Flood Risk Mitigation Aotearoa
P U R P O S E
Provide a roadmap to build further community resilience against flood risks by securing a
central government Budget 2023 commitment (and subsequently yearly commitments) to
co-investment into regional council flood protection infrastructure.

B A C K G R O U N D
INITIAL CO-INVESTMENT REQUEST (AUGUST 2020)
In 2018, on behalf of all regional councils (Te Uru Kahika), Tonkin + Taylor col ated critical
information about the investment and protection value provided by existing flood
protection schemes. This was included in a Te Uru Kahika flood risk co-investment report
(August 2020) for Ministers.

This report requested a central government contribution of $150m per annum to add
resilience against the flood risks posed to many New Zealand communities. This request
was on top of the $200m of on-going investment committed by regional councils.
Together this would provide the  $350m per annum required to take account of the
increasing impact of climate change on flood flow magnitude and frequency.

The report also contained ten case examples describing the devasting impact on
communities of the flood events that had occurred in their regions over the previous five
years.
CABINET PAPER (JULY 2020)
In 2020, DIA prepared a Cabinet paper exploring and establishing broad government
policy about flood risk resilience. The paper noted (paraphrased here for brevity):
•  Current funding arrangements for flood protection infrastructure were
established over 30 years ago. They are no longer sustainable or consistent with
delivering outcomes in line with (the) proposed framework and principles
(outlined elsewhere in the Cabinet paper).
•  Central Government’s funding approach to building resilience should consider the
benefit principle, fairness, and intergenerational wellbeing.
•  Officials will work with Local Government to develop a revised funding model for
flood protection, based on the Cabinet paper’s proposed framework and
principles, for implementation over the longer term.
•  Officials will target action where national assets and national interests warrant
Central Government intervention and funding.
•  Officials will support projects where there is a significant economy of scale, time
constraints, distributional concerns, a need to protect health and safety, and to
protect kaitiakitanga.
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SHOVEL READY PROJECTS (2021)
The 2020 co-investment report was seminal in persuading government to fund Shovel
Ready, Post-Covid-Recovery flood protection projects. A total of 55 projects, with a value
of around $313m, received $217m from central government. The cost share from central
government toward these projects was 75% for poorer regions and 64% for others.
These projects are now being delivered by regional councils throughout New Zealand.
Governance oversight of this delivery is provided via Kānoa.

Most existing Shovel Ready projects are timed to be completed by 30 June 2023. Some
wil  take another year or two to complete. There has a been a substantial commitment by
regional councils to build increased staffing and associated capacity to undertake this
major programme, alongside the step-up made by contractors, and employment within
communities. This lends itself to future continuity, as part of a central / regional
government community flood risk resilience co-investment programme.
SUPPLEMENTARY CO-INVESTMENT REPORT (JANUARY 2022)
Central government’s co-funding of shovel ready projects was valued and valuable to
those regional communities receiving funding. The pervading problem is this funding was
a ‘one-off,’ and available only to those projects that were ready to go. The funded
projects did  not necessarily all reflect urgent community vulnerability and flood risk /
resilience investment needs.

This vulnerability was aptly displayed by three community flood events that occurred in
2021. These provided the base for the three case studies (Ashburton, Blenheim, and
Westport) described in a further 2022 ‘supplementary’ co-investment report.

The 2022 supplementary report re-emphasised the call for national leadership in flood
management as a ‘critical first action’ response to the challenge of managing the flood
risks associated with climate change. The report also:
•  Noted flooding is the number one commonly occurring natural hazard in New
Zealand.
•  Noted the regional council commitment to apply a contemporary multi-tool
approach to flood risk management.
•  Noted the cost-benefits of flood protection schemes (NB an NZIER report
prepared for DIA in 2020 suggested that investment in flood protection structures
provides better value for communities than investment in protecting communities
from any other natural hazard).
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•  Requested central government co-investment of $150m pa to fill the gap in the
$350m per annum total sum identified by regional councils as being the necessary
investment in future community flood protection.
•  Called for central government to work with regional councils to immediately
reach agreement on co-investment expenditure guidelines.
GOVERNMENT RESPONSE TO SECOND ‘SUPPEMENTARY’ REPORT
Minister Mahuta responded to Te Uru Kahika’s second (2022) supplementary co-
investment report by noting the:
•  Possibility of including flood protection schemes in future ‘post 2022’ budgets.
•  Use of the new Climate Emergency Response Fund (CERF) as a possible source of
funding.
•  Intent to view flood protection schemes as part of an integrated suite of flood risk
management solutions, some of which wil  be included in proposed resource
management legislative amendments; some of which will be outlined in the
Climate Change Adaptation Plan.
•  Value of the work undertaken by the River Managers’ SIG on flood risk
management issues.
•  Opportunity that wil  be provided by the Westport ‘pilot’ co-investment business
case to develop and test a framework for enabling a collaborative effort to reduce
flood risks.
WESTPORT PILOT CO-INVESTMENT CASE STUDY
The Westport community flood risk resilience report applied central government’s ‘Better
Business Case’ (BBC) framework to seek $45m (80%) of the $56m cost of proposed
initiatives falling across protect, accommodate, retreat / relocate, and avoid (‘PARA’)
flood risk mitigation elements. DIA was the lead Ministry for this work, along with
Treasury, MfE and NEMA.

West Coast Regional Council and Buller District Council sent the business case to Minister
Mahuta on 30 June 2022. It is expected to go to Cabinet for final approval in September
2022.

DIA are now (July 2020) assessing the Westport business case to determine its validity on
technical, funding, policy, and political grounds. As part of this assessment, DIA have
undertaken a ‘rapid assessment’ of the many other communities throughout New
Zealand, facing a similar position to that experienced in Westport. To do this DIA
commissioned:
•  NIWA to undertake community deprivation, flood risk and potential value of
assets at risk modelling.
•  Tonkin + Taylor to review regional council LTP and 30-year Infrastructure Plans to
identify council future investment needs and intentions, noting that DIA has a
Tonkin + Taylor staff member assigned to work directly to DIA on a similar
proposal.
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•  Regional councils to identify, via MURAL postings, those communities they feel
are most at risk.

The results of the DIA work have not yet been published. Notwithstanding, the River
Managers SIG’s earlier work confirmed a future need for $350m of investment to
mitigate the risk of community flooding. More recently, the River Managers have
commissioned one of their members to do a stock-take / update on regional council flood
protection investment intentions.

M A T T E R S   I N F L U E N C I N G   F U T U R E   T E   U R U   K A H I K A   C O - I N V E S T M E N T
R E Q U E S T S
CABINET PAPER (JULY 2020)
The July 2020 Cabinet paper provides a clear indication of central government’s interest in
co-investment, but within defined bounds. These bounds are mostly related to a
willingness to focus funding toward communities with deprivation, to projects reflecting
other matters of national interests, and to projects reflecting the PARA approach.
PRECEDENT FROM WESTPORT
The Westport case study provides a likely precedent for that now required to be applied
for Te Uru Kahika to be successful in their request for future community flood risk-
mitigation co-investment funding.

Apart from the Westport project’s adherence to the BBC framework (see further details
provided below), other important features likely requiring to be mirrored from the
Westport case study in future similar requests, include:
•  Application of an adaptative pathway approach.
•  Initial consideration of a wide / long list of community flood risk resilience options
and then the reduction of this long list to a short list of preferred interventions.
•  Use of community and government derived critical success statements and
objectives.
•  Assessment of preferred options against an agreed list of assessment criteria such
as those related to constructability, consent-ability, Te Ao Māori, levels of service,
community and landowner approval, disruption, access and occupation
agreements, co-benefits, impact on crown assets such as rail and roads, multi-
hazard risks and benefits, price and the timeframe / staging of the project.

With the above points in mind, it is clear the primary need is for more investment in
protection / structural solutions – alongside longer-term spatial changes, higher levels of
community preparation and other measures.

It is the investment in the structural protection elements of flood risk mitigation that is
the focus of this roadmap. What is well recognised though, is that this investment must be
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part of a comprehensive multi-tool approach to building community flood risk resilience.
Most of the non-structural / protect elements of the necessary multi-tool approach will be
acted upon and / or funded local y.

BETTER BUSINESS CASE FRAMEWORK
An overview of the five BBC elements fol ows, together with a brief description of what
regional councils recognise as the actions required to satisfy these elements. (NB further
details are provided within a model provided in appendix one).
•  Strategic case: the alignment of the need for change with wider national and
sectoral priorities, goals, policy decisions and programmes, including a
commitment to the four well-beings and living standards framework, district /
regional equivalents of these matters, the scope of the project, the chal enge to
be addressed and the benefits sought.
•  Economic case: the critical success factors, the process applied to move from a
long list of options to a preferred set of options, the economics of preferred
options and the cost / benefit of these options.
•  Management case: the approach to be applied to deliver on the preferred set of
options, and the plan to allow for that delivery.
•  Commercial case: the procurement strategy for the materials, labour and project
management and the ability of the market to meet these needs.
•  Financial case: a high-level assessment of the affordability of the short-listed
options and possible funding sources.
This roadmap proposes a path for establishing a national framework for central
government co-investment in flood schemes. It is not a business case for making
investment in a particular set of nominated projects from specified regions although case
examples wil  be used to support the need for this framework.
GOVERNMENT’S BUDGET REQUEST GUIDELINES
Treasury’s budget formulation process will need to be followed to secure central
government’s commitment to the inclusion of the requested co-investment as part of the
2023 budget. It has the fol owing broad steps:
•  Strategic phases (June – December): This involves the development of an overall
strategy for the Budget, including strategic priorities and targets for spending,
revenue, the projected fiscal surplus, and public debt intentions. Decisions taken
during this ‘strategic phase’ are reflected in the Government's Budget Policy
Statement (BPS) which is required to be tabled in Parliament in the subsequent
March.
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•  Decision phase (January - April): Ministers put forward Budget initiatives for
consideration and then the Treasury assesses them and prepares
recommendations on which initiatives Ministers should support. This advice is
then collated, shared with various Ministerial Groups, and considered by Budget
Ministers (the Prime Minister, the Minister of Finance and the Associate Minister
of Finance, the Hon Dr Megan Woods) who put forward a Budget package to
Cabinet for a final decision.
•  Subsequent phases: This involves the
o  Budget production phase leading to ‘Budget Day’ legislative phase, in turn
leading to Parliamentary support of Government’s budgetary package
(spending for the year(s) ahead.
o  Legislative phase often involving examination of the estimates for each
Vote by the appropriate Select Committee.
o  Implementation phase leading to spending being authorised via the
Appropriation (Supplementary Estimates) Bill.

The role of Treasury in the budget build process includes them compiling and processing
budget ‘initiative proposals’ from Vote Ministers. The Treasury have a set of standard
instructions (‘Treasury Circulars’) they and departments must follow when preparing
budget requests.

The timing for the Te Uru Kahika request is therefore good. The Treasury process implies
Te Uru Kahika will first need to secure the support of DIA and Vote Ministers Nanaia
Mahuta and Kieran McNulty before then formally lodging an application. It also implies
Treasury should become part of the ‘Community Flood Risk Resilience Aotearoa’ project
budget-build process.
DIA’S RESPONSE TO PREVIOUS TE URU KAHIKA CO-INVESTMENT REQUESTS
DIA and MFE’s current work program is substantial. It has been viewed by them as too
cluttered to consider co-investment in flood risk protection measures. DIA officials have
said they do not have sufficient budget to add projects to their current workload.

Te Uru Kahika understands this pressure and notes the DIA / MfE’s etc., current
programme includes participation in the development of the:
•  Climate Change Adaptation Act.
•  National Adaptation Plan.
•  Natural and Built Environments Act (NBE Act).
•  National Planning Framework content as part of proposed NBE Act.
•  Westport community flood risk resilience mitigation pilot study / business case.

In addition, it is likely the absence of a clear ‘Vote’ category (up until the establishment of
the Climate Emergency Response Fund – CERF) for sourcing community flood risk
resilience co-investment funding may have further complicated things.
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Nevertheless, Te Uru Kahika would argue that building community resilience against flood
risks via structural solutions is not something that can be left to languish. It is a critical
part of adaptation to climate change.

In addition, Te Uru Kahika note that the earlier active Community Resilience Officials
Group that Basil Chamberlain and other council representatives were part of, appears
currently inactive, but with potential to be re-activated.

POTENTIAL FUNDING SOURCE
The CERF is a potential source of government funding for their co-investment in
community flood risk mitigation. The initial focus of expenditure from this fund has been
on emission reduction actions. Treasury have provided an indication that the longer-term
focus will be on ‘adaptation’ actions. This plays wel  to the current Aotearoa community
flood risk resilience programme’s needs.
WORK STREAMS THAT MAY BE DRAWN FROM THE ABOVE SIGNALS
The above information provides several pointers about what Te Uru Kahika may now need
to do to secure central government’s commitment to co-investment in community flood
risk mitigation. It implies Te Uru Kahika may need to:

1.  Assess comparative community vulnerability / deprivation / affordability.
2.  Better document the state of existing protection infrastructure and the
investment needed to provide higher levels of climate-change-ready community
resilience.
3.  More accurately describe the incremental nature of the Te Uru Kahika co-
investment request and more accurately tie this to potential priority projects that
should be funded in years one, two, three and beyond.
4.  Refresh previous documentation of the value of the assets and communities
protected by flood protection structures and the cost benefit of investing in these
structures.
5.  Describe the capacity / capability of regional councils to implement / deliver flood
risk mitigation structural proposals.
6.  More ful y document the flood protection investment needs documented in
regional council LTPs and 30-year investment plans – noting these current
documents may record information that is cautious / risk averse because of the
absence of local funding sources.
7.  Factor in consideration of how Shovel Ready Kānoa Climate Resilience Flood
Protection Programme funding and delivery will be included in 2023-24 and 2024-
25
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8.  Consider the extent that the shovel ready / Kānoa programme can be adapted to
provide a governance oversight mechanism for the longer-term co-investment
requested, at least for the initial next 3 years.
9.  Develop general and project-specific co-investment assessment principles and
prioritisation criteria, including those related to the socio-economic status of
affected communities.
10. Establish a process through which eligible projects may be requested from
regional councils and then considered and approved for co-investment and then
governed, managed, and implemented.

S C O P E   A N D   A S S U M P T I O N S   -   S U M M A R Y

Flood risk mitigation structures focus: The past Te Uru Kahika co-investment reports have
focused on flood risk mitigation structures. It is proposed this focus be retained, albeit
supplemented with clear statements indicating how other PARA elements wil  be
progressed in an integrated manner or as part of the commitment to a longer-term
managed-adaptation planning approach.

Partnership with DIA: It is also clear from the above information it will be difficult to
navigate through the Treasury budget-application process unless Te Uru Kahika secures a
partnership in this process with DIA.

Incremental build of investment request: A ten-year investment frame is proposed with
an agreed incremental build. This may progress from the current Shovel Ready focus –
with associated capacity and capability being retained, to central government co-
investment of say:
•  $50m at 2023/24
•  $100m at 2024/25
•  $150m at 2025/26
•  $150m in out years forward until 2033 and beyond.

Cost share formula: The core decision needing to be developed, with central government
assistance, is how much money or what percent of the total cost will be allocated by
central government for such variables as:
•  Operational / maintenance projects.
•  Capital projects.
•  Cost share variance at different project locations - to reflect the variance in the
comparative wealth / affordability / deprivation status of affected communities.

More robust evidence: It is clear regional councils (alongside DIA) will need to do more to
clearly demonstrate how flood risk mitigation structural project proposals will satisfy the
information needs listed at points 1-10 above.
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P R O J E C T   P H A S E S   A N D   O U T P U T S

Te Uru Kahika envisage applying the following broad phases to this project, noting that
due to deadline constraints, several of these will be developed in parallel.

PROJECT
BACKGROUND
ENQUIRY – TEST CO-
ESTABLISHMENT
RESEARCH
INVESTMENT CONTENT

DEVELOP
PARTICIPATE IN
CONFIRM
CONSOLIDATED
BUDGET BID PROCESS
COINVESTMENT
BUSINESS CASE
DELIVERY &

01
Phase one: Project establishment and securing agreement

  The River Managers SIG will:
o  Socialise and seek the support of the River Management thought leaders
for the approach described in this paper.
o  Seek the support and sponsorship of the project – with the help of
Michael McCartney and Stefanie Rixecker, of the RCEOs, the Regional
Sector Group Chairs and LGNZ.
o  Convene a meeting between Michael McCartney, Stefanie Rixecker and
DIA senior officials to brief them about the content of this brief.
o  Forward correspondence to Minister Mahuta and Minister McNulty
advising them of the Te Uru Kahika desire to partner with them and DIA
to head down the path described in this brief.
o  Prepare and release communication material - nationally and regionally,
to ‘warm the soil’ and then periodical y sustain the pubic / community
interest toward central government and Ministerial adoption of this
proposal, via future regular and timely releases.
o  Enrol the support of third parties such as NIWA and the Infrastructure
Commission.
o  Socialise and receive the support of senior officials from Treasury, and
MfE, including on the draft contents listed in this paper.
o  Prepare a draft paper on potential arrangements for a Steering Group
(central government and regional councils at Director CEO level),
Governance (Minister of Local Government / Chairs x 2), and the timeline
/ milestones (see draft below).
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o  Confirm arrangements through which members of the River Managers
SIG can be kept informed, contribute, and participate in this project.
o  Request each regional council to appoint a project ‘point person’.
o  Socialise the project and the learnings from Westport etc. at a workshop
with River Managers to be convened in late September 2022.
o  Review, and progress regional council ‘investment intention’ data
gathering already underway with Tonkin + Taylor and the similar exercise
being undertaken by Te Uru Kahika, to ensure this work is completed in a
timely and ‘complete’ manner.
o  Prepare a micro-schedule of this project plan and recruit / contract the
resources to enable the necessary information to be gathered and
governance / steering group meetings to be scheduled.

  The output of this phase would be an agreed and detailed project approach
statement.

Phase two: Background research
02

o  Interrogate the information gathered by DIA as part of their Westport Case
Study technical review and appraisal process and take the learnings from
doing this into this project plan / co-investment business case.
o  Commission third party research from Tonkin + Taylor, NIWA and others, as
may be appropriate e.g., value of assets protected – and other matters as
listed in points 1-10 above.
o  Prepare a template and request regional councils to develop a summary list of
prioritised projects for each of their regions to demonstrate how each of
these proposed flood risk mitigation projects satisfy the areas of enquiry
referenced earlier in this paper and defining what priority / when the project
should be undertaken.
o  Consolidate the results put forward by each region.
o  Use the consolidated results of the regional research to develop an Aotearoa
community flood risk resilience co-investment cost share and project
prioritisation principles and criteria covering both operational and capital
elements.
  The output of this phase will be a consolidated statement of regional flood risk
mitigation needs and a first draft of the co-investment principles and criteria
through which these needs may be met.

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Phase three: Enquiry – test co-investment proposal
03

o  Receive comment / endorsement from the project Steering Group,
Governance Group, RCEOs / Regional Sector Chairs etc. for the proposed cost
share / annual prioritisation, regional prioritisation, and operational / capex
formula.
  The output of this phase would be an agreed cost share approach.

Phase four: Develop consolidated business case using the Better
Business Case framework
04

o  Use all previously gathered information to complete an indicative business
case for consideration as part of the Budget 2023 process.
o  Work with the Steering Group (NB inclusive of Treasury officials) to refine the
business case.
  The output of this phase would be an agreed business case containing principles
and criteria and business case evidence to support central government making a
positive decision to co-invest in flood protection structures.

Phase five: Budget-build process
05

o  This phase will largely be led by senior officials from DIA, with support from
appointed River Manager SIG members and their advisors.
  The output of this phase will be a secured flood risk mitigation line item – and
associated trouble shooting, in each of the documents leading up to the formal
release and confirmation of Budget 2023.

Phase six: Implementation arrangements
06

o  The final phase is to establish arrangements, probably alongside Kānoa,
through which central government’s investment in agreed projects is invited,
approved, managed, and delivered ‘on time and within the agreed budget’.
o  Support the provision of on-going governance oversight and reporting to the
Minister(s) about delivery and the establishment of arrangements that
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provide necessary certainty about the capacity of Te Uru Kahika to deliver the
proposed projects.
  The output of this phase will be necessary incremental delivery of projects
providing much needed certainty to the many New Zealand communities facing
anxiety and uncertainty because of flood risks.

P R O J E C T   M A N A G E M E N T   A N D   G O V E R N A N C E

A multi-level structure should be developed and applied to manage the project.
•  A high-level Governance Group would participate in a short 30-minute Flood Risk
Resilience Aotearoa project update zoom monthly.
•  A Flood Risk Resilience Aotearoa Steering Group would also meet monthly to
provide detailed feedback on core project considerations and propositions.
•  A Flood Risk Resilience Aotearoa Project Manager should be appointed to ensure
that critical deadlines, information sharing occurs and generally, to drive the
project and provide connection between various parties, in accord with this
project brief.
•  The Te Uru kahika Flood Manager River Mangers’ Champions ‘Thought
Leadership Group’ may be used to test key propositions.
•  Te Uru Kahika Flood Managers SIG would be kept informed of progress at their
usual meetings.
•  All regional council river and flood management officers would be kept abreast
of the project and be asked to help provide necessary input information –
probably with short notice.

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T I M E L I N E

We envisage the project schedule operating from July through to the end of November
2022 and beyond (for monitoring progress to ensure budget bid is secured). The indicative
timeline fol ows, noting that phases 2-5 will proceed in parallel, albeit with a focus as
indicated. Preliminary work should commence as soon as this brief and associated project
funding is approved.

The proposed preliminary work will include micro-scheduling of the necessary tasks and
the commissioning of necessary specialist ‘input’ research.

In the period fol owing the phases and actions proposed during the five months described
below, project leadership is likely to shift from a joint Te Kuru Kahika / DIA approach
toward one more centred in DIA – albeit with information and support being readily
provided by Te Kuru Kahika and Kānao as required.

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Month:

August
September
October
November
Week:
2
&

1
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
eek   eek
eek
eek
eek
eek
eek
eek
eek
eek
eek
eek
eek
eek
eek
eek
eek
W   W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
W
Project agreed:
  

1:  Project

establishment
and agreed

approach
2:  Background

research

3:  Test co-

investment
proposal /

formula
4:  Develop

consolidated

business case
5:  Budget-build

process

6:  Implement-

ation
arrangements.



  

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  Appendix one: Better Business Case Framework

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Document Outline