PALMERSTON NORTH CITY
COUNCIL
Finance and
Performance Committee MEETING
19 March 2018
LATE ITEMS
Consideration of the items is subject to the provisions of the
urgent item clause, pursuant to Section 46A(7) of the Local Government Official
Information and Meetings Act 1987.
The
Chairperson recommends that the items be considered as:
- The items were not available at the time the Agenda was circulated;
and
- Consideration of the items is a matter of urgency, requiring a
decision without delay to enable the Council to meet deadlines, finaslise
decisions and receive information within agreed timeframes.
16. Fees
and Charges Review Page 5
Report, dated 15
March 2018 from the Strategy Manager Finance, Steve Paterson.
PALMERSTON NORTH CITY
COUNCIL
Report
TO: Finance and Performance Committee
MEETING DATE: 19 March 2018
TITLE: Fees and Charges Review
DATE: 15 March 2018
AUTHOR/S: Steve
Paterson, Strategy Manager Finance, City Corporate
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RECOMMENDATION(S) TO Council
1. That
the report be received and the current status
of fees and charges be noted.
Planning &
Miscellaneous
2. That
the Statement of Proposal (and the associated summary) to adopt updated fees
and charges for Planning Services and Miscellaneous Services effective from 1
July 2018 as attached in Appendix 2, be approved for public consultation and
the Chief Executive be authorised to undertake the necessary consultative
process under sections 83 and 150 of the Local Government Act 2002.
Building
3. That
the fees and charges for Building Services, as proposed in Appendix 3 be
adopted and following public notification take effect from 9 April 2018.
Environmental Health
4. That
the fees and charges for Environmental Health Services (in terms of
regulation 7 of the Health (Registration of Premises) Regulations 1966 and
regulation 83 of the Food Hygiene Regulations 1974) as proposed in Appendix
4, be adopted and following public notification, take effect from 1 July
2018.
Animal Control
5. That
the fees and charges for the Impounding of Animals (in terms of section 14 of
the Impounding Act 1955) and for Dog Registration and Dog Impounding (in
terms of section 37 of the Dog Control Act 1996) as proposed in Appendix 5 be
adopted, and once following public notification, take effect from 1 July
2018.
Burial & Cremation
6. That
the fees and charges for Burial and Cremation, as proposed in Appendix 6 be
adopted and following public notification take effect from 1 July 2018.
Service Connections
7. That
the fees and charges for Service Connections, as proposed in Appendix 7 be
adopted and take effect from 1 July 2018.
E-Waste Charges
8. That
the fees and charges for e-waste disposal as proposed in Appendix 8 be
adopted and take effect from 1 July 2018.
Event Recycling Fees
9. That
the fees and charges for event recycling as proposed in Appendix 8 be adopted
and take effect immediately.
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Summary of options analysis for
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Problem or Opportunity
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Fees and charges need to be reviewed
annually to ensure they adequately meet Revenue & Financing policy,
budgetary and other objectives
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OPTION 1:
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Approve fee increases as proposed
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Community Views
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Each of different types of fees requires a different
process for community engagement. Where this is legislatively
controlled it is identified in the report
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Benefits
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More likely to comply with funding proportions
contained in Revenue & Financing Policy
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Risks
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Public criticism of increases
Increased charges for some activities may discourage
compliance or reduce volumes
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Financial
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Budgeted revenue targets more likely to be achieved
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OPTION 2:
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Approve fee amendments for some of those
proposed at greater or lesser levels
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Community Views
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As above
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Benefits
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Lower fees than recommended likely to mean policy
targets will not be achieved
Higher fees than recommended in some instances will
increase likelihood of policy user fee target being achieved
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Risks
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Higher fees than recommended may increase the risk
of public criticism
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Financial
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If lower increases are approved for some fees likely
that budgeted revenue will not be achievable
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OPTION 3:
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Do not approve any fee increases
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Community Views
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As above
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Benefits
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Lower fees than recommended likely to mean policy
targets will not be achieved
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Risks
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When increases eventually are made (to reduce the
pressure on rates increases) the extent of the increase required will be
publicly and politically unacceptable
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Financial
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If no increases are approved likely that budgeted
revenue will not be achievable
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Contribution of Recommended Option to
Council’s Strategic Direction
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Council’s Financial Strategy and
Revenue & Financing Policy strive to ensure those who benefit from the
provision of services are the ones who pay, where this is practicable.
The proposed changes to fees and charges attempt to ensure there is a reasonable
chance of this happening
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Rationale for the recommendations
1. Overview
of the problem or opportunity
1.1 The
purpose of this report is to provide an overview of the current status of fees
and charges made by the Council and to recommend the adoption of updated fees
for some of them.
1.2 It
is important that fees and charges be regularly reviewed. There are a
variety of reasons for this including:
· Compliance with legislative requirements – many fees and
charges made by the Council are governed by specific legislation
· Consistency with Council’s Revenue and Financing policy
– for each activity the Council has adopted targets for the funding mix
i.e. the proportion of costs to be funded from fees and charges
· Transparency – in some instances it is important to be able to
demonstrate that the charge being made represents a fair and reasonable
recovery of the costs of providing a particular service
· Market comparability – for some services the Council operates
in a contestable market and it is important that fees and charges are
responsive to market changes.
1.3 However
as a review process is sometimes very time-consuming the depth of the review
for each type of fee or charge may vary depending on the circumstances.
1.4 Attached
as Appendix 1 is a schedule listing, in broad terms, the various types of fees
and charges made by the Council. The schedule is ordered by activity
(consistent with the proposed 10 Year Plan 2018-28) and within that by function
(consistent with the Revenue & Financing Policy). Comments are made
within the schedule outlining the reasons for there being no change recommended
to a particular fee or charge. In cases where changes are recommended
more detail is provided in the appendices.
2. Background and
previous council decisions
2.1 Council
has previously indicated that as a matter of policy it wishes all fee and
charge revisions to be encapsulated in a single report to this Committee in
February each year. This report is a month later than planned due to
staff commitments to the 10 Year Plan process.
2.2 Council’s current Revenue & Financing Policy (10 Year Plan
2015-25 pages 165-184) describes how the Council goes about deciding who
should pay for the provision of each activity and in what proportions.
The policy should be the foundation for decisions about the levels of fees and
charges. The proposed updated policy for 2018-28 makes no fundamental
change to this.
2.3 The following table shows the indicative levels of direct user
contribution (including through the use of targeted rates) sought to fund the
operating costs for each activity as described in the Revenue & Financing
Policy:
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Revenue & Financing Policy – Indicative levels of direct
user contribution (incl. targeted rates*) sought toward activity cost
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Low
0-19%
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Med-Low
20-39%
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Med
40-59%
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Med-High
60-79%
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High
80-100%
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Economic development & international relations
Planning services- public
Urban design
Heritage management
Roads, street facilities, street lighting &
traffic services
Active & public transport
Creative & exciting city
Arts, culture & heritage
Reserves & sportsfields
Swimming pools
Libraries & community centres
Civil defence & safer community initiatives
Biodiversity & sustainable practices
Stormwater
Leadership
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Central Energy Trust Arena
Public Health
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Conference & Function Centre
Building services
Cemeteries
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Planning services – private
Parking
Social housing
Animal Control
************
Rubbish & Recycling#
Wastewater#
Water#
************
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# significant portion of funding through targeted
rates
2.4 For some activities (such as swimming pools) only a portion of the
operating costs is borne by the Council and none of the revenue is received
directly by the Council. The current policy intention is that the ratio
of external income to total operating costs is viewed taking into consideration
the consolidated view (i.e. all of the revenue & costs of the
activity). However such an approach has been difficult to administer so
the proposed policy now focuses only on the Council’s share of
funding. This means that Swimming Pools were previously included in the
Medium funding category but will in future be in the Low category.
2.5 In some of the activities shown above it is not practical to charge
users through a separate charge specifically related to use. An example
of this is water where large consumers are metered but the majority of users
are charged through the rating system by way of a fixed targeted rate as the
best proxy for direct user charge.
2.6 In
some activities a combination of charging mechanisms is used. Rubbish
& recycling is an example. Users are responsible for their own
rubbish disposal. The Council does provide a collection and disposal
service which is funded from the sale of rubbish bags. Recycling activity
is funded from the sale of recyclables and the balance through the rating
system by way of fixed targeted rates.
2.7 Council
reviewed some fees and charges in February 2017 and confirmed in May 2017 those
that were the subject of public consultation. Additional planning charges
were also considered In October and approved in December 2017.
3. Description
of options
3.1 With a few exceptions (e.g.
cemetery/crematorium, conference & function centre), draft revenue budgets
for 2018/19 have been set at levels which aim to meet the Revenue &
Financing Policy proportion targets. Achieving these revenue levels is
dependent not only on the level of fee or charge set but also the actual
volumes of activity by comparison with budget assumptions.
3.2 The
timing of this review is scheduled to fit into the annual planning timetable in
a way which ensures appropriate revenue assumptions are made in the proposed 10
Year or Annual Plans and changes to fees and charges can be implemented as soon
as practicable.
3.3 Much
of this report is focused on providing an overview of Council’s fees and
charges. However the report does include specific proposals for change
for a number of fees and charges as explained in more detail in the following
appendices:
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Appendix
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2
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Planning &
Miscellaneous
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Proposal for
public consultation
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3
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Building
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Proposed increases
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4
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Environmental
Health
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Proposed increases
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5
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Animal Control
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Proposed increases
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6
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Burial &
Cremation
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Proposed increases
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7
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Service
Connections
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Proposed increases
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8
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E-waste
Event Recycling
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Proposed new
regime of fees and charges
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4. Analysis
of options
4.1 Analysis of the options for each of the fee types for individual
activities is contained in the appendices.
5. Conclusion
A broad review of fees and charges has
been undertaken. Revenue from these is an important part of the funding
mix. There are two elements to achieving revenue budgets. The first
is the actual level of the fee or charge. The second is the volume of
sales or use. A change to the level of fee or charge can influence
demand. Achieving revenue targets is sometimes more about volumes than
the level of the charge. There is a fine balance between the two.
This report recommends increases in charges for, planning & miscellaneous,
building, environmental health, animal control, burial & cremation, service
connections, and formalises charges for e-waste and event recycling.
Fees and charges for trade waste and
sportsfields will be the subject of a separate report as soon as practicable.
6. Next
actions
6.1 There
is a series of procedural steps to be followed to enable some of the revised
fees and charges to be implemented. In some cases (as specifically
identified in the recommendations) this involves a period of public
consultation and a report back to the Council for final confirmation (taking
into account any public submissions).
7. Outline
of community engagement process
7.1 The
Revenue & Financing Policy incorporates the Council’s current views
on what portion of each activity should be directly funded from users.
This policy forms part of the 10 Year Plan which was the subject of public
consultation in 2015 and the updated policy is being consulted on in
conjunction with the proposed 2018-28 10 Year Plan.
7.2 There
are varying types of public consultation required to enable changes to be made
to fees and charges. For some the special consultative process or a
process consistent with the principles of section 82 of the Local Government
Act is to be used. More detail about each is provided in the detailed
appendices.
Compliance and administration
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Does the Committee have delegated authority to
decide?
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No
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Are the decisions significant?
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No
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If they are significant do they affect land or a
body of water?
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NA
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Can this decision only be made through a 10 Year
Plan?
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No
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Does this decision require consultation through the
Special Consultative procedure?
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Yes
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Is there funding in the current Annual Plan for
these actions?
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Yes
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Are the recommendations inconsistent with any of
Council’s policies or plans?
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No
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Attachments
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1.
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Appendices 1 - 8 ⇩ 
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Steve Paterson
Strategy Manager Finance
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