Agenda of Council - 25 00 2020

Council

25 August 2020

Reports

Three Waters Reform Programme: Memorandum of Understanding and Stimulus Funding

Department: 3 Waters and Legal

EXECUTIVE SUMMARY

1 In July 2020, the Government announced a $761 million funding package to provide post COVID-19 stimulus to maintain and improve three waters infrastructure, support a three-year programme of reform of local government water service delivery arrangements (reform programme), and support the establishment of Taumata Arowai, the new Water Services Regulator.

2 A joint central/local government Three Waters Steering Committee has been established to provide oversight and guidance to support progress towards reform, and to assist in engaging with local government, iwi/Māori, and other water sector stakeholders on options and proposals.

3 The reform programme is designed to support economic recovery, and address persistent systemic issues facing the three waters sector, through a combination of:

a) stimulating investment, to assist economic recovery through job creation, and maintain investment in water infrastructure renewals and maintenance; and

b) reforming current water service delivery arrangements into larger scale providers, to realise economic, public health, environmental, and other benefits over the medium to long term.

4 Initial funding from the stimulus package will be made available to those councils that agree to participate in the first stage of the reform programme, through a:

a) Memorandum of Understanding (MoU) (template attached at Attachment A);

b) Funding Agreement (template attached at Attachment B); and

c) Delivery Plan.

5 To receive funding, the MoU must be signed by 31 August 2020, with the Funding Agreement and Delivery Plan submitted by 30 September 2020.

6 This initial funding will be provided in two parts: a direct allocation to individual territorial authorities, and a regional allocation. The participating territorial authorities in each region must agree an approach to distributing the regional allocation and advise the Minister of Local Government and the Three Waters Steering Committee by 30 September 2020.

7 This report seeks Council decisions on matters relating to the MoU, Funding Agreement and Delivery Plan.

RECOMMENDATIONS

That the Council:

a) Agrees to sign the Memorandum of Understanding (MoU) at Attachment A and Funding Agreement at Attachment B.

b) Nominates the Acting Chief Executive Officer/Chief Executive Officer as the primary point of communication for the purposes of the MoU and reform programme (as referred to on page 6 of the MoU).

c) Authorises the Mayor to agree an allocation of regional funding through the Otago Mayoral Forum, noting that participation by two-thirds of territorial authorities within the Otago region is required to access the regional allocation.

d) Notes that the MoU and Funding Agreement cannot be amended or modified by either party, and doing so would void these documents.

e) Notes that participation in this initial stage is to be undertaken in good faith, but this is a non-binding approach, and the Council can opt out of the reform process at the end of the term of the agreement (as provided for on page 5 of the MoU).

f) Notes that the Council has been allocated $7.92 million of funding, which will be received as a grant as soon as practicable once the signed MoU and Funding Agreement are returned to the Department of Internal Affairs, and a Delivery Plan has been supplied and approved (as described on page 5 of the MoU).

g) Notes that the Delivery Plan must show that the funding is to be applied to operating and/or capital expenditure relating to three waters infrastructure and service delivery, and which:

i) supports economic recovery through job creation; and

ii) maintains, increases and/or accelerates investment in core three waters infrastructure renewal and maintenance.

h) Agrees to submit a Delivery Plan that sets out an accelerated programme of three waters network renewals.

i) Authorises the Acting Chief Executive Officer/Chief Executive Officer to finalise the Delivery Plan to address Government feedback and obtain the approval needed to release funding.

BACKGROUND

Issues facing the three waters system and rationale for reform

8 Over the past three years, central and local government have been considering the issues and opportunities facing the system for regulating and managing drinking water, wastewater and stormwater (the three waters).

9 The Government Inquiry into Havelock North Drinking Water – set up following the serious campylobacter outbreak in 2016 – identified widespread, systemic failure of suppliers to meet the standards required for the safe supply of drinking water to the public. It made a number of urgent and longer-term recommendations to address these significant systemic and regulatory failures.

10 The Government’s Three Waters Review highlighted that, in many parts of the country, communities cannot be confident that drinking water is safe, or that good environmental outcomes are being achieved. This work also raised concerns about the regulation, sustainability, capacity and capability of a system with a large number of localised providers, many of which are funded by relatively small populations.

11 The local government sector’s own work has highlighted similar issues. For example, in 2014, Local Government New Zealand (LGNZ) identified an information gap relating to three waters infrastructure. A 2015 position paper argued for a refresh of the regulatory framework to ensure delivery of quality drinking water and wastewater services and outlined what stronger performance in the three waters sector would look like.

12 Both central and local government acknowledge there are many challenges facing the delivery of three waters services and infrastructure, and the communities that fund and rely on these services. These challenges include:

a) Underinvestment in three waters infrastructure in parts of the country, and substantial infrastructure deficits. For example, it is estimated that between $300 to $570 million is required to upgrade networked drinking water treatment plants to meet drinking water standards, and up to $4 billion is required to upgrade wastewater plants to meet new consent requirements. These deficits are likely to be underestimates, given the variable quality of asset management data.

b) Persistent funding and affordability challenges, particularly for communities with small rating bases, or high-growth areas that have reached their prudential borrowing limits.

c) Additional investment required to increase public confidence in the safety of drinking water, improve freshwater outcomes, and as a critical component of a collective response to climate change and increasing resilience of local communities.

13 COVID-19 has made the situation even more challenging. Prior to COVID-19, territorial authorities were planning on spending $8.3 billion in capital over the next five years on water infrastructure. However, COVID-19 is likely to cause significant decreases in revenue in the short term. As a result, borrowing will be constrained due to lower debt limits that flow from lower revenues, and opportunities to raise revenue through rates, fees and charges will be limited.

Progress of three waters regulatory reforms

14 Good progress is already being made to address the regulatory issues that were raised by the Havelock North Inquiry and Three Waters Review. The Government is implementing a package of reforms to the three waters regulatory system, which are designed to:

a) improve national-level leadership, oversight, and support relating to the three waters – through the creation of Taumata Arowai, a new, dedicated Water Services Regulator;

b) significantly strengthen compliance, monitoring, and enforcement relating to drinking water regulation;

c) manage risks to drinking water safety and ensure sources of drinking water are protected; and

d) improve the environmental performance and transparency of wastewater and stormwater networks.

15 Legislation to create Taumata Arowai had its third reading on 22 July 2020 and received royal assent on 6 August 2020. This new Crown entity is currently being built and will become responsible for drinking water regulation once the separate Water Services Bill is passed (anticipated mid-2021).

16 However, both central and local government acknowledge that regulatory reforms alone will not be sufficient to address many of the persistent issues facing the three waters system. Reforms to service delivery and funding arrangements also need to be explored.

DISCUSSION

Proposal – central/local government three waters reform programme

Overview of proposed approach to three waters investment and service delivery reform

17 At the recent Central/Local Government Forum, central and local government leadership discussed the challenges facing New Zealand’s water service delivery and infrastructure and committed to working jointly on reform. A joint central/local government Three Waters Steering Committee has been established to provide oversight and guidance to support this work.

18 Central and local government consider it is timely to apply targeted infrastructure stimulus investment to enable improvements to water service delivery, progress service delivery reform in partnership, and ensure the period of economic recovery following COVID-19 supports a transition to a productive, sustainable economy.

19 In July 2020, the Government announced an initial funding package of $761 million to provide post COVID-19 stimulus, support a three-year programme of reform of local government water service delivery arrangements, and support the establishment and operation of Taumata Arowai.

20 The reform programme is designed to support economic recovery, and address persistent systemic issues facing the three waters sector, through a combination of:

a) stimulating investment, to assist economic recovery through job creation, and maintain investment in water infrastructure renewals and maintenance; and

b) reforming current water service delivery arrangements into larger scale providers, to realise significant economic, public health, environmental, and other benefits over the medium to long term.

21 While the Government’s starting intention is for publicly-owned multi-regional models for water service delivery (with a preference for local authority ownership), final decisions on a service delivery model will be informed by discussion with the local government sector and the work of the Three Waters Steering Committee.

22 Further information on the reform objectives, and the core design features of any new service delivery model, are provided in pages 3 to 4 of the MoU at Attachment A.

Reform process and indicative timetable

23 As noted above, this is a three-year programme to reform three waters service delivery arrangements, which is being delivered in conjunction with an economic stimulus package of Crown investment in three waters infrastructure. The reform programme will be undertaken in stages.

24 The initial stage is an opt in, non-binding approach, which involves councils taking the actions and signing the documents described below (MoU, Funding Agreement, and Delivery Plan).

25 Councils that agree to opt in by 31 August 2020 will receive a share of the initial funding package.

26 Any further tranches of funding will be at the discretion of the Government and may depend on progress against reform objectives.

27 An indicative timetable for the full reform programme is provided at Attachment C. While this is subject to change as the reforms progress, and subject to future Government budget decisions, it provides an overview of the longer-term reform pathway.

Allocation of the investment package

28 The Government has determined a notional allocation framework based on a nationally- consistent formula.

29 The general approach to determining each authority's notional allocation is based on a formula that gives weight to two main factors:

a) The population in the relevant council area, as a proxy for the number of water connections serviced by a territorial authority (75 per cent weighting); and

b) The land area covered by a local authority excluding national parks, as a proxy for the higher costs per connection of providing water services in areas with low population density (25 per cent weighting).

30 The investment package is structured into two components:

a) A direct allocation to each territorial authority, comprising 50% of that territorial authority's notional allocation; and

b) A regional allocation, comprising the sum of the remaining 50% of the notional allocations for each territorial authority in the relevant region.

31 The relevant allocations for the Dunedin City Council (DCC) are:

a) $7.92 million (excluding GST) direct allocation for the DCC; and

b) $20.60 million (excluding GST) regional allocation for Otago.

32 For the purposes of the stimulus funding, the Otago region is made up of four councils: DCC, Central Otago District Council, Clutha District Council and Queenstown Lakes District Council.

33 The purpose of the Government’s regional allocation is to establish collective participation by councils in the reform programme. Each regional group of councils has until 30 September 2020 to agree on how best to apportion the regional funds to the individual territorial authorities that make up the region.

34 The Three Waters Steering Committee has recommended a preferred approach to the allocation of regional funding, being the same formula that is used to determine the direct allocations to territorial authorities. Initial discussions between Otago councils are broadly aligned with this recommended approach. Consideration is also being given to retaining 7.5% to 10% of the Otago regional allocation to be applied to collaborative regional initiatives.

35 This report recommends that the Council authorises the Mayor to agree an allocation of the regional funding with other Otago councils through the Otago Mayoral Forum, noting that participation by two thirds of territorial authorities within the Otago region is required to access the regional funding.

What actions are the Council being asked to take at this point?

36 The initial stage of the reform programme involves three core elements:

a) Memorandum of Understanding (Attachment A);

b) Funding Agreement (Attachment B);

c) Delivery Plan.

37 Initial funding will be made available to those councils that sign the MoU, and associated Funding Agreement, and provide a Delivery Plan.

38 This initial funding will be provided in two components: a direct allocation to individual councils, and a regional allocation. The participating councils in each region are required to agree an approach to distributing the regional allocation.

39 The MoU is the ‘opt in’ to the first stage of the reform and stimulus programme. The MoU needs to be signed and submitted by 31 August 2020. To receive funding, the Funding Agreement and Delivery Plan need to be submitted by the end of September 2020 to access the stimulus funding.

40 Councils that do not opt in by the 31 August 2020 deadline will not receive a share of the stimulus funding. Councils will still be able to opt in to the reform programme at a later date but will not have access to the initial funding package retrospectively.

Memorandum of Understanding

41 A MoU has been developed by the Three Waters Steering Committee, for each council to enter into with the Crown. This is a standardised document, which cannot be amended or modified by either party.

42 Signing the MoU commits councils to:

a) engage in the first stage of the reform programme – including a willingness to accept the reform objectives and the core design features set out in the MoU;

b) the principles of working together with central government and the Three Waters Steering Committee;

c) work with neighbouring councils to consider the creation of multi-regional entities;

d) share information and analysis on their three waters assets and service delivery arrangements.

43 At this point, this is a voluntary, non-binding commitment. It does not require councils to commit to future phases of the reform programme, to transfer their assets and/or liabilities, or establish new water entities.

44 The MoU is effective from the date of agreement until 30 June 2021, unless terminated by agreement or by replacement with another document relating to the reform programme.

45 Legal advice from Simpson Grierson, commissioned by the Society of Local Government Managers (SOLGM) on behalf of the Three Waters Steering Committee, advises that the MoU does not contain any explicit triggers for consultation under the Local Government Act 2002. The legal advice is attached to this report at Attachment D.

Funding Agreement

46 The DCC has been allocated $7.92 million by the Crown, if it opts in to the reform programme. A further $20.60 million has been allocated to the Otago region to agree an appropriate distribution between participating councils. This funding will be provided as a grant, which does not need to be repaid if the DCC does not ultimately commit to reform at later stages of the process.

47 There are several possible approaches to allocating the regional funding between the four Otago councils. The Three Waters Steering Committee’s preferred approach is to apply the same formula used to calculate the direct allocations. Under this approach, the DCC would receive an additional $7.92 million, contributing to a total funding allocation of $15.84 million. Initial discussions between Otago councils on distribution of the regional funding are underway and have included consideration of retaining 7.5% to 10% of the Otago allocation to be applied to collaborative regional initiatives.

48 This report recommends that the Council authorises the Mayor to agree an allocation of the regional funding with the other Otago councils through the Otago Mayoral Forum, noting that participation by two thirds of territorial authorities within the region is required to access the regional funding. The Funding Agreement is one of the mechanisms for accessing the funding package. Like the MoU, it is a standardised document, for agreement between each council and the Crown. It cannot be amended.

49 The Funding Agreement is a legally binding Agreement that guides the release and use of funding. It sets out:

a) the funding amount allocated to the Council;

b) funding conditions;

c) public accountability requirements, including the Public Finance Act;

d) reporting milestones; and

e) confidentiality, media and communications obligations/restrictions.

50 While there is some local flexibility around how the funding can be applied, the Government has indicated that this investment is intended to support economic recovery, enable improvements in three waters service delivery, and progress the service delivery reform programme.

51 The Funding Agreement will be supplemented by a Delivery Plan, which is the document that sets out how the grant funding is to be applied by the council.

Delivery Plan

52 The Delivery Plan is the other mechanism for accessing the funding package.

53 This Delivery Plan must show that the funding allocation is to be applied to operating and/or capital expenditure relating to three waters infrastructure and service delivery, and which:

a) supports economic recovery through job creation; and

b) maintains, increases and/or accelerates investment in core water infrastructure renewal and maintenance.

54 The Delivery Plan is a short-form template, which sets out:

a) a summary of the works to be funded, including location, estimated associated costs and expected benefits/outcomes;

b) the number of people to be employed in these works;

c) an assessment of how the works support the reform objectives in the MoU;

d) reporting obligations.

55 The Delivery Plan will be supplied to Crown Infrastructure Partners (and other organisations as agreed between the council and Crown), for review and approval. Crown Infrastructure Partners will monitor progress against the Delivery Plan, to ensure spending has been undertaken with public sector financial management requirements.

56 This report recommends the Council agrees to submit a DCC Delivery Plan that sets out an accelerated programme of three waters network renewals. This would provide for the DCC to use its allocation of the stimulus funding to bring forward planned works to improve Dunedin’s three waters pipeline infrastructure networks and, in doing so, support the local civil contracting market.

57 This report also recommends the Council authorises the Acting Chief Executive Officer/Chief Executive Officer to finalise the Delivery Plan to address Government feedback and obtain the approval needed to release funding.

OPTIONS

58 This report seeks Council decision on signing the MoU and Funding Agreement, and submitting a Delivery Plan for an accelerated programme of three waters network renewals.

Option One – Sign the Memorandum of Understanding and Funding Agreement; submit a Delivery Plan for an accelerated programme of three waters network renewals (Recommended Option)

59 Agree to sign the Memorandum of Understanding at Attachment A and Funding Agreement at Attachment B. Nominate the Acting Chief Executive Officer/Chief Executive Officer as the Government’s primary point of communication for the MoU and reform programme (as set out on page 6 of the MoU at Attachment A).

60 Authorise the Mayor to agree an allocation of the regional funding with other Otago councils through the Otago Mayoral Forum, noting that participation by two-thirds of territorial authorities within the Otago region is required to access the regional allocation.

61 Agree to submit a DCC Delivery Plan that sets out an accelerated programme of three waters network renewals and authorise the Acting Chief Executive Officer/Chief Executive Officer to finalise the Delivery Plan to address Government feedback and obtain the approval needed to release funding.

Advantages

· Secures three waters stimulus funding for Dunedin ($7.92 million direct allocation for DCC, and a share of the $20.60 million regional funding for Otago as agreed through the Otago Mayoral Forum).

· Enables acceleration of planned works to improve Dunedin’s three waters pipeline infrastructure networks, which will support the local civil contracting market.

Disadvantages

· None identified.

Option Two – Decline the opportunity to sign the Memorandum of Understanding and Funding Agreement

62 Do not agree to sign the Memorandum of Understanding at Attachment A and Funding Agreement at Attachment B.

Advantages

· None identified.

Disadvantages

· Dunedin will not secure three waters stimulus funding.

· May compromise the ability of the other Otago councils to secure the regional allocation of the stimulus funding (if the two-thirds threshold for the region is not met).

NEXT STEPS

63 If the Council approves the recommended option, the MoU, Funding Agreement and Delivery Plan will be completed and returned to central government by their respective due dates (31 August 2020 for MoU; 30 September 2020 for Funding Agreement and Delivery Plan).

64 The Mayor will work with the Otago Mayoral Forum to determine the allocation of the Otago regional funding, and advise the Minister of Local Government and the Three Waters Steering Committee of the agreed allocation by 30 September 2020.

65 Updates on the Government’s Three Waters Reform Programme will be provided at future meetings, and may include information on:

a) allocation of the regional funding agreed by the Otago Mayoral Forum;

b) any central government feedback on a Delivery Plan submitted by the DCC; and

c) further opportunities for engagement with central government and/or the Three Waters Steering Committee on the Three Waters Reform Programme.

Signatories

Author:

Scott Campbell - Policy Analyst

Tom Dyer - Group Manager 3 Waters

Karilyn Canton - Senior In-House Legal Counsel

Authoriser:

Simon Drew - General Manager Infrastructure Services

Attachments

	Title	Page
⇩a	Memorandum of Understanding	44
⇩b	Funding Agreement (template)	52
⇩c	Indicative reform pathway	71
⇩d	Legal advice from Simpson Grierson on consultation requirements	72

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities.

This decision promotes the economic, environmental and social well-being of communities in the present and for the future.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☐	☐	☒
Economic Development Strategy	☒	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☐	☐	☒
3 Waters Strategy	☒	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☐	☐	☒
Parks and Recreation Strategy	☐	☐	☒
Other strategic projects/policies/plans	☒	☐	☐

This report has been prepared with reference to Dunedin’s Strategic Framework above.

Māori Impact Statement

There are no known direct impacts for tangata whenua. The Three Waters Steering Committee acknowledges that reform of water service delivery is likely to present a range of Treaty interests which will need to be identified and explored as part of the reform programme through targeted engagement with iwi/Māori. The Steering Committee will be formally engaging with iwi/Māori throughout the reform programme to understand the Treaty rights and interests as they relate to the reform. The Steering Committee has signalled engagement covering service delivery reform and Taumata Arowai will take place in September/October 2020.

Sustainability

If the Council approves the recommended option, stimulus funding received by the DCC would be used to fund an accelerated programme of three waters network renewals. This programme would contribute to environmental, economic and social sustainability in Dunedin.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

If the Council approves the recommended option, stimulus funding received by the DCC would be used to fund an accelerated programme of three waters network renewals. This would provide for the DCC to bring forward physical works to improve Dunedin’s three waters pipeline infrastructure networks currently programmed for later years in the 10 Year Plan 2018-28.

The Three Waters Steering Committee advises that participation in the initial stage of the Three Waters Reform Programme does not impact on the current LTP development process. However, subsequent stages of the reform programme may require changes to the LTP to reflect commitment to future three waters service delivery changes. The Steering Committee intends to provide guidance on this to councils.

Financial considerations

If the Council approves the recommended option, the DCC will secure a direct allocation of three waters stimulus funding to the value of $7.92 million. The DCC will also secure a share of the $20.60 million regional funding for Otago as agreed through the Otago Mayoral Forum.

Significance

The significance of the decision on signing the MoU is considered low in terms of the Significance and Engagement Policy. Legal advice from Simpson Grierson at Attachment D advises that the MoU does not contain any explicit triggers for consultation under the Local Government Act 2002 and does not give rise to legally enforceable obligations.

Engagement – external

Dunedin City Councillors and DCC staff attended a workshop on three waters service delivery reform in Dunedin on 29 July 2020. The workshop was presented by members of the Three Waters Steering Committee and staff of the Department of Internal Affairs. Elected members and staff of Clutha District Council, Central Otago District Council and Queenstown Lakes District Council also attended.

Engagement - internal

Staff from the DCC 3 Waters and Legal teams contributed to the preparation of this report.

Risks: Legal / Health and Safety etc.

The decision to enter into the MoU, Funding Agreement and Delivery Plan is subject to the general requirements relating to decision making in Part 6 of the Local Government Act 2002. Simpson Grierson has advised that, given the exploratory/investigative nature of the reform commitment and the express provision in the MoU that it does not give rise to legally enforceable obligations, there are grounds for not undertaking specific community engagement at this time.

Conflict of Interest

None identified.

Community Boards

None identified.

Council

25 August 2020

10 year plan early engagement

Department: Corporate Policy and Communications and Marketing

EXECUTIVE SUMMARY

1 This report outlines for Council’s consideration options for early engagement with the community, in the context of the 10 year plan 2021-2031 development.

2 Early engagement is not a statutory requirement but represents an additional opportunity to involve the community in the 10 year plan development process.

3 A proposed engagement schedule is presented to Council at Attachment A in the context of a changing COVID-19 position, and the chosen approach may need to be adapted. Contingency plans in the event of escalating COVID-19 alert levels are indicated in the draft schedule.

4 Formal consultation and engagement on the draft 10 year plan is scheduled for March-April 2021, ahead of Council deliberations and hearings in May 2021. Formal consultation will follow the special consultative procedure as outlined in the Local Government Act 2002.

RECOMMENDATIONS

That the Council:

a) Decides on the preferred option for early engagement with the community, in the context of the 10 year plan 2021-2031 development.

b) Notes that staff will implement an early engagement schedule, if approved.

BACKGROUND

5 The proposed early engagement is intended to be a check in with the community, providing an opportunity for the community to express their views and aspirations for the future, in order to inform Council consideration of the 10 year plan budget development.

6 Councillors have provided feedback on the importance of opportunities for ongoing community engagement that can inform long term planning, and on practical considerations and engagement values.

7 DCC has ongoing relationships with community and stakeholder groups and will ensure conversations about the long term planning process continue beyond the period of this proposed early engagement.

8 Community Boards have recently prepared community plans for their board areas. A workshop with community board members is being planned to consider the priorities that they have identified for their areas that they would like to see incorporated into the 10 year plan.

9 Councillors have provided feedback about engaging with the community in relation to city frameworks for sustainability. Staff recommend taking time to discuss sustainability approaches with key partners this year and seeking wider community feedback next year during the 10 year plan formal consultation process.

10 The proposed approach to community engagement on the 10 year plan is in alignment with the DCC’s Significance and Engagement Policy.

11 The Significance and Engagement Policy will be reviewed as part of the 10 year plan development process and will come to Council for consideration later in the year. The scope of the review is to ensure that the principles and values are in alignment with engagement best practice, that significance is considered in the context of the DCC climate change work programme, and that the schedule of strategic council-owned assets remains appropriate.

DISCUSSION

12 The proposed early engagement provides an opportunity to check in with the community and seek some community feedback as Council shapes its draft 10 year plan. It is proposed that the community is provided with the following information as context for the engagement and the 10 year plan:

a) Contextual information about what the DCC does, currently has underway, and has planned in the future years of the current 10 year plan.

b) An update on ‘what’s on the horizon’, including work towards Dunedin’s Carbon Zero target and changes at the legislative level that will impact DCC activities.

c) Accessible information about how DCC currently pays for activities, and financial constraints.

d) An update on how the long term planning process works, and on when the community can expect detailed plans for consultation.

13 The early engagement provides an opportunity for the community to express their views and aspirations for the future and for the Council to seek some more specific feedback about funding options to inform its budget decisions later in the process. Feedback could be gathered online and through targeted stakeholder groups (depending on the chosen option and future developments relating to COVID-19).

14 The key financial messages to be incorporated into any early engagement include:

a) Where DCC income currently comes from;

b) Where DCC spending is currently allocated;

c) High level options available for paying for DCC activities;

d) Current DCC debt relative to current income levels;

e) DCC asset information (Waipori fund and investment properties).

15 It was originally planned that based on feedback from councillors, any early engagement would be undertaken after 19 September, being the original date for the general election. However, in light of the change of election date to 17 October, it is not feasible for early engagement to take place after the election. Any early engagement would need to take place from mid September through until the end of October, to inform the 10 year plan development.

16 Feedback from the community would be incorporated into a report for Council consideration alongside 10 year plan budget deliberations in early December.

OPTIONS

17 An outline schedule for early engagement is attached. It indicates contingency plans for various elements depending on different COVID-19 alert levels being activated.

18 In line with DCC’s sustainability commitments, none of the proposed options include widespread distribution of printed collateral. Any printed materials will be limited to facilitate discussions with specific stakeholder groups.

19 Three options for early engagement are presented below. Consideration was given to having 10 year plan stands in key community locations with the collection of feedback cards, but this is not presented as an option, given the COVID-19 situation.

Option One – Defer 10 year plan engagement until 2021

20 This option is most closely aligned with the approach DCC has taken in the past, with community engagement on the 10 year plan occurring during the formal consultation period in March-April, ahead of adopting the 10 year plan in June.

Advantages

· Avoids wider community engagement during the general election timing and during the current COVID-19 response which may require alert level escalations.

· Enables staff to prioritise COVID-19 communications and other elements of the COVID-19 response, if required.

· Results in limited operational cost savings.

Disadvantages

· Misses an opportunity to check in with the community before the formal 10 year plan consultation next year.

Option Two – Targeted stakeholder meetings only

21 This option provides opportunities for Councillors to lead face to face discussions with targeted stakeholder groups. Face to face discussions would focus on a limited number of existing stakeholder groups. DCC staff would support Councillors to lead the discussions.

22 Potential stakeholder groups/forums include:

a) Ōtepoti Community Support meeting

b) Ōtepoti Youth Vision meeting

c) Community boards

d) Targeted engagements for Māori, Pasifika and migrant groups. (Note: timings for these forums may fall outside of the September-October period, depending on what is appropriate for these groups, but are recommended as part of on ongoing engagement).

e) Otago Southland Employers’ Association and Otago Chamber of Commerce

f) Grow Dunedin, Creative Dunedin, and Te Ao Tūroa partners

Advantages

· Provides a targeted opportunity to engage specific stakeholder groups.

Disadvantages

· If there are further COVID-19 alert level escalations, capacity to engage is likely to be reduced. Contingency options for delivering face to face engagements would need to be implemented, which would likely result in reduced engagement.

· Will require a reprioritisation of DCC staff resourcing to support, however this can be met from within existing budgets.

Option Three – On line and targeted stakeholder meetings

23 This option includes creating accessible online content covering the information outlined in paragraphs 12 and 14 and includes an opportunity for feedback to be collected online until the end of October 2020.

24 The creation of short accessible video content is proposed, for sharing online. It would cover what the DCC does, financial information (income and spending), and challenges the city is facing on the horizon. Language options are being explored.

25 This option also provides opportunities for Councillors to lead face to face discussions with targeted stakeholder groups as discussed in Option Two.

Advantages

· Provides an opportunity for the community to express their views and aspirations for the future, in order to inform Council consideration of the 10 year plan budget development.

· Could be delivered during COVID-19 alert level escalations.

Disadvantages

· Proximity to general election may not be favourable for wider community engagement.

· If there are further COVID-19 alert level escalations, community capacity to engage is likely to be reduced.

· Will require a reprioritisation of DCC staff resourcing to support and meet timing pressures to develop the content in time, however this can be met from within existing budgets.

NEXT STEPS

26 Once Council approves an approach for early engagement with the community, in the context of the 10 year plan 2021-2031 development, staff will implement an early engagement schedule with content to be approved by the Mayor and CEO.

Signatories

Author:

Sophie Lascarides - Policy Analyst

Andrea Jones - Communications Team Leader

Authoriser:

Nicola Pinfold - Group Manager Community and Planning

Robert West - Acting General Manager City Services

Attachments

	Title	Page
⇩a	10 Year Plan Early Engagement Schedule: Mid September - 31 October 2020	85

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities as it will potentially provide an opportunity for the community to express their view and aspirations, in the context of the 10 year plan 2021-2031 development.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☒	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☒	☐	☐
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

Early engagement in the context of the 10 year plan 2021-2031 development is relevant to all strategies in the DCC’s strategic framework.

Māori Impact Statement

DCC is reviewing partnership agreements with mana whenua and collaboratively developing a Mana Whakahono ā Rohe. It is expected this process will inform 10 year plan development. Taurahere will have an opportunity to contribute towards decision making through any early engagement, which potentially includes a targeted forum for Māori.

Sustainability

Early engagement in the context of the 10 year plan 2021-2031 will provide an opportunity for the community to express their views and aspirations in terms of DCC’s work towards sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

Early engagement in the context of the 10 year plan 2021-2031 is an opportunity for the community to express their views and aspirations which is relevant to all 10 year plan strategies and policies.

Financial considerations

All options proposed in this report will be met from within existing operating budgets.

Significance

This report is proposing an early engagement opportunity in relation to the 10 year plan process itself, and is therefore not driven by a specific decision/proposal/issue. However, engagement will be delivered in alignment with the principles outlined in the Significance and Engagement policy.

Engagement – external

No external stakeholders have been engaged in the development of this report. External stakeholders will be approached, depending on the level of engagement sought by Council.

Engagement - internal

The early engagement plan has been prepared with input from staff including community engagement practitioners, across all DCC departments. The departments primarily responsible for preparing the report were Community and Planning, Policy, Community Development Communications and Marketing, and Enterprise Dunedin.

Risks: Legal / Health and Safety etc.

COVID-19 remains a risk which may impact any planned face to face activities. This will be managed in alignment with central government guidance.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Community boards can be incorporated into targeted engagement approaches.

Council

25 August 2020

10 year plan 2021-31 Update and Supporting Information

Department: Corporate Policy and Community and Planning

EXECUTIVE SUMMARY

1 The purpose of this report is to provide Council with an update on the development of the 10 year plan 2021-31 (the Plan).

2 This report also seeks approval of the first round of supporting information that has been developed for the Plan, being the community outcomes, the city profile, and significant forecasting assumptions (SFAs).

RECOMMENDATIONS

That the Council:

a) Approves, for the purposes of developing the 10 year plan 2021-31, and consulting with the community:

i) the use of the existing community outcomes, with minor amendments as shown at Attachment A;

ii) the draft city profile at Attachment B; and

iii) the significant forecasting assumptions at Attachment C.

b) Notes the 10 year plan 2021-31 Update and Supporting Information report.

BACKGROUND

3 The Local Government Act 2002 (LGA) requires all local authorities to develop a 10 year plan. Section 93(6) of the LGA provides that the purpose of the Plan is to:

a) describe the Council’s activities;

b) describe the community outcomes for Dunedin;

c) provide integrated decision-making and co-ordination of resources;

d) provide a long-term focus for the decisions and activities of the Council; and

e) provide a basis for accountability of the local authority to the community.

4 Schedule 10 of the LGA specifies the minimum information and content that must be included in the Plan as follows:

· Community outcomes;

· Groups of activities (including capital expenditure, levels of service and funding impact statements);

· Statement on any variations between proposals outlined in the Plan and our assessment of water and sanitary services, and waste management and minimisation plans;

· Council controlled organisations (including activities provided and key performance targets);

· Statement on the development of Māori capacity to contribute to decision making processes;

· Financial Strategy;

· Infrastructure Strategy;

· Revenue and Financing Policy;

· Significance and Engagement Policy;

· Forecast financial statements (including balancing of budget, rating information and reserve funds); and

· Significant forecasting assumptions.

5 Work on the content and information required for the Plan is well underway, noting that progress on this project had been delayed due to the impacts of COVID-19.

6 Council is also required under section 93(B) of the LGA to develop a Consultation Document, to provide an effective base for public participation in the Council’s decision making processes relating to the content of the Plan.

7 The final Plan and Consultation Document must contain a report from the Auditor General.

DISCUSSION

Community Outcomes

8 Local Authorities are required to have specified community outcomes under the LGA. Section 5 of the LGA defines Community outcomes as:

Community outcomes means the outcomes that a local authority aims to achieve in order to promote the social, economic, environmental, and cultural well-being of its district or region in the present and for the future.

9 Long term plans must describe the community outcomes which Local Authorities are seeking to achieve through their planning. Schedule 10 (1) of the LGA provides:

A long-term plan must, to the extent determined appropriate by the local authority, describe the community outcomes for the local authority’s district or region.

10 The DCC currently has eight community outcomes which are described in the 10 year plan 2018-2028, as shown in Attachment A. Each of these outcomes is linked to the eight core strategies in Dunedin’s Strategic Framework, and each outcome is supported by the priorities contained within the eight core strategies.

11 In 2019 the Government reinstated the four aspects of community wellbeing – social, economic, environmental and cultural – into the LGA. As the existing community outcomes are aligned with the Strategic Framework, they already cover the four aspects of community wellbeing.

12 It is recommended that the existing community outcomes are approved for incorporation into the 10 year plan 2021-2031 development, with the removal of the direct linking of one specified strategy with one individual community outcome. This is recommended as part of the move towards more integrated strategic delivery, and the fact that work across departments contributes to multiple community outcomes.

13 An amendment to the waste services priorities in respect of the community outcome for a health city is also recommended, to reflect a change made in 2020 to the Waste Minimisation and Management Plan.

14 It is recognised that further development is required on the Strategic Framework, the articulation of the strategic principles of Sustainability and Treaty of Waitangi, and the relationship with community outcomes. This work is underway, as discussed below. A process for a refresh of the Strategic Framework will come to Council for approval later this year. This process will incorporate options for appropriate stakeholder and community input.

Strategic Framework Principles

15 The Treaty of Waitangi is a principle that underpins the current Strategic Framework. Further work is being undertaken with mana whenua this year, continuing the work of the DCC Kaiwhakamāherehere, to ensure that the Treaty of Waitangi is integrated into upcoming strategic review work programmes. DCC is also currently reviewing all existing partnership agreements with mana whenua and collaboratively developing a Mana Whakahono ā Rohe. It is expected these processes will inform 10 year plan development, including any priority areas and outcome indicators which may be incorporated into the Plan in relation to the Treaty of Waitangi.

16 The second principle underpinning the strategic framework is Sustainability. No formal definition or framing of this principle has been adopted by the DCC, leaving room for ambiguity in its interpretation. Work is underway to evaluate sustainability frameworks either in common use or in use by key DCC partners, for their potential application in Dunedin, and within the DCC’s strategic and legislative context. Options will be brought to Council later in the year for consideration, as part of the process of the Strategic Framework review.

City Profile

17 The Dunedin 2018 city profile at Attachment B provides a snapshot of the social, cultural, economic and environmental demographics of the city. The profile outlines the makeup and trends of the population and provides projections for what Dunedin could look like over the next 30 years. The profile also provides information such as residents’ perception of quality of life, Dunedin’s major religions, unemployment rate, and climate change emissions and impacts.

18 The purpose of the city profile is to provide a picture of Dunedin’s current state, trends and future projections. This information is intended to help inform planning and decisions relating to the Plan. The attached city profile provides draft content for approval.

Significant Forecasting Assumptions

19 Schedule 10 (17) of the LGA provides the following:

· A long-term plan must clearly identify—

(a) all the significant forecasting assumptions and risks underlying the financial estimates:

(b) without limiting the generality of paragraph (a), the following assumptions on which the financial estimates are based:

(i) the assumptions of the local authority concerning the life cycle of significant assets; and

(ii) the assumptions of the local authority concerning sources of funds for the future replacement of significant assets:

(c) in any case where significant forecasting assumptions involve a high level of uncertainty,

(i) the fact of that uncertainty; and

(ii) an estimate of the potential effects of that uncertainty on the financial estimates provided.

20 The strategic significant forecasting assumptions (SFA’s) traditionally include the key assumptions around growth, climate change and economic projections. The strategic SFAs were scheduled to be submitted for Council approval in April 2020, however, this was delayed due to COVID-19 restrictions. Further work has been undertaken to assess the impact of COVID-19 on the DCC growth projections. Draft Significant Forecasting Assumptions are at Attachment C, for Council approval, and cover climate change and growth projections. Economic projections will be presented to Council at a later date.

Climate change projections

21 The DCC adopted a Climate Change Prediction Policy in 2006 for use across the organisation. This policy was last updated in 2011 but has since lapsed, with climate change projections having been included in the SFAs in the current 10 year plan 2018-28.

22 Updated climate change projections for the draft 10 year plan are at Attachment D. The data has been updated for new information, based on National Institute of Water and Atmospheric Research (NIWA) projections for the Otago region commissioned by the Otago Regional Council (ORC) in 2019, and Ministry for the Environment (MfE) guidance on Coastal Hazards and Climate Change.

23 Sea level rise projections are provided by MfE, along with guidance on which sea level rise projections to use. This MfE guidance has been incorporated into the SFAs, and work will continue to imbed these into future projections.

24 Sea level rise is measured by NIWA using national modelling and a range of scenarios. MfE note there are differences in sea level rise across the country. These spatial differences are attributable to a mix of factors, including:

· local physical processes and aspects inherent in the data records

· variations in vertical land movement (mostly unknown over the record)

· shorter data-record spans outside the four main ports (also reflected in the standard deviations)

· different time periods for the measurement record.

25 Dunedin has tide gauges at Port Otago and Green Island. Further work is needed to identify if this localised data can be used to inform more detailed sea level rise estimates for Dunedin.

Growth Projections

26 Updated growth projections for the 10 year plan are included in Attachment C and E. The DCC growth projections are used for a range of forward planning activities including infrastructure planning, spatial planning, the Development Contributions Policy and the City Profile. In February 2020, independent contractor Russell Jones provided Dunedin city-wide projections and detailed projections for 73 Census Area Units for use in the 10 year plan.

27 Since February 2020, the New Zealand economy has undergone a significant period of upheaval due to the COVID-19 pandemic. This has created uncertainty around Dunedin’s growth and economic performance into the future. In June 2020, the DCC commissioned Infometrics to review the Russell Jones projections, to assess the impact of the COVID-19 recession on the DCC’s growth projections, identify the factors which will impact growth post-COVID, and to provide scenarios highlighting the extent of the uncertainty in the growth environment over the course of the 50 year projections.

28 In early July 2020, Infometrics produced updated city-wide projections across three scenarios (low, medium, high) reflecting differing long-term trajectories for Dunedin City (Attachment E). Projections from Infometrics show minor differences in the pre and post-COVID growth environment for Dunedin. The Infometrics medium scenario for population sits slightly below the Russell Jones projections. There is some divergence between the Russell Jones and Infometrics projections for dwelling numbers over the longer term, largely due to differences in methodology between the two providers. There is a bigger difference in peak day visitor projections post-COVID, given border restrictions.

29 Given the relatively minor difference between the pre and post-COVID projections for population, dwelling and rating unit numbers, and the need for both city-wide and Census Area Unit projections, staff recommend the following projections are used in the 10 year plan:

a) Pre Covid-19 resident population projections (including age demographics)

b) Pre Covid-19 dwelling projections (occupied and unoccupied)

c) Pre Covid-19 rating unit projections (covering DCC’s nine rating unit categories)

d) Post Covid-19 medium scenario peak visitors staying in Dunedin (commercial accommodation and in private residences, plus day visitors, at the city level only).

30 An updated 2020 post COVID-19 DCC growth projections report has been prepared by staff based on these recommendations, at Attachment F.

31 Operational SFAs, including financial assumptions such as inflation will be presented to Council for approval later this year.

OPTIONS

Option One – Supporting documentation is approved. Recommended Option

32 Council approves the supporting documentation for development of, and inclusion in, the draft 10 year plan.

Advantages

· The documentation will be used to further inform the development of the 10 year plan.

Disadvantages

· There are no identified disadvantages.

Option Two – Supporting documentation is not approved.

33 Council does not approve the supporting documentation and requires further work be undertaken to amend as necessary.

Advantages

· There are no identified advantages.

Disadvantages

· Further work would be required to amend the supporting documentation, which would put further pressure on meeting time frames for the development of the 10 year plan.

NEXT STEPS

34 If approved, the supporting documentation will be included in, and used to support the development of the draft 10 year plan.

Signatories

Author:

Sharon Bodeker - Corporate Planner

Suzie Ballantyne - Senior Policy Analyst

Authoriser:

Nicola Pinfold - Group Manager Community and Planning

Robert West - Acting General Manager City Services

Attachments

	Title	Page
⇩a	Draft Community Outcomes	95
⇩b	Draft City Profile	98
⇩c	Draft Significant Forecasting Assumptions	106
⇩d	Climate Change Projections	112
⇩e	Infometrics Projections	116
⇩f	Post Covid Growth Projections Report	131

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities, and promotes the social, economic, environmental and cultural wellbeing of the Dunedin communities, taking a sustainable development approach.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☒	☐	☐
Economic Development Strategy	☒	☐	☐
Environment Strategy	☒	☐	☐
Arts and Culture Strategy	☒	☐	☐
3 Waters Strategy	☒	☐	☐
Spatial Plan	☒	☐	☐
Integrated Transport Strategy	☒	☐	☐
Parks and Recreation Strategy	☒	☐	☐
Other strategic projects/policies/plans	☒	☐	☐

The 10 year plan contributes to all of the objectives and priorities of the strategic framework as it describes the Council’s activities, the community outcomes, and provides a long term focus for decision making and coordination of the Council’s resources, as well as a basis for community accountability.

Māori Impact Statement

DCC is reviewing partnership agreements with Mana whenua and collaboratively developing a Mana Whakahono ā Rohe. It is expected this process will inform 10 year plan development. Taurahere will have an opportunity to contribute towards decision making through any early engagement, which potentially includes a targeted forum for Māori.

Sustainability

The 10 year plan contains content regarding the Council’s approach to sustainability. Major issues and implications for sustainability are discussed in the 30 year Infrastructure Strategy and financial resilience is discussed in the Financial Strategy.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides an update on the development of the 10 year plan.

Financial considerations

There are no financial implications.

Significance

This report is considered to be of low significance in terms of the Council’s Significance and Engagement Policy.

Engagement – external

There will be full community engagement on the draft plan, and pre engagement initiatives are being planned.

Engagement - internal

Staff and managers from across council are involved in the development of the 10 year plan.

Risks: Legal / Health and Safety etc.

There are no identified risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

Community Boards will be involved in the development of the 10 year plan.

Mayor	Mayor Aaron Hawkins
Deputy Mayor	Cr Christine Garey
Members	Cr Sophie Barker	Cr David Benson-Pope
	Cr Rachel Elder	Cr Doug Hall
	Cr Carmen Houlahan	Cr Marie Laufiso
	Cr Mike Lord	Cr Jim O'Malley
	Cr Jules Radich	Cr Chris Staynes
	Cr Lee Vandervis	Cr Steve Walker
	Cr Andrew Whiley

General subject of the matter to be considered	Reasons for passing this resolution in relation to each matter	Ground(s) under section 48(1) for the passing of this resolution	Reason for Confidentiality
C1 Confirmation of the Confidential Minutes of Ordinary Council meeting - 28 July 2020 - Public Excluded	S7(2)(g) The withholding of the information is necessary to maintain legal professional privilege. S7(2)(i) The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations). S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.	.
C2 Confirmation of the Confidential Minutes of Audit and Risk Subcommittee - 20 May 2020 - Public Excluded	S6(b) The making available of the information would be likely to endanger the safety of a person. S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.	.
C3 Confirmation of the Confidential Minutes of Community and Culture Committee - 4 August 2020 - Public Excluded		.
C4 Smooth Hill	S7(2)(g) The withholding of the information is necessary to maintain legal professional privilege. S7(2)(h) The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities. S7(2)(i) The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.
C5 Appointment of District Licensing Committee Members	S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.
C6 Confidential Council Actions	S6(a) The making available of the information would be likely to prejudice the maintenance of the law, including the prevention, investigation, and detection of offences and the right to a fair trial.	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 6.

	Title	Page
⇨a	Minutes of Ordinary Council meeting held on 28 July 2020 (Under Separate Cover 1)

Author:	Clare Sullivan - Team Leader Civic
Authoriser:	Sandy Graham - Acting Chief Executive

	Title	Page
⇩a	Councillor Register of Interest	7
⇩b	ELT Register of Interest	18