222. Consent authorities can recover the actual and reasonable costs associated with processing resource consents (section 36 of the RMA). The way councils recover these costs is generally done one of two ways, either by setting fixed fees for applications or by charging an initial lodgement fee or deposit. Initial lodgement fees or deposits are more widely used than fixedfees.
223. Where fees are fixed by councils, the applicant has certainty upfront that the entire cost of the processing of their application has been covered. However, where an initial lodgement fee or deposit is charged, additional processing charges and disbursements are also passed on to the applicant, generally based on the hourly rate of officers. There is no certainty as to whether the final charge to the applicant will be more or less than the initial lodgementfee.
224. As a result of the different approaches to fee setting, the total cost of the consenting process is not clear for applicants in most council areas. Compounding this lack of certainty is the price of obtaining resource consents also varies significantly across the country due to councils’ different cost structures and the extent to which councils subsidise consentcosts.
225. Independent commissioners deciding notified consent applications and plan hearings are usually paid on an hourly or day-rate basis. Hearing costs are on-charged to applicants, with no limit on the total costs which may be incurred. Consequently there are insufficient incentives for commissioners and councils to run the hearing process as cost-effectively as possible.
226. The proposal will introduce provisions that require consent authorities to fix certain consent charges in accordance with new regulations. New regulation making powers would be introduced to facilitate the fixed fee requirements. These regulations would provide the framework under which consent fees must be set, but consent authorities would still be responsible for determining the actualfees.
227. There is scope for the regulations to allow for additional charges beyond the fixed fees in certain circumstances. For example, an additional fee could be charged for every additional information request. The fixed fee provisions would not prevent councils from determining the extent to which they use rates to subsidise the consentprocess.
228. The proposal will also require councils to pay independent commissioners on a fixed fee basis, and to set the applicant’s fee for consent and plan hearings before they start. A new regulation making power will enable councils to be requiredto:
· pay commissioners on a fixed fee basis for each consent or plan hearing (eg, based on complexity and number of submissions) and when an applicant requests for a commissioner to hear their objection to a decision (section 357B of theRMA)
· fix the fee for each hearings process before it begins, for example after the close of submissions.
229. It will be up to each consent authority and local authority to determine its own remuneration policy for commissioners including the amount they will actually be paid. However, the regulation may set out an optional method for calculating their fixed fees. The regulation may also set out a method for fixing the fee for the hearings process overall. This could be based, for example, on the complexity of the application and/or the number of submissions received.
230. This change will not apply to the payment of local government elected members as their fees are set under the Local Government Act2002.
231. Along with providing more certainty to applicants, requiring the setting of fixed fees will likely incentivise councils to improve their performance and efficiency and commissioners to run hearings more efficiently. Consent authorities (in the case of plan hearings) will be
encouraged to manage the process more efficiently (for example, estimating costs, managing input from specialists, legal advice, staff time, venue costs). The fixed fee will give applicants more certainty about the overall cost of the hearings process before itstarts.
232. The change will complement other existing provisions aimed at speeding up the hearing process. These include commissioners allowing evidence to be taken as read (existing provision) and the pre-provision of expert evidence (this provision came into effect inMarch).
233. Both these changes will enable consent authorities and local authorities to more accurately estimate fees for notified resource consents and plan changes which will significantly increase certainty for applicants and reduce the overallcosts.
234. Councils will be required to develop a policy for how they will calculate the fixed fee for commissioners and the fixed fees before each hearing starts. There may be a reduction in charges through fee-setting at the local authority level, and there will be improved predictability for applicants, cost-containment pressure on local authorities and a more strategic approach to identification and recovery of costs). However, the risks are that applicants may pay more or less in fees than the actual cost, it could make it difficult to get good commissioners if paid on a fixed-fee basis, and commissioners may cut hearings short, which will reduce opportunity for stakeholder participation at planhearings
Central government to fix consent processingfees
235. Central government could provide better direction by issuing guidance on the methods of calculating the fixed fees. This option was discarded as it would impinge on business practices and cost recovery practices of localauthorities.
Fixed fees for notified consent applicationsonly
236. Require councils to introduce fixed fees for notified consent applications. Fees could be based on categories of complexity, consent types or thresholds. The incentives of this option would be the same as the proposal on commissioners and councils to minimise hearing costs. There would be greater certainty up-front for applicants but less ability for councils to base the fee on the complexity of the application and the number of submissions received. There is also a greater chance of councils setting fees higher than they need to be to compensate. Given that notified consents make up only 5% of total consents, this option would have limitedimpact.
237. The proposal is the preferred option because it would result in a reduction in charges through fee-setting and increases certainty of costs for applications from the outset. Decision makers are incentivised to hearing matters efficiently. Costs for similar applications (in size, complexity and number of submissions) would be aligned based on the samefactors.
