Agenda of Council Meeting - Wednesday, 25 March 2026

No.	Option	Advantages	Disadvantages
1	Withdraw $2.841m of managed investment fund gains and interest earnt in the first seven months of the 2025-26 financial year and invest into fixed term deposits from March 2026 through to August 2026.	Protect the gains generated over the past seven months and have the planned annual general funding requirement for council and Northland Inc secured in term deposits and available for council application at year end.	Earn a lower rate of return, associated with term deposits.
2	Do not withdraw any gains from the managed investment fund portfolio in March 2026	Take advantage of a higher rate of return should the managed investment fund portfolio perform well in the remaining months of the 2025-26 financial year.	Maintain an exposure to the risk of a market downturn eroding the managed investment fund gains that have already been generated over the past seven months, and the possibility that annual gains earnt on the managed investment fund portfolio are not sufficient to cover the required annual general funding contributions.

Council Meeting item: 7.1

25 March 2026

TITLE:	Local Government reform programme
From:	Justin Murfitt, Strategic Policy Specialist and Stephanie Versteeg, Kaitohutohu Matua / Principal Advisor
Authorised by Group Managers:	Jonathan Gibbard, Tāhūhū Rangapū - Chief Executive Officer, on 19 March 2026

Executive summary/Whakarāpopototanga

In November 2025 the government released a discussion document setting out draft proposals for reform of local government with the aim of simplifying the system. The reform proposals provide for interim governance arrangements and a process for each region to develop a Regional Reorganisation Plan (RRP), which sets out bespoke local government arrangements in each region.

Following discussion at Northland Forward Together (December 2025), the Chief Executives Forum and the Mayoral Forum, as well as engagement with the Minister for Local Government, on 5 February 2026 Northland councils publicly confirmed a shared position that local government reform should be progressed through a “By Northland, For Northland” approach.

Proceeding with this approach allows us to proactively advance the future of regional governance in Northland, with the aim of delivering material benefit to services and outcomes achieved through local government.

This approach was further considered at the Mayoral Forum on 27 February 2026 where members agreed to take the proposal to establish a Local Government Reform programme to their respective councils for consideration.

This report recommends that council approve the following:

· Governance arrangements and programme structure for a Local Government Reform Programme.

· Draft Terms of Reference for the proposed Governance Steering Group and External Advisory Group to oversee a Local Government Reform Programme.

· A placeholder budget for a Local Government Reform Programme for the remainder of the 25/26 Financial Year and the 26/27 Financial Year.

· An indicative timeline that, subject to detailed planning, could allow for a new governance structure(s) to be in place ahead of the October 2028 local government elections.

Recommendations:

1. That the report ‘Local Government reform programme ’ by Justin Murfitt, Strategic Policy Specialist and Stephanie Versteeg, Kaitohutohu Matua / Principal Advisor and dated 19 March 2026, be received.

2. That council approve the establishment of a staged programme for Local Government Reform as set out in this report.

3. That council approves the governance structure set out in this report, including the establishment of a Local Government Reform Steering Group and External Advisory Group.

4. That council endorse the Mayor of Whangārei District Council as Chair of the Local Government Reform Steering Group.

5. That council nominates the Chair and councillors Craw and Crawford as members of the Local Government Reform Steering Group.

6. That council approve the Draft Terms of Reference for the Local Government Reform Governance Steering Group (Attachment 1).

7. That council approve the Draft Terms of Reference for the Local Government Reform External Advisory Group (Attachment 2).

8. That council approve the indicative timeline set out in this report, which subject to detailed planning once the programme is established would enable a new governance structure(s) to be in place for the October 2028 local government election.

9. That council approve the allocation of $31,250, funded from salary savings, to meet the placeholder budget of $125,000 for the Local Government Reform Programme over the remainder of the 2025/26 Financial Year.

10. That council approve allocation of $250,000 to meet the placeholder budget of $1,000,000 in its 2026/27 Annual Plan, noting that this amount is indicative only and subject to further detailed planning and refinement.

11. That council agree to proceed with the proposed programme and to fund a third of the costs, as outlined in this report, rather than a quarter if only three Northland councils are participating.

12. That council agree that the programme approach needs to be reviewed if fewer than three Northland Councils agree to proceed with the programme as proposed.

Options

No.	Option	Advantages	Disadvantages
1	Council approve the Local Government reform programme and associated recommendations (relating to the programme structure, indicative timeline, provisional budget, terms of reference and nominates council steering group members)	Council will have a proactive role in developing a Regional Reorganisation Plan in collaboration with other participating councils. A regional council perspective will add knowledge and expertise to the process.	Costs and resourcing / staff and elected member time required.
2	Council does not approve the local government reform programme (and associated recommendations)	No costs or demand on staff / councillor time or other council resource.	The process will lack regional council perspective, knowledge and expertise Signals that Northland councils are not unified or aligned on reforms (contrary to previous public statements) The perception that council does not have an interest in improving local government system in Northland

No.

Option

Advantages

Disadvantages

Council approve the Local Government reform programme and associated recommendations (relating to the programme structure, indicative timeline, provisional budget, terms of reference and nominates council steering group members)

Council will have a proactive role in developing a Regional Reorganisation Plan in collaboration with other participating councils.

A regional council perspective will add knowledge and expertise to the process.

Costs and resourcing / staff and elected member time required.

Council does not approve the local government reform programme (and associated recommendations)

No costs or demand on staff / councillor time or other council resource.

The process will lack regional council perspective, knowledge and expertise

Signals that Northland councils are not unified or aligned on reforms (contrary to previous public statements)

The perception that council does not have an interest in improving local government system in Northland

Staff recommend Option 1.

Considerations

1. Alignment to council strategic direction - community outcomes

The matters covered in this report relate to the following community outcomes:

1. ☐ Protected and flourishing native life	☐ Healthy waters, land and air
☐ Safe and resilient transport networks	☐ A sustainable, innovative and equitable economy
☐ Meaningful partnerships with tāngata whenua	☐ Carbon neutral, resilient communities in a changing climate
☒ Efficient, progressive and transparent council systems

2. Climate Impact

The decision to participate in and resource the local government reform programme will not have material impacts on council’s ability to respond to climate change issues. However, reorganisation of local government arrangements in Northland may improve efficiency and effectiveness of local government generally and therefore result in improved ability to respond to climate change risks.

3. Environmental Impact

The decision to participate in and resource the local government reform programme will not have material impacts on council’s ability to respond to environmental issues in the region. However, reorganisation of local government arrangements in Northland may improve efficiency and effectiveness of local government generally and therefore result in improved ability to respond to environmental issues.

4. Community views

Community views on local government arrangements and the need for change vary widely, however it is likely that there is support for reform in Northland communities given common concerns / issues – these include the cost of rates, the quality and timeliness of services delivered, uncertainty over roles and functions, and the ability to have a say on key decisions.

Community views on the optimal form and functions of local government in Northland will be sought and considered in the development of the Regional Reorganisation Plan. Council participation in the local government reform programme is likely to be supported – and conversely there is likely to be some community concern if council decided not to participate given the wide interest in the effective and efficient delivery of regional council functions.

5. Māori impact statement

Māori views on local government arrangements and the need for change are likely to vary, however it is likely that there is significant support for reform by Māori given common concerns / issues – these can be similar to those held by communities generally as outlined above, but honouring Te Tiriti, appropriate provision for engagement and representation and in particular, the role for Māori in any new local government system are particularly significant.

Māori views on the optimal form and functions of local government in Northland will be sought and considered in the development of the Regional Reorganisation Plan. Council participation in the local government reform programme is therefore likely to be generally supported by Māori – and conversely there is likely to be some concern if council decided not to participate given the knowledge and expertise council has access to and the experience and relationships that council has developed with Māori.

6. Financial implications

There are financial implications of the decision for council to participate in the local government reform programme. The intention is that programme costs are shared equally across all participating councils (both in terms of funding and staff /councillor time). Estimated budget for each council include $31,250 for the remainder of this financial year (for NRC, this is proposed to be funded from salary savings) and an undertaking to allocate a further provisional budget of $250,000 in the 2026/27 financial year (subject to Annual Plan decisions, and for NRC this is proposed to be funded from refinements within general funding of the Annual Plan budget which will be subject to future council approval). These are placeholder budgets and, should councils decide to proceed, a more detailed programme budget will be prepared in the next phase of the programme.

Longer-term programme costs and resourcing are difficult to forecast at this stage. Some further programme costs to enable the programme to gain Government decision on the final form of local government arrangements will be subject to LTP decisions. Beyond that, transition and implementation costs depend on the final form of local government arrangements once approved by Government. The costs (and benefits) of shifting to different forms of local government will be estimated as options are assessed and a Regional Reorganisation Plan is developed.

7. Implementation issues

Potential implementation issues associated with the programme include navigating a bespoke process for the region alongside the government-led approach, which is still under consideration with decisions expected in coming months. There is also the complexity and capacity demands on councils due to resource management reform occurring over a similar timeframe. The timeframe for developing and having the Regional Reorganisation Plan approved by government before the 2028 local government elections is likely to be extremely challenging. These issues can be mitigated by staging the programme based on key decision points, ensuring adequate resource is available and keeping governance and senior management ‘line of sight’ of both the resource management and local government reform programmes. Maintaining strong relations with key ministers and officials, and the establishment of an External Advisory Group with relevant expertise and knowledge will also help manage risks and ensure a robust outcome.

8. Significance and engagement

In relation to section 79 of the Local Government Act 2002, the decision to participate and contribute to the local government reform programme is considered of low significance when assessed against council’s significance and engagement policy. This is because council participating in the programme does not in itself have material implications for Northland communities – further, any proposals for regional reorganisation in Northland will be subject to engagement and consultation prior to finalising recommendations to the Minister / Local Government Commission. This does not mean that this matter is not of significance to tāngata whenua and/or individual communities, but that council is able to make decisions relating to this matter without undertaking further consultation or engagement.

9. Policy, risk management and legislative compliance

There is some risk that future change in legislation or policy direction may require alteration to the programme and / or its structure or process requirements. However, there are current reorganisation provisions in the Local Government Act 2002 that are likely to be a sound basis for progressing the reform programme. Staging the programme will enable readjustment to meet any new legislative requirements / policy if needed. The programme will also benefit from independent advice by the External Advisory Group and a representative from the Department of Internal Affairs on the Local Government Reform Steering Group to ensure a quality product. A more detailed table of risks is set out in the report, and if established the programme will establish robust risk management disciplines.

Background/Tuhinga

In November 2025 the government released a discussion document setting out draft proposals for reform of local government. The primary objective (as per the Regulatory Impact Statement) is to initiate a locally led process to simplify and streamline local government structures and service delivery, in a way that supports the implementation of resource management reforms.

The draft proposal was to remove regional councillors and establish a Combined Territories Board (CTB) of Mayors. There would potentially also be a role for a Crown Commissioner on the CTB. The CTB would, among other things, need to develop a Regional Reorganisation Plan (RRP) with a recommended delivery model for council services across the region within two years of being established.

Following discussion at Northland Forward Together (December 2025), the Chief Executives Forum and the Mayoral Forum, and engagement with the Minister for Local Government, on 5 February 2026 Northland councils publicly confirmed a shared position that local government reform should be progressed through a “By Northland, For Northland” approach.

The matter was further considered at the Mayoral Forum on 27 February 2026 where the establishment of a local government reform programme, including a recommended governance and programme structure, indicative project timeline and budget was endorsed for consideration by each council.

Why this is important and what NRC wants to achieve

It is critical that NRC bring a clear perspective on why this is important and what we want to achieve from local government reform. If the programme moves forward, then this will need to be developed at a programme level across councils.

A key framing of the proposed approach is that it is ‘By Northland, For Northland’ and proactively advancing the future of regional governance in Northland.

Further to this, the opportunity to provide better outcomes for Northland is the fundamental driver. Local government reform provides an opportunity to review existing local government arrangements with the aim of delivering better outcomes for Northland. Proposed objectives, which can be refined over time, include to:

· provide material benefit to services and outcomes delivered - including greater affordability, effectiveness and operational efficiency;

· improve local representation - fair and effective representation of communities of interest across all of Northland;

· ensure roles and delivery are at the right scale for efficient and effective system performance and outcomes;

· enable effective and visible regional leadership and governance for Northland; and

· provide financially sustainable delivery of quality services into the future.

Recommended staged programme for Northland Local Government Reform

It is recommended that the programme be staged based on key decision points to ensure that checks and balances are in place before progressing to next steps. Key decisions would be referred back to each council for consideration before progressing (e.g. approval to consult on a draft RRP and recommendations to the Local Government Commission / Minister). Timeframes are indicative, and subject to detailed programme planning in Stage 3.

Proposed stages and indicative timeframes are summarised below:

· Stage 1 (completed) - Early engagement, regional alignment, and council submissions on the draft reform proposals, including confirmation of a shared position that reform should be progressed through a “By Northland, For Northland” approach [December 2025 – February 2026).

· Stage 2 (in progress) - Establishing the governance and advisory arrangements, programme structure, indicative timeline and provisional budget [February – April 2026).

· Stage 3 – Implement and resource the programme structure, detailed project planning and resourcing, including approaches to iwi, hapū and community participation [April – June 2026].

· Stage 4 - Assessment of current state and options for future delivery models, including stocktake of services, functions and structures and options analysis [June – December 2026].

· Stage 5 - Preferred option and draft Regional Reorganisation Plan and supporting evidence (including representation review and assessment against legislative requirements) [December 2026 to February 2027].

· Stage 6 – Engagement and public consultation on draft RRP and representation review [February to May 2027].

· Stage 7 – Consider feedback and finalise and submit Northland’s recommended RRP (including supporting evidence) to Minister / Local Government Commission [June to September 2027].

· Stage 8 – Local Government Commission / Ministerial decision and (subject to approval) establish transition body [October 2027 – February 2028].

· Stage 9 - Establish governance and administrative arrangements to ensure a functioning local government entity/entities capable of meeting statutory, governance, and operational requirements is in place ahead of the election [February to October 2028].

· Stage 10 - Local Body Elections in Northland [September to Saturday 14 October 2028].

· Stage 11 – Full execution of the Transition Plan and Implementation Scheme [November 2028 onwards].

Recommended Governance structure and draft terms of reference

At the meeting of 27 February 2026, the Mayoral Forum considered and endorsed for consideration by each council the programme structure outlined below, and Draft Terms of Reference for the Local Government Reform Steering Group and Local Government Reform External Advisory Group.

The recommended programme governance and operational structure are set out below.

Local Government Reform Steering Group

It is recommended that the programme be overseen by a Local Government Reform Steering Group made up of the Mayors and NRC Chair plus two elected members from each council, and one representative from the Department of Internal Affairs (a total of 13 members).

The core role of this group is to provide collaborative, strategic oversight and regional leadership. It is not proposed that this group has delegated decision-making powers but would make recommendations as required to participating councils on Regional Reorganisation Plans and next steps. It is proposed that the Mayor of Whangārei act as Chair of the Local Government Reform Steering Group. Draft Terms of Reference for the Local Government Reform Steering Group are set out in Attachment 1.

It is recommended that the Steering Group Terms of Reference now be approved.

At a council workshop on 11 March, it was proposed that Councillors Craw and Crawford be nominated to join the Chair and represent NRC on the Local Government Reform Steering Group.

Local Government Reform External Advisory Group

It is recommended that the programme be supported by an External Advisory Group (EAG) that would provide independent advice for the programme and support the Local Government Reform Steering Group to develop a robust proposal and evidence base for local government reorganization that meets central government and Northland’s objectives and quality standards.

It is proposed that four members be appointed through a transparent, merit-based process that ensures the right balance of independence, skills and expertise, and that the Mayor of Whangārei District Council be appointed as an observer to the group. It is not proposed that the EAG have delegated decision-making powers. Draft Terms of Reference for the External Advisory Group are set out in Attachment 2.

It is recommended that the EAG Terms of Reference now be approved.

Programme support

It is recommended that the programme be supported by a dedicated programme manager and cross-council project team, reporting to the Chief Executive’s Forum. The Chief Executive’s Forum will provide operational oversight, resourcing, and the link between governance and operations, and report to the Local Government Reform Steering Group. The programme manager would be appointed by the Chief Executive’s Forum and would provide project management and reporting functions. The cross-council project team would be made up of staff from each council (membership to be confirmed) and would implement the project plan and provide technical data and analysis. The appropriate balance between internal and external capacity to resource the programme will be determined during stage 3 (detailed programme planning).

Budget

A placeholder programme cost and resourcing has been estimated for the remainder of this financial year at a total of $125,000 ($31,250 from each council). For NRC, this contribution is proposed to be funded from salary savings. This will support set up of the EAG, and initial programme planning and analysis.

A placeholder budget of $1,000,000 has been provided for the 2026/27 Annual Plan ($250,000 from each council and for NRC this is proposed to be funded from refinements within general funding of the Annual Plan budget which will be subject to future council approval). These are placeholder budgets and should council decide to proceed a more detailed programme budget will be prepared during Stage 3.

Any further programme costs to enable the programme to gain Government decision on the final form of local government arrangements will be subject to LTP decisions. Beyond that, transition and implementation costs depend on the final form of local government arrangements once approved by Government. The costs (and benefits) of shifting to different forms of local government will be estimated as the options are assessed and the RRP is developed.

Risk management

A programme of this significance on the proposed timeframes is a significant undertaking for Northland Councils and presents a number of risks - as well as opportunities. The programme will establish robust risk management processes. An initial assessment of risks is presented below.

Risk Description	Likelihood	Impact	Potential Mitigation/Control
Central government decisions on LG reform (e.g. local government functions, and CTB establishment) could impact the programme	High	High	- Regular engagement with key officials and Ministers - Initial stages of project are preparatory and advisory (no regrets) - Agile programme approach enables adaptation if necessary as national settings become clear.
Delays establishing governance or work programme impact on timeline	High	High	- Early testing and approval, clear milestones, regular reporting,
Inconsistent council engagement or commitment	High	High	- Agreed roles, responsibilities, and protocols endorsed by CE Forum, recognising capacity constraints
Inadequate engagement of iwi and hapū	High	High	- Stage 3 prioritises gaining agreement on approach to engagement
Misalignment with new Resource Management (RM) system implementation (e.g. functions, resourcing)	Medium	High	- Aligned reporting through CE Forum - Identify and manage interdependencies
Process does not meet legislative requirements and is not approved	Medium	High	- Align with legislative requirements - Ensure process is sufficient
Rushed process does not bring community along	High	High	- Early engagement plan - Thorough consultation that meets legislative requirements - Adequate resourcing of comms and engagement
Capacity constraints across councils (including RM Reform and the implementation of LWDW) impact delivery	High	High	- Early decision to set up project run with sufficient external capacity. - CE oversight of work programmes to manage dependencies and risks
Programme delays mean that new governance is not in place ahead of the 2028 elections	High	High	- Resource the project from the start - Immediate request to central government for funding support - Work closely with central government so approval process is resourced and not delayed. - Procure external and professional services as soon as possible. - Regular governance meetings and report backs to councils. - Consider case to advocate for a four-year term.
Procedural / legal challenge risk increased due to pace of work	Medium	High	- Early legal assurance and disciplined records management. - Ensure statutory processes are followed precisely. - Avoid substantive commitments ahead of triggers. - Embed quality assurance at each decision gate.

Attachments/Ngā tapirihanga

Attachment 1: Draft Terms of Reference - Steering Group ⇩

Attachment 2: Draft Terms of Reference - External Advisory Group ⇩

Council Meeting ITEM: 7.4

25 March 2026Attachment 2