Agenda of Environment and Community Committee

Environment and Community Committee

14 March 2017

Auckland as a UNESCO Creative City Of Music

File No.: CP2016/24817

Purpose

1. To seek a decision on progressing an application for Auckland to be a Creative City of Music.

Executive summary

2. Recorded Music New Zealand approached Auckland Council in June 2016 requesting support for an industry-led application to join the United Nations Educational Scientific and Cultural Organisation (UNESCO) Creative Cities Network as a Creative City of Music.

3. The Network promotes cooperation between member cities across 7 creative sector designations, of which music is one. The creative city designation aims to support economic development, facilitate international collaboration and exchange; and foster social inclusion and cultural vibrancy.

4. Auckland’s music industry representatives will lead the application, in collaboration with council staff. The application is due in June 2017, with the next call for applications in 2019.

5. The application requires formal political commitment from the mayor and council.

6. Membership would involve development of an action plan, use of a global brand, and opportunities for collaboration with other Creative Cities.

7. Auckland has a wide ranging and vibrant music tradition with strong performance and recording history. Promotion of music contributes to the Auckland Plan outcome “A culturally rich and creative Auckland” and brings a range of other benefits, including economic development, cultural expression, and leverage of other art forms.

8. Toi Whītiki: Auckland’s Arts and Culture Strategic Action Plan supports a range of music-related initiatives, but it does not have sector specific plans, e.g. for music.

9. There is anecdotal evidence of the benefits of membership and an evaluation of the impacts is underway by UNESCO.

10. Auckland Council’s contribution to developing the application and action plan can be managed within current resources as part of council’s sector engagement role and existing relationships with the music sector.

11. Music sector representatives have indicated they will take responsibility for any ongoing obligations to maintain membership including any costs associated with attendance at annual network meetings.

12. Two options are presented for consideration:

Option 1: Decline to support the application, and continue to support music as an integral part of implementing Toi Whītiki: Auckland’s Arts and Culture Strategy.

13. Option 2: Endorse application for membership to the UNESCO Creative Cities Network (Recommended option).

14. Staff recommend Option 2 as it brings a range of benefits that will align with council’s strategic objectives in the Auckland Plan and Toi Whītiki. It can be achieved within existing resources and supports a sector-led initiative that is consistent with council’s enabling council approach.

Recommendation/s

That the Environment and Community Committee:

Either:

a) agree to Option 1: Decline to support the application, and continue to support music as an integral part of implementing Toi Whītiki, Auckland’s Arts and Culture Strategy.

Or:

b) agree to Option 2: Endorse the music industry to progress an application for Auckland to seek membership to the UNESCO Creative City Network as a designated City of Music.

i) direct staff through the delegations of the Chief Executive to assist Auckland’s music industry representatives with the application as per the requirements set out in paragraph 32 of this report.

ii) note that staff will report back on the outcome of the application, anticipated to be October 2017.

Comments

Background

15. On 28 June 2016, Mark Roach from Recorded Music NZ presented to the Arts, Culture and Events Committee requesting council support for an industry-led application for Auckland to join the United Nations Educational, Scientific and Cultural Organisation Creative Cities Network (UNESCO CCN) within the creative field of Music.

16. The Regional Strategy and Policy Committee subsequently requested staff undertake analysis and report back with a recommended position on the matter. (Resolution Number REG/2016/70).

17. The call for applications is now open to join the UNESCO Creative Cities Network begins on 17 April 2017 and closes 15 June 2017. Calls for applications are held every two years.

18. Council has received a number of requests to join international networks. While there is currently no formal policy on these kinds of memberships, an objective in the council’s Global Engagement Strategy is to raise Auckland’s profile through global networks. All new memberships are considered on a case by case basis against the value and impact Auckland might achieve through membership.

19. While there are possibilities for Auckland to be designated in other art forms professional bodies representing the music sector have formally indicated they can and will lead the bid process in partnership with council. The music sector has a long-standing working relationship with council.

20. The Environment and Community Committee has the delegated authority to make a decision for Auckland to bid to become a UNESCO Creative City of Music.

What is a UNESCO Creative City?

21. The UNESCO CCN was created in 2004 to promote relationships with cities that have identified creativity as a driver for sustainable urban development, social inclusion and cultural vibrancy.

22. Cities that are members of the Network are organised into seven creative fields: crafts and folk art, design, film, gastronomy, literature, media arts and music. There are 116 Creative Cities and there are 19 global Cities of Music including Adelaide, Bogota, Glasgow, Seville, Varanasi and Kingston.

23. Cities use the designation and Creative City brand to attract tourism, focus investment in arts infrastructure, promote creative exchanges, facilitate international collaboration; and drive economic development and regeneration through their creative sectors.

24. UNESCO is in the process of evaluating the impact of CCN membership but the results of this are not yet available.

25. Anecdotal reports from membership cities cite a range of benefits:

· stronger international cooperation between other creative cities, e.g. this has been done extensively between Seville, Adelaide and Ghent

· stronger creation, production, distribution of musical activities, goods and services that also leverage other associated art-forms

· development of hubs of innovation, broader opportunities for practitioners in the music sector, and other disciplines across the creative industries

· initiatives that are making creativity an essential part of urban development

· improved access to participation in, and enjoyment of music, notably for marginalised or vulnerable groups and individuals.

26. Dunedin is currently New Zealand’s only UNESCO Creative City. It was designated a City of Literature in 2014. Adelaide is Auckland’s closest international Creative City and achieved the designation for music in 2015. Adelaide has reported that this has attracted greater federal investment in the arts and a boom in tourism.

Strategic context and investment in music

27. Promotion of music contributes to the Auckland Plan outcome “A culturally rich and creative Auckland” and brings a range of other benefits, including economic development, diverse cultural expression, and leverage of other art forms.

28. Toi Whītiki: Auckland’s Arts and Culture Strategic Action Plan supports a range of music-related initiatives, but it does not have sector specific plans, e.g. for music.

29. Auckland has a wide ranging and vibrant music tradition with strong performance and recording history.

30. The council invests more in music than any other art form.

Auckland Council Investment by art form (from An Operational Framework for Creative Sector Investment –December 2016, Arts Community and Events).

The process for applying to join the Network

31. Auckland’s music sector has indicated it will lead the application process and take responsibility for ongoing obligations to maintain membership (the industry’s proposal can be seen in Attachment A).

32. The application requires Auckland Council to show commitment through:

· a formal letter from the Mayor presenting the candidature

· formal letters of endorsement including from the New Zealand National Commission for UNESCO, and active national professional associations (see Attachment B)

· a stock-take of current investment in music

· a four year action plan that indicates an ongoing commitment to the City of Music status. The music industry will lead this with assistance from council for an application in 2017 (Attachment C, Adelaide City of Music 2016 Action Plan as an example).

33. Council’s contribution to the application process could be resourced within existing baselines.

Options Analysis

34. Two options are presented for consideration. The advantages, disadvantages, risks and cost implications of each option are outlined in the tables below.

Option 1: Decline to support the application, and continue to support music as an integral part of implementing Toi Whītiki, Auckland’s Arts and Culture Strategy.
Advantages
· continuation of planned activities within established strategic framework, and ‘no surprises” · the council does not appear to favour one artistic sector over another · avoids precluding future opportunities for Auckland to become a Creative City with a different designation, e.g. gastronomy or design.
Disadvantages
· potential missed opportunities to: o harness the energy and enthusiasm of the creative sector (and the music industry in particular) o implement an enabling approach regarding community partnership o develop an action plan o utilise a global brand, and o collaborate internationally · the music industry may look for another territorial authority to support a bid this year. If successful, this would reduce Auckland’s chances in the future as UNESCO is unlikely to designate multiple cities in the North Island.
Risks	Mitigation
Music industry and other creative sector stakeholders perceive council’s rejection of the request negatively, weakening relationships, reducing opportunities for collaboration and damaging council’s reputation.	Council would have to put in additional effort to rebuild the relationship with the music industry.
Auckland misses future opportunities for UNESCO CCN membership.	Council would promote the city’s creativity without formal designation through Toi Whītiki communications, implementation plan and sector hui.
Cost implications
N/A

Option 2: Endorse application for membership to the UNESCO Creative Cities Network (Recommended option).
Advantages
· membership of the CCN would bring three key advantages: o development of a music sector action plan, and associated monitoring and reporting will provide focus, encourage collaboration and leverage other art forms to further deliver on Toi Whītiki objectives. o the branding opportunity will support Auckland’s identity and expression and is in line with council’ Global Partnership and Strategy objectives to raise Auckland’s profile in the global economy o international collaboration, cultural exchange and information sharing with other CCN cities, including applying the results of membership impact evaluation · an industry-led bid implements an “enabling council”, consistent with partnership and council’s community empowerment directives · the resource implications for council can be met within existing baselines.
Disadvantages
This decision limits future opportunities to become a UNESCO CCN for a different designation.
Risks	Mitigation
Implementation and monitoring/reporting of the action plan may require additional council resources.	Set clear expectations with the music sector that council’s contribution is within existing resources.
Expectations for additional funding for new initiatives arising from action plan.	As above, and/or council may choose to consider through contestable grant processes or future Long-term Plan processes.
There may be questions from other creative sectors around the City of Music designation.	Internal and external messaging will be disseminated via council and CCO communications teams regarding strategic alignment and rationale.
Cost implications
· It is expected that membership can be achieved within existing council resources: o Council’s contribution to the application (including development of the action plan) can be met within existing resources in the Arts, Community and Events (ACE) Unit. It can be managed as part of the unit’s sector engagement role and through their existing relationships with the music industry. o any costs for consultation, communications and publication associated with seeking membership will be met by the music industry. · there could be potential costs arising from the four year action plan, these could be considered at council’s discretion either through reprioritising existing budgets or through contestable grants and/or future Long-Term Plan processes · there are some costs implications (e.g international travel) associated with attendance at the annual UNESCO CCN meetings. The music industry has indicated they will attend these at their cost if council/Mayoral attendance was not possible.

35. Staff recommend Option 2 because it brings a range of advantages that align with council objectives in strategies such as Toi Whitiki. It will focus sector effort and resources through the development of an action plan and capitalise on an international brand and international collaboration. It also supports the music industry’s willingness to take the lead which is consistent with the “enabling” council approach.

Next Steps

36. As noted earlier, Auckland’s music industry representative has assured Auckland Council that they will lead the application process including the development of the action plan.

37. If Option 2 is supported, council staff will work with the music industry to formally clarify roles and responsibilities and assist them to progress the application.

38. If the application is successful, coordination of implementation and any ongoing monitoring of the action plan will be led by the music industry with the assistance of council staff.

Timeline for bid process

Key milestones for application and possible award
February 2017	Sign off from Environment & Community Committee to proceed with application Letter of endorsement from the Mayor Music industry led application process begins including sector consultation on proposed actions for Auckland in partnership with council staff (Arts Community and Events Unit)
March 2017	Gain endorsement at the convening of the UNESCO New Zealand National Commission Review consultation results on actions, to create draft action plan
April 2017	UNESCO call for applications
May 2017	Distribute draft action plan for feedback to sector stakeholders, including local boards, mana whenua and mataawaka
June 2017	Confirm and complete action plan and proceed with application
June 2017	Deadline for receipt of the applications by UNESCO
October 2017	Publication of designations by the Director-General of UNESCO on the UNESCO website Inform result to elected members
March 2018	Potential public launch

Consideration

39. Key staff in Global Partnerships, Auckland Tourism Events and Economic Development (ATEED), Regional Facilities Auckland (RFA), and key cultural agencies Creative New Zealand (CNZ), and Ministry for Culture & Heritage (CNZ) have indicated general support for the proposal.

Local board views and implications

40. Many local board plans include arts and culture outcomes, including music specific objectives.

41. Annual discretionary funding reports indicate local boards are strong supporters of music events in their communities. These are often annual commitments to profile the culture and youth of local communities (2015/16 LDI reports: Arts Community and Events).

42. If Auckland applies for a Creative City designation, local boards will be involved in the development of a region-wide action plan that also meets the needs of local communities.

43. Should Auckland achieve Creative City designation, local boards will have the opportunity to leverage the status to develop exchanges and relationships and to profile local initiatives.

Māori impact statement

44. Strategic direction three of the Auckland Plan and the key goal of Toi Whītiki is to integrate arts and culture into everyday life. Music is a democratic art form, which aligns to Te Ao Māori where there is no delineation between arts, culture and life.

45. Music is integral to Māori culture and the profile and calibre of Māori artists is high. A range of grassroots organisations, including Māori organisations, will be able to leverage the network and in fact this type of representation and engagement is critical in getting endorsement for the bid and action plan.

46. Te Reo Māori is an official language and many New Zealanders have learnt to pronounce Māori language through learning a waiata/song or joining the All Blacks in spirit while they perform the haka.

47. Traditional knowledge has survived due to historical narratives found in the oral traditions of waiata (song) and moteatea (lament), while the revival of tāonga pūoro (Māori musical instruments) in Aotearoa has resulted in international interest from other indigenous nations, desiring to rebuild the knowledge and use of such artefacts.

48. It is expected that Auckland as a designated UNESCO City of Music could provide positive impacts for Māori through:

· growing Māori participation by promoting Māori music and culture in all forms including music events internationally (to other members across the creative city network)

· establishing networks for Māori creative practitioners and supporting entrepreneurship and indigenous business development

· promotion of the visual and spoken use of Te Reo Māori, by increasing the profile of Māori music, song-writing and performance.

Implementation

49. If the application is successful, attendance at the UNESCO Creative Cities Network annual meetings is generally required. A city is usually represented at these by their Mayor or another council nominee. The music industry has indicated they would attend these at their cost if a council representative is not able to attend.

Attachments

No.	Title	Page
a ⇩	Auckland City of Music proposal	21
b ⇩	Endorsements	27
c ⇩	Adelaide City of Music Action 2016 Plan	29

Signatories

Authors

Maree Mills - Principal Policy Analyst

Tracey Williams – Head of Creative Strategy Arts and Culture

Authorisers

Kataraina Maki - GM - Community & Social Policy

Dean Kimpton - Chief Operating Officer

Environment and Community Committee

14 March 2017

Community Facilities Network Plan Progress Report

File No.: CP2017/00324

Purpose

1. To provide a progress report on the Community Facilities Network Plan and seek agreement to a report back on community facility provision in the central-west.

Executive summary

2. Auckland Council has over 350 community facilities that provide community, arts, library, aquatic and leisure services.

3. These are important to local communities, providing space where people connect, socialise, learn and participate in activities. This contributes to improved health and wellbeing, a sense of belonging, identity and pride among residents.

4. The Community Facilities Network Plan, adopted in August 2015, guides council’s strategic approach to the provision of community facilities. It is supported by an accompanying Action Plan comprising 121 actions, of these 50 are identified as network priorities.

5. This report shows good progress has been made on implementing actions in 2016, as follows:

· of the 50 network priority actions:

o 32% are completed (16 actions)

o 50% are underway (18 actions) or planned in 2016/2017 (7 actions)

· of the total 121 actions, 30% are completed (37 actions)

· a further 37% of actions are underway or planned for 2016/17.

6. Priority actions progressing first are those with funding in the first five years of the Long-term Plan 2015-2025, network priorities in spatial priority areas; and actions where there is potential for optimisation.

7. Some investigations completed in 2015/2016 or underway in 2016/2017 could result in proposals for additional investment through the next Long-term Plan 2018-2028. If this is required, indicative business cases will be reported to governing body for consideration.

8. One significant provision gap that has been identified is for multi-purpose spaces for aquatic, leisure and community services in the central-west area (which includes Avondale, New Lynn and parts of Mt Albert). An indicative business case on this is being prepared for consideration by the governing body by July 2017.

Recommendation/s

That the Environment and Community Committee:

a) receive the Community Facilities Network Plan progress report.

b) agree that staff report back on an indicative business case for investment in community facility provision in the central-west area by July 2017.

c) note that this report will be forwarded to all local boards for their information.

Comments

Background

What is the Community Facilities Network Plan is and why it is important?

9. Auckland Council has a network of over 350 community facilities that provide community, arts, library, aquatic and leisure services across Auckland.

10. The Community Facilities Network Plan, adopted in August 2015, aims to provide strategic direction for this investment. The goal is to ensure strategically placed and integrated community facilities across Auckland that respond to growth and deliver services in an efficient and cost effective way.

11. The Plan takes a regional network approach and provides a transparent mechanism to prioritise and address competing demands for provision and investment across the region.

12. The plan has the following objectives:

· integrated and coordinated planning across all types of community facilities to ensure future decisions are based on clear evidence of needs and assessment of all options

· maintain, improve and make the best use of the existing network of community facilities where these continue to meet community needs

· focus investment on fit for purpose, integrated and connected community facilities

· explore opportunities to leverage and support partnerships with other providers.

How is the network plan delivered?

13. The Network Plan is accompanied by an Action Plan, which contains 121 actions.

14. Actions were identified through:

· reviewing the current state of existing facilities and services

· an assessment of potential gaps and future demand based on current and projected population growth

· assessment against the network plan’s provision guidelines.

15. The actions are categorised into three types:

· strategic: to support delivery of the Plan’s principles and regional strategies and policies

· business improvements: to create operational efficiencies for services and spaces

· area based actions: localised investigations or developments to improve the network of services and spaces and respond to population growth.

16. The following graph (Figure 1) depicts the breakdown of action types in the Action Plan.

17. Nearly three quarters of the area based actions (74 percent) are investigations to verify gaps in current services or spaces, respond to existing needs and fit for purpose issues; or to consider the implications of projected population growth.

18. Of the 121 actions, 50 are identified as network priorities. Network priorities were determined by criteria set out in the Network Plan. These include network, community and facility factors such as:

· level of demand/catchment size

· projected growth

· community impact

· condition of existing facilities

· opportunities for optimisation.

19. To focus resource in the short term (1-3 years) the actions that have been progressed first are those that:

· have capital funding in the first five years of the Long-term Plan 2015-2025 and/or

· network priority actions in spatial priority areas and/or

· network priority actions with opportunities for optimisation.

20. Most actions involve investigation and options analysis to determine an appropriate response and any funding requirements. An asset solution is not assumed, options may include a range of responses such as:

· operational improvements

· minor improvements

· major upgrades or new facility

· partnerships

· optimise, repurpose or divest

Key challenges and opportunities associated with implementing the network plan

21. There are a number of challenges and opportunities that actions are seeking to address for future community facility provision.

Challenges include:

· perceived gaps and duplication in current provision

· known fit for purpose issues with existing facilities

· demands of a growing and diverse population

· the rising costs of maintaining the network

· improving the financial sustainability in the delivery of community facilities

· security of suitable land for community facility development.

Opportunities include:

· greater integration in the planning and delivery of community facilities

· maximising the benefits of existing facilities

· optimisation of community facilities to support community outcomes

· partnerships in delivery of community facilities

· supporting community-led planning, design, development and governance

· using standardised design to minimise costs.

Progress summary

22. The Network Plan notes that the Action Plan will be updated on an annual basis to reflect progress and that this will be reported to the governing body and local boards.

23. In total, 67% of all actions in the plan have been delivered, are in train or planned for delivery within the next 18 months. Thirty three percent (33%) are yet to be programmed (these are mainly non-priority actions).

24. The following graph (Figure 2) shows a summary of progress to date on all actions:

25. Good progress has been made on priority actions. Of the 50 priority actions:

· 32% are completed (16 actions)

· 50% are underway (18 actions) or planned in 2016/2017 (7 actions).

26. A full list of the actions, drivers and an update on their current status is provided in Attachment A.

Key investigations in 2016

27. Three significant investigations took place during 2016, delivering on eight priority actions in the Action Plan. These are summarised below:

Papakura/Takanini - actions # 81, 82, and 83

28. This work investigated community needs and specifically the requirements for community and library provision in Takanini. The study confirmed the development of a multi-purpose community/ library facility in Takanini is required to meet the needs of current and future residents.

29. There is already $6.3m in the Long-term Plan 2015-2025 for this purpose. The next stage of work underway is to determine how it will be delivered. If additional funding is required this will be reported back to the governing body for consideration.

Manurewa/ Manukau Central - action # 66

30. This work investigated community needs and current service and facility provision in Manurewa/Manukau Central. The study did not identify the need for any new facilities but made recommendations for improvements to existing services and facilities.

31. The next step is to undertake further feasibility work to determine how these improvements could be delivered within existing operational and capital budgets.

32. Future work may be required on a business case for the $2.6m in capital funding currently allocated in the Long-term Plan in 2019/20 for community facilities in Manurewa.

Central-West (Whau and parts of Mt Albert) - actions #113, 114, 115 and 116

33. The primary drivers of this investigation were:

· perceived network gap in aquatic and leisure provision in the central-west (which includes the areas of Avondale, New Lynn and western parts of Mt Albert)

· the need to consider the long-term future of the Mt Albert Aquatic Centre

· major condition issues with the existing Avondale Community Centre.

34. The study concluded that there is a need for new multi-purpose facilities for aquatic, leisure and community services in the Whau area (Avondale and New Lynn) and to maintain provision of aquatic services in Mt Albert.

35. The provision requirements identified and indicative timeframes are as follows:

· spaces to deliver community services in Avondale; replace the current facility (1-3 years)

· spaces for recreation and aquatic services in Whau (optimal location in New Lynn) (1-5 years)

· continue provision of long-term aquatic services in Mt Albert (5-10+ years).

36. There is currently $11.6m in the Long-term Plan for community facilities in the Whau area ($5.03m for replacement of Avondale Community Centre and $6.6m for leisure needs). There is no budget for new aquatic services/facilities.

37. The next step is to develop an indicative business case on the strategic and economic rationale for investment (including options and trade-offs) to meet the service and provision needs in the central-west area.

38. It is proposed that this is reported to the governing body for consideration in the second half of 2017 to align with the next Long-term Plan process.

39. More detailed information on the findings from the above investigations and the next steps is provided in Attachment B.

Key risks in progressing the network plan and actions

40. A number of risks have potential to impact on council’s ongoing and successful delivery of the Network Plan, these risks and the mitigations are set out below:

Risk

Mitigation

Strategic alignment

· the Network Plan aims to create integrated services and multi-purpose facilities which may differ from council’s historic approach of building stand-alone community facilities

· the aim of the new approach is to create efficiencies and improve service delivery to residents, but it may also require the divestment of poor performing or not-fit-for purpose spaces in favour of longer term planning for better integrated or co-located spaces

· if decision-makers and the community do not support this new approach, the service and fiscal benefits may not be realised.

· continue to socialise and reinforce the strategic objectives of the Network Plan to elected members, key staff and through all deliverables

· strengthen the evidence base for the new approach based on the Better Business Case model.

Financial

· budget allocated in the Long-term Plan may be insufficient to deliver some of the actions. In some instances there may be no capital or operational budget allocated in the current Long-term Plan to deliver on any new provision requirements arising from actions

· this may impact on achievement of the Network Plan’s objectives and may not align with expectations of local boards and local communities

· some investigations will have potential impacts on current funding identified in the Long-term Plan.

· manage expectations by acknowledging the delegation for decision-making on investment in new facilities is held by the governing body

· ensure findings of investigations that require new investment are supported by strategic and indicative business cases (based on Better Business Case model) and are reported to governing body for consideration in time to align with the Long-term Plan process.

Timing

· delivery of some actions may exceed timeframes for consideration in the Long-term Plan process

· progressing non-priority actions may impact delivery of priority actions

· timing for some actions (particularly non-priority actions) may not align with elected members and/or local communities.

· drive delivery to meet required timeframes

· focus resources on delivering high priority actions

· manage expectation based on the principles and direction set by the Network Plan.

Next steps

41. Staff will progress actions that are currently underway including those planned to commence in the second half of the 2016/2017 financial year and start programme planning for 2017/2018 actions.

42. Two new actions have been added to the Action Plan, these are to progress findings from the Manurewa-Manukau central and the central-west investigations.

43. Highest priority actions, such as those with funding or in spatial priority areas are targeted for completion in time to inform the next Long-term Plan discussions. This will enable any new or additional budget requirements to be considered by the governing body.

Consideration

Local board views and implications

44. Staff have worked with local boards on the delivery of actions in a number or ways including workshops and reports to local boards on:

· project scope and status updates

· community assessment findings

· potential responses and recommendations.

45. The specific role and level of involvement local board’s play in the delivery of each action is dependent on the nature of the action and their delegation of decision-making.

Māori impact statement

46. Section 2.2 of the Network Plan outlines how the plan will deliver on Māori outcomes identified in the Auckland Plan and the Māori Responsiveness Framework. These include:

· engaging with Māori organisations to understand Māori expectations and investigate community needs

· actively engage and consult on planning, development and operations of facilities

· working closely with Māori groups and key stakeholders throughout projects

· investigating Māori demographic participation and usage trends to identify opportunities to increase attendance and use of facilities

· provide visual representation of the commitment to Māori to tell stories of their connection to the place

· ensure that exploration of potential future sites for facilities incorporate Māori concerns.

47. Engagement with Māori is included as part of investigations and continues through the planning and delivery of responses. Examples of engagement that occurred in 2015-2016 included:

· interviews and meetings with Mana Whenua and Mataawaka

· workshops and focus groups at local marae

· intercept surveys with representative samples of the Māori population base

· face-to-face interviews conducted in Te Reo.

48. Feedback provided from Māori is specific to the nature of the investigation for which the engagement occurred. It is included alongside wider community input and is used to inform the delivery of options and responses.

Implementation

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

Attachments

No.	Title	Page
a ⇩	Community Facilities Network Action Plan - Status of actions	41
b ⇩	Key investigation findings and next steps	55

Signatories

Author

Liz Civil - Manager Community Policy

Authorisers

Kataraina Maki - GM - Community & Social Policy

Dean Kimpton - Chief Operating Officer

Environment and Community Committee

14 March 2017

Exchange of parts of Northboro Reserve for other land

File No.: CP2017/01695

Purpose

1. To obtain approval to publicly notify under section 15(2) of the Reserves Act 1977 a proposed exchange of parts of Northboro Reserve, Belmont, with private land in the Hillary Crescent Special Housing Area under section 15(2) of the Reserves Act 1977.

Executive summary

2. Ngāti Whātua Ōrākei Whai Rawa Limited (Whai Rawa) propose to develop the 8.4ha Hillary Crescent Special Housing Area and build approximately 300 new dwellings.

3. The land proposed for development is located adjacent to Northboro Reserve, Belmont (refer Attachment A).

4. To enable efficient use of the site and improve the configuration of Northboro Reserve, Whai Rawa seek to exchange 1802m² of Northboro Reserve with 3510m² of the Hillary Crescent Special Housing Area (refer Attachments B and C) under section 15 of the Reserves Act 1977. The applicant will bear all costs associated with processing the land exchange.

5. The proposal is to:

· exchange an existing 1370m² steep accessway into Northboro Reserve with 1370m² of level land adjacent to Hillary Crescent to form a pocket park

· relocate and reconfigure three existing narrow accessways into Northboro Reserve (432m²⁾and vest an additional 1708m² of public open space.

6. The proposed land exchange aims to:

· improve sightlines and physical access into Northboro Reserve

· enhance the recreational opportunities and amenity provided to the community by replacing a sloping accessway with a level park space

· provide the community with ‘door step’ access to a small, level, amenity and socialising space

· provide visual relief within a relatively high-density residential development.

7. Staff recommend that the committee approve statutory notification of the proposed land exchange.

Recommendation/s

That the Environment and Community Committee:

a) approve statutory notification under section 15(2) of the Reserves Act 1977 of a proposed exchange of 1802m² of Northboro Reserve for 3510m² of other land within the Hillary Crescent Special Housing Area as shown on Attachments B and C of the agenda report.

Comments

Background

8. Hillary Crescent was declared a Special Housing Area (SHA) in November 2015.

9. Ngāti Whātua Ōrākei Whai Rawa Limited (Whai Rawa) propose to develop the 8.4ha site, commonly known as the Hillary Block, over a five year period commencing in 2018.

10. There are currently 82 houses on the land and Whai Rawa plans to remove these and develop approximately 300 new dwellings.

11. The land proposed for development is located adjacent to Northboro Reserve in Belmont (refer Attachment A).

12. Northboro Reserve is classified as a recreation reserve under the Reserves Act 1977. It does not have reserve management plan in place.

13. To make the most efficient use of their land, Whai Rawa are seeking to exchange 1802m² of Northboro Reserve with 3510m² of the Hillary Crescent Special Housing Area (refer Attachments B and C) using section 15 of the Reserves Act 1977.

14. The proposed land exchange comprises the following components:

· relocation and reconfiguration of three existing narrow accessways into Northboro Reserve to improve sightlines and physical access into the reserve

· exchange of an existing 1370m² steep accessway into Northboro Reserve with 1370m² of level land adjacent to Hillary Crescent to form a pocket park

· vesting of an additional 1708m² of public open space.

15. The proposed land exchange is expected to have positive benefits to the community, including improved access to, and use of, Northboro Reserve.

16. While the proposed pocket park is located closer to Northboro Reserve than the 100m stipulated in the Open Space Provision Policy the park is expected to:

· enhance the recreational opportunities and amenity provided to the community by replacing a sloping accessway with a level park space

· provide the community with ‘door step’ access to a small, level, amenity and socialising space

· provide visual relief within a relatively high-density residential development.

Reserves Act 1977 land exchange process

17. Section 15 of the Reserves Act prescribes the process to be followed to undertake a land exchange between reserves and other land. The process comprises the following four key steps:

· the administering body (in this case the Auckland Council) publicly notifies its intention to undertake the land exchange and calls for objections in writing, allowing a period of at least one month for objections to be received

· after a period of at least one month following public notification the administering body considers all received objections to the proposed land exchange

· the administering body passes a resolution supporting the land exchange if it considers it appropriate to do so in light of all objections received

· a copy of the resolution supporting the land exchange is forwarded to the Department of Conservation along with all the objections for authorisation under delegation from the Minister of Conservation.

18. Relevant mana whenua must be consulted when Auckland Council is performing its functions and duties under the Reserves Act 1977.

Acquisition assessment

19. Staff have undertaken an initial assessment of the relative merits of the proposed land exchange.

20. Open space acquisition opportunities, including land exchanges, are assessed against the criteria of the council’s Parks and Open Space Acquisition Policy. Staff recommendations for acquisition are based on this assessment.

21. Proposed acquisitions are prioritised according to the highest rating achieved. A collective summary of the initial assessment for the proposed relocated and reconfigured walkways and new pocket park is provided in Table 1 below.

Table 1: Initial assessment of the open space configuration which would result from the proposed land exchange

Acquisition criteria	Comment	Rating
Meeting community needs, now and in the future	High priority: · the proposed new pocket park could provide ‘door step’ access to a small, level, amenity and socialising space in a relatively high-density residential development · the proposed new pocket park could also provide visual relief within the development.	Likely to be a high priority
Connecting parks and open spaces	Not a priority: · the proposed land exchange will not connect existing or proposed parks or open spaces.
Protecting and restoring Auckland’s unique features and meanings	Not a priority: · there are no known heritage, cultural or natural values of significance located within the areas included in the proposed land exchange so it adds no value to the parks network with respect to this criterion.
Improving the parks and open spaces we already have	High priority: · the exchange of 1370m² of sloping accessway into Northboro Reserve with a level area adjacent to Hillary Crescent could enhance the recreational opportunities and amenity provided to the community · the relocation and widening of three existing accessways and the formation of a new accessway into Northboro Reserve through the vesting of additional could improve sightlines and physical access into the reserve.

Assessment conclusion

22. The proposed land exchange scores as a high priority for acquisition against the assessment criteria of the Parks and Open Space Acquisition Policy.

23. Staff recommend that the committee approve statutory notification of the proposed land exchange.

Risks

24. There are no risks to the council if the statutory Reserves Act 1977 land exchange process is followed correctly.

25. All risks sit with the applicant, as there is no guarantee that the proposed land exchange will be:

· approved by the governing body for notification

· supported by mana whenua through the consultation process

· supported by the public through the consultation process

· supported by the governing body following public consultation

· authorised by the Minister of Conservation (or their delegate).

Costs

26. The applicant will bear all costs associated with processing the land exchange.

Next Steps

27. If the committee approve commencing the land exchange, staff will work with the applicant and begin the section 15, Reserves Act 1977 process as soon as practicable.

Consideration

Local board views and implications

28. At its 21 February 2017 meeting the Devonport-Takapuna Local Board resolved [DT/2017/18 refers] that it:

a) supports the public notification under section 15(2) of the Reserves Act 1977 of a proposed exchange of 1802m² of Northboro Reserve for 3143m² of other land within the Hillary Crescent Special Housing Area as shown on Attachments B and C of the agenda report

b) requests the developer to fund and work with council’s Parks officers to develop the pocket park to meet the anticipated needs of the local community

c) requests that, in the event the reserve exchange is approved post public notification, the board be formally presented concept designs for the newly created reserves for approval

d) receives the tabled document ‘Hillary Reserve Comparisons’ [refer Attachment D].

Māori impact statement

29. Consultation with mana whenua will be undertaken as part of the statutory process under the Reserves Act 1977.

30. The provision of quality parks and open spaces facilitates Māori participation in outdoor recreational activity.

31. Additional benefits include:

· demonstrating Auckland Council’s commitment to the Active Protection (Tautuaku Ngangahau) Principle of the Treaty of Waitangi

· helping make Auckland a green, resilient and healthy environment consistent with the Māori world view and their role as kaitiaki of the natural environment.

Implementation

32. There are no implementation issues arising from the recommendations of this report.

Attachments

No.	Title	Page
a ⇩	The location and extent of Northboro Reserve and the Hillary Crescent Special Housing Area	65
b ⇩	The areas of Northboro Reserve proposed for exchange	67
c ⇩	The configuration of open space resulting from the proposed land exchange	69
d ⇩	An overview of the proposed land exchange, including indicative development	71

Signatories

Author

Ezra Barwell - Principal Policy Analyst

Authorisers

Paul Marriott-Lloyd - Team Leader

Kataraina Maki - GM - Community & Social Policy

Dean Kimpton - Chief Operating Officer

Environment and Community Committee

14 March 2017

Evaluation of current sports facilities investments and proposed changes to inform the draft Sports Facilities Investment Plan

File No.: CP2017/00192

Purpose

1. To evaluate how Auckland Council currently invests in sports facilities that it does not own or manage and seek agreement on a set of changes to inform the draft Sports Facilities Investment Plan.

Executive summary

2. Auckland Council is taking a more strategic approach to its sports facilities investment in response to rapid population growth, changing sport preferences and increasing resource and land supply constraints.

3. A Sport Facilities Investment Plan is being developed to guide council’s future investment in sports facilities. Decisions on this report will inform the drafting of that plan.

4. An extensive engagement process was conducted during March and April 2016 to seek feedback on council’s current approach and suggestions to frame future investment. The feedback called for a greater focus on delivering outcomes and using investment principles to guide investment decisions.

5. Four investment principles were developed based on the engagement feedback and were approved by the Parks, Recreation and Sport Committee to guide investment decisions [CP2017/00192 refers]. They are:

· outcome-focus

· accountability

· equity

· financial sustainability.

6. This report uses these four investment principles to evaluate the ways Auckland Council currently invests in sports facilities that it does not own or manage. These investments are made in a variety of forms, including:

· direct financial support through grants, community loans and loan guarantees

· use of council land assets through community or commercial leases

· reduced or delayed payments by way of rates remissions or postponements.

7. The evaluation found that council investment through leases and grants generally aligns with the principles, although some refinement of current policy and practice is needed. However, council investment through loans, loan guarantees, rates remissions and rates postponements has poor strategic alignment, and raises accountability and equity issues.

8. Based on the evaluation, this report seeks in-principle decisions on future investments. In particular:

· future council investments in sports facilities that it does not own or manage be made mainly through commercial or community leases and grants.

· loan guarantees be used sparingly to provide a timely response to strategic priorities or an urgent community need when all other funding sources had been exhausted.

· loans, rates remissions and postponements be removed as future investment tools.

9. The proposed changes would be included in the draft Sport Facilities Investment Plan. The draft plan will be subject to public consultation prior to finalisation and approval by the Environment and Community Committee in mid-2017.

10. Further work will be conducted to refine the current practices for leases, grants and loan guarantees, and to consider the method and implications of removing loans, rates remissions and postponements as sports facilities investment tools. The processes and sequence of these changes will be specified in a separate implementation guide, which sets out the operating process to give effect to the investment policy.

11. Council staff will investigate current revenue sources and levels of funding, and present this to the Environment and Community Committee in June 2017.

Recommendations

That the Environment and Community Committee:

a) agree to recommendations (i) to (v) contained in this report to be included in the draft Sport Facilities Investment Plan

b) note that the draft Sports Facilities Investment Plan will be subject to public and local board consultation prior to finalisation and approval by the Environment and Community Committee.

c) note that an implementation guide will be developed alongside the draft Sports Facilities Investment Plan which will outline further policy work to refine practices for leases, grants and loan guarantees for sport organisations, and to consider the method and implications of removing loans, rates remissions and postponements as future investment tools.

Comments

Background

Council’s current investments in sports facilities

12. Auckland Council is committed to increasing sport participation in Auckland, which will improve health and overall wellbeing of individuals and deliver multiple benefits to the community.^{^[1]}

13. Auckland Council supports the provision of sports facilities as access to facilities and the quality of facilities is directly linked to sport participation.

14. There are a number of ways Auckland Council supports sports facilities provision. This report focuses on how council invests in sports facilities that it does not own or manage. These investments are often done through partnerships with sports organisations^{^[2]} and have taken a variety of forms, including:

· direct financial support through grants, loans and loan guarantees

· use of council land assets through community or commercial leases

· reduced or delayed payments by way of rates remissions or postponements.

Developing a strategic approach to sport facilities investment

15. Auckland Council is taking a strategic approach to its future sports facilities investment in response to rapid population growth, changing sport preferences and increasing resources and land supply constraints.

16. A Sport Facilities Investment Plan is currently being developed to guide council’s long-term investment in sports facilities. The plan is a direct response to the Auckland Sport and Recreation Strategic Action Plan 2014-2024. The aim is to set out a framework that shows how Auckland Council will invest and the relationship between its planned investment and outcomes (see Figure 1 below).

Figure 1: Investment management life cycle

Feedback received on the current council investment

17. An extensive engagement process was conducted with local boards, the sports sector and the public during March and April 2016. The Sports Facilities Investment Plan: Discussion Document sought feedback on the current council investment approach and suggestions to frame future investment options.^{^[3]}

18. The feedback called for a greater focus on delivering outcomes from council investments. There was strong support for the council to develop a long-term, strategic investment approach and use investment principles to guide investment decisions.

19. The feedback informed a number of decisions made by the Parks, Recreation and Sport Committee on 20 July 2016 [CP2017/00192]. The decisions are summarised in Table 1 below.

Table 1: Decisions made to-date

*The structure of the Sports Facility Investment Plan* includes:**	· a formal policy statement setting out the primary desired outcome, investment principles and the scope of council’s investment · a decision-making framework that sets how the investment approach will be applied to deliver efficiencies, including the mechanisms for investment and means to compare investment proposals, as well as ongoing monitoring · an implementation guide that aligns with financial, annual and long-term planning processes.
The primary desired outcome of future council investment in sports facilities is increased participation in sport with a view to:	· enable participation amongst sedentary population groups · increase participation in sports with a high growth potential · sustain or increase participation in sports which currently have high participation rates.
*The investment principles underpinning the Sports Facility Investment Plan* and which guide decision-making are:**	· accountability · equity · financial sustainability · outcome-focused
Future council investment focuses on community sport and ensuring a basic level of provision in fit-for-purpose sport facilities, unless a higher level of provision would increase participation or maximise use.
Future council investment will target core sport infrastructure (for example fields, playing surfaces, lighting, or structures required to play a sport) and ancillary infrastructure required for safe and sanitary public access (for example, toilets, changing rooms or equipment storage).

20. This report responds to decisions and the engagement feedback by evaluating current council investment against the expected outcomes. It also explores a number of suggestions proposed during the engagement including:

· equity across council’s investment approach

· more consistent investment across sports codes

· a new regional capital grant

· a review of the terms and conditions of leases to ensure efficient use of council assets, increased participation and wider public access.

21. Based on the evaluation results, this report seeks in-principle decisions on future investments. The decision will inform the development of the draft Sport Facilities Investment Plan.

22. Further work that considers the method and implications of the proposed changes will be outlined in a separate implementation guide, which sets out the operating process to give effect to the investment policy.

23. The draft Sport Facilities Investment Plan will be subject to public consultation prior to finalisation and approval by the Environment and Community Committee in mid-2017.

Evaluation methodology

24. Staff have further developed the four investment principles approved by the Parks, Recreation and Sport Committee on 20 July 2016. Table 2 below illustrates how the principles can be used to guide council investments.

Table 2: Development of the investment principles

Principle	Dimension	Description
Outcome-focus	Strategic alignment	A clear understanding of each investment’s contribution to current strategic outcomes, in particular Chapter 5 of the Auckland Plan, the Auckland Sport and Recreation Strategic Action Plan, Te Whai Oranga and local board plans.
Outcome-focus	Outcome measurement	Demonstrating the impact of council investments and progress towards the desired outcomes.
Accountability	Efficiency and effectiveness	Delivering the highest possible returns for each dollar spent and eliminating duplication.
Accountability	Transparency and consistency	Investment decisions are made consistently with information disclosure on decision-making criteria, process, results and outcomes.
Equity	Equity of outcomes	Investment should ensure equity of outcomes across the population regardless of age, gender, ethnicity, socio-economic status or where people live. This may mean unequal allocation or reallocation of investments to areas or demographic groups with the lowest access to sports facilities.
Financial sustainability	Financial viability	Ensuring there are sufficient means to cover ongoing operating costs, renewals and other capital expenses. This also means being clear about who is responsible for ensuring financial viability of sports facilities in the long run and being specific about expectations.
Financial sustainability	Affordability for the public	Ensuring public accessibility and affordability when making financial decisions for sports facilities.

25. Assessment against the investment criteria was conducted for the following investments:

A. Community and commercial leases

B. Community loans and loan guarantees

C. Rates remissions and postponements

D. Sport and recreation grants.

26. The following four sections provide the evaluation results and the preferred position for each of these investments.

27. Further information about the council’s current investments, such as the size of different investments and recipients’ profile, is provided in Attachment A.

A. Investment through community and commercial leases

28. One of the most common ways that Auckland Council supports sports organisations is through use of council land or buildings. Sports organisations enter into a lease agreement with Auckland Council that specifies the terms and conditions for use of the council assets.

29. Auckland Council currently manages around 453 sport community leases and four commercial leases with golf clubs.

30. The two types of leases have different terms and conditions. Table 1 in Attachment A compares the two types of leases.

Evaluation results

31. The evaluation focused mainly on the current process and criteria used to administer new leases rather than existing agreements.

32. A summary of the evaluation results for community leases is provided in Table 3 below.

33. The evaluation found the current process for community leases aligns with most investment principles. However, there is inconsistency in lease terms and conditions in the legacy council community leases as they were guided by different policies and practices. In particular, the rents are not proportional to the size and cost of council assets and the community benefits delivered.

34. Both the evaluation results and engagement feedback showed the need to clarify outcomes expected from lessees and introduce measures to ensure outcome delivery and to prevent undesirable behaviors.^{^[4]} In part, this has been met by the Community Outcomes Plans as part of the annual review process required by the Community Occupancy Guidelines 2012.

Table 3: Summary of evaluation results for community leases

Principle	Dimension	Community leases
Outcome focus	Strategic alignment	Aligned – the Community Occupancy Guidelines 2012 require the occupants to provide activities, services or programmes that align with, and promote, strategic outcomes for the community as defined by the relevant local board and Local Board Plans.
Outcome focus	Outcome measurement	Partially aligned – the lease holders are subject to annual reviews to ensure they deliver the community benefits identified in their Community Outcomes Plan as part of their agreement. However, the community benefits are not tracked and monitored.
Accountability	Efficiency and effectiveness	Aligned – the Community Occupancy Guidelines 2012 specify the process and criteria used to consider new lease applications to ensure efficiency and effectiveness.
Accountability	Transparency and consistency	Aligned – the Community Occupancy Guidelines 2012 is publicly available. It provides transparency and ensures consistency in process and assessment. However, there is great discrepancy in the way old leases were granted by legacy councils.
Equity	Equity of outcomes	Aligned – new leases should help address the needs of the local population, as identified in the Local Board Plans.
Financial sustainability	Financial viability	Partially aligned – organisations’ financial commitments to deliver services to the community are considered as part of the eligibility assessment but are not monitored over time.
Financial sustainability	Affordability for the public	Partially aligned – new leases should provide community benefits and help improve public access to a certain extent.

35. Further work is currently underway by the Community Leases Team to review the guidelines and to improve measurement and monitoring of outcomes identified in the Community Outcomes Plans.

36. The evaluation did not specifically focus on the current process for commercial leases as Auckland Council only has four commercial leases. Internal discussions revealed a lack of clarity around how the council makes decisions on which type of lease agreement to enter with sports organisations.

Recommendation

37. Staff recommend retaining leases as a way of supporting sports organisations as the current process is well aligned with most investment principles. Leases will be one of the main investment tools outlined in the draft Sports Facilities Investment Plan.

Recommendation (i): agree that the draft Sports Facilities Investment Plan specifies that future council investment in sports facilities be made through community or commercial leases

Implementation Guide

38. As part of the implementation guide to support the Sport Facilities Investment Plan, staff will conduct further work to improve leases’ alignment with the investment principles. Key actions include:

· providing more clarity around how decisions are made on which type of leases sports organisations should enter with Auckland Council

· adjusting terms and conditions of new community leases to ensure that they reflect the size and value of council assets and community benefits (to ensure that appropriate returns are generated from council investments)

· improving the Community Outcome Plan process to ensure outcomes are measured and tracked over time.

B. Investment through community loans and loan guarantees

39. Community loans and loan guarantees provide direct financial support to community organisations. Decisions on whether to provide either of these are made by the Governing Body.

40. Loans appear in the council’s balance sheet as debts to be collected and, therefore, have a negative effect on the council’s credit rating.

41. Loan guarantees provide security against loans from third party lenders such as banks. Mortgages cannot be taken against facilities on council assets or land so loan guarantees are a useful way to access funding. Risk is often managed by ensuring that any arrears are transferred to the council if they default on the loans.^{^[5]} Loan guarantees do not appear in the council’s balance sheet.

42. Currently, Auckland Council has 30 community loan agreements worth approximately $12.3 million. Eighteen of these loan agreements are sport-related, worth around $11.5 million.

43. There are 11 loan guarantee agreements with community organisations worth $41.6 million in total.^{^[6]} Ten of the loan guarantee agreements are sport-related, worth $41.4 million.

Evaluation results

44. Most loans and loan guarantees were issued by legacy councils.^{^[7]} Therefore, the evaluation focused on the current assessment and monitoring process rather than on individual loans and loan guarantee agreements.

45. A summary of the evaluation results for community leases is provided in Table 4 below.

46. The evaluation found that the current process for loans and loan guarantees does not align with the investment principles. This is mainly because there are no guidelines or policy to ensure alignment with current priorities and provide transparency and consistency.

Table 4: Summary of evaluation results for loans and loan guarantees

Principle	Dimension	Community loans	Loan guarantees
Outcome focus	Strategic alignment	Not aligned – strategic alignment is not considered when issuing loans. There are no guidelines or policy for loans that specify to which strategic goals or priorities the loans should contribute.	Not aligned – same as loans, there are no loan guarantees guidelines or policy. It is unclear to which strategic goals or priorities the loan guarantees contribute.
Outcome focus	Outcome measurement	Not aligned – there is no process to measure and monitor the community outcomes loans deliver.	Not aligned – there is no reporting or monitoring process for loan guarantees to measure the community outcomes they deliver.
Accountability	Efficiency and effectiveness	Not aligned – there is no assurance that the money has been spent in the most effective way to deliver strategic priorities and community outcomes. There might be duplications – grants and loan guarantees serve similar purposes as loans.	Not aligned – for the same reasons as loans.
Accountability	Transparency and consistency	Not aligned – there are no guidelines or policy that set out the evaluation criteria and process for loans. The terms and conditions of current loan agreements (for example, interest rates, repayment time and amount) are markedly different.	Not aligned – for the same reasons as loans.
Equity	Equity of outcomes	Partially aligned – only a small number of organisations currently receive loans. Recipient organisations are required to have open membership.	Partially aligned – for the same reasons as loans.
Financial sustainability	Financial viability	Partially aligned – financial sustainability of the organisations was considered when issuing the loans. However, over time the circumstances might change, which means some organisations might not be able to meet repayment obligations.	Partially aligned – quarterly reporting is required to monitor organisation’s ability to repay but some organisations might not be able to meet repayment obligations due to change of circumstances.
Financial sustainability	Affordability for the public	Not aligned – affordability of the public is not a significant part of the consideration when granting loans. Auckland Council does not track membership fees and participation of its loan recipients.	Not aligned for the same reasons as loans.

Options analysis

47. Four options were analysed when considering the future investment approach. The analysis is summarised in Table 5 below.

Table 5: Options analysis for loans and loan guarantees

	Advantages	Disadvantages
Status quo	· No disruptions to the current system · Provides a means for organisations to finance their activities and projects.	· Loans and loan guarantees have poor strategic alignment and significant transparency, consistency, equity and affordability issues. · Auckland Council cannot articulate what returns and benefits have been delivered through loans and loan guarantees.
Removing both loans and loan guarantees	· Saves operating costs to administer loans and loan guarantee. · Both loans and loan guarantee do not align with the investment principles. · Removes duplications as funding for operating expenses can be covered by local and regional grants.	· It might be difficult to meet the current funding gap for capital projects resulted from the disestablishment of the Facility Partnerships Fund. · There will be no contingency instrument for the council to respond timely to an urgent need or a strategic priority.
Improving loans and loan guarantees	· Allows the council to use loans and loan guarantees as contingency instruments to support sports facilities.	· Time and resources to develop and implement a loan policy and a loan guarantee policy. · Possible duplications, as loans and loan guarantees serve similar purposes.
Ceasing loans and developing a loan guarantee policy (Recommended option)	· Avoids duplication. · Loan guarantees can be used as a contingency instrument to respond timely to an urgent need or a strategic request. · Loan guarantees do not affect council’s credit rating.	· Time and resources to develop and implement a loan guarantee policy.

Recommendation

48. Staff recommend ceasing community loans as a way to invest in sports facilities in the future and developing a loan guarantee policy. If approved, loans will not be included in the draft Sports Facilities Investment Plan.

49. Loan guarantees were chosen over community loans because loan guarantees do not have a negative effect on the council’s financial position. This approach allows Auckland Council to have a contingency instrument to respond timely to an urgent need or a strategic request that cannot be financed by other means.

Recommendation (ii): agree that the draft Sports Facilities Investment Plan specifies that loan guarantees be used sparingly to provide a timely response to strategic priorities or an urgent community need when all other funding sources had been exhausted

Recommendation (iii): agree that community loans are not included in the draft Sports Facilities Investment Plan as a future investment tool

Implementation Guide

50. Staff will undertake further work to develop a loan guarantee policy to improve the alignment of loan guarantees with the investment principles. The policy would include several elements such as assessment process and criteria, terms and conditions and reporting requirements particularly regarding community benefits to improve outcome delivery, consistency and transparency.

C. Investment through rates remissions and postponements

51. Auckland Council inherited four rates remission and one rates postponement scheme for sports and community organisations from the former legacy councils. These schemes are only available to properties within the relevant legacy council areas and are not available to the rest of Auckland.

52. Rates remissions are a reduction in rates usually by a set percentage. The percentage remitted varies across legacy councils. The total value of the legacy rates remissions policies was $949,027 in the 2016/2017 financial year. Rates remissions to sports clubs totaled $322,084. This is an ongoing cost to Auckland Council.

53. Rates postponements defer the payment of rates until a future point in time, usually the sale of the property. There are two postponement agreements with golf clubs that have accumulated a value of $803,351 since 2006/2007.

Evaluation results

54. The evaluation found that the rates remissions and postponements schemes do not align with the four investment principles. A summary of the evaluation results for community leases is provided in Table 6 below.

55. In particular, the schemes incur significant ongoing costs for the council. There are also strategic alignment, transparency and equity issues. There is no public visibility of the recipients nor how the outcomes are assessed and monitored over time.

Table 6: Summary of evaluation results for rate remissions and postponements

Principle	Dimension	Rates remissions and postponements
Outcome focus	Strategic alignment	Not aligned – current agreements were granted by legacy councils and their intended outcomes are unclear.
Outcome focus	Outcome measurement	Not aligned – there is no reporting or monitoring of community outcomes delivered by rates remissions and postponements.
Accountability	Efficiency and effectiveness	Not aligned – rates remissions and postponements serve similar purposes as grants but are not subject to contestable processes. They are not tied to performance indicators so it is difficult to measure progress and benefits, and therefore it offers no assurance that the money has been spent in the most effective way to generate the highest returns.
Accountability	Transparency and consistency	Not aligned – there is inconsistency across the legacy council schemes.
Equity	Equity of outcomes	Not aligned – rates remissions and postponements are only available in a few legacy council areas.
Financial sustainability	Financial viability	Not aligned – both incur significant cost to the council. Organisations may not have the ability to pay the postponed rates, particularly given the interest charged on them.
Financial sustainability	Affordability for the public	Not aligned – access and affordability were not always considered when granting rates remissions and postponements.

Options analysis

56. Two options were considered for the legacy rates remissions and postponement schemes. The analysis is summarised in Table 7 below.

Table 7: Options analysis for rates remissions and postponements

Advantage

Disadvantage

Enhanced status quo – requiring all current recipients to make annual applications and meet all reporting requirements

· Improves the alignment with the principles of outcome focus and accountability.

· Still has equity and financial sustainability issues and will incur high administration costs.

Removal of rates remissions and postponements

(Recommended option)

· Will resolve current issues relating to rates remissions and postponements.

· Will save Auckland Council around $417,000 of lost revenue per year.

· Likely negative reactions from current rates remissions recipients but limited flow-on impact to community.

Recommendation

57. Staff recommend the removal of rates remissions and postponements. If approved, rates remissions and postponements will not be included in the draft Sports Facilities Investment Plan.

58. The enhanced status quo option can address the transparency issue to a certain extent but the equity issues would continue. It would also incur significant administration costs to Auckland Council.

59. The option of extending rates remissions and future postponement schemes across the Auckland region to improve equity were considered, but dismissed, as it would incur significant costs to Auckland Council and does not align with other investment principles.

Recommendation (iv): agree that rates remissions and postponements are not included in the draft Sports Facilities Investment Plan as future investment tools

Implementation Guide

60. Removing rates remissions and postponements would require a review of the two schemes in accordance with the Local Government Act 2002. The next review is planned as part of the Long-term Plan 2018-2028. As part of the review, staff will consider the method and implications of removing rates remissions and postponements and ways of mitigating the impact on current recipients.

61. One example is to transfer the current value of the rates remissions and postponement schemes to local grants over a three-year period to mitigate the impact on current recipients.

D. Investment through sports and recreation grants

62. Grants provide direct funding to sport organisations. Currently there are eight local and regional sports and recreation schemes:

· the Community Access Scheme provides operational funding to address gaps in the sports and recreation facility network across Auckland

· Community Grants, Locally-Driven Initiatives (LDI) capex and other discretionary funding and budget line items are used to support local priorities and can be used to support the provision of sports facilities in the local areas.

63. The Governing Body is responsible for decisions on regional grants whereas local boards are responsible for the local grants.

64. More information about each grant is provided in Attachment A.

Evaluation results

65. The evaluation results vary according to the grant schemes. In general, sports and recreation grants have better alignment with the four principles compared to other council investments such as community loans and rates remissions.

66. The grants often incorporate outcomes and priorities in their assessment criteria and as a result, have better strategic alignment. Grants also often have more formal reporting and monitoring processes.

67. Non-contestable grants generally show weaker alignment when measured against the accountability principle. The application and assessment process is not transparent. This shortfall is partly compensated by the fact that these schemes tend to offer better efficiency and flexibility to deliver strategic priorities or respond to an urgent community need.

Recommendation

68. Staff recommend maintaining grants as a way to invest in sports facilities as they are found to have good alignment with the investment principles. Grants will be the other main investment tool, alongside leases, to be outlined in the draft Sports Facilities Investment Plan.

Recommendation (v): agree that the draft Sports Facilities Investment Plan specifies that future council investment in sports facilities be made through grants

Implementation Guide

69. In addition to the proposed changes above, staff will undertake further work to refine council investment in sports facilities through grants as outlined below.

Capital funding gap for regional sports facilities projects

70. Staff will investigate the capital funding gap for regional projects highlighted in the engagement feedback. The gap was suggested to be caused by the disestablishment of the Facility Partnerships Fund in the Long-term Plan 2015-2025. While an annual budget of $10 million was allocated to LDI capex funding to fund local capital projects, the engagement feedback suggested this is insufficient.^{^[8]} Feedback from the Investors Forums raised a similar issue.

71. There is evidence showing current supply shortages in certain areas of Auckland.^{^[9]} This pressure is likely to intensify as the Auckland population continues to grow.

Outcome measurement and monitoring framework

72. The evaluation found that difficulty in measuring and monitoring outcomes is a common issue across all council investments in sports facilities. While some council investments have clear expectations and established monitoring processes to track activities and outputs, the relationships between investment and strategic outcomes are often not clear.

73. Staff will undertake further work to develop a framework to measure outcomes of council’s sport facilities investment. One option is to conduct a pilot project on one of the sports and recreation grants as they have established funding and evaluation processes. The objective is to apply the findings of the pilot project to develop a robust methodology to measure outcomes of other council investments in sports facilities.

Next Steps

74. The changes proposed in this report will improve the quality of council investments in sports facilities. Further work will be undertaken to investigate the current revenue sources Auckland Council uses to fund sports facilities.

75. The aim of the investigation is to ensure there is sufficient funding to meet both current and future demand for sports facilities. Options to increase or expand current revenue sources in the next long-term plan process will also be explored.

76. Staff will present the findings of the investigation in a report to the Environment and Community Committee in June 2017.

Risk identification and mitigation

77. This report seeks in-principle decisions only, however, a preliminary risk assessment was conducted on the proposed investment approach.

78. There are risks associated with the proposal to remove rates remissions and postponements. Sports organisations that currently receive rates remissions and postponements may expect to continue to receive them indefinitely. This risk could be mitigated by a transition period to allow organisations time to adjust. This option will be considered in the Implementation Guide.

79. The risks associated with other proposed changes (to cease loans and refine loan guarantees, grants and leases) are minor at this stage.

80. The proposed investment approach will be tested through the consultation process for the final Sports Facilities investment Plan. Staff will particularly focus on gathering feedback on the potential impacts on sports organisations and the flow-on impacts to the community.

Local board views and implications

81. The analysis in this report drew heavily on the local board feedback on the Sports Facilities Investment Plan: Discussion Document. In particular, local boards:

· expected improved outcomes from council investment to meet the changing demand of the growing population, in the face of land supply and budget constraints.

· supported the adoption of investment principles to guide council investment decisions. In particular, ‘outcome-focus’ and ‘accountability’ were two of the most important principles. This suggests a strong expectation that Auckland Council should measure and articulate the return on its investments.

· identified a capital funding gap for regional scale projects due to the disestablishment of the Facility Partnerships Fund. It was suggested that the funding problem is worsening as the other funding sources available are either diminishing (for example, lottery money) or changing form.

· suggested the need for reviewing lease terms and conditions, particularly to address inconsistency, increase clarity about expected outcomes and allow for multi-sport or multi-function facilities.

The proposed draft Sports Facilities Investment Plan will help meet these expectations.

82. Staff will engage with individual local boards in mid-2017 on the draft Sports Facilities Investment Plan. Staff will use that opportunity to seek feedback on the proposed changes.

Māori impact statement

83. Analysis of the recipients of council investments showed that each type of investment has varied impacts on Māori.

84. Sport and recreation grants are the only type of investment that have Māori outcomes embedded in the list of objectives and provide evidence of delivering direct benefits to Māori^{.^[10]}

Engagement feedback for the Sports Facilities Investment Plan – Discussion Document

85. Staff engaged with the Mana Whenua Information Hui and the Aktive Māori Advisory Panel during the engagement process for the Sports Facilities Investment Plan – Discussion Document. The feedback emphasised that council investments should deliver Māori outcomes and ensure Māori have equitable and affordable access to sports opportunities. The feedback also suggested using targets and indicators as an instrument to support Māori participation.

86. Further work to develop an outcome measurement and monitoring framework will increase Auckland Council’s knowledge about the return of its investments and the impact on Māori. This would allow adjustments to better meet the needs of the Māori community and subsequently increase Māori access to sports facilities and improve their participation in sport.

87. The proposed changes to community leases and loan guarantees should help deliver council strategic priorities, including Māori outcomes. Staff will test the proposed changes with Māori representative groups as part of the consultation process on the draft Sports Facilities Investment Plan.

Implementation

88. This report seeks in-principle decisions on future investment tools for inclusion in the draft Sports Facilities Investment Plan.

89. The draft Sports Facilities Investment Plan will be submitted to the Environment and Community Committee for approval to undertake consultation with the public, key stakeholders and the local boards in mid-2017. The draft plan will also be accompanied with an implementation guide to indicate how it can be operationalised.

Attachments

No.	Title	Page
a ⇩	Council's investments in sports facilities	89

Signatories

Authors

Nancy Chu - Policy Analyst

Natalia Tropotova - Policy Analyst

Jordan Hamilton - Finance Graduate

Authorisers

Paul Marriott-Lloyd - Team Leader

Kataraina Maki - GM - Community & Social Policy

Dean Kimpton - Chief Operating Officer

[1] Auckland Sport and Recreation Strategic Action Plan 2014-2024 sets out several targets to increase adult and child participation in sport and recreation and to make Auckland the most active city in New Zealand.

[2] Policy work on council’s community facility partnerships is currently underway. See report Facilities Partnerships Policy Project: Findings and next steps [CP2016/25314 refers].

[3] More information about the engagement feedback is available in the report Sports Facilities Investment Plan – Analysis of feedback and submissions.

shapeauckland.co.nz/media/1660/sports-facilities-investment-plan-analysis-of-feedback-and-submissions.pdf

[4] For example, breaches of the Human Rights Act 1993 and Bill of Rights Act 1990

[5] Organisations that receive council loan guarantees are assessed twice (by the council and the lenders), which means they are more likely to meet their repayment obligations.

[6] Two guarantees were excluded (Watercare $444 million and New Zealand Local Government Funding Agency $4.328 billion) as the recipients are not community organisations.

[7] It is likely that legacy councils considered several factors when issuing the loans including the contributions to local communities, public versus private benefits, council’s share of the facilities, level of commercial activities undertaken, ability to re-finance elsewhere, and organisations’ ability to repay (for example, debt position and credit rating).

[8] The $10 million LDI funding can be used to fund all kinds of capital projects across 21 local boards. The $6 million Facility Partnerships Fund however, was used only for sports projects and was shared amongst four legacy councils.

[9] Information about the scale of sub-regional supply shortage is provided in the Sports Facilities investment Plan – Discussion Document.

[10] An internal study has recently been completed on the Māori outcomes delivered by Community Grants.

Chairperson	Cr Penny Hulse
Deputy Chairperson	Cr Alf Filipaina
Members	IMSB Member James Brown	Cr Daniel Newman, JP
	Cr Dr Cathy Casey	Cr Dick Quax
	Deputy Mayor Bill Cashmore	Cr Greg Sayers
	Cr Ross Clow	Cr Desley Simpson, JP
	Cr Fa’anana Efeso Collins	Cr Sharon Stewart, QSM
	Cr Linda Cooper, JP	Cr Sir John Walker, KNZM, CBE
	Cr Chris Darby	Cr Wayne Walker
	Cr Hon Christine Fletcher, QSO	Cr John Watson
	Mayor Hon Phil Goff, JP	IMSB Member Glenn Wilcox
	Cr Richard Hills
	Cr Denise Lee
	Cr Mike Lee

Author	Tam White - Senior Governance Advisor
Authoriser	Dean Kimpton - Chief Operating Officer