Agenda of Budget Committee - 21 November 2013

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

There were no minutes to confirm.

4 Petitions

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

5 Public Input

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

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

6 Local Board Input

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

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

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

7 Extraordinary Business

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

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

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

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

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

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

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

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

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

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

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

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

8 Notices of Motion

8.1 Notice of Motion - Cr Fletcher - Local Boards optional targeted rate for berm maintenance

In accordance with Standing Order 3.11.1, the following Notice of Motion has been received from Cr Fletcher for inclusion on the agenda for the Budget Committee meeting being held on Thursday, 21 November 2013.

Motion

That the Budget Committee:

a) request officers to initiate discussions with Local Boards on the possibility of applying an optional targeted rate for berm maintenance in their respective Local Board area, particularly in those areas where this service has not been undertaken with resultant health and safety issues.

b) agree to forward this resolution to the Local Boards for their information.

Background

Cr Fletcher will speak to the notice of motion at the meeting.

Attachments

a Cr Fletcher's Notice of Motion............................................................. 109

Budget Committee

21 November 2013

Annual Plan 2014/2015 - Overview and performance measures and targets

File No.: CP2013/26034

Purpose

1. This report provides an overview of the process to develop the Annual Plan 2014/2015 and seeks decisions on proposed changes to performance measures and targets for the annual plan.

Executive Summary

1. The Council’s Long-term Plan (LTP) 2012-2022 set the first budget for delivering on the aspirations of the Auckland Plan. An annual plan is produced for each year in between long-term plans. It provides an opportunity to refresh the information for the coming year and consult with the community on any changes that are proposed. The annual plan includes 21 local board agreements that are agreed between each local board and the governing body as part of the annual planning process.

2. The mayoral proposal announced on 7 November set out the mayors proposed budget for the draft Annual Plan 2014/2015. At today’s meeting, the Budget Committee will consider that proposal and make decisions for the draft Annual Plan. The Governing Body will then meet to adopt the draft annual plan on 19 December, in order for public consultation to begin in late January.

3. An overview of the process to develop the Annual Plan 2014/2015 is set out in Attachment A.

4. Officers have reviewed performance measures and targets to improve the quality of the measures and ensure targets are based on the most up to date information available. As a result of the review, officers are recommending that a number of changes are made to performance measures and targets across regional, local and CCO measures.

5. Advice on targets for local performance measures has been provided to local boards for their consideration as they develop their draft local board agreements.

6. Recommended changes to performance measures and targets for the Annual Plan 2014/2015 for Budget Committee consideration are set out in Attachments B, C and D and include:

· removing three performance measures that are no longer required

· making minor adjustments to the wording of four regional and six local performance measures

· setting targets for 24 regional performance measures and 3 CCO measures that were introduced in the LTP (as data is now available), and

· revising targets for 16 regional performance measures and 19 CCO measures to reflect improved data now available from historical performance.

7. As part of the LTP 2015-2025 process, officers will review the performance management framework with a view to improving the quality and alignment of the measures and, where appropriate, reducing the number of measures whilst also ensuring they are relevant and provide the community with meaningful information.

Recommendation/s

That the Budget Committee:

a) agree the proposed changes to performance measures set out in Attachment B to the agenda report.

b) agree the proposed targets for regional and CCO performance measures (as set out in Attachments C and D to the agenda report).

c) note that officer advice has been provided to local boards on performance targets for 2014/2015 and that local boards are considering this advice as part of developing their draft local board agreements.

Discussion

Annual Plan 2014/2015 process

8. The Council’s Long-term Plan (LTP) 2012-2022 set the first budget for delivering on the aspirations of the Auckland Plan. It also set the council’s first financial strategy that enables the significant investment required to deliver on the Auckland Plan, while also maintaining affordability for current and future rate payers.

9. An annual plan is produced for each year in between long-term plans. It provides an opportunity to refresh the information for the coming year and consult with the community on any changes that are proposed. The annual plan includes 21 local board agreements that are agreed between each local board and the governing body as part of the annual planning process.

10. The mayoral proposal announced on 7 November set out the mayors proposed budget for the draft Annual Plan 2014/2015. At today’s meeting the Budget Committee will consider that proposal and make decisions for the draft annual plan.

11. Following decisions made today, the text and budgets for the draft annual plan will be updated and council will meet to adopt the draft annual plan on 19 December for consultation.

12. An overview of the end to end process is set out in Attachment A. The key dates are:

· 7 November Mayoral proposal announced

 11 November Governing Body workshop to discuss the mayoral proposal

· 21 November Budget Committee meets to make decisions for draft annual plan

· 9 – 13 December Local boards meet to adopt draft local board agreements

· 19 December Governing body meets to adopt the draft Annual Plan 2014/2015

· 23 Jan – 24 Feb Submission period

· 17 – 28 March Hearings (local and regional)

· 24 April – 5 May Governing body discussions with local boards and CCOs

· 8 May Budget Committee meets to make decisions for final annual plan

· 9-19 June Local boards meet to adopt local board agreements

· 26 June Governing body meets to adopt Annual Plan 2014/2015

Proposed changes to performance measures and targets for the Annual Plan 2014/2015

13. Following the Annual Report 2013/2014, officers have reviewed the performance measures and targets reported in the LTP 2012-2022 and Annual Plan 2013/2014 with a view to:

· ensuring continuous improvement of performance measurement processes to improve the quality of the measure by making them more meaningful and relevant

· updating targets based on current performance or budget movements, and

· setting targets for LTP measures where data is now available.

14. As a result of the review, officers recommend that a number of changes are made to performance measures and targets across regional, local and CCO measures.

15. The recommended changes for Budget Committee consideration are set out in Attachments B, C and D. In summary, it is recommended that:

· one regional measure and two local measures are removed for the Annual Plan 2014/2015

· minor adjustments are made to the wording of four regional and six local performance measures

· targets are set for 24 regional performance measures and 3 CCO measures that were introduced in the LTP (as data is now available), and

· targets are revised for 16 regional performance measures and 19 CCO measures to reflect improved data now available from historical performance.

16. Advice on the targets for local performance measures has been provided to local boards for their consideration as they agree their draft local board agreements for 2014/2015. Once local boards have agreed their targets they will be included in draft local board agreements for consideration by the Governing Body on 19 December. The regional targets for these local measures will reflect the average target across local boards.

17. As part of the review, officers considered the measures that were unable to be measured against in the Annual Report 2012/2013 to determine whether the measure is appropriate and requires only mechanisms to be put in place to collate data to report, or whether the measure is not appropriate and should be removed.

18. There were 8 out of 249 regional measures across the Auckland Council group that could not be measured in the Annual Report 2012/2013. It has been recommended that one of these measures is removed as it was no longer relevant. Officers are confident that the remaining seven measures can be measured for the next annual report.

Further work planned

19. There are currently around 246 regional measures (34 of which are separately reported at the local board level) established as part of the performance management framework that are included in the Annual Plan and reported against in the annual report. The purpose of these measures is to evaluate how successfully the council group delivers council services and how performance changes over time.

20. As part of the LTP 2015-2025 process, officers will review the performance management framework with a view to improving the quality and alignment of the measures and, where appropriate, reducing the number of measures whilst also ensuring they are relevant and provide the community with meaningful information.

21. The review will also consider the cost-effectiveness of reporting certain measures (e.g. survey measures) and ensure that data reported can be used by the council group to improve services where necessary, thereby ensuring that measures are useful and represent value for money for the activities provided.

Consideration

Local Board Views

2. All local boards have held a workshop to consider their draft local board agreements and any areas they wish to consult with their community on as part of the draft annual plan. Local board budgets have been updated to accommodate known cost pressures and efficiency savings, with no impact on service levels. Officer advice has also been provided to local boards on fees and charges and performance measures and targets.

3. The draft local board agreements will be finalised over the next week and local boards will meet to adopt their draft agreements between 9-13 December for consultation as part of the draft annual plan.

Maori Impact Statement

4. The recommended changes to performance measures and targets include minor changes to two Maori measures and 17 regional Maori targets. These recommended changes have been developed in collaboration with Te Waka Angamua and have been provided to the Independent Maori Statutory Board for review at their 18 November meeting.

5. These are mostly minor technical changes to set targets for measures that did not have targets or to improve consistency of wording. One measure has a decreased target based on current performance.

Implementation Issues

6. An overview of the end to end process for the annual plan is set out in Attachment A.

Attachments

No.	Title	Page
a	Annual Plan 2014/2015 - Process overview	11
b	Recommended changes to performance measures	13
c	Recommended targets - LTP measures	15
d	Recommneded changes to targets	17

Signatories

Author

Tanya Stocks – Acting Programme Director Annual Plan and Long-term Plan

Authorisers

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay – Acting Chief Finance Officer

Budget Committee

21 November 2013

Draft Annual Plan 2014/2015 - Mayoral proposal

File No.: CP2013/26172

Purpose

1. Providing the Budget Committee with the opportunity to consider the Draft Annual Plan 2014/2015 – Mayoral proposal.

Executive Summary

2. I presented my proposal for the Draft Annual Plan 2014/2015 to the Governing Body at its meeting on 7 November 2013. The Budget Committee now needs to consider and approve the attached proposal (with any amendments) as the basis for the preparation of the Draft Annual Plan 2014/2015.

Recommendation/s

That the Budget Committee:

a) approve the updated baseline budget including efficiency savings and additional costs and representing a 2.3% rate increase.

b) include $1.6 million of operating expenses in the budget for the Tamaki Redevelopment Company subject to further discussions with the company and the Crown.

c) include $1.25 million of operating expenses in the budget for a staged implementation of the Living Wage Policy.

d) approve an ongoing review of the capital expenditure programme of the CCOs to identify cost reductions and deferrals.

e) approve the “licence to occupy” remission scheme continue in the current form.

f) defer changes to the remission and postponement schemes for community sporting and other organisations providing community services including support related to built and natural heritage until after the review of Local Board Funding Policy is complete, and included in the consultation of the Long-term Plan 2015-25.

g) note that:

i) the estimated rates decrease cap is 3.0% based on an overall rates increase of 2.5% and that this will be updated at the time of adoption of the final Annual Plan.

ii) the discount for early payment of rates is estimated to be 1.1% and that this will be updated at the time of adoption of the final Annual Plan.

h) include the proposed health protection licence fees as set out in the Mayor’s proposal in the draft Annual Plan 2014/15.

i) note that the health protection licence fees have been removed for fitness centres, swimming pools and other premises no longer covered by the health and hygiene by-law.

j) agree that:

i) social housing for older persons rental charges be increased by a uniform 5% in this Annual Plan; and

ii) work commence on reviewing the disparate charges and levels of service in council’s social housing, in consultation with tenants and the seniors panel as part of the development of the Long-term Plan 2015-25.

k) include the proposed building control and property information fees in the draft Annual Plan 2014/2015.

Attachments

No.	Title	Page
a	Mayor's proposal for the draft annual plan 2014/15	25
b	Attachments to Mayor's proposal for the draft annual plan 2014/15	31

Signatories

Author

Mayor Len Brown

Budget Committee

21 November 2013

Auckland Arts Festival Annualisation - Annual Plan Consultation

File No.: CP2013/25823

Purpose

1. To brief councillors on the Auckland Arts Festival Trust’s request for additional funding to introduce an annual festival from 2015, the timing of decisions required by the council, and the work programme to support council decision-making. To recommend public consultation on the provision of additional funding for annualisation, through the draft Annual Plan.

Executive Summary

2. The Auckland Arts Festival Trust (AFT) is one of ten regional amenities that receive council funding under the Auckland Regional Amenities Act. The funding is via the regional amenities levy set by the Auckland Regional Amenities Funding Board (ARAFB) after public consultation.

3. The AFT currently receives $2.23 million per annum from the levy to stage a biennial arts festival. The most recent festival was in March 2013 with the next festival scheduled for 2015.

4. The trust has aspirations for the festival to become an annual event from 2016 onwards and has requested additional council funding of approximately $1 million per annum. The total council contribution would increase while the cost per festival to the council would decrease from approximately $4.46 million per festival to $3.23 million per festival. The council’s share of total festival revenue is projected to slightly decrease from approximately 40% to 38%.

5. The trust would also require additional external^{^[1]} annual funding of nearly $1 million per annum from other sources such as sponsorship and grants from trusts and Creative New Zealand.

6. The additional council funding would have an impact from 2015/2016 onwards and so would not affect the next (2014/2015) Annual Plan. However, in order to start planning and programming the trust has requested a commitment from the council by May 2014.

7. The council’s decision will be informed by an analysis of the full financial implications to the council and an assessment of the wider social and economic implications for the community from annualisation. This assessment will include analysis of risks such as the risk associated with assumptions about other sources of revenue. An officer project group has been established to oversee the development of the business case, and has been working with the AFT on the information required to assess the business case.

8. The report recommends that the council consults on the provision of additional council funding to support annualisation of the Auckland Arts Festival, in the 2014/2015 Annual Plan. This will help gauge the level of public support, as well as providing an opportunity for the community and arts sector groups to have their say.

Recommendation/s

That the Budget Committee:

a) note that work is underway to assess the business case for increased council funding to assist the Auckland Arts Festival become an annual event from 2016, and will be reported in May 2014.

b) agree to consult in the draft 2014/2015 Annual Plan, to help assess the level of public support for the provision of additional council funding for annualisation of the Auckland Arts Festival.

Discussion

9. The Auckland Festival Trust (AFT) currently receives $2.23 million per annum, as part of the council-funded Auckland Regional Amenities Funding Board (ARAFB) levy, to stage a biennial arts festival. The most recent festival was in March 2013 with the next festival scheduled for 2015.

10. The trust has aspirations for the festival to become an annual event and has requested approximately $1 million additional funding per annum from the council. It is most likely that that the additional funding would also be provided through the regional amenities levy. The trust would also require additional external annual funding of nearly $1 million per annum from other sources such as sponsorship and grants from trusts and Creative New Zealand.

11. The next scheduled festival is for 2015, which will proceed regardless. If the trust is successful in securing funding for annualisation, the first annual event would be held in 2016.

12. The council previously considered annualisation of the arts festival at the Governing Body meeting of 21 March 2013. The trust initially approached the council in 2012/2013 for additional funding for a 2014 event but the Governing Body did not agree to provide the funding at that time.

13. The main reasons for the 21 March 2013 decision were that there had been insufficient time to assess the merits of the proposal and that the proposal (at that time) was outside of the regional amenities funding process, potentially undermining the integrity of the process. There were also legal issues about whether the council could even provide further operational funding outside of this process.

14. The council instead asked officers to undertake a business case, which would assist it to decide whether it would support annualisation from 2016 onwards. It also resolved to recommend to the AFT that it hold discussions with other regional arts amenities and arts sector organisations with the aim of developing stronger sector support for annualisation.

Timing and Regional Amenities Process

15. The AFT is one of ten regional amenities that receive council funding under the Auckland Regional Amenities Act. The funding is via the regional amenities levy that is set by the ARAFB after public consultation. The council must agree to the levy^{^[2]} but does not control the amount of funding that each amenity receives.

16. Although it is ARAFB rather than the council that determines funding for each amenity, the board has asked for guidance from the council on whether it supports annualisation in principle. It is expected that ARAFB board will follow the council’s guidance on this matter, although the board would separately scrutinise whether it considers the requested funding to be at an appropriate level.

17. The regional amenities submit funding applications to ARAFB in September each year, for funding for year starting July of the following year. ARAFB makes a preliminary allocation of grants in November, and fixes its levy in April following consideration of public submissions including a submission from the Auckland Council.

18. The total regional amenities levy for 2012/2013 was $14.096 million. It is assumed that annualisation would require an increase in the total regional amenities funding levy rather than a reallocation of funding from other amenities. Under the funding principles, the ARAFB is required to take into account the council’s proposed rates increase when setting its levy; however, the council could request the ARAFB to exclude the impact of annualisation, when applying this principle. The impact of annualisation on the levy would be a levy increase of approximately 7%.

19. The request for additional funding for annualisation did not affect the Trust’s 2014/2015 application, recently submitted. This means that it will not affect the council’s 2014/2015 Annual Plan. However, in order to start planning and programming the trust has requested a commitment from the council in early 2014. Although any commitment would be subject to final confirmation through the LTP process, the trust considers that this would be sufficient to allow it to proceed with planning. The trust’s 2015/2016 funding application, which will be submitted in September 2014, would include provision for annualisation if supported by the council.

Business Case Process

20. The trust’s aspirations to annualise the arts festival have gained momentum following the success of the 2013 event. The perceived benefits to the trust include that it will strengthen the festival brand, enabling it to attract more secure sponsorship and achieve faster audience growth, and reduce the trust’s overheads per festival. It will also allow the trust to recruit and retain event management staff currently employed on fixed-term contracts with the risk of losing this talent and experience between festivals.

21. Currently the council contributes approximately $2.23 million per annum, or $4.46 million per festival to the trust. If the council agrees to contribute further funding up to $1 million for annualisation, this will increase the council’s total funding but reduce the funding per festival. An additional $1 million per annum would reduce the council contribution per festival to about $3.23 million per festival ($6.46m over two years). Council’s contribution as a share of total festival revenue, would fall from approximately 40% to 38%.

22. The table below shows expenditure and revenue sources for the 2013 festival compared with projections for 2016 if the festival is annualised.

	2013 Festival $ million	2016 Festival - projections with annualisation $ million
Expenditure
Programme Expenditure	5.31	5.4
Other expenditure	4.96	3.5
Total Expenditure	10.27	8.91

Revenue
Council (ARAFB)	(2 year contribution ) 4.38	3.3
Box Office	3.03	2.75
Other revenue	3.45	2.71
Total revenue	10.86	8.76
Surplus/Deficit	0.59	-0.15

Notes:

· Figures for 2013 exclude one-off project management revenue and expenditure associated with the trust managing some Rugby World Cup Events.

· Programme expenditure is constant over the two years reflecting the assumption that the programme delivered under annualisation would be similar in nature and scale to that delivered in 2013.

· Box office projections for 2016 are slightly lower than for 2013. This is deemed to be prudent by the trust and in line with its risk management policy, allowing for weather conditions, availability of appropriate revenue-generating product and other factors. The box office budget will be adjusted until the final programme is signed off by the trust’s Board.

· The trust made a small surplus in 2013, which rose to $1.4 million when the project management net revenue was included. The trust plans to use the surplus to underwrite annualisation for the first few festivals from 2016 but plans to break even in the future.

23. The council’s decision to increase funding will be informed by an analysis of the full financial implications to the council and on an assessment of the wider social and economic benefits to the community from annualisation.

24. An officer project group has been established to oversee the development of the business case. The group has representation from CCO Governance; Financial Plan, Policy and Budgeting; Community Policy and Planning; Community Development Arts and Culture; and ATEED. ATEED is involved to help assess how an annual event would fit against the criteria of Auckland’s Major Events Strategy, which sits within the council’s wider Events Policy.

25. The business case will consider the strategic fit of annualisation with the council’s priorities and objectives in relation to:

· Auckland Plan

· Economic Development Strategy

· Arts and Culture Strategic Action Plan (under development)

· Auckland’s Major Events Strategy

· Events Policy

· Children and Young Person’s Strategic Action Plan

· Local Board Priorities

· Any other relevant plans or strategies.

26. The assessment of strategic fit will help identify the likely economic, cultural and social benefits and disbenefits (disadvantages) of annualisation, for further consideration. This will include assessment of factors such as:

· Benefits to audiences from participation in the festival – including assessment of geographic and demographic reach, and the extent to which annualisation would increase participation in the arts, rather than move it from one part of the sector to another.

· Benefits to Aucklanders regardless of actual participation such as civic pride, contribution to a vibrant world city etc.

· Return on regional investment, which is a measure of the economic benefits of annualisation.

· Benefits to arts organisations from having the opportunity to participate in a more regular event.

· Impact on parts of the sector not involved in the festival including loss of market share and difficulty in securing venues.

27. Risk analysis will be included in the assessment. The funding of the festival through the Auckland Regional Amenities levy means that the council bears considerable risk if other revenue sources fall short of forecast or if cost projections are too low. Under these scenarios, the trust may need to seek additional funding from council or reduce its programming, thereby reducing some of the potential benefits. The business case will therefore include a review of reasonableness of projections and assumptions regarding box office revenue, sponsorship and other revenue, and expenses, as well as the trust’s approach to risk management.

Sector engagement

28. One of the reasons for recommending against the provision of further funding in March 2013 was the degree of concern from some parts of the arts sector. Concerns included that the arts spend would be spread more thinly, that the festival disrupts regular schedules, and that brand enhancement for the festival could be at the expense of other brands.

29. These concerns are not unexpected as some tension between organisations that cooperate and compete is inevitable. The trust has provided information that suggests similar concerns have been expressed when Australian Festivals have annualised, but that the impacts tend to be over-estimated.

30. Nevertheless, it was felt that the trust could have done more to develop sector support. To that end, the trust has embarked on a sector consultation programme, the results of which will be considered in the business case.

Regional spread of events

31. At the council workshop on 11 November, a question was raised about whether an annual festival would deliver a greater regional spread of events. The Festival’s education programme includes schools across the region. In addition, the trust has stated the following in material supplied to officers working on the business case.

“As an annual festival, AAF will make maximum use of regional venues outside of the CBD. This will grow local awareness of the arts within Auckland’s suburbs and grow audiences through taking performances directly to communities. In 2013, Festival events travelled north to Matakana, south to Mangere and Pukekohe, east to Pakuranga and west to Henderson.”

32. Further consideration of the geographic spread of events and benefits will be included in the full business case.

Public engagement/consultation

33. The report recommends that the council undertake public consultation through the 2014/2015 Annual Plan, on the council increasing its funding to the trust to support annualisation. Although annualisation will not affect the 2014 /2015 Annual Plan, it is still possible to use the AP for the purpose of consultation on a matter that will affect the next LTP.

34. The main advantage of using the Annual Plan to consult is that there is no additional cost as it would be included with other matters that the council is consulting on. The other advantage is that anyone can make a submission and so consultation would help provide a mandate for the council’s decision.

35. Another option would be to undertake an on-line survey of approximately 1000-1500 people selected to provide a statistically reliable cross-section of Aucklanders to assess the public’s support and willingness to pay for annualisation. The cost of this would be approximately $15,000. Although it would provide useful information it would not provide a general opportunity for public comment and so would have to be supplemented by another form of consultation, such as through the “Have Your Say” link on the council website.

36. On balance, the report recommends the option of undertaking consultation through draft Annual Plan.

Consideration

Local Board Views

37. The likely contribution to local board priorities from annualisation will form part of the business case.

Maori Impact Statement

38. The business case assessment will include matters relating to Māori well-being including:

· Opportunities for Māori artists and performers

· Māori attendance at arts festival events

· Benefits in terms of promoting the Auckland Plan outcome “A Māori identity that is Auckland’s point of difference in the world.”

General

39. The decision of whether to provide additional funding for an annual arts festival is not a significant decision. As noted, annualisation would require approximately a 7% increase it the ARAFB levy which is well below the 33% increase in activity threshold in the council’s significance policy.

Implementation Issues

40. No implementation issues have been identified.

Attachments

There are no attachments for this report.

Signatories

Author

Catherine Syme - Principal Advisor, CCO Governance and External Partnerships

Authorisers

Andrew John – Treasury Funding Manager

Kevin Ramsay – Acting Chief Finance Officer

Budget Committee

21 November 2013

Selection of members to the local board funding policy review political working party

File No.: CP2013/26194

Purpose

1. This report recommends the Budget Committee agree to the continuation of the political working party for the review of the local board funding policy and appoint members to it.

Executive Summary

2. A review of the local board funding policy is being undertaken to enable a broader examination of all the dimensions of the policy, and to allow the full participation of the local boards in the development of the policy. Local boards previously requested the establishment of a political working party to guide the review process and ensure effective engagement between all parties.

3. During the previous term the Strategy and Finance Committee approved the creation of a working party to provide guidance and direction with respect to the development of the local board funding policy. The committee agreed that the working party will include:

· the mayor as chair of the working party

· seven councillors

· eight local board members

· one representative from the Independent Maori Statutory Board.

4. The board chairs previously agreed a formal selection process that required eight board representatives to be chosen as follows: two members from the central boards, one member from each of the northern, western, eastern, southern, rural and island board areas. The local board chairs are due to agree the method of selection at their meeting on 25 November. Appointments are expected to be made as soon as possible afterwards.

5. This is a continuation of the previous Local Board Funding Policy Review Political Working Party updated to reflect members recently elected at the local body election. The next meeting of the working party is scheduled for 17 December 2013.

Recommendation/s

That the Budget Committee:

a) confirm the continuation of the political working party for the review of the local board funding policy

b) confirm that the local board representation is maintained at eight members

c) appoint the following representatives:

i) seven councillors as representatives of the Governing Body in addition to the Mayor as chair of the working party.

ii) one representative from the Independent Maori Statutory Board.

d) note that the next meeting of the political working party is scheduled to be held on 17 December 2013.

Discussion

6. A review of the local board funding policy is currently being undertaken. The primary objectives of the review are to:

· assess the effectiveness and efficiency of the existing policy, and if necessary recommend amendments to the policy

· develop principles and guidelines for the funding of local boards and local services

· provide a full and thorough engagement process to enable local boards and the governing body to fully consider and debate issues and options

· develop options for the local board funding policy.

7. In 2012 local boards requested that a political working party be established to ensure there is effective communication between the boards, governing body and officers over the course of the review of the local board funding policy. The purpose of the working party is to provide direction and guidance on the policy review work programme. On 1 November 2012, the Strategy and Finance Committee approved the creation of the working party. The terms of reference for the working party are contained in attachment A.

8. The board chairs previously agreed a formal selection process that required eight board representatives to be chosen as follows: two members from the central boards, one member from each of the northern, western, eastern, southern, rural and island board areas. The local board chairs are due agree the method of selection at their meeting on 25 November. Appointments are expected to be made as soon as possible afterwards.

9. The next meeting of the working party is scheduled for 17 December 2013.

Consideration

Local Board Views

10. Engagement with the local boards will be a critical factor in the development of the local board funding policy. The political working party is one facet in a successful engagement process. The other key steps will be:

· opportunity for each local board to workshop issues with officers prior to the decision making phases of the review

· local board views and resolutions to be reported to the Budget Committee before each decision making phase of the review

· workshops for local board chairs and the governing body at each phase of the review.

11. Local boards will have equal representation on the working party with councillors. Local boards will be undertaking their own selection process to agree their representatives for the working party.

12. Agreeing members for a political working party is not a significant decision.

Maori Impact Statement

13. The impact on Māori is determined by the decisions of the governing body and local boards regarding the activities that will be undertaken by the council. The local board funding policy constrains the environment in which local boards make their decisions, but does not determine the outcomes of the decision making process. As such, the review of the local board funding policy only has an incidental impact on Māori.

14. The issue of what constitutes equity in the funding of local boards is a key consideration for the review. The differences between boards in terms of Māori population will be one of the matters considered in developing a view of what dimensions of equity are significant in the funding of local boards.

15. The Independent Māori Statutory Board will have oversight of the local board funding policy review process through their membership of the Budget Committee, and its representative on the political working party.

Implementation Issues

16. There are no implementation issues associated with the recommendations in this report.

Attachments

No.	Title	Page
a	Terms of reference for local board funding policy review political working party	101

Signatories

Author

Aaron Matich - Principal Advisor Modelling

Authorisers

Matthew Walker - Manager Financial Plan Policy and Budgeting

Kevin Ramsay – Acting Chief Finance Officer

Terms of Reference

Local Board Funding Policy Review Political Working Party

1.0 Introduction

The Terms of Reference for the Local Board Funding Policy Review Working Party (hereafter referred to as the ‘working party’) outlines the purpose, objectives and expected outputs of the Working Party. It also sets out the membership of the working party and the protocols by which the intended outcomes will be achieved.

Working Party members are expected to abide by the general spirit and intent of the purpose, objectives and outcomes underpinning this Terms of Reference, as well as the Code of Conduct for Elected Members of the Auckland Council.

2.0 Purpose

The purpose of the working party is to provide a joint forum of the governing body and local boards to provide guidance and direction with respect to the development of the local board funding policy. development of comprehensive and robust options for the funding of local activities within the local board funding policy.

3.0 Objectives

The objectives of the working party are to provide guidance and direction to the development of the policy. These will be achieved by developing a shared understanding of:

· key principles that guide the local board funding policy, including (but not limited to) equity, equitable capacity, equitable outcomes, well-being, accountability and transparency

· the balance between achieving equitable service levels across the region, and allowing local boards to set service levels relevant to their communities

· the balance between regional and local decision making, and non-discretionary funding for services levels or discretionary funding based on board attributes (such as population)

· the key attributes for consideration in an attribute based funding model

· the relationship between decision making on spending and responsibility for raising revenue

· the relationship between equity in funding local boards and the funding of programmes and facilities serving multiple board areas

· the level of change that is acceptable in implementing a new funding policy.

4.0 Outputs

The working party will provide guidance and direction to officers in the development of policy options to ensure that the considerations presented are robust.

The proposed direction agreed by the working party will be reported to the Budget Committee or Governing Body when decisions on the local board funding policy, or the process for reviewing the policy are considered.

The key dates for the review are yet to be determined, indicative dates are set out in the table below:

Date	Report to	Purpose
17 Dec 2013	Political Working Party	Confirm LBFP framework for workshops with local boards
Mar 2013	Political Working Party	Recommend draft LBFP to Budget Committee for consultation
May 2013	Budget Committee	Adopt draft LBFP for consultation
July 2013	Governing Body	Adopt LBFP

5.0 Membership

The structure of the working party was established through resolution of the Strategy and Finance Committee at its 1 November 2012 meeting (attached as Appendix one). The structure

· the mayor, seven governing body councillors and one representative of the Independent Maori Statutory Board (IMSB), as identified through resolution of the Strategy and Finance Committee at its 1 November 2012 meeting (attached as Appendix one)

· seven local board members identified through a process determined by local board members.

The local boards previously proposed that their membership on the working party consist of eight representatives drawn from local board clusters as follows:

· two representatives from the central cluster

· one representative from the northern cluster

· one representative from the western cluster

· one representative from the eastern cluster

· one representative from the southern cluster

· one representative from the rural boards

· one representative from the island boards.

The local board chairs are due to meet on 25 November 2013 at which time it is anticipated that they will confirm the membership structure of the local board representatives on the working party. Appointments to the working party are expected to be made as soon as possible after that meeting.

5.1 Working party members

Member	Title	Representing
		Governing Body
		Governing Body
		Governing Body
		Governing Body
		Governing Body
		Governing Body
		Governing Body
		Governing Body
		Central local boards
		Central local boards
		Eastern local boards
		Northern local boards
		Southern local boards
		Western local boards
		Rural local boards
		Island local boards
		Independent Maori Statutory Board

5.1.1 Alternate Members

Member	Title	Alternate for

6.0 Protocols

6.1 Governance

6.1.1 Selection of Chairperson / Deputy Chairperson

The chair person of the working party will be the mayor. A deputy chair will be confirmed at the next meeting of the working party.

6.1.2 Quorum

A quorum will consist of eight members, consisting of at least:

· three governing body councillors

· three local board members.

In the event a quorum is not reached, the meeting will be cancelled and an alternative date scheduled.

6.1.3 Voting

The working party will aim to reach a consensus as its primary decision-making tool. However, if deemed necessary, the chairperson may call for a decision through majority vote.

Should the vote be deadlocked, the chairperson shall cast the deciding vote.

6.1.4 Decision-making

The working party does not have unilateral decision-making power. The purpose of the working party is to provide direction and feedback to officers. Officers will be undertaking a full engagement process with local boards and the governing body, including workshops with all boards. Local boards will then pass resolutions for the governing body to consider when making decisions.

6.2 Administration

6.2.1 Meetings

Approximately 2-3 meetings will be scheduled at key stages of the project. Meetings will be scheduled at the start of each phase, to enable members to inform debate during the full engagement process with local boards and the governing body. Meetings will also be scheduled before the decision point in each phase, to enable members to review local board feedback from engagement. Democracy Services officers will schedule working party meetings as agreed with Financial Planning, Policy and Budgeting officers.

6.2.2 Agendas and minutes

Meeting agendas, minutes and supporting documents will be generated and distributed at least three working days prior to and following scheduled working party meetings. Financial Planning, Policy and Budgeting officers will be responsible for generating all meeting papers, unless agreed otherwise with officers from other council units / departments. Democracy Services officers will distribute meeting agendas, minutes and supporting documents as agreed with Financial Planning, Policy and Budgeting officers.

6.2.3 Officer Support

Officers from the following units and departments within Council will support the Working Party by fulfilling the following roles:

Council unit/department	Role
Financial Planning, Policy and Budgeting/ Planning and Policy (lead officers)	· lead development of programme of work · lead engagement with local boards and governing body · develop policy options in light of local boards and governing body feedback · provide analysis and advice.
Local Board Services	· lead engagement with local boards · collate local board feedback · provide advice/assistance
Community Policy and Planning	· advice on community facilities and services, and on community policy development
Community and Cultural Strategy	· advice community and cultural strategy development
Democracy Services	· assist with administration of working party meetings (e.g. agenda / minute distribution, venue and meeting scheduling etc.)

7.0 Additional notes

7.1 Attendance and participation of non-working party members

Working party meetings will not be open to the public and are to be attended by members of the working party (or in the absence of a member their named alternate); and those officers required for the purposes of advising the working party.

At the discretion of the Chairperson, non-member Governing Body councillors and / or Local Board members may attend meetings and participate in discussions, but will not have voting rights.

7.2 Media enquiries

Financial Planning, Policy and Budgeting officers will work with the chairperson, council’s Communications and Public Affairs office and the Mayoral Office to ensure clear and consistent responses to any media requests received.

The collective views of the working party will be represented by the chairperson (or in his absence, the deputy chairperson), however this role may be delegated to other working party member(s) at the discretion of the chairperson.

Appendix One: Establishment of a political working party for the local board funding policy review

Strategy and Finance Committee

Thursday, 1 November 2012

Item 12: Establishment of a political working party for the local board funding policy review

Resolution number SF/2012/150

MOVED by Cr P Webster, seconded Mayor LCM Brown:

That the Strategy and Finance Committee

a) Approves the creation of a working party consisting of seven councillors and seven local board members to provide guidance and direction with respect to the development of the local board funding policy.

b) Agrees the councillor representatives for the working party will be nominated once the Local Boards have nominated their representation.

c) Agrees that the working party is to be chaired by the Mayor and that a representative of the IMSB be included.

CARRIED

[2] The matter must be referred to arbitration if the council does not agree.

Chairperson	Len Brown, JP
Deputy Chairperson	Penny Webster
Members	Cr Anae Arthur Anae	Cr Calum Penrose
	Cr Cameron Brewer	Cr Dick Quax
	Cr Dr Cathy Casey	Cr Sharon Stewart, QSM
	Cr Bill Cashmore	Cr Sir John Walker, KNZM, CBE
	Cr Ross Clow	Cr Wayne Walker
	Cr Linda Cooper, JP	Cr John Watson
	Cr Chris Darby	Cr George Wood, CNZM
	Cr Alf Filipaina
	Cr Hon Chris Fletcher, QSO
	Cr Penny Hulse
	Cr Denise Krum
	Cr Mike Lee