Auckland Stakeholders and Aucklanders work together to deliver this plan.

Ka mahi ngātahi ngāuepūo te hapori me ngāiwi o Tāmaki Makaurau e oti ai te mahere

796_ The Auckland Council leads the co-development of the Auckland Plan. Its implementation involves the investments and actions of many parties, in particular private providers and central government, to achieve the targets and actions outlined in this Plan; for example, working with New Zealand Transport Agency on major transport projects, and other agencies in order to deliver key targets. Implementation requires alignment and coordination between central and local government, the private sector, institutions and non-government organisations, and Auckland’s communities.

The council will align its internal operations, actions and investments to achieve the promise of the Auckland plan.

797_ Realising the Plan’s vision and providing for Auckland’s growth require substantial investment, particularly in infrastructure. All parties are working in constrained fiscal environments, so shared investment programmes need to be carefully analysed, negotiated, implemented and monitored.

798_ One of the most significant investment mechanisms at the Auckland Council’s disposal is to manage demand rather than simply assume the need for new investment. The projected population growth challenge in Auckland means that the Council must investigate innovative approaches to funding and financing the infrastructure and services required to deliver the Plan.

799_ Recent research into public sector decision-making processes emphasised the need to explore alternative investment options adequately, including ‘non-investment’ solutions.⁷¹

800_ The Auckland Plan can enable significant cost efficiencies by coordinating the investment decisions of different providers to coincide with sequenced changes in land use and community development. It provides the opportunity to coordinate planning among the different agencies and the chance to work collaboratively to achieve the best long-term results. The National Infrastructure Plan (NIP) 2011 signalled central government’s expectation that its agencies will develop business cases that consider the direction for land use, growth and infrastructure needs outlined in the Auckland Plan.

801_ This chapter considers five issues:

1. Internal Auckland Council alignment to implement the Auckland Plan.
2. Central government’s contribution to the Auckland Plan.
3. Developing a long-term sustainable financial strategy.
4. Building enduring implementation partnerships.
5. Supporting integrated re-development and infrastructure provision.

Internal Auckland Council alignment to implement the Auckland Plan

802_ Auckland Council has the potential to create synergies and economies of scale to tackle Auckland’s issues. It is a large organisation with seven substantive Council Controlled Organisations (CCOs). The Council will align its planning, internal operations, actions and investments to achieve the outcomes of the Auckland Plan.

803_ Currently, several plans set out rules for growth and development activity across Auckland. Rather than revising these to be more consistent with the Auckland Plan, the Council will develop a new, integrated plan for Auckland – the Unitary Plan. The Unitary Plan will combine both regional and district planning functions to give effect to the Auckland Plan, using rules and incentives to achieve high-quality outcomes. It will contain the provisions to ensure growth and development occurs in accordance with the principles outlined in Chapter 8: Urban Auckland, Chapter 12: Auckland’s Physical and Social Infrastructure, and Chapter 13: Auckland’s Transport. Development that respects its context, contributes to a high-quality environment, and is in accordance with the Auckland Plan’s outcomes can expect to have an easier path through the consenting process. It is intended that the Council notify the Unitary Plan for submissions in early 2013.

804_ The development of appropriate zoning across Auckland within the Unitary Plan will help implement the Auckland Plan. This will include translating growth into zoning for intensification, in particular aligning land use and transport. Zones will set out criteria for different housing types and mix of uses.

805_ It is intended that the Unitary Plan will be administered in a new way. It will:

• be clear on process
• be simple
• be outcome-focused
• indicate what activities require public notification and what do not
• provide stronger and more direct objectives and policies
• use rules only where critical
• manage intensification scale and form through urban design parameters
• only put proposals into the resource process if the outcome justifies this.

806_ A key regulatory tool is the Long Term Plan (LTP). It combines all Council and CCO funding across Auckland and must, by law, provide for a balanced budget over the 10-year plan period. It will provide the basis for staging and phasing Council/CCO projects. The LTP will include policies on the use of development contributions, rating policies (remissions, postponements, specific local board rates), use of Public Private Partnerships (PPPs), user charges, central government/NZTA subsidies and potential central government partnerships.

807_ Further information on the tools available to achieve the development strategy are identified in Table 14.1 – Implementation tools – options for consideration to achieve the Development Strategy.

808_ Auckland Council will prioritise its own investments towards achieving the most cost-effective, highest-value, and equitable investment programmes. The Council has a number of mechanisms and processes to ensure its substantive CCOs’ activities are aligned with the objectives and priorities of the Council. Namely:

• the annual Letter of Expectation that provides guidance to CCOs to inform the Statement of Intent (SOI) process by communicating the Council’s priorities for each CCO each year. Under the Local Government (Auckland Council) Act (2009), substantive CCOs are required to act consistently regarding relevant aspects of any plans or strategies of the Council, to the extent specified in writing
• the Statement of Intent (SOI) is an essential part of the accountability regime for CCOs, as it sets out:

1. How the CCO’s activities will contribute to its outcomes (which contribute, in turn, to the Auckland Plan)
2. How the CCO’s performance will be measured in relation to these outcomes
3. The specific performance targets that each CCO expects to meet.

809_ CCOs are required by legislation to submit their draft SOIs by March every year, in order to facilitate the Council’s Long Term Plan process. The budgets of the SOIs are a major input to the Council’s Long Term Plan.

810_ The strategic framework of the Council that supports internal alignment towards the achievement of the Auckland Plan is illustrated and discussed in Section A (Figure A3).

Central government’s contribution to the Auckland Plan

811_ Initiatives in the Auckland Plan relate to areas of both central government and Auckland Council funding. Infrastructure will in some cases require joint funding from both organisations.

812_ Central government has indicated that its contributions will be limited, given the fiscal deficits and the need to give priority to funding the recovery from the Christchurch earthquake of 22 February 2011.

813_ Given fiscal constraints, Auckland Council recognises that government agencies will seek to get better value out of existing investments, and to prioritise investments according to the highest value use.

814_ There are benefits from the Auckland Plan to both central government and the Auckland Council. For example:

• central government can help the Auckland Council deliver through its own decision-making, including by requiring agencies to use the Auckland Plan to inform the sequencing and location of government-funded infrastructure and services over time
• the Auckland Plan can help improve outcomes from the existing investment processes.

815_ The Auckland Plan will be an important input to the strategic and business case development for all central government capital investments in Auckland.

816_ Central government currently spends approximately $18 billion in operating funding annually in Auckland, much of it in the social development area. The Plan provides an opportunity for government agencies to align with the strategies in the Plan, developed in partnership with central government, to achieve improved quality of expenditure and enhanced outcomes from current expenditure. The Southern Initiative represents the type of partnership approach to be developed between the Council and central government.

817_ Central government continues to work towards the implementation of the National Infrastructure Plan. An underlying goal is to build a better evidence base to guide future investment decisions and increase the departmental knowledge base on how existing assets can be better utilised. Strongly linked to this is how we can better utilise existing assets, and inform the timing of future investment. This work will focus specifically on the water and transport sectors.

818_ Performance measures and indicators will enable a more comprehensive, robust analysis of the state of New Zealand’s infrastructure and how it is performing. Specifically focusing at a national and sector level, these measures will be used to track progress and improvements, and inform where performance needs to increase, or new investment may be required.

819_ Central government is focused on working with Auckland Council, and sharing as much of the information and lessons learned as possible, to promote and foster ongoing collaboration in the pursuit of mutually agreed outcomes.

Developing a long-term, sustainable financial strategy for Auckland Council

820_ The Auckland Council has a responsibility to ensure that Auckland is appropriately served by its infrastructure and facilities, and to ensure that every ratepayer dollar is spent prudently. Consequently, a Financial Strategy supports the priorities, locations, sequencing and directions established in the Auckland Plan, adopted alongside the Long Term Plan, which in turn provides the detail of the Council’s new investments, and its contribution to multi-party projects. The Financial Strategy improves the transparency of the Council’s activities, and facilitates careful financial management and consultation on funding proposals.

821_ Auckland Council has a substantial balance sheet and a variety of funding mechanisms at its disposal. However, Auckland’s infrastructure requires significant investment to support regional growth and deliver on the challenges outlined in the Auckland Plan. There is limited public tolerance of rates increase to service debt; therefore new, innovative funding tools to support the major projects in this Plan are needed.

822_ At present the Council is examining the operating impact of capital works. It uses debt to fund its share of capital for longlife assets to spread costs fairly over time, and funds associated operating expenditure from rates and other sources of funding.

823_ The Council plans to invest approximately $1 billion per year in the renewal of existing assets, in improving service levels, and in building new assets across Auckland. These planned investments will allow the Council to plan for growth in line with estimated demand, and to transform parts of Auckland in line with the Development Strategy.

824_ The Council’s approach is therefore to:

• minimise costs to achieve the required investment and service delivery
• prioritise investments – this may mean that it cuts back on some of the things it does
• attain fair and appropriate levels of revenue and funding from non-government sources
• seek appropriate contributions to both capital and ongoing operating expenses from central government agencies
• provide the balance of funding by Council
• use economies of scale and the Council’s asset base to secure better investments.

825_ The Council is also investigating new approaches to funding and financing the infrastructure and services required to deliver the Plan’s outcomes. These include the use of market- and incentive-based tools, efficient and flexible pricing of infrastructure and service delivery, demand management and private sector participation. The Council will use funding and financing tools available within existing legislation, and seek legislative change where that may be necessary. A summary of these follows in Table 14.1. Council will investigate how these may be applied to particular programmes through the development of the Financial Strategy. Because of the complexity and implications of introducing new funding tools, this will take a period of time to develop.

826_ Several key infrastructure investments are identified as critical over the time frame of the Auckland Plan. The projects and their estimated time frames and costs are appended in Addendum Table 3. The costs are significant, and suggest a shortfall of between $10 billion and $15 billion. Current funding mechanisms are insufficient on their own to cover this expense, both regionally and nationally. Debt can be used to enable early progress, provided there are funding measures in place to service the debt.

Building enduring implementation partnerships

827_ Implementing the Auckland Plan hinges on all of the Auckland partners working together to align priorities and ensure the directives and targets in the Plan are realised. Partner organisations (not exhaustive) include:

• central government agencies and departments (e.g. Treasury) to develop a shared decision-making framework for capital project investment, such as the ‘better business case’ approach outlined in the National Infrastructure Plan (NIP) to coordinate investment programmes across the public sector. The NIP states that central government expects its agencies to consider the Auckland Plan’s land-use and infrastructure strategies in their investment decisions
• the private sector, including developers, infrastructure and service providers, business organisations and institutions, to understand the imperatives, constraints and hurdles to be overcome in meeting Auckland’s growth challenge. The thirty-year time horizon encourages a long-term view. In identifying key investments and how they are to be sequenced and prioritised, the Auckland Plan serves a critical role in providing certainty for private sector investment. BOOTs (Build Own Operate Transfer), BOO (Build Own Operate), BOT (Build Operate Transfer), DBFO (Design Build Finance Operate), BTO (Build Transfer Operate), BLT (Build Lease Transfer) and other similar arrangements are a means of engaging the private sector in building and operating infrastructure assets
• the voluntary and community sector will be strengthened through Local Boards that provide opportunities for active engagement with communities. Social sector groups (such as tertiary, education and health institutes) and non-government bodies can access non-traditional funding and shape integrated implementation methods
• neighbouring regions (Northland, Waikato and the Bay of Plenty) through the Upper North Island Strategic Alliance (UNISA) to align cross-regional planning objectives, leverage opportunities for cost efficiencies around infrastructure and services and deliver better outcomes for Auckland and for all of New Zealand (see Chapters 6: Auckland’s Economy, 9: Rural Auckland and 12: Auckland’s Physical and Social Infrastructure). Priority issues include economic development, transport, tourism, emergency preparedness, ports, waste and water
• Māori stakeholders and investors who have indicated their willingness to become more active development partners in Auckland.

828_ There are numerous instances where partnerships and collaboration will be critical to Plan delivery. Partnering is dynamic, multifaceted and has the potential for different types of arrangements to be developed, to deliver infrastructure and community and economic development outcomes (see Figure 14.1). A comprehensive process of engagement and planning with stakeholders will clearly define roles and expectations. Section C: The journey to 2040, establishes principles for implementing the Auckland Plan. All who contribute to the Plan’s implementation are encouraged to adhere to these principles.

FIGURE 14.1 The ‘working together ’ continuum

829_ The National Infrastructure Plan (NIP) sets out a framework for the development of infrastructure in New Zealand over the next 20 years. It presents investment principles and central government’s ambitions in the long term. It will support and give certainty to the private sector and local government in their infrastructure planning, by stating national-level expectations and policy settings.

830_ Where infrastructure investment decisions are well aligned to other infrastructure and service-level investments, across sectors and agencies, and with land-use strategies and areas of population growth identified, asset use and investment allocation are maximized. For example, we want schools, hospitals and roads to be located where growth is going to occur, and growth to be encouraged where there is already sunk investment in infrastructure networks and services. The Auckland Plan presents a shared strategy for growth.

831_ As part of the Action Plan for the NIP, the central government will publish 10-year capital intention plans to provide more detailed information about future infrastructure investment. This will assist in the delivery of the Auckland Plan by providing more certainty for investors and decision-makers.

832_ Figure14.1 illustrates the range of partnership tools and coordination mechanisms that are likely to be used in the development and regeneration of the places outlined in this Plan.

Supporting integrated re-development and infrastructure provision

833_ Different development areas in Auckland require different approaches to implementation and funding. Some projects will be led by the market and others will require joint Auckland Council and central government investment and action.

834_ The alignment of investment decisions and other actions in the development process require responses which are tailored to specific places. Large development and regeneration programmes may require development agency approaches to co-ordinate multiple agencies and inputs over a prolonged period of time. Others may require lower-level co-ordination mechanisms.

835_ In some parts of Auckland, the Council may need to be proactive to achieve the outcomes of this Plan: in particular, in prioritised intensification centres where the development market might not readily go, yet where it would be logical to regenerate or to intensify (for example around a transport node). In these places, the Council could assist in different ways, such as with land assembly in key regeneration sites, or selling back to the private sector a site that is significantly easier to develop in a comprehensive way.

Different development areas in Auckland require different approaches to implementation and funding.

836_ Auckland Council has a number of potential tools available to help achieve a compact urban form. These tools (not an exhaustive list) are illustrated in Table 14.1. It is important to note that these are only potential options available, and that more work is required to identify the suitability of these to Auckland.

Table 14.1 - Implementation Tools – Options for Consideration to Achieve the Development Strategy

Table 14.1 Continued - Implementation Tools – Options for Consideration to Achieve the Development Strategy

Table 14.1 Continued - Implementation Tools – Options for Consideration to Achieve the Development Strategy

Ongoing implementation

837_ Auckland Council has to ensure that the outcomes of the Auckland Plan can be successfully achieved at all levels. The directions in section 79 of the Local Government (Auckland Council) Act (2009), state that the Auckland Plan must establish the platform for:

• coherent and co-ordinated decision-making by Auckland Council and its partners in critical infrastructure, services and investment provision (s79(3)(c))
• identification of the existing and future location and mix of critical infrastructure, services and investment in Auckland (s79(3)(c))
• alignment of implementation plans, regulatory plans and funding programmes within Council itself (s79(3)(d))
• identification of policies, priorities, land allocations and programmes and investments to implement the strategic direction (s79(4(f)).

Successful implementation depends on good relationships among the partners and strong alignment in what they do. The focal aspects of implementation are:

• alignment of the Long Term Plan
• regulatory plan alignment through the Operative Plan in the interim, and the Unitary Plan
• wider Council strategy and policy framework alignment
• Central government contribution
• infrastructure and service provider alignment
• developer and delivery agency alignment
• community organisation and non government organisation alignment.

Alignment will take time. A process has to be put in place to work towards these ideals until they become an everyday part of thinking and working by all the Auckland partners.

838_ The Implementation Addendum does two things:

• it provides a starting point for implementation
• it provides a process for reviewing progress on the many projects, policies and programmes proposed to be undertaken.

839_ As a starting point for implementation, the Implementation Addendum contains a list of critical infrastructure projects, timelines, priorities and actions considered necessary to achieve the strategic directions.

These are listed in Addendum Tables 3 to 6. They are likely to change as implementation goes ahead, but reflect current thinking at the time of the adoption of the Auckland Plan as to how the directions can best be achieved.

840_ The Implementation Addendum sets out the process for conducting an Annual Implementation Update which is to be carried out by the Auckland Council when it prepares its Annual Plan. The update will not only review progress, but also seek responses from Auckland Council and its partners to deal with variations to progress, improve approaches, and better achieve outcomes.