BID Network meeting 21 February 2017 Kylie Evans and Andrew Duncan Annual Budget 2017/2018 BID Network meeting 21 February 2017 Kylie Evans and Andrew Duncan

Agenda Brief overview of the process Consultation items adopted Discuss five main topics Consultation approach and how you can have your say Next steps Questions

Process overview Public Local Boards Mayor and Councillors Business Working updates Nov Committee update Issues and Opportunities Mayoral proposal Local Boards agree to consultation content Dec Agree consultation items Jan Budget refresh Feb Adopt Consultation Document Public Consultation Including Local Board Agreements and Tūpuna Maunga Authority Plan Mar Apr Final Mayoral proposal May Decision-making Decision-making Local Boards adopt Local Board Agreements Jun Adopt Annual Plan 2017/2018 Including Local Board Agreements and Tūpuna Maunga Authority Plan

Items for consultation Main topics Issue 1: Rates increase Issue 2: Rating stability Issue 3: Paying for tourism promotion Issue 4: Paying for housing infrastructure Issue 5: Living Wage Changes to local initiatives Other topics, such as New Business Improvement Districts (BIDs) or changes to existing ones Tūpuna Maunga draft Operational Plan 2017/2018 Homelessness Mass Transit

Issue 1: Rates increase Consultation Document Page 6 Option A. 3.5% average rates increase Option B. 2.5% average rates increase Option C. 2% average rates increase We could deliver everything we currently have planned and invest in more such as transport We could deliver everything we currently have planned We would be unable to deliver our currently planned investments and services – decisions would be needed about which investments or services will be reduced Consultation Document Page 6 Supporting Information Page 3

Issue 2: Rates stability Option A. Retain our current policy so residential ratepayers have a higher increase than business ratepayers Option B. Change our policy so business and residential ratepayers have the same increase in 2017/2018 Residential rates would increase by more than business rates Ensures a steady progress towards the end goal of a more even split between business and residential ratepayers A clear and simple policy No reduction in the share of rates paid by businesses in 2017/2018 Consultation Document Page 8 Supporting Information Page 7 Our preferred option: Option B ISSUE: We consider that businesses should pay a greater share of rates than residential properties but that the present share is too high and should be reduced gradually over time. Our current policy seeks to achieve this by applying a higher than average rates increase to residential ratepayers each year, and a lower than average increase to business ratepayers

Issue 3: Paying for tourism promotion Option A. Continue to fund with general rates Option B. Fund with a targeted rate on accommodation providers Costs will continue to be spread across all ratepayers Does not release funds for other priorities within Auckland The average residential ratepayer will contribute $46 next year to this activity Accommodation provides will pay a rate that works out to be approx. 4% of their revenue If passed onto visitors, it is likely to be $6-$10 per night on an average hotel room rate Freed up general rates to invest $250-$300m more in transport infrastructure over the next 10 years. Consultation Document Page 9 Supporting Information Page 15 Our preferred option: Option B ISSUE: The council currently spends $20 - $30 million of general rates money each year on tourism promotion and major events which provide significant benefits to accommodation providers such as hotels and motels. To continue to support Auckland’s rapid tourism growth while keeping rates fair and affordable, we need to consider new ways to pay for this spending.

Issue 4: Paying for housing infrastructure Option A. Continue to only rely on existing growth charges Option B. Change our funding policy Option C. Rely on existing tools for now and request central government to provide new growth charges for growth infrastructure - If the council uses general rates to fund new critical infrastructure for houses, then ratepayers across Auckland will pay higher rates to subsidise these new developments. - Provides another tool to help fund infrastructure to enable more houses to be built sooner Legislation could be changed to allow a range of funding tools for housing infrastructure Better alignment between who pays for infrastructure and who benefits Consultation Document Page 10 Supporting Information Page 35 ISSUE: All houses require roads, drains, water supply and sewerage. The council currently invests billions of dollars to provide for a growing Auckland, but this is not enough to keep up with the unprecedented demand for housing. We need new ways to pay for all the costs involved in unlocking more land for houses, without the need for large increases in general rates. Key examples include: Municipal Utility District bonds Tax increment financing Value capture mechanisms Our preferred option: Option B

Issue 5: Paying council staff a living wage Option A. Continue with current pay policies Option B. Implement a living wage for staff of Auckland Council and its substantive CCOs The council’s social equity policy provides a higher wage increase While the above change help, they will not be sufficient to ensure all council staff receive a living wage The council would phase in a living wage over the council term ending October 2019 The additional cost is projected to up to $2.5m in 2017/2018 and $7m per year by the of the council term These costs would be covered by savings without impacting on the services we deliver Consultation Document Page 12 Supporting Information Page 42 The current adult minimum wage is $15.25 per hour, and it will be $15.75 an hour from 1 April 2017. It is currently $19.80 per hour based on the published rate by Living Wage Movement Aotearoa New Zealand and we estimate it may increase to be around $20.20 per hour in 2017/2018 based on council At present around 2,200 staff employed by the council and its substantive council-controlled organisations (CCOs) earn less than $20.20 per hour. 66 per cent of these staff are female. Our preferred option: Option B

Consultation approach

Objectives Raise awareness and understanding of the Annual Budget and consultation topics & key trade-offs Make it easy for a wide range of Aucklanders to participate Provide Governing body members with useful insights into the views of Aucklanders to better inform decision-making Increase overall trust and confidence in council processes, decision-making and financial management

Approach to engagement & communication Council channels - Shape Auckland, OurAuckland – digital and print, Social media, local boards networks, libraries & service centres Face-to-face – have your say events and presence at wide range of community events Advertising – community newspapers & Fairfax partnership

Next steps Monday 27 February Public consultation opens Monday 27 March Public consultation closes April Elected members receive summarised public feedback May Workshops held to discuss budgets 1 June Budget decisions made 29 June Adoption of the final Annual Budget 2017/2018 July Decisions and documentation made available online, libraries, services centres and local board offices

Any questions?