The Local Government Amendment Act 2012

Passed in December last year, this introduces a new mechanism to facilitate council amalgamations. The previous procedure was easily frustrated as it required a petition of 10% of affected voters to initiate an amalgamation and a majority vote in each district to achieve one. The new process can be initiated simply by satisfying the Local
Government Commission that there is “demonstrable community support” in the affected area for change.

The Commission is currently considering proposals affecting the wider Northland, Hawke’s Bay and Wellington regions. Between them, they have the scope to reduce 22 councils to just four.

The Act also institutes a number of reforms to lift council performance and to reduce the risk of catastrophic failure by enabling issues to be identified and addressed earlier.

  • A sharper focus: local government’s purpose is limited to delivering “good quality local infrastructure, local public services, and performance of regulatory functions”. This is in contrast to the 2002 Act which also gave councils broad responsibility for their community’s social, economic, cultural and environmental well-being.
  • Sharper tools: the CEO remains the only direct employee of the elected council but councils can now decide policy on staff remuneration and set limits on staff numbers, which the CEO must manage within.
  • A sharper leadership role for mayors: effective from the 2013 local government elections, the powers attached to the office of Mayor of Auckland have been extended to all Mayors. These include the power to appoint the deputy mayor and council committees and to propose plans, policies and council budgets.
  • Earlier intervention by central government: previously the government had few options short of the “nuclear option” – sacking the council and either appointing commissioners or calling an election.The new Act provides for a much more flexible and finely calibrated response; from simply requiring the council to provide information about a problem and the steps being taken to address it to appointing a Crown Manager, as was done to sort out Christchurch
    City Council’s loss of building consent accreditation.
  • Sharper fiscal disciplines: councils have to report against “financial prudence” requirements and performance benchmarks in respect of income, expenditure and debt levels.

Financial Prudence Regulations

These will bench mark local authorities against each other across a range of measures including; whether rates and net debt are within the limits set in the council’s financial strategy, whether capital expenditure on network infrastructure equals or exceeds depreciation, whether borrowing costs are less than 10% of operating revenue
(or 15% in districts experiencing above average population growth).

The benchmarks are designed to foster a culture of continuous improvement, showcase best practice and provide early warning to central government of problems which may require intervention.

They will be used in council annual reports, beginning on 31 October 2014.

Link: Cabinet Paper outlining the regulations

Local Government Amendment Bill (No 3)

This was introduced on 4 November and continues the government’s pursuit of a more efficient local government sector. The Bill:

  • extends the use of local boards
  • introduces measures to encourage councils to share services and to enter joint delivery and other collaborative arrangements with other councils
  • removes most of the Act’s requirements to use the special consultative procedure and modernises this procedure so that it can accommodate new communication formats
  • requires councils to incorporate a 30 year “infrastructure strategy” in their long term plans. Such strategies must cover the three waters, flood protection works, roads and footpaths, and
  • reforms the development contributions regime by, among other things:
    • creating a new right of objection to development charges
    • requiring more transparency from councils over how charges are set, and
    • encouraging private provision of infrastructure through development agreements.

Housing Accords and Special Housing Areas Act

This was passed on 5 September 2013 and provides a mechanism for central government and territorial authorities to negotiate housing accords and special housing areas (SHAs). Streamlined consenting and planning powers can be exercised by the local authority within an SHA (and by the government if no SHA has been agreed) in relation
to “qualifying developments”.

A qualifying development must be predominantly residential, no more than six storeys or 27 metres tall and must provide a prescribed number of dwellings. There is also provision for the government to require by Order in Council that a proportion of the dwellings be “affordable”.

The first accord to be recognised is the Auckland Housing Accord.

This aims to have 9,000 new dwellings or sites consented in year one, 13,000 in year two and 17,000 in year three.

The Accord will run for three years, until the Unitary Plan takes effect.

The Auckland Unitary Plan

The proposed plan was approved by the Auckland Council on 10 September and notified for formal consultation on 30 September. Submissions close on 28 February. In response to public feedback during the first round of (informal) consultations, the Council has increased minimum dwelling sizes from the draft plan (except for studio apartments in metropolitan centres) and reduced maximum building heights in many suburbs.