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Administering resource consent charges

Abstract

Section 36 of the Resource Management Act 1991 (RMA) enables councils to charge applicants for receiving, processing and granting (including declining) consents; and consent holders for administering, monitoring and supervising consents. This includes charges for requests under  s100A to have a resource consent application heard by one or more independent commissioner(s). This guidance note provides good practice recommendations for levying such charges under s36.

Section 36AA introduces a discount policy for consent administration charges. The discount policy is to be recommended by the Minister for the Environment as a regulation under s360(1)(hj) by July 2010 following consultation with councils. Councils may also adopt their own discount policy provided it is more generous than that set by regulation.

This guidance note has been prepared as a companion piece to the  Setting charges for processing and monitoring consents under the RMA guidance note.

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Guidance note  

This guidance note covers seven main topic areas:

The focus is on providing good practice examples of documents produced by councils on these topics.

Informing the applicant

Both applicants and submitters should be provided with clear information about potential charges associated with the resource consent process, including:

Some councils have produced their own guideline documents for consent applicants. Examples of these are:

When the discount policy is introduced, guideline documents should include information on how administrative charges for resource consents which are processed late at the fault of council are discounted.

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Schedules of charges

A council should have concise, clearly set out schedules of charges that are easy to follow.

These schedules should be included in the council's annual plan. A table is easier to read than just text. Schedules that only include RMA charges are easier to understand than longer lists of all council charges. A schedule of charges should:

Additionally, a schedule should outline any council charges for applications that are directly referred to the Environment Court under s87D. Under s36, councils can recover all costs of processing an application that is directly referred to the Environment Court up to the point of preparing the report and sending it to the Court. This means the costs of initially considering the application, notification and receipt of submissions can all be directly recovered from applicant.  

However, the costs to the council of being party to the proceedings are not recoverable from the applicant. The power to award costs to any party to a direct referral proceeding remains with the Environment Court under s285 just like any other proceeding.  

Good examples of schedules of charges/fees include:

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.

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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.

When the discount policy regulation or council discount policy for resource consent charges is adopted, guidance should be provided on how to determine responsibility for delays in the consent processing time frame and how the discount is calculated. 

Some good examples of basic staff guidance are listed below:

Some good examples of more comprehensive staff procedures manuals are:

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Estimates

Section 36(3A) of the RMA requires councils to provide estimates of likely additional charges upon request. Such requests are usually associated with notified applications and more complex non-notified applications.

Estimates requested under s36(3A) should be provided in writing. Any assumptions built into the estimate should be made explicit and clear to the applicant. This may include:

It is the applicant and/or submitters responsibility to pay for independent commissioners if they request them.

Given the range of variables that can affect the final cost of processing a resource 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 (eg, after submissions have been received).

Greater Wellington's estimate of costs template (PDF, 89 KB) 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.

This is particularly important in terms of the discount policy for resource consents required under s36AA, where a refund may be required if there have been delays in the consent processing. Councils should closely monitor how the costs and processing time is tracking, including the responsibility for any time delays. 

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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 Setting charges for processing and monitoring resource consents under the RMA guidance note 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:

The invoicing process will be different if either an applicant and/or submitter has requested the application to be heard under s100A, depending on who made the request. Under s36, councils can now fix charges for applications where:

Refer to the Setting charges for processing and monitoring consents under the RMA guidance note for further information on setting charges.  

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, 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 s41C (directions and requests before or at hearing) and s92(2)(b) (further information, or agreement, may be requested) 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.

Note that applicants may refuse to agree to the commissioning of a report. If this occurs, the council must notify the application subsequently and consider the application under s104. Refer to the Requesting further information guidance note for more information.

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, 104 KB) includes a separate space for recording the address for invoicing.

For more best practice tips on invoicing see the Setting charges for processing and monitoring resource consents under the RMA guidance note.

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Objections to additional charges

Section 357 of the RMA enables consent applicants to object to the council for a range of matters. Section 357B provides a right of objection to payment of additional charges under s36(3).  Objection rights also apply with respect to a person required by the Minister to pay costs under s149ZD(2) to (4) (costs of EPA processes). Section 357C sets out the procedure for making and hearing objections.   

The Setting charges for processing and monitoring resource consents under the RMA guidance note explains the difference between fixed charges, fixed initial deposit charges, and additional charges. It also discusses the relative merits of fixed charges compared to initial deposits and the subsequent charging of full actual and reasonable costs in arrears.

Councils will also need to consider s36AA when setting charges, as this introduces a discount policy for resource consents that are processed outside of statutory time frames at the fault of council. See the discount policy section for more information.

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 s357B 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 clearly outlined in terms of the criteria listed in s36(4), and the applicant's appeal rights under s358 clearly noted in the decision.

Examples of how applicants could be advised about the ability to object to additional fees are:

While it may be possible for councils to charge for processing objections under s357, 357A, and 357B, the situation in relation to fixing charges for objections is not clear.  Councils that intend to fix charges for objections should seek legal advice on the legality of those charges. 

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Discount Policy

The 2009 amendments to the RMA introduced s36AA, which requires a discount policy on administration charges for resource consents. The discount policy will be set by regulation by the Governor-General in July 2010 following recommendations by the Minister for the Environment who will consult with local authorities.

Section 36AA also allows councils to develop their own discount policy. This policy must be adopted in accordance with the consultative procedure under s83 the Local Government Act 2002. Section 36AA also specifies that:

Councils should therefore determine whether they should develop their own discount polices in light of the regulation set. If a council adopts its own discount policy it should provide guidance on how to determine the responsibility for failure to meet the statutory time frame and the method to determine the discount.   

Legislation provisions

Resource Management Act

Local Government Act 2002

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Case law

Harrison v Northland Regional Council (W67/2003) – deals with the fact that even if a consent is declined, s36 still applies. The term 'applicant' includes both successful and unsuccessful applicants, and the term 'processing' includes declining an application.

Barton v Wellington Regional Council [2004] NZRMA 337 (ENC) – states that reasonable costs must take into account factors such as using commissioners, reusing 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 estimated costs in advance of processing.

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Related guidance notes

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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 at council managers and staff responsible for applying the administrative charge provisions set out in s36 of the RMA.

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Current challenges in practice

Estimates

Some practitioners may have 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. It is generally useful to break down the estimated costs into different components of the resource consent process and state that these costs can vary depending on certain factors.

Objections to costs

Objections to costs are often initially dealt with as informal inquiries or complaints at the officer level. This can save time and costs as opposed to proceeding directly to a formal hearing. However, the introduction of a discount policy on charges for resource consents may reduce the frequency of objections as applicants may no longer wish to object.

Where an objection proceeds to a section 357B objection, 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 has 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 the Setting charges for processing and monitoring resource consents under the RMA guidance note.

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Acknowledgements and editorial comments

This guidance note was prepared in June 2003 by Erica Sefton from the Ministry for the Environment, based upon research conducted by Irene Clark from the Ministry for the Environment (who is now with Local Government New Zealand.) The following councils contributed to this research:

This guidance note was peer reviewed by Rob van Voorthuysen of Environmental Management Services Limited.

Updates to this guidance note were made in November 2009 by Jerome Wyeth of Hill Young Cooper Ltd and the Ministry for the Environment.