Agenda of Council Controlled Organisations Governance and Monitoring Committee

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

Date:

Time:

Meeting Room:

Venue:

Tuesday, 6 September 2016

9.30am

Room 1, Level 26
135 Albert Street
Auckland

Council Controlled Organisations Governance and Monitoring Committee

OPEN AGENDA

MEMBERSHIP

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

(Quorum 7 members)

Jaimee Maha

Democracy Advisor

30 August 2016

Contact Telephone: (09) 890 8126

Email: jaimee.maha@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

TERMS OF REFERENCE

Responsibilities

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

· Setting policy relating to CCO governance

· Director appointments

· Approving SOIs

· Monitoring performance

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

Powers

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

Except:

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

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

(ii) Power to establish subcommittees.

Exclusion of the public – who needs to leave the meeting

Members of the public

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

Those who are not members of the public

General principles

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

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

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

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

Members of the meeting

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

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

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

Independent Māori Statutory Board

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

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

Staff

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

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

Local Board members

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

Council Controlled Organisations

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

1 Apologies

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

2 Declaration of Interest

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

3 Confirmation of Minutes

That the Council Controlled Organisations Governance and Monitoring Committee:

a) confirm the ordinary minutes of its meeting, held on Tuesday, 2 August 2016, including the confidential section, as a true and correct record.

4 Petitions

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

5 Public Input

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

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

6 Local Board Input

Standing Order 6.2 provides for Local Board Input. The Chairperson (or nominee of that Chairperson) is entitled to speak for up to five (5) minutes during this time. The Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical, give one (1) 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.

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

7 Extraordinary Business

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

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

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

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

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

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

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

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

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

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

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

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

8 Notices of Motion

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

Council Controlled Organisations Governance and Monitoring Committee

06 September 2016

Substantive Council-controlled Organisations and Tāmaki Redevelopment Company Limited : Shareholders' Annual General Meetings

File No.: CP2016/17147

Purpose

1. To authorise the Chief Executive of Auckland Council to execute written resolutions instead of holding an annual shareholders’ meetings of the Auckland Council’s substantive Council-controlled organisations (CCOs), and of the Tāmaki Redevelopment Company Limited (TRC).

Executive summary

2. Section 120 of the Companies Act 1993 (the Act) requires the board of a company to call an annual meeting of shareholders’, to be held not later than six months after the balance date of the company.

3. All of Auckland Council’s substantive CCOs, except for Auckland Transport (AT), are companies registered under the Act. Although Regional Facilities Auckland (RFA) is a charitable trust, Regional Facilities Auckland Limited is the corporate trustee of RFA and is a company under the Act. The balance date for these CCOs (excluding AT) is 30 June of each year.

4. Section 122(1) of the Act permits shareholders’ to pass written resolutions on various matters, instead of holding an annual meeting, provided such resolution is signed by not less than 75 per cent of shareholders’ entitled to vote on it. Auckland Council is the sole shareholder for all of its substantive CCOs and is a joint shareholder in TRC with the Crown.

5. Due to the administrative nature of the business conducted at annual 2015/2016 shareholders’ meetings, this report recommends that the committee authorise the Chief Executive of Auckland Council to execute written resolutions instead of holding annual CCO shareholders’ meetings. We also recommend that the committee authorise the Chief Executive to do the same for the TRC, or to vote on Auckland Council’s behalf, should the TRC hold a shareholders’ meeting.

Recommendation/s

That the Council Controlled Organisations Governance and Monitoring Committee:

a) authorise the Chief Executive Auckland Council to act as Auckland Council’s shareholder representative to execute a written resolution instead of holding an annual shareholders’ meeting for the following companies:

i) Auckland Council Investments Limited;

ii) Auckland Tourism, Events and Economic Development Limited;

iii) Regional Facilities Auckland Limited;

iv) Watercare Services Limited; and

v) Panuku Development Auckland Limited.

b) authorise the Chief Executive Auckland Council to act as Auckland Council representative of the jointly owned company Tāmaki Redevelopment Company Limited to either:

i) execute a written shareholders’ resolution instead of holding an annual meeting of the shareholder; or

ii) vote on Auckland Council’s behalf at an Annual General Meeting of the Company; or

iii) execute a proxy form on behalf of Auckland Council.

Comments

6. The Act requires that companies hold an annual shareholders’ meeting not later than six months after the balance date of the company. The relevant company constitutions also contain this requirement.

7. Section 122(1) of the Act permits the shareholder to pass written resolutions on various matters instead of holding a shareholders’ meeting, provided such resolution is signed by not less than 75 per cent of shareholders’ entitled to vote on it. Such a resolution is as valid as if it had been passed at an annual meeting of the shareholder.

Auckland Council’s CCOs

8. All of Auckland Council’s substantive CCOs, except for Auckland Transport (AT), are companies registered under the Act. Although RFA is a charitable trust, Regional Facilities Auckland Limited is the corporate trustee of RFA and is a company under the Act. The balance date for these CCOs (excluding AT) is 30 June.

9. The business to be completed at the 2015-2016 annual shareholders’ meeting is to:

i) note that the Auditor General was appointed as the company auditor;

ii) note that each CCO has provided a copy of its annual 2015/2016 report;

iii) confirm the reappointments and new appointments to each CCO; and

iv) confirm the amendments to the Auckland Council’s Board Appointment and Remuneration Policy.

10. Due to the administrative nature of the business to be conducted at the annual 2015-2016 shareholders’ meetings, this report recommends that the committee authorise the Chief Executive of Auckland Council to execute written resolutions in lieu of the annual shareholders’ meetings for the CCOs.

11. The CCO Governance and External Partnerships (CCO G&EP) department will prepare the appropriate resolutions to ensure compliance with the statutory timeframes.

Tāmaki Redevelopment Company (TRC)

12. Crown officials are waiting for final decision on whether to proceed with executing written shareholders’ resolutions instead of holding an annual meeting of the shareholders’ for TRC.

13. The recommendation is for the Chief Executive of Auckland Council to either execute shareholder resolutions instead of holding an annual meeting or, in the event of Crown’s decision to proceed with a meeting, to vote on Auckland Council’s behalf, or appoint a proxy to attend in his absence.

Consideration

Local board views and implications

14. Governance of CCOs is the responsibility of the governing body and the views of local boards have not been sought. In addition, the matters for decision in this report are of an administrative nature and do not raise any implications for local boards to consider.

Māori impact statement

15. This report does not raise any issues of significance or adverse impacts for Māori, nor does it raise any issues that will be of benefit to Māori.

Implementation

16. Pursuant to decisions by the CCO Governance and Monitoring Committee, council staff will prepare appropriate documentation and resolutions to ensure compliance with the statutory timeframes (December 2016).

Attachments

There are no attachments for this report.

Signatories

Authors

Josie Meuli - Senior Advisor

Authorisers

Alastair Cameron - Manager, CCO Governance & External Partnerships

Phil Wilson - Governance Director

Council Controlled Organisations Governance and Monitoring Committee

06 September 2016

Council Controlled Organisation Exemptions

File No.: CP2016/17172

Purpose

1. To consider exempting ten council controlled organisations (CCOs) from the Statement of Intent (SOI) accountability requirements.

Executive summary

2. The Local Government Act 2002 (the Act) provides for local authorities to exempt a CCO from the accountability requirements of the Act, following an assessment of:

i) the nature and scope of the CCOs activities; and

ii) the costs and benefits of exempting to the local authority, the CCO and the community.

3. This report recommends exemption of ten entities whose current exemptions are due to be reviewed.

4. The report concludes that for each of the entities there would be little if any benefit from applying the SOI accountability requirements of the Act. Taking into account the limited benefits and the compliance costs there are good grounds to exempt all of these entities.

Recommendation/s

That the Council Controlled Organisations Governance and Monitoring Committee:

a) agree to grant council controlled organisation exemptions under the Local Government Act 2002 to the following council controlled organisations:

i) Downtown Marinas Limited

ii) Westhaven Marinas Limited

iii) Westhaven (Existing Marinas) Trust

iv) Westhaven (Marina Extension) Trust

v) Auckland City Water Limited

vi) Watercare Harbour Clean-Up Trust

vii) Mount Albert Grammar School Community Swimming Pool Trust

viii) Arts Regional Trust

ix) Manukau Beatification Charitable Trust

x) Highbrook Park Trust

on the grounds that the costs associated with meeting the Statement of Intent accountability requirements of the Local Government Act for these organisations, outweigh any likely benefits.

b) agree to review these exemptions by September 2019, noting that the exemptions can be revoked by the council at any time.

Comments

5. Section 7(3) of the Act provides for local authorities to exempt a CCO from the SOI accountability requirements of the Act following an assessment of the nature and scope of the CCOs activities and the costs and benefits of exempting, to the local authority, the CCO and the community. The council can revoke an exemption at any time and must review it every three years. The council cannot exempt a council controlled trading organisation (CCTO) which is a CCO that has the purpose of making a profit. None of the entities considered in this report are CCTOs.

6. Decisions to exempt small CCOs do not trigger the council’s significance policy.

7. The intention of section 7(3) of the Act is to avoid unnecessary compliance costs for small CCOs with limited scope of activities. For such entities, requiring an SOI and regular reporting against the performance measures contained in the SOI would add reporting that is disproportionate to the size and/or scale of the entity.

8. When a CCO is first exempted, this must be reviewed within three years and then at no more than three-yearly intervals. Exemption is not automatically granted and must be reconsidered each time.

9. Despite the exemptions from accountability requirements through the SOI, council does maintain a governance relationship with these entities. In particular, council maintains its board appointment responsibilities, and receives financial reports for the Auckland Council group financial report. Both these processes allow council to have oversight, and the opportunity to pick up issues that could affect the exemption status. In addition, the three-yearly process of re-confirming exemptions itself allows a review of risk, and the appropriateness of exempted status.

10. This report recommends further exemptions for a total of ten entities, shown below:

Name	‘Parent’/controlling entity	Last exempted	Review date
Downtown Marinas Limited	Panuku Development Auckland Limited (Panuku)	August 2013	September 2019
Westhaven Marinas Limited	Panuku	August 2013
Westhaven (Existing Marinas) Trust
Panuku	August 2013
Westhaven (Marina Extension) Trust
Panuku	August 2013
Auckland City Water Limited
Watercare Services Limited	August 2013
Watercare Harbour Clean-Up Trust.
Watercare Services Limited	August 2013
Mt Albert Grammar School Community Swimming Pool Trust
Auckland Council	August 2013
Arts Regional Trust	Auckland Council	October 2012
Manukau Beatification Charitable Trust	Auckland Council	December 2012
Highbrook Park Trust	Auckland Council	December 2012

Marina companies and trusts

11. The four marina organisations shown above form the governance structure for Westhaven and Hobson West marinas, which the Auckland City Council purchased in 2004.

12. Waterfront Auckland gained control of the four organisations on 1 November 2010 as part of the local government reorganisation in Auckland. The subsequent amalgamation in 2015 of Waterfront Auckland and Auckland Council Properties Ltd to form Development Auckland Ltd (Panuku), transferred governance, control and management of these four subsidiary CCOs to Panuku. This provides sufficient oversight of these entities.

13. Downtown Marinas Limited owns the assets of the Hobson Berth West Marina. Via the issue of a redeemable preference share or ‘berth share’, it grants licences to ‘berth shareholders’. The objective of the company is to break even over time by recovering costs from licensees.

14. This report recommends a further exemption for Downtown Marinas Limited taking into account the limited scope of its activities and financial undertakings. Another level of reporting to meet SOI accountability requirements would add cost with little or no benefit.

15. This report also recommends a further exemption for Westhaven Marina Limited, which is the sole corporate trustee of two subsidiary trusts - Westhaven (Existing Marina) Trust and Westhaven (Marina Extension) Trust, which manage the Westhaven marina assets and occupation rights.

16. The Westhaven Marina Limited appoints a manager to supervise, direct and control the management and operation of the two subsidiary marinas. Further exemptions are recommended for these three entities on the basis that the scale and scope of the activities is limited and Westhaven Marina Limited does not hold assets or incur liabilities.

Auckland City Water Limited (ACWL)

17. ACWL is a subsidiary of Watercare. It was originally established by Metrowater Limited for the sole purposes of name protection. It transferred to Watercare in November 2010, along with other Metrowater’s assets. It remains a non-active company, with one director – currently the chair of Watercare.

18. This report recommends a further exemption for ACWL as there is no activity to monitor and therefore no benefit from introducing an SOI accountability regime.

Watercare Harbour Clean-up Trust (WHCUT)

19. The WHCUT oversees the removal of litter from Auckland’s Waitemata Harbour and inner gulf islands, and promotes the concept of rubbish-free waterways. The WHCUT was established in 2002 and is primarily funded by Watercare. Four out of five trustees are Watercare staff members or board members and therefore Watercare indirectly controls 50 per cent or more of the votes.

20. Watercare monitors the performance of the trust and Watercare’s quarterly report often includes an update on WHCUT activities.

21. This report recommends an exemption for the WHCUT based on the limited scope and scale of its activities. Formal reporting on SOI accountability requirements adds cost with little or no benefit.

Mt Albert Grammar School Community Swimming Pool Trust (MAGSCSPT)

22. The MAGSCSPT was formed through a partnership between the Auckland City Council and the Mount Albert Grammar School. The MAGSCSPT is a CCO which owns the Mt Albert Aquatic Centre.

23. Following changes to the governance structure over the 2013-2016 term, the MAGSCSPT has retained ownership of the asset and Auckland Council has assumed full responsibility for the management and operation of the facility. This change was implemented via a sub-license between the MAGSCSPT and council.

24. As a result of this change, the MAGSCSPT’s responsibilities are limited to maintaining and reporting financial accounts and receiving council reports related to the sub-lease agreement. On this basis, this report recommends an exemption for a further three years.

Arts Regional Trust (ART)

25. Auckland and Manukau City Councils formed the ART in 2001 to manage and grow their combined share of funds ($6 million) provided through the disestablishment of the Auckland Regional Services Trust. After annual inflation, ART is charged with maintaining the capital sum and distributing its net income to Auckland’s art and cultural sectors.

26. ART has sound governance and monitoring practices and provides regular reports to the Arts, Culture and Events Committee of council. On this basis, this report recommends a further exemption for ART.

Manukau Beatification Charitable Trust (MBCT)

27. A further exemption is recommended for the MBCT. The MBCT delivers well defined services of limited scope and scale, does not carry significant assets, and has financial reserves. There is little benefit to council, community or MBCT from the SOI process and associated reporting, as the MBCT’s performance is also being monitored through its contract with council.

Highbrook Park Trust (HPT)

28. This report recommends granting a further exemption to HPT. The HPT’s activities are focused on a specific park and are well defined. Although the value of the asset is significant, it is not a built asset and so there is little risk with respect to depreciation, maintenance and renewals.

29. There is little benefit to the council, community or trust from the SOI process and associated reporting, as the HPT is being monitored against its management agreement. In addition, the proximity to Highbrook Business Park, whose owners are also involved with the HPT, provides further reassurance that the asset is well managed.

Consideration

Local board views and implications

30. Local board views were not sought as decision making on the governance of CCOs is a responsibility of the governing body of Auckland Council. There are no implications for local boards associated with these exemptions.

Māori impact statement

31. Māori, as stakeholders in the council, are affected and have an interest in activities and governance of CCOs. CCO exemption does not affect the delivery of activities. In addition, this report has found that CCO governance will not be adversely affected by the approval of the recommendations. As such, the exemptions have no particular benefit or adverse effect on Māori.

Implementation

32. Subject to the resolutions of this committee, each of the ten CCOs in this report will be notified of its SOI exemption status.

Attachments

There are no attachments for this report.

Signatories

Authors

Rose Leonard - Principal Advisor

Authorisers

Alastair Cameron - Manager, CCO Governance and External Partnerships

Phil Wilson - Governance Director

Council Controlled Organisations Governance and Monitoring Committee

06 September 2016

Council Controlled Organisations Fourth Quarter Reports for 30 June 2016

File No.: CP2016/17959

Purpose

1. To receive the reports from each substantive Council Controlled Organisation (CCO) for the fourth quarter ending 30 June 2016.

Executive summary

2. This report is part of the regular quarterly reporting to the CCO Governance and Monitoring Committee by the substantive CCOs on their financial and service performance.

3. The attached reports from each of the CCOs provide an update on strategic issues, achievements, risks and performance.

4. Each CCO is also requested to include sections outlining any key local board issues and contribution to Māori outcomes.

5. In line with the current reporting obligations, it is the responsibility of the board of each CCO to keep the committee, as the shareholder, informed of key risks and issues, and the status of the operating and financial performance.

6. These reports support the consolidated group financial statements for the fourth quarter ending 30 June 2016.

Recommendation/s

That the Council Controlled Organisations Governance and Monitoring Committee:

a) receive the report for the fourth quarter ending 30 June 2016 from Auckland Council Investments Limited.

b) receive the report for the fourth quarter ending 30 June 2016 from Auckland Transport.

c) receive the report for the fourth quarter ending 30 June 2016 from Watercare Services Limited.

d) receive the report for the fourth quarter ending 30 June 2016 from Regional Facilities Auckland.

e) receive the report for the fourth quarter ending 30 June 2016 from Auckland Tourism, Events and Economic Development.

f) receive the report for the fourth quarter ending 30 June 2016 from Panuku Development Auckland.

Attachments

No.	Title	Page
a ⇩	Auckland Council Investments Limited Fourth Quarter Report - 30 June 2016	21
b ⇩	Auckland Transport Fourth Quarter Report - 30 June 2016	35
c ⇩	Watercare Services Limited Fourth Quarter Report - 30 June 2016	59
d ⇩	Regional Facilities Auckland Fourth Quarter Report - 30 June 2016	85
e ⇩	Auckland Tourism, Events and Economic Development Fourth Quarter Report - 30 June 2016	107
f ⇩	Panuku Development Auckland Fourth Quarter Report - 30 June 2016	139