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Governing Body
25 June 2020
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Update on water matters
File No.: CP2020/08131
Te take mō te
pūrongo
Purpose of the report
1. To
clarify roles and responsibilities with respect to water and to direct
investigation of ways to encourage the use of rain tanks, particularly in the
suburban part of Auckland.
Whakarāpopototanga matua
Executive summary
2. Watercare
is accountable for the metropolitan water supply system - the continuity,
supply and quality of drinking water as well as customer service and
communication. They are also responsible for the management and treatment
of wastewater.
3. Auckland
Council has multiple roles:
· Monitoring the performance of council-controlled organisations,
including Watercare
· A
regulating and consenting authority
· Environmental
monitoring of coastal and fresh water
· Long-term
strategy and policy development
· Emergency
management (where Watercare is a lifeline utility)
· Storm
water management including development of non-potable water sources
· A
land-owner, responsible for managing lakes, streams and ponds, and providing
access and amenity
· A
service provider and organisation which is a large consumer of water
· Communication
with Aucklanders
4. A
joined-up approach involving both Watercare and the council preparing for,
communicating and mitigating the impacts of water shortages is being deployed.
5. The
timely promotion of the use of private water-tanks within rural and residential
areas is a means by which a water shortage during summer 2020/21 can be
mitigated. Work is underway to create a package of measures including removal /
simplification of existing regulatory controls aimed at incentivising
home-owners to install tanks.
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Ngā tūtohunga
Recommendation/s
That the Governing Body:
a) note
the different roles and responsibilities of Watercare and Council with
respect to water across Auckland
b) agree,
in principle, to remove the current consenting requirements
for rain tanks in residential zones and rural zones through a change to the
Auckland Unitary Plan
c) direct
staff to explore options under the current legal framework
to enable the council to make rain tanks for water supply mandatory in
certain situations e.g. new buildings
d) note
that the Planning Committee will approve the public notification of any plan
change to the Auckland Unitary Plan.
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Horopaki
Context
6. Storage
dams, which form a key source of supply to the Auckland Metropolitan Water
Supply system, are at historic low levels. If weather conditions continue the
impact of water shortages for Auckland business and communities is forecast to
be most acute during summer 2020/2021.
7. Level
1 Water Restrictions and associated communications have been introduced.
8. Discussions
with major water users, led by Watercare, are underway and are resulting in
reduced demand.
9. With
respect to water supply, Watercare as a business and a lifeline utility is
accountable for:
· Customer
service and communication;
· The
continuity, supply and quality of drinking water;
· Planning
cooperatively and communicating effectively with other lifeline utilities and
emergency services.
10. Watercare is
reviewing its Drought Management Plan and initiatives are underway to source
additional and alternative supplies of potable water.
11. Auckland
Council roles include:
· Monitoring the performance of council-controlled organisations,
including Watercare
· A
regulating and consenting authority
· Environmental
monitoring of coastal and fresh water
· Long-term
strategy and policy development
· Emergency
management (where Watercare is a lifeline service)
· Storm
water management including development of non-potable water sources
· A
land owner, responsible for managing lakes, streams and ponds, and providing
access and amenity
· A
service provider and organisation which is a large consumer of water
· Communication
with Aucklanders
12. Auckland
Council, through Healthy Waters, are developing alternative sources of
non-potable water as a means to replace the use of potable water where
appropriate, for example in construction.
13. In some
cases, Healthy Waters is using its emergency powers under the Resource
Management Act 1991 where ‘immediate preventative measures’ are
required to address adverse effects resulting from the water crisis.
Where appropriate, Healthy Waters will also seek to vary existing, or
obtain new, resource consents to authorise increased water take to reduce
pressure on the city’s potable water supply.
14. In all cases,
Healthy Waters is working to ensure that the supply of non-potable water is
subject to appropriate controls to manage water quality, cultural, and
ecological values of the resource, and to ensure that any public health, noise
and traffic issues associated with the water take are managed without causing
undue disruption to the local community.
15. Watercare and
Auckland Council are working together to mitigate the impact of water shortages
on Auckland communities. A team involving staff from both organisations
has been formed to minimise the possibility of a crisis by next spring and
summer.
Tātaritanga me ngā
tohutohu
Analysis and advice
16. Rain-water
tanks are an example of how we can work together to incentivise behaviour
change and provide an alternative water supply. Rain-water tanks offer
the opportunity to mitigate some of the impact of drought and water shortages
whether or not sites are serviced by the metropolitan water supply.
17. This past
summer saw Auckland Council providing millions of litres of potable water to
bolster commercial delivery of water to private rainwater tank users. This was
as a result of both dry weather conditions and the capacity of people’s
rainwater tanks.
18. In relation
to serviced areas, in particular suburban Auckland, the built environment is
quite different and generally not conducive to sites having 30,000L
tanks. However, smaller tanks e.g 2000L, can be located on some suburban
sites and could be used to take water from the roof, with the water used for
washing cars, watering gardens and/or filling toilet cisterns.
19. Staff are
working on a plan change to remove unnecessary consent requirements for
installing rain-tanks. Direction is sought from the Committee and then a
plan change will be prepared and approved through the Planning Committee.
As part of that process, iwi and local boards will be specifically consulted
prior to notification of the plan change for public submissions. To take
advantage of winter rainfall, between now and when any plan change becomes
operative, council will remove processing charges for resource consent
applications for rain tanks.
Tauākī whakaaweawe
āhuarangi
Climate impact statement
20. While the
focus of this report is immediate and short term, the drought and water
shortage is illustrative of issues associated with climate change.
21. The water
shortage and associated communications to better manage and use water will
highlight to Aucklanders the importance of setting in place a longer-term
strategy and investments which reflect the implications of climate change.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
22. Watercare and
Auckland Council are working together on plans aimed at minimising and
mitigating the impact of water shortages.
23. Each agency
across the Council Group is managing down its water usage reflecting Level 1
water restrictions.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
24. Local Board
views have not been sought on this report given it is predominantly an
information report. However, local boards will have the opportunity to
input into the development of any plan change to the Unitary Plan.
Tauākī whakaaweawe
Māori
Māori impact statement
25. Iwi views
have not been sought on this report given it is predominantly an information
report. Iwi will have the opportunity to input into the development of
any plan change to the Unitary Plan prior to notification and once it has been
notified.
26. On 16 June
2020 the Mana Whenua Operational Hui was briefed by the Healthy Waters team
about the water shortage and the various non-potable water sites that have been
made operational under emergency powers of the Resource Management Act
1991. Whilst understanding the gravity of the current
water shortage, a range of concerns were expressed regarding current and future
use and management of water resources which are beyond the scope of this
report.
Ngā ritenga
ā-pūtea
Financial implications
27. The decision
to remove processing charges for resource consent applications for rain tanks
will result in a reduction in revenue. Historically, there have been very
few applications and even with an increase in applications, the revenue
foregone may only be in the tens of thousands.
28. Financial
implications arising from Watercare’s and Auckland Council’s
actions and works to minimise and mitigate the impact of water shortages will
be considered as part of the Annual Plan 2020-21 (Emergency Budget) and 2021-31
Long-term Plan.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
29. This report
clarifies roles and responsibilities as a means to minimise and mitigate water
shortages expected in summer 2020/21.
Ngā koringa ā-muri
Next steps
30. Monthly
reports by the integrated Watercare and Auckland Council team on the current drought
situation will be provided to the Governing Body.
31. A plan change
will be reported to the Planning Committee in August.
Ngā tāpirihanga
Attachments
There are no attachments for
this report.
Ngā kaihaina
Signatories
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Author
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Megan Tyler - Chief of Strategy
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Authoriser
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Stephen Town - Chief Executive
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Governing Body
25 June 2020
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Shareholder comments on revised draft
CCO Statements of Intent, 2020-2023
File No.: CP2020/07426
Te take mō te
pūrongo
Purpose of the report
1. To
approve shareholder feedback on the revised draft Statements of Intent (SOI)
2020/2021 – 2022/2023 of the council-controlled organisations (CCOs).
2. To
formally approve an extension of the deadline for submission of final SOIs by
CCO Boards to 31 July 2020, in accordance with the Local Government Act 2002,
Schedule 8, Clause 4.
Whakarāpopototanga matua
Executive summary
3. The
substantive CCOs provided a draft SOI to the council by the original deadline
of 1 March 2020, in response to the Letters of Expectation which were sent on
18 December 2019. Three non-substantive CCOs which are required to provide SOIs
to the council also did so.
4. Given
the COVID-19 pandemic situation, Council wrote to each of the CCOs requesting
that they revise their SOIs to reflect the revised annual budget and the new
reality of a post-COVID-19 community and economy. The revised draft Statements
of Intent have been sent to Council and are attached (Attachments A-H).
5. The
draft SOIs mostly reflect council’s priorities as set out in the letters
of expectation. However, the priorities have been crucially affected by
COVID-19, and the effort the CCOs have put into revising their programmes is
much appreciated.
6. The
key themes of feedback for each CCO are in the box below.
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Key feedback
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ATEED
· ATEED has developed a revised strategic framework
focussed on economic recovery and organised around four themes. Staff
consider its new framework is consistent with ATEED’s purpose, and the
council can endorse it.
· A highly condensed version of the three-year work
programme is presented compared to previous SOIs, and needs to be elaborated
on to provide a clearer view of planned priority initiatives, deliverables or
projects under each of the four themes. It is acknowledged however that
given the rapidly changing situation we are in, ATEED’s planning needs
to be timely and agile. Therefore, some expansion during the year is
wise.
· ATEED has revised down the targets for two of its LTP
measures. These should be shown alongside the original LTP Targets. Benchmarks
and targets for some new measures, if less developed, should be included.
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Auckland Transport
· Auckland Transport’s (AT) SOI reflects decisions
made about the draft Emergency Budget discussions. A clearer
description of how the work programme was prioritised would be helpful.
· This prioritisation will also be helpful to explain
which additional projects can be completed if a 3.5% rates rise is approved,
or AT’s revenue is higher than anticipated.
· It is not clear how AT will build on the positive
aspects of the lockdown. experience, such as more Aucklanders walking and
cycling.
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Panuku
· A statement of the key capital projects that
Panuku is looking to deliver needs to be provided
· The work programme deliverables need to be
clearer in terms of what Panuku delivers and by when.
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Regional Facilities
Auckland
Several minor changes
are suggested for the RFA Statement of Intent.
The relevant areas for
inclusion are:
· Asset management plan review and transparency
· Working closely with Council on developing the
long-term, strategic approach to stadiums
· Undertaking a board performance review, which had to be
rescheduled from April 2020
· Linking its sustainability activities to Auckland’s
Climate Plan.
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Watercare
Watercare’s
Statement of Intent should:
· include the immediate actions Watercare is taking to
maintain the security of water supply through to the end of summer 2021
· acknowledge that the resilience Aucklanders expect from
their water network is a strategic issue – which means it is the
council’s decision, with input from Watercare and in consultation with
Aucklanders
· acknowledge that any new revenue opportunities will
need to be approved by the council until Watercare prepares a risk framework
which the council approves.
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7. Each
CCO will also need to reflect the council’s final decisions on the
2020/2021 Emergency Budget in their final SOI.
8. Given
the pandemic and the consequent revision of Council’s Emergency Budget,
the usual SOI process has been delayed. The Local Government Act 2002,
Schedule 8, Clause 4, allows councils to, by written notice, postpone the
deadline for receipt of final SOIs from CCO Boards by up to 1 month. In
order to allow the CCOs additional breathing room to consider the
council’s comments and revise their SOIs, staff propose that an extension
for final submission be given through to 31 July 2020. If approved, this
will be included in the shareholder comment letters sent to the CCOs.
9. Council
staff will continue to work with CCOs to finalise the SOI before 31 July 2020.
We propose that the Mayor, and Chair of the CCO Oversight Committee (where this
report would ordinarily have been considered), prepare letters including
council’s approved comments.
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Ngā tūtohunga
Recommendation/s
That the Governing Body:
a) note
the recommended comments on the draft statements of intent 2020/2021 –
2022/2023 for the five substantive and three non-substantive CCOs contained
in this report
b) note that
feedback at this stage of the statement of intent process is focussed on
matters raised in the letters of expectation, statutory requirements, and any
other council strategies which have not been adequately addressed in the
draft statements of intent.
c) agree
that the Mayor and Chair of the CCO Oversight Committee will prepare letters
to be sent to the five substantive and three non-substantive CCOs containing
the shareholder comments
d) agree
that the content of the shareholder comment letters be based on the feedback
in this report, with any deletions or additions based on feedback at the
meeting
e) note
that staff will record any feedback at the meeting that relates to
performance or operational issues and ensure it is raised with the relevant
CCOs
f) delegate
to the Manager, CCO Governance and External Partnerships, the authority to
finalise the shareholder feedback on the draft statements of intent for
Manukau Beautification Charitable Trust, Contemporary Art Foundation and
Community Education Trust Auckland.
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Horopaki
Statement of Intent process
10. The purpose
of Statements of Intent (SOI) is:
a) for
CCOs to outline intentions and activities for the forthcoming year
b) to
provide an opportunity for shareholders to influence the direction of the CCO
c) to
provide a basis for the accountability of CCO directors to the shareholders.
11. The
SOI process is laid out in the Local Government Act 2002:
· CCOs
are required by legislation to provide the council with a draft statement of
intent by March 1 each financial year.
· The
council provides shareholder feedback to CCOs on their SOIs in April. This may
include a request for further information or clarification on certain matters.
· CCO boards are then
required to consider any shareholder comments and to deliver their final
statement of intent by 30 June.
· Council may by written notice extend SOI deadlines by up to 1 month.
12. Staff from
the CCO Governance department and other relevant divisions review the draft
SOIs, considering statutory requirements, the letters of expectation, the
Auckland Plan and other relevant strategies and policies of council. This
results in any proposed shareholder comments, to be sent to the chairs of each
CCO. Each CCO is required to consider the shareholder comments at a
public board meeting, before submitting a final SOI to the council.
13. Any matters
relating to performance or operational issues will be communicated separately
to each CCO. These issues can be further followed up with the relevant chair
and chief executive through their attendance at quarterly reporting meetings of
the CCO Oversight Committee.
Extension of final submission date for 2020
14. The Local
Government Act 2002 allows for an extension of up to one month for the final
submission date of SOIs (Schedule 8, Clause 4).
15. Given the
Covid-19 situation in 2020, and the consequent need to allow the CCOs more time
to revise their SOIs to reflect both different activities and Council’s
Emergency Budget, staff propose a formal extension of the final submission
date, to 31 July 2020, be granted to each of the CCOs. This will be
included in shareholder comment letters.
Tātaritanga me ngā
tohutohu
Analysis and advice
General comments
16. There has been a good effort by all CCOs to incorporate the messages
in the letters of expectation within their draft SOI. While there are a number
of feedback points in this report, they mostly relate to matters of detail and
refinement, rather than fundamental issues of approach.
Finance
17. The CCOs have adopted varying approaches to the provision of their
financial information. In completing the final SOI, CCOs must ensure that the
financial information is agreed with council staff and includes the following:
· 2018/2019
actual results
· 2019/2020
long-term plan (LTP) budget, updated for any carry-forwards from 2018/2019 and
any other agreed changes
· 2020/2021
budget consistent with annual plan submission to council
· 2021/2022
and 2022/2023 LTP budget, updated for any changes agreed as part of the
2020/2021 Annual Plan
· a
breakdown by activity as in the LTP
· agreed
non-strategic asset sales targets.
18. In addition,
performance measures should align with the LTP. CCOs should ensure that in the
final documents:
· LTP
measures are clearly identified
· Measures
and targets are worded exactly as in the Annual Plan 2020/2021
· Where
there are proposed new COVID-19 affected targets, a clearly identified
additional column is provided in addition to the original targets.
· 2018/2019
actual performance is included alongside 2019/2020 and the next three
years’ targets. These should be updated for any changes agreed as part of
the Annual Plan 2020/2021.
19. The final SOI financial tables must be updated for any material
impacts of the revised assumptions issued by the council’s Financial
Planning team on 10 June 2020, as well as any changes agreed through the
Governing Body workshops between 22 June to 14 July 2020 and Finance and
Performance Committee decisions made on 16 July 2020. CCOs should agree all
financial tables with Financial Planning prior to finalisation.
20. There
is a target of $5 million savings factored into the Emergency Budget, so all
CCOs need to find savings across the Council Group through greater use of
shared services. For example, corporate shared services provide an opportunity
to reduce the overall operating cost for the Council Group. There are areas
across the corporate functions where this is already providing benefits such as
print, mail, courier services and fleet. It is recommended CCOs support further
work on corporate shared services, including reviewing the opportunity to move
to a centrally managed corporate property portfolio.
21. The
Local Government Act (LGA) (Schedule 8, clause 9(1)(i)) requires that each CCO
should include in its final SOI ‘the procedures to be followed before any
member or the group subscribes for, purchases, or otherwise acquires shares in
any company or other organisation’. As a matter of procedure, this needs
to be included in each of the final documents.
22. The CCOs
should continue to work closely with Auckland Council staff to provide
consistent and transparent financial and performance information. This includes
many of the KPI’s that come from the LTP and do not reasonably reflect
the council’s strategic priorities.
Key
performance indicators
23. Many of the
SOI KPI’s are derived from the LTP.
24. Staff
consider there is an opportunity to improve the KPIs to ensure they
appropriately measure a CCO’s progress in this regard. This will be
pursued through the next LTP process.
Māori
outcomes
25. The Council Group is currently developing new KPIs relating to
engagement with Māori and contributions to
Māori Outcomes. The final SOI should therefore include a
statement to indicate that the CCO is collaborating with the Council Group on The draft 2020-23 SOI presents a revised ATEED purpose and strategic
framework. Under the revised strategic framework, ATEED’s focus is firmly
on post-COVID-19 economic recovery:
26. development of Māori Outcome measures and will include such
measures where appropriate to the CCO, in a future SOI.
CCO specific comments
Auckland Tourism Events and Economic Development (ATEED)
Revised purpose and strategic framework
Create prosperity for all by enriching
Tāmaki Makaurau Auckland as a place for investment, talent, innovation,
and visitors
27. Staff
consider this purpose is broadly consistent with the three objectives set out
in ATEED’s constitution (and reflected in the accountability policy), and
as such can be supported by the council.
28. In
the final SOI, ATEED should consider how aspects of the strategic framework
could be made more plain English to make the meaning clearer (e.g. “risk
capital”).
29. ATEED
should also reflect whether the new strategic framework sufficiently captures
its Auckland 2021 activities, climate action/regenerative economy, Māori
economic development and a spatial focus (e.g. South and West). The
‘how we will measure it’ column should indicate which of the
measures listed are SOI accountability measures and consider the inclusion of
metrics around climate action/sustainability.
30. The
draft 2020-23 SOI states ATEED is ‘actively engaged in a strategic review
process that will articulate the long-term ambition and direction for ATEED in
light of new realities.’ The final SOI should explicitly reflect that
this long-term ambition and direction will be agreed in consultation with the
council as shareholder.
Work programme
31. The
draft 2020-23 SOI presents a highly condensed version of the three-year work
programme compared to previous SOIs.
32. It
is challenging from the information provided to gain a clear view of the
planned priority initiatives, deliverables or projects under each of the four
themes. It is therefore unclear what role ATEED is proposing to play in future
in some areas.
33. Examples
include skills, (re)training and redeployment, and also spatially, such as in
the South and West.
34. When
coupled with the new strategic framework, it is unclear whether some of the
activities listed in the current SOI (e.g. skills and job hubs) are continuing
into 2020/21.
35. The final SOI should therefore include more detail on the proposed
three-year work programme to rectify this. It is acknowledged
however that given the rapidly changing situation we are in, ATEED’s
planning needs to be timely and agile. Therefore, some expansion during the
year is wise.
Māori outcomes
36. For
consistency with the rest of the council group, ATEED’s final SOI should
include a commitment to playing a role in the council group Te Tiriti o
Waitangi Audit programmes, as requested in the letter of expectation.
37. Infometrics
(Webinar 5 May 2020) is forecasting 13,500 Māori workers to lose jobs in
Auckland (and 40,000 nationally) over the next two years (2020/22), many of
which are in accommodation and food, retail and the transport
sectors. The major employment/unemployment challenge is not
mentioned directly in the three Māori outcomes work programmes in the
draft SOI, nor is there any mention of ATEED working with the Southern
Initiative or the Western Initiative on such issues.
38. In
the final SOI it would be desirable to clarify how, or if, ATEED will play a
direct role in an equity led approach in economic recovery decision-making and
labour market development, with respect to Auckland’s vulnerable workers
in the south and the west in particular.
Auckland Plan alignment
39. In
the final SOI ATEED should update the Auckland Plan alignment table to consider
outcomes (other than Māori identity and wellbeing) which have focus areas
specific to Māori, and ATEED’s contribution to those. For
example, under Opportunity and Prosperity, focus area 3: Advance Māori
employment and support Māori business and iwi organisations to be
significant drivers of Auckland’s economy.
Performance measures
40. In
the draft 2020-23 SOI ATEED has revised down the targets for two of its LTP
measures ‘contribution to regional GDP from major event and business
events attracted or supported’ and ‘the number of visitor nights
generated as a result of an ATEED intervention.’ The original LTP targets
should be shown alongside the revised targets.
41. The
draft 2020-23 SOI also removes two previous SOI (non-LTP) measures relating to
contributions to regional GDP from ATEED interventions and number of new jobs
created, safeguarded or retained in Auckland as a result of ATEED intervention.
Three new measures are proposed relating to; value of central government
investment into Auckland facilitated by ATEED; attributable value of private
sector investment attraction interventions undertaken over the year and local
board engagement.
42. The
final SOI should include a benchmark and targets for each of the three new
measures. The proposed local board engagement measure is supported but should
include a local board satisfaction component.
Local boards
43. In
the final SOI, ATEED should include a stronger emphasis on guiding local boards
about what actions or interventions are likely to have the most significant
long-term impact in supporting economic growth for their communities,
particularly in supporting higher-value industries and entrepreneurship.
It should also be noted that depending on other demands on available funding
and local board prioritisation, local discretionary initiative (LDI) budgets
may be reduced.
Auckland Transport
44. Auckland
Transport has provided a revised SOI which presents its intended programme,
taking into account the impact of reduced budgets following the
pandemic. Its programme is shaped largely by the extent of existing
contractual commitments and AT board priorities, and this is reflected in the
SOI. It is important to note that the funding envelope determined by the
Emergency Budget process will have a major impact on the final Auckland
Transport programme.
45. The
following changes are recommended:
· The terms of the
Auckland Transport Alignment Project (ATAP) update should be reflected in the
SOI, including definition of mode shift, climate change and spatial priorities,
as these will influence development of the Regional Land Transport Plan (RLTP).
· The SOI should
include a section, as part of the introduction to the work programme discussing
the prioritisation process undertaken to determine the programme. This
will reflect the need to respect contracts already signed and underway, and AT
board priorities.
· There has been a
more robust recovery of public transport patronage under COVID-19 Alert Level 1
than was anticipated. The second tranche of shovel ready projects may also
help council’s financial position. It would be useful for the SOI
to provide an indication of investment priorities should the council’s
financial position improve relative to forecast (e.g. averting public transport
service cuts), and how they relate to council’s overall priorities for
the transport system.
· Similarly, given the
immediate indications of recovery, the Board should consider if patronage
targets for public transport can be revised upward.
· The 3.5% rates increase
scenario will yield an additional $40 million capital investment for AT
relative to the 2.5% rates increase scenario. However, the SOI indicates that
the only difference in activity between the two scenarios relates to a small
increase in the network capacity and performance improvements programme and two
additional parking studies. This should be modified to show the true extent of
additional activity enabled by the 3.5% scenario and how this relates to
council priorities, if the 3.5% scenario is approved
within the Emergency Budget.
· While AT faces
significant fiscal constraints, there is an opportunity for the SOI to
elaborate on the potential for innovative and low-cost techniques to be
deployed to achieve council priorities. Areas where this may apply
include road sealing, renewals, and active modes (building on recent momentum
in walking and cycling).
· The SOI indicates
that policy work in several areas will also be discontinued. Policy work that
responds to council priorities is important and should be reinstated, for
example, the ongoing collaboration with council on the Auckland Climate Plan.
Panuku Development Auckland
More strongly link deliverables to Auckland Plan outcomes
46. It
is good to see discussion of quality compact urban form and the importance of
Panuku in regenerating brownfield and town centre redevelopment to support this
(page 5). The Development Strategy is a key aspect of the Auckland Plan and
Panuku should reference where they have aligned their programme with the
Development Strategy.
COVID-19 Response
47. Figure
1 in the SOI reflects government and Panuku’s respone to COVID-19. Staff
suggest that Auckland Council’s response should also be included.
48. It
is not immediately clear what programmes/projects/capex are likely to be
delayed in response to COVID-19. It would be helpful in the work programme to
make the potential impacts more explicit or be clearer if this work programme
has been revised to take into account COVID-19 impacts.
49. The
SOI notes that Panuku will agree a prudent programme of renewals with Auckland
Council in line with financial constraints (page 24). As this may mean
reductions in renewal spend, we suggest a statement is added to describe where
these risks will be addressed, for example in the Panuku Asset Management Plan
or through the long-term plan process.
Optimising
property opportunities (page 11)
50. We
note that Panuku assesses property opportunities against their strategic
direction. This paragraph would benefit from being clearer on the
council’s role with regard to property decisions. For example, Panuku
provides key strategic investment advice to the council.
Priority Location Programme
51. Panuku
uses ‘redevelopment’, ‘regeneration’, ‘priority
locations’, ‘priority development locations’,
‘Transform’ and ‘Unlock’ and ‘Our
neighbourhoods’ throughout the SOI. These concepts are not explained, and
it would be worthwhile defining or adding some context more generally. In
future, we recommend simplifying and making consistent the language used to
describe the work programme initiatives.
Our
neighbourhoods
52. Many of the deliverables are process orientated rather than outputs.
It is also unclear what exactly is the role of Panuku in delivering some of
these initiatives, for example – ‘Greenslade Reserve
upgraded’ (p 14), ‘Crayford Street West Upgrade’ or
‘New town square’ (p 16). Greater clarity on what it is that Panuku
is delivering is required.
Māori Outcomes
53. Panuku
provides a good level of narrative around their specific contributions to
‘Māori Outcomes’. However, they do not refer explicitly
to playing a role in the Tiriti o Waitangi Audit programme and their commitment
should be stated for consistency with the rest of the council group.
Capital projects
54. There
is no statement of the key capital projects that Panuku is looking to deliver.
This needs to be provided, especially as performance measure number 2 relates
to this.
Financials
55. Panuku
should add a footnote to explain the negative revenue under business interests
(page 36).
Performance Measurement
56. Performance
measure 1 is a new measure assessing the total net sales over a three-year period.
Greater detail is required on what this measure will achieve and targets.
57. Performance
measures 3 and 4. It is pleasing that Panuku has provided two measures relating
to climate change mitigation and adaption performance target. However, the descriptor
of the measure does not vary between these two and needs to be clarified.
58. Performance
measure 5. Clarification is sought on why this measure has changed from last
year’s SOI (where it related to transform and unlock) to focusing
specifically on the waterfront.
Local boards
59. The
governance section (p25) should recognise the role of local boards, especially
with regard to local place making and the requirements under the Governance
Manual to acknowledge local board priorities and objectives in local board
plans. Similarly, there is no mention of the need to update the Local Board
Engagement Plan (LBEP) every three years, by 31 July 2020. This should be
included.
Regional Facilities Auckland (RFA)
60. RFA’s
Statement of Intent provides a clear picture of its intended activities. There
are a few minor issues which we have identified, which are listed below.
We have discussed each of these with RFA, which is prepared to make the
relevant changes.
61. The suggested
changes are:
· Asset
management plans are not addressed in the SOI. We suggest wording is
included to reflect the letter of expectation’s direction, in particular
around asset management plan review, performance trends and transparency.
· We
suggest a reference is made to RFA working closely with Council on developing
the long-term, strategic approach to stadiums.
· We
also suggest the RFA board performance review scheduled within the next 12
months is addressed in the SOI. On this point, RFA has advised that this review was scheduled to begin at the end of April (i.e.
within the current financial year), but the Board decided to postpone it due to
the current workload created by COVID-19 and responding to the CCO Review. RFA
will add a reference to this in its SOI.
· The
“Climate Change Mitigation” table mentions halving RFA’s
emissions target. RFA could usefully link this to Auckland’s
Climate Plan and the role that RFA would play in showcasing some of the built
environment priorities within its assets. We note the Council climate plan is
not mentioned through the document. It would be good to have some mention to
show alignment.
Watercare
62. Watercare has
rewritten its statement of intent from the previous document. It now has a
structure based on the six different ‘capitals,’ with a description
of its work with the council and the relevant KPIs. Watercare has also revised
the KPIs: it has combined some of the previous ones (which are all mandatory
KPIs required by the Department of Internal Affairs) into new, compound targets
and has also introduced some new ones. We think it is an improvement on the
previous document. Seven out of the 16 measures are new and do not have a
target yet. Watercare will set the baseline over the next year and in the
meantime will continue to report the mandatory Department of Internal Affairs
KPIs.
63. The
continuing drought is severe. As Watercare and the council are aware, if the
drought continues there will be severe consequences for Aucklanders. Watercare
and the council will need to work together on short-term, immediate actions to
head off the water supply shortage.
The
statement of intent should include the immediate actions Watercare is taking to
maintain the security of water supply through to the end of summer 2021
64. Staff recommend
that the council provide a comment that Watercare includes a standalone section
with the short-term strategy and actions to maintain the security of water
supply through to the end of summer 2021. The statement of intent is a public
document, and the security of supply is Watercare’s highest short-term
priority.
65. That should
include:
· the
joint Council-Watercare task force (the subject of a separate report on the
Governing Body agenda for 25 June)
· all
measures to increase the supply of drinking water and reduce demand
· an
urgent review of the Drought Management Plan in collaboration with Council
staff, including options for water use restrictions and the associated impacts
on different sectors.
The
statement of intent should acknowledge that the resilience Aucklanders expect
from their water network is a strategic issue – which means it is the
council’s decision, with input from Watercare and in consultation with
Aucklanders
66. On 7 May, the
Emergency Committee resolved to “convene a joint workshop of the
Governing Body, or appropriate council committee and the Watercare board of
directors to canvass the urgent need to examine a climate-resilient water
strategy for Auckland, and other relevant issues” (resolution EME/2020/52).
67. That
discussion, as well as others the Governing Body and Watercare will have during
2020, will guide the council’s water strategy.
68. The council
has made some progress on a water strategy, releasing a discussion document in
2018. To complete it, the council and Watercare will need to collaborate and
share information. The council will also collaborate with iwi that have an
interest in the issues, as well as other entities such as the Waikato River
Authority.
69. The strategy
will need to make choices about:
· desired
long-term outcomes, for example: what type of ‘water city’ Auckland
will be, resilience to droughts and other climate risks, and the environmental
outcomes Aucklanders want to see
· a
pathway to achieving these outcomes, for example: the types of water sources
Auckland will rely on in the future, how environmental challenges will be met,
tools to influence demand including the price of water (the strategy should
allow the council to play an influencing role in setting the price for water)
· performance
measures and targets.
70. Watercare
will update its asset management plan in late 2020 for next year’s
10-year budget. Depending on the timing of the council’s water strategy,
there may need to be another update of Watercare’s asset management plan
later in 2021 to ensure that it gives effect to the water strategy (in line
with section 92(2) of the Local Government (Auckland Council) Act 2009, which
requires a CCO to “act consistently” with a strategy of the
council).
How
the statement of intent should change
71. Page 3 says,
“...a major focus for Watercare over the next few years will be
consulting with Auckland Council, central government, iwi and customers on
sustainable water resources in the immediate and mid-term.” The use of
‘consulting with’ gives the impression that Watercare intends to
plan for new sources independently rather than in collaboration with the
council.
72. The statement
of intent should instead state that Watercare’s planning for future water
sources and asset management plan will implement the council’s water
strategy, including a target for resilience.
73. Page 16 of
the statement of intent says Watercare “will continue to notify Council
of any substantive changes made to our AMP outside of the annual updates
provided.”
74. Shareholder
comments should note that Watercare may need to review its asset management
plan in 2021 or 2022 depending on the outcome of the water strategy in line
with the Local Government (Auckland Council) Act 2009 s92(2). Any update of the
asset management plan will need to include providing information to the council
that is granular enough to assess how well it gives effect to the
council’s strategy.
The
statement of intent should include a review of the Auckland Water Efficiency
Strategy
75. Watercare’s
Water Use Efficiency Strategy covered the period from 2017 – 2020. The
statement of intent should include an update of this strategy in
Watercare’s work programme.
The
statement of intent should acknowledge that any new revenue opportunities will
need to be approved by the council until Watercare prepares a risk framework
which the council approves
76. The statement
of intent says that “Watercare will continue to investigate commercial
arrangements and other funding sources to either achieve savings or develop
alternative revenue sources, where this is in the best interests of our
customers and the Council group.” It also says that it will keep the
council informed on a no-surprises basis, but there appears to be no role for
the council to set its appetite for risk.
77. Because of
the council's current financial position after COVID-19, more revenue would
reduce the pressure on the council group's ratio of debt to revenue. However,
in its current form, the statement of intent does not give the council enough
oversight of the risk Watercare could be exposed to in any new commercial
activities, including possible arrangements with other councils. Therefore,
until Watercare prepares a risk framework which the council is satisfied with,
we recommend that the default risk level is set at low, which would mean that
the Governing Body would need to endorse most commercial arrangements.
78. A risk
framework should:
· provide
a way to assess the risks of a new revenue opportunity (including financial,
reputational and asset risk)
· define
a level of risk that the council, as the shareholder, would be prepared to
accept.
How
the SOI should change:
79. On page 20 of
the draft statement of intent, where it refers to new revenue opportunities,
there should be another statement that the council must approve these
opportunities until a risk framework is in place.
Watercare
should promote public awareness of the help available to customers experiencing
hardship
80. The Water
Utility Consumer Assistance Trust is an independent trust to provide help to
Watercare customers who are struggling to pay their water bills. Watercare
funds the trust. There will be more people experiencing hardship from the
economic impacts of COVID-19. Staff recommend that the council include a
comment asking Watercare to promote the trust more, including through social
media channels, and to increase its funding to the trust.
There
is a difference between the carbon emission reduction targets of Watercare and
the council
81. The
statement of intent contains a long-term target of reducing Watercare’s
carbon emissions by 45 per cent by 2030. In March 2020, the
council agreed to an interim target for the Auckland region of 50 per cent
reduction by 2030 and achieving net zero emissions by 2050.
82. Watercare
has said that it will include short-term annual carbon emission reduction
targets in the next statement of intent (for the 2021 – 2024 period).
Staff recommend that the council make a comment that in setting these
short-term targets, Watercare should consider its contribution to the
region’s interim 2030 and longer-term 2050 targets and should also
consider revising its 2030 target to align with the region’s ambitions.
Māori
outcomes
83. The examples
of how Watercare will deliver on Māori outcomes are high level. We
recommend that you make a comment that Watercare include its work programme or
specific examples.
84. Watercare has
historically held a well-established relationship with mana whenua. On page 14,
Watercare should refer to improving Māori outcomes for ‘Māori
community groups’ instead of ‘mataawaka’ to encompass all eg,
taura here.
Non-substantive CCOs
85. Auckland
Council has nine other CCOs that are not considered ‘substantive’
under the Local Government (Auckland Council) Act 2009. The focus of these CCOs
is more local in nature than the substantive CCOs, though the Governing Body is
still responsible for their governance.
86. Three of these CCOs must provide the council with an SOI.
The others have been exempted from CCO status and are therefore not subject to
the normal accountability requirements of a CCO under the LGA, including
preparing a SOI.
87. There are no
recommended shareholder comments for Contemporary Art Foundation.
88. Staff recommend that the Manager: CCO Governance and
External Partnerships is delegated the authority to provide these three
community focussed CCOs with shareholder comment
on behalf of the council, following consultation with the relevant local
boards.
Manukau Beautification Charitable Trust (MBCT)
Focus
on environmental education
89. The draft
2020-23 SOI represents the first time MBCT has prepared an SOI since its
exemption status was removed. Staff consider the draft SOI covers the key
content requirements sufficiently and that the performance measurement
framework will be further refined over time. The final SOI
performance measures should include actual results for 2019/20 and proposed
targets for 2020/21-2022/23.
90. It should be
noted that over the course of the next financial year MBCT is aiming to more
deliberately weave an environmental education aspect into all of the community
projects it undertakes; including town centre clean ups and beautification
projects. This may be done through projects of a much smaller scale than
previously carried out.
91. The emphasis
will be on delivering quality environmental and civic-pride educational
opportunities that will support mitigating the chance of a re-emergence of
COVID-19 in our communities. For example, the Trust will
investigate the benefits of dividing the Eye on Nature Family Day (at the
Auckland Botanic Gardens) into four smaller events across the southern local
board areas.
92. The final SOI
should reflect a statement to the effect that MBCT will engage with the
relevant local boards on these proposals as they are finalised.
Māori
outcomes
93. The final SOI
should reflect MBCT’s commitment to the Treaty of Waitangi and Māori
outcomes. This could be through the addition of a statement in the SOI
similar to the following: “MBCT is committed to giving effect to the
principles of Te Tiriti o Waitangi through contributing to the council
group’s Māori outcomes strategic direction.” The final SOI should also reflect any planned opportunities or
partnerships with mana whenua, Māori communities or Māori youth
programmes.
Community Education Trust Auckland (COMET Auckland)
Potential changes to council funding
94. The
draft 2020-23 SOI highlights the impact of COVID-19 on COMET Auckland’s
non-council funding. It also signals potential changes to its current
council funding (currently $558,000 per annum until 30 June 2021) as a result
of the significant cost savings the council group is seeking as part of the
2020/21 Emergency Budget. Impacts from possible changes to council
funding are set out under two scenarios; 1) $50,000 reduction or 2) $100,000
reduction for 2020/21.
95. Under
scenario 1 COMET Auckland anticipate a dramatic reduction in the number of
Auckland young people able to participate in its Youth Employability Programme
(YEP). Most of COMET’s external funding for YEP ends in June 2020 and
they have not yet been able to secure replacement funding.
96. Under
scenario 2, in addition to the reductions in the YEP, COMET would be unable to
produce its annual Auckland education data snapshot, or the snapshots for each
local board area which would otherwise have been due in early 2021.
97. The
final SOI financial tables must be updated for any changes agreed through the
Governing Body workshops between 22 June to 14 July 2020 and Finance and
Performance Committee decisions made on 16 July 2020.
Youth Employability Programme
98. Given
the challenges COMET are experiencing in securing external funding for 2020/21
and beyond for the YEP, the sustainability of the programme’s delivery
and rollout should be a key focus of the final SOI. The current action in the
draft SOI relating to ‘demonstrating the need for government
support’ in this area needs to be strengthened.
99. The
final SOI could consider revising the action relating to expansion of the reach
of the YEP License to Work by at least 15% per year (to at least 52 sites in
2020 and 60 in 2021) in the context of current funding challenges.
Māori outcomes
100. The
final SOI should reflect COMET Auckland’s commitment to the Treaty of
Waitangi and Māori outcomes. This could be through the addition of a
statement in the SOI similar to the following: “COMET Auckland is committed to giving effect to the
principles of Te Tiriti o Waitangi through contributing to the council
group’s Māori outcomes strategic direction.”
Tauākī whakaaweawe
āhuarangi
Climate impact statement
101. As noted in the general
comments, there is a lack of clarity around climate change responses and
broader environmental initiatives among the SOIs. We suggest CCOs clearly
indicate which of their planned activities are intended to address climate
change and/or other broader environmental outcomes.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
102. This report relates
directly to the role of CCOs. As part of developing the shareholder
feedback, staff have contacted each of the CCOs to indicate the tenor of the
comments. When the official letters with feedback are provided to the
CCOs, staff will work with the CCOs to provide further detail on how best to
incorporate the shareholder feedback. This will also include correcting
minor errors of fact or incorrect references, which may not have been listed in
this report.
103. Staff have sought and
incorporated feedback from various department across the council to ensure all
council matters are considered.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
104. The Finance and
Performance Committee is responsible for providing shareholder comments on the
draft SOI, and the practice to date has been not to seek direct feedback from
each local board.
105. However, the Local Board
Services department has contributed to the proposed comments, including how the
CCOs have responded to the letters of expectation requirements about local
boards, and their comments have been reflected in this report.
Tauākī whakaaweawe
Māori
Māori impact statement
106. The activities of CCOs
have significant potential to improve Māori wellbeing and to influence the
achievement of the Auckland Plan and 10-year Budget 2018-2028 outcomes relevant
to Māori. The draft SOI were separately provided to the Independent
Māori Statutory Board and council’s Nga Mātārae, and their
comments have been reflected in this report, particularly in the general
comments section.
Ngā ritenga
ā-pūtea
Financial implications
107. As noted in the general
comments above, SOI financial sections need to be aligned with decisions in the
Emergency Budget 2020/2021 process and reflect statutory requirements in the
Local Government Act 2002.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
108. There are no direct
risks associated with the proposed shareholder comments. There is a risk that
the CCOs may not adequately reflect the shareholder comments. This can be
mitigated by working closely with the CCOs. Also, if the shareholder comments
are not adequately reflected, the council can modify a SOI at any time.
Ngā koringa ā-muri
Next steps
109. If the committee agrees
with the feedback contained in this report, staff will draft letters based on
this feedback and any other matters directed to be included by the
Committee. These will be sent by the mayor or the chair of the Finance
and Performance Committee to the chair of each board, as soon as possible after
this meeting, so that the CCOs can revise their SOIs accordingly and meet the
proposed new deadline for final submission of 31 July 2020.
110. The final SOI must align
with the Emergency Budget 2020/2021. Each CCO will need to make changes
to its final statement of intent when this is approved, and council staff will
continue to work with CCOs as needed.
Ngā tāpirihanga
Attachments
|
No.
|
Title
|
Page
|
|
a⇩
|
ATEED Revised Draft SOI 2020-2023
|
55
|
|
b⇩
|
AT Revised Draft SOI 2020-2023
|
75
|
|
c⇩
|
Panuku Revised Draft SOI 2020-2023
|
137
|
|
d⇩
|
RFA Revised Draft SOI 2020-2023
|
175
|
|
e⇩
|
Watercare Revised Draft SOI 2020-2023
|
207
|
|
f⇩
|
COMET Auckland Revised Draft SOI 2020-2023
|
243
|
|
g⇩
|
Contemporary Art Foundation Draft SOI 2020-2023
|
263
|
|
h⇩
|
Manukau Beautification Charitable Trust Revised SIO
Draft 2020-2023
|
279
|
Ngā kaihaina
Signatories
|
Authors
|
Edward Siddle - Principal Advisor
Simon Stewart - Graduate Executive Officer
Sarah Holdem - Principal Advisor
Claire Gomas - Principal Advisor
Sarah Johnstone-Smith - Principal Advisor
|
|
Authorisers
|
Alastair Cameron - Manager - CCO Governance &
External Partnerships
Phil Wilson - Governance Director
Stephen Town - Chief Executive
|
