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Draft Acquisitions and Disposals Policy

draft acquisitions and disposals policy

We’re proposing a single Acquisitions and Disposals Policy to ensure a consistent and transparent approach to buying, selling, leasing or transferring of council property.

The buying and selling of property by council is called land acquisition and disposal and happens for many reasons. These include public works such as roads and other infrastructure, greenspace or recreational purposes, and managing land identified for future public use.

Consultation on the draft policy closed on 15 April 2021. We received 104 submissions, hearings will take place on Monday, 31 May.

What we’re proposing

Council wants to ensure we deliver the best value to ratepayers when acquiring and disposing of land. Currently, council has three policies related to acquisitions and disposals, and these have been consolidated into one proposed policy. The policy will provide a consistent and transparent approach to all aspects of buying and selling of council property, rolling three existing policies into one.

Right of first refusal (RFR) for mana whenua

One of the main additions in the new policy is that mana whenua will be given the opportunity to purchase council property through a right of first refusal (RFR) at market value, before being offered for sale through an open market process. However, not all properties will fit this criteria and this can only happen after any statutory obligations are met.

The proposed right of first refusal, recognises the role that mana whenua have in building, protecting and celebrating Tauranga, its environment and its people, and acknowledges the partnership between council and mana whenua.

Proposed draft policy

As part of our regular review process we’re proposing to replace the three current policies that tell us how we acquire and dispose of property, with a single Acquisitions and Disposals Policy:

The new policy will replace these and reflect the existing key processes and principles that inform how we acquire and dispose of property:

Existing processes

What we're already doing

We distinguish between two types of property acquisitions: 

Operational acquisitions

Operational acquisitions are the procurement of property including, but not limited to, purchase, lease, easements and land exchanges. They are identified in advance and are budgeted through annual or long term plan processes. 

Unscheduled acquisitions 

An unscheduled acquisition has not been identified and planned for in the long term or annual plan, or occurs ahead of the financial year it was planned and budgeted for.
They take advantage of market opportunities and can be funded through the Strategic Acquisition Fund (a budget allocated via the long term plan to be used for time sensitive, unscheduled acquisitions), e.g. if there is not enough time to get a Council resolution. 

Why we’re doing it this way 

The policy states the principles that have been and will continue to be applied to property transactions. 

Unscheduled acquisitions give council the ability to be more agile with unscheduled property acquisitions and to respond quickly when property is on the market.

The draft policy further clarifies when and how it is appropriate to use the Strategic Acquisitions Fund. 

What we're already doing

We differentiate between the disposal of surplus property and strategic disposals.

Surplus property

Property is considered as surplus when it is no longer needed by council for operational, strategic or investment purposes, and which council has identified as suitable for disposal on the open market at market value.

Strategic disposals

Where the disposal of property is for the purpose of achieving a strategic or operational outcome for the community – e.g. the gifting of land in the city centre for the University of Waikato tertiary campus on Durham Street. The market value of the property will inform the decision but will not be the only consideration.

Why we’re doing it this way 

To differentiate between disposals where council is trying to achieve a specific strategic outcome for the community and disposals where council no longer has any use for the property.

The draft policy further clarifies and formalises this approach.

What we're already doing

Market value informs all disposals and all surplus property will be sold at market value.

Market value is the probable price a property would sell for at any given date and can be affected by market factors at the time, including things like the number of properties available vs the number of interested buyers, the existing and potential use of the property, market conditions, the individual characteristics of each property and the economy – including local and national factors.

The market value will be assessed by an independent registered valuer.

Why we’re doing it this way 

This ensures that council obtains information on the value of a property before deciding to buy or sell a property.

The draft policy extends and applies the existing practise of basing decisions on market value to the new Right of First Refusal provision.

What we're already doing

Road stopping relates to changing the status of a piece of legal road so that it can be sold, e.g. a strip of land between a property's boundary and a road or footpath.

Road stopping may occur if the road is no longer required as a public road or if we need to stop it for another reason.

The cost of road stopping is met by the requesting party.

Why we’re doing it this way
This provides clear guidance to the community on when council will permanently stop a road.
The draft policy clarifies the rules and creates a simple, single point of reference for all disposals.

What we’re proposing and why

Consolidate three policies into one

Create a single new policy, merging and replacing three policies:

  • Strategic Acquisitions Fund Policy
  • Council Land: Recognition of Tangata Whenua Interests and Aspirations Policy
  • Property Acquisitions and Divestment Road Stopping Policy
Why
  • To create a simple, single point of reference for all matters relating to acquisitions and disposals.
  • To formalise the current approach to property acquisitions and disposals.
  • To provide clarity and transparency on the rules, with consistent language and definitions and updated definitions and terminology.

Add a new provision: Right of first refusal for mana whenua

The draft policy determines that following the completion of any statutory obligations, mana whenua will be given the opportunity to purchase surplus property at market value prior to it being offered to the public through an open market process. 

  • The existing requirements for property to be disposed of at market value would apply to this new provision.
  • Mana whenua refers to the iwi and/or hapū who have traditional authority over the property, as defined by a geographical area known as rohe.
  • Strategic disposals and road stopping are excluded from the proposed right of first refusal process.

The proposed process for the disposal of surplus property under right of first refusal is detailed in Schedule A of the draft policy and is based on central government’s right of first refusal disposal process.

Why
  • Council recognises the close association that mana whenua have with the land in Tauranga.
  • The proposed right of first refusal recognises the role that mana whenua have in building, protecting and celebrating Tauranga, its environment and its people. 
  • It acknowledges the partnership between council and mana whenua, while achieving a fair value for the ratepayer on the disposal of the property.

 

Te Rangapū Mana Whenua o Tauranga Moana

“This proposed update to the policy represents the ability of the Council to reflect the Treaty partnership with tangata whenua in a meaningful and tangible manner. It affords our Treaty Partners the opportunity to purchase property at market value at the point in time that it is no longer required by the Council on behalf of ratepayers. Purchasing at market rate ensures ratepayers are not disadvantaged but affording first option to tangata whenua recognises the cultural and historical connection to the lands of Tauranga. The policy sets out guidelines, processes and timelines to give effect to this opportunity."

Te Rangapū Mana Whenua o Tauranga Moana, an autonomous body made up of 17 representatives from each of the hapū  and iwi in the Tauranga City Council area. 

 

The draft policy does not cover how property is managed when in council ownership (e.g. leases on council property) or the acquisition of stormwater-affected property.

Timeline

  • Early 2019 - February 2021
    Preparation of draft policy and consultation document
  • 15 March - 15 April 2021
    Public notification and submissions
  • May 2021
    Hearings – A hearing committee considers submissions received and will provide recommendations to Council.
  • Mid to late 2021
    Final policy for adoption and policy becomes operative.

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