Agenda of Governing Body

I hereby give notice that an ordinary meeting of the Governing Body will be held on:

Date:

Time:

Meeting Room:

Venue:

Thursday, 28 July 2016

9:30am

Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland

Governing Body

OPEN AGENDA

MEMBERSHIP

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

(Quorum 11 members)

Elaine Stephenson

Democracy Advisor

22 July 2016

Contact Telephone: (09) 890 8117

Email: elaine.stephenson@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

TERMS OF REFERENCE

Those powers which cannot legally be delegated:

(a) the power to make a rate; or

(b) the power to make a bylaw; or

(c) the power to borrow money, or purchase or dispose of assets, other than in accordance with the long term council community plan; or

(d) the power to adopt a long term plan, annual plan, or annual report; or

(e) the power to appoint a Chief Executive; or

(f) the power to adopt policies required to be adopted and consulted on under the Local Government Act 2002 in association with the long term plan or developed for the purpose of the local governance statement; or

(g) the power to adopt a remuneration and employment policy.

Additional responsibilities retained by the Governing Body:

(a) Approval of a draft long term plan or draft annual plan prior to community consultation

(b) Approval of a draft bylaw prior to community consultation

(c) Resolutions required to be made by a local authority under the Local Electoral Act 2001, including the appointment of electoral officer

(d) Adoption of, and amendment to, the Committee Terms of Reference, Standing Orders and Code of Conduct

(e) Relationships with the Independent Māori Statutory Board, including the funding agreement and appointments to committees.

(f) Approval of the Unitary Plan

(g) Overview of the implementation of the Auckland Plan through setting direction on key strategic projects (e.g. the City Rail Link and the alternative funding mechanisms for transport) and receiving regular reporting on the overall achievement of Auckland Plan priorities and performance measures.

Exclusion of the public – who needs to leave the meeting

Members of the public

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

Those who are not members of the public

General principles

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

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

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

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

Members of the meeting

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

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

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

Independent Māori Statutory Board

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

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

Staff

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

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

Local Board members

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

Council Controlled Organisations

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

1 Affirmation

His Worship the Mayor will read the affirmation.

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.

4 Confirmation of Minutes

That the Governing Body:

a) confirm the ordinary minutes of its meeting, held on Thursday, 30 June 2016, as a true and correct record.

5 Acknowledgements and Achievements

His Worship the Mayor will acknowledge the passing of Frank Stowers and recognise the Auckland Council Group’s achievements in July.

6 Petitions

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

7 Public Input

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

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

8 Local Board Input

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

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

8.1 Local Board Input - Puketāpapa Local Board - Housing for Older People Partnering Proposal

Purpose

1. Puketāpapa Local Board Member Michael Wood will make a presentation to the Governing Body regarding the Housing for Older People Partnering Proposal.

Recommendation/s

That the Governing Body:

a) thank Michael Wood for his presentation regarding the Housing for Older People Partnering Proposal and for his attendance.

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.

Governing Body

28 July 2016

Adoption of the amendment to the Auckland Council Long-term Plan 2015-2025 on Housing for Older People

File No.: CP2016/15422

Purpose

1. To consider the feedback from consultation and recommend amending the Long-term Plan 2015-2025 (LTP) to include the Housing for Older People (HfOP) Partnering Policy.

Executive summary

2. On 25 May 2016, the council agreed to consult on the Auckland Council HfOP Partnering Proposal. The proposal enables the council to:

i) partner with a third-party Community Housing Provider (CHP) to establish a new legal entity in a form of a CHP to manage the council’s HfOP portfolio and seek access to government subsidies

ii) delegate to Development Auckland Limited (Panuku) the authority to work with the third-party CHP to redevelop the portfolio under a framework arrangement.

3. Panuku, as council’s development agency, will provide skills and expertise to support the development of HfOP portfolio. This includes selling some land and buildings to help fund the improvement of the quality of the HfOP portfolio. The council is committed to maintain at least 1,412 units within the HfOP portfolio.

4. Between 1 June 2016 and 1 July 2016, the council undertook public consultation, using a special consultative procedure. There were 476 submissions received with 61 per cent either in favour or partially in favour of the proposal, 24 per cent unsure and 15 per cent not in favour.

5. The main themes received from feedback were:

i) bringing new expertise into the operations of the service will be beneficial

ii) a dedicated organisation will be able to better focus on tenants and maintenance to improve the quality of housing, giving our tenants a better quality of life.

6. Staff recommend the changes be adopted as proposed. Adoption of the LTP amendment enables the council to enter into an agreement with a preferred partner to form a new CHP to manage the council’s HfOP portfolio.

7. If the LTP amendment is adopted, Panuku will seek approval at the 25 August 2016 governing body meeting to implement the partnering arrangement.

Recommendation/s

That the Governing Body:

a) note the consultation feedback received from the special consultative procedure on the proposed amendment to the Long-Term Plan 2015-2025.

b) receive the audit report from the Office of the Auditor-General.

c) adopt the amendment to the Long-term Plan 2015-2025 (Attachment C to the agenda report).

d) delegate the authority and responsibility to the Mayor and the Group Chief Financial Officer for agreeing minor editorial changes to the amendment of the Long-term Plan 2015-2025 document.

Comments

Background

8. The council owns 1,412 HfOP units spread across 62 sites in the north, south and west of Auckland covering 26 hectares of land. The portfolio is operated by the council’s Arts, Community and Events (ACE) and Community Facilities departments.

9. In 2013 the Government reformed how social housing would be delivered in New Zealand. This included providing third-party CHP’s with an income related rent subsidy (IRRS), which was historically only provided to Housing New Zealand. The council and council-controlled organisations are unable to access this subsidy.

10. In June 2015 the Auckland Development Committee (ADC) resolved to explore a partnership approach, where the council would partner with a third-party CHP in the management of the portfolio and to establish a new CHP. This would allow the new CHP to gain access to both the IRRS and potentially other external funding sources. Partnering with a third-party provider also means there is a range of additional expertise to draw from. This proposal would result in the council transferring control over its portfolio to the new CHP through a long-term management agreement and lease.

11. On 8 December 2015, ADC endorsed Panuku to enter into a non-binding Memorandum of Understanding with The Selwyn Foundation as the preferred CHP to establish a partnership for delivering the HfOP services.

12. The proposal to transfer control of the HfOP portfolio triggers a statutory requirement to publicly consult on amending the LTP before the council can agree to adopt the proposal.

13. On 25 May 2016, the governing body adopted the consultation documents, and agreed to the consultation approach.

Consultation process

14. The consultation document formed the basis for public consultation.

15. Public consultation ran between 1 June 2016 and 1 July 2016.

16. Two broad channels were used to collect feedback to make it easy for Aucklanders to get involved. These were:

· written submissions – this included a hard copy feedback form, an online feedback form and also any emails, letters, pro forma or other written communications received

· in person – Have Your Say events were held across Auckland to provide an opportunity for Aucklanders to speak in person to elected members and subject matter experts.

Consideration of feedback received

17. Of the 476 submitters, 61 per cent favoured (support or partial support) the proposal. The chart below shows the level of support for the proposal. Further information can be found in attachment A.

18. There were 85 attendees at 13 Have Your Say events. All attendees were also given the opportunity to provide written submissions. Have Your Say events provided a qualitative source of feedback to consider alongside the quantitative analysis of the written submissions. They also provided an opportunity for people to ask questions for clarification prior to submitting their feedback.

19. Analysis of feedback from those that can be identified as tenants shows similar results as received from overall response. Tenants were generally in support of the proposal. Concerns raised by the tenants are covered in the table below.

20. Feedback from those supporting or partially supporting the partnership proposal follow two main themes:

· bringing new expertise into the operations of the service will be beneficial

· a dedicated organisation will be able to better focus on tenants and maintenance to improve the quality of housing. This will give tenants a better quality of life.

21. The concerns raised by those who did not support the proposal or were unsure, are considered in the following table:

Theme

Concern summary

Consideration

Rent

Increasing rent charges

Some tenants were concerned that their rent could increase under the proposal

Current tenants’ rent on the transfer to the CHP will continue to be set in accordance with Auckland Council’s rent policy.

Rent disparity

The proposed CHP will preferentially take new tenants from the Social Housing Register, who will be eligible for IRRS and pay an Income Related Rent of 25% net income, whereas existing Council tenants will remain paying 30% of gross income.

As above.

25% net income is a Government policy and relates only to those eligible to have their rent subsidised by IRRS. Existing tenants will have access to the Accommodation Supplement. A new tenant will pay approximately $10 less per week for singles and approximately $13 less per week for couples.

Sale or redevelopment of sites

What will happen to me?

Tenants may face temporary disruption if their property is scheduled for refurbishment, development or sale. This may be in the form of noise or relocation. All existing tenants will continue to be housed in suitable properties. To manage tenant disruption, consultation will be undertaken to ensure that this is minimised and the transition to better housing is as rapid as possible.

How will the council choose what sites to develop or sell?

Business cases will be created for each development on existing and new sites, and will be assessed by Panuku with the new CHP. An overview of how this process will be managed will be presented to the council in August 2016 if the LTP amendment is adopted.

Performance and control

Lack of Council oversight

In order to unlock access to the IRRS, management and control of the HfOP portfolio must be at “arms-length” of the council.

However, there are a number of controls that will be put in place to ensure that our assets are used to provide the best possible outcomes for tenants, the council and all of Auckland. These controls could include:

· ensuring that the council is still involved in some decision-making by maintaining our minority representation in the new CHP

· placing contractual obligations in the management agreement and lease to ensure compliance to the council’s current policies and the new partnering policy

· putting in place key performance indicators and service level agreements to ensure contractual agreements are met

· the new CHP providing its annual business plan to the council for information

· ensuring that all decisions on the council’s strategic asset will be made consistently with the council’s Significance and Engagement Policy

· the delegation to Panuku from the council to oversee the redevelopment programme.

When exercising the delegation, Panuku will be required to follow all Council requirements including the council’s Significance and Engagement Policy, and the new partnering policy.

22. At the time of writing, feedback was also received from 12 out of 21 local boards, with ten local boards in support of the proposal in principle and one local board partially supporting the proposal. Rodney local board supports the alternate option included in the consultation document to sell or gift the HfOP portfolio to a CHP as it provides better protection for council debt and rates burden. Full resolutions and feedback can be found in Attachment B.

Details of the Amendment

23. On the basis of the consultation and feedback received, staff recommend that the council amend the LTP to enable the council to:

i) partner with a third-party CHP to form a new legal entity in a form of a CHP to manage the council’s HfOP portfolio and seek access to government subsidies

ii) delegate to Panuku the authority to work with the third-party CHP to redevelop the portfolio under a framework arrangement.

24. Panuku, as council’s development agency will provide skills and expertise to support the development of the HfOP portfolio. This includes over time selling some land and buildings to help fund the improvement of the quality of the HfOP portfolio.

25. The policy (Attachment C) sets out the key parameters for any partnership arrangement the council could enter into. The parameters were developed by taking into account the actions and directives contained within the Auckland Plan and the Housing Action Plan, as well as the objectives agreed to by the ADC in June 2015.

26. The policy sets key decision making criteria that are designed to ensure that the council will maintain at least 1,412 HfOP units, improve the quality of housing and tenant satisfaction without overly exposing the council to financial impacts and risk through:

· general decision making on the council’s HfOP portfolio

· the management of the HfOP portfolio by the new CHP

· the development arrangements for the possible redevelopment and/or sale of parts of the HfOP portfolio.

27. The proposal has implications for the council, tenants and Panuku.

i) Overall, there will be a minor financial impact to the council with a rates increase of $5.1 million over the remaining nine years of the LTP period and a debt increase of $48 million by 2025. There is also potentially an accounting impairment of the HfOP land and/or buildings of up to $84 million depending on the nature of the agreement the council enters into. However, the council will always retain legal ownership of the HfOP portfolio. These issues will be discussed when the final agreement is being considered.

ii) Tenants will mostly be positively affected by the proposal, by being provided with better quality housing and having access to new services such as volunteer network. However, tenants may face temporary disruption during development if their unit is scheduled for refurbishment or sale.

iii) Panuku will be delegated responsibility for managing the relationship with the new CHP and developing the portfolio for the council. In order to do this, over the term of the arrangement, Panuku will undertake assessments of the portfolio to determine what redevelopment needs to take place and when.

Next steps

28. The adoption of the amendment to the LTP enables the council to enter into an agreement with a preferred partner to form a new CHP to manage the council’s HfOP portfolio.

29. If the LTP amendment is adopted, Panuku will seek approval at the 25 August 2016 Governing Body meeting to implement the partnering arrangement.

Consideration

Local board views and implications

30. Local board members were provided with a briefing paper and supporting material outlining the new region-wide initiative being led by Panuku to investigate options to partner with community housing providers to manage and develop the HfOP portfolio.

31. A briefing for local board members was held on this initiative on 30 November 2015 and the local board members have also received updates through quarterly performance reports.

32. Local board members received a memo outlining the consultation process. All local boards were invited to submit formal feedback through business meetings in June and July 2016. At the time of writing, 12 local boards had submitted feedback, which was broadly in support of the proposal. Full resolutions and feedback can be found in Attachment B. Any additional feedback received after the submission of this report will be tabled at the 28 July Governing Body meeting.

Māori impact statement

33. The new CHP will have a role in giving effect to outcomes directed by the council’s Māori Responsiveness Framework. This includes recognition and protection of Māori rights and interests within Tāmaki Makaurau and contributing to the needs and aspirations of Māori. In order to do this, Panuku has established a Mana Whenua Governance Group comprising of four senior representatives of mana whenua, plus senior representatives of Panuku and the preferred partner.

Implementation

34. If the LTP amendment is adopted, staff will undertake activity to close the consultation loop with Aucklanders. An email will be sent to all submitters and Have Your Say event attendees (who provided an email address) advising them of the adoption of the amendment to the LTP. Notification will also be included in the tenant reference group newsletters.

Attachments

No.	Title	Page
a View	Summary of consultation feedback	15
b View	Local board feedback	25
c View	Amendment to the LTP 2015-2025	57

Signatories

Authors

Kat Teirney - Manager Community Occupancy

Robert Irvine - Head of Group Financial Planning

Authorisers

Ross Tucker - Acting GM Financial Strategy and Planning

Sue Tindal - Group Chief Financial Officer

Stephen Town - Chief Executive

Governing Body

28 July 2016

Recommendations from the Finance and Performance Committee - SkyPath - Consideration of the Public Private Partnership (PPP) Proposal

File No.: CP2016/15155

Purpose

1. To adopt the recommendations from the Finance and Performance Committee enabling the SkyPath project to be delivered.

Executive summary

2. At its meeting on 21 July 2016, the Finance and Performance Committee considered the attached report and resolved as follows:

That the Finance and Performance Committee recommend to the Governing Body that it:

a) agree to proceed with the SkyPath project and that the hybrid Public Private Partnership proposal is the preferred procurement option to deliver SkyPath.

b) authorise the Chief Executive to enter into all necessary agreements in relation to the SkyPath proposal, subject to minimal financial impacts, and to take any other actions in the Chief Executive’s delegation to facilitate the progress of the project.

c) agree to make appropriate provision for the SkyPath project in the 2017/18 Annual Plan and the 2018 - 2028 Long-term Plan.

d) support free access to SkyPath for children under five years of age, accompanied by a paying adult.

e) support on-leash dog access to SkyPath, subject to negotiations with NZTA and compliance with health and safety regulations.

3. The attachments to the original report are available on the Auckland Council website in the 21 July 2016 Finance and Performance Committee agenda.

Recommendation/s

That the Finance and Performance Committee recommend to the Governing Body that it:

a) agree to proceed with the SkyPath project and that the hybrid Public Private Partnership proposal is the preferred procurement option to deliver SkyPath.

c) agree to make appropriate provision for the SkyPath project in the 2017/18 Annual Plan and the 2018 - 2028 Long-term Plan.

d) support free access to SkyPath for children under five years of age, accompanied by a paying adult.

e) support on-leash dog access to SkyPath, subject to negotiations with NZTA and compliance with health and safety regulations.

Attachments

No.	Title	Page
a View	21 July 2016 Original SkyPath report to Finance and Performance Committee	67

Signatories

Author	Mike Giddey - Democracy Advisor
Authoriser	Stephen Town - Chief Executive

Author	Elaine Stephenson - Democracy Advisor
Authoriser	Stephen Town - Chief Executive