Council owns a significant amount of property that it acquired over the years. Some property was given to Council as a result of a bequest, some came from the local authority restructuring that occurred in 1989, and some property was purchased for strategic reasons.
Council owns property so it can deliver services as defined in the Local Government, and Amendment, Acts of 2002 and 2012 respectively. The range of services Council delivers is varied and so the property asset is diverse.
Owning and managing property has a cost associated with it, including managing tenancies and doing property maintenance, through to earthquake-strengthening costs in some cases.
Concerned at the cost and that some of the property had been purchased for strategic reasons that no longer exist, Council reviewed the property portfolio to determine which properties were core or non-core to Council business.
In 2014, Council developed principles as a guide to help identify whether properties are core or non-core. In 2015 the Property Strategy, which went through a public consultation process, was developed and adopted by Council.
The Property Strategy can be viewed below. It provides an overarching framework which enables Council to:
- critically examine Council’s property portfolio
- assist in decision-making.
Property Strategy(PDF, 5MB)
Council’s intent through the Strategy is to only hold and maintain those assets that are needed to fulfil the requirements of primary legislation and give effect to those objectives identified by the community in the Long Term planning process.
In the 2018-2038 Long Term Plan Council resolved to “own and maintain only core property by 2028”.
Core properties in this context means those services and properties managed strategically that are vitally important for the wellbeing of the community, such as:
- the three waters and solid waste,
- those that, as a result of legislation, can’t be provided by others, such as cemeteries, or
- those that are unlikely to be provided by private organisations but are critically important to the health and wellbeing of the community, such as swimming pools, public toilets, and some library services.
Following the adoption of the strategy Council began a process of evaluating its properties. Phase one of the evaluations is completed and sales of property identified as non-core are occurring.
What is Council’s property portfolio made up of?
Horowhenua District Council has a property portfolio of about 550 (2014) properties with a total rateable value of just over $100 million (2014). The property includes land, buildings and facilities for community purposes such as halls and cultural community hubs, cemeteries and libraries; recreation and reserves land and facilities; general business premises including offices and depots; properties held for community good that may be leased to voluntary and community groups; miscellaneous land such as endowment land; and forestry blocks.
How do you determine what is core and what is non-core?
The Council’s Property Strategy sets out clearly all the steps that Council must follow, from deciding whether a property is needed to how a surplus property should be disposed of. It contains ten key strategic and operational evaluation criteria:
- Strategic Relevance
- Core Business
- Functionality and Utility
- Cost Effectiveness
- Return on Investment
- Capital Costs
Other issues considered during the evaluation included:
- Impact of the Reserves Act
- Multiple uses
- Property condition
- Interests of long-standing users
- Commercial considerations
Council also has a Significance and Engagement Policy that identifies strategic assets – you can view the policy on our Significance and Engagement Policy page.
Why should non-core land and buildings owned by Council be sold?
An independent report by Stimpson & Co concluded Council wasn’t getting a satisfactory return on its non-core property investments.
Despite being non-core assets, Council has to maintain each property and building, which is a cost to the ratepayer. Council is also facing the prospect of strengthening costs associated with earthquake-prone buildings that may be non-core.
Will the community be consulted if you decide to sell a property?
The Property Strategy considers whether:
- each property is needed for core business,
- it is suitable for its intended purpose,
- it is being well used,
- the costs of maintaining it outweighs the benefit it provides to the District, and
- several other factors.
If a property does not meet the criteria it will be considered for disposal.
Some properties will require public consultation to decide whether they should be retained or disposed of. Others, such as commercial property, would not normally be consulted on as they have no impact on outcomes for the community.