Agenda of Governing Body

Governing Body

02 May 2019

City Rail Link Funding Commitment

File No.: CP2019/01693

Te take mō te pūrongo

Purpose of the report

1. To approve an updated funding commitment for the City Rail Link project.

Whakarāpopototanga matua

Executive summary

2. The City Rail Link (CRL) will deliver two 3.5 km rail tunnels connecting the Britomart and Mt Eden stations and two new stations at Aotea and Karangahape Road. It is Auckland’s highest priority transport project and will provide a critical piece of infrastructure required to support Auckland’s economic growth, unlock development areas and provide for future population growth.

3. City Rail Link Limited (CRLL) is a joint venture set up with the Crown in 2017 to manage and deliver the CRL project. The forecast project cost at the time was $3.4 billion and a 50 per cent share of this ($1.7 billion) is included in Auckland Council’s 10-year Budget 2018-2028.

4. An independent reforecast of total project cost undertaken by CRLL has estimated the total project cost as $4.4 billion, an increase of $1 billion. CRLL has also now received bids for Contract C3 (tunnels and stations), which represents over half of the works programme by cost.

5. CRLL advised the sponsors of the results of the reforecasting exercise on 12 April 2019 requesting that the sponsors address the identified shortfall and advise of their response by the first week of May. It noted that this was required to avoid any delay in awarding the C3 contract which would delay the project and potentially diminish bidder interest and the quality of the contractor’s final project team.

6. Under the Sponsors’ and Project Delivery agreements half of the total project cost will be met by each Sponsor, and therefore the additional commitment required from council is $500 million.

7. The sponsors, CRLL’s Board, and delivery partners (Auckland Transport and KiwiRail) have undertaken three key activities which, taken together, provide assurance that the renewed funding commitment will be both adequate to deliver the project as scoped, and that it continues to be worth additional investment to deliver the benefits identified in the 2015 business case. These activities were:

· undertaking a comprehensive reforecast of the total cost of the project, including having this independently verified by the sponsors’ assurance manager (Advisian)

· re-assessing the benefits of the project against the new forecast project costs

· reviewing the scope of the project, to ensure the key design elements will deliver the benefits for least cost.

8. Council staff have considered how the requested funding commitment increase could be accommodated within the current 10-year Budget and financial strategy settings. A package of initiatives that would enable the council to agree to the new funding commitment is presented in this report for consideration by the Governing Body. These initiatives comprise:

Initiative	$ million
Interest cost savings due to lower market interest rates	120
A reduction in cash holdings from improved cash management	100
Re-assessment of the valuation of operating commitments which impact on council’s debt policy limits	130
Progression of the off-street parking strategy	50
Flexibility around the timing of the council’s CRL contributions	100
Total	500

9. Although we consider that the independent forecast project cost is robust, there remains a risk that the cost of the CRL, like many major infrastructure projects, may continue to increase between now and the 2024 end date. This is both as a result of known risks, which may or may not eventuate (e.g. changed market conditions), and risks that are as yet unforeseen (e.g. unexpected ground conditions).

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) approve the council’s funding commitment to City Rail Link Limited be increased to $2.2 billion and agree that budgets are updated to reflect this.

b) agree that budgets are updated to reflect the funding capacity created by:

i) interest cost savings due to lower market interest rates;

ii) a reduction in cash holdings from improved cash management;

iii) re-assessment of the valuation of operating contract commitments.

c) agree to progress a strategy to assess future off-street parking requirements for Auckland, including additional investment in park and ride facilities, noting:

i) options for the council’s city centre carpark buildings to be investigated will include the status quo alongside outright sale, partnering with developers, and concession arrangements;

ii) budgets will be updated to reflect a target of a $50 million net surplus by 2023/2024 to fund CRL;

iii) decisions on the strategy and any specific actions in relation to any carpark building will be made by the Governing Body or the appropriate committee.

d) agree that council staff will continue efforts to get the best arrangements with the Crown for CRL funding, and to update budgets to reflect flexibility around the timing of the council’s CRL contributions.

e) delegate to the Mayor, Deputy Mayor and Chief Executive the authority to approve any changes to agreements as a result of the above resolutions.

Horopaki

Context

10. CRLL is responsible for managing and delivering the CRL project, two 3.5 km rail tunnels connecting the Britomart and Mt Eden stations and constructing two new stations at Aotea and Karangahape Road. The project is expected to generate significant benefits for Aucklanders in terms of reduced travel times, improved access to employment and education opportunities, and reduced traffic congestion.

11. The estimated cost of the CRL at the time CRLL was set up was $3.405 billion, with the Crown and Auckland Council as joint sponsors, each contributing a half share of the required funding. This cost was based on a P50 estimate, which represents a mid-point estimate of anticipated project costs.

12. Auckland Council has budgeted for our share ($1.7 billion) through the 10-year Budget 2018-2028. With $300 million having already been invested, this was reflected as investment of $1.4 billion over the 2018 to 2028 period.

13. In July 2018, to increase CRL’s passenger capacity in light of revised patronage projections, the sponsors agreed to additional future-proofing work to provide for nine-car trains rather than six-car trains [GB/2018/127]. The Governing Body noted the potential financial impact of this, and that more precise estimates would be known when tenders for Contract C3 (tunnels and stations) were received.

14. The map below shows the route of the CRL between Britomart and Mt Eden stations, the two new stations at Aotea and Karangahape Road, and the split of the project between different procurement contracts.

Tender process and early works

15. CRLL received bids from its two short-listed tenderers in late January and February 2019 and began a comprehensive evaluation process in February 2019. This has recently concluded, and the CRLL Board wrote to Sponsors on 12 April 2019 advising that it has identified a preferred bidder for C3.

16. CRLL notified the preferred bidder on 17 April and has entered into a process of negotiation with that bidder, with a view to concluding a contract (“Project Alliance Agreement”) in mid-year.

17. To ensure there are no delays to the project, CRLL indicated it would seek to contract with the preferred bidder for early works only (e.g. planning, resource consents, underground services relocation, worksite establishment, design development and completion of construction management plans), up to a value of $75 million. Awarding of the early works does not result in the C3 main project agreement automatically coming into effect. The sponsors’ delegates (Mayor, Deputy Mayor and Chief Executive of Auckland Council, alongside the Ministers of Transport and Finance) approved this on 15 April 2019, under current delegations given by the Governing Body.

Tātaritanga me ngā tohutohu

Analysis and advice

Updated funding commitment required

18. CRLL wrote to the sponsors on 12 April 2019 to advise of the reforecast project cost and request a revised funding commitment (Attachment A). The reforecast total project cost is $4.4 billion and therefore the funding commitment required of each sponsor is $2.2 billion. This represents an increase of $1 billion compared to the current forecast, and an increase of $500 million for Auckland Council compared to the current budget.

19. This revised funding commitment is to a P50 (mid-point) level and includes provision for future proofing for revised patronage estimates, including the potential for nine-car trains at Aotea, Karangahape and Mt Eden stations. A large portion of the increased forecast costs result from reassessing appropriate escalation and contingency costs.

20. CRLL requested that the sponsors urgently address the identified shortfall and advise of their response by the first week in May. It noted that this was required to avoid any delay in awarding the C3 bid which would delay the project and potentially diminish bidder interest and quality of the contractor’s final project team

21. Sponsors, CRLL’s Board, and delivery partners (AT and KiwiRail) have undertaken three key activities which, taken together, give significant assurance that the renewed funding commitment will be both adequate to deliver the project as scoped, and that it continues to be worth additional investment to deliver the benefits identified in the 2015 business case.

22. These activities are discussed below and have involved:

· undertaking a comprehensive reforecast of the total cost of the project, including having this independently verified by the sponsors’ assurance manager (Advisian)

· re-assessing the benefits of the project against the forecast costs

· reviewing the scope of the project, to ensure the key design elements will deliver the benefits for least cost

Total cost reforecast

23. In late 2018, as a matter of good infrastructure project practice, CRLL’s Board and management initiated a reforecast of the total project cost. This reflected a view that market conditions had changed substantially since the 2014 forecasts, with increases in materials and labour costs as a result of significant competition for projects in the Australasian projects market, and a fall in the value of the New Zealand dollar.

24. Cost forecasts, and peer reviews of those forecasts, are important because they can be used to inform a purchaser as to whether bids they have received are priced appropriately, both as a whole and in their individual components. CRLL asked its cost estimators to update the 2014 cost forecasts and had this work independently peer reviewed by another company. These cost forecasts have been benchmarked against similar projects internationally. CRLL and the sponsors also used the sponsors’ assurance managers (Advisian) to provide a third view on the revised cost forecasts.

25. The C3 contract represents about half of the CRL project by value and therefore the bids received for this also provided a commercial benchmark to test the forecast.

26. The reforecast costs as set out below, along with the C3 bids, provide support for the updated funding commitment required from the sponsors to deliver the CRL infrastructure in line with the original scope and with the addition of the future proofing works.

$ million	Existing		Updated		Increase
Construction costs		2,382		2,709	327
Client-side cost		484		636	152
Direct costs		2,865		3,345	479

Contingency (P50)	9%	255	14%	458	203
Escalation (P50)	10%	285	12%	391	106

		3,405		4,194	789

Nine-Car adjustment (Aotea, K Rd, Mt Eden)				250	250
C3 bid adjustment				-25	-25

Project costs (P50)		3,405		4,419	1,014

Benefit analysis

27. The 2015 business case for the CRL project identified a benefit-cost ratio of 1.6 (based on the original project cost of $3.4 billion).

28. CRLL engaged PwC to update the economic assessment of benefits of the project prepared as part of the 2015 business case to reflect new parameters, a revised delivery schedule, and using the most up-to-date transport modelling.

29. The updated assessment found that the benefits of the project are between $6.64 billion and $7.06 billion. This means that if the total project costs are less than $6.64 billion, the benefit cost ratio will remain greater than one (i.e. benefits exceed costs).

30. Additionally, PwC noted that this assessment is considered to be conservative as it is based on a standard 40-year assessment period despite being a transformational, long-life project. If the assessment was extended to 60 years the gross benefits would increase by up to 24 per cent. They also noted that the assessment did not incorporate the scope change to support nine-car trains which would be expected to further increase the benefits, although it is noted there would also be additional costs to be considered.

31. This work confirms that at a cost of $4.4 billion CRL remains a strong project for sponsors to invest in with a benefit-cost ratio of at least 1.5.

Scope of the project

32. As a project approaches the award of its major contracts, it is good practice for the sponsors to confirm the major elements of project scope – in other words, the infrastructure being purchased. Given the reforecast total project cost exceeds currently agreed funding, Crown and council staff have undertaken a retesting process with the objective of ensuring that the agreed scope of the project will deliver the desired benefits, while looking to reduce costs where possible.

33. Three comprehensive value engineering reviews have been previously undertaken for the project in 2013, 2014 and 2015. In these reviews a number of options were given comprehensive consideration. These reviews resulted in changes to the project scope (such as deletion of the originally proposed Newton Station).

34. CRLL has, however, again considered a range of options (including those considered in earlier reviews) to save costs by reducing the scope of the infrastructure to be built. A significant effort has been undertaken to identify the widest possible range of options to find savings, while considering the impact on operations, network resilience, safety and benefits. Options considered included:

· removing a station (e.g. Karangahape)

· delivering a single tunnel instead of twin tunnels (meaning trains could only run in one direction)

· modifying connections with the Western Line at Mt Eden (various options were considered).

35. Crown and council staff consider that these options are not practical or desirable as they would severely limit functionality, operability, rail network resilience and passenger experience. Ultimately, doing this would severely inhibit the ability to deliver the benefits of the project. These options would also be impossible to change in the future unless the network were to be shut down for an extended period. Reducing the scope would also impact on the wider transport system, and increase longer term operating and capital costs of the system. KiwiRail and AT, as major stakeholders in the Auckland rail network, do not support the reduced scoping options identified.

36. In summary, the sponsors’ representatives agree that the project should be constructed to its original scope in order to achieve the agreed outcomes. The sponsors will, however, request that CRLL explore any opportunities to reduce the funding amount required as the project progresses, through ongoing cost management and value engineering.

Accommodating the funding commitment

Current budget

37. In June 2018 Auckland Council adopted its 10-year Budget 2018-2028. This document included a financial strategy of balancing investment with cost acceptability for both current and future ratepayers. To support the growing city the plan included $26 billion of investment in assets for Auckland. The balancing revenue and borrowing parameters include limits on the extent of general rates increases and a limit on borrowing of 270 per cent of revenue.

38. The level of spend indicated in the 10-year Budget results in council debt growing by
$4.8 billion over the period, from $8.3 billion in June 2018 to $13.1 billion by June 2028. This level of debt still enables the council to remain within its prudential borrowing ratios, particularly in respect of the target to keep borrowings at a level not exceeding 265 per cent of revenue. In years three to six of the plan (2020/2021 to 2023/2024), however, the ratio is projected to be just below the internal ceiling therefore limiting capacity for additional spend prior to 2023/2024 (as depicted in Figure 1 below).

39. The 10-year Budget 2018-2028 includes $1.4 billion of investment in CRL of the total approved budget of $1.7 billion ($300 million already having been invested).

Financial strategy consideration

40. Auckland Council’s financial strategy sets out the approach for achieving the balance between investing in the assets and services for Auckland’s progress and ensuring that the costs of supporting those investments are acceptable to the community. To achieve this balance the 10-year Budget 2018-2028 sets a number of measures of acceptability of cost both to current ratepayers (in terms of limits on rates increases and fee levels) and to future generations (in terms of limits on our borrowings). These cost parameters, taken together, provide a capacity level for investment in both service delivery and the capital programme.

41. When presented with a scenario such as this, where an additional financial commitment is requested, the finance team will canvas a number of options to enable the investment. The options to address the challenge fall into four categories; increase revenue, decrease costs, sell assets, or borrow more.

42. The council’s key revenue sources are rates, fees and charges and government subsidies. The financial strategy includes both limits around the level of rates increases and parameters around the setting of fees and charges. Changes to these limits or parameters would require community consultation and, in some cases, an audited amendment to the
10-year Budget.

43. The 10-year Budget includes operational cost savings targets in order to deliver the committed service levels and capital programme within the revenue and debt settings of the financial strategy. Further reductions in costs would generally require a reduction in service levels or major changes to the capital programme.

44. The 10-year Budget also includes the sale of some assets not required for core service delivery as a way to pay for capital investment. The sale of additional assets was considered by staff to provide additional investment capacity for CRL. Many of the council’s largest and most valuable assets are defined as “strategic” and would require consultation with Aucklanders. However, AT has investigated opportunities to release value from off-street parking assets and these are discussed further below.

45. When looking at any additional borrowing, a key consideration is to ensure continued prudence in line with the council’s financial strategy. A central measure of this is the debt to revenue ratio, which is a measure of the sustainability of borrowing. Higher levels of borrowing could impact affordability for future ratepayers, access to debt markets, and access to competitive interest rates. Given the position of the council’s projected ratio in the 10-year Budget any new borrowing would need to be offset by reduced borrowing elsewhere or additional revenue.

46. Given the timing of CRLL’s request, consultation requirements and the impacts of any delays in decision-making on bidders’ interests and project deliverables, it is not practicable for the council to consider any funding response that requires changes to key settings included in the 10-year Budget. Such changes would include rates increases, service level changes, sale of significant assets, or major changes to the capital programme.

47. Over recent years, the council has also received some advice on a range of alternative ways to finance additional capital investment in Auckland. This work has considered potential changes to ownership arrangements for Watercare Services Limited and Ports of Auckland Limited (both of which currently 100 per cent owned directly by Auckland Council), and the council’s shareholding in Auckland Airport. It has also looked at the use of Special Purpose Vehicles (SPVs) to finance major infrastructure such as the Central Interceptor project. However, progressing options of this nature would involve long lead times and may require significant work with central government, potential legislative amendment and extensive consultation with a wide range of stakeholders. These timeframes would clearly not align with the decision-making timelines for this funding request.

Funding request

48. The revised funding commitment sought by CRLL from Auckland Council to complete the project represents an increase of $500 million on the amount already budgeted. As shown in Figure 2, without any mitigating initiatives, agreeing to this additional funding commitment would see the projected debt to revenue ratio exceed the prudential limit.

A package of initiatives

49. Council’s finance team, alongside staff at AT, have been working to establish whether the council can accommodate this increased funding requirement.

50. Staff have identified a package of initiatives that would enable the council to agree to the increased CRL funding requirement within the existing settings included in the 10-year Budget. These initiatives comprise:

Initiative	$ million
Interest cost savings due to lower market interest rates	120
A reduction in cash holdings from improved cash management	100
Re-assessment of the valuation of operating commitments which impact on council’s debt policy limits	130
Progression of the off-street parking strategy	50
Flexibility around the timing of the council’s CRL contributions	100
Total	500

51. As shown in Figure 3, implementing the above initiatives as a package would allow the council to accommodate the increased funding requirement within existing financial strategy limits, including keeping debt below 265 per cent of revenue.

52. If the council were not to agree to all of the five budget changes then the projected debt to revenue ratio would likely exceed 265 per cent in some years of the 10-year Budget. This would be a less prudent position and would result in a reduced safety margin. Given the wide range of risks faced by the Auckland Council Group, this is not recommended.

Interest rates

53. Given the size of the council’s investment plans and consequentially the projected borrowing levels, any movement in interest rates can significantly impact operating costs. Current interest rates are below those assumed in the 10-year Budget and are projected to remain below those assumptions over the medium term (see Figure 4).

54. The council’s Treasury department is looking to take advantage of this market situation by locking in these lower rates where possible through the use of hedging instruments. The council hedges a certain amount of debt in accordance with its treasury policy limits.

55. We project the lower interest costs will create cash surpluses of over $120 million by 2024 for the council that can be used to reduce borrowing and create investment capacity.

Cash management

56. The Auckland Council group currently holds, on average, around $200 million of cash at any point in time. This cash holding is not offset against borrowing for the debt to revenue ratio calculation and earns an interest return below the cost of funds.

57. By entering into a new bank revolving credit facility the council can reduce this holding by around $100 million. A decision to enter into this facility was approved in April 2019 by the Treasury Management Steering Group. It is noted this is consistent with the council’s liquidity management policy and continues to reflect a prudent level of risk.

58. This decision means that the council can use the $100 million of cash to pay down debt now and can use this debt capacity in the future to borrow more to pay for CRL.

Operating commitments valuation

59. The council group has a number of long-term operating contractual commitments. The most significant of these relates to Auckland Transport’s long-term contractual arrangements with bus operators. While these are not technically classified as borrowing or financial liabilities in accounting terms, they are nevertheless fixed, long-term contractual payment obligations and are therefore counted as debt for the purpose of assessing financial prudence.

60. Staff have re-assessed the valuation of commitments to operating contracts at different stages through the 10-year budget period. Updated projections (shown in Figure 5) are lower than those reflected in the 10-year Budget 2018-2028.

61. These projections reflect a better understanding of the long-term contracts. There is no change to the contracts that the Auckland Council Group has entered into.

62. As these contracts are firm financial commitments they tie up borrowing headroom. The updated projections free up around $130 million of headroom which can be used to borrow to fund the CRL.

Off-street Parking Asset Strategy development and implementation

63. The Parking Strategy was approved by AT and Auckland Council in 2015. The purpose of this strategy is to provide guiding principles and policies for the management and supply of on-street and AT-controlled off-street parking in Auckland.

64. AT are investigating an Off-street Parking Asset Strategy that would align with the overall Parking Strategy guidelines and policies, and support a mode shift away from single-occupant vehicles towards public transport.

65. Development of the strategy will involve an assessment of future off-street parking requirements. Key considerations will include:

· updating the Off-Street Parking Strategy and Park and Ride Strategy

· finalising the Accelerated Mode Shift Plan

· accessibility plan for the city centre and the City Centre Masterplan

· urban design objectives, including pedestrianisation of certain areas

· technology changes (e.g. EV’s, charging stations)

66. It is anticipated that implementation of the strategy would include:

· a significant increase in investment in new or expanded park and ride facilities to meet more of the projected demand and support increased public transport usage.

· releasing value from some carpark buildings in areas such as the city centre, where the provision of public transport is increasing (particularly through CRL) and where the site may have a more productive alternative use. This could be via outright sale, partnership with a developer, or a long-term concession arrangement.

· additional investment capacity that could be used to support the additional CRL funding commitment required.

67. AT currently expect that capital of at least $100 million could be released through this initiative. Assuming that $50 million is reinvested into park and ride facilities this would provide a net funding surplus to support CRL of approximately $50 million.

68. The budget update recommended in this report is to agree to an assumption that $50 million of net revenue is received by the financial year 2023/2024 from the implementation of this strategy.

69. Decisions on the off-street parking asset strategy and any specific actions in relation to any carpark building will be made by Governing Body or the appropriate committee.

Funding commitment timing

70. Given the duration of the CRL project and that the debt-to-revenue pressure projected in the 10-year Budget 2018-2028 begins to subside after 2023/2024, the phasing of the council’s contribution to the CRL project is important to the affordability of the commitment.

71. The current Sponsors’ Agreement for CRL sets out that when CRLL makes a call for funding from the sponsors those funds are paid based on a 50:50 split and shares are issued accordingly. A more flexible approach to the timing of respective contributions would allow the council and the Crown to work together to ensure the council remains within its debt policy limits throughout the project. The Crown has confirmed it will consider any request to change the timing of respective contributions, if it becomes necessary.

72. The phasing of CRL contributions is based on projections provided by CRLL. Based on current projections, staff are discussing with the Crown the potential for around $100 million less to be contributed by Auckland Council in 2021/2022 with higher contributions in 2023/2024 and 2024/2025.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

73. Auckland Transport is closely involved with the CRL project.

74. Auckland Transport will be a participant in the contracts for C3 and related contracts once they are signed. As such, Auckland Transport staff have worked collaboratively with Auckland Council, the Crown and KiwiRail to finalise the project scope to be delivered, and its views are reflected in this report. Auckland Transport played an important role in the final review, testing and refinement of descoping options to identify potential savings. Its advice has been invaluable throughout the due diligence process.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

75. Local board views have not been sought for this report. The CRL is regional in its impact. The CRL is designed to increase the transport system’s ability to move people to and from, and around, the city centre, as well as providing more capacity along each of the lines.

Tauākī whakaaweawe Māori

Māori impact statement

76. There are no specific impacts, positive or negative for Maori arising from the funding decision recommended in this report. Impact for Maori from CRL is expected to be positive, as is the case for all Aucklanders.

Ngā ritenga ā-pūtea

Financial implications

77. The impact of this decision will be reflected in the Annual Budget 2019/2020.

78. Phasing of the updated funding request has been provided by CRLL and this, alongside the assumed timing agreement with the Crown, will result in the below budget change.

$ million	FY19	FY20	FY21	FY22	FY23	FY24	FY25	FY26	Total
Council CRL contribution
10-year budget	235	254	359	334	304	74	-131		1,429
Updated budget	65	203	395	675	445	162	60	-91	1,914

79. If the council agrees to all five budget changes then this funding request can be accommodated within the current general rates settings and the 265 per cent debt to revenue internal ceiling. However, debt will be higher than projected by the end of the
10-year Budget period compared to the 10-year Budget.

80. If the council were not to agree to all of the five budget changes then the projected debt to revenue ratio would likely exceed 265 per cent in some years of the 10-year Budget. This would be a less prudent position and would result in a reduced safety margin below our debt-to-revenue policy limit.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

81. There is a risk that, as the opening date of the CRL is still five years away, project costs may continue to increase, as occurs with other similar infrastructure projects. It is expected that CRLL will do its best to manage costs. Funding of any additional request could be accommodated through changes to core revenue settings and/or investment plans through future 10-year Budget processes. There will be two of these processes occurring before CRL becomes operational.

82. While every effort has been undertaken to ensure that the revised cost estimate is the most accurate estimate possible, the nature of large infrastructure projects such as the CRL is that a high degree of uncertainty around the cost remains. As the budget is set based on a P50 cost estimate, there is a 50 per cent chance that the actual cost will be higher than budget and a 50 per cent chance that it will be lower. The P90 cost estimate for the project is $5.0 billion, meaning that there is a 90 per cent chance that the actual cost will be lower than this figure.

Ngā koringa ā-muri

Next steps

83. The decision made by the Governing Body with respect to the updated funding commitment will be communicated to the board and management of CRLL via a letter on behalf of the sponsors.

84. Any changes required to project documents as a result of the decisions in this report are approved, under delegation, by the Sponsor’s Delegates (Mayor, Deputy Mayor and Chief Executive).

85. A report to seek shareholder approval for CRLL to enter into a major transaction, being entering into the C3 contract, will come to the Governing Body prior in due course.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	CRLL notification of updated project cost forecast	23

Ngā kaihaina

Signatories

Authors

Claire Gomas - Principal Advisor

Michael Burns - Manager Financial Strategy

Ross Tucker - General Manager, Financial Strategy and Planning

Authorisers

Barry Potter - Director Infrastructure and Environmental Services

Nicola Berghaus - Acting Group Chief Financial Officer

Stephen Town - Chief Executive

Governing Body

02 May 2019

Independent Maori Statutory Board - proposed funding agreement for the 2019/2020 financial year

File No.: CP2019/04556

Te take mō te pūrongo

Purpose of the report

1. To consider the 2019/2020 funding agreement between the Auckland Council and the Independent Māori Statutory Board (IMSB).

Whakarāpopototanga matua

Executive summary

2. For the IMSB to carry out its purpose, perform its functions and exercise its powers, the Local Government (Auckland Council) Act 2009 (LGACA) requires Auckland Council to meet the reasonable costs of the IMSB’s operations, secretariat, the establishment of committees, and seeking and obtaining advice.

3. The IMSB has drafted its work plan and proposed budget for the 2019/2020 financial year. It includes projects, engagement and reporting to Māori and te Tiriti o Waitangi Audit, and monitoring other costs of the board’s operations such as salaries and board remuneration.

4. The Governing Body established a political working party at its meeting of 23 February 2017 (GB/2017/16) to oversee negotiations with the IMSB and develop a recommended funding agreement, for final approval by the Governing Body.

5. The working party has considered the IMSB’s operating (opex) budget proposal and is satisfied that the proposed total direct funding of $3,025,621 for the 2019/2020 financial year falls within the parameters agreed through the Long-term Plan 2018-2028. This represents a 0.73 per cent increase on the funding provided for the 2018/2019 financial year.

6. The political working party has not raised any objections to the proposed funding, therefore staff recommend that the Governing Body approve the proposed funding for the 2019/2020 financial year.

7. It is further recommended that the Governing Body agrees that variations to the funding agreement of no more than $50,000 in the 2019/2020 financial year (subject to budget being available to cover the variations) can be agreed by the chief executives of Auckland Council and the IMSB.

8. Auckland Council and the IMSB also have a Service Level Agreement (SLA), which records shared services between council and the IMSB, and support services provided by third parties through council to the IMSB, such as finance, information technology and property.

Ngā tūtohu

Recommendation/s

That the Governing Body:

a) approve the 2019/2020 funding agreement between Auckland Council and the Independent Māori Statutory Board, which comprises a total direct funding of $3,025,621 (opex)

b) approve that variations to the funding agreement between Auckland Council and the Independent Māori Statutory Board of no more than $50,000 in the 2019/2020 financial year can be agreed between the chief executive of Auckland Council and the chief executive of the Independent Māori Statutory Board, subject to budget being available to cover the variations

c) note that following approval of the proposed funding by the Governing Body at this meeting, the 2019/2020 Funding Agreement between Auckland Council and the Independent Māori Statutory Board and the 2019/2020 Service Level Agreement will be prepared and signed by the mayor and council’s chief executive and the chair and chief executive of the Independent Māori Statutory Board.

Horopaki

Context

9. The Local Government (Auckland Council) Act 2009 requires Auckland Council to meet the reasonable costs of the IMSB’s operations, secretariat, the establishment of committees, and seeking and obtaining advice (Schedule 2, clause 20, subclause 1, LGACA).

2019/2020 Budget Proposal

10. The proposed budget covers costs of the IMSB’s operations such as salaries and remuneration, and costs of strategic projects outlined in the work plan. A copy of the draft 2019/2020 IMSB funding proposal is appended as Attachment A.

11. Details of the proposal for both the IMSB’s operations and work plan projects are provided in the three tables below, including comparisons with the 2018/2019 financial year and percentage changes.

Tātaritanga me ngā tohutohu

Analysis and advice

Analysis

12. Overall, there is little change from the budget agreed for the current financial year. The 0.73 per cent increase for the 2019/2020 financial year from the 2018/2019 financial year is within the parameters agreed through the 2018-2028 Long-term Plan.

Table 1. Percentage increase 2018/19 to 2019/20

2018/2019

$million

2019/2020

(proposed)

$million

Total direct funding (opex)

3.003

3.025

Percentage increase from previous year

1.6%

0.73%

Business as usual expenses

13. The budget prepared by the IMSB proposes funding for its business as usual activities. These are the activities and costs that the IMSB incurs year-on-year, such as staff costs and board member remuneration.

14. Increases in the proposed funding for business as usual activities and costs are broadly in line with expected inflation.

15. As is required by legislation, an independent review of remuneration for the IMSB members has been conducted by Strategic Pay Limited.

16. The independent reviewer recommends that the IMSB members’ remuneration be set at 68 per cent of elected members’ remuneration, compared to 65 percent for the 2018/2019 financial year. There are additional allowances for the chair and deputy chair and a copy of the correspondence is appended as Attachment B.

17. If the Remuneration Authority determines an increase for elected members’ remuneration within the next six months, the IMSB members’ remuneration will be adjusted accordingly.

18. Details of the budget proposed for both business as usual and Work Plan activities are outlined within table 1 below, including comparisons with the 2018/2019 financial year and percentage increases.

Table 2. Business as usual and work plan costs

	2018/2019	2019/2020 Proposed	Increase/ (decrease)
Business as usual
Board remuneration and expenses	$838,760	$833,328	($5,432)
Secretariat salaries	$1,365,974	$1,393,293	$27,319
Expenses (including audit fees)	$119,000	$119,000	Nil
Professional Services	$120,000	$120,000	Nil
Total Business as Usual	$2,443,734	$2,465,621	$21,887
Work Plan
Engagement and reporting to Māori and stakeholders	$140,000	$140,000	Nil
Engagement of specialist Māori expertise for IMSB’s input into council projects/plans work program	$300,000	$350,000	$50,000
Te Tiriti o Waitangi Audit (monitoring)	$40,000	$40,000	Nil
Research, management and monitoring of Māori Plan outcomes	Nil	Nil	Nil
Treaty Audit Assessment of RMA Māori Provisions	$30,000	$30,000	Nil
Monitoring and information of the council’s Māori Economic Development Strategy	$50,000	Nil	Nil
Total proposed funding	$3,003,734	$3,025,621
Expertise for development of Mana Whakahono ā Rohe agreements	$130,000	$130,000	Nil
Grand Total (BAU + Work Plan)	$3,133,734	$3,155,621	$21,887

19. The total proposed funding reflects a 0.73 per cent increase from the 2018/2019 financial year.

Other Budgetary considerations – funding held in council’s budgets

20. In addition to direct funding, the 2019/2020 proposal also includes information on the amount to be held in council’s budgets for the engagement of expertise for development of Mana Whakahono ā Rohe agreements. Mana Whakahono ā Rohe is a new tool designed to assist tangata whenua and local authorities discuss, agree and record how they will work together under the Resource Management Act (2002).

21. In the 2019/20 financial year, this funding will support the IMSB’s independent assessment of Te Toa Takitini projects by selected CCOs.

Table 3. Year on year comparison

	2014/2015	2015/2016	2016/2017	2017/2018	2018/2019	2019/2020
Held within council's budgets with agreed sign off between council CE and IMSB CE	220.0	131.5	130.0	130.0	130.0	130.0

Funding variations

22. The IMSB or council may initiate a review of the funding agreement by giving written or electronic notice to the other party stating the terms of the review (Schedule 20, clause 2, LGACA).

23. For the 2018/2019 Funding Agreement, the Governing Body agreed that variations of the funding agreement of no more than $50,000 in the financial year (subject to budget being available to cover variation) could be agreed by the chief executives of Auckland Council and the IMSB. This process removes the need to formally negotiate an amendment to the agreement as envisaged by LGACA for amounts of no more than $50,000.

24. It is recommended that the same arrangements be put in place for the 2019/2020 financial year.

Political Working Party Advice

25. The legislation notes that the IMSB and the council must negotiate the agreement in good faith. If agreement is not reached either party may initiate a review of the funding agreement by giving a written or electronic notice to the other party stating the terms of the review.

26. The Governing Body established a political working party at its meeting of 23 February 2017 (GB/2017/16) to conduct negotiations with the IMSB and develop a recommended funding agreement, for approval by the Governing Body.

27. The working party has considered the 2019/2020 draft funding agreement and agree that it is consistent with council budget parameters, and appropriate to meet the reasonable costs of the IMSB. Based on that advice, staff recommend that the Governing Body approve the funding sought by the IMSB.

28. If the Governing Body considers the funding is not reasonable to meet the IMSB’s operations, it could ask the political working party to continue negotiating. This option is not recommended, as the level of funding sought by the IMSB has not increased significantly from the 2018/2019 financial year. There is nothing to suggest that the funding sought by the IMSB is unreasonable.

Service level agreement

29. Alongside the funding agreement, Auckland Council and the IMSB have a Service Level Agreement, which records shared services agreed between Auckland Council as a supplier and the IMSB as the customer. This allows council, where possible, to support the IMSB through existing contracts and services, thus reducing the overall cost to the ratepayer.

30. There are no actual payments from the IMSB to council for the services covered in the Service Level Agreement. However, to meet accounting standards, the budget for the support services provided by third parties to the IMSB and paid through council (property, insurance and telecommunications) will be included as a separate line item in the 2019/2020 Service Level Agreement.

31. The draft budget for Shared Business Services (Schedule 3) is approximately $817,000 for the 2019/2020 financial year. A copy of the draft Service Level Agreement is appended as Attachment C. The final Service Level Agreement will be approved along with the Annual Budget (Annual Plan) 2019/2020 in July 2019.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

32. The IMSB has a role in monitoring the implementation of Te Toa Takatini achieving improved outcomes for Māori, which underpins work delivered by the council controlled organisations.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

33. Local board views have not been sought in relation to this matter as the Governing Body is responsible for negotiating the funding agreement with the IMSB.

34. However, the IMSB work supported by the funding may have outcomes that are relevant to local boards.

Tauākī whakaaweawe Māori

Māori impact statement

35. The funding provided through the annual funding agreement supports the IMSB to give effect to its statutory purpose of promoting cultural, economic, environmental, and social issues of significance for Māori in Tamaki Makaurau, and ensuring that the council acts in accordance with statutory provisions referring to the Treaty of Waitangi.

Ngā ritenga ā-pūtea

Financial implications

36. The costs of funding the IMSB will be met through existing budgets.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

37. If the IMSB’s request is not approved by the Governing Body there is a risk that the IMSB may not be able to undertake their work programme and meet their legislative obligations.

38. Staff see this as low risk because the funding is required by legislation, and this increase is modest and in line with inflation.

Ngā koringa ā-muri

Next steps

39. Following approval of the funding by the Governing Body, the 2018/2019 funding agreement between Auckland Council and the IMSB will be signed by the mayor and the council’s chief executive, and the IMSB chair and chief executive.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	2019-20 draft IMSB Funding Agreement	31
b ⇩	Strategic Pay Fees Report	41
c ⇩	Draft Shared Services Agreement 2019-2020	45

Ngā kaihaina

Signatories

Author

Josie Meuli - Senior Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Stephen Town - Chief Executive

No.	Title	Page
a ⇩	Tradewaste Bylaw - Statement of Proposal	109

Governing Body

02 May 2019

Changes to Standing Orders

File No.: CP2019/05337

Te take mō te pūrongo

Purpose of the report

1. To provide information about the implications of the Local Government Regulatory Systems Amendment Act 2019 and to recommend changes to the Governing Body’s standing orders to align with the change in the legislation.

Whakarāpopototanga matua

Executive summary

2. The Local Government Regulatory Systems Amendment Act 2019 (LGRSAA) makes changes to various statutes, including the Local Government 2002 Act (LGA), Local Government Official Information and Meetings Act 1987 (LGOIMA), the Local Electoral Act 2001, the Dog Control Act 1996, the Local Government (Rating) Act 2002 and the Rates Rebate Act 1973.

3. The LGRSAA amends the Local Electoral Act 2001 to include a new principle for “representative and substantial electoral participation in local elections and polls”, and imposes a new responsibility on the Chief Executive of the council by amending the Chief Executive’s responsibilities in the LGA s 42(2)(d):

(da) facilitating and fostering representative and substantial elector participation in elections and polls held under the Local Electoral Act 2001;

4. Prior to the LGRSAA, the LGA provided for an extraordinary meeting where:

(a) It could be called by resolution, or by requisition by the mayor or one third of the members

(b) The notice period was three days (unless it was called by resolution in which case the notice period could be not less than 24 hours)

(c) If it needed to be called earlier it could be called by the mayor, or, if the mayor was unavailable, the chief executive. The notice period could be not less than 24 hours.

5. As a result of the change, the meeting called under (c) above is referred to as an ‘emergency meeting’ rather than an’ extraordinary meeting’.

6. There is a change to the definition of public notice – which requires notification on a council’s website in addition to a newspaper.

7. There is a change to the definition of ‘working day’ to exclude a province’s anniversary.

8. Staff are taking the opportunity, while considering changes to standing orders, to propose an unrelated change to the rules in the current standing orders regarding attendance by electronic link. The current rule requires a member to be representing the council and unable to attend. The proposed change removes the requirement to be representing the council.

9. The Governing Body’s standing orders need to be changed to reflect the changes in the law. A change to standing orders requires a 75 percent majority vote.

Ngā tūtohunga

Recommendation/s

That the Governing Body:

a) note the new statutory responsibility of the chief executive:

facilitating and fostering representative and substantial elector participation in elections and polls held under the Local Electoral Act 2001;

b) amend standing order 2.3.3 by replacing:

Calling an extraordinary meeting at earlier time

The mayor or chairperson, or if they are unavailable, the chief executive, may call a meeting for an earlier time if this is necessary to deal with the business.

The person calling such a meeting must give each member and the chief executive notice of the time and place of the meeting and the matters in respect of which the meeting is being called, by whatever means is reasonable in the circumstances, at least 24 hours before the meeting.

with:

Calling an emergency meeting

The mayor or chairperson, or if they are unavailable, the chief executive, may call an emergency meeting for an earlier time than is provided in Standing Order 2.3.2 if this is necessary to deal with the business.

c) amend standing order 7.2.2 by replacing:

Notification of extraordinary meetings

Where the council calls an extraordinary meeting, but cannot give public notice to the extent required in Standing Order 7.2.1, the council must publicly notify the meeting, and the general nature of business to be considered at it, as soon as reasonably practicable before the meeting.

with:

Notification of extraordinary / emergency meetings

Where the council calls an extraordinary or emergency meeting, but cannot give public notice to the extent required in Standing Order 7.2.1, the council must publicly notify the meeting, and the general nature of business to be considered at it, as soon as reasonably practicable before the meeting. If it is not practicable to publish a notice in newspapers before the meeting, the council must publicly notify the meeting as soon as practicable on the council’s website and in any other manner that is reasonable in the circumstances.

d) amend standing order 9.4 (Definitions) by replacing:

Extraordinary meeting has the meaning defined in clause 22 of Schedule 7 of the Local Government Act 2002.

with:

Emergency meeting has the meaning defined in clause 22A of Schedule 7 of the Local Government Act 2002.

Extraordinary meeting has the meaning defined in clause 22 of Schedule 7 of the Local Government Act 2002.

e) amend standing order 9.4 (Definitions) by replacing:

Meeting means:

(a) any first or ordinary or extraordinary meeting of the governing body

with:

Meeting means:

(a) any first or ordinary or extraordinary or emergency meeting of the governing body

f) amend standing order 9.4 (Definitions) by replacing:

Publicly notified means notified to members of the public by a notice printed in appropriate newspapers circulating in the Auckland region.

with:

Publicly notified means made known to members of the public by a notice on the council’s website, until any opportunity for review or appeal has lapsed, and by a notice printed in appropriate newspapers circulating in the Auckland region.

g) amend standing order 9.4 (Definitions) by replacing:

Working day means any day of the week other than:

(a) Saturday, Sunday, Waitangi Day, Good Friday, Easter Monday, ANZAC Day, the sovereign’s birthday and Labour Day

(b) a day in the period commencing with 25 December in any year and ending with 15 January in the following year.

with:

Working day means any day of the week other than:

(a) Saturday, Sunday, Waitangi Day, Good Friday, Easter Monday, ANZAC Day, the sovereign’s birthday and Labour Day

(b) Where Waitangi Day or ANZAC Day falls on a weekend, the following Monday

(c) Auckland Anniversary Day

(d) a day in the period commencing with 20 December in any year and ending with 10 January in the following year.

h) amend the following standing orders:

i) SO 2.3:

replace the heading “Extraordinary meetings” with “Extraordinary and emergency meetings”

ii) SO 7.2.2:

replace the heading “Extraordinary meetings” with “Extraordinary and emergency meetings”

iii) SOs 1.1.3, 2.4.1, 2.4.2, 7.3.1:

replace the words “extraordinary meeting” with “extraordinary or emergency meeting”

i) amend standing order 3.3.3 to remove the requirement to be representing the council:

Conditions for attending by electronic link

The governing body or its committees may give approval for a member to attend meetings by electronic link, either generally or for a specific meeting. Situations where approval can be given are:

a) where the member is ~~representing the council~~ at a place that makes their physical presence at the meeting impossible or impracticable

b) to accommodate the member’s illness or infirmity

c) in emergencies.

The member who is seeking to attend by electronic link may not take part in the vote to give approval. The only exception is where there is an emergency, in which case the member seeking to attend by electronic link can take part in the vote.

Horopaki

Context

10. The LGRSAA came into force on 21 March 2019. The Act is an omnibus Act in that it makes minor amendments to several pieces of legislation.

11. The LGRSAA amends the Local Electoral Act 2001 to include a new principle for “representative and substantial electoral participation in local elections and polls”, and imposes a new responsibility on the Chief Executive of the council by amending the Chief Executive’s responsibilities in the LGA s 42(2)(d):

(da) facilitating and fostering representative and substantial elector participation in elections and polls held under the Local Electoral Act 2001;

12. It amends the definition of “public notice” and “publicly notified” under the LGA and the LGOIMA to require notification both on the council’s website and in newspapers.

13. It creates a new category of council meeting called an “emergency meeting”, separate from “extraordinary meeting”. Previously, extraordinary meetings had two types of notice requirements. Where the more urgent form of notice is used, the meeting is now referred to as an emergency meeting. This applies to giving notice to members under the LGA and to public notices under LGOIMA.

14. It amends the definition of working day under the LGA and LGOIMA to exclude a province’s anniversary day being counted as a “working day”.

15. It amends the Dog Control Act 1996 by:

(i) moving, with regard to disability assist dogs, the list of certifying organisations to a schedule which can be changed by regulation

(ii) applying the new public notice requirements in the LGA to the annual report on the administration of the dog control policy

16. It amends the Local Electoral Act 2001 by adding to the principles in section 4:

(aa) representative and substantial electoral participation in local elections and polls:

17. It amends the LGA by specifying timeframes for making certain documents publicly available, including the long-term plan, annual plan and annual report. It also adds requirements for placing these on the council’s website.

18. It amends the LGA by adding a provision for the Secretary of Local Government to specify forms for making documents available.

19. It amends the Rates Rebates Act 1973 by making changes to the definition of income in regard to payments under the Veterans Support Act 2014 and winter energy payments under the Social Security Act 2018. There is a minor change in relation to rates paid on a residential unit in a retirement village.

Tātaritanga me ngā tohutohu

Analysis and advice

20. The changes made by the LGRSAA are minor in nature, nevertheless it is necessary to amend the Governing Body’s standing orders in line with the changes so they reflect current legislation.

21. The Governing Body may also wish to consider an unrelated change to standing orders while it is considering these changes. Standing order 3.3.3 provides conditions for attending a meeting by electronic link:

Conditions for attending by electronic link

The governing body or its committees may give approval for a member to attend meetings by electronic link, either generally or for a specific meeting. Situations where approval can be given are:

a) where the member is representing the council at a place that makes their physical presence at the meeting impossible or impracticable

b) to accommodate the member’s illness or infirmity

c) in emergencies.

22. This standing order was adopted in 2015. Since that time the technology has improved and remote attendance is now possible in the Town Hall. However, the conditions in the standing order are very limiting and do not allow attendance by a member who is out of Auckland but not representing the council.

23. Staff recommend amending the standing order by removing the requirement to represent the council in SO 3.3.3 (a):

a) where the member is ~~representing the council~~ at a place that makes their physical presence at the meeting impossible or impracticable

24. The proposed change would allow, for example, an appointed member of the Audit and Risk Committee living outside Auckland to attend by electronic link.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

25. The changes to the standing orders do not impact on the wider council group.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

26. Local boards will need to make similar changes to their standing orders.

Tauākī whakaaweawe Māori

Māori impact statement

27. The changes to standing orders brought about through the LGRSAA do not impact on the Māori community.

Ngā ritenga ā-pūtea

Financial implications

28. There are no financial implications to making these changes to standing orders.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

29. The law applies regardless of standing orders. If standing orders are not aligned to changes in the law there is a risk that the council may act inconsistently with the legislation by relying on standing orders that are not up to date with the law.

Ngā koringa ā-muri

Next steps

30. Following the Governing Body resolution to amend the standing orders, staff will make the appropriate changes and recirculate the updated standing orders.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Author

Warwick McNaughton - Principal Advisor - Democracy Services

Authorisers

Marguerite Delbet - General Manager Democracy Services

Phil Wilson - Governance Director

Stephen Town - Chief Executive

No.	Title	Page
a ⇩	Deputy Mayor's Report: Building Cities: Infrastructure New Zealand delegation to Singapore, Hong Kong, Beijing and Shanghai	191

No.	Title	Page
a ⇩	Forward Work Programme	205
b	Update on America’s Cup 36 Programme - Memorandum (Under Separate Cover)
c	City Rail Link Workshop 29 April 2019 (Under Separate Cover)

Governing Body

02 May 2019

TIRA KĀWANA / GOVERNING BODY FORWARD WORK PROGRAMME 2016 – 2019 TERM

The Governing Body deals with strategy and policy decision-making that relates to the environmental, social, economic and cultural activities of Auckland as well as matters that are not the responsibility of another committee

The Mayor may require any matter that would otherwise be reported to a committee, to be reported to the Governing Body. If that matter is already on a published agenda for a committee meeting, that meeting will not consider that matter unless invited by the mayor to make a recommendation to the Governing Body.

Lead	Area of work	Reason for work	Governing Body role (decision or direction)	Budget/ Funding	Expected timeframes Highlight financial year quarter and state month if known
					FY18/19	FY19/20
					Apr-Jun 2 May 30 May 27 Jun	Jul-Sep 25 Jul 22 Aug 26 Sep	Oct-Dec Nov Dec	Jan-Mar Feb Mar
Chief Financial Office	Annual Budget 2019/2020 (Annual Plan)	The Local Government Act 2002 requires each local authority to consult on and adopt a long term plan every three years. In each intervening year local authorities are required to consult the community on any significant or material changes to the relevant year of the long term plan through the Annual Budget consultation document. Legislation also requires that the council’s consultation document include a summary of key matters from Local Board Agreements and the Draft Tūpuna Maunga Authority Operational Plan for the Annual Plan year.	Adopt consultation document and supporting material Approve Annual Budget Progress to Date: Public Consultation 13/12/18 GB/2018/205 Adoption of consultation material 13/2/19 GB/2019/2 & GB/2019/3		Q4 (Jun)	Q1	Q2	Q3
Chief Operating Office	Americas Cup 2021	Location, infrastructure and funding	Approve preferred location Agree strategy for progressing resource consent applications Progress to Date: Report considered 14/12/17 and approval of Wynyard Basin option GB/2017/172 and agreed single hearing process through direct referral Report and revised decision and approval of Wynyard Hobson proposal 29/3/18 GB/2018/63 Workshop – 6/12/18 Report and decision on additional funding 6/12/18 GB/2018/199		Q4	Q1	Q2	Q3
	Chief Executive’s Performance Objectives	The Appointments, Performance Review and Value for Money Committee has the delegation to set performance objectives. The Governing Body must then consider the recommendations and make a decision.	Approve performance objectives. Progress to Date: Recommendations considered 22/11/18 in confidential, open decision GB/2018/193		Q4	Q1	Q2	Q3
	City Rail Link	Construction of the City Rail Link in the central city	Approve City Rail Link Heads of Agreement Note any matters raised by the Audit and Risk Committee about the project Progress to Date: Heads of Agreement approved 14/9/16 Conf Appoint chair of City Rail Link 15/12/16 Conf Note sponsors agreement and establishment of new entity City Rail Link Limited 29/6/17 Conf Report confirming role of Audit and Risk Committee 25/10/18 GB/2018/175		Q4	Q1	Q2	Q3
Chief Financial Office	Annual Report	Statutory requirement	Adopt Annual Report		Q4	Q1	Q2	Q3
Governance	Review of Code of Conduct	The experience of working with the current Code of Conduct indicates that it could be further improved. In particular, it could be clearer about complaint, investigation and resolution processes, as well as available sanctions	Adopt new Elected Members Code of Conduct Progress to Date: Initial report was considered 22/2/18 Approval 22/2/18 for review GB/2018/37 Workshop – 15/3/18 Workshop – 26/11/18 Report 13/12/18 and deferral GB/2018/209		Q4	Q1	Q2	Q3
Mayoral Office Governance	Terms of Reference	The Terms of Reference enables the governing Body to delegate to committees those power necessary for them to carry out their responsibilities to the most efficient and effective levels. Any changes to the Terms of Reference must be done by the Governing Body.	Adopt the Terms of Reference Adopt changes to Terms of Reference Progress to Date: Amend due of disestablishment of ACIL and two committee amendments 26/7/18 GB/2018/115 Amend to add Cr Paul Young to Committee’s 22/11/18 GB/2018/190		Q4	Q1	Q2	Q3
Governance	Accountability Review of council-controlled organisations	The accountability review are to increase the accountability and value for money of CCOs by: • increasing the transparency of CCO decision-making • increasing the responsiveness of CCOs to the public and council • improving the recognition of ratepayer funding for CCO activity • increasing the ability to align CCOs to the direction set by the council. Reporting on a quarterly basis	Approve objectives as basis of review Approve scope and timing Progress to Date: Approve objectives, scope and timing 23/2/17 GB/2017/17 Memorandum 9/4/18 to councillors with an update	Within timelines and budgets	Q4	Q1	Q2	Q3
Governance	Independent Māori Statutory Board funding	The Local Government (Auckland Council) Act 2009 (LGACA) requires Auckland Council to meet the reasonable costs of the Independent Māori Statutory Board (IMSB) board’s operations, secretariat, the establishment of committees, and seeking and obtaining advice (Schedule 2, clause 20, sub-clause 1, LGACA)	Approve 2019/2020 funding agreement		Q4	Q1	Q2	Q3
Co-governance	Tūpuna Maunga o Tāmaki Makaurau Operations Plan	Section 60 of Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act 2014 requires the Tūpuna Maunga o Tāmaki Makaurau Authority (Tūpuna Maunga Authority) and Auckland Council to annually agree an operational plan as part of the annual or long-term plan process. This requires the council to consult on a summary of the Draft Tūpuna Maunga o Tāmaki Makaurau Operational Plan (the Draft Tūpuna Maunga Plan). The Governing Body is also required to adopt the final plan.	Adopt Operational Plan and summary Progress to Date: Report to approve draft 13/12/18 GB/2018/204		Q4	Q1	Q2	Q3
People and Performance	Health, Safety and Wellbeing	The Governing Body has the role of the person or organisation conducting a business or undertaking.	Receive the quarterly Health, Safety and Wellbeing Report Progress to Date: August 2018 report received GB/2018/147 December 2018 report received GB/2018/203 February 2019 report received GB/2019/15		Q4 Jun	Q1	Q2	Q3
Social Policy and Bylaws	Public Safety and Nuisance Bylaw Review	Legislative requirement to review bylaw within five years. Committee resolution to “commence the review of the Public Safety and Nuisance Bylaw 2013 at an early date”.	Approve statement of proposal. # Make/Amend/Revoke the bylaw. ^#public notification is required for bylaw reviews even if no change to the bylaw is recommended. Length of time required to draft the statement of proposal will depend on the scope of amendments requested following the review findings. Progress to Date: Report to Approve the statement of proposal 27/9/18 GB/2018/148 Panel report to approve bylaw 28/3/19 GB/2019/22	Within current baselines.	Q4	Q1	Q2	Q3
Social Policy and Bylaws	Dog management Bylaw and Policy on Dogs	Legislative requirement to review the bylaw and policy after five years.	Approve statement of proposal # Make/Amend/Revoke the bylaw. ^#public notification is required for bylaw reviews even if no change to the bylaw is recommended. Progress to Date: Report to Approve the statement of proposal 28/2/19 GB/2019/15	Within current baselines.	Q4	Q1	Q2	Q3
Social Policy and Bylaws	Solid Waste Bylaw Review	Legislative requirement to review the bylaw and policy after five years.	Approve statement of proposal # Make/Amend/Revoke the bylaw. ^#public notification is required for bylaw reviews even if no change to the bylaw is recommended.	Within current baselines.	Q4	Q1	Q2	Q3
Social Policy and Bylaws	Trade Waste Bylaw Review	Legislative requirement to review the bylaw and policy after five years.	Approve statement of proposal # Make/Amend/Revoke the bylaw. ^#public notification is required for bylaw reviews even if no change to the bylaw is recommended. Progress to Date: Report to Approve the statement of proposal 28/3/19 GB/2019/23	Within current baselines.	Q4	Q1	Q2	Q3
Social Policy and Bylaws	Signage Bylaw Review	Legislative requirement to review the bylaw and policy after five years.	Approve statement of proposal # Make/Amend/Revoke the bylaw. ^#public notification is required for bylaw reviews even if no change to the bylaw is recommended	Within current baselines.	Q4	Q1	Q2	Q3
Social Policy and Bylaws	Alcohol Control Bylaw Review	Legislative requirement to review the bylaw and policy after five years.	Approve statement of proposal # Make/Amend/Revoke the bylaw. ^#public notification is required for bylaw reviews even if no change to the bylaw is recommended.	Within current baselines.	Q4	Q1	Q2	Q3
Social Policy and Bylaws	Freedom Camping	Explore the need for and options for regulating freedom camping in Auckland Regulatory response may be required following completion of research and pilot	If regulatory response required: Approve statement of proposal Make the bylaw Progress to Date: Approve the statement of proposal 22/11/18 GB/2018/188	Review is within current baselines. Funding proposals will be required for any recommendations that require capital or operational upgrades.	Q4	Q1	Q2	Q3
Mayoral Office	Mayoral Housing Taskforce Steering Group	Oversee the progress and implementation of the June 2017 Mayoral Housing Taskforce report.	Setup, agree and approve membership of group Receive six-monthly updates Progress to Date: Taskforce setup 27/7/17 GB/2017/79 Memorandum 9/4/18 to councillors updating progress Progress report 25/10/18 GB/2018/172		Q4	Q1	Q2	Q3
Governance	Auckland Council Top Risk Register	The Audit and Risk Committee will refer the risk register to the Governing Body every quarter.	Note the top risk register and risk heat map Receive quarterly reports Progress to Date: September 2018 report 25/10/18 GB/2018/173 February 2019 report 28/2/19 GB/2019/9		Q4	Q1	Q2	Q3
Governance	Te Tiriti o Waitangi / Treaty of Waitangi	The Crown negotiates settlements with iwi on a confidential basis and from time to time invites Council to express its views. The Te Tiriti o Waitangi / Treaty of Waitangi Settlement Working party is accountable to the Governing Body and reports its findings to the Governing Body.	Approve submissions to the Crown as and when required Approve establishment and on-going implementation of co-management and other governance arrangements		Q4	Q1	Q2	Q3
Governance	Advisory Panels	The Governing Body appoints members to advisory panels, as required.	Approve appointments to advisory panels Progress to Date: Replacement members appointed to Youth Advisory Panel open process report 25/10/18 GB/2018/177 decision made in confidential	Within current baselines.	Q4	Q1	Q2	Q3
Governance	2019 Local Government New Zealand Conference and Annual General Meeting	The Governing Body sends representatives to the conference and as delegates to the Annual General Meeting	Appoint presiding delegate to Annual General Meeting Appoint three other delegates to Annual General Meeting Approve councillors to attend conference Progress to Date: Report to appoint delegates and approve attendance 28/3/19 GB/2019/25		Q4	Q1	Q2	Q3

COMPLETED
Governance	2018 Local Government New Zealand Conference and Annual General Meeting	The Governing Body sends representatives to the conference and as delegates to the Annual General Meeting		Appoint presiding delegate to Annual General Meeting Appoint three other delegates to Annual General Meeting Approve councillors to attend conference Progress to Date: Report was considered 22/3/18 Approved the above GB/2018/47	Q3 FY17/18	Q4	Q1	Q2
People and Performance	Remuneration Policy	The current Remuneration Policy was adopted in 2014. The policy provides high-level guidance for all remuneration decisions made by the council. The policy is also supported by operational guidelines and policies. Under the Local Government Act 2002 (Schedule 7, section 36A) the policy must be reviewed every three years.		Approve the change to the policy. Progress to Date: Report considered 22/3/18 Approved 22/3/18 GB/2018/42	Q3 FY17/18	Q4	Q1	Q2
Chief Planning Office	Auckland Plan Refresh	The Auckland Plan was approved in 2012 and a commitment made to a refresh within six years. A refresh will ensure that the Auckland Plan remains current and will inform Long-term Plan 2018-2028 prioritisation and budget decisions.	Approve refresh of Auckland Plan Progress to Date: Various workshops throughout 2017/2018 Adopted summary information 21/2/18 GB/2018/25 Adopted by Planning Committee 6/5/18 PLA/2018/62		Q3	Q4 FY17/18	Q1	Q2
Chief Financial Office	Long-term Plan 2018-2028	Statutory Process · Consultation process – including hearings for community to be heard and local board engagement meetings (Have Your Say events). Approach to communication of investments in local board areas to be considered · Elected members consideration of feedback · Decision-making for Long-term Plan 2018-2028 · Long-term Plan 2018-2028 adoption	Adopt consultation document and supporting material Adopt Long Term Plan and set rates Progress to Date: Various workshops throughout 2017/2018 Adopted consultation document and supporting material 21/2/18 GB/2018/24 Agree recommendation for adoption 31/5/18 GB/2018/91 Adoption report 28/6/18 GB/2018/108		Q3	Q4 FY17/18	Q1	Q2
Chief Financial Office	Regional Fuel Tax Proposal	Auckland Council consulted on its 10-year Budget 2018-2028 (LTP), part of which asked if there was support for a Regional Fuel Tax. A report on the consultation undertaken is required by legislation to be submitted to the Ministers of Transport and Finance.	Approve a Regional Fuel Tax for Auckland Progress to Date: Approved 31/5/18 GB/2018/90		Q3	Q4 FY17/18	Q1	Q2
Governance	Advisory Panels	The Governing Body appoints members to advisory panels, as required.	Approve appointments to advisory panels Progress to Date: Initial appointments to demographic panels 23/3/17 Conf Appointments to the Youth Advisory Panel 25/5/17 Conf Replacement members appointed to Youth Advisory Panel 22/3/18 Conf		Q1	Q2	Q3	Q4
People and Performance	Chief Executive’s Employment Review Process	Under the Local Government Act 2002, a local authority Chief Executive is appointed for a five year term. Schedule 7 of the Act gives the option of a two year extension if Council undertakes a formal employment review at least six months before the expiry of the current contract. The Governing Body is responsible for the review.	Approve performance objectives Agree to the review of the chief executive performance before 30 June 2018 Delegate the review if desired Decision on chief executives contract Progress to Date: Objectives approved and released 23/11/17 GB/2017/153 Process approved 19/4/18 GB/2018/71 Re-appointment confirmed 27/6/18 GB/2018/103		Q3	Q4 FY17/18	Q1	Q2
Governance	Independent Maori Statutory Board funding	The Local Government (Auckland Council) Act 2009 (LGACA) requires Auckland Council to meet the reasonable costs of the Independent Māori Statutory Board (IMSB) board’s operations, secretariat, the establishment of committees, and seeking and obtaining advice (Schedule 2, clause 20, sub-clause 1, LGACA)	Approve 2018/2019 funding agreement Progress to Date: Report received 27/6/18 and funding approved GB/2018/94		Q3	Q4 FY17/18	Q1	Q2
Governance	Te Tiriti o Waitangi / Treaty of Waitangi	The Crown negotiates settlements with iwi on a confidential basis and from time to time invites Council to express its views. The Te Tiriti o Waitangi / Treaty of Waitangi Settlement Working party is accountable to the Governing Body and reports its findings to the Governing Body.	Approve submissions to the Crown as and when required Approve establishment and on-going implementation of co-management and other governance arrangements Progress to Date: Submission on Point England Development Enabling Bill 23/2/17 GB/2017/8 Submission on Ngāti Tamaoho Claims Settlements Bill 27/7/17 GB/2017/85 Report Upper Mangatangi-Mangarawhiri Catchments Co-governance Arrangements 24/8/17 GB/2017/99 Submission on Ngāi Tai ki Tāmaki Claims Settlement Bill 22/2/18 GB/2018/36 Open Report Te Akitai Waiohua – Treaty Settlement Redress Conf 19/4/18 GB/2018/69 Open Report Ngāti Paoa – Treaty settlement redress Conf 24/5/18 Open Report on Maungauika – transfer of administration 27/6/18 GB/2018/97		Q1	Q2	Q3	Q4
Chief Financial Office	Annual Report	Statutory requirement	Adopt Annual Report Progress to Date: Adoption 27/9/18 GB/2018/153		Q1 27 Sep	Q2	Q3	Q4
Mayoral Office Governance	Terms of Reference	The Terms of Reference enables the governing Body to delegate to committees those power necessary for them to carry out their responsibilities to the most efficient and effective levels. Any changes to the Terms of Reference must be done by the Governing Body.	Adopt the Terms of Reference Adopt changes to Terms of Reference Progress to Date: Initial adoption 1/11/16 GB/2016/237 Review report 14/12/17 GB/2017/177 Review after by-election 22/3/17 GB/2018/57 Amend Appointments, Performance Review and Value for Money 19/4/19 GB/2018/71		Q1	Q2	Q3	Q4
People and Performance	Health, Safety and Wellbeing	The Governing Body has the role of the person or organisation conducting a business or undertaking.	Receive the quarterly Health, Safety and Wellbeing Report Progress to Date: March 2018 report received GB/2018/55 June 2018 report received GB/2018/119		Q1 Sep	Q2 Dec	Q3 Mar	Q4 Jun
Governance	Accountability Review of council-controlled organisations	The accountability review are to increase the accountability and value for money of CCOs by: • increasing the transparency of CCO decision-making • increasing the responsiveness of CCOs to the public and council • improving the recognition of ratepayer funding for CCO activity • increasing the ability to align CCOs to the direction set by the council. Reporting on a quarterly basis	Approve objectives as basis of review Approve scope and timing Progress to Date: Approve objectives, scope and timing 23/2/17 GB/2017/17 Memorandum 9/4/18 to councillors with an update		Q1	Q2	Q3	Q4
Governance	Representation Review	The Local Electoral Act 2001 requires all local authorities to undertake a review of representation arrangements at least once every six years. Auckland Council is required to undertake a review for the 2019 elections. Council’s decision must be issued no later than 11 April 2019.	Approve the process for conducting the review of representation arrangements Approve final decision rogress to Date: Report and approval of process 14/12/17 GB/2017/175 Workshop – 16 October 2018 Recommendations report 18/10/18 and decision GB/2018/157-165		Q1	Q2	Q3	Q4
Social Policy and Bylaws	On-site Wastewater Bylaw	Legislative requirement to review legacy bylaws by 31 October 2020.	Approve statement of proposal # Make/Amend/Revoke the bylaw. ^#public notification is required for bylaw reviews even if no change to the bylaw is recommended. Progress to Date: Approve the statement of proposal 26/7/18 GB/12018/121 Hearings Panel report 25/10/18 and decision GB/2018/174 Within current baselines.		Q1	Q2	Q3	Q4
Financial Strategy and Planning	Contributions Policy	The Local Government Act requires Council to review the policy every three years. Consultation and adoption must be done by 1 July 2018	Adopt policy Progress to Date: Agree to consultation 30/4/18 GB/2018/79 Agree extension until new policy in place 27/6/18 GB/2018/96 Workshop – 15/10/18 Report for consultation 18/10/18 GB/2018/166 Stakeholder Submissions Workshop – 23/11/18 Feedback Session – 28/11/18 Workshops – 29/11/18 and 6/12/18 Report on feedback and adoption 13/12/18 GB/2018/206		Q1	Q2 (13 Dec)	Q3	Q4
Social Policy and Bylaws	Health and Hygiene Bylaw	Legislative requirement to review the bylaw and policy after five years.	Approve statement of proposal # Make/Amend/Revoke the bylaw. ^#public notification is required for bylaw reviews even if no change to the bylaw is recommended. Progress to Date: Approve the statement of proposal 26/7/18 GB/2018/120 Hearings Panel Report and confirm the bylaw 22/11/18 GB/2018/187		Q1	Q2	Q3	Q4

Mayor	Hon Phil Goff, CNZM, JP
Deputy Mayor	Deputy Mayor Cr Bill Cashmore
Councillors	Cr Josephine Bartley	Cr Mike Lee
	Cr Dr Cathy Casey	Cr Daniel Newman, JP
	Cr Ross Clow	Cr Greg Sayers
	Cr Fa’anana Efeso Collins	Cr Desley Simpson, JP
	Cr Linda Cooper, JP	Cr Sharon Stewart, QSM
	Cr Chris Darby	Cr Sir John Walker, KNZM, CBE
	Cr Alf Filipaina	Cr Wayne Walker
	Cr Hon Christine Fletcher, QSO	Cr John Watson
	Cr Richard Hills	Cr Paul Young
	Cr Penny Hulse

Date	Subject
2/4/19	Update on America’s Cup 36 Programme

Date	Workshop/Briefing
17/4/19	City Rail Link – CONFIDENTIAL
29/4/19	City Rail Link

Author	Suad Allie - Governance Advisor
Authoriser	Stephen Town - Chief Executive

Author	Sarndra O'Toole - Team Leader Governance Advisors
Authoriser	Stephen Town - Chief Executive