The Regional Benefit

Flood Mitigation

The $556m agreement includes $203.5m of Crown funding, that is dependent on HBRC contributing $44m towards flood mitigation for the region. This prevents more residential properties being placed in Category 3. The proposed flood mitigation works will benefit areas currently assessed as Category 2, from Wairoa to Pōrangahau. It includes $70m ringfenced for a much-needed flood mitigation scheme for Wairoa.

Transportation

$260m towards transport infrastructure projects. This includes fully funding the estimated cost of the Redclyffe Bridge replacement, the Puketapu, Matapiro and Aropauanui bridge works in Hastings, Te Reinga bridge works in Wairoa and critical roading recovery projects in Central Hawke’s Bay. It would also include culvert replacements and additional support for transport resilience and repair initiatives across the region. For Napier this represents an improved roading subsidy of $32m (Redclyffe Bridge repair costs).

Category 3 Residential Property Compensation

In applying the Government’s flood risk categories, HBRC has provisionally classed six areas as Category 3. This is where it has been assessed that there is a high risk to life from a future severe weather event which cannot be reduced through flood mitigation.

Napier has one provisional Category 3 area of around 20 properties in Esk Valley. The balance of affected properties in Esk Valley,

WHAT DOES VOLUNTARY RESIDENTIAL PROPERTY PURCHASE MEAN?

Although there is an offer of significant investment in our flood control schemes, some areas will still be unsafe to live. Properties assessed as Category 3 are eligible for voluntary purchase. Category 3 properties are considered not safe to live in due to the unacceptable risk of future flooding and loss of life. Homes in these areas should not be rebuilt on the current sites. The compensation package is the purchase of those residential property rights that the owner gives up voluntarily. This will enable property owners to move on and settle somewhere safer.

The 20 Category 3 properties in Napier range from lifestyle properties through to larger, mixed-use properties, such as orchards or vineyards with a home. The original owner may keep that land for non-residential uses such as horticulture. In other cases, the Council may take control of the land as part of the settlement.

HOW WILL IT WORK?

The legal framework for the purchase and settlement process is still being worked through before we can finalise our Voluntary Property Settlement Policy. Council is also exploring options for properties in Category 3 areas that currently do not have a residential dwelling on them. These will be considered as we finalise our settlement policy. Council is obtaining independent valuations on

Amendment.

WHAT IS AN LTP AMENDMENT?

Every three years we work with our community on an LTP that sets out our plans for investing in our city and how it will be funded over the next 10 years.

If we need to make any significant changes, such as adding new activities to the LTP, we are required to check in with our community first. The official process for doing this is known as an LTP Amendment.

WHY IS AN LTP AMENDMENT REQUIRED?

As a result of the cyclone, some areas have been assessed as too dangerous to live in due to the flood risk. Under the terms of the funding partnership with the Crown, Council will have involvement in the voluntary purchase of residential properties or property rights that have been given up by owners in Category 3 areas. This is a new activity for Council, so by law we must consult with you, our community, on this change through a proposed amendment to the LTP.

This amendment allows Council to deliver a residential property rights compensation scheme for Category 3 residents. This will in turn unlock the wider Crown funding support package.

Our current LTP does not contain a mandate for Council to be involved in the purchase of residential properties or property rights, in partnership with the Crown, that have been voluntarily given up by property owners. It requires an amendment to the LTP, which is the reason for this consultation process.

This amendment is about securing the best possible support package from the Crown to enable us and our affected residents to move forward in a timely way.

• Voluntary residential property purchases of Category 3 properties can proceed, providing certainty to landowners where the risk to life has been assessed as too high. This will provide affected property owners the opportunity to move forward, avoiding further mental and social wellbeing implications from continued uncertainty. Should the offer be declined, there is no current ability for Council to help our community vacate an area where it is no longer safe to live.

• Full funding for NCC’s share (50%) of the replacement of the Redclyffe Bridge ($32m), a cost that would otherwise fall on Council entirely.

• Crown investment in the restoration of roads and bridges which will ultimately unlock a faster economic recovery and improved accessibility for our communities.

• Significant investment in flood mitigation / protection works which is intended to keep properties out of Category 2 and also reduce the number of residential and other properties that will be within Category 3 areas. Also included is funding for repairs and upgrades to telemetry and drainage pump stations. This includes the upgrade of three pump stations near Brookfields and Awatoto.

Providing for this new activity in the LTP (voluntary residential property purchases), will provide Council with:

• The ability to engage with Category 3 owners on the voluntary purchase arrangements and process

• The ability to develop systems and processes to administer applications through to settlement

• A budget for acquisitions, building demolition and proceeds of sales and claims settlements.

Financial implications of accepting the Crown’s offer

This would also trigger an amendment to Council’s Revenue and Financing Policy

As part of setting up a new activity of Council for property rights compensation, Council is also required to amend its Revenue and Financing Policy. That policy sets out how the funding needs of all Council activities will be met. The amended policy can be found in the full LTP Amendment document. In short, it concludes that the costs and benefits are city-wide. They can’t be easily differentiated between groups, and city-wide funding to recover costs is the most appropriate decision. The actual specifics of the rating mechanism will be determined as part of the 2024-34 LTP and we’ll consult with the community on this in early 2024.

Visit sayitnapier.nz to read the Revenue and Financing Policy Consultation Document in full and have your say on how this activity should be funded.

Other recovery costs impacting Napier

The property compensation proposal (the purpose of this LTP amendment) will have a minor impact on rates, but Napier still faces an expensive road to recovery. There are key recovery projects involving vital services for our city, that will require significant investment in coming years. These include:

• Essential Wastewater Treatment Plant resilience improvements

• Solid waste resilience improvements

• Awatoto Industrial stormwater improvements

• Rural stormwater rebuilds and repairs

• Urban waterways resilience upgrades

• Potential relocation of the Redclyffe Transfer Station

Investing in these projects may require us to make trade-offs with other community priorities because of the investment needed to fund and deliver these recovery projects. These additional projects will be a core focus for Council as it develops the 2024-34 LTP. This will be consulted on in early 2024.

This LTP Amendment that we are consulting on now does not address these expenses. However, the Crown’s offer enables us to plan with greater certainty.

What do you think?

We want to hear your feedback on the Crown’s regional offer and the proposed LTP amendment.

Option One

Support the LTP Amendment and accept the Crown’s regional offer

Provide for the voluntary residential property purchases as an activity in the 2021-31 LTP, which will allow Council to accept the Crown’s funding offer for the Hawke’s Bay region. No practical alternatives to the Crown’s global financial support offer for the region have been identified that will provide the same regional benefits, or allow the voluntary purchase of Category 3 properties to proceed.

If this option is adopted:

• Council will be able to provide for this new activity in the LTP, which will allow it to advance the voluntary property purchase process

• Resolution and certainty will be provided to Category 3 property owners

• The local benefits of the Crown’s offer will be realised for Napier City

• The wider benefits of the Crown’s offer will be realised for the region, including the flood mitigation and protection works that will also benefit Napier

Option Two

Do not support the LTP Amendment, which will result in a refusal of the Crown’s regional offer

If the voluntary property purchase activity is not provided for in the 2021-31 LTP, the Council will not be able to accept the Crown’s offer.

• If Council is unable to accept the offer, the offer for the region will be taken away

• Category 3 property owners will be left in limbo

• Council will not receive funding for the replacement of Redclyffe Bridge ($32m)

• Benefits of the Crown’s offer will not be realised for the region

• Refusing the Crown’s regional offer would mean waiting until after the general election to see what financial support package could be negotiated – this will result in significant time delays when our community has been clear it wants action. The region’s leaders consider this high risk along with the ongoing distress to Category 3 residents whose homes are considered unsafe for ongoing residential use