Agenda of Extraordinary Council Meeting

Extraordinary Council Meeting item: 3.1

10 July 2018

TITLE:	Adoption of the rating policies pertaining to the Far North district
ID:	A1076948
From:	Bree Torkington, Assistant Management Accountant

Executive summary

The purpose of this report is to present the rating policies for the Far North district for adoption and confirmation by council.

The rating policies are differentiated by district. The Far North District Council (FNDC) made changes to its rating policies at both its long-term plan deliberations meeting, and on 28 June 2018 during final adoption. We recommend that the same material changes resulting from these decisions also be made to our rating policies.

Due to the late changes to FNDC’s rating policies, and our approach of materially matching the policies of the district councils, it is proposed that adoption of the rating policies for Far North district to be effective from 1 July 2018. Legal advice was received from Simpson Grierson which confirmed the appropriateness of this approach. The potential for an implementation issue stemming from this approach has been resolved with FNDC.

Legal advice was also received prior to consultation on the policies; however, several recommended minor amendments were unable to be incorporated at that time. These changes have now been incorporated. The rating policies underwent a period of public consultation concurrently with the Long Term Plan 2018–2028.

Council is required to consider Schedule 11 of the Local Government Act 2002 (LGA) when determining its policies on the Remission and Postponement of Rates on Māori Freehold Land, and it may consider Schedule 11 in determining its other policies. This consideration is included.

Recommendations

1. That the report ‘Adoption of the rating policies pertaining to the Far North district’ by Bree Torkington, Assistant Management Accountant and dated 20 June 2018, be received.

2. That having undertaken consultation in accordance with sections 82 and 83, and pursuant to section 102 and sections 108-110 of the Local Government Act 2002, and having considered Schedule 11 of the Local Government Act 2002, the council adopt the rating policies for the Far North district (including the Policy on the Remission and Postponement of Rates on Māori Freehold Land), effective from 1 July 2018, as attached to this report.

3. That council authorises Dave Tams, Group Manager – Corporate Excellence, to make any necessary minor drafting, typographical, or presentation corrections to the rating policies prior to the document going to print.

Background

The council’s rating policies set out its policies on: remission and postponement of rates on Māori freehold land, remission and postponement of rates and penalties, and early payment of rates.

The Far North, Kaipara and Whangārei district councils collect rates on Northland Regional Council's behalf. It is administratively efficient that, where possible, the council adopts policies on the remission and postponement of its rates and penalties, and early payment of its rates, that are materially the same as those of the three district councils.

Rating policies for the Kaipara and Whangārei districts were approved by council at its 21 June 2018 meeting. In mid-June, FNDC advised it would be proposing further changes to its rating policies at its 28 June 2018 meeting, so presentation of council’s rating policies for the Far North district was delayed until these changes could be confirmed. These changes have now been confirmed, and are incorporated into council’s rating policies where applicable.

Please note that the numbering of the policies has changed since the 21 June 2018 agenda item, due to the removal of the original ‘FN03 Extreme Financial hardship’ policy. The changes are reflected in the attachments to this item.

The rating policies for rating units in the Far North district are:

· FN01 Common-use properties

· FN02 Community, sports and not-for-profit organisations

· FN03 Incentivising Māori economic development

· FN04 Landlocked land

· FN05 Land subject to protection for outstanding natural landscape, cultural, historic or ecological purposes

· FN06 Māori Freehold Land not used

· FN07 New users of Māori Freehold Land

· FN08 Papakāinga on Māori Freehold Land

· FN09 Penalties

· FN10 Properties spanning multiple districts

· FN11 Residential rates for senior citizens

· FN12 Treaty settlement lands

· FN13 Unusable land.

Legal advice was received on the policies from Simpson Grierson prior to consultation. Many of the recommended changes to the wording of the rating policies were minor, but due to limited time were unable to be incorporated prior to consultation. These recommended changes have now been incorporated.

The rating policies were consulted on in conjunction with the consultation for the Long Term Plan 2018-2028, in accordance with section 83 of the Local Government Act 2002 (LGA). Several changes to the rating policies were proposed and consulted on. These included significant changes to policies that apply to rating units in the Far North district (including alterations to ensure that the unique history and nature of Māori freehold land ownership was recognised).

The FNDC have now had their deliberations on its Long Term Plan, which included its rating policies. At its deliberations, FNDC made some changes to its rating policies. At its 28 June 2018 meeting where FNDC’s final long-term plan and policies were adopted, the FNDC made two further changes to its rating policies, one of which impacts our rating policies for the Far North district.

The final rating policies (attached to this report) have been prepared in accordance with:

· legal advice;

· the council resolution resulting from the Northland Regional Council deliberations;

· the changes arising from FNDC’s deliberations; and

· the changes made by FNDC on 28 June 2018.

A summary of the changes to the rating policies for the Far North district since consultation is included as supporting information to this report.

Considerations

1. Options

Staff recommend option 1, to confirm and adopt the rating policies.

No.	Option	Advantages	Disadvantages
1	Confirm and adopt the rating policies pertaining to Far North district.	Council will achieve compliance with the LGA, and have rating policies consistent with FNDC, allowing administrative efficiency.	Different rating policies will apply in each district.
2	Do not confirm and adopt the rating policies pertaining to Far North district.	None.	Council will not achieve compliance with the LGA, and will have rating policies inconsistent with FNDC, causing administrative inefficiency.
3	Establish new rating policies which apply across Northland.	A single set of rating policies across Northland.	Policies for Kaipara and Whangārei districts were adopted on 21 June 2018, so would need to be revoked and replaced in early July. This is not administratively viable for 2018/19.

2. Significance and engagement

Section 76AA of the LGA directs that council must adopt a policy setting out how significance will be determined and the level of engagement that will be triggered. This policy assists council in determining how to achieve compliance with the LGA requirements in relation to decisions.

Council was required by section 102 of the LGA to undertake consultation on the rating policies, which also achieved compliance with council’s Significance and Engagement Policy, in particular “We will consult when we are required to by law, when a proposal is considered significant, and when we need more information on options for responding to an issue”.

The decision to confirm and adopt the rating policies follows a process of consultation and it is considered that in making this decision council is compliant with its Significance and Engagement Policy.

3. Policy, risk management and legislative compliance

The decision to confirm and adopt the rating policies is in accordance with:

· Section 102 of the Local Government Act 2002 (LGA), which requires local authorities to adopt a policy on the remission and postponement of rates on Māori freehold land, and allows a local authority to adopt rates remission and postponement policies.

· Sections 108 to 110 of the LGA, which require the policies to be reviewed at least once every six years.

Due to the late changes to FNDC’s rating policies, and council’s approach of materially matching the policies of the district councils, we considered several options to best adopt our rating policies for the Far North district. Note that in all instances, the rating policies will apply from 1 July 2018.

Option 1 was preferred by staff, as it presented the lowest legislative risks, and did not penalise Kaipara and Whangārei for delays in the Far North district.

No.	Option	Advantages	Disadvantages
1	Preferred Adopt the Whangārei and Kaipara policies on 21 June 2018, then adopt the Far North district policies once Far North District Council had adopted any further changes.	Rating policies for Far North adopted once, administratively clear and s82 of LGA is not triggered again.	Rating policies adopted on a different date for Far North than for Whangarei and Kaipara. Potential for implementation issues in Far North district (now resolved, See Implementation issues).
2	Adopt the Whangārei, Kaipara and Far North policies on 21 June 2018, then adopt any changes required following the Far North District Council’s 28 June 2018 meeting	Rating policies adopted on same date for all districts – but only if no further changes are required.	Rating policies potentially adopted twice for Far North district: administratively messy, and risk of meeting s82 of LGRA being required again. Will likely still result in rating policies adopted on a different date for Far North than for Whangarei and Kaipara.
3	Adopt the Whangārei, Kaipara policies, and the expected Far North policies on 21 June 2018.	Rating policies adopted once on same date for all districts, and administratively simple, unless expected Far North policies are not adopted.	Pre-empts FNDC decisions: may result in future changes being required, and risk of meeting s82 of LGRA being required again.
4	Adopt the Whangārei, Kaipara and Far North policies in July 2018.	Rating policies adopted once on same date for all districts, and administratively simple.	Based on advice from WDC and KDC, this would compromise implementation of rates assessments for Kaipara and Whangārei districts.

In determining its policies on the Remission and Postponement of Rates on Māori Freehold Land, council is required to consider Schedule 11 of the LGA. In determining these policies, and other policies, the council has considered Schedule 11 of the LGA, and recognises that the nature of Māori Freehold Land is different to general title land. This includes recognising that certain unoccupied Māori Freehold Land may have particular conditions, ownership structures, or other circumstances which make it appropriate to remit or postpone rates for defined periods of time. The council’s considerations on these policies for the Far North district was included as supporting information to the the 21 June 2018 report “Adoption of rating policies pertaining to the Kaipara and Whangārei districts”, and is attached again with minor revisions to consider the final policies, including addition of the revised policy numbers.

Further considerations

4. Community views

The views of the community on the amendments and alterations in the rating policies were obtained during a period of consultation in accordance with sections 82 and 83 of the LGA. Community views have been provided to council by way of a summary of submissions report and full submission book, and were also summarised in council’s deliberations report.

Council has considered the proposals included in the rating policies by way of a deliberations meeting that centred upon the public feedback received.

5. Māori impact statement

The rating policies were consulted on as part of the Long Term Plan 2018–2028 consultation. During the process of developing the Long Term Plan 2018–2028, council staff engaged with the Te Tai Tokerau Māori and Council Working Party Māori Technical Advisory Group (TTMAC) over the course of three intensive workshops, where feedback was obtained and incorporated into the plan development process. Engagement was also carried out with Te Uri O Hau representatives during development of the plan.

The process of public consultation on the plan included targeted engagement with Māori by way of pānui circulated to all iwi and hapū groups on council’s database, and regular reporting to the TTMAC working party.

6. Financial implications

The expected rates remissions as a result of the adoption of these rating policies are being taken account of in setting the rates for 2018/19. This process will occur every financial year.

7. Implementation issues

We are proposing adoption of our rating policies for the Far North district after the rates will be assessed (which occurs on 1 July 2018). FNDC have advised that because of this delay, which it has caused, it will not finalise its rates assessments until after we have adopted our rating policies for the Far North district. As a result, we do not anticipate any implementation issues for the rating policies following adoption.

Attachments

Attachment 1: Draft "Rating policies: Effective 1 July 2018" for Far North district ⇩

Attachment 2: Summary of changes to rating policies for Far North district ⇩

Attachment 3: Schedule 11 considerations for Far North district rating policies ⇩

Authorised by Group Manager

Name:	Dave Tams
Title:	Group Manager, Corporate Excellence
Date:	28 June 2018

Extraordinary Council Meeting ITEM: 3.1

10 July 2018Attachment 2

Summary of changes to rating policies for Far North district in “Rating policies: Effective 1 July 2018”

All rating policy titles have been edited to include a policy code: FN(xx) for Far North district.

Summary of legal review of rating policies

The previous version of this summary was included with the 21 June 2018 item “Adoption of rating policies pertaining to the Kaipara and Whangārei districts”. This version includes changes stemming from Far North District Council’s late changes to its rating policies.

Section	Removed text	Final text	Notes
Far North district: Making an application? This is what you need to know: 11	the council’s…	The council’s…	Minor typographical error
Far North district: Definitions		ARREAR	Legal request to change to “ARREARS”. No change was made. Term as per Far North District Council policy.
POLICY SUBSEQUENTLY REMOVED Extreme Financial Hardship: Background	In its role as rates collector for Northland Regional Council, the Far North District Council is sometimes approached by ratepayers…	The council is sometimes approached by ratepayers…	Reframe as Northland Regional Council decisions processed by the district councils.
POLICY SUBSEQUENTLY REMOVED Extreme Financial Hardship: Conditions and criteria: 6	The Far North District Council is available to assist applicants for the rates Rebate Scheme.	The Far North District Council advises it is available to assist applicants for the rates Rebate Scheme.	Reframe as what Far North District Council has advised Northland Regional Council it will do.
FN05: Background	The council recognises that certain rateable land within the district…	The council recognises that certain rateable land within the Far North district…	Clarify the district being discussed.
FN05: Conditions and criteria: 4	… the remission or postponement of rates will apply to all rates levied on the property.	… the remission or postponement of rates will apply to all rates assessed on the property.	Replace with correct wording regarding rating.
FN10: Policy objective	… receives a rates assessment for Northland Regional Council rates from the Far North District Council.	… receives a rates assessment for Northland Regional Council rates in respect of the Far North district.	Clarify our interest is in our rates in the Far North district, not the Far North District Council.
FN11: Policy statements: d	The accrued charges exceed 80% of the rateable value…	The total postponed rates (including Far North District Council rates) exceed 80% of the rateable value…	Clarify that both Far North District Council and Northland Regional Council rates contribute to this figure.
FN11: Conditions and criteria: 11	The Far North District Council is able to assist applicants for the Rates Rebate Scheme.	The Far North District Council advises it is able to assist applicants for the Rates Rebate Scheme.	Reframe as what Far North District Council has advised Northland Regional Council it will do.

Summary of changes arising from Far North District Council deliberations

Section	Removed text	Final text	Notes
Throughout section	Papakainga	Papakāinga	Spelling error.
FN02: Policy statements: 2.	… used by an entity whose principal purpose is to provide benefit to Far North residents through:…	… used by an entity for the purpose is of providing benefit to Far North residents through:…	Strengthen the definition of eligible entities.
FN03: Conditions and Criteria: 2.	… and confirmed as currently unoccupied.	…and confirmed as currently not used.	“unoccupied” is undefined.
FN04: Conditions and Criteria: 5.	Any rates postponed and not remitted under this policy will be immediately repayable if the land ceases to be landlocked during the period of the postponement.	If the land ceases to be landlocked during the period of the postponement, any rates postponed and not remitted under this policy will not be immediately repayable unless the owner fails to keep the current and future rates up to date.	Clarification.
FN05: Conditions and Criteria: 5.	If part of the protected area is being used, the used and unused portions will be … … will only apply to the unused portion of the rating unit.	The protected and unprotected portions of the rating unit will be… … will only apply to the protected portion of the rating unit.	Contradictions removed.
FN06: Policy Objectives: 2.	… the imposition of rates on unoccupied lands.	… the imposition of rates on lands not used.	“unoccupied” is undefined.
FN08: Conditions and Criteria: 4.	The council reserves the right to cancel the remission on any part of a rating unit if the rates remain unpaid …	The council reserves the right to cancel the remission on the portion of a rating unit upon which rates remain unpaid …	Clarification.

Summary of changes arising from Far North District Council 28 June 2018 resolutions

1. Deletion of the “Extreme Financial Hardship” policy.

Note – FNDC also made a change to its Community, sports and not-for-profit organisations policy, however the change did not impact the Northland Regional Council policy, as it related to charges for services (e.g. water and waste).

Extraordinary Council Meeting ITEM: 3.1

10 July 2018Attachment 3

Draft “Rating policies: Effective 1 July 2018” for Far North district: Schedule 11 considerations – matters relating to rates relief on Māori freehold land

Background

The Far North District Council collect rates on Northland Regional Council's behalf, and it is administratively efficient that where possible the council adopts policies on the remission and postponement of its rates and penalties, and early payment of its rates that are materially the same as those of the three district councils.

Section 108 of the Local Government Act 2002 (LGA) states that when council is determining its policies on remission and postponement of rates for Māori freehold land, it must consider Schedule 11, which outlines matters relating to rates relief on Māori freehold land. Sections 109 and 110 states that council may also consider Schedule 11 in determining its other policies on remission and postponement of rates.

In summary, Schedule 11 requires the consideration of a number of objectives (clause 2) to each district and an analysis of how the remission and postponement of rates for Māori freehold land achieve any that are relevant. All of these objectives are considered by council to be important within each of the constituencies of the Northland region.

Schedule 11

Matters relating to rates relief on Māori freehold land

1) The matters that the local authority must consider under section 108(4) are—

a) the desirability and importance within the district of each of the objectives in clause 2; and

b) whether, and to what extent, the attainment of any of those objectives could be prejudicially affected if there is no remission of rates or postponement of the requirement to pay rates on Māori freehold land; and

c) whether, and to what extent, the attainment of those objectives is likely to be facilitated by the remission of rates or postponement of the requirement to pay rates on Māori freehold land; and

d) the extent to which different criteria and conditions for rates relief may contribute to different objectives.

2) The objectives referred to in clause 1 are—

a) supporting the use of the land by the owners for traditional purposes:

b) recognising and supporting the relationship of Māori and their culture and traditions with their ancestral lands:

c) avoiding further alienation of Māori freehold land:

d) facilitating any wish of the owners to develop the land for economic use:

e) recognising and taking account of the presence of waahi tapu that may affect the use of the land for other purposes:

f) recognising and taking account of the importance of the land in providing economic and infrastructure support for marae and associated papakainga housing (whether on the land or elsewhere):

g) recognising and taking account of the importance of the land for community goals relating to—

i) the preservation of the natural character of the coastal environment:

ii) the protection of outstanding natural features:

iii) the protection of significant indigenous vegetation and significant habitats of indigenous fauna:

h) recognising the level of community services provided to the land and its occupiers:

i) recognising matters related to the physical accessibility of the land.

Consideration and analysis

Of the 13 policies that council is to adopt for the Far North constituency, 11 apply to Māori freehold and one policy applies only to Treaty Settlement lands. These policies are set out below, with an analysis of to what extent the policies for remission and postponement support or facilitate achievement of the objectives set out in Schedule 11, or would otherwise be affected if there was no remission or postponement.

Policy that applies remission and postponement to Māori freehold land	Schedule 11 objectives that are supported or facilitated by this remission or postponement
FN01 Common-use properties	· Facilitating any wish of the owners to develop the land for economic use · Recognising and taking account of the importance of the land in providing economic and infrastructure support for marae and associated papakainga housing (whether on the land or elsewhere)
FN02 Community, sports and not-for-profit organisations	· Recognising the level of community services provided to the land and its occupiers
FN03 Incentivising Māori economic development	· Facilitating any wish of the owners to develop the land for economic use
FN04 Landlocked land	· Recognising matters related to the physical accessibility of the land
FN05 Land subject to protection for outstanding natural landscape, cultural, historic or ecological purposes	· Recognising and supporting the relationship of Māori and their culture and traditions with their ancestral lands · Recognising and taking account of the presence of waahi tapu that may affect the use of the land for other purposes · Recognising and taking account of the importance of the land for community goals relating to— i. the preservation of the natural character of the coastal environment ii. the protection of outstanding natural features iii. the protection of significant indigenous vegetation and significant habitats of indigenous fauna.
FN06 Māori Freehold Land not used	· Avoiding further alienation of Māori freehold land
FN07 New users of Māori Freehold Land	· Supporting the use of the land by the owners for traditional purposes · Facilitating any wish of the owners to develop the land for economic use.
FN08 Papakāinga on Māori Freehold Land	· Recognising and taking account of the importance of the land in providing economic and infrastructure support for marae and associated papakainga housing (whether on the land or elsewhere).
FN09 Penalties	· No specific objectives apply.
FN10 Properties spanning multiple districts	· No specific objectives apply.
FN13 Unusable land	· Recognising matters related to the physical accessibility of the land.

Far North District Council's (FNDC) 'rating relief policies' have undergone significant review by the FNDC, resulting in policies with less repetition and duplication, reduced complexity, and a simpler structure. An analysis of the changes that are to be adopted by council, and the Schedule 11 considerations specific to these changes, are set out below.

Revised policy	Relevant changes	Schedule 11 considerations
FN03 Incentivising Māori economic development	New policy: Remit rates on Māori Freehold Land for the purposes of incentivising economic development.	Provides incentives for Māori land owners to develop Māori freehold land for economic use. Enables owners to develop an economic base and to assist with the subsequent payment of rates.
FN04 Landlocked land	Includes Māori freehold land.	Consistent with equitable approach to policies in the Far North district, recognises matters relating to the physical accessibility of the land.
FN06 Māori Freehold Land not used	The definition of ‘use’ has been explained in more detail, removed the condition that unused Māori Freehold Land that is deemed to have a high amenity value cannot receive a remission.	Allows for a more consistent approach across Far North district, and addresses issues of equity. Removes contradiction with the Regional Policy Statement regarding preservation of the natural character of the coastal environment.
FN07 New users of Māori Freehold Land	Provision for a sole-owner to be treated as a new user with rates postponed as well, where the land was previously in multiple-ownership.	Recognises the nature of multiple-ownership can create a rates debt that may be passed on to a sole owner.
FN08 Papakāinga on Māori Freehold Land	Aligned definition of papakāinga to the Far North District Plan.	Provides for strategic alignment in Far North district.
FN12 Treaty settlement lands	New policy: Remit rates on Treaty settlement land.	The rating relief policies for Māori Freehold Land do not apply to all properties returned as part of Treaty of Waitangi settlements (as some can be classed as general title). This policy provides the post settlement governance entities time to develop plans for the use or protection of cultural or commercial redress properties.
FN13 Unusable land	Changes from a postponement to a remission, and includes Māori Freehold Land.	Consistent with equitable approach to policies in the Far North district, recognises the importance of land in providing economic support.

Note: The ‘Extreme financial hardship policy’ was originally consulted on, but is not being adopted.