Agenda of Council - Wednesday, 25 June 2025

Palmerston North City Council

Minutes of the Council Meeting Part I Public, held in the Council Chamber, First Floor, Civic Administration Building, 32 The Square, Palmerston North on 04 June 2025, commencing at 9.02am

Members

Present:

Grant Smith (The Mayor) (in the Chair) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

Members Present Online:

Councillor Patrick Handcock

Apologies:

Councillor Roly Fitzgerald

Councillor William Wood left the meeting at 3.57pm after consideration of clause 94-25. He entered the meeting again in Part II Confidential at 3.02pm. He was not present for clause 95-25.

	Karakia Timatanga
	Councillor Debi Marshall-Lobb opened the meeting with karakia.

81-25

Apologies

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council receive the apologies.

Clause 81-25 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

	Declaration of Interest
	Councillor Debi Marshall-Lobb declared a conflict of interest in Item 8 Notice of Motion: Palmerston North Boys High School - Hockey Turf Project (clause 80-25) and took no further part in discussion or debate.

82-25

Confirmation of Minutes

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

That the minutes of the ordinary Council meeting of 7 May 2025 Part I Public and Part II Confidential be confirmed as a true and correct record.

Clause 82-25 above was carried 15 votes to 0, the voting being as follows:

For:

83-25

Confirmation of Minutes

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

That the minutes of the ordinary Council meeting of 14 May 2025 Part I Public be confirmed as a true and correct record.

Clause 83-25 above was carried 15 votes to 0, the voting being as follows:

For:

84-25

Notice of Motion: Palmerston North Boys High School - Hockey Turf Project.

Councillor Wood introduced the Notice of Motion.

Moved William Wood, seconded Grant Smith.

RESOLVED

1. That Council create a new operating programme to provide civic support for the PNBHS Hockey Turf project of $33.5K in 2025/26 and refer $33.5K per year to 2026/27 and 2027/28 annual budget processes.

Clause 84-25 above was carried 11 votes to 3, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Mark Arnott, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad and William Wood.

Against:

Councillors Brent Barrett, Karen Naylor and Kaydee Zabelin.

Note

Councillor Debi Marshall-Lobb declared a conflict of interest, withdrew from the discussion and sat in the gallery.

85-25	Community Committee Part I Public - 21 May 2025 Councillor Johnson presented the recommendations below. She moved an additional motion, to agree Niuvaka Trust as a Sector lead from 2025-2028. This was the recommendation that was laid on the table from the Community Committee on 21 May 2025. The motion was lifted and moved as the engagement required with the Pasifika community had occurred.
	Moved Lorna Johnson, seconded Patrick Handcock. RESOLVED 1. That Council adopt the recommendations from the Community Committee of 21 May 2025: Potential locations for a public toilet at Albert St (clause 12-25) Memorandum, presented by Bill Carswell, Activities Manager, Property Services. 1. That Council proceed with applying for a planning and building consent for the installation of a single pan toilet at the end of Albert Street (option 2 residential pump station).
	Clause 85-25 above was carried 12 votes to 1, with 2 abstentions, the voting being as follows: For: Councillors Debi Marshall-Lobb, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Against: Councillor Mark Arnott. Abstained: The Mayor (Grant Smith) and Councillor Leonie Hapeta.
	Moved Lorna Johnson, seconded Patrick Handcock. RESOLVED 2. That Council adopt the recommendations from the Community Committee of 21 May 2025: Recommendation to engage Sector Lead Organisations (clause 11-25) Memorandum, presented by Ahmed Obaid, Community Development Advisor and Stephanie Velvin, Manager Community Development. 1. That Council engage the following organisation through Sector Lead Partnership Agreement for the period 1 July 2025 to 30 June 2028: a. MASH Trust
	Clause 85-25 above was carried 14 votes to 0, with 1 abstention, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Abstained: Councillor Leonie Hapeta.
	Moved Lorna Johnson, seconded Patrick Handcock. On a procedural motion: That Council lift 1.b (make the Niuvaka Trust a sector lead for the period 1 July 2025- 30 June 2028) off the table. The procedural motion was carried 13 votes to 1, with 1 abstention, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Lorna Johnson, Billy Meehan, Orphée Mickalad, William Wood and Kaydee Zabelin. Against: Councillor Karen Naylor. Abstained: Councillor Leonie Hapeta.
	Moved Lorna Johnson, seconded Patrick Handcock. RESOLVED 2. That Council engage the following organisation through Sector Lead Partnership Agreement for the period 1 July 2025 to 30 June 2028: b. Niuvaka Trust
	Clause 85-25 above was carried 13 votes to 1, with 1 abstention, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Lorna Johnson, Billy Meehan, Orphée Mickalad, William Wood and Kaydee Zabelin. Against: Councillor Karen Naylor. Abstained: Councillor Leonie Hapeta.

86-25	Fees and Charges - Confirmation following consultation Memorandum, presented by Steve Paterson, Manager - Financial Strategy. Councillor Wood moved an additional motion seeking information on how fees and charges for Planning Services are set.
	Moved Grant Smith, seconded Vaughan Dennison. RESOLVED 2. That Council approve the fees and charges for Planning & Miscellaneous Services, as scheduled in Attachments 2 and 3, effective from 1 July 2025.
	Clause 86-25 above was carried 11 votes to 4, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Rachel Bowen, Lew Findlay, Patrick Handcock, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor and Kaydee Zabelin. Against: Councillors Mark Arnott, Vaughan Dennison, Leonie Hapeta and William Wood.
	Moved Grant Smith, seconded Vaughan Dennison. RESOLVED 1. That Council receive the submissions for fees and charges (Attachment 1). 3. That Council approve the fees and charges for Trade Waste Services, as scheduled in Attachment 4, effective from 1 July 2025.
	Clause 86-25 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.
	Moved William Wood, seconded Karen Naylor. RESOLVED 4. That the Chief Executive provide a breakdown for how we set our fees and charges for Planning Services.
	Clause 86-25 above was carried 9 votes to 6, the voting being as follows: For: Councillors Mark Arnott, Brent Barrett, Vaughan Dennison, Leonie Hapeta, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Against: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Rachel Bowen, Lew Findlay, Patrick Handcock and Lorna Johnson.

Meeting adjourned at 10.35am

Meeting resumed at 10.56am

87-25

2025/26 Annual Budget - Adoption

Memorandum, presented by Cameron McKay, Chief Financial Officer, Steve Paterson, Manager - Financial Strategy and Scott Mancer, Manager - Finance.

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council adopt the Annual Budget (Plan) for 2025/26 (as amended to incorporate item 8 (clause 84-25)) as attached.

2. That Council confirm the adoption of the Annual Budget (Plan) 2025/26 is a significant decision within the parameters of the Local Government Act 2002 and that Council is satisfied that all submissions have been considered and that there has been compliance with the decision-making and consultation requirements of the Act.

3. That Council delegate authority to the Chief Executive to authorise payments to council-controlled organisations and other external organisations in accordance with their respective service level agreements.

Clause 87-25 above was carried 11 votes to 4, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Orphée Mickalad and Kaydee Zabelin.

Against:

Councillors Mark Arnott, Billy Meehan, Karen Naylor and William Wood.

88-25

Setting Rates for 2025/26

Memorandum, presented by Steve Paterson, Manager - Financial Strategy.

The agreed Rates resolution 2025-26 is attached.

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council adopt the resolution to set the rates for the 2025/26 year (Attachment 1).

2. That Council note that the setting of rates is a significant decision within the parameters of the Local Government Act 2002 and that it is satisfied there has been compliance with the decision-making and consultation requirements of the Act.

Clause 88-25 above was carried 12 votes to 3, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad and Kaydee Zabelin.

Against:

Councillors Mark Arnott, Karen Naylor and William Wood.

89-25

Resolutions to Authorise Borrowing

Memorandum, presented by Steve Paterson, Manager - Financial Strategy.

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council authorise the Chief Executive to borrow, in accordance with delegated authority, up to $49 million (“the Borrowing”) of additional term debt by way of bank loan or loans or credit facilities or other facilities or the issue of stock for the Borrowing secured by the Debenture Trust Deed.

2. That Council note that the purpose of the Borrowing is the carrying out or continuing of programmes identified in the 2025/26 Annual Budget.

3. That Council note that any sums raised and subsequently on-lent to Palmerston North Airport Limited pursuant to the loan agreement between the Council and the Company will be in addition to the sums to be raised for the Council’s own funding purposes as authorised above.

4. That Council note that the security for the Borrowing may be the charge over rates under the Debenture Trust Deed if the Chief Executive considers appropriate.

5. That Council approve that having regard to the Council’s financial strategy, it is prudent and reasonable to enter into the proposed borrowing for the reasons set out in this report.

6. That Council note that the raising of the Borrowing will comply with the Council's Liability Management Policy.

7. That Council note that the decision to borrow up to $49 million is a significant decision within the parameters of the Local Government Act 2002 and is satisfied that there has been compliance with the decision-making and consultation requirements of the Act.

Clause 89-25 above was carried 11 votes to 0, with 4 abstentions, the voting being as follows:

For:

Abstained:

Councillors Mark Arnott, Billy Meehan, Karen Naylor and William Wood.

Meeting adjourned at 12.16pm

Meeting resumed at 1.18pm

90-25	Local Water Done Well Decision Report, presented by Mike Monaghan, Manager Three Waters, Julie Keane, Transition Manager, Olivia Wix, Manager Communications and Scott Mancer, Manager Finance. Officers made a presentation (as attached). They explained that there was an error in workshop material from last week where the inflated figures for the Palmerston North City Council base case had been shown. This has been corrected in the report to show the uninflated figures over the 10 year period. Officers corrected the following additional errors in the report: In section 11.9 of the report (page 96), the additional debt repayment provisions of $75M should read $150M in the Long-Term Plan. Figures in the Palmerston North City Council base case throughout the report include the cost of the IFF levy (for Nature Calls). Page 83 – Financial Section for Option 3 (for a standalone Council-Controlled Organisation) - The figure for 10 years should read $2790 per year not 3,800 per year.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That this matter or decision is recognised as of high significance in accordance with the Council’s Significance and Engagement Policy.
	Clause 90-25 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.
	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 2. That Council confirm a Joint Water Services Council-Controlled Organisation as its preferred future Water Services Delivery Model. 3. That Council agree to partner with Horowhenua District Council and Rangitīkei District Council in a Joint Water Services Council-Controlled Organisation (WSCCO). 4. That Council agree to continue to work with Ruapehu District Council and Whanganui District Council with a view to including them in a Joint WSCCO upon confirmation from those councils. 5. That Council instruct the Chief Executive to prepare a Joint Water Services Delivery Plan to be brought back to Council in August 2025 for approval prior to submission to the Department of Internal Affairs before the 3 September deadline, which includes further information relating to the management of stormwater.
	Clause 90-25 above was carried 12 votes to 3, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad and William Wood. Against: Councillors Brent Barrett, Karen Naylor and Kaydee Zabelin.

91-25

Te Motu o Poutoa Governance and Management Structure Options: Summary of submissions, including hearings

Report, presented by Kathy Dever-Tod, Manager Parks and Reserves
Cameron McKay, General Manager, Corporate Services.

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council agree to the establishment of a Jointly Governed Council-Controlled Organisation, governed by Council and Rangitāne o Manawatū for the Te Motu o Poutoa civic marae and cultural centre, subject to Council confirming ongoing funding in the 2025/26 Annual Plan.

2. That Council note the following steps are required before the new Jointly Governed Council Controlled Organisation commences operations:

· Proposed establishment costs and processes, including relevant entity agreements such as a shareholders agreement or trust deed.

· A Statement of Expectation agreed by Council

· A Statement of Intent agreed upon between the Board and the Shareholders, outlining the specific objectives, clear roles and responsibilities for the Council-Controlled Organisation, including Council and Rangitāne o Manawatū roles in monitoring and accountability

· Appointment of Board members

Clause 91-25 above was carried 14 votes to 1, the voting being as follows:

For:

Against:

Councillor Mark Arnott.

92-25

Council Work Schedule

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council receive its Work Schedule dated 4 June 2025.

Clause 92-25 above was carried 15 votes to 0, the voting being as follows:

For:

Recommendations from Committee Meetings

93-25	Strategy & Finance Committee Part I Public - 28 May 2025 Councillor Vaughan Dennison presented the recommendations below:
		Moved Vaughan Dennison, seconded Karen Naylor. RESOLVED 1. That Council adopt the recommendations from the Strategy & Finance Committee of 28 May 2025: Variable Speed Limits for schools - confirmation of scope for draft Speed Management Plan (clause 17-25) Memorandum, presented by Peter Ridge, Senior Policy Analyst and James Miguel, Senior Transport Planner. 1. That Council confirm that the scope of the draft Speed Management Plan 2025 (stage 1) will include: · variable speed limits for all schools within Palmerston North; and · Te Wanaka Road/SH56 intersection; and · An intersection speed zone (ISZ) for Longburn- Rongotea Road/No. 1 Line.
		Clause 93-25 above was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Against: Councillor Leonie Hapeta.

Exclusion of Public

94-25

Recommendation to Exclude Public

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

That the public be excluded from the following parts of the proceedings of this meeting listed in the table below.

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:

General subject of each matter to be considered		Reason for passing this resolution in relation to each matter	Ground(s) under Section 48(1) for passing this resolution
21.	Presentation of the Part II Confidential Strategy & Finance Committee Recommendations from its 28 May 2025 Meeting	NEGOTIATIONS: This information needs to be kept confidential to ensure that Council can negotiate effectively, especially in business dealings	s7(2)(i)

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Section 6 or Section 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public as stated in the above table.

Clause 94-25 above was carried 15 votes to 0, the voting being as follows:

For:

The public part of the meeting finished at 2.57pm

Confirmed 25 June 2025

Mayor

Attachment One

Palmerston North City Council

Resolution to Set Rates for the 2025/2026 year

The Palmerston North City Council resolves to set rates for the financial year commencing on 1 July 2025 and ending on 30 June 2026 in accordance with the Rating Policies and Funding Impact Statement contained in its Annual Budget (Plan) 2025/26 as follows:

1 Details of rates to be set

Notes

· All rates and charges shown are inclusive of Goods and Services Tax.

· References to the ‘Act’ relate to the Local Government (Rating) Act 2002.

1.1 Uniform Annual General Charge

A Uniform Annual General Charge of $300 on each rating unit pursuant to section 15 of the Act.

1.2 General Rate (based on land value)

A general rate pursuant to section 13 of the Act set on all rateable land on the basis of land value and assessed differentially (based on land use) against each property group code at the rate of cents in the dollar set down in the following schedule:

Differential Group		Differential Factor (expressed as % of Group Code MS)	Rate (cents in $ of LV)
Code	Brief Description		Rate (cents in $ of LV)
R1	Single unit residential	Balance (approx.80)	0.4134
R2	Two unit residential	110	0.5697
R3	Three unit residential	120	0.6215
R4	Four unit residential	130	0.6733
R5	Five unit residential	140	0.7251
R6	Six unit residential	150	0.7769
R7	Seven unit residential	160	0.8286
R8	Eight or more unit residential	170	0.8804
MS	Miscellaneous	100	0.5179
CI	Non-residential (Commercial/Industrial)	250	1.2948
FL	Rural & Semi-serviced (5 hectares or more)	25	0.1295
FS	Rural & Semi-serviced (0.2 hectares or less)	75	0.3884
FM	Rural & Semi-serviced (between 0.2 & 5 hectares)	55	0.2848

1.3 Capital Value targeted rate

A targeted rate to fund the costs of the goal one (innovative and growing city) activities including transport, economic development, housing and urban design, set under section 16 of the Act on all rateable land on the basis of the capital value, and assessed differentially (based on land use ^{^[1]}) against each property group code at the rate of cents in the dollar set down in the following schedule:

Differential Group		Differential Factor (expressed as % of Group Code MS)	Rate (cents in $ of CV)
Code	Brief Description		Rate (cents in $ of CV)
R1	Single unit residential	Balance (approx. 76)	0.1009
R2	Two unit residential	120	0.1589
R3	Three unit residential	120	0.1589
R4	Four unit residential	120	0.1589
R5	Five unit residential	120	0.1589
R6	Six unit residential	120	0.1589
R7	Seven unit residential	120	0.1589
R8	Eight or more unit residential	120	0.1589
MS	Miscellaneous	100	0.1324
CI	Non-residential (Commercial/Industrial)	200	0.2648
FL	Rural/Semi-serviced	35	0.0463
FL	(5 hectares or more)	35	0.0463
FS	Rural/Semi-serviced	75	0.0993
FS	(0.2 hectares or less)	75	0.0993
FM	Rural/Semi-serviced (between 0.2 & 5 hectares)	55	0.0728

1.4 Water Supply Rates

A targeted rate for water supply, set under section 16 of the Act, of:

· $487 per separately used or inhabited part of a residential rating unit which is connected to a Council operated waterworks system. This charge is not made where water supply is invoiced on the basis of water consumed.

· $487 per rating unit for all other rating units which are connected to a Council operated waterworks system. This charge is not made where water supply is invoiced on the basis of water consumed.

· $243.50 per rating unit which is not connected to a Council operated waterworks system but which is serviceable (i.e. within 100 metres of such waterworks system) and the Council would allow a connection.

Instead of the above targeted rates for metered water supply, targeted rates set under sections 16 and 19 of the Act, of $1.96305 per cubic metre of water supplied to any rating unit that is invoiced on the basis of water supplied plus a fixed amount of $253 per metered connection for connections of 25mm or less and $540 for connections greater than 25mm.

1.5 Wastewater Disposal Rates

A targeted rate for wastewater disposal, set under section 16 of the Act, of:

· $397 per separately used or inhabited part of a residential rating unit which is connected to a public wastewater drain.

· $397 per rating unit for all other rating units which are connected to a public wastewater drain.

· $397 per pan (i.e. water closet or urinal) for all pans in excess of three for non-residential rating units connected to a public wastewater drain.

· $198.50 per separately used or inhabited part of a residential rating unit which is not connected to a public wastewater drain but which is serviceable (i.e. within 30 metres of such a drain) and the Council would allow the connection.

· $198.50 per rating unit for all other rating units which are not connected to a public wastewater drain but which is serviceable (i.e. within 30 metres of such a drain) and the Council would allow the connection.

1.6 Rubbish and Recycling Rates

1.6.1 Kerbside Recycling

A targeted rate for kerbside recycling set under section 16 of the Act of:

· $188 per separately used or inhabited part of a rating unit for residential properties receiving the Council’s kerbside collection service.

· $188 per rating unit for non-residential and rural/semi-serviced properties receiving the Council’s kerbside collection service.

Where ratepayers elect, and the Council agrees, additional levels of service may be provided. These additional services could be by way of provision of more recycling bins or more frequent service. Each additional level of service will be charged a rate of $188. This may include charges to non-rateable rating units where the service is provided.

1.6.2 Rubbish and Public Recycling

A targeted rate for rubbish and public recycling set under section 16 of the Act of $69 per separately used or inhabited part of each residential rating unit and $69 per rating unit for all other rating units. Rating units which are vacant land will not be liable for these rates.

1.7 Palmy BID

Targeted rates set under section 16 of the Act on all properties within the central city Palmy BID area as shown on the following map that are categorised as non-residential for the Council’s general rate calculated as follows:

· A fixed amount of $345 per rating unit; and

· A variable amount of 0.0137 cents in the dollar of capital value of the rating unit.

2. Due Dates for Payment of Rates

Rates (other than metered water targeted rates) will be payable at the offices or agencies of the Council in four quarterly instalments on 1 August 2025, 1 November 2025, 1 February 2026 and 1 May 2026.

The due dates (i.e. final day for payment without incurring penalty) shall be:

Instalment One 29 August 2025

Instalment Two 28 November 2025

Instalment Three 27 February 2026

Instalment Four 29 May 2026

3. Due Dates for Payment of Metered Water Targeted Rates

Properties which have water provided through a metered supply will be invoiced either monthly or two monthly at the discretion of the Council.

The due date for metered water targeted rates shall be the 20^th of the month following invoice date as follows:

Monthly invoicing

Instalment

Date meter read & invoice issued

Due date

Instalment

Date meter read & invoice issued

Due date

June 2025

July 2025

August 2025

September 2025

October 2025

November 2025

20 July 2025

20 August 2025

20 September 2025

20 October 2025

20 November 2025

20 December 2025

December 2025

January 2026

February 2026

March 2026

April 2026

May 2026

20 January 2026

20 February 2026

20 March 2026

20 April 2026

20 May 2026

20 June 2026

Two monthly invoicing
Linton, East & North Rounds			Ashhurst, South West, PNCC & Central Rounds
Instalment	Date meter read & invoice issued	Due date	Instalment	Date meter read & invoice issued	Due date
1 2 3 4 5 6	June 2025 August 2025 October 2025 December 2025 February 2026 April 2026	20 July 2025 20 September 2025 20 November 2025 20 January 2026 20 March 2026 20 May 2026	1 2 3 4 5 6	July 2025 September 2025 November 2025 January 2026 March 2026 May 2026	20 August 2025 20 October 2025 20 December 2025 20 February 2026 20 April 2026 20 June 2026

4. Penalties on Unpaid Rates (excluding metered water)

A penalty charge of 10% will be added on the following dates to any portion of an instalment remaining unpaid after the due dates:

Instalment One 3 September 2025

Instalment Two 3 December 2025

Instalment Three 4 March 2026

Instalment Four 3 June 2026

Any penalty charge imposed on the outstanding first instalment will be automatically remitted provided payment of the full year’s rates is made by 28 November 2025.

A penalty charge of 10% will be added to any outstanding rates (including penalties) assessed in previous years and remaining outstanding at 3 July 2025 (penalty applied on 4 July 2025) and again on 5 January 2026 (penalty applied on 6 January 2026).

Penalties will not be applied to the metered water targeted rate.

4 June 2025

Report

TO: Council

MEETING DATE: 25 June 2025

TITLE: Kākātangiata Urban Growth Area: Update and Next Steps

PRESENTED BY: Jono Ferguson-Pye, Manager City Planning, Stewart McKenzie, Consultant Planning Advisor

APPROVED BY: David Murphy, General Manager Strategic Planning

RECOMMENDATION(S) TO Council

1. That the Chief Executive prepare a District Plan change to zone the Kākātangiata Residential Growth Area identified in Map 9.2 of the Palmerston North City District Plan to Future Urban Zone (Option 4).

Summary of options analysis

Problem or Opportunity	Kākātangiata rezoning options
OPTION 1:	Rezone Kākātangiata to Residential using existing resources and budget allocated in 2024/34 LTP (current approach).
Community Views	Will be heard through the plan change submission and hearing process.
Benefits	Conventional and well understood, uses existing technical inputs, is consistent with landowner and developer expectations.
Risks	Complex process, programme delay, landowner and developer frustration at not advancing land supply in the medium term.
Financial	High costs borne by ratepayers to date, existing budget not sufficient to fund process.
OPTION 2:	Rezone Kākātangiata to Residential with increased budget 2025/26 -2026/27
Community Views	Will be heard through the plan change submission and hearing process.
Benefits	Conventional and well understood, uses existing technical inputs, consistent with landowner and developer expectations, may deliver land supply in the medium term.
Risks	Complex process, unlikely to resolve programme delay, landowner and developer frustration at not advancing land supply over the medium term.
Financial	Higher costs borne by ratepayers. Additional budget not provided in 2025/26 Annual Budget. Would require reprioritizing existing work programme in 2025/26 and additional budget in 2026/27. Reassess progress and budgets as part of 2027 LTP. This option will require more budget in years 2 and 3 of the 2024 LTP than option 3.
OPTION 3:	Rezone Kākātangiata to Residential with increased budget 2025/26 -2029/30
Community Views	Will be heard through the plan change submission and hearing process.
Benefits	Conventional and well understood, uses existing technical inputs, consistent with landowner and developer expectations, delivers land supply in the medium term but over a longer timeframe.
Risks	Complex process, unlikely to resolve programme delay, landowner and developer frustration at not advancing land supply over the medium term.
Financial	Higher costs borne by ratepayers, but spread over longer timeframe. Additional budget not provided in 2025/26 Annual Budget. Would require reprioritizing existing work programme in 2025/26 and additional budget in 2026/27. Reassess progress and budget as part of 2027 LTP. This option spreads the costs of a longer time period than option 2.
OPTION 4:	Rezone Kākātangiata to Future Urban Zone using existing budget allocations for 2025/26 and 2026/27
Community Views	Will be heard through the plan change submission and hearing process.
Benefits	Nationally standardised best practice, a realistic and manageable two-step pathway for rezoning, protects land from inappropriate development, an integrated and flexible planning approach, and enables cost sharing.
Risks	Untested approach to greenfield planning for the city, not fully understood or accepted by landowners / developers, resistance to cost sharing, an additional step to ‘live’ zoning, may not deliver all the urban form and function outcomes of Options 1, 2 and 3.
Financial	Uses existing 2024-34 LTP budgets (Y1: $204k and Y2: $261) to progress step 1. Developers fund step 2 ‘live’ zoning via private or Council led plan changes. Reassess progress and budgets as part of 2027 LTP.
OPTION 5:	Rely on Private Plan Changes to rezone Kākātangiata to Residential
Community Views	Will be heard through the plan change submission and hearing process.
Benefits	Conventional and well understood, flexibility for landowners / developers to progress when they are ready.
Risks	Complex / inefficient process, poorly coordinated and fragmented land development, less Council control, difficult to co-ordinate infrastructure funding and delivery when needed.
Financial	Costs covered by landowners / developers. Growth paying for growth.

Rationale for the recommendations

1. Overview of the problem or opportunity

1.1 The rezoning of the Kākātangiata Urban Growth Area (Kākātangiata) from Rural to a range of urban zones (Residential, Local Business and Recreation) to enable development has been difficult to progress since 2010. The rezoning process to date has relied on conventional planning methods which have proven complex, costly and inefficient resulting in significant delays. Apart from the Kikiwhenua Residential Area, the bulk of the land identified in Map 9.2 of the District Plan has yet to be rezoned. These issues have been exacerbated by:

- The 2010-11 Christchurch earthquakes and the need to more fully understand liquefaction risk and cost-effective mitigation responses;

- The number of landowners and stakeholders involved and their competing interests;

- The increasing scale of the land area over time;

- The adoption of PNITI by the NZTA Waka Kotahi board in 2021 and subsequent discussion regarding the alignment of the Manawatu Regional Freight Ring Road (MRFRR); and

- The decision of the 2024/34 LTP not to fund supporting infrastructure for Kākātangiata.

1.2 The issues experienced with rezoning Kākātangiata are not unusual for greenfield development of this scale, and they are commonly experienced by many councils across the country.

1.3 The time, costs and complexity associated with rezoning land is one of the drivers of the Government’s plan to replace the RMA 1991. Regardless of what planning and resource management legislation is in place, the rezoning of land at this scale will be a complex process.

2. Background and previous council decisions

Residential Growth Strategy

2.1 In 2010 Council adopted the Residential Growth Strategy which identified City West (later named Kākātangiata) and Whakarongo as preferred areas for future residential development.

2.2 In response to the 2010-11 Christchurch earthquakes, the Residential Growth Strategy was amended in 2012. The amendment prioritised the zoning of Whakarongo and delayed the rezoning of Kākātangiata until further information was known about how best to address liquefaction risk in Kākātangiata.

2.3 The 2018 LTP process also identified the need to provide greater guidance and additional residential land at Aokautere. District Plan Change G was developed in response to this direction and is nearing completion. The outstanding appeal on Plan Change G is scheduled for an Environment Court hearing in August 2025.

District Plan Work Programme 2011-2020

2.4 While the implications of liquefaction risk to urban development were being investigated across the country post the 2010-11 Christchurch earthquakes, Council commenced its Sectional District Plan Review (SDPR). Preparation of the SDPR commenced in 2011 and was completed in December 2018. SDPR Plan Change 15A reviewed the Rural Zone in 2014-15 and inserted Map 9.2, City West – Potential Residential Growth Area (see Attachment 1).

2.5 Post the Whakarongo Residential Area becoming operative in the District Plan in 2015 and the completion of the SDPR in 2018, work began understanding the resource management challenges associated with Kākātangiata. The Kikiwhenua Residential Area was rezoned in 2020 as stage 1 of Kākātangiata. This plan change area was identified as the extent or urban growth that could be delivered without significant investment in water and wastewater infrastructure.

Scaling up of Land Area and Yield

2.6 The original extent of Kākātangiata (see Attachment 1 and Area 1 in Attachment 2) was initially bounded by:

- State Highway 56 (Pioneer Highway) (SH56), Longburn-Rongotea Road and No 1 Line (Tremaine Avenue); and

- Land south of SH56 between the Mangaone Stream and Te Wanaka Road and land between Te Wanaka Road and Sheriffs Road.

2.7 The 2019 HBA identified a shortage of greenfield land to meet projected demand for housing in the medium to long term and noted additional land needed to be identified for long-term housing growth.^{^[2]} In response, the extent of Kākātangiata has changed over time to respond to a projected shortfall of greenfield land over the long-term as follows (see Attachment 2):

1. November 2015: 306 ha

2. March 2020: 693 ha

3. March 2021: 797 ha

4. May 2021: 842 ha

2.8 The scale of Kākātangiata has increased significantly since 2015, growing from 306ha to 842ha (see Attachment 3). However, the conventional planning response has struggled to grapple with the increased complexity associated with the increased scale of Kākātangiata.

Previous Work

2.9 Significant work has been undertaken to support rezoning Kākātangiata for urban development in recent years, including:

· High-level support in the Housing and Business Needs Assessment (HBA) and Future Development Strategy (2019-2024);

· A detailed master planning exercise to determine the potential spatial extent, scale, and form of urban development and other features (2022) (see Attachment 4);

· Comprehensive technical studies and reports covering transport, ecology, flood risk, liquefaction, contamination, economics and other key matters (2019-2025);

· Development of a Cultural Values Assessment with Rangitāne (2020-2021);

· Council led consultation processes (2020-2021); and

· Strong developer and landowner interest in urban development.

As a result of this work the urban development potential of Kākātangiata is well understood.

Resetting the Key Assumptions for Kākātangiata

2.10 As discussed in the City Planning Priorities and 3-Year Work Programme report presented to the 14 August 2024 Strategy and Finance Committee, staff have been in the process of resetting some of the key assumptions sitting behind Kākātangiata. The reset looked at:

- The funding and financing options available to support growth at Kākātangiata in light of changes to LTP funding assumptions for greenfield growth.

- Understanding how available funding and financing options will shape the planning framework needed to enable development.

- Reviewing the extent of the proposed zone considering increased scale between 2015-2021 and the future alignment of the Manawatu Regional Freight Ring Road (MRFRR).

- Reviewing the extent of the proposed area that Council may want to rezone, and what portion could be left to the market to advance private plan change applications.

- Reviewing the extent of control exerted through the District Plan via master planning and associated design controls.

- Assessing what procurement model is best placed to deliver the plan change in a timely manner given the size and scale of the zoning proposal.

Reset Planning Response: Future Urban Zone

2.11 The Future Urban Zone (FUZ) is a planning tool established by the National Planning Standards that can be applied to rural land that has been identified as being suitable for urban development. It has three purposes:

1. It formally acknowledges the future urban development potential of greenfield areas in the District Plan, both spatially and through legally binding planning provisions;

2. It protects greenfield areas identified for urban development from inappropriate and ad hoc development such as rural residential subdivision and other incompatible land uses that may compromise the future development potential of the land; and

3. It establishes a clear process and framework for rezoning based on prescribed structure plan requirements and development area provisions, which also provide flexibility in the timing, location and scale of urban development.

2.12 The FUZ can be more generally described as a ‘holding zone’ where land can continue to be used for a range of rural activities, and subdivision and urban development is discouraged until a structure plan is prepared and the land rezoned. Structure planning helps achieve an optimal type, form and extent of urban development, and demonstrates how future development can be adequately serviced by infrastructure.

2.13 This approach introduces a three-step process for rezoning:

Step 1: The FUZ – introduces a high-level structure plan and planning provisions that articulate the broad resource management outcomes being sought for the whole of the growth area (the extent being that shown in Map 9.2 of the District Plan).

Step 2: Private Plan Changes: involves private plan change requests that use the FUZ to inform a more detailed and fleshed out structure plan and planning provisions. Private plan changes respond to and enable the site-specific needs of development while ensuring the broad growth area outcomes articulated in the FUZ for the whole growth area are achieved.

Step 3: Council initiated Plan Changes for any residual land not rezoned via Private Plan Changes: The final stage of rezoning that is likely to address smaller land holdings and / or areas with multiple owners that are not addressed via Step 2.

2.14 The FUZ proposal leverages off all previous work meaning existing Council and developer investment in enabling the future development of Kākātangiata will not be lost.

2.15 Case studies of how the FUZ has been successfully used to enable urban development in the Wellington Region are provided in Attachment 5.

2.16 Scaling Down Kākātangiata: the proposed reset of Kākātangiata includes reducing the extent of the land area proposed for rezoning to FUZ to make the process more manageable and enable timely land supply. It is proposed the extent of the FUZ will cover the area shown as Area 1 in Attachment 2. Area 1 aligns with Map 9.2, City West – Potential Residential Growth Area shown in Attachment 1.

2.17 Areas 2-4, shown in Attachment 2, will sit outside the proposed FUZ and are proposed to be treated as follows:

Area 2b (located north west of the Main Trunk Railway Line (MTRL), including the Manderson Block):

o Will remain identified in the FDS for residential development via private plan change requests (700 lots).

Areas 2, 3 and 4 (located to the west of Longburn Rongotea Road and Shirriffs Road, and south of Area 1):

o The land’s suitability for future residential development will be re-evaluated in the next review of the FDS in late 2025/26. If the indicative business case for the MRFRR identifies Longburn Rongotea Road and or Shirriffs Road as part of the preferred future alignment, residential development on both sides of the road alignment may undermine the suitability and operational efficiency of this planned strategic freight route.

2.18 Limited Resource, Reliance on Private Plan Changes and Shifting Cost: the cost of developing a coordinated planning framework to support development of a further 1000 lots at Aokautere cost approximately $2.2m over the period 2018-2024. While $2.2M is a significant cost, it equates to $2,200 per lot to establish a robust planning framework for the entire neighbourhood. To date, Council has spent $214,000 in 2025/26 responding to an appeal on the Aokautere plan change. These costs have been borne solely by Council.

2.19 The cost of the Aokautere Plan Change G (PC G) was driven in-part by the level of control and certainty over the planning outcomes sought by Council. The planning approach for PC G reflected the long history of compliance issues in this part of the city, poor urban form outcomes under the previous District Plan and the desire of Council to ‘complete’ the establishment of a neighbourhood at Aokautere.

2.20 While Council have commissioned a suite of technical reports since 2019 to support the rezoning of Kākātangiata, a significant amount of additional spend is required to fully develop a plan change ready for public notification under the RMA. The LTP has budgeted $204k and $261K in years 2 and 3 to develop the Kākātangiata District Plan Change. When looking at the scale of Kākātangiata and then considering the cost of developing the smaller Aokautere plan change, the year 2 and 3 budget will not be sufficient to progress a plan change to rezone the area to residential.

2.21 The FUZ will not provide the same level of Council control over urban form and function outcomes as PC G. However, the cost, complexity, and time associated with delivering a plan change similar in nature to PC G, of the scale proposed in Kākātangiata, will be costly and time consuming.

2.22 Private plan changes will have to respond to and deliver on the key urban form and function outcomes articulated in the FUZ but will not provide Council with as much control over planning outcomes as current zoning approaches at Aokautere and Roxburgh Crescent.

2.23 Given the current restrained fiscal environment, the FUZ provides a level of control that balances the maximization of planning outcomes while minimising cost. Given current LTP settings, the City Planning Team does not have the level of resource to manage Kākātangiata in the same manner as Aokautere.

2.24 Balancing 3 Year Work Programme Priorities – the City Planning Team’s 3 -year work programme is extensive. Alongside zoning land to provide for growth (Aokautere, Roxburgh Crescent, Plan Change I and Kākātangiata), the team has reinitiated the Sectional District Plan Review (SDPR). It is now well over 10 years since key parts of the District Plan were reviewed and parts of the Plan are no longer fit for purpose (see Attachment 6, 3 Year Work Programme).

2.25 The proposed approach to the FUZ will free up resource to assist the City Planning Team to meet Council’s statutory obligation to review the District Plan while meeting obligations to plan for residential growth under the National Policy Statement for Urban Development (NPS-UD).

2.26 Relationship of FUZ Process with Pending Private Plan Change Requests – staff are working with and advising several developers in the wider Kākātangiata Urban Growth Area who are at various stages of developing private plan change requests. A proposed private plan change in Area 2b, (see Attachment 2), for approximately 700 homes, is expected to be lodged in the second half of this year. This private plan change request will not affect the rezoning of the scaled down Kākātangiata area to FUZ.

2.27 A number of developers are exploring the potential to lodge private plan change requests within the proposed FUZ area. Staff are considering options to progress the FUZ in parallel with these private plan change proposals in a way that aligns outcomes. Discussions are under way with the relevant developers to assess whether the FUZ and private plan changes can be developed concurrently and possibly notified together as a coordinated package.

2.28 Relationship of FUZ Process with the pending replacement of the Resource Management Act 1991 – The exact nature, timing and implications of the replacement of the RMA 1991 remains uncertain. Whatever happens, the new legislation is likely to involve a long transition period. The existing provisions of the District Plan, including the FUZ, will have a significant influence on any new regional or sub-regional planning document produced under the new legislation. It is also anticipated that the existing National Planning Standards will continue to have a role under the new legislation, including the FUZ.

3. Description of options

3.1 The recommendation to proceed with a FUZ for Kākātangiata has been based on an assessment of 5 options. These are described below:

Option 1: Rezone Kākātangiata to Residential using existing resources and budget allocated in 2024/34 LTP (current approach) – continuing with the current approach to rezoning Kākātangiata using existing resources and budget allocated in the 2024 – 34 LTP.

Option 2: Rezone Kākātangiata to Residential with increased budget 2025/26 - 2026/27 – continuing with the current approach to rezoning Kākātangiata, but with reprioritised budget in year 2 and additional budget in year 3 of the 2024-34 LTP. Reassess progress and budget as part of the 2027 LTP. This option will require larger budgets in years 2 and 3 of the 2024 LTP than option 3.

Option 3: Rezone Kākātangiata to Residential with increased budget 2025/26 - 2029/30 – continuing with the current approach to rezoning Kākātangiata, but with reprioritized budget in year 2 and additional budget in year 3 of the 2024-34 LTP. Reassess progress and budget as part of the 2027 LTP. This option spreads the costs of a longer time period than option 2.

Option 4: Rezone Kākātangiata to Future Urban Zone using existing budget allocations for 2025/26 and 2026/27 – establishes a clear process and framework for rezoning based on prescribed structure plan requirements and development area provisions.

Option 5: Rely on Private Plan Changes to rezone Kākātangiata to Residential – relies on landowners and developers coming forward individually with private plan changes to facilitate development.

3.2 The benefits and risks associated with these five options have been assessed and summarised in Section.

4. options Analysis for rezoning of kākātangiata

	Kākātangiata rezoning analysis
OPTION 1:	Rezone Kākātangiata to Residential using existing resources and budget allocated in 2024/34 LTP (current approach)
Community Views	- Previous plan changes have been notified with limited community opposition. - General acceptance of the need for greenfield urban growth through the FDS.
Benefits	- Conventional and well understood planning process. - Significant existing investment by Council in this approach. - Expectation of developers and landowners that is approach will continue. - High level of Council control over planning outcomes.
Risks	- Complex, unwieldy and inefficient process (cost and time). - Significant programme delays experienced with no land yet rezoned. - Landowner and developer frustration at delays. - Private plan changes initiated ahead of Council zoning process. - Not helping to meet the City’s housing and business needs in the short to medium term. - Private plan change requests progressing ahead of Council process. - National Policy Statement – Highly Productive Land
Financial	- High costs borne by ratepayers to date. - Budget allocated in LTP not sufficient to cover the cost of a full plan change.
OPTION 2:	Rezone Kākātangiata to Residential with increased budget 2025/26 - 2026/27
Community Views	- As per option 1.
Benefits	- As per Option 1. - Additional budget allocated could assist with delivery.
Risks	- Unlikely to resolve the programme delays currently being experienced. - Landowner and developer frustration at delays likely to continue. - Unlikely to help meet the City’s housing and business needs in the short to medium term. - Private plan change requests progressing ahead of Council process. - National Policy Statement – Highly Productive Land
Financial	- Higher costs to be borne by ratepayers than the current approach. - Current budget allocated in the LTP insufficient to cover the cost of a full plan change. Approximate cost $2m. - Will require reprioritization of year 2 budget and additional budget in year 3. - Will require larger budget in years 2 and 3 than option 3 - Progress and budgets reassessed as part of 2027 LTP.
OPTION 3:	Option 3: Rezone Kākātangiata to Residential with increased budget 2025/26 - 2029/30
Community Views	- As per Option 1.
Benefits	- As per Options 1 and 2.
Risks	- As per Option 2.
Financial	- As per Option 2 but costs spread over longer time period. - Will require reprioritization of year 2 budget and additional budget in year 3 - Progress and budget reassessed as part of 2027 LTP.
OPTION 4:	Rezone Kākātangiata to Future Urban Zone using existing budget allocations for 2025/26 and 2026/27
Community Views	- General acceptance of the need for greenfield urban growth through the FDS.
Benefits	- A nationally standardised best practice approach to greenfield urban development. - Provides a realistic and manageable two-step pathway for rezoning. - Protects land from inappropriate subdivision and land use which may compromise future development potential. - Structure plan guidance and development area planning provisions provide integration and flexibility in the spatial extent, timing and form of urban development. - Provides statutory weight to national, regional and city-wide strategic development objectives. - Ability to enter in cost-sharing arrangements in accordance with the principle of ‘growth paying for growth’.
Risks	- An untested approach to greenfield urban planning in Palmerston North. - May not be fully understood or accepted by landowners and developers. - Resistance to cost-share agreements by landowners and developers. - Additional steps required for rezoning. - Private plan change requests progressing ahead of Council process. - Less Council control over planning outcomes than Options 1, 2 and 3, but more control than Option 5. - National Policy Statement – Highly Productive Land
Financial	- Lower cost compared to residential plan change (Options 1, 2 and 3), and within existing LTP budget. - Cost recovery or cost-share agreements for full rezoning can be entered into.
Option 5:	Rely on Private Plan Changes to rezone Kākātangiata to Residential
Community Views	- Previous plan changes have been notified with limited community opposition. - General acceptance of the need for greenfield urban growth through the FDS.
Benefits	- Conventional and well understood planning process. - Provides flexibility to landowners and developers to progress with rezoning when they are ready. - Costs covered by landowners and developers.
Risks	- Complex and inefficient process (cost and time). - Likely to result in poorly co-ordinated and fragmented land development. - Less Council control and direction leading to greater risk of sub-optimal development outcomes. - Difficult to predict and co-ordinate private plan changes with infrastructure funding and delivery. - National Policy Statement – Highly Productive Land - Lack of leadership on core Council function
Financial	- Costs predominately borne by landowners and developers. - Agreements for cost recovery or coast share agreements for Council can be entered into.

5. Rationale for recommending a future urban zone

5.1 The FUZ is considered the best option for rezoning the Kākātangiata Urban Growth Area because it provides a manageable, structured and nationally standardised approach to urban development.

5.2 Unlike previous methods, which have proven complex, inefficient and resulted in significant delays, the FUZ enables a more streamlined and predictable planning pathway. It protects the area from inappropriate rural subdivision and other land uses that could compromise future development potential. By formally recognising the area’s suitability for urban development and aligning with national standards, the FUZ ensures long-term strategic co-ordination and minimises fragmented growth.

5.3 From a financial perspective, the FUZ offers significant advantages. It is more cost-effective than the current approach and fits within Council’s current LTP budget, unlike the conventional rezoning options that require additional resourcing although with no certainty of delivery. It also allows for future cost-recovery mechanisms, such as cost-sharing agreements with developers, aligning with the principle of ‘growth paying for growth.’ This reduces the financial burden on ratepayers while ensuring that infrastructure and planning costs are equitably distributed and efficiently managed.

5.4 Given the constrained fiscal environment, the FUZ offers Council a planning instrument that ensures an acceptable level of control over urban growth outcomes while balancing cost efficiency.

5.5 In terms of community support and alignment with Council objectives, the FUZ is consistent with engagement outcomes from the FDS, which demonstrated broad acceptance of greenfield urban growth. It also upholds strategic goals by enabling sustainable and integrated development, contributing to the city’s economic growth and resilience.

5.6 While the FUZ is a new approach for Palmerston North and may require time to be fully understood by stakeholders and our partners, its benefits in terms of clarity, coordination, and cost effectiveness make it the most prudent and future focused option.

6. Conclusion

6.1 The FUZ is considered the most effective and strategic option for progressing development of the Kākātangiata Urban Growth Area. It provides a manageable, nationally recognised framework that protects the land for future urban development, reduces costs to Council, and supports coordinated, sustainable urban growth. While new to Palmerston North, the FUZ builds on previous planning work and aligns with community views and Council’s long-term plans.

7. Next actions

7.1 Initiate Plan Change Process – prepare and notify a district plan change to apply the FUZ over the Kākātangiata Urban Growth Area. Indicative notification in April 2026.

7.2 Stakeholder Engagement – begin targeted engagement with key landowners, developers, Rangitāne o Manawatu, and infrastructure providers to ensure a shared understanding of the FUZ approach and structure planning requirements.

7.3 Structure Planning Framework – develop a high-level structure planning programme and accompanying guidance for the future development areas within Kākātangiata.

7.4 Cost Sharing Strategy – establish a cost-sharing and funding approach for development area plan changes to ensure the ‘growth pays for growth’ principle is upheld.

8. Outline of community engagement process

8.1 Since 2020, staff have undertaken significant engagement with landowners and developers who have ownership interests within the wider Kākātangiata Urban Growth Area, along with surrounding landowners, central and local government agencies, and Rangitāne o Manawatu (RoM). Development of the Kākātangiata Master Plan (see Attachment 4) was heavily influenced by RoM. In particular, the Whānau Ora Principles woven into the spatial layout of the Master Plan were driven by RoM.

8.2 Consultation on the FDS in 2024 was city wide in its scope and comprehensive in nature. Over 400 submissions were received on the FDS, with significant support for the greenfield development option, including the Kākātangiata Urban growth Area.

8.3 In respect of the FUZ, landowners, the community, and Council’s partners will be engaged through the stakeholder engagement approach outline above and interested parties will also have the opportunity to lodge a submission and be heard at the hearing when the FUZ is notified.

9. Compliance and administration

Does the Council have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these objectives?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		Yes
The recommendations contribute to:Whāinga 1: He tāone auaha, he tāone tiputipu Goal 1: An innovative and growing city
The recommendations contribute to this plan: 15. Mahere whare 15. Housing Plan The objectives are: · Implement the National Policy Statement in Urban Development Capacity · Rezone Kākātangiata
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Zoning Kākātangiata to Future Urban Zone will assist Council in meeting its obligations to ensure there is sufficient development capacity to meet projected demand, which will assist with improving housing affordability and being responsive to growth.

Attachments

1.	Map 9.2 City West Potential Residential Growth Area ⇩
2.	Kākātangiata Changed Extent 2015-21 ⇩
3.	Existing Extent of Kākātangiata in FDS ⇩
4.	Kākātangiata Masterplan Feb 2022 ⇩
5.	FUZ Case Studies Wellington and Porirua ⇩
6.	City Planning Team 3 Year Work Programme ⇩

Memorandum

TO: Council

MEETING DATE: 25 June 2025

TITLE: 21 Havelock Avenue, Bill Brown Park: Proposal to grant a lease on Council land to Kia Toa Football Club Incorporated - Deliberations Report

Presented By: Glenn Bunny, Manager Property and Perene Green, Property Officer

APPROVED BY: Chris Dyhrberg, General Manager Infrastructure

RECOMMENDATION(S) TO Council

1. That Council grant a community lease to Kia Toa Football Club Incorporated at 21 Havelock Avenue, part of Bill Brown Park, Palmerston North, in accordance with the Support and Funding Policy 2022 and Section 54 of the Reserves Act 1977.

2. That Council note that the land affected by the proposed community lease to Kia Toa Football Club Incorporated is Lot 1 DP40097 and Lot 442 DP44423.

1. ISSUE

1.1 Kia Toa have requested a land lease at Bill Brown Park with the view to construct clubrooms on their ‘home ground’ to provide recreational activities for the community.

1.2 Council consulted the community on the proposal to lease part of 21 Havelock Avenue for the purpose of clubrooms.

1.3 This report seeks approval to grant a new lease to Kia Toa in accordance with Section 54 of the Reserves Act 1977 and Council’s Support and Funding Policy.

2. BACKGROUND

2.1 A report titled ‘Bill Brown Park – Proposal to support Kia Toa Rugby Football Club Incorporated by notifying the intention to grant community occupancy via a lease of Council land’ was presented to the Strategy and Finance Committee on 26 February 2025. Please refer to this report for additional background. The report recommended that public consultation be undertaken of Council’s intention to enter a new lease arrangement with the club.

2.2 Public notice was published in the Manawatu Standard on 7 April 2025 in accordance with Section 119 of the Reserves Act 1977. Consultation was undertaken between 7 April to 9 May 2025.

2.3 The Strategy and Finance Committee on 28 May 2025 received copies of all submissions and held a hearing for submitters who wished to be heard in person as required by Section 120 (1) (c) of the Reserves Act 1977. While hearings were scheduled, no submitters attended.

2.4 At the same meeting the Committee received a report titled ‘Summary of Submissions – Bill Brown Park proposed land lease to Kia Toa Rugby Football Club Incorporated’. 306 submitters supported the proposal and 9 were against the proposal. Please refer to this report for details on the submissions received.

2.5 If entered into, the proposed lease will commence on 1 July 2025 and will be for a term of thirty-three (33) years, as per the Committee resolution on the 26 February 2025.

2.6 The proposed annual rental is $150 plus GST. This is consistent with the rental framework in Council’s Support and Funding Policy 2022.

2.7 The proposed lease area is 751m² as outlined in Red in Figure 1 below.

Figure 1: Proposed lease area at Bill Brown Park

3. Consideration of submissions

3.1 The Reserves Act Section 120(1)(d) requires Council to consider any objections raised in public submissions regarding the proposal before making a decision.

3.2 Three tables are provided for consideration of submissions:

· Table 1 sets out the reasons for objections received and responses (including issues of concern about alcohol raised in submissions in support).

· Table 2 sets out the issues raised in submissions that supported the proposal but had some concerns.

· Table 3 answers those questions raised in submissions – either on opposition or in support.

Table 1: Responses to objections

Matters raised in opposition

Number

Officer Comment

Alcohol related issues and questions (from both opposition and in favour):

· Behaviour

· Impact on Pasifika Centre

· Social/community harm

· Proximity of licenced premises to early childhood centres, churches, and community centres

· Be alcohol free, given the number of young people playing for the club

· How will no alcohol be policed?

· Make hire events not alcohol-free, but have the bar run by the club

· Alcohol in plenty would need to be monitored

5 in opposition

plus concerns from submissions in support

This report is only requesting approval to grant a lease, Kia Toa will be required to comply with the provisions of all statutes, ordinance, regulations and by-laws. In order to serve alcohol, Kia Toa will be required to apply to the District Licencing Committee for the appropriate Alcohol Licence. It should be noted that the District Licencing Committee is independent of Council and that timeframes are prescribed by legislation, as such officers can offer no assurance regarding the outcome.

Impact on the Pasifika hub

The proposed lease area is outside of the current proposed Pasifika Hub scope of works. There is a risk of occasional conflicts e.g. if both had events or activities on at the same time putting pressure on parking. However, it is a large park and has been the traditional home ground of Kia Toa which is a 123 year old club.

Table 2: Responses to Concerns/Comments from those supporting the proposal

Concern or comment from submissions in favour (alcohol cover in opposition section)	Number of submitters	Officer Comment
Amount of on-site parking	4	Prior to the Kia Toa proposal, Council had budgeted for the extension of the carpark by approximately 32 carparks. The carpark extension is budgeted for 2027/2028 of the Long Term Plan. Kia Toa have indicated they would like to see the carpark construction bought forward into the 2026/27 year to better fit with their development timing.
Fear of increased vandalism/boy racers/gangs/unwanted visitors	2	Officers acknowledge the comment. Kia Toa have advised that if any issues are caused by their members or patrons, disciplinary action can be taken. Kia Toa will be responsible for the maintenance of their building from vandalism.
Prefer closing to be no later than 10/10.30pm	2	The District Plan allows for recreation zone hours from 7 am to 11.30 pm Sunday to Thursday and 7 am to 1.30 am Friday and Saturdays. Hours of the alcohol licencing would be considered in the licencing process.
Proposal that Kia Toa buys the land instead of leasing it	1	Kia Toa representative has provided comment and do not have any desire for purchasing of land. Council would prefer to retain land ownership to avoid a third party owning land in the middle of a reserve/park, retaining flexibility for use were Kia Toa to ever vacant.
Suggestion to give local businesses connected to this club the opportunity to tender first and help them work through the bidding process before going to market	1	Kia Toa has been notified of this comment and are giving consideration to the feedback provided.
Lack of lighting on the playing fields	1	Council do not own lights on the Bill Brown Park fields. Lighting currently on the training fields are owned, maintained and operated by Kia Toa.

Table 3: Questions raised in submissions

Questions raised	Officer Comment
How much rent would be paid to Council?	The rental will be $150 plus GST, as per the rental framework under the Support and Funding Policy 2022.
If another club proposed this, would they be given the same opportunity?	All for-purpose groups are provided the same opportunities, provided what is proposed can fit in the reserve without too much impact and they meet the requirements of the Support and Funding Policy and Reserves Act 1977.
Apart from rugby, what other events will take place?	Kia Toa was formed as a rugby club and currently also includes Netball. Kia Toa has had other sport codes teams in the past and is open to inclusion of other sports.
What happens to the ownership of the building at the end of the lease?	The lease includes clauses regarding this matter. If Council does not wish to purchase the building or come to an arrangement with Kia Toa, they will be required to remove the building. If Kia Toa are unable to remove it, then Council would decide whether to remove it at Councils expense (or sell it for removal if feasible) or take over ownership and lease it to another club or group.
Who would take over maintenance of the building if the club is unable to maintain it?	If Kia Toa is unable to maintain the building, as the landlord, we would arrange maintenance and on bill any associated costs. If Kia Toa could not afford the maintenance costs, Council would need to decide if it would enact clauses about breach of the lease and consider termination clauses. There would need to be major maintenance issues to be using this process.
How will Council ensure the lease is upheld and public space is not limited in any way?	Council monitors complaints about leases. It also has Service Level Agreements with the sports codes that use the fields at Bill Brown that can provide feedback as well as regular engagement with the Pasifika Community Centre management. If issues arose, they would be addressed with Kia Toa. If major issues occurred, and could not be remedied, and Kia Toa were in breach of their lease conditions, the steps set out in the lease would be enacted. This is considered unlikely.
What conversations have been had with Mana Whenua Rangitāne about this decision?	Rangitāne have been consulted on the proposal both by Council Officers and Kia Toa has approached Rangitāne senior representatives directly. They have supported the proposal for Kia Toa lease.

4. Discussion and Conclusion

4.1 Council has supported Kia Toa through Service Level Agreements under Manawatu Rugby Union for the use of the Bill Brown Park Sports fields and changing rooms on a seasonal basis. Kia Toa intends to provide further opportunities for the public to support Council’s strategic direction.

4.2 Bill Brown is the home ground of Kia Toa and has ample space to accommodate the clubrooms without negatively impacted the wider reserve use. The Clubrooms are expected to add value to the sporting community and any negative impacts to be manageable.

4.3 Having considered the objections, it is recommended that Council proceed with granting a new lease.

5. NEXT STEPS

5.1 Enter a new lease agreement between Palmerston North City Council and Kia Toa for part of 21 Havelock Avenue.

5.2 Kia Toa will manage the building consent application process.

6. Compliance and administration

Does the Council have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these objectives?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to: Whāinga 1: He tāone auaha, he tāone tiputipu Goal 1: An innovative and growing city Whāinga 2: He tāone whakaihiihi, tapatapahi ana Goal 2: A creative and exciting city Whāinga 3: He hapori tūhonohono, he hapori haumaru Goal 3: A connected and safe community
The recommendations contribute to this plan: 6. Mahere rēhia 6. Recreation and Play Plan The objective is: places across the city and its neighbourhoods for communities to take part in play and recreation.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The recommendation is in line with Council’s Support and Funding Policy which supports for-purpose groups to occupy, and operate out of, Council-owned property for sporting, and recreational purposes.

Attachments

Nil

Memorandum

TO: Council

MEETING DATE: 25 June 2025

TITLE: Public Participation and Engagement: Annual Progress Report, and proposed indicators.

Presented By: Olivia Wix - Manager Communications

APPROVED BY: Danelle Whakatihi, General Manager Customer & Community

RECOMMENDATION(S) TO Council

1. That Council endorse the proposed indicators for future annual public participation and engagement reports.

1. BACKGROUND

Elected Members requested: That the Chief Executive (a) develop key civics indicators to report against, and (b) provide a progress report annually to assess the effectiveness of the civics education initiatives.

The first annual progress report is provided in Attachment 1. It covers public participation and engagement activity from 1 January 2024 to 31 March 2025. This timeframe was chosen to reflect what happens in an average year, but we extended it slightly to make sure the Long Term Plan work was included. We ended the period in March to ensure we could bring this report to Council for endorsement of indicators prior to the proposed period for future reporting.

Officers recommend that in future, these annual reports will cover the 12-month period from 1 July to 30 June and will be presented to Council each year in September. This aligns with the annual reporting timeframes.

As we have not had endorsement for the indicators that will be used to measure progress, this first report focuses on showing the range and volume of work completed during the timeframe.

Since this work has not been formally tracked by staff collectively at an organisational wide level before, it is possible that some engagement activity may have been missed from this report.

The annual progress report will be available on the Council website under the ‘What goes where’ section. It will also be used as a reference point when people ask how Council has gathered feedback or involved the community in its work.

From next year onwards, annual reports will include, if endorsed, the indicators proposed later in this memo.

While much of our engagement is motivated by a genuine desire to inform, educate, and listen to our community to support good decision-making, some engagement is also required by law or is a condition of external funding—for example, the waste levy. Both types are reflected in the report.

The work outlined in the annual progress report, along with the draft indicators, is all within our existing levels of service and is not part of a standalone programme. If elected members would like to see more work, or additional indicators included in future, this may have implications for staffing and budgets.

This Council memo sets out what is included in our engagement work, why people want to take part and the challenges they face, what we’ve learned from other research, what we are already planning on doing more of, and how that information has shaped the proposed indicators.

Defining public participation and engagement

Before developing indicators, it is important to define the scope of this work. While the Council resolution refers to “civics education,” officers recommend using the term “Public participation and engagement” instead. This better reflects a partnership approach—working with our community rather than implying the community needs to be ‘educated.’

Officers proposed definition is:

“Public participation and engagement refer to any activity that helps people understand how Council and local government work, how decisions are made, and how they can participate or have a say. It is about building people’s knowledge, confidence, and motivation to engage with Council processes — from understanding roles and responsibilities, to knowing how to give feedback, report issues, or contribute to shaping their community. It also includes helping people learn more about specific Council services, projects, and issues that affect their daily lives, so they can make informed contributions and feel more connected to local decision-making.”

It is important to clarify that everyday contact—like calling to report an issue, emailing about a building consent, waving to a recycling truck driver, chatting to a parking warden, talking to the water team on the street, commenting on a facebook post and so on, is not included in the scope of the annual progress report or the proposed indicators. These one-on-one interactions are important and valued, but this report focuses on broader, intentional opportunities for engagement that are more visible and accessible to the wider community. These include but are not limited to: public consultations and submissions, large-scale campaigns, drop-in sessions, open days, facility and site tours, attendance at expos and events, co-hosted hui and community workshops, school and university visits, and stakeholder forums.

This distinction helps ensure we are consistently tracking and reporting on meaningful, inclusive opportunities for the public to engage with Council decisions, services, and planning.

Based on conversations with colleagues in other councils and sector networks, we are aware that we already deliver a high volume of public engagement and communication compared to other councils of a similar size. While this is anecdotal, the consistency of this feedback across multiple sources gives us confidence in that assessment.

We offer a wide range of opportunities for people to learn about and engage with Council, from community meetings, public consultations, and school visits to guided facility tours, pop-up events, and open days – with a strong emphasis on face-to-face interaction, which helps build trust and understanding. Council staff are proactive and willing to try new approaches, using creative formats and tools to reach different audiences and make our processes more accessible. The work already underway reflects a deep commitment to helping people understand what Council and Elected Members do and how they influence the decisions that shape their city.

What we know about engagement with local government

Helping people understand and participate in local government is essential, but not without challenges. There are real barriers, for both the organisation and our communities.

· Our community is busy and stretched

Most residents are juggling work, family, and other responsibilities. Even those who are interested might not have the time or energy to engage. Council information can get lost among the many messages people receive each day and staying informed and involved can feel like another task on a long list.

· Engagement is usually issue-by-issue

People tend to get involved when something affects them directly — like a road change or a local park upgrade. We rarely ask about the Council's work in its entirety, and residents do not often think about how local government fits into the bigger picture. This is an area we have been focusing on more over the past 18 months to give more general opportunities to engage.

· Topics can be complex and time-consuming

Some council matters, such as water reform, require reading detailed information to fully understand the issue. That is a big ask of busy people. By comparison, something like whether a dog should be on leash at Linklater Reserve is easier to understand and engage with. We do our best to explain things clearly, but even simplified material can still be a lot for people to work through. Coming to a meeting or open day can also feel intimidating for those unfamiliar with council processes.

· Schools, groups, and organisations plan ahead — and have limited room for more

While schools and community groups are often keen to connect with Council, their calendars are planned well in advance, and time is limited. Rest homes, clubs, and other organisations often welcome visits, but their capacity to host speakers or organise trips to council facilities is constrained. Making space for learning more and getting involved can be a challenge, even when the interest is there.

· Limited time, budget, and dedicated roles

We do not have a specific staff role dedicated to “civics education.” Instead, this work is carried out by many staff alongside their primary responsibilities. Planning and delivering high-quality civics initiatives — like classroom sessions or public workshops — takes time and coordination, and some schools require us to develop full lesson plans and attend multiple meetings with teachers before we even begin. There is also no dedicated budget for this work. However, with sufficient funding, we could achieve a significant lift in public understanding and involvement — even without a major increase in staff resources. For example, this could include establishing citizen panels, designing a localised curriculum pack for schools, or producing regular hard copy newsletters that explain key Council issues in plain language for the wider community.

· We often ask for feedback — but not everyone feels heard

There's a common perception that Council does not listen. In reality, we do listen - but it is not always possible to act on every piece of feedback. Often, people do not see their view reflected in the final decision and may assume their input did not count. In truth, many decisions involve balancing a range of perspectives, evidence, and legal or funding constraints.

· Positive interactions do not always lead to formal participation

We regularly talk with people at events, in libraries, through advisory groups, and out in the community. These informal conversations are valuable, and often enough for people to feel heard or have their questions answered. But they do not always translate into things like formal submissions or voting. That does not mean those people aren't engaged, just that engagement can look different from what we can measure.

· We are limited in the personal data we can ask for

We are limited in the demographic data we can collect during engagement. We cannot ask for personal information like age, ethnicity, or gender unless we have a clear and specific reason. This means that for most consultations, we do not collect this kind of data. As a result, we often do not have a full breakdown of who we are reaching. It makes it harder to tell whether we are hearing from a broad cross-section of our community or if some groups are missing from the conversation. Asking for data can also be off putting. It is more questions for people to fill in, and they may feel that it isn’t relevant for us to know that information. That could put them off having their say altogether.

· Engagement does not always feel safe or accessible for everyone

Some residents, and sometimes staff and Elected Members, can feel uncomfortable speaking up when a discussion is dominated by strong, forceful, and on occasion aggressive or threatening people. This can affect who chooses to participate and how. We want to ensure that everyone has opportunities to engage in a way that feels safe and inclusive for them, while also caring for the wellbeing of our staff and elected officials.

· Change takes time, and that can cause frustration

There's often a long gap between asking for public input and being able to make decisions or take visible action. That delay can make people feel like nothing has happened, or that their views were ignored, even when their feedback did play a role. We know that closing the loop is important and are working to get better at showing how public input helps shape decisions. This can be for major things like consultations, or even just someone logging a job for a pothole. Expectations of when something should happen as a result of their feedback is varied.

· Language and cultural diversity

Language differences and cultural backgrounds may affect whether people feel comfortable accessing council information or feel confident participating. Tailoring our communication and engagement to meet diverse needs is important and something we are trying to do more of, but it is still hard to make a significant shift in participation.

· Youth engagement challenges

Younger people often feel disconnected from traditional council processes because they’re less likely to own property or see how council decisions relate to the issues they care about.

· Confusion about roles and responsibilities

Many residents find it difficult to understand which level of government—central government, council, or regional council—is responsible for different services or decisions. This can create frustration and make it harder for people to know where to direct their questions or feedback. We often see this in the transport space with NZTA roads and Horizons’ buses, but also some see council as being responsible for things like the hospital or schools.

· Lack of central government action in civics education

Central government needs to do more to improve public understanding of how government works as a whole. When people have a clearer picture of the roles and responsibilities across all levels of government, it becomes easier for them to understand how local government fits into the bigger picture. A good example of this working well is the Electoral Commission, which effectively manages elections and helps people understand voting processes. However, this level of support is rare, and more is needed to boost civics education overall.

We have a good understanding of what helps people engage

· If it is simple and quick to understand

The more straightforward it is — with short, plain language, not too much reading, and only a couple of easy questions — the more likely people are to take part.

· It affects their day-to-day life, especially in a way they see as negative

People are more likely to engage if they think something will impact them, particularly if they are worried it might make things worse. We see more engagement when changes involve roads, rubbish, parks, or services people use regularly, or when it comes to rates increasing. People are often less likely to get involved for “positive” things.

· There are different ways to give feedback

We already offer a mix of options, including online forms, email, face-to-face chats, and creative submissions like drawings or videos. This helps people choose what works best for them.

· We use events to talk to people

Using events that are already happening in the community is a good way to reach people informally. It means we can have natural conversations without asking people to make a special trip or commitment. We meet them where they are. It is a particularly good way to engage with people who may be less likely to make a submission or come to a formal council meeting or drop-in.

· We offer flexible times and locations

We already try to include a range of times and settings for our drop-ins and events, including evenings and weekends, so people with different routines can get involved.

· We make personal contact

Staff regularly reach out to individuals and groups, including preparing tailored messages or flyers for stakeholder organisations to share with their networks. We also work through community and reference groups we have established relationships with, asking them to help spread the word or encourage participation within their circles. This targeted approach often leads to stronger turnout and more relevant feedback.

· People get to take part, not just observe

In many of our face-to-face engagements, we create opportunities for people to give input directly, whether that is through interactive displays, one-on-one conversations, or simple activities that spark discussion.

· They feel like their feedback matters

We respond directly to people who give feedback, often with a follow-up email or summary of what we heard. We are also publishing engagement summaries on our website, so it is clear how community input is being used. Being transparent builds trust and keeps people involved. We do need to do a better job at keeping people updated on more day to day service level requests.

· We open the doors to places people do not usually see

Tours of facilities like the recycling centre, water treatment plants, and other operational sites help people understand the scale and complexity of the work Council does. These behind-the-scenes opportunities give residents a tangible connection to services they might otherwise take for granted, and help build trust through transparency.

We also have insights from other organisations’ reports.

The Local Government Voters report by Local Government New Zealand, published in November 2023, found that people are more likely to vote in local elections if they have lived at the same address for more than ten years. Turnout among the 18–25 age group remains lower than other age groups, although it is gradually increasing. The highest levels of participation were seen in people aged 61 and over, and those living in rural areas were more likely to vote than those in urban centres. People who chose not to vote said they were either not interested, too busy, or not interested in local government specifically.

In its 2024 issues paper, the Electoral Reform Working Group of LGNZ identified a low understanding of what councils do as a major barrier to both engagement and turnout. It noted that more community-wide education is needed, not just through schools. The paper found that women, older residents—especially those aged 66 and over—and people who have lived at the same address for ten years or more are the most likely to vote. In contrast, Māori, Pasifika and Asian communities, renters, and people under the age of 45 are less likely to vote, although participation in the under-45 age group is slowly increasing. The paper said that turnout could be improved if people had better access to clear information about what councils do and how council decisions affect their daily lives. It also highlighted the need for simpler ways to engage with councils, better information about candidates, and more guidance on how people can provide feedback and influence decisions. Greater awareness of citizens’ rights and responsibilities was also seen as important. In addition, the paper encouraged councils to use a wider range of engagement methods, such as participatory budgeting, citizens’ panels or assemblies, and collaborative planning.

How this informs our indicators

These insights about local government and community engagement have guided us in selecting the indicators outlined below. They ensure we measure the most relevant aspects of participation, communication, and trust to better understand and improve how we engage with our community.

There are some opportunities we are looking at now

· Keep using co-design where possible on projects.

This occurred for Featherston St, Highbury revitalisation and is underway for the Bunnythorpe Community Plan

· Provide more detailed information about the processes for how people can make requests but also speak at Council, as well as more detail about how decisions are made.

This work will happen over the coming months so it is ready to refer to once the new Council is in place.

· We are planning on piloting an email newsletter.

Councils who have these, have noticed a spike in users since some community publications have been discontinued. We are looking at piloting a monthly email newsletter in the coming months.

· Once the new Council is in place, we are looking at how we can share content about the work our elected members do (opt-in).

This could include updates on decisions, days in the life, and summaries of all the engagement elected members do.

· Once the new Council is in place, we will seek feedback on whether elected members would be open to having a regular general drop in session for our community to come chat about all the things we do.

Similar to how the Mayor does this in Ashhurst, but across the city on a regular day/time that we can promote, with some key staff able to assist elected members. This is a suggested action following some community requests, but also some comments of members of the public wanting more face to face opportunities to speak to elected members informally.

· In consultations, we will add a question to ask why people care about the topic.

This data will help guide us on what motivates people to make submissions. This could help with our communications and engagement efforts.

· Consider the outcomes of the focus group programme.

Based on the feedback we get; we will trial and roll out some different ways of talking about things we do.

We believe these initiatives have real potential to shift the dial on community engagement and awareness. By improving transparency, expanding communication channels, and creating more meaningful opportunities for involvement, we expect to see positive changes reflected in our indicators. These efforts will help us build a more informed and engaged community over time.

There are additional engagement methods we could explore in the future, such as citizens’ panels, juries, and participatory budgeting. However, these approaches require significant staff time and/or funding, which we currently do not have available.

Potential indicators for future reporting.

Building on a clear definition, insights into effective approaches and challenges, relevant research, and current and planned initiatives, the following proposed indicators have been developed by officers. These indicators combine data from the Residents Survey, existing records, and information that can be easily tracked going forward. Their implementation requires no additional budget or staff resources.

Indicator	What the data is	What it may tell us	Where the data comes from
Opportunities to participate in decision-making	Total number of engagement opportunities through formal consultations or feedback periods. This data can track whether elected members were in attendance.	The range and frequency of formal opportunities people have to shape decisions	Officers to track
Number of other formal participation	E.g. number of petitions, public comments.	Whether people are aware of/feel comfortable using the most formal channels available to them	Meeting records, governance team.
Opportunities to learn about Council	Number of general engagement events not tied to consultation (e.g. Esplanade Day, drop-ins, community visits)	Whether we are offering chances to learn about Council in everyday settings rather than only specific topics	Officers to track
Awareness channels for participation for consultation/feedback	This is a question we ask on formal consultation and submission forms.	Which communication methods are most effective	Website/hardcopy forms.
Engagement via Council website	Number of unique users engaging with Council webpages related to “What Council does and the ‘Have your say page. Also include total user information and top pages, and number of people using online forms for services.	Online interest in Council work and ease of accessing info	Website analytics.
Social media engagement	Number of users reached and engaged via Council social media platforms, benchmarked against government averages.	Whether our digital engagement is effective	Council officers
Civic engagement email newsletter	Number of subscribers to opt-in civic newsletter	How many people actively want to stay informed	Email platform
Motivations for participating	Themes in why people chose to provide feedback	What drives people to engage	Website and hard copy form data
Engagement complexity rating	Staff rating of complexity (simple/moderate/complex). Examples: Complex would be Local Water/LTP. Simple would be dog on leash at Linklater/playgrounds. Moderate would likely be policies or bylaws.	Helps contextualize the level of effort required to engage	Officer tracking
Health & Safety	Number of public-related H&S incidents logged	Any risks to public or staff or elected members during engagement	PeopleSafe reports
Issue reporting by public	Number of reports via SnapSendSolve, website, call centre etc.	How actively people are participating in day-to-day interactions.	Website, Call Centre and SnapSendSolve data
Library engagement	Number of active members and physical visits	Passive civic learning and engagement via libraries	Library team data
Perceived availability of Council info	% of residents who feel well-informed	Whether residents feel they have access to the info they need	Residents Survey
Perceived ease of participation	% who feel it is easy to have a say	Perceived barriers to civic engagement	Residents Survey
Perceived opportunity to be heard	% who believe they’re given sufficient chances to contribute	Whether people feel Council listens and values input	Residents Survey
Trust in Council decision-making	% who trust Council to make good decisions	General sentiment about Council performance and integrity	Residents Survey
Overall quality of life	% rating quality of life positively	Overall civic wellbeing and connection to place	Residents Survey
Voter turnout – local elections	% of enrolled voters who voted	Overall participation in democratic process	Electoral Commission / Council elections data
Voter turnout – general elections	% of enrolled voters who voted	Broader civic participation trends	Electoral Commission

These indicators are intended to give us a sense of patterns and shifts over time, rather than to act as standalone performance measures. Careful interpretation and context will be essential in understanding what the data is telling us.

It is important to note that some indicators are likely to fluctuate year to year, and changes in the numbers are not always good or bad in themselves. For example, a higher number of issues reported through tools like Snap Send Solve or the Council website could reflect increased community awareness and confidence in using these systems, rather than a rise in frustration. Similarly, the number of engagement opportunities provided will vary depending on the type and scale of projects or consultations underway in any given year.

The Resident’s Survey remains a useful tool for tracking high-level trends over time. Palmerston North City Council delivers a wide and complex range of services, particularly compared to most councils who do the survey who are far smaller or rural. Those councils often report higher satisfaction scores, which may reflect lower service complexity, fewer high-contact services, and closer-knit communities. In contrast, urban councils tend to face more diverse expectations and scrutiny, which can influence results.

The Resident’s Survey is just one method for assessing our performance, not the single factor. We can use other methods to complement it such as communications-specific surveys or “voice of the customer” approaches. These methods provide insight into service experiences, allowing for faster responsiveness and potentially stronger reputational outcomes. Our upcoming community focus groups connected to our residents’ survey will also help us better understand how people perceive Council services, information, and participation opportunities — giving important context to interpret survey results and refine our indicators over time.

At this stage, we do not have a set indicator that specifically measures the significant civic engagement work undertaken by our elected members. While this was considered, it was ultimately set aside due to the time and reporting burden it would place on elected members to accurately track all of their activities. Instead, we will look to reflect this important work more fully in the next annual progress report, with narrative examples and highlights that better capture the role elected members play in fostering civic participation and connection.

NEXT STEPS

Officers will continue working in this space, in partnership with the large amount of work Elected Members do.

The next progress report will include the new indicators and be brought to Council in September 2026, covering the time period 1 July 2025-30 June 2026.

2. Compliance and administration

Does the Council have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these objectives?		No
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to: Whāinga 1: He tāone auaha, he tāone tiputipu Goal 1: An innovative and growing city Whāinga 2: He tāone whakaihiihi, tapatapahi ana Goal 2: A creative and exciting city Whāinga 3: He hapori tūhonohono, he hapori haumaru Goal 3: A connected and safe community Whāinga 4: He tāone toitū, he tāone manawaroa Goal 4: A sustainable and resilient city
The recommendations contribute to this plan: 14. Mahere mana urungi, kirirarautanga hihiri 14. Governance and Active Citizenship Plan The objective is: Provide clear and accessible information and opportunities for community input into Council decisions
Contribution to strategic direction and to social, economic, environmental and cultural well-being	This inaugural report and proposed indicators can give confidence to elected members that we are meeting our objective. By having the report be publicly available on our website it is also a transparent way for us to ensure our community knows all the ways they can get involved.

Attachments

Public Participation and Engagement _ Annual Progress Report 2024-2025 ⇩

Memorandum

TO: Council

MEETING DATE: 25 June 2025

TITLE: Palmerston North Quarterly Economic Update - June 2025

Presented By: Stacey Andrews, City Economist

APPROVED BY: David Murphy, General Manager Strategic Planning

RECOMMENDATION(S) TO Council

1. That Council receive the Palmerston North Quarterly Economic Update – June 2025, including:

a. Palmerston North Economic Growth Indicators – June 2025 (Attachment 1), and

b. Palmerston North Quarterly Economic Card Spending Report (Attachment 2).

1. purpose

1.1 This memorandum presents a summary of the key themes in the Palmerston North Quarterly Economic Update to June 2025, and the Palmerston North Quarterly electronic card spending report for the March quarter 2024.

1.2 The quarterly economic update is prepared in-house, using data from a range of sources to provide the most up-to-date information available on the city economy. This includes national and global data where appropriate, to inform decision makers of broader conditions that are impacting on local economic conditions.

1.3 The quarterly economic update is organised under the categories of ‘Gross Domestic Product (GDP) and national indicators’, ‘business and jobs’, ‘earnings and income’, ‘spending’, and ‘housing’. National data that influences the city economy, such as the Consumer Price Index (CPI) and the Official Cash Rate (OCR), are also included in the quarterly economic update. This update is attached as Attachment 1.

1.4 The Palmerston North Quarterly electronic card spending report is prepared in-house and provided as a resource to the city retail sector. This report includes information on retail spending across the city and by precinct. The electronic card spending report for the city is included as Attachment 2.

1.5 Section 2 of this report includes a high-level summary of economic outcomes for the city to June 2025. A more in-depth analysis of economic performance, including the economic outlook for the city, is included within sections 3 to 5 of this report.

2. Economic summary

2.1 Economic activity in the city is showing some early signs of recovery as elevated returns to the agricultural sector continue, construction investment and recruitment intentions show signs of improvement, and lower interest rates flow through to households and businesses.

2.2 Despite strengthening in some economic indicators, GDP growth in the year to March 2025 continues to reflect the economic slowdown. March quarter GDP is estimated to have fallen by 0.3% in both the city and nationally, compared with the December quarter 2024. Annual GDP growth remains negative with GDP in Palmerston North contracting by 1.3% in the March 2025 year, compared with a 1.1% contraction nationally.

2.3 Business numbers increased +0.4% to 8,186 in Palmerston North over the year to March 2025, with an additional 34 businesses established in the city over the year. This was lower than national growth of +1.2%.

2.4 Non-residential construction values increased by 32.6% in the city over the year, driven by a boost in investment in warehousing, commercial accommodation and education buildings. This compares with a 7.6% fall in the value of non-residential consents, nationally.

2.5 Jobs data for Palmerston North city continued to reflect the weakness in labour market conditions, with the number of people employed by place of residence falling -876, (-2.5%) and jobs by workplace location down -1,030 (-2.2%) over the year to March 2025. This compares with 1.7% fall in jobs nationally over the same timeframe. More positively, ‘Seek’ employment data for April reflects strengthening employment intentions with a 10% increase in jobs ads in the Manawatū-Whanganui Region, compared with March. This compares with a 1.0% increase nationally.

2.6 The annual average unemployment rate in Palmerston North remains relatively stable at 4.3%. This compares with an annual average unemployment rate of 4.9% nationally. Increasing Jobseeker beneficiary numbers reflect the current labour market weakness with recipients in Palmerston North rising 14.9% compared to an 11.6% increase in Jobseeker benefits, nationally.

2.7 Annual earnings growth has eased as expected in response to weaker labour market conditions. Total earnings from salaries and wages increased 1.8% in the city over the year, compared with 2.3% growth nationally. These earnings figures exclude income from self-employment.

2.8 Tourism and consumer spending remains soft, with the exception of new commercial vehicle registrations which increased by 9.9% in Palmerston North over the March 2025 year. This compares with 6.4% decline in commercial vehicle registrations nationally, over the same timeframe.

2.9 House sales in the city increased 14.2% over the year to April 2025 to a total of 1,321. This compares with a 9.5% increase in house sales nationally. At the same time, house price growth remains subdued with the average price in the city easing 1.6% over the year. This compares with a 1.3% decrease in house prices nationally. Housing continues to be far more affordable in Palmerston North than at the national level, with the average property in the city equal to 4.6 times the average city income. This compares with the average house price of 6.5 times the average household income nationally.

2.10 Weekly rental prices increased by 3.0% in the city over the year to April 2025, to an average price of $495 per week. The number of properties rented in the city increased by 0.7% over the year to a total of 8,175. This compares with a 2.8% increase in the number of rented properties, nationally.

2.11 New dwelling consents increased 6.7% over the year to April 2025, to a total of 432. This compares with a 5.2% decline in new dwelling consents nationally. Some of the increase appears to be explained by a rise in the construction of relocatable dwellings in the city. Net dwelling data for the March quarter estimates that 287 out of a total 426 dwellings consented in the city over the year, will add to the housing stock. This rate has eased to 67.4% in the year to March 2025, down from the longer term trend of +70%.

3. Quarterly economic Update

GDP and National Indicators

3.1 Infometrics reports that Palmerston North GDP fell by 1.3% over the year to March 2025. This compares with a 1.1% decrease in GDP nationally. The Infometrics data is released prior to the Statistics NZ GDP data for the March 2025 quarter (released 19 June 2025).

3.2 Annual inflation (as measured by the Consumer Price Index - CPI) increased from 2.2% in the September and December quarters 2024, to 2.5% in the March quarter 2025. This was slightly above market expectations of 2.4%. The higher than expected CPI reading was driven by stronger than expected costs of transport, health, education, and recreation and cultural services in the March quarter. This result remains well within the RBNZ target range of 1%-3% CPI.

3.3 Negative GDP growth highlights continued pressure on the New Zealand economy, with weak spending, in particular, continuing to hamper the economic recovery. In the latest Official Cash Rate (OCR) review, the Reserve Bank of New Zealand (RBNZ) signalled concern over global uncertainty and near-term inflationary pressures in the New Zealand economy. This is predominantly due to tariff uncertainty and rising domestic electricity and food prices in the near term.

3.4 At the time of writing, the market is pricing in a 25% chance of a 0.25% reduction in the Official Cash Rate (OCR) at the next OCR review on 9 July. This compares with the market pricing a 100% chance of a 0.25% reduction in the OCR in the May review, reflecting the more negative tone of the RBNZ in the May Monetary Policy Statement. Despite the more hawkish tone, the RBNZ actually projected a lower OCR path in the May Monetary Policy Statement than in the previous two reviews, as illustrated in figure 1. Lower interest rates are critical to stimulating spending and economic activity and boosting confidence across the New Zealand economy.

Figure 1: RBNZ OCR projections – May 2025, February 2025, November 2025

3.5 On the upside, the OCR has fallen 2.25% since its peak of 5.5% from May 2023 to July 2024. The OCR currently sits at 3.25% with one-year and two-year mortgage rates falling below 5% for the first time since March 2022. This lower OCR will provide relief to households and businesses by lowering interest payments on borrowing and releasing money for spending on other goods and services across the economy. Alongside elevated demand and pricing for exports produced in our region, lower interest rates will support the recovery of the New Zealand and regional economy throughout 2025. Looking forward, the level of inflation, alongside the appetite of the RBNZ to drop interest rates into stimulatory territory, will influence the rate of recovery across the local and national economy.

Business and jobs

3.6 A total of 8,186 businesses were located in Palmerston North in March 2025; an increase of 34 businesses from the previous year (+0.4%). This compares with a 1.2% increase in the number of businesses registered nationally, over the same timeframe.

3.7 There was a total of $139,952,697 worth of non-residential consents issued in Palmerston North over the year to April 2025. This is an annual increase of 32.6%, compared with a 7.6% contraction in the value of non-residential consents nationally. Growth in non-residential construction in the city was driven by a mix of public and private sector investment. In terms of public investment, education sector construction increased by 190.9% to $10.25 million over the year. Growth in private sector construction investment was dominated by a 164.8% increase in investment in ‘storage buildings’ to a total of $89.53 million over the year. Investment in ‘hotels, motels and short-term accommodation’ was also elevated, rising 859.1% to a total value of $5.28 million.

3.8 Job numbers fell in the city and nationally over the year. The number of people in employment by place of residence fell by -876 (-2.5%) over the March year while employment by workplace location decreased by 1,030 (-2.2%). There was a total of 34,636 residents of Palmerston North in employment in March 2025, alongside 46,575 jobs located in the city. This data does not include self-employment.

3.9 Looking forward, the latest Seek Employment report reflects an improving recruitment trend across the Manawatū-Whanganui Region, with a 10% increase in jobs advertised in April compared with March 2025. This compares with a 1.0% increase in job ads nationally. Reflecting the more positive trend in the Region, the number of jobs advertised over the year to April 2025 remains equal to the year ended April 2024. This compares with a 10% decrease in the number of jobs advertised nationally.

3.10 Implying signs of an improvement in construction activity, the number of job ads for ‘design and architecture’ and ‘trades and services’ workers across the country increased by 15% and 6% respectively between March and April 2025. In contrast, the number of roles advertised for ‘science and technology’ roles declined by 8% between March and April 2025.

3.11 The annual average unemployment rate in Palmerston North eased from 4.4% in March 2024 to 4.3% in March 2025. This compares with a 4.9% annual average unemployment rate, nationally. The national unemployment rate published by Statistics NZ was 5.1% in the March quarter 2025. This statistic does not average the unemployment rate over four-quarters. The RBNZ expects the New Zealand unemployment rate to peak at 5.2% in the June and September quarters this year, falling to below 5.0% in the June quarter 2026.

3.12 The number of MSD jobseeker beneficiaries in Palmerston North increased by 450 over the year to March, to a total of 3,477. This is a 14.9% increase on the previous year compared with an 11.6% increase nationally. Of this increase, 270 people were receiving the benefit due to health conditions and disability. Jobseeker benefits increased across all age-groups both in the city and nationally.

3.13 Employment data suggests improving labour market conditions over the year, due to the export led economic recovery and households rolling off higher interest rates onto lower mortgage interest rates. This will support spending, and it follows employment levels across the New Zealand economy over the remainder of 2025 and into 2026. This expectation is reflected in the RBNZ employment projections, which anticipates the number of people employed nationally will increase by 56,000 between March 2025 and March 2026.

Earnings and income

3.14 Statistics NZ publishes business collection data that estimates quarterly earnings at the territorial authority level. This series is not as robust as the Linked-Employer-Employee data but does provide a more-timely indication of earnings from salary and wages by territorial authority area. From this series, total annual earnings in the city in the March quarter 2025 increased by 1.8% compared to the year ended March 2024. This compares with a 2.3% increase in earnings nationally, over the same timeframe. This lower level of earnings growth follows a period of +4.0% annual increases in the city between June 2021 and December 2024.

3.15 Elevated earnings growth continues to be reflected in the Statistics NZ median salary and wages data for the year to March 2024, with median earnings in the city increasing by 8.1% over the year. This compares with a 5.4% increase nationally. Strong wage growth, due to sector wage agreements and tighter labour market conditions, explains the elevated growth in earnings over the year to March 2024.

3.16 Wage pressure is easing in 2025 with the Labour Cost Index (LCI) falling to 2.8% over the year to March. This follows a period of elevated wage growth over the period March 2022 to December 2024 with annual wage growth peaking at 5.5% in the year to June 2023. As illustrated in figure 1, annual growth in labour costs continues to remain above the 15-year average trend. The RBNZ expects annual labour cost increases to return to the pre-COVID trend of around 2.0% per annum in December 2025.

Figure 1: Labour Cost Index annual and 15-year trend (New Zealand)

Spending

3.17 Retail spending in the city decreased by -1.8% over the year to April 2025, to a total value of $1.488 billion. This compares with a -1.5% fall in retail spending nationally. Retail spending is in dollar value and does not account for the impact of inflation on the purchasing power of consumers. Negative growth in retail spending, alongside CPI inflation of 2.5% over the year, indicates the continuation of a contraction in consumption across the country over the year to April 2025.

3.18 The pressure on household budgets continues to be reflected in the decrease in spending in the city over the year to April 2025. Spending on ‘groceries and liquor’ was the only storetype to increase, up 1.3% over the year. This growth rate remains below the annual rate of inflation of 2.5% thereby indicating negative real growth in spending over the year. ‘Groceries and liquor’ was the largest spending category with a total spend of $529.6 million in the city over the year.

3.19 Spending on discretionary items continued to be weak. Spending on ‘home and recreational retail’ fell -3.1% over the year alongside a 3.5% fall in ‘fuel and automotive’ spending and a 3.0% fall in spending at ‘cafes, restaurants and bars’ in the city. This is consistent with the national trend with spending falling across all categories other than ‘groceries and liquor.’

3.20 Following the trend, new car registrations in the city fell by 12.2% over the year to March 2025. This compares with a 17.8% fall nationally. In contrast, commercial vehicle registrations increased by 9.9% in Palmerston North relative to a 6.4% decline in commercial vehicle registrations, nationally.

3.21 A total of $296.2m in tourism spending flowed into the city over the year to April 2025. This is down 3.3% from the previous year compared with a 1.0% fall in tourism spending nationally. Tourism spending continued to be impacted by a pullback in spending by domestic travellers, falling 4.0% in the city and 3.5% across New Zealand compared with the previous year. In contrast, international tourism spending increased 4.7% to $27.1m in the city over the year. This compares with a 7.0% increase in international tourism spending nationally.

Housing

3.22 According to QV, house prices in the city fell 1.6% over the year to April 2025 to an average price of $634,094. This compares with a 1.3% fall in house prices nationally, to $914,504. The volume of house sales continued to strengthen in Palmerston North over the year, with 1,321 houses sold in the April 2025 year. This is a 14.2% increase in sales volumes from the previous year compared with a 9.5% increase in sales volumes nationally. While house sales are increasing likely due to improved affordability, elevated supply of houses for sale are keeping house prices relatively stable.

3.23 Mortgage lending increased to $82.0 billion in the year to April 2025. This compares with $65.4 billion the previous year, representing a +25.4% increase in mortgage lending compared with the year ended April 2024. Mortgage lending to owner-occupiers and investors increased the most, up $9.6 billion (+25.5%) and $5.5 billion (+48.3%) respectively. Lending to first home buyers lifted by $1.3 billion (+8.6%) over the same period. The proportion of total mortgage lending to investors has increased to 20.0% after falling back to an historically low 16.5% in the year to June 2023.

3.24 Home ownership affordability, as measured by Infometrics as the ratio of the average house price to average annual income, remained at 4.6 for a second quarter in March 2025. This compares with the average house price of 6.5 times the average income, nationally. We note that the housing affordability series has been recalculated recently to reflect higher earnings growth relative to lower average house prices. This has resulted in a lower ratio of average house price to household income through the series.

3.25 Average rents increased 3.0% in the city over the year to April 2025 to an average price of $495 per week. This compares with a +2.1% increase nationally to $574. Over the same period, the number of properties rented increased by +0.7% in Palmerston North, compared with a +2.8% increase nationally. As at April 2025, 8,175 homes were formally rented in the city.

3.26 Renting a home in Palmerston North remains more affordable than in much of New Zealand, with annual average rent making up 20.1% of annual household income. This compares with 22.1% nationally. Renting in the city continues to be more affordable than both the Manawatū District and the wider Manawatū-Whanganui region, with average annual rent taking up 20.8% and 22.0% of the average household income, respectively.

3.27 The number of households on the public housing register in Palmerston North fell by 162 (-27.4%) to a total of 429 over the year to March 2025. This compares with a 24.4% fall nationally. The number of families on the transfer register in Palmerston North sat at 156 in the March quarter 2025, down from 165 a year ago (-5.5%). This compares with an 11.1% fall nationally. Note, the criteria for being placed on the housing register has been tightened under the current government, likely explaining a proportion of the reduction in households on the public housing register.

3.28 Households in emergency housing in Palmerston North fell to nine in March 2025, down from 72 in March 2024. Some of the decrease in the number of families accessing housing support may be explained by the increased level of evidence required to prove housing need. The value of emergency housing grants also dropped sharply, down from $1,125,668 in the March quarter 2024 to $97,649 in the March quarter 2025.

3.29 There were 432 consents for new dwellings issued in Palmerston North over the year to April 2025, an increase of 27 (+6.7%) versus the previous year. This compares with a -5.2% decline in new dwelling consents issued nationally. While lower mortgage interest rates are likely to support levels of private residential development moving forward, the pullback in development by Kāinga Ora will weigh on levels of development in the city.

3.30 Net dwelling analysis for the March year estimates that 287 of the total 426 dwellings consented over the year will add to the housing stock of Palmerston North. This equates to 67.4% of total building consents issued annually in contrast to the average +70% average. This series attempts to remove ‘relocates’ moved outside the city, add in ‘relocates’ coming into the city, and remove uplifted dwellings, and is subject to revision. This provisional estimate is below the housing demand forecast in the 2024-34 LTP of 328 dwellings per year from 2024-2027, with annual totals tending to fluctuate due to wider economic conditions.

4. Palmerston North electronic card spending report – March 2025

4.1 Reflecting the current economic climate, total electronic card spending fell 2.0% in the March quarter 2025 to a total value of $356 million. This compares with a 1.7% decrease in spending nationally, with spending gaining support from an uplift in international tourism spending over the peak season.

4.2 Over the year to March 2025, $1.492 billion was spent in the city. This is a decline in spending of 1.5% compared to a 1.3% fall nationally over the same period. Of this total, 56.6% was spent in the city centre.

4.3 Spending in the city centre decreased by 0.8% over the year. The retail sectors most affected by the pullback in consumer spending were ‘arts, recreation & visitor transport’ falling 10.4%, ‘apparel and personal’ down 3.7%, and ‘home and recreational retail’ decreasing by 3.3%. This is consistent with electronic card spending data for many parts of the country, where domestic tourism and spending on non-essential goods and services has come under pressure from weaker labour market conditions and higher living costs.

4.4 In contrast, spending on ‘groceries and liquor’, ‘fuel and automotive’ and ‘other consumer spending’ all increased in the city centre over the year. Spending on ‘groceries and liquor’ rose 3.5% to a total of $285 million alongside a 1.3% increase in spending on ‘fuel and automotive’ to $64 million, and a 7.8% increase in consumer spending to a total of $1 million.

4.5 As expected, spending growth across all retail precincts in the city fell below the annual rate of inflation of +2.5%. ‘Palmerston North CBD and Broadway Avenue’ fared the best, with annual spending down 0.2% followed by ‘Palmerston North City centre’ with a 0.8% decline in spending over the year.

4.6 Coinciding with Central District Field Days, the biggest spending week in the city in the March quarter was the week ending 16 March with a total of $16.8 million spent in the city over the week. This compares with an average weekly spend of $15.5 million in the March quarter. The first week of the year is typically the lowest spending week in the city and this year was no different with $14.3 million spent in the week ending 5 January 2025.

4.7 The Quarterly Economic Card Spending Report for March 2025 is attached as Attachment 2.

5. Economic outlook

5.1 The latest quarterly data reflects glimmers of improvement in economic conditions in the city, as the export sector booms, regional recruitment intentions rise, and commercial investment and non-residential construction activity lifts. Challenges remain for our sectors most sensitive to weak consumer confidence and spending, and heightened uncertainty driven by both international and domestic factors.

5.2 The current uncertainty was reflected in the latest Monetary Policy Statement released in May 2025, with comments implying a more cautious approach to employing interest rate reductions to boost weak economic activity. This is due to the risk of supply chain disruptions and the potential for upward pressure on prices, and therefore rising inflation, here in New Zealand.

5.3 On the other side of the equation, global economic and geopolitical challenges are arguably more likely to reduce global growth and suppress demand leading to lower inflation across both the domestic and global economy. This would lead to the need for lower interest rates to boost spending and support economic activity across the New Zealand economy. The more recent tone of the RBNZ highlighted these opposite scenarios while at the same time, projecting a lower OCR path than recent OCR reviews. Just as global economic uncertainty is slowing down investment and spending activity generally, the issue here for the RBNZ is ‘uncertainty’.

5.4 On the upside, interest rates have fallen 2.25% since their recent peak of 5.5%, providing relief to households and businesses across the city and national economy. This will help to boost spending across the economy, supporting businesses most exposed to the impact of higher interest rates and weak consumer confidence and spending. The full impact of these lower interest rates is expected to flow through to households throughout 2025 and into 2026, with the RBNZ projecting national GDP growth to increase to +2.2% over the year to March 2026. This clearly signals the expectation of better times ahead.

5.5 For the city and the Manawatū Region, the diverse mix of public and private sector activities continues to support economic activity relative to many other parts of New Zealand. Signalled investment in some of our large stable sectors such as health, defence, and education look set to support economic activity and population levels across the broader economy. Levels of private investment in warehousing and commercial accommodation also support opportunities for further investment and visitation to the city. The completion of large-scale roading projects will also deliver efficiencies and support flows of goods and services across regional economies, impacting positively on both business profitability and the wellbeing of people. The scene is set for economic recovery with an improvement in wider economic conditions key to the pace of recovery.

5.6 Factors that influence economic conditions in the city will continue to be reported on throughout the quarterly economic reporting series.

6. Compliance and administration

Does the Council have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these objectives?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to: Whāinga 1: He tāone auaha, he tāone tiputipu Goal 1: An innovative and growing city
The recommendations contribute to this plan: 2. Mahere whakawhanake ohaoha 2. Economic Development Plan The objective is: Support sustainable business activity and labour market development, in particular, providing information and education resources to city businesses.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Reporting on economic trends in the city and the longer-term outlook for growth, is important for encouraging local business to invest, growing their business and attracting new businesses to the city. It is also important to support businesses to make informed decisions based on current economic conditions and to provide information to Councillors to support decision making.

Attachments

1.	Palmerston North Economic Growth 2025 ⇩
2.	Palmerston North Electronic Card Spending Report March 2025 ⇩

#	Estimated Report Date	Subject	Officer Responsible	Current Position	Date of Instruction & Clause
1	6 August	Options for property on Ruahine Street	GM Infrastructure		5 February Clause 14-25
2	~~25 June~~ ~~2025~~	~~Quarter 3 – Economic Update~~	~~GM Strategic Planning~~	~~Moved from Economic Growth~~
3	~~25 June~~ 6 August 2025	Public Spaces: policy and bylaw options	GM Strategic Planning	Moved from Strategy & Finance Committee
4	~~25 June 2025~~	~~Kākātangiata Development Progress Report~~	~~GM Strategic Planning~~	~~Moved from Economic Growth~~
5	~~25 June 2025~~	~~Deliberation - Kia Toa Lease~~	~~GM Infrastructure~~	~~Moved from Strategy & Finance Committee~~
6	6 August 2025	Approve LWDW - Water Services Delivery Plan	Chief Executive		12 Feb 2025 Clause 18-25
7	~~25 June 2025~~	~~Effectiveness of Civics Education Initiatives – Annual progress report~~	~~GM Customer & Community~~		29 May 2024 Clause 95.29 -24
8	~~6 August~~ 3 Sept 2025	Review of CEDA Directors Policy	GM Corporate Services	Steering group meeting in August	2 Oct 2024 Clause 172
9	6 August 2025	Report back on Investment Options for PN Airport.	GM Corporate Services		6 December 2023 Clause 197-23
10	6 August 2025	Civic and Cultural Precinct Master Plan Steering Group – 6-monthly update	GM Strategic Planning		Terms of Reference
11	6 August 2025	Appointment of Trustees on Council Controlled Organisations	GM Corporate Services		Terms of Reference
12	~~3 Sept~~ 8 Oct 2025	Review of PNCC Appointment of Directors Policy.	GM Corporate Services	To align with CEDA Appointment Policy Review	2 Oct 2024 Clause 172
13	8 Oct 2025	Residents Survey – Action Plan	GM Strategic Planning		Terms of Reference
14	8 Oct 2025	Adopt Annual Report 2024-25	Chief Executive		Terms of Reference
15	8 Oct 2025	Low Carbon Fund Allocations 2024/25	GM Strategic Planning	Moved from Sustainability Committee	21 August 2024 Clause 24-24
16	8 Oct 2025	Waste Management and Minimisation plan 2019 - annual progress update for 2024/25 FY	GM Strategic Planning	Moved from Sustainability Committee	9 Sept 2020 Clause 17-20
17	8 Oct 2025	Citywide Emissions Inventory 2024 Annual Report	GM Strategic Planning	Moved from Sustainability Committee	Climate Change Plan Action 3
18	8 Oct 2025	PNCC Organisational Emissions Inventory 2024/25 Annual Report	GM Strategic Planning	Moved from Sustainability Committee	Climate Change Plan Action 1
19	TBC	Summerhays Reports – Partnership Models Expressions of Interest	GM Infrastructure	Lying on the Table	1 May 2024 Clause 66-24 and 74 -24

[1] Note – for the purposes of this targeted rate vacant serviced property where non-residential use is a permitted activity under the city’s District Plan will be categorised as non-residential, whereas it is categorised as miscellaneous for the purposes of the general rate.

Grant Smith (Mayor)
Debi Marshall-Lobb (Deputy Mayor)
Mark Arnott	Leonie Hapeta
Brent Barrett	Lorna Johnson
Rachel Bowen	Billy Meehan
Vaughan Dennison	Orphée Mickalad
Lew Findlay (QSM)	Karen Naylor
Roly Fitzgerald	William Wood
Patrick Handcock (ONZM)	Kaydee Zabelin