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Manurewa Local
Board
10 April 2014
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Local
board input into the Council-Controlled Organisations current state assessment
File No.:
CP2014/06456
Purpose
1. This
report seeks input from the Board into the first phase of the
Council-controlled organisations review - current state assessment.
Executive
Summary
2. Auckland
Council is undertaking a review of its seven substantive Council-controlled organisations (CCOs).
3. The first step
of this review consists of an assessment of the current state. Auckland
Council has prepared a preliminary assessment reviewing the experience of the
Council and its CCOs over the last three years from a Council perspective,
along with a discussion document to guide input.
4. Local boards
are invited to provide their input based on the discussion document. Feedback
will be reported back to the Governing Body and will inform the first phase of
the CCO review (current state assessment) as well as subsequent phases of the
review.
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Recommendation/s
That the Manurewa Local Board:
1) provide input
into the CCO review current state assessment, OR
2) delegate to
member XX to provide the Board’s input into the review by 30 April 2014.
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Discussion
5. Auckland
Council is undertaking a review of its substantive Council-controlled
organisations (CCOs): Auckland Transport, Auckland Council Property Ltd,
Auckland Council Investments Ltd, Auckland Waterfront Development Agency,
Auckland Tourism Events and Economic Development, Regional Facilities Auckland,
and Waterfront Services Ltd.
6. The review aims
to determine whether there is a need to change the scope of activities and
functions within any CCO, the structures that the CCOs operate within, or any
accountability mechanisms between the CCOs and Auckland Council.
7. Governing body
members, local board chairs, the CCOs and the Independent Māori Statutory
Board (IMSB) were given the opportunity to provide feedback into the draft
Terms of Reference. Common themes amongst the feedback received included:
· the need to reduce duplication between
Auckland Council and CCO activities
· views as to where responsibility should
lie for strategy/policy development
· questions around effectiveness where an
activity is split between Auckland Council and one or more CCO
· the need to assess the impact of change
on outcomes and delivery
· the need for effective communication and
collaboration across organisations
· the need to achieve constructive and
positive engagement with Aucklanders.
8. The feedback
contributed to the development of the Terms of Reference. The final version was
adopted by the Governing Body on 27 February 2014 and is presented in
Attachment A.
9. The Terms of
Reference specify the objectives of the review of CCOs as follows:
· To ensure the governance structures and
accountability mechanisms:
§ Facilitate appropriate alignment of the
CCO operations with the Auckland Plan and other council strategies and policies
§ Provide an effective and efficient model
of service delivery for Auckland Council and Aucklanders
§ Provide a sufficient level of political
oversight and public accountability.
· In addition, the review will seek to:
§ Provide clarity of role and
responsibilities e.g. development of strategies, prioritisation of work
programmes
§ Eliminate duplication and gaps between the
Auckland Council group organisations
§ Identify any opportunities for better
integration of activities and functions.
10. The intention is
to complete the review and be ready to implement agreed outcomes by 30 June
2015, which aligns the CCO review with the Long Term Plan process. This
timeline is extended from what was initially proposed to allow for full
participation and feedback at the appropriate points of the process.
Current state
assessment: preliminary findings
11. The first step
of the CCO review consists of an assessment of the current state. Auckland
Council has prepared a report reviewing the experience of the Council and its
CCOs over the last three years from a Council perspective.
12. The report,
entitled “Auckland Council CCO Review, Current State Assessment (Council
Perspective)”, is presented in Attachment B. It is referred to as the CSA in
the rest of this report. The CSA is based on interviews with governing body
members and input from Auckland Council staff.
13. Key preliminary
findings in the CSA are as follows:
· CCOs were seen to deliver well for
Auckland, and significant progress has been made over the last three years.
· Some governing body members are
considering fine tuning the model while others expect more significant change.
· Views differ about the relative role of
the Council and its CCOs in developing mid-level strategies – i.e. strategies
that bridge the gap between the Auckland Plan and implementation plans.
· The majority view is that the formal
accountability framework between the Council and its CCOs needs to be
simplified and streamlined, with more rigorous debate when priorities are being
communicated through the letter of expectations.
· Informal accountability and
communication is seen just as important as the formal accountability framework.
· Feedback was received on the importance
of integration within the Council group for effective operation, and of a
strong culture of collaboration, as well as other integration mechanisms.
14. The CCOs have
prepared a report to reflect their own perspective, with support from
Pricewaterhouse Coopers (PWC) and informed by interviews with CCO board members
and staff of each of the seven CCOs. The CCO perspective was sought in
recognition that the experience of the CCOs is different from that of Council,
and to utilise the considerable
skills and experience within the CCOs to help inform the review.
15. The intention is
to augment the current state assessment with input from local boards.
Local board
feedback into Auckland Council’s discussion document
16. CCOs, as
delivery agents of Auckland Council, have the potential to have a significant
impact on positive outcomes for Auckland residents, ratepayers, and visitors.
Local boards have an interest in the extent to which CCOs can contribute to
their priorities, in projects being undertaken in their area, and in being kept
up-to-date on wider regional projects. While the CCOs are accountable to the
governing body as shareholder, they also have relationships with local boards
who share decision-making responsibilities.
17. Local boards’
views on the CCO current state will enrich the Council perspective, and local
boards are invited to provide feedback based on the discussion document
prepared by Auckland Council. The discussion document, entitled “Auckland
Council CCOs, Current State, Council Perspective: Discussion and Questions for
Local Boards” provide a series of questions addressed to local boards and is
presented in Attachment C.
18. Local boards are
encouraged to:
· reflect on their experience working with
the CCOs over the last three years
· reflect on what worked well and what can
be improved
· provide feedback on the issues and
opportunities that the CCO review may address.
19. In providing
their feedback, local board members are invited to base their comments on
experience and to provide examples to illustrate the local board’s views.
20. Local board
input will inform the analysis of CCOs and related activities and functions as
part of the first phase of the CCO review (current state assessment) as well as
informing subsequent phases of the review.
Consideration
Local
Board Views
21. This report
seeks the views of the Local Board, which will inform the CCO review.
Maori
Impact Statement
22. The Independent
Māori Statutory Board (IMSB) and Te Waka Angamua will be involved at
several points in the process of reviewing the CCOs. They have provided input
into the development of the Terms of Reference and have been asked to provide
comments on the discussion document
23. Consultation
with Māori, including mana whenua, mataawaka and iwi, would form part of
any public consultation should this occur during the third phase of the review.
Implementation
Issues
24. There are no
implementation issues at this stage of the CCO review.
Attachments
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No.
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Title
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Page
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aView
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Review of Auckland Council CCOs:
Terms of Reference
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9
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bView
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Auckland Council CCO Review, Current
State Assessment (Council Perspective)
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15
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cView
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Auckland Council CCOs, Current State,
Council Perspective: Discussion and Question for Local Boards
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31
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Signatories
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Authors
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Carole Canler –
Advisor, Local Board Services
Anna Bray - Policy and
Planning Manager, Local Board Services
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Authoriser
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Karen Lyons – Manager,
Local Board Services
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Manurewa Local
Board
10 April 2014
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Financial Planning for Extreme Weather Events
File No.:
CP2014/06879
Purpose
1. This report
provides an overview of the current financial management practice for dealing
with extreme weather events in local parks across the region. There are a
number of issues and inconsistencies with the current practice and therefore it
is recommended that a new and consistent approach be adopted.
Executive
Summary
2. Auckland is
prone to a range of extreme weather events including tornadoes, high tides,
high winds, high rainfall and drought, all of which can contribute to sudden
erosion, plant loss, tree fall, fixed asset damage and land slips. 12 local
boards have some funding to deal with land slips and other effects from extreme
weather but it is rarely sufficient when serious issues arise. Nine boards
have no inbuilt financial capacity to cope with the impact of weather events.
3. Council has an
obligation to plan for extreme weather events. There is a legal and moral
obligation to ensure that some rates funding is set aside for this purpose
given that weather damage, while unpredictable in timing and location, is
none-the-less a constant in the Auckland region as a whole.
4. Three options
are considered in this report. This first is to continue with the ad-hoc
funding arrangement i.e. do nothing. The second is to pool local board funding
to essentially develop a regional self-insurance fund (local unallocated
budget). The third is to seek a regional fund, controlled by the governing
body, which is applied for on a case by case basis. The second approach is
recommended. The current arrangement will result in the need for local boards
to cut existing budgets from time to time to react to weather events and
overspend or approach the governing body regarding unforecast over expenditure.
The second option, which involves funding moving to the area of greatest need,
is likely to cover most weather events, without changing existing regional
expenditure, and minimizes the time delays/bureaucracy involved.
5. In 2011, storms affected many
areas and resulted in a number of severe slips on Waiheke Island. In 2012 the
Upper Harbour Local Board was hit by a major cyclone event and dealt with the
extensive damage via cuts in their current work and over expenditure. In 2013
all boards were affected by drought and a number of boards have been affected
by slips and erosion. However the Hibiscus and Bays Local
Board and the Waitemata Local Board, in particular, are finding their
current liabilities well beyond their individual ability to fund the remedy.
In general terms, extreme weather events affect coastal areas and older suburbs
more than rural, flat or inland areas however all areas are prone to wind,
drought and flooding.
6. The financial information
relating to events that have occurred in the last three years is poor due to
the fact that funds were taken from a variety of Auckland Council sources and
expenses were not labelled consistently. As such the average financial risk
for the region over the last three years is not specifically known. While it
is possible for damage to be catastrophic and incalculable (if there is a
regional disaster) it is only the common weather occurrence that is
contemplated in this report. Over the last three years costs have been in the
realm of six figures every year and the burden has traversed boards.
7. Current budgets are
operational. However damage from extreme weather events often results in the
need for the development of new retaining or structures to protect existing
assets from ongoing slips or similar. There is currently no capital funding
sitting with local boards specifically tagged for storm damage remediation. It
is recommended that a portion of the existing funding be allocated to capital
budgets to provide for this eventuality.
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Recommendation/s
That the Manurewa Local Board:
a) agree to
allocate the current (less expenses to date) and future “storm damage” budget
of $16,926 to a
local unallocated “extreme weather event” self-insurance budget, which can be
utilized by the board for repair or rehabilitation of areas affected by
extreme weather events on an as required basis.
b) support a
portion of the pooled operating budgets being allocated to local unallocated
capital funding.
c) note that
expenditure against the local unallocated operational and capital storm
damage budgets will be reported to all local boards annually.
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Discussion
8. Auckland is
prone to a range of extreme weather events including tornadoes, high tides,
high winds, high rainfall and drought all of which can contribute to sudden
erosion, plant loss, tree fall, fixed asset damage and land slips.
9. The scale or
impact of extreme weather events is particularly felt in urban parks where
space is at a premium and landscapes are heavily developed. Although weather events
still have an impact on regional parks the scale of the regional park
landscapes and the management of those landscapes (i.e. a lot more fully
restored streams and coastal dunes) means the impact of extreme weather events
can usually be tolerated without affecting the day to day use of the park. In
general terms, extreme weather events also affect coastal areas and older
suburbs more than flat or inland areas however all areas are prone to wind,
drought and flooding.
10. The financial
impact of managing damage associated with extreme weather events in the urban
park environment has historically been dealt with in three ways:
· Self-insurance – a fund is kept to call on for unforeseen damage
· Reforecasting – no funds are set aside for
unforeseen damage and as a result current projects and operational expenses are
put on hold while funding is diverted to managing the impact of extreme weather
events.
· Overspend – where neither of the two
options above are possible then some costs have been worn as an overspend
11. Auckland City
Council held specific “storm damage” budgets for parks and other Council’s had
a level of self-insurance against unforeseen damage. Others had nothing.
12. Upon
amalgamation the funding pool held by Auckland City Council was divided amongst
the local boards in those areas, and local boards in the old Manukau City had
some funding allocated to cater for this possibility in their local budgets.
This resulted in very small buckets of money being allocated to 12 local
boards.
13. This local board
budget allocation has largely defeated the purpose of the self-insurance fund
as extreme weather events do not happen regularly in any given area. They can
affect a localized area or a large scale area that has no correlation to board
boundaries. This means that individual local boards can go many years without
an extreme weather event while its neighbor or another local board may have
several events in short succession. This random occurrence is normal and the
current budget allocation does not befit this natural phenomenon.
14.
The current operational “storm damage” budgets held across the region are:
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YTD Actual (Feb)
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Budget
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Albert-Eden
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$77,558
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Maungakiekie-Tamaki
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$96,947
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Orakei
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$13,101
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$109,874
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Puketapapa
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$2,197
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$64,632
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Waiheke
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$19,389
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Waitemata
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$7,508
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$102,894
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Franklin
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$20,371
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Howick
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$30,451
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Mangere-Otahuhu
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$15,515
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Manurewa
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$16,926
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Otara-Papatoetoe
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$16,715
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Papakura
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$11,158
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Total
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$22,806
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$582,431
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Note: there are a number of commitments or
costs expected in Waitemata and Orakei that are not yet shown in the these
budgets
Consideration
15. Council has an
obligation to plan for extreme weather events. Under property law there is
term known as lateral support which is about the right of a landowner to have
their land physically supported in its natural state by both adjoining land and
underground structures. There are around 4000 local and sports parks and each
of these parks have neighbours. Any excavation or alteration Council makes to park land may, at a
later time, damage and affect a neighbour and leave Council liable. Our
neighbours have a right to enjoy their land in its natural condition. This
includes the right to have their land held in place from the sides by the
neighbouring land unless both are subject to unforeseen natural events.
16. In addition to
this legal obligation to neighbours, some extreme weather events come at such a
substantial cost that the budget available to an individual board is either
unable to wear the cost of the recovery or the cost of recovery affects a range
of other activities within a local board area. This budget shortfall creates a
liability and its own set of risks for Council and the community.
Options
17. The following
options have been considered for ongoing/future management of storm damage:
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Option
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Pro’s
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Con’s
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1
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Do nothing:
Some boards have
limited funds available, others have nothing
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· No change to boards budgets. A small
contingency fund remains available for those boards with funding.
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· No boards have sufficient funding to deal
with medium size weather event – this exposes council to a range of risks
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2
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Create local
unallocated fund (self-insurance):
This would be a ring fenced fund for all boards to
access allocated to the local and sports parks activity. It would be
established from existing storm damage budgets held by some local boards.
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· Funding is accessible across the region
i.e. funds go where the storm goes
· The size of the fund, pooled across the
region, is more likely to accommodate regional extreme weather events than
current arbitrary and small funding base available to those boards that have
funding
· Can be established immediately (providing
all the boards agree) thereby helping with current liabilities
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· Risk of the fund being inappropriately
used for day to day weather events. This is a current risk and can be more
readily mitigated as a local unallocated fund. It is recommended that there
would be a single Tier 4 manager with a regional view determining a
consistency of approach.
· Some boards contribute to this solution
while others benefit without contribution – may be seen as inequitable
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3
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Ask governing
body to cater for most impacts of extreme weather events on a case by case
basis.
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· No change needed and governing body would
pick up costs of damage (if agreed/funding found). Local boards that have
existing funding would potentially need to show expenditure of current
budgets before being eligible.
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· The time delay and bureaucracy involved
in making this happen means that most applications will be retrospective and
expose the Council to financial risk
· No funding is currently available at a
governing body level. May take time to advocate for/secure
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Local
Board Views
18. This report is
being circulated to all Local Boards to canvas their views on this issue.
Maori
Impact Statement
19. In many cases
extreme weather events can damage archeological sites or sites of significance
to Tangata Whenua. This can trigger the need for cultural impact assessments
and more careful/expensive restoration works to protect the values of the
site. Without a fund to support rehabilitation or restoration work recently
discovered or damaged sites of significance cannot be attended to as there are
no funds. A regional self-insurance fund would help to mitigate risk for
Council.
General
20. As previously
mentioned a variety of extreme weather events have affected parks over the years.
For instance in 2011 storm damage caused extensive slips across Waiheke.
Repair work is ongoing and existing storm damage funding has been insufficient
to cope. In 2012 a tornado hit Hobsonville causing widespread damage to trees
and houses. The arboricultural and general cleanup was unforeseen and no
budget for this kind of work was available to the Upper Harbour Local Board.
In this case the cost of repair was funded by savings in the Local Board budget
combined with a budget overspend.
21. During September
last year, a major storm event hit the east coast beaches, particularly in the
Hibiscus and Bays local board area but also affecting Rodney, Orakei and Howick
Local Boards. A storm surge of 0.8 metres on top of high tide caused substantial
erosion. Orewa Beach was hit the hardest with significant sand loss and coastal
structure damage.
22. Weather events
are part of the life of Auckland. The current inconsistent, and in many cases
non-existent, planning for extreme weather events is a risk and exposes Council
to a high likelihood of budget blowout in any given year and local board area.
23. The
unpredictable nature of extreme weather events means that we cannot anticipate
what portion of funding is needed for capital and operational funding.
However, based on the last three years weather events, we know that there is a
need for both operational and capital funding. It is therefore recommended
that a portion of the current operational funds be allocated to capital funding
to offset these costs.
Implementation
Issues
24. If a regional
self-insurance fund, initially created from existing local board funds, is
universally supported by formal resolution from all boards then this fund can
be created in the current 2013/14 financial year.
25. The expenditure against the local unallocated operational and
capital storm damage budgets will be reported to all local boards annually.
26. There are currently several areas affected by storm damage that have
projected funding shortfalls that could benefit from immediate implementation
of the regional solution. The beneficiaries from this fund will change from
year to year. Some recent historical events and current events and associated
funding requirements are detailed in Attachment A.
Attachments
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No.
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Title
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Page
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aView
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Historical and current events and
associated funding requirements
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55
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Signatories
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Authors
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Jane Aickin, Manager Local and Sports Parks Central
Martin Van Jaarsveld, Manager Local and Sports Parks
North
Malcolm Page, Manager Local and Sports Parks, South
Grant Jennings, Manager Local and Sports Parks West
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Authorisers
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Ian Maxwell, Manager Parks, Sports and Recreation
Karen Lyons, Manager Local Board Services
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