Consultation to Community Board of Property
Strategy
REPORT SUMMARY
FROM
Sam Marshall - Area Manager Whangamata/Tairua/Pauanui
Report Purpose:
Significance of Decision:
For Decision
 Significant  Non-Significant
Issue
Council at the meeting held on 14 December 2011 adopted the Property Strategy as
Council Policy subject to consultation with Community Boards and the finalisation of the
Strategy.
Factors to Consider

The Strategy adopts a structured approach to property management at both operational
and strategic levels.

The Strategy generally reflects the directions outlined in a presentation to Council
earlier in 2011.

A variety of actions are proposed for implementation now the Strategy is adopted.

A property monitoring and review process will be established.
Options
The following options exist:
Option A - Recommended Option - Provide feedback on the Property Strategy to
Council
In this option community boards provide feedback on the Strategy and initial
recommendations on specific properties in relation to potential sale/disposal, retention,
acquisition or opportunities for more efficient use of existing properties. The Strategy and
associated community board feedback will be presented back to Council. Should Council
finally adopt the Strategy it will be incorporated as part of Councils general business. The
key implementation actions as set out in the Strategy would be carried out. A monitoring
and reporting process relating to property would also be established as per the Strategy
recommendations.
Attachment A is the Strategy that was adopted by Council on 14 December 2011.
Option B - Status Quo (do not take any action)
Community Boards may elect to provide no feedback to Council on the Property Strategy.
Recommendations
That the Mercury Bay Community Board:
1.
Receives the report.
2.
Determines that it believes it has complied with the decision-making provisions of the
Local Government Act 2002 to the extent necessary in relation to this decision; and in
2
accordance with the provisions of Section 79 of the Act determines that it does not
require further information prior to making a decision on this matter.
3.
Provides feedback to Council on the draft Thames-Coromandel District Council
Property Strategy.
4.
Provides initial recommendations on any specific properties in the community board
area that the community board considers should be:

Disposed of or sold;

Retained for current or future uses;

Needed to be acquired for specific Council projects;

Could be more efficiently used in the future.
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TO
Mercury Bay Community Board
FROM
Sam Marshall - Area Manager Whangamata/Tairua/Pauanui
APPROVED BY
Peter Mickleson - Group Manager Policy and Planning
DATE
19 December 2011
SUBJECT
Community Board Consultation on the Property Strategy
Report Purpose:
Significance of Decision:
For Decision
 Significant  Non-Significant
Issue
Council at the meeting held on 14 December 2011 adopted the Property Strategy as
Council Policy subject to consultation with Community Boards and the finalisation of the
Strategy.
Recommendations
That the Mercury Bay Community Board:
1.
Receives the report.
2.
Determines that it believes it has complied with the decision-making provisions of the
Local Government Act 2002 to the extent necessary in relation to this decision; and in
accordance with the provisions of Section 79 of the Act determines that it does not
require further information prior to making a decision on this matter.
3.
Provides feedback to Council on the draft Thames-Coromandel District Council
Property Strategy.
4.
Provides initial recommendations on any specific properties in the community board
area that the community board considers should be:

Disposed of or sold;

Retained for current or future uses;

Needed to be acquired for specific Council projects;

Could be more efficiently used in the future.
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Background
1.
At the Council meeting on 14 December 2011, the draft Property Strategy was
presented for adoption.
Below is a copy of the resolution from that meeting:
Resolved
That the Thames-Coromandel District Council:
1.
Receives the report.
2.
Determines that it believes it has complied with the decision-making provisions
of the Local Government Act 2002 to the extent necessary in relation to this decision;
and in accordance with the provisions of Section 79 of the Act determines that it does
not require further information prior to making a decision on this matter.
3.
Adopts the Property Strategy as Council policy in principle subject to
consultation with Community Boards and the finalisation of the Strategy.
4.
Rescinds the Land and Building Ownership Policy and notes that the Property
Strategy will form the basis of policy guidance on the ownership of Council property.
Moved/Seconded By: Wells/Bartley
2.
Council has a significant property holding of approximately 763 properties worth $273
million.
3.
Historically property has been acquired, managed and disposed of in response to the
needs of the time without overlying policy guidance.
4.
The lack of a strategic approach impacts on decisions to keep, dispose of, or acquire
further land. Adopting a property strategy will provide a strategic framework for
considering property matters.
5.
The Strategy sets out the strategic vision and broad principles to be applied in the
management of Council property. It also identifies key policies that will be applied and
further priority work areas relating to the operational levels of property management.
6.
As it is a strategic document the Strategy does not attempt to solve all operational
issues, however it does identify key focus areas for action post adoption.
Statutory Requirements
7.
A number of specific legislative requirements apply specifically to property
management and more generally to the way in which council's conduct their business
affairs on behalf of communities.
8.
One of the most important is the Local Government Act 2002 (LGA'02). For example
at a general level, the consultation requirements within Part 6 require consideration of
community views and preferences in decision making including decisions relating to
property. Specific sections of the LGA'02 also have a more detailed impact on
decisions relating to individual properties such as changing the use of properties held
for a specific purpose.
9.
Since 2000, legislation has been reviewed to ensure that property management by
Council, and in particular acquisition and disposal, should be subject to scrutiny as a
significant decision. Section 90 of the LGA'02 requires local authorities to adopt a
significance policy that, among other things, determines which assets are considered
to be strategic assets. Council’s current significance policy lists fixed assets relating
to roads, water, stormwater, wastewater, reserves, and community housing as being
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significant and therefore any decisions pertaining to these assets should be
considered with regard to sections 77, 78, 80, and 82 of the LGA.
10.
In accordance with Section 12 of the LGA'02, only Council can acquire or dispose of
property. Council delegates some authority to its Committees for example to authorise
leases which comply with the Lease Policy and the Revenue and Financing Policy.
11.
Further applicable acts include the Property Law Act 2007, Public Works Act 1981
Reserves Act 1977 and Resource Management Act 1991. In some cases specific
local legislation exists that will impact decisions with the Thames-Coromandel District
Council area such as the Reserves and Other Lands Disposal Act which applies to the
Council's endowment farms.
12.
The Strategy has been prepared with consideration given to the relevant legislation
and a detailed overview of the legislation is provided within Appendix 1 of the
Strategy.
Relevant Policy and Plans
13. There are a number of policies and plans that have relevance to Council property
including the Leases Policy, Investment Policy, Development Contributions Policy,
District Plan, Ten Year Plan and the draft Land and Building Ownership Policy.
Relevant extracts from all of these are included within the Strategy and are not
repeated within this report.
14.
In relation to a draft Land and Buildings Ownership Policy, at its 16 December 2009
meeting Council made the following resolution:
Resolved
That the Thames-Coromandel District Council
15.
16.
1.
Receives the report.
2.
Determines that it believes it has complied with the decision-making provisions
of the Local Government Act 2002 to the extent necessary in relation to this
decision; and in accordance with the provision of section 79 of the Act
determines that it does not require further information prior to making a decision
on this matter.
3.
Determines that Council's high level policies relating to the reasons for owning
land do not need to be reviewed and ask staff to finalise the draft Property
Management Strategy for use in guiding operational decisions relating to
property.
4.
Adopts the Land and Building Ownership Policy subject to the review of a
compiled list of all Council owned land and buildings suitable for disposal under
the Policy.
Council therefore adopted in principle a draft Land and Buildings Ownership Policy
that stated:
1.
Council will only own land and buildings that are necessary to deliver agreed
levels of service identified in a Council activity.
2.
Any land or building that is not required for the delivery of an agreed level of
service identified in a Council activity shall be assessed by the Activity Manager
as to its suitability for disposal and a recommendation made to Council.
One issue associated with the Land and Building Ownership Policy is the activity
planning process did not focus on property planning, therefore there are few if any
direct links made in activity plans between property needs and the levels of service.
Further, land and buildings purchased for future strategic projects were not
necessarily linked to the levels of service contained within activity plans.
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17.
The Strategy establishes linkages to the asset and activity planning functions of
Council, essentially embedding consideration of property planning into Council
business planning.
18.
Council at its meeting on 14 December rescinded the Land and Buildings Ownership
Policy and directed that the Strategy and its associated policies replace it.
Strategic Fit
Strategic Direction
Comment
Choosing Futures
The Property Strategy contributes to the Choosing Futures
outcomes of:
The needs of both local and visitor communities are met through
sound planning, ahead of growth and development
Our local economies reflect the spirit of the Peninsula
The Peninsula's long and rich history is valued and preserved
Coromandel Peninsula
Blueprint
The Blueprint outcome "where generations can live, work and
enjoy" is relevant in that Councils strategic approach to property
management will directly impact on the ability of people to live,
work and enjoy in the area. Further commentary on this area is
contained within the Strategy itself.
Council Direction
Council's Direction states that on behalf of the Coromandel
Peninsula the Council will aim to achieve a prosperous and
liveable district. Further commentary on this area is contained
within the Strategy itself.
Factors to Consider
19.
The majority of key factors to consider are outlined within the Strategy itself and not
repeated within this report, however some key points are outlined below.
20.
The Strategy follows a structured approach of considering the extent of the property
holding, the relevant legislation, the policy environment and key factors in a new
management approach through to establishing specific policies and implementation
actions.
21.
A presentation outlining the broad strategic approach proposed for the strategy was
presented in a Council workshop held 13 April 2011. The directions proposed in the
draft Strategy reflect the approaches presented at that workshop with some additional
inclusions.
22.
All Council owned land and buildings are allocated to, depreciated, and (mostly)
maintained through the activity to which they relate. For example, the land and
buildings associated with a water treatment plant are funded through and 'owned' by
the respective community water supply account. Under Council’s Revenue and
Financing Policy, the activity that requires the land and building asset is required to
pay for the capital costs of acquiring the asset, including the land.
23.
The Strategy attempts to set both the higher level approach to strategic property
management while also confirming a level of detail that will ensure operational
improvements. A number of actions are proposed post adoption including:

A review of Council's property holdings that will include the identification of
operational issues such as any occupancies without leases or agreements in
place and properties potentially suitable for disposal;

Improvements to property information records and an investigation into a new
property management system;
7
24.

Changes to organisational procedures and guidelines, some of which will be
confirmed as part of the policies confirmed via adoption of the Strategy and with
detailed operational process changes to be developed post adoption;

Establishment of a monitoring and reporting process;

Confirmation of the roles, functions and responsibilities associated with property
management, and;

Training as required to ensure the property planning function is effective within
the activity planning process and to address any individual property related skill
development needs.
Timeframes for reviewing the Strategy are included within it, with the key review
timeframe being not more than six yearly and to coincide with the three yearly Ten
Year Plan review.
Community Views & Preferences
25. There has been no formal public consultation on the draft Strategy.
26.
Specific community views have not been sought; however the Strategy reflects the
new governance approach and directions being implemented by Council since its
election in 2010.
27.
An indication of some community views can be drawn through other processes such
as Ten Year Plan and the various non-statutory community plan exercises. Achieving
financial restraint, organisation efficiencies and a conservative approach to rating
increases are some general themes that are reflective of some broad community
views relevant to property management.
28.
Community Boards were consulted in 2007 on a property management report
prepared by the Property Group Limited. While this occurred some time ago, the
general directions of the Strategy are consistent with the feedback provided by boards
at that time.
29.
It is likely that various sectors of the community will have an interest in Council's
approach to property management, particularly if Council were to adopt an aggressive
approach to property disposals or acquisitions.
30.
The strategic approach that Council adopts will have an impact on the interests of
future generations. For example, a pro-active approach to property acquisitions and
management to achieve current and future projects is likely to contribute to a more
liveable and potentially more prosperous community in the future. Decisions to carry
out acquisitions or disposals will also affect the financial position of Council and of
future ratepayers.
31.
Separate to this Strategy, approximately $4 million of revenue from proposed property
disposals has been budgeted for in the draft Ten Year Plan.
32.
The finalisation and adoption of the Strategy is also an opportunity for community
boards to provide initial recommendations on specific properties in relation to potential
sale/disposal, retention, acquisition or opportunities for more efficient use of existing
properties. It should be noted that recommendations from community boards on
specific properties (for example their possible sale or acquisition) are subject to further
process and Council approval.
Compliance with Legislative Requirements
33. Property management is subject to a number of legislative requirements and the
strategy has been prepared with consideration of these. Further information is
contained within the Strategy itself.
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Activity Plan Implications
34. The main impact of the Strategy on activity plans is the requirement for property
planning to be carried out as part of activity plan reviews.
Budget Implications
35. The Strategy was prepared by Council staff rather than external consultants thereby
avoiding significant costs.
36.
The adoption of the Strategy did not involve any significant expenditure, however one
of the actions post adoption is the investigation of a new property management
system. This may involve a future cost to Council.
37.
There will be further staff time involved to develop and implement the proposed
changes as proposed in the Strategy however this will not be significant in terms of
budget implications.
Internal Consultation
38. Preparation of the strategy has involved staff from other teams including service
delivery, finance, strategic policy, area managers and development control (resource
consents). The strategy has been reviewed by the Executive Leadership Team.
Options
39.
The following options exist:
Option A - Recommended Option - Provide feedback on the Property Strategy to
Council
In this option community boards provide feedback on the Strategy and initial
recommendations on specific properties in relation to potential sale/disposal, retention,
acquisition or opportunities for more efficient use of existing properties. The Strategy and
associated community board feedback will be presented back to Council. Should Council
finally adopt the Strategy it will be incorporated as part of Councils general business. The
key implementation actions as set out in the Strategy would be carried out. A monitoring
and reporting process relating to property would also be established as per the Strategy
recommendations.
Attachment A is the Strategy that was adopted by Council on 14 December 2011.
Option B - Status Quo (do not take any action)
Community boards may elect not to provide feedback to Council on the Property Strategy.
Assessment of Options
40.
The assessment of options are as follows:
Option
Advantages and
Benefits
Disadvantages and
Costs
Impact on capacity
to meet current and
future needs
Integrated and
Efficient Promotion
of Council
Outcomes
A - Adopt the
Strategy
 A strategy is put in
place.
 Management and
operational
improvements
initiated.
 Structure
established to
guide strategic and
operational
approaches to
property
management.
 Minimal financial
costs (however
property
management
system to be
investigated
including costings)
 Strategy may not
reflect community
views.
 Strategy itself will
have minimal
impacts on
capacity; however
a strategic
approach to
property
management is
likely to make a
positive
contribution to
Councils ability to
meet current and
 Adoption will
promote both
integration and
efficiencies
relating to property
at both a strategic
and operational
level.
 Helps Council
achieve "A liveable
district."
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future needs.
B - Do not
take any
action
(status quo)
 Minimal
advantages essentially Council
would be 'doing
what it has always
done' in relation to
property.
 Strategic approach
to property not
established.
 Guidance for
operational
improvements not
established.
 Inconsistency with
Office of the
Auditor General
recommendation.
 Minimal impact,
however not
adopting a
strategic
approach,
particularly to
property
acquisitions and
disposals may
mean lost
opportunities to
meet current and
future community
needs that are
reliant on a
property
component in their
delivery.
 Not adopting and
continuing with the
status quo will
reduce the
opportunity for
improved
integration and
efficiencies
relating to property
at both a strategic
and operational
level.
Recommended Option
41.
The recommended option is Option A.
Identification of Inconsistent Decisions
42.
This is not an inconsistent decision
Significance Assessment
43.
Under the Council’s Determining Significance Policy, a decision in accordance with
the recommendation(s) is not considered to have a high degree of significance.
44.
Under the LGA'02, decisions relating to property (particularly the disposal of property)
often constitute a significant decision. However adopting the Strategy and community
boards providing recommendations on actions associated with specific properties is
not committing Council to any course of action in relation to property disposals or
acquisitions. Currently all disposal and acquisition decisions will require Council
approval. Decisions to dispose of or abandon a strategic asset (currently roads, water,
stormwater, wastewater, reserves and community housing) or the sale/exchange of
land vested as an endowment are likely to constitute a significant decision and should
be considered with regard to sections 77, 88, 80 and 82 of the LGA'02.
Next Actions
45.
The Strategy will move into implementation as set out within the 'Key Implementation
Actions' section of the Strategy.
46.
A key action is to review of the council property holding from both an operational
perspective to, for example, identify any occupations without an agreement in place
and from a strategic perspective in relation to proposed retention, disposal and
acquisition of property. One focus of the review will be to identify potentially surplus
land for disposal. Any community board recommendations relating to specific
properties made as part of considering this report will form a part of that process.
47.
Any decisions to dispose of or acquire land will be subject to Council approval.
48.
As part of the Strategy implementation a property monitoring and reporting process
will be scoped and implemented over the course of the 2012 year.
49.
The Strategy will be formatted into a final version. This has not been completed given
the possibility of further amendments.
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References-Tabled/Agenda Attachments
Attachment A
Draft Thames-Coromandel District Council Property Strategy
11
Attachment A
Draft Thames-Coromandel District Council Property Strategy