Agenda of Council Meeting - 30 November 2017

File Ref: 17/991

REPORT TO: Council

MEETING DATE: Thursday 30 November 2017

FROM: Cemetery Manager

Isak Bester

SUBJECT: Mangaroa Cemetery Eco Burials

1.0 SUMMARY

1.1 The purpose of this report is to update Council on the establishment of the Eco-burial site at Mangaroa Cemetery and proposed pricing structure for Cemeteries & Crematorium.

1.2 This request arises from the fact that the Eco-burial site is now ready to be used and a price for selling plots in this area needs to be set.

1.3 Pursuant to Section 150 of the Local Government Act (2002), Council may set fees and charges and these must not provide for Council to recover more than the reasonable costs incurred by the Council for the matter for which the fee is charged.

1.5 The objective of this decision relevant to the purpose of Local Government is to provide local and public services, especially for an ageing population, that provides them with a greener, eco-friendly option when deciding on a burial for a loved one or for themselves.

1.6 This report concludes by recommending that the report on the pricing structure of the Mangaroa Cemetery Eco-burial area be accepted and also that the fees and charges in relation to eco burials and other cemetery and crematorium charges be accepted.

2.0 BACKGROUND

2.1 Between 2012 and 2015 several letters from the Citizen Action group were sent to Council enquiring about the increasing need and provision for Natural Burials (Eco-burials).

2.2 A survey conducted in 2013 by Local Government New Zealand of local authorities revealed a growing interest and support in Natural Burials. As a result, a number of local authorities have either established or are planning Natural Burial areas.

2.3 In a 2015 Review by the New Zealand Law Commission on Death, Burial and Cremation states “there are examples throughout New Zealand of local authorities responding pro-actively to requests from different groups for accommodating beliefs and practices relating natural burials”.

2.4 In August 2015 Council responded to the Citizen Action Group advising that Council will be offering residents of the district the option of a Natural Burial site at the Mangaroa Cemetery. Officers were currently working on developing policies and procedures in relation to the new service.

2.5 As part of the new development the previous Cemeteries Manager set aside and fenced a portion of land at Mangaroa Cemetery to be used as a Natural Burial/Eco-burial area.

2.6 A memorial wall has been installed, which allows plot purchasers to memorialize their loved one on the wall as no form of memorial is allowed on the plots.

2.7 A Global Positioning System (GPS) will be used to locate plots in the Eco-burial area. The Global Positioning System (GPS) is a network of about 30 satellites orbiting the Earth at an altitude of 20,000 km. Once it has information on how far away at least three satellites are, your GPS receiver can pinpoint a given location using a process called trilateration.

2.8 Officers are currently investigating the suitability of extending Mangaroa Cemetery and will be reporting back to Council on 14 December 2017.

3.0 CURRENT SITUATION

3.1 The Mangaroa Cemetery eco burial site is in the final stages of preparation for opening.

3.2 Final preparations include development of a Communication Strategy, a Blessing of the site and an Opening.

4.0 PROPOSED PRICING STRUCTURE

4.1 In accordance with section 9(e) of the Burial & Cremation Act (1964) which confers powers on local authorities relating to provisions for placement of memorials, tablets and plaques, it is intended that no grave markers will be permitted for the deceased (except for the GPS marker) in the eco burial area. A monument is erected outside the eco burial area to which a memorial plaque of specified size and type may be attached.

4.2 A pricing structure is proposed in 4.5. This includes the plot price, interment and maintenance fee, the GPS positioning and a space for a plaque on the memorial wall.

4.3 This proposed pricing structure below is in line with Council’s current Cemetery fee and charges which are set out in 4.7.

4.4 The pricing structure will be publicly notified and a final report will be brought back to Council early next year, as required.

4.5 Proposed eco burial pricing structure

CEMETERY/ AREA	PLOT PRICE	INTERMENT FEE	MAINTENANCE FEE	TOTAL COST*
ECO BURIAL SECTION	$1200	$650	$400	$2250

* All fees and charges are inclusive of GST

4.6 The pricing structure above is based on existing plot prices for Mangaroa Cemetery with an additional $150 per plot to cover the cost for a space for placement of the granite plaque on the memorial wall. Plaques will be available through approved monument masons.

4.7 Current cemetery new burial plot fees and charges

CEMETERIES / AREA	PLOT PRICE	INTERMENT FEE	MAINTENANCE FEE	TOTAL COST*
MANGAROA A & D SECTIONS	$900	$650	$400	$1950
MANGAROA B & C SECTIONS	$1050	$650	$400	$2100
HASTINGS CEMETERY	$1550	$650	$400	$2600
HAVELOCK NORTH CEMETERY	$1850	$650	$400	$2900
PUKETAPU CEMETERY	$900	$650	$400	$1950

*All fees and charges are inclusive of GST

4.8 A list of all fees and charges relating to Cemeteries and Crematorium operations is attached and for completeness and context, it is proposed to publicly notify all Cemeteries and Crematorium fees and charges at the same time.

5.0 SIGNIFICANCE AND ENGAGEMENT

5.1 There are no recommendations presented in the report that are significant in terms of Council’s Significance and Engagement Policy.

6.0 RECOMMENDATIONS AND REASONS

A) That the report of the Cemetery Manager titled “Mangaroa Cemetery Eco Burials” dated 30/11/2017 be received.

B) That Council approves the establishment of the eco burial area at Mangaroa Cemetery.

C) That pursuant to section 9 of the Burial and Cremation Act 1964 Council approves the Natural (Eco) Burial Policy and Condition (2017) for the burial in the eco burial area at Mangaroa Cemetery.

D) That pursuant to section 150 of the Local Government Act 2002 the Council approves the proposed pricing structure for the eco burial area at Mangaroa Cemetery for public notification.

E) That pursuant to section 150 of the Local Government Act 2002 Council sets the Fees and Charges for all Cemeteries and Crematorium for public notification as set out in the schedule (Appendix A) CFM-04-04-17-88.

With the reasons for this decision being that the objective of the decision will contribute to meeting the current and future needs of communities for local public services by:

· Providing a cost effective, eco-friendly interment option to the community for laying to rest a loved one.

Attachments:

1	Photo of Eco-burial area - 13 November 2017	CFM-04-04-17-86
2	Photo of Memorial Wall - 13 November 2017	CFM-04-04-17-87
3	Cemeteries & Crematorium schedule of fees and charges	CFM-04-04-17-88
4	Natural (Eco) Burial Policy and Conditions (2017)	CFM-04-04-17-89

File Ref: 17/849

REPORT TO: Council

MEETING DATE: Thursday 30 November 2017

FROM: Principal Advisor: District Development

Mark Clews

SUBJECT: Medium Density Housing Strategy

1.0 SUMMARY

1.1 The purpose of this report is to obtain a decision from the Council on adoption of the Medium Density Housing Strategy.

1.2 This proposal arises from the Heretaunga Plains Urban Development Strategy 2010 (HPUDS 2010) to promote a shift from greenfields residential development to intensification within existing urban areas.

1.3 The subject matter of the report is directly related to the bolded Council objectives in the Table 1 below and indirectly related to the others listed.

Table 1 Council Objectives

Good Quality Local Infrastructure

· Diversity in Housing Choice.

· Residential Development Opportunities.

· Accessible Range of Transport options.

· Walking and Cycling Facilities.

· Sustainable Use of Land and Water resources.

Good Quality Local Services

· Putting People at the Centre of Planning and Service.

Good Quality Regulatory Functions

· A More Compact Urban Form.

· Responsive Council services

1.4 The Council is required to give effect to the purpose of local government as prescribed by Section 10 of the Local Government Act 2002. That purpose is to meet the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost–effective for households and businesses. Good quality means infrastructure, services and performance that are efficient and effective and appropriate to present and anticipated future circumstances. The objective of this decision relevant to the purpose of Local Government is to provide the regulatory environment, services and infrastructure necessary to encourage redevelopment of existing housing in identified areas for good quality intensification that is appropriate to the changing demographics and housing needs of the community.

1.5 This report concludes by recommending that the Medium Density Housing Strategy be adopted and implementation programme endorsed.

2.0 BACKGROUND

2.1 In August 2010 the Hastings District Council, Napier District Council, and Hawke’s Bay Regional Council jointly adopted HPUDS2010 to guide integrated urban development of the Heretaunga Plains for the years 2015 to 2045. The strategy has recently undergone the first of its scheduled five yearly reviews. It maintains substantially the same direction as the original strategy with some amendments to improve flexibility and responsiveness to changing circumstances.

2.2 A key thrust of HPUDS is a more compact growth pattern through the achievement of residential density targets requiring intensification of the existing Hastings urban area. Recognising that this scenario represented a significant shift from traditional development patterns, the final strategy adopted provided a transition from greenfields development to redevelopment within existing boundaries over time.

2.3 The need to ensure appropriate residential amenity is provided requires a change in development methods from single site infill towards a more comprehensive design approach to intensification. In recognition of this Council determined, through the Hastings Urban Design Framework 2010 (UDF), that medium density housing development should be encouraged within identified areas of Hastings District where the facilities and amenities existed to support and attract investment in medium density development.

2.4 Following on from HPUDS and the UDF Council undertook Stage 1 of a Medium Density Strategy to “ground truth” or validate the capacity, physically and commercially, of the existing urban areas to accommodate the intensification targets envisaged in HPUDS.

2.5 Stage 1 found that the intensification targets set out by HPUDS could be met via a mixture of infill and comprehensive site redevelopment, but the district plan requirements needed to be altered to better facilitate comprehensive multi-site redevelopment of older housing stock. It also noted that the market for medium density housing is currently constrained by differential land values that favours fringe or greenfields locations and intervention in the residential housing market may be required to improve the relative value of developing and living in existing urban locations.

2.6 The Stage 1 report and findings were reported to Council in 2012 and Council resolved to move to Stage 2, the development of a strategy to enable the intensification targets to be met over time.

3.0 CURRENT SITUATION

Strategy Timing

3.1 Stage 2 of the Strategy was completed at the end of 2013. Attached as Appendix 1 is a summary report of the extensive detailed studies undertaken, and fully detailed in the full report STR-16-06-16-14-128 (totalling 272 pages) and 4 appendices. These collectively lead to a suite of recommended actions for Council that essentially form the strategy and these have been compiled into an implementation programme attached as Appendix 2 for easy reference.

3.2 Officers delayed presenting the strategy to Council back in 2014 as the Government had signalled that it was intending to introduce significant changes to the Resource Management Act concerning housing affordability and land supply for housing. These could potentially have had a significant effect on HPUDS, and the strategy. A number of attempts by the Government over the next few years to provide policy direction on urban land issues failed due to a lack of support from other parties. During that time Council was itself grappling with issues surrounding the planning and delivery of greenfields land which consumed much of Council’s attention and focus on housing issues.

3.3 In the meantime a number of recommendations have been progressed, mainly through the Proposed District Plan and the 2015 Long Term Plan in terms of forward infrastructure funding provision, as well as changes to the development contributions policy through the 2016/2017 Annual Plan. Nevertheless officers consider that is would be desirable for the Council to consider and adopt the strategy summary in its complete 2013 form so that it retains its integrated format and intrinsic coherence, which might easily be lost in attempts to rewrite it as new version.

3.4 The Strategy has been updated to the current date by using the recommended implementation plan (Appendix 2) to signal those actions that have been completed and those which are now scheduled in the forthcoming and subsequent Long Term Plans. The Proposed District Plan incorporates many of the strategy findings as these were ready when the proposed Plan was being prepared and it refers to the Medium Density Strategy as one of the Methods to achieve the plan objectives. It would be desirable therefore for Council to adopt the version which was relied upon for the District Plan Review.

Strategy Aims

3.5 The aim of the strategy is to create the conditions that maximise the benefits and delivery of more compact housing development, while addressing the risks and in particular any negative perceptions of higher density living environments. A significant objective is to promote medium density housing within the housing market on both the demand and the supply side.

3.6 The purpose of the strategy is therefore to articulate a comprehensive and coherent strategy for the intensification (through medium density housing development) of a number of the “host neighbourhoods” identified through the Hastings Urban Issues and Urban Design Framework (UDF), namely parts of:

· Heretaunga Street East;

· Raureka;

· Havelock North;

· Parkvale; and

· Mahora.

Approach

3.7 The strategy takes a comprehensive approach focussed around eight individual yet integrated work streams, as demonstrated in Figure 1 below:

Figure 1 Integrated Workstreams

3.8 This recognises that shifting development patterns requires change across a number of fronts to maximise the ability to achieve the desired outcomes envisaged by HPUDS. Each of these workstreams is discussed briefly in tern below.

Changing Perceptions and Capability

3.9 International research concluded that negative perceptions of medium density related to larger scale, poor quality or monotonous design, loss of existing amenities/buildings, poorly located to services and transport choices, or it changed the social character of an area (especially where it involved significant amounts of non-residential activities (i.e. mixed use).

3.10 The UDF and the strategy attempt to deal with all of these through good location and design, through the district plan, design guidance and education, and supported by appropriate investments in targeted amenity and infrastructure investment).

3.11 What is considered to be an appropriate density of medium density housing in inner city Auckland or Wellington is unlikely to be transferable to Hastings or other similar New Zealand cities, so a local definition of what is meant by medium density is also required.

3.12 Through consultation with relevant Council staff, architects, builders and developers, medium density housing in the Hastings District residential context is considered to be:

Housing at densities of more than 250m2 and less than 350m2 gross area of land per unit.

3.13 These densities can be achieved in detached and semi-detached single and two storey formats and is adequate to achieve the HPUDS density targets and be more likely to be acceptable to the Hastings housing market and receiving environments. Higher densities of around 150m2 in terraced housing or apartment formats may still be appropriate in or near CBDs and other locations with special amenity value.

3.14 The strategy recommends that a more descriptive and positive term should be used in promoting the emergence of newer higher density housing products. For the Proposed District Plan, the term “Comprehensive Residential Development” has already been adopted to reflect the good design aspect.

3.15 On the other side of the market, barriers to the development community to supplying medium density housing include, lack of understanding/knowledge, relative competitiveness of easier greenfields development, planning/consenting issues/timeframes, infrastructure limitations, development costs and financing restrictions/limits.

3.16 In addition to approaches that centre on design, development contributions and competitiveness of greenfields development, the strategy also promotes approaches intended to address less tangible supply barriers as follows (italics denote where the recommended approach requires investigation before being adopted):

1. Engagement with real estate agents

2. Education to deal with misconceptions and demonstrate good practice.

3. Prepare a business case for a demonstration model^{^[1]}.

4. Review resource consent requirements* and processing systems to reduce delays and risk

(*Proposed District Plan is addressing this aspect)

5. Promote design guidance

6. Consider fast track consent processes on a pre-qualification basis.

7. Explore other ways of reducing the risk increasing consenting

8. Early input from senior/specifically trained planners

9. Investigate development finance options

10. Possible role of Council as a landowner and acquirer

3.17 It is considered that recommendations 3, 9 and 10 could be completed over the next three year LTP period and if appropriate funding could be provided to undertake projects in the following LTP. This will allow time to see whether the other earlier initiatives have sufficiently stimulated the market so that these more direct measures are not needed.

Promoting Quality Design and Amenity

3.18 Ensuring medium density housing development demonstrably achieves and reflects appropriate urban amenity values (within the Hastings context) should go some way (in addition to education etc.) towards ensuring the acceptance of medium density housing as a viable housing option.

3.19 The strategy guidelines and host neighbourhood assessments undertaken provide comprehensive guidance for developers and their designers to ensure good quality design outcomes using a wide variety of examples on real sites and establishing, at least on paper, commercial viability using standard feasibility analysis.

3.20 This therefore provides the basis for a comprehensive “how to” process for developers and designers and it is proposed that this chapter be developed further into a stand-alone design guideline for use by developers and builders.

Responsive and Effective Regulation

3.21 To date the amenity outcomes achieved by intensification under the current rules have tended to be poor quality with the majority being in the form of infill housing development and the strategy concluded that it needed to be changed to enable quality design led redevelopment.

3.22 The design guidelines referred to above were developed sufficiently in time for them to be used in the formulation of the Proposed District Plan, which also picked-up the recommendations of the UDF relating to the preferred residential intensification areas (or “Host Neighbourhoods”).

Building Local Amenity and Open Space

3.23 The provision of good quality and quantity public open space is necessary to ensure the achievement of appropriate levels of amenity. Analysis has identified that 94% of households within the proposed intensification areas are located within 500m of an existing area of public open space and 78% within 500m of an existing public playground. There is therefore no requirement to acquire any additional areas of public open space as a result of the increase in number of households in the intensification areas.

3.24 A new reserve is however required on the southern side of Heretaunga Street to address an existing level of service deficit and should be prioritised accordingly when the opportunity arises. There is also a requirement to improve the level of service with regard to playground facilities on the existing areas of public open space within the 500m buffer areas. recoverable from development contributions spread over a number of years as medium density development takes place.

3.25 Streets are also valuable public open space that can assist in mitigating effects of intensification and Council’s Draft ‘Green Streets’ Strategy should therefore give priority consideration to the intensification areas and alignment with road network and underground infrastructure upgrades and this is recommended in the strategy.

Medium Density Ready Services

3.26 In general, the assessments have shown that the proposed medium density housing sites are positioned in very sustainable locations and in addition to sewer and water services, are served well by all transport modes. A number of deficiencies have however been identified which should be addressed prior to completion of the developments to ensure accessibility and connectivity is maximised, particularly in the Mahora and Heretaunga Street East areas.

3.27 A programme of suitable transportation works across all modes is identified that can be addressed through the adoption programmes that will be required regardless of the proposed intensification, but with a fair share of the any anticipated extra costs being recovered from the medium density developments through development contributions.

3.28 Only one sewer pipe upgrade in Havelock North is required as a result of the medium density development when the existing service is renewed. No upgrades to the existing water infrastructure network are required as a result of medium density development.

3.29 Stormwater is more problematical as might be expected with increasing density. Concentrating development has a direct effect on some local stormwater networks, Some stormwater renewals and upgrades may need to occur earlier than otherwise planned, with a direct effect on pipe size in many cases however, new infrastructure will be needed to support medium density in some cases, particularly in the Heretaunga Street East and Havelock North intensification areas, where there are no existing levels of service deficiency. The extra stormwater cost to meet the demands of intensification of around $700,000 is allocated for stormwater renewals and new works to support medium density housing development in the draft LTP.

3.30 Table 2 below summarises the Draft LTP and 30 Year Infrastructure Plan allowances across all services:

Table 2 Draft LTP Infrastructure Allowances for Medium Density Development

Cost Competitive Development

3.31 Council’s generally have little control over direct costs of new housing. What influence they do have is limited to land price (through zoning management), and its own charges for infrastructure through development contributions.

3.32 In line with the draft strategy recommendations Council undertook a review of the development contributions policy and a change establishing separate greenfield, infill and medium density intensification area catchments was ultimately adopted through the 2016/2017 Annual Plan. This resulted in a contributions differential between infill/intensification areas and greenfields development, of approximately $9-11,000, which was in line with the strategy findings and expectations.

Managing Greenfield Land Supply

3.33 Council currently influences greenfields land supply through structure plan requirements and deferred zoning. Deferments are uplifted when infrastructure is in place, which are intended to be installed based on the rate of uptake within the new growth areas, i.e. largely driven by market demand for greenfields development to ensure continuity of supply.

3.34 HPUDS however, seeks to affect a change to housing supply and housing preferences in order to minimise the loss of productive land, which will be slow to occur if the greenfields land supply is simply set to satisfy current market preferences. Accordingly the strategy recommends a review of the approach to greenfields land management be undertaken to introduce more tension in the supply of land to increase the competitiveness of urban intensification.

3.35 While the Council should remain cautious about releasing more greenfields land than is dictated by overall housing demand (as opposed to other shorter term market drivers) officers consider that active measures to constrain the rate of release of greenfields land may be premature and should be delayed pending the need being established through monitoring over the next 5-10 years. Recent greenfields growth rates are within the HPUDS expectations and more positive measures to encourage intensification should be used in the first instance.

Socially Integrated Development

3.36 Medium density housing needs to be supported by the right types of services and facilities such as shops, public transport, parks, schools, and community facilities, taking into account the likely socio-economic makeup of residents.

3.37 Analysis of the current levels of service of the host neighbourhoods identified are reasonably well serviced by commercial and social facilities, but at the fringes of both the Mahora and Parkvale intensification areas are less well served for commercial facilities. Consideration should be given to improving the situation if and when demand can sustain further provision.

3.38 It is also important that medium density developments can be assimilated within host communities. The research suggests that the host neighbourhoods are likely to be able to assimilate medium density housing without any significant impact on their socio-demographic profiles and that medium density housing may also have a potential role in addressing the housing affordability issue within Hastings through lower land costs per dwelling and smaller dwellings.

3.39 Where medium density housing is seen as a housing preference for current home owners, older (and potentially more affordable and appropriate) housing can also be released into the housing market to meet broader family needs. There will however, continue to be a need for social housing providers to invest in new housing stock and there may be concerns that excessive clustering of medium density public/social housing can adversely affect a neighbourhood, particularly from a social well-being perspective, although current social housing models suggest this is not a significant risk at this time.

3.40 Taking the above into account, the strategy recommends that the Council develop an affordable housing strategy that determines whether a greater level of Council intervention (e.g. affordable housing policy) is required in the housing market to ensure housing affordability.

Implementation Plan

3.41 As noted the development contributions single catchment policy and District Plan Review are significant actions already completed. The research and consultation for this strategy also strongly suggests that up skilling staff and streamlining consenting processes and the preparation of design guidance to build on the work done in preparing this strategy and with the District Plan Changes, should occur sooner rather than later.

3.42 In this respect an indicative implementation plan is described in the table attached that roughly sorts the recommendations that have been progressed and those that can be progressed within the next (2018) LTP period. Those that depend upon uptake, monitoring, further investigation or other future circumstances as to when, if and how they are implemented are indicated for inclusion in subsequent LTPs (2021+).

4.0 OPTIONS

4.1 The options available to Council are:

1. To adopt the Strategy and Implementation pattern as presented.

2. To adopt the Strategy as presented with any additions or deletions as the Council see fit.

3. Not to adopt the Strategy.

5.0 SIGNIFICANCE AND CONSULTATION

5.1 The Strategy does not trigger Council’s policy on significance requiring the special consultative process. The subject matter of the strategy has been subject to extensive prior consultation through HPUDS the Regional Policy Statement and successive Long Term Plans and the Proposed Plan.

5.2 Consultation with members of the development community on perceptions and barriers was undertaken during strategy preparation, but not on the draft document itself. Further consultation has already occurred for some recommendations e.g. District Plan Review, review of development contributions policy, while funding allocations for parks and services upgrades, greenfields development and possible Council roles as financier/developer investments will need to be consulted on through successive LTP’s or special consultative procedures as appropriate. This is considered sufficient and no additional consultation is considered necessary.

6.0 ASSESSMENT OF OPTIONS (Including Financial Implications)

6.1 Council Objectives adopted during the 2015-2025 Long Term Plan included sustainable use of land and water, providing diversity in housing choice and planning for a more compact urban environment. The medium density strategy is an essential component in helping to deliver on these outcomes and is consistent with the Council’s strategic direction, HPUDS and Urban Design Framework.

6.2 The strategy will ensure regulatory planning, infrastructure investments and other Council services are integrated and supports growth in comprehensive residential development in a way that is efficient and cost effective appropriate in particular for the changing demographic profile of the community into the future.

6.3 Option 2 may still be consistent but, depending upon the nature of the changes Council would wish to make could signal some weakening (or strengthening) of Council’s resolve around containing urban sprawl and promoting a more sustainable urban form.

6.4 Option 3 would significantly challenge Councils commitment to its strategic direction and potentially require a significant review of HPUDS only a few years after its adoption and even more recent five yearly review. This could have significant consequences for the veracity Proposed District Plan and the relationship Council has with the other partner Councils.

7.0 PREFERRED OPTION/S AND REASONS

7.1 The preferred option is Option 1 adoption of the strategy. The strategy will to help stimulate housing development that is less land intensive and energy efficient. It will promote diversity in housing choice appropriate to the changing demographic profile of the community, reduce pressure for further loss of versatile land from production through urban sprawl, with it is attendant demand for extension of infrastructure and services.

1.0 RECOMMENDATIONS AND REASONS

A) That the report of the Principal Advisor: District Development titled “Medium Density Housing Strategy” dated 30/11/2017 be received.

B) That the Council adopt the Medium Density Strategy as outlined in the Summary Report attached to the report as Attachment 1 and the Implementation Programme attached as Attachment 2.

C) With the reasons for this decision being that the objective of the decision will contribute to the provision of an effective regulatory environment, efficient council services and good quality infrastructure in an integrated way necessary to encourage redevelopment of existing housing in identified areas for good quality intensification that is appropriate to the changing demographics and housing needs of the community and reducing urban sprawl over versatile land.

Attachments:

1	Urban development strategy - Medium Density - Medium Density Summarised Strategy Final	STR-16-06-16-16-150	Under Separate Cover
2	Residential - Urban development strategy - Medium Density - Medium Density Implementation Programme	STR-16-06-16-15-149	Under Separate Cover

File Ref: 17/916

REPORT TO: Council

MEETING DATE: Thursday 30 November 2017

FROM: Democratic Support Manager

Jackie Evans

SUBJECT: Response to Remuneration Authority Consultation Document - Local Government Review - Part 3 - Arrangements from 2019

1.0 SUMMARY

1.1 The purpose of this report is to seek guidance from the Council on a proposed response to the Remuneration Authority consultation document which outlines proposed changes from 2019. The consultation has been initiated to ensure a robust process that is as transparent as possible, and provides a suitable level of financial reward which matches the personal contribution of local government elected members.

1.2 This issue arises from the receipt of a consultation document on 3 May 2017 setting out proposals for changes in July 2017 and 2019. On 25 May 2017 the Council considered and responded to the 2017 proposals, which have since been advised and implemented..

1.3 The Council is required to give effect to the purpose of local government as prescribed by Section 10 of the Local Government Act 2002. That purpose is to meet the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost–effective for households and businesses. Good quality means infrastructure, services and performance that are efficient and effective and appropriate to present and anticipated future circumstances.

1.4 The objective of this decision relevant to the purpose of Local Government is robust and transparent remuneration arrangements for elected members

1.5 This report concludes by recommending that the response set out in Attachment 1 to this report be approved as this Council’s response to the proposals set out in the Remuneration Authority Consultation paper.

2.0 BACKGROUND

2.1 The Remuneration Authority was required to give a new determination taking effect from 1 July 2017 covering local government elected members’ remuneration.

2.2 The Remuneration Authority has been undertaking a review on how to approach elected members remuneration and concluded that there was an opportunity for short term changes to the system, as well as deeper changes for introduction in 2019

2.3 As a result, on 3 May 2017, a consultation paper was sent to all Councils (Attachment 1 of this report) with a request for feedback on 19 June and 20 October 2017 respectively.

2.4 Part two of the consultation paper dealt with proposals for immediate changes from 1 July 2017 which was responded to by the 20 June 2017 deadline.

2.5 Part three of the consultation paper is concerned with changes to be introduced in 2019 and includes:

· Criteria for ‘sizing’ councils for comparative rates of remuneration

· Remuneration criteria for Mayors/Chairs

· A framework for councillor remuneration and responsibility allowances

· Remuneration for external representation roles and board membership

· Community Board Remuneration

· Relationship of local government remuneration to parliamentary remuneration

2.6 A working group was set up to consider the proposals for 2019. As the proposals potentially impact on all levels of elected representatives, the working group comprised elected members both with and without additional responsibilities and included the Acting Mayor Hazlehurst, Acting Deputy Mayor Nixon, Councillors Barber, Dixon and Heaps.

2.7 The working group met on 20 July 2017, debated the proposals and that draft response is appended to this report (Attachment 1). The proposed response is shown in bold italics.

2.8 The deadline for response to the longer term proposals was 20 October 2017. This deadline was extended to 15 December 2017 to enable Fran Wile, the chair of the authority to address all LGNZ zone meetings about the review. On 2 November 2017, Fran Wilde addressed the zone 3 meeting in Napier and a webinar was held on 13 November 2017. The presentation to the LGNZ zone meetings is also appended (Attachment 2)

3.0 CURRENT SITUATION

3.1 The Remuneration Authority consultation proposals (Attachment 2) set out the following rationale behind the current proposal.

The Authority members have also decided that these legal requirements (including attraction and retention of competent people) should be aimed at attracting a wide variety of competent people and balanced by the need to have a local government remuneration system that is accepted in the wider community. To enable this, we require a robust process that is as transparent as possible, intuitively plausible and sustainable for the foreseeable future.

We recognise that whether or not the level of financial reward matches the personal contribution of any elected member is not necessarily a significant determinant of the willingness of many people to stand for election. However, remuneration may be an issue for some, depending on personal circumstances, and it may also become an issue for an incumbent deciding whether or not to continue.

In considering this proposal, the Authority has decided to maintain a number of existing approaches. The principal ones are:

a) Maintaining a “total remuneration” approach rather than meeting fees.

b) Using a size index to determine relativity between various councils.

c) Adopting a “pay scale” for local government that is fair and seen to be fair.

d) Reviewing the components of the council size index every three years and applying appropriate factors to territorial authorities and regional authorities.

e) Recognising that unitary councils have dual responsibilities and sizing them accordingly.

4.0 OPTIONS AND FINANCIAL IMPLICATIONS

4.1 To consider the draft responses as set out in the report for submission as this Council’s response to the Remuneration Authority consultation paper.

4.2 It should be noted that any increases in elected member remuneration will need to be taken into account in the Council’s Long Term planning process.

5.0 SIGNIFICANCE AND ENGAGEMENT

5.1 This matter does not trigger the Council’s significance and engagement policy

6.0 RECOMMENDATIONS AND REASONS

A) That the report of the Democratic Support Manager titled “Response to Remuneration Authority Consultation Document - Local Government Review - Part 3 - Arrangements from 2019” dated 30/11/2017 be received.

B) To consider and comment on the draft response as set out in the attachment 1 to the report for submission to the Remuneration Authority by 15 December 2017 as this Council’s response to part 3 of the consultation on the Local Government Review.

With the reasons for this decision being that the objective of the decision will contribute to meeting the current and future needs of communities for performance of regulatory functions in a way that is most cost-effective for households and business by ensuring robust and transparent remuneration arrangements for elected members.

Attachments:

1	Draft response to Remuneration Consultation Part 3 atttachment to Council report 20 November 2017	CG-01-04-17-385
2	Remuneration Pay presentation slides	CG-14-1-00508
3	Remuneration Authority Consultation Document - changes to elected members remuneration and allowances 2017 and 2019	CG-01-04-17-369

File Ref: 17/1229

REPORT TO: Council

MEETING DATE: Thursday 30 November 2017

FROM: Principal Advisor: District Development

Mark Clews

SUBJECT: HPUDS 2017 Proposed Resetting of Greenfields Priorities and Sequencing for the Long Term Plan.

1.0 SUMMARY

1.1 The purpose of this report is to obtain a decision from the Council on the indicative sequencing of development for the residential greenfield areas identified in the Reviewed Heretaunga Plains Urban Development Strategy (HPUDS) to 2045. This is necessary to inform the Long Term Plan and Thirty Year Infrastructure Strategy with respect to infrastructure invest nets to support urban growth and development.

1.2 This issue arises from the adoption of a Reviewed HPUDS by the three partner Councils earlier this year and the need to consequently reset development priorities to account for changes arising from the review and other shifts in Council’s strategic focus. This is necessary to provide for some certainty for both landowners and for the Council in terms of its forward planning and asset development programmes. A similar exercise was undertaken flowing the adoption of HPUDS in 2010.

1.4 The objective of this decision relevant to the purpose of Local Government is to perform Council’s regulatory functions and provision of infrastructure in an efficient and cost effective manner for households and businesses through orderly planning and programming of urban development that meets the current and future needs of our communities. The subject matter of the report is also directly related to the Council specific objectives in the table below.

Table 1 Relevant Council Objectives

Local Infrastructure

· Diversity in Housing Choice.

· Residential Development Opportunities.

· Sustainable Use of Land and Water resources.

Local Services

· Putting People at the Centre of Planning and Service.

· More Compact Urban Form

Regulatory Functions

· Responsive Council services

1.5 The scheduling of investment in residential greenfield areas is an important input into the 2018-2028 Long Term Plan and accordingly the matter was canvassed in two LTP workshops in recent months. While there was an inclination from some Councillors to advance the Brookvale area earlier in the programme than that suggested by officers at the workshops, there was no clear overall consensus to do this given the financial risk to Council of having too many areas open and serviced for development at one time. This report considers the financial risk aspect further and concludes by recommending that the greenfields priorities and indicative timing suggested in by officers in the workshops as set out in Table 7 of the report be adopted for planning purposes and incorporated into the Council’s long term planning and associated processes as appropriate.

2.0 BACKGROUND

2.1 HPUDS takes a long-term integrated view of urban land-use and infrastructure to 2045 aimed at sustainably managing urban development on the Heretaunga Plains over 30 years.

2.2 The key elements of the settlement pattern proposed in HPUDS are;

§ Providing for an increase in households within a smaller land footprint.

§ Ensuring that there are incentives to provide more intensive forms of housing.

§ Providing the same housing choices in both Napier and Hastings to maintain a balanced market.

§ Providing housing locations that make efficient use of servicing and transport infrastructure.

2.3 Although the thrust of HPUDS is to avoid urban development over versatile and productive soils and prevent urban sprawl, it is recognised that this necessarily involves a transition away from greenfields development to intensification within the existing developed areas over time.

2.4 HPUDS therefore identified several areas for future greenfields as this transition takes place, in the form of rounding or squaring off the existing urban footprint, and the development of some further areas along the Havelock Hills.

2.5 For Hastings the following Greenfields Areas were identified (Table 2 and see also the attached plan):

Table 2. Hastings Greenfields Growth Areas HPUDS2010

Area	Anticipated Households
Lyndhurst Stage 2 (part of current strategy)	210 (from 2015)
Lyndhurst Road Extension	230
Howard Street	80*
Kaiapo Road	350
Murdoch Road/Copeland Road	230
Irongate/York (part of current strategy)	270
Arataki Extension	220
Middle Road/Iona (part of current strategy)	140
Havelock North Hills (Lower)	100
Te Awanga/Haumoana	130

* Subsequently expanded and increased significantly through the structure planning process.

2.6 In 2011 Council adopted in principle a prioritisation and sequencing plan for the Hastings greenfields sites as a basis for future structure planning and indicative infrastructure programme as described in Table 3 below.

Table 3. 2011 Prioritisation and Sequencing Plan (Households)

	Indicative Yield	2016-2021	2021-2026	2026-2031	2031-2036	2036-2041	2041-2046	Predicted Uptake
Target		459	482	341	238	123	94	1737
Lyndhurst Stage 2	210	210						210
Kaiapo Road	300		141	159				300
Lyndhurst Extension	230	29	201					230
Howard Street	80			80				80
Copeland /Murdoch Road	230			77	133			210
Irongate York	270				80	98	69	227
Arataki Extension	220	220						220
Middle Road/Iona	140		140					140
Havelock Hills	100			25	25	25	25	100
Total	1780	459	482	341	238	123	94	43

3.0 CURRENT SITUATION

3.1 The sequencing of land use, infrastructure and funding is fundamental to successful growth management and integrated planning. Sequencing involves identifying the order and indicative timeframes for land use, which has regard to infrastructure servicing, funding availability and market appeal over time.

3.2 The aim is to balance the need for orderly development that provides a clear direction for managing future growth and well supported by infrastructure, while retaining enough flexibility to ensure that land is not overly restricted. It gives some, but not exact, certainty to developers and the community about the future timing of urban growth areas.

3.3 In accordance with the 2011 programme, Lyndhurst Stage 2 with capacity for around 270 sites is currently starting to be subdivided, while stage 1 has capacity for around another 60 Households, although half of these are within the unit titled Frimley Lifestyle Village. Northwood and Arataki still have remaining capacity for around another 130 households. This represents the committed development.

3.4 Since 2011 one of the priority areas (Arataki Extension) experienced difficulty due to reverse sensitivity issues with the neighbouring mushroom farm. As a result Council re-prioritised the Middle Road Iona Road and Howard Street areas to 2016-2021 to compensate for this. Howard Street has been actively rezoned by Council through a Variation to the Proposed District Plan and is currently the subject of an Environment Court Appeal and mediation processes. The structure planning for Iona has been completed and notification of a Variation to rezone the land in the accordance with the structure plan is the subject of a separate item on this agenda.

3.5 As part of a medium to longer term response to the issues with the Arataki extension and more optimistic forward growth projections, the HPUDS Review recommended that the Brookvale/Romanes Drive area be introduced as new Greenfield growth areas with capacity ultimately for around 550-600 households. In addition the Review adopted revised growth projections that are higher than those anticipated in 2010.

3.6 In addition some further areas were added as ‘reserve areas” to be advanced if any of the preferred areas proved unviable for any reason or in other more limited circumstances. The fact that there is no ‘given’ expectation of development for these areas means they do not require prioritisation. In theory they would simply slot to the programme for the unviable area should that prove necessary.

3.7 Both the introduction of the Brookvale/Romanes area and the revised growth predictions, which increase the greenfields demand from 100 to 140 dwellings per annum over the first ten years of the plan, means that the priorities and sequencing plan needs to be reset. Figure 1 below indicates the projected greenfields growth component of the HPUDS projections which need to be distributed over the greenfields growth areas over time.

Figure 1. Targeted Greenfield Growth Share of Projected Growth

3.8 Figure 2 translates this into 10 year block annual average growth rates, which are compared to Historical Averages to get a feel for the level of development Councils is planning for in terms of greenfields, intensification and rural/lifestyle development.

Figure 2. Annual Growth Rates by Sector

3.9 In planning for the greenfields component of this development, some assumptions need to be made about market appeal over the projection period across the greenfield growth areas. This is difficult to predict over longer periods of time, but for the purpose of this exercise the following assumptions are made:

· The upper value market will continue for elevated sites over the period, but it is likely to be slower into the future than experienced in the past as the population ages.

· Similarly the demand for coastal locations will continue over the period but at a slowing rate due to concerns about coastal hazards and transportation costs.

· The changing ethnic composition of the population will mean younger and increasingly educated Maori will play a greater role in the economy and therefore the new home market, with potentially different market location choices becoming evident over time.

· Older suburbs will become increasingly attractive as infrastructure and amenities are replaced and upgraded, and the existing housing stock ages and is regenerated.

3.10 It will also be important to ensure continuity of choice across the different market segments, while ensuring Council does not have development and the investment in infrastructure open on too many fronts. The latter could expose ratepayers to unnecessary risk and increase the finance and holding cost component of development contributions (due to the demand being spread too thinly), which would adversely affect housing affordability.

3.11 In order to reconcile these various matters a matrix approach has been used to create a baseline position upon which to determine what areas should be developed earlier in the period where conditions are more predictable. From there some judgement needs to be exercised about the future based on the market change assumptions set out above, i.e. this cannot be an exact science and judgement will be required.

3.12 Finally, it is also important to realise that HPUDS is not about simply meeting the market demand, which might otherwise result in urban sprawl, and the consumption of versatile and productive soils. Some market tension is needed to regenerate the existing and ageing housing stock into more intensified housing forms. Accordingly there may be an element of market tensioning required to achieve Council’s and the community’s broader sustainability goals. The challenge is to provide the right balance within the framework of HPUDS to steer the balance more toward intensification, while still providing a degree of market choice to reflect an increasingly diverse household and demographic composition within the District.

4.0 OPTIONS

4.1 The available options are:

· Adopt the indicative prioritisation and sequencing position set out in Table 7 below the Long Term Plan and 30 year infrastructure programme.

· Adopt a different prioritisation and sequencing position as determined at the meeting.

· Not adopt a prioritisation and sequencing position and allow market forces through private plan changes to determine the development pattern over time.

5.0 SIGNIFICANCE AND CONSULTATION

5.1 No specific consultation has been carried out with the development community or the public generally specifically on timing at this stage, although some submitters to the HPUDS review did advocate for the land of interest to them be made available sooner than other areas.

5.2 This issue is about setting a policy position for future planning, the outcome of which can and will be consulted on as part of the forthcoming LTP. Clearly the matter will be of some significance for individual landowners with a vested financial interest in having their land identified for development earlier, rather than later in the HPUDS timeframe (2015-2045).

5.3 The matter does not of itself pass the Council’s significance policy threshold so there is no mandatory requirement to invoke the special consultative procedure outside of the current LTP process.

6.0 ASSESSMENT OF OPTIONS (Including Financial Implications)

Servicing Costs

6.1 The Council’s Infrastructure Group have undertaken a high level analysis of the likely water, stormwater and sewer servicing costs of each of the greenfields sites is shown in Table 4 below. Roading and reserve costs are expected to be roughly proportionate between areas (except for the Havelock Hills) and largely internal to the development and so are unlikely to unduly influence priorities.

6.2 Clearly these costs will change over time with more investigation as part of the structure planning process. They are presented only to provide an “apples with apples’ comparison for prioritisation purposes.

6.3 In addition, each area will have a different cost profile in terms of Council infrastructure versus Developer provided infrastructure due to geography, proximity of existing services and number of landowners. In the end analysis it is the total cost of development that is important for this exercise. An overall ranking of 1 to 3 from least expensive, to more expensive is used to summarise the findings.

Table 4. Relative Servicing Costs (Indicative)

	Indicative Yield	Developer Cost/site	Council Cost/site	Total Cost/site	Rank Score
Lyndhurst Extension	230	30,745	6,739	37,484	1
Howard Street	260	31,832	11,538	43,371	2
Copeland	210	33,130	4,783	37,913	1
Irongate	270	30,955	3,407	34,362	1
Kaiapo	350	32,920	16,056	48,976	2
Brookvale/ Romanes	575	31,832	2,522	34,354	1
Iona /Middle	230	34,428	22,214	56,642	3
Havelock Hills	140	36,814	5,000	41,814	2

Note: Lyndhurst Stage 2 is excluded from the analysis as it is already committed for development.

Market Considerations

6.4 It is important to understand that some areas attractiveness and associated market value will also vary between areas and may outweigh higher development costs, e.g. coastal and elevated Havelock hills sale values are likely to sustain the higher development costs over time.

6.5 Market demand and locational appeal may also change over time, but this is likely to be gradual and the areas likely to be more attractive at the start of the planning period will have similar characteristics to the current development areas like Lyndhurst, Northwood and Arataki. Those with little current market appeal are less likely to be acceptable at the beginning of the period, but may be more likely to gain market acceptance toward the end of the period as time (re-generation of housing stock) and investment improves their attractiveness or established through front ended developments such as with retirement villages. On this basis the areas have again been ranked in Table 5 by officers using 6 categories as follows:

1. Short term appeal (Conditions exist now, i.e. extension of existing areas under development).

2. Short to Medium Term (existing areas in sought after suburbs, or offering elevation/views).

3. Medium Term (newer areas next to desirable suburbs)

4. Medium to Longer term appeal (well-located areas with recent signs of interest or potential)

5. Longer term (Not favoured by current market, but demographic change and suburb regeneration is likely, especially if supported by sustained investment in amenity and infrastructure).

6. Long Term potential (may require significant shifts in market composition)

Table 5. Market Factors (1- 6 More Attractive to Less Attractive)

	Indicative Yield	Extension of Development	Elevation /Views	Suburb Appeal	Rank Score
Lyndhurst Extension	230	Yes	No	Middle	3
Howard Street	260	Yes	No	Middle	3
Copeland	230	No	No	Lower Middle	5
Irongate	270	No	No	Lower	6
Kaiapo	350	Yes	No	Middle Lower	4
Brookvale/Romanes	575	Yes	Partial	Middle Upper	2
Iona/Middle	210	Yes	Partial	Middle Upper	2
Havelock Hills	140	Yes	Yes	Upper	1

6.6 Combining these rankings gives a first order ranking in Table 6.

Table 6. First Order Rankings

	Indicative Yield	Cost	Market	Combined	Rank
Lyndhurst Extension	230	1	3	4	2
Howard Street	260	2	3	5	3
Copeland	210	1	5	6	4
Irongate	270	1	6	7	5
Kaiapo	350	2	4	6	4
Brookvale/ Romanes	575	1	2	4	2
Iona /Middle	230	3	2	5	2
Havelock Hills	140	2	1	3	1

6.7 Although this is a fairly coarse assessment, on this basis Lyndhurst Extension should follow the now committed Lyndhurst Stage 2 and Howard Street. Havelock North sites are considered separately from the Hastings sites to allow some locational choice, particularly for elevated sites. This means in Hastings, Irongate scores well due to its low development costs, but its market appeal mitigates it being seen as a mainstream residential option at this time.

6.8 Kaiapo Road has a slightly better appeal to the market relative to Copeland Road given its proximity to Stortford lodge and major interregional routes and a small development there in the early 2000 sold well. This off-sets the lower cost profile for Copeland Road, although the figures are less well understood than for Kaiapo Road where more work has been undertaken to date. In view of long held expectations of the Kaiapo Road landowners for development and the fact that structure planning work is more advanced for Kaiapo it is suggested on balance, that Kiaipo Road be scheduled for development ahead of Copeland Road and Irongate Road at this stage.

6.9 In Havelock North, servicing logic suggests Middle Road/Iona Road should be developed ahead of Havelock Hills and the roading costs for the Havelock Hills, which are not included, would make the development costs less attractive than the scoring indicates. The cost estimates for the Havelock Hills also assumes that the Iona Middle Road trunk services have been installed and would be much higher if the order was reversed. The developer has however indicated that they could start in the lower part of the Havelock Hills and expand up and downhill.

6.10 At this stage, due to the advanced nature of the planning for Iona Road/Havelock Hills, this area is maintained as priority over the Brookvale/Romanes area despite the later having a lower development cost score.

Sequencing Issues

6.11 These rankings however provide only part of the picture. Consideration also needs to be given to balancing locational choice over time and ensuring sufficient land is available in at any particular time period to meet the HPUDS targets. It involves more than one area under development and more than one location type being available, e.g. coastal and hill sites and sites in Hastings, Havelock North and Flaxmere on the flats. Consideration also needs to be given to the areas currently available for development and remaining capacity in those.

6.12 In achieving a balance supply that meets the HPUDS targets, there are a number of points to note as follows:

1. The demand for elevated sites can be met at least in part over the short to medium term from an identified surplus of lifestyle lots in the Havelock Hills. These may be larger than some people will want and this consideration will likely become more important as the population ages and sites become more expensive to maintain. This has implications for the timing and uptake rates for the Havelock Hills greenfields area, mainly on the upper plateau (medium to longer term).

2. There are existing sites, in Flaxmere, in and near the Flaxmere Village and Flaxmere West that could be available for development at higher than standard greenfields densities. This may mean there will still be Flaxmere options even if the Irongate York area is not developed until toward the end of the period.

3. Lyndhurst Stage 2 and Northwood will have land available in Hastings at the beginning of the period that should be developed before new Hastings areas are opened up.

4. Not all the areas are of equal size, so there may be a need to stage larger developments to ensure continuity of supply, without over-supplying the market relative to the HPUDS targets. This needs to be balanced against the timing of smaller areas to meet that objective.

5. Market demand and affordability may move more toward the middle/middle lower market over time, meaning Kaiapo Road may offer greater market spread if introduced a little earlier on a staged basis.

6.13 Table 7 below tries to balance all of these considerations against the HPUDS targets. The anticipated 5 yearly development profile is based on estimates of each areas likely market share using the ten year average uptake assumptions set out in table 8, which are based on past experience for similar greenfields development areas.

Table 7. Indicative Sequencing Programme (No of Households)

Growth Area*	2018-2023	2023-2028	2028-2033	2033-2038	2038-2043	2043-2048
Northwood	70
Lyndhurst 2	200	70
Howard Street	185	85
Lyndhurst Extension		155	75
Kaiapo		125	80	100	35	10
Copeland			20	75	40	70
Irongate						40
Iona /Middle	210
Havelock Hills	15	75	50	20
Brookvale Romanes	10	175	125	155	75	30
Coastal/Other	25	25	25	25	25	25
Total	715	710	375	375	175	175
*Note: This programme may need to be adjusted if the Arataki Extension is re-instated as a growth area following resolution of odour issues associated with the nearby mushroom farming operation.

Table 8 Growth Rate Assumptions (No of Households/Annum)

Growth Area	2018-2028	2028-2038	2038-2048
Northwood	20
Lyndhurst 2	40
Howard Street	40
Lyndhurst Extension	45	20
Kaiapo	40	15	10
Copeland		15	10
Irongate		10	5
Iona /Middle	50
Havelock Hills	15	10	5
Brookvale Romanes	35	25	10
Total. Note columns not intended to sum	140	75	35

6.14 Figure 3 below is a depiction of what the year on year view of growth could look like based on the above and is similar to that shown to Councillors during the LTP workshops.

Figure 3. Indicative Year to Year Sequence (2018-2028)

Option 1

6.15 This scenario is essentially Option 1 in this report. Lyndhurst stages 1 and 2, Northwood and Iona are taken as committed and Kaiapo Road is staged to balance supply in conjunction with Lyndhurst Extension once Northwood and Howard Street and Lyndhurst Stage 2 are completed. Copeland and Irongate follow Lyndhurst Extension and Kaiapo Road respectively.

6.16 It is noted that the Brookvale Road/ Romanes Drive area would not start being built on until after Iona Road was substantially completed, expected to be at the very end of the first five year period. This is a very large area and will likely need to be staged as is likely to be the case with Kaiapo. The Havelock Hills are then expected to develop at around the same time at around 10 -15 per year. The more modest uptake rate reflects the assumption that the upper slopes may demand a premium, but also be exposed to competition from rural residential offerings.

6.17 In general this plan would see a maximum of four areas under development at once during the earlier to mid period, but reducing as population growth falls away over time and intensification becomes the preferred development type.

6.18 While in reality the nature of growth projections is less precise than this table suggests, it provides at least one reasonably sound basis for continuing with Council’s structure planning and financial forecasting. It is necessarily based on average projected demand assumptions that cannot account for recessionary and expansionary phases in the economy, so actual time frames should be regarded as indicative only.

6.19 While this would form the basis for planning, financial allocations can easily be brought forward or delayed by Council to account for changing circumstances and economic phases as required, through Annual Plans and by advancing or delaying zoning and infrastructure investments, provided the structure plans have been completed. This priorities and sequencing report also should be re-calibrated following regular monitoring and review of the HPUDS targets.

6.20 In this respect it is worth pointing out that the 2016 HPUDS Review confirms the Brookvale Road area as a short to medium term replacement for the Arataki Extension. While Arataki Extension was removed from the list of greenfield growth areas it was placed on the reserve areas list with the intention that this area may be reintroduced area ahead of other growth areas, should the odour and reverse sensitivity issues due to proximity of the mushroom farming operations be overcome.

6.21 If and when this comes to pass Council will need to give explicit consideration to when the Arataki Extension should be progressed relative to Iona Road and or the Brookvale/Romanes Drive areas as well as and any flow on effects on uptake in Howard Street or the Lyndhurst areas, and the programme adjusted accordingly through the relevant annual plan or LTP at the time. This recognises that apart from the odour issue, the Arataki Extension represents an attractive development option both in terms of the market, but also in terms of the HPUDS principles and should be slated for development as soon after the odour issues have been resolved as possible.

Option 2

6.22 Bearing those caveats in mind Option 2 is to adjust this programme to reflect different priorities and sequencing using a different logic to that set out above. Councillors will need to be aware of how such changes will affect Council’s debt profile and financial risk exposure. This is discussed in more detail in section 7.0 below. Changes will also have implications for balancing supply against the HPUDS targets which will need to be managed and officers may need to take away Councils altered preferences and recast table 7 for final adoption at a later meeting.

Option 3

6.23 Option 3 would see Council taking no position on priorities and sequencing, essentially leaving it to the market. While this may be appealing for some on a philosophical basis, it is a potentially very risky approach, both in terms of the HPUDS objectives and intensification direction, and in terms of Council’s planning and financial programming over the long term. Landowners too, may find themselves with less certainly in predicting demand and supply resulting in a potential “free for all” with Council having to react to demands for plan change requests and associated services upgrades.

6.24 Landowners could also find themselves over-exposed financially and the potential profits available from a more orderly pattern and timing of development could be quickly eroded. The resulting over-supply and “fire sale” market could stimulate rapid urban sprawl at the expense of Council’s intensification approach which would otherwise contribute to a more efficient urban form over the long term.

6.25 Finally this would not accord with the HPUDS strategy and the expectations of the strategy partners, nor offer any certainty for developers which can be an important factor in the financial feasibility of greenfields development and property valuations and is not recommend by officers.

7.0 DEBT AND FINANCIAL RISK

7.1 The capital expenditure required to meet this reset sequencing is now reflected in the draft 2018-28 Long Term Plan that is currently being finalised and is detailed inn Table 9 below.

Table 9 Ten Year Capital Programme for Greenfields Residential and Industrial Development

7.2 The 2017/18 budget of $18.6m is unusually large and includes $14.3m of growth related expenditure that has been carried forward from prior years. Work at Omahu Road and Lyndhurst in particular will get underway with earnest this year.

7.3 The impact of this forecast capital expenditure will have an impact on the debt profile for growth related debt with growth debt solely funded from Development Contributions. The graph (Figure 4) below shows the impact on growth related debt compared to the 2015-25 Long Term Plan. Current debt levels are lower than had been anticipated through the 2015-25 LTP with some projects not progressing as previously planned. Industrial developments at Irongate and Omahu Road were heavily weighted to the early years of that plan and while the Irongate water supply and wastewater have largely been implemented, these two development still make up a large proportion of the 2017/18 budget. Likewise Lyndhurst stage II was budgeted for in the early years of the 2015-25 LTP and is only now progressing.

7.4 The impact of these deferred capital projects is that actual growth related debt is lower at 30 June 2017 than anticipated in the 2015-25 LTP. However the impact of these deferred projects now coming on stream and the reset sequencing following HPUDS 2017 means that projects like Howard Street and Iona/Middle are forecast to happen much earlier than previously forecast. Growth related debt is now forecast to reach $25.8m, significantly more than the $17.9m peak in the 2015-25 LTP.

Figure 4 2018-2028 Draft LTP Growth Related Profile

7.5 Increased growth related debt does come with some risk to Council as this debt is funded solely through development contributions and any interest incurred on this debt is ring fenced and capitalised. If growth does not occur at rates expected then the level of growth related debt will increase further.

7.6 Officers have however been working hard to secure development contributions upfront and have secured development contributions from over 40% of the developable land at Omahu Road. The payment of development contributions has the added benefit to the landowners of reducing their per hectare development contributions as well as reducing risk to Council. Officers are also working hard with the landowners at Irongate to secure a larger proportion of development contributions upfront.

7.7 While the LTP signals when the capital expenditure will be required, expenditure will only be incurred when demand for sections suggests it is reasonable to do so. If take up of sections does not proceed as predicted, then the timing of capital expenditure can be delayed. Conversely, if section uptake is quicker than expected then this capital expenditure will have to be brought forward.

7.8 Slower than expected growth will impact on the amount of development contributions received and the amount of the growth related debt that can be repaid. This is a risk that Council will have to manage and be cognisant of as it progresses through this greenfield sequencing.

8.0 PREFERRED OPTION AND REASONS

8.1 Option 1 is recommended as it is considered to provide a reasonably logical and sound basis for prioritising Council’s investment in structure planning and infrastructure; sustains a balanced market supply in terms of location. It reflects current market preferences and an evolution over time to areas not currently favoured with appropriate monitoring and investment.

8.2 This would suggest the immediate priorities for Structure Plan Development over the next 3 years would be as follows:

1. Brookvale Road/ Romanes Drive. In order that the first stages can be ready for development when Iona/Middle Road is largely complete, which could as early as 2022-2023. This means structure planning and plan processes need to be completed by 2020-2021 at the latest, so the process needs to start soon. Early completion of the structure plan and deferred zoning (if appropriate) would allow Council to respond if difficulties arise with the delivery of Iona Road/Middle Road to the market in sufficient numbers.

2. Kaiapo Road. Structure planning for this area has commenced but is difficult due to drainage constraints, number of landowners and staging issues. Although development would not be expected to start until around 2024 when Northwood and Lyndhurst Stage 2 is complete. Accordingly this needs to be complete by 2020 at the latest, to account for the possibility that the development is not viable and an alternate reserve area needs to be advanced. Note a separate report on progress and feasibility of the Kaiapo Road area is in preparation.

3. Cape Coast’ The relative current scarcity of a coastal development options suggests that the Haumoana/Te Awanga master planning structure planning exercise should also be an emerging priority. Master Planning and specific structure planning for Haumoana/Te Awanga was put on hold some years back due to coastal erosion issues. This should be re-ignited following final decisions on coastal erosion response management, although it is noted that in this case the landowners are making substantial progress on this themselves as a result of the District Plan Review and Appeal process.

8.3 Funding has been provided in the Draft LTP budgets for capital works, but sufficient allowance need also to be made for this structure planning in this LTP, so that more accurate capital estimates can be included in the first 3 years of the next LTP (2021-2031). Provision is made however in the current LTP for Lyndhurst Stage 2, and Draft LTP in years 1-3 for servicing infrastructure Howard Street and Iona Road.

9.0 RECOMMENDATIONS AND REASONS

A) That the report of the Principal Advisor: District Development titled “HPUDS 2017 Proposed Resetting of Greenfields Priorities and Sequencing for the Long Term Plan.” dated 30/11/2017 be received.

B) That Sequencing set out in Table 7 of the Report be adopted in principle as a basis for future structure planning and indicative infrastructure programming through Long Term plan and 30 Year Infrastructure Strategy

C) That Council notes that the greenfields priorities as part 2018 Long Term Plan any interested person may make a submissions and be heard in relation to the sequencing of development.

Attachments:

There are no attachments for this report.

[1] While the Fitzroy development on the ex-Nursery site was in some ways a demonstration of medium density and eco-friendly development, it was not a true demonstration of financial viability given that Council already owned the land. Private developers on the other hand must necessarily include land and holding costs in determining whetther suffficent profit can be extracted to make the project worthwhile.

1	Agreed Terms of Reference HB Drinking Water Governance - 24 October 2017	CG-14-1-00498
2	Proposed HB Drinking Water Governance Joint Committee minutes 24 October 2017	CG-14-1-00497

Committee	Date	Time	Venue
Opera House and Art Precinct Subcommittee	Thursday, 7 December 2017	2.00pm	Landmarks Room

Hastings District Council

Lyndon Road East, Hastings