Questions and answers from the information sessions

A series of information sessions about the Tourism Infrastructure Fund were held in mid-2017 in 10 centres around New Zealand. This was an opportunity for councils to find out more about the Fund, the criteria, what sorts of projects might qualify and how to apply for funding. The sessions were aimed at council staff likely to be involved in preparing applications for the new Fund. Below are some of the questions they raised.

Co-funding/financial assessment

1. What is the minimum level of co-funding expected from applicants?

Applicants are expected to demonstrate that they have offered the maximum co-funding possible (for projects that are ready to start immediately, it is expected that the co-funding will have been confirmed at the time of application).

As a starting point, we expect that there will be at least a 50-50 sharing of construction costs between the applicant and central government. Proposals with co-funding below 50 per cent will still be considered and assessed alongside those with higher levels of co-funding, but will need to be supported by the independent financial assessment to confirm that the council is financially constrained and unable to offer 50 per cent co-funding.

2. What does the financial assessment involve?

The purpose of the financial assessment is to ensure TIF funding goes to councils that are most in need (i.e. most financially constrained), and that the level of co-funding put forward by applicants are appropriate, taking into account their financial position.

The financial assessment will involve looking at applicants’ financial position, other projects that have been funded by council, and the potential impacts should the project proceed and TIF funding not be made available (e.g. whether the council would be required to take on more debt to address the identified problem). It will also look at councils’ project management capability and financial management history to assess whether councils are able to deliver on their project proposals.

How the assessment will be done is up to the independent assessors, but it might include looking at, for example, recent rates increases, debt levels in relation to ratepayer base, and history of project delivery.

3. What does it mean that projects demonstrate value for money? Does this mean the most basic and cheapest option?

The notion of value for money means that proposed projects should be cost-effective and fit-for-purpose. Considerations could include:

  • that the applicant has considered a range of alternative solutions
  • innovative solutions that enhance productivity, reduce costs (operating or capital), leverage economics of scale and/or raise revenue
  • whole-of-life costs to demonstrate the proposed solution offers value for money
  • the need for higher quality infrastructure to enhance the visitor experience, in order to support higher value visitors.

4. Can several projects costing less than $100,000 be bundled together to meet eligibility?

Yes. Applicants will need to clearly state the priority for each sub-project in their application.

5. How do applicants demonstrate they have considered alternative funding sources?

Applicants should describe the alternative sources they have considered and why that source of funding is not available for them to draw upon (e.g. an application for the alternative funding was rejected).

6. Can two or more councils get together and submit a single application?

Yes. Councils are encouraged to work together to fund and deliver solutions that address an identified issue, generate value for money and result in a better outcome for visitors.

7. How do we apply for co-funding for feasibility studies? Does the minimum $100,000 funding requirement apply to feasibility studies?

Feasibility studies will be funded where an applicant has been able to establish a tourism infrastructure problem that needs to be addressed but requires additional specialist advice on the best solution to that problem.

There will be a separate application form for feasibility studies that will be released at the same time as the first funding round begins.

The $100,000 minimum funding requirement does not apply to feasibility studies. However, there is still an expectation that applicants will fund at least half the cost of any feasibility studies. For example $2500 from the TIF and a council contribution of up to $2500 for a total feasibility study cost of $5000.

8. Can an economic development agency or regional tourism organisation make an application on behalf of a local council?

The TIF is open to all local councils and non-for –profit community organisations that can demonstrate support from their local council. Who a council authorises to make the application is up to them, but it will be necessary that the person or organisation has the authority to commit the financial contribution required from the local council.

9. Can a regional council make an application to the TIF?

While regional councils are technically able to apply to the TIF, the delivery of most of the projects we envisaged would be eligible under the TIF would most likely be the responsibility of the local council to co-fund and deliver. However, we are open to receiving applications for any eligible projects that regional councils might want to deliver and co-fund with the TIF.

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Scope for projects

10. We understand that the TIF will support mixed-use infrastructure, what about infrastructure that is solely used by visitors, such as cruise-related infrastructure at wharfs?

Infrastructure connected to wharves, such as shelters or toilets for off- and on-boarding passengers, is within the scope of the TIF, provided it is a suitable solution to the problem identified. However, wharves and berths themselves are out of scope.

11. Would projects not on council-owned land (e.g. DoC or NZTA land) be eligible for the TIF?

Yes, projects that involve building tourism infrastructure on land owned by other government agencies such as DoC, LINZ or NZTA are eligible for TIF funding.

Projects on land owned by a commercial operator or iwi may also be eligible However, councils would need to own the infrastructure that is funded through the TIF (i.e. register it as a council asset). Councils would also be responsible for making arrangements with the relevant agencies for the maintenance of the infrastructure and on-going, certain land access and use.

Government agencies and commercial entities are not eligible to receive TIF funding.

12. Are projects that are included in council long term and annual plans, or in other consultation processes, eligible for TIF funding?

Yes, provided that the council has not already decided to fully fund the project by itself. TIF funding is only available where it will ensure a project goes ahead, or will enable a superior solution to a problem than the solution the council can afford on its own, or where it will make a vital project happen earlier.

Councils are required to demonstrate that there is community support for any project for which they are seeking TIF funding. Projects that have been discussed with the community during consultation and/or planning processes would meet that requirement.

13. Projects receiving other central government funding will not be eligible for additional funding under the TIF. Does this mean projects receiving lotteries grant would not be eligible?

For the purposes of the TIF, lotteries grants are not considered to be central government funding.

14. Are cycle trails in scope? What about visitor facilities for users of cycle trails?

Cycle trails with ‘Great Ride’ status are out of scope, as they have a dedicated fund. Eligible projects would need to clearly demonstrate they are not commercial in nature, and that other funding options had been investigated.

15. We understand that accommodation is out of scope, but does this include infrastructure projects in campgrounds?

Infrastructure projects in campgrounds could be in scope, provided the campground is council-owned. We will look closely at such proposals to consider their impact on commercial operators in the area (if any).

16. Do projects that are based on considerations of improving health and safety qualify for the TIF?

Yes, so long as they are public mixed-use infrastructure projects that address an identified problem, meet TIF eligibility criteria and will have demonstrable benefits for visitors.

17. Would projects that are ‘shovel-ready’ be given a higher priority, similar to the Regional Mid-sized Tourism Facilities Grant Fund (MFF)?

Unlike the MFF, the TIF will co-fund both projects that are able to start immediately and projects that are to be completed in the longer-term. Projects that are most certain to meet the objectives of the TIF (including the Priorities Statement) will be prioritised for co-funding.

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TIF process

18. When will the funding rounds open?

Funding rounds will open for a four week period. Round one will likely open in the first week of August 2017. No decision has been made about the timing of Round two, but it will likely open in the first quarter of 2018.

19. Will there be feedback for unsuccessful applicants?

Feedback will be provided to unsuccessful applicants on request.

20. Will unsuccessful but eligible applications be automatically considered in future funding rounds?

All eligible applications that are unfunded in round one will be reconsidered in subsequent funding rounds. However, MBIE will alert the applicants that their project is to be re-considered and invite them to review and then re-submit their application.

21. Looking at the eligibility criteria, how are ‘regions’ defined and what are the types of data MBIE would look at to determine visitor numbers and tourism revenue?

MBIE interprets ‘region’ as the area for which the applicant (e.g. local council) is responsible. In assessing eligibility, MBIE will refer to the following territorial authority level data:

  • For visitor numbers, MBIE will use guest night figures available under the Accommodation Survey published by Statistics NZ.
  • For tourism revenue, we will use the Monthly Regional Tourism Estimates (MRTEs) which is published on MBIE’s website.

Applicants are encouraged to also use the Accommodation Survey and the MRTEs. However, applicants may offer any data from reliable sources to support their case for co-funding.

22. How do you define rating unit for the purposes of calculating the visitor to rating unit ratio? Is it the total local population?

To calculate the visitor to rating unit ratio, MBIE will look at the number of rateable properties and not the local population. For visitor numbers, MBIE will use guest night figures from the Commercial Accommodation Monitor as it allows us to capture both domestic and international visitors. However, MBIE will also consider any other reliable data that are provided in support of an application.