I hereby give notice that an ordinary meeting of the Council Controlled Organisations Governance and Monitoring Committee will be held on:

 

Date:                      

Time:

Meeting Room:

Venue:

 

Wednesday, 2 July 2014

9.30am

Reception Lounge, Level 2
Auckland Town Hall
301-305 Queen Street
Auckland

 

Council Controlled Organisations Governance and Monitoring Committee

 

OPEN AGENDA

 

 

 

MEMBERSHIP

 

Chairperson

Penny Hulse

 

Deputy Chairperson

Calum Penrose

 

Members

Cr Anae Arthur Anae

 

 

Cr Cameron Brewer

 

 

Cr Dr Cathy Casey

 

 

Member Precious Clark

 

 

Cr Ross Clow

 

 

Cr Linda Cooper, JP

 

 

Cr Chris Darby

 

 

Cr Denise Krum

 

 

Cr Dick Quax

 

 

Cr Penny Webster

 

 

Member Glenn Wilcox

 

 

Cr George Wood, CNZM

 

Ex-officio

Mayor Len Brown

 

 

(Quorum 7 members)

 

 

 

Rita Bento-Allpress

Democracy Advisor

 

26 June 2014

Contact Telephone: (09) 307 7541

Email: rita.bento-allpress@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 


Council Controlled Organisations Governance and Monitoring Committee

02 July 2014

 

ITEM   TABLE OF CONTENTS                                                                                        PAGE

1          Apologies                                                                                                                        5

2          Declaration of Interest                                                                                                   5

3          Confirmation of Minutes                                                                                               5

4          Petitions                                                                                                                          5  

5          Public Input                                                                                                                    5

6          Local Board Input                                                                                                          5

7          Extraordinary Business                                                                                                5

8          Notices of Motion                                                                                                          6

9          Te Motu a Hiaroa (Puketutu Island) Governance Trust - Nomination of council trustees and exemption of the Trust from Council Controlled Organisation accountability requirements                                                                                                                  7  

10        Consideration of Extraordinary Items 

PUBLIC EXCLUDED

11        Procedural Motion to Exclude the Public                                                                 39

C1       Substantive Council Controlled Organisations Board Appointments                 39  

 


1          Apologies

 

An apology from Cr CM Casey has been received.

 

2          Declaration of Interest

 

Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.

 

3          Confirmation of Minutes

 

That the Council Controlled Organisations Governance and Monitoring Committee:

a)         confirm the ordinary minutes of its meeting, held on Tuesday, 3 June 2014, including the confidential section, as a true and correct record.

 

 

4          Petitions

 

At the close of the agenda no requests to present petitions had been received.

 

5          Public Input

 

Standing Order 3.21 provides for Public Input.  Applications to speak must be made to the Committee Secretary, in writing, no later than two (2) working days prior to the meeting and must include the subject matter.  The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.  A maximum of thirty (30) minutes is allocated to the period for public input with five (5) minutes speaking time for each speaker.

 

At the close of the agenda no requests for public input had been received.

 

6          Local Board Input

 

Standing Order 3.22 provides for Local Board Input.  The Chairperson (or nominee of that Chairperson) is entitled to speak for up to five (5) minutes during this time.  The Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical, give two (2) days notice of their wish to speak.  The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.

 

This right is in addition to the right under Standing Order 3.9.14 to speak to matters on the agenda.

 

At the close of the agenda no requests for local board input had been received.

 

7          Extraordinary Business

 

Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

 

“An item that is not on the agenda for a meeting may be dealt with at that meeting if-

 

(a)        The local  authority by resolution so decides; and

 

 

(b)        The presiding member explains at the meeting, at a time when it is open to the public,-

 

(i)         The reason why the item is not on the agenda; and

 

(ii)        The reason why the discussion of the item cannot be delayed until a subsequent meeting.”

 

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

 

“Where an item is not on the agenda for a meeting,-

 

(a)        That item may be discussed at that meeting if-

 

(i)         That item is a minor matter relating to the general business of the local authority; and

 

(ii)        the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

 

(b)        no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

 

8          Notices of Motion

 

At the close of the agenda no requests for notices of motion had been received.

 


Council Controlled Organisations Governance and Monitoring Committee

02 July 2014

 

Te Motu a Hiaroa (Puketutu Island) Governance Trust - Nomination of council trustees and exemption of the Trust from Council Controlled Organisation accountability requirements

 

File No.: CP2014/13598

 

  

 

Purpose

1.       To provide an update on the agreements reached to date for the Puketutu Island rehabilitation project (the project), to nominate council trustees for appointment to the ‘Te Motu a Hiaroa (Puketutu Island) Governance Trust’ (the Governance Trust), and to seek the trust’s exemption as a Council Controlled Organisation (CCO).

Executive summary

2.       Watercare’s Puketutu Island Rehabilitation Project (the project) is a 35-year programme to deposit biosolids in an excavated site on Te Motu a Hiaroa (the island) and at the same time set up long-term governance structures to rehabilitate the island to become a regional park in conjunction with council and iwi. 

3.       The iwi entities will hold the freehold title to Te Motu a Hiaroa through a land-owning trust (the Island Trust).

4.       The Governing Body, in June 2011, confirmed its intent to manage the island as a regional park in perpetuity, in line with a suite of governance and lease arrangements proposed by Watercare (“Puketutu Settlement”).

5.       As part of the Puketutu Settlement, a separate Governance Trust was established by Watercare to help oversee the development and management of the island. The trust is made up of twelve trustees. Watercare and council can appoint up to four trustees each, and Waikato Tainui Te Kauhanganui Incorporated, Te Kawerau Iwi Tribal Authority Incorporated, and Makaurau Marae Maori Trust (the iwi entities) can between them appoint a further four trustees.

6.       Staff recommend four senior managers are appointed as Auckland Council’s representatives on the Governance Trust during the first year of the Trust’s operation. 

7.       Because both Watercare Services Limited (Watercare) and council have the power to appoint over 50 percent of the trustees, the Governance is a CCO under the Local Government Act 2002 (LGA). This report recommends that council grant the Governance Trust a three year exemption from being deemed a CCO, which is allowable under the LGA. Staff will explore options with the Department of Internal Affairs to make the exemption permanent.

 

Recommendations

That the Council Controlled Organisations Governance and Monitoring Committee:

a)         approve the appointment of four trustees to the Te Motu a Hiaroa Governance Trust, being the:

i)          Manager Parks, Recreation and Sport, Mr Ian Maxwell

ii)         Manager Community Policy and Planning, Mr Anaru Vercoe

iii)         Manager Regional and Specialist Parks, Mr Mace Ward

iv)        Manager Environmental Services, Ms Gael Ogilvie

 

b)         authorise the Chief Executive to execute these appointments by giving written notice to the Governance Trust as required under clause 7.6 of Te Motu a Hiaroa (Puketutu Island) Governance Trust Deed.

c)         exempt (by and from the date of this resolution, for a period of three years) Te Motu a Hiaroa (Puketutu Island) Governance Trust from being a Council Controlled Organisation under section 7(3) of the Local Government Act 2002.

d)         receive and acknowledge the letter from iwi entities (Attachment C), outlining their views on the proposed exemption from Council Controlled Organisation status.

e)         agree that at least every six months council staff report to the Parks, Recreation and Sport Committee on matters relating to the council-managed area of the island and planning for the establishment of Te Motu a Hiaroa Regional Park, having obtained the view of Mangere-Otahuhu local board on these matters.

 

Comments

Background: The project

8.       Te Motu a Hiaroa is an 187 ha volcanic island in the inner reaches of the Manukau Harbour and is connected to the mainland by a 1.7km causeway. The island is commonly known as Puketutu, which is the name of the island’s highest peak.  Te Motu a Hiaroa is the name for the island as agreed by the iwi entities.

9.       Watercare’s wastewater treatment plant sits opposite the island.  The area known as Pond 2, located to the south east of the plant, is currently used for the deposition of biosolids.   Pond 2’s capacity will be exhausted this year.  Watercare, in planning for the future disposition of biosolids, saw the opportunity to utilise and rehabilitate the quarried volcanic cones on the island.  Watercare have been granted consent to deposit 4.4 million tonnes of biosolids on the island over approximately 46 ha during the projects 35-year operational life.  The completed topography will represent as far as possible, within engineering constraints, the original volcanic landform. 

10.     In the negotiations to realise Watercare’s proposal, agreements were made with the Kelliher Charitable Trust (KCT) to acquire the island and obtain a lease to enable the disposition of biosolids.  At the same time, council has been granted a parallel 999 year lease, renewable in perpetuity, for the purposes of a public park (the Park Lease). 

11.     As a result of consent conditions for the biosolids project, agreements have been reached with the iwi entities to hold the underlying title to the island.  The iwi entities will become trustees of a separate trust - Te Motu a Hiaroa Charitable Trust (the Island Trust) and will be recognised as kaitiaki of the island. Refer to Attachment A for a diagram of the agreements and resulting trusts.

Lease Agreements

12.     The Governing Body has previously confirmed its intention to manage the island as a regional park at its 23 June 2011 meeting.  This was subject to the final confirmation of the Park Lease terms being acceptable to the Manager Parks, Recreation and Sport and Manager Property. The Park Lease has since been approved by those managers and signed.

13.     The Park Lease will initially cover the open space area, not subject to the Watercare operational area, and be exclusive of a marae precinct[1].   As the rehabilitation of the area used for the biosolids deposition progresses, further land will be transferred from Watercare’s management to council, until finally council will manage the entire island as a regional park, with the exception of the marae precinct. 

 

The establishment of the Governance Trust

14.     Watercare established the Governance Trust (deed shown in Attachment B) to oversee and hold a trust fund for the development, management, maintenance and operation of the island as public open space. The Governance Trust will collect revenue from the leases and tenancies on the island, and it may receive other discretionary grant funding (from council or other sources) from time to time.

15.     The Governance Trust now requires the appointment of up to four trustees from council, and a total of four from the iwi entities. Watercare has appointed four senior managers as trustees.

16.     On 14 May 2013, the Parks Recreation and Heritage Forum recommended that during the establishment phase, council staff be appointed as council’s trustees for the first year of the trust’s operation.  During this time, the decisions for the island will be operational and the membership can be reviewed when more emphasis will be on confirming the strategic planning and funding for the future of the park.

17.     At that same meeting, the Parks Recreation and Heritage Forum also requested that at least six-monthly reports be brought back to ensure political representatives are kept informed of significant policy, funding and ‘vision’ matters being considered by the Governance Trust in relation to the regional park activity.  

The change in Watercare’s status will make the Governance Trust a CCO

18.     The Governance Trust was established by Watercare, prior to Watercare becoming a CCO[2].  The change to the status of Watercare has consequentially led to a change in status of the Governance Trust. 

19.     Section 6 of the Local Government Act 2002 (LGA 2002) provides that a trust in which council (directly or indirectly) has the right to appoint 50 percent or more of the trustees is a CCO. The interpretation accepted by Auckland Council, and the Auditor General, is that “indirect” includes the right of any of council’s existing CCOs to appoint trustees to the trust. In the Governance Trust’s case, council and Watercare between them can appoint eight out of the 12 trustees, meaning the Governance Trust is a CCO.

20.     "Indirect Control" does not mean that council can compel a CCO to appoint certain directors to a subsidiary, rather control stems from the fact that an entity that council controls, makes the appointments.  The ‘indirectness’ of the control is that it is one-step removed from council.  Council’s auditors (Audit New Zealand) concur with this view and have recommended that council apply consistency in this approach across the council group.

21.     It is necessary for council to maintain its powers of appointment on the Governance Trust, because council will be developing and maintaining a regional park which will require the use of ratepayer funds.

22.     The Governance Trust will be the key forum for developing management plans and achieving consensus between Watercare, the iwi entities and council in relation to “governance” of Puketutu Island. However,  the Governance Trust decisions do not bind council (or any other party), and  council retains control of its discretionary funding decisions in relation to the regional park and  other rights and obligations under the Puketutu Settlement agreements.

 

 

 

 

Exemption of the Governance Trust from CCO accountability requirements

23.     The iwi entities do not support the Governance Trust becoming a CCO. Their concerns are:

(a)          Council and Watercare between them control a majority of the trustee appointments. However, this arises under the express terms of the trust deed (as agreed by iwi entities), and not from any CCO status (which is simply consequence of these appointment powers, and not the cause). Watercare does not wish to revisit the terms of the trust deed or of the overall Puketutu Settlement.

(b)          CCO status would give Council additional powers to set objectives and “control” the activities of the Governance Trust. This would not be consistent with the spirit or letter of the Puketutu Settlement arrangements, and for this reason Council should exempt the Governance Trust from CCO status.

24.     Watercare and the iwi entities have therefore asked that council consider an exemption for the Governance Trust. A letter from Te Kawerau iwi Tribal Authority to that effect is attached as Attachment C to this report. Both other iwi entities have written in support of the matters covered in that letter.

25.     The Local Government Act 2002 provides for local authorities to exempt a CCO from the accountability requirements of the Act following an assessment of the nature and scope of the CCO’s activities and the costs and benefits of exempting, to the local authority, the CCO and the community. The council can revoke an exemption at any time and must review it every three years.

26.     The intention of the exemption provisions is to avoid unnecessary compliance costs for small CCOs with limited scope of activities. For such entities, requiring a Statement of Intent (SOI) and regular reporting against the SOI would add reporting requirements disproportionate to the size/scale of the entity.

27.     Having regard to the applicable criteria in section 7 of the LGA, this report recommends an exemption of the Governance Trust on the following grounds:

a. The Governance Trust does not hold any assets (other than its income, as described above), the scope of its activity is limited at this time and general reporting of the activities of the trust will occur through the six monthly report to the Parks, Recreation and Sport Committee. The addition of a level of reporting to meet CCO accountability requirements would therefore appear to add cost with little or no benefit.

b. The Governance Trust meets the criteria for an exemption under section 7(3) of the LGA, namely that it is a “small organisation” and is not a Council Controlled Trading Organisation (i.e. it is charitable, not profit seeking).

c. CCO status was not anticipated when the Governance Trust was established, because at the time Watercare had its own statutory exemption from CCO status. This meant a majority of the Trustees were initially non-council group appointed. When Watercare’s CCO exemption expired on 1 July 2012, the Governance Trust became a CCO. 

d. The specific rights and responsibilities of council, Watercare and iwi entities were negotiated and agreed as part of the overall Puketutu Settlement. Having the ability to direct or influence the Governance Trust through council’s “CCO” powers under the LGA 2009 would be inconsistent with the negotiated settlement. The Governance Trust’s decision making powers are limited to its own assets (i.e. certain income streams), and it cannot make other decisions that bind council. Council retains control over its regional parks spend through the LTP and this budget would be applied by the council’s regional parks team in the usual way, and not be channeled through the Governance Trust. Council remains a direct contracting party to the lease agreement and the vision document (once finalised), under which the parties have mutual rights and obligations. The Governance Trust does not overlay these agreements, although in practice it will have an advisory and sounding board function for council, Watercare and iwi entities.

28.     When a CCO is first exempted, the exemption must be reviewed within three years and then at no more than three yearly intervals. Exemption is not automatically granted and must be reconsidered each time. Exemption for the Governance Trust must therefore be reviewed no later than July 2017. During this time, staff will explore with the Department of Internal Affairs the option of permanently exempting the Trust under the LGA.

Consideration

Local board views and implications

29.     The Mangere-Otahuhu board has been updated at workshops in November 2012, March 2013 and June 2013 on progress with Te Motu a Hiaroa; including the signing of the Park Lease and the determination of the CCO status of the Governance Trust.  Members of the board undertook a site visit to the island on 16 April 2013. 

30.     The Mangere-Otahuhu board had previously formally sought direct representation on the Governance Trust. As outlined in paragraph 16, this matter was discussed on 14 May 2013 by the Parks Recreation and Heritage Forum, who agreed that rather than the local board having direct representation, senior managers would serve as trustees for one year. 

31.     It was also agreed that staff would obtain the view of Mangere-Otahuhu local board on the operations and establishment of a ‘vision’, policy and funding matters for Te Motu a Hiaroa Regional Park and report to the Parks, Recreation and Heritage Forum at least every six months. In this political term, those responsibilities now fall to the Parks, Recreation and Sport Committee as the delegation for Te Motu a Hiaroa Regional Park is with the Governing Body of the council. 

Maori impact statement

32.     The island, known as Te Motu a Hiaroa, was named after the sister of Rakataura, a tohunga of the Tainui waka.  As a site of extended Maori occupation, it is highly significant to tangata whenua and contains many sites and associations of cultural importance.  The proposed agreements with iwi have recognised the island as taonga to the people of Tamaki Makaurau.

33.     There are a number of iwi with an expressed interest in Te Motu a Hiaroa.  Through the negotiations for Watercare to obtain resource consent, three iwi entities were given particular recognition and in forming the Island Trust will acquire freehold title to the island, and Oruarangi Creek.  The Island Trust will be recognised as kaitiaki of the island and the Island Trust envisages the development of a new marae precinct on 1.2 hectares on the island’s northern slopes.

34.     As noted above, the iwi entities have recently challenged the CCO status of the Governance Trust.  They have requested it be recorded they believe it is clearly inappropriate in this circumstance.  While they have agreed to support seeking exemption of CCO accountability requirements under s7 LGACA at this time, they request council seek a more permanent legislative exclusion.

Implementation

35.     There has been no formal public consultation on the agreements reached to establish the new regional park.  Some local stakeholder groups, such as the Manukau Harbour Forum, have been kept informed of the intentions for the island and consultation was undertaken as part of Watercare’s consent for their rehabilitation project. The exiting lessees and tenants have been formally advised of council’s role in managing the island outside of the Watercare operational area and the intention of the future regional park.  Puketutu Island has been identified as a high priority for open space since the late 1980’s and provides connections from a landscape and recreational perspective to other parkland.

36.     It is proposed a joint media release be prepared to make a public announcement of the new regional park status of the island once all trustees have been appointed to the Governance Trust.  This will need to manage the public’s expectations around gaining access to the island and the type of experiences that will be available in the initial years of park development.

Planning and development of the island

37.     The suite of documents prepared to reflect the agreements between Watercare, Auckland council and the iwi entities includes a ‘vision’ document.   The vision document outlines how the island will be developed and managed and sets out council’s role and obligations along with those of Watercare and iwi and is still a work in progress.

38.     It is recommended that the ‘vision’ document be formally signed off prior to the council Governance Trust trustees being officially appointed.  The Chief Executive can execute the trustee appointments by giving “written notice to the Trust” as required under clause 7.6 of the Trust Deed.  It is recognised the ‘vision’ will be an evolving document, however, clauses relating to council’s future funding commitments require further definition and clarification.

39.     At the same time further clarification will be sought on the reporting requirements of the Governance Trust under the Financial Reporting Act 2013 and the Public Audit Act 2001.

40.     The vision document also references a spatial plan that has been prepared for the island by Boffa Miskell to reflect the initial discussions between the relative parties (Attachment D – Draft vision and island enhancement plan).  This provides a very high level plan that ‘is indicative only of the type of park development which may occur’ once the rehabilitation of Watercare’s site is complete. Further planning is currently being progressed to determine where infrastructure to support the regional park will be placed, such as parking areas, toilets and walkways. Key to this is ensuring a clear understanding of the cultural overlay of the island. The vision document also requires the Governance Trust develop an operational plan to facilitate the safe and efficient use of the island.

41.     Consistent with the management of other regional parks, the high level principles and general objectives and policies in the Regional Parks Management Plan 2010 will be applied to Te Motu a Hiaroa. Council trustees will be recommending to the Governance Trust that these policies be adopted along with more specific management policies and actions as they are developed. This will involve consultation with the local board, wider community and the Governing Body (Parks, Recreation and Sport Committee).

42.     Auckland Council Property Ltd has undertaken condition assessments of the building assets on the island and has taken over the management of the existing lease and tenancy agreements.

Watercare Funding

43.     A separate Cultural Facilities Fund has also been set up by Watercare to develop the marae precinct and cultural facilities. The Watercare lease obligates Watercare to pay a biosolids levy that forms this fund.  A sub-committee of the Governance Trust, which currently excludes council, will approve plans for the marae precinct and expenditure of this fund on the development, management, maintenance and operation of the marae precinct.

Council Funding 

44.     No acquisition capital or lease rents are payable by council in relation to the new regional park.  However, the level of funding required to support the park’s development has not yet been defined.  The Governance Trust’s revenue from the leases and tenancies on the island will be applied to a range of purposes as set out in the trust deed. The Cultural Facilities Fund is to be applied solely to the development and management of the marae precinct and cultural facilities.

 

45.     The Park Lease (which forms an integral part of Watercare’s broader proposal for the island) does not contractually oblige the council to ensure that funds are available for the development and maintenance of the park.  However, there is an expectation, through the vision document that funding will be required from council over and above the funding that will be available from the Governance Trust for the development and operation of the regional park.  This will occur progressively over a 35 year period as the areas used for the deposition of biosolids are rehabilitated and released by Watercare.

46.     Council commenced management of the open space area of the island on 1 August 2013.  At this stage it is anticipated the regional park will not be open to the public until late 2016 at the earliest, following planning for the park’s future development and some basic facilities to provide recreational access.  

47.     Ongoing funding for the management of the island as a regional park has not been specifically provided for in the Long Term Plan (LTP) and general funding for new park development and operation is limited.  Future funding for the development of the park will become clearer once the Governance Trust has a full complement of trustees and more detailed planning has been completed. Any financial contribution from council will need to be approved through a future LTP process. 

 

Attachments

No.

Title

Page

aView

Diagram of agreements and resulting trusts

15

bView

Te Motu a Hiaroa (Puketutu Island) Governance Trust - Trust Deed

17

cView

Letter from Te Kawerau Iwi Tribal Authority

35

dView

Draft vision and island enhancement plan for Te Motu a Hiaroa

37

      

Signatories

Authors

Rose Leonard - Principal Advisor

Authorisers

Mark Butcher - Treasurer

Stephen Town - Chief Executive

 


Council Controlled Organisations Governance and Monitoring Committee

02 July 2014

 


Council Controlled Organisations Governance and Monitoring Committee

02 July 2014

 



















Council Controlled Organisations Governance and Monitoring Committee

02 July 2014

 


Council Controlled Organisations Governance and Monitoring Committee

02 July 2014

 

     

 


Council Controlled Organisations Governance and Monitoring Committee

02 July 2014

 

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

 

That the Council Controlled Organisations Governance and Monitoring Committee:

a)      exclude the public from the following part(s) of the proceedings of this meeting.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution follows.

This resolution is made in reliance on section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public, as follows:

 

C1       Substantive Council Controlled Organisations Board Appointments

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

Ground(s) under section 48(1) for the passing of this resolution

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

s7(2)(a) - The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

In particular, the report contains information about individual CCO directors which needs to be considered confidentially to protect the privacy of natural persons.

s48(1)(a)

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

 

   



[1] A marae precinct has been proposed by the Island Trust. Discussions on the form of the precinct are still in early stages.

[2] Watercare became a CCO on 1 July 2012.