The Infrastructure Funding and Financing (Western Bay of Plenty Transport System Plan Levy) Order 2022

Te Tūāpapa Kura Kāinga – Ministry of Housing and Urban Development (HUD) is responsible for administering the Infrastructure Funding and Financing Act 2020, and also has the roles of ‘recommender’ and ‘monitor’ under the Act.

For more information on the Infrastructure Funding and Financing Act, and HUD's roles, please read our webpage about the Infrastructure Funding and Financing Act 2020.

The Western Bay of Plenty Transport System Plan

The Transport System Plan aims to support a projected population of 258,000 residents and 34,000 new homes in Tauranga, resulting in more than one million extra transport movements every day by 2050. The plan considers a range of transport modes including roads, rail, public transport, freight, walking and cycling.

The Transport System Plan seeks to:

• Support quality urban growth by improving access to social and economic opportunities like schools, jobs, GP clinics and shops by different transport modes (including walking, cycling, buses, and vehicles.)
• Increase use of public transport, cycling and walking to help reduce transport-related greenhouse gas emissions
• Maintain or improve off-peak travel time predictability for freight via road and rail and
• Contribute to a reduction in road fatalities and injuries

The levy

Leviable properties

The levy applies to all properties within the district in which Tauranga City Council is entitled, at any time, to charge general rates under the Local Government (Rating) Act 2002 (Tauranga City Council rating area), excluding any protected Māori land. Properties subject to Tauranga City Council's rates remissions policy will also not be charged the levy.

If the boundaries of the Tauranga City Council rating area are updated over time, the levy area will automatically update alongside it.

Fifty per cent of the proposed levy will be charged to residential rating units in the levy area and fifty per cent will be charged to commercial rating units.

The capital value (CV) of a rating unit will be used for assessing the annual levy liability of that rating unit:

• It is estimated that a median CV residential rating unit would be charged a levy of $68 in the first levy year (2024/25), increasing to $80 in 2029/30 and $95 in 2034/35.
• It is estimated that a median CV commercial property would be charged a levy of $521 in the first levy year, increasing to $618 in 2029/30 and $730 in 2034/35.

Protected Māori land

Protected Māori land can only be included in a levy area with the written consent of the owners of the land. This consent must be provided in advance of the recommendation report being provided to the Minister of Housing.

 Protected Māori land is defined in section 11 of the IFF Act(external link) and generally includes Māori freehold land and Māori customary land. However, it also applies to a number of other categories of land, including general title land owned by Māori if it was previously Māori freehold land, but had its status changed by Part 1 of the Maori Affairs Amendment Act 1967 or an order of the Māori Land Court made on or after 1 July 1993.

It was not feasible for Tauranga City Council to seek to obtain the consent of owners of protected Māori land and as such, no parcels of protected Māori land have been included in the levy area.

The levy period

The levy will be charged for 30 years from 1 July 2024 to 30 June 2054.

Maximum levy revenue

The maximum amount of levy revenue that may be collected over the entire levy period is $524,846,339.54 (plus GST, if any).

This amount may be reduced from time to time if the SPV’s forecast of its excess levy revenue exceeds $1 million (see below). Any reduction in the maximum levy revenue will be published here.

Setting annual levy

The annual levy is the amount of levy the SPV intends to collect in a given levy year. Before the start of each year in the levy period, the SPV must set the annual levy for the upcoming levy year by:

1. Taking the intended annual levy for that year and
2. Adding the annual reconciliation amount for the prior levy year.

The annual reconciliation amount for a levy year will be calculated with the following steps:

1. Start with the annual levy for the year being reconciled.
2. Subtract the amount of levy assessed to date in the year being reconciled.
3. Subtract any increases in levy assessments for prior levy years determined after the previous annual reconciliation was undertaken.
4. Add any decreases in levy assessments for prior levy years determined after the previous annual reconciliation was undertaken.

The annual reconciliation for a levy year will occur between Tauranga City Council sending out the final levy invoices for the year in February, and the SPV setting the annual levy for the next year by May 10.

As such, there may be changes to the amount of levy assessed for a levy year after the reconciliation for that year has been completed (for example, because of an objection raised by a as to the amount of levy for which they have been assessed that is not resolved at the time the reconciliation is completed).

Steps 3 and 4 above ensure these changes to the amount of levy assessed after the reconciliation will be taken into account in a later reconciliation.

Collecting the levy

The levy liability for a property will be included in the rates invoice issued by Tauranga City Council for that property and levies will be paid to Tauranga City Council alongside rates. Tauranga City Council will pass on the levy revenue it collects to the SPV.

Levy remission and postponement

The SPV’s policies for levy remission and postponement are published here:

Levy remission policy (PDF, 424 KB)

Levy postponement policy (PDF, 194 KB)

Annual levy resolutions

Each annual levy resolution contains the information necessary for Tauranga City Council to correctly assess the amount each rating unit should be charged during the levy year, and the total amount of levy revenue that the SPV intends to collect in the levy year.

The annual levy resolutions for this levy will be published here no later than the May before the start of the levy year to which the resolution relates.

2024/25 Annual levy resolution  (PDF, 995 KB)

Eligible Costs

Levy revenue may be applied towards the following types of eligible costs:

• the costs of the construction of eligible infrastructure, including establishment costs
• financing costs such as interest and fees, debt repayment and equity repayment and returns
• the costs of the administration of a levy
• the general operating costs of the responsible SPV and
• any further costs incurred by the responsible SPV in complying with the Act and the Levy Order.

Caps on the application of levy revenue to certain eligible costs

There are caps on the total level of IFF funding that each eligible infrastructure project may receive:

• the total construction costs of the TSP 009 (Tauriko West Enabling Work Package) project that are to be met by the levy must not exceed the lesser of 15% of the total final costs of construction of that project and $50 million plus GST (if any).
• the total construction costs of the TSP 002 (Hewletts Road sub access area) project that are to be met by the levy must not exceed the lesser of 65% of the total final costs of construction of the project and $110 million plus GST (if any).
• the total construction costs of the TSP 018 (Cameron Road multi-modal upgrade stage 2) project that are to be met by the levy must not exceed the lesser of 65% of the total final costs of construction of the project and $110 million plus GST (if any).
• the total construction costs of each of the other Transport System Plan eligible infrastructure projects that are to be met by the levy must not exceed the lesser of 65% of the total final costs of construction of the project and $50 million plus GST (if any).

In addition, eligible costs to complete business cases are capped at $25 million plus GST (if any).

Forecast excess levy

Excess levy is levy revenue that, at the end of the levy period, has not been applied to eligible costs. The SPV will estimate the first forecast excess levy prior to the first levy year and subsequently, the SPV is required to periodically forecast its excess levy. These forecasts will occur on and then at 30 June 2028 and at least every subsequent 30 June thereafter.

To calculate its forecast excess levy, the SPV will add its cash balances to its forecast of the expected levy revenue over the remaining levy period and its forecast of the expected drawdowns of debt and equity funding over the remaining levy period, and subtract its forecast of the expected eligible costs over the remaining levy period.

Reduction in maximum levy revenue

If at any time the forecast excess levy is greater than $1 million (excluding GST), the SPV will be required to reduce the maximum levy revenue to ensure the forecast excess levy no longer exceeds $1 million. In addition, the SPV will be required to make corresponding amendments to the intended annual levy revenue for the remainder of the levy period.

The reduced intended annual levy revenue would be used for setting the annual levy for levy years beginning after the reduction occurs.

The Special Purpose Vehicle

Transport System Plan Finance LP is the Special Purpose Vehicle for the purposes of the TSP Levy Order. This SPV is wholly owned by Crown Infrastructure Partners through an intermediate holding company.

Crown Infrastructure Partners is unable to sell its equity in the SPV unless consented to in writing by HUD as the IFF Act monitor. If it does so, HUD will be able to direct the SPV to not pay distributions to the new equity holders. However, certain rights of financiers (for example, the right to appoint a receiver, a receiver and manager, an administrator, or a liquidator to the SPV, or to acquire the partnership interests in the SPV and shares in its general partner) will be provided for without requiring HUD’s consent.

Annual Reports

The annual reports for this levy will be published here once available.

2023/24 Annual Report (PDF, 9.3 MB)