Agenda of Council Controlled Organisations Governance and Monitoring Committee

I hereby give notice that an ordinary meeting of the Council Controlled Organisations Governance and Monitoring Committee will be held on:

Date:

Time:

Meeting Room:

Venue:

Tuesday, 4 August 2015

9.30am

Rooms 1 and 2, Level 26
135 Albert Street
Auckland

Council Controlled Organisations Governance and Monitoring Committee

OPEN AGENDA

MEMBERSHIP

Chairperson	Deputy Mayor Penny Hulse
Deputy Chairperson	Cr Calum Penrose
Members	Cr Anae Arthur Anae
	Cr Cameron Brewer
	Cr Dr Cathy Casey
	Member Precious Clark
	Cr Ross Clow
	Cr Linda Cooper, JP
	Cr Chris Darby
	Cr Denise Krum
	Cr Dick Quax
	Cr Penny Webster
	Member Glenn Wilcox
	Cr George Wood, CNZM
Ex-officio	Mayor Len Brown, JP

(Quorum 7 members)

Jaimee Maha

Democracy Advisor

29 July 2015

Contact Telephone: (09) 890 8126

Email: jaimee.maha@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

TERMS OF REFERENCE

Responsibilities

The committee will undertake the Auckland Council’s responsibilities for CCOs through:

· Setting policy relating to CCO governance

· Director appointments

· Approving SOIs

· Monitoring performance

· The committee will also have responsibility for the over sight of, and making appointments to, Council Organisations and exempt CCOs and COs

Powers

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

Except:

(a) powers that the Governing Body cannot delegate or has retained to itself (see Governing Body responsibilities)

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

(ii) Power to establish subcommittees.

Exclusion of the public – who needs to leave the meeting

Members of the public

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

Those who are not members of the public

General principles

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

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

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

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

Members of the meeting

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

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

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

Independent Māori Statutory Board

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

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

Staff

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

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

Local Board members

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

Council Controlled Organisations

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

Council Controlled Organisations Governance and Monitoring Committee

04 August 2015

ITEM TABLE OF CONTENTS PAGE

1 Apologies 7

2 Declaration of Interest 7

3 Confirmation of Minutes 7

4 Petitions 7

5 Public Input 7

6 Local Board Input 7

7 Extraordinary Business 8

8 Notices of Motion 8

9 Council Controlled Organisations' Governance Manual 9

10 Council Controlled Organisations 2015-2018 Statements of Intent 13

11 Development Auckland - establishment documents 197

12 Council-controlled Organisations (CCOs) Remuneration Review : Development Auckland 237

13 Consideration of Extraordinary Items

PUBLIC EXCLUDED

14 Procedural Motion to Exclude the Public 259

C1 Board Appointments : Auckland War Memorial Museum (AWMM) and Museum of Transport and Technology (MOTAT) 259

C2 Board Appointments: Auckland Council Council Controlled Organisations (CCOs) - Development Auckland 259

C3 Board Appointments: Tamaki Redevelopment Company Limited (TRC)

This report was not available when the agenda was compiled, and will be circulated in a confidential addendum agenda.

C4 Board Appointments: Auckland Council's Council Controlled Organisations - Auckland Council Investments Limited

This report was not available when the agenda was compiled, and will be circulated in a confidential addendum agenda.

1 Apologies

At the close of the agenda no apologies had been received.

2 Declaration of Interest

Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.

3 Confirmation of Minutes

That the Council Controlled Organisations Governance and Monitoring Committee:

a) confirm the ordinary minutes of its meeting, held on Thursday, 9 July 2015, including the confidential section, as a true and correct record.

4 Petitions

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

5 Public Input

Standing Order 7.7 provides for Public Input. Applications to speak must be made to the Democracy Advisor, in writing, no later than one (1) clear working day prior to the meeting and must include the subject matter. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders. A maximum of thirty (30) minutes is allocated to the period for public input with five (5) minutes speaking time for each speaker.

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

6 Local Board Input

Standing Order 6.2 provides for Local Board Input. The Chairperson (or nominee of that Chairperson) is entitled to speak for up to five (5) minutes during this time. The Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical, give one (1) days notice of their wish to speak. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.

This right is in addition to the right under Standing Order 6.1 to speak to matters on the agenda.

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

7 Extraordinary Business

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

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

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

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

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

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

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

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

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

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

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

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

8 Notices of Motion

At the close of the agenda no requests for notices of motion had been received.

Council Controlled Organisations Governance and Monitoring Committee

04 August 2015

Council Controlled Organisations' Governance Manual

File No.: CP2015/14684

Purpose

1. To agree the new CCO Governance Manual for the substantive Council Controlled Organisations (CCOs).

Executive Summary

2. As part of the CCO Review, a workstream was established to review the CCO Accountability Framework. The objective was to improve the way we work together, improve clarity in decision making and to simplify information flows, whilst ensuring adequate governance.

3. The review primarily focused on the Statement of Intent (SOI) process (including the Letter of Expectation), governance documents, and reporting and monitoring.

4. Improvements have been made to the SOIs and quarterly reporting, with the new CCO Governance Manual providing the final deliverable for this workstream.

5. The new governance manual brings together key documents relating to CCO governance and accountability frameworks and aligns with our group approach of working collaboratively together. The governance manual encompasses a number of enhancements identified through the CCO Review project. It also includes governance content that was previously in the SOI and replaces the existing Shareholder Expectation Guide for CCOs.

6. Key stakeholders, including elected members, the Independent Māori Statutory Board, Local Board Services, CCOs and the relevant operational areas of the council group have contributed towards the development of the manual.

7. The manual provides guidance to CCO boards, chief executives, senior leaders, staff and elected representatives. It also provides clarity for members of the public interested in how we ensure the effective governance of our CCOs.

8. The manual will be continually assessed to ensure it remains fit for purpose. This includes an annual review by the CCO Governance and Monitoring Committee, who will also be responsible for approving material changes to the document through the year.

9. The section in appendix 10.10 (Summary of Plans and policies relevant to the substantive CCOs) is still draft. A number of internal reviews are underway to clarify which aspects of council plans and policies relate to CCO operations. Once finalised, this section will be provided to the CCO Governance and Monitoring Committee for agreement as an update to the manual.

Recommendation/s

That the Council Controlled Organisations Governance and Monitoring Committee:

a) adopt the Governance Manual for Substantive Council Controlled Organisations (CCOs), noting that this:

i) replaces the existing Shareholder Expectation Guide for CCOs

ii) sets the overall approach and accountability framework for CCOs and documents previously agreed updates to that framework

iii) includes the updated Auckland Council Appointment and Remuneration Policy for Board Members of Council Organisations.

b) delegate the approval of any minor changes to the CCO Governance Manual to the chair of the CCO Governance and Monitoring Committee.

Comments

10. The new governance manual for the substantive CCOs is a deliverable of the CCO Review Project. It is in response to objectives to improve the way we work together, improve clarity in decision making and to simplify information flow, whilst ensuring adequate governance. This new manual outlines the overall approach and accountability framework for CCOs and brings together key documents, policies and templates relating to CCO governance.

11. It provides guidance to boards, chief executives, senior leaders, staff and elected representatives. It also provides clarity for members of the public interested in how we ensure the effective governance of our CCOs.

12. This manual provides enhancements to the accountability framework for CCOs based on the maturing relationship between council and its CCOs, current state assessment reporting, stakeholder engagement and directives provided through CCO review reporting and workshops during the past 18 months. This includes:

a) improved alignment with the long-term plan / annual plan, CCO letter of expectation and SOI processes

b) enhanced requirements for CCOs to adhere to “no surprises” protocols, consistency in documentation and reporting on financial and other risks

c) a review of governance policies covering board member remuneration and director recruitment, including diversity.

13. The manual incorporates governance content that was previously provided within the SOIs and replaces the existing CCO Shareholder Expectation Guide.

14. The manual covers the following areas of governance:

a) introduction to the document and core principles for good governance

b) an overview of the CCO Accountability Framework

c) the approach to key relationships

d) financial governance

e) board governance

f) plans, policies, strategies and projects relevant to CCOs (noting that the supporting appendix is in draft format pending the outcomes from various internal review programmes)

g) Māori responsiveness

h) reporting and monitoring

i) organisational governance.

15. Each section provides an overview of council expectations, with further detail provided within the stand-alone appendices.

Consideration

Local Board views and implications

16. Working with Local Board Services, sections 3 and 6 and appendices 10.2, 10.3 and 10.5 of the manual were developed to improve clarity on roles and expectations between CCOs and local boards. This includes requirements for the CCO Local Board Engagement Plans and quarterly reporting on local board engagement and issues.

Māori impact statement

17. The CCO Governance Manual provides clarity on how we all work together, embedding the council group approach to Māori responsiveness with CCOs.

18. Representatives of the Independent Māori Statutory Board (IMSB) and council’s Te Waka Angamua have been actively involved in the development of the CCO Governance Manual.

19. Value Te Ao Māori is noted as a core principle for good governance. In particular, sections 3, 7 and appendices 10.3, 10.8 and 10.11 of the manual outline CCO commitments and obligations to Māori. The SOI and quarterly reporting templates include a summary of key projects and initiatives which deliver on Māori transformation.

Implementation

20. The final governance manual will be provided on the council website, as a replacement to the existing Shareholder Expectation Guide, and will be presented to key stakeholders. CCO boards will also be offered the opportunity for a briefing on the manual and it will form part of the induction pack for all incoming CCO board members and senior executives.

21. Templates for the SOI and related reporting are already in use. A number of additional initiatives are underway to ensure on-going improvements to the way we work together as a council group.

Attachments

No.	Title	Page
a View	CCO Governance Manual (Under Separate Cover)

Signatories

Authors

Robert Irvine - Financial Planning Manager CCOs

Authorisers

Matthew Walker - General Manager Financial Plan Policy & Budgeting

Stephen Town - Chief Executive

Council Controlled Organisations Governance and Monitoring Committee

04 August 2015

Council Controlled Organisations 2015-2018 Statements of Intent

File No.: CP2015/14245

Purpose

1. To agree on the final 2015-2018 Statements of Intent (SOIs) for the Council Controlled Organisations (CCOs).

Executive Summary

2. At the 1 April 2015 meeting, the Council Controlled Organisations Governance and Monitoring Committee approved the shareholder comments on the draft SOIs for each CCO.

3. Following the consideration of council’s shareholder comments at public board meetings, the CCOs have delivered their final SOIs.

4. The final SOIs have been reconciled against the shareholder comments, with a full reconciliation provided as Attachment A for the substantive CCOs.

5. All the shareholder comments were adequately reflected in the final substantive CCO SOIs with the exception of:

a) Auckland Council Investments Limited (ACIL), Auckland Transport, Regional Facilities Auckland (RFA) and Watercare did not include a performance measure on the engagement with mana whenua

b) the financials in the Auckland Transport SOI do not fully align with the Long-term Plan 2015-2025 (LTP)

c) a comment in the ACIL SOI to work with Ports of Auckland Limited’s (POAL) Board on their Statement of Corporate Intent.

6. It is recommended that no modification to the SOIs are made on the following basis:

a) a performance measure on the engagement of mana whenua is not applicable to ACIL, given the nature of the business

b) Auckland Transport and RFA have included a commitment in their SOIs to develop a performance measure on engagement with mana whenua

c) Watercare has provided a commitment that the performance with respect to engaging with mana whenua will be discussed with the Independent Māori Statutory Board (IMSB) and there is also the ability for the Chair of the Mana Whenua Kaitiaki Forum to outline performance in the Watercare Annual Report

d) Auckland Transport will be seeking approval from the Finance and Performance Committee to re-stating their revenue and expenses from what was adopted in the LTP. This has no adverse bottom line impact

e) ACIL has worked with POAL to update their Statement of Corporate Intent, and therefore did not include the comment in the SOI.

7. With the establishment of Development Auckland, the Auckland Council Property Limited (ACPL) and Waterfront Auckland SOIs will only be effective to 30 August 2015. These will be replaced by the Development Auckland SOI from 1 September 2015. Under legislation, it is required that the SOIs are still agreed for the two months.

8. The Development Auckland SOI is being approved by this committee as a separate agenda item.

9. The SOIs for COMET Auckland and the Contemporary Art Foundation have been updated with the shareholder comments and are attached for approval.

Recommendation/s

That the Council Controlled Organisations Governance and Monitoring Committee:

a) agree the Statements of Intent of Auckland Council Investments Limited, Auckland Tourism Events and Economic Development Limited, Auckland Transport, Regional Facilities Auckland and Watercare Services Limited for the period 1 July 2015 to 30 June 2018.

b) agree the Statements of Intent of Auckland Council Property Limited and Waterfront Auckland for the period 1 July 2015 to 30 June 2018, noting that they will be replaced by the Development Auckland Statement of Intent from 1 September 2015.

c) agree the Statements of Intent of COMET Auckland and Contemporary Art Foundation for the period 1 July 2015 to 30 June 2018.

Comments

Background

10. Agreeing the final SOIs for the period 1 July 2015 to 30 June 2018 is the final step in a process that commenced with agreeing the Letter of Expectation in November 2014. Since then, the process has covered the following steps:

a) on 1 March 2015, the CCOs submitted a draft SOI to Auckland Council

b) in April, the CCO Governance and Monitoring Committee agreed shareholder comments on the draft SOIs, which were sent to CCO board chairs

c) CCOs considered the shareholder comments at public meetings through May and June 2015

d) on 30 June 2015, the CCOs delivered their board approved SOIs to council

e) council staff reconciled the final SOIs to the shareholder comments.

11. This report provides detail on how the final SOIs reflected the shareholder comments. It focuses on the exceptions where the CCOs have not adequately responded to the shareholder comments, with a full reconciliation provided as an attachment.

12. If a change is required, the CCO Governance and Monitoring Committee can resolve to request the CCO board to modify the SOI.

Substantive CCO SOIs for the period 2015 - 2018

13. All the shareholder comments were adequately reflected in the final substantive CCO SOIs with the exception of:

a) ACIL, Auckland Transport, RFA and Watercare did not include a performance measure on the engagement with mana whenua

b) the financials in the Auckland Transport SOI which do not align with the Long-term Plan 2015-2025 (LTP)

c) a comment in the ACIL SOI to work with POAL’s Board on their Statement of Corporate Intent.

ACIL’s exclusion of a performance measure on the engagement with mana whenua

14. A performance measure on the engagement of mana whenua was not included in the ACIL SOI due to the nature of the business as an investment company.

15. ACIL has included in the SOI a commitment as a member of Te Toa Takitini to work to identify how it can contribute to Māori well-being other than through financial returns.

16. ACIL has also included a commitment to work with POAL and AIAL on contributing to Māori economic and well-being.

17. The POAL Statement of Corporate Intent includes the following performance measure: “Identify initiatives undertaken by POAL which increase Maori economic and social wellbeing. Strengthen relationships with Mana Whenua.”

Auckland Transport’s and RFA’s exclusion of a performance measure on the engagement with mana whenua

18. Both CCOs have committed to work on a new performance measure on the engagement with mana whenua.

19. Once completed the measure will be included in the quarterly report and the next SOI.

Watercare’s exclusion of a performance measure on the engagement with mana whenua

20. Watercare has provided a commitment that the performance measure with respect to engaging with mana whenua will be discussed with the IMSB.

21. The Chairman of the Mana Whenua Kaitiaki Forum will also continue to have the opportunity to present the annual report of the Forum to the Watercare Board and to prepare a statement for inclusion in the Watercare Annual Report. Any issues with respect to engaging with mana whenua could be included through this process.

The alignment of the financials in the Auckland Transport SOI with the LTP

22. Since completing the LTP, Auckland Transport of re-worked their three year budgets taking into account more recent revenue and expense projections from public transport patronage.

23. The updated budgets, which have no adverse bottom line impact, have been included in the SOI. They will also be tabled at the Finance and Performance Committee for approval.

A comment in the ACIL SOI to work with POAL’s Board on their Statement of Corporate Intent

24. ACIL has worked with POAL to update their Statement of Corporate Intent, and therefore did not include the comment in the SOI.

25. Updated comments in the Statement of Corporate Intent include POAL recognising the place they play in the Auckland community and that they are committed to ongoing consultation with Auckland, its related entities and our community. It outlines that POAL will act as a good neighbour and as a good corporate citizen. It also states that POAL will act in an environmentally and socially responsible manner.

Establishment of Development Auckland

26. From 1 September 2015, the activities of ACPL and Waterfront Auckland will be combined to form a new CCO, Development Auckland.

27. As ACPL and Waterfront Auckland in their current form are operating from 1 July to 30 August 2015, it is still required under legislation that the council agrees an SOI for these entities.

28. A new SOI for Development Auckland is being provided to this committee as a separate agenda item.

COMET Auckland

29. COMET Auckland has amended its draft SOI to reflect the shareholder comment that was provided by council. The only comment that was provided was that the final SOI should reflect the funding decisions that were made as part of the Long-term Plan process.

30. COMET’s final SOI has been amended to reflect the funding provided in the LTP. The activities outlined within the SOI generally align with the Auckland Plan’s transformational shifts, and the shared economic agenda.

Contemporary Art Foundation

31. Improvements have been incorporated into the Contemporary Art Foundation’s (CAF) SOI in line with council’s comments. Council requested that the SOI performance targets should be amended to take into account both the previous year’s performance and anticipated growth, as the performance targets had remained the same as the previous SOI, despite CAF having exceeded all of those targets. Council also asked that the SOI should contain financial information from 2014/2015, to allow comparison with future years.

Consideration

Local Board views and implications

32. The Governing Body is responsible for providing shareholder comments on the draft SOIs. In December 2012 the Accountability and Performance Committee resolved that CCOs either hold workshops with Local Boards regarding their upcoming annual work programmes, or offer to engage with Local Boards on their work programmes. This engagement is to ensure the Local Boards are involved at the front end of CCOs’ planning of their annual work programmes, which may influence the SOIs.

33. The approach to CCOs engaging with Local Boards has been included on the CCO Governance Manual.

Māori impact statement

34. The CCOs’ contribution to strategic initiatives, activities, and obligations are documented in a number of different places. These include council’s Accountability Policy, the SOIs, the CCO Governance Manual, as well as group and entity work programmes.

35. The Accountability Policy states that “the Council acknowledges its responsibilities in respect of Te Tiriti o Waitangi/Treaty of Waitangi as set out in the Auckland Plan and expects (name of CCO) to enable Māori aspirations and wellbeing in accordance with council’s Māori Responsiveness Framework.” The CCOs are required to give effect to the Accountability Policy.

36. The SOI’s contain a number of initiatives and performance measures relating to the CCOs’ contribution to Maori effectiveness.

37. The Treaty Audit process is an important part of ensuring that Council is meeting its statutory and Te Tiriti based obligations toward Māori. Council is committed to improving its performance across the areas identified in the 2015 Treaty Audit.

38. A report is being presented to the August Finance and Performance Committee, responding to the recommended actions in IMSB’s Treaty Audit. The report will attach a high level response work programme and identifies priority response actions for the first quarter of 2015/2016.

39. The Effectiveness for Māori work programme of Te Toa Takitini has oversight of the Treaty Audit response work programme and is led by Council’s Transformation Director. Council’s response to the 2015 Treaty Audit will be part of an group wide work programme of transformational change, including a whole of council programme of improved business, team and performance planning.

40. Detailed project planning and sequencing for the remaining response actions will occur, in consultation with IMSB secretariat staff, as part of Council’s Effectiveness for Māori work programme.

41. Quarterly reports on progress on the 2015 Treaty Audit response work programme will be made to the:

a) council’s Chief Executive and the executive leadership group of Te Toa Takitini

b) the Finance and Performance Committee

c) joint Governing Body and IMSB meetings.

42. Internal Audit will provide bi-annual reporting on the results of monitoring to the Audit and Risk Committee.

43. In addition to the above reporting, the CCOs report quarterly on what they are specifically doing in accordance with their statements of intent in regards to Maori responsiveness.

44. Also, all substantive CCO Chief Executives are members of Te Toa Takitini’s executive leadership group which will lead and influence better outcomes with Māori by driving a shift in culture, thinking and practice by modelling high performance leadership behaviours and by embedding a transformation in the way the council plans, prioritises and delivers for Māori.

45. Representatives of the IMSB and council’s Te Waka Angamua have been involved in the updates to the accountability framework and associated documents and templates for CCOs. The IMSB is also represented on the CCO Governance and Monitoring Committee which provides an overview on all matters relating to CCO governance and accountability.

Implementation

46. No significant implementation issues are applicable.

Attachments

No.	Title	Page
a View	Substantive CCO shareholder comments reconciliation to final SOI	19
b View	ACIL Final SOI 2015-2018	35
c View	Auckland Transport Final SOI 2015-2018	51
d View	ATEED Final SOI 2015-2018	73
e View	RFA Final SOI 2015-2018	97
f View	Watercare Final SOI 2015-2018	115
g View	ACPL Final SOI 2015-2018	131
h View	Waterfront Auckland Final SOI 2015-2018	151
i View	COMET Auckland Final SOI 2015-2018	169
j View	Contempory Art Foundation Final SOI 2015-2018	185

Signatories

Authors

Robert Irvine - Financial Planning Manager CCOs

Authorisers

Matthew Walker - General Manager Financial Plan Policy & Budgeting

Stephen Town - Chief Executive

Council Controlled Organisations Governance and Monitoring Committee

04 August 2015

Development Auckland - establishment documents

File No.: CP2015/14858

Purpose

1. To approve the establishment documents for Development Auckland Limited (Development Auckland) prior to its commencement on 1 September 2015.

Executive Summary

2. The formation of Development Auckland is an amalgamation under the Companies Act of Auckland Waterfront Development Agency Limited (Waterfront Auckland) and Auckland Council Property Limited (ACPL). The most cost effective way to affect this amalgamation has been to keep Waterfront Auckland’s company number and to change the company name to Development Auckland. Under the amalgamation, all rights and liabilities of the merging companies become rights and liabilities of Development Auckland.

3. This report recommends the approval of two documents for the further establishment and governance of Development Auckland, those being:

(a) The 2015-2018 Statement of Intent (SOI) covering the first ten months of Development Auckland’s operations (Attachment A). The simplest and most effective way to put this SOI in place is by way of a shareholder modification of the SOI for Waterfront Auckland which consolidates the workplans and financial information of both entities and incorporates all of ACPL’s performance measures and targets.

(b) The company constitution for Development Auckland (Attachment B).

Recommendation/s

That the Council Controlled Organisations Governance and Monitoring Committee:

a) approve the 2015-2018 Statement of Intent for Development Auckland commencing 1 September 2015, as set out in Attachment A.

b) note that the new Development Auckland Limited Statement of Intent includes the consolidated workplans, financial information, measures and targets previously contained in the Statements of Intent for Auckland Council Property Limited and Auckland Waterfront Development Agency Limited.

c) note the substantive Council Controlled Organisation draft constitution for Development Auckland Limited (Attachment B) to take effect from 1 September 2015.

d) delegate to the Auckland Council Chief Executive the authority to make editorial changes to the Statement of Intent contained in Attachment A and constitution contained in Attachment B if necessary.

Comments

Statement of Intent

4. All CCOs are required under the Local Government Act 2002 to have a SOI covering 3 years of operation. The purpose of the SOI is to outline the programme of work to be delivered and to provide a set of measures and targets so that Council may monitor the performance of the CCO.

5. The SOI for Development Auckland covering the period 1 September 2015 – 30 June 2018 (Attachment A) includes the consolidated workplans, financial information, measures and targets previously included in the SOIs for ACPL and Waterfront Auckland. It is a combination of the material in both ACPL and Waterfront Auckland’s SOIs which are being approved in a separate report on this agenda.

6. This reflects that activities currently undertaken by these two entities will be carried out by Development Auckland. It gives effect to councillors’ requirements that there be no loss of momentum around the development of the Waterfront and other locations being undertaken by ACPL or any loss of focus on the commercial management of non-service assets in the amalgamation.

7. Additionally and importantly, the new SOI shows how the workplans of the two amalgamating entities are being melded together into a cohesive whole and being shaped to align with the new purpose and objectives of Development Auckland, approved through the Long Term Plan (LTP).

8. Because the new board of Development Auckland is yet to be formed and will meet for the first time after the commencement date of 1 September 2015, the new SOI needs to be put in place by the CCO Governance and Monitoring Committee. It is being proposed as a modification to the SOI of the surviving entity, Waterfront Auckland. Waterfront Auckland is the surviving entity of the amalgamation only in a technical sense.

9. In November 2015, council will begin the process for the next year’s SOI with the annual Letter of Expectation (LOE). The new board of Development Auckland will be required to draft a Statement of Intent in response to that LOE, covering 1 July 2016 – 30 June 2019 and submit it to council in February 2016. The number of measures will need to be streamlined as part of that process, and council staff will work with Development Auckland to ensure that the performance framework remains robust and accurately reflects the new objectives.

Constitution

10. A constitution sets out the structural and procedural framework for a company, including the rights, powers, duties and obligations of the company, its board of directors and its shareholder/s. A constitution is about operation of the company as an entity (i.e. the ‘mechanics’ of the entity) and not about the operation of its business, its performance objectives or deliverables.

11. A draft constitution for Development Auckland is attached (Attachment B). This constitution mirrors those for council’s other CCOs which were updated in June 2012 and includes the ability for directors to act in a manner which he or she believes is in the best interests of Auckland Council even though it may not be in the best interests of the company.

12. Council can amend a constitution at any time by shareholders resolution.

13. The formation of Development Auckland is an amalgamation under the Companies Act of Waterfront Auckland and ACPL. The most cost effective way to affect this amalgamation has been to keep Waterfront Auckland’s company number and to change the company name to Development Auckland. Under the amalgamation, all rights and liabilities of the merging companies become rights and liabilities of Development Auckland.

Consideration

Local Board views and implications

14. The views and preferences of local boards have not been sought in the development of the constitution or SOI for Development Auckland. However, four cluster workshops were held in April to inform local board chairs of the intention to establish Development Auckland prior to, and as part of the adoption of the LTP. Local board views and preferences were heard at an LTP workshop of all elected members.

15. These views and preferences will be taken into consideration as Development Auckland moves into new redevelopment locations. New practices will need to be developed for working with a local board to support the redevelopment process.

Māori impact statement

16. The work of Development Auckland will be of interest to Maori, and this is reflected in objectives outlined in the SOI for Development Auckland. The approval of the Development Auckland constitution has no particular impacts on Maori which are different from the general public of Auckland.

Implementation

17. The new SOI will be recommended to the board of Development Auckland for adoption at their first meeting early in September 2015. Reporting to council against the Development Auckland SOI will be the responsibility of the new board from that point on.

18. The constitution will also be provided to the board at that inaugural meeting as a foundation document which outlines the council’s purpose for establishing Development Auckland.

19. At that first meeting the process for the development of the next SOI (2016-2019) will also be outlined. That process will begin towards the end of 2015 with the council’s LOE.

Attachments

No.	Title	Page
a View	Development Auckland Statement of Intent 1 September 2015 - 30 June 2018	203
b View	Draft Development Auckland Constitution	223

Signatories

Authors

Rose Leonard - Principal Advisor

Authorisers

John Bishop - Treasurer and Manager CCO Governance & External Partnerships

Stephen Town - Chief Executive

Council Controlled Organisations Governance and Monitoring Committee

04 August 2015

Council-controlled Organisations (CCOs) Remuneration Review : Development Auckland

File No.: CP2015/14064

Purpose

1. To assist the Council Controlled Organisations Governance and Monitoring Committee to determine appropriate remuneration for the directors of Development Auckland from 1 September 2015.

Executive Summary

2. Development Auckland will come into existence on 1 September 2015. The committee must determine the appropriate remuneration for the Development Auckland directors.

3. A methodology was developed in 2011 to assist with the setting of the CCOs director remuneration. The methodology sets a number of remuneration bands, and then scores each CCO against various criteria including the size and complexity of the entity to determine which band is appropriate.

4. Development Auckland has been assessed using the approved methodology. The cumulative score of 48 out of 66 places Development Auckland in the same remuneration band as Watercare (48) and Auckland Transport (55).

5. The directors of Watercare and Auckland Transport currently receive $53,300 per annum, and it is therefore recommended that the Development Auckland directors receive the same remuneration.

Recommendations

That the Council Controlled Organisations Governance and Monitoring Committee:

a) approve the remuneration of $53,300 for base director fees for the directors of Development Auckland, from 1 September 2015.

b) note that the fees for Chair, Deputy Chair and Committee Chair(s) for Development Auckland will be base fees multiplied by a factor of 2.0; 1.25; and 1.15 respectively, in accordance with council’s Director Appointment and Remuneration Policy.

Comments

6. Under the council’s Board Appointment and Remuneration Policy, the council will undertake a full review of director remuneration once every triennium following the local body elections. The next full CCO review for all substantive CCOs will be undertaken post 2016 elections.

7. Development Auckland (DA) is a new substantive CCO and therefore requires the council to approve an appropriate remuneration for the directors outside of the usual review cycle.

Director Remuneration Methodology

8. Martin Jenkins was commissioned in 2011 to advise on a methodology for setting director remuneration, using central government’s ‘fees framework’ as a basis for the council methodology. The Martin Jenkins report for Development Auckland Director Remuneration is appended at Attachment A and the methodology outlined on pages 9-14.

9. The methodology adopted by the CCO Strategy Review Subcommittee in 2011 involved scoring each CCO against a number of criteria. The cumulative scores were then used to determine the remuneration band for each CCO.

10. Appropriate remuneration for each band was determined by benchmarking against other comparable entities. The following table shows the placement of CCOs within bands, and the fees agreed for each band.

Band	CCOs	Total Points (out of 66)	Current Director Base Fees	Recommended Fees Band	Band Midpoint
One (cumulative of 46+ out of 66)	Auckland Transport	55	$53,300	$51,000 – 58,000	$54,500
One (cumulative of 46+ out of 66)	Watercare	48	$53,300	$51,000 – 58,000	$54,500
Two (cumulative score of 37 – 45 out of 66)	ATEED	40	$40,600	$38,000 – 45,000	$41,500
	RFA	39	$40,600
	AWDA	38	$40,600
Three (cumulative score of 27 – 36 out of 66)	ACIL	36	$35,525	$33,000 – 40,000	$36,500
Three (cumulative score of 27 – 36 out of 66)	ACPL	35	$35,525	$33,000 – 40,000	$36,500

Development Auckland

11. In setting an appropriate remuneration for Development Auckland, Martin Jenkins has been commissioned to provide analysis using the methodology approved in 2011.

12. The report recommends that an appropriate range for the remuneration of DA directors is in Band One, and in line with Watercare and Auckland Transport being $53,300.

ACIL

ATEED and RFA

Watercare and Auckland Transport

Development Auckland

2015

$35,525

$40,600

$53,300

(48 points out of 66)

Consideration

Local Board views and implications

13. Director remuneration is a matter for the council’s Governing Body.

Māori impact statement

14. Through membership on the CCO Governance and Monitoring Committee the Independent Maori Statutory Board members can provide feedback in the debate and decision-making regarding director remuneration.

Implementation

15. Director remuneration is funded from CCO budgets. There are no implementation issues associated with this report.

Attachments

No.	Title	Page
a View	Development Auckland Remuneration Review : Martin Jenkins	243

Signatories

Authors

Josie Meuli - Senior Advisor

Authorisers

John Bishop - Treasurer and Manager CCO Governance & External Partnerships

Sue Tindal – Acting Chief Executive Officer

Council Controlled Organisations Governance and Monitoring Committee

04 August 2015

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

That the Council Controlled Organisations Governance and Monitoring Committee:

a) exclude the public from the following part(s) of the proceedings of this meeting.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution follows.

This resolution is made in reliance on section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public, as follows:

C1 Board Appointments : Auckland War Memorial Museum (AWMM) and Museum of Transport and Technology (MOTAT)

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

Ground(s) under section 48(1) for the passing of this resolution