Section 36(1)(c) enables councils to charge for the cost of 'its functions in relation to the administration, monitoring and supervision of resource consents'. The same funding policy and legal constraints therefore apply to monitoring charges that apply to consent application charges.
In terms of funding policy for consent monitoring and supervision, these costs should be fully charged to consent holders as the monitoring activity is solely occasioned by the existence of the consent.
Types of monitoring
Some compliance monitoring activities will be routine, involving a simple site inspection and the filling in of a site visit form. These inspections might be one-off post commencement or construction events, or occur annually. In these cases monitoring fees could be fixed and charged in advance.
Other compliance monitoring activities will be more complex, involving the taking of samples, or multiple visits each year. In these more complex situations any charges levied in advance should be limited to fixed initial deposit charges. These charges should be calculated based on the actual time and disbursements anticipated to be spent on monitoring the consent. Any additional actual costs can then be charged in arrears.
Where a simple post-commencement or construction monitoring inspection is required, it is acceptable practice to invoice for that monitoring inspection at the time the consent is deemed to commence, if such charges payable in advance have been fixed and included in the annual plan. Councils should note however that this would preclude them charging additional costs incurred if the inspection takes more time than was estimated when setting the fixed charge.
It is important that councils clearly identify what the fixed initial deposit charge for compliance monitoring is designed to cover. If the charge is based on the cost of undertaking a site visit and associated file maintenance for a compliant site, then this should be stated in the Schedule of Charges. The costs of dealing with any non-compliance would then be recovered through actual and reasonable additional charges.
Council monitoring charge requirements
Councils should ensure that:
Standard fixed compliance monitoring charges payable in advance for different types of consents are only set for routine consents requiring simple, one-off or annual site inspections. Such charges can not be supplemented by additional actual and reasonable charges in arrears.
Standard fixed compliance monitoring charges payable in advance are levied at the time a consent is deemed to commence.
Standard fixed compliance monitoring charges payable in advance are listed in an annual plan schedule by consent category or activity type.
Fixed initial compliance monitoring deposit charges payable in advance for the monitoring of complex consents are calculated based on the actual time and disbursements anticipated to be spent on monitoring each particular consent.
Fixed initial compliance monitoring deposit charges payable in advance for complex consents are listed in an annual plan schedule which names the consent holder and their initial fixed deposit charge. A statement should be made in the plan that any additional costs over and above the initial fixed deposit will be charged in arrears.
Fixed initial compliance monitoring deposit charges payable in advance are levied once the annual plan is adopted, preferably in July or August each year.
If compliance monitoring does not occur as planned, any fixed monitoring charge or fixed initial deposit charge payable in advance is refunded.
If the compliance monitoring of complex consents incurs less costs than the initial fixed deposit charge payable in advance, then a partial refund of the deposit is made.
Dealing with non-compliance is covered by additional charges levied in arrears.
Consent holder input
Fixed initial monitoring deposit charges payable in advance can total several thousand dollars for large or complex consents. As these charges are set through the annual plan process and the special consultative procedure under s83 of the LGA, they are not subject to RMA s357B objection and s358 appeal rights. This raises an issue of procedural fairness for the consent holder.
Consent holders should be advised early in the annual plan process what their monitoring charges are likely to be for the next year. They should be invited to comment on the charges. Councils should be willing to take on board any concerns expressed and act on them in a reasonable manner.
Consent holders should also be given the opportunity at this time to undertake self monitoring for some activities. An example would be the routine collection and analysis of water quality samples. If an applicant can do these tasks at less cost and to the same quality standards as the council, then they should be allowed to do so. This might particularly apply where there are significant travel and time costs for council staff in visiting remote sites.
When the annual plan is notified, all named consent holders liable for fixed initial compliance monitoring deposit charges payable in advance should be written to, advised of their charge, and informed about the annual plan submission process. It would also be helpful if the new charge was compared to the previous year's figure, and the reasons for any significant changes listed. This does not mean that they need to be sent a copy of the entire annual plan, but simply informed about their compliance monitoring charges for the coming year.
Public good monitoring?
Some councils consider that consent compliance monitoring and supervision is a public good as it protects the environment and the community from potential adverse effects arising from the resource use or development activity authorised by the consent. In those cases compliance monitoring is largely or totally funded from general revenue (e.g. rates).
Such an approach may not be appropriate. It is important that the approach responds to s36AAA(3)(b) criteria which advises that the costs with monitoring activity solely occasioned (caused) because a consent has been granted are recoverable. In other words, if there was no consent there would be no need to do any compliance monitoring. Therefore, councils need to consider if it is appropriate for the wider community bear any of the monitoring costs?
There may be situations where the consent holder's compliance monitoring programme yields 'public good' information that can be used by other parties (e.g. ground water levels or river water quality data). In such cases it may be appropriate to recognise that fact by reducing the compliance monitoring charge to the consent holder and accounting for the costs of the public good monitoring activities in other council programmes such as SOE monitoring.
Annual administration charges
Under the provisions of s36(1)(c) some councils levy an annual administration charge on consent holders. Such charges are typically in the range of $30 to $80 per consent per annum. The charges cover the routine administration costs of the consent activity that are not able to be charged directly to consent applicants for consent processing, or to consent holders for compliance monitoring.
Annual administration charges are quite legitimate. However care needs to be taken in determining their magnitude. It is not appropriate to use such charges as a simple top up between the total operating costs of the consents unit and the revenue received from application charges for example.
If annual administration charges are to be levied then they should be based on a careful analysis of the actual costs of consent related activities that are either occasioned by the applicant or consent holder, or are of direct benefit to them over and above the general community (the s36AAA(3) tests). Such activities might include:
consent computer database maintenance
consent file system maintenance
correspondence to consent holders advising their consents are soon to lapse or expire
dealing with enquiries related to generic types of consented activities (e.g. dairy shed discharges)
the preparation of education material for consent holders on complying with their consent conditions, or of reducing their compliance costs.