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:
o
Local Board
agreements
o
Financial policy
related to the LTP and AP
o
Setting of rates
o
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
·
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
(a) 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.
(b) 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.
(c) 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.
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Finance and
Performance Committee
22 November
2018
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|
Proposed
priorities for the 2019 letters of expectations to substantive
council-controlled organisations
File No.: CP2018/22628
Te take mō te pūrongo /
Purpose of the report
1. To
propose priorities for inclusion in the 2019 letters of expectations to
substantive council-controlled organisations (CCOs).
Whakarāpopototanga matua / Executive summary
2. The
letters of expectations are important documents that provide direction on:
· the
development of the substantive council-controlled organisations’
Statements of Intent for 2019-2022
· other
priorities and issues of importance for the council to inform CCO operations,
behaviours and service delivery.
3. These
will be the first letters of expectations since the adoption of the Long-term
Plan 2018-2028 and the Auckland Plan 2050.
4. The
expectations are set out in two parts.
· Part
I: Common organisational expectations and priorities for all CCOs. These
include financial accountability and value for money, building on the group
approach and Māori responsiveness.
· Part
II: The key strategic areas each CCO should focus on.
5. The
key messages have been drafted based on the priorities in the Long-term Plan
2018-2028, those identified in a workshop with councillors and through informal
consultation with the CCOs.
6. The
letters will be drafted on the basis of the committee’s resolutions and
sent by Mayor Goff to the board chair of each substantive CCO in early December
2018.
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Ngā tūtohunga / Recommendation/s
That the Finance and
Performance Committee:
a) approve
the proposed priorities for inclusion in the 2019 letters of expectations for
substantive council-controlled organisations.
b) delegate
representatives to discuss the agreed expectations directly with the CCO
boards.
|
Horopaki / Context
Introduction
7. The
2019 letters of expectations are important documents that provide direction on:
· the
development of the substantive council-controlled organisations Statements of
Intent for 2019-2022
· other
priorities and issues of importance for the council to inform CCO operations,
behaviours and service delivery.
8. The
letters should reflect the Long-term Plan 2018-2028 which sets out the
investment plans for each CCO.
9. This paper sets out a scheme for the council’s
proposed expectations in two parts:
Part I: Common organisational expectations and
priorities for multiple or all CCOs
Part II: The key strategic areas each CCO should
focus on.
10. The focus on fewer key strategic themes or messages should provide a
clearer basis for accountability to the council.
11. Ports of
Auckland Limited is not a CCO. The Statement of Corporate Intent for Ports of
Auckland Limited was approved at the last Finance and Performance meeting (23
October 2018) and council will have the opportunity to set expectations for its
2019-2022 Statement of Corporate Intent next year.
Relation to other accountability mechanisms
12. The
letters of expectations are one part of an overall accountability framework for
substantive CCOs. Some other important parts of this framework are the:
· Statement
of Intent: the Statement of Intent (SOI) sets out the activities and
intentions of a CCO for the next year, and the objectives it will contribute to
(the letters of expectations provide direction to them). CCOs report
quarterly on progress towards achieving the objectives set out in the Statement
of Intent.
· CCO
accountability policy: the CCO accountability policy sets more enduring
expectations about CCO priorities and behaviours, is part of the Long-term Plan
2018-2028 and is complementary to the letters of expectations.
· CCO
governance manual: the CCO governance manual provides more detailed
guidance on governance and operational matters to CCO boards and staff, and
brings together key policies and other requirements.
Tātaritanga me ngā tohutohu / Analysis and advice
Proposed issues for the letters of
expectations
13. The
proposed expectations which are common to all CCOs are set out below. These
were workshopped with the Finance and Performance Committee on the 23 October
2018, with the focus being on determining the high-level strategic priorities
for each CCO. A summary of the key messages from the workshop were then
provided to CCOs in draft format for their initial feedback.
Part I: Common messages
14. The
proposed common expectations are focused on the following themes:
· focusing
on delivery of council’s work programmes and providing value for money
·
being more proactive in communicating with public and stakeholders to build
trust and confidence, and to highlight successes; climate change - developing
mitigation and resilience
· focusing
on Auckland Plan implementation and Māori responsiveness.
15. The
council also expects:
· CCO
participation and support in council’s review of the Statement of Intent
process
· CCO
commitment to board performance reviews
· CCO
commitment to working with council on reviewing performance measures.
Programme delivery
16. Council has set a significant agenda with a record capital
expenditure investment of $26 billion and increased spending on transport,
housing, environment and community initiatives. In the 2019/2020 year the focus will be on delivering our substantial capital
projects, readying the city centre for the Americas Cup and APEC in 2021 and
continuing to pursue savings, efficiencies and alternative financing
opportunities.
17. Council would like to be kept informed of progress on this capital
programme and the wider programmes of investment and where savings are being
made. Council expects the CCOs to work collaboratively with the council group
to advance the capital programme and to develop improved governance and
capability around the delivery of these programmes.
Building trust and confidence
18. The new funding tools, including the regional fuel tax, and the
water quality and environmental targeted rates, along with the council’s
focus on delivery mean that it will be important for our CCOs to develop strong
community engagement programmes. We will expect CCOs to work with the
council group to lift trust levels amongst our community and stakeholders, by
putting our customers and ratepayers at the centre of their businesses and by
providing evidence-based analysis for any decisions made.
19. CCOs will
be expected to monitor and report on the delivery of these programmes and their
capital investment activity in transparent and easily understood way.
Auckland Plan implementation
20. Our CCOs
play a critical role in responding to Auckland’s key challenges by
delivering on the outcomes of the Auckland Plan 2050.
This year, we would expect each CCO to outline in their
Statement of Intent how they will:
· align priorities
with the directions and focus areas and show how their activities will
contribute to delivering the Auckland Plan outcomes
· support development and activity
envisaged in the nodes, development areas, future urban areas and rural
settlement expansion identified in the first decade of the
Auckland Plan Development Strategy (including development of structure plans
and plan change processes)
· report annually on
activities that contribute to delivering the Auckland Plan 2050.
Climate Change
21. Addressing the challenges that climate change presents for Auckland is a priority for council. The impacts of climate change
will require the application of new ideas and approaches to ensure that as a
council group we respond to, mitigate and adapt to the effects of climate
change.
22. We expect
the CCOs to outline how they plan to address climate change in their areas of
responsibility, including the development of any measures to assess their
performance in this area.
Māori responsiveness
23. The
council expects the CCOs to contribute to Te Toa Takatini and the council group
Tiriti o Waitangi Audit response as an integral part of their work programme.
We expect CCOs to provide detail on their performance in delivering their
Māori responsiveness in their quarterly reporting.
Part II: Specific expectations for each council-controlled
organisation
24. The
specific expectations for each CCO are provided below.
Auckland
Transport
25. Auckland
Transport’s SOI should:
· strongly
reflect the directions and focus areas of the Auckland Plan 2050. In
particular, the SOI should outline how Auckland Transport will:
o deliver
the safety strategy to reduce death and serious injuries on the Auckland
transport network, including safety education for young Aucklanders and our
rangatahi
o continue
to increase uptake of public transport and walking and cycling
o deliver
value for money in the approved Regional Land Transport Plan capital programme,
including the Regional Fuel Tax initiatives
o investigate
and invest in transport technology that improves the efficiency of the
Auckland’s transport system
o improve
transparency on critical asset maintenance programming
o work
collaboratively with council to ensure the capital programme takes into account
the impact of transport investment on surrounding urban form and incorporates
good urban practice
· describe
how Auckland Transport will improve communication with councillors, local board
and customers, and have clear strategies for community engagement
· respond
to emerging issues to prepare for operationalisation of the City Rail Link
project.
Auckland
Tourism, Events and Economic Development (ATEED)
26. ATEED’s
SOI should outline how the organisation will:
· encourage
sustainable growth of Auckland’s visitor economy through the lens of
destination management and demonstrate value for money for Accommodation
Providers Targeted Rate
· attract
investment to Auckland by coordinating and promoting the Auckland Investment
Story to grow business and employment in Auckland
· focus
on economic development outcomes, especially in Auckland’s south and
west, to meet challenges of new economy and mobilising central government
agencies around Auckland needs
· ensure
performance measures provide evidence of ATEED’s performance in
generating new economic activity
Regional Facilities Auckland
27. Regional
Facilities Auckland’s SOI should outline how the organisation will:
· work
closely with council on any plans for strategic redevelopment of assets,
particularly for stadiums
· actively
engage with the council and arts and cultural institutions in the co-design of
a strategy for the sector, and supporting governance and funding arrangements
· deliver
on capital redevelopment programme and manage the business through these works
to improve financial performance.
Panuku Development Auckland
(Panuku)
28. Panuku’s
SOI should outline how the organisation will:
· deliver
the transform and unlock programme to help create our major centres as
community catalysts for good design
· improve
capex delivery and business planning
· work
with ATEED, council and other CCOs on preparing for and the timely delivery of
infrastructure to support the America’s Cup and APEC
· ensure
community engagement assists decision-making and that the benefits of
redevelopment to communities are fully explained
· work
closely with council on the marina strategy.
Watercare Services Limited
29. Watercare’s
SOI should outline how the organisation will:
· continue
to work with the council to respond to any changes from the government’s
review of how water, waste water and storm water services are regulated and
delivered
· investigate
commercial arrangements and other funding sources which are in the best
interests of the council group. Noting that this should not compromise service
for Aucklanders. Council expects to be kept informed of any proposals and
significant changes will need to be approved by the council.
· stay on schedule and on budget for the delivery of the
Central Interceptor project, including participating in ongoing work with the
crown and council on its funding and on engaging with the community
· continue
to work with the Healthy Waters department of council on the Western Isthmus
Water Quality Improvement Programme. Watercare Services Limited should ensure
it constructively engages the community on this project.
Ngā whakaaweawe ā-rohe me ngā tirohanga a te
poari ā-rohe /
Local impacts and local board views
30. The
governance relationship between the substantive CCOs and the council sits with
the Governing Body, and therefore local boards have not been consulted on
issues for inclusion in the letters of expectations.
31. This year there is an increased focus on ensuring that those CCOs
with a role in place-shaping (particularly Auckland Transport, Watercare
Services Limited, Panuku Development Auckland and Auckland Tourism, Events and
Economic Development) are implementing their obligations to engage with local
boards and their communities.
Tauākī whakaaweawe Māori / Māori impact
statement
32. Māori responsiveness is a priority for the substantive CCOs and
this is reflected in the common expectations proposed in the letters of
expectations.
Ngā ritenga ā-pūtea / Financial implications
33. There are
no financial implications arising from this report. The CCOs are being
asked to focus on delivering activities agreed through the Long-term Plan 2018-
2028.
34. The CCOs
are also being asked to pursue savings, efficiencies and
alternative financing opportunities.
Ngā raru tūpono / Risks
35. There is
a risk that CCOs may misunderstand the expectations provided in the letters of
expectations. It is suggested that the committee could delegate representatives
to discuss the agreed expectations directly with the CCO boards.
Ngā koringa ā-muri / Next steps
36. Council
staff will draft the letters of expectations based on the resolutions of this
committee and including only the issues that are approved by this committee.
The mayor will send the letters to CCO board chairs during December 2018.
37. Each CCO
must provide a draft Statement of Intent to the council no later than 1 March
2019.
Ngā
tāpirihanga / Attachments
There are no attachments for
this report.
Ngā kaihaina / Signatories
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Author
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Claire Gomas - Principal Advisor
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Authorisers
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Alastair Cameron - Manager - CCO Governance &
External Partnerships
Phil Wilson – Governance Director
Matthew Walker - Group Chief Financial Officer
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