Agenda of Orākei Local Board

Orākei Local Board

06 August 2015

Auckland Regional Amenities Funding Act (ARAFA) Funding Model Review - Local Board Input

File No.: CP2015/15190

Purpose

1. Auckland Council is undertaking a review of the funding model under the Auckland Regional Amenities Funding Act 2008 (ARAFA Funding Model Review). Feedback from the local boards is sought on the level of change proposed in the options and the impacts on local boards and local communities (if any).

Executive Summary

1. The Auckland Regional Amenities Funding Act 2008 (the Act) established a distinct model for contributing funds to specified regional amenities (regional amenities). This funding model is now under review to consider whether it remains fit for purpose and to identify how it might be improved. The Governing Body adopted Terms of Reference for the review on 26 February 2015.

2. Working closely with representatives of the regional amenities, seven funding model options were generated along a spectrum, ranging from:

· retaining the status quo

· seeking improvements within the existing ARAFA legislative framework

· modifying the existing ARAFA framework by amending legislation, to

· repealing the existing ARAFA framework and replacing it with an Auckland Council policy framework. (The options are discussed in paragraphs 15 - 32)

3. The Finance and Performance Committee endorsed the seven options for evaluation on 18 June 2015. The options will be evaluated against criteria previously endorsed by Finance and Performance on 21 May 2015. (The criteria is discussed in paragraph 14)

4. When viewed across the spectrum, the options shift the role of Auckland Council from influencing decision-making under the Act (by a Funding Board) to becoming the decision-maker itself. The closer Auckland Council becomes to being the decision-maker the more opportunities there are to align the council’s strategic outcomes with those of the regional amenities. The options also incorporate improvements relating to information flows, longer term planning, communications and relationship building.

5. The options are also associated with a progressively increasing volume of further work that would be required to implement them. The implementation of options requiring legislative change is particularly complex. The necessary trade-offs involved will be teased out and considered through the evaluation of the options.

6. The evaluation is to be completed and will be reported to the Finance and Performance Committee on 17 September 2015. The evaluation will identify the preferred option/s which may be a refined version, comprising different elements of the options proposed.

7. Local board feedback is sought on the level of change proposed in the options as set out in this report and the impacts on local boards and local communities(if any).

Recommendation/s

That the Orākei Local Board provides feedback on the level of change proposed in the options and the impacts on local boards and local communities (if any) as an input into the evaluation of options under the Auckland Regional Funding Amenities Act Funding Model Review.

Comments

The Funding Model under the Auckland Regional Amenities Funding Act 2008

2. The Auckland Regional Amenities Funding Act 2008 (the Act) has two purposes; to provide adequate, sustainable and secure funding for specified regional amenities, and to ensure that local government in Auckland contributes funding.

3. The Act came into force prior to amalgamation of Auckland’s former councils. It was designed to ensure that all councils in the region contributed fairly to funding the regional amenities given the amenities operated across and benefited the whole of the Auckland region. It also sought to ensure that qualifying regional amenities remained financially viable.

4. The regional amenities apply each year to a Funding Board for next year’s funding. The Funding Board confers with Auckland Council and prepares and consults on a funding plan, before recommending a levy to Auckland Council for the next financial year. Auckland Council approves the recommended levy and if not, arbitration takes place. The Funding Board subsequently receives the levy and allocates funding to the regional amenities.

5. Auckland Council appoints six of the Funding Board’s 10 members with four members appointed by an Amenities Board, also created by the Act.

6. Only the regional amenities specified under the Act may apply for funding and funding is not available for any part of services or facilities provided outside of the Auckland region. Funding is to contribute towards the operational expenditure that regional amenities must incur and is not available for capital expenditure.

7. The regional amenities must make all reasonable endeavours to maximise funding from other sources. The regional amenities are prohibited from receiving operating funding form Auckland Council, other than via the Funding Board. However, staff are aware that local boards may receive funding requests from groups affiliated with the amenities.

8. The Funding Board and Auckland Council must have regard to the funding principles prescribed in the Act. The Act makes provision for additional funding principles to be adopted.

Regional Amenities

8. The purpose of the Act is to ensure the regional amenities are funded to provide services or facilities that contribute to “the well-being of the whole region” and “towards making Auckland an attractive place to live in and visit”. Organisations that wish to become regional amenities must possess these qualities to satisfy criteria for admission. The Act as enacted specified 10 regional amenities in Schedule 1:

· Auckland Observatory and Planetarium Trust Board

· Auckland Philharmonia

· Auckland Regional Rescue Helicopter Trust

· Auckland Theatre Company

· Coast Guard Northern Region Incorporated

· New Zealand National Maritime Museum

· New Zealand Opera Limited

· Surf Life Saving Northern Region Incorporated

· Auckland Festival Trust

· Watersafe Auckland Incorporated

9. The following examples illustrate the way the regional amenities serve the Auckland region:

· The Auckland Philharmonia (APO) was accorded the status of Metropolitan Orchestra as part of the Ministry of Culture and Heritage’s Orchestra Review in 2012. In that year the APO presented 31 performances in the Auckland Town Hall and performed in the Bruce Mason Centre (Takapuna) Telstra Events Centre (Manukau), Massey High Schools and Trusts Stadium (West Auckland) and the Holy Trinity Cathedral (Parnell). It also presented chamber concerts in Takapuna, Remuera and Howick and five free community performances and events in west, central, north and south Auckland.

· Coast Guard Northern Region Incorporated has 14 units located across the Auckland region at Waiuku, Papakura, Titirangi, Kaipara, Kawau, Great Barrier, Hibiscus, North Shore, Auckland, Waiheke, Howick and Maraetei, with the Operations Centre and the Auckland Air Patrol operating centrally.

· Similarly, there are 10 clubs in the Auckland Region under the umbrella of Surf Life Saving Northern Region Incorporated, located at Karioitahi Beach, Karekare, Piha (2), Bethels Beach, Murawai, Omaha, Red Beach, Orewa and Mairangi Bay.

The ARAFA Funding Model Review

10. Auckland Council’s establishment and issues arising out of the Act’s operation have raised the question of ‘whether the funding model remains fit for purpose’. Auckland Council agreed to review the ARAFA Funding Model through its deliberations on the Mayor’s proposal for the 2014 Annual Plan. The Governing Body endorsed Terms of Reference (Attachment A) for this review on 26 February 2015. It records stakeholder issues and objectives (Schedule 2) and sets the overarching objective to:

“achieve long term sustainable, affordable and predictable funding of the existing amenities while recognising the Council’s purpose and responsibilities under the Local Government Act 2002 and other legislation.” (paragraph 12):

11. The ARAFA funding model and changes to enhance its effectiveness are the focus of the review:

· The review will not consider whether to add or remove any of the regional amenities from the funding mechanism. That would be a separate piece of work.

· The review will also not consider how much funding each regional amenity currently receives but rather look at the process that determines the amount of funding provided.

12. The Terms of Reference set out the basic process for the review with the identification of criteria for the evaluation of options, identification of options and their subsequent evaluation. In undertaking this review we are working closely with representatives of the amenities and engaging with the Funding Board.

Criteria for the Evaluation of Options

13. The following criteria for evaluating options were endorsed by the Finance and Performance Committee on 21 May 2015:

i. Financial sustainability and certainty

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

ii. Affordability

- Addresses the affordability of the sum of the contributions allocated under the funding model including the impact on rates.

iii. Independence and continuity

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

iv. Accountability and transparency

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

v. Administrative efficiency

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

vi. Alignment of outcomes and goals

- Considers the extent to which the option allows for alignment between the outcomes and goals sought and achieved by the regional amenities and those of the Auckland Council on behalf of Auckland’s ratepayers.

vii. Fairness

- Considers the extent to which the funding model provides for fairness.

viii. Flexibility

- Requires consideration of the extent to which the option provides a funding model with sufficient flexibility to take account of changing circumstances.

Options to Enhance Effectiveness

14. Working closely with representatives of the amenities, seven options along a spectrum have been generated, ranging from:

· retaining the status quo

· seeking improvements within the existing ARAFA legislative framework

· modifying the existing ARAFA framework by amending the legislation, to

· repealing the existing ARAFA legislative framework and replacing it with an Auckland Council policy framework.

15. The options were endorsed for evaluation by the Finance and Performance Committee on 18 June 2015.

16. Figure 1 illustrates the options and where they are located on the spectrum. Viewed across the spectrum, the options shift the role of Auckland Council from influencing the Funding Board’s decision-making to becoming the decision-maker itself. Similarly, there are increasing opportunities along the spectrum to align Auckland Council’s strategic outcomes with those of the amenities.

17. The review to date has identified that processes relating to funding bids and reporting have evolved under the existing arrangements. There appear to be further opportunities to pursue improvements through a focus on, information, communication, developing relationships and longer term planning which are being investigated through the final evaluation.

18. Implementation of the options will require further work, some of which is significant. The implementation of options requiring legislative change is particularly complex.

19. Options 1 to 4 are based on current arrangements which provide the pathway for regional amenities to seek operational funding from Auckland Council. Improvements under these options would be available for the 2016/2017 funding year.

20. Option 5 limits opportunities for Auckland Council to scrutinise the funding sought by the regional amenities, whereas Options 6 and 7 increase Auckland Council’s role in decision-making. The level of funding provided under Option 7 would be dependent on the policy and decisions of the governing body. There may therefore be a greater level of uncertainty for the regional amenities which may hold implications for the level of services and facilities they provide.

21. Options 5 to 7 require legislative change through the parliamentary process and it is not possible to indicate when they might become available for implementation.

22. The necessary trade-offs in relation to implementation will be considered through the evaluation of the options.

Figure 1.

23. Option 1 – Status Quo

The existing funding model prescribed by the Act is the benchmark against which the other options will be compared. It is described in paragraphs 1 to 7.

Seeking Improvements from within the existing ARAFA legislative framework

24. The following three options seek to introduce changes to enhance the legislative framework and the sharing of information between the regional amenities, the Funding Board and Auckland Council.

25. Option 2 – Enhanced Status Quo – ‘Clear Pathway to Capital Funding’

This option provides a ‘clear pathway for capital funding’ to augment the status quo.

While the amenities can currently apply for capital funding from Auckland Council via the Long Term Plan process, the granting of such funding is considered to be by exception. Under this option, applications for capital could be anticipated from any of the regional amenities. Potential applications would need to be signaled well ahead of time to assist financial planning and to enable the provision of funding.

26. Option 3 - Enhanced Status Quo – ‘Sustainable Funding’

This option introduces financial planning over a longer time frame with a 3 year rolling funding cycle and supporting information, and establishes how the sustainable level of funding for each regional amenity might be determined:

Introduction of a three year ‘rolling’ funding cycle

This cycle would align with Auckland Council’s Long Term Plan/Annual Plan cycle. Applications for the first year of funding (the year of application) would seek that year’s funding and identify anticipated funding for the next two years. Annual applications made in the second and third year would be considered in the light of all the relevant information then provided.

Information supporting ‘rolling’ applications

The clarity and timeframe of information accompanying applications would be reviewed to ensure it supports the rolling funding cycle.

‘Sustainability’

A definition of the sustainable level of funding would be developed for application in the context of each of the regional amenities. This would also establish appropriate levels of reserves amenities would be able to build-up and maintain to help manage the peaks and troughs of the funding requirements.

27. Option 4 – Enhanced Status Quo – ‘Alignment/Groupings’

This option similarly proposes the three year rolling review, maximises opportunities to improve strategic alignment between the regional amenities and Auckland Council and addresses the diverse range of regional amenities.

The three year ‘rolling’ funding cycle / Information supporting applications becomes available as set out in the previous option.

Auckland Council and the Funding Board confer

Auckland Council would be more explicit in clarifying its expectations, its funding constraints and its intentions when conferring with the Funding Board on the draft Funding Plan. The purpose would be to ensure transparency about the Auckland Council context and any funding constraints the council might face.

Auckland Council supports public notification

Auckland Council supports public notification of the Draft Funding Plan. The council could support the notification of the Draft Funding Plan on the council’s web site, through the media centre and/or in publications. This would help rate payers provide feedback and make submissions.

More particular consideration relevant to the type of amenity

This could include:

· Criteria and considerations as relevant to different types of amenities – e.g. safety, arts & culture, and facilities

· Clarification and guidance around what might be meant by ‘sustainability’ and the sustainable contribution required could be developed with reference to the activities undertaken by the particular regional amenities.

Modifying the existing ARAFA framework by amending legislation

28. The two following options amend the ARAFA legislative framework, proposing specific amendments to the way funding is determined or the roles of institutions and the processes through which they work.

29. Option 5 – Baseline Plus CPI

Under this option the specified amenities would determine the ‘sustainable’ level of funding required for year 1, which would be CPI adjusted for the next two years. The level of sustainable funding would then be reset for the next (4^th) year and CPI adjusted in each of the next two years.

The basis for determining the sustainable level of funding would need to be developed and the implications for the Funding Board explored.

30. Option 6 - Strong Funder

This option remaps the relationship between the regional amenities and the Auckland Council with Auckland Council providing funds directly. Under this option the ARAFA legislative framework would be amended so that:

· the regional amenities apply to Auckland Council directly for funding

· three year rolling funding cycle / supporting information applies

· Auckland Council sets the funding envelope

· Auckland Council prepares and adopts the Funding Plan

· the role of the Funding Board becomes one of providing expert advice to Auckland Council

· the regional amenities report annually to the Auckland Council.

Auckland Council sets the funding envelope

The funding envelope from which contributions to the regional amenities would be drawn would be set for the 10 year period though the Council’s Long Term Plan process. This longer term approach to funding would likely require a review of the information required in support of setting the envelope.

Auckland Council prepares and adopts the Funding Plan

The Funding Plan mechanism could be similar to the status quo or be modified in terms of the process and matters to be taken into consideration.

The role of the Funding Board

The Funding Board’s role would change to one of providing expert advice to assist Auckland Council. Appointments may still be made by Auckland Council and by the regional amenities.

Repeal of the existing ARAFA framework and replacement with an Auckland Council policy framework

31. Under this model the existing ARAFA legislative framework would be repealed and replaced with a policy framework established and maintained by Auckland Council.

32. Option 7 - Auckland Council Dedicated Fund

The repealed ARAFA legislative framework would be replaced by a specific policy of Auckland Council where:

· Auckland Council sets the funding envelope

· there is no Funding Board and the regional amenities apply to Auckland Council for funding

· Auckland Council considers applications and determines the funding allocated following public consultation

· there is separate policy and consideration for different types of amenity – for example, safety, arts & culture and facilities for example.

· a three year rolling funding cycle with supporting information would apply

· the amenities annually report to the Auckland Council.

This option replicates many of the policy intentions of the Strong Funder option within Auckland Council formulated policy, though without the legislation or the Funding Board. As Council policy, the funding model/policy framework would be amenable to any amendment subsequent Councils may require.

Evaluation

33. The evaluation involves considering the performance of each option against the criteria, relative to the performance of the status quo. Working closely with the amenities representatives, this process is currently underway and the results will be reported to the Finance and Performance Committee on 17 September 2015. The evaluation will identify the preferred option/s which may be a refined version, comprising different elements of the options proposed.

34. Local board feedback on the level of changes proposed in the options and the impacts on local boards and local communities (if any) is sought and will be an input into the evaluation along-side feedback received from the Funding Board and Regional Facilities Auckland.

35. From the work completed to date it is clear that Option 4- ‘Alignment/Groupings’ is compromised. The idea of grouping amenities by the nature of their operations is unworkable due to the extent of the difference between each of the regional amenities. The other features of this option continue to offer merit however and will be included in the evaluation.

36. Implementation is a particular consideration in addition to the identified criteria. With the exception of the status quo, each option will require further work to become operational. The amount of work required and the level of complexity is likely to:

· be less from options seeking improvement within existing frameworks (options 2, 3 and 4)

· increase where improvements are sought through amendments to the Act (options 5 and 6)

· further increase with the repeal of the Act and its replacement by an alternative regime (option 7).

37. Seeking amendments to or the repeal of the Act would require sponsorship by a Member of Parliament to drive it through the Parliamentary processes. These include three readings in Parliament and the Select Committee Hearings process. The Act is a private Act. A private bill seeking changes would be subject to parliamentary processes required and it is not possible to indicate the time it might take for it to be enacted.

Next Steps

38. Local Board feedback will be collated and incorporated into the final report to the Finance and Performance Committee on 17 September 2015.

Consideration

Local Board views and implications

39. The ARAFA funding model review considers the funding model established under the ARAFA legislation and will not directly impact on local board funding or decision-making. However, communities across all of Auckland are able to benefit from the services and facilities provided by the amenities funded through the Act.

40. Local board views on the level of change proposed in the options and their impacts on local boards (if any) are being sought via this report. This report follows a memo circulated to Local Board Chairs in February 2015 and a briefing to Local Board Chairs and members on 22 June 2015. This report follows the structure of that briefing while elaborating on the information provided.

Māori impact statement

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

Attachments

No.	Title	Page
a View	Auckland Regional Amenities Funding Act Review	17

Signatories

Authors

Alastair Cameron – Principal Advisor, CCO Monitoring & External Relationships

Wayne Brown - Lead Strategic Advisor, Strategic Advice

Authorisers

Denise O’Shaughnessy - Manger Strategic Advice

Karen Lyons - Manager Local Board Services

Orākei Local Board

06 August 2015

Allocation of discretionary capital budget to local boards

File No.: CP2015/13937

Purpose

1. This report seeks direction from Local Boards on the proposed discretionary fund for local board capital expenditure (Capex fund) regarding the:

· model for allocating the fund

· criteria for the fund.

Executive Summary

2. The Governing Body has created a discretionary fund for capital expenditure for local boards. Local boards are to work with staff to develop a formula for allocation and criteria for qualifying projects.

3. The Capex fund enables local boards to deliver small local asset based projects, either directly, in partnership with the community, or through joint agreements between boards.

4. The Capex fund will be managed over three years. Local boards can use their entire three year allocation for one project or spread it over the three years for smaller projects.

5. Local boards provided views on how funding should be allocated during the review of the Local Boards Funding Policy (LBFP) in 2014. The resulting funding formula for Locally Driven Initiatives (LDI) allocates 90 per cent based on population, 5 per cent on deprivation and 5 per cent on land area. The same allocation formula can be used for the Capex fund to maintain consistency in the policy. Staff note however that the link between costs and land area is weak and leads to major shifts in the allocation of funding.

6. A formula based approach provides limited funding for the Great Barrier Island and Waiheke boards. Local boards should consider what level of funding over three years is appropriate for these boards. Staff recommend setting funding at one per cent of the fund for Great Barrier Island and two per cent for Waiheke.

7. Using the Capex fund is preferable to LDI funding as the Governing Body funds the consequential opex. Boards should consider whether they need to continue to use LDI funding for minor (less than $1 million) capital projects. Boards should also consider whether they need to be able to bring forward regionally funded projects using the Capex fund.

8. The proposal to allocate a Capex fund to local boards will require an amendment to the LBFP. This will amend the Long-term Plan and requires the use of the special consultative procedure.

Recommendation/s

That the Orākei Local Board provides feedback on the allocation of Capital expenditure (Capex) funding to local boards.

Comments

Background

9. The Governing Body has created a discretionary fund for capital expenditure for local boards. On May 7 the Budget Committee passed the following resolution:

a) Provide a new Local Board discretionary capex fund of $10 million per annum noting that this will incorporate the existing Facilities Partnership Fund.

b) Approve the following parameters for this fund:

i. The fund may be managed as a three year amount

ii. Local Boards may use the fund to build council owned assets, add to an existing council funded renewal or new capital project, work in partnership with an external provider or seed fund a community project.

10. The Budget Committee requested that staff and local boards develop a formula for allocation and criteria for qualifying projects to report to the Finance and Performance Committee.

Purpose of the Capex fund

11. The purpose of the fund is to ensure locally important projects are given appropriate priority. It is envisaged that the fund will be used for projects similar to those historically funded by the local improvement projects (LIP’s) or small local improvement projects (SLIP’s).

Funding Allocation Model

Principles for funding allocations

12. The core principles for allocating funding to local boards are an:

· equitable capacity for each local board to enhance well-being

· administrative effectiveness

· transparency.

Attributes for funding allocation

13. The Local Boards Funding Policy (LBFP) makes allocations on the following basis:

· 90 per cent based on local board population size

· 5 per cent based on the relative level of deprivation of the board

· 5 per cent based on the land area of the board

· Waiheke and Great Barrier Island are funded for a fixed amount set by the Governing Body.

14. The following table shows the level of local board support for the use of the above factors for allocating LDI recorded during the review of the LBFP.

Local Board Attribute	Local Boards that supported use during last review of LBFP	Relationship to need for funding	Staff Comments
Population	21	Strong	Strongly relates to demand for services
Deprivation	17	Weak	Little objective evidence for relationship to demand for services
Geography	16	Weak	High distortion effect on allocation that does not relate to need for services

15. A key decision for the allocation of the Capex fund will be to determine the appropriate level of capital funding for Great Barrier Island and Waiheke. The discussion document considers the two current allocation models used to fund these boards:

· LDI allocation: Great Barrier Island and Waiheke receive the same proportion of the Capex fund as they currently receive of the total funding pool for Locally Driven Initiatives. (This is 2.3% of the total pool for Great Barrier Island and 2.7% for Waiheke)

· Transport Model: Great Barrier Island receives 1 per cent and Waiheke 2 per cent of the total funding pool.

16. Five models have been considered for allocating the Capex fund between all boards based on the population, deprivation and land area attributes of the boards:

· Model A: All boards funded based on 100% population

· Model B: All boards funded based on 95% population and 5% deprivation

· Model C: All boards funded based on 90% population, 5% deprivation and 5% land area

· Model D: Great Barrier Island receives 2.3% and Waiheke receives 2.7% of total funds, remaining funds allocated to all other boards based on 90% population, 5% deprivation and 5% land area

· Model E: Great Barrier Island receives 1% and Waiheke receives 2% of total funds, remaining funds allocated to all other boards based on 90% population, 5% deprivation and 5% land area.

17. The following pages present these five models in table and chart form.

18. Other potential funding attributes that have not been included in the modelling are:

· Rates paid: there is no relationship with need for services, and support was low for this attribute during the last review, with six boards in favour.

· Current levels of capital expenditure: data on regional activities is unavailable at local level. Levels of expenditure on local assets are not relevant to the purpose of the Capex fund. Gaps in the provision of assets will be met through the relevant network facilities plan.

· Population growth: growth will be addressed every three years through the proposed allocation formula.

19. The charts show the following:

· Using land area as an allocation factor significantly increases funding to Rodney and Franklin local boards.

· Great Barrier Island receives less than $7,000 under a population based allocation. This rises to $77,000 under the allocation formula that includes deprivation and land area.

· Providing Great Barrier Island and Waiheke with fixed allocations under the LDI allocation and Transport models only has a small impact on the other 19 boards.

20. In determining the appropriate funding levels for Great Barrier Island and Waiheke consideration should be given both to the total value of the funding over three years, and the typical costs of activities likely to undertaken by these boards. The following table shows the level of funding these boards would receive over three years in comparison to the next smallest board, Papakura:

Allocation formula model	Three year capex funding allocation for
Allocation formula model	Great Barrier	Waiheke	Papakura
Board Population size	900	8,400	45,000
A: 100% population	$20,000	$180,000	$970,000
B: 95% population + 5% deprivation	$130,000	$260,000	$1,000,000
C: 90% population + 5% deprivation + 5% land area	$230,000	$290,000	$970,000
D: GBI: 2.3% Waiheke 2.7% (Current LDI allocation)	$690,000	$820,000	$940,000
E: GBI: 1% Waiheke 2% of total fund	$300,000	$600,000	$960,000

21. The average cost for SLIPs projects in the last financial year was $31,000 for Great Barrier Island and $27,000 for Waiheke. Under Model E Waiheke would receive two per cent of the fund, and be able to deliver 20 average cost projects over three years. Great Barrier would receive one per cent of the fund and be able to deliver 10 average cost projects over the same period. They can of course accumulate funds over the three year period to undertake larger projects.

22. Staff consider there is a strong case for using the same formula for LDI and the capex fund to maintain consistency in the allocation. However, there is also a case for excluding land area given its impact on the distribution of funding.

23. Staff consider that allocating Great Barrier and Waiheke the same proportion of funding as they receive from the LDI opex fund would over fund these boards compared to other board areas. Staff recommend an allocation of one per cent of the total fund to Great Barrier, and two per cent to Waiheke would be appropriate.

Decision making process for capex projects

24. The chart on the following page provides an overview of decision making pathways for each type of project.

25. Staff will work with boards to develop guidelines for facilities partnerships (including feasibility studies) and community-led projects.

Bringing future capex allocation forward

26. The Governing Body has proposed that the fund be managed over a three year period, aligned with the Long-term Plan planning cycle. Local boards can use their entire three year allocation for one project or spread it over the three years for smaller projects. This provides boards with greater choice in the size and timing of projects they undertake.

27. As a practical consideration, it is unlikely that all 21 local boards would be in a position to bring forward their three years of funding to 2015/16. However, in the event that this was to happen, the projects would need to be assessed against the modified “gateway” process to ensure they were able to be delivered.

28. Budget for the Capex funding is included in the ten year plan. Local boards’ can only bring three years budgets forward however so future decision making is unencumbered.

Role of LDI funding

29. The table below sets out how the Capex Fund and LDI Opex Fund could be used for different types of projects.

Funding Type	Project Type	Capex Fund		LDI Opex fund
Capex	Minor Asset based projects (less than $1M)	ü	GB funds consequential opex	?	LBs fund consequential opex (feedback sought)
	Top-up of regional projects and renewals	ü	GB funds consequential opex	?	LBs fund consequential opex (feedback sought)
	Major Asset based projects (greater than $1M)	ü	GB approval required. GB funds consequential opex.	û	Must use Capex fund for large projects
Opex	Capital grants to community groups	ü	Debt funded opex. Must be included in annual plan	ü	Standard opex expenditure
Opex	Feasibility Studies	ü	Debt funded opex. Must be included in annual plan	ü	Standard opex expenditure

30. Local boards are currently able to fund capital projects using their LDI budget by funding the consequential opex. The capex fund largely does away with the need for this and the Mayor’s report proposed the removal of the ability to fund major new facilities with opex funded by their LDI. This raises the question of whether local boards still need the ability to use LDI to fund minor capital projects. The table sets out the key differences between the Capex fund and the LDI opex fund for capital projects.

Capex fund	LDI opex fund
GB funds consequential opex	LB funds consequential opex
Easier for GB to control and plan for debt (set amount available for three years)	Creates variable unknown capex requirements on an annual basis
Simplified reporting processes	Complex financial reporting required to track LB funding vs regional funding

31. Staff recommend that local boards’ do not fund minor (less than $1 million) capital projects with LDI opex from 1 July 2016. This will not impact projects that boards have already committed to funding.

32. Local boards should provide feedback on whether they see a need to use:

· LDI to fund minor capital projects

· Capex funding to bring regionally funded projects forward.

Transferring LDI to Capex

33. Local boards may transfer their currently approved capex projects paid for by LDI (as outlined in their LB Agreement 2015/16), to the new discretionary fund. This will free up their LDI opex again and remove the need to fund consequential opex.

Deferral of Capex

34. Normal deferral conditions apply to the Capex fund. Projects cannot be planned outside of the three years but funds may be deferred if projects are unable to be completed within this period.

Transition for current Capex allocations

35. There will be no transition mechanism for any existing Capex budgets held by some local boards. The Governing Body has decided that this fund will replace the current Facilities Partnership fund.

36. Projects that have already been committed to through the Facilities Partnership fund will need to be funded from the relevant boards’ Capex fund allocation.

Local Boards Funding Policy

37. The current Local Boards Funding Policy must be amended to provide for the allocation of capex funding. This is an amendment to the Long-term Plan requiring use of the Special Consultative Procedure with a public consultation period of one month.

38. Staff propose to amend the LBFP to provide a general formula for allocating any non LDI funding. This will avoid the need to amend the LBFP every time the Governing Body decides to give local boards funding that is not for Locally Driven Initiatives.

Consideration

Local Board views and implications

39. The proposal does not impact the allocation of decision making.

Significance and Engagement

40. The proposed Capex fund is a minor change in the scale of the Council’s budget and funding for Local Activities. As such it is not a significant change. However, creating a new funding allocation for local boards requires an amendment to the Local Board Funding Policy, and consequently the Long-term Plan.

41. The Council is required to undertake a special consultative process for any amendment to the Long-term Plan.

Implementation

42. The proposed amendment to the Local Board Funding Policy is not significant. As such, the amendment to the Long-term Plan will not need to be audited.

Attachments

There are no attachments for this report.

Signatories

Author

Beth Sullivan - Principal Advisor Policy

Authorisers

Matthew Walker - General Manager Financial Plan Policy & Budgeting

Karen Lyons – Manager Local Board Services

Orākei Local Board

06 August 2015

Auckland Transport Update: August 2015

File No.: CP2015/00901

Purpose

1. The purpose of this report is to update the Board on a range of transport related issues in Orākei area during July 2015.

Recommendation/s

That the Orākei Local Board:

a) receives the August 2015 report from Auckland Transport.

b) approves an increase to the fixed cost estimate for bike racks to be installed at Remuera Train station from $4,000 to $11,000.

c) approves an increase to the fixed cost price for the Abbotts Way Footpath Fence by $10,000, making the final cost $60,000

d) approves the reduction in the fixed cost price for bike shelters at the Orākei Train Station from $76,000 to $30,000 for the installation of one shelter rather than the 3 previously quoted for.

e) requests Auckland Transport to implement a mixture of P15 and P120 parking outside the Meadowbank Shops on St Johns Road, as noted in the attachment as Option One.

Monthly Overview

Approved Transport Plan

The Auckland Transport CEO presented a high level view of the projects that have been approved for the next three years of the transport plan to Local Board members on 27 August 2015. Later in August Auckland Transport will be meeting with the board to discuss the Orākei specific projects being funded in the Approved Transport Plan.

Orākei Local Board Transport Capital Fund

2. The Process for Discretionary Fund Projects

The Orākei Local Board has allocated the entire Local Board Transport Capital Fund up to June 2016. There is still $311,000 remaining in the budget allocation for the 16/17 financial year.

Below is an update on any projects that have had status change in the last month:

3. Benson Road Upgrade

The following design (attachment A) has been drawn up to match the work completed in January this year on the other side of Benson Road. This project will now go through consultation with directly impacted parties. Auckland Transport expects this project to be delivered in October 2015.

4. Remuera Bicycle Racks

The Orākei Board has previously resolved to install bike racks at the Remuera Train Station. The previous quote was for $4,000, however further investigation determined the need to reinforce the base of the rack, as it is on the rail platform. This will incur an additional cost making the new fixed cost estimate for this project $11,000.

5. Abbotts Way Footpath Fence

This project requires the fixed cost for construction to be increased by $10,000 to $60,000. The reason for the increase is that on further investigation, the wall requires additional retaining to ensure that the area is stable before installing the fence. This stabilisation was not provided for in the initial design costing.

6. Orākei Train Station Bicycle Racks

Attachment B is an image of the bicycle rack we are currently trialling. If this option is successful, it will be installed at the Orākei Train Station. Following discussion with the Transport Lead, it has been decided that rather than put three of these in at Orākei as previously agreed, the board would prefer to have one installed and if popular then install the further two. This requires us to agree to reduce the fixed cost from $76,000 to $30,000.

7. Glen Innes to Tamaki Drive Shared Path

The project team (Auckland Transport and the Transport Agency) have received a decision on the resource consent application for the beginning of section one of the Glen Innes to Tamaki Drive shared path (Merton Road to St Johns Road). The decision noted that the consent will be partially notified and specified a limited number of residents potentially affected by the project who will be given opportunity to make a submission. This decision will delay the start of construction for section one, the extent to which is currently under review as NZTA / AT look for ways to minimise the impact. Investigation, planning and design work on sections two, three and four will continue.

8. Meadowbank Shops Parking

The Orākei Local Board requested Auckland Transport to review the parking at the Meadowbank Shops on St Johns Road. This parking restriction is currently P30. The change request came as a result of a new business opening in the area, with other businesses noticing a change in the availability of car parks. However, Auckland Transport’s site observations showed that there were no parking availability issues. This means that Auckland Transport has no reason to change the current parking restrictions. Auckland Transport’s options were paid parking or no change. The Orākei Local Board facilitated two meetings with stakeholders, also attended by Auckland Transport. From each of those meetings there were two different options presented for consultation. Option one (attached) which suggests P15 and P120 over roughly 50 percent of the parking space, and option two (attached) proposing that 75 percent of parking along St Johns Road be P15 and the rest P60. Following consultation, there was objection to both options, although the majority of opposition came from Option One. Auckland Transport is comfortable installing either option, however as the request came from the Board, it would need to provide a resolution for their preference. At a workshop in July 2015, the Orākei Local Board discussed both parking options for the Meadowbank Shops on St Johns road. In order to progress an option, the Board is requested to resolve on the outcome it prefers for parking at the Meadowbank shops. The final decision will be subject to approval by Auckland Transport’s Traffic Control Committee (TCC).

9. Introduction of Double-Deck Buses

Auckland Transport has an urgent requirement to address capacity constraints on some bus routes. The central corridors, Northern Express and services from Botany to the CBD are experiencing annual growth rates of 10 percent, 6.5 percent and 7 percent respectively, with peak seated capacity utilization from 80 percent to 95 percent. Strategically, the Auckland Plan looks to double public transport trips to 140 million by 2022.

There is a need to address capacity constraints and to improve the efficiency and effectiveness of the bus new network corridors without increasing bus volumes.

The use of double decker buses is the first step in the progressive strategy for increasing capacity on high demand routes and is aligned to delivering improved customer experience, reducing congestion and increasing patronage. Customer growth is expected to be in the region of 20 percent to 30 percent over the first four years of introduction.

Double decker buses are due to start on the Botany route (city centre to Botany via Newmarket) in October 2015. Mt Eden, Waiheke and Northern Express routes are due to commence in early 2016, with further routes to follow progressively. Over the next ten years, it is planned that up to 13 key routes may be converted to double deck bus operation.

Obstacles are being carefully checked such as trees, shop verandas, utility service poles and cables. As a result of this process, alterations to verandas or the relocation of poles and cables may be required. The Orākei Local Board will be briefed on issues specific to them as necessary.

Implementation Issues

AT Ref #

TPL Ref #

Issue

Discussion

Action

N/A

Stonefields Parking

It has been reported that the high density housing units that are currently being built only have one car park for each three bedroom unit and there are no parking bays on the streets.

Many of the new units are used as rental

properties and have multiple vehicles at each residence.

This is resulting in the streets having cars parked down both sides, some partly on the berms and reducing the road width (at times) to one lane only.

This issue was discussed at the May 2013, Orākei Local Board Meeting.

Auckland Transport was asked to comment on a memo from Auckland Council.

Auckland Transport has provided comment and has asked for this matter to be removed from the ‘Issues Register’.

At the July 2013 Orākei Local Board meeting members requested that this item remain on the register.

A meeting with Auckland Transport and the Stonefields Residents Association was held on 26 March 2014.

June 2014, The board approves a resolution for a ROC to install additional parking bays as part of their Transport Capital Fund.

November 2014, apologies that this has not been completed; this will be available for the December meeting.

December 2015 Proposal is provided in the body of the report for the board’s consideration.

Feb 2015, no agreement has been reached and it has been referred back to the residents association for farther comment.

March 2015,

The Orākei Local Board transport lead has asked the Stonefields residents to speak to the developers regarding additional car parks.

5/15 Orākei Local Board requests that Auckland Transport meet with the SRA to assist in resolving issues for residents of Stonefields.

6/15 A meeting was held 17 June with Stonefields Residents Association and Auckland Transport to discuss alternatives for the parking issues.

8/15 At the July Stonefields Residents Association meeting, Auckland Transport explained that there was no viable option for additional parking within Stonefields, as the consent conditions require the current green space to remain as green space.

Notes: N/A – A Customer Service Reference Number is not applicable to this item because either it was handled directly by the EMRM or it is a legacy issue or the request was for information that was outside the boundaries of a service request.

Attachments

No.	Title	Page
a View	Upland Road Concept Plan	43
b View	Orākei Train Station Bicycle Racks Trial	45
c View	St Johns Rd Meadowbank consultation drawing Option 1	47
d View	St Johns Rd Meadowbank consultation drawing Option 2	49