2 Apologies
At the close of the agenda no apologies had been received.
3 Declaration of Interest
Members are reminded of the need to be vigilant to stand aside from
decision making when a conflict arises between their role as a member and any
private or other external interest they might have.
The Auckland Council Code of Conduct for Elected Members (the Code)
requires elected members to fully acquaint themselves with, and strictly adhere
to, the provisions of Auckland Council’s Conflicts of Interest Policy. The
policy covers two classes of conflict of interest:
i) A financial conflict of interest, which
is one where a decision or act of the local board could reasonably give rise to
an expectation of financial gain or loss to an elected member; and
ii) A non-financial conflict interest, which
does not have a direct personal financial component. It may arise, for
example, from a personal relationship, or involvement with a non-profit
organisation, or from conduct that indicates prejudice or predetermination.
The Office of the Auditor General has produced guidelines to help
elected members understand the requirements of the Local Authority (Member’s
Interest) Act 1968. The guidelines discuss both types of conflicts in more
detail, and provide elected members with practical examples and advice around
when they may (or may not) have a conflict of interest.
Copies of both the Auckland Council Code of Conduct for Elected
Members and the Office of the Auditor General guidelines are available for
inspection by members upon request.
Any questions relating to the Code or the guidelines may be directed
to the Relationship Manager in the first instance.
4 Leave of Absence
At the close of
the agenda no requests for leave of absence had been received.
5 Acknowledgements
At the close of the agenda no requests for acknowledgements had been
received.
6 Petitions
At the close of the agenda no requests to present petitions had been
received.
7 Deputations
Standing
Order 3.20 provides for deputations. Those applying for deputations are
required to give seven working days notice of subject matter and applications
are approved by the Chairperson of the Kaipātiki Local Board. This means
that details relating to deputations can be included in the published agenda.
Total speaking time per deputation is ten minutes or as resolved by the
meeting.
At the close
of the agenda no requests for deputations had been received.
8 Public Forum
A period of
time (approximately 30 minutes) is set aside for members of the public to
address the meeting on matters within its delegated authority. A maximum of 3
minutes per item is allowed, following which there may be questions from members.
At the close of the agenda no requests for public forum had been
received.
9 Extraordinary Business
Section 46A(7) of the Local Government Official Information and
Meetings Act 1987 (as amended) states:
“An item that is not on the agenda for a meeting may be dealt with
at that meeting if-
(a) The local authority by resolution so
decides; and
(b) The presiding member explains at the
meeting, at a time when it is open to the public,-
(i) The reason why the item is not on the agenda; and
(ii) The reason why the discussion of the item
cannot be delayed until a subsequent meeting.”
Section 46A(7A) of the Local Government Official Information and
Meetings Act 1987 (as amended) states:
“Where an item is not on the agenda for a meeting,-
(a) That item may be discussed at that meeting
if-
(i) That item is a minor matter relating to
the general business of the local authority; and
(ii) the presiding member explains at the
beginning of the meeting, at a time when it is open to the public, that the
item will be discussed at the meeting; but
(b) no resolution, decision or recommendation
may be made in respect of that item except to refer that item to a subsequent
meeting of the local authority for further discussion.”
10 Notices of Motion
At the close of the agenda no requests for notices of motion had
been received.
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Kaipātiki
Local Board
22 June 2016
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Northcote Town
Centre Incorporated – transfer of the Northcote Business Improvement District
Programme to Auckland Council
File No.: CP2016/12568
Purpose
1. To seek
direction from the Kaipātiki Local Board regarding the management of the
Northcote Business Improvement District (BID) Partnership Programme and the
associated targeted rate.
Executive
summary
2. Northcote
Town Centre Incorporated (NTCI)
is an incorporated society operating as a business association. They are
responsible for the implementation and delivery of the Northcote BID
Partnership Programme. NTCI has
operated as a BID within the Auckland Council BID Partnership Programme since
2011.
3. BID
programmes are delivered by business associations with core funding being
provided via a targeted rate
collected by Auckland Council. The business associations are independent
incorporated societies and are not governed by Auckland Council.
4. The BID
Policy (2011) and the updated BID Policy (2016 – operative from 1 July 2016)
contain accountability mechanisms to ensure the BID Partnership Programme
targeted rate grant is appropriately managed by the business association responsible for the BID
Partnership Programme.
5. Auckland Council
has formally requested information from NTCI on aspects of the BID Partnership
Programme operating in the Northcote town centre area. The information
requested includes:
· confirmation of purposes for which the target rate has
been used (2015_2016 year);
· amount of targeted rate unspent;
· a current business plan;
· a current strategic plan;
· a signed BID Partnering Agreement; and
· clarification of how the managerial role duties have
been undertaken.
6. NTCI has
responded to council officers regarding the BID Partnering Agreement
requirement and are working with council to finalise this document. The other
documents, however, have not been provided to council; therefore council has no evidence that the targeted rate funding is being
used appropriately.
7. The need to
ensure members of the Northcote BID Partnership Programme paying the targeted
rate amount receive services is
paramount. Officers consider the BID Programme is at risk due to the lack of
action undertaken by the business association. Local boards have allocated
decision-making in regards to
some aspects of the BID Programme. Officers are concerned that those paying the
Northcote BID targeted rate are not receiving adequate services, communications
or accountability from NTCI relevant to the Northcote BID Partnership
Programme.
8. It is
therefore recommended that council withhold the 2016/2017 targeted rate grant
payment designated for the Northcote BID Partnership Programme until NTCI are
able to meet the accountability requirements of the BID Policy (2011 and 2016).
It is also recommended that officers from council’s BID team provide interim
management of the Northcote BID Partnership Programme.
9. This approach
would be temporary until NTCI is able to demonstrate the resolution of current
concerns with the management of the BID Partnership Programme
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Recommendation/s
That the Kaipātiki Local
Board:
a) request
officers withhold the 2016/2017 Northcote Business Improvement District
targeted rate grant payment of $120,000, designated for the Northcote
Business Improvement District Partnership Programme until Northcote Town
Centre Incorporated are able to meet the accountability requirements of the
operative Business Improvement District Policy (2011 or 2016) by providing
either the following information in accordance with section 3.15 (2) of the
2011 policy:
i. audited
accounts;
ii. an
annual report for the previous year;
iii. a
strategic plan covering the current three to five year period;
iv. an
annual business plan; and
v. a budget for the
following financial year.
or, in accordance with Operating
Standards section 3.4 Table 1 of the 2016 Business Improvement District
policy,:
vi. provide
a strategic plan for next three to five years, reviewed every three
years;
vii. provide
audited financial accounts and an audit management letter;
viii. provide
an annual business plan including a minimum of three performance indicators
that are meaningful, measurable and aligned to achieving the outcomes in the
business association’s strategic plan;
ix. provide
an annual review report including achievement of previous year’s objectives
against business plan and report against expenditure
x. undertake an annual Business Improvement District programme
reporting and alignment workshop/meeting/presentation with the local board
and business association board:
xi. provide
an annual accountability
agreement to Auckland Council.
b) request
council officers from the Auckland Council Business Improvement District Team
provide interim management of the Northcote Business Improvement District
Partnership Programme over the 2016/2017 financial year or until Northcote
Town Centre Incorporated are able to meet the requirements of the operative
Business Improvement District Policy (2011 or 2016) as outlined in
recommendation a).
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Comments
Northcote Town Centre Incorporated (NTCI)
10. Northcote Town
Centre Incorporated, (NTCI) is an incorporated society operating under the
Incorporated Societies Act
(1908).
11. Attachment
A contains the NTCI
certificate of incorporation and the incorporation details.
12. NTCI has
partnered with Auckland Council since the inception of the BID Policy (2011),
which brought together all
legacy council BID policies and guidelines. NTCI has been part of a
BID/Mainstreet approach operated by either North Shore City Council or Auckland
Council since 1998. Auckland Council has previously worked well with NTCI over
many years.
13. NTCI has an executive committee responsible for
the governance of the business association’s activities, including the
implementation and delivery of the Northcote BID Partnership Programme to its
members and BID targeted ratepayers.
14. Council
figures indicate the Northcote BID has 38 property owners paying the targeted
rate, and 90 businesses operating out of the area.
15. The amount of targeted rate for Northcote BID
Partnership Programme is $120,000 for the 2016/2017 financial year.
16. The funds will
be paid to each business association operating a BID Partnership Programme in
quarterly payments (1 July 2016, 1 October 2016, 1 January 2017 and 1 April
2017).
BID programmes in general
17. The BID
Partnership Programme provides a mechanism for Auckland Council to collaborate
with the business sector to improve the environment within which businesses
operate. The onus is on the business association operating a BID Partnership
Programme to provide the information required to council as per the BID Policy
(2011 and 2016). This is because the business association receives rate payer
funding, and must demonstrate that it is using that funding for the intended
purposes.
18. A new BID
Policy (2016) has been approved by the governing body and comes into effect on
1 July 2016.
19. There are 48
BIDs within the Auckland programme, all of whom are required under the BID
Policy (2011) to provide
annually to their members and council a range of information. The accountability
requirements for BIDs under the 2011 Policy are listed in section 3.15(2) as
follows:
· audited accounts;
· annual report for the previous year;
· strategic plan covering the current three to five year
period;
· annual business plan; and
· budget for the following financial year.
20. There are two important components to the
council’s BID Partnership Programme, namely:
· the business association itself, which is the
incorporated society. In this case, this is NTCI, operating as the business
association; and
· the BID Partnership Programme, where a business
association partners with Auckland Council to deliver the BID Partnership
Programme. The BID Partnership Programme is not a legal entity in its own
right, rather a partnership programme where two parties agree to work together.
The role of local boards within the BID Programme
21. Both BID
Policy versions (2011 and 2016) acknowledge that local boards have been
allocated decision-making
responsibilities regarding BID programmes in their areas.
22. These responsibilities include:
· BID programme strategic direction (in partnership with
the business association);
· establishment of new BID programmes;
· recommending BID programme targeted rates to the
governing body;
· approval of BID expansions, disestablishments,
amalgamations and rating mechanism changes;
· approval of BID programme boundary maps;
· providing feedback to the business association at the
annual BID programme reporting and alignment workshop/meeting/ presentation
with the local board;
· various roles relating to dealing with BID programme
problems; and
· seeking alignment between relevant local board
activities and BID programme activities.
23. The
information that is required from business associations is necessary to allow
the local board to make informed decisions regarding the recommendation of a
targeted rate to the governing body.
BID Policy treatment of ‘serious concerns’
24. BID Policy
(2011) section 4.60 outlines that serious concern “may arise through
governance, management or operational procedures that expose the business
association unnecessarily to risk”.
25. Section 4.62
outlines the actions that may be taken, and that the goal of Auckland Council
when serious concerns have arisen is to support the continuation of a BID
Partnership Programme.
26. The goal of any action taken by council in circumstances where
concerns are raised is to support the business association to manage a BID Partnership Programme independently. Whilst council
has the ability under the BID Policy (2011 and 2016) for involvement in the
management of a BID Partnership Programme, the longer term objective is always
to return the management and delivery of the BID Partnership Programme back to
a functioning and well-managed business association.
27. There are two
areas of focus that concern the Auckland Council BID Team about the Northcote
Partnership Programme:
Concerns over the governance and
management of the business association
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Issue
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Context
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No management resources for the BID
Programme since February 2015.
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Requirement of the BID Policy (2011 and
2016) that a BID Partnership Programme be implemented and managed by a
manager (employee or contractor).
This provides clear separation of
operational management and governance responsibilities (executive committee).
NTCI has had no dedicated manager (or
service provider) from February 2015.
The implications of this - reduction in
services to members – the business association newsletter ceased and the
Northcote Town Centre website was taken off line.
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No operative business plan for 2015/2016
financial year.
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No indication how NTCI would spend the
target rate for 2015/2016 financial year.
No visibility for members paying target
rate of how funds spent.
Concern at approach used to define
activities for 2015_2016 - executive committee called for ideas ‘from the
floor’ at the AGM. A business plan should seek input from all members. It is
unclear whether the notice of AGM to members identified that the business
plan would be developed at the AGM.
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No operative strategic plan shared with
council.
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BID Partnership Programmes are required
to have both a strategic plan (3-5 year period) and an annual business plan.
No strategic plan has been provided to council by Northcote BID.
The lack of a strategic plan reduces the
BIDs ability to maximise opportunities for targeted rate paying members.
Without a strategic plan for the longer
term development of an area, BID Programme members have little opportunity to
influence the direction of the BID Programme, leverage opportunities for the
area or gauge the success of the Programme against.
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Concern over the management and
delivery of the BID Partnership Programme
28. A further
concern of council staff relates to the amount of targeted rate collected. The
BID Policy (both 2011 and 2016) provides the opportunity for business
associations to agree to increase or decrease the amount of targeted rate they
receive. Business associations vote on their next year’s budget at their annual
general meeting (AGM).
29. NTCI is unique
in that it has not varied the amount of targeted rates it receives since 1999.
The association’s annual income
has risen and fallen over that time period due to its ability to attract
additional funding or grants. With the lack of managerial resources to attract
extra funds and the practice of not increasing the targeted rate amount, there
is the real risk that, as prices for goods and service increase, the amount of
income available to NTCI loses its potency in providing the types of services
its members require.
30. Auckland
Council BID team members consider the lack of information and documentation by
NTCI, as per the policy’s requirements, a serious concern. BID team staff have
been unable to confirm the services provided by NTCI for its members, the
longer term sustainability of the business association itself, or that there is
a clear separation between governance and management. Council’s BID team
therefore seeks endorsement from the local board to minimise risk to the funds
collected for the Northcote BID Programme and potential risks to that
programmes members.
31. The Kaipātiki
Local Board has the allocated authority to recommend not striking the targeted
rate for a BID Programme to the governing body. One option could have been for
officers to suggest to the local board that no targeted rate be struck for
2016_2017. However, this was not suggested as, at the time, there was initial
communication ongoing between NTCI and officers. This communication however has
not lead to information being provided as required by the BID Policy.
Actions taken
32. Conversations
focused on improving the management of the business association have been ongoing since early 2015. Council’s
communication with the business association has been generally been with the
chairperson of the Executive Committee.
33. Officer
concerns about the management of the Northcote BID Partnership Programme were
raised in a local board
workshop on 3 February 2016. The workshop focused on issues with governance of
the association, management function and operational matters relating to the
delivery of the BID Partnership Programme.
34. Following the
workshop a formal letter dated 4 March 2016 (also translated into simplified
Chinese and Mandarin) was
provided to the Executive Committee of NTCI (refer Attachment B). The
letter outlined concerns with the management of the Northcote BID Partnership Programme and asked the business association
to:
a) Provide
an immediate response to the following:
· Confirmation and copy of the resolution, if targeted
rate funds were used to pay for management services being provided by members
of the NTCI Executive Committee. (No response received to date of this
report).
· Confirmation of the amount of unspent targeted rate
for the 2015/2016 financial year; and what these funds would be spent on. (No
response received to date of this report).
b) Provide
a response by mid April 2016 to the following::
· Appointment of a manager. (No response received to
date of this report).
· Development of a business plan for the 2015/2016
financial year and a three to five year strategic plan. (No response
received to date of this report).
c) Provide
a response by 31 March 2016 to the following::
· Copy of signed BID Partnering Agreement. (In
communication with NTCI regarding this).
· Confirmation of services to members since February
2015. (No response received by date of this report).
· Written confirmation of payments made for managerial
duties undertaken by members of the NTCI Executive Committee over the 2015/2016
financial year. (No response received by date of this report).
· Written confirmation of how the BID targeted rate
budget would be spent for the remainder of the 2015/2016 financial year. (No
response received by date of this report).
35. A second
workshop with the local board took place in April 2016. Council officers
updated the local board on communication and response from NTCI. Insufficient
process towards the resolution of what are considered serious concerns were
discussed. Outcomes from that meeting included:
a) an officer from the Auckland Council BID
Team to attend the next Executive Committee meeting of NTCI; and
b) an undertaking from officers to keep the
local board abreast of progress on discussions between council and NTCI.
36. To the date of
this report preparation there has been only email correspondence between the chairperson
of NTCI and council BID Team officers once it was clear that officers had
concerns regarding the management of the Northcote BID Programme.
37. Discussion on
the BID Partnership Agreement has been the only topic of the above list of
council requirements where movement has occurred.
38. Email
correspondence with NTCI has raised their concerns as being:
· the lack of assistance from council officers;
· the range of parties that are aware of the issues;
· the shortness of time available to undertake required
actions; and
· unhappiness with the partnership approach.
39. NTCI
acknowledged receipt of the 4 March 2016 letter from council and that a draft
response had been prepared for ratification at their April Executive Committee
meeting. This response has not been received by officers.
Recommended actions
40. Officers
consider the management of the Northcote BID Partnership Programme to still be
a serious concern. The need to ensure that members of the Northcote BID
Partnership Programme paying the targeted rate amount receive services is
paramount. Officers consider the BID Programme is at risk due to the lack of
action undertaken by the business association. Members may or may not be
receiving services or aware of these concerns.
41. There has been
no discussion with the chairperson or the NTCI Executive Committee, apart from
regarding the BID Partnership Agreement, on any of the additional information
required as part of the BID Partnership Programme and formally requested via
the 4 March 2016 letter.
42. The following
way forward is recommended:
· seek the approval from Kaipātiki Local Board to
withhold the Northcote BID Partnership Programme funds collected via the
targeted rate from NTCI members as at 1 July 2016. It is suggested that payment
be withheld from NTCI until
o concerns regarding Northcote BID Partnership
Programmes non-compliance with the BID Policy (2011) have been resolved. It is
hoped that NTCI is able to demonstrate they can retake the responsibility for
the Northcote BID Partnership Programme; OR
o members of NTCI have indicated, via ballot, that they
do not wish to continue operating as a BID Partnership Programme and wish to
cease activities.
43. If necessary,
council officers could manage (or organise management of) the Northcote BID
Partnership Programme. However, this is not a long term solution to the current
concerns. The best long term solution is to rejuvenate the NTCI to manage the
Northcote BID Partnership Programme. This approach would require council
officers to
· retain the Northcote BID targeted rates funds within Auckland
Council;
· honour current contractual obligations that NTCI has
entered into under the Northcote BID Partnership Programme (for example,
security contracts) utilising the targeted rate funds;
· survey Northcote BID Partnership Programme members to
ascertain if they wish to continue the BID Partnership Programme or
disestablish the BID Partnership Programme utilising the targeted rate funds;
and
· organise the preparation of a business plan for how
the remaining funds could be utilised for the benefit of members.
44. The removal of a BID Partnership Programme from
the business association responsible for its operation would be precedent
setting for Auckland Council. The ideal outcome for the approach would be for
NTCI to regain responsibility for its own BID Partnership Programme as soon as
possible.
Consideration
Local
board views and implications
45. Officer
concerns about the management of the Northcote BID Partnership Programme were
discussed in a workshop with the local board on 3 February 2016. The workshop
focused on issues with NTCI governance of the Northcote BID Partnership
Programme, management function and operational matters.
46. A second local
board workshop on 18 May 2016 discussed the response from NTCI and action steps
to resolve concerns about the Northcote BID Partnership Programme and protect
paying members.
47. Local board
approval is required to withhold BID targeted rate grant payments until either
the board is satisfied that non-compliance issues have been resolved, or a
decision is made on the future of the business association.
48. Council
officers will report to the local board on a quarterly basis regarding this
issue and any funds utilised to manage and operate the Northcote BID
Partnership Programme. The funding for activities undertaken on behalf of NTCI
to operate the BID Programme would be provided by the targeted rate funds
collected and held by council.
Māori
impact statement
49. BID Programmes
involve all businesses within a defined geographical area and would include any
Maori businesses operating within the Northcote area that would pay the
targeted rate.
Implementation
50. Council
officers would be responsible for ensuring the withholding of targeted rate
payment for the 2016/2017 financial year. Council officers would utilise the
targeted rate funds collected by the BID Programme to manage and fund services
delivered.
51. Officers would
also formally communicate with NTCI advising them of the decision of the local
board and endorsed way forward.
52. Officers would
work with NTCI, as much as practicable, to ensure ongoing member services are
maintained as per contractual arrangements. Temporary management services may
be contracted utilising the targeted rate collected for the management of the
Northcote BID Programme.
Attachments
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No.
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Title
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Page
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aView
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Northcote Town Centre Incorporation documents
(#628308)
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17
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bView
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Formal letter from Auckland Council to Northcote Town
Centre Incorporated dated 4 March 2016
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21
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Signatories
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Authors
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Gillian Plume - Team Leader BID Partnership
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Authorisers
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Alastair Cameron - Principal Advisor CCO Governance
and External Partnerships
Eric Perry - Relationship Manager
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