Agenda of Finance and Performance Committee

Finance and Performance Committee

20 August 2015

Sportsfield Charges

File No.: CP2015/14731

Purpose

1. To consider the removal of sports field charges in the central area of Auckland, in the following local board areas: Albert-Eden, Maungakiekie-Tāmaki, Orākei, Puketāpapa, Waitematā, Waiheke.

Executive Summary

2. A review of charges applied to sports field users in the central area of the city was requested by six local boards (Albert-Eden, Maungakiekie-Tāmaki, Orākei, Puketāpapa, Waitematā, Waiheke) in May / June 2015, along with options to potentially drop these charges. A report on this issue was submitted to the six boards in June 2015.

3. All of the above local boards have since passed resolutions that support the removal of charges, with the revenue short fall being met by the Governing Body (adopting a revised budget within the Parks Sports and Recreation Department) rather than through the use of Locally Driven Initiative (LDI) funding.

4. This report sets out the current practice with regard to applying charges across the region, summarises the feedback given by the six local boards above, identifies, at a high level, consideration around equity and consistency, and provides the committee with two options for consideration. The options are:

· remove sports field charges in the six local board areas, with any removal of charges in the current 2015/2016 financial year being conditional on the relevant local boards meeting the associated revenue shortfall through Locally Driven Initiative (LDI) funding.

· do not remove sports field charges in the current 2015/2016 financial year in the six local board areas but consider the ongoing application or removal of sports field charges as part of the upcoming 2016/2017 annual plan review.

Recommendation/s

That the Finance and Performance Committee:

a) approve one of the two following options:

i) remove sports field charges in the central part of the city, in the following local board areas: Albert-Eden, Maungakiekie-Tāmaki, Orākei, Puketāpapa, Waitematā, Waiheke, with any removal of charges in the current 2015/2016 financial year being conditional on the relevant local boards meeting the associated revenue shortfall through Locally Driven Initiative (LDI) funding.

ii) do not remove sports field charges in the current 2015/2016 financial year in the six local board areas (Albert-Eden, Maungakiekie-Tāmaki, Orākei, Puketāpapa, Waitematā, Waiheke) but consider the ongoing application or removal of sports field charges as part of the upcoming 2016/2017 annual plan review.

b) note that the Parks, Sport and Recreation department staff will report back to the six affected local boards with an update of the Finance and Performance Committee’s decision and seek confirmation as to whether the affected boards still wish to drop sports field charges in the current 2015/2016 financial year.

Comments

5. Prior to the formation of Auckland Council, two approaches were practiced by legacy councils in relation to sports field charges.

6. With the forming of the Auckland Council in 2010 Local Boards were given delegated authority to set local charges / fees for community facilities, with the status quo being maintained in terms of the continued application of sports field charges in the relevant board areas (Albert-Eden, Maungakiekie-Tāmaki, Orākei, Puketāpapa, Waitematā, Waiheke).

7. The sports field charges applied in the central area of Auckland City (Albert-Eden, Maungakiekie-Tāmaki, Orākei, Puketāpapa, Waitematā, Waiheke) have been applied for a number of years and constitute a nominal fee in terms of recouping costs for maintaining fields (ie it represents less than 8% of the maintenance costs ).

8. With the formation of Auckland Council there were some local board boundary changes, which resulted in reserves where charges had been applied, being moved into board areas where charges had never been applied. These reserves are:

· Seaside Park (Māngere-Ōtāhuhu Local Board area)

· Murphy Park (Māngere-Ōtāhuhu Local Board area)

· Sturges Park (Māngere-Ōtāhuhu Local Board area)

· Avondale Racecourse (Whau Local Board area)

· Riversdale Reserve (Whau Local Board area)

· Eastdale Reserve (Whau Local Board area)

· Blockhouse Bay Reserve (Whau Local Board area)

· Valonia Reserve (Whau Local Board area).

9. In order to ensure a consistent approach within the two board areas, the charges previously applied to the use of sports fields in these reserves were dropped with the formation of Auckland Council.

10. The table below sets out field charges for the three main winter sports codes plus fees for casual and tournament use for the relevant sports fields. The seasonal fee is charged to the codes for Saturday afternoon competition play (junior competition generally takes up morning play) at the weekend and covers the use of the field for a whole season (fees and charges schedule attached).

Sportsfield charges for the three main winter codes (casual and competition games)

SPORT	CASUAL	Prepaid	TOURNAMENT	SEASONAL
	$ PER GAME	Casual	$ PER GAME	$ PER FIELD
LEAGUE	$ 58.00	$ 45.50	$ 29.50	$ 721.00
RUGBY	$ 67.00	$ 55.00	$ 33.50	$ 832.00
SOCCER	$ 49.50	$ 39.50	$ 25.00	$ 611.00

11. Irrespective of the code, sports clubs booking a lit field for two nights of training per week over a whole season are charged a fixed fee of $267. Priority is given to ensuring competition games go ahead at the weekend and the need for closing fields due to inclement weather therefore mainly impacts on midweek training. Rather than organising reimbursements, the training fees have been set at a relatively low level in order to reflect this likelihood. The practice fee does not include the cost of lights. If lights are used by clubs in the central area, an extra charge of $1.10 per lamp per hour applies.

12. Each year the charges for fields and lights have been raised roughly with the rate of inflation and the forecast income generated by the six central area local boards in 2014/2015 was $263,284. However, these levels will not be achieved and the budget is revised down for 2015/2016 to $181,000.

13. No field charges are applied to juniors (17 years and under) and Rugby and League codes charge a standard affiliation fee to clubs, which is determined by the number of teams that a club has enrolled, rather than the area the club are located in. For these codes the regional inequity with regard to field charges therefore only applies to clubs booking fields for training rather than games organised by the codes at weekends.

14. However, the Auckland Football Federation, while applying a standard enrolment fee per team, also pass extra ground charges and referee fees, on to the club it pertains to. Soccer clubs in the relevant central board areas therefore pay higher fees to their parent body. Auckland Cricket adopts a similar practice.

15. Aside from the issues of equitability and consistency there are pros and cons related to the application of field charges.

16. The pros include:

· charges discourage users from making bookings that are ‘tentative’ and not actually utilised

· ability for council to generate some income for the provision of sporting facilities that are costly to maintain and noting that other codes using courts and hockey turfs do not receive this level of subsidy from council

· council has an accurate record of actual use levels and can therefore utilise the fields to their maximum capacity.

17. The cons include:

· charges encourage some clubs not to book fields because of the costs entailed when making a formal booking

· puts an additional financial burden on clubs that are run on limited budgets and that generally rely on the good will of volunteers

· sport plays an important role in creating a sense of community with charges potentially excluding some sectors of the community

· sport plays an important role in growing healthy communities and charges for field access that are passed onto members could be prohibitive for some families.

18. Differences in how the council support various sporting codes also results in different approaches to charging. Auckland Council, through its recreation centres, manages a large number of indoor court spaces catering for the likes of basketball, badminton, table tennis and volley ball and charges are applied to the hire of these facilities. Partnership agreements are also forged with codes (or schools) such as netball and hockey and these often involve the relevant code managing their own fields and applying a user charge that enables the code to maintain the courts/fields to the required standard and potentially to generate income for renewal of the asset at the end of its life. Therefore, while the legacy councils and Auckland Council have historically supported the build of, for example, netball and hockey facilities through grants and favourable leases, council does not always have control over the setting of charges relating to sports facilities.

19. There are a number of different approaches that could be taken by council with regards to sports field fees and charges which could cover one of the following scenarios:

· retain charges at their current rates

· change charges by increasing or decreasing current rates

· remove charges.

20. As part of the process to identify potential park services savings, a proposal to apply field charges in areas where no charges had previously been applied, was considered as part of the draft 2015-2025 Long-term Plan process but was not progressed.

21. In May 2015, three local board chairs made a request to the Parks Recreation and Sport (PRS) Committee for the charges applied in the central area to be dropped because of the inequity created by the two different approaches practiced across the region. The PRS Committee requested a report be submitted to the Finance and Performance Committee to consider this issue.

22. All of the above local boards have since passed resolutions that support the removal of charges, with the revenue short fall being met by the Governing Body (adopting a revised budget within the Parks Sports and Recreation Department) rather than through the use of Locally Driven Initiative (LDI) funding.

23. One option (presented as recommendation a/i) is to remove sports field charges in the six local board areas, with any removal of charges in the current 2015/2016 financial year being conditional on the relevant local boards meeting the associated revenue shortfall through Locally Driven Initiative (LDI) funding.

24. Dropping charges will create a $181,000 (anticipated income from sports field charges for the 2015/2016 financial year) budget shortfall due to lost income and would need to be offset. The local boards have advocated strongly against offsetting the revenue shortfall through LDI.

25. The other option (presented as recommendation a/ii) is to leave the revenue budget for sports field charges in place for the 2015/2016 financial year, but consider the ongoing application or removal of sports field charges, and any potential lost revenue should they be removed, as part of the upcoming 2016/2017 annual plan review.

26. Should charges continue to be applied in 2015/2016 financial year it is suggested that no inflation related increase be applied, with fees remaining at 2014/2015 levels (as per the attached Fees and Charges schedule). Four local boards have already formally endorsed this position (Albert-Eden, Maungakiekie-Tāmaki, Waitematā, Waiheke), leaving just the Orākei and Puketāpapa Local Boards to confirm their position on this issue by means of a resolution.

Consideration

Local Board views and implications

27. On 12 May 2015 the Chairs of the Albert Eden, Orākei and Waitematā Local Boards presented to the Parks, Recreation and Sport Committee (PRS) and requested that the inequity in relation to sports field charges, which only apply in the central area, be reviewed as it disadvantages sports clubs in the central area (affecting six local boards). The PRS Committee asked for a report to the Finance Committee.

28. The key points that have come out of the local board resolutions are:

· Large inequity in current approach

· Request to provide the governing body with options including the removal of charges

· Request to the governing body to waive all fees for sports fields in the central local board areas until a region wide policy has been adopted

· Rejection of the use of Locally Driven Initiative funding being used to meet the budget shortfall should charges be dropped

· Requesting the Chief Operating Officer identifies what other fees and charges affecting users have also not been reviewed since amalgamation.

Māori impact statement

29. The Maunga Authority is currently reviewing fees for activities on the Tūpuna Maunga. The Authority recognises that the sports fields on the Tūpuna Maunga currently play a critical role in the supply of sports field playing hours in the Auckland region and that they are well used, with many having clubs which have had a long association with the Tūpuna Maunga domiciled next to the fields. It is proposing to remove the sportsfield charges on Ōwairaka/Te Ahi-kā-a-Rakataura/Mt Albert and Ōtāhuhu/Mt Richmond to create a consistent approach across the network of Tūpuna Maunga and to remove one of the barriers to groups wanting to utilise these fields. The Maunga Authority is currently seeking feedback from groups impacted by the fees review and is likely to adopt the new fees schedule in July 2015.

Implementation

30. A board’s ability to generate income from local fees and charges are reflected in baseline revenue and expenditure levels determined by the governing body. While local boards therefore have responsibility for reviewing, setting and adopting fees and charges each year, any reduction to baseline budgets must be balanced through alternative means of funding.

31. Local and Sports Parks central will not be sending out any invoices relating to the 2015 winter season until a decision on sports field charges has been made.

Attachments

No.	Title	Page
a View	Schedule of sportsfield charges	15
b View	Local Board Resolutions	17

Signatories

Authors

David Barker - Team Leader Parks Specialists and Programmes

Authorisers

Mark Bowater - Manager Local and Sports Parks

Dean Kimpton - Chief Operating Officer

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

20 August 2015

Disposal recommendation report

File No.: CP2015/15984

Purpose

1. This report seeks approval to sell seven non-service council owned sites that Auckland Council Property Limited (ACPL) considers suitable for sale.

2. This report also seeks approval for some of the proceeds of the proposed sale for 27 Normanby Road, to be allocated towards the purchase of a suitable site or drop off sites for central community recycling facilities if required.

Executive Summary

3. ACPL is required to identify properties from within council’s portfolio that may be suitable for potential sale to a combined value of $40 million by 30 June 2016. ACPL and Auckland Council Property Department (ACPD) work collaboratively on a comprehensive review process to identify such properties. Capital receipts from the sale of surplus properties will contribute to all Auckland Plan outcomes by providing the council with an efficient use of capital and prioritisation of funds to achieve its activities and projects.

4. The first property presented for disposal in this report re-presents 27 Normanby Road, Mt Eden. This site was previously presented to the Strategy & Finance Committee. Three central local boards and the Waste Solutions team had sought to use this site for a community recycling centre (CRC), and the decision was delayed to allow three central local boards the opportunity to find an alternative site for a central community recycling centre. This work has now been progressed. The Waste Solutions team and ACPL have also created a site selection criteria that was endorsed by the governing body. Using the site selection criteria, it was found that 27 Normanby Road is not a suitable site for a community recycling centre. 27 Normanby Road, Mt Eden was recently identified as a suitable site to rehouse a church that will be displaced by the construction of the City Rail Link (CRL). We recommend that 27 Normanby Road be used for this purpose. We also recommend that some of the proposed proceeds of sale from 27 Normanby Road be allocated towards the purchase of a suitable site or drop off sites for central community recycling facilities if required. A detailed overview of the work undertaken regarding this property and the feedback gathered through the rationalisation process is contained in Attachment A to this report.

5. The other six properties included in this report have been through the agreed consultative process including organisation wide internal officer consultation, local board and Iwi engagement. The feedback has been supportive of the proposed disposal of these sites. A detailed overview of the rationalisation process undertaken for these sites is outlined in the Comments, Local Board Views and Implications, and Maori Impact Statement sections of this report. Site specific detail, including information and feedback gathered through the rationalisation process is contained in Attachments B to F of this report.

Recommendation/s

That the Finance and Performance Committee:

a) approve, subject to the satisfactory conclusion of any required statutory processes, the disposal of the land at 27 Normanby Road, Mt Eden comprised of an estate in fee simple comprising approximately 7,756m² more or less being Lot 1 DP 90570 in certificate of title NA47D/698;

b) approve partial proceeds of sale from 27 Normanby Road, Mt Eden be allocated towards the purchase of a suitable site or drop off sites for central community recycling facilities if required, with the amount to be agreed in due course and delegated to the board of directors of Development Auckland and Council’s Chief Executive;

c) approve, subject to the satisfactory conclusion of any required statutory processes, the disposal of the land at:

i) 19B Crisp Avenue, Pukekohe comprised of an estate in fee simple comprising approximately 142m² more or less being Lot 20 DP 62409 in certificate of title NA19A/1230;

ii) 18D Walpole Avenue, Hill Park, Manurewa comprised of an estate in fee simple comprising approximately 119m² more or less being Lot 85 DP 53109 in certificate of title NA50C/172;

iii) 22D Walpole Avenue, Hill Park, Manurewa comprised of an estate in fee simple comprising approximately 114m² more or less being Lot 84 Deposited Plan 53109 in certificate of title NA50C/171;

iv) 49D Scenic Drive, Hill Park, Manurewa comprised of an estate in fee simple comprising approximately 205m² more or less being Lot 93 Deposited Plan 53695 in certificate of title NA49C/1383;

v) 78 Queen Street, Waiuku comprised of an estate in fee simple comprising approximately 24m² more or less being Lot 4 Deposited Plan 44615 in certificate of title NA35B/774;

vi) 4 Amandale Avenue, St Lukes comprised of an estate in fee simple comprising approximately 75m² more or less being Lot 7 Deposited Plan 171379 in certificate of title NA104D/41;

d) agree that final terms and conditions to be approved under the appropriate delegations.

Comments

Property information

6. 27 Normanby Road is a 7,756m² site that was acquired by Auckland City Council and Mt Eden Borough Council as tenants in common in equal shares in 1980 for use as a works depot. This primary service use ceased in approximately 2005. The site has subsequently been partially leased on a commercial basis and some additional areas are used by Parks and the Art Gallery free of charge. The site is presently under-developed, with a low site coverage of 25 percent. The buildings are a mixture of 1970s industrial and low quality ancillary offices, which produce an annual income of circa $240K plus GST per annum. Under the operative District Plan the site is zoned Mixed Use. The Proposed Auckland Unitary Plan zoning is Business – Mixed Use. 27 Normanby Road is situated in a high value city fringe location near public transport links and a proposed CRL station. A 2014 independent valuation assessment was undertaken by Telfer Young, which valued this site at $14.3 million. This site is currently under-utilised given its size, location and mixed use zoning.

Internal consultation

7. The rationalisation process for 27 Normanby Road commenced in early 2013. As part of the rationalisation process, ACPL engaged with the Albert-Eden Local Board about the potential disposal of this site. The Albert-Eden Local Board expressed an interest in retaining this site to use as a CRC in conjunction with the Puketapapa and Waitemata Local Boards. The Waste Solutions team were supportive of investigating if this site could be used as a CRC.

8. Given the value of this site and its strategic location in a city fringe area that is close to public transport and the proposed City Rail Link (CRL), ACPL’s view (which was supported by a senior, cross-council steering group) was that this site should be used for a quality, compact housing development, possibly with a retail element, in line with the urban design that is envisioned in the Auckland Plan.

9. ACPL recommended this site for disposal to the Strategy and Finance Committee in March 2013. The Strategy and Finance Committee resolved that action to dispose of this site should be put on hold for up to six months to enable a business case for a CRC on this site to be developed. ACPL was also asked to work with the Waste Solutions team to identify potential alternative sites for a CRC in the central local board area.

10. After a comprehensive search, an alternative site was found for a CRC at 956-990 Great North Road in November 2013. The three central local boards and the Waste Solutions team commissioned a business case and an external consultant was engaged to prepare a high level review of the advantages and disadvantages of using the two sites for a CRC. The business case found that both sites could be used to accommodate and operate a CRC, but that using 27 Normanby Road had the most potential for the diversion of waste. However other significant factors were not considered in the business case. These included:

· the value of the two respective sites;

· the financial viability and cost to Council of using each site;

· the lost opportunity cost to Council of using 27 Normanby Road for a CRC given other Auckland Plan objectives that could be achieved on the site, whereas the Great North Road site has limited other potential uses given its open space zoning; and

· planning and zoning considerations.

11. Following the completion of the business case, a report recommending that 27 Normanby Road be disposed of was jointly authored by the manager of Infrastructure and Environmental Services and ACPL and submitted to the Finance and Performance Committee in April 2014. However, the report was not ultimately considered as the governing body requested further information on the implementation of the Resource Recovery Network, budgets for inclusion in the Long Term Plan and that a site selection criteria for CRCs be prepared to provide a framework for assessing which sites would be most suitable to use for CRCs.

Site selection criteria for community recycling centres

12. Following this, the Waste Solutions team developed a long term strategy and budgets for the Resource Recovery Network, and worked with ACPL to develop a site selection criteria for the development of a network of CRCs. These were approved by the Regional Policy and Strategy Committee in October 2014. The budgets approved for the Resource Recovery Network are for capital works and the operations of CRCs, but does not include capital funding to acquire sites for CRCs. The governing body approved site selection criteria provide a framework for assessing the suitability of sites for potential CRCs against the following considerations:

· financial and economic considerations, including the value of the land, rates, operating costs and the financial opportunity costs to Council of using a site for a CRC;

· resource management and planning constraints;

· compatible land uses;

· site setting and size;

· physical site conditions and accessibility;

· environmental considerations;

· social considerations.

13. ACPL and the Waste Solutions team have assessed both of the sites that were considered for a central area CRC, being 27 Normanby Road and 965-990 Great North Road using the site selection criteria. The assessment found that 27 Normandy Road is not a suitable site for a CRC for the following reasons:

· It is not financially or economically viable. The total cost to Council to use 27 Normanby Road as a CRC is $15.5 million over a 20 year period.

· Using 27 Normanby Road as a CRC would be incompatible with the existing surrounding land uses, which includes a school, residential housing and nearby restaurants and eateries.

· Ideally, a CRC would be located in an area zoned for industrial uses. 27 Normanby Road is zoned Mixed Use, and the Proposed Auckland Unitary Plan zoning is Business - Mixed Use. A publically notified resource consent would be required to use 27 Normanby Road as a CRC, and Council’s Planning team have advised that there are likely to be complex issues raised in using the site as a CRC.

· Normanby Road is a narrow road which can be heavily congested. Locating a CRC on the site may contribute to further congestion with an increase in commercial vehicle movements.

14. 956-990 Great North Road was also assessed using the site selection criteria and was found to be a suitable site for a central CRC for the following reasons:

· It is financially viable, with the total cost to Council being $850,000 over a 20 year period.

· It is compatible with surrounding land uses, with residential development in the vicinity being buffered by the surrounding road network, including the north-western motorway.

· The site is not zoned for industrial uses, but has an open space zoning (as opposed to a mixed use or residential zoning) in both the operative district plan and Proposed Auckland Unitary Plan. Advice from Council’s Planning team is that a resource consent would be required to use the site for a CRC, which may need to be publically notified depending on the detail of its use and design.

· Planning advice is that the value of using this site as a CRC lies in its strategic location, which is an existing educational/destination hub. A CRC, which involves a significant educational and workshop aspect, would be well-located within this educational hub.

· This site serves a large residential catchment area and is easily accessible due to its proximity to motorway exchanges and public transport links.

15. ACPL and the Waste Solutions team are of the view that 956-990 Great North Road is a suitable site for a CRC. However, the Albert-Eden Local Board advised ACPL and the Waste Solutions team that 956-990 Great North Road is no longer available for a CRC as the local board have plans to use it for Chinese gardens.

16. ACPL and the Waste Solutions team have undertaken another thorough search for an alternative site for a central CRC, using the parameters provided in the site selection criteria. No suitable sites for a full CRC within the central area were identified within the Council portfolio. This is mainly due to available sites been designated for the CRL, and no certainty can be provided as to the length of time these sites will be available prior to construction of the CRL commencing. Several suitable sites were identified outside of Council’s property portfolio. The option of utilising a number of smaller, temporary, Council-owned sites was explored after the Waste Solutions team provided ACPL with the criteria for these.

17. Now that all options of finding a site within Council’s property portfolio for a central CRC have been exhausted, and no viable sites other than 956-990 Great North Road have been identified, the Waste Solutions team have commenced investigating a potential alternative strategy for implementing the Resource Recovery Network in the central area. This could potentially involve a number of smaller drop-off points in the central area feeding into a larger processing facility outside the central area. ACPL and Waste Solutions team are currently investigating sites that could accommodate this option.

Auckland Transport

18. Contemporaneous to the work that ACPL and the Waste Solutions team undertook to find potential sites for a central CRC, Auckland Transport began acquiring the sites in the central area that are required for the CRL. All sites that are acquired by central or local government for public works, either by negotiation or compulsorily, are subject to the provisions of the Public Works Act 1981. The Public Works Act 1981 recognises that public works often cannot be carried out without affecting private landowners. The Public Works Act 1981 seeks to ensure that:

· landowners are not unfairly deprived of their land;

· affected landowners are fairly compensated for any losses arising from the acquisition of land for public works, and

· affected landowners are left in no better or worse position than before the public work commenced.

The Public Works Act sets out the steps for determining the value of the land and providing compensation to affected landowners.

19. Auckland Transport identified that land upon which a Mt Eden church is located is required for the construction of the CRL. As the church will be displaced by the construction of the CRL, Auckland Transport carried out a market scan in 2013 to identify suitable alternative sites to rehouse it. 27 Normanby Road was identified as a suitable site which can facilitate the relocation of the church from its existing premises. After undertaking a thorough analysis, Auckland Transport has concluded that 27 Normanby Road is a suitable site for Council to offer the church as a relocation option, as part of the Public Works Act compensation package.

ACPL’s view

20. ACPL remain of the view that 27 Normanby Road would make an ideal site for an intensified housing development. However, given the wider Council and Auckland Plan objectives of facilitating the CRL, and Council’s obligations under the Public Works Act to fairly compensate landowners who are displaced due to public works, ACPL support this site being used by Auckland Transport to rehouse the church.

21. ACPL continues to support the provision of resource recovery facilities within the central Auckland area. Together with the Waste Solutions team, we have explored all available options for a suitable, long term site in the Council portfolio for a central CRC. 956-990 Great North Road is the only viable option that has been identified in the Council portfolio for a full CRC, and the Waste Solutions team and ACPL both remain of the view that this is a viable option. Given the Albert-Eden Local Board have informed ACPL and the Waste Solutions team that this site is no longer available for use as a CRC, the Waste Solutions team is now exploring an alternative strategy for the central area. This work is in the initial planning stages and will be further developed over the coming months.

22. ACPL are mindful of the considerable efforts that have gone into finding a site for a central CRC, and that several exhaustive searches of the Council property portfolio have only identified 956-990 Great North Road. Further, there is considerable support from the Waste Solutions team, the three central local boards and the wider Council family for a central CRC to form part of the Resource Recovery Network. Due to this, and given there is no capital funding available to purchase a suitable site for a central CRC, ACPL recommends that the governing body authorise some of the proceeds from the proposed sale of 27 Normanby Road be used if required for the purchase of a suitable site or drop off points for a CRC.

Consideration

Local Board views and implications

23. The three central local boards are opposed to the proposed disposal of this site and have continued to support it being used for a CRC. The three central local boards each recently resolved the following regarding 27 Normanby Road:

· that all other areas have CRCs that are already operational or due to be established, and that a central area resource recovery centre will support a significant portion of the Auckland population;

· the local boards do not agree that Auckland Transport requirements should have preference over a CRC; and

· that should 27 Normanby Road be disposed of, the retention of up to $9 million from the sale proceeds be retained for a CRC in the central area.

24. Regarding the resolutions of the three central local boards, ACPL notes that Auckland Transport requirements are not being prioritised over the requirements of the Waste Solutions team. Rather, 27 Normanby Road has been found not to be suitable for a CRC (for the reasons set out in paragraph 13 above). Rehousing the church to this site is based upon Council’s obligations which are mandated in the Public Works Act.

25. Staff from ACPL, Auckland Transport and the Waste Solutions team have recently met with members of the three central local boards regarding this matter. The three central local boards were advised of the site selection criteria for CRCs and that 27 Normanby Road is not a suitable site for a CRC. The ongoing search for an alternative central site for a CRC was canvassed and the alternative strategy for community recycling facilities that the Waste Solutions team are developing for the central area was discussed. Auckland Transport provided information about why it seeks to use 27 Normanby Road to rehouse the church displaced by the CRL construction.

26. The Waste Solutions team have undertaken to continue working with the three central local boards in developing the alternative strategy for the central area. It will provide indicative costings for a central processing facility and potential drop-off facilities in the central Auckland area to the central local boards in due course. ACPL will continue to assist with this ongoing work as and when required.

Māori impact statement

27. Thirteen Iwi Authority contacts were contacted in 2013 regarding the potential sale of 27 Normanby Road, Mt Eden. Five responded, with feedback as outlined below.

i. Ngai Tai ki Tamaki Tribal Trust

27 Normanby Road, Mt Eden is located in an area of general cultural relevance to Ngai Tai known as ‘Pukekawa’. Ngai Tai do not oppose the sale of this property outright, but objected at the time in lieu of finding an alternative venue for a community project run by a Ngai Tai member that is struggling with its current venue. Ngai Tai are also potentially commercially interested in this site, as well as focused on positive community outcomes in the region. They have a keen interest in partnering with Auckland Council to achieve these outcomes.

ii. Pukaki Maori Marae Committee - Te Akitai Iwi Authority

Te Akitai have lodged an expression of interest in potential purchase of 27 Normanby Road, Mt Eden.

iii. Patukirikiri

Patukirikiri confirm they have no specific links to 27 Normanby Road, Mt Eden.

iv. Te Ara Rangatu o Te Iwi o Ngati Te Ata Waiohua Incorporated

The Ngati Te Ata stakeholder contact indicates they are unhappy with council process/policies in that council owned properties are considered outside of treaty settlement processes. He requests some attention be given to redressing treaty violations, possibly via preferential discounted offers to purchase with right of first refusal.

v. Ngati Tamaoho Trust

Ngati Tamaoho did not have any site specific cultural significance considerations to raise in respect of this property.

Implementation

28. This site is not subject to offer back requirements under section 40 of the Public Works Act 1981.

29. This property is not one of the Council’s strategic assets to which the significance policy would apply.

Attachments

No.	Title	Page
a View	27 Normanby Road, Mt Eden property information	31
b View	19B Crisp Avenue, Pukekohe property information	39
c View	18D and 22D Walpole Avenue, Hill Park, Manurewa property information	43
d View	49D Scenic Drive, Hill Park, Manurewa property information	47
e View	78 Queen Street, Waiuku property information	51
f View	4 Amandale Avenue, St Lukes property information	55

Signatories

Author

Letitia McColl - Senior Engagement Advisor, Portfolio Review, Auckland Council Property Limited

Authorisers

David Rankin - Chief Executive, Auckland Council Property Limited

Ian Wheeler - Manager Property

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

20 August 2015

Proposed work programme in response to the Independent Māori Statutory Board's Te Tiriti o Waitangi audit report 2015

File No.: CP2015/12809

Purpose

1. In response to the recommended actions in the Independent Māori Statutory Board’s (IMSB) 2015 Te Tiriti o Waitangi Audit Report (2015 Treaty Audit) this report:

· attaches two high level programme plans;

· identifies priority response actions for the first quarter of 2015/2016 financial year (FY);

· establishes a three tier control framework for monitoring progress on response actions.

Executive Summary

2. IMSB presented their 2015 Treaty Audit to the Finance and Performance committee on 21 May 2015. The Audit was undertaken by PricewaterhouseCoopers (PWC) and contains 71 individual recommendations which have been grouped together into 25 recommended actions. Copies of the 2015 Treaty Audit were provided at the meeting and made available on the IMSB’s website.

3. The committee noted that Auckland Council staff would report back by July 2015 with a proposed work programme in response to the 2015 Treaty Audit recommendations. A high level response work programme for 2015-2018 is attached (Appendix A) and nine priority response actions for the first quarter of 2015/2016 financial year are identified at paragraph 24. The proposed work programme aligns with the 25 recommended actions from the 2015 Treaty Audit. Appendix B attaches a high level work programme for 2015/16.

4. The Effectiveness for Māori work programme, part of Te Toa Takitini, has oversight of the Treaty Audit response work programme and is led by the council’s Transformation Director. The council’s response to the 2015 Treaty Audit will be part of an organisation wide work programme of transformational change, including a whole of council programme of improved business, team and performance planning. Detailed project planning and sequencing for the remaining response actions will occur, in consultation with IMSB secretariat staff, as part of the council’s Effectiveness for Māori work programme.

5. The 2015 Treaty Audit notes that the council has made improvements in a number of areas including:

o good awareness of legislative obligations to Māori, Te Tiriti principles and the purpose and importance of the Te Tiriti audit;

o good practice is occurring by design in a number of areas;

o significant workstreams are underway to support the implementation of the recommendations from the 2012 Treaty Audit, notably the Māori Responsiveness Framework and Te Toa Takatini; and

o good executive and senior level support for securing a response work programme which dovetails into existing projects and initiatives.

6. Forty two of the recommendations from the 2012 Treaty Audit were included in the scope of the 2015 Treaty Audit. It should be noted that the council and PWC have differing views as to how many of the 2012 recommendations have been completed. PWC’s assessment is that three of the 2012 Treaty Audit recommendations were completed; 28 were assessed as ‘substantial work has commenced’ and 11 were assessed as ‘no substantial work commenced’. The council’s view is that 14 (of the 42) 2012 recommendations were completed and 28 are in progress. For the 2015 Audit response, Council and IMSB secretariat staff will reach agreement about what constitutes completion of the agreed actions as part of the detailed programme planning.

7. The 2015 Treaty Audit has also found that:

· Improvements are required to the way in which progress is monitored and reported to ensure efforts achieve the desired impact;

· The internal control framework remains under development and lacks maturity.

8. On 21 May 2015, the Finance and Performance Committee noted that the IMSB will provide advice to the council by July 2015 on improvements to monitoring and reporting progress in implementing the 2015 Treaty Audit recommendations. IMSB’s advice (Appendix B) has been provided and taken into account in the development of this report.

9. Since 2010, the council has established a number of strategic building blocks to support improved Māori responsiveness, including the Auckland Plan, Māori Responsiveness Framework, the Unitary Plan, the 2015-2025 Long-term Plan (LTP) and Te Toa Takitini. Other work in progress will also support improved Māori responsiveness, including NewCore, the Legal Compliance and Risk Frameworks and the revised Internal Audit work programme. These strategic building blocks are important components of the council’s response to the audit recommendations, and of establishing a strong internal control system to monitor the council’s progress towards full compliance.

10. The council will ensure comprehensive monitoring and reporting of audit response actions through a robust control framework as set out in paragraph 29.

11. On 7 May 2015 the Budget Committee agreed to identify $2 million (over three years, commencing 2015/16) to implement the council’s response programme to the priority recommendations in the IMSB’s 2015 Treaty Audit report, including increasing the roll-out of Māori Responsiveness Plans and senior staff training. Reporting on this budget provision will be included in the quarterly reports noted at paragraph 29.

Recommendation/s

That the Finance and Performance Committee:

a) approve the two high level work programme plans and priority response actions for the first quarter of 2015/2016 financial year in response to the recommended actions in the 2015 Treaty Audit.

b) note that progress on the priority actions for the first quarter of 2015/2016 financial year will be reported to this committee in October 2015.

c) note that the Effectiveness for Māori work programme of Te Toa Takitini, led by the council’s Transformation Director, has oversight of the Treaty Audit response work programme and that detailed project planning and sequencing for the remaining response actions will occur, in consultation with Independent Māori Statutory Board secretariat staff, as part of the Effectiveness for Māori work programme.

d) note that Independent Māori Statutory Board secretariat staff provided advice to the chief executive on improvements to monitoring and reporting progress in implementing 2015 Treaty Audit recommendations and that this advice has been taken into account in the preparation of this report.

e) note that quarterly reports on progress on the 2015 Treaty Audit response work programme will be provided to:

· The council’s chief executive and the executive leadership group of Te Toa Takitini;

· The Finance and Performance Committee

· The Joint Governing Body and Independent Māori Statutory Board meetings.

f) note that bi-annual reports by Internal Audit on progress of the 2015 Treaty Audit response work programme and its operations will be provided to the Audit and Risk Committee during 2015-2018.

g) note that the Budget Committee agreed on 7 May 2015 to identify $2 million (over three years, commencing 2015/2016) to implement the council’s response programme to the priority recommendations in the Independent Māori Statutory Board’s 2015 Treaty Audit report, including increasing the roll-out of Māori Responsiveness Plans and senior staff training, and that reporting on this budget provision will be included in the reports noted in f) above.

Comments

12. This is the second Treaty Audit report since the establishment of Auckland Council in November 2010. The Treaty Audit process is an important part of ensuring that the council is meeting its statutory and Treaty based obligations toward Māori.

13. Since 2010, the council has established a number of strategic building blocks to support improved Māori responsiveness, including the Auckland Plan, Māori Responsiveness Framework, the Unitary Plan, the 2015-2025 Long-term Plan and Te Toa Takitini. Other work in progress will also support improved Māori responsiveness, including NewCore, the Legal Compliance and Risk Frameworks and the revised Internal Audit work programme. These strategic building blocks are important components of the council’s response to the Treaty Audit recommendations, and of establishing a strong internal control system to monitor the council’s progress towards full compliance.

14. The 2015 Treaty Audit process was supported by a group of senior staff, from across the council group, who engaged closely with PWC and IMSB. The council liaison group met regularly with PWC and IMSB staff during the 2015 Treaty Audit process to resolve issues and help inform the final report and recommended actions. This improved liaison has helped to ensure that the 2015 Treaty Audit recommendations translate more readily into a recommended work programme.

15. The council is committed to improving its organisational performance across the areas identified in the 2015 Treaty Audit report. Following a IMSB audit of the council’s expenditure on Māori outcomes (May 2014), the council committed to taking a more strategic top down approach to agreeing and prioritising activities that contribute to Māori outcomes. This approach resulted in the clear identification of Māori Transformational Shift priority areas included in the LTP. Improvements in monitoring and reporting against agreed activities and budgets in FY 2014/2015 have been noted by the IMSB members at joint hui with the Governing Body.

16. The council’s chief executive leads the Māori Responsiveness Executive Leadership group which includes the council’s executive leadership team and the chief executives of the council’s substantive CCOs and the IMSB. This group has oversight over the Te Toa Takitini structure and work programme to embed improved Māori responsiveness into the council:

· achieve progress on the Māori transformational shift;

· uplift Māori well-being; and

· achieve better outcomes with Māori.

17. Te Toa Takitini has five programmes of action. One of these, Effectiveness for Māori, has oversight of the Treaty Audit response work programme and is led by the council’s transformation director. The council’s response to the 2015 Treaty Audit will be part of an organisation wide work programme of transformational change, including a whole of council programme of improved business, team and performance planning.

18. The Effectiveness for Māori programme team includes senior staff from Te Waka Angamua, Communications and Engagement, Organisational Development, Legal, Internal Audit, Risk and Governance. Individual actions in the audit response programme will be the responsibility of identified business owners so that improved effectiveness for Māori is a transformational change owned and supported by the whole of council.

2015 Te Tiriti o Waitangi Audit Findings

Audit process

19. PWC’s overall comment about the 2015 Treaty Audit process is “the council has demonstrated good support of the 2015 Treaty Audit process, which supports their intent to create a good internal control environment enabling Māori Responsiveness”. Specifically, PWC found:

· A good level of awareness of the 2015 Treaty Audit, including its purpose and importance;

· The council staff at all levels made themselves available for questions and information, at times with relatively short notice;

· The council staff engaged transparently, openly saying where they could do better and sharing examples of good practice; and

· Good executive and senior support for the 2015 Treaty Audit process, particularly interest and support in securing a clear and readily implementable work programme that dovetails into existing projects and initiatives with no delay.

Audit outcomes

· There has been a positive shift in the council’s knowledge of Te Tiriti o Waitangi obligations. The council has identified its legislative obligations and undertaken widespread training to strengthen awareness;

· The Māori Responsiveness Framework, which incorporates the Māori Responsiveness Plans, provides the framework for ensuring that obligations at a department (including Local Board Services) and CCO level are identified, and policies and processes to ensure compliance developed;

· This framework, together with the related recommendations for improvement, serves as an enabler for the council to adopt a more mature approach, with Māori requirements embedded within day-to-day business as usual processes, and Māori statutory requirements which are clearly communicated and understood throughout the council. In turn, improving the council’s ability to meet its statutory obligations and therefore enhance overall Māori outcomes;

· There are a number of instances where good practice is occurring. This is by design, rather than due to the institutional knowledge held by certain individuals as was the case in the past. These good practices are not yet fully embedded processes;

· There are some good project examples of engaging Mana Whenua at a staff level which are also being used to raise profile/educate at local board member level. For example, engaging with specific iwi and associated iwi organisations over recent treaty settlement legislation (including, Ngati Whatua o Orakei, Ngati Manuhiri and the Tamaki Collective);

· Engagement with Mana Whenua on a day-to-day operational basis also continues to improve, including engagement with Mana Whenua regarding specific Cultural Impact Assessments, as well as providing reporting to specific iwi groups; and

· Overall, there is good awareness of the need to engage with Mana Whenua directly.

Areas for continued focus

· In some areas, where progress has been made at policy or strategy level, the underlying detailed processes, roles, responsibilities, systems and data to ensure the objectives and intended outcomes will be met are still a work in progress;

· In other areas, the policies, processes and controls, needed to actively support Te Tiriti principles and ensure compliance with the range of statutes relating to local government, in which there are references to Te Tiriti principles and responsibilities to Māori, are under development; and

· Engagement with Mana Whenua and Mataawaka continues to be a work in progress. Engagement with Mana Whenua is more advanced than engagement with Mataawaka.

Progress on recommendations from 2012 Treaty Audit

20. Forty two of the recommendations from the 2012 Treaty Audit were included in the scope of the 2015 Treaty Audit. It should be noted that the council and PWC have differing views as to how many of the 2012 recommendations have been completed. PWC’s assessment is that three of the 2012 Treaty Audit recommendations were completed; 28 were assessed as ‘substantial work has commenced’ and 11 were assessed as ‘no substantial work commenced’. The council’s view is that 14 (of the 42) 2012 recommendations were completed and 28 are in progress.

21. Many of the recommendations from the 2012 Treaty Audit were process oriented and open ended and others were not, in the council’s view, necessarily the most appropriate course of action. For example, in some cases the recommendation was for a policy to be developed when in practice the best course was simply to implement certain actions. The council and IMSB did not agree in advance what constituted closure of the agreed actions. These factors have contributed to the differing views about whether actions from the 2012 Treaty Audit are completed or not. Improved liaison between the council, PWC and IMSB staff during the 2015 Treaty Audit process has helped to ensure that 2015 recommendations will translate more readily into a recommended work programme with clearly agreed deliverables.

Recommended Actions

22. The 2015 Treaty Audit report contains 71 individual recommendations which have been grouped together into 25 recommended actions in the report. Copies of the report were provided at the Finance and Performance Committee meeting on 21 May 2015 and the report is available on the IMSB’s website.

The Treaty Audit Response work programme

23. The 25 recommended actions in the 2015 Treaty Audit report logically group into the following eight key themes and establish the framework for the high level response work programme, attached at Appendix A:

· Māori Responsiveness Planning

· Māori Centered Engagement and Communication

· Planning and Policy

· Process Improvements

· Information Management

· Māori Relationship Management

· Organisational Capability

· Monitoring and Evaluation

24. In the first quarter of 2015/2016 FY, the following response actions will be completed and progress reported to the Finance and Performance Committee in October 2015. Appendix B attaches a high level work programme for the response actions for 2015-16 and includes the actions in the table below and proposed actions for the remainder of this year.

Response Action	Detail
Māori Responsiveness Planning Toolkit	Methodology, templates, monitoring and reporting requirements refined and confirmed
	Communication and user training of the toolkit
	Planned implementation of departmental and CCO Māori Responsive Plans
	IMSB feedback on Māori Responsiveness Planning pilot
Significance and Engagement Policy	Consultation and Engagement Guidebook updated to reflect the Significance and Engagement Policy
Significance and Engagement Policy	Significance and Engagement Guidelines published
Governance Statement	The next update will address the recommended action to affirm council's position on partnership with Māori.
Hearings Policy	Completed and socialised across council
Te Reo Māori Framework	Completed and socialised across council
Kaitiakitanga/ Stewardship of Natural Resources Policy	Complete and report feedback from discussions with iwi
Kaitiakitanga/ Stewardship of Natural Resources Policy	Complete and publish Operational Guidance material on legal frameworks, delegations, insurance, health and safety responsibilities for co-governance entities.
Taonga Policy	Completed and socialised across council
Compliance Framework	Develop proposed Compliance Framework that maps, measures and reports compliance of statutory obligations of the 2015 Treaty Audit recommendations, see paragraph 29 below
Performance Framework	Develop proposed Performance Framework that maps, measures and reports achieving the objectives of the 2015 Treaty Audit recommendations and improved Māori responsiveness, see paragraph 29 below

25. Detailed project planning and sequencing for the remaining response actions will occur, in consultation with IMSB secretariat staff, as part of the Effectiveness for Māori work programme. The council currently has a significant programme of transformational change work underway, including changed work programmes arising from LTP decisions, the enterprise prioritisation process as well as improved business, team and performance planning. It is important that the council’s response to the 2015 Treaty Audit is integrated with these other transformational work programmes to deliver optimal results. Sequencing, timing and planning of response actions will be guided by this.

Monitoring and Reporting Framework

26. The 2015 Treaty Audit found that improvements are needed to the way in which progress is monitored and reported to ensure progress is made, and efforts achieve the desired impact, and that the internal control framework needed to actively support Te Tiriti principles and ensure compliance with the range of local government statutes that reference Te Tiriti principles and responsibilities remain under development and lacks maturity.

27. On 21 May, the Finance and Performance Committee noted that the IMSB will provide advice to the council by July 2015 on improvements to monitoring and reporting progress in implementing the 2015 Treaty Audit. IMSB’s advice has been taken into account in the development of this report (Appendix C).

28. IMSB’s advice includes a proposed ‘three lines of defence’ model for monitoring and reporting progress in implementing the agreed Treaty Audit work programme. The council staff have discussed this approach with IMSB secretariat staff. We support an amended version of this approach and are proposing the following model, which aligns with the Te Toa Takitini structure, going forward.

29. Proposed monitoring and control framework for Treaty Audit work programme:

First

Business operations

The agreed Treaty Audit work programme for 2015 -2018 is the primary work stream of the Effectiveness for Māori programme of Te Toa Takitini, under the leadership of the council’s transformation director.

Business owners have informed the development of the recommended Treaty Audit work programme. Individual actions in the response programme will be the responsibility of identified business owners

Second

Oversight

Quarterly progress reports will be made to:

· The council’s chief executive and the executive leadership group of Te Toa Takitini;

· Finance and Performance Committee; and

· Joint Governing Body and IMSB meetings.

Third

Independent Assurance – Internal Audit

Monitoring and reporting by Internal Audit will include:

· providing advice to action owners as to whether controls being implemented will achieve the objective of the Treaty Audit recommendation;

· periodically testing to assess whether processes and controls implemented in response to Treaty Audit recommendations, are in fact operating as intended; and

· reporting on the results of monitoring to the Audit and Risk Committee on a six-monthly basis.

Consideration

Independent Māori Statutory Board Views

30. The council has provided an end of year report of its Te Tiriti o Waitangi Audit Response Programme. The Board expects that this report from the council concerning progress made on the recommended actions of the 2014/2015 Treaty Audit would also cover the process by which the council will be addressing outstanding actions from the 2012 Audit, including integration with those recommended actions from the 2014/2015 Treaty Audit.

31. The council has made progress in designing its governance and reporting structure to direct and oversee the successful delivery of the Treaty Audit response work programme 2015-2018. The Board also has a role and related responsibilities to advise on the Te Tiriti o Waitangi Response Programme and also to monitor and assure the progress of the work programme.

32. As highlighted by the council, further detailed work is required to plan, budget and properly phase the Te Tiriti o Waitangi Response Programme over the next three years. The Board expects the inclusion of the good practice approaches below within the work programme:

Objective	Good Practice
1. Te Tiriti o Waitangi Audit Response Programme fully addresses all 71 individual recommendations which have been grouped into 25 recommended actions contained in the Te Tiriti Audit Report 2014/2015.	· The work programme provides for delivery plans and milestones that align with each recommendation. · Each delivery plan includes detail on: the action owner; the action supporter; action completion target due dates; related indicator or milestone criteria by which each action would be closed; and required resources/funding.
2. Te Tiriti o Waitangi Audit Response Programme includes a robust process for monitoring and reporting progress towards addressing Treaty Audit recommendations.	· Monthly meetings specific to the work programme are held amongst the council officers and IMSB secretariat staff for detailed discussion concerning current actions and actions due in the upcoming three months. · The council will provide the IMSB with all relevant plans and reports on a monthly basis to validate an assessment of quarterly reporting of progress.
3. In 2018, both the independent auditor and council agree on the extent to which the Treaty Audit Response Programme has been delivered.	· Monthly meetings will discuss results of internal audit checks performed on actions closed in the prior three months. · There will be a process of documenting milestones delivered and whether an action is open or closed.

33. The Board will work closely with the council to ensure that the detailed programme is clearly stated and is aligned with the intent of the auditor’s recommendations.

Response to Independent Māori Statutory Board Views

34. The council staff, PWC and IMSB have differing views as to how many of the 2012 recommendations remain outstanding (as mentioned in paragraph 30). Forty two of the recommendations from the 2012 Treaty Audit were included in the scope of the 2015 Treaty Audit. The council intends to be highly responsive in addressing the 2015 Treaty Audit recommendations during 2015/2016 and considers that the proposed 2015 Treaty Audit work programme will address the key outstanding actions from the 2012 Audit. The council intends to work with the IMSB secretariat to resolve our differing views on what remains outstanding from the 2012 Treaty Audit, this will include the collaborative development of agreed criteria for what constitutes the closure of a recommended action.

35. In the table provided in paragraph 32, objective 1 the IMSB propose good practice requirements for planning the Treaty Audit Response work programme, the council agrees to adhere to these requirements.

36. The council notes the good practice requirements proposed by the IMSB for objectives 2 and 3. The council staff propose the alternative approach set out in this report, based on:

· identifying response actions for the first quarter of 2015/2016 FY;

· undertaking detailed project planning and sequencing for the remaining response actions in consultation with IMSB secretariat staff, as part of the Effectiveness for Māori work programme; and

· ensuring comprehensive monitoring and reporting on audit response actions through a identified control framework

37. As members of the Effectiveness for Māori programme group of Te Toa Takitini, IMSB secretariat staff have full opportunity to discuss progress with the council officers who are delivering the proposed Treaty Audit work programme. They will also have the opportunity to formally provide comment on the quarterly progress reports. The council also expects to work collaboratively with IMSB staff in the development of the Compliance and Performance Frameworks.

38. The council staff consider that the approach set out in this report and summarized at paragraphs 29 and 36 will embed the council’s audit response actions into an organisation wide work programme of transformational change and drive improved effectiveness for Māori across council.

Local board views and implications

39. Local boards have not been consulted in the development of this report. The council’s response to the 2015 Treaty Audit will be part of an organisation wide work programme of transformational change, including a whole of council programme of improved business, team and performance planning. These organisational changes will support improved Māori responsiveness across all parts of the council including local boards.

Māori impact statement

40. This report responds to the recommended actions in the Independent Māori Statutory Board’s 2015 Te Tiriti o Waitangi Audit Report. The Treaty Audit process is an important part of ensuring that the council is meeting its statutory and Te Tiriti based obligations toward Māori. The council is committed to improving its performance across the areas identified in the 2015 Treaty Audit and to improving our responsiveness to Māori.

Implementation

41. The council’s transformation director, has oversight of the Treaty Audit response work as part of the Effectiveness for Māori work programme. The Effectiveness for Māori programme team includes senior staff from Te Waka Angamua, Communications and Engagement, Organisational Development, Legal, Internal Audit, Risk and Governance. Individual actions in the audit response programme will be the responsibility of identified business owners so that improved effectiveness for Māori is a transformational change owned and supported by the whole of council.

Attachments

No.	Title	Page
a View	Appendix A Te Tiriti Audit Response High Level Work Programme 2015-2018	69
b View	Appendix B Te Tiriti Response High Level Work Programme 2015-2016	71
c View	Appendix C IMSB advice on monitoring and reporting	73

Signatories

Authors

Deborah James - Executive Officer

Sarah Howard - Manager Effectiveness for Maori

Authorisers

Johnnie Freeland - Paearahi Matua - Manager

Phil Wilson - Governance Director

Patricia Reade - Transformation Director

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

20 August 2015

Māori Transformational Activity and Expenditure Report - Quarter Four

File No.: CP2015/14809

Purpose

1. This report provides the fourth quarter results for the 2014/2015 activity and expenditure to progress 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:

· 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 final quarter results show expenditure of $3,627,659 against a budget of $3,867,472. The majority of expenditure is in the Māori Cultural well-being budget. The largest expenditure was on Mana Whenua capacity Contracts $950,000 and Marae Development $765,000.

5. Year to date (YTD) expenditure for the final quarter was $5,631,735 against an YTD budget of $5,995,664. The majority of the variance of $363,928 can be attributed to underspend in Māori cultural well-being expenditure. The result is within a seven percent variance of overall budget.

6. Activities and budgets contributing to achieving the Māori transformational shift are assessed on the basis of criteria developed for this purpose (the Māori transformational shift activity criteria). At the start of 2014/2015 the Māori transformational shift activity budget was $5.9 million. During the year, other projects that met the Māori transformational shift activity criteria were identified, which has increased the final 2014/2015 budget to $5,996 million.

Recommendation/s

That the Finance and Performance Committee:

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

Discussion

7. The majority of Māori transformational initiatives commenced in the first quarter of 2014/2015. The final quarter results show expenditure of $3,627,659 against a budget of $3,867,472.

8. Two additional projects identified as meeting the Māori Transformational Shift criteria during the 14/15 Annual Plan cycle have been identified in Whai Painga - Māori Social Well-being:

· Te Whare Wananga o Owairoa is located within the Emilia Maud Nixon Garden of Memories. The whare wananga is a community facility focused on celebrating the cultural and educational heritage of Tainui waka and Ngai Tai ki Tāmaki and encompasses the whare (Matariki), the whare taonga (Museum) and the rear garden known as the Tainui Garden of Memories.

· A contract between Te Ora o Manukau and Community Development Arts and Culture (CDAC) to deliver programmes targeting Māori communities.

Summary of Fourth Quarter 2014/15

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

Māori Transformational Shift Activity	June 2015 YTD
OPEX	Budget	Actuals	Variance
Māori Economic Well-being	$153,000	$228,371	($75,371)
Māori Cultural Well-being	$5,019,273	$4,530,239	$489,034
Māori Social Well-being	$301,391	$237,922	$63,469
Effectiveness for Māori	$302,000	$417,203	($115,203)
Treaty of Waitangi Settlements	$220,000	$218,000	$2,000
OPEX TOTAL	$5,995,664	$5,631,735	$363,929

Table 1

Summary of Whai Rawa - Māori Economic Well-being expenditure

10. Year to date expenditure date reflects an overspend of $75,371. Costs associated with this budget include the ongoing development of a Māori Signature Event, led by Auckland Tourism, Events and Economic Development (ATEED), a joint initiative with mana whenua and potentially the private sector regarding the revitalisation of waka culture in Auckland and other various initiatives to identify and strengthen Auckland Council’s knowledge and contribution in the Māori economic development arena.

Māori Economic Well-being	June 2015 YTD
OPEX	Update	Annual Budget 2014/15	Actuals
Māori Economic Development Programme	Ongoing programme to build council’s understanding, knowledge and role in the Māori economic development arena. Joint initiative with mana whenua and the private sector regarding the revitalisation of waka culture as a way to strengthen Māori well- being and identity in Auckland.	$100,000	$197,000
Development of a signature Māori event	ATEED have undertaken 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 a further commitment to this event in the Long-term Plan	$53,000	$31,371
COUNCIL OPEX TOTAL		$153,000	$228,371

Table 2

Summary of Whai Tiaki- Māori Cultural Well-being expenditure

11. The final quarter results show expenditure of $3,627,659 against a budget of $3,867,472. The majority of expenditure is in the Māori Cultural well-being budget. The largest expenditure was on Mana Whenua capacity Contracts $950,000 and Marae Development $765,000.

12. Ngāti Whatua Orakei Joint Management Reserve Boards Annual funding cycle is now complete. The work programmme enables employment and the opportunity to exercise kaitiakitanga. It includes a contract with the Ngāti Whauta Orakei Whai Maia Limited business unit, Toki Taio, who undertake the maintenance works – this is ongoing and performing well. Funding also provides for a whanau centered kaitiaki service over the summer from December to April. In addition, the Okahu Catchment Education and Restoration Programme (OCERP) is also serviced by this funding.

13. A marae needs analysis focusing on the needs of 31 Mataawaka and Mana Whenua marae has been completed. The report will provide data to inform Auckland Council’s resource contribution to marae development and future priority setting. Marae funding for 2014/2015 totaled $765,000. This figure includes committed expenditure and monies spent during the 2014/2015 Annual Plan cycle. Six marae secured Auckland Council grants ranging from $50,000-150,000. Work is underway for the 2015/2016 marae funding cycle.

14. Council support for Matariki events for 2014/2015 is complete. This year's festival included over 100 events, including a mixture of council led and community supported activities and events. Highlights included a sell-out season of Shakespeare's Romeo and Juliet in Te Reo Māori, the 2°s Kapa Haka Super 12s event on the Auckland waterfront, and traditional reed waka making. The regional event fund also contributed $20,000 towards Matariki on the Move, where performing artists travel across the region to perform in local communities.

15. Southern Local Boards Marae Assistance Funding is now completed. Funding grants totaling $83,000 were made to marae within the Southern Local Board Areas. There is an under spend of $61,000. Funding structure (the fund is split across six local boards), local boards grant allocation decisions and limited applications have contributed to the underspend.

16. A total of $323,000 was awarded within the Papakāinga Grants Programme for the 2014/2015 financial year. The grants programme covers a range of regulatory costs including development contributions. Inquiries resulted in two formal grant applications being received and approved by council.

17. Mana whenua remain committed to involvement in Hauraki Gulf Marine Spatial Planning (MSP). Good progress has been made but the complexity of the challenge coupled with the LTP prioritisation processes has required an extension of the timeline for plan delivery. As such, aspects of the project have slowed while its process and timeline are reviewed. The review is expected to be complete by late July early August and will also cover off issues that have been raised by mana whenua.

Māori Cultural Well-being	June 2015 YTD
OPEX	Update	Annual Budget 2014/2015	Actuals
Matariki	Council supported Matariki events for 2014/15 completed. Please refer to narrative above.	$141,000	$141,000
Waitangi Day	Waitangi Day events were held at Okahu Bay Park, Sir Barry Curtis Park and Hoani Waititi Marae.	$177,875	$166,500
Ngāti Whatua Orakei Reserves Board	Operational and maintenance costs of the agreed work programme for the reserves.	$707,421	710,000
Waiomanu Reserve – Co-management	This committee is working well and making some significant decisions about the reserve. The committee appreciate that decision- making has been supported by Council and the Franklin Local Board. The underspend was due to a delayed works programme	$50,738	$20,000
Pūkaki Tapu O Poutukeka Historic Reserve, Pukekiwiriki and Associated Lands Co-management	This is a full governance arrangement between the iwi and the Papakura Local Board. The Management Plan is completed for Pukekiwiriki.and a Action plan for works is underway. The complexities of the Agreement have resulted in slow decision- making to initiate projects. This has resulted in significant underspend in Papakura Local Board Budget	$152,213	$42,000
Pukekiwiriki Reserve – Co-management	Board meeting costs	$30,478	$17,056
Parakai Recreation Reserve Co-management agreements - local parks	Operational and maintenance costs of the agreed work programme for the reserves	$53,000	$53,000
Mana Whenua Capacity Contracts	Contracts all signed. Iwi currently drawing down on funds. As a way to make the process efficient the contracts have a two year duration period. Funding is $950,000 p.a. across the 19 mana whenua groups. Contract renewals are due 2016.	$950,000	$950,000
Papakāinga Development	Papakāinga grants totaled $323,000 for the 14/15 financial year. The grants covered a range of regulatory costs including development contributions.	$500,000	$323,000
Marae Development	Please refer to section 13	$740,000	$765,000
Kaitiakitanga Programme	A mana whenua chairs working group has been convened to establish a Regional Mana Whenua Forum to enable strategic leadership level engagement between mana whenua, council and central government on matters of significance for Auckland. Collaboration and research in conjunction with Landcare in relation to Wai Ora Wai Mauri . The production of iwi maps as a way to improve Auckland Council engagement process	$100,000	$60,000
Marae Needs Analysis	A marae needs analysis has been completed. Please refer to section 16	$118,000	$143,000
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. Any daylighting options are subject to the successful completion of upstream separation works of Bastion Point to reduce the frequency of wastewater overflows The separation works of Bastion Point are programmed for the 2015/16 financial year.	$270,000	$165,335
Marine Spatial Plan	Please refer to section 18.	$50,000	$57,363
Māori Heritage Programme	Pilot project underway with iwi on new sites of significance. Iwi engaged and completed review of 3600 sites of value as evidence for PAUP hearings. Specialist skills procured Year 1 of the ten year programme completed.	$770,000	$766,811
Southern Local Boards – Marae Assistance Fund	The funding round is now complete. Six marae received funding.	$144,000	$83,000
Hoani Waititi Marae Property maintenance contract	Council’s funding cycle completed on the agreed work programme	$64,548	$67,175
COUNCIL OPEX TOTAL		$5,019,273	$4,530,239

Table 3

Summary of Whai Painga - Māori Social Well-being expenditure

18. The Māori programmes funding managed by Community Development Arts and Culture (CDAC) has contributed to a number of Māori focused events including Matariki and Waitangi Day events. A contract with Te Ora Manukau for $90,000 that supported the design and delivery of CDAC initiatives related to Māori is now complete.

19. The Māori Sport and Recreation Plan is currently in development, following feedback from Māori communities gained last year. No costs beyond engagement were incurred during the 2014/2015 Annual Plan cycle hence the $30,000 underspend.

20. Arts and Culture led Māori Programmes budget contributed to community based Matariki and Waitangi Day events across the Auckland region. The majority of the budget of $81,180 was utilised as shown in table 4.

21. Te Whare Wananga o Owairoa is located within the Emilia Maud Nixon Garden of Memories. The whare wananga is a community facility focused on celebrating the cultural and educational heritage of Tainui waka and Ngai Tai ki Tāmaki and encompasses, the whare (Matariki), the whare taonga (Museum) and the rear garden known as the Tainui Garden of Memories. Community education programmes are delivered by staff with the support of Te Roopu Awhina o Wairoa Trust, a community volunteer based organisation. Te Roopu Awhina has played a critical role in finishing the whare Matariki for its opening last year.

Māori Social Well-being expenditure	June 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	Contract between Te Ora o Manukau and CDAC to deliver programmes targeting Māori communities completed.	$90,000	$90,000
Te Whare Wananga o Owairoa	Community facility that provided Māori education programmes for local schools and community and celebrates the cultural heritage of Tainui waka and Ngai Tai ki Tāmaki.	$26,623	$32,773
Māori Sport and Recreation Plan/framework is	Staff have met with Māori communities to gauge what are their focus areas of sports and recreation. The development of Māori Sport and Recreation Plan/framework is currently in development. No costs beyond engagement were incurred in the 2014/2015 financial year	$30,000	$0
Mataawaka Networks	Working with mataawaka networks and local boards to design and establish better ways to engage with mataawaka. Engagement costs absorbed by local board 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	$81,000
COUNCIL OPEX TOTAL		$301,391	$237,922

Table 4

Summary of Whai Tika - Effectiveness for Māori expenditure

22. There is an $115,203 overspend in Māori Effectiveness. This reflects the council’s funding for initiatives reported below; internal policy development to respond to the Treaty Audit (this is reported as separate agenda item to the Finance and Performance Committee) and an independent evaluation of council’s Māori Responsiveness Planning processes to assist this moving forward.

23. Work continues in the delivery of Ngā Kete Akoranga – Māori Responsiveness Learning and Development programme. Final YTD expenditure is $67,703 which includes foundational courses, the introduction of digital learning platforms and an analysis of links between the level of uptake of te reo Māori and the rollout of Māori Responsiveness Plans.

24. Te Waka Angamua are working with People and Capability to strengthen Māori employment opportunities, including the identification of structural barriers that may be limiting opportunities for Māori to secure employment at Auckland Council.

25. The Māori Responsiveness Planning/ Treaty Audit Response is ongoing. Four pilot plans have been completed and externally evaluated to gauge where improvements are needed going forward. Rollout of Māori Responsiveness Plans throughout the organisation will be a high priority in Council’s response to the 2015 Treaty Audit.

26. Auckland Council’s chief executive leads the Māori Responsiveness Executive Leadership group which includes council’s executive leadership team and the chief executives of council’s substantive CCOs and the IMSB. This group has oversight over the Te Toa Takitini structure and work programme to embed improved Māori responsiveness across whole of council family to:

· achieve progress on the Māori transformational shift;

· uplift Māori well-being; and

· achieve better outcomes with Māori.

27. The Te Toa Takatini establishment phase is completed. Te Toa Takatini’s strategy and five work programme are being implemented across the Auckland Council family.

28. 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. This can be been at many of our building renewal workspaces and public buildings. Two recent examples include the Te Pātaka Kōrero o Te Hau Kapua (Devonport Library) and the Waiheke Community Library renewals.

Effectiveness for Māori Programme	June 2015 YTD
OPEX	Update	Annual Budget 2014/2015	Actuals
Māori Responsiveness Learning and Development	Please refer to paragraph 23	$100,000	$67,703
Māori Responsiveness Treaty Audit Response	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. Budget used to achieve deliverables in relation to the Treaty Audit Establishment of Te Toa Takatini Leadership Strategy The production of iwi maps as a way to improve Auckland Council engagement process	$202,000	$349, 500
COUNCIL OPEX TOTAL		$302,000	$417,203

Table 5

Summary of Whai Tahinga -Treaty of Waitangi Settlements expenditure

29. The Treaty Settlement Manager leads council’s engagement in Treaty settlement negotiations with the Crown and iwi. This has included Marutūāhu Iwi, Ngāi Tai ki Tāmaki, Te Ākitai, Waiohua, and negotiations related to the Kaipara Harbour. The Treaty Settlement Programme is ongoing and will develop as the Treaty settlements landscape evolves.

30. As a key decision-making body the Maunga Authority has been in place for one year and meets on a monthly basis. During this foundation year, considerable progress has been made to established core systems, processes and resources.

31. Some of the Maunga Authority’s decisions to date include:

• publicly notifying the intention to create an Integrated Management Plan that applies to the entire network of Tūpuna Maunga;

• establishing a smoke and alcohol-free policy over the Tūpuna Maunga; and

• establishing a set of Tūpuna Maunga values, which act as guiding principles for management decisions made in relation to the maunga.

Treaty of Waitangi Settlements	June 2015 YTD
OPEX	Update	Annual Budget 2014/15	Actuals
Treaty Settlements Work Programme	Treaty Settlement Programme ongoing	$220,000	$218,000
COUNCIL OPEX TOTAL		$220,000	$218,000

Table 6

Annual Plan 2014/2015 Māori Priority Project Area update

32. 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.

33. 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.

34. 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)

Māori Priority Project Areas	Update	Budget	Actuals YTD Jun 2015
Major Event Contributes to Māori Economic Well-being	ATEED continues to facilitate the design and development of a signature Māori event according to its Statement of Intent 2014/15 and the 2013-2016 Letter of Expectation for ATEED. ATEED has facilitated an engagement period with mana whenua that began in November 2014, and included a collective hui with iwi leadership hosted by ATEED on 9 March 2015. In Quarter three of 2014/2015, ATEED contracted external expertise to facilitate this Māori engagement about the development of a signature festival rather than a one off event. Following this hui, ATEED has undertaken 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	$31,600
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 1) are now complete. Mana whenua and AT are working together on investigating koiwi and taonga internment from this stage of works. The Cultural Values Assessment for Mokoia Pa, a site of significance principally for Ngāti Paoa is now finalised for inclusion in the NOR. The new road at AMETI, Te Horeta, named by mana whenua was opened on 1 November with a site blessing. Engagement with the eight mana whenua tribes is focused on signage for the Tainui Springs and Van Damme’s Lagoon works. Dominion Road Ngāti Te Ata, Ngāi Tai ki Tamaki, Ngāti Whātua o Orākei, Ngāti Maru and Ngāti Tamaoho worked with the Dominion Road project team on the implementation of the Cultural Landscape Concept that they designed. 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 was opened on 5 June 2015. 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 & Mill Road Hui on East-West are continuing with mana whenua in a process now led by NZTA. Discussions were centred on the selection of the route options. Final documentation for Mill Road, including a 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 lodgement and are to be kept 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 1, and appropriate cultural mitigation measures such as cultural monitoring and landscape design for inclusion in consent conditions. Current focus for mana whenua is on thematic overview of Māori Urban Design opportunities across all stages, stage 1 design opportunities will be developed first. 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 1, and appropriate cultural mitigation measures such as cultural monitoring and landscape design for inclusion in consent conditions. Current focus for mana whenua is on thematic overview of Māori Urban Design opportunities across all stages, stage 1 design opportunities will be developed first. 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 viewshafts 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. Resource consent requirements, particularly regarding stormwater, and Cultural Impact Assessment triggers under the Proposed Annual 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 A brochure outlining the changes to the new bus network for the Hibiscus Coast (Whangaparaoa/Orewa areas) was translated into te reo Māori by a licensed te reo Māori interpreter. 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 lodgement. 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 Since September 2014, a number of hui have been held with mana whenua (including sites visits), on the Newmarket Level Rail Crossing. Stormwater issues and Māori Urban Design for the bridge have been raised by mana whenua for consideration in the assessment of options and next steps. 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 Two pre-engagement hui in Manukau and Orewa were held with mana whenua on reviewing the Regional Land Transport Plan (RLTP) for incorporation into the Long Term Plan and setting priorities for funding projects for 2015 onwards in May 2014. Thirteen mana whenua groups were represented at the two hui where mana whenua were invited to contribute to the priorities prior to formal engagement in early 2015. 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. Te Wiki o te reo Māori Te Wiki o te reo Māori (Māori Language week) was held nationally from 21-27 July 2014. AT’s contribution to the week was a daily kupu o te rā (a transport related word of the day) that was handed out to commuters at key train and bus stations. Kapa haka was performed at the stations, the week beginning with a performance at Britomart with pork and puha soup served to commuters. Decals in te reo Māori were also placed on the floor at train stations. 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. Māori Image Gallery A Māori professional photographer was commissioned to provide Māori images for AT’s photographic library. These images covered AT activities including walking and cycling, public transport (ferry, train and bus), and Māori Urban Design. A selection was included in AT’s Annual Report 2014. 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. AT’s Statement of Intent Shareholder comment on the AT’s Statement of Intent (SOI) requested the inclusion of a KPI for Māori engagement. Senior management are leading discussions with mana whenua on a suitable KP Transport Day with Mana Whenua In July 2014, AT established a Transport Day with mana whenua (kaitiaki) who meets one day a month. Projects present to hui participants, and input and feedback is received from mana whenua. Further engagement occurs outside the Transport Day on projects. Resourcing for 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. AT senior staff participated in the PWC review/Treaty of Waitangi Audit of AT’s contribution to Auckland Plan Māori Outcomes and are waiting on the release of the findings and recommendations. 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). A te reo Māori digital book using an App based platform on i-tunes and google play is being developed release during Te Wiki o te reo Māori week (Monday 27 July 2015). This bilingual book is based on a whānau taking a train journey from Pukekohe to Eden Park discovering the Māori history of Auckland and original Māori placenames along the way. The book is a collaboration with Kiwa Digital, Pukekohe North School, COMET Auckland, ATEED, Duco Events and NRL	$1,000,000	$1006,100
The Southern Initiative (TSI)^{^[3]} 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 and Pasifika Trades Training – central government contract over three 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 completed with iwi on identifying 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 GIS co-ordination of mapping sites. PAUP Hearings Council prepared evidence in general support of Mana Whenua provisions in the PAUP: Treaty settlement land, Māori purpose zone, Sites and places of Significance to Mana Whenua overlay and Sites and places of value to Mana whenua overlay, cultural impact assessment, accidental discovery protocols (koiwi) Cultural Impact Assessment (CIA) Facilitating a working group to address implementation issues regarding the CIA provisions in the PAUP. 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^{^[4]} $150,000	$1,197,690 $367,879

150k represents the estimated cost at the commencement of the financial year. Additional budget is being sought to cover the cost overrun in relation to this item
Tāmaki Transformation Programme^{^[5]} 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. This work now part of the needs assessment work below as part of the master plan for the Marae. 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 master plan will commence once the Ruapotaka Marae needs assessment is received. The budget number is likely to be spent - not all prior to financial year end as the final master plan requires the needs assessment to be completed. 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. 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. . This work has paused due to the Crown’s upcoming consultation process with mana whenua around the transfer of assets and land from Housing NZ to TRC and the Ngati Whatua litigation process. 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 $200k 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. Two key projects – one on the supply side which is being led by Community Housing Aotearoa and on the demand side which is being led by Nga Iwi Katoa/COMET. TRC has also completed designs and received TRC Board sign off to implement an intergenerational housing design in Fenchurch Neighbourhood – first papakainga type housing in an urban setting. Site excavation to start in December 2015.	$420,000	$233,600 (Total) $53,600 No spend this Q4 as work now wrapped up in Master Plan work. $90,000 $70,000 $20,000
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 reviewed. The cost of the daylighting options range between $0.5 million and $1.5 million (excluding landscaping and amenity works). A business case document is currently being prepared as part of the Gateway documentation requirements. Any daylighting options are subject to the successful completion of upstream separation works of Bastion Point to reduce the frequency of wastewater overflows. The detailed design for the separation works is nearing completion subject to additional geotechnical investigation to support the resource consent application. The separation works of Bastion Point are programmed for the 2015/2016 financial year. Expenditure to date has been lower than forecast due to the majority of the work being completed May and June 2013/2014.	$270,000	$ 165,331

Māori Priority Project Areas

Update

Budget

Actuals YTD Jun 2015

Major Event

Contributes to Māori Economic Well-being

ATEED continues to facilitate the design and development of a signature Māori event according to its Statement of Intent 2014/15 and the 2013-2016 Letter of Expectation for ATEED.

ATEED has facilitated an engagement period with mana whenua that began in November 2014, and included a collective hui with iwi leadership hosted by ATEED on 9 March 2015. In Quarter three of 2014/2015, ATEED contracted external expertise to facilitate this Māori engagement about the development of a signature festival rather than a one off event.

Following this hui, ATEED has undertaken 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

$31,600

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 1) are now complete. Mana whenua and AT are working together on investigating koiwi and taonga internment from this stage of works. The Cultural Values Assessment for Mokoia Pa, a site of significance principally for Ngāti Paoa is now finalised for inclusion in the NOR. The new road at AMETI, Te Horeta, named by mana whenua was opened on 1 November with a site blessing. Engagement with the eight mana whenua tribes is focused on signage for the Tainui Springs and Van Damme’s Lagoon works.

Dominion Road

Ngāti Te Ata, Ngāi Tai ki Tamaki, Ngāti Whātua o Orākei, Ngāti Maru and Ngāti Tamaoho worked with the Dominion Road project team on the implementation of the Cultural Landscape Concept that they designed. 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 was opened on 5 June 2015.

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 & Mill Road

Hui on East-West are continuing with mana whenua in a process now led by NZTA. Discussions were centred on the selection of the route options. Final documentation for Mill Road, including a 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 lodgement and are to be kept 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 1, and appropriate cultural mitigation measures such as cultural monitoring and landscape design for inclusion in consent conditions. Current focus for mana whenua is on thematic overview of Māori Urban Design opportunities across all stages, stage 1 design opportunities will be developed first.

Walking and Cycling (Glen Innes to Tāmaki Drive)

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 viewshafts 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. Resource consent requirements, particularly regarding stormwater, and Cultural Impact Assessment triggers under the Proposed Annual 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

A brochure outlining the changes to the new bus network for the Hibiscus Coast (Whangaparaoa/Orewa areas) was translated into te reo Māori by a licensed te reo Māori interpreter.

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 lodgement. 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

Since September 2014, a number of hui have been held with mana whenua (including sites visits), on the Newmarket Level Rail Crossing. Stormwater issues and Māori Urban Design for the bridge have been raised by mana whenua for consideration in the assessment of options and next steps. 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

Two pre-engagement hui in Manukau and Orewa were held with mana whenua on reviewing the Regional Land Transport Plan (RLTP) for incorporation into the Long Term Plan and setting priorities for funding projects for 2015 onwards in May 2014. Thirteen mana whenua groups were represented at the two hui where mana whenua were invited to contribute to the priorities prior to formal engagement in early 2015. 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.

Te Wiki o te reo Māori

Te Wiki o te reo Māori (Māori Language week) was held nationally from 21-27 July 2014. AT’s contribution to the week was a daily kupu o te rā (a transport related word of the day) that was handed out to commuters at key train and bus stations. Kapa haka was performed at the stations, the week beginning with a performance at Britomart with pork and puha soup served to commuters. Decals in te reo Māori were also placed on the floor at train stations.

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.

Māori Image Gallery

A Māori professional photographer was commissioned to provide Māori images for AT’s photographic library. These images covered AT activities including walking and cycling, public transport (ferry, train and bus), and Māori Urban Design. A selection was included in AT’s Annual Report 2014.

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.

AT’s Statement of Intent

Shareholder comment on the AT’s Statement of Intent (SOI) requested the inclusion of a KPI for Māori engagement. Senior management are leading discussions with mana whenua on a suitable KP

Transport Day with Mana Whenua

In July 2014, AT established a Transport Day with mana whenua (kaitiaki) who meets one day a month. Projects present to hui participants, and input and feedback is received from mana whenua. Further engagement occurs outside the Transport Day on projects. Resourcing for 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.

AT senior staff participated in the PWC review/Treaty of Waitangi Audit of AT’s contribution to Auckland Plan Māori Outcomes and are waiting on the release of the findings and recommendations.

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).

A te reo Māori digital book using an App based platform on i-tunes and google play is being developed release during Te Wiki o te reo Māori week (Monday 27 July 2015). This bilingual book is based on a whānau taking a train journey from Pukekohe to Eden Park discovering the Māori history of Auckland and original Māori placenames along the way. The book is a collaboration with Kiwa Digital, Pukekohe North School, COMET Auckland, ATEED, Duco Events and NRL

$1,000,000

$1006,100

The Southern Initiative (TSI)^{^[3]}

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 and Pasifika Trades Training – central government contract over three 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 completed with iwi on identifying 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

GIS co-ordination of mapping sites.

PAUP Hearings

Council prepared evidence in general support of Mana Whenua provisions in the PAUP: Treaty settlement land, Māori purpose zone, Sites and places of Significance to Mana Whenua overlay and Sites and places of value to Mana whenua overlay, cultural impact assessment, accidental discovery protocols (koiwi)

Cultural Impact Assessment (CIA)

Facilitating a working group to address implementation issues regarding the CIA provisions in the PAUP.

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^{^[4]}

$150,000

$1,197,690

$367,879

150k represents the estimated cost at the commencement of the financial year. Additional budget is being sought to cover the cost overrun in relation to this item

Tāmaki Transformation Programme^{^[5]}

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. This work now part of the needs assessment work below as part of the master plan for the Marae.

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 master plan will commence once the Ruapotaka Marae needs assessment is received.

The budget number is likely to be spent - not all prior to financial year end as the final master plan requires the needs assessment to be completed.

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.

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. . This work has paused due to the Crown’s upcoming consultation process with mana whenua around the transfer of assets and land from Housing NZ to TRC and the Ngati Whatua litigation process.

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 $200k 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.

Two key projects – one on the supply side which is being led by Community Housing Aotearoa and on the demand side which is being led by Nga Iwi Katoa/COMET.

TRC has also completed designs and received TRC Board sign off to implement an intergenerational housing design in Fenchurch Neighbourhood – first papakainga type housing in an urban setting. Site excavation to start in December 2015.

$420,000

$233,600

(Total)

$53,600

No spend this Q4 as work now wrapped up in Master Plan work.

$90,000

$70,000

$20,000

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 reviewed. The cost of the daylighting options range between $0.5 million and $1.5 million (excluding landscaping and amenity works). A business case document is currently being prepared as part of the Gateway documentation requirements. Any daylighting options are subject to the successful completion of upstream separation works of Bastion Point to reduce the frequency of wastewater overflows. The detailed design for the separation works is nearing completion subject to additional geotechnical investigation to support the resource consent application. The separation works of Bastion Point are programmed for the 2015/2016 financial year. Expenditure to date has been lower than forecast due to the majority of the work being completed May and June 2013/2014.

$270,000

$ 165,331

Table 7

Local Board views and implications

35. 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

36. 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

37. 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

Author

Shane Cook - Kaihautu Whakatuturu Puni - Senior Maori Effectiveness Advisor

Authorisers

Johnnie Freeland - Paearahi Matua - Manager

Phil Wilson - Governance Director

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

20 August 2015

IS Transformation Programme and NewCore Project Update

File No.: CP2015/14266

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 30 June 2015.

Executive Summary

2. The Long-term Plan includes $183 million of efficiency savings for the 2014/2015 financial year, plus new savings of $41 million totalling $224 million in 2015/2016. Total savings of $2.74 billion are forecast over the 10 year budget.

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 projects being completed, and other 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.

6. NewCore is progressing well and remains forecast to be completed on time and on budget. Specific commentary on progress to date:

· On track to achieve Quality Assurance (QA) gate to move into end to end testing (SIT) on 3 August.

· The project has been able to deliver some reports early through our Enterprise Data Warehouse and Business Intelligence solution (EDW/BI) which are delivering value now.

· There have been some issues with progress on consenting projects, but these are under control, and the corrective actions and plan are effective.

· We are looking at options to bring the last go live forward which will enable:

§ Benefits being delivered earlier;

§ Reduced costs for the programme;

§ Enable follow on initiatives, especially digital, to be delivered earlier.

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

7. To date there has been strong progress across the transformation programme with a number of key projects completed as provided tabled previously to this committee.

Projects in Progress

8. 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 server infrastructure resulting in lower operating costs, lower operational risk and stronger platform for technology enhancement projects. The first phase of co-locating all servers into the primary data centre has been completed. Work is now underway to uptimes the format and number of servers to be utilised going forward. To date over 2500 servers have been rationalized down to 1500.
SAP future proofing upgrade and digital ecommerce platform	Life cycle management reducing impact to NewCore project midstream and allowing multi-channel online transactions. The migration to the new SAP technology platform has been successfully completed. The core e-commerce platform has been installed and is now being configured in order to enable the delivery of on line transactional services.
Network consolidation	Consolidation of IS network infrastructure resulting in lower operating costs, lower operational risk and stronger platform for technology enhancement projects. Phase 1 of the programme has been completed to optimize the network between primary office locations. Work is now underway to remediate and optimise the data and telephony network to other council locations across the region.
Workplace Strategy	Support of new working practices through technology deployment allowing for greater mobility of workforce.
Building Control Mobile Enablement	Develop and implement mobile field working capability for building control inspections. Phase 1 of the project has been implemented successfully within the CBD area of operation. Planning is on track to rollout the technology across the rest of the region.
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 of the legacy GIS systems into a single version. GFMO (Geospatial Future Mode of Operation) is approximately 80 % complete. Recent deliverables include the rollout of the new internal viewer to over 800 staff. This process will continue over the coming weeks across council. Planning is underway to deliver the external viewer, together with the decommissioning of the legacy systems prior to the end of the year.
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. Work is progressing on the reporting structures. Activities are on track for a delivery in late August/early September.

NewCore detailed discussion

9. 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 June 2015

10. As of end June Project % actual: 56 % v plan target 60 %. The 4% difference equates to approximately two weeks.

11. As of July this has been brought back to 61% actual versus 63% plan. This is well within the variance range you would expect to see in a large transformational programme like NewCore.

12. Summary of key activity and achievement in the last quarter are:

· Selected EDW/BI reports have been released early:

§ Dual maintenance reports for Manukau following their migration last year to Pathway.

§ Customer Services reports – enhanced reporting providing the ability to report on additional data not available in current reports such as root cause analysis, triggers, detailed description etc. Removes the need to manually combine reports from old legacy Council systems saving considerable time.

· Property and Consent sprints (agile design and build) progressing.

· Systems testing commenced and progressing well for Contact to Request, Lodge to Issue (Licensing), Monitor to Enforce (Licensing), Value to Rate and Credit to Cash. System testing for Property Capture to Inform slightly delayed. System testing for Lodge to Issue (Consenting) and Monitor to Enforce (Consenting) is behind schedule but a plan in place to address and manage.

· Data Governance forum successfully running and making effective decisions around data to be migrated from the legacy councils. Examples include rules for customer deduplication and handling of open infringement notices.

· Solution for Records and Document Management is agreed and on track for ‘go live’ in June 2016.

· Business impacts as a result of the new future state design have been identified and reviewed with the respective businesses. From these a more detailed action and change plan is prepared.

· Training needs analysis work commenced and progressing to plan.

· Executive Steering Committee risk review session that was facilitated by Westpac Group CIO who led the successful SAP migration for Commonwealth Bank of Australia. Learnings are in the process of being applied. These include:

§ Relooking at our SIT (end to end testing) cycles and adjusting to reflect the risk based approach to testing and known issues resulting from unit testing and system testing.

§ Investigation and option analysis for Data Governance forum moved under NewCore programme to help provide focus as all of the current requirements are driven by NewCore.

§ Relooking at June 17 go live to see if this can be bought forward. Key challenge is Rates and we are working this through with various teams and looking to have a recommendation by late August.

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

· Have signed a new commercial agreement with SAP that moves the Property and Consenting activities from a time and material commercial relationship to a fixed price agreement effective from 1 April 2015. This is a key outcome from our Delivery Model review and helps to better allocate delivery and financial risk to those best equipped to manage it.

13. 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. We have now completed test load 6 and are on track.

· 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.

· Consenting Sprints – progress has been slower than planned. We have escalated within SAP and have agreed a new plan that will still enable us to deliver within our timeframes although entry to end to end testing for Consenting only will be delayed. To mitigate we have identified those functions that cover approximately 80% of their activity and these are prioritised. The remaining functions will follow. Note that provision was made into the original project timeframe to accommodate for unavoidable delays.

14. Upcoming significant milestones

· Further release of EDW/BI reports:

§ Animal management, Licensing & Compliance and Consents – combines what were previously reports from each legacy system into a single consolidated report saving significant time and rework, some reports previously only available monthly will now be available daily and further enhanced capabilities to enable more targeted reporting.

· Finalise NewCore “Reset” phase outcomes and benefits, and link these back to original business case.

· 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 2015.

· Commence Rates Cycle 1 testing in early October 2015.

· Commence Change Champion roadshows in July.

· Commence training material preparation in August.

NewCore Project Costs Year to Date and Project Life to Date

15. Current year

· Actual YTD June 2015 $ 42.9m

· Full Year Budget FY14/15 $ 46.7m

16. Whole of Project Life

· Actual Life to June 2015 $ 73.5m

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

Project Completion forecast

17. The forecast cost for full completion of the NewCore Project remains at $156.9m (Capital $150.9m and Opex $6.0m) within the November 2014 approved budget. Please note that:

· The underspend for FY2014/15 has been transferred to FY2015/16 as the variation relates to a timing difference.

· Current detailed re-forecasts show the programme coming in slightly under the $156.9m.

· As an outcome from the Executive Steering Committee Risk Review session we are looking at the potential to bring forward the June 2017 second go-live.

IS Transformation Capital Budgets

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

Consideration

Local Board views and implications

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

Māori impact statement

20. This transformation project is corporate support in nature and Iwi views have not been sought. Nor is it considered there is a specific impact.

Implementation

21. There are no implementation issues

Attachments

There are no attachments for this report.

Signatories

Author

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

20 August 2015

Efficiency Savings Update

File No.: CP2015/15983

Purpose

1. To provide an update on efficiency savings achieved to date and future projections built into the Long-term Plan. The previous update on efficiency savings was in April 2014.

Executive Summary

2. Efficiency means doing the same or more for less. Since merging eight councils into one, we have delivered more new assets and services than ever before while spending less money than anticipated by the legacy councils.

3. We do this knowing that the better and smarter we work, the less need we will have for difficult trade-off discussions with our community.

4. Some of the ways in which we have done this include:

· improved use of enhanced information technology

· better procurement and tendering processes

· bringing more work in-house to reduce our reliance on external providers

· reducing the number of office buildings we occupy

· enhanced commercial management

5. Future targets for efficiency savings have recently been reviewed as part of the adoption of the Long-term Plan 2015-2025 as shown in the following table:

Financial year ending 30 June ($ million)	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Savings from prior year	183	224	243	260	267	274	281	288	295	302
Increase	41	19	17	7	7	7	7	7	7	7
Annual efficiency savings	224	243	260	267	274	281	288	295	302	309

6. Staying on track to deliver the efficiency savings included in the Long-term Plan 2015-2025 remains a challenge. There are also a range of longer-term cost pressures that may need to be addressed. Strong leadership and concerted management effort will be required to deliver the increasing savings each year.

7. The efficiency savings delivered to date are at the upper end of the expectations set during the early discussion on the benefits of regional amalgamation for Auckland. Without these savings, either:

i. general rates and/or user charges would need to be significantly higher, or

ii. significant cuts would be required to both the capital programme and service levels.

Recommendation/s

That the Finance and Performance Committee:

a) receive the Efficiency Savings Update report.

Comments

Scope / Definition

8. For the purpose of this report, “efficiency” refers to delivering the same level of service for a lower cost than budgeted. Therefore the efficiency savings discussed in this report exclude:

· cost savings associated with reduced service levels;

· increases in user charges, the introduction of new revenue sources and/or benefits from PPP structures;

· operational cost savings resulting from the disposals of surplus assets.

Background

Amalgamation expectations

9. Amalgamation of the eight former councils into the new Auckland Council established an expectation of significant efficiency gains from centralising procurement, consolidating IT systems and streamlining both internal and external facing business processes. A report produced for the Royal Commission on Auckland Governance by independent consultants in 2009 addressed the level of efficiency benefits that could be expected through amalgamation^{^[6]}.

10. Based on financial information applicable to the eight individual former councils in 2008/2009, the report concluded that operating expenditure efficiency gains were estimated to lie in the range $67 million to $96 million per annum representing some 5-7 per cent of the costs amenable to efficiencies and 3.5-5 per cent of the total annual operating expenditure undertaken by the Auckland councils. The same report also concluded that capital expenditure efficiency gains range from $28 million to $46 million per annum representing 2-4 per cent of the total annual capital expenditure programmes of the Auckland councils at the time.

11. Financial analysis in that report concluded that the financial savings from amalgamation were expected to significantly outweigh the financial costs of amalgamation, even under the most pessimistic of scenarios. In preparing their financial analysis, the authors assumed that 80% of the potential savings would be realised.

Long-term Plan efficiency savings

12. Building on $81 million of cost savings achieved for the new council’s first full year of operation, the Long-term Plan 2012-2022 (LTP) included $50 million of additional savings for 2012/2013 taking total savings for that year to $131 million. These savings were budgeted to increase to $188 million by 2017/2018.

13. Detailed annual budget reviews undertaken for each of the first three financial years of the LTP have confirmed the achievement of these efficiency savings, despite the need to accommodate additional cost pressures.

14. Future targets for efficiency savings have recently been reviewed as part of the adoption of the Long-term Plan 2015-2025 as shown in the following table:

Financial year ending 30 June ($ million)	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Savings from prior year	183	224	243	260	267	274	281	288	295	302
Increase	41	19	17	7	7	7	7	7	7	7
Annual efficiency savings	224	243	260	267	274	281	288	295	302	309

Financial strategy

15. Along with maximizing returns on investment, selling non-strategic surplus assets, maintaining prudential treasury ratios and moving to fully fund depreciation by 2025, ensuring that all spending is as efficient as possible is a core component of the council’s financial management strategy.

16. Without efficiency savings, either:

i. general rates and/or user charges would need to be significantly higher, or

ii. significant cuts would be required to both the capital programme and service levels.

Source of savings achieved to date

17. A range of initiatives have contributed to achieving the LTP efficiency savings. Over the last few years these initiatives have focused on

· improved use of information technology

· better procurement and tendering processes

· bringing more work in-house to reduce our reliance on expensive outsiders

· reducing the number of office buildings we occupy

· enhancing commercial management

18. Technology changes have allowed us to improve and streamline some of our back office processing areas. This includes the use of scanning technology to improve invoice processing and GPS tracking of fleet vehicles to enable more efficient use of council vehicles.

19. While simpler and better technology has delivered significant savings to date, the full implementation and delivery of benefits associated with consolidating IT platforms and applications has yet to be achieved. That consolidation, with the most significant element to be delivered through the New Core project, will enable the radical transformation of key customer-facing services while reducing the cost to serve each customer.

20. Significant procurement savings have been achieved through commercial negotiations and the consolidation of suppliers and contracts in some high value/opportunity categories including property maintenance, parks maintenance and office consumables.

21. More generally management have also applied widespread targeting of savings in combined staff and consultancy budgets to encourage departments and CCOs to identify more streamlined solutions, primarily for back office support functions.

22. Cost savings have also been achieved in relation to corporate accommodation as we move from seven buildings to three in the CBD.

23. Some initiatives have delivered savings that mitigate inherited and new cost pressures, rather than achieving savings relative to budget. For example, the project to consolidate the council’s data centres and move data storage to “the cloud” was estimated to be $5.4 million per annum cheaper than next best option for meeting the council’s data storage needs. However, because the baseline budget had not adequately provided for these storage needs, the $5.4 million benefit from this project and related initiatives was required to just achieve the existing budget and therefore not available to contribute to delivering the LTP efficiency savings. This project will also provide other benefits in terms of business continuity, lower operational risk and a stronger platform for future technology enhancement projects.

24. Achieving efficiency gains within council’s capital expenditure budgets has tended to focus on maximising value for money on individual projects and programmes, rather than across the board efficiency initiatives. Work is progressing to improve the visibility and consistency of capital expenditure efficiencies. Focus has also been applied to efficient management of interest expenditure through executing step change procurement initiatives such as establishing the Local Government Funding Agency and accessing offshore funding.

25. A detailed schedule of the efficiency savings initiatives we have pursued to date is included as Attachment A.

Planned future savings

26. Staying on track to deliver the LTP efficiency savings remains a constant challenge. Strong leadership and concerted management effort will be required to deliver the incremental savings each year growing to $309 million in 2025, being accumulated savings of $2.74 billion over the ten years of the Long Term Plan 2015 – 2025.

27. In time, changes to the organisation’s culture through “The Way We Work” will foster an environment of continuous improvement that will see staff at all levels of the organisation actively engaged in delivering greater value for money on a day-to-day basis.

28. In the meantime, a range of specific initiatives are in place to enable us to meet the immediate financial challenge. Key initiatives include:

· continued enhancement and streamlining of our back office processing areas as part of the making size work strategy;

· delivery of key technology projects including New Core and the digital rollout to transform our key customer-facing services and reduce cost to serve;

· continuing to bring more work in-house, such as the continued development of an in-house design studio as part of the Communications and Engagement Review, Legal Services, etc;

· strategic procurement to move from opportunistic and tactical procurement to systematically enhancing the end to end procurement process including taking an enterprise approach to planning and identifying opportunities, strategic sourcing and supplier relationship management;

· continued consolidation of corporate office accommodation and fleet;

· shared service opportunities including those with the CCO’s.

29. A detailed schedule of planned future efficiency savings initiatives is included as Attachment B.

Consideration

Local Board views and implications

30. Efficiency savings budgets apply to both local and regional budgets. As efficiency savings are identified at a detailed level, local board budgets may reduce. However, by definition, efficiency savings will not affect local service levels.

Māori impact statement

31. The achievement of efficiency savings may reduce some budgets relating to Māori outcomes, but will not impact the associated service levels or actual outcomes.

General

32. Budget changes related to efficiency savings could be significant under the council’s significance policy, although this is unlikely given that service levels are not impacted.

33. There are no implementation issues as this report is for information only.

Attachments

No.	Title	Page
a View	Efficiency savings initiatives pursued to date	107
b View	Future efficiency savings initiatives	109

Signatories

Author

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

Authorisers

Kevin Ramsay - General Manager Finance

Sue Tindal - Chief Financial Officer

Finance and Performance Committee

20 August 2015

Community Loans and Loan Guarantees

File No.: CP2015/14241

Purpose

1. To update the committee on the status of community loans and community group loan guarantees.

Executive Summary

2. Council provides loans and financial guarantees to various community groups. These are typically incorporated societies, trusts, charities and other community groups. The loans and guarantees vary in size from several thousands to millions of dollars depending on the purpose.

3. There are currently 45 loans to Community Groups of varying amounts, terms and other conditions. Forty one of these loans existed at the time Auckland Council was established in November 2010. Four community loans have been approved by Council since November 2010. A further three loans are administered by Regional Facilities Auckland.

4. Financial guarantees are provided to Community Groups in instances where the group resides on Council owned land and have opted to borrow funds from third party lenders that require security for the loan. Council policy prohibits the charging [mortgaging] of the land, in which case the lenders seek financial guarantees from Council as security for the loan repayment.

5. Two loans relating to Waikato District Council are to be removed from the Auckland Council loans register; details have previously been sent to Waikato District Council to follow up.

6. Two old, irrecoverable loans dating back to circa 1989 (Swanson RSA - $6,000 and Kumeu Community Centre - $18,000) are considered irrecoverable and staff recommend these should be written-off. These loans have previously been fully impaired.

7. Separate reports relating to two large loans where the borrowers (Waitakere Badminton and Herne Bay Ponsonby Rackets Club) are seeking restructuring arrangements will be forwarded to the committee for consideration in future.

Recommendation/s

That the Finance and Performance Committee:

a) note that community loans and loan guarantees are being administered in accordance with the terms and conditions of the loan and guarantee agreements.

b) approve the removal of two loans relating to organisations located in the Waikato District Council region (Kairotahi Community Centre ($5,190), and Aka Aka Hall Society ($6,000)) from the Auckland Council loans register.

c) approve the write-off of two loans considered irrecoverable – Swanson RSA ($6,000) and Kumeu Community Centre ($18,000), noting that both loans have previously been fully impaired and there are no further financial implications for Auckland Council.

d) note that separate reports relating to the restructuring of loans for Badminton Waitakere and Herne Bay Ponsonby Rackets Club will be forwarded to the committee for consideration later in the 2015 calendar year once Council staff have undertaken further review and analysis of the options available.

Discussion

Community Loans:

8. Council provides loans to various community groups. These are typically incorporated societies, trusts, charities and other community groups (together, Community Groups). The loans range in size from several thousands to millions of dollars depending on the purpose.

9. There are currently 45 loans to Community Groups of varying amounts, terms and other conditions. Forty one of these loans existed at the time Auckland Council was established in November 2010. Four new community loans have been approved by Council since November 2010.

10. A further three loans were transferred from Auckland City Council, and consistent with the provisions of the relevant legislation these are under the jurisdiction of Regional Facilities Auckland.

11. Details of all community loans are provided in Attachment A.

12. Loans to Community Groups are typically given in those instances where the group resides on land owned by Council and as such the Community Group is unable to provide security to a third party lender by way of registered mortgage over that land.

13. The interest rate on loans varies depending on the circumstances of the borrower.

14. Loan repayment arrangements vary reflecting the policies of the former Councils in the Auckland region; however, new loans (post November 2010) require repayment of interest and principal on a monthly basis over terms ranging from 5 to 15 years and generally follow a standard set of terms and conditions.

15. Council only approves loans when it is satisfied that all other avenues of fundraising have been exhausted and that the proposed loan facility will provide benefits not only to the Community Group, but also the wider community and it is in the interests of all concerned for the development to proceed sooner rather than waiting for further fundraising activities to be undertaken.

16. In those instances where the Community Group experiences difficulties with repayments, Council staff work with the organisation concerned to develop workable solutions to enable loan repayments to continue, based on the relevant circumstances of that Community Group. Exercising enforcement rights (or calling in the loan) is not an avenue Council has pursued given the fact these loans are "community loans” for the benefit of the community.

Loan Guarantees for Community Groups

17. Council provides financial guarantees to assist Community Groups to secure loans from banks in New Zealand and other lenders.

18. The amounts guaranteed range from several thousands of dollars to millions of dollars. For example:

o Council has provided a loan guarantee in respect of Tennis Northern Inc in respect of its bank borrowings of $138,000.

o Council is proposing to enter into limited guarantee arrangements (up to $6 million) of bonds to be issued to philanthropic investors and charitable trusts by a new community housing funding company, to help support the establishment of third-sector social housing infrastructure.

19. Financial guarantees are typically (although not exclusively) provided to Community Groups in instances where the group resides on Council owned land and have opted to borrow funds from third party lenders that have a requirement of security for the loan. Council policy prohibits the charging (mortgaging) of the land, in which case the lenders seek financial guarantees from Council as security for the loan repayment.

20. Council works closely with the Community Group as well as the lender to ensure that satisfactory checks and all necessary due diligence has been undertaken to minimise the risk of default to the lender and Council.

21. Similar to loans to Community Groups, financial guarantees are provided as a last resort and only after all other avenues of funding have been exhausted. With the exception of the large financial guarantees referred to in paragraph 18 above, the guarantees provided to community based organisations are for lesser amounts and for varying terms.

22. Council currently has obligations for six financial guarantees in favour of Community Groups. Of these, four financial guarantees were carried over from the former councils and a further two have either been renewed or approved as new guarantees by Auckland Council.

23. To date, Auckland Council has not been required to make payments to lenders as a result of defaults by Community Groups.

24. Details of the financial guarantees are provided in Attachment B.

Loans Under Management

25. For the most part, the community loans are performing well, with borrowers making regular repayments in accordance with the provisions of their respective loan agreements.

26. Under the terms of the various loan agreements, repayment arrangements vary from one annual payment, through to quarterly or monthly payments.

27. There are however a number of loans that require more direct intervention from Council staff to ensure principal and interest repayments continue to be made.

28. Most recently in September 2014, the Finance & Performance Committee approved writing off a community loan that was subject to the provisions of the Limitations Act. In April 2015 the balance ($110,000) of a loan to the Mt Albert Grammar School Community Swimming Pool Trust (total $860,000) was forgiven after the Council accepted an offer from the Trust of $750,000 as full and final settlement of the debt.

29. Those loans which have required more direct staff involvement are listed in Attachment A, together with details of the current status of the loan and action being taken in respect of any arrears.

Loans Requiring Action / Decisions

30. As a result of the review of community loans, staff have identified a number of anomalies that require correcting.

31. Two loans in respect of entitles in the Waikato District Council area have been recorded in the Auckland Council loan register. Details of these two loans (Kairotahi Community Centre ($5,190), and Aka Aka Hall Society ($6,000)) have been passed to Waikato District Council to administer and will be removed from the Auckland Council loan register.

32. A loan of $6,000 to the Swanson RSA remains on the register. The records held indicate that there is no requirement for the loan to be repaid, no interest is payable, and no recovery action has ever been undertaken. The loan was approved pre amalgamation in 1989; has already been fully impaired, and is unlikely to be repaid. Staff recommend that the loan be forgiven and removed from the Auckland Council loan register.

33. Likewise, a loan to the Kumeu Community Centre ($18,000) is considered irrecoverable as no recovery action has been undertaken and records of the loan are sketchy. This loan has also been fully impaired and is unlikely to be repaid and should therefore be forgiven/written-off.

34. In summary, two loans need to be written-off (Swanson RSA $6,000; Kumeu Community Centre $18,000), but as both loans have already been fully impaired (provided for as irrecoverable debts) in previous accounting periods there is no impact in the current financial year. Two loans will be struck off of the Auckland Council loans register as these relate to the Waikato District Council area.

Waitakere Badminton Association Incorporated, t/a Badminton Waitakere

35. A request has recently been received from the Waitakere Badminton Association Incorporated, (trading as Badminton Waitakere), seeking Council assistance to restructure its community and other loans (circa $509,000). As work on this request has only just commenced, a separate, detailed report will be prepared and submitted to the committee for consideration after an arrangement has been considered and discussed with the Waitakere Ranges Local Board and Badminton Waitakere.

36. This loan that dates back to pre-1989 amalgamation and requires a significant amount of research to verify the nature of agreements and arrangements that have been entered into over the years in order to ensure a suitable restructured arrangement (if considered appropriate) can be presented to the committee to consider.

Herne Bay Ponsonby Rackets Club Incorporated

37. This Club has also recently written to Council seeking assistance to restructure its community loan of circa $571,000, to ensure it can meet on-going repayment obligations. Consideration of the request, including discussions with the Club and further information gathering, mean that a detailed report will be prepared and submitted to the committee for consideration after an arrangement has been considered, discussed with the Waitemata Local Board and the Club.

Consideration

Local Board Views and Implications

38. As this report was requested by the former Strategy and Finance Committee as an update on the status of community loans and loan guarantees, it has not been considered necessary to seek input from individual or specific local boards.

Māori Impact Statement

39. As this report was requested by the former Strategy and Finance Committee as an update on the status of community loans and loan guarantees, no specific impact on Māori has been identified.

General

40. There is no overall policy covering community loans and loan guarantees. Each request since November 2010 (for either a loan or guarantee) has been considered on a case by case basis and referred to the Finance and Performance Committee (or its equivalent) for consideration after being forwarded to the relevant local board for its recommendation and comment.

41. Local boards do not hold budgets for community loans, and these are currently centrally funded from the Treasury function.

42. Likewise, there is currently no provision for local boards to consider and approve community loan guarantees, primarily on the basis that a decision to incur liabilities of this nature are a Governing Body responsibility to be undertaken in conjunction with Treasury. The opinions of local boards are sought prior to making recommendations to the Governing Body.

43. In February 2015 an application for Auckland Council to be exempt from the provisions of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 was lodged with the Ministry of Justice on the grounds that the organisations Council enters into these arrangements with are low risk; subject to a significant amount of scrutiny; loans and guarantees are infrequent in nature and Council is not in the business of money lending. A response is awaited.

Implementation Issues

44. There are no implementation issues associated with this report.

Attachments

No.	Title	Page
a View	Community Loans	117
b View	Community Loan Guarantees	121

Signatories

Author

Leigh Redshaw - Strategic Funding Advisor

Authorisers

Kevin Ramsay - General Manager Finance

Sue Tindal - Chief Financial Officer

[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] Māori and Pacific Trades Training (MPTT)

This is a contract between Auckland Council TSI Consortium – MBIE Ministry of Business Innovation & Employment & TEC Tertiary Education Commission to support Māori & Pasifika learners to develop skills/training to pathway into employment. Nga Mana Whenua O Tamaki Makaurau are a partner within the consortium.

Ongoing dialogue and support with individual Mana Whenua within TSI area is underway, to engage and recruit their Rangatahi through the programme.

Tamaki Healthy Families Alliance (THFA)

This is a joint project with Alliance Health Plus and Ngā Mana Whenua o Tāmaki Makaurau, funded by the Ministry of Health. The project focuses on making systems-level change to the health eco-system in south Auckland (rather than more front-line delivery of services). The management recruitment for the Healthy Families project has been completed. The establishment and discovery phases, which are expected to be completed by August, include:

• The development of a joint high-level work plan which details how the project will advance over the next nine months.

• Data mapping.

• Service delivery Stocktake

• Stakeholder Identification

[4] The budget for this work sits within the wider budget for the cultural heritage inventory programme. This work is led by the Heritage team.

[5] In terms of spend to date for Quarter 2, is that most expenditure will occur over next 6 months. 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.

[6] Taylor Duignan Barry, 9 February 2009 - “Financial Analysis: Re-organisation of the Councils in the Auckland Region”.

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

Statistics Auckland Council Community Loans
Smallest loan balance		500
Largest loan balance		6,544,550


36 loans less than $100,000: Ave value $19,058		686,083
3 loans between $100-$200,000: Average $124,681		374,042
1 loan of $200,000		200,000
2 loans between $500,000 - $1M		1,063,022
2 loans over $1M approved		10,544,550
Auckland Council		12,867,697
RFA		3,427,511
TOTAL		16,295,208

Balances
Auckland Council		2,342,156
Pending drawdown (Auckland Council)		2,400,000
Combined from legacy councils		8,175,541
RFA		3,427,511

Total		16,295,208

$000	Closing Group Net Borrowing	Group Net Surplus/(Deficit) After Tax	General Rates		Cumulative % rates increase
	2015/2016	2015/2016	2016/2017	% increase	Cumulative % rates increase
Long-term Plan 2015-2025 budget (2015/2016)	7,806,305	226,448	1,488,482		3.2%
August proposal
Release of Albany Off-Street Parking Fund	362	-362	0	0.0000%
Potential Position	7,806,667	226,086	1,488,482		3.2%
Transfers from reserves
Off-street parking		362

Author	Chris Parker - Chief Economist
Authoriser	Sue Tindal - Chief Financial Officer