Report to COUNCIL for decision

Transcription

1 Title: Section: Prepared by: Fees and Charges for Regional Compliance Monitoring and Science Strategic Planning and Environmental Services Yvette Kinsella (Acting Strategic Planning Manager) and Lois Easton (Environmental and Science Manager) Meeting Date: 22 February 2018 Legal Financial Significance = Medium Report to COUNCIL for decision SUMMARY The purpose of this report is seek approval to consult on proposed changes to annual fees and charges for regional compliance monitoring and science activities. Officers recommend establishing new fees to cover costs that are currently borne by the general ratepayer, despite them being for activities that are required to manage resource consents. Currently we are the only regional council/unitary authority in the country who has none of these charges in place. Instead all of these costs have been borne by all ratepayers. In workshops on 12 October and 1 November 2017 on the Revenue and Financing Policy, identified that moving from a 1% cost recovery for consent related activities including monitoring to a 25% cost recovery was appropriate. The remainder of the costs will continue to be charged as a differentiated targeted rate based on land value. Report to this meeting outlines all proposed fees and charges for the Long Term Plan (LTP). Due to the scale of the changes proposed for regional compliance monitoring and science, this report details the rationale for the recoveries. The decisions or matters in this report are considered to be of Medium significance in accordance with the s Significance and Engagement Policy. RECOMMENDATIONS That the : 1. Notes the contents of this report. 2. Approves release of the proposed changes to fees and charges for regional consent compliance monitoring and science (as set out in the report) for consultation as part of the Long Term Plan. Authorised by: Keita Kohere Director Transformation & Relationships Nick Zaman Director Environmental Services & Protection Keywords: Resource Management Act, Fees, Monitoring, resource consent monitoring, science Page 1 of 9

2 BACKGROUND 1. has responsibilities under the Resource Management Act 1991 (RMA) for processing resource consents, monitoring and managing consented and other authorised activities, and investigating the state of the region s resources. This work is carried out by teams in the Environmental Services and Protection Hub. Under section 36 of the RMA, can recover reasonable costs from consent holders and applicants for carrying out these regulatory functions. Revenue and Financing Policy 2. The Revenue and Financing Policy (R&F Policy) sets out how funds its activities. 3. In deciding how to fund each activity, takes into account: the community outcomes to which an activity contributes the distribution of benefits between the community as a whole, identifiable parts of the community and individuals (beneficiary pays principle) the period during which the benefits are expected to occur (inter-generational equity principle) the extent to which actions, or inactions, of individuals or groups contribute to the need to undertake the activity (exacerbator pays principle) the costs and benefits of funding the activity distinctly from other activities. 4. Under the current R&F Policy, funds regional compliance monitoring and science through 1% user fees and charges and 99% differentiated targeted rate (land value). Fees and Charges Manual 5. Where an activity is (part) funded by user fees and charges, those charges are detailed in s Fees and Charges Manual. This document outlines s charges for work carried out under the RMA. Setting charges follows five key guiding principles: charges must be simple, clear and easy to understand charges must be transparent clear, logical and justifiable charges must be reasonable charges must be fair community benefits must be considered. 6. The Auditor General recommends that local authorities conduct a full-scale review of charges at least once every three years. workshops At its Revenue and Financing Policy Workshops on 12 October and 1 November 2017, agreed to consider increasing the user pays proportion of funding for regional compliance monitoring and science from 1% to 25%. This was because a significant portion of the costs of compliance monitoring are a direct result of resource consents. PROPOSED NEW FEES and CHARGES 8. To meet a target of 25% cost recovery for managing resource consent compliance, officers recommend introducing two new types of fees and charges: an annual compliance monitoring fee an annual science and environmental monitoring charge. The prosed fees and charges for the financial year are set out in Table 1. Page 2 of 9

3 Table 1: Proposed Fees and Charges Financial Year (GST Inclusive) Activity Annual monitoring fee Annual science charge Total annual fee Estimated number of consents Estimated income Discharge to land or water <20m3/day* $146 $60 $ $26,780 Discharge to land or water m3/day $292 $200 $ $14,760 Discharge to land or water >100m3/day $438 $400 $ $8,380 Air discharge small $146 $60 $ $7,210 Air discharge medium $292 $200 $ $7,380 Air discharge large $584 $400 $984 5 $4,920 Water take surface water <5 l/s, or groundwater <100,000m3/year $146 $60 $ $16,068 Water take surface water 5-25l/s, or groundwater 100, ,000 m3/year $292 $200 $ $21,648 Water take surface water >25l/s - <60 l/s, groundwater >200,000 m3/year - <400,000m3/year $584 $700 $, $29,964 Water take surface water 60 l/s - <100 l/s, groundwater 400,000 m3/year - <1,000,000m3/year $1,000 $1,584 8 $12,672 Water take surface water>100 l/s, groundwater >1,000,000m3/year $2,000 $2,584 8 $20,672 Gravel/sand abstraction <2000m3/annum $146 $60 $ $2,060 Gravel/sand abstraction ,000m3/year $292 $200 $ $14,760 Gravel/sand abstraction >10,000m3/year $438 $300 $ $14,760 Forestry/woodlot harvest <100 ha** $438 $60 $ $24,900 Forestry harvest > ha** $876 $100 $ $48,800 Forestry harvest >200ha** $1,168 $200 $1, $68,400 Quarry/ Other Earthworks** $438 $60 $ $14,940 Native vegetation clearance** $438 $60 $498 5 $2,490 Total estimated income $361,564 * domestic wastewater systems which are considered low risk and for which no consent is required are not subject to this charge **charges only apply to multi-year consents where activity is taking place over a number of years. Smaller woodlots are generally harvested over one season Page 3 of 9

4 BASIS OF PROPOSED NEW FEES and CHARGES Annual compliance monitoring fee 9. These costs are made up of compliance monitoring and the administration of systems to support compliance monitoring requirements. Specific activities covered include: checking that resource consent conditions are being met checking that conditions to submit information such as water meter readings, shingle returns and water quality monitoring results are being met reviewing the submitted data to check that the consent is compliant databases to hold compliance information web portals for easy submission of compliance results corresponding with consent holders (e.g. around expiring consents) and dealing with general enquiries compiling and monitoring accounts and administration associated with monitoring systems Preparation of information around complying with consent conditions and reducing compliance costs. Annual science and environmental monitoring charges 10. These costs are made up of science and environmental monitoring to support resource consents and compliance of them. Specific activities covered include: low flow monitoring of rivers with water takes static water level monitoring for groundwater installation and maintenance of telemetry systems and equipment to support river and groundwater flow monitoring biological and water quality monitoring of rivers where significant land use activities, discharges or water takes are being undertaken Science and research into the impacts of water abstraction/discharges/land disturbance/vegetation clearance and other activities to support the development and review of resource consent conditions and to set resource use limits where resources are under pressure. Projected revenue generated 11. The cost to of delivering these regional compliance monitoring and science activities was $1,441,650 in the 2017/2018 financial year. If 25% of these indicative costs were recovered this equates to $360, As the table above indicates, officers project the proposed new fees and charges would generate an estimated $361,564. Page 4 of 9

5 Fixed fees 13. Officers recommend these fees and charges be fixed based on the scale and type of activity. The benefits of this approach are that it: is simple to understand and administer creates certainty for resource consent holders allows cost recovery to align with actual costs activities of greater scale are more complex and time consuming to monitor and require greater science input. 14. For example, larger water take consents generate more compliance activity. They have more conditions and more complex conditions to be checked (for example irrigation management plans, frequency and extent of water meter reading requirements, pumping rates, minimum static water levels). Larger water takes also have a greater potential environmental impact so are the major drivers of science related monitoring and compliance investigations. BENCHMARKING AGAINST OTHER COUNCILS Charging of fees 15. All other regional councils in the country charge ongoing compliance monitoring fees. Gisborne District is the only council which currently does not. Some councils charge on an actual and reasonable costs basis but the majority of councils have a fixed annual charge in place. 16. In a recent review, the Consent Managers Special Interest Group found that almost all regional councils also recover some of the costs of science, research and environmental monitoring from consent holders. Table2 outlines the approach of other regional councils to science and environmental monitoring charges. Table 2: Proportion of science and environmental monitoring activity costs recovered via fees and charges at other regional councils Regional % of costs to be recovered via charges Example impacts on consent holders Tasman District 30% Stepped based on environmental risk Waikato Regional Under review (34% in current LTP) Variety of fixed charges Environment Canterbury None (previously <20%) N/A Greater Wellington Bay of Plenty Regional Auckland Looking at increase from 20% to 23-25% 25% (doubling of charges $1.5m by Year 3) % varies by domain (5% - 70%) Stepped based on environmental risk Unknown Stepped based on environmental risk Horizons Regional 28% Variety of fixed charges Northland Regional Unknown (looking at extra $3m by Year 3) Fixed charge Environment Southland 20.6% Variety of fixed charges Page 5 of 9

6 Size of fees 17. Table 3 below outlines the size of annual monitoring and science charges in other regional councils for comparison. Because the type of activities which occur in different regions is different it s not easy to directly compare fees. For example, geothermal, aquaculture and dairy consents are a part of the Bay of Plenty Regional fees, but are not relevant to Gisborne. 18. Some councils use a pollution index to set their fees and this requires reasonably complex calculations to be undertaken to determine what fee is required for an individual activity. 19. Fees in the table below are based on 2017/2018 fee structures. All councils surveyed have indicated they are significantly reviewing their fees upward in their new LTP in order to be able to meet the costs of statutory requirements. Table 3: Annual Monitoring and Science Charges in Other Regional s Regional Fixed annual monitoring fee Annual science charges Bay of Plenty Regional Gisborne District Environment Southland Hawkes Bay Regional $130 base charge on all consents plus the following: Discharge to air small $125 Discharge to air med $495 Industrial discharges small $185 Industrial discharges med $870 Dams - $40 Industrial water take minor $160 Hort/Agri abstraction <5 l/s $115 Hort/Agri abstraction >5L/s - $175 A number of consent types (e.g. forestry and large abstractions) are still charged on an actual and reasonable costs basis No charge Annual administration charges of $20 - $1150 depending on complexity plus the following: Consents with minimal monitoring e.g. bores -$60 Dairy or piggery discharge - $385 Whitebait stands - $95-$200 Gravel abstraction $0.51/m3 Water takes <5 l/s - $120 Water takes >5 l/s - $300 Unmetered water takes $293 Gravel abstraction has a per m3 charge of $0.2/m3 - $0.6/m4 Other Compliance monitoring actual and reasonable costs Fees set on a stepped basis depending on impact: Discharges to water $45- $56,375 Water takes range from $60 -$4,6526 Dam or divert water - $45 -$9865 Discharges to air - $45 - $16,915 Earthworks, forestry, quarries - $70 - $420 No charge Coastal permit - $339 Discharge to air - $87 Discharge to land - $250 Discharge to water - $500 Land use consent - $500 Water permits groundwater minimum $162, max $15,000 at $0.85/m3 Water permits surface water minimum $138, max. $15,000 at $1.81/m3 Charges based on a pollution index with multipliers for different parts of the region. Discharge to water - $583-$7398 Structures in rivers - $437 - $954 Gravel abstraction charges $0.12/ m3 Tasman District Combined Charges (stepped based on environmental risk) Gravel abstraction $ $6.12/m3 Coastal Aquaculture structures $469 +$25.25/line Coastal structures $104 Water takes <2.5 L/s $141 Other water takes $197-$26,010 depending on size Rural Discharge permits $141 - $398 Industrial Discharges $141 - $4993 Air Discharges $141 - $1912 Page 6 of 9

7 DISCUSSION and OPTIONS 20. has not before charged consent holders either the cost of ongoing monitoring of consents for compliance, or a contribution towards the costs of environmental monitoring which supports resource consents. Currently we are the only regional council/unitary authority who has none of these charges in place. Instead all of these costs have been borne by all ratepayers. It could be considered to be inequitable and unfair that the ongoing compliance and environmental monitoring required to ensure that consent holder s activities are undertaken in accordance with their consents and without causing significant effects on the environment should be funded by general ratepayers, when the need for this monitoring is driven by the consent holder s activity. 21. Since the LTP was developed, the government has increased requirements of monitoring and reporting through changes to the RMA, the National Policy Statement for Freshwater, the National Environmental Standard for Plantation Forestry and other regulatory documents. These changes have substantially increased requirements on councils in relation to in particular regional functions. All regional councils are currently reviewing their fees and charges around the RMA to reflect those increased costs. 22. Introducing consent holder fees in relation to compliance and environmental monitoring recognises: that there are costs associated with these activities who the beneficiaries of these activities are in terms of being able to exercise their consents who are the exacerbators driving the need for environmental monitoring in areas of impact. Impacts on consent holders 23. These charges are new and they will impact on consent holders. However, at this stage they will only be put in place for ongoing regional consents which require ongoing monitoring not one off activities (which do still have a cost associated with checking compliance). This is expected to affect in the order of 630 consent holders. 24. Based on the estimates of resource consent numbers and scale of activities, 40% of consent holders to whom the charges will apply will pay $206 annually. This group is likely to include most of the small business consent holders such as dairy farms with less than 800 cows, truck stops, service stations, small orchard operations, farmers requiring gravel for tracks on their property. 25. About 32% of consent holders are expected to pay $492 - $498 annually. This is likely to affect medium sized orchards, a large (1000 cow) dairy farm, moderate sized forestry operations which span multiple years, quarries and multi year scrub clearance consents. 26. Larger fees of $700-$1000 will be incurred by about 13% of consent holders this would include things like timber mills and the large processing industries and large gravel/crushing operations. 27. The largest fees apply to 13% of consent holders with 12% having annual fees between $1000- $2000 and 1% having fees of $2,584 per year. These are very large forestry operations covering hundreds of hectares and the very large water irrigation takes. These are among the highest impact activities being undertaken in the region, as well as reflecting where the largest amount of environmental monitoring is being undertaken. Page 7 of 9

8 Size of annual charge Estimated number of consent holders Estimated percentage consent holders affected $ % $492 - $ % $700-$ % $ $ % $ % 28. One of the benefits of the consent charges is that it assists in creating the right signals to support other environmental goals, priorities and policies of. For example, the increasing scale of fees with size of water takes and gravel consents creates an incentive for water/gravel permit holders to reduce the amount of paper allocation i.e. the water or gravel they have consent to use but are not using. ASSESSMENT OF SIGNIFICANCE Criteria This Report The Process Overall The effects on all or a large part of the Gisborne district Low Low The effects on individuals or specific communities Low High The level or history of public interest in the matter or issue Low Low Inconsistency with s current strategy and policy Low Low Impacts on s delivery of its Financial Strategy and Long Term Plan. Low Medium 29. The decisions or matters in this report are considered to be of low significance in accordance with s Significance and Engagement Policy. The decision to be taken is to consult on the proposed changes to fees and charges. 30. However, a decision to increase fees would have a medium degree of significance. As identified in the report around 600 consent holders are expected to be affected by any eventual change in fees and charges. For these businesses the effect will be significant, but it will have little impact on other parts of the district. COMMUNITY ENGAGEMENT 31. No community engagement has been undertaken on this issue. It will be highlighted as part of the LTP consultation and affected consent holders will be advised directly so they can participate in the submissions process should they wish. CONSIDERATIONS Financial/Budget 32. Provision for the proposed fees and charges is included in the draft LTP budgets which were considered by on 25 January The collection of these fees is expected to be introduced at the start of the financial year but as the current figures are based on estimates of consent numbers financial budgets have allowed for $250,000 to be achieved in income in the first year. Page 8 of 9

9 Legal 33. The RMA (section 36) allows the to charge the actual and reasonable costs of the resource consent process. These proposed fees fit within the section 36 framework. POLICY and PLANNING IMPLICATIONS 34. The proposed new fees and charges are consistent with s proposed direction in the pending LTP. Increasing revenue from sources other than rates funding is a key direction in s draft Financial Strategy projections are that a minimum of 13% of expenditure will be funded from alternative income particularly fees and charges. RISKS 35. The proposed fees are new, and as such are likely to be unpopular with consent holders. When moved to a more cost recovery basis with the resource consent application process there were complaints about the size of the charges. We can expect a similar response to these proposed fees. NEXT STEPS Date Action/Milestone Comments March 2018 Consultation on the R&F Policy and fees and charges for 2018 as part of the LTP June 2018 Decisions on LTP including setting of fees and charges for 2018 Page 9 of 9