Agenda of Finance and Performance Committee

TERMS OF REFERENCE

Responsibilities

The purpose of the Committee is to :

a) control and review expenditure across the Auckland Council Group to improve value for money

b) monitor the overall financial management and performance of the council parent organisation and Auckland Council Group

c) make financial decisions required outside of the annual budgeting processes

Key responsibilities include:

· Advising and supporting the mayor on the development of the Long Term Plan (LTP) and Annual Plan (AP) for consideration by the Governing Body including:

- Local Board agreements

- Financial policy related to the LTP and AP

- Setting of rates

- Preparation of the consultation documentation and supporting information, and the consultation process, for the LTP and AP

· Monitoring the operational and capital expenditure of the council parent organisation and Auckland Council Group, and inquiring into any material discrepancies from planned expenditure

· Monitoring the financial and non-financial performance targets, key performance indicators, and other measures of the council parent organisation and each Council Controlled Organisation (CCO) to inform the Committee’s judgement about the performance of each organisation

· Advising the mayor on the content of the annual Letters of Expectations (LoE) to CCOs

· Exercising relevant powers under Schedule 8 of the Local Government Act 2002, which relate to the Statements of Intent of CCOs

· Exercising Auckland Council’s powers as a shareholder or given under a trust deed, including but not limited to modification of constitutions and/or trust deeds, granting shareholder approval of major transactions where required, exempting CCOs, and approving policies relating to CCO and CO governance

· Approving the financial policy of the Council parent organisation

· Overseeing and making decisions relating to an ongoing programme of service delivery reviews, as required under section17A of the Local Government Act 2002

· Establishing and managing a structured approach to the approval of non-budgeted expenditure (including grants, loans or guarantees) that reinforces value for money and an expectation of tight expenditure control

· Write-offs

· Acquisition and disposal of property, in accordance with the long term plan

· Recommending the Annual Report to the Governing Body

· Te Toa Takatini

Powers

(i) All powers necessary to perform the committee’s responsibilities, including:

(a) approval of a submission to an external body

(b) establishment of working parties or steering groups.

(ii) The committee has the powers to perform the responsibilities of another committee, where it is necessary to make a decision prior to the next meeting of that other committee.

(iii) The committee does not have:

(a) the power to establish subcommittees

(b) powers that the Governing Body cannot delegate or has retained to itself (section 2).

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

Apologies from Deputy Mayor B Cashmore, Cr C Casey, Cr C Fletcher and Cr D Quax have 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 Finance and Performance Committee:

a) confirm the ordinary minutes of its meeting, held on Tuesday, 11 April 2017, 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 Governance 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.

5.1 Sir Noel Robinson and Richard Jeffery - Second Nature Charitable Trust - History and Performance

Purpose

1. Richard Jeffery, CEO of Second Nature Charitable Trust, accompanied by the Chairman Sir Noel Robinson and some of the Trustees, wishes to address the Committee about the History and Performance of Second Nature Charitable Trust.

Recommendation/s

That the Finance and Performance Committee:

a) receive the presentation regarding the History and Performance of Second Nature Charitable Trust and thank Richard Jeffery, Sir Noel Robinson and the Trustees for their attendance.

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.

6.1 Local Board Input - Whau Local Board - 3 Memorial Drive, New Lynn

Purpose

1. Tracy Mulholland, Chairperson of the Whau Local Board wishes to address the Committee in relation to 3 Memorial Drive, New Lynn which is contained in the Disposals recommendation report.

Recommendation/s

That the Finance and Performance Committee:

a) receive the presentation regarding 3 Memorial Drive, New Lynn and thank Tracy Mulholland for her attendance.

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

There were no notices of motion.

Finance and Performance Committee

23 May 2017

Disposals recommendation report

File No.: CP2017/02790

Purpose

1. To obtain approval to dispose of council-owned property that Panuku Development Auckland (Panuku) considers suitable for sale.

Executive summary

2. Capital receipts from the sale of surplus properties contribute to Auckland Plan outcomes and the Long-term Plan 2015-2025 (LTP) by providing the Council with an efficient use of capital and prioritisation of funds to achieve its activities and projects. In the 2016/2017 financial year, the LTP has forecast the disposal of non-strategic council assets to the combined value of of $69 million.

3. In accordance with the Local Government Act 2002, the annual Statement of Intent (SOI) states the activities and intentions of Panuku, the objectives that those activities will contribute to and performance measures and targets as the basis of organisational accountability. For the 2016/2017 financial year Panuku is required to identify properties from within council’s portfolio that may be suitable for potential sale to a combined value of $75 million and to sell $50 million of property by 30 June 2017.

4. The property presented in this report, Areas C and D, 3 Memorial Drive, New Lynn is subject to a legacy joint development agreement between Auckland Council and Infratil Infrastructure Property Limited (IIP) which gives IIP first rights to develop the subject area once council releases it from service. Panuku is undertaking the rationalisation process for the subject area to enable the joint development agreement with IIP to proceed.

5. Consultation about the subject portions of this property has been undertaken with council and its CCOs, iwi authorities and the Whau Local Board. No alternative service uses were identified through the rationalisation process and the feedback received was supportive of the proposed disposal. As such, it is recommended that Areas C and D, 3 Memorial Drive, New Lynn be divested.

Recommendation/s

That the Finance and Performance Committee:

a) approve, subject to the satisfactory conclusion of any required statutory processes, the disposal of the land at Area C, 3 Memorial Drive, New Lynn comprising approximately 1,034m² and Area D, 3 Memorial Drive, New Lynn comprising approximately 2,350m² comprised of an estate in fee simple more or less being Section 1 SO 440190 and Section 2 SO 440190 contained in computer freehold register CFR 616014; and

b) agree that final terms and conditions be approved under the appropriate delegations.

Comments

6. Panuku and the Auckland Council’s Land Advisory team in the Community Facilities department work collaboratively on a comprehensive review process to identify properties in the council portfolio that may be suitable to sell. Once identified as a potential sale candidate Panuku takes the property through a multi stage engagement process.

7. The first phase of the process involves engagement with all council departments and relevant CCOs. The engagement establishes whether a property is needed for a future funded project or whether it must be retained for a clear strategic purpose. Once a property has been internally cleared of any service requirements, Panuku then consults with local boards, mana whenua and ward councillors. All sale recommendations must be approved by the Panuku board before a final recommendation is made to the governing body.

Property information

8. Area C, 3 Memorial Drive, New Lynn comprises 1,034m²and Area D, 3 Memorial Drive, New Lynn comprises 2,350m². Both areas are formed as off street parking. The New Lynn War Memorial Library is located at the front of 3 Memorial Drive, New Lynn and is intended to remain in council ownership.

9. 3 Memorial Drive, New Lynn is the residue of multiple parcels of land acquired by the New Lynn Borough Council between 1913 and 2003. Most of the historic parcels were acquired for the provision of car parking.

10. Areas C and D, 3 Memorial Drive, New Lynn is subject to a 2010 joint development agreement between the former Waitakere City Council (WCC) and IIP which gives IIP first rights to develop the subject area once it has been released from service. In 2012, a variation to the joint development agreement was signed to reflect Auckland Council’s obligations as the successor to the former WCC.

11. The entire site has a 2014 capital value assessment of $3,800,000. A valuation which more accurately reflects the value of the subject area will form part of the negotiations with the IIP, should the subject areas be cleared for disposal.

12. The Unitary Plan zoning for Areas C and D, 3 Memorial Drive, New Lynn is business – metropolitan centre.

13. 3 Memorial Drive, New Lynn is unlikely to be subject to offer back obligations to the former owners under section 40 of the Public Works Act 1981 as the site comprises the balance of multiple amalgamated lots and the character of the site has significantly changed from the purpose for which the land was acquired.

Internal consultation

14. The internal consultation for 3 Memorial Drive, New Lynn commenced in December 2016. No alternative uses were identified during the internal consultation process and no issues were raised.

Consideration

Local board views and implications

15. Local boards are informed of the commencement of the rationalisation process for specific properties. Following the close of the EOI period, relevant local boards are engaged with. Panuku attend workshops with the relevant local board and provide information about properties being rationalised in its local board area. A report is subsequently prepared for the local board business meeting so that its views can be formalised.

16. Informal engagement with the Whau Local Board took place over three workshops during February and March 2017.

17. The Whau Local Board resolved at its 22 March 2017 business meeting that it endorsed the proposed disposal of Areas C and D, 3 Memorial Drive, New Lynn subject to its expectations that Panuku ensure good urban design outcomes are achieved for the anticipated mixed use development at 3 Memorial Drive, which compliments the wider urban regeneration being undertaken in New Lynn. The board’s full resolutions are included in Attachment B to this report.

Māori impact statement

18. The importance of effective communication and engagement with Māori on the subject of land is understood. Panuku has a robust form of engagement with mana whenua groups across the region. Each relevant mana whenua group is contacted independently by email and provided general property details, including a property map, and requested to provide any feedback within 15 working days.

19. Panuku’s engagement directs mana whenua to respond with any issues of particular cultural significance the group would like to formally express in relation to the subject properties. We also request express notes regarding any preferred outcomes that the group would like us to consider as part of any disposal process.

20. Mana whenua groups are also invited to express potential commercial interest in any sites and are put in contact with Panuku’s Development team for preliminary discussions if appropriate to the property. This facilitates the groups’ early assessment of the merits of a development opportunity to their iwi. In the event a property is approved for sale all groups are alerted of the decision, and all groups are alerted once a property comes on the market.

21. 14 mana whenua iwi authorities were contacted regarding the potential sale of Areas C and D, 3 Memorial Drive, New Lynn. The following feedback was received:

a) Te Runanga o Ngati Whatua

No site specific feedback received for this site, noting that as per earlier conversations with Te Runanga representatives, it is understood that any cultural significance considerations will be raised at hapū level and that all Ngāti Whatua hapū have been contacted about properties in their rohe.

b) Ngāti Whatua o Kaipara

No feedback received for this site.

c) Ngāti Whatua o Orakei

Ngāti Whatu o Orakei advised they have no cultural or commercial interest in the subject area.

d) Te Kawerau ā Maki

No feedback received for this site.

e) Ngāi Tai ki Tāmaki

Ngāi Tai ki Tāmaki has drawn attention to their recent settlement and signaled an increased interest in council owned property that may come available for sale in their rohe.

f) Ngāti Tamaoho

No feedback received for this site.

g) Te ākitai - Waiohua

No feedback received for this site.

h) Ngāti Te Ata - Waiohua

Ngāti Te Ata has expressed general cultural interest across Tāmaki Makaurau, and potential commercial interest in any council owned land that comes available for sale in their rohe and notes specific association with the south western area of Auckland, focusing around Manukau and the western coastline.

i) Te Ahiwaru

No feedback received for this site.

j) Ngāti Pāoa

Ngāti Paoa has reinforced their desire to be kept in the loop for property disposals.

k) Ngāti Whanaunga

No feedback received for this site.

l) Ngāti Maru

No feedback received for this site.

m) Ngāti Tamaterā

No feedback received for this site.

n) Waikato-Tainui

Waikato-Tainui signaled general interest in the acquisition of any property that is being identified for disposal. In terms of the cultural significance of the subject site, they recommend any future use/development of the site aligns with their Waikato-Tainui Environmental Plan and that marae in the vicinity of those sites are consulted with.

Implementation

22. The results of the rationalisation process are that Areas C and D, 3 Memorial Drive, New Lynn are not required for current or future service requirements. As such, we recommend that the subject areas be divested. Should the Finance and Performance Committee approve the divestment of the subject areas, we will undertake a disposals process which is in accordance with the existing joint development agreement and provides an optimal return to council.

Attachments

No.	Title	Page
a ⇩	Images of Areas C and D, 3 Memorial Drive, New	17
b ⇩	Whau Local Board meeting 22 March 2017 minutes extract	19

Signatories

Author

Anthony Lewis - Senior Advisor Portfolio Review, Panuku Development Auckland

Authorisers

Letitia McColl - Team Leader Portfolio Review, Panuku Development Auckland

Marian Webb – Manager Portfolio Strategy, Panuku Development Auckland

David Rankin – Chief Operating Officer, Panuku Development Auckland

Kevin Ramsay – Acting Group Chief Financial Officer

Finance and Performance Committee

23 May 2017

Unlock Henderson

File No.: CP2017/08643

Purpose

1. For the Finance and Performance Committee to approve the disposal of the properties set out in the Unlock Henderson High Level Project Plan (HLPP), which were endorsed by the Planning Committee on 2 May 2017.

Executive summary

2. Unlock Henderson is an urban regeneration project which will catalyse and reinvigorate wider private development potential in central Henderson through three broad stages of proposed development on specific council landholdings within the Unlock Henderson boundary.

3. On 2 May 2017, the Planning Committee considered and adopted the HLPP for Unlock Henderson. The Planning Committee endorsed Panuku Development Auckland (Panuku) to actively collaborate with the wider council group and its controlled organisations to integrate the planned activities in order to align projects and implementation to achieve the outcomes in the High Level Project Plan (resolution number PLA/2017/53).

4. The Planning Committee also endorsed the disposal of the following sites to enable them to be utilised for the urban renewal and housing outcomes set out in the Henderson HLPP:

Property	Certificate of Title	2014 Capital Value
Central One building, associated parking and casual staff car park:
i. 2-4 Henderson Valley Road, Henderson	CFR284767	$12,050,000.00
The Alderman car park:
i. 4 Edmonton Road, Henderson	NA625/22	$380,000.00
ii. 6 Edmonton Road, Henderson	NA625/23 (part-cancelled)	$340,000.00
iii. 8 Edmonton Road, Henderson	NA1040/14	$370,000.00
iv. 10 Edmonton Road, Henderson	NA1106/257	$720,000.00
v. 22 Alderman Drive, Henderson	NA91/77 (part-cancelled)
The Falls car park		$885,000.00
i. 14 Edmonton Road, Henderson	NA693/359
ii. 16 Edmonton Road, Henderson	NA810/244
iii. 18 Edmonton Road, Henderson	NA1656/50
iv. 20 Edmonton Road, Henderson	NA1656/51
5 Trading Place, Henderson (car park leading to the footbridge)	NA11A/1335	$830,000.00
1 Ratanui Street, Henderson (car park adjacent to the library)	CFR95624	$310,000.00
Corban’s Hill car park aka 430 Great North Road, Henderson	N/A (vested as legal road)	N/A
Auckland Film Studios site:		$9,850,000.00
i. 2 Hickory Avenue, Henderson	CFR 493255
ii. 10-14 Hickory Avenue, Henderson	CFR 493254

5. The Finance and Performance Committee need to approve the disposal of the aforementioned properties to enable Panuku to progress Unlock Henderson.

Recommendation/s

a) approve, subject to the satisfactory conclusion of any required statutory processes, the disposal of the following properties, with the objective of contributing to the outcomes of the Henderson High Level Project Plan of urban renewal and housing:

1. Central One building (associated parking and casual staff car park):

i. 2-4 Henderson Valley Road, Henderson - (CFR) 284767

2. The Alderman car park:

ii. 4 Edmonton Road, Henderson - NA625/22

iii. 6 Edmonton Road, Henderson - NA625/23 (part-cancelled)

iv. 8 Edmonton Road, Henderson - NA1040/14

v. 10 Edmonton Road, Henderson - NA1106/257

vi. 22 Alderman Drive, Henderson - NA91/77 (part-cancelled)

3. The Falls car park:

i. 14 Edmonton Road, Henderson - NA693/359

ii. 16 Edmonton Road, Henderson - NA810/244

iii. 18 Edmonton Road, Henderson - NA1656/50

iv. 20 Edmonton Road, Henderson - NA1656/51

4. 5 Trading Place, Henderson (car park leading to the footbridge) - NA11A/1335

5. 1 Ratanui Street, Henderson ( car park adjacent to the Library) –CFR 95624

6. Corban’s Hill, Henderson car park – road reserve aka 430 Great North Road- N/A (vested as Legal Road)

7. Auckland Film Studios site:

i. 2 Hickory Avenue, Henderson – CFR 493255

ii. 10-14 Hickory Avenue, Henderson – CFR 493254

subject to:

- Satisfactory conclusion of required statutory processes, and

- Auckland Transport satisfaction regarding transport requirements for the Corban’s Hill, Falls and Alderman car parks;

- cessation of film activity on the Auckland Film Studios site at some future point or once it transitions elsewhere.

b) agree that final terms and conditions be approved under the appropriate delegations.

Attachments

No.	Title	Page
a ⇩	Unlock Henderson resolutions of the Planning Committee	35

Signatories

Authors

Richard Davison – Senior Project Planning Leader, Panuku Development Auckland

Letitia McColl - Team Leader Portfolio Review, Panuku Development Auckland

Authorisers

David Rankin – Chief Operating Officer, Panuku Development Auckland

Kevin Ramsay – Acting Group Chief Financial Officer

Finance and Performance Committee

23 May 2017

Transform Onehunga

File No.: CP2017/08776

Purpose

1. For the Finance and Performance Committee to approve the disposal of the properties set out in the Transform Onehunga High Level Project Plan (HLPP), and the reinvestment of the proceeds of sale from these properties, which was endorsed by the Planning Committee on 28 March 2017.

Executive summary

2. Transform Onehunga is a transformative urban regeneration project which will catalyse and reinvigorate wider private development potential in Onehunga within the Transform Onehunga boundary.

3. On 28 March 2017, the Planning Committee considered and adopted the HLPP for Transform Onehunga. The Planning Committee endorsed Panuku Development Auckland (Panuku) as the lead council agency for the Onehunga regeneration project, to actively collaborate with the wider council group and its controlled organisations to integrate the planned activities in order to align projects and implementation to achieve the outcomes in the High Level Project Plan (resolution number PLA/2017/34).

4. The Planning Committee also endorsed the disposal of the following sites with the objective of utilising them for the urban regeneration, urban renewal and housing outcomes set out in the Transform Onehunga HLPP:

Property	Certificate of Title	2014 Capital Value
3 Paynes Lane, Onehunga	NA43B/710, NA717716	$810,000.00
45 Waller Street, Onehunga	NA717717	$1,210,000.00
61-65 Selwyn Street, Onehunga	NA320/187, NA349/112, NA51B/525	$430,000.00
Lots 3 and 4, DP 60645 Waiapu Lane, Onehunga	NA20A/51, NA20A/52	$60,000.00
230 Onehunga Mall, Onehunga	NA714641	$235,000.00
1 Waiapu Lane, Onehunga	NA43D/1068, NA679/89, NA591/224, NA591/221, NA591/222, NA43D/1066, NA320/70	$3,450,000.00
9-21 Waller Street, Onehunga	NA394690, NA928/267, NA271015	$1,480,000.00

5. The Finance and Performance Committee need to approve the disposal of the aforementioned properties to enable Panuku to progress Transform Onehunga.

6. The Planning Committee further endorsed the principle of reinvesting the proceeds of sale from the development sites in the Transform Onehunga project area, into projects and initiatives that progress the intent of the Onehunga High Level Project Plan and Framework Plan. This is in line with the reinvestment approach agreed by the Finance and Performance Committee for the Transform Manukau location. The Finance and Performance Committee need to approve this reinvestment policy for Transform Onehunga.

Recommendation/s

That the Finance and Performance Committee:

a) approve, subject to the satisfactory conclusion of any required statutory processes, the disposal of the following properties, with the objective of contributing to the outcomes of the Onehunga High Level Project Plan objectives of urban regeneration, urban renewal and housing:

i) 3 Paynes Lane, Onehunga (NA43B/710, NA717716);

ii) 45 Waller Street, Onehunga (NA717717);

iii) 61-65 Selwyn Street, Onehunga (NA320/187, NA349/112, NA51B/525);

iv) Lots 3 and 4, DP 60645 Waiapu Lane, Onehunga (NA20A/51, NA20A/52);

v) 230 Onehunga Mall, Onehunga ( NA714641);

vi) 1 Waiapu Lane, Onehunga (NA43D/1068, NA679/89, NA591/224, NA591/221, NA591/222, NA43D/1066, NA320/70); and

vii) 9-21 Waller Street, Onehunga (NA394690, NA928/267, NA271015);

subject to the satisfactory conclusion of the required statutory processes; and

subject to agreement with Auckland Transport on the transport outcomes required for the sites listed in vi) and vii).

b) agree that final terms and conditions be approved under the appropriate delegations; and

c) agree to the reinvestment of proceeds from sales of development sites in the Transform project area, into projects and initiatives that progress the intent of the High Level Project Plan and Framework Plan, conditional upon a satisfactory review of a detailed business case for new investments within Transform Onehunga.

Attachments

No.	Title	Page
a ⇩	Transform Onehunga resolutions of the Planning Committee	39

Signatories

Authors

Gavin Pebbles – Project Development Director - Onehunga, Panuku Development Auckland

Letitia McColl - Team Leader Portfolio Review, Panuku Development Auckland

Authorisers

David Rankin – Chief Operating Officer, Panuku Development Auckland

Kevin Ramsay – Acting Group Chief Financial Officer

Finance and Performance Committee

23 May 2017

Review of Fees Framework and Expenses Policy for Appointed Members

File No.: CP2017/03809

Purpose

1. To consider and adopt the updated Fees Framework and Expenses Policy for Appointed Members, including an increased hourly rate for independent hearings commissioners and reasonable accommodations to support appointed members with a disability to perform their role.

Executive summary

2. The Auckland Council Fees Framework and Expenses Policy (the framework) is used for setting fees and guiding the reimbursement of expenses for appointed members of committees, advisory panels or boards that have been established by the mayor, governing body or its committees, local boards or their committees.

3. The previous term’s Finance and Performance Committee adopted the current framework in 2014 (FIN/2014/25).

4. Staff have reviewed the framework in light of upcoming and recent recruitment of new independent hearings commissioners and demographic advisory panels, respectively. Staff recommend three key changes to the framework, which is included in attachment A:

· a 10 per cent increase in fees paid to independent hearings commissioners and separation of the fee-setting mechanism from the Cabinet Fees Framework

· the expenses policy provisions now applying to independent hearings commissioners

· the introduction of reasonable accommodations to support people with a disability to perform their role.

5. A recent survey of other New Zealand councils (attachment B) shows that Auckland Council’s independent hearings commissioners are paid less per hour on average than other councils and that the Cabinet Fees Framework is no longer appropriate for setting independent hearings commissioner fees. Auckland Council’s independent hearings commissioner fees have not changed since the council was established in 2010.

6. Staff recommend a 10 per cent increase in fees, based on wage-based inflation since 2012 when the last survey of other councils was conducted, and separation from the Cabinet Fees Framework. Staff also recommend that the expenses policy provisions of the framework apply to independent hearings commissioners to ensure consistency and transparency.

7. Staff received feedback during the recent recruitment of the disability advisory panel that some members need additional support to enable them to prepare for and participate in panel meetings. Staff recommend that the framework introduce reasonable accommodations to support for members with a disability, including providing a sign language interpreter and remuneration of a support person set at 50 per cent of the member’s fee with expenses reimbursed as outlined in the expenses policy.

8. The cost of a 10 per cent fee increase for independent hearings commissioners is approximately $17,000 per year to the council and $200,000 per year in total for applicants. The cost to the council of each support person required to assist a member with a disability is approximately $1,250 per year. All costs to the council can be met within existing operational budgets.

Recommendation/s

That the Finance and Performance Committee:

a) approve a 10 per cent increase to independent hearings commissioner fees from 1 July 2017, in accordance with paragraph 36 of the Fees Framework and Expenses Policy for Appointed Members in attachment A.

b) adopt the updated Fees Framework and Expenses Policy for Appointed Members, noting that Recommendation (a) is reflected in paragraph 37.

c) authorise the General Manager Democracy Services to amend the Fees Framework and Expenses Policy for Appointed Members to reflect subsequent decisions or make amendments of a minor nature.

Comments

Background

9. The Auckland Council Fees Framework and Expenses Policy for Appointed Members (the framework) was adopted by the previous term’s Finance and Performance Committee on 22 May 2014 (FIN/2014/25). The framework sets fees and guides the reimbursement of expenses for appointed members of committees, advisory panels or boards such as independent hearings commissioners and demographic advisory panel members.

10. The new term of council and appointment of demographic advisory panel members has prompted a review of the framework. It is also timely to review the hourly rates for independent hearings commissioners as recruitment is currently underway for a new pool of commissioners who will be contracted for three years from 1 July 2017.

11. Staff have reviewed the framework and recommend minor editorial changes as well as three substantive changes, including:

· an increase in fees paid to independent hearings commissioners and separation from the Cabinet Fees Framework

· the expenses policy provisions now applying to independent hearings commissioners (rather than being included in their contracts)

· the introduction of reasonable accommodations to support people with a disability to perform their role.

12. The key changes to the framework are set out in the table below.

Proposals for changes to the fees framework and expenses policy

Item	Proposed change	Reason for change
Scope	New paragraph 7	To make it clear that the fees framework applies to independent hearings commissioners
Hourly rate for independent hearings commissioners	Separate independent hearings commissioner fees from the Cabinet Fees Framework Increase hourly rate by 10 per cent to $187 per hour for chairpersons and $165 per hour for members, effective 1 July 2017	To align more closely with other councils’ remuneration of independent hearings commissioners To reflect the wage price inflation since 2012 when the independent hearings commissioner fees were last reviewed To reinforce council’s commitment to recruiting and retaining high quality hearings commissioners
Mileage allowance	Update mileage allowance to specify that a mileage allowance is payable for any travel within the Auckland region that is required to perform the member’s role Change the mileage rate from the IRD rate to the rate for elected members set by the Remuneration Authority	To make it clear that mileage allowance is applicable for travel within the Auckland region To be consistent with the Elected Members Expenses Policy
Reasonable accommodations for people with a disability	New section entitled ‘reasonable accommodations’, including: § sign language interpreters at scheduled meetings attended by an appointed member with a hearing impairment § provision for fees and expenses for a support person in accordance with the definition of reasonable accommodations § remuneration of a support person set at 50 per cent of the member’s fee, and expenses reimbursed as outlined in the expenses policy	To support appointed members with a disability to perform their role To align with the United Nations Convention on the Rights of Persons with Disabilities, which has been ratified by New Zealand
Fees for co-chair	New paragraph 34 which specifies that the fee for co-chairs is calculated as follows: (chair fee + deputy chair fee) ÷ 2.	To formally record how fees for panels that appoint co-chairs are set (this formula was applied last term for the co-chairs of the Rainbow Panel)

Separating independent hearings commissioner fees from the Cabinet Fees Framework

13. The Auckland Transition Agency set the fees for Auckland Council’s independent hearings commissioners in 2010. The rates were established at $170 per hour for chairpersons and $150 per hour for members.

14. In 2012, the council contracted an external company, Strategic Pay Limited (Strategic Pay), to review independent hearings commissioner fees through a survey of New Zealand councils. The purpose of the survey was to ascertain the fee levels paid to independent hearings commissioners, whose fee levels are not set by the Remuneration Authority.

15. Strategic Pay was asked to take the Cabinet Fees Framework criteria into consideration in its report. The Cabinet Fees Framework provides guidance on the classification and remuneration of statutory and other Crown bodies, using a range of criteria that can be scored and sorted into appropriate fee categories.

16. Strategic Pay applied the Cabinet Fees Framework criteria and concluded that the independent hearings commissioner role fits most appropriately within the framework’s Group 2 category (“Statutory Tribunals and Authorities”).

17. The fee ranges within the Group 2 category were $43-$100 per hour for chairpersons and $34-$64 per hour for members – significantly lower than the rates established for Auckland Council and also lower than the rates paid by other councils surveyed. Based on the Strategic Pay survey, Auckland Council’s independent hearings commissioner fees remained at the 2010 rate.

18. The Cabinet Fees Framework was updated in December 2012 and the fee ranges within the Group 2 category increased to $43-$125 per hour for chairpersons and $34-$80 per hour for members – still significantly lower than existing independent hearings commissioner fees.

19. The 2014 Fees Framework and Expenses Policy for Appointed Members reconfirmed the 2010 hourly rate and stated that fees would be aligned to any further increases in the Cabinet Fees Framework, such that fees would increase by the same percentage as those within the Group 2 category.

20. The State Services Commission reviewed the Cabinet Fees Framework in 2016 and confirmed that the 2012 framework remains the mechanism for determining or reassessing the fees to members of bodies to which the Crown has an interest.

21. Consequently, the independent hearings commissioner rates remained unchanged. Some commissioners have raised concerns about their hourly rate staying the same since 2010 and have advised that they are more likely to prioritise other jobs above commissioner work, as their professional charge-out rate is considerably higher than the independent hearings commissioner rate.

22. Staff have conducted a new survey of councils using the same councils as the 2012 Strategic Pay Limited survey. Staff received responses from 18 of the 26 councils.

23. The survey, in Attachment B, shows that the level of fees for independent hearings commissioners does not align with the Cabinet Fees Framework. As the 2012 survey, this year’s survey results indicate that the Cabinet Fees Framework is not relevant to the setting of fees for highly skilled professionals who sit as commissioners. Staff consider that an alternative approach is required.

24. Staff recommend that the Fees Framework and Expenses Policy for Appointed Members states that Auckland Council will pay set fees for chairs and members, and that the fees will be set by the governing body or one of its committees of the whole based on a market evaluation.

Review and comparison of hourly rates for independent hearings commissioners

25. The 2012 Strategic Pay survey found that councils used a variety of approaches to paying for independent hearings commissioner services. Some councils set a single hourly rate, while others applied a variety of rates across a pay range. For the most part, councils paid commissioners at their professional market rate.

26. The different approaches make it difficult to directly compare hourly rates across surveyed councils, however the Strategic Pay survey showed that among councils paying a set rate, the average rate was $165 per hour for chairpersons and $160 per hour for members. The pay range in 2012 was $80-$350 per hour for chairpersons and $68-$350 per hour for members.

27. The latest council responses also vary significantly in terms of set rates and pay ranges. An analysis of responses for 2017 shows that the average set rate is now $178 per hour for chairpersons and $152 per hour for members. The pay range is now $90-$400 per hour for both chairpersons and members.

28. Staff have applied various methods of calculation to the latest survey responses (including midpoints across all fee ranges and midpoints within a fee range no larger than $100) to better understand how Auckland Council’s commissioner fees compare to other councils. Although the results cannot be directly compared to the Strategic Pay findings, all methods of calculation indicate that on average, other councils pay their independent commissioners more than Auckland Council, both for chairpersons ($179-227 per hour) and members ($152-208 per hour).

29. Staff reviewed wage-based inflation through the Reserve Bank website to further inform the survey findings. The inflation calculator shows that private sector wages have increased by 10 per cent (rounded to the nearest whole number) since September 2012, when the Strategic Pay Survey was completed.

30. If a 10 per cent increase is applied to current commissioner fees, the resulting hourly rates are $187 for chairpersons and $165 for members. These rates sit at the conservative end of the pay range in the survey findings.

31. The comparatively higher fees across surveyed councils and the wage based inflation since 2012 indicate that Auckland Council’s independent commissioner fees should now be increased.

32. Staff have considered three options, which are set out in the table below.

Options

Option

Consideration

1) No change. Fees remain at:

· $170 per hour for chairpersons; and

· $150 per hour for members.

Pros:

§ no financial impact to the council or applicants.

Cons:

§ risk that we will be unable to recruit and retain quality candidates and that will have a negative impact on the quality of decision-making

§ risk that efforts to introduce performance and development initiatives among commissioners will be unsuccessful without a financial incentive.

2) Increase fees by 10% to:

· $187 per hour for chairpersons; and

· $165 per hour for members

to align with wage price inflation since 2012.

Pros:

§ fee increase linked to known wage price inflation and applied equally across chairpersons and members

§ ability to recruit and retain quality candidates that are trusted to make good decisions on behalf of the council

§ fee increase an action of good faith and an incentive for commissioners to engage with performance and development initiatives

§ fee increase less than option 3 and the resulting hourly rate sits conservatively within the fee range of recently surveyed councils.

Cons:

§ fee increase on-charged to applicants for recoverable hearings and duty commissioner work, which may result in public opposition and negatively impact the council’s reputation

§ fee increase may not be large enough to mitigate recruitment and retention risks.

3) Increase fees by 13-15% to:

· $194 per hour for chairpersons; and

· $170 per hour for members.

(the average of midpoints for data range less than $100, set rates and fees provided as an average).

Pros:

§ places Auckland Council fees within the average range used by surveyed councils across New Zealand

§ fee increase an action of good faith and an incentive for commissioners to engage with performance and development initiatives

§ cost of fee increase to the council can be met within existing operational budgets.

Cons:

§ fee increase greater than option 2, which means a higher cost to council and applicants

§ fee increase on-charged to applicants for recoverable hearings and duty commissioner work, which may result in public opposition and negatively impact the council’s reputation

§ fee increase may not be large enough to mitigate recruitment and retention risks.

Discussion and recommendation

33. Independent hearings commissioners are expected to be professionals who are outstanding in their fields of expertise. They act under delegated authority to make decisions on behalf of Auckland Council that stand up to appeal in the Environment Court. Independent hearings commissioners must be accredited with the Making Good Decisions certification, which is obtained at their own cost.

34. Through its three-yearly recruitment programme, the council aims to attract quality professionals at the top of their career, who become long term members of the independent hearings commissioner pool and help to develop new members.

35. There is a risk that a further decision to keep the commissioners’ hourly rates unchanged will negatively impact the recruitment and retention of quality professionals.

36. This risk must be balanced by the financial impact to those who bear the cost of commissioner fees, including applicants and the council generally. An increase of any amount could have a reputational impact for the council.

37. Most independent commissioner costs are on-charged to applicants, with a small proportion of costs borne by the council. However a very small percentage of applicants will be affected by an increase in commissioner fees.

38. Independent commissioners earn fees by considering applications on the papers as duty commissioners, or through hearings. Approximately 5 per cent of resource consent applications are considered by duty commissioners and less than 1 per cent of applications go to a hearing.

39. Feedback from resource consents staff indicates that a 10 per cent increase to duty commissioner fees would amount a maximum of $150 for each complex application that would normally cost approximately $10,000-$15,000 in total.

40. Applications that go to hearing are more costly for applicants, however as noted above, less than 1 per cent of applications are heard. A review of hearings information for the 2016 financial year indicates that the impact of a 10 per cent increase in independent commissioner fees for hearings is approximately $200,000 per year in total for applicants and $17,000 per year for the council.

41. On balance, staff recommend option 2 – increasing fees by 10 per cent to minimise the impact of the fee increase on applicants.

42. The increased cost to the council can be met within existing operational budgets.

Expenses for independent hearings commissioners

43. In the last term, expenses for independent hearings commissioners were set in their independent contracts. To ensure consistency and transparency, the new framework makes it explicit that the expense policy provisions also apply to independent hearings commissioners.

Reasonable accommodations for people with a disability

44. Some members of the Disability Advisory Panel who have recently been appointed require help to prepare for and attend meetings and have asked that their support person be remunerated. The current framework does not include specific provisions on support for panel members with a disability.

45. Article 2 of the United Nations Convention on the Rights of Persons with Disabilities, which has been ratified by New Zealand, defines reasonable accommodations as necessary and appropriate modification and adjustments, not imposing a disproportionate or undue burden, where needed in a particular case, to ensure to persons with disabilities the enjoyment or exercise on an equal basis with others of all human rights and fundamental freedoms.

46. Auckland Council is committed to supporting appointed members with a disability to perform their role by providing reasonable accommodations. This will enable appointed members to fully participate in relevant council meetings and workshops.

47. The reasonable accommodations provisions included in the new framework are based on the principles of the March 2017 Office for Disability Issues’ Guidelines. These guidelines set out a consistent approach for meeting the costs of disabled people’s organisations’ representatives collectively engaging with government agencies under the New Zealand Disability Strategy.

48. The new provisions in the framework include:

· New Zealand sign language interpreters for appointed members with a hearing impairment (this was previously provided but is now explicit)

· fees for a support person required for appointed members with a disability.

49. The fee for a support person will be 50 per cent of the appointed member’s fee less any applicable taxes, which equates on average to $1,250 per annum for each support person.

50. Appointed members with a disability will seek approval for the provision of reasonable accommodations from the General Manager Democracy Services to ensure that costs can be absorbed in the advisory panels’ budget.

Consideration

Local board views and implications

51. Local board members are not directly affected by a review of the Fees Framework and Expenses Policy for Appointed Members, as their fees and expenses are set out in the Elected Members Expenses Policy and approved by the Remuneration Authority. As such, local boards have not been consulted on the changes recommended in this report.

Māori impact statement

52. Auckland Council appoints independent hearings commissioners who are experts in the Treaty of Waitangi and Te Ao Māori, to ensure better decision-making by, and for, Māori. This aligns with Auckland Council’s statutory responsibilities and priorities under the Māori Responsiveness Framework

53. The proposed fee increase applies equally across all commissioners and is intended to improve the recruitment and retention of high quality commissioners. Māori as commissioners and applicants are affected and have an interest in any fee increase, however this increase does not impact specific outcomes or activities for Māori that are different from other commissioners and applicants.

54. Similarly, the provision for reasonable accommodations to support people with a disability to perform their role will impact Māori with a disability in the same way as other people with a disability.

Implementation

Impact on budget

55. The proposed changes to the Fees Framework and Expenses Policy will cost the council approximately $17,000 per year for independent commissioner hearings fees and $1250 per year for each support person required to assist a member with a disability.

56. The impact to applicants of a 10 per cent increase in commissioner fees is approximately $200,000 per year in total for hearings.

57. Further costs are unknown but are not expected to be significant. All costs to the council can be met within existing operational budgets.

Timeframe for implementation

58. The changes to the Fees Framework and Expenses Policy for Appointed Members will come into effect upon adoption by the Finance and Performance Committee, with the exception of new independent commissioner fees, which will be effective from 1 July 2017 to align with the start date of the new commissioner contracts.

Attachments

No.	Title	Page
a ⇩	Proposed revised Fees Framework and Expenses Policy for Appointed Members	51
b ⇩	Survey of New Zealand councils: Independent hearings commissioner fees	65

Signatories

Author

Elizabeth McKenzie - Principal Advisor Hearings

Authorisers

Marguerite Delbet - General Manager Democracy Services

Phil Wilson - Governance Director

Kevin Ramsay - Acting Group Chief Financial Officer

Finance and Performance Committee

23 May 2017

2017 Survey of New Zealand councils
Independent hearings commissioner remuneration review

Survey participants

Data was received from the following 18 councils:

Auckland Council	Kapiti Coast District Council
Carterton District Council	Porirua City Council
Christchurch City Council	Queenstown Lakes District Council
Environment Bay of Plenty	Tararua District Council
Environment Canterbury	Taupo District Council
Greater Wellington Regional Council	Waimate District Council
Hastings District Council	Waipa District Council
Hauraki District Council	Wellington City Council
Hutt City Council	Whangarei District Council

Cabinet Fees Framework, Group 2:
Statutory Tribunals and Authorities

	Fees range - chair		Fees range - members
Level	Daily	Hourly	Daily	Hourly
1	$640 - $1,000	$80-$125	$410 - $638	$51-$80
2	$580 - $855	$73-$107	$380 - $527	$48-$66
3	$530 - $720	$66-$90	$340 - $470	$43-$59
4	$450 - $560	$56-$70	$290 - $360	$36-$45
5	$340 - $500	$43-$63	$270 - $325	$34-$41

Strategic Pay considered that the independent hearings commissioner role fits most appropriately in level 3, and would occasionally fit the level 2 criteria.

Survey responses

Council	Chair fees	Member fees	Comments
1	-	-	Haven’t used an independent commissioner for many years
2	-	-	Haven't used an independent commissioner for over two years
3	-	-	Negotiate rate on a case by case basis
4	$150	-	Use single commissioner for hearings
5	$150	$150
6	$170	$150
7	$170	$150
8	$250	$200 Independent commissioner $110 Iwi commissioner $150 Former elected member
9	$90-350	$90 - $350	Negotiated rate in 2014 with individual commissioners (35 in pool)
10	$150-300	$150 - $300	Plus disbursements. Negotiate with each commissioner at time of appointment
11	$165-200	$165 - $200	No set hourly rate, commissioners charge their own rate.
12	$170-320	$150 - $225	Some commissioners charge a day rate instead of an hourly rate (chairs $1388-$2750, members $800 - $2100)
13	Ave $180-220	Ave $180 - $220	Highest is $350+GST and lowest is $90+GST – most are around $180-$220+GST
14	$180-400	$180-400	Depending on skills and experience
15	$200-250	$120-180	No set rate - rate offered is based on experience and skills
16	$200	$160	Rates do vary based on experience but these are the average.
17	$200	$200	No set rate but generally commissioners charge around $200 per hour
18	$234 average	$219 average

Key:

Auckland Council

Comparison between 2012 and 2017

Hourly rates paid to chairpersons

Hourly rates paid to chairpersons	Minimum		Maximum		Average
	2012	2017	2012	2017	2012	2017
With set rates	$150	$150	$180	$250	$165	$178
Without set rates	$80	$90	$350	$400	-	-
Ranges	$200-250	$165-200	$80-350	$90-350	-	-

Hourly rates paid to members

Hourly rates paid to members	Minimum		Maximum		Average
	2012	2017	2012	2017	2012	2017
With set rates	$150	$110	$180	$200	$160	$152
Without set rates	$68	$90	$350	$400	-	-
Ranges	$80-100	$165-200	$120-275	$90-350	-	-

Further calculations

Chairpersons

Description	Average hourly rate (to nearest dollar)
Set rates	$178
Set rates and fees provided as an average	$191
Midpoints where a data range is provided	$227
Midpoint where data range is less than $100	$203
Midpoint for data range less than $100, set rates and fees provided as an average	$194
Combined responses (all midpoints, set rates and averages)	$207

Members

Description	Average hourly rate (to nearest dollar)
Set rates	$152
Set rates and fees provided as an average	$165
Midpoints where a data range is provided	$208
Midpoint where data range is less than $100	$180
Midpoint for data range less than $100, set rates and averages	$170
Combined responses (all midpoints, set rates and averages)	$184

Finance and Performance Committee

23 May 2017

Progress on Te Toa Takitini portfolio - third quarter of 2016/2017

File No.: CP2017/07409

Purpose

1. To report on progress for the third quarter of 2016/2017 for Te Toa Takitini.

Executive summary

2. The council has established a group-wide approach called Te Toa Takitini to better enable the council group to identify, invest, and track progress on transformational outcomes for Māori. The portfolio is divided up into four Whai (programmes of work).

3. The name Te Toa Takitini is a call to action for the entire council group and draws from the whakatauki (proverb) “Ehara taku toa i te toa takitahi, engari he toa takitini”, “Success is not determined by me alone, it is the sum of the contribution of many”.

4. Māori transformational shift activity descriptions are provided in Attachment A.

5. Combined Te Toa Takitini budgets for the 2016/2017 financial year are $8,812,000. Combined expenditure for the end of the third quarter is $3,912,000, which is 44 per cent of the combined annual budget. Key points to note for the year to date budgets are:

· Whai Rawa (Māori economic development) expenditure is $600,000 against an annual budget of $960,000, which is 63 percent of the annual budget.

· Whai Painga (Māori social wellbeing) expenditure is $612,000 against an annual budget of $967,000, which is 63 percent of the annual budget.

· Whai Tiaki (Maori cultural wellbeing) expenditure is $2,531,000 against an annual budget of $6,333,000, which is 40 percent of the annual budget meaning that significant activity would need to occur in the fourth quarter (April-June 2017 inclusive).

· Whai Tika (Effectiveness for Māori) expenditure is $169,000 against an annual budget of $552,000, which is 31 percent of the annual budget, but is forecasting a small overspend of $12,000 by the end of the financial year.

6. The rate of spend is expected to significantly increase over the fourth quarter, with combined forecast spend for the financial year of $8,223,000, or 93 per cent of annual budget.

7. Te Toa Takitini programmes and projects for the 2016/2017 financial year period have been approved by Te Toa Takitini executive leadership group. Programme conveners and business owners from across the council group have responsibility for delivery.

Recommendation/s

That the Finance and Performance Committee:

a) note progress on key Te Toa Takitini portfolio projects included in this report for the third quarter of 2016/2017.

Comments

Te Toa Takitini Māori Transformational shift activity

8. Te Toa Takitini is a cross-council portfolio of projects organised into four Whai (programmes of work). Te Toa Takitini identifies, prioritises, tracks and reports on projects across council group that lead and influence transformational outcomes for Māori, including:

· strengthening internal organisational capacity in responding to Māori

· demonstrating a positive impact on and with Māori communities

Budgets

2016/2017 budget and year-to-date expenditure

9. The budget for the 2016/2017 financial year is $8,812,000. Year to date expenditure at quarter three is $3,912,000. This is 44 per cent of annual budget. Year to date and forecast expenditure are presented in table one.

10. The budget for the 2016/2017 financial year has been reduced by $1,052,000 from $9,864,000 to $8,812,000 due to:

· Whai Tiaki: Auckland Transport Road Safety Improvements project capital expenditure of $1,000,000 being deferred to FY2017/2018 as construction works will not start until after June 2017.

· Whai Tahinga: This programme has been removed from Te Toa Takitini portfolio, and progress on treaty settlement work programme budget of $52,000 will be reported on through the monthly performance report for the governance division of council.

Table one: Māori transformational shift activity

Māori Transformational Shift Activity	FY17 Q3 YTD Actual $(000’s)	FY17 Forecasted Actual $(000s)	FY17 Annual Budget $(000s)	FY17 Forecasted Variance $(000s)
Whai Rawa – Māori Economic Development	600	960	960	-
Whai Painga – Māori Social Well-being	612	840	967	127
Whai Tiaki – Māori Cultural Wellbeing	2531	5,859	6,333	474
Whai Tika – Effectiveness for Māori	169	564	552	-12
Total	3,912	8,223	8,812	589

11. The rate of spend is expected to increase significantly over the fourth quarter, with forecast spend for the year of $8,223,000, or 93 per cent of an annual budget of $8,812,000, indicating a forecasted variance for the year of $589,000.

Key variances for the third quarter expenditure

12. Whai Tiaki: Māori cultural well-being - Expenditure at the end of quarter three is $2,531,000 against an annual budget of $6,333,000, or 40 per cent.

13. Whai Tika: Effectiveness for Māori - Year to date expenditure at the end of quarter three is $169,000 from an annual budget of $552,000, or 31 per cent.

Year-end forecast

14. The forecasted variance for the year of $589,000 is made up of the following project variances for each Whai:

· Whai Tiaki variances totalling $474,000:

o Māori Sites of Significance variance of $87,000. Underspend resulted from slower than expected progress with mana whenua activities.

o Beneath Our Feet variance of $121,000. Underspend resulted from a lengthy procurement process.

o Kaitiaki Ranger Forum and Ranger Programme variance of $186,000. Underspend identified due to unclear status reporting.

o Seven other project variances totalling $80,000. Underspend affected by minor delays in project activity.

· Whai Painga variances totalling $127,000 across three projects. Underspend related to project activity that has now been moved back to business as usual.

· Whai Tika variance (overspend) of $12,000 for increased elections activity.

Highlights and issues

Whai Rawa (Māori economic well-being): Third quarter highlights

15. Māori Signature Event – The Tāmaki Herenga Waka Festival 2017 was delivered by ATEED over Auckland Anniversary weekend 2017, and was attended by approximately 30,189 visitors; a 232 per cent increase on last year’s attendance of 13,000 visitors. The satisfaction survey was conducted and 95 per cent of event patrons were satisfied with the event this year compared to 86 per cent of those surveyed at last year’s event.

16. Māori Tourism Development – In the third quarter, ATEED was focused on building partnerships and supporting the industry, and supporting their development in a range of major events such as TRENZ 2017 and the World Masters Games in April. ATEED is in the process of creating more marketing collateral such as the Tāmaki Makaurau Māori tourism brochure, and destination video in order to enhance the Māori tourism presence within these major events.

Whai Painga (Māori social well-being): Third quarter highlights and issues

17. Māori Housing Programme – There has been positive progress for housing projects seeking to develop the sites at two urban-based marae. Panuku Development Auckland Ltd (Panuku) is currently progressing a consortium led by New Zealand Housing Foundation, with mana whenua and housing providers for 20 Barlowcliffe Place, Manukau, ensuring the development proposal reflects the mana whenua’s aspirations for the site.

18. Auckland Transport Road Safety Programmes - Successful promotion of driver licensing programme at Te Herenga Waka festival and Polyfest. 190 rangatahi (young people) signed up for Auckland Transport’s driver licensing courses held on marae or at other locations. Te Kura Māori o Ngā Tapuwae, in Māngere, has also approached Auckland Transport about licensing for their tauira (students) and discussions are underway to run learners and restricted license training. Planning is underway for a series of Māori road safety videos and resources for Te Kura Kaupapa Māori schools.

19. It is important to note future reporting will require clearer project forecasting in order to provide better performance information in Te Toa Takitini quarterly reporting.

Whai Tiaki (Māori cultural well-being): Third quarter highlights and variances

20. Maramataka Toi Māori (Calendar of Māori arts and cultural events) – Planning for the 20 June – 2 July Matariki festival is underway. Ngāti Manuhiri is the host iwi for this year’s festival. Sponsorship discussions have continued with Te Wananga o Aotearoa, AMI Insurance Ltd, SKYCITY Ltd, and the United States Embassy. Projects have been developed to deepen the understanding and engage Aucklanders with Ngāti Manuhiri stories, and will include various online presentations, and guided heritage tours as part of the festival programme.

21. Auckland Transport Road Safety Improvements - construction work for marae and papakainga has been scheduled to begin in the first quarter of the 2017/2018 financial year rather than the fourth quarter of the 2016/2017 financial year. Therefore, capex budget of $1,000,000 will be accrued to financial year 2017/2018. The 2016/2017 financial year budget has been reduced to $200,000.

22. Māori Cultural Initiatives Fund – Project schedule has been updated to include milestones and dates for delivery throughout quarter four and will be closely monitored during the fourth quarter due to significant underspend, to date. This detailed scheduling will support the team to receive and evaluate applications for funding of approximately $1,000,000.

23. It is important to note future reporting will require clearer project forecasting in order to provide better performance information in Te Toa Takitini quarterly reporting.

Summary of Whai Tika – Effectiveness for Māori

24. The Auckland Council Treaty Audit Report 2015 has 24 ‘action’ groups covering specific recommendations and closure criteria for them. The Waharoa, comprising representatives from Te Waka Anga Mua ki Uta and the Internal Audit department of council, and the Independent Māori Statutory Board (IMSB), determines what actions can be closed. The table below summarises progress to date.

Table two: Treaty audit response action groups

Action Groups

Open

Closed

Initiatives

Department/CCO Māori Responsiveness Plans

Treaty of Waitangi Settlements Implementation

Hearings Policy

Good Practice Benchmarking

Effectiveness and Compliance Framework

25. There has been no progress since the first quarter report due to lack of evidence provided that meets the closure criteria. The Waharoa group has reviewed this part of the process and agreed on evidence required to meet the closure criteria for each action group.

26. Further detail about the treaty audit response workstream is provided in Attachment B.

Whai Tika (Effectiveness for Māori): Highlights

Māori Responsiveness Plans

27. Māori responsiveness plans are progressing steadily. Eleven Māori responsiveness plans are now complete, and eight are in development. Of the eight, two plans (for the People and Capability, and Transport and Infrastructure Strategy departments) are in the final stages of the development and in Internal Audit/Legal/Te Waka Anga Mua ki Uta review process.

28. Further information on the Māori responsiveness plans can be found in Attachment C.

Other Whai Tika highlights

29. Māori leadership value training – The pilot programme is underway and there is potential for this to be expanded into a larger leadership development programme for the 2017/2018 financial year.

30. Māori engagement initiative - Successful recruitment for a Principal Advisor, Māori Engagement. Eight Māori engagement hui have been held so far over the second and third quarters.

31. Akona (Māori e-learning application) – the People and Capability department of council have successfully recruited a Māori responsiveness e-learning project coordinator. This new resource, combined with existing e-learning capability now meets the needs of the People and Capability department.

Consideration

Local board views and implications

32. Local board engagement - Otara Health Ltd facilitated two workshops with Māori input into the Local Board Decision Making Project Reference group. The focus is on establishing how mana whenua provides input into the draft Manurewa Local Board Plan. Funding agreements to support the implementation of these recommendations will be completed in the fourth quarter.

Māori impact statement

33. This report provides an overview of Māori transformational activity for the third quarter of the 2016/2017 financial year. These activities continue to deliver on the priorities agreed in the council’s Long-term Plan 2015-2025.

34. The treaty audit response work programme is progressing, enabling the council to strengthen its responsiveness to Māori through targeted actions and improvements.

Implementation

35. Te Toa Takitini programmes and projects for the 2016/2017 financial year period have been approved by Te Toa Takitini executive leadership group. Programme conveners and business owners from across the council family have responsibility for delivery. The Finance and Performance Committee receives activity and expenditure reports in April, August and November of each financial year. Updates on progress are also provided at the Joint Governing Body/IMSB quarterly meetings.

Attachments

No.	Title	Page
a ⇩	Te Toa Takitini Glossary	75
b ⇩	Treaty Audit Register	77
c ⇩	Maori Responsiveness Plans Status	81

Signatories

Author

Amokura Panoho - Head of Te Toa Takitini

Authorisers

Graham Pryor - GM Maori Responsiveness & Relationships

Phil Wilson - Governance Director

Kevin Ramsay – Acting Group Chief Financial Officer

Finance and Performance Committee

23 May 2017

Mount Albert Grammar School Community Swimming Pool Trust - Changes to Trust Deed

File No.: CP2017/08587

Purpose

1. To consider changes to the Mount Albert Grammar School Community Swimming Pool Trust Deed.

Executive summary

2. The Mount Albert Grammar School Community Swimming Pool Trust (the trust) is a council-controlled organisation. The trust is the legal owner of the Mount Albert Aquatic Centre.

3. The trust is proposing several changes to its trust deed to reflect the changed nature of the trust’s responsibilities since council now fully manages the facility. Any proposed changes must be approved by Auckland Council before the trust deed can be amended.

4. The key changes proposed are:

· a reduction in the number of trustees from seven to five

· removal of the limitation on the maximum number of continuous years serving as a trustee. Currently, the trust deed states that trustees can serve a maximum of six years continuously as a trustee.

5. In general, the changes to governance proposed by the trust reflect the change in effort and oversight required following changes to the management of the aquatic centre. The trust now has a relatively passive role as the legal owner of the aquatic centre, with management being the responsibility of council.

6. No changes have been proposed which would change the purpose of the trust or its charitable status. The proposed changes are supported by staff.

7. The trust has also requested that the council change the trust deed so that one of the council appointed trustees would automatically be an elected member from the Albert-Eden Local Board. This request is not supported as there is a potential for a conflict of interest between the positions of local board member and trust board member.

8. It is recommended that the trust deed remain silent on who council should appoint as trustees. This would mean that a local board member would not be appointed as a trustee as of right, but would not preclude the appointment of a local board member if it was appropriate to do so.

Recommendation/s

That the Finance and Performance Committee:

a) approve the Deed of Variation of Trust No.2 changing the Mount Albert Grammar School Community Swimming Pool Trust Deed with the following inclusions:

(i) to reduce the number of trustees, by replacing the provision for a total of seven trustees (with the chair and three other trustees appointed by Auckland Council, and three trustees appointed by Mount Albert Grammar School), with a provision for a total of five trustees (with the chair and two other trustees appointed by Auckland Council, and two trustees appointed by Mount Albert Grammar School)

(ii) remove the limitation on the maximum number of continuous years serving as a trustee (currently six years), and leaving it to the discretion of the appointing parties

(iii) to change the minimum composition of a quorum of the trust from four trustees to three

(iv) to change the minimum number of trustees needed to modify the terms of the trust deed from the current requirement of no less than five out of seven trustees, to no less than four out of five trustees, always subject to confirmation of the changes by both Auckland Council and the Mount Albert Grammar School Board of Trustees.

b) decline the request to amend the Mount Albert Grammar School Community Swimming Pool Trust Deed to include a provision that would automatically appoint an Albert-Eden Local Board member as one of the Auckland Council appointed trustees.

Comments

Background

9. The Mount Albert Grammar Community Swimming Pool Trust (the trust) was originally established as a collaboration between Auckland City Council and Mount Albert Grammar School to provide an aquatic centre facility for the school and the residents of the area. The trust is the legal owner of the Mount Albert Aquatic Centre.

10. The trust is a council-controlled organisation, as Auckland Council currently has the right to appoint a majority of trustees (four of seven). The balance of the trustees are appointed by Mount Albert Grammar School.

11. Although the trust is a council-controlled organisation, it has been exempted from the Local Government Act 2002 accountability requirements under section 7 of the Local Government Act 2002. Under this provision, a local authority may exempt a council-controlled organisation from the accountability requirements under the act after having considered the nature and scope of the activities of the organisation, and considered the costs and benefits of applying the Act’s accountability requirements.

12. During the 2013-2016 period, Auckland Council assumed full responsibility for the management and operation of the aquatic centre. This change was alongside a major re-development of the aquatic centre which was funded by the council although the centre is owned by the trust. The changes to management and operations also prompted a review of the governance structure for the facility.

13. The final changes to governance have been agreed by the trust, but these require the approval of the Mount Albert Grammar School Board of Trustees as well as the council.

14. The key changes proposed are:

· to reduce the number of trustees, by replacing the provision for a total of seven trustees (with the chair and three other trustees appointed by Auckland Council, and three trustees appointed by Mount Albert Grammar School), with a provision for a total of five trustees (with the chair and two other trustees appointed by Auckland Council, and two trustees appointed by Mount Albert Grammar School). It is noted that the school’s headmaster is automatically one of the school’s appointed trustees;

· to remove the maximum term of six consecutive years for serving on the trust, and leaving it to the discretion of the appointing parties.

· to change the minimum composition of a quorum of the trust from four trustees to three

· to change the minimum number of trustees needed to modify the terms of the trust deed from the current requirement of no less than five out of seven trustees, to no less than four out of five trustees, always subject to confirmation of the changes by both Auckland Council and the Mount Albert Grammar School Board of Trustees.

15. The trust has also requested that the council consider changing the trust deed to include one elected member from the Albert-Eden Local Board as one of the council appointees.

16. A copy of the trustees’ resolution for variation of the trust deed is attached (Attachment A) and a copy of the draft Deed of Variation of Trust (Attachment B).

Discussion

17. The changes that have been made over the last three years to the management and operations of the aquatic centre facility have considerably reduced the commitment required of the trustees. In the future, the trust’s business will largely consist of maintaining financial accounts and receiving reports from the council.

18. In general, the changes to governance proposed by the trust reflect the change in effort and oversight required. The changes proposed do not change the purpose of the trust or its charitable status. These changes are therefore supported by staff.

19. In relation to the request that council consider changing the trust deed to include one appointment from the Albert-Eden Local Board the commentary on the resolution of the trust states:

“It is the opinion of the trustees that as the Albert-Eden Local Board represents the local constituents and contributes funding to the operation of the swimming pool complex, that one of the trustee appointments to the trust should be from the Albert-Eden Local Board.

The trust recognises that Auckland Council’s internal policies may prevent the appointment of elected members to trusts and other entities, however, the trustees wish this option to be considered first by Auckland Council, before reverting to the fall-back position of simply two trustees appointed by Auckland Council.”

20. The council’s Board Appointment and Remuneration Policy states that elected members should not serve on the boards of council-controlled organisations unless there is a compelling reason to do so. The rationale for this policy is that council is responsible for monitoring the performance of council-controlled organisations, and should therefore maintain separation from the board to avoid any actual or perceived conflicts of interest.

21. Although the council does not actively monitor exempted council-controlled organisations, if it became aware of any performance issue it would be required to act, so the principle still applies.

22. Additionally, changes will be needed to the aquatic centre operations in the future to meet predicted demand. At the point that planning moves to options, the Albert-Eden Local Board will become key stakeholders and potentially decision makers on behalf of their community.

23. Currently, for a variety of historical reasons, the three council appointed members of this CCO are also members of the Albert-Eden Local Board. A key reason for this was the importance of maintaining institutional knowledge while the major changes to governance and management were being considered.

24. Nevertheless, the trust board has been established with a specified purpose. As trustees must act in line with the purpose of the trust, there is the potential to be conflicts of views and interests between the Albert-Eden Local Board and the trust, especially once the longer term future of the facility is under consideration.

25. Staff recommend that it is not appropriate to change the trust deed to provide for one trustee to be an elected member from the Albert-Eden Local Board as of right. This would not preclude the appointment of a local board member, if it was appropriate to do so.

Consideration

Local board views and implications

26. The Albert-Eden Local Board was invited to provide comment on the changes proposed by the trust but has not given any feedback.

27. As council fully manages the facility currently and the trust’s main business is to receive council reports, there are no local board implications arising from these decisions.

Māori impact statement

28. As this report is focussed on changes to the governance arrangements for a small community trust with limited and defined responsibilities, there are no impacts for Māori arising from this issue.

Implementation

29. If the proposed changes to the trust deed are approved, the amendments to the trust deed will be put into effect.

Attachments

No.	Title	Page
a ⇩	Resolution of Trust relating to variation of Trust Deed	87
b ⇩	Deed of Variation of Trust	93

Signatories

Author

Alastair Cameron - Manager - CCO Governance & External Partnerships

Authorisers

Phil Wilson - Governance Director

Kevin Ramsay – Acting Group Chief Financial Officer

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

Author	Mike Giddey - Senior Governance Advisor
Authoriser	Kevin Ramsay - Acting Group Chief Financial Officer