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

 

Date:                      

Time:

Meeting Room:

Venue:

 

Wednesday, 1 February 2017

1:30pm

Room 1, Level 26
135 Albert St
Auckland

 

Appointments and Performance Review Committee

 

OPEN AGENDA

 

 

 

MEMBERSHIP

 

Chairperson

Hon Phil Goff, JP

 

Deputy Chairperson

Hon Christine Fletcher, QSO

 

Members

Cr Chris Darby

 

 

Cr Richard Hills

 

 

Cr Penny Hulse

 

 

Cr Desley Simpson, JP

 

 

 

 

Ex-officio

Deputy Mayor Bill Cashmore

 

 

(Quorum 3 members)

 

 

 

Elaine Stephenson

Senior Governance Advisor

 

26 January 2017

 

Contact Telephone: (09) 890 8117

Email: elaine.stephenson@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 


 


 

TERMS OF REFERENCE

 

Responsibilities

 

The Appointments and Performance Review Committee is established to:

 

1. Review the chief executive’s performance and to recommend to the Governing Body the terms and conditions of the CE’s employment including any performance agreement measures and annual remuneration.

2. Make appointments to Council-Controlled Organisations (CCOs), Council Organisations (COs) and exempt CCOs and COs.

3. Approve policies relating to the appointment of directors and trustees to CCOs and COs.

 

Powers

 

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

(c)        the power to establish sub-committees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 


Appointments and Performance Review Committee

01 February 2017

 

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                                                                                                7

8          Notices of Motion                                                                                                          8

9          Process for appointments to the boards of Auckland Transport and the Auckland Council/Selwyn Foundation joint venture company                                                 9

10        Process for appointments to the board of the Auckland Regional Amenities Funding Board                                                                                                                             11

11        Accountability of Auckland Council Controlled Organisations                            15  

12        Consideration of Extraordinary Items 

PUBLIC EXCLUDED

13        Procedural Motion to Exclude the Public                                                                 39

C1       Chief Executive's Performance Review                                                                    39

C2       Board Appointments Council Controlled Organisations: Auckland Transport Candidate Short-list                                                                                                                       39

C3       Board appointments to the Auckland Council/Selwyn Foundation joint venture company providing housing services for older people                                                           40

C4       Board Appointments to the Auckland Regional Amenities Funding Board        40  

 


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 Appointments and Performance Review Committee:

a)         confirm the ordinary minutes of its meeting, held on Thursday, 24 November 2016, 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 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.

 


Appointments and Performance Review Committee

01 February 2017

 

Process for appointments to the boards of Auckland Transport and the Auckland Council/Selwyn Foundation joint venture company

 

File No.: CP2017/00053

 

  

 

Purpose

1.       To update the committee regarding the process for appointments to the boards of Auckland Transport and the joint venture company with the Selwyn Foundation for the provision of housing services for older people (JVCo).

Executive summary

2.       The Appointments and Performance Committee, at its 24 November 2016 meeting approved the appointments process for filling three director vacancies on the Auckland Transport board and two director vacancies on the JVCo board.

3.       The current process for appointing directors to any council-controlled organisation (CCO)  and external partnership board includes the following:

 

4.       The advertising campaign for Auckland Transport and the JVCo was completed in December 2016 and the nomination panels for each board have considered all the candidates that have applied.

5.       Two confidential reports on the agenda provide the necessary information for the committee to make its decisions regarding the short-listed candidates for the three vacancies on Auckland Transport and two vacancies on JVCo board. 


 

6.       The information in the two confidential reports is deemed private to protect the privacy of the candidates and includes the:

·   complete list of candidates for both board vacancies

·   short-listed candidates recommended by each nomination panel

·   skills matrix, candidate summaries and precis of curriculum vitae  for the short-listed candidates.

7.       The process outlined in the table is consistent with the Auckland Council Appointment and Remuneration Policy for Board Members of Council Organisations (the policy).

 

Recommendation/s

That the Appointments and Performance Review Committee:

a)      note the board appointment process for Auckland Transport and the Auckland Council/Selwyn Foundation joint venture company, have now completed the advertising part of the board appointment process.

b)      note that confidential reports for Auckland Transport and the Auckland Council/Selwyn Foundation joint venture company are included within the agenda and provide the necessary information for the committee to approve the short-listed candidates recommended by each nomination panel.

c)      note the final appointment decisions will be made publicly available at the conclusion of the appointment process.

 

Attachments

There are no attachments for this report.     

Signatories

Author

Josie Meuli - Senior Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

 


Appointments and Performance Review Committee

01 February 2017

 

Process for appointments to the board of the Auckland Regional Amenities Funding Board

 

File No.: CP2017/00361

 

  

 

Purpose

1.       To approve the process for appointments to the board of the Auckland Regional Amenities Funding Board (the Funding Board).

Executive summary

2.       The Auckland Regional Amenities Funding Act 2008 (the Act) established a model for funding ten specified regional amenities.[1] The Act established two administrative bodies, the Funding Board and the Amenities Board. 

3.       The Funding board assesses funding applications from the regional amenities and allocates the funding from Auckland council to the amenities.  The Amenities board make appointments to the Funding board.  A diagram outlining the Funding board membership is below.

 

4.       Auckland Council appoints six of the ten board members (one of which must represent the interests of Māori in Auckland) and four members are appointed by the Amenities Board.

5.       Six of the current Funding Board members are due to retire on 31 May 2017.  Four are Auckland Council (the council) appointments and two are Amenities board appointments.  The Amenities Board will undertake a separate process for their two board appointments.

6.       The current process for appointing directors to any council controlled organisation (CCO) and external partnership board is outlined in Auckland Council’s Appointment and Remuneration Policy for Board Members of Council Organisations (the appointment policy). 

7.       The Appointments and Performance Committee are required to make decisions regarding the:

·   process for appointing the four Auckland Council board members

·   skill requirements as outlined within the Act (detailed in the confidential report)

·   appointment of the nomination and interview panel members, if required.

 

[1] Auckland Observatory and Planetarium Trust Board ;  Auckland Philharmonia ;  Auckland Regional Rescue Helicopter Trust ;  Auckland Theatre Company Limited ;  Coast Guard Northern Region Incorporated ;  New Zealand National Maritime Museum Trust Board ; New Zealand Opera Limited ;  Surf Life Saving Northern Region Incorporated ;  The Auckland Festival Trust ; Watersafe Auckland Incorporated

 

8.       A confidential report on today’s agenda provides the necessary information for the committee to make its decision regarding the four Auckland Council board members on the Funding Board whose appointment term is due to expire.

 

Recommendation/s

That the Appointments and Performance Review Committee:

a)      approve that the board appointment process for the Auckland Regional Amenities Funding Board appointments be consistent with Auckland Council’s board appointment and remuneration policy.

b)      approve a nomination and interview panel for director vacancies, if any, on the Auckland Regional Amenities Funding board comprised of:

i)        up to two councillors

ii)       an Independent Māori Statutory Board member

iii)      Auckland Council’s Chief Executive (or his representative).

c)      note that a confidential report is included in the agenda and provides information regarding the four board members appointed by Auckland Council whose appointment term expires on 31 May 2017.

d)      note that the Amenities Board will undertake a separate process for its two board appointments.

e)      note the final appointment decisions will be made publicly available at the conclusion of the appointment process.

 

Comments

Funding Board legislation

9.       In 2008 the Auckland Regional Amenities Funding Act (the Act) established a mechanism to provide adequate, sustainable and secure funding for ten specified amenities that provide arts, education, rescue or community facilities or services to the Auckland region.

10.     The Acts two administrative bodies are the Auckland Regional Amenities Funding board (the Funding Board) and the Amenities Board.

11.     The Amenities Board is made of one representative from each of the ten specified amenities.

12.     The function of the Amenities Board is to make appointments to the Funding Board.

13.     Auckland Council appoints six members to the Funding Board, one of which must represent the interests of Maori in the Auckland region, and the Amenities Board appoint four board members.

Board member competencies and terms

14.     The Funding Board member competencies outlined in the legislation provide that each board member must have the management skills, experience and professional judgement necessary to undertake the Funding Board’s functions.

15.     The legislation states board members are:

(i)         Appointed for a term of three years

(ii)      Eligible for reappointment indefinitely hence there is no maximum tenure.  However, the council’s board appointment policy states that directors should serve a maximum of two three-year terms.  Some circumstances can permit an extension, but total tenure must not exceed nine years.

Confidential report

16.     The information in the confidential report is deemed private to protect the privacy of the board members and includes the:

(i)         skill matrix for the current Funding Board members

(ii)        appointment terms

(iii)       curriculum vitae for four board members whose term expires 31 May 2017.

Consideration

Local board views and implications

17.     Board appointments to region-wide entities are the role of the governing body.

18.     Local boards are able to participate in the nomination process.

Māori impact statement

19.     The appointment policy aims to appoint diverse CCO and partnership boards.  This can have positive impacts for Māori by creating opportunities for Māori directors.

20.     In line with the policy, an IMSB board member may be appointed to the nomination and interview panels to provide a Māori perspective throughout the process.

21.     One of the ten board members on the Funding Board must represent the interests of Māori in the Auckland region.


Implementation

22.     Following approval from this committee, staff from the CCO Governance and External Partnerships department will progress the advertising process, if required.

23.     The timeline for the board appointment process would include:

(i)         advertising campaign: early February 2017

(ii)        nomination panel short-list candidates: early March 2017

(iii)       committee approve short-list: 29 March 2017

(iv)       interview panel interviews candidates: April 2017

(v)        committee approves preferred candidates: 4 May 2017

 

Attachments

There are no attachments for this report.    

Signatories

Author

Josie Meuli - Senior Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

 


Appointments and Performance Review Committee

01 February 2017

 

Accountability of Auckland Council Controlled Organisations

 

File No.: CP2017/00022

 

  

 

Purpose

1.       To consider and approve a programme of improvements to the accountability mechanisms currently in use for council-controlled organisations (CCOs) and the use of previously unused mechanisms.

Executive summary

2.       The Governing Body, at its 10 November 2016 meeting asked for an assessment of the opportunities to improve the strategic alignment, accountability and responsiveness of CCOs using existing accountability mechanisms.

3.       There are twenty existing accountability mechanisms available for the Governing Body with which to control the direction of CCOs, not all of which are currently in use. Some of these mechanisms were already programmed for review in 2017 and some are improved continuously as each cycle of direction setting and reporting is undertaken.

4.       This report provides three options for a work programme to enhance the transparency, alignment and responsiveness of CCOs, and to improve the recognition of ratepayer funding for CCO activity.

a.   Option 1 (status quo): existing programme of twelve mechanisms for review which would be completed in line with the finalisation of the Long-term plan (LTP).  This ‘default’ programme will proceed even if council do not agree to the enhanced programme in options 2 or 3.

b.   Option 2 (recommended option): adds five mechanisms into the existing work programme within the same timeline (including operating rules for Auckland Transport (AT)). This option is recommended because it best meets the Governing Body’s new expectations and can be met within existing budgets

c.   Option 3 (expanded scope or some elements delivered sooner):  envisages that council might want to bring the timing of some mechanisms forward, or expand the scope of option 2.  Option 3 would likely have costs which have not been budgeted for. More work would need to be done to see which elements could be fast-tracked, or what the cost would be.

5.       The report sets out the high level scope and timing of the recommended work programme (option 2) which utilises existing resources and finishes in line with the 2018-2028 LTP. An expanded version of the scope and timing and the current state of each mechanism is provided in Attachment A.

6.       It is possible that in the process of working through the proposed mechanisms, staff discover that the cost of implementing improvements outweigh the benefits.  This will be covered in quarterly reporting.

7.       This report also outlines the importance of monitoring, noting that it is the role of the governing body of council to ensure CCO boards are well acquainted with council expectations.


 

 

Recommendation/s

That the Appointments and Performance Review Committee:

a)      recommend to the Governing Body, at its 23 February 2017 meeting, the approval of the following objectives as the basis for the council-controlled organisations accountability review:

i)        to increase the accountability and value for money of council-controlled organisations by:

·    increasing the transparency of council-controlled organisation decision-making;

·    increasing the responsiveness of council-controlled organisations to the public and council;

·    improving the recognition of ratepayer funding for council-controlled organisation activity;

·    increasing the ability to align council-controlled organisations to the direction set by the council.

b)      recommend to the Governing Body, at its 23 February 2017 meeting, the approval of the scope and timing of option 2 outlined in this agenda report, which recommends that five mechanisms be added to the existing  twelve-mechanism work programme within the same timeline and budget 

c)      note that the existing work programme of council-controlled organisation accountability mechanisms will review the use of twelve out of twenty available tools and will proceed even if the committee does not agree to the enhanced programme described as option 2 in the agenda report

d)      agree that the progress of the council-controlled organisation accountability review be reported to Governing Body meetings as a programme of work on a quarterly basis

e)      request that as part of the council-controlled organisation accountability review, staff report back on the cost-effectiveness of the existing monitoring regime and the resource that is currently allocated to this function.

 

 

Comments

Background

8.       The Governing Body, at its meeting on 10 November 2016, resolved that a report be brought back to this committee with an assessment of the opportunities to improve the strategic alignment, accountability and responsiveness of CCOs using the current suite of accountability tools.  The discussion at that meeting centred on improving council’s capacity to control and influence the operations of AT (in the context of a discussion regarding the appointment of councillors on the AT board) and other CCOs.

9.       On 24 November 2016, at a workshop of the Appointments and Performance Review Committee, councillors were given an overview of the twenty accountability mechanisms currently applicable to Auckland CCOs.  They were also asked to give their views of draft objectives for a ‘review programme’ of these tools. 


 

10.     Having considered the feedback from the 24 November 2016 workshop, the proposed (revised) objectives for a review of accountability mechanisms are:

To increase the accountability and value for money of CCOs by:

a.       increasing the transparency of CCO decision-making

b.       increasing the responsiveness of CCOs to the public and council

c.       improving the recognition of ratepayer funding for CCO activity

d.       increasing the ability to align CCOs to the direction set by the council.

11.     These proposed objectives will be used as a reference point when evaluating the effectiveness of individual accountability mechanisms as work progresses.

CCO accountability mechanisms that are already programmed for improvement/use

12.     Staff had already programmed the review of seven accountability mechanisms, in line with the completion of the 2018-2028 LTP process (30 June 2018).  The summarised scope of these seven programmed mechanisms is shown in table 1 below. The expanded scope, timing and contribution for each of these mechanisms are shown in table 1 of attachment A. 

Table 1: Summary of seven CCO accountability mechanisms already programmed for review/use.

Accountability mechanism

Proposed scope and timing of improvement/use

1a) The Accountability Policy for substantive CCOs – contained in the LTP. 

Contribution to review objectives: increasing alignment.

Proposed scope of improvements: The expectations section should be reviewed to ensure they match current council priorities.

Improvement of the transparency of investment decision-making undertaken by CCOs – likely to be in the form of an Investment Policy. 

Clarify the decision-making parameters around the combined wastewater/stormwater network in the strategic assets/major transactions section.

Proposed timing: workshopped September – December 2017. Completion June 2018 to align with LTP milestones.

1b) Section 92(2) of the Local Government (Auckland Council) Act 2009 (LGACA)).

Contribution to review objectives: responsiveness, recognition of ratepayer funding, increasing alignment.

Proposed scope of improvements: All approved council policies that affect CCOs or CCOs contribute to will be reviewed and direction given to CCOs. Further detail of the approach and timelines for the roll-out of this direction to CCOs is outlined in attachment B. 

Proposed timing: first tranche – May 2017, second tranche between June and November 2017 depending on available resource.

1c) Appointment of the CCO board of directors (including the appointment of the chair and deputy chair)

Contribution to review objectives: increasing alignment.

Proposed scope of improvements: The external contract for recruitment support services is due to expire – staff will review procurement brief to ensure council is able to attract the best proposals.  Review of appointment process to ensure that there is sufficient political input.

Proposed timing: 4 May 2017 report to Appointment and Remuneration committee which will outline the recruitment programme for 2017; contract for recruitment support services will need to be in place by mid-March. Potential policy refinements by September 2017.

 

Accountability mechanism

Proposed scope and timing of improvement/use

1d) Appointment of councillors to the board of Auckland Transport (AT)

Contribution to review objectives: increasing alignment.

Proposed scope of improvements: New process underway.

Proposed timing:  The Board Appointment and Remuneration Policy will be updated to reflect the decisions of the 10 November meeting once the director appointment process review (above) has been completed[1].

1e) Advice to the Auditor General (OAG) on section 104 of LGACA.

Contribution to review objectives: increasing alignment.

Proposed scope of improvements: Every year, the OAG seeks input from council on activities that would benefit from an audit under s104. Advice is provided from a number of sources in council and is not necessarily well integrated within the wider audit programme. Integrated advice from both a political and senior executive level to be developed.  There is no obligation for the OAG to take this advice.

Proposed timing: Advice provided by staff by March 2017 for communication to OAG in time to inform their annual planning round.

1f) Councillor to CCO board workshops

Contribution to review objectives: increasing alignment and responsiveness.

Proposed scope of improvements: Clearer protocols for agenda setting. Roles and responsibilities of support staff. 

Proposed timing:  Continuous improvement but with most significant changes in place ahead of 6 April workshop.

1g) Enhanced local decision-making for local boards for CCO activities.

Contribution to review objectives: transparency, responsiveness, recognition of ratepayer funding, increasing alignment.

Proposed scope of improvements: The Governance Framework Review[2] is likely to explore opportunities for increasing local board decision-making about activities carried out by CCOs. This is likely to require a link through to section 92(2) direction.

Proposed timing: Governance Framework Review will make recommendations in July 2017.

 


CCO accountability mechanisms that are subject to continuous improvement

13.     Five accountability mechanisms are cyclical in nature i.e. they occur on annual, or three yearly cycles.  These mechanisms, summarised in table 2 below (and expanded in table 2 of attachment A) are reviewed and improved on a continuous basis and although no significant problems have been detected, staff have identified a number of potential improvements.

Table 2: Summary of CCO accountability mechanisms that are subject to continuous improvement

Accountability mechanism

Proposed scope and timing of improvements

2a) The Long-term plan (LTP) – three year cycle covering a period of 10 years.

Contribution to review objectives:responsiveness, improving the recognition of ratepayer funding, increasing alignment.

Proposed scope of improvements: More detailed level of financial information required of CCOs for budgeting and reporting purposes.

Proposed timing: Undertaken as part of the 2017/2018 annual plan process (adoption by June 2017). 

2b) The Statement of Intent (SOI) – annual cycle covering a period of three years.

Contribution to review objectives: responsiveness, recognition of ratepayer funding, increasing alignment.

Proposed scope of improvements: Review Key Performance Indicators (KPIs) in the SOI for overall consistency, appropriateness and clarity. Review existing targets to ensure they are appropriate.

Proposed timing: Amendments to the  content and structure of the SOI -  December 2017

The KPIs will be reviewed in time for the finalisation of the LTP (June 2017).

2c) Reporting against the SOI – quarterly reporting covering the previous three months, plus annual report covering the previous year. 

Contribution to review objectives: transparency, responsiveness, recognition of ratepayer funding, increasing alignment

Proposed scope of improvements: Risk section of the quarterly report template updated to improve overall consistency in disclosure. Traffic light indicators should have consistent thresholds across CCOs. Improve the support for councillors prior to half year and fourth quarter meetings to ensure that any non-performance of CCOs has been identified.

Proposed timing: Changes to template two months ahead of the end of the quarterly period.

2d) Strategic direction setting and prioritisation.

Contribution to review objectives: responsiveness, recognition of ratepayer funding, increasing alignment.

Proposed scope of improvements:  Council must maintain the ability to specify the outcomes it wants from CCOs and also the ability to determine if CCOs are delivering what council (representing the public) want.There have been instances where the strategic capability of council (as the overall direction setter and monitor) has been eclipsed by the technical/strategic capability of CCOs. 

Proposed timing: Issues and options report by end 2017.

2e) The Governance Manual for Substantive CCOs (the manual). 

Contribution to review objectives: responsiveness, recognition of ratepayer funding of CCO activity, increasing alignment.

Proposed scope of improvements: Update the manual to include updates to mechanisms listed in this report and also the ‘no surprises’ policy.

Proposed timing: Updated twice during the course of the review – once after the director appointment process review and again at the completion of all elements of this review (June 2018).

 

14.     Taken together, table 1 (the mechanisms already programmed for review/use) and table 2 (the mechanisms that are subject to continuous improvement) make up the existing review programme for the CCO accountability review (option 1: status quo).

CCO accountability mechanisms which had not been programmed

15.     Table 3 below, shows a summary of five mechanisms available to council which had not been programmed for use. An expanded version is included in attachment A.

16.     Adding these five mechanisms into the existing review programme (option 1) will require additional resource, but can be achieved within existing budgets, if the proposed scope and timing is approved with few or minor amendments and few problems are encountered.

Table 3: Summary of CCO accountability mechanisms that are not currently in use.

Accountability mechanism

Proposed scope and timing for improvement

3a) Operating rules for Auckland Transport.  

Contribution to review objectives: transparency, responsiveness, recognition of ratepayer funding, increasing alignment.

Proposed scope: To review and consider current AT board practices including the way the AT board holds meetings and releases information, its employment practices and its acquisition and disposal practices.

Proposed timing:  Issues and options paper - end May 2017.

3b) Section 91 of LGACA provides that council may impose additional accountability requirements.

 

Contribution to review objectives: transparency, responsiveness, recognition of ratepayer funding, increasing alignment.

 

Proposed scope: review of all current reporting and planning requirements and the conventions associated with them e.g. use of business case methodology. 

Proposed timing: Initial analysis provided to council by September 2017.

3c) Shareholder-led independent CCO board performance reviews

Contribution to review objectives: increasing alignment.

 

Proposed scope:  Consider the best way of assessing and improving the performance of the CCO boards. 

Indicative timing: Issues and options (scope and methodology) by May 2017.  If a board performance review is agreed to then it could be completed and reported by December 2017.

3d) Requirement for Watercare to report against section 57 of LGACA (cost-effectiveness of service delivery).

Contribution to review objectives: transparency, increasing alignment.

 

 

 

Proposed scope: Requires discussion with Watercare to determine achievable methodology.  This is likely to be an additional reporting requirement under s91 of LGACA (item 3b) above).

Proposed timing: initial findings reported by September 2017.

Accountability mechanism

Proposed scope and timing for improvement

3e) Service Delivery Reviews under section 17A of LGACA Potential for contribution to review objectives if CCO activities are included: recognition of ratepayer funding, increasing alignment.

Proposed scope: A report will be taken to 23 February 2017 Finance and Performance Committee on s17(A) reviews.  The activities that will be subject to these reviews and the timing of them will be considered at that time.

Proposed timing: not yet determined.

 

CCO accountability mechanisms that are not possible or useful to review

17.     Three mechanisms are not recommended because they either would not contribute to the achievement of the objectives of a CCO accountability review or the council has no certain ability to implement change. These mechanisms are shown in table 4 below.

Table 4: CCO accountability mechanisms that are not possible or useful to review

Accountability mechanism

Rationale for not reviewing

4a) CCO company constitutions

CCO constitutions were last updated in 2012 to include the ability for council to issue a binding management directive. Due to the nature and purpose of company constitutions it is not likely that any change will contribute to the review objectives.

4b) Public Audit Act 2001

Council cannot change an Act of parliament.  No problems have been identified that would warrant lobbying for change to this Act

4c) The Local Government Official Information and Meetings Act 1987 (LGOIMA).

Council cannot change an Act of parliament. No problems have been identified that would warrant lobbying for change to this Act.

However, council will consider whether the existing LGOIMA guidance for CCOs contained in the CCO Governance Manual is working effectively. If not, staff will consider turning this guidance into a policy and including it as a s92(2) policy (table 1 b).

 

Ongoing monitoring to ensure CCO effectiveness

18.     The Office of the Auditor General has noted the importance of both the health of the CCO/council relationship and the appropriate administrative processes for monitoring[3].

19.     The effectiveness of the existing ongoing CCO monitoring regime and the resources needed for additional accountability mechanisms should become a separate workstream alongside any option chosen for the CCO accountability review.


 

Options

20.     There are three options for the scope and timing of a CCO accountability review which are shown below in table 5.

Table 5: Options for the scope and timing of the CCO accountability review.

 

Pros and Cons

Risks

Option 1 (status quo): Work is limited to the review of the accountability mechanisms contained in table 1 (mechanisms already programmed for review) and table 2 (continuous improvement mechanisms) e.g. small KPI review - KPIs are made more consistent across CCOs and changes to the way KPIs results are displayed to improve understanding for the reader.

 

Pros: This option would achieve the objectives for the CCO accountability review (but to a lesser extent than option 2) and is achievable within existing resources

Cons: This option does not make the fullest use of all available accountability tools or sufficiently support Mayoral expectations.

Planned review does not lead to improvements that meet political or public expectations

Option 2 (recommended option).  Work is expanded to include the accountability mechanisms in table 3 (mechanisms not previously programmed for use or review).

This option could include moderate increases in scope to proposed improvements table 1 and 2 e.g. additional KPIs for specific CCOs

Pros: This option would achieve the objectives for the CCO accountability review to the greatest extent and is achievable within existing resources.

Cons: This option requires that resources allocated to budgeted savings will be needed to support the additional work.

High level project planning (only) has been done on fitting in additional mechanisms. Risk of requiring more resource than anticipated or budgeted.

Unanticipated problems with some mechanisms could push timeframes for some workstreams out.

If either of these risks eventuate, this will be reported as part of the overall programme reporting (every three months

Option 3 (not recommended).  Work in this option would be as for option 2 above, but undertaken within shorter timeframe and/or with an expanded scope e.g. comprehensive redesign of KPIs including the development of new indicators.

Pros: This option would achieve the objectives for the CCO accountability review

Cons: This option is unachievable within existing resources - and is not recommended for this reason.

As for option 2 but also a risk of less time for complex work if timelines brought forward leading to poor results.

Benefit of expanded scope unknown.

 

21.     It is possible that in the process of working through the proposed mechanisms, staff discover that the cost of implementing improvements outweigh the benefits.  This will be covered in quarterly reporting.

22.     Some mechanisms require integration with LTP timelines. Significant delay in making a decision on the options (including the scope and timing of individual elements of the review) may result these mechanisms missing LTP decision-making timelines, resulting in the need for additional resources.

Consideration

Local board views and implications

23.     The views of local boards have not been sought in relation to the analysis in this report. However, the activities and decision-making of CCOs do impact on local board decision-making and responsibilities. 

24.     Further work is currently being undertaken within the Governance Framework Review mentioned in table 1g) to understand how the placemaking role of local boards could be enhanced, and what the cost and other implications might be. This work will consider the ability of local boards to have input into transport related decision-making on local issues.

Māori impact statement

25.     The operation of CCOs has been noted by the previous Independent Māori Statutory Board as lacking transparency and not fully cognisant of the needs of Māori.

26.     The Governance Manual for Substantive CCOs (page 46) requires all CCOs to develop Māori Responsiveness Plans.  To date, only two CCOs have complied with this requirement, and two others have begun the process. No time frames were set for these plans to be in place.

Implementation

Next steps

27.     The decisions of this meeting will be taken to the 23 February 2017 meeting of the Governing Body for approval. 

28.     Because of the importance of this work and for the sake of efficiency, staff recommend that ongoing reporting on the CCO accountability review be taken to Governing Body meetings approximately once every three months. 

29.     The exceptions to this would be Items 1c, 1d and 3c which relate to CCO board appointments and performance.  These three elements of the review will be reported to the Appointments and Performance Review Committee in accordance with the committee terms of reference, but can be noted in the broader programme updates to the Governing Body meetings, for the sake of completeness.  

30.     Some of the improvements to mechanisms contained in this report need to be incorporated into the LTP.  Because the LTP process is specified in legislation, it has to meet deadlines that allow for public consultation.  The milestones for LTP-related accountability mechanisms listed in this report have taken the 2018-2018 LTP deadlines into account.


 

 

Attachments

No.

Title

Page

a

Expanded description of CCO accountability review

25

b

Section 92(2) Local Government (Auckland Council) Act 2009 - proposed work programme

35

 

  Signatories

Author

Rose Leonard - Principal Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

 


Appointments and Performance Review Committee

01 February 2017

 


 


 


 


 


 


 


 


 


Appointments and Performance Review Committee

01 February 2017

 


 


 

     

 


Appointments and Performance Review Committee

01 February 2017

 

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

 

That the Appointments and Performance Review 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       Chief Executive's Performance Review

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, during this item, the Appointments and Performance Review Committee will examine and discuss progress against agreed performance objectives for the Chief Executive.

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.

 

C2       Board Appointments Council Controlled Organisations: Auckland Transport Candidate Short-list

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 regarding the candidates who have applied to be directors on Auckland Council's Council Controlled Organisations. 

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.

 


 

C3       Board appointments to the Auckland Council/Selwyn Foundation joint venture company providing housing services for older people

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 candidates who have applied to be directors on Auckland Council's joint venture company with the Selwyn Foundation to provide housing services for older people.

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.

 

C4       Board Appointments to the Auckland Regional Amenities Funding Board

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 the board members on the Auckland Regional Amenities Funding Board and their potential reappointment or retirement.

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] Although the policy could be updated now to reflect the decisions of 10 November 2016, staff will delay updating until the completion of the director appointment process review, because there may be additional updates to be included to reflect a revised process.

[2] The Governance Framework Review considers the options for improvement of the Auckland Council governance model (governing body and local boards). 

[3] Office of the Auditor General. (September 2015). Governance and accountability of council-controlled organisations. Page 40.