Events Fund, $83,000 for the Community Events Fund, $112,000 for the Council requested events, $604,000 for the Arts Festival, $32,000 for the Santa Parade, $147,000 for kapa haka, $35,000 for youth events, $26,000 for Four Lanes and several others. Our Council staff do a good job of managing this budget and delivering quality events.

17.3 I love the many cultural and sporting events supported by Council but do not think during a cost-of-living crisis and when we are proposing the largest rate increase in decades that we can justify increasing Council expenditure in this area.

17.4 The increasing budget this year and in future years arises as a consequence of new events being added to the events programme without considering taking the funding from existing economic, community or Council events budgets.

17.5 I am proposing that the events funding be capped at the current 2023-24 level of $1.780 million per year. It would require Council officers to review the overall events budget with a mind to achieve savings for some events and seeking greater sponsorship or partnering for others. This review would be consistent with the wide refresh of the Nelson Events Strategy currently being led by our officers.

Other Options

17.6 Council could continue to inflate the budget for events so that the current and planned events would be supported as expected. Events support the economic and social wellbeing of the community and the capping of overall funding may lead to a reduction in provision. Council could also choose to freeze the events budget for a period less than the 10 years of the Long Term Plan. This would allow some rationalisation of delivery without such a significant reduction.

18. Recommendation

That the Council

approves for consultation in the Long Term Plan 2024-34 Consultation Document an events budget capped at $1.780 million (the current 2023-24 budget) for each year, resulting in savings over the current draft LTP of $60,000 in Year 1 (2024-25), $225,000 in Year 2 (2025-26), $180,000 in Year 3 (2026-27) and totalling $3 million over the 10-year LTP and for Council officers to review the proposed events programme and budgets including exploring greater sponsorship and partnering so as to achieve the optimum economic, community and cultural benefits within this capped budget.

19. Next Steps

19.1 Based on the decisions in this report officers will amend the draft Long Term Plan 2024-34 budgets and develop the Consultation Document for community engagement. Elected members will have the opportunity to view the draft Consultation Document at a workshop on 25 January 2024 and provide feedback on the messaging in document before it goes to Audit for review. Adoption of the Consultation Document will occur at the Council meeting on 21 March 2024.

Attachments

Nil

Important considerations for decision making

Fit with Purpose of Local Government

Explain how the decision you are seeking fits the purpose of Local Government:

“a) to enable democratic decision-making and action by, and on behalf of, communities; and (b) to promote the social, economic, environmental and cultural well-being of communities in the present and for the future” Refer to LGA 2002 s10

The decisions in this report support the purpose of local government and all four wellbeings by contributing to the development of a robust Consultation Document for the Long Term Plan 2024-34 to enable community input to the 10-year work programme of Council.

Consistency with Community Outcomes and Council Policy

This report supports the following community outcome:

Our Council provides leadership and fosters partnerships, a regional perspective, and community engagement.

Risk

If the decisions in this report are not taken, this will delay the audit of the Consultation Document for the Long Term Plan 2024-34, which risks Council being unable to adopt the Plan by 30 June 2024 as required.

Financial impact

Describe how both the immediate and long term costs associated with the recommendation will be funded. Consider whether the recommendations may lead to a need for increased staffing. Are there future or associated costs that may not be immediately obvious?

There is no immediate financial impact from the decisions in this report but it does provide direction for important elements of the proposed Long Term Plan 2024-34 budget to be consulted on with the community.

Degree of significance and level of engagement

The content of the Long Term Plan 2024-34 is of high significance and a special consultative procedure will be undertaken to engage with the community.

Climate Impact

See for more guidance.

Your response may:

This decision will have no effect on the ability of Council to proactively respond to the effects of climate change, now or in the future.

Inclusion of Māori in the decision making process

No engagement with Māori has been undertaken in preparing this report but early engagement has occurred with iwi on priorities for the Long Term Plan 2024-34 and Māori will have the opportunity to submit on the Consultation Document to the Long Term Plan 2024-34.

Legal context

Development of a Long Term Plan is a requirement of the Local Government Act 2002.

Delegations

Provide a statement about which committee, or the Council if appropriate, has the delegations for this decision; refer to the Delegations Register. Quote the specific section relevant to this decision in italics, delete the headings below not applicable.

Example text:

This is a matter for Council.

Item 8: Long Term Plan 2024-2034 Supporting Information and change to Rates Remission Policy

Council

14 December 2023

Report Title: Long Term Plan 2024-2034 Supporting Information and change to Rates Remission Policy

Report Author: Susan Coleman - Acting Manager Strategy

Report Authoriser: Nicky McDonald - Group Manager Strategy and Communications

Report Number: R28167

1. Purpose of Report

1.1 To adopt some of the supporting information for the Long Term Plan 2024-2034 (LTP) consultation process.

1.2 To remove the Heritage Buildings remission from the Draft Rates Remission Policy previously approved by Council for consultation.

2. Summary

2.1 Council is required to consult the community on its LTP through a Consultation Document and at the same time it needs to make available to the public a range of supporting information that was used to inform the development of the Consultation Document. Some of the supporting information relied on for developing the Consultation Document is now available for Council approval.

2.2 On 19 October 2023, Council adopted the Rates Remission Policy for consultation in parallel with the LTP Consultation Document. Council has had further workshop discussions and this report proposes a reconsideration of whether to retain the Heritage Buildings remission.

3. Recommendation

That the Council

1. Receives the report Long Term Plan 2024-2034 Supporting Information and change to Rates Remission Policy (R28167) and its attachments (1852948764-433, 1852948764-460, 1852948764-398, 1852948764-399, 1852948764-265); and

2. Adopts the following documents as supporting information for Nelson’s Long Term Plan 2024-2034 Consultation Document as required by section 93G of the Local Government Act 2002:

2.1 Draft Vision and Priorities (1852948764-433)

2.2 Draft Community Outcomes (1852948764-460)

2.3 Draft Statement on Fostering Māori Participation in Council Decision Making (1852948764-398)

2.4 Draft Forecasting Assumptions (1852948764-399); and

4. Adopts the revised Draft Rates Remission Policy (1852948764-265), updated to remove the Heritage Buildings remission, for public consultation in accordance with sections 102, 109, 82 and 82A of the Local Government Act 2002; and

4. Background and Discussion

Supporting information

4.1 Every three years Council is required, under the Local Government Act 2002, to prepare and adopt a LTP containing Council’s 10 year work programme including all the services and activities it plans to deliver and the estimated costs of those. Council has held numerous workshops to discuss its approach to the LTP.

4.2 Council is being asked to adopt the following supporting information that has helped inform development of Council’s LTP Consultation Document.

4.2.1 Vision and Priorities (Attachment 1: 1852948764-433) – the vision and priorities were discussed by Council at several workshops. Staff have collated elected member feedback and Council is now being asked to adopt the new vision and priorities for inclusion in various documents relating to the LTP and its supporting information.

4.2.2 Community Outcomes (Attachment 2: 1852948764-460) - the community outcomes were discussed by Council at several workshops. Elected members indicated their preference to retain the existing community outcomes and Council is now being asked to adopt them for inclusion in various documents relating to the LTP and its supporting information. Each outcome has an associated paragraph explaining more about it. The explanations taken from the previous LTP have been reviewed and are substantively the same with minor editorial updates.

4.2.3 Statement on Fostering Māori Participation in Council Decision Making (Attachment 3: 1852948764-398). The Statement has been updated for Council adoption.

Assumptions

4.3 On 6 July 2023, Council resolved to approve the Draft Significant Forecasting Assumptions:

Resolved CL/2023/162

That the Council

2. Approves the amended Draft Significant Forecasting Assumptions that will be used to inform development of the Long Term Plan 2024-2034 (1852948764-211).

4.4 The draft assumptions were based on information available at that time and the report noted that the final draft assumptions would come back to Council for approval as supporting information when all the data was available. The final draft assumptions document is attached and it shows the changes from the version approved in July. Council is now asked to adopt the final version of the draft assumptions.

4.5 Staff note that the assumption ‘Amalgamation of water services – Water Services Reform’ on page 4 of Attachment 4 (1852948764-399) is based on the current legal requirements under the Water Services Entities Act 2022. If the legislation changes, it is proposed the assumption be updated to wording on the table below, noting approval of the change will be delegated to the Mayor and Chief Executive if Recommendation 3 is approved.

Forecasting assumption 2024-2034	Description of risk 2024-2034	Impact if assumption not correct 2024-2034	Mitigation 2024-2034
It is assumed Council will continue to manage water supply, wastewater, and stormwater for the lifetime of the Long Term Plan 2024-2034. Therefore, funding for assets, staff and contractors who deliver water services will continue to be included in the budgets.	There is still considerable uncertainty about the future management of the three waters services. If Council’s role in managing and delivering water services changes it would mean Council’s Long Term Plan will need significant adjustment and it could have impacts on Council finances, staffing, capital works programmes and operations.	High	Council will respond to the direction provided by the incoming Government and engage closely with the Te Tauihu councils, iwi and stakeholders as needed.

4.6 The ‘Inflation/price changes’ assumption on page 6 and 7 of Attachment 5 is the Local Government Cost Index (LGCI) figures provided by BERL. BERL provided two sets of figures to councils – one set with water infrastructure and one set without water infrastructure. Staff have used the figures that include water infrastructure for the first two years of the Long Term Plan and the figures without water infrastructure from 2026/27 onwards. This meets the current legislative requirements. If legislation changes the figures with infrastructure included will need to be used (set out below).

Year	LGCI (with water infrastructure)
2024/25	2.9
2025/26	2.2
2026/27	2.3
2027/28	2.3
2028/29	2.2
2029/30	2.1
3030/31	2.0
3031/32	2.0
3032/33	1.9
3033/34	1.9

Draft Rates Remission Policy change

4.7 On 19 October 2023, Council adopted (CL/2023/231) the Draft Rates Remission Policy for consultation in parallel with the LTP Consultation Document. Council has subsequently indicated it wishes to reconsider whether to retain the Heritage Buildings general rate remission of up to $3,000 per year per property. Council grants in the order of $90,000 - $100,000 of general rate remissions relating to heritage buildings each year. Council has provided a rates remission to assist with the preservation and maintenance of Nelson’s heritage buildings.

4.8 Removing the remission may make it harder for building owners to maintain them. However, while Council seeks a commitment from building owners for the ongoing retention and maintenance of their buildings, it has no guarantee that the money saved by the property owner through the remission will be spent on maintenance. There is also a cost in staff time for the processing of the remission applications. If Council retains the remission, it will mean that the lost revenue from the remissions will need to be recovered from other ratepayers. The attached Draft Rates Remission Policy (Attachment 5: 1852948764-265) shows the removal of the heritage buildings remission in tracked changes.

5. Options

5.1 Council has two options in relation to the supporting information.

Option 1: Adopt the supporting information to the Long Term Plan 2024-2034 consultation process (recommended option)
Advantages	· Provides Council with the opportunity to make minor amendments to the documents at the meeting, if needed. · Meets the requirements of the LGA 2002 to prepare and adopt the information relied on for the content of the LTP Consultation Document. · Reduces the amount of supporting information Council will need to adopt in March 2024. · Provides members of the community with additional information to help them prepare submissions to Council on the LTP Consultation Document. · Puts the information in the public arena earlier to enable interested members of the public the opportunity to start considering it prior to the formal consultation process commencing.
Risks and Disadvantages	· Council would not have a further opportunity to make major amendments to the supporting information, if it considers they are needed prior to public consultation.
Option 2: Amend the supporting information prior to consultation
Advantages	· If Council considers that the supporting information does not meet its needs or the needs of the community, Council can request staff to make further amendments before releasing the information for public consultation.
Risks and Disadvantages	· Use of further staff time to undertake the amendments and report back to Council.

5.2 Council has two options in relation to the heritage building rates remission.

Option 1: Remove the rates remission for heritage buildings from the draft Rates Remission Policy (recommended option)
Advantages	· Enables the public to comment on the proposal to remove the remission. · The lost revenue from the remissions of in the order of $90,000 - $100,000 per annum will not need to be recovered from other ratepayers. · There will be less staff time needed to process the rates remissions.
Risks and Disadvantages	· Removing the remission may make it harder for heritage building owners to maintain them.
Option 2: Retain the rates remission for heritage buildings in the draft Rates Remission Policy
Advantages	· Heritage building owners will receive a rates remission which may assist with the maintenance of the buildings.
Risks and Disadvantages	· There is no guarantee that the heritage building owners will spend the money saved through the remission on maintaining the heritage building. · The lost revenue of $90,000 - $100,000 per annum from the remissions will need to be recovered from other ratepayers. · Staff time will need to be spent on processing the remissions.

6. Conclusion

6.1 Council is required to make available to the public a range of supporting information used to inform the development of the LTP Consultation Document. This report provides Council will the opportunity to adopt some of the supporting information now.

6.2 The report also enables Council to consider whether to remove the Heritage Buildings remission from the Draft Rates Remission Policy prior to consultation.

7. Next Steps

7.1 If Council approves the supporting information and Draft Rates Remission Policy, they will be made available to the public along with the LTP Consultation Document in March 2024. These documents will also need to be audited by Audit NZ prior to consultation as part of the LTP audit process. Staff will prepare the remainder of the supporting information required and bring that to Council in the New Year.

Attachments

Attachment 1: 1852948764-433 Draft Vision and Priorities ⇩

Attachment 2: 1852948764-460 Draft Community outcomes ⇩

Attachment 3: 1852948764-398 Draft Statement on Fostering Māori Participation in Council Decision Making ⇩

Attachment 4: 1852948764-399 - Draft Significant Forecasting Assumptions - Long Term Plan 2024-2034 ⇩

Attachment 5: 1852948764-265 Draft Rates Remission Policy ⇩

Important considerations for decision making

Fit with Purpose of Local Government

The decisions in this report support the purpose of Local Government by enabling our community to have input to Council’s democratic decision-making processes that will impact community wellbeing.

Consistency with Community Outcomes and Council Policy

Providing information to assist the public with their submissions on the LTP is consistent with the community outcome “Our Council provides leadership and fosters partnerships, a regional perspective, and community engagement”.

Risk

Adopting the supporting information and making the change to the Draft Remission Policy is considered low risk, as Council will consider public feedback before making its final decisions. The proposed process is in line with the requirements of the Local Government Act 2002. There is a risk that some members of the public might object to the final decisions that Council makes or challenge the process. Ensuring sufficient information is available to the public to enable a robust consultation process will help mitigate this risk.

Financial impact

There is limited financial impact from the decision to adopt the supporting information. The costs will be covered from existing budgets. The decision to remove the Heritage Buildings remission from the Draft Rates Remission Policy also has limited financial impact, as Council will either receive the rates income from those building owners or recover it from other ratepayers.

Degree of significance and level of engagement

The decisions sought in this report have been assessed as having a low to moderate level of significance, and the community will have an opportunity to provide feedback on the supporting information and the Draft Rates Remission Policy prior to the LTP being finalised.

Climate Impact

The decisions in this report will have no impact on the ability of Council to proactively respond to the impacts of climate change now or in the future.

Inclusion of Māori in the decision making process

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

Legal context

Council’s decision must be made in accordance with Part 6 of the LGA 2002. Council has power to make this decision under the Local Government Act 2002 (sections 93G, 102, 109, 82 and 82A). The legal process Council must follow to make this decision is to consider the supporting information and the Draft Rates Remission Policy and, if happy with them, make them available during the LTP consultation process.

Delegations

The decisions contained in this report are within the Council’s area of responsibility.

Item 9: Change in Marina Governance from Management CCO to Asset Owning CCO - Transfer of Marina Assets and Liabilities to CCO

Council

14 December 2023

Report Title: Change in Marina Governance from Management CCO to Asset Owning CCO - Transfer of Marina Assets and Liabilities to CCO

Report Author: Nigel Skeggs - Manager Nelson Marina

Report Authoriser: Martin Croft - Strategic Adviser Community Services

Report Number: R28179

1. Purpose of Report

1.1 To establish an Asset Owning Council Controlled Organisation as the preferred governance model for Nelson Marina, and then transfer the Marina assets and liabilities to the new CCO once established (the proposal) and agree on the process for consultation on the proposal as part of the Long Term Plan process.

2. Recommendation

That the Council

2. Approves the establishment of an Asset Owning Council Controlled Organisation as the preferred governance model for Nelson Marina; and

3. Agrees, subject to consultation, to provide for the transfer of the Marina assets and liabilities to the Marina CCO in the Long Term Plan; and

3. Background

3.1 In 2021, the Council initiated a strategic collaboration with Infracure to undertake a comprehensive Section 17A review. This review (required by the Local Government Act 2002 and testing the best options for delivering services) was centred on exploring various potential governance structures for Nelson Marina, projecting into the future.

3.2 Following this, on 3 December 2021, a comprehensive report entitled "Nelson Marina s17A Governance Review (R26108)" was presented. This report proposed the formation of a Council-Controlled Organisation (CCO) dedicated to the management of the marina.

3.3 As required by Section 56 of the Local Government Act, a public consultation was necessary prior to establishing a Council-Controlled Organisation (CCO). This consultation ran for eight weeks from 20 December 2021 to 20 February 2022.

3.4 The Strategic Development and Property Subcommittee, on 24 March 2022, endorsed the "Nelson Marina Governance Review (R26685)" report, recommending it to the Council. The recommendation entailed the initial establishment of a Management CCO, with a provision for future evaluation and potential evolution into a fully Asset-owning CCO.

3.5 On 10 May 2022, the Council (CL/2022/001) formally endorsed the formation of a Council-Controlled Organisation (CCO). Subsequently, on 29 September 2022, the Council ratified the "Nelson Marina Management Council Controlled Organisation Formation (R26940)", a document encompassing the constitution and the board of directors' appointment procedures for the new entity.

3.6 Effective from 1 July 2023, Nelson Marina Management Ltd, owned by the Council, assumed the management responsibilities of Nelson Marina.

4. Discussion

4.1 Nelson Marina Management Ltd, which is currently established and operating as a Management Council-Controlled Organisation (CCO) for Nelson Marina, has established a robust governance structure and is directed by a highly qualified board of directors. Despite this strong framework, there are inherent limitations that need to be addressed:

4.1.1 The board's decision-making authority is currently constrained. It’s delegated powers from the Council, particularly in executing contracts and leases, and ultimately directing staff and resources, are limited.

4.1.2 Under the current Management CCO Model, Nelson Marina is required to borrow exclusively from the Council. Given the approved masterplan for Nelson Marina will require an investment exceeding $100 million, the current arrangement would significantly increase the Council’s debt levels. In contrast, an Asset-owning CCO model would allow for a more diversified approach to financing, spreading the financial burden and associated risks across commercial financial institutions.

4.1.3 There is an observed inefficiency in resource utilisation, as the Council continues to allocate resources to manage Nelson Marina. This arrangement leads to a redundancy in roles, particularly overlapping with the functions of the board of directors, resulting in an inefficient use of both time and financial resources for Nelson Marina and the Council.

4.2 In light of these limitations, this report proposes a shift from a management CCO model to the establishment of a full Asset-owning CCO for the Nelson Marina.

4.3 This shift will also involve a transfer of the Council’s Marina assets to the CCO.

4.4 The assets and liabilities, and their book value (Net Carry Value), linked to Nelson Marina’s closed account are listed in Attachment 1, and comprises of:

Assets:

4.4.1 Land @ $6,504,000

4.4.2 Buildings @ $1,257,667

4.4.3 Plant @ $12,597,886

4.4.4 Total Asset Value = $13,855,553

Liabilities:

4.4.5 Loan @ $9,600,000 (as at 1 November 2023)

Owners Equity:

4.4.6 Assets less Liabilities = $4,255,553

4.5 The assets and liabilities, and their market and reinstatement value, linked to Nelson Marina’s closed account are listed in Attachment 2, and comprised of:

Assets:

4.5.1 Land @ $11,020,000 (Unimproved Capital Value – QV2021)

4.5.2 Buildings @ $6,200,000 (Reinstatement Value – Sept23)

4.5.3 Plant @ $29,000,000 (Reinstatement Value – Sept23)

4.5.4 Total Asset Value = $46,220,000

Liabilities:

4.5.5 Loan @ $9,600,000 (as at 1 November 2023)

Owners Equity:

4.5.6 Assets less Liabilities = $36,620,000

4.6 The land parcels relating to Nelson Marina are shown in Attachment 3.

4.7 With the transfer of assets and liabilities from the Council to the Asset-owning CCO, there will be a revaluation of these assets to their current market value. An independent market valuation will be commissioned prior to transfer and it is anticipated that the total market value of the marina will exceed the reinstatement value of its buildings, plant, and equipment.

Why Transfer the Assets:

4.8 This proposed shift is aimed at improving efficiency, effectiveness, and the overall value delivered to the community. The reasons for the change include:

4.8.1 Positive Impact on Council Debt Levels: The transfer of assets and liabilities to the new CCO would also transfer the associated debt. This means the debt currently recorded on the Council's balance sheet would move to the new CCO, alleviating the Council's direct debt load. This aspect becomes increasingly importantl as the marina progresses according to the approved masterplan, enabling external borrowing for capital development instead of relying solely on Council funds.

4.8.2 Enhanced Operational Efficiency and Expertise: The structure of an Asset-owning CCO brings with it significant advantages in terms of operational efficiency and expertise. Being independent from direct Council oversight, the board can make strategic decisions more swiftly and effectively. This autonomy enables the CCO to optimise asset utilisation and respond promptly to evolving market conditions, ensuring a more agile and professional approach to managing its responsibilities and assets.

4.8.3 Financial Advantages: Asset-owning CCOs enjoy increased flexibility in their financial operations, encompassing aspects like investment, borrowing, and pricing. This flexibility can lead to improved financial outcomes and potentially lessen the fiscal impact on both the Council and the ratepayers.

4.8.4 Balancing Community Service with Commercial Objectives: A fully Asset-owning CCO, while dedicated to public service objectives, is also positioned to engage in commercially driven pursuits. This strategy emphasises the efficient use of assets and the generation of revenue, which can be subsequently reinvested into community services and infrastructure development. This dual focus enables the CCO to sustainably support community needs while fostering financial growth and stability.

4.8.5 Strategic Asset Management: CCOs that specialise in asset ownership possess a heightened capacity for flexible and strategic asset management. This approach primarily revolves around the ability to make more agile and informed decisions concerning the maintenance, upgrades, and expansion of assets, tailored to anticipate and meet future community needs. The emphasis on flexibility allows for a more dynamic response to changing requirements, ensuring assets are managed effectively over the long term.

4.8.6 Risk Management: Shifting assets to a CCO also entails transferring certain risks away from the Council. CCOs typically have greater agility in responding to market fluctuations and managing operational risks.

4.8.7 Community and Stakeholder Engagement: A full Asset-owning CCO can effectively balance commercial and community interests, ensuring that provided services and facilities align with local needs and expectations.

4.8.8 Regulatory Compliance and Governance: Operating under specific governance and regulatory frameworks, CCOs can achieve higher levels of compliance and operational transparency.

4.8.9 Revenue Generation and Cost Efficiency: CCOs may have more opportunities for innovation and revenue generation, potentially leading to increased income and cost efficiencies.

4.8.10 Political Independence: CCOs can function with a certain degree of independence from daily political dynamics, fostering business-centric and long-term decision-making.

4.8.11 Flexibility in Market Response: Owning assets empowers CCOs to respond more flexibly to market conditions and opportunities, adapting their strategies for optimal asset utilisation and revenue generation.

4.9 The anticipated impact of transferring assets and liabilities to the Asset-owning CCO on Nelson City Council (NCC) includes:

4.9.1 A decrease in Council debt by approximately $9,600,000.

4.9.2 An enhancement in Council equity regarding the ownership of marina assets, rising from $4,255,553 to $36,620,000. This increase is attributed to the Council's 100% shareholding in the Asset-owning CCO, Nelson Marina Management Limited.

4.10 To summarise, the shift to an Asset-owning CCO model represents a transition to a more business-focused management of crucial community assets while also maintaining a social lens. This change holds the potential to improve services, financial outcomes, and add value to the community. It is expected to bolster the Council's equity and simultaneously reduce its overall debt. Nonetheless, this strategic direction requires a careful balancing of commercial goals with the public interest and community values.

4.11 Although the marina debt is off the Council’s balance sheet, it is likely that the debt within the marina CCO would still be considered by Standard and Poor’s when setting the Council’s credit rating as the CCO is 100% owned by Council. Council will still need to be very mindful of the marina’s debt profile through the Statement of Expectation/Statement of Intent process.

4.12 The recommendation in this report is that the Asset-owning CCO not be a council-controlled trading organisation (CCTO). A CCTO is defined in the LGA as a CCO that operates a trading undertaking for the purpose of making a profit. The differences between a CCO and a CCTO, and the advantages and disadvantages of each, are discussed in the options analysis below.

4.13 Adopting an Asset-owning CCO model will not necessitate any alterations to the existing constitution of Nelson Marina Management Limited. This includes maintaining the current board composition and the operational methods of the board.

4.14 The governance and performance monitoring of the Asset-owning CCO will be conducted through various reporting measures. These include the Statement of Expectation, Statement of Intent, and regular reporting intervals - every six months and annually - to the Council as shareholders.

4.15 In accordance with Section 93E(d) of the Local Government Act 2002, officers have conducted a thorough evaluation and determined that the proposed transfer of control or ownership of the Marina assets does not present any conflicts of interest.

Considerations on Tax Implications of Asset Transfer

4.16 The main drawback of transferring assets to the marina company is the loss of the Council's tax-exempt status. This change would subject the Asset-owning CCO to corporate taxes on its profits. Based on the operational results of the past five years, the estimated annual tax cost would be approximately $65,000. However, it's important to note that paying company tax, currently at a rate of 28%, is a standard practice for businesses. This expense will be factored into the CCO’s pricing strategy and revenue generation plans to ensure financial stability and operational efficiency.

5. Options

5.1 In evaluating potential models for the management and operation of the Marina, four options have been identified for consideration:

5.2 Option 1 - Status Quo – Management Council-Controlled Organisation (CCO) – no Transfer of Marina assets: This approach involves retaining the existing framework (status quo), where a Management CCO will continue to oversee and manage the assets which are owned by Council. Operating as a closed account, this model emphasises administrative control and oversight, ensuring that the assets are managed directly under the Council's guidelines and directives. This model is characterised by its direct alignment with the Council's objectives and operational norms, maintaining a steady course without significant structural or functional changes.

5.3 Option 2 - Asset-Owning Council-Controlled Organisation (CCO) – transfer of Marina assets: This option involves a shift towards a more service and community-oriented approach. Here, the Marina assets are transferred to the CCO whose primary objective would be to provide services and facilities on behalf of the Council, but with a strong emphasis on serving community needs. This model is designed to strike a balance between operational efficiency and effectiveness, while also remaining committed to public service values. Unlike a purely commercial entity, this type of CCO, while operating in a business-like manner and aiming for profitability, would also factor in broader public interests. These interests include ensuring public access to facilities and potentially supporting specific community amenities like the Sea Sports facility. This approach reflects a dual commitment to both fiscal responsibility and community service.

5.4 Option 3 - Asset-Owning Council-Controlled Trading Organisation (CCTO) – transfer of Marina assets: This option also involves transferring the Marina assets to the CCO, but with the CCO operating as a Council-Controlled Trading Organisation. As a specialised form of CCO, a CCTO's mandate is primarily focused on the carrying out of trading activities for the purpose of making a profit. Compared to the Asset-owning CCO in Option 2, a CCTO has a more business-centric operational ethos, prioritising revenue generation and commercial viability, and potentially providing a new revenue stream for the Council while also engaging in market-driven activities. This is different from the focus of an Asset-owning CCO on the provision of services for the Council, and serving community needs.

5.5 Option 4 – Council Owns and Operates the Marina – Revert to old model: Reverting the marina back under direct council management remains a possibility, however, it is not a recommended course of action. Such a reversal would likely be perceived by the community as a downgrade in service quality, and be viewed as an inefficient use of time, money, and resources. This perspective stems from the fact that transitioning away from a governance model with a dedicated and effectively functioning board would represent a step back, rather than building upon and enhancing the existing successful framework.

5.6 Each of these options presents a unique approach to asset management and service delivery, with varying degrees of alignment with public service ethos, operational efficiency, and profit generation. The choice among these models depends on Council’s priorities, strategic objectives, and the specific needs and expectations of the Nelson community it serves.

5.7 Given the above, officers recommend that Option 2 – transfer of the Marina assets to an Asset-owning CCO – be approved as the preferred governance option (Proposal).

5.8 The table below sets out an assessment of the advantages and risks/disadvantages of the four options considered in this report:

Option 1: Status Quo – Management Council Controlled Organisation
Advantages	· business as usual with all staff remaining as Council employees. · not liable for company tax on profits.
Risks and Disadvantages	· complex governance and oversight structure that is halfway between an Asset Owning CCO and a Council department. · slower to react to market and to develop assets as many decisions need to come back through Council. · not fully utilising the governance skills of a highly qualified board of directors. · challenging lines of delegation and oversight.
Option 2: Asset Owning Council Controlled Organisation (CCO) (Recommended Option)
Advantages	· reduces Council debt levels by transferring the marina loan with the assets. · allows the Asset-owning CCO to set the fees and charges for the marina on a commercial basis, ensuring a return on assets to the shareholders. · increases Council’s overall asset value. · specialised management, governance and expertise to the operation and maintenance of marina assets. · operate more efficiently than Council departments due to a more commercial and performance-driven culture. · clear focus on specific services or assets, leading to better accountability and performance monitoring. · segregating risks, particularly where the assets are associated with commercial or operational risks that the Council prefers not to directly manage. · can generate profits which can be reinvested in community services or returned to the Council. · provides a strategic approach to the utilisation of assets, ensuring they are used effectively and in alignment with long-term community and economic goals. · can be more agile in adapting to new technologies and innovative practices. · subject to robust governance structures and oversight mechanisms, which can lead to more transparent and accountable management of public assets. · strikes a balance between a commercial company for profit and providing services to the public.
Risks and Disadvantages	· transferring assets to a CCO can result in the Council having less direct control over the management and operation of the marina assets. · there may be concerns about reduced transparency and public accountability in the management of the assets, as CCOs operate at arm's length from the Council. · there might be concerns that transferring assets to a CCO is a step towards privatisation, which could lead to resistance from the public and certain stakeholder groups. · as an asset owning CCO, the company will be liable for company tax at 28% on profits generated.
Option 3: Asset Owning Council Controlled Trading Organisation (CCTO)
Advantages	· reduces Council debt levels by transferring the marina loan with the assets. · increases Councils overall asset value. · allows the Asset-owning CCO to set the fees and charges for the marina on a commercial basis, ensuring a return on assets to the shareholders. · allows the marina to borrow from alternative sources rather than relying solely on Council. · specialised management, governance and expertise to the operation and maintenance of marina assets. · operate more efficiently than Council departments due to a more commercial and performance-driven culture. · clear focus on specific services or assets, leading to better accountability and performance monitoring. · segregating risks, particularly where the assets are associated with commercial or operational risks that the Council prefers not to directly manage. · will generate profits which can be reinvested in community services or returned to the Council. · provides a strategic approach to the utilisation of assets, ensuring they are used effectively and in alignment with long-term community and economic goals. · can be more agile in adapting to new technologies and innovative practices. · subject to robust governance structures and oversight mechanisms, which can lead to more transparent and accountable management of public assets.
Risks and Disadvantages	· transferring assets to a CCO can result in the Council having less direct control over the management and operation of the marina assets. · there may be concerns about reduced transparency and public accountability in the management of the assets, as CCOs operate at arm's length from the Council. · there might be concerns that transferring assets to a CCO is a step towards privatisation, which could lead to resistance from the public and certain stakeholder groups. · the transfer might lead to changes in service levels or access, potentially impacting the community negatively. Councils often consider the public service aspect of asset management, which might not align with a more commercially focused CCTO. · as an asset owning CCTO, the company will be liable for company tax at 28% on profits generated. · marina will be operated on a commercial basis purely for profit and may drop out non-commercial/non-revenue generating community projects within the masterplan.
Option 4: Council Owns and Operates the Marina
Advantages	· the Council retains direct control of all Marina land, assets, and operations. · not liable for company tax on profits.
Risks and Disadvantages	· goes against the views of the community as previously established in the section17a review. · would remove the currently sitting board. · would be viewed by the community as a step backwards. · less commercial or nimble than a dedicated and separate entity. · viewed as less able to respond quickly and effectively by berth holders and other stakeholders. · given the significant amount of investment that is likely to occur at the Marina over the next 10 years or so, it would be beneficial to have involvement from individuals with expertise and experience in significant capital projects, and the commercialisation of them. · management of the Marina is one of many functions carried out by the Council, meaning it may not get as much attention or dedicated focus, as it would under an entity that’s sole purpose is to deal with the Marina.

6. Conclusion

6.1 The recommended course of action, as determined through thorough evaluation, is the adoption of Option 2, the establishment of a new Asset Owning Council Controlled Organisation to operate and manage the Nelson Marina, including its assets.

6.2 The strategic transition to an Asset-owning CCO will involve a well-planned transfer of assets and liabilities from Council ownership to a newly established Asset-owning CCO. Accompanying this transition, there will be a need to modify the constitutional, governance, and accountability frameworks of the existing management CCO, aligning them with its new role as an Asset-owning CCO. The preference for this model is based on its alignment with several critical goals: it enhances operational efficiencies, optimises asset utilisation, and promises significant governance improvements by fully leveraging the board's expertise with complete authority to make strategic decisions. Additionally, this approach provides a notable level of commercial autonomy, further supporting its effectiveness.

6.3 A key element of the favoured approach is the continued dedication to enhancing the management and delivery of public amenities and facilities. This commitment aligns closely with the community-focused principles integral to the Council's mission. In this framework, the Asset-owning CCO model is viewed as offering a harmonious balance, effectively blending business acumen with public service responsibilities. Additionally, the Council's well-established accountability and monitoring measures will play a crucial role in assessing the CCO's performance, ensuring that it meets both commercial objectives and community needs effectively.

6.4 This preference for Option 2 is also informed by a careful consideration of the potential limitations inherent in other models, particularly the Council-Controlled Trading Organisation (CCTO) as outlined in Option 3. While a CCTO offers an attractive pathway for revenue generation and commercial ventures, it inherently carries the risk of overly prioritising profit-making objectives. Such a profit-centric approach might inadvertently lead to the deferment, or, in more extreme scenarios, the complete abandonment of projects and initiatives focused on public welfare and amenities. This could be at odds with the Council's overarching mandate of serving the public interest. By preferring Option 2, the Council will mitigate these risks, and ensure that the balance between commercial viability and public service is maintained.

7. Next Steps

7.1 Pursuant to Section 76 of the Local Government Act 2002 (LGA2002), the evaluation conducted by officers categorises the transfer of assets and liabilities from the Council to the Asset-owning CCO as having a medium to high level of significance. This assessment is detailed in Attachment 4 for reference.

7.2 Given the noted significance of this assessment, coupled with the proposal to exclude the marina's closed account from the Long Term Plan (LTP), and considering the substantial value of the assets and liabilities involved, it is advised that the decision to transfer should be part of the public consultation process outlined in the LTP consultation document. This will ensure the decision is adequately covered and incorporated within the LTP.

7.3 The consultation document for the LTP must also include discussion of the various alternative options for Marina governance. This will, through consultation, provide the opportunity to gather public input and gauge community sentiment regarding the proposed governance and ownership change.

7.4 Regarding the LTP consultation process, it is a critical component of local government planning in New Zealand, designed to engage the community in the decision-making process. The LTP is a document that outlines the Council's intentions for the next 10 years, including strategies for community services, infrastructure, and financial management. The consultation process for the LTP typically involves several key steps:

7.4.1 Preparation and Drafting: The Council prepares a draft LTP, which includes proposed strategies, plans, and budgets for the next decade.

7.4.2 Preparation and Public Notification of Consultation Document: The Council prepares and makes publicly available a Consultation Document as the basis for public participation in decision-making on the LTP, and the community is notified. This notification includes details about how and when to submit feedback.

7.4.3 Submission Period: There is a statutory period during which members of the community can make submissions. This period is usually several weeks long, providing ample time for thorough review and response.

7.4.4 Public Hearings: After the submission period, the Council may hold public hearings where submitters can present their views in person. These hearings are an opportunity for direct dialogue between the Council and its community.

7.4.5 Analysis and Deliberation: The Council reviews and analyses all feedback received. This stage is crucial for understanding community perspectives and concerns.

7.4.6 Amendments and Finalisation: Based on the feedback, the Council may make amendments to the draft LTP. Once these adjustments are made, the final LTP is prepared.

7.4.7 Adoption: The final step is the formal adoption of the LTP by the Council. This document then guides the Council's activities and budget allocations for the next 10 years.

7.5 Including the proposed governance change and transfer of Marina assets in the LTP consultation document ensures that these significant decisions are made with a comprehensive understanding of community needs and preferences. It reflects a commitment to transparency and participatory governance.

7.6 Following the adoption of the Long Term Plan (LTP) and contingent upon receiving community support, the Council intends to expedite the transition of Nelson Marina Management Limited into an Asset-Owning Council-Controlled Organisation (CCO).

7.7 The objective is to finalise this transition swiftly, targeting completion within the first year of the LTP. This strategic move is intended to ensure that the management of Nelson Marina aligns with predefined strategic objectives, facilitating efficient and effective operations under the new governance structure.

Attachments

Attachment 1: 149934158-12067 - Nelson Marina Council Asset Register as at Nov23 ⇩

Attachment 2: 149934158-12069 - Nelson Marina Insurance Asset Schedule ⇩

Attachment 3: 149934158-12071 - Nelson Marina Land Parcels ⇩

Attachment 4: 149934158- 12096 - Significance and Engagement Assessment - Nelson Marina CCO-CCTO Dec23 ⇩

Important considerations for decision making

Fit with Purpose of Local Government

The transfer of assets and liabilities to the Marina Council-Controlled Organisation (CCO) is a significant step that reinforces Council’s commitment to ensuring the best possible return on assets to the Nelson community. This action will support the social, economic and environmental well-being of the Nelson community by providing a destination and providing an economic return on investment. The formation of an Asset-owning CCO for Nelson Marina will entrust its management to a board of suitably qualified individuals. This board, acting on behalf of the Council, will align its operations with the strategic objectives set forth by the Council. This alignment will be guided by the directives in both the Statement of Expectation and the Statement of Intent, ensuring that the Marina's operations are consistent with the overarching goals and expectations of the local authority.

Consistency with Community Outcomes and Council Policy

The recommendation to transition assets and liabilities to an Asset-Owning Council-Controlled Organisation (CCO) aligns with the Council's overarching objectives to deliver effective governance of community assets. This strategic move is intended to enable the Marina to not only improve its community assets but also to establish a focused governance structure within the organisation to deliver on the Council approved masterplan. Importantly, the board governing the Marina will continue to operate under the guidance and accountability frameworks set by the Council. Furthermore, the Council will retain full ownership of the CCO, ensuring that the Marina's operations and developments are consistent with the community's interests and Council's long-term vision.

Risk

Risk management in relation to the Council-Controlled Organisation (CCO) will be addressed through the Statement of Expectation and a Council-approved Statement of Intent, complemented by both half-yearly and annual reporting mechanisms.

Additionally, the CCO will undergo an annual independent audit. This external audit serves as an additional layer of oversight, ensuring transparency and accountability in the organisation’s operations.

As the Marina evolves, there might be opportunities to revise fees and charges for marina services, which could be determined by the CCO . In such scenarios, the presence of a commercially-oriented board within the CCO becomes increasingly beneficial. This board, appointed for its expertise, can make well-informed decisions regarding the setting of fees and charges at appropriate rates. Furthermore, having a commercial board manage these aspects provides a buffer for elected members, shielding them from potential political pressures that may arise from changes in marina-related charges. This arrangement allows for a more business-focused approach to financial decisions while maintaining alignment with the broader community interests and Council directives.

Financial impact

The process of transferring assets and liabilities to the Council-Controlled Organisation (CCO) will involve certain costs. These include expenses for implementing new accounting and HR systems/software, legal fees to facilitate the transfer, and additional fees for auditing services. However, these initial costs are anticipated to be counterbalanced by improved financial and operational performance in the future.

Additionally, a service contract will be necessary for some services that the Council retains, such as IT support. This arrangement ensures that essential services continue seamlessly during and after the transition.

In terms of ongoing expenses, there will be a balance achieved by eliminating the annual fees that Nelson Marina currently pays to the Council for these services. This adjustment in financial structuring will contribute to overall cost efficiency.

There is a risk associated with concern about change, particularly with regard to the berth holders who are concerned about fees going up for capital works. This will be mitigated through clear communication on the benefits and increased levels of service as well as generating new revenue streams to support capital development, based on robust business cases.

As an Asset-owning CCO, Nelson Marina will also be subject to company tax on its profits. This represents a new financial obligation but is a standard aspect of operating within a more autonomous and commercial framework. The imposition of company tax underscores the Marina's transition to a more business-like operational model, aligning with the broader goals of financial sustainability and operational independence.

Degree of significance and level of engagement

A significance assessment (see Attachment 4) has been carried out in accordance with the Council’s Significance and Engagement Policy. The transfer of assets and liabilities to an asset owning CCO has been assessed as being of medium to high significance due to the value of assets and liabilities in question. As such, it is recommended that the proposed decision be included in the LTP consultation document, and specifically consulted on as part of the adoption of the LTP.

Climate Impact

This decision, pertaining to the establishment of a new Asset-owning CCO and the transfer of public assets to that CCO is not expected to directly influence climate change or result in increases or decreases in emissions. However, the responsiveness to climate impact will be integrated as a key performance measure under the Statement of Expectation. This inclusion ensures that the CCO remains accountable for considering and addressing climate-related impacts in its operations and decision-making processes.

Inclusion of Māori in the decision making process

In the preparation of this report, there has been no engagement with Māori. However, it is noteworthy that Nelson Marina Management Limited, which oversees the marina's operations, includes a governance structure that includes Māori representation. Of its five directors, one seat is designated as an Iwi directorship. This allocation was established as a result of consultation conducted during the initial establishment of the Management CCO in 2022, reflecting a commitment to ensuring Māori perspectives are included in the governance of the Nelson Marina.

Legal context

The Council's decision regarding the transfer of assets to a new Asset-owning CCO must comply with the decision-making requirements in Part 6 of the Local Government Act 2002. Specifically, this requires the completion of an options analysis, and giving due consideration to the views and preferences of interested and affected persons. This community engagement will occur as part of the public consultation on the draft LTP. The options analysis relating to the proposed decision in this report (namely to approve consultation on the proposed CCO governance change and transfer of assets for the Nelson Marina) is included in this report.

Delegations

This is a decision for Council, subject to public consultation.

Item 11: Nelson Events Strategy implementation update

Council

14 December 2023

Report Title: Nelson Events Strategy implementation update

Report Author: Ailish Neyland - Policy Adviser

Report Authoriser: Nicky McDonald - Group Manager Strategy and Communications

Report Number: R27953

1. Purpose of Report

1.1 To provide an update on the implementation of the Nelson Events Strategy for the period of 1 July 2022 to 30 June 2023.

1.2 To approve increasing the Chief Executive and Events Development Committee delegation levels for approving funding through the Nelson Events Fund.

2. Summary

2.1 Council supported a wide range of events in 2022/23, contributing to the social, economic and cultural wellbeing of the community. It also delivered a range of events directly to the community, however, the current economic environment is driving up costs to deliver events. Staff are reviewing how Council could take a more strategic approach to delivering and supporting events.

2.2 To reflect inflation and increasing costs, staff propose an increase to the Events Fund delegation levels for approving funding.

3. Recommendation

That the Council

1. Receives the report Nelson Events Strategy implementation update (R27953) and its attachment (839498445-17987); and

2. Approves increasing the delegation levels for the Nelson Events Fund as outlined below:

a. The Events Development Committee may approve funding up to $45,000

b. The Chief Executive may approve funding between $45,001 and $99,999

c. Council may approve funding of $100,000 or above.

4. Background

4.1 The Nelson Events Strategy was adopted in 2018 and provided a vision and objectives to guide Council’s support for the city’s events. The Strategy’s vision is “events that strengthen the region and its identity, stimulate a prosperous, vibrant and engaged community and deliver value at the right time”.

4.2 The report has been prepared with input from the Nelson Regional Development Agency (NRDA).

Council supports a wide range of events

4.3 Nelson’s events portfolio is wide-ranging, including arts, heritage, culture, music and sport. Events directly delivered by Council fill a gap in the local event offering with most of them being provided as free entry events or heavily underwritten to maintain a level of accessibility for all in the community.

4.4 Council delivers a range of associated services to support events, such as resource, noise and building consents, marketing and communication support, road closures and traffic management plans. Council also provides guidance to event organisers to help them navigate the different aspects of the planning process, such as health and safety, risk management, waste management, climate change mitigation, and ensuring organisers are aware of the regulatory requirements.

Venues

4.5 Council supports the provision of venues across Nelson that can be used for events. The Nelson City Council Venues website supports organisers to find a venue and provides guidance to those planning an event.

4.6 Council staff, along with the maintenance contractors CLM and Nelmac, have ensured that Council’s event facilities (indoor and out) are presented to a high standard for events and endeavour to ensure that resources can be allocated to accommodate different opportunities, even at short notice.

In 2022, Council adopted He Tātai Whetū, Whakatū Nelson’s Arts and Creativity Strategy, which included an action to “Advance business cases to explore opportunities for new venue development” for gaps identified in an analysis of Nelson’s community arts facilities. Council allocated $100,000 operating expenditure in 2023/24 to investigate opportunities for a new arts hub to support the arts sector. A scoping document is being finalised, which will have sufficient detail to serve as the base for development of a business case on an arts hub.

Funding

4.7 The NRDA administers funds distributed through Council’s Events Fund, which has two streams – economic and community. The economic stream recognises that events are an increasingly important contributor that can grow the visitor market and make Nelson an attractive destination. The community stream recognises that events are important for building a sense of belonging, identity and pride within Nelson’s diverse community. The NRDA also administers Council’s Venue Hire Fund. Events delivered by Council use a different pool of funding managed in-house.

4.8 The Events Development Committee, which includes Council and NRDA staff, reviews applications to the Events Fund and Venue Hire Fund and makes decisions about the funding allocation, unless the level of funding sought is above the Committee’s delegated level, meaning it requires approval by either Council’s Chief Executive or full Council.

4.9 All of Council’s event budgets for 2023/24 are outlined in the table below.

Item	2023/24
Nelson Arts Festival	$604,000
Economic Events Fund	$399,709
Kapa Haka (Te Matatini)	$147,700
Council Delivered Events	$112,331
Matariki	$20,000 Actual cost $104,950
Te Ramaroa	$117,171
Community Events Fund	$83,081
Tuku	$75,748
Council Requested Events	$52,750
New Years Eve	$37,147
Santa Parade	$32,000
Youth Events	$34,948
Venue Hire Fund	$30,870
Waitangi	$5,417 Actual $25,500
Summer Events Programme	$9,000
Opera in the Park	$0
4 Lanes (Winter Event)	$26,375
Total	$1,788,247

5. Discussion

Delivery of events in 2022/23

The events sector gradually built back confidence after the effects of COVID-19

5.1 The removal of COVID-19 restrictions meant the events sector was able to build back confidence to hold events and this was helped by the return of international attendees.

5.2 Council delivered or supported several big events that returned following the disruption of COVID-19. These included the Santa Parade, Opera in the Park and Te Ramaroa. The Santa Parade had an estimated 8,000- 10,000 people attend and Opera in the Park had over 7,000 attendees. Te Ramaroa, which ran over five days, attracted more than 50,000 people into the city. Council also supported 12 community and youth events or event series, including Summer Movies al Fresco and Music Mix.

5.3 Fifty-eight events received support through the Events Fund. This included 28 events funded (see attachment 1) through the economic stream of the Fund, with a combined economic impact of an estimated $7.9 million (calculated through the NRDA’s Economic Impact Assessment tool) and an overall return on investment of 29:1. As confidence in the sector grew, the NRDA saw an increase in applications to the Events Fund, which were processed as quickly as possible to maximise use of venues and support the CBD and local events industry.

Successful delivery of heritage and culture events

5.4 Council supported arts and heritage events, led by community partners, through its partnership grants. This included Tuku 23 Whakatū Nelson’s festival of heritage, which included over 65 events held over six weeks and attracted 12,000 attendees.

5.5 Council hosted its fifth annual Te Huihui-o-Matariki event on 14 July 2023 in collaboration with Te Herenga Tahi, Te Tauihu o Te Waka-a-Māui Māori Cultural Council Te Kotahi o Te Tauihu charitable Trust. An estimated 7,500 people attended the event at Rutherford Park and the Trafalgar Centre. Although falling just outside of the 2022/23 year, the majority of planning and preparation occurred in 2022/23.

Challenges and opportunities

5.6 The economic environment and inflation have increased event delivery costs which may affect the number of events that are able to be offered by Council within existing budgets. The impact of these cost increases is being worked through by staff.

5.7 Council has received feedback from the Hospitality Association and Uniquely Nelson asking for a more strategic approach to events, particularly in the city centre. Outlined below is a summary of their feedback and suggestions.

5.7.1 Request for a more collective approach to organising and delivering events in the city, rather than a series of one-off events, with the events calendar decided well in advance so that resources can be pooled for a bigger impact.

5.7.2 A request for overarching guidelines on the purpose of events, who the events are benefiting, the timing of the events and consideration of who the events could affect.

5.7.3 That return on investment be considered both in terms of the number of people that are expected at the event and the value add to city businesses, particularly when events require road closures.

5.7.4 Request for stronger marketing of Nelson at a tourism level and using Nelson’s annual and biennial events, such as the Masked Parade and Te Ramaroa, as part of the campaign to attract the domestic market.

5.8 This has prompted Council staff to review the current approach to events to identify gaps, such as direction on how to prioritise events and best leverage the outcomes of events. This work is currently underway, and staff held a workshop with elected members in late November to initiate discussions at a governance level. However, staff recognise that progressing these changes would require buy in and collaboration across the sector.

6. Proposed changes to the Council’s events management process

Proposed update to the Nelson Events Fund delegation levels

6.1 The current delegation to approve funding through the Events Fund has three levels: the Events Development Committee can approve funding up to $25,000, Council’s Chief Executive can approve between $25,000 and $50,000, and if it is $50,000 or above, it is a decision for Council.

6.2 Staff recommend the delegation thresholds for the Events Fund be raised. The levels have not changed since the adoption of the Strategy in 2018, but with the impact of inflation driving up prices to organise and run events, it should be reviewed and updated to reflect this. The table below outlines the current and proposed the delegation levels.

Delegated to	Current delegation level	Proposed delegation level
Events Development Committee	Up to $25,000	Up to $45,000
Council’s Chief Executive	Between $25,000 and $50,000	$45,001 to $99,999
Council	From $50,000 upwards	$100,000 or higher

6.3 An increase in the delegation levels would also reduce the number of funding applications needing to go to Council for approval, ensuring Council’s involvement is only for applications of a considerable amount.

Management of the Events Fund and the Venue Hire Fund

6.4 The NRDA has an economic development and tourism focus. However, currently it is administering the community stream of the Events Fund and the Venue Hire Fund, as well as the economic stream.

6.5 The NRDA undertook an independent review of its events workstream with findings that the workload had grown considerably, both in the number of applications received, and the associated functions of communication, administration, reporting and engagement.

6.6 To align the agency’s work more with its core economic focus, Council staff are considering bringing the community stream of the Events Fund, and the Venue Hire Fund, back in-house to Council. The NRDA is supportive of this option being explored.

Events Calendar - ItsOn

6.7 ItsOn is the current online events guide for Nelson and Tasman, supported by both Nelson City Council and Tasman District Council through a service level agreement with the NRDA. The ItsOn platform is 13 years old and the technology is no longer supported, meaning the platform is vulnerable. Staff have looked at a range of options to address this, including rebuilding the ItsOn platform, closing the platform completely or partnering with another events platform.

6.8 Following discussions with the NRDA, the solution selected is that Council will partner with Eventfinda through the NRDA. This is an already well-used platform by some regions and is a vastly cheaper option than rebuilding a platform. The ItsOn branding can remain on the new platform, it is user friendly and functional, and it is already familiar to many event organisers.

Economic Impact Assessment tool

6.9 Since 2018, the NRDA has been using an Economic Impact Assessment tool to estimate the economic value of events. From July 2024, staff propose moving to a new tool called Event Economics, which is used widely by other councils around New Zealand. The biggest advantage of the new tool is that it will allow Council to measure events in a way that is consistent with other councils and allow the NRDA to benchmark its calculations against other similar-style events across the country, providing a more accurate picture of the relative value of events to the region. Event Economics is also able to put a value on the social impact of events, not just the economic impact. However, its primary purpose will be in the economic space initially. Funding for this will be considered through the Long Term Plan 2024-2034 process.

7. Options

Option 1: Approves increasing the delegation levels for the Nelson Events Fund as outlined below: · The Events Development Committee approves up to $45,000 · The Chief Executive approves between $45,001 and $99,999 · Council approves $100,000 and above (recommended)
Advantages	· Delegation levels reflect the economic realities and impact of inflation driving up costs. · Reduces time Council and the Chief Executive need to spend on considering Events Fund applications.
Risks and Disadvantages	· None obvious.
Option 2: Approves increasing delegation levels for the Nelson Events Fund to a different level
Advantages	· Gives Council flexibility to choose another amount it deems appropriate.
Risks and Disadvantages	· A lower increase means delegation levels do not reflect the economic realities and the impact of inflation.
Option 3: Do not approve changes to the delegation levels for Nelson Events Fund applications
Advantages	· None obvious.
Risks and Disadvantages	· Delegation levels will not reflect the economic realities and impact of inflation on the costs of running events. · An increasing amount of Council and the Chief Executive’s time will be needed to consider Events Fund applications.

8. Conclusion

8.1 Over 2022/23 the events sector built back confidence to hold events following the disruption of COVID-19, delivering high-quality events that contributed to the social, cultural and economic wellbeing of the community. However, areas for improvement have been identified, both for Council’s internal events management processes and how we can better coordinate with the sector.

9. Next Steps

9.1 If the delegation levels are approved, staff will advise the NRDA and update the Officer Delegations Register.

Attachments

Attachment 1: 839498445-17987 Economic events funded through the Nelson Events Fund in 2022/23 ⇩

Important considerations for decision making

Fit with Purpose of Local Government

Supporting the implementation of the Strategy provides Council with an opportunity to support a rich events calendar in Nelson, which contributes to the economic, social and cultural wellbeing of the community.

Consistency with Community Outcomes and Council Policy

Nelson City events contribute to the following Community Outcomes:

• Our communities have opportunities to celebrate and explore their heritage, identity and creativity

• Our region is supported by an innovative and sustainable economy

• Our Council provides leadership and fosters partnerships, a regional perspective, and community engagement

• Our communities are healthy, safe, inclusive and resilient.

Risk

The recommendation to increase the Events Fund delegation levels is low risk, as it is reflecting the current economic environment and level of inflation.

Financial impact

Increasing the delegation levels for the Events Fund does not have budget implications for Council.

Degree of significance and level of engagement

This matter is of low significance as the proposed increases to the delegation levels for approving funding applications to the Events Fund is reflecting the impacts of inflation. Funding applications above $45,000 would be considered by Council’s Chief Executive and $100,000 or above would need full Council approval. Therefore, no feedback has been sought from the community.

Climate Impact

One of the Events Strategy’s guiding principles is Strategic Alignment, which includes how events align with relevant Council policy. Event organisers are asked to provide information on how they plan to manage environmental impacts during their event, such as minimising waste.

Inclusion of Māori in the decision making process

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

Legal context

There is no legal context to consider.

Delegations

This is a matter for Council.

State the outcome you want to achieve with the report. To consider/decide/adopt etc. The wording must align with your recommendation. Do not use this report if no decision is required, use the Brief Report.