Alcohol Licensing Fee-Setting Bylaw

Introduction

Southland District Council is reviewing its Alcohol Licensing Fee-Setting Bylaw and would like to know what you think.  Council has a number of fees relating to alcohol licencing. The types of fees that Council charges are outlined in central government regulations. They include:

  • application fees for on/off/club licenses
  • annual fees for on/off/club licenses
  • special license application fees (ie for events)
  • temporary authority applications
  • temporary license applications
  • manager’s certificates.

All councils are able to vary the fee amounts provided in the regulations, through a bylaw process (the exception to this is the fee manager’s certificates, which cannot be varied).  The Alcohol Fee-Licensing Bylaw outlines how much these fees will be.

Background

When this bylaw was reviewed in 2015, Council heard submissions from the hospitality industry that raised concerns with the licensing fee amounts set by the Ministry of Justice, under the regulations.  At that time, there was a large reserve held by the alcohol licensing business unit that could be used to fund a portion of the costs, and a 30% discount to annual fees was considered an appropriate response to the concerns of the hospitality industry.  The situation that Council is currently in is that the income generated through alcohol fees is not meeting the annual costs to run this business unit.  In addition, the reserves have been depleted and there is now a negative reserves balance. 

Proposal

Council is proposing to remove the current discount to annual fees and to increase the following fees to 10% above the amount provided in the regulations:

  • application fees for on/off/club licences
  • annual fees for on/off/club licences,
  • special license application fees to 10% above the amount provided in the regulations.

This would take effect from 1 July 2021 for the 2021/22 and 2022/23 financial year.  After that, these fees would be increased by an additional 5% for 2023/24, 2024/25 and 2025/26.  The 5 or 10% increase would be based on the previous year’s fee. 

The proposal is reflected in the following table:

Fee type

21/22

22/23

23/24

24/25

25/26

annual fees

revoke 30% discount and add 10% to the amount provided in the regulations

 

+ 10%

+ 5%

+ 5%

+ 5%

application fees

+ 10% to the amount provided in the regulations

+ 10%

+ 5%

+ 5%

+ 5%

special licence fees

+ 10% to the amount provided in the regulations

+ 10%

+ 5%

+ 5%

+ 5%

temporary authority applications

No increase, fee amount as provided in regulations

temporary license applications

No increase, fee amount as provided in regulations

manager’s certificates

No increase, fee amount as provided in regulations

annual % increase is based on previous years fee

 

Options for this bylaw

Option 1 (this is option proposed in the draft bylaw)

Remove 30% discount to annual fees, 10% increase in fees (annual, application and special) for 2021/22 and 2022/23, with a 5% increase in years 2023/24 to 2025/26

Advantages:

  • enables full cost recovery and repayment of the negative reserve over nine years 
  • reflects Council’s intention that this business unit is 90% self-funding through fees generated.

Disadvantages:

  • there may be negative feedback from some in the industry from the increasing fees particularly due to the ongoing impacts of Covid-19.

 

Option 2

Revoke the current bylaw, thereby increasing annual fees by 30%, rest of fee amounts are as prescribed by the regulations

Advantages:

  • license holders may see this as preferable to the increases proposed in option one
  • more consistent with the majority of Councils across New Zealand.

 

Disadvantages:

  • would result in an increasing overdrawn reserve
  • there may be negative feedback from some in the industry from the increasing fees particularly due to the ongoing impacts of COVID-19
  • Council will need to increase its rate contribution to this activity from 10% to 22.5% and repay the overdrawn reserve from another reserve.

 

Option 3

Status quo, 30% discount to annual fees

Advantages:

  • No changes to the fees charged to license holders.

 

Disadvantages:

  • would result in an increasing overdrawn reserve
  • Council will need to increase its rate contribution to this activity from 10% to 29% and repay the overdrawn reserve from another reserve.

 

Where to from here?

  • Consultation has now closed
    The consultation period ran from 8am Friday 12 March to 5pm 26 March 2021
  • Hearings will be held on 27 April 2021
    If, in your submission, you signalled you would like to speak to councillors about this bylaw, hearings will take place on 27 April at the Ascot Park Hotel. Staff will get in touch with you about this.
    If you said you did not want to speak about your submission but have since changed your mind, please get in touch and we will try to accommodate you at the hearing - please phone Shanin Brider on 0800 732 732 or email shanin.brider@southlanddc.govt.nz 
    Hearings are open to the public
  • It is intended that Council will deliberate and adopt a draft bylaw at its meeting on 5 May, 2021. Any changes to the bylaw, should there be any, would come into effect from 1 July, 2021. 

Consultation documents