Administering resource consent charges
Abstract
Section 36 of the RMA enables councils to charge applicants for receiving, processing and granting (including declining) consents; and consent holders for administering, monitoring and supervising consents. This Guidance Note provides good practice recommendations for levying such charges (please note this guidance note has the best practice examples included within the guidance note and not included as a separate section).
This guidance note has been prepared as a companion piece with the guidance note Setting charges for processing and monitoring resource consents under the RMA.
Guidance note
The contents of this Guideline cover six main topic areas:
Its focus is on providing actual good practice examples of documents produced by councils on these topics.
Informing the applicant
An applicant should be provided with clear information about:
- What the council will charge an applicant for
- Any additional charges that may be payable
- Objection rights to additional charges
- How to reduce consent processing and compliance monitoring costs.
Some councils have produced their own Guideline documents for consent applicants. Examples of these are:
Schedules of charges
A council should have concise, clearly set out schedules of charges that are easy to follow. These should be included in the council's annual plan. A table is easier to read that just text. Schedules that only include RMA charges are easier to understand than longer lists of all council charges. A schedule of charges should:
- Be simple to use and easy to understand
- Follow a consistent format from year to year (other than when formatting improvements are made)
- Clearly define the different categories of consent related activities that are covered by the charges (e.g. applications, hearings, certificates of compliance, compliance monitoring, enforcement actions, etc.)
- Clearly differentiate any difference in the charges for notified versus non-notified consents
- Clearly identify any compliance monitoring charges payable, either by way of fixed charges payable in advance, or actual and reasonable charges payable in arrears
- Use either single GST inclusive figures; or alternatively show the charge, the additional GST, and the total GST inclusive charge (three figures)
- State clearly if the charge is a set fee, or a fixed initial deposit charge payable in advance only
- Advise that additional charges may be levied at the completion of the process (in the case of initial fixed deposit charges payable in advance).
Good examples of schedules of charges include:
- Waikato District Council's schedule of charges is long and detailed but easy to read in a table format.
If charges are changed councils should advertise the new schedule of fees widely using a variety of methods such as community newspapers and the council's website.
Guidance for officers
Staff should be provided with guidance on council procedures for determining resource consent charges. This could be a basic guide on what activities are chargeable, or a more comprehensive procedures manual. Staff should be given training in what to charge for when they first start working in a resource consent or compliance monitoring unit.
Some good examples of basic staff guidance are:
Some good examples of more comprehensive staff procedures manuals are:
Estimates
Section 36(3A) of the RMA now requires councils to provide estimates of likely additional charges upon request. Although this is a new provision inserted by the RMAA 2003, a small number of councils have previously offered this service for notified applications and more complex non-notified applications.
Estimates should be provided in writing. Any assumptions built into the estimate should be made explicit and clear to the applicant. This may include:
- Whether or not additional information will be required
- The general number of submissions anticipated. Applicants need to be made aware that the number and scope of submissions received can have a significant impact on costs;
- Whether or not a pre-hearing meeting might be held
- The assumption that there will be a hearing
- How long it is assumed the hearing will last
- Whether the hearing will be before councillors or commissioners.
Given the range of variables that can affect the final cost of processing a consent, it may be desirable to cost each of the above items separately, so that a range of likely costs can then be estimated. Updates to estimates should be provided, say after submissions have been received.
Greater Wellington's estimate of costs template (PDF 89KB) shows what they include in estimates and how the assumptions are communicated to the applicant.
An estimate may also include a note about further information requests and reports commissioned by the council.
Council staff should refer to previous, similar applications to work out how many officer hours might be charged for.
Monthly billing on large scale projects can avoid potential over runs by closely monitoring how actual and estimated costs are tracking. Keeping accurate timesheets can also assist here. Councils should advise the applicant in advance if it looks like the final costs are going to exceed the estimate.
Invoicing
Most councils use timesheets to ensure that staff keep accurate records of all time and costs associated with processing resource consents. All the time spent on a job should be recorded regardless of whether all the actual hours are deemed to be reasonable and consequently invoiced to the applicant.
A time recording system should be easy to understand for all staff and not too complex, but able to generate enough detailed information. Accurate time recording also assists in reviewing set fees or deposits.
The Guidance Note titled 'Setting charges for processing and monitoring resource consents under the RMA' provides guidance on invoicing for consent processes. A clear, easy to read invoice should be provided, accompanied by a costing sheet that includes a breakdown of the total costs itemised in the invoice.
Some examples include:
Where a council uses a system of fixed initial deposit charges, applicants should be advised when the deposit they have paid is nearing being spent and additional charges are likely. Another way of keeping applicants informed of costs is to charge at set points during the process (Hamilton City Council does this), or to provide interim monthly invoices for larger or more complicated consents. Interim invoicing can also occur at defined points in the process such as after submissions have closed.
Under section 92(2)(b) of the RMA an applicant must be advised if the council is going to commission a report on any matter raised in the resource consent application. An applicant should be informed that this will generate additional costs that will be payable by them.
The council must send the invoice to the applicant, which is not necessarily the address for service or the applicant’s consultant. The Otago Regional Council's application form (PDF 104KB) includes a separate space for recording the address for invoicing.
For more best practice tips on invoicing see the QP guidance note on charging for resource consents.
Objections to additional charges
Section 357 of the RMA enables consent applicants to object to the council for a range of matters. This Guidance Note deals with objections under s357(4) which states 'any person who has been required by a consent authority to pay an additional charge under s36(3) shall have a right of objection to the local authority in respect of that requirement'.
The Guidance Note titled 'Setting charges for processing and monitoring resource consents under the RMA' explains the difference between fixed charges, fixed initial deposit charges, and additional charges. That Guidance Note also discusses the relative merits of fixed charges compared to initial deposits and the subsequent charging of full actual and reasonable costs in arrears.
Where a council does not use a schedule of fixed charges, it is recommended good practice to advise applicants of their ability to object to additional charges when sending out an invoice for processing a consent or for undertaking compliance monitoring. This information should either be printed on the invoice or included in an accompanying covering letter (if one is used). It should also be included in any general advisory material provided to applicants about consent charges. The advice should clearly explain that the consent applicant only has an ability to object to the additional charges, and not any fixed initial deposit charge already paid.
If an applicant is unhappy with the council’s decision on a s357 objection, then they have the ability to lodge an appeal with the Environment Court under s358 of the RMA. All s357 decisions should be given in writing, reasons for the decision are clearly outlined in terms of the criteria listed in s36(4), and that the applicant's appeal rights under s358 are clearly noted in the decision.
Examples of how applicants could be advised about the ability to object to additional fees are:
The RMA does not provide councils with the legal ability to charge for processing section 357 objections. Councils should not therefore attempt to do so.
Legislation provisions
Resource Management Act
- Section 36(1) enables councils to charge applicants for receiving, processing (including declining) and granting consents; and consent holders for administering, monitoring and supervising consents.
- Section 36(3) allows councils to require the payment of additional charges.
- Section 36(3A) requires councils to provide estimates of likely additional charges upon request.
- Section 36(4) sets out the criteria councils have to have regard to when setting fixed charges.
- Section 92(2)(b) requires councils to advise an applicant if the council is going to commission a report on any matter raised in a resource consent application.
- Section 357(4) provides a right of objection to the council where additional charges have been required.
- Section 358(1) provides a right of appeal to the Environment Court for any person who has made an objection under section 357.
Local Government Act
- Section 102 requires councils to adopt funding and financing policies, and in particular a revenue and financing policy.
Case law
Harrison v Northland Regional Council (W67/2003) - deals with the fact that even if a consent is declined section 36 still applies. The term 'applicant' includes both successful and unsuccessful applicants, and that the term 'processing' includes declining an application.
Barton v Wellington Regional Council (W81/2003) - reasonable costs must take into account factors such as using commissioners, re-using a report from a previous application, necessity of commissioning a consultant report when in-house advice is available. Deals with estimates of costs. Held that applicants can be requested to pay estimate costs in advance of processing.
Related guidance notes
Relevant publications
A free lunch or a fair deal? A good practice guide for charging for resource consent processing (PDF 314 KB)
Published by Local Government New Zealand - March 2001
This report is intended to raise awareness of the key issues regarding the costs of resource consent processing, and also provide good practice advice on administrative charging for resource consents under the RMA. It is targeted to local authority managers and staff responsible for applying the administrative charge provisions set out in section 36 of the RMA.
Current challenges in practice
Estimates
As this is a new requirement some practitioners may have only limited experience in preparing estimates. Councils have indicated that discrepancies can result between the estimate and the final costs because of the large number of variables outside the immediate control of the council. Pre application meetings can be used to discuss the process and likely estimated costs. We welcome any feedback from applicants or consultants on their experiences with the value and accuracy of estimates.
Objections to costs
Objections to costs are often initially dealt with as informal inquiries or complaints at officer level. This can save time and costs as opposed to proceeding directly to a formal hearing. However, councils should use independent commissioners to hear and decide s357 objections that do proceed to a hearing. Council officers and councillors should not be used for that purpose. Councils have commented that objections are generally upheld and, in some cases, have resulted in better record keeping and accurate time recording in order to justify the cost. A significant case taken to appeal may even result in a review of the whole basis for charging.
Processes for setting charges
This guidance note had focused on good practice in applying charges. Some of the variation in charging practice between councils comes down to differences in the policy behind setting charges. Councils use different processes for setting and reviewing charges under the RMA. These wider policy issues are covered in a separate guidance not.
Acknowledgements and editorial comments
This Guidance note was prepared by Erica Sefton from the Ministry for the Environment, based upon research conducted by Irene Clark from the Ministry for the Environment (now Wellington City Council.) The following councils contributed to this research:
- Auckland City Council
- Auckland Regional Council
- Greater Wellington Regional Council
- Hamilton City Council
- Invercargill City Council
- Manawatu District Council
- Otago Regional Council
- Southland District Council
- Stratford District Council
- Tauranga District Council
- Timaru District Council
- Upper Hutt City Council
- Waikato District Council
- Wellington City Council
- West Coast Regional Council
- Whakatane District Council
This guidance note was peer reviewed by Rob van Voorthuysen of Environmental Management Services Limited.
This guidance note was prepared in June 2003.
