Agenda of Finance and Performance Committee

Finance and Performance Committee

21 May 2015

Auckland Regional Amenities Funding Act (ARAFA) Funding Model Review - Evaluation criteria

File No.: CP2015/05789

Purpose

1. This report identifies criteria for the evaluation of options, as part of the review of the funding model under the Auckland Regional Amenities Funding Act 2008 (ARAFA).

Executive Summary

2. Auckland Council agreed to review the ARAFA funding model through its deliberations on the Mayor’s proposal for the 2014 Annual Plan. The Terms of Reference for this review were endorsed by the Governing Body on 26 February 2015. The first milestone of this review identifies criteria for the evaluation of options. The second milestone identifies the options.

3. The purpose of criteria for evaluating options is to indicate the extent to which an option addresses the issues and objectives of the review, as set out in the Terms of Reference. A set of criteria to evaluate options is proposed for endorsement.

4. Consideration will also be given to the establishment and implementation of options. These considerations are different from those relating to the functioning of a funding model and will be undertaken as a subsequent step before any recommendations are made.

5. The criteria were developed working closely with representatives of the amenities and the Amenities Board and engaging with the Funding Board.

6. The next phase of the review will identify options to achieve the long term sustainable, affordable and predictable funding of the amenities specified. The options will be reported in June 2015.

Recommendation/s

That the Finance and Performance Committee:

a) endorse the following criteria for the evaluation of options as part of the review of the funding model under the Auckland Regional Amenities Funding Act 2008:

i. Financial sustainability and certainty

ii. Affordability

iii. Independence and continuity

iv. Accountability and transparency

v. Administrative efficiency

vi. Alignment of outcomes and goals

vii. Fairness

viii. Flexibility.

Comments

Background

7. Auckland Council agreed to review the ARAFA funding model through its deliberations on the Mayor’s proposal for the 2014 Annual Plan. The Governing Body endorsed Terms of Reference for this review on 26 February 2015. The overarching objective for the review is stated in paragraph 12:

“achieve long term sustainable, affordable and predictable funding of the existing amenities while recognising the Council’s purpose and responsibilities under the Local Government Act 2002 and other legislation.”

8. The purpose of the review is to provide advice to Auckland Council on whether the ARAFA funding model remains fit for purpose, and to identify any changes to the model to enhance its effectiveness. The scope of the review therefore focuses on the funding mechanism itself, associated issues and the objectives an enhanced funding model could achieve.

9. Feedback at a recent Finance and Performance Committee workshop queried the scope of the review and whether it ought to be expanded. The scope is appropriate for a targeted review of the funding model. Still, the Terms of Reference do not preclude the consideration of broader issues in a subsequent phase if deemed necessary. Auckland Council will be better informed to undertake further work as a result of the completion of the review as it currently stands.

10. In undertaking the Funding Model review we are working closely with representatives of the amenities and engaging with the Funding Board.

Criteria

11. With the purpose of enhancing the effectiveness of the funding system, options will be developed (including the status quo) and evaluated against agreed criteria. The purpose of criteria for evaluating options is to indicate the extent to which an option addresses the issues and objectives of the review, as set out in the Terms of Reference.

12. In identifying the evaluation criteria we have been guided by the propositions that the criteria:

· must provide an effective means for considering the relative performance of an option

· must be simple and able to be clearly understood

· must be discrete, each criterion focusing on a single or clearly related set of ideas, that does not overlap with or duplicate other criteria

· should be no more in number than is required to ensure sufficient scope to consider the issues and objectives in the Terms of Reference.

13. What might be required to establish and implement an option will also need to be considered. This will be attended to as a separate exercise from the evaluation of options

14. The evaluation criteria are set out below. A brief description is provided together with the key questions that arise in considering the extent to which an option might address the issues and objectives.

15. Financial sustainability and certainty

This criterion addresses the ‘sufficiency’ of the contribution provided by the funding model in terms of “adequate, sustainable and secure funding for specified amenities.” It includes the predictability of that funding over the short to medium terms in support of financial planning.

Key questions:

· Does the option deliver a sustainable funding model for amenities that ensures delivery of services?

· Does the option provide predictability of funding and support financial planning?

16. Affordability

This criterion addresses the affordability of the sum of the contributions allocated under the funding model including the impact on rates.

Key questions:

· Does the option enable consideration of the impact on rates?

· Does the option support amenities attracting funding from other sources (e.g. user pays, government, philanthropic, fundraising, sponsorship etc.)?

17. Independence and continuity

This criterion considers the extent to which the funding model provides for objective decision making and the extent it provides for continuity of decision-making over time. These considerations go to the stability of the funding model over time.

Key questions:

· Does the option provide for independence of decision-making?

· Does the option provide for a consistent approach to decision-making over time?

· What degree of separation does the funding model provide, between the funder and the decision-maker, if any?

18. Accountability and transparency

This criterion considers the information and the processes to support decision-making required by an option to ensure there is a clear chain of accountability from the recipient through to the funder. Transparency supports accountability, providing clarity around decision-making processes. Public sector responsibility requires accountability and transparency generally, and particularly in respect of public funds. Key questions:

· Does the option ensure the flow of appropriate information between the parties to support sound decision-making?

· What are the accountability mechanisms to elected representatives and Aucklanders that show how ratepayer funds are spent and what is achieved?

· Does the option provide a mechanism that promotes efficient use of funding?

19. Administrative efficiency

This criterion considers the efficiency of the funding model, with regard to the costs associated with the information and processes required by an option. Funding arrangements should have regard to the costs of implementation, and how effective they will be in achieving their objectives.

Key questions:

· Is the option easy to understand and implement?

· What are the costs and risks (both explicit and potential, both financial and non-financial e.g. legal/reputational) associated with the option?

· Are the option’s requirements proportionate to the sums of money involved?

20. Alignment of outcomes and goals

This criterion considers the extent to which the option allows for alignment between the outcomes and goals sought and achieved by the amenities and those of the Auckland Council on behalf of Auckland’s ratepayers. (This alignment is considered at a high-level, recognising the independence and autonomy of the amenities.) This includes the broader strategies and priorities as set out in the Auckland Plan for example.

Key questions:

· To what extent is there alignment between the outcomes and goals sought and achieved by the amenities and those of Council?

· Does the option promote alignment of strategic goals between the Council and the amenities

21. Fairness

This criterion considers the extent to which the funding model provides for fairness.

Key questions

· Does the option allocate monies to the amenities in a fair manner?

· Does the option recognise the diverse financial needs of different amenities?

· Does the option give regard to the varying fund raising abilities/potential fund raising of the amenities?

· Does the option give regard to the historic financial performance and potential financial performance of the amenities?

22. Flexibility

This criterion requires consideration of the extent to which the option provides a funding model with sufficient flexibility to take account of changing circumstances.

Key question:

· Does the option enable appropriate responses to changing circumstances?

Next Steps

23. The next step is the reporting of identified options to the Finance and Performance Committee at its meeting on 18 June 2015.

Consideration

Local Board views and implications

24. The ARAFA funding model review considers the funding model established under the ARAFA legislation and will not impact on local board funding or decision-making. Even so Local Boards may wish to reflect their communities interest in the benefits they receive from the services and facilities provided by the specified amenities.

25. An opportunity will be provided for local board feedback. A briefing is being scheduled for the last week of June 2015, followed by a report to local boards. Local board views and resolutions received will be included in the final report in August 2015.

Māori impact statement

26. The ARAFA funding model review focuses on how Auckland Council’s funding contribution to the specified amenities is determined. Using Whiria Te Muka Tangata: The Māori Responsiveness Framework as a lens there do not appear to be any statutory or treaty obligations, direct Māori or value Te Ao Māori outcomes affected by this review. Enquiries were made of mana whenua in March 2015 to ascertain whether the ARAFA funding model review held any interest. No interests were identified.

Attachments

There are no attachments for this report.

Signatories

Authors

Alastair Cameron – Principal Advisor, CCO Monitoring & External Relationships

Wayne Brown - Lead Strategic Advisor Strategic Advice

Authorisers

Jacques Victor - GM Auckland Plan Strategy and Research

Roger Blakeley - Chief Planning Officer

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

21 May 2015

Amending the license to occupy remission scheme to include proposed the Transport Levy

File No.: CP2015/08817

Purpose

1. This report seeks agreement from the Finance and Performance Committee to consult on the proposal to amend the remission scheme in the Rates remission and postponement policy for residents of licence to occupy (LTO) retirement villages and/or Papakāinga housing to remit the proposed Transport levy targeted rate in addition to the Uniform Annual General Charge (UAGC).

Executive Summary

2. On 8 May 2015 the Governing Body agreed to the proposal to set a Transport levy of $99 plus GST per Separately Used or Inhabited Part (SUIP) for non-business ratepayers and $159 plus GST per SUIP for business ratepayers for the first three years of the Long-term Plan 2015-2025.

3. During discussion on the Transport levy at the meeting of the Governing Body concern was raised regarding the affordability of the levy for residents of licence to occupy retirement villages. As the levy is applied per SUIP, it will be charged for each separate unit within the villages. While residents of licence to occupy villages are usually responsible for paying the rates associated with their unit, they are unable to apply for assistance under the central government’s rates rebate scheme as they are not the ratepayer. The Auckland Council offers a rates remissions for residents of licence to occupy retirement villages and papakainga to address this issue, however, this remission is limited to the UAGC.

4. In response to the concern raised, the Governing Body directed staff to report back on options for amending the remission for residents of licence to occupy retirement villages and papakainga housing (LTO remission scheme) in the Rates remission and postponement policy to include the proposed Transport levy.

5. The current LTO remission scheme remits the UAGC for residents of LTO retirement villages or papakainga who would otherwise qualify for a rate rebate based on their level of household income and amount of rates. The value of this remission is just over 60 per cent of the maximum rebate available under the government’s scheme.

6. Amending the LTO remission scheme to remit the Transport levy in addition to the UAGC will increase the value of the remission per qualifying residence to $500 in 2015/2016. This is equivalent to 83 per cent of the maximum rebate available under the government’s scheme. This compares to Auckland Council applicants for the rates rebate, who on average qualify for 90 per cent of the maximum available rebate.

7. Staff recommend amending the LTO remission scheme to remit the Transport levy to better align the scheme with the government rebate scheme. This amendment would assist in meeting the objective of the remission scheme which is to address the inequity between residents of licence to occupy retirement villages and owner-occupiers.The increased cost of the amended remission scheme is expected to be less than $146,000. This cost will be met through the council’s existing allowance for remissions, so will have no impact on ratepayers. There are no costs associated with implementing this amendment.

8. Staff do not recommend retaining the LTO remission scheme in its current form as this does not address the issue of the affordability of rates for residents of licence to occupy housing.

9. Consideration has been given to replacing the existing LTO remission scheme with a grants mechanism that provides assistance directly to the residents of licence to occupy housing. Such a scheme could better replicate the government’s rates rebate scheme. Staff do not recommend adopting such a grants scheme, due to the cost of implementation, increased cost of administration, and the likely reduction in applicants to the scheme.

10. The council is required to consult on any changes to its Rates remission and postponement policy under the Local Government Act 2002 (LGA). The decision to amend the LTO remission scheme is not significant, and is not likely to attract much public interest. As such, staff recommend a short engagement process targeted primarily to residents of licence to occupy retirement villages.

11. Attached to this report is the Proposal to amend Auckland Council’s Rates remission and postponement policy (remission scheme for residents of licence to occupy retirement villages and/or Papakāinga housing). This document will form the basis for consultation with the public. Also attached is a copy of the proposed text for the amended rates remission scheme.

12. Staff will report back to the Governing Body on the results of consultation and the proposed changes to the Rates remission and postponement policy on 25 June 2015. Staff will recommend the adoption of the proposed amendment to the Rates remission and postponement policy by the Governing Body in June 2015.

Recommendation/s

That the Finance and Performance Committee agree:

a) to consult on the proposal to amend the remission scheme in the Rates remission and postponement policy for residents of licence to occupy retirement villages and/or Papakāinga housing to remit the proposed Transport levy targeted rate in addition to the Uniform Annual General Charge.

b) that consultation on the proposal will be in the following form:

i) A public notice of the proposal to be published in newspapers

ii) The proposal and analysis of the reasonably practicable options to be published on the Shape Auckland website

iii) Letters to be sent to all retirement villages and papakainga with Licence to Occupy tenancies containing the proposal and the process for feedback. The letters will request that village operators advise their residents of the proposal and the opportunity for feedback.

iv) Communicate the proposal and the opportunity for feedback across relevant Maori networks

v) Only written responses will be sought, though any respondents who wish to will be offered the opportunity to discuss the issue with staff

vi) The feedback period will be two weeks from the opening of consultation.

Comments

Background

13. Central government offers a rates rebate scheme to low income households. The scheme is administered by council on the behalf of the Department of Internal Affairs (DIA) and in 2015/2015 offered a maximum rebate of $605. The amount of rebate that is available depends on the total rates that are paid, the level of household income, and the number of dependents in the household. The DIA makes payments direct to the council, which are then applied to the successful applicants’ rate accounts.

14. The rebate scheme is only available to ratepayers who are owner-occupiers. Other low income households that have tenancy agreements or a right to occupy the property but are not the identified ratepayer are excluded from the scheme. This is the case even if the occupants are responsible for paying rates through the terms of their occupancy agreement.

15. The council was concerned about the affordability of rates for residents of licence to occupy retirement villages who may have low income but who are ineligible for rates rebates. The council considered there was an inequity between the treatment of such residents, and those residents of retirement villages who own their properties directly and are therefore able to apply for rebates. The council adopted a rates remission scheme for residents of licence to occupy retirement villages in June 2012 to address this issue. This scheme was expanded to include papakainga housing developments in 2013 following consideration of remission schemes for Maori land.

16. The purpose of this remission scheme is to address the disparity between residents of retirement villages that use licence to occupy agreements compared to residents of villages that are in individual titles. It enables the council to remit the Uniform Annual General Charge (UAGC) where applicants meet the same eligibility criteria for level of household income and amount of rates as for the governments rebate scheme. The level of remission applied is the same regardless of the level of the rebate the applicant would qualify for.

17. The remission applies to the rates of the retirement village in which the applicant resides. It is a requirement of the remission scheme that an agreement exists between the village operator/papakainga and Auckland Council. This agreement requires that the benefit of the rates remission be passed to the resident.

18. The council did not consult on its Rates remission and postponement policy alongside the Long-term Plan 2015-2025 as no changes were proposed. No feedback from the public was received on the existing remission scheme for residents of licence to occupy retirement villages and/or Papakāinga housing.

Analysis

Current Remission Scheme

19. There are approximately 5965 units across 64 retirement villages that are not in individual title. (This excludes villages that are known to use rental or lease agreements under which their tenants are not required to pay rates.) Of these, 60 villages have an agreement with Auckland Council that enables their residents to apply for the rates remission scheme for licence to occupy retirement villages.

20. The council does not yet have full figures for remissions for the 2014/2015 year, so the following analysis is based on the 2013/2014 year.

21. For the 2013/2014 year, 1,156 applicants qualified for remission, at a total cost of $420,000. This equates to 20 per cent of potential LTO retirement units qualifying for remission.

22. The UAGC in 2013/2014 was $363.35, while the maximum rates rebate available from the government was $595. This means that the amount paid for each LTO remission was equivalent to 61 per cent of the maximum rebate.

23. This can be compared to the amounts given through the rates rebate scheme. In 2013/2014, 18,641 ratepayers qualified for the DIA rebate, with an average rebate of $538. This means the average rebate paid was 90 per cent of the maximum available rebate.

24. For 2015/2016, the UAGC will be $385. This is equivalent to 64 per cent of the current maximum rates rebate of $605. The DIA has not yet announced the maximum rebate for next year, which is expected to be in the range of $610-$615. This would mean that the current remission policy would remit approximately 62-63 per cent of the maximum rebate next year.

Impact of Transport levy

25. The Transport levy is proposed to be charged on a per SUIP basis. This means a retirement village that consists of 50 residential units would receive be charged $5700 in Transport levies for the residential part of the property. These charges will normally be passed to the residents of the units.

26. The Transport levy will be automatically included in the calculation for eligibility for both the council’s LTO remission scheme, and the government rates rebate. This is because eligibility is based on the total rates to be paid.

27. The introduction of the Transport levy will mean that a greater number of ratepayers will qualify for both rates rebate and the LTO remission. It is equivalent to raising the threshold for household income for these schemes by 2 per cent.

28. To illustrate the point, in the current year, the average rate per unit in a LTO retirement village is $1321. At this level, a single person reliant on the on NZ Superannuation is eligible for the LTO remission scheme. Such an individual can earn up to $8000 in additional income, and still qualify for the remission (at this level they would only receive $6 if applying for the government rebate.)

29. Households made up of couple who both receive NZ superannuation would not qualify for a remission based on rates of $1321. Their rates would need to increase by more than 50 per percent to qualify.

30. It is reasonable to conclude that the introduction of the Transport levy, as well as the general rates increase of 2.5 per cent will not significantly increase the number of ratepayers eligible for the LTO remission scheme.

Options

31. This report considers three options available to the council in response to the concern regarding the affordability of the Transport levy for residents of licence to occupy housing. These are:

· retain the existing LTO remission scheme with no changes

· amend the LTO remission scheme so that it remits the Transport levy in addition to the UAGC.

· replace the LTO remission scheme with a grants scheme.

Retaining the existing LTO remission

32. The council can choose to retain the existing LTO remission scheme without change. Assuming growth of ten per cent over the 2013/2014 number of eligible applicants for the LTO remission scheme would equate to 1,270 LTO remissions in 2015/2016. (This level of growth is likely to be a high estimate.) The total estimated cost of the remission for 2015/2016 is $490,000.

Amending the LTO remission scheme to remit the Transport levy

33. The proposal is to amend the LTO remission scheme so that the Transport levy is remitted in addition to the UAGC. For 2015/2016, this would be equivalent to a total remission of $500. This is equivalent to a rebate of 83 per cent of the current maximum. This is much closer to the average level of rebate currently being applied by Auckland Council under the government scheme.

34. Assuming growth of ten per cent over 2013/2014, the total cost of the LTO remission scheme if the Transport levy is also remitted will be $635,000 in 2015/2016. This is an increase of $146,000 over the estimated cost of retaining the existing LTO remission scheme. This is 0.01 per cent of the 2015/2016 total rates budget. This cost will be met through the council’s existing allowance for remissions, so will have no impact on ratepayers.

Replacing the LTO remission scheme with a grants scheme

35. The council could choose to replace the existing LTO remission scheme with a grants mechanism. This would enable council to better replicate the government’s rates rebate scheme. Grants would be provided directly to the qualifying residents of LTO housing.

36. There would be significant work required to implement a grants scheme, with associated costs. The existing remission requires the operators of retirement villages to provide administrative support, and most villages actively assist their residents in claiming their entitlement. If the council moved to dealing with residents directly, there is likely to be a drop in uptake of the scheme. There would also be a significant increase in administration costs for the council.

37. The council could adopt a grants scheme that matches the government’s rates rebate scheme for both eligibility criteria and amount of assistance given. Assuming a maximum DIA rate rebate of $610 in 2015/2016 and ten per cent growth in applicants over 2013/2014, the additional cost of such a grants scheme compared to the existing remission scheme would be $209,000.

Conclusions

38. Staff recommend that the remission scheme for residents of licence to occupy retirement villages and/or Papakāinga housing be amended to remit the Transport levy in addition to the UAGC. This would better align the scheme with the level of rebate being given under the central government’s rate rebate scheme. This change would better enable the remission scheme to meet its objective of addressing the inequity between people who reside in licence to occupy retirement villages and are unable to access the rebate scheme, and those retired people who own their own homes and who can access the rebate.

39. Staff will recommend the adoption of the proposed amendment to the Rates remission and postponement policy by the Governing Body in June 2015.

40. Staff do not recommend retaining the LTO remission scheme as this course of action does not address the issue of the affordability of rates for residents of licence to occupy housing.

41. Staff do not recommend adopting a grants scheme due to the cost of implementation, increased cost of administration, and the likely reduction in applications.

Issues

42. There may be an equity issue with the proposed remission scheme, as LTO households who would only qualify for a few dollars under the rates rebate scheme if they were eligible still receive the full remission. There is not sufficient data available at this time to identify whether this has been an issue under the current remission scheme however.

Significance and Engagement

43. The council is required to consult on changes to its rates remission and postponement policy under the Local Government Act 2002 (LGA). Consultation must be in accordance with the principles set out in Section 82 of the Act and the process in section 82A. This requires the council to make the proposal and analysis of options publicly available. council must identify all people or organisations who may have interest in the issue, and to provide them with a reasonable opportunity to consider and comment on the proposal. Engagement should be proportionate to the level of interest that any proposal is likely to create, and the level of significance or impact of any proposed changes.

44. Staff consider that the interest in the proposed change to the LTO remission policy is primarily limited to the operators and residents of licence to occupy retirement villages and papakainga. The level of interest outside of these communities is unlikely to be significant, nor is the financial impact on general ratepayers significant.

45. The decision to amend the remission scheme for residents of licence to occupy retirement villages and/or Papakāinga housing to include the Transport levy is not significant. The number of people impacted by the change is small, and the expected cost of the change is less than two per cent of current total rates remissions. The change does not meet any of the thresholds for significance identified in the council’s Significance and Engagement policy.

46. Staff consider a short, targeted engagement process will be sufficient for the council to meet its obligations under the LGA.

47. Staff recommend the following process for consultation on the proposal:

· a public notice of the proposal to be published in newspapers

· the proposal to be published on the Shape Auckland website

· letters to be sent to all retirement villages and papakainga with Licence to Occupy tenancies informing them of the proposal and the opportunity for feedback. These letters will request that village operators pass the information to their residents.

· communicate the proposal and the opportunity for feedback across relevant Maori networks

· only written responses will be sought, though any respondents who wish to will be offered the opportunity to discuss the issue with staff

· the feedback period will be two weeks from the opening of consultation.

48. Attached to this report is the Proposal to amend Auckland Council’s Rates remission and postponement Policy (remission scheme for residents of licence to occupy retirement villages and/or Papakāinga housing). This document will form the basis for consultation with the public. Also attached is a copy of the proposed text for the amended rates remission scheme.

49. Note the council is unable to directly correspond with the residents of licence to occupy retirement villages, as they are not ratepayers, and therefore are not identified to council. This is unlikely to be an issue given the wide and active support the current scheme receives from retirement villages across Auckland.

50. Staff will report back to the Governing Body on the results of consultation and the proposed changes to the Rates remission and postponement policy on 25 June 2015.

Consideration

Local Board views and implications

51. The decision to amend the Rates remission and postponement policy is the responsibility of the Governing Body.

52. Local boards will have the opportunity to provide feedback on the proposal during the engagement process.

Māori impact statement

53. To date, the council has not identified any papakainga housing developments that are using licence to occupy agreements. The council has not received any applications for remission from such developments.

54. Te Waka Angamua has an ongoing project to identify papakainga housing developments that may be eligible for the current LTO remission scheme to encourage them to apply. Te Waka Angamua will continue to work to ensure that Maori are aware of the remission scheme.

55. If any licence to occupy papakainga housing developments are identified before or during public engagement on the proposal, then these will be included in the consultation process.

Implementation

56. There are no implementation costs to amend the LTO remission scheme as proposed in this report. The recommended proposal does not require any changes to application process for the rates remission scheme, and as such it does not place any increased burden either on applicants, or the management of retirement villages who help administer the scheme.

57. Introducing a grants scheme would incur implementation costs, and increased administration costs. An estimate of the costs and the time to implement such a scheme would require further investigation.

Attachments

No.	Title	Page
a View	Proposal to amend Auckland Council’s Rates Remission and Postponement Policy (remission scheme for residents of licence to occupy retirement villages and/or Papakāinga housing)	25
b View	Text for the remission scheme for residents of licence to occupy retirement villages and/or Papakāinga housing)	27

Signatories

Authors

Beth Sullivan - Principal Advisor Policy

Aaron Matich - Principal Advisor Modelling

Authorisers

Matthew Walker - General Manager Financial Plan Policy & Budgeting

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

21 May 2015

Mount Albert Grammar School Community Swimming Pool Trust - Community Loan Repayment

File No.: CP2015/00216

Purpose

1. To recommend to the Finance and Performance Committee to accept the offer of $750,000 from the Mount Albert Grammar School Community Swimming Pool Trust as full and final settlement of the outstanding community loan of $860,000, and for the remaining amount of $110,000 to be forgiven.

Executive Summary

2. Auckland City Council advanced $860,000 to the Mount Albert Grammar School Community Swimming Trust to enable construction of the Mount Albert Aquatics Centre to be completed in 1999.

3. The facility has experienced a number of issues relating to the condition of the facility. The Trust brought a successful ‘leaky building’ claim against the construction company and received a settlement of $850,000 in 2009.

4. Having already spent a portion of the funds on re-tiling the main pool, the Trust has advised it is now in a positon to repay $750,000 as full and final settlement of the loan, leaving an amount of $110,000 outstanding.

5. The Trust has acceded to pass control of the Mount Albert Aquatics Centre to Auckland Council to manage and operate and will not be in a positon to make any further repayments in future. Council has approved a $3.2 million rehabilitation programme at the facility commencing on 19 April 2015.

6. Financial delegations for writing–off or forgiving debts of up to $40,000 resides with Chief Officers. As the remaining balance of the community loan would be over $40,000 the matter must be referred to Governing Body for consideration.

7. Forgiving or writing-off debts carries the risk of setting precedent and reputational concerns, however in this instance the circumstances and relationship between Auckland Council and one of its CCO’s warrants the balance of the loan being forgiven, and is not seen as setting a precedent for any other community loans.

8. For accounting purposes, the debt has been previously treated as unrecoverable. Any funds recovered now will represent a positive unbudgeted cash in-flow for Council.

9. The Albert-Eden Local Board met on 1 April 2015 and resolved to support the recommendation to accept the $750,000 payment and forgive the remaining amount of the community loan of $110,000.

Recommendation/s

That the Finance and Performance Committee:

a) accept the Mount Albert Grammar School Community Swimming Pool Trust offer of $750,000 as full and final settlement of the outstanding community loan of $860,000, and for the remaining amount of the $110,000 to be forgiven.

Discussion

Background:

10. The Mt Albert Grammar School Community Swimming Pool Trust Board was formed through a partnership between Auckland City Council and the Board of Trustees of Mt Albert Grammar School to build a swimming pool complex that served the needs of the school and the local community.

11. Built at a cost of approximately $8 million, the Mt Albert Aquatic Centre was funded by a council grant of $5.6 million, with the remaining $2.4 million coming from school fundraising ($1.54 million) and loans from Council of $860,000.

12. The facility is owned by the Trust and operated on school land under a Licence to Occupy granted from the Ministry of Education. The Trust has recently issued a sub-licence to Auckland Council to enable the Council to assume total control of the facility, but not ownership.

13. The Trust is a council controlled organisation (CCO) that operates with an exemption from reporting requirements. The new sub-licence arrangement is a result of a comprehensive governance review undertaken in 2014 culminating in a Framework Agreement documenting future actions by all parties. This agreement has now been largely implemented.

14. The facility has experienced a range of issues relating to the condition of the asset; its location on the school grounds; and its operating performance. In December 2010, the Trust sought Council’s assistance to identify options to address the facility issues.

15. In February 2012 the Trust wrote to Council seeking financial assistance to address the structural issues with the facility. The Trust further acknowledged and identified the need to review the on-going governance and management of the facility.

16. At the conclusion of the governance review a Framework Agreement was executed that outlines the next steps for all parties, including how the Trust will attend to the outstanding community loan.

Condition of the Mount Albert Aquatics Pool Facility

17. The Mt Albert Aquatic Centre building is leaking, resulting in deterioration of the internal and external building fabric. The building needs to be re-roofed, re-clad with new vapour barrier and new linings. In 2009, the Trust lodged leaky building proceedings against the construction company and a cash settlement (compensation) of $850,000 was agreed through mediation.

18. The Trust subsequently applied $150,000 of this settlement towards the urgent re-tiling of the main fun pool.

19. Auckland Council has approved a grant / budgetary allowance of $3.2 million to enable the rehabilitation works to commence in mid-April 2015. These are due to be completed by July 2015.

Community Loan

20. The 1999 community loan arrangements required the Trust to repay the loan within an agreed timeframe. Notwithstanding this agreement, the Trust has never been in a positon to make any payments of either interest or principal. Management of the facility has always been undertaken by contractors, and the Trust has not derived sufficient income to enable it to reduce the loan amount.

21. The recently executed Framework Agreement requires the Trust to use the funds it holds to repay as much as possible off the community loan. The funds will be paid over to Council to coincide with the completion of the rehabilitation works, the re-opening of the facility and the day to day management of the facility passing to Auckland Council.

22. The Trust has advised that under the new governance and management arrangements that commence once control of the facility transfers to Council, it does not anticipate generating any further revenue. However, as the on-going owner of the facility, the Trust continues to have statutory reporting requirements, as well as needing to engage with Council as it undertakes the swimming pool network facilities plan that will ultimately determine the future use of the Mount Albert Aquatics facility.

23. The Trust has therefore determined that it needs to retain approximately $100,000 cash as working capital to cover its outgoings over the next 5-10 years. This is based on expenditure of approximately $8000 per annum, plus an overall contingency of $20,000 to cover any consultancy or legal costs that it may need to incur in the future. Following discussions with the Trust, Council staff consider this allowance to be adequate and reasonable.

24. The Trust has advised it is able to repay $750,000 as full and final settlement of the loan, leaving an amount of $110,000 outstanding.

Risks, Benefits and Precedents

25. During the period 1999 to 2010, periodic discussions regards the status of the outstanding community loan did not result in a clear decision on how the loan was to be treated, i.e. written-off/forgiven, converted to a grant, or whether the Trust would be required to make repayments.

26. Auckland Council does not have a policy of forgiving or writing-off community loans. Notwithstanding this, in this particular instance, there are circumstances that warrant this being considered.

27. The risks involved with writing-off this debt are principally around organisational reputation and setting precedent.

28. The financial delegations for writing–off or forgiving debts of up to $40,000 resides with Chief Officers. As the remaining balance of the community loan would be over $40,000 the matter must be referred to Governing Body for consideration.

29. In accordance with required accounting practice, the loans have previously been ‘fully impaired’ and effectively treated as un-recoverable, however the debt is still treated as being due and payable to Council. Receipt of any amount will provide an unbudgeted positive inwards cash contribution to Council.

30. As previously noted the Trust is a CCO, as the majority of the trustees are appointed by Council. The remaining trustees are appointed by the school. Auckland Council has assumed total control of the Mt Albert Aquatics Centre and the Trust will remain as an asset owning trust only and will not derive any income.

31. This community loan is unique because it is between Council and a trust that is also a CCO. Forgiving a debt may result in further requests from the other community loan borrowers for debts to be forgiven. However the current situation is differentiated on the basis that it has never been the intention of Council to take recovery action against the Trust and the loan has already been treated as a bad debt by Council.

32. If the Trust was forced to pay over all cash that it currently holds to reduce the debt to nil, the Trust may be forced to wind-up which, under the terms of the Licence to Occupy from the school, may result in ownership of the facility reverting to the school; and Council’s ability to use the facility as part of its city-wide swimming pool network being severely compromised.

33. Additionally, as the Trust would not be in a position to repay the loan, the on-going costs of administration, bookkeeping, reporting and associated activities would outweigh the benefit of retaining any remaining balance on the books of either the Council or the Trust.

34. In the interests of implementing a tidy solution to a matter which has been left unresolved for many years, staff consider that the offer of $750,000 as full and final settlement is fair and reasonable. Forgiving the remainder of the debt ($110,000) would bring closure to a matter that has been largely left unresolved for 15 years, and because the debt has already been fully impaired there are no further costs to be incurred by Council.

Local Board Views and Implications

35. The Albert-Eden Local Board met on 1 April 2015 and resolved to support the recommendation to accept the $750,000 payment and forgive the remaining amount of the community loan of $110,000.

Maori Impact Statement

36. There are no known issues impacting on Maori interests.

General

37. In accordance with various accounting policies and auditing requirements, Council staff have assessed the loan to determine whether provision for the non-repayment of the loan should be taken into account.

38. Over the years, the full amount of the loan has been ‘impaired’, and effectively written off as a bad debt in the Councils financial reports.

Implementation Issues

39. There are no known issues that would impact on the successful implementation of the recommendations.

Attachments

There are no attachments for this report.

Signatories

Authors

Leigh Redshaw - Strategic Funding Advisor

Authorisers

Kataraina Maki - GM - Community & Social Policy

Kevin Ramsay - Chief Financial Officer

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

21 May 2015

IS Transformation Programme and NewCore Project Update

File No.: CP2015/08477

Purpose

1. This report updates the Finance and Performance Committee on progress of the NewCore project and more generally the IS Transformation programme and budgets for the period ending 31^st March 2015.

Executive Summary

2. The Long-term Plan (LTP) 2012-2022 included $159 million of efficiency savings for the 2014/2015 financial year. These savings were budgeted to increase to $188 million by 2017/2018. The current LTP is being finalised and includes additional savings.

3. Critical to the success of achieving these efficiency savings is the IS Transformation programme.

4. The IS Transformation programme has made strong progress with a number of key projects being completed and a further number of key projects currently in progress.

5. NewCore is one of the most significant projects that underpins organisational transformation. It enables the future radical transformation of key customer-facing services while also reducing the cost to serve each customer. The annual benefits of NewCore are in excess of $10m annually when the project is completed.

Recommendation/s

That the Finance and Performance Committee:

a) note progress on the NewCore project and more generally the IS Transformation programme.

Comments

IS Transformation Programme

Projects Completed

6. To date there has been strong progress across the transformation programme with a number of key projects completed.

Project	Issue addressed
Contact Centre Consolidation	Challenges in understanding the consistency, quality and volume of customer interactions across the region due to multiple business processes and operating models across multiple locations and technology platforms.
Asset Management and Plant Maintenance	Disparate systems and processes being utilised to manage core asset management of parks and property functions, leading to inefficiencies for maintenance programmes and asset utilisation.
Human Resources Information Services	Core Human Resources information made available to cost centre managers to actively manage staffing levels and costs.
Desktop Programme	Migration of desktop environment from Windows XP to Windows 7 to reduce risk to organisation and deliver a consistent and more cost effective desktop environment to manage.
Library System Upgrade	Life cycle management of library systems reducing impact to library services.
Holistic Performance Reporting (Holly)	Improve decision making through providing timely and relevant financial and non-financial reporting as part of the overall Finance Transformation programme.

Projects in Progress

7. IS transformation projects underway include :

Project	Issue addressed
NewCore	Transforming services to customers including digital solutions and reduction of costs, by: · simplifying and standardising our customer and business processes for customer interaction, rates, regulatory services and related property data, · enabling more effective development of digital solutions for customers, giving them more choices around how they want to interact with the council, · consolidating core customer-facing systems that support those processes, · creating a standardised base set of processes and systems for implementation of the Unitary Plan and bylaw reviews, where only one set of systems needs to be updated, as opposed to multiple legacy systems, and reducing operational risk associated with complex end-of-life systems.
Data Centre Consolidation	Consolidation of IS infrastructure resulting in lower operating costs, lower operational risk and stronger platform for technology enhancement projects.
SAP future proofing upgrade and digital ecommerce platform	Life cycle management reducing impact to NewCore project midstream and allowing multi-channel online transactions.
Network consolidation	Consolidation of IS network infrastructure resulting in lower operating costs, lower operational risk and stronger platform for technology enhancement projects.
Workplace Strategy	Support of new working practices through technology deployment.
Building Control Mobile Enablement	Develop and implement mobile field working capability for building control inspections.
Geospatial Information Services (GIS) Future Mode of Operation	Establishes the future mode of operation for the provision of GIS services, management of GIS information and consolidation GIS systems.
Finance Systems Development and Stability	Resolves Hyperion stability/performance issues, increases reports available, expands access to developing reports and management of the "downstream" impacts of Activity Structure and Local Board funding changes on cost allocations and reporting functions.

NewCore detailed discussion

8. NewCore is one of the most significant projects undertaken by Council and underpins organisational transformation. It enables future and more radical transformation of customer-facing services, our digital/on-line interface, and will reduce the cost to serve as a result.

Quarterly update to March 2015

9. Project % complete: 44% v Plan target 44%

Key achievements in last quarter are:

· Design ‘sprints’ for Property and Consents commenced.

· Vendor delivery model successfully implemented by 31^st March. On-going reviews to continue.

· Property and Consents Lean Blueprint (Lean design) completed as per plan and approved by business owners.

· Quarterly full cost reforecast completed that shows our forecast fitting within the approved budget.

· Data Governance forum established to help address key data governance, management and process issues. This is critical input for NewCore ‘go live’.

10. Key risks/issues being addressed (subset of risk register):

· Data Quality – combining the data from the legacy councils into one integrated data set that enables us to deliver a consistent set of services to our customers. Data Governance Council is formed and data issues are being prioritised and addressed.

· Transformational Change – as we consolidate, simplify and standardise there will be changes required in how we operate (i.e. day to day work processes and practice). This change will be led by the operational heads and supported by the NewCore programme.

· Document Management – reviewing as to how documents are created, modified, saved and retrieved both within the NewCore solution and across the old legacy council Electronic Document Record Management System solutions. Working through technical challenges with SAP and HP to determine the best cost effective business approach.

11. Upcoming significant milestones

· Finalise “Reset” phase outcomes and benefits and document, including linking these back to original business case.

· Executive Steering Committee risk review session to be facilitated by Westpac Group CIO who led the successful SAP migration for Commonwealth Bank of Australia.

· Data migration test to validate the quality and completeness of master data (Customer, Property, Consents, etc.) as a pre-requisite to more complete end to end and integration testing.

· Commence System and Integration Testing (end to end testing) on 3 August.

NewCore Project Costs Year to Date and Project Life to Date

12. Current year

· Actual YTD March 2015 $ 30.4m

· Full Year Budget FY14/15 $ 46.7m

· Forecast for FY14/15 is on track to be completed within the November 2014 approved budget.

13. Whole of Project Life

· Actual Life to March 2015 $ 60.9m

· Budget Life to June 2015 (end of current financial year) $ 77.7m

· Actual spend on track for project life to revised budget and no overspend forecast to June 2015 when compared to November 2014 approved budget.

Project Completion forecast

14. The forecast cost for full completion of the NewCore Project remains at $156.9m and within the November 2014 approved budget.

NewCore Benefit Analysis

15. NewCore represents a core ‘building block’ of overall council transformation and is key to its success.

16. The benefits NewCore brings are in productivity and service improvements from decommissioning of legacy IT systems and consolidating and simplifying our core IT systems.

17. NewCore has already delivered a single repository for financial data through a “data warehouse” thereby producing significantly better business intelligence and insights into pricing and volume trends. It has also provided necessary information to support commercial negotiations and contracts, allowing us to negotiate with more commercial strength, more timely reporting and ability to query information more quickly.

18. When complete NewCore will open up the opportunity for:

· More online interaction with our customers which will lower the processing costs involved in transactions such as billing, valuations, credit management, and payment receipting.

· Shared administrative services, customer self-service, field services and the customer experience.

· Streamlining and service enhancements of many regulatory, property and financial processes.

19. With increased workflow and automation capability, lodging and issuing regulatory consents and licencing will be more efficient with a simplified customer interface enabling applications and key information to be made on-line.

20. NewCore benefits are currently being refreshed and more detail on the benefits will be available to be reported in the next few months.

IS Transformation Capital Budgets

21. The overall capital budgets for the IS transformation programme are shown in the following table.

Consideration

Local Board views and implications

22. Transformation projects are of corporate support in nature. Local board views were not sought.

Māori impact statement

23. Transformation projects are of corporate support in nature. Iwi views have not been sought, nor is it considered there is a specific impact.

Implementation

24. There are no implementation issues

Attachments

No.	Title	Page
a View	NewCore Executive Steercom Update	41
b View	SAP NewCore Programme Status Update	61
c View	Glossary of IS Transformation Projects	63

Signatories

Authors

Bruce Gardiner - Commercial Manager (CE/CFO/Governance)

Authorisers

Kevin Ramsay - General Manager Finance

Dean Kimpton - Chief Operating Officer

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

21 May 2015

Māori Transformation Activity and Expenditure report 2014/15 - Quarter 3

File No.: CP2015/05903

Purpose

1. This report provides an update on the 2014/2015 third quarter activity and expenditure for activities that progress towards uplifting Māori well-being and achieving better outcomes with Māori, including the six Māori priority projects in the 2014/2015 Annual Plan.

Executive Summary

2. The Auckland Plan Māori transformational shift is to ‘significantly lift Māori social and economic wellbeing’. Activities and budgets contributing to uplifting Māori wellbeing have been grouped together to provide a ‘whole of council group’ view of progress towards uplifting Māori well-being and achieving better outcomes with Māori.

3. The ‘whole of council group’ view sits across five areas of Māori transformational shift activity that include:

· Whai Rawa - Māori economic well-being

· Whai Tiaki – Māori cultural well being

· Whai Painga – Māori social well being

· Whai Tika – Effectiveness for Māori

· Whai Tahinga –Treaty of Waitangi Settlements

4. The total budget for 2014/2015 is $5.9 million.

5. Year to date (YTD) expenditure for the third quarter was $3,021,998 against a YTD budget of $3,835,482. This indicates a variance $813,484. A majority of the variance ($500,000) can be attributed to Papakainga Development Grant Funding yet to be allocated.

Recommendation

That the Finance and Performance Committee:

a) note the financial and non-financial information on Māori transformational shift activity in quarter three of the 2014/2015 financial year provided in this report.

Discussion

6. The majority of Māori transformational initiatives commenced in the first quarter of 2014/2015. The second quarter report noted that remaining initiatives were due to commence in the third quarter. While programmes did commence during the third quarter, they are yet to trigger a cost element, therefore no expenditure is shown.

7. Year to date (YTD) expenditure for the third quarter was $3,021,998 against a YTD budget of $3,835,482. This indicates a variance $813,484. A majority of the variance ($500,000) can be attributed to Papakainga Development Grant funding yet to be allocated.

8. The following should be noted;

· That $118,000 of the council’s Effectiveness for Māori budget within Te Waka Angamua was repriortised in order to complete the marae needs analysis as noted in the Māori Cultural Well-being expenditure.

Summary of Third Quarter 2014/15

9. Table one provides a summary of the total opex expenditure for quarter two 2014/2015 across the five portfolios.

Council’s Māori Transformational Shift Activity	March 2015 YTD
OPEX	Budget	Actuals	Variance
Māori Economic Well-being	$103,000	$196,371	($93,371)
Māori Social Well-being	$108,934	$113,296	($4,362)
Māori Cultural Well-being	$3,301,548	$2,449,628	$851,920
Effectiveness for Māori	$202,000	$212,703	($10,703)
Treaty of Waitangi Settlements	$120,000	$50,000	$70,000
COUNCIL OPEX TOTAL	$3,835,482	$3,021,998	$813,484

Table1

Summary of Whai Rawa - Māori Economic Well-being expenditure

10. The expenditure to date reflects costs associated with the establishment of the Māori Economic well-being programme and the residual costs from the Waka Powhiri reported in the second quarter results.. Expenditure in this area exceeded budget forecasts due a programme reprioritisation that resulted in the inclusion of the Waka Powhiri project.

Māori Economic Well-being	March 2015 YTD
OPEX	Update	Annual Budget 2014/15	Actuals
Māori Economic Development Programme	Programme ongoing with further expenditure expected in Quarter four	$100,000	$172,000
Development of a signature Māori event	Completed consultation with Auckland iwi about festival vision and content. Planning for a waka themed inaugural event in 2015/2016 tentatively scheduled for December. Total 2014/2015 adjusted from 37k to 53k as reported by ATEED In Quarter 3 of 2014/2015, ATEED contracted external expertise to facilitate Māori engagement about signature festival development. ATEED will undertake further thinking in partnership with iwi on the governance and operational management of the festival and options for delivering a waka festival in December 2015. ATEED have made further commitment to this event in the draft Long-term Plan	$53,000	$24,371
COUNCIL OPEX TOTAL		$153,000	$196,371

Table 2

Summary of Whai Tiaki- Māori Cultural Well-being expenditure

11. Quarter three data indicates that the majority of expenditure is in the Māori cultural well-being budget. The largest expenditure was on Mana Whenua Capacity Contracts $745,000 and Marae Development $460,000.

12. A marae needs analysis has been undertaken and is due to be complete on the 25 May, 2015. The project will provide data to inform Auckland Council’s resource contribution to marae development and future priority setting. The report focuses on the needs of 31 Mataawaka and Mana Whenua marae. The needs analysis excludes all institutional marae such as churches, schools, or university marae as these marae are owned by institutions in a position to resource their own marae development. Budgets from the internal Māori Responsiveness Programme have been reprioritised to enable this work to be completed. Anticipated costs in this area were lower than expected as the majority of resource required has been absorbed within departmental budgets. The portfolio budgets have been changed accordingly.

13. Council supported Waitangi Day events were held at Okahu Bay Park, Sir Barry Curtis Park and Hoani Waititi Marae. All events received great public feedback and were well attended. Planning for Matariki events are underway.

14. Second round applications for Southern Local Boards Marae Assistance opened on 1 February 2015 and closed on 15 March 2015. Decisions will be made at the May and June meetings of the local boards and reported in quarter four.

15. Papakainga Development. Funding will be confirmed during the month of May. All funding will be spent during quarter four.

16. A mana whenua chairs working group has been convened to establish the Regional Kaitiaki Forum to enable strategic leadership level engagement between mana whenua, council and central government on matters of significance for Auckland.

Māori Cultural Well-being	March 2015 YTD
OPEX	Update	Annual Budget 2014/2015	Actuals
Matariki	Expenditure towards community matariki events. Remainder to be spent Quarter four.	$141,000	$62,000
Waitangi Day	Expenditure towards the key Waitangi Day events across Auckland. Waitangi Day events were held at Okahu Bay Park, Sir Barry Curtis Park and Hoani Waititi Marae.	$177,875	$166,340
Ngāti Whatua Orakei Reserves Board	Operational and maintenance costs of the agreed work programme for the reserves. As at Feb 2015 (reported to Reserves Board) spend was $359,182.	$707,421	$359,182
Waiomanu Reserve – Co-management	Administrative and operational costs for agreed works.	$50,738	$35,174
Pūkaki Tapu O Poutukeka Historic Reserve, Pukekiwiriki and Associated Lands Co-management	Management Plan completed for Pukekiwiriki. Action plan for works underway, Budget expected to be spent quarter three/four as a result of agreed actions. Budget held with Papakura Local Board.	$152,213	$32,000
Pukekiwiriki Reserve – Co-management	Papakura Local Board expects further costs in quarter four.	$30,478	$500
Mana Whenua Capacity Contracts	Contracts all signed. Iwi currently drawing down on funds.	$950,000	$745,000
Papakāinga Development	Interim papakainga grants 2014/15 to be spent in quarter four. Funding agreement drafted in anticipation of payment. Funding decisions finalised in May, 2015.	$500,000	0
Marae Development	Successful applicants currently drawing down on funds. Due diligence being undertaken for other potential recipients of council grants.	$740,000	$460,000
Kaitiakitanga Programme	A mana whenua chairs working group has been convened to establish the Regional Kaitiaki Forum to enable strategic leadership level engagement between mana whenua, council and central government on matters of significance for Auckland Further cost will be reported in quarter four.	$100,000	$13,800
Marae Needs Analysis	A marae development needs report has been undertaken better enable Auckland Council to support marae needs. This includes 31 Mataawaka and Mana Whenua Marae. The report is currently being finalised. Completed 25 May.	$118,000	$118,000
Okahu Bay daylighting project^{^[1]}	Expenditure to date has been lower than forecast due to the wastewater contamination risks identified by the review of the Ōkahu Bay Daylighting inlet and outlet options and the majority of the design work being completed May and June 2013/2014. The implementation of separation works will need to be completed prior to undertaking any daylighting works due to risks from wastewater overflows.	$270,000	$130,371
Marine Spatial Plan	Expenditure to date includes six round table discussions involving Stakeholder Working Group,(SWG) members (including Mana Whenua reps) The establishment of a new matauranga Māori Round Table (MMRT). The MMRT has engaged iwi through a series of hui, considering matauranga Māori issues and how Mana Whenua interests and expectations should be reflected in the SWG process. The MMRT will continue to operate and contribute to the next stages of plan development by the SWG.	$50,000	$17,452

Māori Heritage Programme	Desktop review of Sites of value in PAUP -completed. Pilot project underway with iwi on new sites of significance. Officer review of 3600 sites of value to iwi completed Iwi engaged and completed review of 3600 sites of value as evidence for PAUP hearings.	$770,011	$212,066.
Southern Local Boards – Marae Assistance Fund	Second round applications for Southern Local Boards Marae Assistance opens on 1 February 2015 and closes on 15 March 2015. Decisions will be made at the May and June meetings of the local boards and reported in quarter four.	$144,956	$30,584
Hoani Waititi Marae Property maintenance contract	Funding cycle near completion on a work programme agreed between the marae and council .	$64,548	$67,175
COUNCIL OPEX TOTAL		$4,918,240	$2,449,644

Table 3

Summary of Whai Painga - Māori Social Well-being expenditure

17. The Māori programmes funding managed by CDAC has contributed to a number of Māori focused events including Matariki and Waitangi Day events. A contract for $90,000 has been secured with Te Ora Manukau to support the design and delivery of CDAC initiatives related to Māori. The overall Māori transformation shift expenditure has been amended to reflect this change.

18. Work continues in the delivery of Ngā Kete Akoranga – Māori Responsiveness Learning and Development programme. Year to date expenditure is $67,703 and includes foundational courses with 513 attendees from across the Auckland Council Family and 400 attendees for department specific courses. Digital learning platforms are currently being considered as part of suite of tools to improve organisational uptake of te reo Māori. This will improve organisational accessibility.

Māori Social Well-being expenditure	March 2015 YTD
OPEX	Update	Annual Budget 2014/15	Actuals
Māori programmes community development	Funding YTD has contributed to CCS Disability Action to deliver the Karanga Maha Noho Marae, Whai Maia Ltd to deliver waste management, and support to the waka powhiri held in December at Okahu Bay.	$23,588	$34,149
Te Ora Manukau	New funding agreement between Te Ora o Manukau and CDAC to deliver programmes targeting Māori communities.	$90,000	$45,000
Māori Sport and Recreation Plan	Staff have met with Māori communities to gauge what are their focus areas of sports and recreation. Accessibility to facilities that cater to traditional Māori sports highlighted. Costs reported in quarter four.	$30,000	0
Mataawaka Networks	Working with southern Mataawaka networks and local boards to design and establish better ways to engage with mataawaka. Budget expected to be spent in quarter four. Te Waka Angamua staff have met with southern and western Iwi\Maatawaka sectors, groupings, and communities to support the establishment of mechanism that allows Auckland Council to better engage with these networks.	$50,000	0
Māori programmes	Expenditure supplements community Matariki and Waitangi day events. Remainder to be spent quarter four.	$81,180	$34,147
COUNCIL OPEX TOTAL		$274,768	$113,296

Table 4

Summary of Whai Tika - Effectiveness for Māori expenditure

19. Work continues in the delivery of Ngā Kete Akoranga – Māori Responsiveness Learning and Development programme. Year to date expenditure is $67,703 and includes foundational courses with 513 attendees from across the Auckland Council Family and 400 attendees for department specific courses. Digital learning platforms are currently being considered as part of suite of tools to improve organisational uptake of te reo Māori. This will improve organisational accessibility.

20. The Māori Responsiveness Planning/ Treaty Audit Response are well underway with the aim to complete several key Treaty Audit priorities by July 2015. These are reported as a separate agenda item in the Quarterly Finance and Performance Committee Report.

21. The Māori Responsiveness Framework informs the design outputs of Auckland Council’s Workplace Strategy. This has resulted in the incorporation Te Ao Māori in both renewals and new Auckland Council buildings. This has been achieved through bilingual signage, Māori naming, and the inclusion of Māori design and arts.

Effectiveness for Māori Programme	March 2015 YTD
OPEX	Update	Annual Budget 2014/2015	Actuals
Māori Responsiveness Learning and Development	Update noted in summary. Cost will be ongoing and reported quarter four.	$100,000	$67,703
Māori Responsiveness Treaty Audit Response	Work programme reported in Treaty Audit report included in this agenda. Māori Responsiveness Plans ongoing, Development of Matauranga Māori Framework, assisted by Te Arapai consultants that provide expertise in this area. Māori Responsiveness overlay in Auckland Council’s Workplace Strategy outputs.	$202,000	$145,000
COUNCIL OPEX TOTAL		$302,000	$212,703

Table 5

Summary of Whai Tahinga -Treaty of Waitangi Settlements expenditure

22. Council has appointed a Treaty Settlements Manager and a Lead Officer for the Maunga Authority. A cross-council project team is also coordinating council’s response to a number of ongoing Crown-Iwi Treaty Settlement negotiations

Treaty of Waitangi Settlements	March 2015 YTD
OPEX	Update	Annual Budget 2014/15	Actuals
Treaty Settlements Work Programme	Update noted in summary. Cost will be ongoing and Reported quarter three/four.	$220,000	$50,000
COUNCIL OPEX TOTAL		$220,000	$50,000

Table 6

Annual Plan 2014/2015 Māori Priority Project Area update

23. In addition to the projects identified above, the Annual Plan 2014/2015 identifies six Māori priority project areas. These are reported on a quarterly basis. Table seven below provides a summary of expenditure on these six priority areas for the third quarter of 2014/2015.

24. The financial information and commentary in table seven is provided by the project managers’ from the relevant departments and Council Controlled Organisations (CCOs) responsible for each of the projects.

25. ATEED, Auckland Transport and Tāmaki Redevelopment Company all have separate financial management systems to Auckland Council and provide estimates^{^[2]} of expenditure to date.

Annual Plan 2014/2015- Māori Priority Project Areas (MPPA)

MPPA	Update	Budget	Actuals YTD March 2015
Major Event Contributes to Māori Economic Well-being	ATEED continues to facilitate the design and development of a signature Māori festival according to t Statement of Intent 2014/2015 and the Mayor's 2013-2016 Letter of Expectation for ATEED. ATEED has facilitated an engagement period with mana whenua that began in November 2014, and recently included a collective hui with iwi leadership hosted by ATEED on 9 March 2015. During quarter three of 2014/2015, ATEED contracted external expertise to facilitate this Māori engagement about signature festival development. ATEED will undertake further thinking in partnership with iwi on the governance and operational management of the festival and options for delivering a waka festival in December 2015. The Long-Term Plan specifies ATEED will use its events funding for a significant and regular Māori event. A prerequisite for the festival enabling successful Māori outcomes, according to Auckland Council's Whai Rawa programme of action under Te Toa Takitini, is determining measures of success, for years one to three, and how Māori living and doing business in Auckland can be impacted positively through the festival over the next five to 10 years. Draft pou (Māori outcome pillars) for the festival require discussion with iwi.	$53,000	$24,371
Transport, walking and cycling infrastructure Te Reo signage / narrative, Māori design and public artworks. Contributes to Māori Cultural Well-being	AMETI Construction works around Mt Wellington and Panmure Station (Stage One) are now complete. Mana whenua and AT are working together on investigating koiwi and taonga internment from this stage of works. Work is continuing on finalising the Cultural Values Assessment for Mokoia Pa, a site of significance principally for Ngāti Paoa and possible mitigation measures. Engagement with the eight mana whenua tribes is now focused on other AMETI packages such as the Pakuranga Road Busway. Dominion Road Ngāti Te Ata, Ngāi Tai ki Tamaki, Ngāti Whātua o Orākei, Ngāti Maru and Ngāti Tamaoho continue to work with the Dominion Road project team on the implementation of the Cultural Landscape Concept. This includes a hinaki (eel pot) inspired walking and cycling bridge, native planting landscape design, pavings, pou whenua and placemaking signage. The hinaki walking and cycling bridge is presently being constructed. Penlink A joint Māori Values Assessment was produced by Ngāti Manuhiri and Te Kawerau a Maki outlining the association of Māori values along the proposed Penlink route. An update to mana whenua was given in March 2015. East West and Mill Road Hui on East-West are continuing with mana whenua in a process now led by NZTA. Discussions are centred on the selection of the route options. Cultural Values Assessment from seven mana whenua groups was finalised late in 2014. Mana whenua were updated in February 2015, prior to Notice of Requirement lodgment and are regularly informed and engaged of key dates and milestones. Senior AT staff recently attended a meeting hosted by Papakura Marae for the local community on Mill Road. Roads and Footpaths Includes the Glenvar Ridge Road project that has developed consent conditions from cultural impact assessments, addressing mana whenua issues. Work continues on cultural monitoring and Māori Urban Design opportunities in this project. Initial discussions have commenced with mana whenua and AT on mana whenua’s proposed approach to Corridor Management Plans and a set of agreed principles to be included in the plans. Walking and Cycling (Glen Innes to Tāmaki Drive) Glen Innes to Tāmaki Drive Shared Pathway commenced engagement with mana whenua in 2014, including a walkover of the proposed route and identifying sites of Māori cultural and ecological significance. Engagement in 2015 has been focused on works in stage one, and appropriate cultural mitigation measures such as cultural monitoring and landscape design for inclusion in consent conditions. Walking and Cycling This includes engagement with mana whenua over Point England to Panmure cycleway, and a site visit in early 2015, where feedback was received on Māori cultural heritage and environmental issues for inclusion in proposed design. Mt Roskill Safety Routes site visit was held with two mana whenua groups in late 2014. Feedback was received on Te Aranga Māori Urban Design principles, such as view shafts to maunga and appropriate stormwater measures such as vegetated swales in the proposed route, which is being considered in next steps. City Rail Link Work is progressing on the CRL design with mana whenua who are working closely with the CRL design team. Cultural Impact Assessment triggers under the Proposed Auckland Unitary Plan were the focus for mana whenua. A mauri model of assessment is being considered by mana whenua, in conjunction with Auckland University Engineering students. Mana whenua involvement in the tendering processes for CRL is a further area of focus. Te reo Māori translations Ongoing, on a project by project basis including events during te wiki o te reo. Ōtāhuhu Bus interchange AT has been working with Ngāti Whātua o Ōrākei, Ngāi Tai ki Tāmaki, Ngāti Tamaoho, Te Akitai Waiohua, Ngāti Te Ata, Ngāti Maru and Ngāti Paoa in the detailed design of the Ōtāhuhu Bus Interchange. This includes cultural narratives that celebrate the portage, rango (totara logs used to move waka overland), Manukau Harbour and Tāmaki Walkways, maunga, navigation and the Ridge (Tutu trees). Other areas of importance identified were stormwater, plantings and water quality. Resource consents were recently completed for the interchange with draft Assessment of Environmental Effects documentation distributed to mana whenua pre lodgment. Rau Hoskins (Design Tribe) has been re-engaged on the project to work alongside AT and mana whenua in the developed design phase of the interchange. Completion date is scheduled for March 2016. Māori Wardens Māori Wardens provide a customer service role on some train services particularly in the evenings, and for special events. This is met through a contract between AT and TransDev. Public Transport Half Moon Bay Ferry Terminal redevelopment commenced engagement with mana whenua in February 2015. Mana whenua have expressed interest in the application of Te Aranga Māori Urban Design principles, resource consents and water quality. As a first step, mana whenua undertook a site visit to Half Moon Bay and Hobsonville Marina, where they viewed completed cultural narratives and the hinaki (eel weir) inspired art work from engagement with Te Kawerau a Maki. Engagement on the Manukau Bus Interchange and the associated works for Lot 59 is progressing, including stormwater measures and input into design with the AT project team and engineering consultants. RLTP In February and March 2015, two hui were held with mana whenua on the draft RLTP, which were attended by nine mana whenua groups. Feedback from mana whenua is currently being reviewed on AT priorities and the RLTP prioritisation process. Wynyard Quarter Wynyard Quarter is an integrated programme with AT, Waterfront Development and Watercare. AT is leading the mana whenua engagement, with mana whenua from the Waitematā Local Board area. During engagement, mana whenua raised concerns relating to contaminated soil, storm, groundwater and waste water management and partnering on Māori identity/Māori cultural expression (naming, art and planting). Cultural monitoring of contaminated soil by consent condition were adopted, and agreements to provide for mana whenua involvement and input into naming are being developed. Work is ongoing Māori Image Gallery A Māori professional photographer was commissioned to provide Māori images for AT’s photographic library for promotional purposes. Māori Engagement Framework A legal review of AT’s Māori Engagement Framework was undertaken to identify recent amendments including Treaty Settlement legislation and changes to the Land Transport Management Act. Mana Whenua Transport Day Monthly meetings with mana whenua (kaitiaki) Projects present to hui participants, and input and feedback is received from mana whenua. Further engagement occurs outside the Transport Day on projects. Resourcing to contribute to Māori outcomes is met by the specific projects. Other Engagement Initial discussions have been held with iwi representatives in the North West with a view to a series of workshops with AT staff and contractors working in the area. These meetings will focus on areas of cultural and historical significance. Senior AT staff members are participating in ACs ‘Whai Tiaki’ (Māori Cultural Wellbeing) series of workshops aimed at developing a programme of work across the Council family, which contributes to the Auckland Plan transformational shifts of raising Māori social and economic wellbeing. A senior AT staff member on behalf of Council is preparing a statement of evidence for the Unitary Plan Independent Hearings Panel for June 2015 (Māori Values).	$1,000,000	$751,100
The Southern Initiative (TSI) Scope a project to address Māori interests. Contributes to Māori Cultural and Social Well-being	Ngā Mana Whenua Diorama Project In the current financial year specific budget has been allocated for Māori historic interpretation signage throughout the TSI region and mana whenua rohe. The TSI also plays an essential facilitation role in the delivery of Māori transformational shifts. Māori & Pasifika Trades Training – central government contract overethree years 2014 – 2017. Tamaki Healthy Families Alliance – central government contract over four years 2014 - 2018. Ongoing Diorama Project – includes supporting capacity building of Mana Whenua rōpū and MOU with POA, Te Ara (pathway) of pou and diorama. Opening of Te Ara January 2016. Diorama for Ngati Tamaoho and Te Pukekiwiriki (collective of mana whenua) governance group in Papakura. It’s South – digital platform to include Māori and the wider community Relationship building with TPK, IMSB and Mana Whenua to align work programmes adding value to realising project outcomes Planning to meet with operational senior leadership team of Nga Mana Whenua o Tamaki Makaurau and Tainui Group Holdings to potentially align work programmes Collaborating with CDAC, ATEED and Mana Whenua on social enterprise opportunities	$20,000	$20,000
Proposed Auckland Unitary Plan Funding of mana whenua engagement, use of iwi management plans, sites of significance and other Māori provisions. Contributes towards Māori Cultural Well-being	Progress to date Pilot project underway with iwi on new sites of significance. Officer Review of 3600 sites of value to iwi completed. Iwi engaged and completed review of 3600 sites of value as evidenced for the PAUP hearings Reprioritisation Due to the scale and complexity of the issues, it is anticipated that additional costs (above the estimated $150,000) will be necessary to respond to the submissions on remaining provisions of the PAUP that relate to the Treaty of Waitangi .	$920,000^{^[3]} See footnote	$463,521 See footnote
$150,000	$251,455
150k represents the estimated cost contributing to Māori Cultural Well-being. Additional budget is being sought to cover the cost overrun in relation to this item specifically
Tāmaki Transformation Programme^{^[4]} Opportunities for affordable housing, marae and associated education and cultural facilities. Contributes to Māori Cultural and Social Well-being	Ruapōtaka Marae Capacity Building Project Scope priority needs in partnership with marae completed. Programme includes training for its trustees, supporting back office systems, training for funding application writing, governance, and policy writing. Ruapōtaka Master Plan and Feasibility Study The Ruapotaka Marae Precinct Plan with a budget of $100,000 is a project lead by ACPL who is currently determining the scope of the project. The various parties involved include – ACPL, TRC, Parks, Local Board, Marae, and designers. The project is to determine the Marae Final master plan, Marae design and costings by June 2015. The budget number is likely to be spent - not all prior to financial year end as the final scope of the project is yet to be determined. Cultural Mapping Working with iwi (Ngai Tai, Ngāti Pāoa, Ngāti Whatua Orakei) to protect cultural landmarks. Digital map development completed, initial content developed in partnership with three mana whenua iwi. Expenditure of $35k was reported in quarter one, this was incorrect. Actuals of 20k against $50k is a more accurate figure at this time. The Cultural Mapping and Marae Capacity Building projects with budgets of $50,000 and $45,000 respectively are on track to be fully expended by year-end. Financial Literacy Training Massey University (targeting Māori and Pacific). Seven coaches trained and qualified including three Māori. Programme developed to enable community members to deliver information sessions to Tamaki families throughout 2015. Implement affordable housing strategy Confirmed actions with key partners Deliver identified actions by June 2015. Key partners include Community Housing Aotearoa, Ngā Iwi Katoa, and Te Matapihi (sector body representing Māori housing interests). TRC has also been in discussion with IMSB for strategic alignment Māori housing. Expenditure of $100k was reported in quarter one, this was incorrect. Actuals of 5k against $200 k budget is a more accurate figure at this time. The Affordable Housing Strategy with a budget of $200,000 has now commenced in quarter three and we are likely to spend $110,000 prior to year-end with the remainder in the next financial year.	$420,000	$53,600 We expect significant spend quarter four – see comments.
Stormwater Investment Incorporate Mātauranga Māori Contributes towards Māori Cultural Well-being	Okahu Bay Daylighting The final report on the proposed daylighting options has been received and the appropriate Gateway documentation is being prepared. The design of the separation of the combined network upstream of the proposed Daylighting project is nearing completion. The implementation of separation works will need to be completed prior to undertaking any daylighting works is undertaken due to risks form wastewater overflows. Expenditure to date has been lower than forecast due to the risks identified by the review of the project and the majority of the work being completed May and June 2013/2014.	$270,000	$130,371

MPPA

Update

Budget

Actuals YTD March 2015

Major Event

Contributes to Māori Economic Well-being

ATEED continues to facilitate the design and development of a signature Māori festival according to t Statement of Intent 2014/2015 and the Mayor's 2013-2016 Letter of Expectation for ATEED.

ATEED has facilitated an engagement period with mana whenua that began in November 2014, and recently included a collective hui with iwi leadership hosted by ATEED on 9 March 2015. During quarter three of 2014/2015, ATEED contracted external expertise to facilitate this Māori engagement about signature festival development.

ATEED will undertake further thinking in partnership with iwi on the governance and operational management of the festival and options for delivering a waka festival in December 2015.

The Long-Term Plan specifies ATEED will use its events funding for a significant and regular Māori event. A prerequisite for the festival enabling successful Māori outcomes, according to Auckland Council's Whai Rawa programme of action under Te Toa Takitini, is determining measures of success, for years one to three, and how Māori living and doing business in Auckland can be impacted positively through the festival over the next five to 10 years. Draft pou (Māori outcome pillars) for the festival require discussion with iwi.

$53,000

$24,371

Transport, walking and cycling infrastructure

Te Reo signage / narrative, Māori design and public artworks.

Contributes to Māori Cultural Well-being

AMETI

Construction works around Mt Wellington and Panmure Station (Stage One) are now complete. Mana whenua and AT are working together on investigating koiwi and taonga internment from this stage of works. Work is continuing on finalising the Cultural Values Assessment for Mokoia Pa, a site of significance principally for Ngāti Paoa and possible mitigation measures. Engagement with the eight mana whenua tribes is now focused on other AMETI packages such as the Pakuranga Road Busway.

Dominion Road

Ngāti Te Ata, Ngāi Tai ki Tamaki, Ngāti Whātua o Orākei, Ngāti Maru and Ngāti Tamaoho continue to work with the Dominion Road project team on the implementation of the Cultural Landscape Concept. This includes a hinaki (eel pot) inspired walking and cycling bridge, native planting landscape design, pavings, pou whenua and placemaking signage. The hinaki walking and cycling bridge is presently being constructed.

Penlink

A joint Māori Values Assessment was produced by Ngāti Manuhiri and Te Kawerau a Maki outlining the association of Māori values along the proposed Penlink route. An update to mana whenua was given in March 2015.

East West and Mill Road

Hui on East-West are continuing with mana whenua in a process now led by NZTA. Discussions are centred on the selection of the route options. Cultural Values Assessment from seven mana whenua groups was finalised late in 2014. Mana whenua were updated in February 2015, prior to Notice of Requirement lodgment and are regularly informed and engaged of key dates and milestones. Senior AT staff recently attended a meeting hosted by Papakura Marae for the local community on Mill Road.

Roads and Footpaths

Includes the Glenvar Ridge Road project that has developed consent conditions from cultural impact assessments, addressing mana whenua issues. Work continues on cultural monitoring and Māori Urban Design opportunities in this project. Initial discussions have commenced with mana whenua and AT on mana whenua’s proposed approach to Corridor Management Plans and a set of agreed principles to be included in the plans.

Walking and Cycling (Glen Innes to Tāmaki Drive)

Glen Innes to Tāmaki Drive Shared Pathway commenced engagement with mana whenua in 2014, including a walkover of the proposed route and identifying sites of Māori cultural and ecological significance. Engagement in 2015 has been focused on works in stage one, and appropriate cultural mitigation measures such as cultural monitoring and landscape design for inclusion in consent conditions.

Walking and Cycling

This includes engagement with mana whenua over Point England to Panmure cycleway, and a site visit in early 2015, where feedback was received on Māori cultural heritage and environmental issues for inclusion in proposed design. Mt Roskill Safety Routes site visit was held with two mana whenua groups in late 2014. Feedback was received on Te Aranga Māori Urban Design principles, such as view shafts to maunga and appropriate stormwater measures such as vegetated swales in the proposed route, which is being considered in next steps.

City Rail Link

Work is progressing on the CRL design with mana whenua who are working closely with the CRL design team. Cultural Impact Assessment triggers under the Proposed Auckland Unitary Plan were the focus for mana whenua. A mauri model of assessment is being considered by mana whenua, in conjunction with Auckland University Engineering students. Mana whenua involvement in the tendering processes for CRL is a further area of focus.

Te reo Māori translations

Ongoing, on a project by project basis including events during te wiki o te reo.

Ōtāhuhu Bus interchange

AT has been working with Ngāti Whātua o Ōrākei, Ngāi Tai ki Tāmaki, Ngāti Tamaoho, Te Akitai Waiohua, Ngāti Te Ata, Ngāti Maru and Ngāti Paoa in the detailed design of the Ōtāhuhu Bus Interchange. This includes cultural narratives that celebrate the portage, rango (totara logs used to move waka overland), Manukau Harbour and Tāmaki Walkways, maunga, navigation and the Ridge (Tutu trees). Other areas of importance identified were stormwater, plantings and water quality. Resource consents were recently completed for the interchange with draft Assessment of Environmental Effects documentation distributed to mana whenua pre lodgment. Rau Hoskins (Design Tribe) has been re-engaged on the project to work alongside AT and mana whenua in the developed design phase of the interchange. Completion date is scheduled for March 2016.

Māori Wardens

Māori Wardens provide a customer service role on some train services particularly in the evenings, and for special events. This is met through a contract between AT and TransDev.

Public Transport

Half Moon Bay Ferry Terminal redevelopment commenced engagement with mana whenua in February 2015. Mana whenua have expressed interest in the application of Te Aranga Māori Urban Design principles, resource consents and water quality. As a first step, mana whenua undertook a site visit to Half Moon Bay and Hobsonville Marina, where they viewed completed cultural narratives and the hinaki (eel weir) inspired art work from engagement with Te Kawerau a Maki. Engagement on the Manukau Bus Interchange and the associated works for Lot 59 is progressing, including stormwater measures and input into design with the AT project team and engineering consultants.

RLTP

In February and March 2015, two hui were held with mana whenua on the draft RLTP, which were attended by nine mana whenua groups. Feedback from mana whenua is currently being reviewed on AT priorities and the RLTP prioritisation process.

Wynyard Quarter

Wynyard Quarter is an integrated programme with AT, Waterfront Development and Watercare. AT is leading the mana whenua engagement, with mana whenua from the Waitematā Local Board area. During engagement, mana whenua raised concerns relating to contaminated soil, storm, groundwater and waste water management and partnering on Māori identity/Māori cultural expression (naming, art and planting). Cultural monitoring of contaminated soil by consent condition were adopted, and agreements to provide for mana whenua involvement and input into naming are being developed. Work is ongoing

Māori Image Gallery

A Māori professional photographer was commissioned to provide Māori images for AT’s photographic library for promotional purposes.

Māori Engagement Framework

A legal review of AT’s Māori Engagement Framework was undertaken to identify recent amendments including Treaty Settlement legislation and changes to the Land Transport Management Act.

Mana Whenua Transport Day

Monthly meetings with mana whenua (kaitiaki) Projects present to hui participants, and input and feedback is received from mana whenua. Further engagement occurs outside the Transport Day on projects. Resourcing to contribute to Māori outcomes is met by the specific projects.

Other Engagement

Initial discussions have been held with iwi representatives in the North West with a view to a series of workshops with AT staff and contractors working in the area. These meetings will focus on areas of cultural and historical significance.

Senior AT staff members are participating in ACs ‘Whai Tiaki’ (Māori Cultural Wellbeing) series of workshops aimed at developing a programme of work across the Council family, which contributes to the Auckland Plan transformational shifts of raising Māori social and economic wellbeing.

A senior AT staff member on behalf of Council is preparing a statement of evidence for the Unitary Plan Independent Hearings Panel for June 2015 (Māori Values).

$1,000,000

$751,100

The Southern Initiative (TSI)

Scope a project to address Māori interests.

Contributes to Māori Cultural and Social Well-being

Ngā Mana Whenua Diorama Project

In the current financial year specific budget has been allocated for Māori historic interpretation signage throughout the TSI region and mana whenua rohe. The TSI also plays an essential facilitation role in the delivery of Māori transformational shifts.

Māori & Pasifika Trades Training – central government contract overethree years 2014 – 2017.

Tamaki Healthy Families Alliance – central government contract over four years 2014 - 2018.

Ongoing Diorama Project – includes supporting capacity building of Mana Whenua rōpū and MOU with POA, Te Ara (pathway) of pou and diorama. Opening of Te Ara January 2016. Diorama for Ngati Tamaoho and Te Pukekiwiriki (collective of mana whenua) governance group in Papakura.

It’s South – digital platform to include Māori and the wider community

Relationship building with TPK, IMSB and Mana Whenua to align work programmes adding value to realising project outcomes

Planning to meet with operational senior leadership team of Nga Mana Whenua o Tamaki Makaurau and Tainui Group Holdings to potentially align work programmes

Collaborating with CDAC, ATEED and Mana Whenua on social enterprise opportunities

$20,000

Proposed Auckland Unitary Plan

Funding of mana whenua engagement, use of iwi management plans, sites of significance and other Māori provisions.

Contributes towards Māori Cultural Well-being

Progress to date

Pilot project underway with iwi on new sites of significance.

Officer Review of 3600 sites of value to iwi completed.

Iwi engaged and completed review of 3600 sites of value as evidenced for the PAUP hearings

Reprioritisation

Due to the scale and complexity of the issues, it is anticipated that additional costs (above the estimated $150,000) will be necessary to respond to the submissions on remaining provisions of the PAUP that relate to the Treaty of Waitangi .

$920,000^{^[3]}

See footnote

$463,521

See footnote

$150,000

$251,455

150k represents the estimated cost contributing to Māori Cultural Well-being. Additional budget is being sought to cover the cost overrun in relation to this item specifically

Tāmaki Transformation Programme^{^[4]}

Opportunities for affordable housing, marae and associated education and cultural facilities.

Contributes to Māori Cultural and Social Well-being

Ruapōtaka Marae Capacity Building Project

Scope priority needs in partnership with marae completed. Programme includes training for its trustees, supporting back office systems, training for funding application writing, governance, and policy writing.

Ruapōtaka Master Plan and Feasibility Study

The Ruapotaka Marae Precinct Plan with a budget of $100,000 is a project lead by ACPL who is currently determining the scope of the project. The various parties involved include – ACPL, TRC, Parks, Local Board, Marae, and designers.

The project is to determine the Marae Final master plan, Marae design and costings by June 2015.

The budget number is likely to be spent - not all prior to financial year end as the final scope of the project is yet to be determined.

Cultural Mapping

Working with iwi (Ngai Tai, Ngāti Pāoa, Ngāti Whatua Orakei) to protect cultural landmarks. Digital map development completed, initial content developed in partnership with three mana whenua iwi.

Expenditure of $35k was reported in quarter one, this was incorrect. Actuals of 20k against $50k is a more accurate figure at this time.

The Cultural Mapping and Marae Capacity Building projects with budgets of $50,000 and $45,000 respectively are on track to be fully expended by year-end.

Financial Literacy Training Massey University (targeting Māori and Pacific).

Seven coaches trained and qualified including three Māori. Programme developed to enable community members to deliver information sessions to Tamaki families throughout 2015.

Implement affordable housing strategy

Confirmed actions with key partners

Deliver identified actions by June 2015.

Key partners include Community Housing Aotearoa, Ngā Iwi Katoa, and Te Matapihi (sector body representing Māori housing interests). TRC has also been in discussion with IMSB for strategic alignment Māori housing. Expenditure of $100k was reported in quarter one, this was incorrect. Actuals of 5k against $200 k budget is a more accurate figure at this time.

The Affordable Housing Strategy with a budget of $200,000 has now commenced in quarter three and we are likely to spend $110,000 prior to year-end with the remainder in the next financial year.

$420,000

$53,600

We expect significant spend quarter four – see comments.

Stormwater Investment

Incorporate Mātauranga Māori

Contributes towards Māori Cultural Well-being

Okahu Bay Daylighting

The final report on the proposed daylighting options has been received and the appropriate Gateway documentation is being prepared. The design of the separation of the combined network upstream of the proposed Daylighting project is nearing completion. The implementation of separation works will need to be completed prior to undertaking any daylighting works is undertaken due to risks form wastewater overflows. Expenditure to date has been lower than forecast due to the risks identified by the review of the project and the majority of the work being completed May and June 2013/2014.

$270,000

$130,371

Table 7

Consideration

Local Board Views and Implications

26. Local boards have not been consulted in the preparation of this report. Local boards will be included in the business partnering process to support implementation of the monitoring and reporting system.

Māori impact statement

27. The updated reporting and monitoring framework was developed in consultation with the Independent Māori Statutory Board secretariat. Clarifying the contribution of projects and activities to lift Māori social and economic well-being through improved criteria, monitoring and reporting will strengthen the council group’s Māori responsiveness. The 2014-2015 Annual Plan Māori Transformational shift budgets will make a positive contribution to Māori and Auckland as a whole

Implementation

Work will continue to improve the level and quality of financial and non-financial data captured by the framework, including with council’s substantive CCOs to ensure that the portfolio management system captures data from the whole council group.

Attachments

There are no attachments for this report.

Signatories

Authors

Shane Cook - Kaihautu Whakatuturu Puni - Senior Maori Effectiveness Advisor

Authorisers

Johnnie Freeland - Paearahi Matua - Manager

Grant Taylor - Governance Director

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

21 May 2015

Te Tiriti o Waitangi Audit response work programme 2014/15 update

File No.: CP2015/05904

Purpose

1. This report provides a progress update on the 2014/2015 work programme to deliver on priority elements in the third and final year of council’s Treaty Audit response work programme

Executive Summary

2. Te Tiriti o Waitangi/ Treaty of Waitangi audit undertaken in 2011 was one of two key projects in the first (2011/2012) funding agreement between the Independent Māori Statutory Board (IMSB) and council. The audit provides a basis for IMSB to fulfil its statutory obligation to assist council to act in accordance with statutory provisions referring to Te Tiriti o Waitangi.

3. In July 2012, the governing body adopted a three year work programme of actions in response to the Treaty Audit recommendations, 2014/2015 is the third and final year of this work programme. This report provides a progress update for the third quarter, ending March 2015, on the priority actions for 2014/2015, as approved by the Finance and Performance Committee on 24 September 2014 (FIN/2014/55).

Recommendation

That the Finance and Performance Committee:

a) note the progress update on the Treaty Audit response work programme for the 2014/2015 priority actions.

Comments

4. The table below provides a progress update on the Treaty Audit response work programme 2014/2015 priority actions, as approved by the Finance and Performance Committee on 24 September 2014

5. The 2014/2015 work programme builds on work already completed in the previous two years. A number of the agreed Treaty Audit response actions need continuing work beyond the original three year timeframe to embed best practice and ensure continuous improvement throughout the council group. This work will become part of council’s wider Effectiveness for Māori portfolio of work, which is focused on building internal capacity and capability across council.

Te Tiriti o Waitangi Audit response work programme 2014/15	Te Tiriti o Waitangi Audit Recommendation	Progress Update
Knowledge of Obligations
1	Evaluation of Māori responsiveness plan pilots	· Increase awareness and set out principles, rules and guidelines to direct council and CCO actions.	· The evaluation of the Māori Responsiveness Plan pilots has been completed. · Finalising the evaluation report for peer review by the IMSB secretariat for close off by the end of May.
Policies
2	Te Reo Māori framework	· Develop Māori place names policy. · The media for communication should include Te Reo options where possible and promoted in council documents, signs and other communication tools.	· Final draft being prepared for consultation with Māori and completed by the end of June. · Work has also included the Road Naming guidelines for Local Boards. · The draft guidelines have been presented to mana whenua for feedback
3	Māori relationships framework	· Development of draft Māori Relationships Framework.	· The development of Mana Whenua relationship agreements are underway. · All 19 Mana Whenua have been informed of council’s intention to formalise relationship agreements. · Five Mana Whenua have been initially engaged in the process. · Engagement across local boards will also commence.
4	Development of Nga Taonga Tuku Iho framework	· Develop management of Taonga policy.	· Development of the framework commenced in May 2015.
5	Framework for Mana Whenua participation in natural resource management.	· Develop co-management/co-governance policy · Develop joint management agreements policy · Develop transfer of powers policy. · Develop Māori partnership policy · Develop management of memoranda of understanding policy · Development of management of court order agreements policy	· Engagement with Mana Whenua relating to the framework will be incorporated into the discussions with Mana Whenua relating to formalising relationship agreements due for commencement in March. · Operational guidance material on legal frameworks, delegations and, insurance, health and safety responsibilities for co-governance entities has been developed. · The guidance material has been tested with targeted departments and CCOs.
6	Significance and Engagement policy	· Development of engagement policy · Review significance policy · Provide clarity over what constitutes a significant decision and how this is determined.	· Completed
7	Development/update of hearings policy	· Update of Hearings Policy.	· Initial scoping work completed across different council hearings processes. · Given the range of legislative drivers for council hearings, Legal Services are providing input in to the most effective way to recognise and provide for Te Reo Māori and Tikanga Māori across hearings.
Processes, systems and data
8	Māori Heritage Programme	· Wāhi tapu information management.	· Iwi engaged and completed review of 3600 sites of value as evidence for PAUP hearings
9	Tāmaki Makaurau Mana Whenua Kaitiaki Forum	· Consider establishment of Mana Whenua/Kaitiaki forums · Council should work together with Mana Whenua (and mataawaka where appropriate) to establish effective resourcing options.	· In progress. · Resource provided to support a Mana Whenua working group to facilitate the establishment of a forum.
10	Māori information portal	· Establish and implement a centralised system to track Mana Whenua, key contacts and their details, and to track current consultation activities · Develop systems, which allow information to be shared across the organisation · Information and knowledge on Māori values, interests and aspirations should be collated, recorded and shared to ensure coordinated consultation efforts.	· Mana Whenua contacts completed and maintained. · Key information sources have been identified and collated. · Information will be accessed through the council shared drive and intranet.
11	Māori responsiveness planning (three new plans completed in 2014/2015)	· Embed Māori requirements within the day-to-day business as usual approach and an effective compliance covering both Māori statutory requirements and other legal requirements.	· Community Development Arts and Culture and People and Capability Māori Responsive Plans are on track to be completed by June 30. · CPO are likely to be completed in September · ATEED and Communication and Engagement are progressing.
12	Māori heritage programme	· The Māori Strategy and Relations unit and Resource Consents team should work together with Mana Whenua to establish monitoring processes for consents.	· Completed quality assurance of the Sites of Māori value, as identified in the Cultural Heritage Inventory. · Mana Whenua have been contracted for the wider Māori Cultural Heritage Project on improving identification, mapping and protection of sites of importance to Māori.
13	Māori-friendly recruitment process	· Recruitment process.	· Work is underway to evaluate and identify actions to improve the recruitment process for Māori.
Capacity
14	Mana Whenua capacity building	· Council should support Māori with training in council language and process, information, council expertise or systems e.g. GIS to improve quality of Māori contribution to council decision-making.	· Implemented capacity funding agreements. · Initiated planning with Mana Whenua regarding capacity needs.
Mataawaka communication and education programme	· Communication and Engagement have commenced this project.
Training and awareness
15	Evaluation of link between staff participation in Ngā Kete Akoranga and departmental Māori responsiveness plans	· Incorporation of training and awareness KPIs into staff performance objectives and competency frameworks.	· Work has commenced as part of the evaluation of the Māori Responsiveness Planning pilot and due for completion by the end of May 2015.
Communication
16	Roll out of best practice from evaluation of Māori responsiveness business planning case studies.	· The example of current good initiatives should be shared with the wider organisation, local boards and CCOs to promote awareness of other ways to upskill staff and increase awareness of Māori aspects.	· Māori responsiveness business planning case studies have been completed. · Communication and Engagement are preparing case studies for publication.
Monitoring
17	Monitoring and Reporting	· Monitoring the effectiveness of policies, processes and controls to ensure compliance with obligations to Māori · People performance against competency frameworks and performance objectives · Short-term key performance indicators · Consideration should also be given to monitoring CCO and local board performance in these areas.	· Performance and activity monitoring framework has been developed and currently in place. · The effectiveness of policies and controls framework is yet to commence. · Legal Services are developing a legal compliance framework that will take into account council’s statutory obligations to Māori. · Developing framework for long-term Māori well-being reporting is yet to commence.

Te Tiriti o Waitangi Audit response work programme 2014/15

Te Tiriti o Waitangi Audit Recommendation

Progress Update

Knowledge of Obligations

Evaluation of Māori responsiveness plan pilots

· Increase awareness and set out principles, rules and guidelines to direct council and CCO actions.

· The evaluation of the Māori Responsiveness Plan pilots has been completed.

· Finalising the evaluation report for peer review by the IMSB secretariat for close off by the end of May.

Policies

Te Reo Māori framework

· Develop Māori place names policy.

· The media for communication should include Te Reo options where possible and promoted in council documents, signs and other communication tools.

· Final draft being prepared for consultation with Māori and completed by the end of June.

· Work has also included the Road Naming guidelines for Local Boards.

· The draft guidelines have been presented to mana whenua for feedback

Māori relationships framework

· Development of draft Māori Relationships Framework.

· The development of Mana Whenua relationship agreements are underway.

· All 19 Mana Whenua have been informed of council’s intention to formalise relationship agreements.

· Five Mana Whenua have been initially engaged in the process.

· Engagement across local boards will also commence.

Development of Nga Taonga Tuku Iho framework

· Develop management of Taonga policy.

· Development of the framework commenced in May 2015.

Framework for Mana Whenua participation in natural resource management.

· Develop co-management/co-governance policy

· Develop joint management agreements policy

· Develop transfer of powers policy.

· Develop Māori partnership policy

· Develop management of memoranda of understanding policy

· Development of management of court order agreements policy

· Engagement with Mana Whenua relating to the framework will be incorporated into the discussions with Mana Whenua relating to formalising relationship agreements due for commencement in March.

· Operational guidance material on legal frameworks, delegations and, insurance, health and safety responsibilities for co-governance entities has been developed.

· The guidance material has been tested with targeted departments and CCOs.

Significance and Engagement policy

· Development of engagement policy

· Review significance policy

· Provide clarity over what constitutes a significant decision and how this is determined.

· Completed

Development/update of hearings policy

· Update of Hearings Policy.

· Initial scoping work completed across different council hearings processes.

· Given the range of legislative drivers for council hearings, Legal Services are providing input in to the most effective way to recognise and provide for Te Reo Māori and Tikanga Māori across hearings.

Processes, systems and data

Māori Heritage Programme

· Wāhi tapu information management.

· Iwi engaged and completed review of 3600 sites of value as evidence for PAUP hearings

Tāmaki Makaurau Mana Whenua Kaitiaki Forum

· Consider establishment of Mana Whenua/Kaitiaki forums

· Council should work together with Mana Whenua (and mataawaka where appropriate) to establish effective resourcing options.

· In progress.

· Resource provided to support a Mana Whenua working group to facilitate the establishment of a forum.

Māori information portal

· Establish and implement a centralised system to track Mana Whenua, key contacts and their details, and to track current consultation activities

· Develop systems, which allow information to be shared across the organisation

· Information and knowledge on Māori values, interests and aspirations should be collated, recorded and shared to ensure coordinated consultation efforts.

· Mana Whenua contacts completed and maintained.

· Key information sources have been identified and collated.

· Information will be accessed through the council shared drive and intranet.

Māori responsiveness planning (three new plans completed in 2014/2015)

· Embed Māori requirements within the day-to-day business as usual approach and an effective compliance covering both Māori statutory requirements and other legal requirements.

· Community Development Arts and Culture and People and Capability Māori Responsive Plans are on track to be completed by June 30.

· CPO are likely to be completed in September

· ATEED and Communication and Engagement are progressing.

Māori heritage programme

· The Māori Strategy and Relations unit and Resource Consents team should work together with Mana Whenua to establish monitoring processes for consents.

· Completed quality assurance of the Sites of Māori value, as identified in the Cultural Heritage Inventory.

· Mana Whenua have been contracted for the wider Māori Cultural Heritage Project on improving identification, mapping and protection of sites of importance to Māori.

Māori-friendly recruitment process

· Recruitment process.

· Work is underway to evaluate and identify actions to improve the recruitment process for Māori.

Capacity

Mana Whenua capacity building

· Council should support Māori with training in council language and process, information, council expertise or systems e.g. GIS to improve quality of Māori contribution to council decision-making.

· Implemented capacity funding agreements.

· Initiated planning with Mana Whenua regarding capacity needs.

Mataawaka communication and education programme

· Communication and Engagement have commenced this project.

Training and awareness

Evaluation of link between staff participation in Ngā Kete Akoranga and departmental Māori responsiveness plans

· Incorporation of training and awareness KPIs into staff performance objectives and competency frameworks.

· Work has commenced as part of the evaluation of the Māori Responsiveness Planning pilot and due for completion by the end of May 2015.

Communication

Roll out of best practice from evaluation of Māori responsiveness business planning case studies.

· The example of current good initiatives should be shared with the wider organisation, local boards and CCOs to promote awareness of other ways to upskill staff and increase awareness of Māori aspects.

· Māori responsiveness business planning case studies have been completed.

· Communication and Engagement are preparing case studies for publication.

Monitoring

Monitoring and Reporting

· Monitoring the effectiveness of policies, processes and controls to ensure compliance with obligations to Māori

· People performance against competency frameworks and performance objectives

· Short-term key performance indicators

· Consideration should also be given to monitoring CCO and local board performance in these areas.

· Performance and activity monitoring framework has been developed and currently in place.

· The effectiveness of policies and controls framework is yet to commence.

· Legal Services are developing a legal compliance framework that will take into account council’s statutory obligations to Māori.

· Developing framework for long-term Māori well-being reporting is yet to commence.

Consideration

Local Board views and implications

6. Local board views have not been sought in the preparation of this report. A number of the Treaty Audit recommendations impact on the work of local boards and require their involvement in specific work programmes. Te Waka Angamua relationship managers will work with local boards to determine how best to address this.

Māori impact statement

7. This report provides a progress update on the Treaty Audit response work programme for the 2014/2015 priority actions. The Treaty Audit response work programme forms part of a wider programme of work intended to lift council’s overall responsiveness to Māori in contributing to Māori well-being.

Implementation

8. Treaty Audit response work programme is an important part of council’s overall Māori responsiveness approach. Total expenditure and activity towards the achievement of the Auckland Plan Māori transformational shift, including on the agreed Treaty Audit actions and priorities, will be reported on a quarterly basis to this committee, and to the joint Governing Body/ IMSB meetings.

Attachments

There are no attachments for this report.

Signatories

Authors

Lillian Tahuri - Paeurungi Whakatuturu Puni, Maori Effectiveness Manager

Authorisers

Johnnie Freeland - Paearahi Matua - Manager

Grant Taylor - Governance Director

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

21 May 2015

STATEMENT OF INVESTMENT POLICY AND OBJECTIVES

Table of Contents

Page No.

EXECUTIVE SUMMARY…………………………………………………….…….……. 3

SIPO: EFFECTIVE DATE AND REVIEW DATES………………………………………..…………………………………...………..4

Diversified Financial ASSETS Portfolio Characteristics……….. 4

Principles……………………................ ……………………………………........ 4

Investment Risk................................. ……………………………………........ 4

Investment ObjectivES.................. …………………………………………. 5

Distribution Policy……………………………………………………………… 5

LIQUIDITY POLICY……………………………………………………………………………….5

REFERENCE PORTFOLIO...................... …………………………………………. 5

Responsibilities………………..…………………………………………..………...6

EXECUTIVE SUMMARY

Ø The primary goal of the Diversified Financial Assets Portfolio (DFA) is to provide a portfolio of assets held in reserve to meet any unforseen liquidity or funding events (i.e. act as a “rainy day” fund). The DFA along with bank standby facilities and cash reserves form Council’s liquidity management policy.

Ø Returns will be sought on the DFA (after investment related fees but before any taxes) that exceed the Consumer Price Index (CPI) plus 4.0% over rolling ten-year periods. For budgeting purposes and based upon the Reference Portfolio, Council can expect a return^{^[5]} of 7.0% pa over a minimum time horizon of rolling ten year periods. This return represents a probability weighted expectation rather than a guaranteed return (i.e. there is a 50% probability of the return being achieved and a 50% probability of under achievement).

Ø The Reference Portfolio for the DFA is a high growth strategy with some 70% of assets allocated to growth assets and 30% to defensive income assets. The Reference Portfolio is determined by Council in conjunction with the investment objectives.

Ø The DFA is managed by Auckland Council Treasury ((Treasury). The Operational Investment Policies and Objectives (OIPO) document prepared by Treasury details the investment strategy, liquidity rules, performance goals and responsibilities of participants.

Ø The actual asset allocation of the DFA is determined by Treasury. Its performance is measured against the Reference Portfolio.

SIPO: EFFECTIVE DATE AND REVIEW DATES

Effective Date

Ø This Statement of Investment Policy and Objectives document ('SIPO') takes effect from the commencement date.

Review Dates.

Ø Review of the SIPO will be undertaken every three years or earlier as required by Auckland Council (“Council”).

DIVERSIFIED FINANCIAL ASSETS PORTFOLIO CHARACTERISTICS

Portfolio’s Primary Objective

The primary objective of the Diversified Financial Assets Portfolio (DFA) is as follows:

Ø To form part of the liquidity policy of Council that comprises cash, standby facilities and the DFA. This provides a reserve (or “rainy day”) fund that Council can utilise.

Investment Strategy

Through applying best business practice and generating optimal returns within acceptable levels of risk, Council can be confident that the DFA can meet its objective of being a core part of the Council liquidity policy, pay out annual distributions.

In addressing the investment strategy, the conflict between the objectives of capital preservation and the paying out of distributions needs to be acknowledged. The greater the flexibility provided within the Distribution Policy and the increased ability of the Council to make higher distributions, the lower the probability that the capital value will be maintained over a long term period, and vice versa.

Treasury will implement a Responsible Investment policy. The Responsible Investment policy integrates Environmental, Social and Governance considerations into the investment and operational policies of the DFA, where possible.

The DFA is required to be managed by implementing appropriate investment strategies and by operating in a financially responsible manner.

PRINCIPLES

Ø The DFA’s total returns are made up of income from interest payments, share dividends and bond coupon payments, and capital growth from changes in the market value of investments. Market values change due to share price fluctuations, changes in interest rates affecting the capital value of bonds held, and foreign exchange fluctuations.

Ø It is the Council’s practice to recognise income, expenditure and changes in the market value of equity investments on a monthly basis as reported by Treasury.

INVESTMENT RISK

Ø Fluctuations in investment returns have been taken into account in the design and construction of the DFA’s Reference Portfolio.

INVESTMENT OBJECTIVES

Ø The specific investment objective of the DFA is to achieve a return, before tax and after investment expenses, that exceeds the Consumer Price index (CPI) plus 4.0% over rolling ten-year periods. Based on the investment adviser’s most recent estimates, the Council can expect a return of 7.0% p.a over a minimum time horizon of rolling ten year periods. This return represents a probability weighted expectation rather than a guarantee (there is a 50% probability of the return being achieved and a 50% probability of under achievement).

Ø Based on the investment adviser’s modelling, there is a 50% probability that the portfolio return in any given year will be between 0% and 14%.

Ø In addition, out-performance will be sought where appropriate (i.e. where management is active as opposed to passive) relative to the notional return on the Reference Portfolio designed to reflect the risk profile according to which the assets are invested at the time.

DISTRIBUTION POLICY

Ø Council requires an annual distribution from the DFA.

Ø The distribution to be paid each financial year will be reviewed on an annual basis as part of Council’s annual budgeting process.

Ø Treasury will arrange for funds to be distributed from the DFA to Council on an annual basis and to be paid by 30 June of each year.

Ø Council may reinvest, reduce, waive or defer distribution payments at its discretion.

Ø The Distribution Policy is to be reviewed every three years.

Council is aware that the targeted budgeted return is dependent upon the asset allocation and the performance of investment markets. There is a risk that the budgeted annual return may not be met in any particular year (or group of consecutive years).

LIQUIDITY POLICY

Council requires sufficient liquidity from the DFA to meet the following needs:

Ø annual distributions to Council

Ø balance sheet requirements

Ø “rainy day” fund requirements. i.e. a reserve fund that Council can utilise in case its traditional sources of funding are temporarily unavailable.

Accordingly, Treasury will maintain a liquidity policy which reflects Council’s preference for assets to be able to be converted to cash within one month under normal market conditions. However, up to 15% of the total portfolio can be held in investments that may take up to two months to be converted into cash. It is recognised that, during distressed market conditions, liquidity may be achievable but that a discount to “fair value” may apply.

REFERENCE PORTFOLIO

Ø Council has developed a Reference Portfolio, which is a simple portfolio which could meet the Investment Objectives by investing passively in liquid public markets at low cost.

Ø Council believe that, although the Reference Portfolio can meet the investment objectives, it is not the most efficient portfolio. It is of the view that further diversification and active management can make meaningful improvements to the overall risk/return trade off. The diversification and active management decisions are reflected in the Long Term Benchmark that is benchmarked against the Reference Portfolio to assess whether the diversification and active management decisions have added value net of costs.

Asset Class	Long Term Reference Portfolio %
Listed Equities	60
Listed Property (Real Assets)	10
Income Assets	30

Ø Specific details of the asset classes invested in, asset class ranges and currency hedging are documented in the OIPO.

RESPONSIBILITIES

Treasury with the approval from the Treasury Management Steering Group is responsible for setting the Primary Objectives and general level of asset risk of the DFA. Treasury is responsible for operational investment matters including the specific asset class exposures determined, and appointment of service providers, for ensuring value is added from manager selection and minimising costs incurred in managing the portfolio.

Specifically, responsibilities are broken down as follows:

Chief Financial Officer

Ø Specify the annual distribution amount

Treasury Management Steering Group

Ø Developing and reviewing investment objectives, Reference Portfolio strategies and distribution policy

Ø Ensure the DFA maintains a capital value sufficient to fulfil the “rainy day” fund objective.

Ø Reviewing this SIPO every three years

Treasury

Ø Providing advice on investment theories, practice and technical analyses to support the development and review of investment objectives and strategies

Ø Implementing investment strategies

Ø Ongoing operational management of the investment portfolio, including executing Fund Manager instructions and transactions

Ø Determining the appropriate number of Fund Managers, and selecting and changing those managers as appropriate, with the consideration of advice obtained from the Investment Advisor. This includes reviewing the performance of appointed fund managers on a regular basis.

Ø Managing relationships with Fund Managers, the Custodian and the Investment Advisor

Ø Monitoring the asset allocations between fund managers, against the ranges specified in the OIPO, based on market values at month-end and determining when the DFA requires rebalancing

Ø Performance monitoring and reporting

Ø Paying all the cost and expenses associated with the DFA

[1] The overall project cost is $1,543,000-the reported budget is what has been allocated for the daylighting component of the project

[2] Project codes are in the process of being set up for all Māori Priority Projects that are reported through the Auckland Council parent financial system. Council Controlled Organisation’s and Tamaki Redevelopment Company have separate accounting systems therefore figures provided are based on estimates from Project Managers responsible for the projects being reported.

[3] The budget for this work sits within the wider budget for the Proposed Auckland Unitary Plan (PAUP). The estimated cost relating to engagement with Mana Whenua and responding to submissions on the provisions in the PAUP that relate to the Treaty of Waitangi is $150,000. This includes the Sites of Significance to Mana Whenua work programme which is being led by the Heritage Team (770k).

[4] In terms of spend to date for Quarter 3, is that most expenditure will occur in the last quarter . The second quarter was spent working with local groups and other stakeholders to design the project, cost it up, and develop the outcomes, measurements and roles.

[5] By definition expected returns have a 50% probability of being achieved and a 50% probability of under achievement.

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

Authors	Crispian Franklin - Democracy Advisor
Authorisers