COUNCIL MEETING AGENDA Tuesday 6 July 2021 At

Home , Energy FM (Taranaki), Hauraki District, Manawatu District, South Taranaki District, South Waikato District, South Wairarapa District

Council agenda (6 July 2021) - Agenda

COUNCIL MEETING AGENDA

Tuesday 6 July 2021 at 1pm

COUNCIL CHAMBER LIARDET STREET, NEW PLYMOUTH

Chairperson: Mayor Neil Holdom Members: Cr Tony Bedford Cr Sam Bennett Cr Gordon Brown Cr David Bublitz Cr Anneka Carlson Cr Murray Chong Cr Amanda Clinton-Gohdes Cr Harry Duynhoven Cr Richard Handley Cr Stacey Hitchcock Cr Colin Johnston Cr Richard Jordan Cr Dinnie Moeahu Cr Marie Pearce

1 Council agenda (6 July 2021) - Agenda

Purpose of Local Government The reports contained in this agenda address the requirements of the Local Government Act 2002 in relation to decision making. Unless otherwise stated, the recommended option outlined in each report meets the purpose of local government and:

 Promote the social, economic, environmental, and cultural well-being of communities in the present and for the future.

 Would not alter significantly the intended level of service provision for any significant activity undertaken by or on behalf of the Council, or transfer the ownership or control of a strategic asset to or from the Council.

END

2 Council agenda (6 July 2021) - Health and Safety

Health and Safety Message

In the event of an emergency, please follow the instructions of Council staff.

Please exit through the main entrance.

Once you reach the footpath please turn right and walk towards Pukekura Park, congregating outside the Spark building. Please do not block the foothpath for other users.

Staff will guide you to an alternative route if necessary.

If there is an earthquake – drop, cover and hold where possible. Please be mindful of the glass overhead.

Please remain where you are until further instruction is given.

3 Council agenda (6 July 2021) - Apologies

APOLOGIES

None advised

4 Council agenda (6 July 2021) - Register of Interests

Elected Members Declaration of Interests (ECM8481389)

as at 8 April 2021 (please advise the Governance Team of any amendments)

Mayor and Councillors

Name of Member Interest Being Declared Nature of Interest/Transaction (includes positional or transactional interests eg funding agreements, proposals and other relationships) Taranaki Electricity Trust Trustee Waitara Services and Citizens Club Member Hurricanes Alumni Member Hurricanes Schools Council Life Member Tony Bedford Residential Property Owner Family Trust Taranaki Electricity Trust Hurricanes Alumni Trustee Taranaki Elite Athletes Foundation Council appointee Speaking Made Easy Ownership of company and contract with NPDC Full Circle Bespoke Life Events Heart of Brooklands New Plymouth Operatic Society Sponsorship Manager Sam Bennett Celebrants Association of New Zealand Residential Property Owner APJ and DM Bennett and PJ Bennett Family Trust Star Gym Council representative

5 Council agenda (6 July 2021) - Register of Interests

Name of Member Interest Being Declared Nature of Interest/Transaction (includes positional or transactional interests eg funding agreements, proposals and other relationships) Taranaki Chamber of Commerce Contracting work New Plymouth Bowls Club Member Gordon Brown Writing Services Ltd Director Sport Taranaki (Chair) Council appointee Friends of Pukekura Park Council appointee New Plymouth Boys’ High School Employee New Plymouth Golf Club Member Residential Property owner David Bublitz Bublitz Family Trust YMCA Taranaki Board member Taranaki Elite Athletes Foundation Council appointee Yarrow Stadium Joint Committee Council appointee Pride Taranaki Chairperson Anneka Carlson Residential property owner Taranaki Elite Athletes Foundation Council appointee Murray Chong Not advised Institute of Directors Member Residential Property Owner Amanda Clinton- Family trust beneficiary Gohdes Dress for Success New Plymouth Trust Board member (resigning April 2021) District Licensing Committee Deputy Chairperson Harry Duynhoven Not advised

6 Council agenda (6 July 2021) - Register of Interests

Name of Member Interest Being Declared Nature of Interest/Transaction (includes positional or transactional interests eg funding agreements, proposals and other relationships) Cogwheel Investment Club Member Residential Property Owner Tainui Rest Home Director Hadley Tarawera Ltd Sole shareholder and director Taranaki Retreat Richard Handley YMCA Taranaki Board member Taranaki RSA Vestry of St Mary’s Cathedral Member TRC Solid Waste Working Party Council appointee YMCA National Board Member St Mary’s Parish Finance Committee Member Casual employment Department of Conservation (self-employed contractor) New Plymouth Mountain Bike Club Member Taranaki Alpine Club Member Residential Property Owner Stacey Hitchcock Creative Taranaki (no financial benefit) Taranaki Trails Trust Trustee Jobhop Limited Shareholder TRC Policy and Planning Committee Council appointee New Plymouth Mountain Bike Club Member Lifestyle Block Owner (Smallholding) Neil Holdom TRC Civil Defence Emergency Council appointee Management Committee

7 Council agenda (6 July 2021) - Register of Interests

Name of Member Interest Being Declared Nature of Interest/Transaction (includes positional or transactional interests eg funding agreements, proposals and other relationships)

The Vintage Car Club of NZ Taranaki Current Chairman / 50 year badge holder Branch Waitara Town and Country Club Life Member / Past President Waitara Town and Country Club Debenture holder Colin Johnston Residential Property Owner Puke Ariki Trust Member Johnston Collections Private Museum owner Friends of PUkekura Park Council appointee Heritage Taranaki Council appointee Fun Ho! Toys Director Inglewood Development Trust Manager / Trustee Inglewood Club Member Richard Jordan TRI Member Residential Property Owner Commercial Property Owner Institute of Directors Member Little Fighters Trust Ambassador Change is Coming Coaching Managing Director Ngā Manu Reo Toastmasters Member Tātai Business Advisor Dinnie Moeahu Te Kotahitanga o Te Atiawa Affiliate Te Korowai o Ngaruahine Affiliate Te Kahui o Taranaki Affiliate Puketapu Affiliate Ngāti te Whiti Affiliate Ngati Moeahu Affiliate

8 Council agenda (6 July 2021) - Register of Interests

Name of Member Interest Being Declared Nature of Interest/Transaction (includes positional or transactional interests eg funding agreements, proposals and other relationships) Ngati Manuhiakai Affiliate Rural Property Owner Wakefield Family Trust Inglewood First Trust Marie Pearce Inglewood Mini Golf Trust Inglewood District Health Trust Taranaki Arts Festival Trust Council appointee

9 Council agenda (6 July 2021) - Register of Interests

Community Boards

as at 31 March 2021 (please advise the Governance Team of any amendments)

Name of Member Interest Being Declared Nature of Interest/Transaction (includes positional or transactional interests eg funding agreements, proposals and other relationships) Jono Burrows Nil Graham Chard Not advised Mel Cook Nil Paul Coxhead Nil Trevor Dodunski Summit Agriculture Contractor Christine Fabish Dudley District Hall Committee Member Hudson Essex Terraplane Club Member Neville Hagenson Not advised Ōākura Boardriders Club Member Doug Hislop Residential Land Owner Taranaki Biodiversity Trust Andrew Larsen Not advised Jonathan Marshall Not advised Tyla Nickson Not advised Warren Petersen Not advised Joe Rauner Not advised St Andrews Anglican Church, Inglewood Vestry Secretary, Synod Rep Paraninihi Anglican Archdeconry Treasurer Graeme Sykes QM Services Ltd Director Inglewood Golf Club Member Egmont Village Community House Committee member

10 Council agenda (6 July 2021) - Register of Interests

Name of Member Interest Being Declared Nature of Interest/Transaction (includes positional or transactional interests eg funding agreements, proposals and other relationships) Murray Seamark Nil Taranaki District Health Board Member Independent Management Consultant Ōākura School Board of Trustees Paul Verić Residential Property Owner BTE Consulting LTd Director PASS Ltd Director Veric Family Trust

11 Council agenda (6 July 2021) - Deputations

ADDRESSING THE MEETING Requests for public forum and deputations need to be made at least one day prior to the meeting. The Chairperson has authority to approve or decline public comments and deputations in line with the standing order requirements.

PUBLIC FORUM Public Forums enable members of the public to bring matters to the attention of the committee which are not contained on the meeting agenda. The matters must relate to the meeting’s terms of reference. Speakers can speak for up to 5 minutes, with no more than two speakers on behalf of one organisation.

 None advised

DEPUTATIONS Deputations enable a person, group or organisation to speak to the meeting on matters contained on the agenda. An individual speaker can speak for up to 10 minutes. Where there are multiple speakers for one organisation, a total time limit of 15 minutes, for the entire deputation, applies.

 None advised

12 Council agenda (6 July 2021) - Previous Minutes

PREVIOUS COUNCIL MINUTES Recommendation: That the minutes of the following meeting of the Council, and the proceedings of the said meeting, as circulated, be taken as read and confirmed as a true and correct record:

Council 25 May 2021 Extraordinary Council 29 June 2021 COMMITTEE MINUTES Recommendation That the minutes of the following meetings, as circulated be received and: a) Decisions made under delegated authority by the committees be incorporated in the minutes of this meeting of the Council.

Finance, Audit and Risk Committee (26 May 2021) Strategy and Operations Committee (1 June 2021) Strategic Projects Committee (16 June 2021) Te Huinga Taumatua Committee (22 June 2021) CCOs Committee (23 June 2021) Finance, Audit and Risk Committee (29 June 2021)

END

13 Council agenda (6 July 2021) - Table of Contents

REPORTS

1 Manaaki Urupā Grant Allocation Report

2 Taranaki Three Waters Aggregation Study Update Report

3 Central Landfill Joint Committee Agreement

4 The Junction Update Report

5 Citizens’ Award Policy Review

6 Honorary Ambassadors Policy Review

7 Exclusion of the Public from the Remainder of the Meeting

END

14 1 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

MANAAKI URUPĀ GRANT ALLOCATION REPORT

PURPOSE

1. The purpose of this report is to inform Council of the outcome of the Manaaki Urupā Grant in its first year of implementation.

RECOMMENDATION That having considered all matters raised in the report, the report be noted.

STRATEGY AND OPERATIONS COMMITTEE RECOMMENDATION

2. The Strategy and Operations Committee endorsed the officer’s recommendation.

COMMUNITY BOARD RECOMMENDATIONS

3. The Clifton, Inglewood, Kaitake and Waitara community boards have endorsed the officer’s recommendation.

TE HUINGA TAUMATUA RECOMMENDATION

4. Te Huinga Taumatua Committee endorsed the officer’s recommendation.

EXECUTIVE SUMMARY

5. Adopted by Council in July 2020, the inaugural round of the Manaaki Urupā Grant opened in September of the same year. After only having received three applications in the first round, a second round was run over February-March 2021.

6. Over the two rounds, a total of 15 applications were received, seeking funding totalling $68,081.27. Twelve applicants have since been notified that their respective applications have been successful, at a total value of $46,269. The total amount available for distribution each year under the Manaaki Urupā Grant is $50,000.

7. Noting a review of the Manaaki Urupā Grant Policy is scheduled for 2023-24, areas of improvement discussed in this report ahead of the opening of the next round in September 2021 include: timely pay out of distributions; promotion of the grant; up-lifting of grants by successful applicants; and managing demand on the fund.

15 1 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

SIGNIFICANCE AND ENAGAGEMENT

8. This report is provided for information purposes only, and has been assessed under Council’s Significance and Engagement Policy as being significant. This assessment is based on a likely decrease in the value of grant distributions, due to an expected increase in applications over the next two rounds, therefore impacting on the relationship of Māori (including their culture and traditions) with their ancestral land, water, sites, wāhi tapu, valued flora and fauna and other taonga (Schedule 1, NPDC Significance and Engagement Policy).

BACKGROUND

9. Adopted by Council in July 2020, the purpose of the Manaaki Urupā Grant is to provide partial financial support to owners or trustees in meeting the annual maintenance costs of their urupā Māori (Māori burial grounds). The support is similar to that made available by Council each year to the four rural cemeteries at Huirangi, Lepperton, Tikorangi and Tongapōrutu.1

10. With a total of $50,000 available for allocation each year, a discussion of the Manaaki Urupā Grant in its first year of implementation follows below.

MANAAKI URUPĀ GRANT

Criteria

11. To be eligible for a grant, an application must provide evidence that the urupā lies within the New Plymouth District, and is located on either:

 Māori freehold land; or

 A reservation set aside for the purpose of an urupā; or

 General freehold land in Māori ownership.

12. A grant may only be used for activities directly related to the annual care and maintenance of an urupā. While generally excluded, urgent one-off protection- or capital-related activities may be considered on a case-by-case basis.

13. All applications are required to provide copies of third-party quotes, a letter of support for the application, and a copy of a bank deposit slip or bank statement. Only one application per urupā may be considered in any one year, with successful applicants also required to evidence the completion of proposed works.

1 Managed by independent Cemetery Boards, ground maintenance costs are off-set by ouncil through an annual contestable grant of $8,000.

16 1 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

Application process

14. A link to the Manaaki Urupā Grant is available on the NPDC Funding and Grants web page. The page provides a summary of the grant criteria, and further links to the Manaaki Urupā Grant Policy and application page proper. Applicants must register as a user via the Smarty Grants log-in page, which is the program Council uses to manage all its funds and grants. Once logged in, applicants fill out the application form, then submit it once completed.

15. In some instances, while applicants are contacted a month ahead of the closing date, some applications may remain unsubmitted. However, the information in these applications remains confidential, with access possible only through an email request to the applicant.

Applications

16. In September 2020, Council invited applications to the Manaaki Urupā Grant. By the end of October 2020, a total of three applications had been submitted, with two applications unsubmitted. Given the low number received, a second round was held over February-March 2021. At the end of March 2021, a further eleven applications had been received, with five remaining unsubmitted. The combined total of funds sought across the fourteen applications submitted was $68,081.27.

Reference no. Urupā Grant approved a. MUG012020 Puteretere $7150 b. MUG042020 Paewehiwehi $950 c. MUG052020 Matarikoriko $3900 d. MUG01 Pukekohatu $5277 e. MUG03 Teremutu $2654 f. MUG05 Hoewaka $3928 g. MUG08 Te Kaha i te Iwi $5670 h. MUG10 Oropuriri $2200 i. MUG11 Puketuakura $9800 j. MUG12 Titirangi $660 k. MUG15 Kowhangamoku $1040 l. MUG16 Waiau/Kaiateahi $3040 Total Total: $46,269 Table 1: 2020-21 Manaaki Urupā Grant approved applications

17. To date, a total of 12 applications have been approved (see Table 1 above), at a combined value of $46,269. Three submitted applications have been declined, with two being withdrawn by the applicant due to not being able to provide quotes. The third was declined as the application did not meet the requirements regarding the provision of invoices, and a copy of a bank deposit slip or statement.

17 1 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

18. The range of proposed activities identified in applications include: fencing and gateway repairs; lawn-mowing services; vegetation removal; headstone maintenance; and installation of concrete berms.

19. Being the first year of implementation, a summary of key observations are discussed below.

DISCUSSION

Promoting the grant

20. Ahead of the opening of the grant in September 2020, hapū and iwi were notified via email, with notices also published in local newspapers throughout July 2020. However, the low number of applications received in the inaugural round of the grant can be attributed to one main factor.

21. Given the newness of the grant, the publication of notices in the local newspapers one month before the 1 September 2020 opening date was inadequate. With the subsequent low number of applications, a decision to run a second round was made. A more concerted effort to promote the grant was also made, with hapū and iwi again notified by email, and notices published in the local newspapers from late January 2021, continuing on throughout February and March.

22. For the 2021-22 round, the grant will continue to be promoted via emails to iwi and hapū, and publications in the local newspapers from late July to September. However, with a likely increased awareness among urupā owners and trustees, the grant will return to a single two-month application round from September to October 2021.

Late distributions

23. While three applications were received and subsequently approved in the inaugural 2020 round, payments for two have only recently been completed. This was due to an assumption that grants were assessed, processed, paid and administered through the Smarty Grants programme.

24. While having the capability to do this, Smarty Grants is unable to interface with Council’s Technology One database, where all its financial information is stored. As a result, all grants are confirmed and paid out through existing procurement systems and processes.

25. This issue with the implementation process has been solved and there is now in place a process for finalising confirmation and payment of Manaaki Urupā Grant distributions through Council’s procurement processes, in line with current practice, with apologies also extended to the affected applicants.

18 1 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

Up-lifting grants

26. With assessments completed, and applicants notified of the outcome, the focus is now on completing the process for finalising payments. This requires working through Council’s procurement system to confirm approvals, then award monies to the successful applicants.

27. As Council requires an invoice from successful applicants to be able to pay out grants, the up-lifting of distributions before the next round of the grant has been identified as a potential area of risk. Due to the implementation of a second round this 2020-21 year, successful applicants will have less time to use their grants before the start of the next round in 1 November 2021.

28. As a result, Council Officers will keep regular contact with the affected successful applicants, to remind them to up-lift their grants before 31 October 2021. Where notified that a grant will not be up-lifted before 31 October 2021, successful applicants will have till 30 April 2022 to up-lift a grant.

29. If funds remain unclaimed by this date, Council Officers will work with the applicants. If the monies are not recollected, the monies will then be returned to the Manaaki Urupā Grant fund for future distribution.

30. This response is intended to mitigate the potential risk of grants not being up- lifted before the start of the next round later this year. However, with a return to a single application round for the 2021-22 round, Council Officers will monitor the situation to determine whether provisions regarding the late up-lift of grants should be added during the 2023-24 review of the policy.

Grant funding

31. With the grant almost fully subscribed in its first year of implementation, it is likely that there will be an increase in applications for both the 2021-22 and 2022-23 rounds. Placing greater pressure on the fund, this may result in smaller, less useful distributions. To mitigate over-subscription of the grant, it is proposed that priority be given to applications from owners or trustees of urupā, who did not apply in the 2020-21 round.

32. This is intended to be an interim solution, until the scheduled review of the Manaaki Urupā Grant Policy in 2023-24, which is discussed further below.

Policy review

33. A review of the Manaaki Urupā Grant Policy is scheduled for 2023-24, with a focus on the following areas:

 eligibility criteria;

19 1 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

 application process;

 purpose of the grant (including the total annual fund available);

 evidence requirements;

 the review process and next review timeframe (paragraph 10, Manaaki Urupā Grant Policy refers).

34. To inform that review, an assessment form has been developed, which provides applicants the opportunity to give comment and feedback on their application experience. Attached as Appendix 1, completed assessment forms will be collated, and used to inform the 2023-24 review of the policy.

35. The review will also be informed by data being recorded in a Manaaki Urupā Grant Issues Log, information and data captured by the Smarty Grants programme, Council reports, as well as interviews with other groups like applicants, hapū and iwi and Council Officers.

NEXT STEPS

36. Council Officers will continue to work with successful applicants to finalise the payment of grants, following up where required with the objective of completing all payments, and up-lift of 2020-21 grants ahead of the opening of the next round on 1 September 2021.

FINANCIAL IMPLICATIONS

37. There are no financial and resourcing implications.

IMPLICATIONS ASSESSMENT

38. This report confirms that the matter concerned has no particular implications and has been dealt with in accordance with the Local Government Act 2002. Specifically:

 Council staff have delegated authority for any decisions made;  Unless stated above, any decisions can be addressed through current funding under the Long-Term Plan and Annual Plan;  Any decisions made are consistent with the Council’s plans and policies; and  No decisions have been made that would alter significantly the intended service provision for any significant activity undertaken by or on behalf of the Council, or would transfer the ownership or control of a strategic asset to or from Council.

20 1 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

APPENDICES

Appendix 1 Manaaki Urupā Grant Assessment Form (ECM8534350)

Appendix 2 Manaaki Urupā Grant Policy (ECM8534357)

Report Details Prepared By: David More (Kaitohutohu Māori) Team: Iwi Liaison Approved By: Aroha Chamberlain (Iwi Relationships Lead) Ward/Community: District wide Date: 10 May 2021 File Reference: ECM8533248

------End of Report ------

21 1.1 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

APPENDIX 1

New Plymouth District Council

Manaaki Urupā Grant Assessment Form 2020-2021

To help us improve the application process, please feel free to answer the following questions.

1. How did you find the online application process?

Very easy to use Easy to use Somewhat difficult to use Difficult to use

2. How long did it take to complete your application?

1 week or less 2-3 weeks 1 month More than 1 month

3. What challenges did you encounter when working through your application?

4. What improvements would you suggest to improve the application process?

22 1.2 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

APPENDIX 2

NEW PLYMOUTH DISTRICT COUNCIL

MANAAKI URUPĀ GRANT POLICY

1. INTRODUCTION The purpose of this policy is to guide the assessment, approval, administration and review of the Manaaki Urupā Grant. Consistent with support Council provides the rural cemeteries at Huirangi, Lepperton, Tikorangi and Tongapōrutu, the grant has been established to support trustees and/or owners in the annual care and maintenance of their urupā.

2. OBJECTIVES The objectives of this policy are to ensure:

a) Clear, concise and easy to understand criteria;

b) Assessments are thorough and consistent;

c) Final decisions are robust and defensible; and

d) Council and applicants are clear of their respective responsibilities.

3. DEFINITIONS Evidence: Tangible, verifiable proof of, for example, estimated costs, support of the application, and completion of proposed urupā grounds maintenance activities.

Urupā: Māori burial ground.

4. RESPONSIBILITY The New Plymouth District Council is responsible for approving grants under this policy.

5. PURPOSE a) The purpose of this contestable grant is to partially cover costs for activities directly related to the care of urupā;

b) The total annual funding available for distribution under the Manaaki Urupā Grant is $50,000; and

c) Monies left-over from previous funding rounds will be carried over into the following year.

6. ELIGIBILITY To be eligible to apply for a Manaaki Urupā Grant, the urupā must be:

a) Within the New Plymouth District; and b) Located on: i. Land designated a Māori reservation under section 338 of the Te Ture Whenua Māori Act 1993 for the purposes of an urupā; or

ii. Māori freehold land; or

iii. General freehold land in Māori ownership.

23 1.2 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

7. SCOPE 7.1 Activities that will be considered for a grant include, but are not limited to the following:

a) Repair and maintain gateways, fences, etc.;

b) Maintain, clean, repair and restore headstones, install berms, etc.;

c) Maintain, repair or replace existing ground maintenance equipment; d) Maintain and repair pedestrian and vehicular access and parking; and e) Maintain urupā lawns, hedges, trees, etc., and remove green waste. 7.2 Council may also consider urgent protection-related work on a case-by-case basis, including but not limited to:

a) Erosion-related mitigation;

b) New car-parking, and vehicle and pedestrian access ways; and c) Flood-mitigation. 7.3 The grant may not be used for:

a) Establishing a new urupā;

b) Multiple-year projects;

c) Payment of salaries, wages, commission, fees, etc.; and d) Power and water rates, legal fees or leases.

8. APPLICATION PROCESS 8.1 Applying for a grant a) Applications must meet all the relevant provisions of this policy;

a) Applications may only be submitted via the online Application Form available on the Council’s website;

b) All sections marked by a * in the form must be completed; and

c) Only 1 application per urupā will be accepted per annual funding round.

8.2 Timeframes a) Council will accept applications from 1 September to 31 October each year; and

b) Invitations to submit applications will be advertised through various media channels, with iwi and hapū notified directly through their respective representative entities.

8.3 Assessment a) Council’s Iwi Relationships Team will be responsible for assessing applications, with support from the Community Partnerships Team; and

b) The process for assessing Manaaki Urupā Grant applications is attached to this policy as APPENDIX 1.

9. EVIDENCE REQUIREMENTS Further details regarding the evidence requested in the Manaaki Urupā Application Form is attached to this policy as APPENDIX 2.

24 1.2 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

10. POLICY REVIEW a) The policy will be reviewed in 2023-24, guided by the framework attached to this document as APPENDIX 3;

b) To answer the framework questions, the review will consider evidence from numerous sources including, but not limited to:

Past applications; and

Feedback from: applicants; urupā owners/trustees; application sponsors; contractors; Council officers; and whānau and hapū; and

c) Where recommended, the Community Partnerships Team will report back to Te Huinga Taumata to approve proposed changes to this policy.

POLICY HOLDER The contact for this policy is the Community Partnerships Team, Strategy Group.

25 1.2 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

26 1.2 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

A. Manaaki Urupā Grant Application: Evidence Requirements

27 1.2 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

Manaaki Urupā Grant Policy Assessment Framework

Policy section Rationale Assessment questions a) How well does the criteria ensure urupā are located within the District?

Section 6: Confirm that the urupā is b) Was an urupā excluded under the criteria, and if so, 1. Eligibility within the District. why? c) Is there sufficient evidence to warrant revising the criteria, and if so, why?

a) How well does Section 7 of the policy cover the range of activities applied for by Applicants?

b) To what extent were applications or activities declined because of not meeting Section 7 requirements? c) To what extent were applications seeking a grant for Indicate the types of Section 7: protection- or health and safety-related activities 2. activities, which would be Scope successful? considered for a grant. d) What impact did these applications have on distributions generally? e) Is there sufficient evidence to warrant: Revising this section, and if so, why; and Increasing the total annual grant available.

a) How well does the 2-month September-October Ensure clarity around the application timeframe work for applicants? Section 8: application process, and b) To what extent is the grant effectively meeting the 3. Application assessment and decision- demands of urupā owners/owners? Process making responsibilities. f) Is there sufficient evidence to warrant revising this section, and if so, why. a) How well do Applicants meet the requirements detailed in APPENDIX 2?

Detail the evidence b) Are the details useful, and if not, how could they Section 9: requirements in the improved? 4. Evidence Manaaki Urupā Grant c) Has the discretionary clause at Section A3(b) been Requirements Application Form. used, and if so what was the outcome? d) Is there sufficient evidence to warrant revising this section, and if so, why. a) How well does Section 10 support a thorough Describe the review process Section 10: assessment of the policy? 5. at the end of Year 2 of Policy Review b) Is there sufficient evidence to warrant revising this implementation. section, and if so, why.

a) To what extent does the assessment process support the effective and efficient processing of applications?

APPENDIX 1: b) To what extent are decisions reached clear, Application Illustrate the process for transparent and defendable? 6. Assessment assessing applications. c) How well does the assessment process reflect the Process actual assessment of applications? d) Is there sufficient evidence to warrant revising the assessment process, and if so, why.

28 1.2 Council agenda (6 July 2021) - Manaaki Urup? Grant Allocation Report

Policy section Rationale Assessment questions

a) How well do applicants meet the requirements? b) Is the information provided useful, and if not, how

APPENDIX 2: could they improved? Detail the grant’s evidence 7. Evidence c) Has the discretionary clause at Section A3(b) been requirements. Requirements used, and if so what was the outcome? a) Is there sufficient evidence to warrant revising this section, and if so, why.

a) How useful are the prompts as a starting point for gathering data and information to inform the policy’s

APPENDIX 3: review? Provide prompts to guide 8. Review b) To what extent does the evidence gathered provide a the policy review. Framework useful basis for improving the policy? b) Is there sufficient evidence to warrant revising the review prompts, and if so, why.

29 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2

TARANAKI THREE WATERS AGGREGATION STUDY

PURPOSE

1. The purpose of this report is to inform the Council of the outcome of the Taranaki Three Waters Aggregation Study commissioned by the region’s Mayoral Forum.

RECOMMENDATION That, having considered all matters raised in the report, the report be noted.

STRATEGY AND OPERATIONS COMMITTEE RECOMMENDATION

2. The Strategy and Operations Committee endorsed the officer’s recommendation.

COMMUNITY BOARD RECOMMENDATIONS

3. The Clifton, Inglewood, Kaitake and Waitara community boards have endorsed the officer’s recommendation.

TE HUINGA TAUMATUA RECOMMENDATION

4. Te Huinga Taumatua Committee endorsed the officer’s recommendation.

SIGNIFICANCE AND ENGAGEMENT

5. This report is provided for information purposes only, and has been assessed as being Significant. This assessment is based on the fact that the report outlines potential options that would see the council transfer the ownership and/or control of strategic assets (as listed in schedule 3 of the Council’s Significance and Engagement Policy).

EXECUTIVE SUMMARY

6. In early 2019 the Taranaki Mayoral Forum sponsored a study to explore the potential benefits and options for the aggregation of the three district council’s Three Waters services (drinking water, wastewater and stormwater).

7. Stage one of the study provided an overview of the service delivery operational environment and risk scape and then assessed the main practicable options available, which included maintaining the status quo, a regional shared business unit and a regional asset owning council-controlled organisation.

30 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2

8. At the conclusion of stage one, the Mayoral Forum agreed to proceed with stage two of the study in order to develop an Indicative Business Case and identify which of the options was the preferred option.

9. Subsequent to the commencement of stage two of the study, the Department of Internal Affairs national reform programme began to gather momentum. As a result of advice from the Department of Internal Affairs, the option of a multi- regional asset owning service delivery entity was added to the Indicative Business Case. This was on the basis that the assessment of this particular option would provide insights to the three district councils so that they are better informed and more able to engage in the national reform debate and process.

10. The Indicative Business Case has been undertaken by the independent consultants GHD based on the Treasury’s Better Business Case methodology.

11. The Indicative Business Case concluded that both a regional and multi-regional service delivery entity would provide benefits in terms of safe, reliable service delivery, improved economies of scale and efficiencies as well as improved technical capability and capacity.

12. Due to the perceived balance between economies of scale and local accountability, as well as political and community acceptability, a Taranaki only regional entity was identified as the preferred option.

13. A report including the Indicative Business Case was presented to the Mayoral Forum in March 2021. The report asked the Forum to confirm the next steps regarding the Taranaki Three Waters Aggregation Study. The options presented were:

i) Conclude the study and do no further work.

ii) Engage specialist consultant services and advice on the implications of a multi-regional service delivery entity in anticipation of the national reforms process

iii) Proceed with the Indicative Business Case preferred option and prepare a detailed plan for the establishment of the Taranaki regional Three Waters service delivery entity.

14. Given the current stage of the national reform process, with a key cabinet decision expected to be made in May 2021, the Mayoral Forum decided to put the study on hold, with the option to restart it once more information about the shape and nature of the national reform proposal is available.

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DISCUSSION

15. In early 2019, the Taranaki Mayoral Forum sponsored a study to explore the potential benefits and options for the aggregation of the three district council’s Three Waters services (drinking water, wastewater and storm water) so that they could be delivered by a single service provider. 16. The Mayoral Forum approved a set of Terms of Reference (ToR) for the study. The ToR split the study into two stages. The scope of stage one was limited to a desktop review of:

 The risk scape associated with Three Waters service delivery;

 The three council’s performance track records; and

 A high level assessment of potential options for aggregation that may warrant further exploration at stage two of the study.

17. New Plymouth District Council was appointed to coordinate stage 1 of the study with the input and support of the engineering/infrastructure management teams from Stratford and South Taranaki district councils.

18. The conclusions of stage 1 of the study are summarised as follows:

 Whilst the region’s Three Waters service delivery performance has improved over the last 10 years, further improvement is still necessary to reach an acceptable level;

 At the same time there are a variety of drivers that are increasing the performance expectations on Three Waters services;

 In order to make the necessary improvements and meet current and future service level expectations, our customers are inevitably going to have to pay more and;

 The status quo will struggle to deliver the scale of change that is required.

19. Stage 1 of the study recommended three broad categories of aggregation that should be investigated in stage 2 of the study. These are as follows:

 The Status Quo – continue with and enhance the existing cross boundary shared services for discrete functions, such as electrical engineering support and laboratory services.

 Joint Management Unit – formation of a single management unit for the operation and asset management of Three Waters services for the Taranaki region; however, the three councils retain ownership of and responsibility for funding their respective infrastructure.

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 Independent Council Controlled Organisation – formation of an independent Council Controlled Organisation for the operation and asset management of Three Waters services for the Taranaki region, including transferring the associated assets, debt and funding responsibilities to the new entity.

20. The findings of stage 1 of the study were presented to the Mayoral Forum in July 2019.

21. After the local body elections were completed, the findings were subsequently presented to the elected members of each of the three district councils.

22. The Mayoral Forum subsequently made the decision in April 2020 to proceed with the second stage of the study and develop an outline business case that assesses in more details the three options put forward by Stage 1 of the study. The independent consultants GHD were subsequently appointed to undertake the business case work on behalf of the three district councils.

23. Subsequent to the commencement of stage 2 of the study, the Department of Internal Affairs national reform programme began to gather momentum. As a result of advice from the Department of Internal Affairs, the option of a multi- regional asset owning service delivery entity was added to the indicative business case. This was on the basis that the assessment of this particular option would provide insights to the three district councils so that they are better informed and more able to engage in the national reform debate and process.

24. The indicative business case produced by GHD followed the Treasury’s Better Business Case methodology including; problem identification, investment objectives and associated benefits, options development and assessment as well as an outline of the commercial, financial and management cases for change.

25. A copy of the indicative business case is included in Appendix 1 of this report.

26. The benefits identified in the business case are summarised as:

 Improved environmental performance, particularly in regard to discharge receiving environments

 Safe and high quality drinking water that consistently meets the required standards

 Improved economies of scale and cost efficiencies

 Improved technical capability and capacity

33 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2

 A dedicated focus on water and a recognition of its true value.

27. The following three options were assessed by the business cases:

 Option 1 Status Quo – continuing with the current operational shared services (procurement of chemicals and SCADA services etc.)

 Option 2 A Taranaki Regional Asset Owning Entity – a standalone entity, such as a Council Controlled Organisation, that would own and operate Three Waters assets on behalf of the Taranaki councils and would directly bill its customers for Three Waters services.

 Option 3 A multi-Regional Asset Owning Entity – this option is effectively what is being proposed as part of the national Three Waters Reform programme. Whilst it is outside of the terms of reference for stage 2 of the study, it was added after advice from the Department of Internal Affairs on the grounds that it would provide some insight to the three Taranaki councils ahead of making any decisions to opt in/out of the national reforms programme.

28. The assessment of the three options found no fatal flaws with any of the options. The output of the multi-criteria Assessment (MCA) is summarised as follows:

 Option 1 scored relatively poorly at against key investment objectives related to improved investment, greater operational efficiency and development of a technical centre of excellence.

 Option 2 scored relatively strongly in terms of achieving investment objectives, and was therefore significantly better than the other two options. This option was identified as the preferred option because of factors such as the balance between scale and local accountability, deliverability and political and community acceptability.

 Option 3 scored relatively strongly against key investment objectives related to improved investment, greater operational efficiency, and development of a technical centre of excellence, but very poorly against local accountability and responsiveness. Option 3 also suffered because its comparison by necessity was limited by its ‘in principle’ construct and accordingly lacking quantification compared to the other two options.

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29. Overall there was a strong theme of the trade-offs between the economies of scale/improved efficiencies associated with a larger multi-regional entity and the local accountability and engagement with mana whenua that could be preserved with a Taranaki only entity. This was further reinforced by a high level assessment of several potential groupings of neighbouring district councils (from the Waikato to Wellington) that could potentially form a multi-regional entity.

30. In almost all groupings of neighbouring regions, there were no material benefits or disadvantages associated with a multi-regional entity. This is due to a number of factors such as the fact that almost all councils within these geographic areas have similar or greater renewals funding deficits. 31. It should be noted that the assessment was undertaken utilising data obtained from the Water New Zealand National Performance Review (NPR). Whilst this will give a good insights, the recent request for information by the Department of Internal Affairs that has subsequently been analysed by the Water Industry Commission for Scotland (WICS) is likely to provide much more detailed and accurate analysis.

32. The report to Mayoral Forum presented three practicable options as outlined below.

Option A: Note the Stage 2 Business Case and Conclude the Study.

33. This option would effectively conclude the Taranaki Three Waters Aggregation Study. No further work would be undertaken. Instead, the options for Three Waters aggregation will be solely led by the Department of Internal Affairs (DIA) voluntary reforms programme.

Option B: Note the Stage 2 Business Case and Engage specialist consultant services to start assessing the impacts a Multi-Regional Three Waters service delivery entity will have on the three district council organisations.

34. Whilst the Taranaki Three Waters Aggregation Study identifies a regional Three Waters service delivery entity as being the preferred option, the national Department of Internal Affairs-led Three Waters reforms have a preference for larger multi-regional entities. These national reforms are, at the time of writing this report, in the process of analysing data gathered from local authorities across New Zealand. This analysis will provide further insight into the financial, economic and management case merits of multi-regional Three Waters entities and the optimal number of such entities.

35. This option would effectively conclude the Taranaki Three Waters Aggregation Study and no further work would be undertaken to investigate the option of a Taranaki regional Three Waters service delivery entity.

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36. This option would see all three council’s jointly scoping further work to begin investigating the likely consequential impacts of the national Three Waters reform programme and any resultant multi-regional water supply entities. This would include issues such as the financial impact on the residual council organisations such as “stranded overheads”. The intention is to better prepare and support the three district councils to engage with the Department of Internal Affairs as they develop the detail of the proposed voluntary opt in/out Three Waters reforms.

Option C: Note the Stage 2 Business Case and endorse the recommendation that a Taranaki Regional Three Waters entity is the preferred delivery model and commence work to plan for the establishment of a Taranaki Three Waters service delivery entity.

37. This option involves officers of the three district councils reporting back to their respective councils on the progress and outcome of the Taranaki Three Waters Aggregation Study and the associated Stage 2 Business Case. These reports would include recommendations to commission a further piece of work to start planning for the establishment of a Taranaki regional Three Waters service delivery entity, noting that this does not entirely align with the direction currently being set by the DIA’s national reforms.

38. This option could be perceived as foreshadowing a decision by the three district councils to opt out of the national reforms programme. There is also a risk, should central government decide to mandate Three Waters reforms rather than continue with the current voluntary opt in/out approach, that any work undertaken on this option would need to be aborted and any sunk costs would be written off.

39. The Mayoral Forum decided to place the aggregation study on hold and defer making any decision on the next steps until more information is released by the Department of Internal Affairs about the shape and nature of the proposed reforms.

NEXT STEPS

40. The Taranaki Three Waters Aggregation Study is now on hold until further notice and there is currently no active work.

41. With regard to the national reforms process, current information available from the joint Department of Internal Affairs/LGNZ steering group indicates that central government will receive a cabinet papers in May 2021 providing the first level of detail around the proposed reforms, such as how many service delivery entities there will be and confirming if storm water will be included or not.

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42. It is also anticipated that each individual council will be given access to a data dashboard summarising the Water Industry for Scotland (WICS) analysis of the information all council’s provided in response to the Department of Internal Affair’s Request for Information (RFI).

43. The information available also confirms an intention by central government to introduce a temporary amendment to the Local Government Act (LGA) that will enable and streamline the consultation process on whether individual council’s should opt in/out of the reforms.

44. Assuming the LGA amendment is passed, it is expected that councils will be required by central government to consult their communities on this issue and then make the decision to opt in/out of the reforms process between September and December 2021.

FINANCIAL AND RESOURCING IMPLICATIONS

45. There are no immediate financial implications associated with this report.

46. There will likely be significant and material implications associated with the national Three Waters reform process; however, at this stage there is insufficient information to assess them.

IMPLICATIONS ASSESSMENT

47. This report confirms that the matter concerned has no particular implications and has been dealt with in accordance with the Local Government Act 2002. Specifically:

 Council staff have delegated authority for any decisions made;  Council staff have identified and assessed all reasonably practicable options for addressing the matter and considered the views and preferences of any interested or affected persons (including Māori), in proportion to the significance of the matter;  Council staff have considered how the matter will promote the social, economic, environmental, and cultural well-being of communities in the present and the future.  Unless stated above, any decisions made can be addressed through current funding under the Long-Term Plan and Annual Plan;  Any decisions made are consistent with the Council's plans and policies; and  No decisions have been made that would alter significantly the intended level of service provision for any significant activity undertaken by or on behalf of the Council, or would transfer the ownership or control of a strategic asset to or from the Council.

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APPENDIX Appendix 1 Taranaki Three Waters Aggregation Study – Stage 2 Business Case. (ECM8518262)

Report Details Prepared By: David Langford (Group Manager Planning & Infrastructure) Team: Planning & Infrastructure Approved By: Craig Stevenson (Chief Executive Officer) Ward/Community: District Wide Date: 16 April 2021 File Reference: ECM8520128 ------End of Report ------

38 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2.1

Options for 3 Waters Delivery for the Taranaki Region New Plymouth District Council (Co-ordinator) 19 March 2021

GHD ADVISORY 1 GHD Report for New Plymouth District Council (Co-ordinator) - Options for 3 Waters Delivery for the Taranaki Region

This document is in draft form. The contents, including any opinions, conclusions or recommendations contained in, or which may be implied from, this draft document must not be relied upon. GHD reserves the right, at any time, without notice, to modify or retract any part or all of the draft document. To the maximum extent permitted by law, GHD disclaims any responsibility or liability arising from or in connection with this draft document.

39 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2.1

Contents Glossary ...... 4

Executive summary ...... 5 Introduction ...... 5 Three Waters review ...... 5 Taranaki Stage 1 study...... 5 Process followed ...... 6 Problem statements ...... 6 Investment objectives and KPIs ...... 7 Benefits of investing ...... 7 Option descriptions ...... 7 MCA criteria and assessment ...... 8 Key outcomes ...... 9 Preferred way forward ...... 10 Financial Case ...... 10 Commercial Case ...... 11 Management Case ...... 11 Next steps ...... 11

1. Introduction and background ...... 13

1.1 Introduction ...... 13 1.2 Impact of the Three Waters Reform Programme ...... 13 1.3 Stage 1 Taranaki three waters aggregation study ...... 15 Scope of study ...... 15 Current state summary ...... 16 Stage 1 findings ...... 17 Recommended options for investigation in Stage 2 ...... 17 1.4 Process followed ...... 18 1.5 Scope of work ...... 19 2. Strategic context ...... 20

2.1 National strategies ...... 20 Three Waters Reform Programme ...... 20 National Policy Statement for Freshwater Management ...... 21 Action for Healthy Waterways ...... 22 2.2 Regional strategies ...... 23

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Water and Soil plan review ...... 23 Involvement of iwi in decision-making relating to water ...... 23 2.3 Local strategies ...... 24 2.4 Demographics ...... 24 3. Strategic Case ...... 25

3.1 Defining the problem ...... 25 Problem statement 1 - Funding gap and affordability ...... 25 Problem statement 2 - Ageing assets ...... 25 Problem statement 3 - Fragmented and inconsistent delivery ...... 25 Problem statement 4 - Ongoing compliance gaps ...... 25 Problem statement 5 - Community expectations of environmental performance ...... 25 Problem statement 6 - Resilience ...... 26 3.2 Investment objectives and KPIs ...... 26 3.3 Benefits of investing ...... 26 4. Economic case ...... 27

4.1 Option descriptions ...... 27 Option 1 - Status quo/enhanced joint service delivery ...... 27 Option 2 – Taranaki region asset owning entity ...... 27 Option 3 – Multi-region asset owning entity ...... 28 Broad impact of options ...... 29 4.2 Options assessment ...... 30 MCA criteria ...... 30 MCA assessment ...... 30 Key outcomes ...... 31 4.3 Preferred way forward ...... 32 5. Financial, Commercial, and Management Cases ...... 33

5.1 Financial Case ...... 33 5.2 Commercial Case ...... 33 5.3 Management Case ...... 34 5.4 Risk and uncertainty ...... 34 6. Next steps ...... 36

GHD ADVISORY 3 GHD Report for New Plymouth District Council (Co-ordinator) - Options for 3 Waters Delivery for the Taranaki Region

41 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2.1

Appendices Appendix A – Water assets summary ...... 38

Glossary

CBA Cost Benefit Analysis . .

CCO Council Controlled Organisation

DBC Detailed Business Case

IBC Indicative Business Case

ILM Investment Logic Mapping

KPI Key Performance Indicator

MCA Multi-criteria assessment

PCG Project Control Group

WWTP Wastewater Treatment Plant DIA Department of Internal Affairs

Disclaimer This report: has been prepared by GHD for New Plymouth District Council (Co-ordinator) and may only be used and relied on by New Plymouth District Council (Co-ordinator) for the purpose agreed between GHD and the New Plymouth District Council (Co-ordinator).

GHD otherwise disclaims responsibility to any person other than New Plymouth District Council (Co-ordinator) arising in connection with this report. GHD also excludes implied warranties and conditions, to the extent legally permissible.

The services undertaken by GHD in connection with preparing this report were limited to those specifically detailed in the report and are subject to the scope limitations set out in the report.

The opinions, conclusions and any recommendations in this report are based on conditions encountered and information reviewed at the date of preparation of the report. GHD has no responsibility or obligation to update this report to account for events or changes occurring subsequent to the date that the report was prepared.

The opinions, conclusions and any recommendations in this report are based on assumptions made by GHD described in this report. GHD disclaims liability arising from any of the assumptions being incorrect.

GHD has prepared this report on the basis of information provided by New Plymouth District Council (Co-ordinator) and others who provided information to GHD (including Government authorities), which GHD has not independently verified or checked beyond the agreed scope of work. GHD does not accept liability in connection with such unverified information, including errors and omissions in the report which were caused by errors or omissions in that information.

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42 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2.1

Executive summary

Introduction This Indicative Business Case (IBC) has been prepared by GHD for New Plymouth District Council, as coordinator for the three Taranaki territorial authorities of New Plymouth District, Stratford District, and South Taranaki District Councils. It responds to the New Zealand Government’s desire for reform in the water sector, which is being implemented through the Department of Internal Affairs Three Waters Reform Programme. The business case discusses options for three waters service delivery in the Taranaki region which are consistent with that Programme. It has been developed alongside a similar process for the Manawatu-Whanganui councils.

Three Waters review Since mid-2017, the Government has been reviewing the delivery of water, wastewater, and stormwater services. Its Three Waters Reform Programme has set some parameters that have a strong influence on this project, particularly: • a preference for asset owning entities of multiregional scale • a target of May 2021 for confirming the scale and form of entities, and for the late 2023 for them to be operational • release of significant initial funding for councils that agree to participate in the reform process • a very detailed request for information on the current state and performance of water assets.

Taranaki Stage 1 study In early 2019, the Taranaki Mayoral Forum commissioned a study of the potential benefits and options for aggregation of three waters services including the risk landscape associated with three waters service delivery, the three Council’s performance track records, and a high level assessment of potential options for aggregation. The study concluded that: • Whilst the region’s three waters service delivery performance has improved over the last 10 years, further improvement is still necessary to reach an acceptable level. • At the same time there are a variety of drivers that are increasing the performance expectations on three waters services. • In order to make the necessary improvements and meet current and future service level expectations, customers are inevitably going to have to pay more • The status quo will struggle to deliver the scale of change that is required. Three options were identified for further investigation: status quo, a joint management unit, and an independent asset owning Council Controlled Organisation. The content of this business case, which examines these options and also a multi-region asset owning enity1, was developed through a series of workshops and meetings with the three Taranaki councils2.

1 The rationale for this is to support councils in their engagement with the DIA process which includes multi-region entities. 2 Note that through this process, Options 1 and 2 from the Stage 1 study were effectively combined into single Option 1.

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43 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2.1

Strategic context The overall framework national level for water management includes the National Policy Statement for Freshwater and associated Action for Healthy Waterways, plus the formation of a new water regulator Taumata Arowai (with an initial focus on drinking water, but including wastewater and stormwater). These usher in new and higher standards for water management, and a comprehensive regulatory framework to enforce them. The higher standards reflect community expectations for safe drinking water, environmental protection of receiving water environments, and better management of the impacts of stormwater. All three territorial authority councils, and the regional council have strong relationships with the eight local iwi, and work with them on local decision-making relating to water. For significant decisions relating to water takes for drinking water, and discharge of both wastewater and stormwater, this is focused on the resource consent process, and there are also specific discussions about major investments in infrastructure scratch that in water infrastructure, such as upgrades to wastewater treatment plants. At a regional level, Taranaki is introducing a new soil and water plan that will be consistent with this national framework. The three councils have existing water asset investment plans that are based on sustaining the status quo, and do not generally incorporate additional investment required to meet new water quality standards across the three waters. Community plans relating to water and water assets at a territorial authority level are also embodied in the individual council’s asset management plans for water related assets.

Process followed The content of this indicative business case was developed through a series of workshops and meetings with the three Taranaki councils, using a Better Business Case (BBC) methodology. The process included:

• problem identification • investment objectives and benefits of investment • developing options • developing assessment criteria and assessing the options against criteria using a multi criteria analysis process to identify a preferred way forward • assessment of risks and uncertainty • outline of the commercial, financial, and management cases relating to market viability, funding, and implementation.

Problem statements 1 - Funding gap and affordability - Existing funding mechanisms and the ability of communities to pay has resulted in a significant backlog of required water infrastructure investment3. 2 - Ageing assets - The overall age of assets in the water sector is high, and many assets are in poor condition and require replacement. 3 - Fragmented and inconsistent delivery - Ownership and management of water assets is located across the councils and in many, often small, independent suppliers with different management approaches and systems.

3 Note that both South Taranaki District and Stratford District Councils could potentially access significant investment funds if a community consensus could be developed to apply the funds for this purpose.

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44 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2.1

4 - Ongoing compliance gaps - Because of the age, condition, and often outdated design of many assets achieving compliance with drinking water and wastewater can be challenging. 5 - Community expectations of environmental performance - Community expectations of environmental performance have been rising significantly, particularly those relating to the protection of receiving water environments. 6 – Resilience - In some locations water assets are vulnerable to damage from natural hazards and climate change, and the overall capacity of some assets such as stormwater may be affected by these factors.

Investment objectives and KPIs 1. Improved investment in three waters and assets and Compliance with nationally mandated improved regulatory compliance (health protection drinking water and receiving water standards and environmental performance)

2. Operational efficiencies and scale economies Cost of delivery per property and volumetric, gained from a larger entity number of faults, response times

3. Develop technical centres of excellence in Benchmarked organisational performance operations and staff capability -

4. Local accountability and responsiveness Community survey measures of engagement and satisfaction

5. Reliability and repeatability of delivery and meeting Compliance with nationally mandated compliance standards drinking water and receiving water standards

6. Improved resilience Ability to cope with climate change and natural disasters

Benefits of investing • Improved environmental performance, particularly in receiving environments • Safe, high quality drinking water • Improved scale economies and efficiencies • Improved technical capability and capacity • Focus on and recognition of the true value of water.

Option descriptions Option 1 - Status quo/enhanced joint service delivery Option description: This option involves the majority of management activities being moved over time to the existing shared services arrangement i.e. similar in concept to the Wellington Water model. This is significantly more than the current, relatively limited, set of services delivered jointly. Signoff of budgets and strategic direction would be retained by councils. Option 2 – Taranaki region asset owning entity Option description: this would be a stand-alone asset owning entity with a separate identity and direct relationship with customers, including direct billing for services. Councils would be shareholders in the new

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45 Council agenda (6 July 2021) - Taranaki Three Waters Aggregation Study Update Report 2.1

entity at proportions to be determined, and the form of the new entity would be similar to a CCO in terms of Council setting strategic direction but with independent governance. The governance structure is not yet developed but would be expected to include independent Directors. The entity would be able to borrow in its own right. The expectation is that the entity would meet Three Waters Reform Programme “design parameters” but would be focused on the Taranaki region only. The expectation is that it the entity would be unlikely to initially include stormwater due to funding mechanism issues. Option 3 – Multi-region asset owning entity Option description: the form and function of this entity would be similar to a Taranaki region asset owning entity, but at a much larger scale. Clearly the councils to be included would be heavily influenced by central government but there would be an opportunity for councils/regions to influence the final shape and form. Sub-options could be considered using criteria such as travel distances, scope for smoothing charges, age and condition of a combined asset base, natural alliances, etc. • 3a Alignment with Manawatu/Whanganui • 3b North to Waikato and BoP • 3c South of the Mountain • 3d Band across North Island (excl. Wellington) • 3e Band across North Island (incl. Wellington) No preference for a particular grouping has been expressed by the Taranaki councils, and this option has been assessed in principle only as a multi-region asset owning entity. Across the councils that are potential candidates for an aggregated entity, there are significant variations in asset condition, investment programmes, and the charges for individual services. For the two key impacts of charges to users and the extent of any ‘catch up’ investment required, initial analysis indicates that there could be some benefits for the Taranaki councils from lower average charges across a greater area, but this could be offset by a greater need for renewals investments. Overall, there do not appear to be any obvious and significant benefits or disbenefits in some of the possible groupings for the Taranaki councils in terms of the current charging and investment programmes.

MCA criteria and assessment The multi-criteria analysis criteria were developed in two areas: • how well the option supports the investment objectives • how the option rates against critical success factors or fatal flaws. The results of the MCA assessment which were developed with council representatives were as below:

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Option title Option 1 - Status quo/enhanced Option 2 - Taranaki regional asset Option 3 - Multi-region asset- joint service delivery owning entity owning entity

Total population served 122,500 122,500 say 500,000 – 1,500,000

Asset owning No Yes Yes

Investment objectives Weight Score Score Score

Facilitates improved investment in 25% 4 Unlikely to be achieved with current 5 Greater ability to work 5 Greater ability to borrow larger three waters assets and improved settings (STDC has capacity to collaboratively and likely to attract amounts/attract more government regulatory compliance (health continue investing in infrastructure some govt funding funding protection and environmental (LTIF)) performance) Delivers operational efficiencies and 15% 3 Possibly better scale economies in a 4 If entity was solely focussed on 3 Too big may result in smaller scale economies larger entity water/wastewater there would be plants/communities being efficiencies gained forgotten/lower priority due to fewer connections Allows the development of technical 15% 3 Don't really have capacity or staff 5 Could easily be achieved 5 Would provide for greater staff centres of excellence in operations numbers to warrant this but a joint capacity. Staff could feel more and staff capability service regionally could add some supported/have better back-up. benefit Supports local accountability and 25% 5 We know our communities, local 4 The closer you are the more 2 Bigger entity can be less visible to responsiveness issues, locations etc. Team can responsive you can be local community, hard to hold to respond in timely manner. Well account capable of this. Results in reliability and repeatability 10% 4 Currently deliver reliable service, 5 Can maintain greater focus on sole 5 Can maintain greater focus on sole of delivery have some plants with the same function/s function/s treatment systems. IT duplicated across plants. Supports greater resilience 10% 3 Current issues are capably dealt with 4 More back up, greater ability to step 3 More back up, greater ability to step in and bridge any gaps in and bridge any gaps Total for Investment Objectives out 100% 77 Strong on accountability but weak 90 Could achieve the step change in 75 Critical drawback is that size and 'big of 100 on investment/scale economies, and investment required without city priorities' are expected to also inconsistent with central sacrificing local accountability severely hinder local responsiveness government objectives and local input to water-related decision-making

Critical Success Factors: Weight Score Score Score

Achievability 25% 5 Status quo of enhanced joint service 4 More achievable politically than a 2 We see major difficulty in selling this delivery totally achievable larger entity option to our Elected Members and communities/Iwi

Value for money 25% 3 Larger scale entity MAY have 3 Larger scale entity MAY have 3 Larger scale entity MAY have economies of scale economies of scale economies of scale Optimal scale and structure 25% 3 Some vulnerability with staff 4 Greater staffing capacity, technical 4 Greater staffing capacity, technical numbers etc. knowledge etc knowledge etc Long term flexibility 25% 4 Can be nimble in the future if needed 4 Could go larger or smaller in the 3 Harder to be flexible in a bigger future entity Total for Critical Success Factors out o 100% 75 Achievable, no fatal flaws 75 Achievable, no fatal flaws 60 Achievable, no fatal flaws

Carry forward for further analysis Yes – as a basis for comparison only Yes, preferred Yes, specific grouping TBC

Key outcomes • No fatal flaws were identified for any of the three options, but there were serious misgivings about the achievability of Option 3, a multi-region asset owning entity. This was due to expected opposition at a political, community, and iwi/Māori level to a very large entity that would potentially have poor local accountability. • Option 1 scored relatively poorly at against key investment objectives related to improved investment, greater operational efficiency and development of a technical centre of excellence. • Option 2 scored relatively strongly in terms of achieving investment objectives, and was therefore significantly better than the other two options.

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• Option 3 scored relatively strongly against key investment objectives related to improved investment, greater operational efficiency, and development of a technical centre of excellence, but very poorly against local accountability and responsiveness. Option 3 also suffered because its comparison by necessity was limited by its ‘in principle’ construct and accordingly lacking quantification compared to the other two options. • Overall, a strong theme was the trade-off between the scale efficiencies in a very large multi-region entity, and the local accountability that could be achieved by an entity with a more focused community of interest. • It was felt that the vast majority of the benefits that could be achieved with a multi-region entity could also be achieved with an entity at regional scale, and there could even be some diseconomies of scale with a very large and unresponsive organisation. • With a multi-region entity that was delivering services to a large number of communities, the ‘big city priorities’ would inevitably dominate at the expense of smaller and more remote communities. It was the experience of many of these communities that they were easily forgotten and marginalised. • Moreover, communities and iwi/Māori could easily become detached from critical decision-making around water investment and management, including decisions relating to water takes and water discharges, if those decisions were made from afar.

Preferred way forward The current assessment of options shows a marked preference for Option 2, a Taranaki region asset owning entity. The rationale is that the vast majority of benefits that could be achieved with a multi-region entity could also be achieved with an entity at regional scale. An entity focused on Taranaki only would also support local accountability and responsiveness, and a sense of ownership of the management of water resources. No further work is recommended on Option 1, because of its poor delivery against investment objectives, and inconsistency with the stated direction of central government water reform. Option 3 should be retained in any further business case development, but only on the basis that investigation of this option would allow the Taranaki region to have a more meaningful discussion with central government, in the event that multi-regional entities were mandated. The current data collection and modelling work being carried out by DIA will provide a much more detailed picture of the status of individual councils and also the impacts of different aggregations of councils, including at a regional and multi-regional scale. This information would enable further evaluation of options, and that evaluation is recommended. A range of issues would arise in that situation, including how the assets owned by communities were valued, the impact on charging frameworks, and what alliances could result in the most effective delivery of overall water related objectives.

Financial Case The intent of the Three Waters Reform Programme is to introduce a new model for water infrastructure investment and water service delivery, which is funded by user charges and (at least initially) taxpayer funding. Part of that model will involve averaging charges over much larger areas, which typically means areas with higher density networks such as cities will support those with lower density networks such as smaller communities and rural areas. Therefore, the funding requirements and affordability of options in this business case are an intrinsic part of the options themselves. This will require substantial further work to

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model the required investment levels and the plan to replace and upgrade assets to meet new and significantly higher standards.

Commercial Case For the commercial case, Options 2 and 3 require a significant transition from a large number of asset owners and suppliers of water services (67) to a much smaller number with a dramatically different operating model. This transition will require a wide range of skills in areas such as organisational design, governance, financial analysis, asset management, data and analytics, etc. These skills are freely available in the New Zealand and wider market and have been applied in other areas such as electricity sector and telecommunications sector reform. However there are potentially constraints in the technical skills required to design, build, and manage water- related assets. These are already in relatively short supply and the expected investment programme will involve a significant increase to close an existing infrastructure deficit and lift the level of future investment to meet higher standards and community expectations. This is likely to require detailed planning to ensure the necessary resource is available as this investment comes on stream.

Management Case For the management case, the expected mechanism to implement a new asset owning entity, at a regional or multiregional scale, would be to set up an establishment unit which could plan and carry out the implementation. For a Taranaki scale entity, many of the governance processes and relationships already exist to support this. For example, at the political level there are established structures including a regional leadership group that includes the Iwi Chairs, and a Mayoral Forum for issues that involve the councils collectively. The Mayoral Forum is managing the Taranaki Three Waters Aggregation Study. The Chief Executives of the region’s councils also collaborate on a number of joint service delivery activities, including the existing shared services in the water area. Should a detailed business case lead to a Taranaki region entity, these structures could be utilised to manage the implementation. A key aspect of developing a more detailed way forward is the consultation and stakeholder engagement needed to achieve community buy-in. Although there has been significant national publicity about the water reform process, and the implementation of higher environmental standards, there has been relatively little consultation and engagement at a local level. In addition, councils are currently preparing their next long- term plans and spending on water assets capex and opex are a significant part of these plans. Relatively soon, the way in which these plans are related to any plans for investment by new water entities will need to be resolved.

Next steps Next steps for this project will be strongly influenced by the overall DIA Three Waters Reform Programme. The Taranaki councils could further develop the option of a Taranaki region asset owning entity by further investigating and analysing areas such as: • with DIA, investigating changes to legal/accounting issues that may limit the effectiveness of a regional CCO 4 • preparing draft financials that included projected investment levels and transition costs

4 such as the rolling up of debt onto the shareholding council’s balance sheets that limits access to capital for the CCO. investigating asset condition assessments and valuations

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• examination of the impact of stranded overheads • developing detailed transition and implementation plans • risk analysis • engaging with communities and iwi/Māori on future options. Information generated could support a discussion with central government on the best solutions for the Taranaki region, and in particular demonstrating how the overall water reform objectives could be achieved with a Taranaki region asset owning entity. From the analysis in this business case, key parts of that discussion could be: • demonstrating how acceptable levels of scale economies could be achieved • showing how an effective model of iwi/Māori and community input could support shared ownership of the cultural and environmental values relating to water. This could be supported by the more detailed quantitative information that will be produced by the DIA data gathering and modelling processes, specifically through further analysis and evaluation of options.

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1. Introduction and background

1.1 Introduction This Indicative Business Case (IBC) has been prepared by GHD for New Plymouth District Council, as coordinator for the three Taranaki territorial authorities of New Plymouth District, Stratford District, and South Taranaki District Councils. It responds to the New Zealand Government’s desire for reform in the water sector, which is being implemented through the Department of Internal Affairs Three Waters Reform Programme. The business case discusses options for three waters service delivery in the Taranaki region which are consistent with that Programme. It has been developed alongside a similar process for the Manawatu-Whanganui councils. An IBC aims to provide decision-makers with an indication of the preferred way forward for an investment proposal. The evidence expected of an IBC is indicative by nature. It provides the decision-makers with an early opportunity to consider change and confirm the preferred option being considered before more detailed evidence is gathered in a detailed business case (DBC).

1.2 Impact of the Three Waters Reform Programme Since mid-2017, the Government has been reviewing the delivery of water, wastewater, and stormwater services. This has been driven by issues in the areas of: • Weaknesses across the regulatory system relating to both drinking water and the impacts of water takes and discharges on the environment • Funding and financing, particularly the difficulties of funding water assets from rates funding at a level that respond to population growth and community expectations of environmental standards. This had resulted in a significant infrastructure deficit in terms of investment in assets which were fit for purpose. • Capability and capacity where the ownership and stewardship of water assets is often the responsibility of relatively small councils, and the technical requirements for water management continue to increase. In late 2018, the Government committed to significant reform of the sector, prioritising regulatory reform over changes to service delivery5. The regulatory reform included system wide changes to drinking water legislation, targeted changes to wastewater and stormwater legislation, and establishment of a water regulator, Taumata Arowai. In early 2020, changes to service delivery arrangements were signalled in principle, with an expectation that local government would need to demonstrate tangible progress towards new service delivery arrangements by the end of that calendar year6. Funding was made available to support councils in this process. The three

5 Department of Internal Affairs, April 2018. Review of three waters infrastructure: key findings and next steps, retrieved 3 October 2020, from https://www.dia.govt.nz/diawebsite.nsf/Files/Three-Waters-Review-Cabinet-papers-April-2018/$file/Review-of-three-waters- infrastructure-key-findings-and-next-steps-April-2018-a.pdf 6 Department of Internal Affairs, January 2020. Three waters service delivery and funding arrangements: approach to reform, retrieved 3 October 2020 from https://www.dia.govt.nz/diawebsite.nsf/Files/Proactive-releases/$file/three-waters-service-delivery-and-funding- arrangements-approach-to-reform.pdf

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potential service delivery models signalled at that point were a single entity for the entire country, three to five multiregional entities, or regional entities roughly corresponding to existing regional council boundaries. The development of this business case was commenced in April 2020 in this context. However, in July 2020 the Government announced a more ambitious Three Waters Reform Programme as part of an overall $761 million funding package which included an allocation of $523 million to councils, $30 million for rural water supplies, $51 million for Taumata Arowai, and some funding retained to be potentially applied to the Auckland area7. The decision to use funding in this way, including an indication this would be the first of multiple rounds of funding, was significantly influenced by the need to provide stimulus funding in the wake of the Covid-19 epidemic. Investment in water infrastructure was seen as ‘nation building’ that would generate economic activity as well achieve a wide range of social and environmental objectives. A key aspect of the Programme was the promulgation of a set of “design features” for new water services as follows: A. Water service delivery entities that are: • of significant scale (most likely multiregional) to enable benefits from aggregation to be achieved over the medium to long-term • asset owning entities with balance-sheet separation, to support improved access to capital, alternative funding instruments and improved balance sheet strength • structured as statutory entities with appropriate and relevant commercial disciplines and competency-based boards. B. Delivery of drinking water and wastewater as a priority, with the ability to extend to stormwater service provision only where effective and efficient to do so. C. Publicly owned entities, with a preference for collective Council ownership. D. Mechanisms for enabling iwi/Māori and communities to provide input in relation to the new entities8. An overall timeline has also been set which includes resolving the form of new entities by May 2021, and for those new entities to be operational by late 2023. The overall timeline incorporating Taranaki initiatives is as below: • Jun 2017 review of three waters sector

• Apr 2018 reform programme proposed • Nov 2018 regulation and service delivery proposals • Early 2019 Stage 1 of Taranaki water reform discussion commences • June 2019 report on targeted stakeholder engagement • Aug 2019 proposal for a new drinking water regulator

7 Department of Internal Affairs, 8 July 2020. Major investment in safe drinking water. Retrieved 3 October 2020 from https://www.beehive.govt.nz/release/major-investment-safe-drinking-water 8 Department of Internal Affairs, September 2020. Taumata Arowai and Three Waters Reform Programme iwi/Māori pre-workshop introductory webinar slide pack. p.16. Retrieved 3 October 2020 from https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters- reform-programme/$file/Presentation-for-Pre-Hui-Webinar-15-September-2020.pdf

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• Dec 2019 national stock-take and cost upgrade estimates • Jan 2020 reform programme objectives - tangible progress by end of CY 2020 • Apr 2020 stage 2 of Taranaki water reform discussion commences • Jul 2020 new legislation creating Taumata Arowai • Jul 2020 funding announcement for three waters change programme • Feb 2021 provision of Council data requests to DIA • May 2021 form and scale of new water entities confirmed • Late 2023 new water entities operational The announcement of the Three Waters Reform Programme substantially changed the scope of this project part way through, by: • setting the parameters for options, especially that they be asset owning and potentially of multiregional scale • changing the nature of the discussion from a voluntary process within the councils to one that was responding to central government preferences with a clear timeline for a decision on the form of the new entities • more recently, initiating a process of detailed data collection that will map the current state and performance of water assets and effectively be the single point of reference for that data. Therefore, detailed consideration of the financial and implementation aspects, such as stranded overheads identification and governance models, of a new water entity for the Taranaki region became less applicable. The focus has shifted to developing a Taranaki position in terms of preferences for the scope and scale of a new entity that could support a discussion with central government. Department of Internal Affairs (DIA) funding and support for this project has been confirmed, with guidance that there should be less focus on shared service models and more focus on whether there should be a Taranaki region entity or multi-region entity. It also seems highly likely that the objectives, funding, and timeline of the Three Waters Reform Programme have survived the 2020 general election.

1.3 Stage 1 Taranaki three waters aggregation study

Scope of study In early 2019, the Taranaki Mayoral Forum sponsored a study to explore the potential benefits and options for the aggregation of the three district council’s three waters services (drinking water, wastewater and storm water) being aggregated together and delivered by a single service provider. The Mayoral Forum approved terms of reference for the study which split it into two stages, with stage 1 limited to a desktop review of:

• the risk landscape associated with three waters service deliver • the three Council’s performance track records

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• a high level assessment of potential options for aggregation that may warrant further exploration in stage 2 of the study. New Plymouth District Council were appointed to coordinate stage 1 of the study with the input and support of the engineering/infrastructure management teams from Stratford and South Taranaki District Councils.

Current state summary The total water asset value for the region is as below:

Category Replacement $m Water 567 Wastewater 516 Stormwater & Flood protection 304 Total 1,387

The expected forward investment programme over the next 10 years is:

Forecasts $m 10 year depreciation9 214 Capital renewals funding 165 Capital renewals that will actually be completed 125 Probable gap between depreciation and asset renewals 89

Additional to meet Grade B for wastewater discharges to freshwater10 74-110 Additional to meet likely higher standards for wastewater discharges to ocean11 13-20 Additional to meet drinking water standards12 33-59

TRC Environmental Performance Reporting rates all three council’s performance complying with consent conditions as “high”. The track record for the last 5 years only has isolated instances of performance rated as “needs improvement”. The impact of aligning charges for water would be as below:

Impact of aligning residential water charges New Plymouth Stratford South Taranaki Stormwater general rate (calculated) $58 $80 $67 Wastewater targeted rate $500 $302 $619 Water targeted rate $300 $574 $592

9 Stratford has fully funded depreciation for water assets, South Taranaki and New Plymouth are partly funded. 10 DIA (GHD, Boffa Miskell), Sept 2018. Cost Estimates for Upgrading Wastewater Treatment Plants to meet objectives of the NPS Freshwater. Retrieved 9 October 2020, from https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters-documents/$file/Costs-of- wastewater-upgrades-GHD-Boffa-Miskel-Final-report-Oct-2018.pdf. 11 DIA (GHD, Boffa Miskell), Dec 2019. Cost estimates for upgrading wastewater treatment plants that discharge to the ocean. Retrieved 9 October 2020, from https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters-documents/$file/Report-2-Cost-Estimates-for- Upgrading-WWTPs-that-Discharge-to-the-Ocean.pdf 12 DIA (Beca), Dec 2019. Additional Analysis on Drinking Water Costs for Compliance. Retrieved 2 October 2020 from: https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters-documents/$file/Additional-Analysis-on-Three-Waters-Drinking-Water- Work.pdf Note this includes all types of drinking water suppliers, not just councils.

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Total $858 $956 $1,278 Rationalised rate for all three waters $950 $950 $950 Change $ $93 -$6 -$327 Change % 11% -1% -26%

A more detailed summary of water asset information is attached as Appendix A. As noted above, DIA have issued a Request For Information (RFI) relating to detailed water asset condition, value, and performance which is expected to form the basis of a national database.

Stage 1 findings The conclusions of Stage 1 of the study were: • Whilst the region’s three waters service delivery performance has improved over the last 10 years, further improvement is still necessary to reach an acceptable level. • At the same time there are a variety of drivers that are increasing the performance expectations on three waters services. • In order to make the necessary improvements and meet current and future service level expectations, our customers are inevitably going to have to pay more • The status quo will struggle to deliver the scale of change that is required. The findings of Stage 1 of the study were presented to the Mayoral Forum in July 2019, and after the 2019 local body elections were completed, the findings were subsequently presented to the elected members of each of the three district councils.

Recommended options for investigation in Stage 2 Stage 1 of the study recommended three broad categories of aggregation that should be investigated in Stage 2 of the study13. These are as follows: 1. The Status Quo – continue with and enhance the existing cross boundary shared services for discrete functions, such as electrical engineering support and laboratory services. 2. Joint Management Unit – form a single management unit for the operation and asset management of three waters services for the Taranaki region; however, the three councils retain ownership of and responsibility for funding their respective infrastructure. 3. Independent Council Controlled Organisation – form an independent Council Controlled Organisation for the operation and asset management of three waters services for the Taranaki region, including transferring the associated assets, debt and funding responsibilities to the new entity. In addition, this report includes the option of a multi-regional asset owning entity – i.e. to provide the councils with evidence based information to better engage in the national debate with DIA on the reforms programme.

13 Note that through this process undertaken for development of this business case, Options 1 and 2 from the Stage 1 study were effectively combined into single Option 1.

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1.4 Process followed The content of this indicative business case was developed through a series of workshops and meetings with the three Taranaki councils, using a Better Business Case (BBC) methodology. • Workshop 1 was held on 3 July 2022 at Stratford14 to confirm the case for change, identify problems and issues, potential benefits, and broad opportunities. (On 8 July the government announced the new water reform program and funding package). • Follow-up meetings were held on 29 and 30 July with the respective councils at Hawera, Stratford, and New Plymouth15 to discuss re-scoping as a result of the above government announcement, further development of options and development of criteria for assessment of options. • Workshop 2 was held by Zoom meeting on 11 September16 to discuss provisional options and to assess them using a multi criteria assessment (MCA) process. • Workshop 3 was held by Teams meeting on 25 September17 to further refine the assessment of options and arrive at an agreed position for a preferred way forward. This process is summarised below:

14 Attendees: Sven Hanne (Chief Executive, SDC), Waid Crockett (Chief Executive, STDC), David Langford (Infrastructure Manager, NPDC), Craig Stevenson (Chief Executive, NPDC), Peter Cook (Water Supply Manager, STDC), Steve Broome (Strategic Assets Manager, STDC), Fiona Greenhill (GM Community & Infrastructure Services, STDC), Mark Hall (Manager Water & Wastes, NPDC), Victoria Araba (Director – Assets, SDC), Graeme Pool (Principal Operations Engineer, NPDC), David Taylor (Network Planner, NPDC), Mike Oien (Services Asset Manager, SDC), Neville Anderson (Water Treatment Supervisor, STDC), Paul Jacobs (Engineering Officer, SDC), David Walker (GHD), Reiko Baugham (GHD), Paul Desborough (GHD). Apology: Herbert Denton (Works Delivery Manager, STDC).

15 Attendees: Hawera: Waid Crockett (STDC), Fiona Greenhill (STDC), Herbert Denton (STDC), Steve Broome (STDC), Peter Cook (STDC), Neville Anderson (STDC), Kobus Van der Merwe (STDC), Vicky (STDC); Stratford: Sven Hanne (SDC), Victoria Araba (SDC); New Plymouth: David Langford (NPDC), Mark Hall (NPDC), Graeme Pool (NPDC); All: David Walker (GHD), Paul Desborough (GHD).

16 Attendees: Waid Crockett (STDC), Fiona Greenhill (STDC), Sven Hanne (SDC), Victoria Araba (SDC), David Langford (NPDC), Craig Stevenson (NPDC), David Walker (GHD), Paul Desborough (GHD).

17 Attendees: Waid Crockett (STDC), Fiona Greenhill (STDC), Sven Hanne (SDC), Victoria Araba (STDC), David Langford (NPDC), Craig Stevenson (NPDC), David Walker (GHD), Paul Desborough (GHD).

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1.5 Scope of work The balance of this report includes sections that cover: • an outline of the strategic context • identification of the problem, investment objectives and potential benefits

• description of risks and uncertainty • development of options • development of assessment criteria consistent with the investment objectives • assessment of options and identification of a recommended way forward • discussion of the financial, commercial, and management aspects relating to funding, suppliers, and implementation.

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2. Strategic context

2.1 National strategies

Three Waters Reform Programme The overall timeline for this programme and its impact on this project are discussed above. Additional aspects of this programme relevant to the project are: • overall objectives • principles for consideration in determining the scale of new entities. The overall objectives for the reform process are: A. Mechanisms for enabling iwi/Māori rights and interests. B. Significantly improving safety and quality of drinking water services, and the environmental performance of wastewater and stormwater systems. C. Ensuring all New Zealanders have equitable access to affordable three waters services. D. Improving resource coordination and unlocking strategic opportunities to consider national infrastructure needs at a larger scale. E. Increasing resilience of three waters service provision to both short- and long-term risks and events, particularly climate change and natural hazards. F. Moving three waters services to a more financially sustainable footing, and addressing the affordability and capability challenges faced by small suppliers and councils. G. Improving transparency and accountability in cost and delivery of three waters services, including the ability to benchmark performance of service providers18. The programme has indicated the potential size of the entities could be considered against three principles: 1. Scale benefits- potential to achieve greater affordability into the future from greater scale of water service delivery at a multi-regional level to ensure full benefits of scale are achieved through a population/customer base. 2. Communities of interest - alignment of geographical boundaries to encompass natural communities of interest, belonging and identity including rohe/takiwā. 3. Relevant regulatory boundaries - relationship with relevant regulatory boundaries particularly to enable water to be managed on a holistic catchment basis from source to the sea19. Both of these aspects have an impact on the development and assessment of options that meet the investment objectives of the Taranaki region councils. The interests of those councils and their communities will not necessarily align with these overall objectives, or the design criteria that have been put forward as part of the Three Waters Reform Programme.

18 Department of Internal Affairs, September 2020. Taumata Arowai and Three Waters Reform Programme iwi/Māori pre-workshop introductory webinar slide pack. p.14. Retrieved 3 October 2020 from https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters- reform-programme/$file/Presentation-for-Pre-Hui-Webinar-15-September-2020.pdf 19 Ibid. p.15.

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National Policy Statement for Freshwater Management A key consideration for the councils during the option assessment amongst a range of new regulation is the new National Policy Statement for Freshwater Management 2020 (NPS-FM 2020) 20.This came into effect on 3 September 2020, provides local authorities with updated direction on how they should manage freshwater under the Resource Management Act 1991. The NPS-FM 2020 replaces the previous NPS-FM 2017 to prevent further loss and degradation of freshwater habitats and introduces more controls on some high-risk activities. The stricter regulations aim to stop further degradation of New Zealand’s freshwater resources and improve water quality within five years and reverse past damage and bring freshwater resources, waterways, and ecosystems to a healthy state within a generation. The Freshwater programme is established to safeguard life supporting capacity, ecosystems, indigenous species, health of people and communities, maintain or improve (where degraded) overall water quality for primary contact. The key objective is to achieve optimal health and economic wellbeing for all communities including Māori and existing and potential new users with sustainable freshwater quality. New requirements include: • Manage freshwater in a way that ‘gives effect’ to Te Mana o te Wai through involving tangata whenua

o Working with tangata whenua and communities to set out long-term visions in the regional policy statement

o Prioritising the health and wellbeing of water bodies, then the essential needs of people, followed by other uses.

o Improve degraded water bodies and maintain or improve all others using bottom lines defined in the NPS.

• An expanded national objectives framework:

o two additional values - threatened species and mahinga kai - join ecosystem health and human health for recreation, as compulsory values

o councils must develop plan objectives that describe the environmental outcome sought for all values (including an objective for each of the five individual components of ecosystem health)

o new attributes, aimed specifically at providing for ecosystem health, include fish index of biotic integrity (IBI), sediment, macroinvertebrates (MCI and QMCI), dissolved oxygen, ecosystem metabolism and submerged plants in lakes; councils will have to develop action plans and/or set limits on resource use to achieve these attributes.

o tougher national bottom lines for the ammonia and nitrate toxicity attributes to protect 95% of species from toxic effects (up from 80%)

o no national bottom lines for dissolved inorganic nitrogen (DIN) or dissolved reactive phosphorus (DRP) (as consulted on) but there is a requirement to manage these attributes as they relate to periphyton and other ecosystem health attributes, and to provide for the health of downstream ecosystems. • Avoid any further loss or degradation of wetlands and streams, map existing wetlands and encourage their restoration.

20 MfE, 2020. National Policy Statement for Freshwater Management. Source: https://www.mfe.govt.nz/fresh-water/national-policy- statement/about-nps

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• Identify and work towards target outcomes for fish abundance, diversity and passage and address in- stream barriers to fish passage over time. • Set an aquatic life objective for fish and address in-stream barriers to fish passage over time. • Monitor and report annually on freshwater (including the data used); publish a synthesis report every five years containing a single ecosystem health score and respond to any deterioration. In summary, the NPS-FM 2020 will continue to provide national level guidance in the form of ecosystem health (freshwater quality) targets for a range of contaminants. Within this guidance the national targets are categorised into attributes (A, B, C, and D), with Attribute A being the highest standard for both lakes and rivers. Attributes (e.g. total nitrogen, total phosphorus) and their associated national bottom lines in the NPS- FM 2020 were selected on the advice of specialist science panels. Ideally, water quality should be within Attribute A or B target ranges and suitable for primary contact.

Action for Healthy Waterways On 28th May 2020, the Minister for the Environment announced the Action for Healthy Waterways Essential Freshwater national direction package21. This announcement signalled where changes to the policy package had been made in response to the consultation on the proposals (then known as the 'Essential Freshwater' package) in September 2019. The amended policy documents which come into effect from 3rd September 2020 are: • National Policy Statement for Freshwater Management 2020 • National Environmental Standards for Freshwater 2020 • Stock Exclusion s360 Regulations • Measurement and Reporting of Water Takes s360 Regulations

Taumata Arowai – the Water Services Regulator Taumata Arowai (Water Services Regulator Act 2020) has been created by the Cabinet in September 2019 and anticipated to be New Zealand’s first new dedicated Water Services Regulator of three waters: Drinking water, Wastewater, and Stormwater by March 2021 after the enactment of the Water Services Bill. Until then, the Ministry of Health remains as the regulator22. Its main role is to oversee and administer an expanded and strengthened drinking water regulatory system and to ensure all New Zealand communities have access to safe drinking water. It will also oversee the environmental performance of wastewater and stormwater networks from a national perspective while regional councils remain as the primary regulators. Taumata Arowai will act in respect of its complementary bill, the Water Services Bill, introduced in July 2020. The Water Services Bill reforms the regulatory framework for drinking water and sets out Taumata Arowai’s wastewater and stormwater monitoring functions. The key objectives are outlined as below: • To give effect to Te Mana o te Wai, to the extent that Te Mana o te Wai applies to the functions and duties of Taumata Arowai

21 MfE, 2020. Action for Healthy Waterways Summary. Source: https://www.mfe.govt.nz/sites/default/files/media/Fresh%20water/action- for-healthy-waterways-summary.pdf 22 Water NZ, 2020. 3 Waters Reform. Source: https://www.waternz.org.nz/3_Waters_Reform

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• To protect and promote drinking water safety and related public health outcomes • To effectively administer the drinking water regulatory system, build and maintain capability among drinking water suppliers and across the wider industry • To provide oversight of, and advice on, the regulation, management, and environmental performance of wastewater and stormwater networks • To promote public understanding of the environmental performance of wastewater and stormwater networks

2.2 Regional strategies

Water and Soil plan review Taranaki Regional Council intends to combine its freshwater, soil, and air quality plans into one integrated ‘Natural Resources Plan’. The Council is currently reviewing and updating all relevant provisions including all draft provisions that would fit within the new framework for managing use, development and protection of air, land, and freshwater resources and to ensure that the region’s environment quality is improved. Following the release of the Action for Healthy Waterways package, the Council is planning to notify the proposed plan by December 202423.

Involvement of iwi in decision-making relating to water All three territorial authority councils, and the regional council have strong relationships with local iwi, and work with them on local decision-making relating to water. This includes specific representation on Council committees. For significant decisions relating to water takes for drinking water, and discharge of both wastewater and stormwater, this is focused on the resource consent process, and there are also specific discussions about major investments in water infrastructure such as upgrades to wastewater treatment plants. The map below indicates the rohe of the eight local iwi:

23 Taranaki Regional Council, 2020. Water and Soil Plan Review. Source: https://www.trc.govt.nz/council/plans-and-reports/strategy- policy-and-plans/regional-soil-plan/review-of-fresh-water-and-soil-plan/

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The Regional Council incorporates mātauranga Māori (traditional Māori knowledge) alongside western science into freshwater planning and monitoring24. The Council takes Iwi Management Plans into account in its own regional plans and Regional Policy Statement by meeting regularly with Iwi and Hapū on a range of issues of mutual interest, and for delivery of specific services including advice, expertise, information, research projects and training.

2.3 Local strategies Community plans relating to water and water assets at a territorial authority level are embodied in the individual council’s asset management plans for water related assets. An overview of current state, performance, and future investment plans is included in section 3.1, and more detail of each of the three waters infrastructure in Appendix A.

2.4 Demographics the June 2019 population estimates for the Taranaki councils were New Plymouth District, 84,400, Stratford District 9,860, South Taranaki District, 28,600. Population growth over the next 10 years is expected to focus on New Plymouth at 1% p.a., with growth in South Taranaki around 0.2% p.a., and Stratford around 0.3% p.a. Overlaying this is a trend to less residents per household which will result in more residential connections as a greater number of houses will be needed to accommodate the population. The impact of this is estimated at about 0.5% p.a. increase in number of connections.

24 Taranaki Regional Council, 2020. Working with Iwi. Source: https://www.trc.govt.nz/council/working-with-iwi/iwi-and-council/

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3. Strategic Case

3.1 Defining the problem

Problem statement 1 - Funding gap and affordability Existing funding mechanisms and the ability and willingness of communities to pay has resulted in a significant backlog of required water infrastructure investment25. Evidence of the problem: Programmed funding of $247 million is about half the estimated $516 million spend required to replace ageing infrastructure over the next 10 years. Existing three waters debt is $191 million. Over the next 10 years depreciation exceeds renewal budgets by $49 million.

Problem statement 2 - Ageing assets The overall age of assets in the water sector is high, and many assets are in poor condition and require replacement. Evidence of the problem: Existing asset base of $1.4 billion (DW, $567 million, WW $516 million, SW $304 million). The weighted average for all three waters pipes is 38 years, 27% are in in poor or very poor condition, and 22% have unknown condition.

Problem statement 3 - Fragmented and inconsistent delivery Ownership and management of water assets is located across the councils and in many, often small, independent suppliers with different management approaches and systems. Evidence of the problem: This is essentially a qualitative assessment – but supported by lack of scale, consistency in relation to delivery of essentially the same service/product when viewed at a regional or multi- regional level.

Problem statement 4 - Ongoing compliance gaps Because of the age, condition, and often outdated design of many assets achieving compliance with drinking water and wastewater can be challenging. Evidence of the problem: Over the past few years there has been a significant lift in compliance, but there are localised non-compliances and standards continue to increase.

Problem statement 5 - Community expectations of environmental performance Community expectations of environmental performance have been rising significantly, particularly those relating to the protection of receiving water environments. Evidence of the problem: Performance against consent conditions has generally been good, but community expectations continue to increase, including those driven at a national level such as the National Environmental Standards for Freshwater and the National Policy Statement for Freshwater Management.

25 Note that both South Wairarapa District and Stratford District Councils could potentially access significant investment funds if a community consensus could be developed to apply the funds for this purpose.

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Problem statement 6 - Resilience In some locations water assets are vulnerable to damage from natural hazards and climate change, and the overall capacity of some assets such as stormwater may be affected by these factors. Evidence of the problem: Should be considered but vulnerability to natural hazards and sea level rise is relatively localised.

3.2 Investment objectives and KPIs

Investment objectives KPIs

1. Improved investment in three waters and assets Compliance with nationally mandated and improved regulatory compliance (health drinking water and receiving water protection and environmental performance) standards

2. Operational efficiencies and scale economies26 Cost of delivery per property and gained from a larger entity volumetric, number of faults, response times

3. Develop technical centres of excellence in Benchmarked organisational performance operations and staff capability -

4. Local accountability and responsiveness Community survey measures of engagement and satisfaction

5. Reliability and repeatability of delivery and meeting Compliance with nationally mandated compliance standards drinking water and receiving water standards

6. Improved resilience Ability to cope with climate change and natural disasters

3.3 Benefits of investing • Improved environmental performance, particularly in receiving environments • Safe, high quality drinking water • Improved scale economies and efficiencies • Improved technical capability and capacity • Focus on and recognition of the true value of water.

26 Noting that these gains are likely to be modest and would be recycled into a higher level of investment.

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4. Economic case

4.1 Option descriptions

Option 1 - Status quo/enhanced joint service delivery Option description: this option involves the majority of management activities being moved over time to the existing shared services arrangement, i.e. similar in concept to the Wellington Water model. This is significantly more than the current, relatively limited, set of services delivered jointly. Signoff of budgets and strategic direction would be retained by councils. Indicative locations for generic functions in a joint service delivery entity are shown below:

Option 2 – Taranaki region asset owning entity Option description: this would be a stand-alone asset owning entity with a separate identity and direct relationship with customers, including direct billing for services. Councils would be shareholders in the new entity at proportions to be determined, and the form of the new entity would be similar to a CCO in terms of Council setting strategic direction but with independent governance. The governance structure is not yet developed but would be expected to include independent Directors. The entity would be able to borrow in its own right. The expectation is that the entity would meet Three Waters Reform Programme “design parameters” but would be focused on the Taranaki region only. The expectation is that it the entity would be unlikely to initially include stormwater due to funding mechanism issues.

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Option 3 – Multi-region asset owning entity Option description: the form and function of this entity would be similar to a Taranaki region asset owning entity, but at a much larger scale. Clearly the councils to be included would be heavily influenced by central government but there would be an opportunity for councils/regions to influence the final shape and form. Sub-options could be considered using criteria such as travel distances, scope for smoothing charges, age and condition of a combined asset base, natural alliances, etc. Example groupings for a multi-region asset owning entity are shown below: Potential Taranaki entity options 2. Taranaki 3a. Alignment 3b. North to 3c. South of 3d. Band 3e. Band regional asset with Waikato the across North across North owning entity Manawatu / Mountain Is (excl. Is (incl. Population Whanganui Wellington) Wellington) North Island Region Name June 2019 122,860 428,310 601,350 651,140 979,150 1,450,940 Northland Far North District 68,500 Northland Whangarei District 96,000 Northland Kaipara District 24,100 unitary authority Auckland 1,642,800 Waikato Thames-Coromandel District 31,500  Waikato Hauraki District 21,000  Waikato Waikato District 79,900  Waikato Matamata-Piako District 36,000  Waikato Hamilton City 169,500  Waikato Waipa District 56,200  Waikato Ōtorohanga District 10,500  Waikato South Waikato District 25,100  Wai 95%, M-W 5% Waitomo District 9,490  W 73%, BoP 14%, HB 11%, M-W 1%Taupō District 39,300  Bay of Plenty Western Bay of Plenty District 53,900   Bay of Plenty Tauranga City 144,700   BoP 62%, Wai 38% Rotorua District 75,100   Bay of Plenty Whakatāne District 37,100   Bay of Plenty Kawerau District 7,490   Bay of Plenty Ōpōtiki District 9,720   unitary authority Gisborne District 49,300    Hawke's Bay Wairoa District 8,680    Hawke's Bay Hastings District 85,000    Hawke's Bay Napier City 65,000    Hawke's Bay Central Hawke's Bay District 14,850    Taranaki New Plymouth District 84,400       Tar 68%, M-W 32% Stratford District 9,860       Taranaki South Taranaki District 28,600       Manawatū-Whanganui Ruapehu District 12,750     Manawatū-Whanganui Whanganui District 47,300     M-W 86%, HB 14% Rangitikei District 15,750     Manawatū-Whanganui Manawatu District 31,700     Manawatū-Whanganui Palmerston North City 88,300     M-W 98%, Wel 2% Tararua District 18,650     Manawatū-Whanganui Horowhenua District 35,000     Wellington Kapiti Coast District 56,000  Wellington Porirua City 59,100  Wellington Upper Hutt City 46,000  Wellington Lower Hutt City 108,700  Wellington Wellington City 210,400  Wellington Masterton District 26,800  Wellington Carterton District 9,690  Wellington South Wairarapa District 11,100  These show the total population served by sub- options such as:

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• 3a Alignment with Manawatu/Whanganui • 3b North to Waikato and BoP • 3c South of the Mountain • 3d Band across North Island (excl. Wellington) • 3e Band across North Island (incl. Wellington) No preference for a particular grouping has been expressed by the Taranaki councils, and this option has been assessed in principle only as a multi-region asset owning entity.

Broad impact of options Across the councils that are potential candidates for an aggregated entity, there are significant variations in asset condition, investment programmes, and the charges for individual services. For the two key impacts of charges to users and the extent of any ‘catch up’ investment required, initial analysis indicates that there could be some benefits for the Taranaki councils from lower average charges across a greater area, but this could be offset by a greater need for renewals investments. Overall, there do not appear to be any obvious and significant benefits or disbenefits in some of the possible groupings for the Taranaki councils in terms of the current charging and investment programmes. This is summarised below:

Water Wastewater Stormwater Total revenue Taranaki base Variance Variance Potential Taranaki entity options revenue revenue revenue per property case % 2. Taranaki regional asset owning entity $612 $623 $57 $1,292 $1,292 $0 0% 3a. Alignment with Manawatu / Whanganui $480 $572 $121 $1,173 $1,292 -$119 -10% 3b. North to Waikato $463 $500 $110 $1,074 $1,292 -$218 -20% 3c. South of the Mountain $440 $527 $113 $1,080 $1,292 -$212 -20% 3d. Band across North Is (excl. Wellington) $469 $572 $208 $1,249 $1,292 -$43 -3% 3e. Band across North Is (incl. Wellington) $470 $544 $206 $1,221 $1,292 -$71 -6%

Water - Wastewater - Stormwater - Total - Taranaki base Variance Variance Actual renewals Actual renewals Actual renewals Actual renewals case % Capex vs Depn Capex vs Depn Capex vs Depn Capex vs Depn 2. Taranaki regional asset owning entity 67% 108% 17% 74% 74% 0% 0% 3a. Alignment with Manawatu / Whanganui 101% 88% 27% 83% 74% 9% 11% 3b. North to Waikato 72% 88% 15% 70% 74% -4% -5% 3c. South of the Mountain 93% 70% 16% 67% 74% -7% -11% 3d. Band across North Is (excl. Wellington) 87% 72% 16% 66% 74% -8% -12% 3e. Band across North Is (incl. Wellington)

Notes Includes residential and commercial properties Based on Water New Zealand survey data which does not include data for all constituent councils As illustrated below there are significant variations at individual council level. The focus of this analysis is overall impacts of groupings, which result in averaged charges and investment

Three Waters Charges per annum per property $3,500 Water Wastewater Stormwater $3,000 $2,500 $2,000 $1,500 $1,000 $500 $-

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4.2 Options assessment

MCA criteria The multi-criteria analysis criteria were developed in two areas:

• how well the option supports the investment objectives, i.e.:

o Facilitates improved investment in three waters assets and improved regulatory compliance (health protection and environmental performance)

o Delivers operational efficiencies and scale economies o Allows the development of technical centres of excellence in operations and staff capability o Supports local accountability and responsiveness o Results in reliability and repeatability of delivery o Supports greater resilience • how the option rates against critical success factors or fatal flaws, which are:

o Achievability o Value for money o Optimal scale and structure o Long term flexibility Scoring on a 1-5 scale was on the basis of: 5 Strongly meets the criteria in all respects 4 Meets the criteria in most respects 3 Only partly meets the criteria 2 Does not meet the criteria 1 Fails to meet and is contrary to the criteria A weighting was applied to each investment objective criterion on to reflect its relative importance in the overall assessment. Equal weighting was applied to critical success factors. A total score out of 100 was calculated for each of the assessment areas.

MCA assessment The results of the MCA assessment which were developed with council representatives were as below:

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Option title Option 1 - Status quo/enhanced Option 2 - Taranaki regional asset Option 3 - Multi-region asset- joint service delivery owning entity owning entity

Total population served 122,500 122,500 say 500,000 – 1,500,000

Asset owning No Yes Yes

Investment objectives Weight Score Score Score

Critical Success Factors: Weight Score Score Score

Carry forward for further analysis Yes – as a basis for comparison only Yes, preferred Yes, specific grouping TBC

Key outcomes • No fatal flaws were identified for any of the three options, but there were serious misgivings about the achievability of Option 3, a multi-region asset owning entity. This was due to expected opposition at a political, community, and iwi/Māori level to a very large entity that would potentially have poor local accountability. • Option 1 scored relatively poorly against key investment objectives related to improved investment, greater operational efficiency and development of a technical centre of excellence. • Option 2 scored relatively strongly in terms of achieving investment objectives, and was therefore significantly better than the other two options.

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4.3 Preferred way forward The current assessment of options shows a marked preference for Option 2, a Taranaki region asset owning entity. The rationale is that the vast majority of benefits that could be achieved with a multi-region entity could also be achieved with an entity at regional scale. An entity focused on Taranaki only would also support local accountability and responsiveness, and a sense of ownership of the management of water resources. No further work is recommended on Option 1, because of its poor delivery against investment objectives, and inconsistency with the stated direction of central government water reform. Option 3 should be retained in any further business case development, but only on the basis that investigation of this option would allow the Taranaki region to have a more meaningful discussion with central government, in the event that multi-regional entities were mandated. The current data collection and modelling work being carried out by DIA will provide a much more detailed picture of the status of individual councils and also the impacts of different aggregations of councils, including at a regional and multi-regional scale. This information would enable further evaluation of options, and that evaluation is recommended. A range of issues would arise in that situation, including how the assets owned by communities were valued, the impact on charging frameworks, and what alliances could result in the most effective delivery of overall water related objectives.

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5. Financial, Commercial, and Management Cases

5.1 Financial Case The financial case relates to the funding requirements and affordability of the preferred option. A fundamental premise of the water reform process is that investment in water infrastructure has been for many years below the levels needed to meet community expectations of aspects such as drinking water quality, environmental outcomes for receiving waters, and stormwater impacts. Where this infrastructure is funded via rating mechanisms, there is a significant barrier to achieving the levels of investment needed. The intent of the Three Waters Reform Programme is to introduce a new model for water infrastructure investment and water service delivery, which is funded by user charges and (at least initially) taxpayer funding. Part of that model will involve averaging charges over much larger areas, which typically means areas with higher density networks such as cities will support those with lower density networks such as smaller communities and rural areas. Therefore, the funding requirements and affordability of options in this business case are an intrinsic part of the options themselves. This will require substantial further work to model the required investment levels and the plan to replace and upgrade assets to meet new and significantly higher standards.

5.2 Commercial Case The commercial case relates to the project feasibility and deliverability for investors and contractors, and showing that the supplier market has been tested. Options 2 and 3 require a significant transition from a large number of asset owners and suppliers of water services (67) to a much smaller number with a dramatically different operating model. This transition will require a wide range of skills in areas such as organisational design, governance, financial analysis, asset management, data and analytics, etc. These skills are freely available in the New Zealand and wider market and have been applied in other areas such as electricity sector and telecommunications sector reform. However there are potentially constraints in the technical skills required to design, build, and manage water- related assets. These are already in relatively short supply and the expected investment programme will involve a significant increase to close an existing infrastructure deficit and lift the level of future investment to meet higher standards and community expectations. This is likely to require detailed planning to ensure the necessary resource is available as this investment comes on stream. Further development of the commercial case would require components such as: • legal structure of the new entity, with a start point of a Council Controlled Organisation, but noting that this area is under investigation by central government because of the potential issues around revenue from rating, possible statutory objectives, etc. • organisational design and role definitions • shareholding structures • develop provisional change management plans for staff

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• governance mechanisms, including potentially co-governance with iwi/Māori.

5.3 Management Case The management case addresses the achievability of the proposal and planning arrangements required to both ensure successful delivery and to manage project risks. The expected mechanism to implement a new asset owning entity, at a regional or multiregional scale, would be to set up an establishment unit which could plan and carry out the implementation. For a Taranaki scale entity, many of the governance processes and relationships already exist to support this. For example, at the political level there is an established Mayoral Forum which meets regularly to address issues that involve the councils collectively, and manage specific projects such as the Stage 1 Taranaki Three Waters Aggregation Study. The Chief Executives of the region’s councils also collaborate on a number of joint service delivery activities, including the existing shared services in the water area. Should a detailed business case lead to a Taranaki region entity, these structures could be utilised to manage the implementation. A key aspect of developing a more detailed way forward is the consultation and stakeholder engagement needed to achieve community buy-in. Although there has been significant national publicity about the water reform process, and the implementation of higher environmental standards, there has been relatively little consultation and engagement at a local level. In addition, councils are currently preparing their next long- term plans and spending on water assets capex and opex are a significant part of these plans. Relatively soon, the way in which these plans are related to any plans for investment by new water entities will need to be resolved. A high level assessment of risks is included in Section 5.4.

5.4 Risk and uncertainty An assessment of key risks and uncertainties has been undertaken as below:

Risk Detail Likelihood Likelihood Mitigation H/M/L H/M/L

Political Elected members cannot High High Government subsidy incentive consensus agree on the recommended scheme, potential impact of way forward increased regulation on councils

Funding Ratepayers who have already Medium Low Communicate benefit of scale equity funded upgrades refuse to on long term costs contribute to other district upgrades

Customer Price and quality do not satisfy Medium High Ensure string focus on expectation customer expectations business as usual during any change

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Community Recommended change is not Medium High Government subsidy incentive acceptance broadly supported by scheme reducing future costs ratepayers to customers

Objective Change impacts on current Medium High Ensure strong focus on achievement council delivery requirements business as usual during any change

Management Impact of potential change High Medium Change process needs to be & staff effects outputs well structured and incorporate positive messaging around the benefits of change

Insufficient Regionally accepted position High Medium This can be addresses through change not significant enough for a combination of the way the Government imperatives change is structured and having a transition plan that is phased over time to allow councils time to adjust

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6. Next steps

Next steps for this project will be strongly influenced by the overall DIA Three Waters Reform Programme. The Taranaki councils could further develop the option of a Taranaki region asset owning entity by further investigating and analysing areas such as: • asset condition assessments and valuations • preparing draft financials that included projected investment levels and transition costs • examination of the impact of stranded overheads • developing detailed transition and implementation plans • risk analysis • engaging with communities and iwi/Māori on future options. Information generated could support a discussion with central government on the best solutions for the Taranaki region, and in particular demonstrating how the overall water reform objectives could be achieved with a Taranaki region asset owning entity. From the analysis in this business case, key parts of that discussion could be:

• demonstrating how acceptable levels of scale economies could be achieved • showing how an effective model of iwi/Māori and community input could support shared ownership of the cultural and environmental values relating to water. This could be supported by the more detailed quantitative information that will be produced by the DIA data gathering and modelling processes, specifically through further analysis and evaluation of options.

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Appendices

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Appendix A – Water assets summary Water Water Parameter New Plymouth Stratford South Taranaki All Taranaki Serviced Population 63,263 5,711 18,292 87,266 Residential Water Connections 25,134 2,381 7,673 35,188 Non-residential Connections 3,116 522 3,215 6,853 Total Connections 28,250 2,903 10,888 42,041 Average residential consumption (L/P/D) 335 209 246 Water treated (m3/year) 12,296,400 975,500 9,816,152 23,088,052 Authorised Consumption m3 10,096,100 838,600 8,609,464 19,544,164 non-residential Consumption m3 2,475,400 402,480 6,851,369 9,729,249 Network Losses 2,200,200 136,800 1,320,700 3,657,700 Residential Water Supplied 7,620,800 436,220 1,644,083 9,701,103 Number of treatment plants 4 3 10 17 Number of pump stations 5 1 4 10 Number of reservoirs 17 4 37 58 Total treated storage capacity (m3) 63,120 9,682 50,295 123,097 Length of water mains (km) 839 89 627 1,555 Total Revenue 11,260,319 1,658,000 12,837,000 25,755,319 revenue per m3 of authorised consumption $ 1.12 $ 1.98 $ 1.49 $ 1.32 revenue per m3 of residential consumption $ 8,499,583 $ 862,453 $ 2,451,383 $ 12,784,123 revenue per residential property $ 338 $ 362 $ 319 $ 363 Gross Current Replacement Cost $ 285,417,959 $ 24,111,470 $ 257,479,360 $ 567,008,789 Annual Depreciation $ 4,416,026 $ 364,304 $ 4,816,962 $ 9,597,292 Optimised Depreciated Replacement Cost $ 149,468,486 $ 14,095,257 $ 136,821,984 $ 300,385,727 Average weighted age of reticulation (years) 36.4 37.2 40.0 volume of water loss (CARL) m3 2,124,100 212,700 1,174,300 3,511,100 Infrastructure Leakage Index 2.23 3.23 3.67 Condition grade 1: Water pipelines 31% 15% 20% 26% Condition grade 2: Water pipelines 20% 53% 31% 26% Condition grade 3: Water pipelines 17% 23% 18% 18% Condition grade 4: Water pipelines 10% 2% 25% 16% Condition grade 5: Water pipelines 15% 6% 5% 11% Not assessed: Water pipelines 7% 1% 0% 4% Unplanned Total Interruptions: No./yr 222 2 255 479 Unplanned Interruption Frequency: No./1000 prop 5.73 0.69 23.42 Water Supply Complaints No. 8 7 184 199 Average Residential Water Charge Based on 200 m3/yr $ 267.50 $ 570.00 $ 592.00 Budgeted Capex to replace Assets $ 1,520,000 $ 410,000 $ 2,957,000 $ 4,887,000 Actual Capex to replace Assets $ 1,252,193 $ 134,302 $ 2,415,000 $ 3,801,495 Budget/depreciation 34% 113% 61% Budget delivery 82% 33% 82% Energy Consumption GJ/year 1144 1375 3653 6172 Energy Intensity: Water Supply kJ/m3 0.09 1.41 0.37 0.27

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Wastewater Wastewater Parameter New Plymouth Stratford South Taranaki All Taranaki Serviced Population 61,036 5,337 13,260 79,633 Residential Water Connections 24,249 2,225 5,562 32,036 Industrial Connections 1,845 275 2,327 4,447 Average wastewater treated (m3/year) 10,084,355 4,035,027 14,119,382 Number of treatment plants 1 1 8 Level of Treatment Tertiary treatment plant peaking factor 2.37 5.67 - 25.50 Number of pump stations 34 4 35 73 Length of wastewater mains (km) 478 47.6 186.51 712.11 Average weighted age of reticulation (years) 43.9 55.07 54 Dry weather overflows 17 0 48 65 Wet weather overflows 4 2 3 9 Gross Current Replacement Cost $ 385,718,796 $ 21,021,519 $ 109,378,266 $ 516,118,581 Annual Depreciation $ 5,190,345 $ 236,071 $ 1,408,506 $ 6,834,922 Optimised Depreciated Replacement Cost $ 211,839,045 $ 6,907,031 $ 58,860,309 $ 277,606,385 Condition Grade 1: Wastewater pipelines 14% 1% 12% 13% Condition Grade 2: Wastewater pipelines 15% 0% 18% 15% Condition Grade 3: Wastewater pipelines 23% 0% 8% 18% Condition Grade 4: Wastewater pipelines 23% 0% 29% 23% Condition Grade 5: Wastewater pipelines 24% 0% 32% 24% Not assessed: Wastewater pipelines 1% 99% 0% 7% Wastewater consent abatement notices 0 0 1 1 Wastewater consent infringement notices 0 0 0 0 Wastewater consent enforcement orders 0 0 0 0 Wastewater consent successful prosecutions 0 0 0 0 Total Revenue: Wastewater $ 15,880,798 $ 763,811 $ 5,101,000 $ 21,745,609 Fixed Charge: Non residential wastewater $ 500 $ 312 $ 619 Wastewater complaints 1 10 447 Wastewater complaints frequency No./1000prop 0.038 4 57 Budgeted capital to replace existing assets $ 9,047,000 $ 162,500 $ 1,309,000 $ 10,518,500 Actual capital to replace existing assets $ 6,874,867 $ 166,494 $ 951,000 Energy Consumption: Wastewater GJ/year 62,540 703 4,848 68,091 Energy Intensity: Wastewater kJ/m3 6.20 1.20 4.82

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Stormwater Stormwater Parameter New Plymouth Stratford South Taranaki All Taranaki Number of pump stations 1 0 0 1 Number of detention dams 4 0 0 4 Length of storm water mains (km) 291 20 94 405 Gross Current Replacement Cost $ 253,365,973 $ 10,608,068 $ 39,631,692 $ 303,605,733 Annual Depreciation $ 2,657,058 $ 102,959 $ 422,611 $ 3,182,628 Optimised Depreciated Replacement Cost $ 166,782,111 $ 6,311,164 $ 22,556,791 $ 195,650,066 Average weighted age of reticulation (years) 34.61 41.07 40 Habitable Floors Flooded (Number) 0 0 4 4 level of service 20% 5% 10% level of protection 1% 1% 1% Condition Grade 1: Stormwater pipelines 0% 1% 7% 2% Condition Grade 2: Stormwater pipelines 0% 2% 25% 6% Condition Grade 3: Stormwater pipelines 0% 0% 30% 7% Condition Grade 4: Stormwater pipelines 0% 0% 35% 8% Condition Grade 5: Stormwater pipelines 0% 0% 2% 0% Not assessed: Stormwater pipelines 100% 97% 0% 77% Stormwater Charge N/A N/A $ 55.77 General Rate charge $ 47.53 $ 54.15 N/A Stormwater Complaints 0 3 258 261 Stormwater Complaints Frequency No./1000 prop 0.00 0.76 18.10 Total Revenue: Stormwater $ 1,770,304 $ 314,000 $ 950,000 $ 3,034,304 Budgeted capital to replace existing assets $ 167,000 $ 156,700 $ 199,000 $ 522,700 Actual capital to replace existing assets $ 85,391 $ 11,177 $ 129,000 $ 225,568

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CENTRAL LANDFILL JOINT COMMITTEE AGREEMENT

MATTER

1. The matter for consideration by the Council is the formalising of previous decisions relating to the Central Landfill through an updated agreement to allow for a Holding Period while an out of region landfill is used, and the re- establishment of a Joint Committee to provide tripartite governance by the three Taranaki Territorial Authorities over the proposed regional landfill (Central Landfill) during the Holding Period.

RECOMMENDATION FOR CONSIDERATION That having considered all matters raised in the report, the Council: a) Approves the new Joint Committee Agreement (Appendix 1) to incorporate a Holding Period while waste is disposed of at an out of region landfill; b) Agrees to re-establish the Central Landfill Joint Committee; c) Delegates authority to the Chief Executive Officer to sign the Joint Committee Agreement, and subject to the execution of the agreement, notes that the Mayor:

i) is expected to re-establish the Central Landfill Joint Committee following signing of the JCA by all parties;

ii) will be New Plymouth District Council’s appointee (in line with s41A(5) of the LGA);

iii) will call for expressions of interest for New Plymouth District Council’s alternate appointee; d) Adopts the Central Landfill Joint Committee Terms of Reference (appended to this report); e) Delegates authority to the Central Landfill Joint Committee to:

i) Oversee the initial development, operation, closure and aftercare of the Central Landfill;

ii) Approve the annual budget and business plan for the Central Landfill;

iii) Determine the prices to be charged for depositing solid waste at the Central Landfill;

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iv) Determine (subject to any consent conditions) the types of solid waste that will be accepted at the Central Landfill;

v) Determine the date of permanent closure of the Central Landfill;

vi) Determine during the Holding Period,

 An annual review of activities and approval of the budget

 The viability of Central Landfill and whether Central landfill would need to accept waste on 1 July 2024 and if so, ensure timelines to facilitate this are met; f) Resolves that the Central Landfill Joint Committee not be discharged at the Triennial election (Schedule 7 (Clause 30(7)) of the Local Government Act).

STRATEGY AND OPERATIONS COMMITTEE RECOMMENDATION

2. The Strategy and Operations Committee endorsed the officer’s recommendation.

TE HUINGA TAUMATUA RECOMMENDATION

3. Te Huinga Taumatua Committee endorsed the officer’s recommendation.

COMPLIANCE Significance This matter is assessed as being of some importance This report identifies and assesses the following reasonably practicable options for addressing the matter:

a) Approve the updated Joint Committee Agreement, Options agree to re-establish the Central Landfill Joint Committee, and adopt the terms of reference.

b) Do nothing.

The persons who are affected by or interested in this matter Affected persons are the residents and commercial/industrial businesses in the Taranaki Region. Recommendation This report recommends option 1 for addressing the matter.

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COMPLIANCE Long-Term Plan / Annual Plan No Implications Significant Policy and Plan No Inconsistencies

EXECUTIVE SUMMARY

4. In 2018, NPDC, Stratford District Council (SDC) and South Taranaki District Council (STDC) made resolutions to transport Taranaki waste to Bonny Glen landfill and put the development of Central Landfill on hold.

5. The previous Central Landfill Joint Committee Agreement requires updating to provide further governance during this holding period.

6. We recommend that the Council approves the new Central Landfill Joint Agreement in order to ensure the Committee can be re-established and continue to function during the holding period. Taking this approach will ensure appropriate governance around regional waste disposal options and define the role of the Joint Committee and Administering Authority during the holding period and operation of the landfill if a decision is made to progress with the Central Landfill in the future.

7. If the new Joint Committee Agreement is approved by each council, the Joint Committee will re-establish with the nominated representatives from each Council. A review of the viability of the Central Landfill will be completed within the next 12 months.

BACKGROUND

8. NPDC, SDC and STDC are bound by the Regional Waste Services Management Agreement 2008 (RWSMA). This agreement outlines the respective councils’ responsibilities for current and future solid waste disposal.

9. In 20 December 2017, the councils established the Central Landfill Joint Committee Agreement to oversee the development and operation of Central Landfill, with NPDC appointed as the Administering Authority. As part of this agreement the RWSMA was amended to reflect the agreed regional approach to waste disposal.

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Amendment to Joint Committee Agreement

10. In November 2018, each district council made resolutions to transport Taranaki waste to Bonny Glen Landfill under a 35-year contract with Midwest Disposal Limited. The contract has six five-year rights of renewal, with the first renewal date on 30 June 2024.

11. As a result of this contract, the development of Central Landfill was put on hold. However, should a review of the feasibility of the Central Landfill indicate that the landfill should proceed as originally intended, there is potential for the landfill to be developed further by the first right of renewal of the Midwest Disposal contract in 2024 and prior to the lapse dates for Central Landfill resource consents and land use consent in 2025.

12. The Central Landfill Joint Committee Agreement (JCA) does not reflect this ‘Holding Period’, therefore an amendment is required to outline the committee’s delegation and responsibilities during the Holding Period.

Re-establishment of Joint Committee

13. In 2019, the Central Landfill Joint Committee was disestablished at the local election in accordance with Schedule 7, clause 30(7) of the Local Government Act which states:

“A committee, subcommittee, or other subordinate decision-making body is, unless the local authority resolves otherwise, deemed to be discharged on the coming into office of the members of the local authority elected or appointed at, or following, the triennial general election of members next after the appointment of the committee, subcommittee, or other subordinate decision- making body.”

14. Therefore the Joint Committee is required to be re-established by resolution of each council. A new JCA must be completed prior to establishment of committee. To ensure the JCA remains valid in future council terms, the re- establishment should include a recommendation that the committee not be discharged at the end of future triennial council terms.

15. The JCA has been reviewed and a new agreement drafted by Simpson Grierson to reflect:

 Updated background to provide further information since the previous agreement was established.

 Updated definitions to reflect changes throughout agreement.

 Addition of clauses relating to the holding period.

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16. The new JCA is provided in Appendix 1 with tracked changes highlighted.

Terms of reference

17. The Mayor has the ability (through s41A of the Local Government Act (LGA)) to establish the Committee and its appointees but the Committee’s Terms of Reference must be adopted by each council.

18. The terms of reference for the Joint Committee have been updated to reflect the new agreement, including the Holding Period, and is provided in Appendix 2.

NEXT STEPS

19. If the new JCA and terms of reference are approved by each council, the Joint Committee will re-establish with the nominated representatives from each Council. The Committee will meet on an annual basis during the Holding Period as outlined in the JCA and the terms of reference, and review the viability of the Central Landfill within the next 12 months.

SIGNIFICANCE AND ENGAGEMENT

20. In accordance with the Council's Significance and Engagement Policy, this matter has been assessed as being of some importance as this report merely actions previous approvals made by Council.

OPTIONS

Option 1 Approve the new Joint Committee Agreement, agree to re-establish the Central Landfill Joint Committee, and adopt the terms of reference

Financial and Resourcing Implications

21. The new Agreement allows the Committee to continue to function during the holding period and defines the role of the Joint Committee and Administering Authority.

22. This can be provided for within existing budgets allowing for administration, baseline monitoring of the landfill site and review of the feasibility of the landfill ($30,000 per year).

23. The initial capital provided by each Council to construct the landfill has been refunded in accordance with the Joint Committee resolution on 30 August 2019.

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Risk Analysis

24. Should the decision be made to continue with disposal of waste to Bonny Glen landfill, the JCA may need to be terminated or further amended to allow for a change in future governance of regional waste disposal. The agreement has been amended to enable future termination of the agreement should it be required.

25. The provision of alternate committee members is not explicitly referenced in the LGA, however given the small size of the committee, and the statutory obligation to appoint Mayors to all Council committees, the appointment of alternate members will facilitate effective and efficient meetings by ensuring a quorum is achievable.

Promotion or Achievement of Community Outcomes

26. The re-establishment of the Central Landfill Joint Committee under a new agreement allows the previously approved Partnership between the three councils to continue incorporating the allowance of a Holding Period and associated responsibilities to be formally incorporated into the agreement.

27. This also ensures a review of the feasibility of the Central Landfill can be undertaken and the Delivery of the Central Landfill should it be required. It also continues to ensure there can be a local option for waste disposal if it is deemed cost effective, supporting prosperity.

Statutory Responsibilities

28. This option allows the Committee to be re-established and operate as defined in the LGA 2002.

Consistency with Policies and Plans

29. This option is consistent with the LTP, and reflects previous decisions made by the Central Landfill Joint Committee and the Council in relation to waste disposal and associated amendments to the agreement.

Participation by Māori

30. There has been no consultation with Māori on this option, however engagement with iwi associated with the Central Landfill site will continue as required based on any proposed activities on the site.

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Community Views and Preferences

31. This option allows the Joint Committee to operate under an amended agreement and terms of reference to ensure the option to develop Central Landfill is available for the community should it be required.

Advantages and Disadvantages

32. This option allows the feasibility of the Central Landfill to be monitored and reviewed by the Joint Committee during the first term of the Bonny Glen Landfill waste disposal contract and provide governance for decision making prior to the landfill designation and resource consent lapse dates.

33. Amending the JCA provides clarity of roles for the Central Landfill Joint Committee and Administering Authority during the holding period.

34. The project can be reactivated quickly should the agreement with Midwest Disposals for Bonny Glen landfill not perform as expected.

Option 2 Do not approve the new Joint Committee Agreement

Financial and Resourcing Implications

35. If the Joint Committee is not re-established, there would be no formal agreement in place between the three councils, requiring the Administering Authority to be disbanded and any costs for future landfill disposal to be met by individual councils.

36. If the JCA is not amended to reflect the decision to dispose of waste at Bonny Glen, the Committee will not have delegated authority to make decisions during the holding period.

Risk Analysis

37. Without a JCA, the ability to collaborate on waste management regionally would be restricted.

38. There is a risk of delays in making a decision to remobilise the Central Landfill project without a JCA to facilitate clear governance during the holding period.

Promotion or Achievement of Community Outcomes

39. This option would not reflect the previous decision and resulting savings to the community for waste disposal.

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40. This option would not reflect the regional partnership approach to waste management as reflected in the Regional Waste Management Services Agreement 2008.

Statutory Responsibilities

41. This option does not reflect previous decisions made by the Joint Committee or the three councils.

Consistency with Policies and Plans

42. This option is not consistent with the Long Term Plan.

Participation by Māori

43. There has been no consultation with Māori on this option, however engagement with iwi associated with the Central Landfill site will continue as required based on any proposed activities on the site.

Community Views and Preferences

44. The community may perceive this option as inefficient governance.

Advantages and Disadvantages

45. This option would provide ineffective governance in relation to regional waste disposal.

46. This option could delay decision making and remobilisation of Central Landfill should it be required.

Recommended Option This report recommends Option 1, approve the new Joint Committee Agreement, re- establish the Central Landfill Joint Committee, and adopt the terms of reference, for addressing the matter.

APPENDICES

Appendix 1 New Central Landfill Joint Committee Agreement with tracked changes (ECM8508640)

Appendix 2 Central Landfill Joint Committee Terms of Reference (ECM8508906)

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Report Details Prepared By: Kimberley Hope (Manager Resource Recovery) Team: Resource Recovery Approved By: David Langford (Group Manager Planning and Infrastructure) Ward/Community: Taranaki wide Date: 22 April 2021 File Reference: ECM8520158

------End of Report ------

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3.1

JOINT COMMITTEE AGREEMENT

NEW PLYMOUTH DISTRICT COUNCIL

SOUTH TARANAKI DISTRICT COUNCIL

STRATFORD DISTRICT COUNCIL

Barristers & Solicitors Auckland, Wellington & Christchurch New Zealand www.simpsongrierson.com

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3.1

CONTENTS

CLAUSE PAGE

1. DEFINITIONS AND INTERPRETATION 221 2. CONDITIONS 675 3. CENTRAL LANDFILL JOINT COMMITTEE 776 4. FINANCIAL 10107 5. ADMINISTERING AUTHORITY 121210 6. OWNERSHIP AND CONTROL OF CENTRAL LANDFILL SITE AND ASSETS 141411 7. RESOURCE CONSENTS 151512 8. TERM AND TERMINATION 151512 9. DISPUTE RESOLUTION 161613 10. CONFIDENTIALITY 171714 11. INTELLECTUAL PROPERTY 171714 12. FORCE MAJEURE 181815 13. NOTICES 181815 14. GENERAL 181815

SCHEDULES

1. LANDFILL SERVICES DEED FOR MUNICIPAL USERS 2. LANDFILL SERVICES DEED FOR COMMERCIAL USERS 3. SITE LEASE 4. COMMITTEE TERMS OF REFERENCEAGREEMENT VARYING REGIONAL WASTE SERVICES MANAGEMENT AGREEMENT 55. DESCRIPTION OF CENTRAL LANDFILL SITE

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3.1

AGREEMENT DATED 20172021

PARTIES

1. NEW PLYMOUTH DISTRICT COUNCIL (NPDC)

2. SOUTH TARANAKI DISTRICT COUNCIL (STDC)

3. STRATFORD DISTRICT COUNCIL (SDC)

BACKGROUND

A. Under a Regional Waste Services Management Agreement dated 2 July 2008 (RWSMA), the parties used a landfill situated at Colson Road in New Plymouth (Colson Road Landfill). The Colson Road Landfill is owned and operated by NPDC and closed to the acceptance of general waste in 2019 while it remaininged open for special waste from August 2019. It will closed to the acceptance of all waste on 31 October 2020. B. Under a Central Landfill Joint Committee Agreement dated 20 December 2017 entered into by the parties (original CLJC Agreement), the parties agreed to establish a joint committee pursuant to the Local Government Act 2002 (Joint Committee or CLJC), for the purposes of developing the Central Landfill (Central Landfill) and operating it following the closure of the Colson Road Landfill. C. In November 2018, each of the parties resolved to transport Taranaki waste to Bonny Glen Landfill. A 35-year contract (including renewals) with Midwest Disposal Limited has been entered into. The first five yearly contract renewal date in the Bonny Glen waste disposal contract is 30 June 2024. D. The development of the Central Landfill was put on hold. The lapse date for the Central Landfill resource consents and the land use consent from STDC is 2025 if they are not given effect to. There is potential for the Central Landfill to be developed further and a decision to proceed with its use as originally intended. If the Bonny Glen waste disposal contract is not renewed after its first term, then the Central Landfill will need to accept waste on 1 July 2024. E. The original CLJC was disestablished following the 2019 triennial local government elections (in accordance with clause 30(7) of Schedule 7 of the Local Government Act 2002). F. The parties intend to enter this new Joint Committee Agreement (Agreement) to ensure that the CLJC will be able to facilitate effective governance on regional waste disposal options during the remaining term of the Bonny Glen waste disposal contract until 30 June 2024 (Holding Period). Under a Regional Waste Services Management Agreement dated 2 July 2008 (RWSMA), the parties currently use a landfill situated at Colson Road in New Plymouth (Colson Road Landfill). The Colson Road Landfill is owned and operated by NPDC and is expected to close in 2019. A. Under a Memorandum of Understanding entered into by the parties, dated 22 December 2016 (MoU), the parties have agreed in principle to establish a joint committee pursuant to the Local Government Act 2002, comprising NPDC, STDC and SDC, for the purposes of developing a new landfill and operating it following the closure of the Colson Road Landfill (Joint Committee or CLJC). The new regional landfill will be on land owned by STDC and situated on State Highway 3, approximately three kilometres south of Eltham (Central Landfill).

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B. This agreement sets out the terms on which the Joint Committee will be established and operated and on which the parties will exercise their rights as CLJC Members.

THIS AGREEMENT RECORDS THAT:

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions: In this agreement, unless the context indicates otherwise:

Administering Authority means the party to be appointed as such, in accordance with clause 5.1;

Aftercare means the on-going monitoring and maintenance of the Central Landfill following its permanent closure, as required under the Resource Consents;

Aftercare Fund means, at any time, an amount set aside to provide for all anticipated Aftercare costs (as determined from time to time in accordance with clause 5.4.19 of the Landfill Full Cost Accounting Guide for New Zealand);

Annual Budget has the meaning given to that term in clause 4.2;

Background IP means:

(a) all Intellectual Property developed by any party for incorporation into the landfill consent, design or expressly for the joint benefit of the parties; and

(b) all Intellectual Property that has been developed by any third party on behalf of any party (including any financial model developed for any party by an independent third party),

which is in existence at the date of this Agreement or which comes into existence after the date of this Agreement otherwise than in connection with this Agreement;

Bill Rate means in respect of any day of a month:

(a) the average of the bid rates for 30 day bank accepted bills of exchange, expressed as a percentage per annum (to two decimal places) as quoted on Reuters page BKBM or any successor page displaying substantially the same information (subject to manifest error) at 10.45 am on the first Business Day of the month in respect of which the rate is to be calculated; or

(b) if this rate does not appear on that Reuters page on that Business Day, the average of the mean bid and offered rates of Westpac Banking Corporation for bank bills of exchange having a tenor of 30 days at 10.45 am on that Business Day;

Business Day means any day excluding Saturdays, Sundays and statutory public holidays in Taranaki and excluding any day in the period beginning on 25 December in any year and ending on 5 January in the following year;

Business Plan has the meaning given to that term in clause 4.2;

Central Landfill has the meaning given to that term in the Background section of this Agreement or, as the context requires, the business which comprises the

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operation, by the Administering Authority on behalf of the parties, of the Central Landfill;

Central Landfill Site means the area of land described as such in Schedule 5 of the Agreement, being a subdivision of part of the land situated on State Highway 3, three kilometres south of Eltham with legal description Pt Sec 26 Sec 27 Blk XIV Ngaere SD;

CLJC Member has the meaning given to that term in clause 3.43.3.43.43;

Commencement Date means the date of this Agreementon which the CLJC is to be formed or the date on which the last of the conditions in clause 2 is satisfied, whichever is the later;

Confidential Information means any information:

(a) relating to the terms of this Agreement;

(b) relating directly or indirectly to the business operations of the Central Landfill;

(d) which might reasonably be expected by any party to be confidential in nature,

provided that, where information relates exclusively to one party, nothing in this Agreement will require that party to maintain confidentiality in respect of that information;

Default Rate means the Bill Rate plus 5%;

Financial Year means the financial year of the Central Landfill, being 1 July to 30 June;

Force Majeure means in relation to any party (Affected Party) an event or circumstance (or combination of events or circumstances) which is beyond the reasonable control of the Affected Party, including any:

(a) (a) war, revolution, riot, act of terrorism, commandeering, nationalisation or requisition by or under the order of any Government Agency;

(b) stoppage, material shortage or short term restriction of labour, including an industrial dispute, strike, ban, embargo and lockout (provided that any such unavailability of labour is not restricted to the Affected Party);

(c) act of any Government Agency, including a governmental restraint, order, embargo or declaration of regional or national state of emergency (or equivalent);

(d) natural disaster including cyclone, tsunami, flood, earthquake, volcanic eruption, fire, landslide or mudslide; or

(a) disease, epidemic, pandemic or officially imposed quarantineact of God; (a)

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(b) (b) strike, lock-out or other industrial disturbance by or amongst employees of a person other than the Affected Party; (c) (d) (c) act of public enemy, or declared or undeclared war or threat of war; (e) (f) (d) terrorist act, blockade, revolution, riot, insurrection, civil commotion or public demonstration (other than one caused by the Affected Party); or (g) (h)(e) (e) governmental or regional or local authority restraint, legislation or by law,

but does not include any:

(f) event or circumstance which could have been avoided by the exercise, by the Affected Party, of Good Industry Practice; or

(g) lack of funds or authority or power on the part of the Affected Party;

Future Development Fund means an amount set aside for the costs associated with the future development and the eventual permanent closure of the Central Landfill Site (excluding Aftercare), including any expansion or development of its infrastructure and Future Development has a corresponding meaning;

Good Industry Practice means, in relation to any activity, the exercise of a degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced person engaged in New Zealand in the same type of activity, under the same or similar circumstances;

Government Agency means any recognised government or any governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity whether at a national or local level.

Holding Period means the period between the commencement of this agreement and the expiry of the initial term of the Bonny Glen waste disposal contract (expected to be 30 June 2024);

Intellectual Property means trade marks, rights in domain names, copyright, patents, registered designs, circuit layouts, rights in computer software, databases and lists, rights in inventions, confidential information, know-how and trade secrets, operating manuals, quality manuals and all other intellectual property, in each case whether registered or unregistered (including applications for the grant of any of the foregoing) and all rights or forms of protection having equivalent or similar effect to any of the foregoing which may subsist anywhere in the world, including the goodwill associated with the foregoing and all rights of action, powers and benefits in respect of the same;

Joint IP means all Intellectual Property developed during the Term by any combination of two or all of the parties, for the purposes of giving effect to this Agreement;

Landfill Management Agreement means an agreement entered into between the Administering Authority (in its capacity as such and with the approval of the CLJC) and a third party for the management of the Central Landfill's day-to-day operations;

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Landfill Services Deed means a deed setting out the basis on which a person is entitled to deposit Solid Waste at the Central Landfill;

Law means the law in force from time to time in New Zealand;

Operating Account means a ledger account to be used solely for the receipt of all income and the payment of all expenses (excluding those relating to Aftercare or Future Development) relating to the operations of the Central Landfill (including its initial development);

Percentage Interests means the proportions in which the parties invest capital in, or receive any operating surplus or apportion any operating deficit from, the Central Landfill being:

(a) NPDC - 66.4%;

(b) STDC - 27.1%; and

Representative means the representative nominated by resolution of each party (evidenced by written notice to, or by inclusion in any minutes of, the CLJC) to receive notices on behalf of that party relating to this Agreement;

Resource Consents means the following resource consents, as amended or replaced from time to time, and together with any additional resource consents granted in the future in respect of the Central Landfill:

Consent Reference Consenting Authority Lapse Date Expiry Date  05347-1.3 (dated Taranaki Regional 21 December 1 June 2034 20 July 2005) Council (TRC) 2025  05348-1.4 (dated TRC 21 December 1 June 2034 20 July 2005) 2025  05349-1.4 (dated TRC 21 December 1 June 2034 20 July 2005) 2025  05350-1.3 (dated TRC 21 December 1 June 2034 20 July 2005) 2025  05351-1.3 (dated TRC 21 December 1 June 2034 20 July 2005) 2025  10501-1.0 (dated 23/11/2017) TRC Exercised 1 June 2022  10502-1.0 (dated 23/11/2017) TRC Exercised 1 June 2034  10529-1.0 (dated 19/2/2018) TRC Exercised 1 June 2034  10530-1.0 (dated 19/2/2018) TRC Exercised 1 June 2034  RM 980102 (dated STDC 21 December N/A 30 March 2000, as varied on 2025 14 December 2005)

Site Lease has the meaning given to that term in clause 8.2(b)2.1(b);

Solid Waste means all forms of waste, including recyclable waste and compatible green waste;

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Sunset Date means 31 December 2017; and

Term means the period from and including the date of this Agreement, up to and including the date on which this Agreement terminates in accordance with clause 8.28.3; and

Terms of Reference means the terms of reference of the Joint Committee as set out in this Agreement and in Schedule 4 and amended by the parties from time to time.

1.2 Interpretation: In this agreement, unless the context indicates otherwise:

(a) Defined Expressions: expressions defined in the main body of this Agreement have the defined meaning throughout this Agreement, including the background;

(b) Headings: clause and other headings are for ease of reference only and will not affect this Agreement's interpretation;

(d) Persons: references to a person include an individual, company, corporation, partnership, firm, joint venture, association, trust, unincorporated body of persons, governmental or other regulatory body, authority or entity, in each case whether or not having a separate legal identity;

(e) Plural and Singular: references to the singular include the plural and vice versa;

(f) Clauses/Schedules: references to clauses and schedules are to clauses in, and the schedules to, this Agreement. Each such schedule forms part of this Agreement;

(g) Statutory Provisions: references to any statutory provision are to statutory provisions in force in New Zealand and include any statutory provision which amends or replaces it, and any by-law, regulation, order, statutory instrument, determination or subordinate legislation made under it;

(h) Negative Obligations: any obligation not to do anything includes an obligation not to suffer, permit or cause that thing to be done;

(i) Inclusive Expressions: the term includes or including (or any similar expression) is deemed to be followed by the words "without limitation"; and

(j) Documents: references to any document (however described) are references to that document as modified, novated, supplemented, varied or replaced from time to time and in any form, whether on paper or in an electronic form.

2. CONDITIONS

2.1 Agreement Conditional: This agreement is conditional on the following:

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Landfill Services Deed: each of the parties entering into a Landfill Services Deed in the form set out in schedule 1 (Landfill Services Deed for Municipal Users);

(b) Lease of Central Landfill Site: STDC (as lessor) and the Administering Authority, being NPDC (as lessee), entering into a lease of the Central Landfill Site, in the form set out in schedule 3 (Site Lease);

(b) Variation of RWSMA: the parties signing a formal variation of the RWSMA, in the form set out in schedule 4; and

(b) Commerce Act Sign Off: the parties receiving written legal advice (addressed to each of the parties) to the effect that the establishment and operation of the Central Landfill, in the manner contemplated by this agreement, will not breach, and will not require a clearance or authorisation under, the Commerce Act 1986.

2.1 Satisfaction of Conditions: If any condition set out in clause 2.1 has not been satisfied or waived on or before the Date, then unless or until the relevant condition is satisfied or waived, any party may, by written notice to the other parties, terminate this agreement with immediate effect.

3. CENTRAL LANDFILL JOINT COMMITTEE

3.1 Existing arrangements: The parties recognise that:

(a) the joint committee established by the old CLJC Agreement between them dated 20 December 2017 was disestablished and that old CLJC Agreement is terminated;

(b) the parties were refunded a portion of the funds that they transferred into the Operating Account due to the reduction in expected costs during the Holding Period; and

(c) the Agreement Varying Regional Waste Services Management Agreement was entered into on 20 December 2017 and remains in force.

3.13.2 Establishment: The CLJC is established with effect from the Commencement Date.

3.23.3 Functions: The functions of the CLJC will be to oversee the initial development, and the operation, eventual permanent closure and Aftercare, of the Central Landfill in accordance with this Agreement, including:

(a) during the Holding Period, determining: (i) on an annual (or otherwise as required) basis, the previous year’s activities in review and approve budgets for the next financial year; (ii) the viability of Central Landfill as reviewed by the Administering Authority considering:

(A) the performance of the Bonny Glen waste disposal contract;

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(B) comparison with initial waste disposal modelling assumptions using the identified triggers: Total cost of disposal exceeding LTP budget; Waste volume growth exceeding LTP expected volume; Waste minimisation progress less than modelled in 2018;

(D) the capital required to maintain the consents and Central Landfill site;

(E) any options to future proof the landfill site including purchasing neighbouring land if required;

(F) any changes to landfill best practice, government policy and implementation of Waste Management and Minimisation Plan actions. (iii) whether Central Landfill would need to accept waste on 1 July 2024 and if so:

(A) ensure the following timeline is met to enable Central Landfill to open by this time:

Milestone Date Required By Undertake cost benefit analysis of Bonny July 2021 Glen vs Central Landfill, including updated landfill construction cost estimate Decision by three councils whether to December 2021 proceed with Central Landfill Payment of Initial Instalments February 2022 Review and confirm landfill design June 2022 Tender and construct landfill July 2022 (two construction seasons – allows time to June 2024 to confirm leachate disposal option)

(B) if the decision is made for one or more Councils to continue (or not continue) with the Bonny Glen Waste disposal contract for the second term, inform MidWest Disposal Limited by 31 December 2023.

(iv) subject to clauses (ii) and (iii) above, and a decision being made to continue with the Bonny Glen Waste disposal contract for the second and subsequent terms of five years, changes required to update this Agreement to reflect the role of the Joint Committee and Administering Authority over these periods.

(b) determining (subject to the provisions of the Landfill Services Deeds, where applicable) the prices to be charged for the deposit of Solid Waste at the Central Landfill (Gate Charges);

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(c) determining (subject to the provisions of the Landfill Services Deeds, where applicable) which types of Solid Waste will be accepted at the Central Landfill;

(d) approving the Annual Budget and Business Plan for the Central Landfill (in accordance with clause 4.2);

(e) determining the date of permanent closure of the Central Landfill (consistent with the Resource Consents);,

in each case, in a manner which:

(a) meets the requirements of the parties' respective Long Term Plans (under the Local Government Act 2002) relating to Solid Waste disposal; and

(b) creates a long-term economically viable, least cost solution (compliant with all relevant regulatory requirements) for the disposal by the parties of their respective Solid Waste.

Anything expressed in this Agreement as an obligation of the CLJC will be construed as an obligation of the parties, to exercise their rights under this agreement, through their respective CLJC Members, to ensure that the CLJC's obligation is discharged in the manner contemplated by this agreement.

3.33.4 Membership: The CLJC will comprise one elected member from each of the parties (CLJC Members). Each party will, prior to the Commencement Date, nominate, by written notice to the other parties, that party's initial CLJC Member. Any party may subsequently change its CLJC Member at any time by written notice to the other parties. If a CLJC Member ceases to be an elected member of the party that appointed that person, he or she will automatically cease to be a CLJC Member.

3.5 Alternates: Each party is entitled to nominate an alternate elected member to attend meetings of the CLJC and vote. For the avoidance of doubt, each party is only entitled to one vote regardless of the number of members or alternates appointed by it.

3.43.6 Voting: Each CLJC Member will have one vote on all resolutions of the CLJC. All meetings of the CLJC may be attended by officers of the parties, but such officers will not be entitled to vote on resolutions of the CLJC.

3.53.7 Proceedings: The CLJC will operate in accordance with the following:

(a) Chairperson: The chairperson of the CLJC (CLJC Chairperson) will be any CLJC Member nominated by NPDC to be chairperson (subject to his or her consent to act as chairperson). The CLJC Chairperson (or his or her nominee) will chair meetings of the CLJC. The CLJC Chairperson will not have a second or casting vote on any resolution of the CLJC.

(b) Quorum: The quorum for a meeting of the CLJC will be a simple majority of the CLJC Members.

(c) Resolutions: All decisions by the CLJC will be made by resolution of the CLJC Members, passed at a CLJC Meeting. Each CLJC Member must ensure, prior to voting on any resolution of the CLJC, that he or she has the authority of the party which appointed him or her to the CLJC to

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exercise his or her vote accordingly, and that the exercise of his or her vote does not require any subsequent ratification or approval by that party.

(d) Other: The CLJC will otherwise regulate its proceedings as the CLJC Members so resolve or, in the absence of any such resolution to the contrary, in accordance with the Local Government New Zealand Model Standing Orders.

3.63.8 Terms of Reference: The Terms of Reference of the CLJC are set out in this Agreement and in Schedule 4. In the event of any conflict between the provisions in Schedule 4 and the provisions in the body of this Agreement, the provisions in the body of this Agreement will prevail.

4. FINANCIAL

4.1 Separate Accounting: The Administering Authority will:

(a) maintain financial and budgeting practices in accordance with the Landfill Full Cost Accounting Guide for New Zealand (published by the Ministry for the Environment);

(b) maintain financial records and accounts (including the Operating Account) for the Central Landfill, separate from those relating to the Administering Authority's other activities;

(c) determine suitable accounting and investment policies for the Future Development Fund, the Aftercare Fund, and all other amounts relating to the Central Landfill; and

(d) report routinely to the CLJC on the matters as set out in paragraphs (a) and (b) above, and by exception according to any policies the CLJC may ratify in respect of accounting and investment.

4.2 Annual Budget and Business Plan: The Administering Authority will prepare, and submit to the CLJC for approval, an annual budget and business plan for the Central Landfill, not less than 6 months prior to, and in respect of, each Financial Year (Annual Budget/Business Plan). Once the Annual Budget and Business Plan have been approved, the Administering Authority will use all reasonable commercial endeavours to manage the Central Landfill in accordance with the approved Annual Budget and Business Plan, to the extent possible (and will notify the CLJC, at the earliest available opportunity, of any material deviation or expected material deviation from the Annual Budget or Business Plan). For the avoidance of doubt, the rental and any other amounts payable by the Administering Authority under the Site Lease, and the Administering Authority's reasonable overheads in relation to its role as such, will be included as an expense in the Annual Budget and Business Plan.

4.3 Initial Capital: In order to meet the costs of the initial development and operation of the Central Landfill, the parties will pay, into the Operating Account, such amounts into the Operating Account as the Administering Authority calculates and is approved by the CLJC in accordance with the percentage interests the following amounts, in the initial instalments set out below (Initial Instalments). The Initial Instalments will be payable on the date that the CLJC determines (and if no such determination is made, then the date that is 2 months after the last of the parties has resolved to proceed with Central Landfill) Commencement Date.

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Party Percentage Interest NPDC 66.4% STDC 27.1% SDC 6.5% Total:

4.4 Additional Capital Contributions: Where any additional capital is required for the development or operation (including the eventual, permanent closure) of the Central Landfill, the parties will pay such amounts into the Operating Account on such dates as the CLJC requires. The CJLC will give the parties at least 20 Business Days' prior written notice of any additional capital contributions required.

4.5 Future Development Fund: The Administering Authority will allocate, from the Operating Account, sufficient funds in order to meet the anticipated costs of Future Development. Such funds will be held in a separate Future Development Fund, to be held and administered by the Administering Authority on trust for the parties (as to their respective Percentage Interests). All Future Development costs must be paid from the Future Development Fund.

4.6 Aftercare Fund:

(a) The CLJC will establish a separate Aftercare Fund to meet the costs of Aftercare. The Aftercare Fund will be funded from the Operating Account (subject to clause 4.6(b)). The Aftercare Fund will be held by the Administering Authority in a separate account, on trust for the parties (as to their respective Percentage Interests) and will be used to meet the parties' obligations in relation to Aftercare, following permanent closure of the Central Landfill. All Aftercare costs must be paid from the Aftercare Fund.

(b) If, at any date (Reference Date), the Aftercare Fund does not have sufficient funds in order to meet all of the Aftercare costs that are or are expected to be payable within the following 60 Business Days, the parties will be required to deposit to the Aftercare Fund an aggregate amount equivalent to the shortfall, divided between them in proportion to the total quantity of Solid Waste deposited by each of the parties during the period between the first date on which the Central Landfill is open and able to provide the Landfill Services (as defined in the Landfill Services Deed) and the Reference Date.

4.7 Operating Account: The Operating Account must be kept in surplus at all times (net of all funds which are required to be paid from the Operating Account into the Future Development Fund or the Aftercare Fund, and net of all amounts paid by the parties under clause 4.3) until all of the Aftercare requirements of the Central Landfill have been met. If the CLJC or the Administering Authority requires any payment by the parties into the Operating Account (on any basis, including as a capital contribution or as a repayable advance) in order to keep the Operating Account in surplus, such payment must be made by the parties in their respective Percentage Interests, at the time required by the CLJC or the Administering Authority (respectively) on not less than 2 Business Days' notice.

4.8 Operating Revenue: The Administering Authority must ensure that all Gate Charges and other receivables relating to the operation of the Central Landfill are paid into the Operating Account.

4.9 Operating Expenses: The Administering Authority will pay all operating expenses of the Central Landfill (including any payments payable by the Lessee under the

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Site Lease, and the amounts referred to in clause 4.10 out of the Operating Account.

4.10 Operating Surplus: Any operating surplus (determined by reference to the Central Landfill's then current Annual Budget and Business Plan) will be allocated by the Administering Authority as follows:

(a) first, to the Aftercare Fund (to the extent that any such allocation is required in order to ensure that the Aftercare Fund has sufficient funds in it, net of any investment returns on it, to meet all of the Aftercare costs of the Central Landfill); then

(b) to the Future Development Fund (to the extent that any future development of the Central Landfill Site, including any capital costs associated with plant or equipment needed to operate the Central Landfill or with any roading or other costs associated with the operation of the Central Landfill, is not fully funded through the Future Development Fund); then

(c) paid to the parties, in accordance with their respective Percentage Interests, at such times as the Administering Authority (acting in accordance with this Agreement) considers appropriate, and as approved by CLJC.

4.11 Payment Default: If any amount owed by any party (Party B) under this clause 4 falls overdue for payment (Payment Shortfall) then:

(a) any other party (Party A) may meet the Payment Shortfall on Party B's behalf; and

(b) Party B will be liable to repay to Party A the Payment Shortfall, including any default interest incurred on that amount. Such default interest will:

(i) be calculated from the date on which the Payment Shortfall falls overdue until the date on which payment of the Payment Shortfall is made in full;

(ii) accrue and be calculated on a daily basis at the Default Rate; and

(iii) be compounded monthly.

4.12 Reimbursement of Historical Costs: NPDC will pay to STDC from the Operating Account within 5 Business Days after the Commencement Date the sum of $3,070,081 in respect of resource consents for the period up to 30 June 2016 and such further amount as is agreed between NPDC and STDC on reconciliation of further costs from 1 July 2016 to the Commencement Date.

5. ADMINISTERING AUTHORITY

5.1 Appointment of NPDC: Until or unless the parties agree otherwise in writing, NPDC will be the Administering Authority. If NPDC is replaced at any time as the Administering Authority, the replacement must be either:

(a) one of the other parties; or

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(b) a third person, appointed pursuant to a written agreement between the CLJC and that person, on terms which are consistent with this clause 5 and which are approved by each party in writing accordingly (such approval not to be unreasonably withheld).

5.2 Delegation of Powers to Administering Authority: To the fullest extent permitted by law, the CLJC will be deemed to have granted to the Administering Authority, on and from the Commencement Date, all functions, rights and powers of the CLJC, required for the development, operation and Aftercare of the Central Landfill in the manner contemplated by this agreement. Without limiting the effect of this clause, the Administering Authority may, on behalf of the CLJC:

(a) enter into Landfill Services Deeds with commercial users, in accordance with the matters determined by the CLJC under clauses 3.3(a) and (b)3.2(a) and (b) and using the template set out in a Schedule 2 (subject to any modifications as the Administering Authority reasonably considers to be in the best interests of each of the parties);

(b) enter into a Landfill Management Agreement for the management of the Central Landfill's day-to-day operations (on terms which must be consistent with any Landfill Services Deed that is in existence prior to the entry into the Landfill Management Agreement, and with this Agreement);

(c) purchase, and hold on trust for the parties (as to their respective Percentage Interests) such assets as are necessary for the operation of the Central Landfill (but excluding the Central Landfill Site itself);

(d) access, use and make improvements to (including the construction of fixtures on) the Central Landfill Site (and, for this purpose, enter into the Site Lease and, if there is any change in the Administering Authority, assign the Site Lease to the new Administering Authority);

(e) hold and operate the Operating Account, Aftercare Fund and Future Development Fund in the manner set out in this Agreement;

(f) enter into binding commitments on behalf of the parties, as required for the operation of the Central Landfill in the manner contemplated by this Agreement, provided that any such commitment:

(i) will be made on the basis that it is a joint liability of the parties, as to their respective Percentage Interests;

(ii) must, if not expressly authorised by any other provision of this Agreement, be authorised by a resolution of the CLJC if that commitment (either alone or in conjunction with other related commitments) constitutes an aggregate contingent or actual liability of the parties in excess of $250,000 in any financial year of the Central Landfill; and

(iii) must be permitted by law;

(g) arrange, and hold on trust for the parties as to their respective Percentage Interests, all insurances reasonably required in respect of the Central Landfill; and

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(h) manage, on behalf of the CLJC, any disputes with third parties and any regulatory compliance matters relating to the Central Landfill (including any issues relating to the Resource Consents).

(i) during the Holding Period and subject to the CLJC review, apply for Additional/Modified Resource Consents under clause 7.1 of this agreement as required.

5.3 Obligations of Administering Authority: In addition to any other obligation of the Administering Authority under this Agreement, the Administering Authority, in its capacity as the Administering Authority and/or in exercising its functions, rights and powers under clause 5.2, must:

(a) not breach, or do anything that constitutes a breach by any other party, of any obligation imposed by law;

(b) exercise due skill and care in accordance with Good Industry Practice;

(d) not, without being authorised to do so by this Agreement or a resolution of the CLJC:

(i) borrow any amount on behalf of the parties (provided that this does not limit the acquisition by NPDC of any goods or services on unsecured deferred payment terms, in the ordinary course of operating the Central Landfill);

(ii) give any security over, or dispose of any interest in, the Central Landfill Site, the Site Lease, the Operating Account, the Aftercare Fund, the Future Development Fund, or any other asset which is held on behalf of the parties for the operation of the Central Landfill; or

(iii) grant any person any right of access to, or any right to deposit Solid Waste in, the Central Landfill Site (except as set out in any Landfill Services Deed or in the Landfill Management Agreement);

(e) comply with the Site Lease (and assign the Site Lease if required to do so under clause 5.2(d)); and

(f) act in accordance with its applicable financial limitations and procurement policies.

6. OWNERSHIP AND CONTROL OF CENTRAL LANDFILL SITE AND ASSETS

6.1 Restrictions on STDC: Subject to the Site Lease, STDC must not, during the Term, enter into any arrangement to sell, lease, license any person to use, occupy or control, or encumber in any way, any part of the Central Landfill Site, except:

(a) as expressly required in order to give effect to this Agreement; or

(b) as approved by a unanimous resolution of the CLJC Members.

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6.2 Ownership/Control of Site at End of Term: For the avoidance of doubt, STDC will (as between the parties) be the sole owner of the Central Landfill Site during and following the Term. Without limiting the effect of the Site Lease, nothing in this Agreement is intended to confer on NPDC or SDC any proprietary interest in the Central Landfill Site.

6.3 Ownership of Other Assets: Any asset which has, during the Term, been acquired on behalf of the parties, for the operation of the Central Landfill, will (subject to any contrary provision in the Site Lease dealing with the ownership of the lessee's improvements on the Central Landfill Site) be:

(a) (if that asset is a fixture on the Central Landfill Site) owned by STDC at all times (provided that any net cost incurred by STDC as a result of such ownership must be met out of the Operating Account or the Aftercare Fund, failing which SDC and NPDC will indemnify STDC for such cost, in proportion to their Percentage Interests); or

(b) (if that asset is not a fixture on the Central Landfill Site) disposed of by the Administering Authority on behalf of the CLJC at the end of the Term, with the net proceeds of disposal being distributed amongst the parties in accordance with their respective Percentage Interests.

6.4 No Transfer/Encumbrance of Parties' Interests: No party is entitled to transfer to any other party or to any third person, or to encumber in any way, any legal or beneficial interest of that party in, or in any asset held or used for the purposes of, the Central Landfill.

7. RESOURCE CONSENTS

7.1 Transfer of Resource Consents: STDC will transfer each of the Resource Consents to NPDC (as the Administering Authority) on or as soon as possible after the Commencement Date. STDC or, following such transfer, NPDC, will exercise its rights as the holder of the Resource Consents in such manner as is required in order to give effect to this agreement. The consideration for such transfer is the payment, under clause 4.12, of the historical costs which relate to the Resource Consents.

7.27.1 Additional/Modified Resource Consents: STDC or, following the transfer under clause 7.1, NPDCThe Administering Authority will apply for such new Resource Consents, and such modifications to Resource Consents, as are required in order to give effect to this Agreement. Any associated costs will be paid out of the Operating Account (and may be debited to the Future Development Account, if and to the extent that they relate to Future Development).

8. TERM AND TERMINATION

8.1 Parties to Maximise Term: The parties will give effect to this Agreement in such a manner as will maximise the Term (subject to compliance with this Agreement) by, amongst other things:

(a) optimising the management of the Central Landfill site (including undertaking Future Development) so as to maximise its operating capacity and life; and

(b) facilitating the obtaining by the Administering Authority of such additional or modified Resource Consents, and any other permits or authorisations

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required by law, as may be needed for any such future development and/or for the on-going operation of the Central Landfill.

8.2 Termination at end of Holding Period in certain circumstances: Any party may, by written notice to the other parties, terminate this Agreement with immediate effect, if any (or all) of the following has not occurred prior to 30 June 2022:

(a) Landfill Services Deed: Each of the parties has entered into a Landfill Services Deed substantially in the form set out in Schedule 1 (Landfill Services Deed for Municipal Users);

(b) Lease of Central Landfill Site: STDC (as lessor) and the Administering Authority, being NPDC (as lessee), have entered into a lease of the Central Landfill Site, substantially in the form set out in Schedule 3 (Site Lease).

8.28.3 Termination by Expiry or Agreement: This Agreement may not be terminated except by:

(a) the operation of clause 8.2 above;

(a)(b) the expiry of the Term under clause 8.58.4; or

(b)(c) written agreement (authorised by a formal resolution of each party) between the parties,

notwithstanding anything to the contrary in the Contract and Commercial Law Act 2017Contractual Remedies Act 1979.

8.38.4 Consequences of Termination: On termination of this Agreement for any reason:

(a) the termination will be without prejudice to any party's rights and remedies in respect of any breach of this Agreement by any other party, where the breach occurred before the termination of this Agreement; and

(b) the provisions of clauses 6.2, 6.3, 8.48.3, 9, 10 and 11, together with those other provisions of this Agreement which are incidental to, and required in order to give effect to those clauses, will remain in full force and effect.

8.48.5 Expiry on Completion of Aftercare: If this Agreement has not previously terminated, it will terminate when an independent expert, acceptable to each party (acting reasonably) certifies in writing to each of the parties that all of the Aftercare requirements of the Central Landfill have been met.

9. DISPUTE RESOLUTION

9.1 Initial Resolution: In the event of any dispute arising out of, or in relation to, this Agreement:

(a) a party may, at any time while there is a genuine dispute involving that party and any other party, relating in any way to this Agreement (Dispute), give written notice (Dispute Notice) to the other parties specifying the subject matter of the Dispute;

(b) the parties' Representatives will meet within 10 Business Days after delivery of the Dispute Notice to endeavour to agree in writing a suitable resolution of the Dispute; and

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(c) if no such resolution is agreed within 30 Business Days after the Dispute Notice is given, then any party may refer the Dispute to the parties' respective Chief Executives for direct negotiation between them in order to agree a suitable resolution of the Dispute.

9.2 Arbitration: In respect only of a Dispute arising out of the interpretation or application of this Agreement, that has not been resolved pursuant to clause 9.1 within 20 Business Days of reference of the Dispute to the parties' Chief Executives, then any party may refer the dispute to arbitration under the Arbitration Act 1996. For the avoidance of doubt, if the parties cannot reach agreement about any matter that is expressly to be agreed pursuant to this Agreement, this will not constitute a dispute that is able to be referred to arbitration under this clause.

9.3 Legal Proceedings: No party may issue any legal proceedings (other than for urgent interlocutory relief) relating to any Dispute, unless that party has first taken all reasonable steps to comply with clauses 9.1 and 9.2.

10. CONFIDENTIALITY

10.1 Parties to Maintain Confidentiality: Subject to clause 10.2 and to any contrary written agreement between the parties, the parties will, subject to statutory obligations, keep all Confidential Information confidential during the Term.

10.2 Disclosure Required by Law: A party may disclose Confidential Information if and to the extent that it is necessary to do so in order to comply with its obligations under the Local Government Official Information and Meetings Act 1987 (LGOIMA) or any other statutory obligation. In the event that any party receives under LGOIMA a request for information that includes Confidential Information, that party will consider whether it is appropriate to transfer the request to the other parties under section 12 of LGOIMA and, if it does not transfer the request, will consult with the other parties on the handling of the request and which, if any, withholding grounds may apply before providing its response. For any other disclosure of Confidential Information, the party making the disclosure must notify the other parties in writing prior to disclosure.

10.3 Parties' Representatives: The parties must ensure that each of their respective employees, officers and agents, who receive or have access to Confidential Information, observe that party's confidentiality obligations contained in this clause 10.

11. INTELLECTUAL PROPERTY

11.1 Ownership of Intellectual Property: Unless otherwise agreed between the parties:

(a) each party will remain the owner of its Background IP; and

(b) all Joint IP will be owned jointly by the parties in proportion to their respective Percentage Interests.

11.2 Intellectual Property Licences: Unless otherwise agreed by the parties in writing, each party (Licensor) grants (to the extent legally permissible) to each other party and to their respective CLJC Members (each a Licensee) a non-exclusive, royalty- free licence to:

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(a) use the Licensor's Background IP to the extent necessary to enable the Licensee to:

(i) implement this Agreement during the Term; and

(ii) exercise the Licensee's rights in the Joint IP; and

(b) use the Joint IP to the extent necessary to enable the Licensee to implement this agreement during the Term,

provided that where the Background IP or Joint IP is Confidential Information for the purposes of this Agreement, such licence will be subject to any restriction under clause 10.

12. FORCE MAJEURE

12.1 No party (First Party) will be liable for any act, omission or failure by it under this Agreement if that act, omission or failure results directly from a Force Majeure, provided that:

(a) whenever the First Party becomes aware that such a Force Majeure has occurred or is likely to occur, the First Party will notify all other parties by written notice accordingly;

(b) each party will continue to use its best endeavours to perform its obligations as required under this Agreement;

(c) no party will be deemed to have accepted any liability to pay or share any extra costs which may be incurred by any other party in complying with this clause or otherwise resulting from such act, omission or failure.

13. NOTICES

13.1 Method of Delivery: Any written notice required under this Agreement must be signed by a duly authorised representative of the party giving that notice and (without limiting the means by which notice may be given under this Agreement) will be deemed validly given to the relevant recipient in accordance with clause 14.4 if:

(a) Delivery: delivered by hand to the intended recipient's address (as the recipient may nominate, by written notice to the other parties from time to time); or

(b) Email: sent by email to the intended recipient's email address (as the recipient may nominate, by written notice to the other parties from time to time) and if the recipient acknowledges receipt (whether by way of automated message or otherwise).

13.2 Time of Delivery of Notices: any notice transmitted by email or delivered after 5.00pm on a Business Day, or at any time on a non-Business Day, will be deemed received at 9.00am on the next Business Day.

14. GENERAL

14.1 Amendment: This Agreement can be amended only by written agreement between the parties (and, for the avoidance of doubt, the CLJC is not authorised to amend this agreement) except for any amendment required in order to comply with

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a change in any applicable Law (in which case this Agreement will be amended, at the written request of any party (sent to the other parties) to the minimum extent required to comply with the change in the applicable Law, while maintaining the same risk profile for each party).

14.2 Announcements: Without limiting the effect of any other provision in this Agreement, any announcement or publication of information relating to this Agreement is to be made by CLJC or by the parties in accordance with CLJC's directions.

14.3 Assignment: No assignment of this Agreement by any party is permitted, except with the other parties' prior written consent.

14.4 Communications Between Parties: Anything requiring the agreement of or any consent or authorisation by any party must, in order to be effective, be communicated to that party's Representative and copied to that party's CLJC Member. All other communications relating to this Agreement will be effective if made by or to the CLJC Members.

14.5 Counterparts: This Agreement may be signed in counterparts. All executed counterparts will together constitute one document.

14.6 Copies: Any copy of this Agreement that is received by facsimile or via email in PDF or other document reproduction format (including any copy of any document evidencing a party's signature to this Agreement) may be relied upon by any party, and presented in evidence in any legal proceedings, as though it were an original copy of this Agreement. This agreement may be entered into on the basis of an exchange of facsimile, PDF or other document reproduction format.

14.7 Costs: The legal costs incurred by any party in relation to the drafting and negotiation of this Agreement will (except to the extent that payment for these has been made, or is to be made, under clause 4.104.10) be reimbursed to that party out of the Operating Account. Each party will pay its own costs of complying with this agreement, unless stated otherwise in this agreement.

14.8 Entire Agreement: This Agreement supersedes the MoU and any other previous understandings or agreement relating to the Central Landfill (except for the Regional Waste Services Management Agreement, as varied underreferred to in 3.1(c) clause 2.1(c)).

14.9 Further Assurances: Each party will do all things and execute all documents reasonably required in order to give effect to the provisions and intent of this Agreement.

14.10 Partial Invalidity: If any provision of this Agreement is or becomes invalid or unenforceable, that provision will be deemed deleted from this Agreement. The invalidity or unenforceability of that provision will not affect the other provisions of this Agreement, all of which will remain in full force and effect to the extent permitted by law, subject to any modifications made necessary by the deletion of the invalid or unenforceable provision.

14.11 Relationship Between Parties: Nothing in this Agreement is intended to create any employment relationship, agency, partnership or council-controlled organisation (under the Local Government Act 2002). No party has any authority to bind any other party except as expressly set out in this Agreement.

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14.12 Remedies: Subject to clause 8.38.2, the rights, powers and remedies in this agreement are cumulative and are in addition to any rights, powers and remedies provided by law.

14.13 Regulatory Functions: Nothing in this Agreement limits the exercise by any party of its regulatory functions as required by law.

14.14 Open Book Policy: Without limiting the effect of any other provision of this Agreement, each party will at all times, and to the extent that it is reasonably able, make available to each other party, on request, such copies of financial and other information relating to that party's activities under this Agreement.

SIGNATURES

SIGNED on behalf of the NEW PLYMOUTH DISTRICT COUNCIL by:

Signature

Name/Title

SIGNED on behalf of the SOUTH TARANAKI DISTRICT COUNCIL by:

Signature

Name/Title

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SIGNED on behalf of the STRATFORD DISTRICT COUNCIL by:

Signature

Name/Title

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3.1

SCHEDULE 1

LANDFILL SERVICES DEED FOR MUNICIPAL USERS

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SCHEDULE 2

LANDFILL SERVICES DEED FOR COMMERCIAL USERS

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SCHEDULE 3

SITE LEASE

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SCHEDULE 4

AGREEMENT VARYING REGIONAL WASTE SERVICES MANAGEMENT AGREEMENTJOINT COMMITTEE TERMS OF REFERENCE

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SCHEDULE 455

DESCRIPTION OF CENTRAL LANDFILL SITE

The Central Landfill Site is made up, generally, of:

 The landfill footprint 14.92 ha (attached Figure 2)

 Access road 2.25 ha (attached Figure 3)

 Riparian planting 2.75 ha (attached Figure 4)

 Leachate pond 0.15 ha (attached Figure 4)

 Screen planting 2.00 ha (attached Figure 5)

(Subject to any provisions in the Site Lease related to the final determination of the boundaries of the Central Landfill Site.)

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Central Landfill Joint Committee

Terms of Reference

1 Interpretation:

These are Terms of Reference (ToR) of the Central Landfill Joint Committee (CLJC). They supplement the Central Landfill Joint Committee Agreement (CLJC Agreement) between the three Taranaki District Councils (Parties); and should be read in context with it. All numbered clause references in these ToR are to the relevant clause in the CLJC Agreement unless stated otherwise. The CLJC will act in accordance with: (a) the Local Government Act 2002 and particularly with the relevant provisions of Schedule 7 of the Act (b) the Local Government Official Information and Meetings Act 1987.

2 Definitions:

Definitions are listed alphabetically in Schedule 1 of this ToR. They restate the CLJC Agreement definitions or are additional to it.

3 Purpose:

The purpose of the CLJC is: (a) To provide overall governance on the initial development, operation, closure and Aftercare of the Central Landfill including during the Holding Period (b) Create a long-term economically viable, least cost and regulatory compliant solution for the disposal of the Parties’ Solid Waste.

4 Overview of Function and Responsibility

4.1 Functions and responsibilities of a general governance nature include: (a) Approve the Business Strategy, Annual Budget and Business Plan for the Central Landfill including during the Holding Period (b) Oversee, review and hold accountable the Administering Authority in the performance of its delegated powers and responsibilities (c) Monitor risks and opportunities for the Central Landfill and share these with the Administering Authority and the Parties as the need arises (d) Communicate and report openly to the Parties on performance and on important issues and achievements (e) Adopt policies and procedures to facilitate the effective operation and governance of the Central Landfill. Unless unsuitable or deficient these will be Administering Authority policies and/or standing orders. Where the CLJC requires the Administering Authority to apply a policy that is not an Administering Authority policy, the policy requires approval of the

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Administering Authority CEO, to avoid Administering Authority staff having conflicting policy requirements (f) As appropriate, take advice and share information, plans and proposals with the Advisory Group. 4.2 Recognising that: (a) The powers, rights and responsibilities of the CLJC have been delegated to the Administering Authority (AA) to the greatest extent possible (b) The AA present an annual Business Plan and Budget to the CLJC with analysis on waste types accepted, pricing and long term financial obligations. The CLJC approve the Business Plan and Budget (c) During the Holding Period, the AA will review and advise on (i) the viability of Central Landfill considering: (A) the performance of the Bonny Glen waste disposal contract, (B) initial modelling assumptions, (C) the ability to extend all relevant Central Landfill consents for an extended period, or at least five years; (D) the capital required to maintain the consents and Central Landfill site; (E) any options to future proof the landfill site including purchasing neighbouring land if required; (F) any changes to landfill best practice, government policy and implementation of Waste Management and Minimisation Plan actions. (ii) whether Central Landfill would need to accept waste on 1 July 2024 and if so confirm the timeline to be met to enable Central Landfill to open by this time (d) The CLJC oversees the performance against plan and budget; meeting intermittently to do so (e) The CLJC’s only further involvement is in approving proposals put forward by the AA where: (i) Intended material expenditure or contractual commitments are not in the approved Business Plan and Budget (ii) There is a need for a change to the Parties’ contributions towards the landfill development, operations and aftercare so funding remains adequate; or in paying out unneeded surpluses to the Parties (iii) A decision is required on recommencing the landfill development during the Holding Period to enable operation by a certain date (iv) Confirmation of the date the landfill will close is required (v) Further amendments to the CLJC Agreement are required.

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5 Detail of Function and Responsibility:

5.1 Functions and responsibilities specified in the CLJC Agreement include: (a) Determine, subject to the provisions of Landfill Services Deeds, the Gate Charges of the Central Landfill (clause 3.3(b)) (b) Determine, subject to the provisions of the Landfill Services Deeds, which types of Solid Waste will be accepted at the Central Landfill (clause 3.3(c)) (c) Approve the Annual Budget and Business Plan for the Central Landfill (clause 3.3(d)) (d) Determine the date of permanent closure of the Central Landfill, consistent with the Resource Consents (clause 3.3(e)) (e) During the Holding Period, on the advice of the AA, determine the viability of Central Landfill, whether Central Landfill would need to accept waste on 1 July 2024 and any changes required to update the CLJC agreement to reflect the decisions made (clause 3.3(a)) (f) On advice of the Administering Authority, determine and, using the specific terms of the CLJC Agreement, call on the Parties to: (i) Make any change in capital contribution required for the Holding Period, development, operation and permanent closure of the Central Landfill (clause 4.4) (iii) Make payment into the Operating Account in order to keep the account in surplus (Clause 4.7) (iv) Make payment into the Aftercare Fund to fully meet the costs of Aftercare costs following permanent closure of the Central Landfill. (clause 4.6) (g) On advice of the Administering Authority and using the specific terms of the CLJC Agreement, approve the distribution of any annual operating surplus to the Parties, where the surplus is not required to fully fund the Aftercare Fund and Future Development Fund (clause 4.10) (h) Approve any binding commitment that constitutes an aggregate contingent or actual liability of the Parties in excess of $250,000 in any financial year of the Central Landfill; where such commitment has not been included in the approved Annual Budget or expressly authorised by any other provision of the CLJC Agreement (clause 5.2) 5.2 The CLJC will perform all functions and responsibilities in a manner which: (a) Meets the requirements of the Parties' respective Long Term Plans (under the Local Government Act 2002) relating to Solid Waste disposal; and (b) Create a long-term economically viable, least cost and regulatory compliant solution for the disposal of the Parties’ Solid Waste (clause 3.3) 5.3 To ensure the CLJC's responsibilities are discharged in the manner contemplated by the CLJC Agreement, any responsibility of the CLJC is construed as an obligation of the Parties, as performed through their respective CLJC Members (clause 3.4).

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6 Administering Authority:

6.1 Appointment New Plymouth District Council is the Administering Authority until or unless the Parties agree otherwise (clause 5.1). 6.2 Delegation of Powers to the Administering Authority To the fullest extent permitted by law, the CLJC was deemed to have granted to the Administering Authority, on and from the Commencement Date (of the CLJC Agreement), all functions, rights and powers of the CLJC, required for the development, operation and Aftercare of the Central Landfill, including during the Holding Period, in the manner contemplated by the CLJC Agreement (clause 5.2). The detail of these delegations is given in Schedule 2.

7 Membership, voting and operation of the CLJC:

7.1 CLJC Membership The CLJC comprises the Mayor plus one alternate elected member from each Party. Each Party nominates in writing to the other Parties their initial CLJC Member. Any Party may subsequently change its CLJC Member at any time by written notice to the other Parties. If a CLJC Member ceases to be an elected member of the Party that appointed them, he or she will automatically cease to be a CLJC Member. (clause 3.4 and 3.5) 7.2 Voting Each Party has one vote on all resolutions of the CLJC. If both the Mayor and other elected members from a Party are in attendance, then the Mayor exercises the single vote. The CLJC Chairperson will not have a second or casting vote on any resolution of the CLJC. Meetings of the CLJC may be attended by officers of the parties, but such officers will not be entitled to vote on resolutions of the CLJC. (clause 3.6 and 3.7(a)) 7.3 Proceedings The CLJC operates in accordance with the following (clause 3.7): (a) Chairperson: The chairperson of the CLJC will be any CLJC Member nominated by the Administering Authority (subject to his or her consent) (b) Quorum: The quorum for a meeting of the CLJC will be a simple majority of the CLJC Members (c) Resolutions: All decisions by the CLJC will be made by resolution of the CLJC Members, passed at a CLJC Meeting. Each CLJC Member must ensure, prior to voting on any resolution of the CLJC, that he or she has the authority of the Party which appointed him or her to the CLJC to exercise his or her vote accordingly, and that the exercise of his or her vote does not require any subsequent ratification or approval by that Party (d) Other: The CLJC will otherwise regulate its proceedings as the CLJC Members so resolve or, in the absence of any such resolution to the contrary, in accordance with the Administering Authority Standing Orders.

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8 Meetings

8.1 Timing Meetings will be held quarterly except during the Holding Period when they will be held annually and at occasions when a need for decision making occurs. 8.2 Administration Meeting agendas will be published and distributed to members before the meeting date. Minutes of all meetings will be taken of attendance and of all decisions and resolutions. These will be circulated to: (a) Members within two weeks of the meeting (b) The Parties as required by them Members will follow up individually on specific actions when required to do so and within the agreed time. 8.3 Support The CLJC may receive advice from: (a) representatives of the Administering Authority who attend meetings and provide secretarial or other support services to them (b) officers from NPDC, STDC and SDC, who give specialist landfill management and other useful advice and feedback to CLJC to assist them to perform their governance role (c) external persons who attend meetings as necessary to discuss matters of relevance to that person or for the CLJC to draw on their expertise.

9 Budget

The cost of the CLJC carrying out its functions and responsibilities ‘lie where they fall’ and are borne by each member’s Party and included in their annual budgets. The exception is any external procurement, such as for professional advice to the CLJC, where costs will be included in the Central Landfill Annual Budget.

10 Reporting

The Administering Authority will provide reporting to the CLJC and the CLJC members will provide reporting to the Parties as agreed from time to time. Reports to the Parties will replicate reports CLJC receives from the Administering Authority.

11 Communication

Communications and publicity on the CLJC Agreement, the Central Landfill activity and operations, including its initial development and ongoing viability, are the responsibility of the CLJC and will be conducted by the Chair with support of the Members. Any CLJC Agreement communications requiring the agreement, consent or authorisation by any Party must be communicated to that Party's Representative and copied to that Party's CLJC Member.

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12 Review and revision of ToR

The CLJC should review the ToR as needed, agree any changes with the Administering Authority and the Parties. Each new version will be numbered and dated.

13 Term/Cessation of CLJC

Having resolved under schedule 7 clause 30(7) of the Local Government Act 2002 that the committee not be discharged at a triennial election, the CLJC remains operative until:  A duly appointed independent expert certifies in writing to each Party that all of the Aftercare requirements of the Central Landfill have been met (clause 8.4)  A formal resolution of the Parties agrees on the termination of the CLJC Agreement (clause 8.2).

Confirmed on ______(day) of ______(month) ______(year)

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SIGNATURES

SIGNED on behalf of the NEW PLYMOUTH DISTRICT COUNCIL by:

Signature

Name/Title

SIGNED on behalf of the SOUTH TARANAKI DISTRICT COUNCIL by:

Signature

Name/Title

SIGNED on behalf of the STRATFORD DISTRICT COUNCIL by:

Signature

Name/Title

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Schedule 1 Definitions Administering Authority (AA) – The organisation responsible for administering and operating the Central Landfill, under delegation from the CLJC, as set out clause 5.1 of the CLJC agreement. New Plymouth District Council (NPDC) is the delegated AA. Aftercare - is the on-going monitoring and maintenance of the Central Landfill following its permanent closure, as required under the Resource Consents. Aftercare Fund - is an amount set aside to provide for all anticipated Aftercare costs (as determined from time to time in accordance with clause 5.4.19 of the Landfill Full Cost Accounting Guide for New Zealand). Annual Budget – The CLJC approved annual operating and capital budget of the Central Landfill, prepared by the AA. (clause 4.2) Business Day means any day excluding Saturdays, Sundays and statutory public holidays in Taranaki and excluding any day in the period beginning on 25 December in any year and ending on 5 January in the following year. Business Plan – The CLJC approved annual business plan on the intentions, operations and risks of the Central Landfill prepared by the AA. The plan informs and is supported by the Annual Budget and also informs the Parties Annual and Long Term Plans. (clause 4.2) Central Landfill – The new regional landfill on land owned by STDC and situated on State Highway 3, approximately three kilometres south of Eltham. Central Landfill Joint Committee (CLJC) – A joint committee comprising NPDC, STDC and SDC, established for the purposes of providing overall governance on the initial development, operation, closure and Aftercare of the Central Landfill including during the Holding Period. CLJC Members – means one elected member from each of the parties that comprise the CLJC. Financial Year - is the financial year of the Central Landfill, being 1 July to 30 June. Future Development Fund - is an amount set aside for the costs associated with the future development and the eventual permanent closure of the Central Landfill Site (excluding Aftercare), including any expansion or development of its infrastructure. Gate Charges - the prices charged for the deposit of Solid Waste at the Central Landfill. Unit charges can vary, including for waste type and volumes delivered. Good Industry Practice - in relation to any activity, is the exercise of a degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced person engaged in New Zealand in the same type of activity, under the same or similar circumstances. Holding Period - the period between the commencement of this agreement and the expiry of the initial term of the Bonny Glen waste disposal contract (expected to be 30 June 2024). Landfill Management Agreement - means an agreement entered into between the Administering Authority (with the approval of the CLJC) and a third party for the management of the Central Landfill's day-to-day operations.

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Landfill Services Deed - means a deed setting out the basis on which a person is entitled to deposit Solid Waste at the Central Landfill. Operating Account - is a ledger account to be used solely for the receipt of all income and the payment of all expenses relating to the operations of the Central Landfill, including its initial development but excluding those relating to Aftercare or future development. Parties – are NPDC, STDC and SDC, usually acting together, in relation to the affairs of the Central Landfill. Party is any one of these Councils. Percentage Interests - is the proportion which the parties invest capital in, or receive any operating surplus from, or share in any operating deficit from, the Central Landfill. Being: (a) NPDC - 66.4%; (b) STDC - 27.1%; (c) SDC - 6.5% Representative - means the representative appointed by the Mayor of each Party under clause 41A of the Local Government Act 2002 or nominated by resolution of each Party (evidenced by written notice to, or by inclusion in any minutes of, the CLJC) to receive notices on behalf of that Party relating to these Terms of Reference. Resource Consents - means the following resource consents, as amended or replaced from time to time, and together with any additional resource consents granted in the future in respect of the Central Landfill:

Consent Reference Consenting Authority Lapse Date Expiry Date  05347-1.3 (dated Taranaki Regional 21 December 2025 1 June 2034 20 July 2005) Council (TRC)  05348-1.4 (dated TRC 21 December 2025 1 June 2034 20 July 2005)  05349-1.4 (dated TRC 21 December 2025 1 June 2034 20 July 2005)  05350-1.3 (dated TRC 21 December 2025 1 June 2034 20 July 2005)  05351-1.3 (dated TRC 21 December 2025 1 June 2034 20 July 2005)  10501-1.0 (dated TRC Exercised 1 June 2022 23/11/2017)  10502-1.0 (dated TRC Exercised 1 June 2034 23/11/2017)  10529-1.0 (dated TRC Exercised 1 June 2034 19/2/2018)  10530-1.0 (dated TRC Exercised 1 June 2034 19/2/2018)  RM 980102 (dated STDC 21 December 2025 N/A 30 March 2000, as varied on 14 December 2005)

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Site Lease – the lease of the Central Landfill site by the AA from STDC (clause 8.2 (b)) Solid Waste - means all forms of waste, including recyclable waste and compatible green waste.

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Schedule 2

1 Delegations of Powers and Functions to the Administering Authority

1.1 Under clause 5.2 of the CLJC Agreement, the AA may, on behalf of the CLJC: (a) Enter into Landfill Services Deeds with commercial users, in accordance with the Gate Charges and Solid Wastes types determined by the CLJC (under clause 3.2) (b) Enter into a Landfill Management Agreement for the management of the Central Landfill's day-to-day operations (on terms consistent with any Landfill Services Deed that is in existence prior to the entry into the Landfill Management Agreement, and with the CLJC Agreement) (c) Purchase, and hold on trust for the Parties, assets necessary for the operation of the Central Landfill but excluding the Central Landfill Site itself (d) Access, use and make improvements to (including the construction of fixtures on) the Central Landfill Site (and enter into the Site Lease with STDC) (e) Hold and operate the Operating Account, Aftercare Fund and Future Development Fund in the manner set out in the CLJC Agreement (f) Enter into binding commitments for the operation of the Central Landfill in the manner contemplated by the CLJC Agreement, provided that any such commitment: (i) will be made on the basis that it is a joint liability of the parties, as to their respective Percentage Interests (ii) must, if not expressly authorised by any other provision of the CLJC Agreement, be authorised by a resolution of the CLJC if that commitment (either alone or in conjunction with other related commitments) constitutes an aggregate contingent or actual liability of the parties in excess of $250,000 in any financial year of the Central Landfill (iii) must be permitted by law (g) Arrange, and hold on trust for the Parties as to their respective Percentage Interests, all insurances reasonably required in respect of the Central Landfill (h) Manage disputes with third parties and any regulatory compliance matters relating to the Central Landfill (including any issues relating to the Resource Consents); and (i) during the Holding Period and subject to the CLJC review in clauses 3.2 (e)(i) and 3.2 (e)(ii), apply for Additional/Modified Resource Consents per clause 7.2 of the CLJC Agreement as required. 1.2 Under clause 4 of the CLJC Agreement, the AA will: (a) Maintain financial and budgeting practices in accordance with the Landfill Full Cost Accounting Guide for New Zealand (published by the Ministry for the Environment) (b) Maintain financial records and accounts for the Central Landfill, separate from those relating to the Administering Authority's other activities

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(c) Prepare a Central Landfill annual budget and business plan for the CLJC, and: (i) Submit the Annual Budget and Business Plan to the CLJC for approval not less than 6 months prior to each Financial Year end (ii) Once approved, use all reasonable commercial endeavours to manage the Central Landfill in accordance with the approved Annual Budget and Business Plan (iii) Notify the CLJC, at the earliest available opportunity, of any material deviation or expected material deviation from the Annual Budget or Business Plan (iv) Incorporate a reasonable allowance for overheads as an expense in the Annual Budget and Business Plan

2 Delegation of Accounting requirements, obligations and rights to the Administering Authority

The following actions are also required of the Administering Authority under clause 4 of the CLJC Agreement: (a) Separately maintain an Operating Account, a Future Development Fund account and an Aftercare account for the Central Landfill (clauses 4.1(a), 4.5, 4.6(a)) (b) Determine and apply suitable accounting and investment policies for the Future Development Fund, the Aftercare Fund, the Operating Account and all other amounts relating to the Central Landfill (clause 4.1 (b)) (c) Ensure these accounts are fully funded in each financial year to meet the obligations and purpose for which they are intended (clauses 4.5,4.6(b),4.7) (d) Propose, for approval by the CLJC, any change in contributions by the Parties, including during the Holding Period, required for the development, operation and aftercare of the Central Landfill (clause 4.4) (e) Allocate, from the Operating Account, sufficient funds in order to meet the anticipated costs of Future Development. Such funds will be held in the Future Development Fund. All Future Development costs must be paid from the Future Development Fund (clause 4.5) (f) Allocate, from the Operating Account, sufficient funds in order to meet the anticipated aftercare costs. Such funds will be held in the Aftercare Fund. The Aftercare Fund will be used to meet all for aftercare following permanent closure of the Central Landfill. All Aftercare costs must be paid from the Aftercare Fund. (clause 4.6) (g) Pay all operating revenue into the Operating Account (clause 4.8) (h) Pay all operating expenses from the Operating Account (clause 4.9) (i) Keep the Operating Account in surplus at all times after taking into account funds to be paid to the Future Development Fund and the Aftercare Fund, and of amounts paid into the Operating Account by the Parties under any change in contributions by the Parties, until all requirements of the Central Landfill have been met. (clause 4.10)

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(j) Allocate any operating surplus in the Operating Account as follows: (clause 4.10) (i) First, to the Aftercare Fund to the extent such allocation is needed to ensure the Fund has sufficient funds in it to meet all Aftercare costs (ii) Second, to the Future Development Fund to the extent any future development of the Central Landfill Site is not fully funded through the Future Development Fund (iii) Any residual paid to the Parties, in their Percentage Interests, where the Administering Authority considers appropriate and as approved by CLJC.

3 Other Obligations of Administering Authority:

In addition to any other obligation, the Administering Authority, in its capacity, functions, rights and powers under clause 5.2 of the CLJC Agreement, must: (clause 5.3) (a) Not breach, or do anything that constitutes a breach by any other party, of any obligation imposed by law (b) Exercise due skill and care in accordance with Good Industry Practice (c) Act in good faith (d) Not, without being authorised to do so by the CLJC Agreement or a resolution of the CLJC: (i) Borrow any amount on behalf of the parties (provided that this does not limit the acquisition by the Administering Authority of any goods or services on unsecured deferred payment terms, in the ordinary course of operating the Central Landfill); (ii) Give any security over, or dispose of any interest in, the Central Landfill Site, the Site Lease, the Operating Account, the Aftercare Fund, the Future Development Fund, or any other asset which is held on behalf of the Parties for the operation of the Central Landfill; or (iii) Grant any person any right of access to, or any right to deposit Solid Waste in, the Central Landfill Site (except as set out in any Landfill Services Deed or in the Landfill Management Agreement). (e) Comply with the Site Lease. (f) Act in accordance with its applicable financial limitations and procurement policies.

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Document Set ID: 8508906 Version: 2, Version Date: 22/04/2021 133 Council agenda (6 July 2021) - The Junction Update Report

4 THE JUNCTION – REUSE SHOP AND EDUCATION PROGRAMMES

PURPOSE 1. The purpose of this report is to provide an update on the operation of The Junction activities, including the Reuse shop which opened in March 2020 and the education programmes, which have been offered since August 2019.

RECOMMENDATION That, having considered all matters raised in the report, the report be noted.

STRATEGY AND OPERATIONS COMMITTEE RECOMMENDATION

2. The Strategy and Operations Committee endorsed the officer’s recommendation.

COMMUNITY BOARD RECOMMENDATIONS

3. The Clifton, Inglewood, Kaitake and Waitara community boards have endorsed the officer’s recommendation.

TE HUINGA TAUMATUA RECOMMENDATION

4. Te Huinga Taumatua Committee endorsed the officer’s recommendation.

SIGNIFICANCE AND ENGAGEMENT

5. This report is provided for information purposes only, and has been assessed as being of some importance.

EXECUTIVE SUMMARY

6. The Junction – Zero Waste Hub is a key facility for achieving Council’s Zero Waste 2040 vision.

7. The following is a summary of the key metrics of the facilities success during its first year of operating.

 2,700 people have attended education sessions;

 38,753 items have been sold;

 92 tonnes of waste have been diverted from landfill;

 13,538 visitors to the site;

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4  94 tours of the MRF.

8. The above stats have been delivered despite the facility opening in the immediate aftermath of the first Covid-19 lockdown.

9. The Junction is operated by both WISE, who deliver the reuse shop, and Sustainable Taranaki who deliver the community education programmes. The Council subsidises the operation of the facilitiy with a total of $162,500 paid to WISE and Sustainable Taranaki as the annual operating fee.

10. In total, WISE and Sustainable Taranaki have generated $116,081.65 of revenue from the sale of items. The revenue and operating fees offset the total operating expenses of $368,658.33 with the remaining shortfall made up from community grant funding.

DISCUSSION

11. The Junction – Zero Waste Hub is a key facility for achieving Council’s Zero Waste 2040 vision and maximising diversion of waste from landfill. The Junction is a community space that is helping to create attitude change around waste by providing easy options for reusing and recycling unwanted items as well as education on how to avoid creating waste in the first place.

12. Located on Colson Road, Waiwhakaiho, New Plymouth, The Junction includes:

 Reuse shop and drop-off

 Education – workshops, events and tours

 Recycling bins

 Materials Recovery Facility (MRF).

13. Operation of The Junction is a collaborative partnership with Council contracting WISE (Waitara Initiatives Supporting Employment) Charitable Trust to run the Reuse Shop, Sustainable Taranaki to provide educational services and EnviroWaste Services Ltd. to operate the MRF.

The Junction - Reuse shop

14. The Reuse shop provides a second life for items which would have otherwise been disposed to landfill and provides a cheap alternative to landfilling. The Reuse shop currently operates within a temporary tent building with attached gravel yard and 40 foot containers next door to the MRF. The shop is open from Tuesday to Sunday 10am till 3pm.

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4 15. Since the Reuse shop opened on 6 March 2020 the operation has gone from strength to strength despite a Covid-19 lockdown which meant the shop was shut for all of April and half of May 2020. Both visitor numbers and sales have steadily increased (Figures 1 and 2).

16. As shown in Table 1 more than 38,000 items have been sold through the Reuse shop, diverting 92 tonnes of materials from landfill since the shop opened. More than 13,000 visitors have shopped and/or dropped off items over this period.

Table 1: Reuse Shop May 2020 to May 2021 Visitors 13,538 Drop-offs 1,328 Items sold 38,753 Tonnes diverted 92

Visitors per month 2500

2000

1500

1000

500

Figure 1 Number of visitors per month

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4 Number of items sold per month 7000

6000

5000

4000

3000

2000

1000

Figure 2 Number of items sold per month

17. As well as cleaning and repairing items for resale the shop staff also upcycle items for sale through the shop. Some of the items produced include earrings made out of bike tyre inner-tubes, mini glasshouses made from recycled windows, chairs made from ATV tyres and upcycled furniture. WISE plans to continue to increase their upcycling of items over time to increase the value and saleability of donated items.

18. A range of items are donated and sold through the Reuse shop but building materials in particular are proving to be increasingly popular with shoppers and are also a point of difference compared with other second hand shops. Builders in the region are becoming increasingly aware that offcuts, demolition fixtures and fittings and new obsolete items can be taken to The Junction rather than being landfilled and DIYers are visiting in increasing numbers for items to finish their projects. Some of the more interesting items that have passed through the shop include new bath tubs, complete show room kitchens, Pink Batts offcuts (which have proved very popular) and bronze brackets and bolts which the company donating them has requested be used in sculptures by local artists.

19. The Junction – Reuse shop provides a range of recycling options for items which cannot be recycled at the kerbside, including:

 Household batteries  Milk bottle lids  Writing instruments  Shaving razors, their blades and packaging  Aluminium can tabs and wine bottle tops  Bread tags  Cling wrap, food storage bags, food storage containers

137 Council agenda (6 July 2021) - The Junction Update Report

4  Toothbrushes, toothpaste tubes, floss containers and their packaging  The Collective suckies yoghurt tubes and pouches  L’OR, Maccona, Illy, L’affare, Nescafe Dolce Gusto and Jed’s coffee capsules  Scrap metal.

20. Although these recycling options are relatively new to The Junction they are already proving popular with residents.

21. A range of Will and Able bulk cleaning products are also available at the Reuse shop, so residents can refill their own containers. These products are eco- friendly and produced by New Zealanders with intellectual disabilities. Refilling containers, rather than purchasing new, reduces the amount of plastic bottles produced.

Chair made from ATV tyre

138 Council agenda (6 July 2021) - The Junction Update Report

Recycling options

Bulk cleaning products

Inside the reuse shop Play sink made from old BBQ

139 Council agenda (6 July 2021) - The Junction Update Report

4 The Junction - Education

22. In August 2019 Sustainable Taranaki took over running the MRF tours and started holding workshops and events at The Junction, under contract to the Council. Since then more than 2,700 residents have participated in educational activities at The Junction.

23. Residents have had the opportunity to participate in workshops on everything from making a garden bed, worm farm or compost bin from recycled materials to preparing their own cleaning products and making Christmas wrap and gifts. All of these workshops have provided practical skills to reduce waste at home.

24. School groups, residents and businesses have undertaken 94 tours of the MRF facility where they have seen how our kerbside recycling is sorted by MRF staff and learnt about what can be recycled at the kerbside and what not to put in your recycling bin.

25. Events held at The Junction have included planting of the gardens, which involved 70 volunteers, ‘green drinks’ where businesses have the opportunity to present their waste minimisation initiatives and share ideas with other businesses, and teacher engagement sessions where teachers from various schools come together to discuss waste minimisation initiatives in schools around the district.

The Junction - Communication

26. Effective communication with our community is essential to achieve the goals for the site. This is managed under a joint Community Engagement Plan which contains measurable KPIs that are reviewed annually. The Junction is promoted through a broad range media and also at events. The site has a Facebook page https://www.facebook.com/TheJunctionTaranaki which currently has 2,700 followers, a Twitter account and a page on the Council’s website https://www.newplymouthnz.com/Residents/Your-Property/Zero- Waste-Recycling-and-Rubbish/The-Junction.

Community event in Marfell

140 Council agenda (6 July 2021) - The Junction Update Report

Making cleaning products

Watching how the recycling is sorted

The Junction sculpture Making a compost bin

141 Council agenda (6 July 2021) - The Junction Update Report

4 NEXT STEPS

27. On 1 June 2021 shop opening hours will increase to 10am to 4pm Tuesday to Sunday and E-waste recycling will shift from the Transfer Station to The Junction. Over the next 12 months The Junction operation will continue to focus on expanding their customer base, raising a higher community profile and engagement, and identifying new waste streams that can be diverted from landfill.

28. Within the next six months a Steering Committee will be established to provide guidance and ensure the growth and success of the site. A representative from Ngāti Tawhirikura has been invited to be part of this group along with representatives from the three partners. Nominated community representatives with the skills needed to make The Junction a success will also be brought onto the committee as needed.

FINANCIAL AND RESOURCING IMPLICATIONS

29. Further expansion of site infrastructure such as a permanent building for the Reuse shop and development of the green spaces, will be dependent on the outcome of the 2021-2031 Long Term Plan deliberations

30. The Junction is operated by both WISE, who deliver the reuse shop, and Sustainable Taranaki who deliver the community education programmes. The Council subsidises the operation of the facilitiy with a total of $162,500 paid to WISE and Sustainable Taranaki as the annual operating fee.

31. In total, WISE and Sustainable Taranaki have generated $116,081.65 of revenue from the sale of items. The revenue and operating fees offset the total operating expenses of $368,658.33 with the remaining shortfall made up from community grant funding.

IMPLICATIONS ASSESSMENT

32. This report confirms that the matter concerned has no particular implications and has been dealt with in accordance with the Local Government Act 2002. Specifically:  Council staff have delegated authority for any decisions made;  Council staff have identified and assessed all reasonably practicable options for addressing the matter and considered the views and preferences of any interested or affected persons (including Māori), in proportion to the significance of the matter;  Council staff have considered how the matter will promote the social, economic, environmental, and cultural well-being of communities in the present and the future.  Unless stated above, any decisions made can be addressed through current funding under the Long-Term Plan and Annual Plan;

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4  Any decisions made are consistent with the Council's plans and policies; and  No decisions have been made that would alter significantly the intended level of service provision for any significant activity undertaken by or on behalf of the Council, or would transfer the ownership or control of a strategic asset to or from the Council.

Report Details Prepared By: Nicolette West (Resource Recovery Contracts Engineer) Team: Resource Recovery Approved By: Kimberley Hope (Resource Recovery Manager) Ward/Community: Whole district Date: 10 May 2021 File Reference: ECM8533105

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143 Council agenda (6 July 2021) - Citizens’ Award Policy Review

CITIZENS’ AWARDS POLICY REVIEW

5 MATTER 1. The matter for consideration by the Council is the amendment to the Citizens’ Awards policy.

RECOMMENDATION FOR CONSIDERATION That having considered all matters raised in the report Council: a) Notes the Council acknowledges outstanding community service through an annual Citizens’ Award programme. b) Notes this programme is guided by a policy on Citizens’ Awards, which was last reviewed in 2016. c) Approve the Citizens’ Awards Policy with amendments as per Appendix 1.

STRATEGY AND OPERATIONS COMMITTEE RECOMMENDATION

2. The Strategy and Operations Committee endorsed the officer’s recommendation.

COMMUNITY BOARD RECOMMENDATIONS

3. The Clifton, Inglewood, Kaitake and Waitara community boards have endorsed the officer’s recommendation.

TE HUINGA TAUMATUA RECOMMENDATION

4. Te Huinga Taumatua Committee endorsed the officer’s recommendation.

144 Council agenda (6 July 2021) - Citizens’ Award Policy Review

COMPLIANCE

Significance This matter is assessed as being of some importance. 5 This report identifies and assesses the following reasonably practicable options for addressing the matter:

1. Approve the amendment to the policy

Options 2. Retain the existing policy

3. Revoke the policy and do not have a policy

4. Revoke the scheme

The persons who are affected by or interested in this matter Affected persons are citizens of the New Plymouth District.

Recommendation This report recommends Option 1 for addressing the matter.

Long-Term Plan / Annual Plan No Implications

Significant Policy and Plan No Inconsistencies

EXECUTIVE SUMMARY

5. Officers recommend the adoption of the Citizens’ Awards Policy (the policy) with the proposed amendments in Appendix 1, in order to complete the review of the policy. The proposed amendments remove the limitation for a single award per organisation, enhance the role of the ceremony within the policy and extends the policy review timeframe. Taking this approach will confirm that the policy continues to be fit for purpose.

6. If the amended policy is adopted, the next steps are to continue the Awards and to develop operational guidelines for the ceremony.

BACKGROUND

7. The Council acknowledges outstanding community service through an annual Citizens’ Award programme. This is commonly known as the Local Legends award.

145 Council agenda (6 July 2021) - Citizens’ Award Policy Review

8. The programme is guided by the Citizens’ Awards policy. The policy was last reviewed by the Council in 2016, which revoked the delegation to the Policy Committee to approve nominations for the Award, and instead, requiring full 5 Council to consider and approve nominations. The review also determined that nominations will be limited to individuals and cannot be lodged for groups.

9. The number of nominations for the annual Awards varies, with a maximum of 12 Awards being allocated each year. The Awards are advertised through an annual communications campaign. In 2020 the campaign actively targeted younger volunteers to be nominated for the Awards.

10. The Awards ceremony is well attended and includes a pōwhiri and formal presentation, light catering and socialising. The annual Awards cost the Council approximately $12,000. The organisation and significance of the ceremony receives considerable positive feedback, and an Award can be deemed as a prestigious recognition.

11. The policy was due for review in 2019. There are no implications for not reviewing the policy. The current policy works well and is relatively fit for purpose. The policy limits a single award be given to members of any one organisation per year. Anecdotally, organisations find nominating a single volunteer for the Awards limiting as it requires singling out a volunteer for the Awards. It is proposed to remove this restriction from the policy. The review timeframe is currently three years, it is proposed to extend this to six years.

12. Other Awards exist at a local and national level that recognise volunteers and service in the community. These include Volunteering New Plymouth’s Volunteer Recognition Awards, Sport Taranaki Volunteer of the Month, and Kiwibank Local Hero of the Year. Each have a different selection criteria and some work together to forward appropriate nominations to another with the nominator’s approval.

SIGNIFICANCE AND ENGAGEMENT

13. In accordance with the Council's Significance and Engagement Policy, this matter has been assessed as being of some importance. There are no statutory obligations to have a policy or to review this policy, it is of interest to a small section of the community, and does not impact on levels of service as stated in the Council’s Long-Term Plan.

OPTIONS

14. There are four reasonably practicable options:

a) Approve the amendment to the policy

b) Retain the existing policy

146 Council agenda (6 July 2021) - Citizens’ Award Policy Review

c) Revoke the policy and do not have a policy

d) Revoke the scheme. 5

15. The following assessment is provided for the four options:

Risk Analysis

16. There are no risks in approving this amendment, retaining the policy, or revoking the scheme. There is a risk in retaining the scheme without a policy as the implementation of the criteria may become less robust, not holding the Awards for a year, or revoking the scheme could be decided without Council approval.

Financial and Resourcing Implications

17. Revoking the scheme will remove the cost of the Awards, being approximately $12,000 per annum. There are no financial or resourcing implications from options a, b and c.

Statutory Responsibilities

18. There are no statutory requirements to have this policy or Awards programme.

Consistency with Policies and Plans

19. The policy supports the Council’s strategic goal of community and partnerships. There is no inconsistency between the options and Council’s policies and plans.

Participation by Māori

20. This policy review has not included external consultation with Māori. The policy does not impact on relationships with ancestral land, water, sites, waahi tapu, or valued flora. The Council employs a group to deliver a pōwhiri at the Awards ceremony. The development of operational guidelines for the Awards ceremony, including consideration of the pōwhiri, developed in collaboration with tangata whenua is recommended.

Community Views and Preferences

21. The number of nominations for the Awards vary from year to year. The ceremony is well attended and those who receive Awards are appreciative. Positive feedback on the Awards ceremony is regularly received.

147 Council agenda (6 July 2021) - Citizens’ Award Policy Review

Promotion or Achievement of Community Outcomes

22. The Citizens’ Awards contributes to community through acknowledging 5 community service and partnerships through acknowledging volunteers of community organisations. The revocation of the scheme will not support the community outcomes.

Advantages and Disadvantages

Option Advantages Disadvantages 1: Approve . Raises the importance of the . May have an increase in the planning and management of number of nominations to amendment the ceremony. process. to the policy . Removes the limitation on . Resources to develop organisations to select one operational guidelines in outstanding citizen to consultation with tangata nominate over another. whenua. . May have an increase in nominations for the award. . Extending the review timeframe reduces the requirement for staff resources on reviewing policies that may not be required. 2: Retain the . A single award for members of . Resources to conduct a three existing any one organisation each yearly review of the policy will policy year will be retained unless remain. under exceptional . Contact information on the circumstances. policy is dated. . Three yearly review retained. . The ceremony may not be adequately planned for. 3: Revoke the . The implementation of the . The implementation of the policy and do Awards can be flexible. criteria becomes less robust not have a and/or vary from year to year. policy. . The scheme can be changed or revoked without Council approval. 4: Revoke the . Reduce workload and costs. . Does not contribute to scheme Council’s strategic framework.

Recommended Option This report recommends Option 1 – Approve the amendment to the policy.

148 Council agenda (6 July 2021) - Citizens’ Award Policy Review

APPENDICES Appendix 1 Citizens’ Awards Policy (ECM8531534) 5

Report Details Prepared By: Nadine Ord (Policy Adviser) Team: Corporate Policy and Planning Reviewed By Mitchell Dyer (Corporate Policy and Planning Lead) Julie Straka (Governance Lead) Approved By: Joy Buckingham (Group Manager Corporate Services) Ward/Community: District Wide Date: 5 May 2021 File Reference: ECM8532983

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149 Council agenda (6 July 2021) - Citizens’ Award Policy Review

P11-005 Policy on New Plymouth District Citizens’ Awards 5 July 2011 SG – Governance 5.1 Review 2019

POLICY PURPOSE New Plymouth District Citizens’ Awards recognise citizens for significant contributions to the district and/or its citizens. This policy sets out how the Council will provide, deliver and manage the New Plymouth District Citizens’ Awards.

POLICY STATEMENTS The following statements apply to the provision, delivery and management of New Plymouth District Citizens’ Awards, which for the purposes of this policy shall be referred to as “Citizens’ Awards”:

Nominations are called for 1. Nominations are called for on an annual basis. 2. Nominations are called for on the understanding that they are confidential between the nominator/seconder and the Council. 3. Nominations must be submitted on an official New Plymouth District Citizens’ Awards Nomination Form. 4. Nominations received after the nomination closing date will not be considered. 5. Nominations must be for named individuals and cannot be lodged for groups.

Nominations are received Nominee criteria 6. Nominees must have made a significant contribution to the well-being of the district and/or its citizens: a) Over a significant period of time; and/or b) Through exceptional actions; and/or c) By other means. 7. Nominees must normally be resident in New Plymouth District. However, if a nominee from outside the district boundaries meets one of the criteria, then they can be deemed eligible for receipt of an award at the discretion of the Council. 8. Current serving political figures, including District Councillors and Community Board Members, are ineligible for receipt of a Citizen’s Award. Nominator criteria 9. Nominations by immediate family members of the nominee will not be considered. 10. District Councillors and Community Board Members may make nominations for the Citizens’ Awards, with the restriction that no more than two recipients come from these nominations annually.

Nominations are considered 11. No more than 12 awards are given in any one year. 12. Unless there are exceptional circumstances, only one award will be given to members of any one organisation each year.

150 Council agenda (6 July 2021) - Citizens’ Award Policy Review

13. If the nominee has received payment or other remuneration then the Council shall determine whether, in its view, the nominee’s contribution was sufficiently beyond the call of duty to warrant special recognition. 5.1 14. Unless there are exceptional circumstances, a nominee that has previously received a Citizen’s Award will not be eligible for another Citizen’s Award.

Awards Ceremony is held 15. The awards are presented to the recipients at a Citizens’ Awards Ceremony. 16. The ceremony will be guided by procedures for the planning and management of the ceremony. 17. A media release naming recipients is prepared and embargoed until the Citizens’ Awards Ceremony.

Following the Awards Ceremony 17. The names of the recipients are published on the Citizens’ Awards honours board following the Citizens’ Awards Ceremony. 18. If a recipient is subsequently found guilty of an offence punishable by a term of imprisonment of two years or more, that person will be notified immediately that their name will be removed from the Citizens’ Awards honours board without delay.

POLICY REVIEW This policy shall be reviewed three six yearly from the date the policy was adopted unless required at an earlier date. Notes: This policy replaces P03-002 (20 May 2003). Clause 3 amended and clause 5 added.

151 Council agenda (6 July 2021) - Honorary Ambassadors Policy Review

HONORARY AMBASSADORS SELECTION CRITERIA – POLICY REVIEW

MATTER 6 1. The matter for consideration by the Council is the review of the Honorary Ambassadors Selection Criteria Policy.

RECOMMENDATION FOR CONSIDERATION That having considered all matters raised in the report, the Council: a) Notes the Council formally recognises the achievements of citizens and promotes the district through an Honorary Ambassadors scheme. b) Notes this programme is guided by an Honorary Ambassadors Selection Criteria policy, which was last reviewed in 2018. c) Approves the Honorary Ambassadors Selection Criteria Policy with amendments as per Appendix 1.

STRATEGY AND OPERATIONS COMMITTEE RECOMMENDATION

2. The Strategy and Operations Committee made an amendment to the officer’s recommendation.

That having considered all matters raised in the report, the Council:

a) Notes the Council formally recognises the achievements of citizens and promotes the district through an Honorary Ambassadors scheme.

b) Notes this programme is guided by an Honorary Ambassadors Selection Criteria policy, which was last reviewed in 2018.

c) Approves the Honorary Ambassadors Selection Criteria Policy with amendments as per Appendix 1 subject to amending the Term to read:

Term Honorary Ambassadorships shall be granted for the duration of the event being recognised, or a period of time to be determined at the discretion of the Mayor.

COMMUNITY BOARD RECOMMENDATIONS

3. The Clifton, Inglewood, Kaitake and Waitara community boards have endorsed the Strategy and Operations Committee recommendation.

152 Council agenda (6 July 2021) - Honorary Ambassadors Policy Review

TE HUINGA TAUMATUA RECOMMENDATION

4. Te Huinga Taumatua Committee endorsed the Strategy and Operations Committee recommendation. 6 COMPLIANCE

Significance This matter is assessed as being of some importance. This report identifies and assesses the following reasonably practicable options for addressing the matter:

1. Approve the amendment to the policy

Options 2. Retain the existing policy

3. Revoke the policy and do not have a policy

4. Revoke the scheme

The persons who are affected by or interested in this matter Affected persons are citizens of the New Plymouth District.

Recommendation This report recommends Option 1 for addressing the matter.

Long-Term Plan / Annual Plan No Implications

Significant Policy and Plan No Inconsistencies

EXECUTIVE SUMMARY

5. Officers recommend the adoption of the Honorary Ambassadors Selection Criteria Policy (the policy) with the proposed amendments in Appendix 1. The proposed amendments extend the criteria to national events, clarify that international events taking place within New Zealand are included and setting a six-year review timeframe. Taking this approach will ensure that the policy continues to be fit for purpose.

6. A significant increase in applicants for national events is a potential risk that may arise from this amendment. However, this is mitigated in part by the requirement that applicants must have been selected through a formal process to attend an event and that applicants be chosen by the Mayor to represent the district.

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7. If the amended policy is adopted, the next step is the continuation of the Honorary Ambassadors scheme in accordance with the amended policy.

BACKGROUND 6 8. The Council has an Honorary Ambassadors scheme. The scheme is one means of the Council facilitating civic engagement, formally recognising the achievements of citizens and to encourage promotion of the district by the recipients.

9. The scheme recognises those citizens who reside or have a close relationship with New Plymouth and are chosen to represent New Plymouth, Taranaki or New Zealand at an international event in a cultural/artistic/sporting or academic field or are attending an international activity or event, which is likely to enhance and promote the reputation of the New Plymouth District.

10. Since the scheme’s initiation in 1986, the Council has appointed 642 individuals as Honorary Ambassadors. Numbers vary considerably per year. More recently, 24 Honorary Ambassadors were recognised in 2019, with 22 being Francis Douglas Memorial College students, some attending a Global Young Leaders Conference and others a Future Problem Solving Competition. The Council appointed no Ambassadors in 2020.

11. Successful recipients are invited, along with their guests, to a morning or afternoon tea with the Mayor. At the function, they are presented with an Honorary Ambassadors lapel pin and a certificate.

12. The policy was reviewed in 2018 and amended the policy to:

 Reflect that Honorary Ambassadors are not required to be New Zealand citizens.

 Limit the term of ambassadorship for a period of 12 months.

 Revoke the delegation from the Policy Committee to make appointments of Honorary Ambassadors of the New Plymouth District.

 Delegate authority to the Mayor to consider nominations and make appointments of Honorary Ambassadors of the New Plymouth District.

13. The current policy works well. Given modest numbers of recipients, and an uncertain international climate, it is proposed to extend the programme to include those chosen to represent the New Plymouth District or the Taranaki region at national events. This extends Council’s ability to recognise those citizens who have achieved at a high level and to enhance and promote the reputation of the New Plymouth District within New Zealand.

154 Council agenda (6 July 2021) - Honorary Ambassadors Policy Review

14. The key risk to the recommendation is a significant increase to applicants for national events. This is mitigated in-part by the requirement that applicants must be selected to attend these events and that applicants to the award be chosen by the Mayor to represent the district. It is also proposed to amend the policy to clarify that attendees at international events held in New Zealand are 6 also eligible for honorary ambassadorship.

15. Those applying to the scheme are often from groups that have previously been involved in the scheme. Extending this scheme to national events, and public communications to that effect, may increase the range of participants to be acknowledged through this scheme.

SIGNIFICANCE AND ENGAGEMENT

16. In accordance with the Council's Significance and Engagement Policy, this matter has been assessed as being of some importance. There is no statutory requirement to have this policy, the amendment recommended is minor and there are no financial implications.

OPTIONS

17. There are four reasonably practicable options:

a) Approve the amendment to the policy

b) Retain the existing policy

c) Revoke the policy and do not have a policy

d) Revoke the scheme.

18. The following assessment is provided for the four options:

Risk Analysis

19. There are no risks with retaining the policy, or revoking the scheme. There is a risk in retaining the scheme without a policy as the implementation of the criteria may become less robust and in turn the scheme less valued to those who may apply. The scheme could also be revoked without Council approval. Approving the amendment may increase applications for the scheme, however, as discussed above, this is in-part mitigated through the policy requirements including selection to attend events and Mayoral decision as to who becomes an honorary ambassador.

155 Council agenda (6 July 2021) - Honorary Ambassadors Policy Review

Financial and Resourcing Implications

20. There are no financial or resourcing implications from any of the options. The costs for lapel badges, certificates and hosting recipients are met from the Civic Receptions budget. 6

Statutory Responsibilities

21. There are no statutory requirements to have a scheme or a policy.

Consistency with Policies and Plans

22. Having a scheme supports the Council’s strategic direction. However there is no inconsistency between the options and Council’s policies and plans.

Participation by Māori

23. This policy review has not included external consultation with Māori. The policy does not impact on Maori culture and traditions or relationships with ancestral land, water, sites, waahi tapu, or valued flora. The proposed extension of the scheme to national events may provide more opportunity for Maori honorary ambassadors through involvement in events such as Te Matatini.

Community Views and Preferences

24. Recipients of Honorary Ambassadorships often express their gratitude for the recognition of their achievements. The morning or afternoon tea provides an opportunity for residents and their families to meet with elected members in an informal environment which is often appreciated.

Promotion or Achievement of Community Outcomes

25. The Honorary Ambassadors Scheme recognises achievements by members of our community and supports the community outcome of Community. The revocation of the scheme will not support the community outcomes.

Advantages and Disadvantages

Option Advantages Disadvantages 1: Approve . The scheme retains its . A significant increase in the integrity as per the policy. numbers could impact on staff amendment . The information in the policy is and elected representative to the policy current. workload. . More people may utilise this scheme, and in turn raise the profile of New Plymouth within New Zealand.

156 Council agenda (6 July 2021) - Honorary Ambassadors Policy Review

. The recommended policy review timeframe will reduce staff requirements.

2: Retain the . The scheme retains its . Some of the information in the 6 existing integrity as per the policy. policy is not current. policy . Given the current and uncertain international climate, the uptake of the scheme may be limited with less people attending international events.

3: Revoke the . The implementation of the . The scheme can be changed policy and do scheme can be flexible. or revoked without Council not have a approval. policy

4: Revoke the . Reduce staff and elected . Does not contribute to scheme member’s workloads. Council’s strategic direction.

Recommended Option This report recommends Option 1: Approve the amendment to the policy.

APPENDICES Appendix 1 Honorary Ambassador Selection Criteria Policy (ECM8531748)

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157 Council agenda (6 July 2021) - Honorary Ambassadors Policy Review

P00-012 Honorary Ambassadors Selection Criteria 3 April 2000 SP-Governance Review 2021 6.1 POLICY PURPOSE This policy sets out the criteria for selecting Honorary Ambassadors of the New Plymouth District and the manner of recognising their appointment.

POLICY STATEMENTS

Eligibility Recipients of an Honorary Ambassadorship shall: a) Reside in, or have a close relationship with, the New Plymouth district; and b) Have been chosen through a recognised selection process to represent New Plymouth, Taranaki or New Zealand at an international or national event, held in New Zealand or overseas, in a cultural/artistic/sporting or academic field; or c) Be involved in an international activity or event, including an international conference, held in New Zealand or overseas, which is likely to enhance and promote the reputation of the New Plymouth District.

Term Honorary Ambassadorships shall be granted for a period of twelve months. Further ambassadorships will not usually be granted to an individual, however subsequent achievement may be acknowledged in another manner (such as a morning or afternoon tea).

Expectations Honorary Ambassadors are expected to: a) Achieve their best; b) Be good ambassadors of the New Plymouth District and be prepared to take opportunities to promote the district in a positive way; and c) Report back to the Council.

158 Council agenda (6 July 2021) - Honorary Ambassadors Policy Review

Receipt of nominations Nominations will be received by the Mayor’s office and forwarded to the Mayor for consideration.

Recognition 6.1 Recipients will be recognised at an appropriate function, usually a morning or afternoon tea, and will be presented with a certificate and a badge to acknowledge receipt of the ambassadorship.

Review This policy shall be reviewed six yearly from the date the policy was adopted unless required at an earlier date.

Notes: Amendments made by Council resolution 10 April 2018

159 Council agenda (6 July 2021) - Exclusion of the Public

EXCLUSION OF THE PUBLIC FOR THE REMAINDER OF THE MEETING

MATTER

1. This report details items that are recommended should be considered with the 7 public excluded, and the reason for excluding the public.

RECOMMENDATION FOR CONSIDERATION That having considered all matters raised in the report, the Council hereby resolves that, pursuant to the Local Government Official Information and Meetings Act 1987, the public be excluded from the following parts of the proceedings of this meeting: a) Citizens’ Award The withholding of the information is necessary to protect the privacy of natural persons, include that of deceased persons, this particular interest being protected by section 7(2)(a) of the Act.

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987.

COMPLIANCE

Significance This matter has been assessed as being of some importance. This report identifies and assesses the following reasonably practicable options for addressing the matter:

Options 1. Exclude the public.

2. Not exclude the public.

This report recommends option one (1) for addressing the Recommendation matter.

Long-Term Plan / Annual Plan There are no budget considerations. Implications

Significant Policy and Plan This report is consistent with Council’s Policy and Plans. Inconsistencies

160 Council agenda (6 July 2021) - Exclusion of the Public

BACKGROUND

2. This report details items that are recommended should be considered with the public excluded, and the reason for excluding the public.

SIGNIFICANCE AND ENGAGEMENT 7 3. In accordance with the Council's Significance and Engagement Policy, this matter has been assessed as being of some importance because the exclusion of the public is a statutory procedure that will have a little or no impact on the Council’s strategic issues.

OPTIONS

Option 1 Pursuant to the Local Government Official Information and Meetings Act 1987, good reason exists to exclude the public for consideration of the items listed.

Option 2 The Council can choose to consider these matters in an open meeting.

Risk Analysis Release of information which meets the statutory tests for withholding (under the Local Government Official Information and Meetings Act 1987) may expose the Council to legal, financial or reputational repercussions.

Recommended Option This report recommends Option one (1) exclusion of the public for addressing the matter.

Report Details Prepared By: Charles Woollin (Governance Adviser) Team: Governance Approved By: Julie Straka (Governance Lead) Ward/Community: District Wide Date: 18 June 2021 File Reference: ECM8568918

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161