I hereby give notice that an ordinary meeting of the Finance and Performance Committee will be held on:

 

Date:                      

Time:

Meeting Room:

Venue:

 

Thursday, 19 November 2015

9.30am

Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland

Finance and Performance Committee

 

OPEN AGENDA

 

 

MEMBERSHIP

 

Chairperson

Cr Penny Webster

 

Deputy Chairperson

Cr Ross Clow

 

Members

Cr Anae Arthur Anae

Cr Calum Penrose

 

Cr Cameron Brewer

Cr Dick Quax

 

Mayor Len Brown, JP

Cr Sharon Stewart, QSM

 

Cr Dr Cathy Casey

Member David Taipari

 

Cr Bill Cashmore

Member John Tamihere

 

Cr Linda Cooper, JP

Cr Sir John Walker, KNZM, CBE

 

Cr Chris Darby

Cr Wayne Walker

 

Cr Alf Filipaina

Cr John Watson

 

Cr Hon Christine Fletcher, QSO

Cr George Wood, CNZM

 

Deputy Mayor Penny Hulse

 

 

Cr Denise Krum

 

 

Cr Mike Lee

 

 

(Quorum 11 members)

 

 

 

Mike Giddey

Democracy Advisor

 

12 November 2015

 

Contact Telephone:  (09) 890 8143

Email: mike.giddey@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

Please note: Any attachments listed within this agenda as “Under Separate Cover” can be found at the Auckland Council website http://infocouncil.aucklandcouncil.govt.nz/.

 

 


TERMS OF REFERENCE

 

Responsibilities

 

This committee will be responsible for monitoring overall financial management and the performance of the council parent organisation and the financial monitoring of the Auckland Council Group. It will also make financial decisions required outside of the annual budgeting processes. Key responsibilities include:

 

·           Financial management

·           Approval of non-budgeted expenditure

·           Write-offs

·           Acquisition and disposal of property relating to the Committee’s responsibilities

·           Monitoring achievement  of  financial and other measures of  performance and service levels

·           Recommending the Annual Report to the Governing Body

·           Development of the 2016/17 Annual Plan and amendments to the LTP including:

-        Local Board agreements

-        Financial Policy related to AP (recommendation to the Governing Body)

-        Setting of rates (recommendation to the Governing Body)

-        Preparation of the consultation document and supporting information for the LTP and Annual Plan (recommendation to the Governing Body)

·           Financial policy outside the LTP and AP

 

Powers

 

(i)      All powers necessary to perform the committee’s responsibilities.

 

Except:

(a)       powers that the Governing Body cannot delegate or has retained to itself (section 2)

(b)       where the committee’s responsibility is limited to making a recommendation only

 

(ii)      Approval of a submission to an external body

 

(iii)     Powers belonging to another committee, where it is necessary to make a decision prior to the next meeting of that other committee.

 

(iv)    Power to establish subcommittees.

 

 

 

 


EXCLUSION OF THE PUBLIC – WHO NEEDS TO LEAVE THE MEETING

 

Members of the public

 

All members of the public must leave the meeting when the public are excluded unless a resolution is passed permitting a person to remain because their knowledge will assist the meeting.

 

Those who are not members of the public

 

General principles

 

·           Access to confidential information is managed on a “need to know” basis where access to the information is required in order for a person to perform their role.

·           Those who are not members of the meeting (see list below) must leave unless it is necessary for them to remain and hear the debate in order to perform their role.

·           Those who need to be present for one confidential item can remain only for that item and must leave the room for any other confidential items.

·           In any case of doubt, the ruling of the chairperson is final.

 

Members of the meeting

 

·           The members of the meeting remain (all Governing Body members if the meeting is a Governing Body meeting; all members of the committee if the meeting is a committee meeting).

·           However, standing orders require that a councillor who has a pecuniary conflict of interest leave the room.

·           All councillors have the right to attend any meeting of a committee and councillors who are not members of a committee may remain, subject to any limitations in standing orders.

 

Independent Māori Statutory Board

 

·           Members of the Independent Māori Statutory Board who are appointed members of the committee remain.

·           Independent Māori Statutory Board members and staff remain if this is necessary in order for them to perform their role.

 

Staff

 

·           All staff supporting the meeting (administrative, senior management) remain.

·           Other staff who need to because of their role may remain.

 

Local Board members

 

·           Local Board members who need to hear the matter being discussed in order to perform their role may remain.  This will usually be if the matter affects, or is relevant to, a particular Local Board area.

 

Council Controlled Organisations

 

·           Representatives of a Council Controlled Organisation can remain only if required to for discussion of a matter relevant to the Council Controlled Organisation.

 

 


Finance and Performance Committee

19 November 2015

 

ITEM   TABLE OF CONTENTS                                                                                        PAGE

1          Apologies                                                                                                                        7

2          Declaration of Interest                                                                                                   7

3          Confirmation of Minutes                                                                                               7

4          Petitions                                                                                                                          7  

5          Public Input                                                                                                                    7

6          Local Board Input                                                                                                          7

7          Extraordinary Business                                                                                                8

8          Notices of Motion                                                                                                          8

9          Auckland Council Performance Report for the period 1 July 2015 to 30 September 2015                                                                                                                                         9

10        Auckland Council Group first quarter financial results to 30 September 2015   41

11        Quarter one Māori transformational shift and co-governance activities and expenditure                                                                                                                                       49

12        Implementing the New Food Act for Environmental Health (Food Premises)     65

13        Reports Pending Status Update                                                                                85

14        Annual Plan 2016/17 - Update                                                                                    93

15        Alternative Sources of Financing - Feedback                                                          97

Please note: The attachments listed within this report as “Under Separate Cover” can be found at the Auckland Council website http://infocouncil.aucklandcouncil.govt.nz/.

16        Consideration of Extraordinary Items 

PUBLIC EXCLUDED

17        Procedural Motion to Exclude the Public                                                                 99

C1       Restoration of St James Theatre                                                                               99  

 


1          Apologies

 

At the close of the agenda no apologies had 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 Finance and Performance Committee:

a)         confirm the ordinary minutes of its meeting held on Wednesday, 28 October 2015 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 7.7 provides for Public Input.  Applications to speak must be made to the Democracy Advisor, in writing, no later than one (1) clear working day 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 6.2 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 one (1) day’s 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 6.1 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.

 


Finance and Performance Committee

19 November 2015

 

Auckland Council Performance Report for the period 1 July 2015 to 30 September 2015

 

File No.: CP2015/22486

 

  

 

 

Purpose

1.       This report provides an overview of the Auckland Council parent performance results for the period 1 July 2015 to 30 September 2015.

Executive Summary

2.       The performance results presented in this report are for the Auckland Council parent, not the group. A separate report of the group financial results is included in this committee’s agenda papers.

3.       The report includes an overview of the highlights and achievements in the key areas to achieve organisational objectives. There was a range of highlights and achievements over the quarter which includes council being recognised at award ceremonies as follows:

-     Wai Care programme at the LGNZ Excellence Awards,

-     Geospatial Future Mode of Operation programme awarded the Project Management Institute NZ Public Sector project of the Year,

-     Devonport and Waiheke Libraries at the NZ Wood Resene Timber Design Awards.

 

This section of the report also includes information about the growth in demand for council building control and resource consent services.

Performance measure results

4.       During the preparation of the Long-term Plan 2015-2025 (LTP) the levels of service and associated performance measures were reviewed. There were some significant changes which included a refocussing and reduction in the number of measures. This report provides first quarter interim results on this new set of performance measures. Some of the measures will only be reported on at year end, for example for those dependent on annual independent surveys.

5.       Of the 40 measures reported on 67% achieved the targeted level set, 10% substantially achieved the target and 23% did not achieve the target. The majority of measures which did not achieve the target are within the regulatory activity, where the expectation is that performance will improve, as a result of improvement programmes currently being implemented.

6.       The regulatory business recognised the challenges faced by customers and its own operation with unprecedented increases in demand for regulatory services and increased leakage of technical staff to the private sector. The Consenting Made Easy programme was implemented in Q3 of FY2015. This program included the rollout of mobile technology and Active Workforce scheduling of inspections, Online Consenting and the implementation of a Customer Enabled Consenting Process. Mobile technology has been rolled out to the Central / South regions and the North / West regions rollout will go live early December. An Online consenting pilot was launched with group home builders delivering significant improvements in consent processing times and the quality of Consent applications. Phase 3 of this project goes live in early December and will be available to all building control customers. Active workforce scheduling is planned for Q3 that will deliver a more efficient utilisation of the inspection resource. The Customer Enabled Consenting process design has been completed and it is expected that it will be rolled out in Q3 & Q4 of FY2016.

 

Financial performance results

7.       The financial performance results provide an indication of how the organisation is performing against the budget and associated financial risks. The quarterly net operating financial results are largely on track compared to budget, with a $5 million variance to budget. The budget for the year includes a challenging target for efficiency gains for the council and there are risks associated with achieving this.

8.       Capital delivery performance is on track with an $88 million investment completed this year.

9.       Treasury management performance is included in the report. Debt levels are on track compared to budgeted levels and average funding costs are tracking below budgeted levels. The Diversified Financial Assets portfolio performance for the year to date was a negative 2.7% compared to a benchmark of negative 2.1% which is mainly due to a downturn in the market.

 

Recommendation/s

That the Finance and Performance Committee:

a)   receive the Auckland Council Performance report for the period 1 July 2015 to 30 September 2015.

 

Comments

10.     This report provides an overview of the Auckland Council parent performance results for the period 1 July 2015 to 30 September 2015. A separate report of the group financial results is presented to this Committee.

Highlights and achievements

11.     An overview of key highlights and achievements for the first quarter are summarised here. These are sorted by the service delivery themes as expressed in the Long-term Plan (LTP).

Auckland development

12.     Auckland Council is partnering with Community Housing Aotearoa and New Zealand Council for Infrastructure Development on a website called "Making Affordable Homes Happen" (http://www.makinghomeshappen.co.nz/), which was launched on 5 October. The purpose of the website is to increase familiarity of developers around affordable/community housing models and bring together information on current and proposed plans and programmes to deliver on affordable housing in the Auckland region.

13.     Housing Project Office - 11 new Special Housing Areas within Tranche 7 were announced taking the total number of SHA's to 97 with a potential yield of 47,000 sites and dwellings.

14.     'The Housing We’d Choose' study was completed, which is a comprehensive study into Aucklanders’ housing choices and trade-offs. It provides an insight into the types of dwellings that households would choose to buy or rent if a wider range of housing types and sizes were available across Auckland.

15.     ‘The Sustainability Hub’ was launched of the Auckland Design Manual. The manual was launched two years ago and additional hubs are being added. We engaged with over 1,000 people at the Auckland Home Show on the manual.

16.     Te Waka Angamua and RIMU co-hosted a seminar on defining Māori business, as a first step in developing an evidence base of Māori business in Tamaki Makaurau. This evidence will be used to develop baseline data for Auckland Council, central government agencies, businesses etc. to make well-informed decisions and direct investment to well-targeted opportunities that can deliver Māori economic development return and benefit.

17.     We signed a collaboration agreement with Energy Efficiency & Conservation Authority.

18.     The Property Maintenance and Nuisance bylaw was adopted in September. This was the last major bylaw in the Bylaw Review Programme and signifies the conclusion of 5 year Bylaw Review Programme project.

Economic and cultural development

19.     The Mayoral-led visit to Singapore and China included attending the LGNZ NZ-China Mayoral Forum in Xiamen and visiting partner city Guangzhou.

20.     Positive investor roadshow to Asia, Australia and Europe on Auckland Council and its treasury function.

Environmental management and regulation

21.     Demand for Building Control Services continue to grow strongly with first quarter lodged consent volumes up 15% compared to the first quarter a year ago (this equates to average increase of approximately 1,000 consents per month). Similarly inspection volumes are up 10% and sale of information is up 37% for first quarter compared to a year ago. Compliance services are significantly up with a 312% increase in the issue of “notice to fix” directions as a result of dangerous and non-compliant buildings. A number of key initiatives are in progress to meet the surge in demand, and include the new consenting process design, online consenting which is due to go live in December and roll out of mobile technology.

22.     Resource Consents – Over the last two financial years we have registered a total increase in resource consents of approximately 20% (17% in 2013/2014 and 3% in 2014/2015). The number of resource consents received during the first three months of 2015/2016 has increased by 12% compared to the same period last year. This indicates that the market is continuing to grow and is likely to result in an increase in building consents.

23.     Auckland Council in conjunction with the New Zealand Institute of Environmental Health was successful in winning the bid to hold the 15th World Congress on Environmental Health in Auckland. The conference will be held in March 2018.

24.     The Hunua Pest Control Project was completed.

25.     The Wai Care programme, encouraging residents to take action for Auckland’s local waterways, received highly commended in the category “Air New Zealand Excellence Award for Local Environmental Impact” at the LGNZ Excellence Awards.

26.     The Stormwater unit in association with Morphum recently won the IPENZ Arthur Mead Merit Award for the Alexandra Stream enhancement project. This project was aimed at improving water and habitat in the stream and incorporated a community designed cycle way.

27.     A conference paper on the results of the La Rosa Stream "Daylighting" project was presented to the 57th Water NZ Conference held in Hamilton, where it won the award for Best Paper.

Parks, community and lifestyle

28.     Ōtāhuhu’s new recreational precinct Tōia opened its doors to the public on 8 August. The precinct includes pools, a library, outdoor play space and an indoor recreation centre.

29.     Mt Albert Aquatic Centre reopened its doors to the public on 12 September after a revamp which included a new roof, repainting, refreshed hydro slide and changing rooms.

30.     Kapa Haka Super 12s were attended by over 8,000 people on 11 July 2015.

31.     NZ Wood Resene Timber Design Awards: Waiheke Library took the Resene Overall Winner and the Commercial Architectural Excellence awards, whilst Devonport Library was highly commended in the Interior Innovation and Commercial Architectural Excellence categories.

32.     Opening hours at many libraries have changed which includes several libraries now opening on Sundays for the first time.

33.     The rollout of the new public computing hardware and software at libraries has commenced and initial customer feedback is positive on the new functionality and faster response times.

34.     The Reading Steps Project launched in September and is in response to customer feedback to make it easier for parents to find books at a suitable reading age for their children.

35.     Matariki was celebrated at libraries with events including kapa haka, kōrero pūrākau with mana whenua, Living Book sessions with Māori MPs, and Matariki star activities.

36.     Te Wiki o Te Reo Māori / Māori Language Week saw inspiring events and activities taking place at libraries across Auckland.

37.     Sir George Grey Special Collection - Pūtahitanga exhibition: A meeting of two worlds in the North 1769-1842. The exhibition covered the history leading to the formation of Auckland.

38.     Family History Month was celebrated in August at libraries. Talks and workshops took place across the region to help customers uncover their family tree and included a Family History Expo.

Governance and support

39.     Geospatial Future Mode of Operation (GFMO) programme was awarded Project Management Institute NZ Public Sector Project of the Year.

40.     The Group Annual Report was adopted by the Governing Body in September with an unmodified audit opinion received from the auditors.

 

Performance measures

41.     For each of the activities delivered by the council, the LTP includes level of service statements and associated performance measures. This section provides interim results showing how we are tracking on the performance measures for the first quarter ended 30 September.  The year-end performance results will be reported in the Annual Report and will be audited. The quarterly results presented here are not audited.

42.     There is a significant change to the performance measures that are included in the new LTP. The Business units are working to ensure robust systems and processes are in place to ensure quality results are reported against performance measures. The number of measures has reduced by over 50% compared to the previous year. The results presented here represent the measures where the results are available to date. Some measures will only be reported at year end, for example for those dependent on annual independent surveys.

43.    

 

Out of 40 measures available for reporting at the end of this first quarter, 27 measures (67%) achieved the targets set, 4 measures (10%) achieved a result close to target (termed ‘substantially achieved’) and 9 were not achieved. The majority of measures that did not achieve the targets are within the regulatory activity, where the expectation is that performance will improve in future months, as a result of an improvements programme currently being implemented.


 

44.     The next graphs provide a summary of key performance measures for the quarter. Further detailed information can be found in appendix 1.

 

45.     Percentage of urgent animal management complaints such as dog attacks responded to within one hour

46.     Percentage of high risk alcohol premises inspected annually

 

 

 

47.     Percentage of registered food premises graded annually

 

48.     Percentage of D/E graded food premises re-inspected within one month

 

 

49.     Percentage of noise complaints responded to within 30 minutes for urban areas or 60 minutes for rural areas

50.     Number of dwellings and sites consented towards Auckland housing targets

 

 


 

51.     Percentage of non-notified resource consent applications processed within 20 working days

52.     Percentage of notified resource consent applications processed within 70 working days

 

 

53.     Percentage of building consent applications processed within 20 days

54.     Domestic kerbside refuse per capita per annum

 

 

55.     The median response time to attend a flooding event, from the time that Auckland Council receives notification to the time that service personnel reach the site

56.     Percentage of threatened species under active management

 

 


 

57.     Facility utilisation – utilisation at off-peak times for council managed community centres and venues for hire

58.     Facility utilisation – utilisation at peak times for council managed community centres and venues for hire

 

 

59.     Percentage of community facilities bookings used for health and wellbeing related activity

60.     Number of visits to library facilities per capita

 

 

61.     Number of library items borrowed (millions)

 

62.     Rolling 10-year return for diversified assets portfolio, compared to reference portfolio

 


 

Financial performance results

63. This next section provides an overview of the financial performance results for the council for the three months ended 30 September 2015.

$millions

YTD

Actual

YTD

Revised

Budget

YTD

Variance

FY

Revised

Budget

FY

Annual

Plan

 

Operating revenue

121

123

(2)

518

513

Operating expenditure

535

544

9

2,032

2,027

Net operating expenditure

414

421

7

1,514

1,514

Rates revenue

1,575

1,577

(2)

1,584

1,584

Net operating surplus/(deficit)

 

1,161

 

1,156

 

5

 

70

 

70

Net non-operating expenditure/(revenue)

156

25

(131)

275

275

Net surplus/(deficit)

1,005

1,131

(126)

(205)

(205)

 

 

 

 

 

 

 

 

 

 

64.     Year-to-date (YTD) results: The overall result shows a surplus of $1,005 million, which is $126 million unfavourable compared to the YTD budget. The net operating result included in this of $1,161 million is $5 million favourable compared to budget.

65.     The full rates generation income is recognised at the beginning of the year due to the revenue recognition requirements of the current accounting standards (International Public Sector Accounting Standards). This early revenue recognition of rates revenue results in a large surplus at the beginning of the year which will reduce as the year progresses.

66.     Operating revenue: is $2 million (2%) unfavourable to budget.  This is mainly due to losses incurred on the Diversified Financial Assets (DFA) portfolio of $16 million (due to a downturn in the market) offset by additional dividend income received together with favourable results for user charges revenue and property income.

67.     Rates revenue: is slightly below budget mainly due to lower penalty income than budgeted.

68.     Operating expenditure: is $9 million (2%) favourable to budget.  This is mainly due to expenditure expecting to be incurred later than originally planned across a number of areas.

69.     Non-operating surplus/(deficit):  is $131 million unfavourable compared to budget which is mainly due  to accounting(non-cash) adjustments related to fair value of treasury derivatives portfolio of $131 million together with lower development contributions income than budgeted of $8 million offset by unbudgeted vested assets revenue.

70.     Net operating performance results by theme

The next table provides a split of the net operating result by each of the LTP themes.

The net operating results presented by theme shows YTD underspends across all the themes except for ‘Governance and support’. The underspends are largely due to expenditure expected to be incurred later than planned. For ‘Governance and support’ the unfavourable variance of $7 million is largely due to organisational efficiency targets budgeted for in the LTP which have not been achieved in the first quarter. The LTP includes a challenging target for efficiency gains for the council for the year. Work is underway to progress a range of initiatives to achieve this target, such as strategic procurement, fleet management, shared services, workforce management etc. 


 

71.     Net operating result by theme

$million

 

YTD

Actual

YTD

Revised Budget

YTD variance

 

FY

Revised Budget

FY

Annual Plan

Auckland development

37

40

3

8%

146

147

Economic and cultural development

21

23

2

9%

92

91

Environmental management and regulation

71

76

5

8%

301

307

Parks, community and lifestyle

114

118

4

3%

478

476

Transport

97

97

0

0%

389

389

Governance and support

74

67

(7)

2%

109

105

Net operating expenditure

414

421

7

2%

1,515

1,515

Rates revenue

1,575

1,577

(2)

 

1,584

1,584

Net operating surplus

1,161

1,156

5

1%

70

70

 

72.     Capital delivery performance

$million

 

YTD

Actual

YTD

Revised Budget

YTD variance

 

FY

Revised Budget

FY

Annual Plan

Auckland development

18

31

13

42%

155

101

Environmental management and regulation

22

18

(4)

22%

102

112

Parks, community and lifestyle

31

30

(1)

3%

217

252

Governance and support

17

20

3

2%

98

89

Capital expenditure

88

99

11

11%

572

554

 

73.     Capital investment completed in the first quarter totals $88 million which is 15% of the full programme approved for the year of $572 million.

74.     Capital delivery performance to date is largely on track and progressing well for all areas. There are some delays in the Commercial property portfolio (part of the Auckland development theme) where there have been delays mainly relating to timing of development projects.

75.     Balance sheet performance

$million

 

Actual as at Sept 2015

 

Projected per LTP June 2016

Actual audited June 2015

Assets

 

 

 

Property, plant and equipment

12,129

12,077

12,064

Other assets and investments

25,249

23,992

24,161

Less Liabilities

 

 

 

Borrowings

6,775

7,175

6,557

Other liabilities

1,327

1,175

1,396

Net assets (ratepayers’ equity)

29,276

27,719

28,272

 

76.     Property, plant and equipment - Asset revaluations at the year ended 30 June 2015 resulted in asset values higher than projected in the LTP.

77.     Other assets and investments – the increase in this category for the first quarter is due to an increase in Accounts Receivable category for rates, being the rates generation billing for the full year which is expected to reduce as we reach rates instalment due dates.

78.     Total gross debt at the end of the quarter was $6.7 billion and forecast debt is expected to be in line with the LTP.

Treasury management

79.     Treasury management information can be found in Appendix 3 - Treasury report. This report includes treasury compliance information together with information about the performance of treasury activities against benchmarks.

80.     The focus of the treasury team continues to be on minimising funding costs, managing liquidity and interest rate risk, diversifying the investor base and lengthening the term of debt.

81.     The council was fully compliant with all treasury management policy limits at 30 September 2015.

82.     Funding costs - the year to date average cost of funds was 5.1% which is below the budgeted level of 5.6%.

83.     The DFA portfolio totaled $319 million at the end of the first quarter. The portfolio performance for the year to date was a negative 2.7% compared to a benchmark of negative 2.06% which is mainly due to a downturn in the market.

84.     Further information available in the appendices to this report include:

Appendix 1 – Performance measure information

Appendix 2 – Auckland economic update

Appendix 3 – Treasury report

Appendix 4 – Professional services expenditure information

Appendix 5 – LGOIMA information

Appendix 6 – Customer service information.

Consideration

Local Board views and implications

85.     Local Boards receive their own reporting for their respective areas.

Māori impact statement

86.     The report details some high level activities delivered in the first quarter 2015/2016, of which there are several initiatives with positive impacts on, or for, Māori. While this is not a complete list, key activities with positive impacts on and for Māori include:

87.     Te Waka Angamua and RIMU co-hosted a seminar on defining Māori business, as a first step in developing an evidence base of Māori business in Tamaki Makaurau. This evidence will be used to develop baseline data for Auckland Council, central government agencies, businesses etc. to make well-informed decisions and direct investment to well-targeted opportunities that can deliver Māori economic development return and benefit.

88.     Matariki was celebrated at libraries with events including kapa haka, kōrero pūrākau with mana whenua, Living Book sessions with Māori MPs, and Matariki star activities.

89.     Te Wiki o Te Reo Māori / Māori Language Week saw inspiring events and activities taking place at libraries across Auckland.


 

Implementation

90.     There are no financial or resourcing implications arising from receipt of this report.

91.     Quarterly reporting on performance is not a legal requirement and there are no legislative implications from the receipt of this request.

 

Attachments

No.

Title

Page

aView

Performance report appendices September 2015

21

      

Signatories

Author

Jenny Livschitz - Manager Corporate Performance and Reporting

Authorisers

Kevin Ramsay - General Manager Finance

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

19 November 2015

 




















Finance and Performance Committee

19 November 2015

 

Auckland Council Group first quarter financial results to 30 September 2015

 

File No.: CP2015/14177

 

  

 

 

Purpose

1.       This report presents the financial performance results of the Group for the three months to 30 September 2015.

Executive Summary

2.       This report is part of the regular quarterly reporting to the Finance and Performance Committee on the Auckland Council Group’s financial performance for the year to date.

3.       The Council Controlled Organisations report their individual performance to the Council Controlled Organisations Governance and Monitoring Committee.

4.       The Auckland Council parent’s performance will be reported to this Committee today.

5.       The results are in line with the phased budget and there are no significant items of concern.

 

Recommendation/s

That the Finance and Performance Committee:

a)      receive the Auckland Council Group first quarter financial results to 30 September 2015 report.

 

Comments

6.       The Auckland Council Group Financial Report 30 September 2015 attached to this report compares the actual financial performance for the quarter against the phased three months budget in the Long-term Plan.

7.       This report is not formally released to meet any other external reporting requirements, and is simply for internal reporting on the performance of the group.

8.       The results of this quarter’s group consolidation are used to support the rolling over of European Medium Term Notes (EMTN) programme.  While the EMTN programme is subject to an agreed-upon-procedures review, this result has not been reviewed or audited by Audit New Zealand.

9.       The operating surplus before gains and losses is $1,183 million vs. budget of $1,235 million.

10.     Actual results are in line with the phased budget and there are no significant items of concern.

11.     The group continues to manage financial performance prudently according to the Long-term Plan.

Consideration

Local Board views and implications

12.     This report is for the Council Group.  Local Boards receive reports specific to their area.

Māori impact statement

13.     The report is limited to financial performance.  Council’s contributions to Māori outcomes are reported in the annual report.

Implementation

14.     There are no implementation issues.

 

Attachments

No.

Title

Page

aView

Auckland Council Group Quarterly Financial Report 30 September 2015

43

     

Signatories

Author

Francis  Caetano - Group Financial Controller

Authorisers

Kevin Ramsay - General Manager Finance

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

19 November 2015

 







Finance and Performance Committee

19 November 2015

 

Quarter one Māori transformational shift and co-governance activities and expenditure

 

File No.: CP2015/21969

 

  

 

 

Purpose

1.       To report quarter one results for the 2015-16 Māori transformational shift activity and co-governance and co-management activity budget.

Executive Summary

2.       In the 2015-2016 financial year, forty-four projects or activities with a combined budget of $9,131,000 have been identified as Māori transformational shift activity and will contribute to ‘significantly lift Māori social and economic well-being’. In addition, eight activities totaling $6,036,000 have been identified as co-governance or co-management activities for 2015/2016. These activities are delivering on the priorities agreed in council’s 2015-2025 Long-term Plan.

3.       Year to date (YTD) expenditure for the 2015-2016 first quarter Māori transformational shift activity was $1074, 000 against an YTD budget of $1,934,000. This indicates a variance of $860,000. A majority of the variance is attributable to programmes and projects yet to start and grant payments yet to be allocated in the Whai Tiaki budgets. Expenditure will be carefully monitored over the remaining quarters to ensure agreed priorities stay on track. 

4.       YTD expenditure for the first quarter co-governance and co-management activity was $540,000 against a YTD budget of $882,000. This indicates a variance of $342,000. The majority of this relates to delays in the development of the Integrated Management Plan for the Tūpuna Maunga o Tāmaki Makaurau Authority and some to delays in capital projects. Expenditure will be carefully monitored over the remaining quarters to ensure agreed priorities stay on track.

5.       Council-controlled Organisation (CCO) results include YTD expenditure and estimates of YTD budgets. Finance staff will work with CCOs to ensure that actual phased YTD budgets are included for the remaining 2015/16 Māori transformational shift activity reports.    

6.       On 22 October, the Finance and Performance Committee agreed that as part of the Annual Plan process, council would identify resources reallocated to new projects identified in Te Toa Takitini portfolio for 2016/2017.  Scoping work has identified other Māori transformational activity proposals for potential inclusion in the 2015/2016 budget (year two of the Long-term Plan) and staff will report back to the Finance and Performance Committee in April 2016 on these.

7.       From quarter two onwards, staff will provide a consolidated Te Toa Takitini portfolio report encompassing Māori transformational activity and expenditure; Co-governance/co-management activity and expenditure; and Treaty of Waitangi Audit response work programme.

 

Recommendation/s

That the Finance and Performance Committee:

a)      receive the quarter one Māori transformational shift and co-governance activities and expenditure report.

b)      note that a consolidated Te Toa Takitini portfolio report, as outlined in paragraph seven, will be provided for quarter two.


Comments

2015/16 Māori Transformational Shift Activity overview

Te Toa Takitini

8.       Te Toa Takitini is council’s strategic top-down council-family approach to Māori responsiveness and prioritises activities that increase Māori responsiveness and contribute to Māori outcomes. Te Toa Takitini encompasses five Māori transformational shift programmes of action:

·        Whai Rawa – Māori Economic Well-being

·        Whai         Painga – Māori Social Well-being

·        Whai Tiaki – Māori Cultural Well-being

·        Whai Tika – Effectiveness for Māori

·        Whai Tahinga – Treaty of Waitangi Settlements.

9.       This approach enables the identification and tracking of progress on activities and budget that contribute to significantly lifting Māori, economic, social and cultural well-being, strengthen council’s effectiveness for Māori, and optimise post-Treaty settlement opportunities for the benefit of mana whenua and the wider public of Auckland.

10.     In the 2015-2016 financial year, forty-four projects or activities totaling $9,131,000 have been identified as Māori transformational shift activity and will contribute to ‘significantly lift Māori social and economic well-being’. These activities are delivering on the priorities agreed in Council’s 2015-2025 Long-term Plan. Table one shows the Māori transformational shift activity budgets in the whai-well-being portfolio areas.

Māori Transformational Shift Activity

Opex

$000

Capex

$000

Budget 2015/16

$000

Whai Rawa – Economic Development

1,125

0

1125

Whai Tiaki - Māori Cultural Well-Being

5,623

359

5,982

Whai Tika-Māori Effectiveness

644

0

644

Whai Painga - Māori Social  Well-Being

1,330

0

1330

Whai  Tahinga –Treaty Settlement

50

0

50

GRAND TOTAL

8,772

359

9,131

                Table one

2015/16 Co-governance and co-management overview 

11.     Auckland Council also partners with various mana whenua entities in delivering co-governance and co-management activities. These activities also deliver on the priorities agreed in Council’s 2015-2025 Long-term Plan and are reported separately from Māori transformational shift activity. Eight activities totaling $6,036,000 have been identified as co-governance or co-management activities for 2015/2016, as shown in table 2.

Co- governance and co management  activity

Opex

Capex

Budget 2015/16

$000

Co-governance-co-management 

3,371

2,665

6,036

GRAND TOTAL

 

 

6,036

             Table two


Summary of Quarter One Māori Transformational Shift Activity

12.     Year to date (YTD) expenditure for the 2015-2016 first quarter Māori transformational shift activity was $1074, 000 against an YTD budget of $1,934,000. This indicates a variance of $860,000. A majority of the variance is attributable to programmes and projects yet to start and grant based payments such as papakainga and marae development funding yet to be allocated. Payments based on contract deliverables yet to be completed have also contributed to the variance. Expenditure will be carefully monitored over the remaining quarters to ensure agreed priorities stay on track. Issues will be elevated to Te Toa Takitini Executive Leadership Group for resolution if required.

13.     Table three provides a summary of the total expenditure for quarter one 2015/2016 across the Māori transformational shift programmes of action for council.

Māori Transformational Shift Activity

September YTD 2015/2016

$000

Activities

Budget

$000

Actuals

Variance

Māori Economic Well-being

300

144

156

Māori Social Well-being

325

174

151

Māori Cultural Well-being

1,158

681

477

Effectiveness for Māori

144

75

69

Treaty of Waitangi Settlements

7

0

7

OPEX TOTAL

1,844

978

866

CAPEX TOTAL

90

96

-6

GRAND TOTAL

1,934

1,074

860

             Table three

Summary of Whai Rawa - Māori Economic Well-being activity

14.     The narrative below provides programme highlights from quarter one activity. Further detail of activity and expenditure is located in A.

15.     Māori signature festival. Auckland Tourism, Events and Economic Development Limited (ATEED will deliver a Māori Signature Festival during the 2016 Auckland Anniversary weekend. The Tāmaki Herenga Waka Festival will leverage off Auckland’s strong nautical heritage, focusing on traditional and contemporary Māori waka culture. ATEED are working with mana whenua entities to deliver this event, which will be an annual event celebrating the importance of Māori culture to Tāmaki Makaurau.

16.     Waka development programme. The waka development programme, led by mana whenua and supported by Te Waka Angamua, is established. The Tāmaki Herenga Waka Trusts role includes building, operating, and maintaining waka with the ultimate purpose of:

a.   revitalising a vibrant waka culture throughout Tāmaki Makaurau and associated harbours

b.   promoting and supporting Māori participation and expression in cultural and sporting activities in Tāmaki Makaurau through the use of waka;

c.   utilising waka culture to promote and support educational opportunities, including cultural development, for Māori in Tāmaki Makaurau; and

d.   promoting and supporting any other matter which is beneficial to Māori in Tāmaki Makaurau, and the wider community more generally through the use of waka.

The first two waka built will support the Tāmaki Herenga Waka Festival signature event.

17.     Māori Business Intelligence Forum. Te Waka Angamua with support from the Research, Investigation and Monitoring Unit hosted a Māori business intelligence forum, which brought together Māori business people, central government agencies, Independent Māori Statutory Board (IMSB) representatives and council staff to develop metrics to measure Māori business growth and development.

 

18.     Emerging Iwi Leaders Programme.  ATEED is developing a programme to grow Auckland mana whenua capability to participate in iwi board, land trust and iwi asset discussions. This work is ongoing and will support skills and capability development for iwi.

19.     Māori-focused events at the waterfront- To showcase and support economic viability and help preserve traditional Māori carving, Panuku Development Auckland (Panuku) have arranged for Ngā Whaotapu o Tāmaki Makaurau (The Sacred Chisels of Tamaki Makaurau) to use facilities at the Percy Vos boat yard, Wynyard Quarter for their projects.

Summary of Whai Painga - Māori Social Well-being activity

20.     The narrative below provides highlights from quarter one activity. Further detail of activity and expenditure is located in appendix A.

21.     Whānau well-being-Whai Oranga Maori Sport and Recreation.  As part of council’s contribution to Māori Social Well-being a draft Māori Sport and Recreation framework has been developed, drawing on the Auckland Plan, Māori Plan, Auckland Sport and Recreation Action Plan and Sport New Zealand’s He Oranga Poutama Strategic Policy.  The framework will inform decision-making on Māori wellbeing outcomes that can be achieved and delivered through sport and recreation activity. The next steps include re-engagement with the community and linking to other social well-being initiatives such as Healthy Families, Healthy Auckland Together and Whānau Ora. 

22.     Te Waka Angamua are working with Arts Communities and Events, Parks and iwi Ngai Tai, to host the nationally recognised Iron Māori Triathlon event in Tāmaki Makaurau in April, 2016. Te Waka Angamua has met internal and external stakeholders for this event which will be held at Umupuia and the Duder Regional Park.

23.     Road safety programme - young Māori drivers and passengers.  Statistics show that young Māori drivers are disproportionately represented in transport offences leading to court actions. Recognising this, Auckland Transport as part of  a multi-agency approach with the Māori Regional Police liaison teams, Ruapotaka Marae and a specialist drug and alcohol health provider completed a pilot programme called Ready for the Road. The programme aims to reduce offending through awareness and education. Another programme is scheduled to be delivered in December with Ngāti Whātua o Ōrākei Marae.

24.     Māori wardens.  Māori Wardens provide a customer service role on some of the Auckland Transport train services as ambassadors.        

Summary of Whai Tiaki- Māori Cultural Well-being activity

25.     The narrative below provides highlights from quarter one activity. Further detail of activity and expenditure is located in appendix A.

26.     Kaitaiki Ranger Programme. Council’s Southern Sector Regional Parks team in partnership with the Department of Conservation and mana whenua have started a mana whenua kaitiaki ranger trainee program, with four positions based at the Ardmore office. Mana whenua entities across Auckland were invited to nominate candidates. Trainees will learn all aspects of rangering including recreation and conservation land and asset management, farming skills, and pest and weed management. Trainees will share Māori environmental and conservation concepts with their ranger coaches and mentors.


 

27.     The Environmental Services Unit has provided budget to operationalise the initiative.  This activity is well under way and $31,000 of budget now committed, including kaitiaki training, track clearance, water quality monitoring, post operational monitoring of rodent numbers, and ongoing co management of work programme.

28.     Watercare Mana whenua Kaitiaki Forum (MWKF)  The Watercare Mana whenua Kaitiaki Forum (MWKF) meets on regular basis to input into Watercare projects. In quarter one five Watercare programmes were presented to the forum. These included, updates on Waikato River Projects, Wai Ora Wai Māori, Watercare wastewater network strategy, Mangere Wastewater Treatment Plant and discussions relating to the further development of the MWKF. The MWKF function does not devolve Watercare of the responsibility to work with individual iwi who identify their interest in any particular project. Watercare have provided budget to service that provision as noted in appendix A.

29.     Kaitiakitanga for healthy waterways and harbours.   To support mana whenua as kaitiaki, Council’s Infrastructure, Environments and Stormwater team have a funding agreement ($45k) with Te Uri O Hau. The agreement supports a programme manager role and wider work programme for the Integrated Kaipara Harbour Management Group. This builds on previous agreements with mana whenua related to the Kaipara Harbour Management Group.

30.     Māori sites of significance. Council’s Plans and Places team lead this program to support the protection of waahi tapu sites. Quarter one activity included consultancy work linked to the hearing process for sites of significance selection process; the establishment of a specialist team to support the Māori heritage programme; and engagement with mana whenua stakeholders on the hearing process.

Summary of Whai Tika - Effectiveness for Māori activity

31.     The narrative below provides highlights from quarter one activity. Further detail of activity and expenditure is located in Attachment A.

32.     Effectiveness for Māori. - Council’s Treaty Audit response work programme for 2015/2016 was approved by the Finance and Performance Committee on 22nd October. The work programme included detailed project level planning with business owners, ensuring that increasing Māori responsiveness is a transformational change owned and supported by the whole of council.

33.     A key Treaty Audit recommendation relates to progress with developing Māori Responsiveness Plans (MRPs). Currently ten Māori Responsiveness Plan plans are underway and four are completed. A MRP toolkit, outlining the methodology and framework for developing these plans, has been developed and templates and process are being tested for implementation with other council departments and CCOs.

34.     Council and IMSB secretariat staff have established a Waharoa gate group to ensure alignment of Treaty Audit response project objectives with 2015 Treaty Audit recommendations and to verify closure and acceptance of final deliverables.

35.     Ngā Kete Akoranga.   Learning and development activities that build council capability to respond effectively to Māori are on-going, including: e-learning modules; group learning workshops; and role-specific training for elected members, senior managers, technical/professional roles, and Māori specialist roles. This has included te reo and waiata training, tikanga and marae training and Treaty of Waitangi Workshops.


 

Summary of Whai Tahinga -Treaty of Waitangi Settlements activity

36.     Treaty of Waitangi Settlement Programme. Māori transformational shift activity for quarter one encompassed ongoing engagement with crown, collective mana whenua groups and individual mana whenua on treaty settlement negotiations. This included attendance by council representatives at Te Kawerau ā Maki Claims Settlement Bill third reading. No specific expenditure beyond staff time was incurred. Activities, and expenditure, anticipated for quarters two and three, include those relating to harbour negotiations and across-council projects to enhance post-settlement engagement with mana whenua.

Summary of co-governance and co-management activity

37.     The narrative below provides highlights from quarter one activity from the Parks, Sport and Recreation team. Further detail of activity and expenditure is located in Attachment B.

38.     A total of $540,000 was spent in quarter one. This included $472,000 opex and $ 68,000 capex. A majority of this related to Tūpuna Maunga o Tāmaki Makaurau Authority (Maunga Authority) activities and the costs associated with the Whenua Rangatira, Ngāti Whātua Ōrākei Reserves Board.

39.     Ngāti Whātua Ōrākei Reserves Board (opex)   Orakei Marae hosted the 2015 Hūi Poutama on 11 October. This focused on providing career pathways and educational outcomes for Māori. As a result of ongoing discussions with theNgāti Whātua Ōrākei Reserves Board, a feasibility study for a Wharewaka (waka facility) at the eastern end of The Landing, Tamaki Drive will commence in the next quarter.   

40.     Tūpuna Maunga o Tāmaki Makaurau Authority (opex).  Work on the Integrated Management Plan for the maunga Work has commenced, with a completion date of June 2016.  In November the Maunga Authority approved the planting of three Pohutukawa and six Tōtara trees on Maungakiekie to replace the tree that was felled in 2000 after sustaining damage in 1994 and 1999.

Consideration

Local Board views and implications

41.     Local boards through their advisors have been consulted in the identification of local board Māori transformational shift activity. Local boards will be included in the business partnering process to support the implementation of the monitoring and reporting system Māori transformational activity.

Māori impact statement

42.     This report provides information on the quarter one activities for 2015/2016 identified as Māori transformational shift activity. This report also provides information on the quarter one identified as co-governance or co-management activities for 2015/2016. These activities are delivering on the priorities agreed in council’s 2015-2015 Long-term Plan.

Next steps

43.     Additional Māori transformational activity proposals have been identified for potential inclusion in council’s 2015/2016 budget. Decisions on these activities will be reported to the Finance and Performance Committee in April 2016.

44.     Finance and Te Waka Angamua will work with CCOs to ensure that budget and expenditure results are included in the remaining quarterly reports for the 2015-2016 financial year. 

 

Attachments

No.

Title

Page

aView

Māori Transformational Shift Activity

57

bView

Co-governance and co-management activities

63

     

Signatories

Author

Shane Cook - Kaihautu Whakatuturu Puni - Senior Maori Effectiveness Advisor

Authorisers

Johnnie Freeland - Paearahi Matua - Manager

Phil Wilson - Governance Director

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

19 November 2015

 







Finance and Performance Committee

19 November 2015

 



Finance and Performance Committee

19 November 2015

 

Implementing the New Food Act for Environmental Health (Food Premises)

 

File No.: CP2015/23645

 

  

 

 

Purpose

1.       This report advises on the options for the establishment of new fees for environmental health services (food premises) as a consequence of the Food Act 2014 that comes into force on 1 March 2016.

Executive Summary

2.       The Food Act 2014 introduces significant improvements to how food safety is addressed by commercial establishments across New Zealand. The new Act places a greater emphasis on the operator being responsible for food safety, and the regulator auditing and verifying that their plan is adequate and being followed correctly.

3.       The new Act changes the way food premises are registered and managed by Council and a range of businesses will register for the first time with Council.

4.       Changes are required to the way Council charges for the services it provides through administering the Food Act; due to amendments to the registration process and the addition of new verification, auditing and compliance services. 

5.       This report recommends the adoption of a Statement of Proposal for consultation with the public and food operators on the fixing of fees.  It is proposed that operators will pay a fixed (minimum) fee upfront with additional officer time charged on an hourly rate basis.

 

Recommendation/s

That the Finance and Performance Committee:

a)      adopt the statement of proposal to fix fees to recover the costs of the Council’s functions under the Food Act 2014.

b)      agree the process for consultation as set out in the report. Staff will report back on submissions and the proposed fees to the Regulatory and Bylaws Committee in 2016.

c)      note that the December 2015 meeting of the Regulatory and Bylaws Committee will appoint hearings panel members to consider the submissions.

 

 

Background

6.       The Food Act 2014 (The Act) was passed into law in June 2014, replacing the Food Act 1981. A three year transition starts on 1 March 2016. High risk food service businesses with an alcohol on-licence such as hotels, restaurants, bars and cafes will be among the first to transition to the new Act.


 

Existing premises will transition

7.       As at 30 June 2015, there were 8904 registered food premises in the region. The majority of these fall into the following categories:

·        A Grade High Risk premises (59%)

·        A Grade Medium Risk premises (19%)

·        A Grade Low Risk premises (14%) or

·        B Grade High Risk premises (6%) 

8.       Most of these premises are expected to register with Food Control Plans.  Some lower risk premises such as dairies and fruit and vegetable stores will register with National Programmes.  The new categories are as follows:-

·        Food Control Plan – Food Service Sector (Restaurants/Cafes)

·        National Programme 3 – Dairies, Fruit and Vegetable Stores

·        National Programme 2 – Early Childhood Education providers

·        National Programme 1 -  Coffee Carts - Lowest Risk.

New types of businesses are now in scope

9.       An additional number of premises will be required to register with Council, estimated at around 1400 - 2000 premises.  They will be registered under different risk based measures:-

·        Food Control Plan premises - rest homes (150), schools (100), hospitals (35), prisons (10), workplace cafeterias (200-600) and others. 

·        National Programme premises – Early Childhood Education providers (900).

10.     A national food grading system is provided for in the new Act but is still some time away from being developed and implemented. Auckland Council is currently reviewing its existing grading system to ensure it is in accordance with the new Act. This will be part of a separate review which will be reported to the Regulatory and Bylaws Committee.

Implementing the new Food Act

11.     A project team has been established to implement the Act; both the transition of the nearly 9000 premises and the addition of extra premises required to be registered.

12.     Mentoring sessions have been held with over 1000 operators.  Currently, over 1500 early adopters are using a Food Control Plan. These VIP operators (Voluntary Implementation Programme) have provided valuable information to assist with the planning process, training of staff, mentoring of operators and modelling of time to complete tasks.  This has also enabled the team to forecast staffing requirements and to better understand the new requirements. 

Principles for recovering costs under the new Food Act 

13.     Fees and charges are currently set under the Health Act 1956 and the Food Hygiene Regulations 1974. Food premises subject to the requirements of the new Food Act have up to three years to transition and, until they do, will be subject to the current charging regime.

14.     The new Food Act enables Council to fix fees to recover the direct and indirect costs of any registration, verification, compliance and monitoring functions performed under the Act. 

15.     The Ministry of Primary Industries has provided guidance on how fees and charges should be determined. The Act states that fees must not recover more than the reasonable costs and must satisfy the follow criteria:


Equity

Funding should come from the persons using or benefiting from the functions, power or service.

16.     Staff advise it is equitable to recover the full costs of the Council’s functions under the Act from the direct beneficiaries.  The beneficiaries are determined as the owners of food premises to which these functions apply.  Users of food premises receive an indirect benefit from the functions performed by the Council under the Act. Conversely, it would not be equitable to recover the costs arising from a complaint that did not result in the issuing of an improvement notice.  Rather a complaint service is of general benefit to the public and costs should not be directly recovered from the food operator where a complaint is not justified. 

Efficiency

Costs should be allocated and recovered so that maximum benefits are delivered at minimum cost.

17.     Council is obliged to deliver its functions in the most efficient manner possible and to ensure this efficiency is reflected in the costs to users. 

Justifiable

Costs should be collected only to meet actual and reasonable costs (including indirect costs).

18.     Fees and charged should be determined on the estimated time to process registration, verification and compliance functions.  The hourly rate reflects a careful analysis of direct costs such as salary and operational expenditure, as well as indirect costs such as support functions, IS and property costs.  The indirect costs have been adjusted to be market related where possible .i.e. property charges have been based on the Colliers Public Sector per employee property cost.

Transparency

Costs should be identified and allocated to the tangible service provision for the recovery period in which the service is provided.

19.     The proposed fees are based on a calculated hourly rate charge. These have been determined, based on current timings, the associated time that is allocated to the individual functions of registration, verification and compliance.  Included in the calculated $155 per hour charge are the direct, indirect and corporate support charges

20.     Registration includes the administration work such as providing basic advice to new businesses, recording food premises details, processing licences and certificates.

21.     Verification includes auditing of food premises, including preparation (booking of appointments, checking prior history), travel time, actual on-site time, completing reports and recording system entries.

22.     All compliance and monitoring activity will be charged on a per hour basis in circumstances where an improvement notice is issued.


 

Options considered for fixing fees and charges

23.     The Act provides options for fixing fees.  These are presented below:

Option

Positives

Negatives

Risks

Option 1:

Minimum fixed fee based on average time, with the ability to recover additional costs as required.

 

·   Rewards good compliance & behaviour

·   Recovers costs for actual work performed

·   Minimum charge removes risk of not recovering full costs

·   Consistent with MPI fees and charges methodology

·   Provides customer guidance on total fees

 

 

·    Some averaging for some operators

·    More invoicing than current approach

 

 

·   Not accurately recording time spent could see cost recovery affected

·   Additional overheads required with explaining additional hours

 

Option 2:

Subsidised cost recovery with rates funding to lower the hourly rate

 

·   Keeps costs for operators lower

·   Encourages use of Council as preferred verifier when competition is introduced

 

·    Increases costs to ratepayers

·    Inconsistent with Food Act principle of equity, in that although users of food premises are beneficiaries, the real benefit of safe food premises are the business owners 

·    Lower incentive for operators to be efficient

 

 

·   Ratepayers unhappy subsidising food businesses

·   Increased demand for verification services unable to be met

·   Subsidised services could lead to business competitor complaints

Option 3:

Charging by the hour only (no upfront fixed fee)

 

·   Possible perceived lower charges by customers

 

·    High administration costs which haven’t been factored into costs

·    High transaction volume

·    Uncertainty for operators as to likely total charges

 

 

·   Higher debt collection costs

·   Overall lower revenue and possibly not all costs recovered

·   New systems (Newcore) will not be available initially 

·   Very limited transition period for staff to move to full time based recording

 

24.     Option 1 provides customers with certainty on how much a service would cost on average through a fixed fee, and at the same time provides the ability to recover additional costs as required through additional charges based on time spent.

25.     Option 3 provides the greatest flexibility to users.

Projected Financial Implication

26.     There will be a level of fluctuation in the revenue as we transition applicants across to the new Food Act over three years.  We expect the revenue to meet the projected budget targets for the next two years but this will need to be reforecast for year 3 (2018/19) once the regulations have bedded in . It is also important to note that the verification frequency for high performing operators will extend to every eighteen months.  By 2018/19 the verification trends and bedding in of new processes will enable an accurate assessment of the projected operating expenditure and revenue.

Special Consultative Procedure

27.     Prior to fixing fees, the Council is required to consult on the proposed fees using the special consultative procedure as provided in section 83 of the Local Government Act 2002. 

28.     To meet the requirements of section 83, this report seeks adoption of the statement of proposal to be released for special consultative procedure. The Statement of Proposal is included in attachment A of this report.

29.     Key steps for the consultation include:

a.       The consultation period will be from Friday 20 November to Monday 21 December. Whilst this is not an ideal time to call for submissions the need to get the new fee regime in place by March 2016 makes it unavoidable.

b.       A Statement of Proposal will be published on the Shape Auckland website and available at service centres

c.       A public notice will be published

d.       Current licensed premises and industry groups will be communicated with directly 

e.       Public hearings will be available for those wishing to present oral submissions

 

 

Table 1:  Proposed fee schedule for administering the Food Act 2014

Function

Fee (inclusive of GST)

Timing of Payment

Registration

Application for registration of Food Control Plan (FCP) based on a template or model issued by MPI

$310 (includes two hours of processing of application)

 

$155 per hour for every extra hour of registration activities

$310 payable on application

 

 

Remainder payable on invoice

Application for registration of a business subject to a national programme template

$155 (includes one hour of processing of application)

 

$155 per hour for every extra hour of registration activities

$155 payable on application

 

 

Remainder payable on invoice

Application for renewal of registration

$155 (includes one hour of processing of application)

 

$155 per hour for every extra hour of registration activities

$155 payable on application

 

 

Remainder payable on invoice

Application for amendment to registration

$155 (includes one hour for processing of application)

 

$155 per hour for every extra hour of processing the application

 

 

 

 

$155 payable on application

 

 

Remainder payable on invoice

Verification

Verification of a food control plan based on a template or model issued by MPI

$620 (includes four hours of verification activities)

 

 

$155 per hour for every extra hour of verification activities

Payable at registration (if verification due within next 12 months)

 

Remainder payable on invoice

Verification of a food control plan based on a National Programme Three (NP3) template

 

 

 

$465 (includes three hours of verification activities)

 

 

$155 per hour for every extra hour of verification activities

Payable at registration (if verification due within next 12 months)

 

Remainder payable on invoice

Verification of a food control plan based on a National Programme Two or One (NP2 or NP1) template

 

 

$310 (includes two hours of verification activities)

 

 

$155 per hour for every extra hour of verification activities

Payable at registration (if verification due within next 12 months)

 

Remainder payable on invoice


Compliance

Issue of improvement notice

$155 per notice (includes one hour of improvement notice activity)

 

$155 per hour for every extra hour of improvement notice activity

Payable on invoice

Application for review of issue of improvement notice

$155 per application (includes one hour of review activity)

 

$155 per hour for every extra hour of review activity

$155 payable on application

 

 

Remainder payable on invoice

All other Services for which a fee may be set under the Food Act

$155 per hour

Payable on invoice

 

Additional points to consider

30.     The initial verification fixed fee is based on an initial estimate of time. The actual officer time will be subject to the size, complexity, level of compliance and the readiness of the business.

31.     The registration frequency for National Programmes is every two years.

32.     The verification frequency for high performing operators may extend to every eighteen months, further reducing compliance costs for food operators.  Verifications for businesses on National Programmes may also be extended to twenty four months.  Businesses on National Programme One (businesses such as coffee carts) will only need to be verified once. 

33.     The Council may also grant an exemption from, or waive or refund, any fee or charge in whole or in part.  For example, under the current fee schedule, approximately 500 premises such as clubs pay a nominal fee of approximately $300 to receive certificate of inspections.  A similar method of recognising not for profit type organisations will be adopted. 

34.     Renewal of registration will be based on the annual anniversary date of registration under the Food Act 2014.

35.     Food businesses transitioning from the Food Hygiene Regulations 1974 to the Food Act 2014 will be able to transfer fees on an annual pro-rata basis to the Food Act registration.

Fee comparatives between existing & proposed charges

36.     The new charges comprise registration, verifications and monitoring activity charges. The new Act and fee structure will enable high performing premises to receive lower charges through fewer verification site visits. Noted below is an example of what operators will be charged based on option 1:

·        Most food premises are currently categorised as A Grade High Risk (59%) and are currently being charged $1,048.  Most of these will need to register with a Food Control Plan and be verified on an annual basis.  This will cost $930 in the first year, and $775 in subsequent years.  A proportion of these (estimated at up to 50%) will require extra time to verify, and Council are required to recover the extra costs associated with this time.  As time goes on, and operators become familiar with their requirements, some will become high performing and verifications will occur every 18 months.  Effectively this means over three years they will be registered each year but only be verified twice, therefore paying average annual fees of $568 (Yr1 $775 + Yr2 $775 + Yr3 $155). 

·        For smaller, low risk businesses such as dairies and service stations, they currently pay $407 or $542.  Fees will reduce for these operators to $310 per year as they will only need to register and be verified every two years unless they require additional time to complete the verification process.

37.     Table 2 provides a full comparative of existing and proposed fees, refer attachment B.

Consideration

Local Board views and implications

38.     Local Boards views will be sought during the special consultative procedure and included in the report following the analysis of responses. 

Māori impact statement

39.     Food prepared and served on a marae for customary activities is outside the scope of the Act and will not be regulated as the food is not sold or traded.

40.     Food businesses that operate from marae and sell food will be regulated under the Act in the same way that food businesses operating elsewhere will be regulated.

41.     The Food Act Transition project team has engaged with mana whenua, the Independent Māori Statutory Board and will be sharing information with Mataawaka on 11 Nov at the Te Mahurehure Marae in Point Chevalier. This session includes representatives from Te Puni Kokiri and based on the feedback from this hui further engagement will be scheduled for next year.

42.     Marae that are raising funds for ‘charitable, benevolent, or cultural purposes’ would not need to operate with a Food Control Plan or under a National Programme provided the trading takes place on no more than 20 occasions in any calendar year.

Implementation

43.     The new fees and charges are required to be in place by 1 March 2016.  The special consultation procedures described above enable Council to meet its obligations under the Act, within the very tight timeframe prescribed by the Ministry of Primary Industry.

 


 

Attachments

No.

Title

Page

aView

Statement of Proposal (Setting fees under the Food Act)

73

bView

Table 2: Fee Comparative (Current versus Proposed charges)

83

     

Signatories

Author

Mervyn Chetty – Manager Environmental Health, Licensing and Compliance Services

Authorisers

Grant Barnes - General Manager Licensing and Compliance Services

Penny Pirrit - Director Regulatory Services

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

19 November 2015

 










Finance and Performance Committee

19 November 2015

 


Finance and Performance Committee

19 November 2015

 

Reports Pending Status Update

 

File No.: CP2015/24076

 

  

 

 

Purpose

1.       To update the committee on the status of Finance and Performance Committee resolutions from July 2015 requiring follow-up reports.

Executive Summary

2.       This report is a new regular information only report that provides committee members with greater visibility of committee resolutions requiring follow-up reports (Attachment A).  It updates the committee on the status of such resolutions. It covers committee resolutions from July 2015 and will be updated for every regular meeting.

3.       This report covers open resolutions only.  A separate report will be prepared in future covering any confidential resolutions requiring follow-up reports.

4.       The committee’s Forward Work Programme 2015/2016 is also attached for information (Attachment B).

 

Recommendation/s

That the Finance and Performance Committee:

a)      receive the Reports Pending Status Update report.

 

 

Attachments

No.

Title

Page

aView

Reports Pending Status Update

87

bView

Forward Work Programme 2015/2016

89

     

Signatories

Author

Mike Giddey - Democracy Advisor

Authoriser

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

19 November 2015

 



Finance and Performance Committee

19 November 2015

 


Finance and Performance Committee

19 November 2015

 


Finance and Performance Committee

19 November 2015

 



Finance and Performance Committee

19 November 2015

 

Annual Plan 2016/17 - Update

 

File No.: CP2015/24378

 

  

 

 

Purpose

1.       This report recaps the Annual Plan 2016/17 process to date and sets out the next steps leading up to consultation with Aucklanders ahead of final decision making in May/June 2015.

Executive Summary

2.       During the development of the long-term plan a number of resolutions were passed requesting further work be undertaken on selected issues as part of the Annual Plan 2016/17. In response, over the past 3 months workshops have been held with the Finance and Performance Committee on financial policy changes and the budget for 2016/17.

3.       In October 2015 the Finance and Performance Committee agreed its preference to consult on financial policy issues such as the quantum of the Uniform Annual General Charge and the composition of the interim transport levy.

4.       During workshops, staff have provided information and analysis to assist understanding of existing budgets, including six year revenue and expenditure trends and social and economic spend analysis. This has not resulted in any significant proposed changes to budgets at this stage.

5.       During this period local boards have also been undertaking a series of workshops to discuss their budgets and priorities for 2016/17. In December 2015, local boards will be agreeing their proposed content for annual plan consultation.

6.       The Mayoral proposal will be presented to the Finance and Performance Committee on 10 December 2015. Should it be required, time has been set aside to workshop the Mayoral proposal ahead of agreeing the issues for consultation on 17 December 2015. The consultation document and any supporting material will then be adopted on 10 February 2016. Public consultation will run from 15 February to 15 March 2016.  

7.       Staff will be undertaking their standard annual review process across all council budgets for the 2016/17 year in February – March 2016. A briefing on the budget following this review will be provided to the Finance and Performance Committee and local board chairs in April 2016.

8.       Following feedback from the community, final decisions will be made in May 2016 before adopting the annual plan in June 2016.

 

Recommendation/s

That the Finance and Performance Committee:

a)      note the contents of this Annual Plan 2016/17 Update report.

 

 

Comments

Background

9.       All councils are required by legislation to adopt a long-term plan (LTP) and review it every three years.  Councils are also required to adopt an annual plan in each of the two intervening years between each LTP.

10.     Annual Plan 2016/17 budgets, priorities and funding envelopes have been set in the second year of the current LTP. Any significant or material changes to the budget or service levels from the LTP will require consultation.

11.     Auckland Council is also required to include local board agreements in its annual plan. The proposed content of the local board agreement must also be included in annual plan consultation.

Developing the AP 2016/17

12.     The process to develop council’s Annual Plan 2016/17 began with a programme briefing to the Finance and Performance Committee in August 2015.  Workshops on financial policy changes and the budget for 2016/17 have also been held in September, October, and November 2015.

13.     In October 2015 the Finance and Performance Committee agreed its preference to consult on the following financial policy issues:

·   the quantum of the Uniform Annual General Charge

·   increasing in the share of the interim transport levy met by businesses and sharing it amongst business ratepayers based on capital value

·   a proposal to reallocate rates from large farm/lifestyle properties over all other ratepayers

·   amending the Maori Freehold Land Remission and Postponement policy. 

14.     During these workshops staff also provided information and analysis to assist understanding of the existing budgets. This included:

·   Draft three-year activity review programme

·   Six year revenue and expenditure trends

·   Social and economic spend analysis

·   Grants budgets for 2015/16

·   opportunities to discuss aspects of this analysis with representatives from ACE, ATEED, AT and Governance.

This has not resulted in any significant proposed change to budgets at this stage.

Next steps

Preparing for consultation

15.     On 10 December 2015 the Finance and Performance Committee will receive the Mayoral proposal for consultation on the annual plan. Should it be required, time has been set aside to workshop the Mayoral proposal ahead of agreeing the issues for consultation on 17 December 2015.

16.     If consultation includes any proposal to amend the LTP then the consultation document will also include an opinion from the Auditor-General confirming or amending the Auditor-General’s report made for the LTP.  The audit process would need to be completed before the consultation document is adopted by the Governing Body on 10 February 2016.

Annual budget review

17.     Staff will be undertaking their standard annual review process across all council budgets for the 2016/17 year in February – March 2016. This will include a review of cost pressures, progress against savings targets and any changes to the capital programme. It will also include an update on planning assumptions for key items such as inflation and dividend expectations.

18.     A briefing on the budget following this review will be provided to combined Finance and Performance Committee and local board chairs on 12 April 2016 ahead of final decision making for the annual plan.


 

Finalising the annual plan

19.     Consultation will run from 15 February to 15 March 2016.  Following feedback from the community final decisions will be made in May 2016 before adopting the annual plan in June 2016. The table below sets out the high level process to finalise the annual plan.

Table One: Finalising the AP following today

Phase

Timing

Local board workshops to discuss budgets and priorities for 2016/17

7 Oct – 20 Nov

Local board meetings to agree advocacy and feedback on regional issues

16 Nov – 25 Nov

F&P Committee meet with local boards to discuss priorities, advocacy and feedback on regional issues

27 and 30 Nov

Mayoral proposal

10 December

Local board meetings to agree local consultation content

9 Dec – 14 Dec

Governing Body workshop Mayoral proposal (if required)

11 and 16 Dec

Governing Body meets to agree consultation issues 

17 December

Governing Body meets to adopt consultation document and supporting material 

10 February

Public consultation

15 Feb- 15 Mar

Budget review briefing

12 April

Finance and Performance Committee hold discussions with local boards

28 April – 1 May

Finance and Performance Committee  make final decisions for the annual plan

16 May

Local boards meet to adopt their local board agreements

6-16 June

Governing Body meet to adopt the final annual plan

30 June

Documentation will be published and made available to the public and information on the decisions made will be shared with people who participated in the consultation process.

July / August

Consideration

Local Board views and implications

20.     Local board views were considered within each of the relevant Annual Plan 2016/17 reports provided to the Finance and Performance Committee in October and November 2015.

21.     Local board members were also provided with a briefing on the Finance and Performance Committee preferences for consultation on financial policy issues in cluster sessions held between 2 and 5 November 2015.   

22.     Local boards have a series of workshops scheduled between 7 October and 20 November 2015 to discuss their budgets and priorities for 2016/17.

23.     Local boards will meet with the Finance and Performance Committee on 27 and 30 November 2015 to discuss their priorities, advocacy and feedback on the financial policy issues.

24.     A report will be provided to Governing Body when it considers the Mayoral proposal on 17 December 2015. The report will cover local board feedback and advocacy.

Māori impact statement

25.     The impact on Māori was considered within each of the relevant Annual Plan 2016/17 reports provided to the Finance and Performance Committee in October and November 2015.

26.     Targeted engagement with Mana Whenua will take place as consultation.

Implementation

27.     Decisions on the consultation issues are required by 17 December 2015. This is to enable sufficient time for staff to prepare the necessary consultation materials in time for adoption on 10 February 2016.

 

Attachments

There are no attachments for this report.    

Signatories

Author

Aaron Matich – Acting Programme Director – Annual Plan

Authorisers

Matthew Walker - General Manager Financial Strategy and Planning

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

19 November 2015

 

Alternative Sources of Financing - Feedback

 

File No.: CP2015/23640

 

  

 

 

Purpose

1.       To submit the two independent reports from Ernst & Young and Cameron Partners on alternative sources of financing available to Auckland Council.

Executive Summary

2.       The Budget Committee agreed on 8 May 2015:

·   to undertake a review of Auckland Council’s mix of funding sources to inform the Annual Plan 2016/2017, with the broad objectives of further reducing the proportion of council revenue funded from rates, maximising the return on council’s investments and exploring alternative sources of funding, including from the optimisation of assets that are poorly aligned with council’s core business and the broader strategic growth priorities for Auckland.

·   to direct the Chief Executive to commence the design of the review and its associated processes, following the release of the Local Government New Zealand Funding Review Final Report in June 2015.

·   to request that the terms of reference for the review be reported back to the July 2015 meeting of the Finance and Performance Committee.

3.       The Finance and Performance Committee agreed on 23 July 2015 :

·   to endorse managements approach and associated processes to review Auckland Council’s mix of alternative financing sources; and

·   that the reports would be provided back to Councillors for input and consideration into the 2016/2017 Annual Plan process.

4.       Cameron Partners and Ernst & Young were appointed to independently provide input and thought expertise into the range of alternative financing options available to the council and the criteria by which the council should evaluate these options. The full reports are attached as Attachment A and B respectively.

5.       Both parties had access to council information and conducted interviews with a wide range of senior management from across the wider council group. The process has been facilitated by the Group Chief Financial Officer.

6.       Certain options identified by the report authors would require council to amend its Long-term Plan prior to any final decision-making. An amendment process would require a full audit as well as comprehensive community consultation.

 

Recommendation/s

That the Finance and Performance Committee:

a)      receive the reports from Cameron Partners and Ernst & Young.

 

 


Attachments

No.

Title

Page

aView

Cameron Partners report (Under Separate Cover)

 

bView

Ernst & Young report (Under Separate Cover)

 

     

Signatories

Authors

Matthew Walker - General Manager Financial Strategy and Planning

John Bishop - Treasurer and General Manager Transaction Services

Authoriser

Sue Tindal - Group Chief Financial Officer

      

 


Finance and Performance Committee

19 November 2015

 

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

 

That the Finance and Performance 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       Restoration of St James Theatre

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)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

In particular, the report contains commercially sensitive information.

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.