Statement of proposal for changes to Council’s schedule of fees and charges
Changes set to commence on 1 July 2023.
Council is consulting on proposed changes to fees and charges for 2023-24 alongside consultation on the Annual Plan.
Most fees are being raised in line with inflation of 7.2%. Some, where the cost is disproportionately falling on the ratepayer are being increased by more, but none by more than 20%. There is also one charge being removed because it is inefficient – costing more to collect than the sum received. There are also some charges that are being reduced. Decisions relating to fees and charges will have an impact on budgets, and the proposed changes impact on projected income have been reflected in the supporting financial information to this consultation document.
1. Introduction
Council is facing all of the same cost pressures that are impacting on households and businesses. These include increases in interest costs, staff salaries and expenses like electricity and insurance.
Council sets fees and charges so as to allocate a reasonable cost sharing between the ratepayers and the people or businesses using the service. There is no perfect balance between the two but the greater the public good element, the more the cost is funded by general rates.
If Council chooses not to increase these fees and charges in line with other cost increases, they will need to be funded by a larger rate increase. We are very mindful of the cost of living pressures on households and businesses and have worked hard to minimise the increases.
Council is proposing to increase fees and charges by the Consumer Price Index (CPI) of 7.2% but some, as detailed in this document, are proposed to increase by more, but none by over 20%. Increases above CPI are designed to better achieve the recovery targets from the beneficiaries of Council services as set out in Council’s Revenue and Financing Policy. This Policy explains ‘who pays and why’ for each of Council’s activities and outlines the expected private benefit/public cost split to determine the expected level of cost recovery. Cost increases over CPI are in those areas where a greater proportion of costs should be met by applicants and other users of Council services.
2. Proposals
Nelson City Council is seeking your views on the following proposals:
- to increase some resource management fees and charges by more than the CPI
- to remove one charge relating to domestic on-site wastewater systems
- to increase fees and charges under the Food Act 2014 by more than CPI
- to increase cemetery and crematorium fees for activities that are managed under the Urban Environments Bylaw by more than CPI
- to increase marina fees and charges under the Navigation and Safety Bylaw by more than CPI
- to increase some Building Act fees by more than CPI and add a new Land Information Memorandum (LIM) cancellation fee
- to increase the public health fees by more than CPI.
All of the proposed fees and charges listed above are outlined on pages 48 to 68 of the Consultation Document.
3. Special Consultative Procedure – we want your feedback
Council is required to undertake a special consultative procedure before introducing or amending any fees or charges under the Resource Management Act and the Food Act. Council is also required to consult the public before amending any fees or charges provided for under the Urban Environments Bylaw and Navigation Safety Bylaw, and is taking the opportunity to include these proposed amendments in this statement of proposal. The opportunity is also taken to introduce some additional changes to fees and charges.
Council would like to know what you think of the proposed changes in this document. Based on community feedback, the outcomes of this special consultative procedure could include:
- Retaining the existing charges
- Adopting a lower increase in charges
- Adopting the proposed amendments outlined in this statement of proposal, or a variation of these
- Adopting a higher increase in charges
4. Proposed amendments to the charges under the Resource Management Act 1991 (RMA)
4.1 The proposal in relation to charges under the RMA
Council is proposing changes to charges under the RMA relating to the administration of resource consents and other prescribed activities. The changes would better reflect the actual cost to Council in providing this service and ensure reasonable cost-recovery goals are met. Specifically, the amendments would ensure that those gaining the benefit from the regulatory service pay the reasonable cost for that service.
Analysis of the issues and options is provided in section 4.2 of this proposal. The charges schedule with all proposed changes is included on pages 48 to 55 of the Consultation Document, and the proposed amendments for the most frequent activities, as well as a proposed removal of a charge, are summarised below:
- Increase the hourly charge out rate from $170 per hour to $197 per hour
- Increase the initial charge (deposit) for most consent activities from $1575 to $1860
- Increase the initial charge (deposit) for subdivisions over three lots from $2625 to $3095
- Increase the initial charge (deposit) for simple consent activities from $525 to $620
- Increase the fixed charge for deemed permitted activities (marginal, temporary or boundary) from $505 to $595
- Increase the swing mooring annual charge from $80 to $90
- Remove the annual charge for discharge to land or water of less than 20m3 per day
Consideration under the relevant legislation
This section of the statement of proposal to amend the charges under the RMA has been prepared in accordance with the following legislation:
- RMA sections 36 and 36AAA
- Local Government Act 2002 sections 82, 83 and 150
4.2 Issues and Options – RMA charges
Resource consent processing and monitoring hourly charge out rate
Since the last review of charges under the RMA, organisational support and external expertise costs have increased by at least CPI annually. There is also a nation-wide shortage of planners meaning Council needs to engage external consultants to assist with the processing of consent applications and their hourly charge out rates are $20 to $30 higher than internal costs.
The Council resource consent hourly rate is proposed to increase by 16% and to recover 48% of the costs to provide this service. No changes are proposed for planning documents where the charge adequately reflects the reasonable cost.
The main factors influencing the level of income received from charges are the hourly charge out rate and number and complexity of resource consent applications. Consent numbers decreased last year but income from fees and charges increased due to the higher complexity of applications. The income for 2022/23 is tracking to be lower than last year.
At least 40% of staff time is not chargeable to resource consent applicants. Much of this time is spent answering public enquiries, training, reporting or responding to objections to conditions or costs. When there is time, staff review procedures, systems, templates and practices to improve quality and efficiency.
It is reasonable therefore that at least 40% of overall resource consent costs are met by rates. The Council’s Revenue and Financing Policy requires 40 to 60% of costs be met by charges. Current fees and charges will only recover 31% of expected costs. It is proposed to increase the hourly rate to $197 to recover 48% of the anticipated costs.
Options Analysis
While applicants and consent holders would not face increased charges, more of the costs of the activity will need to be covered by income from rates, rather than those directly benefitting from the Council services. If no increases are made now there may need to be larger increases in the future.
As proposed on pages 48 to 53 of the consultation document.
This option improves the cost recovery from the current situation. A larger increase in the future may be required to recover a fairer proportion of the costs from those who gain the most from the services.
This option improves the recovery rate from applicants and consent holders, reduces the potential for larger increases in the future and reduces the requirement on rates. The increased hourly charge out rate of $212.50 is similar to some other Councils (and consultancies). However, increasing charges by 25% is not considered reasonable and could deter developments.
Annual environmental monitoring and science charge
Section 36 of the RMA provides for councils to collect charges from certain categories of consent holders for the purpose of “administration, supervision and monitoring” of those consents. This gives local authorities the power to recover ‘reasonable’ costs associated with the environmental monitoring function. An example is where private water take consents are informed by publicly funded hydrology programmes.
In general, the charges have been accepted by consent holders, except for discharges from domestic wastewater treatment systems to land. These consents are for a perpetual non-commercial activity that does not generate any income from the consent holder, and the charge is on top of annual charges to monitor the consent. Therefore, it is proposed that the charge for discharge to land or water of less than 20m3 per day be revoked from 1 July 2023.
Options Analysis
This option removes an annual charge of $60 that is not well tolerated by consent holders. Revoking this charge would result in a reduction of the income used to offset the cost of the environmental monitoring and science activity by approximately $2880 per annum.
This option reduces the staff resource required to administer the charges and removes an annual charge from resource consent holders. It would reduce the level of income used to offset the cost of the environmental monitoring and science activity by approximately $30,000 per annum.
This option retains an annual charge of $60 that is not well tolerated by consent holders. This option does not reduce the income used to offset the cost of the environmental monitoring and science activity.
5. Proposed amendments to the fees under the Food Act 2014
5.1 The proposal in relation to fees under the Food Act 2014
Council is proposing amendments to the fees relating to registration, verification, compliance and monitoring activities for food businesses under section 205 of the Food Act 2014. The changes will improve the current allocation of costs between food business owners and ratepayers, and will better reflect the actual time and costs for the services.
Analysis of the issues and options is provided in section 5.2. The current fees and proposed changes are set out in the table below:
| Activity | Current fee | Proposed fee |
|---|---|---|
New Registration Food control plan | $267 initial fee | $300 initial fee |
New Registration National programme | $170 initial fee | $204 initial fee |
Renewal | $85 initial fee | $102 initial fee |
Amendment to Registration | $85 initial fee | $102 initial fee |
Voluntary suspension | $85 initial fee | $102 initial fee |
Verification | $170 per hour | $187 per hour |
Compliance | $170 per hour | $187 per hour |
Monitoring (where there is compliance) | No charge | No charge |
5.2 Issues and Options
Options Analysis
While food business owners would not face increased fees, some current initial fees do not reflect the actual time it takes to perform that activity and the cost of the food registration, verification and compliance functions is not sufficiently covered by income from fees and charges. In addition, the food businesses are not paying a large enough proportion of the costs of the services relative to the costs covered by general rates. This is inconsistent with the principle that all direct and indirect costs incurred by administering the Food Act should be recovered by way of fees, and it passes on those costs to ratepayers. If no increases are made now there may need to be larger increases in the future.
Increasing the fees at a higher level to best reflect the actual time for all services will ensure the business owner meets the actual Council costs for providing the service and lower the dependence on rates to provide these services. The proposed increase to hourly rates will align more closely with other regulatory functions.
6. Proposed amendments to the fees and charges under the Navigation Safety Bylaw 2019
6.1 The proposal in relation to fees and charges under the Navigation
Safety Bylaw
Council has reviewed the current charges and is proposing to increase certain fees and charges by 10 to 20%. This is to ensure that costs to provide certain marina services are paid by the users who directly benefit from that service, and to allow the Marina to keep up with compounded inflation.
Analysis of the issues and options is provided in section 6.2 of this proposal. The charges schedule with all proposed changes is included on pages 57 to 58 of the Consultation Document, and the proposed amendments are summarised below:
- Increase permanent annual recreational and commercial berth fees by 10%;
- Increase live aboard charges by 10%;
- Increase visitor berth rates by 20% and include a new rate classification;
- Increase public boat ramp launching fees by 20%.
Consideration under the relevant legislation
Council may set fees and charges for marina services that are regulated under the Navigation Safety Bylaw 2019, under clause 3.4 of the Bylaw and s 150 of the Local Government Act 2002.
The fees and charges for Nelson Marina that are regulated by the Bylaw are as follows:
- Marina Berthing fees for all vessels;
- Live aboard charges;
- Public Boat Ramp fees.
Other services provided by Nelson Marina are land based and are not covered by the Bylaw. It should be noted however that Nelson Marina will be decreasing the travel lift and boat yard fees to better match industry standards.
6.2 Issues and Options
Annual Licence Fee for marina berths, pile berths, commercial berths and live aboard fees
The annual licence fees for renting a berth within Nelson Marina is for vessels that are on a long-term contract with Nelson Marina and Nelson City Council. This fee was last increased in July 2021 and needs to consider two years of CPI adjustment. The live aboard fee is additional to the annual berth fee and applies to those vessels with a permit to live on board their vessel within the marina on a permanent basis.
Options Analysis
While licence holders would not face increased charges this year, the revenue for the marina will not increase proportionally to the increases in costs associated with operating the marina. If no increases are made now there will need to be larger increases in the future.
This option will allow the marina to recover the increased cost of doing business for the current financial year but does not take into account the CPI increase from 2021/22.
This option allows Nelson Marina to keep up with compounded inflation over the previous two financial years.
Temporary berth charge
The temporary berth charge is not often used and is at the discretion of management. It is available for a vessel that is given a temporary berth (subject to availability) while awaiting a permanent berth. The fee is designed to be a mid-point rate between a permanent berth and a visitor berth. The vessel on a temporary rate is using a visiting berth reducing the ability for the marina to recover its costs from the visitor jetty. It is discounted from the visiting berth as living on board is not allowed.
The rate can only be used for a period not exceeding three months and only when the vessel is next on the waiting list for a permanent berth.
Options Analysis
Discourages marina management from offering this service due to the opportunity cost for placing a vessel in the berth on a temporary rate compared to a visiting rate.
This option also discourages marina management from offering this service due to the opportunity cost for placing a vessel in the berth on a temporary rate compared to a visiting rate. This option only increases the fee in relation to inflation and does not allow the marina to reposition the fee between the permanent and visitor rate.
This option returns the temporary rate to a mid-point rate between the permanent berth rate and the visitor berth rate.
Marina Berth Fee – Visitor Rate
Nelson Marina has a limited number of dedicated visitor berths for local, national, and international visiting vessels who do not have a permanent berth at Nelson Marina. A vessel is limited to being a visitor vessel to three months per annum.
Currently Nelson Marina’s visitor berths, particularly for larger vessels is well below the national average. There is also a large disparity between the costs for a vessel less than 14m, 14m to 20m and 20m plus. The proposal is to split the fee from 14m to 20m into two fees – 14m to 18m and 18m to 20m. This will allow for more equitable charging.
Options Analysis
Reduces the ability for the marina to recover costs from operating a dedicated visitor berth facility that is seasonal and at a lower occupancy than the permanent berths. Charges for vessels over 14m is inequitable.
This option allows for an increase in fees in line with inflation and to allow for equitable fees charges for the 14m plus vessels.
This option allows the marina to recover its costs on the visitor berths and makes it more equitable between vessel sizes. Although the 18m plus berth fee increases by 20%, the new fee for vessels between 14m and 18m remains the same as current fees.
Public Boat Ramp Fee
Nelson Marina operates the public boat ramp for Nelson. The fee of $5 currently includes launch and retrieval of the trailered vessel and unlimited parking for the towing vehicle and trailer. The marina has 92 dedicated carparks available.
Revenue is collected from annual ramp fees for unlimited use or on a casual use basis. Total revenue collected from the boat ramp launch fees is $30,000 and the total cost to the marina to operate the boat ramp is $90,000. The shortfall of $60,000 is being subsidised by other revenue streams within the marina business.
For comparison, Motueka boat ramp fee is $15 per use (ie $30 to launch and retrieve) and Marlborough Marinas (Havelock, Picton and Waikawa) is $14 to use the ramp and $10 per day for parking.
Options Analysis
The boat ramp should be user pays and not subsidised by other revenue streams of the marina. To retain current charges means that other marina users are subsidising the boat ramp users by 66% of the cost of operating the facility.
This option allows the marina to recover 40% of the costs of operating the boat ramp.
This option allows the marina to recover 66% of its costs on providing the boat ramp and dedicated parking. Full cost recovery ($15) is the minimum desired level for the ramp but is considered a large one-off increase.
7. Proposed amendments burials and cremation activities under the Urban Environments Bylaw
7.1 The proposal in relation to charges under the Urban Environments Bylaw
Analysis of the issues and options is provided in section 7.2 of this proposal. The charges schedule with all proposed changes is included on pages 59 to 61 of the Consultation Document, and the proposed amendments are summarised below:
- Increase fees and charges for both cemetery and crematorium activities (plots, internments, cremation and chapel hire) by 20%.
Consideration under the relevant legislation
Council may set fees and charges for burials and cremations activities that are managed under the Urban Environments Bylaw, under clause 8.32 of the Bylaw and s 150 of the Local Government Act 2002.
7.2 Issues and Options
Options Analysis
Increasing the fees for the crematorium and cemetery activities by 20% will ensure the gap between the Revenue and Financing policy recovery target of 70-90% for crematorium and 40-60% for the cemetery is more likely to be achieved in the 2023-24 year. The 20% increase assumes a 40% recovery for the cemetery and 67% for the crematorium. Therefore, reducing the burden on the rate payer to subsidise burial and cremation costs.
Retaining the existing fees will result in the rate payer having to subsides the fees and charges at the crematorium and cemetery and recovery target will not be met.
Increasing the fees and charges by CPI will result in the rate payer having to subsidise the fees and charges at the crematorium and cemetery and the recovery target will not be met.
8. Proposed amendments to fees and charges under the Building Act 2004
8.1 The Proposal
Analysis of the issues and options is set out in section 8.2 of this proposal. The charges schedule with all proposed changes is included on pages 62 to 67 of the Consultation Document, and the proposed amendments for the most frequent activities, as well as a proposal to introduce a fee, are summarised below:
- Increase the staff hourly rate for administrators and residential technical officers from $172 per hour to $187 per hour
- Increase the staff hourly rate for commercial technical officers from $210 per hour to $225 per hour
- Change the fee for Project Information Memorandums from $320 to a rate of $364
- Include a system fee per consent based on the estimated value of the works:
- A $80 fee for works up to $10,000 in value
- $132 for works between $10,001 and $600,000 in value and
- $264 for works over $600,000 in value
- Increase the earthquake prone building fees in the schedule (application for exemption, extension of time for a heritage building and assessment of information relating to a building’s status) from a $650 deposit to a $697 deposit.
- Increase the quality assurance levy from $3.15 to $3.38 per $1,000 of the estimated value of the works (applies when the value of works is $20,000 and over and is capped at $10 million)
- Increase the insurance levy from $1.60 to $1.72 per $1,000 of the estimated value of the works (applies when the value of works is $20,000 and over and is capped at $10 million)
- Introduce a new Land Information Memorandum (LIM) cancellation fee
Consideration under the relevant legislation
This statement of proposal to amend the fees and charges under the Building Act 2004 has been prepared in accordance with the following legislation:
- Building Act 2004, sections 219 and 281A
- Local Government Act 2002 sections 83 and 101(3)
8.2 Issues and Options
In exercising its discretion about what fees and charges to impose, Council should ensure charges are cost-effective, with the purpose of recovering the reasonable costs incurred by the Council in respect of the activity to which the charge relates, and with those gaining the benefit from the regulatory service paying the reasonable cost for that service.
Options Analysis
In addition to the reasons set out above, this option will help to achieve improved proportionality in terms of costs associated with building consents and performance of other Council functions under the Building Act 2004 being met by building customers rather than ratepayers. Council is incurring increased costs in providing building services and the proposed amendments will help achieve a higher rate of recovery for those costs. Council considers the proposed changes better reflects the average time taken to perform tasks and reduces the potential for large increases to fees and charges in the future.
Some of the increased costs incurred include the staff time and training required to prepare for and meet the requirements of the national audit. While staff are involved in this process contractors are needed to meet statutory processing timeframes and also increases costs to Council.
Council appreciates that an increase to fees and charges may cause dissatisfaction to some customers. However, it considers that the proposed increases more fairly reflect the actual costs incurred by Council (currently met through rates), costs associated with processing, inspecting and compliance duties.
While customers would not face increased fees and charges, many current fees and charges do not reflect the average time to perform that activity. In addition customers obtaining the benefit of building services are not currently meeting the actual costs to Council in providing these services. If no increases are made to fees and charges now, Council may need to impose a higher increase in the future. There will need to be an increase in funding from rates to meet the increase in actual costs.
This option means a lesser increase to fees and charges, however the cost of the activity will not be sufficiently covered by the income from charges and a more significant increase to charges may be needed at a later date.
9. Proposed amendments to environmental health licence fees
9.1 The Proposal
Analysis of the issues and options is set out in section 9.2 of this proposal. The charges schedule with all proposed changes is included on page 68 of the Consultation Document and the proposed amendments are summarised below:
- Increase the hairdressers annual licence fee from $170 to $205 and if paid after 31 July increase from $204 to $245
- Increase the offensive trades annual licence fee from $255 to $305 and if paid after 31 July increase from $306 to $365
- Increase the hourly charge out rate for animal control (other than dog control) from $170 per hour to $187 per hour
- Identify the staff hourly rate for processing Site Marine Oil Spill Contingency Plans as being $187 per hour
- Identify the staff hourly rate for maritime oil spill responses is $187 per hour and other disbursement charges will apply at cost
Consideration under the relevant legislation
This statement of proposal to amend the Environmental Health (including Maritime) fees and charges has been prepared in accordance with the following legislation:
- Health Act 1956 sections 120 and 120B and the Health (Registration of Premises) Regulations 1966
- Impounding Act 1955 Parts 4 and 7
- Maritime Transport Act 1994 sections 33R, 270 and Part 130B of the Maritime Protection Rules
- Local Government Act 2002 sections 83 and 150
9.2 Issues and Options
Options Analysis
The proportional cost of the services is better met by applicants and consent holders than ratepayers. It will prevent a larger increase at a later date, and there will less of an impact on rates.
The cost of the activity is not sufficiently covered by income from the charges. There would be an additional rates burden if expected costs are not better met by applicants.
Likely to require larger increases in the future. The cost of the activity is not sufficiently covered by income from the charges.
