I hereby give notice that an ordinary meeting of the Council Controlled Organisation Oversight Committee will be held on:
Date: Time: Meeting Room: Venue:
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Tuesday, 22 March 2022 2.00pm This meeting will be held remotely and a recording of the meeting will be available on: |
Kōmiti Aromātai Whakahaere Kaupapa Kei Raro I Te Maru O te Kaunihera / Council Controlled Organisation Oversight Committee
OPEN AGENDA
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MEMBERSHIP
Chairperson |
Deputy Mayor Cr Bill Cashmore |
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Deputy Chairperson |
Cr Angela Dalton |
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Members |
Cr Josephine Bartley |
Cr Richard Hills |
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Cr Dr Cathy Casey |
Cr Tracy Mulholland |
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Cr Fa’anana Efeso Collins |
Cr Daniel Newman, JP |
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Cr Pippa Coom |
Cr Greg Sayers |
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Cr Linda Cooper, JP |
Cr Desley Simpson, JP |
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Cr Chris Darby |
Cr Sharon Stewart, QSM |
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Cr Alf Filipaina, MNZM |
IMSB Chair David Taipari |
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Cr Christine Fletcher, QSO |
Cr Wayne Walker |
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Mayor Hon Phil Goff, CNZM, JP |
Cr John Watson |
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IMSB Member Hon Tau Henare |
Cr Paul Young |
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Cr Shane Henderson |
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(Quorum 11 members) |
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Duncan Glasgow Kaitohutohu Mana Whakahaere / Governance Advisor
17 March 2022
Contact Telephone: (09) 890 2656 Email: duncan.glasgow@aucklandcouncil.govt.nz Website: www.aucklandcouncil.govt.nz |
Terms of Reference
Responsibilities
The purpose of the committee is to:
· have a general overview and insight into the strategy, direction and priorities of all Council Controlled Organisations (CCO)
· set policy relating to CCO governance
· approve CCO Statements of Intent
· monitor performance of CCOs and other entities in which the council has an equity interest (such as CRLL, Tāmaki Regeneration Company and Haumaru Housing).
Key responsibilities include:
· monitoring the financial and non-financial performance targets, key performance indicators, and other measures of each CCO and the performance of each organisation
· advising the mayor on the content of the annual Letters of Expectations (LoE) to CCOs and Ports of Auckland Limited
· exercising relevant powers under Schedule 8 of the Local Government Act 2002, which relate to the Statements of Intent of CCOs
· exercising relevant powers under Part 1 of the Port Companies Act 1988, which relate to the Statements of Corporate Intent for port companies
· exercising Auckland Council’s powers as a shareholder or given under a trust deed, including but not limited to modification of constitutions and/or trust deeds, granting shareholder approval of major transactions where required, exempting CCOs, and approving policies relating to CCO and CO governance
· approval of a work programme which includes a schedule of quarterly reporting of each CCO to balance reporting across the meetings.
Powers
(i) All powers necessary to perform the committee’s responsibilities.
Except:
(a) powers that the Governing Body cannot delegate or has retained to itself (section 2)
(b) where the committee’s responsibility is limited to making a recommendation only
(ii) Power to establish subcommittees.
Code of conduct
For information relating to Auckland Council’s elected members code of conduct, please refer to this link on the Auckland Council website - https://www.aucklandcouncil.govt.nz/about-auckland-council/how-auckland-council-works/elected-members-remuneration-declarations-interest/Pages/elected-members-code-conduct.aspx
Auckland Plan Values
The Auckland Plan 2050 outlines a future that all Aucklanders can aspire to. The values of the Auckland Plan 2050 help us to understand what is important in that future:
Exclusion of the public – who needs to leave the meeting
Members of the public
All members of the public must leave the meeting when the public are excluded unless a resolution is passed permitting a person to remain because their knowledge will assist the meeting.
Those who are not members of the public
General principles
· Access to confidential information is managed on a “need to know” basis where access to the information is required in order for a person to perform their role.
· Those who are not members of the meeting (see list below) must leave unless it is necessary for them to remain and hear the debate in order to perform their role.
· Those who need to be present for one confidential item can remain only for that item and must leave the room for any other confidential items.
· In any case of doubt, the ruling of the chairperson is final.
Members of the meeting
· The members of the meeting remain (all Governing Body members if the meeting is a Governing Body meeting; all members of the committee if the meeting is a committee meeting).
· However, standing orders require that a councillor who has a pecuniary conflict of interest leave the room.
· All councillors have the right to attend any meeting of a committee and councillors who are not members of a committee may remain, subject to any limitations in standing orders.
Independent Māori Statutory Board
· Members of the Independent Māori Statutory Board who are appointed members of the committee remain.
· Independent Māori Statutory Board members and staff remain if this is necessary in order for them to perform their role.
Staff
· All staff supporting the meeting (administrative, senior management) remain.
· Other staff who need to because of their role may remain.
Local Board members
· Local Board members who need to hear the matter being discussed in order to perform their role may remain. This will usually be if the matter affects, or is relevant to, a particular Local Board area.
Council Controlled Organisations
· Representatives of a Council Controlled Organisation can remain only if required to for discussion of a matter relevant to the Council Controlled Organisation.
Council Controlled Organisation Oversight Committee 22 March 2022 |
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ITEM TABLE OF CONTENTS PAGE
1 Apologies 9
2 Declaration of Interest 9
3 Confirmation of Minutes 9
4 Petitions 9
5 Public Input 9
6 Local Board Input 9
7 Extraordinary Business 10
8 Quarter Two Performance Reports 2021/2022 Substantive Council-controlled organisations and Ports of Auckland 11
9 Amendment to the constitution of Watercare Services Limited 119
10 CCO Review: Implementation Programme Update 143
11 Liaison councillors' updates 163
12 Review of Forward Work Programme - Council Controlled Organisation Oversight Committee 165
13 Summary of Council Controlled Organisation Oversight Committee information memoranda and briefings - 22 March 2022 175
14 Consideration of Extraordinary Items
PUBLIC EXCLUDED
15 Procedural Motion to Exclude the Public 179
C1 CONFIDENTIAL: Defining Auckland Council's Ownership Objectives for the Ports of Auckland Limited 179
At the close of the agenda no apologies had been received.
Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.
That the Council Controlled Organisation Oversight Committee: a) confirm the ordinary minutes of its meeting, held on Tuesday, 14 December 2021, as a true and correct record.
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At the close of the agenda no requests to present petitions had been received.
Standing Order 7.7 provides for Public Input. Applications to speak must be made to the Governance Advisor, in writing, no later than one (1) clear working day prior to the meeting and must include the subject matter. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders. A maximum of thirty (30) minutes is allocated to the period for public input with five (5) minutes speaking time for each speaker.
At the close of the agenda no requests for public input had been received.
Standing Order 6.2 provides for Local Board Input. The Chairperson (or nominee of that Chairperson) is entitled to speak for up to five (5) minutes during this time. The Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical, give one (1) day’s notice of their wish to speak. The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.
This right is in addition to the right under Standing Order 6.1 to speak to matters on the agenda.
At the close of the agenda no requests for local board input had been received.
Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as amended) states:
“An item that is not on the agenda for a meeting may be dealt with at that meeting if-
(a) The local authority by resolution so decides; and
(b) The presiding member explains at the meeting, at a time when it is open to the public,-
(i) The reason why the item is not on the agenda; and
(ii) The reason why the discussion of the item cannot be delayed until a subsequent meeting.”
Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:
“Where an item is not on the agenda for a meeting,-
(a) That item may be discussed at that meeting if-
(i) That item is a minor matter relating to the general business of the local authority; and
(ii) the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but
(b) no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”
Council Controlled Organisation Oversight Committee 22 March 2022 |
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Quarter Two Performance Reports 2021/2022 Substantive Council-controlled organisations and Ports of Auckland
File No.: CP2021/19890
Te take mō te pūrongo
Purpose of the report
1. To receive a summary of and comments on the substantive Council-Controlled Organisation (CCO) and Ports of Auckland Limited (POAL) second quarter reports, for the period ending 31 December 2021.
Whakarāpopototanga matua
Executive summary
3. Under the Memorandum of Understanding between POAL and Auckland Council, POAL is to provide a quarterly report to the council as shareholder. The Interim Report 2022 and Key Performance Targets update for the second quarter of 2021/2022 are contained in Attachments F and G.
4. Key results are highlighted in the table below, and in more detail in the body of the report.
Council-controlled Organisation |
Summary of Quarter Two results |
Auckland Transport |
· Covid-19 has negatively affected many parts of AT’s business, including operating revenue, capital delivery, public transport boardings, and cycling numbers. · Safety on the transport (especially road) network continues to be a major issue. |
Auckland Unlimited |
· Auckland Unlimited’s revenue has been significantly affected by Covid-19 restrictions, though it has offset this with reduction in operational expenditure. · While the capital programme is behind budget, some important projects (Zoo, Maritime Museum) were completed or well on track. · Covid-19 restrictions represent a major ongoing risk for the organisation. |
Eke Panuku |
· Eke Panuku is expecting to meet its operational budget for the year, but its capital delivery is being significantly affected by Covid-19 and is expected to fall short of its full-year target programme. · Nine of Eke Panuku’s 12 performance measures are on target to be met for the year. |
Watercare |
· Watercare’s operational revenue is higher than budgeted, reflecting more charges from development than anticipated, but its operational expenditure is also up. · Watercare’s capital programme has been affected by Covid-19 slowdowns and is likely to not meet full-year targets. |
Ports of Auckland |
· POAL are reporting a reasonable six months with progress made on core priorities notwithstanding the ongoing impacts of Covid-19. · Looking ahead, POAL are expecting the spread of the Omicron variant to cause challenges but are still forecasting to meet most full year targets. |
Ngā tūtohunga
Recommendation/s
That the Council Controlled Organisation Oversight Committee:
a) receive the 2021/2022 second quarter reports of the substantive Council-controlled Organisations and Ports of Auckland Limited, provided as attachments A to G of the agenda report.
Horopaki
Context
5. Each substantive CCO must provide a quarterly report to the Council-Controlled Organisation Oversight Committee. They are required to:
· summarise the CCO’s performance against the approved budget and agreed targets in the 10-year Budget and statement of Intent (SOI);
· provide a forecast of the CCO’s performance;
· identify the cause of major variances;
· highlight major achievements for the quarter; and
· signal any potential or developing issues.
6. The CCO reports for the second quarter of 2021/2022 are appended in Attachments A to E of the agenda report.
7. Under the Memorandum of Understanding between POAL and Auckland Council, POAL is to provide a quarterly report to the council as shareholder. Council and POAL have agreed a format similar to the quarterly report for substantive CCOs. The Interim Report 2022 and Key Performance Targets Update for the second quarter of 2021/2022 are provided at Attachments F and G of the agenda report.
Tātaritanga me ngā tohutohu
Analysis and advice
Auckland Transport
Financial results
8. Similar to the first quarter of the year, the Covid-19 pandemic continued to negatively impact on Auckland Transport’s (AT) operation and financial result for the second quarter.
9. In December 2021, up to $50 million additional funding was approved by the Finance and Performance Committee in light of AT’s projected revenue and operating result shortfalls. As per the covering letter from the Chair of Auckland Transport (Attachment A), AT is currently estimating an operating deficit of around $60 million for this financial year, which could be higher under certain scenarios. To the extent that the operating deficit exceeds the additional $50 million of Auckland Council funding, they anticipate that will be offset by additional cash savings from the slowdown in delivery of the capital programme which is expected to be in the range of $650 million to $700 million compared to the full year budget of $820 million.
10. For the six-month period, AT’s net operating result including depreciation is $27 million unfavourable to budget mainly due to the impact of Covid-19 restrictions on public transport and parking revenues.
11. Operating revenue is unfavourable to budget by $66 million driven by lower public transport income because of lower-than-expected patronage. AT advised that Waka Kotahi have confirmed the continued topping up 51 per cent of lost public transport farebox revenue due to Covid-19 restrictions this year but further financial support beyond the 51 per cent is unlikely.
12. Operating expenditure is below budget by $39 million mainly due to lower public transport contract costs, contractor maintenance, unplanned facilities maintenance, AT delivered events and training, and advertising costs.
13. Capital delivery is $252 million for the six months against a budget of $363 million (69 per cent). Programmes and projects across the board are behind the planned spend mainly driven by the impacts of Covid-19. There are approximately six to 12 weeks of delays to projects and programme delivery because of the lockdowns affecting project activities such as public consultations, consenting, procurement and tendering processes.
Performance measures and other issues
14. Covid-19 has had a significant impact on Auckland Transport’s performance in this quarter. This has resulted in several of the most critical areas of AT’s business not tracking to meet targets, and a key discussion should be about how AT is planning to address these. In total, 12 of 28 Statement of Intent measures are below target for the year.
15. Of particular concern are the safety targets, which are noted in detail on page 15 of the Quarterly Report. All four of these are listed as ‘not on track’. Given that some of the targets had already been adjusted downward to take account of Covid-19, it is concerning that this continues to deteriorate. There is a discussion in the report about the reasons for this, but it would be useful to discuss with AT representatives how this can be urgently addressed.
16. The results for public transport boardings are not unexpected given the Covid-19 resurgence and lockdown experienced by Auckland from August 2021 and continuing through until the beginning of December (ie. within quarter two). It is clear this will continue into quarter three given the arrival of the Omicron variant in Aotearoa New Zealand. Discussing how to restore confidence in the public transport system and getting back to the positive mode shifts trends experienced prior to March 2020 will be important in the next period. There is some evidence in this report that public transport did start to rebound in December 2021 (when traffic light framework began, but prior to Omicron), so AT’s plan for building on this through the later part of 2022 will be a useful topic of discussion.
17. There is a somewhat unclear picture about cycleway delivery in the report, which can be teased out with AT representatives. On the ‘better connecting people’ project page (page 7), cycleway delivery is listed as on track, but in the indicators section it is listed as not on track to meet the annual target. As a priority element of the capital programme to delivery mode shift, it is important to get reassurance that these projects will be prioritised for completion. The cycling programme is intended to shift into a greater delivery phase in future years, so despite the difficult context for capital delivery, 2021/22 is a key year to complete existing projects, and lay a base for faster rollout of the strategic cycleway network in the coming years.
18. Despite all this, it is clear that AT is continuing to deliver a very large programme of works and maintaining services as best it can in the circumstances. The ongoing challenges of safety and the various facets of mode shift remain and should be critical points of conversation.
Financial results
19. Auckland Unlimited had a net direct expenditure of $54.5 million for the half-year, which is $6.2 million favourable to budget. This favourable variance is due to lower than planned expenditure that more than offset the adverse revenue result.
20. Direct revenue is $12.1 million unfavourable to budget driven by a reduction in visitor and event revenues resulting from the Covid-19 lockdowns. Wage subsidy receipts in the Trust partially mitigated the impact of lower core revenue.
21. Direct expenditure is $18.3 million favourable to budget due to changes in programme timing as a result of Trans-Tasman border restrictions and resurgence of Covid-19 domestically, delays in implementation of the organisational design/target operating model and further cost controls during lockdown.
22. Capital spend is $17.7 million for the first six months, against a year-to-date budget of $30.5 million (58 per cent). The slowdown is due to range of factors including the Covid-19 restrictions on capital works under Alert Level 4, operational constraints impacting under Level 3 as well as ongoing supply chain issues.
Performance measures and other issues
23. Auckland Unlimited has a total of 11 SOI measures, of which seven are Long-term Plan (LTP) measures. Nine of the 11 measures are tracked quarterly. One measure is a six-monthly measure and one is an annual measure.
24. In quarter two, of the 11 measures, two are achieved, five are on track against the year-end target, and two are not on track as a result of Covid-19 restrictions. Two have not been measured.
25. The two measures that are not on track are:
· The number of people who are issued tickets to attend Auckland Live, Auckland Zoo, Auckland Art Gallery, NZ Maritime Museum and Auckland Stadiums venues and events. The year end target (1.44m) is now very unlikely to be achieved due the extended Covid-19 restrictions and resulting venue closures over quarters one and two.
· The percentage of operating expenses funded through non-rates revenues. The quarter two result (34%) is below target (44%) due to the closure of all Trust facilities over quarter one and two. This significantly impacted revenue generated by the Trust in all brands. In addition, over quarter two only two months of wage subsidy were available to offset lost revenue.
26. Highlights for quarter two include Auckland Unlimited attracting $85.5 million in government funding to support Covid-19 recovery during Q2. This funding sits across two programmes; Activate Tāmaki Makaurau to support small businesses through a business advisory and implementation fund and health and wellbeing programme (led by Auckland Unlimited, with support from partners) and; Reactivate Tāmaki Makaurau to encourage locals to support tourism and events operators.
27. The Southeast Asia Jungle Track and the new boardwalk over the Central Lake at Auckland Zoo opened on 23 December. Completion of the tiger, otter and swamp forest habitats is expected in April 2022. Furthermore, refurbishment of the Edmiston Gallery at the NZ Maritime Museum was completed in December.
Issues/risks
28. Auckland Unlimited have highlighted the ongoing impact on Auckland and New Zealand of border closures and restrictions on events and visitation, hospitality, tourism, accommodation and arts and culture. This is damaging the city's reputation, impacting Auckland Unlimited’s revenues and creating disruptions to labour and construction material availability.
29. A further risk flagged by Auckland Unlimited is that Auckland’s reputation as a screen friendly city is at risk as it becomes increasingly difficult for location shoots to take place, due to permit regulations and more sites being listed as mana whenua sites of significance.
Financial results
30. Eke Panuku has been tracking within the budget for the first six months and is expecting to meet the operational budget for the full year.
31. Direct revenue is slightly favourable to budget mainly due to increased occupancy at the Marinas and higher commercial property rental revenue which more than offset the Covid-19 rental relief provided to tenants.
32. Direct expenditure is $4.7 million favourable compared to budget due to slower than anticipated spend around repair and maintenance, external events and engagement within the priority locations. A number of vacant roles held at the half-year also contributed to the favourable budget variance.
33. Capital expenditure is at $15.7 million for the half of the year compared to a budget of $43.5 million (36 per cent). The delivery is behind mainly due to impacts of Covid-19 and associated restrictions. Eke Panuku advised that they are forecasting the full year capital spend to be around $50 million against a budget of $91 million. This is due to Northern Pathway related projects being delayed, the effect of Covid-19, delayed design and consenting, Public Works Act requirements for acquisitions, and tenant and stakeholder decisions.
Performance measures and other issues
34. Eke Panuku has a total of 12 SOI performance measures, three of which are Long-term Plan (LTP) measures. One SOI measure has no target this year.
35. In quarter two, of the 12 measures, nine are on track against the year-end target, and two are at risk. The two measures that are at risk are:
· Public realm - square metres - The public realm completed to date (390sqm) relates to the Eastern Viaduct Street intersection. No new works have been completed this quarter. The annual target for this measure is 21,000sqm. This measure is dependent on a large public realm project being completed in the Waterfront, which is expected to be completed later this year
· Capital project milestones approved by the board achieved (LTP measure) - There are two milestones in the renewals programme at risk, Shed 10 and 27 Princes St. The majority of the remaining fourteen milestones are on track to be met. The annual target for this measure is achieving 80 per cent or more of project milestones for significant capital projects
36. Highlights for quarter two include a container activation which has started with a bike fix-it programme near Manukau’s Hayman Park, and the pump track is operational in Pukekohe. In the Waterfront, multiple community sports courts have been installed at the former AC36 bases, contributing to place activation for the area.
37. For the Maungawhau and Karangahape Precinct Development Programme, the programme business case was provided to the CRL Project Sponsors in November 2021, following its approval by the Joint Board Committee. This is a key milestone for the programme, a step towards realising the urban regeneration and housing outcomes for the location.
Issues/risks
38. Eke Panuku have highlighted the challenges of continuing to manage the impacts of covid-19 and other factors in its changing operating environment. These include competitive labour market, changing property market demand, building material shortages, rising inflation, tighter lending and rising interest rates.
Watercare
Financial results
39. Watercare’s net direct revenue is $409 million ($35.5 million favourable to budget), mainly due to higher than budgeted infrastructure growth charges ($31.2 million) associated with new developments. Direct expenditure is unfavourable to budget by $55.9 million due to Covid-19 contracts payments, operational costs associated with the uplift in the Waikato capital programme and digital project spend, and employee costs (including increased leave balances, increased overtime).
40. Capital delivery is $266.4 million (73.9 per cent) against a year-to-date budget of $360.4 million. The underspend mainly relates to Covid-19 Alert Level 4 restrictions, which saw the closure of most construction sites.
Performance measures and other issues
41. The impacts of Covid-19 can be seen on Watercare’s performance and in delivery of the infrastructure programme in Q2, and are likely to have more significant impacts in Q3 as a result of disruptions with staffing and supply chain issues. Progress on the Central Interceptor has been and will continue to be impacted. The extent of these impacts are unknown at this stage and are likely to impact on Watercare’s ability to meet some of its SOI’s targets.
42. Watercare has a total of 27 SOI measures, of which 14 are LTP measures. 22 of the 27 measures are tracked monthly. Watercare met 12 of its 14 LTP/SOI measures. It exceeded its measures for attendance at sewerage overflows (61 minutes compared with a target 60 minutes). Covid-19 restrictions have impacted on the ability to collect accurate data for real water loss from the reticulated system and no numbers are reported. This is an ongoing issue with this measure.
43. Of its remaining SOI measures, all were on track with the exception of the employee net promoter score (October report 11, against a target of greater/equal than 20). This is due to lockdowns, restructures and end of year fatigue.
44. In January 2022, the Board of Inquiry granted Watercare’s application to draw an additional 150m litres of water a day from the Waikato for 20 years. One of the conditions requires Watercare to establish an executive committee or board to investigate and address options for the reduction of reliance on the river by Watercare, including identifying alternative water sources, and invite representation from tangata whenua onto that executive committee. This committee should seek progress updates on how this condition is being met.
45. Over the summer, Aucklanders have continued to utilise water at lower rates than previously, and total volume drawn from the Waikato remains lower than this time last year.
46. Watercare is increasingly being asked to respond to information as part of the National Water Reforms and transition activity. They are working with council in responding to these requests. The impact of these requests and the reform on Watercare is not yet clear and will remain an area of interest for council.
Ports of Auckland Limited
47. POAL are reporting a reasonable six months with progress made on core priorities notwithstanding the ongoing impacts of Covid-19. Looking ahead, POAL are expecting the spread of the Omicron variant to cause challenges but are still forecasting to meet most full year targets.
Financial results
48. Improved volume across all cargo types contributed revenue of $131.6 million for the six months, up by $17.4 million from the previous comparative period ($114.2 million) while costs increased by $15.7 million due to additional costs in energy, depreciation, and labour.
49. Overall financial results are improved with Group Net Profit after Tax increasing to $23.5 million, an increase of 72.8 per cent from December 2020 results. However, this result includes a $8.6 million revaluation gain on investment properties. Excluding this gain, Group Net Profit After Tax increased by 9.05 per cent to the same period last year. POAL are paying an interim dividend to the council of $2.114 million.
50. Capital expenditure is around $15 million for the six-month period, behind the planned $33 million (45 per cent of delivery), mainly as a result of restrictions on capital works during the Covid-19 Alert Level 4 lockdown.
Performance measures and other issues
51. All six of the financial performance targets are on track to achieve the annual targets for 2021/22. Of the non-financial targets, all are on track except for reducing the number of lost time injuries and ship rate. Emission target reductions are reported at year end.
Health and Safety
52. Twelve lost time injuries (LTI) were reported in Q2, up from nine in Q1. POAL have already exceeded last year’s total and missed the 50 per cent reduction target.
53. Importantly, there have been zero fatalities or serious workplace injuries or illnesses.
54. POAL have completed 21 of the 45 CHASNZ recommendations. Covid-19 restrictions have delayed the remaining recommendations, but POAL are still on track to meet the target to have all recommendations complete by June 2022.
55. The staff survey CHASNZ undertook as part of its inquiry was repeated in December and POAL were pleased to see that staff considered that there had been clear improvements in safety processes and awareness, across a wide range of areas.
Productivity/Performance
56. Some improvement in container terminal service delivery is reported but there is still work to do. POAL are on track to meet targets for crane rate, truck turn around, truck average turn time, percentage land side moves and average car dwell times. Ship rate is improved, but still well below target. Safely improving ship rate is a main priority for POAL looking ahead.
Automation
57. The Covid-19 lockdown in Auckland slowed implementation of the automation project, but steady progress has been made and stage two of testing begun in January. Overseas experts are now on the ground to support the project. The aim is to have full terminal rollout by 30 June, but this may be impacted by the spread of the Omicron variant in Auckland.
Tauākī whakaaweawe āhuarangi
Climate impact statement
58. The quarterly performance reports are a key tool to monitor the progress of each CCO’s action on climate change. The CCOs quarterly reports contain commentary on activities relating to climate change.
59. Auckland Transport included a new Climate Change page in its quarterly report in Quarter 1 for the first time. This has continued in the Quarter 2 report and covers AT’s greenhouse gas emissions performance, its role in the Transport Emissions Reduction Plan, reducing emissions from the bus fleet and construction, and its assessment of the impacts of climate change for AT’s business. With respect to the latter there is welcome reference to the council group’s approach to climate change risk and disclosure. This reflects the obligations which will be placed on the council by the Taskforce on Climate-Related Disclosures Framework which arises out of legislative obligations (see also below).
60. Auckland Unlimited’s first Climate Change and Sustainability report was published before the end of November, highlighting ongoing work on corporate sustainability and the organisation’s contribution to Te Tāruke-ā-Tāwhiri: Auckland’s Climate Plan for financial year 2020/2021. Auckland Unlimited’s operational emissions were audited under the Toitū CARBON REDUCE certification programme and received certification.
61. In November, the Eke Panuku board adopted an initial set of sustainable procurement targets which included waste minimisation requirements that will help deliver on the council's objective to achieve zero waste by 2040. The board adopted a requirement for all projects to use soft-strip and deconstruction methodologies and that all Eke Panuku led events apply zero waste principles.
62. Watercare are refreshing their climate change strategy (2019) to include the strategic direction and actions that have been established in Te Tāruke-ā Tāwhiri: Auckland's Climate Plan as well as update of operational actions. This update will be completed in collaboration with Healthy Waters and integrate stormwater considerations and actions. Considerable work is also being undertaken on drought management and introducing domestic and commercial smart meters.
63. POAL report that their long-term sustainability goals remain in place with focus on near-term carbon reduction projects, sustainable procurement strategy, working with shipping lines to support them on their environmental goals, and their climate response strategy. POAL expect delivery of our new electric tug, Sparky, the first of its kind in the world, in April.
64. POAL reviewed the proposed Hydrogen Demonstration Project in December and made the decision not to continue with the joint venture. POAL are still assisting the project partners and stakeholders to continue the project on the port site. POAL will also continue to operate the interim hydrogen refuelling facility to refuel the hydrogen vehicles already operating in Auckland.
65. The Auckland Council group is required to report against the climate disclosure reporting standards from 2023/2024 under the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021. Achieving full compliance will require the council group to make fundamental changes to the organisation to ensure climate risk management is embedded into the governance structures, strategic, and financial planning processes. Work has started on this and the Chief Sustainability Office, Financial Control and Risk team are working together with the CCOs and POAL to progress the group climate disclosure. A governance group, chaired by Peter Gudsell, and a working group that includes representatives from across the council group has also been set up.
Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
66. Each CCOs quarterly report contains information on how they are contributing to the council’s outcomes and objectives.
Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
67. The governance of substantive CCOs and POAL is a responsibility delegated to the CCO Oversight Committee. We have not sought the views of local boards. CCOs provide six-monthly progress and performance reports to local boards. The quarterly reports also provide a summary of the engagement that CCOs have carried out with local boards during the quarter.
Tauākī whakaaweawe Māori
Māori impact statement
68. Each CCO reports on their contribution towards achieving Māori Outcomes in their quarterly report.
69. Auckland Transport has a page in its quarterly report which outlines its contribution to Māori Outcomes in the quarter. This covers a range of engagements with mana whenua, road safety programmes for Māori, marae safety programmes, implementation of bilingual signage and announcements (the latter includes 6,106 bus stop announcements), and internal organisational development. The work on the wider transport network is particularly significant, and staff are working with Auckland Transport to find time for a wider briefing on this to be brought to the council.
70. The Auckland Unlimited Māori Outcomes Plan was presented and approved at the October Board meeting. The Plan supports an effort over the next three years for each rōpū to develop a bespoke approach, reflecting the SOI, our Te Tiriti commitments, legislative obligations and the advice and guidance of mana whenua and IMSB. Key projects are now being scoped for delivery in quarter three and four of this financial year. Capability building with the Board and staff will commence in quarter three.
71. Eke Panuku has presented several exclusive opportunities to mana whenua. The most significant commercial opportunity is at Racecourse Parade in Avondale Central. They have also engaged with mana whenua developers at Downtown carpark and megalots in Hobsonville. The Eke Panuku board are considering how they present commercial opportunities to mana whenua in the future. Eke Panuku has created several expressions of interest to appoint mana whenua nominated artists to collaborate on design outcomes.
72. Watercare are focusing on building internal capability, with two additional staff joining Te Rua Whetū (Māori Outcomes & Relationships Unit) in December 2021. Watercare also took on five rangatahi as part of their summer internship. Watercare is considering partnering with Amotai as one avenue to achieve their contract spend targets. In November 2021, they opened a purpose-built laundry and repair service, which is currently managed by Makaurau Marae. These initiatives support outcomes under Kia Ora te Umanga (Māori, Business and Employment).
73. POAL’s focus on operations during a Covid-19 challenged half year has delayed progress on their Māori Outcomes Framework. POAL have drafted a Māori Outcomes Framework that has been reviewed internally and is going to the POAL board for endorsement this month. After the board has provided feedback, the draft will be presented to the council (Ngā Mātārae, the Independent Māori Statutory Board) and mana whenua for consultation (starting with Ngāti Whātua Ōrākei). Consultation feedback will be incorporated into the draft and then it will it be presented back to the board for approval.
Ngā ritenga ā-pūtea
Financial implications
74. Each of the CCOs and POAL’s quarterly reports contain information regarding their financial performance. These are described in the sections above.
Ngā raru tūpono me ngā whakamaurutanga
Risks and mitigations
75. Each of the CCOs and POAL’s quarterly reports contain information regarding their risks and mitigations, which is summarised above.
Ngā koringa ā-muri
Next steps
76. This report is primarily for information purposes. The next CCO and POAL quarterly reports (Quarter Three, January to March 2022) will be provided to the CCO Oversight Committee in May 2022.
Attachments
No. |
Title |
Page |
a⇩ |
Auckland Transport Chair's cover letter for Quarter Two report 2021/2022 |
23 |
b⇩ |
Auckland Transport Quarter Two report 2021/2022 |
25 |
c⇩ |
Auckland Unlimited Quarter Two report 2021/2022 |
45 |
d⇩ |
Eke Panuku Quarter Two report 2021/2022 |
57 |
e⇩ |
Watercare Quarter Two report 2021/2022 |
77 |
f⇩ |
Ports of Auckland Limited Interim Report 2022 |
93 |
g⇩ |
Ports of Auckland Limited Key Performance Targets Update |
117 |
Ngā kaihaina
Signatories
Authors |
Sarah Johnstone-Smith - Principal Advisor Rachel Wilson - Principal Advisor Claire Gomas - Principal Advisor Chris Levet - Principal Advisor |
Authoriser |
Edward Siddle - Acting Manager - CCO Governance & External Partnerships |
Council Controlled Organisation Oversight Committee 22 March 2022 |
|
Amendment to the constitution of Watercare Services Limited
File No.: CP2022/03159
Te take mō te pūrongo
Purpose of the report
1. To amend the Watercare Services Limited constitution to enable directors to serve more than three consecutive terms.
Whakarāpopototanga matua
Executive summary
2. The Three Waters Reform Programme anticipates that Watercare Services Limited (Watercare) will be replaced by a new entity by 1 July 2024.
3. The Appointments and Performance Review Committee resolved to reappoint directors of the Watercare board whose terms end before 1 July 2024 [APR/2022/7]. Maintaining the same membership of the board supports the stability of the board during the reform and transition period and avoids recruiting directors who would only serve a short tenure.
4. The reappointment of one director (Nicki Crauford) is conditional on this committee approving an amendment to the Watercare constitution that would allow directors to remain on the board for more than three consecutive terms (nine years).
5. Amendment to clause 7.3 of the Watercare constitution removing the three-term maximum tenure will enable Nicki Crauford to serve a fourth term for a total of 10 years and two months ending on 30 June 2024.
Recommendation/s
That the Council Controlled Organisation Oversight Committee:
a) approve an amendment to the Watercare Services Limited constitution to remove the restriction on directors serving more than three consecutive terms
b) delegate to the chief executive the authority to execute a shareholders resolution to make this amendment and take any other required steps.
Horopaki
Context
6. The Three Waters Reform Programme transition roadmap anticipates that new water entities will commence their operations by 1 July 2024, replacing the functions of Watercare.
7. The Chair of Watercare has proposed that in this context it is better to maintain all the current directors rather than recruit new directors for the following reasons:
· Maintaining the current board makeup will minimise disruption to the board during the progress of the Three Waters Reform Programme.
· New directors would serve on the board for a period of 18 months or less. The number and quality of applicants may be less given that appointments would be for a limited time.
· Watercare needs to deliver on a significant capital programme and continue to meet its water service delivery obligations between now and 1 July 2024 and a new director will only have a short time to make an impact once they are onboarded.
8. Staff consider that the proposal to maintain the current board is prudent and the best way for the board to continue its work. The Appointments and Performance Review Committee resolved on 1 March 2022 to reappoint the directors of Watercare Services whose terms end before 1 July 2024 [APR/2022/7].
9. The reappointment of Nicki Crauford would mean that they were appointed for a fourth consecutive term. Currently Watercare’s constitution limits director appointments to three consecutive terms, and this would have to be changed to permit any fourth term appointments.
10. The Appointments and Performance Review Committee therefore resolved to reappoint Nicki Crauford as a director of Watercare subject to, and effective from this committee resolving to amend the Watercare constitution to allow directors to serve more than three consecutive terms. This will allow Nicki Crauford to serve a fourth term ending on 30 June 2024 with a total tenure of 10 years and two months.
11. The constitution of Watercare is provided as Attachment A.
Tātaritanga me ngā tohutohu
Analysis and advice
12. The three-term limit for directors is intended to encourage regular rotation of board members. This prevents directors from becoming entrenched and to allow new members with new ideas to drive the organisation forward. Given that Watercare Services is an organisation that is anticipated to be replaced by 1 July 2024, staff consider the limit of tenure is less relevant at present and the risks that the clause seeks to mitigate are minimal given the current mix of directors.
13. Staff therefore recommend that clause 7.3 of the company’s constitution be amended to remove the limit of tenure as described in Table 1.
Table 1: Proposed amendment to the Watercare constitution
Version |
Text |
Original/current |
7.3 Term of Appointment: No person may be appointed as a Director for a term greater than three years. Any Director may be reappointed at the expiry of his or her term of appointment, provided that no Director may be appointed for more than three consecutive terms. |
Proposed amendment |
7.3 Term of Appointment: No person may be appointed as a Director for a term greater than three years. Any Director may be reappointed at the expiry of his or her term of appointment. |
14. The alternative option is that this committee does not approve the proposed amendment. In this case, the Appointments and Performance Review Committee will need to consider a replacement for Nicki Crauford. This option is not favoured, for the reasons outlined in paragraph 7 above.
15. Should the Three Waters Reform Programme not result in the replacement of Watercare, this amendment can be reversed to re-establish the limit of tenure for directors.
16. The proposed amendment to the constitution only removes an appointment constraint. It does not in any way limit council’s shareholder discretion on appointment or removal of directors. Council remains free to manage board composition in the usual way under the Appointments and remuneration policy for board members of council organisations.
Tauākī whakaaweawe āhuarangi
Climate impact statement
17. Amending the Watercare constitution does not have a direct climate impact.
18. Watercare is accountable for ensuring their planning and decisions reflect the action areas outlined in Te-Tāruke-ā-Tāwhiri and a well-functioning board will support this work.
Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
19. Amending the Watercare constitution does not have any impact on other parts of the Auckland Council group.
Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
20. The governance relationship between the substantive CCOs and the council sits with the Governing Body, and therefore local boards have not been consulted on amending the Watercare constitution or the appointment that it enables.
Tauākī whakaaweawe Māori
Māori impact statement
21. An Independent Māori Statutory Board member is involved as a selection panel member in the appointment process. This ensures that a Māori perspective informs the recommendations of the selection panel during the shortlisting and interview of director candidates.
22. The Independent Māori Statutory Board is also represented on the Appointments and Performance Review committee. This ensures a Māori perspective is brought to the decision-making process, and that the Independent Māori Statutory Board’s views are considered by the committee when making reappointments.
Ngā ritenga ā-pūtea
Financial implications
23. Amending the Watercare constitution has no financial implications.
Ngā raru tūpono me ngā whakamaurutanga
Risks and mitigations
24. If the Three Waters Reform programme does not proceed according to the anticipated schedule, further appointment decisions regarding the Watercare board may be necessary. Recommendations will be made to the relevant committees if new information becomes available.
Ngā koringa ā-muri
Next steps
25. The chief executive will execute the shareholder’s resolution to amend the constitution.
26. Staff will notify those directors that have been reappointed to the Watercare board.
Attachments
No. |
Title |
Page |
a⇩ |
Constitution of Watercare Services Limited |
123 |
Ngā kaihaina
Signatories
Author |
James Stephens - Senior Advisor |
Authoriser |
Edward Siddle - Acting Manager - CCO Governance & External Partnerships |
Council Controlled Organisation Oversight Committee 22 March 2022 |
|
CCO Review: Implementation Programme Update
File No.: CP2022/02556
Te take mō te pūrongo
Purpose of the report
1. To provide an update on the implementation of the Council-controlled Organisations (CCO) Review (the Review).
Whakarāpopototanga matua
Executive summary
2. The Review investigated the effectiveness of the council’s CCO model; whether the council has adequate accountability measures and is using them effectively, and accountability to Māori and the public; and CCO culture.
3. Good progress continues implementing the recommendations of the Review. Since the previous update to the committee in December 2021, six more recommendations are now completed or are business as usual. Twenty-six of the 64 recommendations are now fully implemented.
4. Recommendation 42 of the review is that the council provide better clarity on how CCOs should balance commercial and non-commercial interests. Staff note that this recommendation is already covered off in several ways, including:
· CCO constitutions are already clear that the CCOs are to account for both the commercial and non-commercial objectives of the shareholder.
· Guidance on this issue has been provided in the new Statement of Expectations (SOE). The SOE states that CCOs may have commercial objectives and non-commercial public good objectives and the SOE notes that each CCO will have a different balance of commercial and non-commercial activity and, in balancing these, a CCO Board should ensure it is clear about the choices it is making and the balance it is striking.
· The most appropriate place for the balance of objectives of each CCO to be expressed is in the annual Statement of Intent, through which the activities of each CCO for the year is agreed with council.
Recommendations
That the Council Controlled Organisation Oversight Committee:
a) receive the update on the implementation programme for the Council-controlled Organisations Review
b) note that in response to Recommendation 42, staff consider that Council-controlled Organisations constitutions already express that Council-controlled Organisations have both commercial and public good objectives, the new Statement of Expectations has a section about these objectives, and that the most appropriate place for a specific balance to be expressed is in the annual Statement of Intent.
Horopaki
Context
5. The independent panel highlighted that their recommendations are interrelated and should be considered as a package. Implementation of recommendations is about improving accountability to the community and the council. The focus is on increasing collaboration and trust across the group.
Tātaritanga me ngā tohutohu
Analysis and advice
6. Twenty-six of the 64 recommendations of the Review are now fully implemented. Six recommendations (7, 15, 16, 33, 49 and 52) have been completed since the previous update to the committee in December 2021:
· To simplify the transport funding process Waka Kotahi has approved an increase in Auckland Transport’s delegated funding to $15 million. The Waka Kotahi Board has also indicated that it supports the proposal for programme-based funding and work is underway as part of business as usual within Auckland Transport on the details of work suitable for programme-based funding approvals. A Memorandum of Understanding for targeted National Land Transport Fund (NLTF) allocation of $2.508 billion was finalised in December 2021 between Auckland Transport and Waka Kotahi covering the 2021-2024 period. [Recommendation 7]
· The Environment and Climate Change Committee adopted the Auckland Water Strategy at its meeting in March 2022 (ECC/2022/54). [Recommendation 15]
· Council has updated the CCO Accountability Policy requiring Watercare and Auckland Transport to submit asset management plans to council and the parties have agreed the information to be covered in the annual updates. [Recommendation 16]
· The council has the ability to exercise its statutory powers under section 92 of the Local Government (Auckland Council) Act 2009 that a CCO must act consistently with the relevant aspects of any plan or strategy. [Recommendation 33]
· Quarterly meetings of council and CCO executive leadership teams are taking place and is noted by the council chief executive’s office as now business as usual. [Recommendation 49]
· Job descriptions across the council group refer to the need to contribute to Māori outcomes. [Recommendation 52]
7. Nine recommendations have a RAG status of Amber and one has a RAG status of Red, due to delay against timeframes.
Chart 1: Status of review recommendations
Note, there are 65 recommendations recorded in the chart as recommendation 3 on a) the Museum and b) MOTAT is split into two for reporting purposes.
Recent progress
8. Recent progress on the implementation programme is summarised below.
Auckland Unlimited
9. The Single Operator Stadiums Auckland work has been identified as an area of focus in the Auckland Unlimited Letter of Expectation for 2022/23. Workstreams are being activated as part of the programme of work towards a business case. An update on this work was provided to a confidential workshop of this committee on 15 December 2021.
Auckland Transport
10. One of the opportunities for speeding up delivery of minor capital works and managing the effect on customers is in temporary traffic management on construction sites. Design workshops were completed in February 2022 and the results are being compiled.
Eke Panuku
11. Work is underway for the council organisation to assume responsibility for the process to support decision making by elected members on which non-service properties to sell. This excludes unlock and transform areas which will remain the responsibility of Eke Panuku.
Watercare
12. Watercare has supported the development of the water strategy and have been part of the senior leaders’ group that was formed to oversee production of the final documents and guide implementation following adoption. Watercare will report quarterly progress towards demand targets agreed to in April 2021 including per capita demand, smart-meter rollout and network leakage.
13. The first of three collaborative data exercises has been undertaken to support the Better Faster (CCO) Consents project between the council, Watercare and Auckland Transport.
Accountability
14. The water strategy and economic development action plan are complete, which together with strategic stadium work, were the strategies recommended by the Review. There has been further work across the group to identify and review prioritised topics where more strategic direction is needed by CCOs. This first phase of the project has been completed. A CCO-council group has worked through issues related to the effective collaboration, prioritisation, alignment and commissioning of strategic work. In January 2022 it was agreed that the commissioning and prioritisation of strategy and policy will be part of Public Policy Service Programme within the operating model review. This work is to be completed by October 2022 to engage with the new term of council.
15. Delivery of the first round of joint quarterly update reporting across three of the four CCOs to December 2021 local board meetings was well received. Quarterly update reports to local boards will be sent to March 2022 business meetings, and these reports will cover all four CCOs. The final stage of implementation before this project is business as usual is the delivery of a consistent framework for CCO newsletters and bulletins that is accessible to the public.
Culture
16. Eke Panuku has led work across the group to scope the Terms of Reference (TOR) for a ‘lead agency’ role. The TOR sets out the lead role of Eke Panuku in its priority locations and a list of possible functions of a lead agency in other areas, such as facilitating shared vision and outcomes, information sharing, stakeholder engagement, and joint communications. Proposals for where a lead agency could apply would be brought to the Group Chief Executives for support.
17. Eke Panuku, as lead agency for the City Centre, is undertaking establishment work to ascertain how communications, engagement and consultation work can be undertaken collaboratively.
18. CCO Board chairs held their latest quarterly meeting in February 2022 to share information and views.
19. Key themes from interviews and focus groups with elected members and staff on how to best support effective governance within Auckland Council were published in the report Supporting effective governance in Auckland Council in February 2022. The new performance indicator framework to replace the previous elected member survey will be developed over 2022 and includes engagement with CCOs in the first half of 2022.
Balancing public and commercial interests (recommendation 42)
20. Recommendation 42 from the CCO Review relates to CCOs balancing commercial and non-commercial interests. The review panel contended that the CCOs do not have adequate guidance on when to act in their commercial interests or when to act in the public best interest. Therefore, the review Panel recommended that the council provide clarity on this point and suggested that the constitutions of the CCOs be amended to make it clear that each CCO must meet both commercial and non-commercial objectives. The recommendation in full reads:
The council gives guidance on how to balance public and commercial interests and amends their constitutions to make explicit that each CCO must meet each objective.
Constitutions and the Law
21. To understand how best to address this recommendation staff reviewed each CCO constitution and the Local Government Act 2002 (LGA). Section 59 of the LGA sets out the “principal objectives” of a CCO. Section 59(1)(a) states that a principal objective of a CCO is to “achieve the objectives of its shareholders, both commercial and non-commercial, as specified in the statement of intent.” Correspondingly each CCO constitution states their principal objective by reference to section 59 of the LGA.
22. By including a restatement of section 59 the CCO constitutions are clear that the CCOs are to account for both the commercial and non-commercial objectives of the shareholder. This is what we would expect to find in a constitution as they are designed to set out rules or legal boundaries. They are limiting or permitting tools and not directive tools. Therefore, as it relates to this recommendation, staff advise that the CCO constitutions are fit for purpose and should not be amended.
Addressing the Issue - Statement of Expectations and Statements of Intent
23. To address the issue identified by Recommendation 42, guidance has already been provided in the new Statement of Expectations of substantive council-controlled organisations (SOE), adopted by this committee in June 2021 (CCO/2021/26) in response to Recommendation 22 of the Review. The SOE makes it clear that CCOs may have commercial objectives and non-commercial public good objectives. The SOE notes that each CCO will have a different balance of commercial and non-commercial activity and, in balancing different objectives, a CCO Board should ensure it is clear about the choices it is making and the balance it is striking.
24. The SOE states that the balance of each CCO should be reflected in the Statement of Intent (SOI) and agreed with the council. This is consistent with s59(1)(a) of the Local Government Act, as noted above. The council can provide direction into the SOI through Letters of Expectations, shareholder comments on draft SOIs, and (if ever required) modification. The balance of the objectives, and the trade-offs, should also be evident (such as in Board papers) when a Board is considering a significant decision. The SOE also notes that when there is doubt about balancing the objectives the CCO should ensure the council is fully informed of the trade-offs and seek advice on how those interests should be balanced. In addition to the SOE and SOI, the Accountability Policy is another tool that can be used to provide further guidance.
Tauākī whakaaweawe āhuarangi
Climate impact statement
25. Climate impacts are considered through the implementation of individual recommendations.
Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
26. The council group is working collectively to implement the recommendations of the Review.
27. CCOs report on their contribution to implementing the Review in their quarterly reporting to this committee.
Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
28. Local impacts and local board views are considered when implementing individual recommendations.
29. CCOs are working with local boards to implement recommendations to improve local board engagement, implementation of local projects and community consultation (see recommendations 34, 6, 53). A comprehensive update on this work was provided to the committee in December 2021.
Tauākī whakaaweawe Māori
Māori impact statement
30. The Review made seven recommendations to improve the use of mechanisms to ensure CCOs meet their obligation to Māori at governance, senior management and staff levels. Ngā Mātārae have been convening staff from council, CCOs and the Independent Māori Statutory Board secretariat to progress the recommendations.
31. The Independent Māori Statutory Board secretariat, Ngā Mātārae and Tāmaki Makaurau Mana Whenua Forum secretariat have developed guidance material to explain their respective roles and how staff in CCOs and the council should engage with each. The Board has approved its material which is to go on Kotahi. The Forum’s material will be uploaded once approved.
32. The Auckland Unlimited board met with the Tāmaki Makaurau Mana Whenua Forum in November 2021 and the Auckland Transport board is to meet with the Independent Māori Statutory Board in May 2022.
33. All CCOs have undertaken work to align their plans that set out commitments to Māori to the new Kia Ora Tāmaki Makaurau Outcomes Framework. Working guidance has been completed for council teams and CCOs on the development of Achieving Māori Outcomes plans.
34. All CCOs have included the need to contribute to Māori outcomes in staff position descriptions.
35. The council/CCO chief executives’ group has initiated a quarterly meeting with the Independent Māori Statutory Board chief executive focused on Māori outcomes, with the most recent in December 2021, and next scheduled for March 2022.
Ngā ritenga ā-pūtea
Financial implications
36. There is no financial impact from the committee receiving this report on the implementation programme for the Review.
Ngā raru tūpono me ngā whakamaurutanga
Risks and mitigations
37. The current COVID-19 restrictions are continuing to impact on the speed of implementation and milestone timeframes for some recommendations. However, no major impacts across the programme have been reported.
Ngā koringa ā-muri
Next steps
38. Work is underway with the CCOs to report on the review programme to the April 2022 meeting of this committee, which will outline significant implementation achievements since the council received the review findings and recommendations from the independent panel in August 2020 and the programmes underway to ensure the outstanding recommendations are completed.
Attachments
No. |
Title |
Page |
a⇩ |
CCO review implementation - progress by recommendation |
149 |
Ngā kaihaina
Signatories
Author |
Trudi Fava - CCO Programme Lead |
Authoriser |
Edward Siddle - Acting Manager - CCO Governance & External Partnerships |
Council Controlled Organisation Oversight Committee 22 March 2022 |
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File No.: CP2022/02571
Te take mō te pūrongo
Purpose of the report
1. To tūtohi / receive an update from liaison councillors to the boards of Council Controlled Organisations (CCOs).
Whakarāpopototanga matua
Executive summary
2. In February 2020, the Council Controlled Organisation Oversight Committee resolved to establish the role of a CCO liaison councillor (Resolution number CCO/2020/3).
3. The key purpose of the liaison councillor role is to develop trusting relationships with the CCOs, to allow a better exchange of information. Liaison councillors can act as a key point of contact when specific issues arise, and provide advice when issues are likely to be of high public interest. They can provide the CCO with Governing Body perspectives which may help board decision-making, while at the same time being able to provide Governing Body colleagues with information about the rationale and detail of board decisions.
4. Liaison councillors are required to regularly report verbally to the CCO Oversight Committee, or in writing if unavailable to attend in person, about activities undertaken in the role and issues arising.
5. Liaison councillors are allocated to each CCO as follows:
· Auckland Transport: Deputy Mayor Bill Cashmore and Cr Chris Darby
· Auckland Unlimited: Cr Richard Hills and Cr John Watson
· Eke Panuku Development Auckland: Cr Efeso Collins
· Watercare: Cr Linda Cooper.
Recommendation/s That the Council Controlled Organisation Oversight Committee: a) tūtohi / receive the updates from liaison councillors to the Council Controlled Organisations.
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Attachments
There are no attachments for this report.
Ngā kaihaina
Signatories
Author |
Duncan Glasgow - Kaitohutohu Mana Whakahaere / Governance Advisor |
Authoriser |
Edward Siddle - Acting Manager - CCO Governance & External Partnerships |
Council Controlled Organisation Oversight Committee 22 March 2022 |
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Review of Forward Work Programme - Council Controlled Organisation Oversight Committee
File No.: CP2022/00135
Te take mō te pūrongo
Purpose of the report
1. To arotake / review and tuhi / note progress on the 2022 Council Controlled Organisation Oversight Committee forward work programme appended as Attachment A.
Whakarāpopototanga matua
Executive summary
1. The forward work programme for the Council Controlled Organisation Oversight Committee was adopted by the committee at its meeting held on 12 December 2019. It was agreed that the forward work programme would be reported for information and reviewed on a six-monthly basis.
2. The Council Controlled Organisation Oversight Committee work programme was last reviewed on 24 August 2021 (CCO/2021/36)
3. All committees have been requested to review their forward work programme, by the end of March 2022.
4. Following approval, all committee forward work programmes will be reported to the Governing Body in April and October each year, for oversight as per the Terms of Reference.
5. The current forward work programme for the Council Controlled Organisation Oversight Committee is appended as Attachment A.
6. Following the approval of the forward work programme, it will be reported to the Governing Body, for oversight as per the Terms of Reference.
Recommendation/s
That the Council Controlled Organisation Oversight Committee:
a) riro / receive and arotake / review the progress on the 2022 forward work programme as appended in Attachment A of the agenda report.
b) whakaae / approve the forward work programme as agreed to at the meeting to October 2022.
Attachments
No. |
Title |
Page |
a⇩ |
Forward Work Programme |
167 |
Ngā kaihaina
Signatories
Author |
Duncan Glasgow - Kaitohutohu Mana Whakahaere / Governance Advisor |
Authoriser |
Edward Siddle - Acting Manager - CCO Governance & External Partnerships |
Council Controlled Organisation Oversight Committee 22 March 2022 |
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Kōmiti Aromātai Whakahaere Kaupapa Kei
Raro I Te Maru O te Kaunihera / CCO Oversight
Committee This committee deals with the performance monitoring of CCOs and other entities in which the council has an equity interest. The committee are to have a general overview and insight into the strategy, direction and priorities of all CCOs, set policy relating to CCO governance and approve the CCO statements of intent. The full terms of reference can be found here: Terms of Reference - Agreed 12 November 2019 |
Reason for work |
Committee role (decision and/or direction) |
Expected timeframes Highlight the month(s) this is expected to come to committee in 2022 |
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Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
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CCO Review Updates CCO Governance and External Partnerships |
As per the CCO Review: Terms of Reference, agreed by the Governing Body in November 2019 (Resolution number: GB/2019/127), an independent review panel conducted a review of Auckland Council’s Substantive Council-Controlled Organisations. The recommendations from the CCO Review report were received by the Governing Body on 27 August 2020 (Resolution number: GB/2020/89). |
To receive monthly updates on the implementation and progression of the 64 summary recommendations of the CCO Review |
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Quarterly, Half-Year and Annual Reports CCO Governance and External Partnerships |
Under the LGA and LGACA the council must regularly undertake performance monitoring of the CCO to evaluate its contribution to meeting its objectives, and the desired results identified in the SOI. |
Receive quarterly reports,
receive, and adopt half yearly and annual reports. The CCOs will
present to the CCO Oversight committee twice a year on their performance. |
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Liaison Councillor Updates CCO Governance and External Partnerships |
Mayor Phil Goff has appointed a list of six CCO liaison councillors to attend the board meetings of the CCOs allocated to them, and report back to this committee. |
To receive updates from the CCO Liaison Councillors. |
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CCO site visits |
To implement CCO Review recommendation 27 - The governing body spends half a day each year visiting each CCO to better understand its business and culture and to informally build relationships. |
· Auckland Unlimited – 10 May 2022. · Eke Panuku – 5 July 2022. · Auckland Transport – TBC. · Watercare – TBC · Ports of Auckland – TBC. |
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Ports of Auckland - Statement of Corporate Intent CCO Governance and External Partnerships |
Under legislation Ports of Auckland Limited must deliver annually a statement of corporate intent not later than 1 month after the commencement of each financial year. |
Seeking committee feedback of draft 2022/25 Ports of Auckland Limited Statement of Corporate intent in August. Seeking committee approval of final 2022/25 Ports of Auckland Limited Statement of Corporate intent in September. |
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Draft and Final SOIs CCO Governance and External Partnerships |
Under legislation CCOs must deliver annually a draft statement of intent to its shareholders by 1 March 2022 Under legislation CCOs must deliver annually a final statement of intent to its shareholders by 30 June 2022. These dates can be extended one month by resolution of council under section 4, schedule 8 of the LGA 2002. This is a recommendation of the LOE report on 14 December 2021 to the Committee and a similar recommendation may be made in 2022. Covers: AT, Watercare, Auckland Unlimited, Eke Panuku Manukau Beautification Charitable Trust, COMET Auckland and Contemporary Art Foundation |
Seeking committee approval of draft 2022/25 Statements of Intent from its substantive and non-substantive CCOs. Seeking committee approval of final 2022/25 Statements of Intent from its substantive and non-substantive CCOs. |
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Auckland International Airport – end of year results |
AIAL is an NZX listed company in which council has a 18.09% shareholding. |
AIAL will report to CCO Oversight Committee once a year to discuss performance and end of year results. Results will be presented in a workshop in August 2022. |
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Joint operating model for Auckland stadiums Auckland Unlimited |
The recommendations from the CCO Review report were received by the Governing Body on 27 August 2020 (Resolution number: GB/2020/89).
Recommendation 2 was that “the merged entity explores, at the council’s direction, the critical need for joint management and operation of the city’s four stadiums with the Eden Park Trust.” |
It is expected a confidential report will be provided in May 2022 for committee approval of the first of a series of decision-making gates. Progress to date: Confidential workshop held 7 July Confidential workshop held 22 September Confidential workshop held 15 December. |
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Review of non-substantive Council controlled organisations CCO Governance and External Partnerships
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To ensure that the governance model for Council's non-substantive CCOs is appropriate. CCO/2020/21 approved the council undertaking a review of the status of non-substantive council-controlled organisations and the framework for undertaking the review. |
To make decisions about the future governance of non-substantive CCOs |
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City Rail Link Limited (CRLL) – end of year results CCO Governance and External Partnerships |
CRLL has been established to govern and manage the delivery of the City Rail Link CRL), as part of an agreement between the Crown and Auckland Council to jointly fund the project. The company has the full governance, operational and financial responsibility for the CRL, with clear delivery targets and performance expectations. |
CRLL reports quarterly as part of the group report to the Finance and Performance Committee. CRLL will present to the CCO Oversight Committee to discuss performance and end of year results. Results will be presented in workshops in October 2022. |
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Haumaru Housing – End of year results CCO Governance and External Partnerships |
Haumaru Housing is a new joint venture established by Auckland Council and The Selwyn Foundation. This will ensure the long-term provision of affordable housing services for older people in Auckland. |
Haumaru Housing will report to CCO Oversight Committee once a year to discuss performance and end of year results. Results will be presented in a workshop in October 2022. |
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Tamaki Regeneration Company (TRC) - End of year results CCO Governance and External Partnerships |
TRC is a Crown entity that is jointly owned by the government and Auckland Council. TRC is leading urban regeneration activity in Tāmaki to achieve four strategic objectives; social transformation, economic development, placemaking and housing resource. |
TRC will report to CCO Oversight Committee once a year to discuss performance and end of year results. Results will be presented in a workshop in October 2022. |
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Letters of Expectation CCO Governance and External Partnerships |
Council issues an annual letter of expectations to each of its substantive CCOs to inform the development of the CCOs’ Statements of Intent. |
Seeking committee approval of the content of draft 2022/2023 letters of expectation. A report will be provided in December 2022. |
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Completed
Area of Work |
Committee Role (decision and/or direction) |
Decision |
Quarterly, Half-Year and Annual Reports |
Receive quarterly reports, receive and adopt half yearly and annual reports. The CCOs will present to the CCO Oversight committee twice a year on their performance. |
First quarter reports were received for substantive council-controlled organisations in December 2019, December 2020, and November 2021. Second quarter reports received for substantive council-controlled organisations in March 2020, and March 2021. Third quarter reports were scheduled for June 2020; however this meeting was cancelled due to COVID-19; received in May 2021. Fourth quarter reports were received for substantive council-controlled organisations September 2020, and September 2021. The Ports of Auckland Limited Interim Report for the six months ending 31 December 2020 were received in March 2021, annual report received in October 2021. Annual reports for non-substantive CCOs received in October 2021. |
Letters of Expectation |
Seeking committee approval of the content of draft 2020/21 letters of expectation. |
Decision to approve content of 2020/2021 letters of expectation, authority delegated to mayor to finalise and issue the letters, 12 December 2019. (Link to decision CCO/2019/2) |
CCO AGM Resolutions |
To delegate the authority to Auckland Council’s chief executive to act as Auckland Council’s shareholder representative to execute a written resolution in lieu of an annual meeting. |
Decision to delegate authority to council’s chief executive to act as council’s shareholder representation to the substantive council-controlled organisations and also Tāmaki Regeneration Company and City Rail Link Limited and sign written resolutions (Link to decision CCO/2019/3) |
Final SOIs |
Seeking committee approval of final 2020/21 Statements of Intent from its substantive and non-substantive CCOs. |
Decision to approve the 2020-2023 statements of intent, 22 September 2020. (Link to decision CCO/2020/10) |
Haumaru Housing – End of year results |
Haumaru Housing will report to CCO Oversight Committee once a year to discuss performance and end of year results. |
Results presented in a workshop, 21 October 2020. |
City Rail Link Limited (CRLL) – end of year results |
CRLL reports quarterly as part of the group report to the Finance and Performance Committee. CRLL will present to the CCO Oversight Committee twice a year to discuss performance and end of year results. |
Results presented in a workshop, 21 October 2020. |
Tamaki Regeneration Company (TRC) - End of year results |
TRC will report to CCO Oversight Committee once a year to discuss performance and end of year results. |
Results presented in a workshop, 21 October 2020. |
Merged Entity – new name |
To approve the new name for the merged entity resulting from the amalgamation of RFAL and ATEED. |
Decision to approve name of merged entity, 27 October 2020. (Link to decision CCO/2020/17) |
Legacy CCO Review |
To agree a set of criteria that will guide a review of Auckland Council’s legacy CCOs and the sequence of their review. |
Decision to approve a review of the status of non-substantive CCOs and framework, 27 October 2020. (Link to decision CCO/2020/21) |
Auckland Unlimited Final SOI |
To approve a statement of intent for the new merged entity, Auckland Unlimited, resulting from the amalgamation covering the period 1 December 2020 to 30 June 2021. |
Decision to approve a statement of intent for the new merged entity, Auckland Unlimited, 24 November 2020. (Link to decision CCO/2020/27) |
Ports of Auckland statement of corporate intent |
To consider POAL’s final statement of corporate intent. |
Draft statement of corporate intent received by the Governing Body, 27 August 2020. Decision to approve POAL’s final statement of corporate intent 2020-2023, 8 December 2020. (Link to decision CCO/2020/33) |
Te Puru Community Charitable Trust Organisation – extension of exemption |
To approve Te Puru’s extension to the exemption from council-controlled organisation requirements under the Local Government Act 2002. |
Decision to extend the Trust’s exemption, 23 February 2021. (Link to decision CCO/2021/5) |
Draft SOIs |
To approve proposed shareholder comments on substantive and non-substantive CCO draft 2021/2024 Statements of Intent. |
Decision to note recommended comments, focus of the feedback and feedback received at committee, and agree the process of providing feedback to substantive and non-substantive CCOs, 21 May 2021. (Link to decision CCO/2021/18) |
Highbrook Park Trust - Review of Trust Deed and Management Contract |
To disestablish the trust |
Decision to disestablish the trust, 18 May 2021. (Link to decision CCO/2021/19) |
Statement of Expectation |
Approve the statement of expectations content and process. |
Decision to approve the Statement of Expectations for substantive Council-controlled Organisations, agreed that the CCO Governance Manual is no longer required, 22 June 2021. (Link to decision CCO/2021/26) |
Auckland Council Branding Guidelines |
Approve new Auckland Council branding guidelines. |
Decision to approve the updated Auckland Council group brand guidelines, require CCOs to comply with the updated guidelines, and note updates on compliance will be reported annually, 24 August 2021. (Link to decision CCO/2021/32) |
Final SOIs |
Approval of final 2020/24 Statements of Intent for substantive and non-substantive CCOs. |
Decision to approve the 2021-2024 statements of intent for substantive and non-substantive CCOs (Link to decision CCO/2021/34) |
Ports of Auckland statement of corporate intent |
To consider POAL’s final statement of corporate intent. |
Decision to receive Ports of Auckland Limited’s final Statement of Corporate Intent 2021-2024 (Link to decision CCO/2021/46) |
Haumaru Housing – End of year results |
Haumaru Housing will report to CCO Oversight Committee once a year to discuss performance and end of year results. |
Decision to receive annual reports in October 2021 (Link to decision CCO/2021/47) |
City Rail Link Limited (CRLL) – end of year results |
CRLL reports quarterly as part of the group report to the Finance and Performance Committee. CRLL will present to the CCO Oversight Committee twice a year to discuss performance and end of year results. |
Decision to receive annual reports in October 2021 (Link to decision CCO/2021/47) |
CCO ‘Scan the Horizon’ Workshops |
The topics and sequencing of these workshops is being developed and will be agreed early in 2020. Future of these workshops being considered as part of CCO Review. |
Workshops were held as follows: ATEED - February 2020, Auckland Transport - March 2020, Watercare - July 2020 (Governing Body workshop) |
CCO site visits |
To implement CCO Review recommendation 27 - The governing body spends half a day each year visiting each CCO to better understand its business and culture and to informally build relationships. |
Watercare site visit – 10 August 2021 Auckland Transport briefing in lieu of site visit due to Covid – 19 October 2021 Auckland Unlimited briefing in lieu of site visit due to Covid – 8 November 2021 Eke Panuku briefing in lieu of site visit due to Covid – 16 November 2021 |
CCO Review Updates |
To receive updates on the implementation and progression of the 64 summary recommendations of the CCO Review |
A programme update was received in February 2020 The CCO Review was received by the Governing Body on 27 August 2020. An update by way of memorandum was provided in November 2020. An update was received in February 2021. An update by way of memorandum was provided in March 2021. Updates were received in May 2021, June 2021, August 2021, September 2021, October 2021 and November 2021 |
Liaison councillor updates |
To receive updates from the CCO Liaison Councillors. |
Principals and draft protocols for the liaison councillor role were agreed in February 2020 Updates were provided in September, October and November 2020. Updates were provided in May, June, August , September, October , November and December 2021.. |
Letters of Expectation |
Seeking committee approval of the content of draft 2021/22 letters of expectation. |
Decision to approve content of 2021/2022 letters of expectation, authority delegated to mayor and deputy mayor to finalise and issue the letters, 14 December 2021. (Link to decision CCO/2021/62) |
Council Controlled Organisation Oversight Committee 22 March 2022 |
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Summary of Council Controlled Organisation Oversight Committee information memoranda and briefings - 22 March 2022
File No.: CP2022/02568
Te take mō te pūrongo
Purpose of the report
1. To tūtohi / receive a summary and provide a public record of memoranda or briefing papers that may have been held or been distributed to Council Controlled Organisation Oversight Committee members.
Whakarāpopototanga matua
Executive summary
2. This is a regular information-only report which aims to provide greater visibility of information circulated to Council Controlled Organisation Oversight Committee members via memoranda/briefings or other means, where no decisions are required.
3. The following workshops have taken place:
Date |
Subject |
15/12/2021 |
Confidential: Auckland Unlimited – Stadiums Strategy |
09/02/2022 |
Confidential: Reimagining Tamaki Makaurau Auckland |
4. The following information items have been distributed:
Date |
Subject |
04/02/2022 |
2021 Eden Park Annual Report |
21/02/2021 |
Te Hononga Akoranga, COMET Auckland half-year report (period ending 31/12/2021) |
24/02/2022 |
Confidential report from 22 February 2022 Audit and Risk Committee: C1 CONFIDENTIAL: Council-controlled organisations' quarterly risk update – February 2022. Open resolution number AUD/2022/10 |
28/02/2022 |
Beautification Charitable Trust half-year report (period ending 31/12/2021) |
5. Note that, unlike an agenda report, staff will not be present to answer questions about the items referred to in this summary. Council Controlled Organisation Oversight Committee members should direct any questions to the authors.
Recommendation/s That the Council Controlled Organisation Oversight Committee: a) tūtohi / receive the Summary of Council Controlled Organisation Oversight Committee information memoranda and briefings – 22 March 2022. |
Attachments
No. |
Title |
Page |
a⇨ |
2021 Eden Park Annual Report (Under Separate Cover) |
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b⇨ |
Te Hononga Akoranga, COMET Auckland half-year report (period ending 31/12/2021) (Under Separate Cover) |
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c⇨ |
Beautification Charitable Trust half-year report (period ending 31/12/2021) (Under Separate Cover) |
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Ngā kaihaina
Signatories
Author |
Duncan Glasgow - Kaitohutohu Mana Whakahaere / Governance Advisor |
Authoriser |
Edward Siddle - Acting Manager - CCO Governance & External Partnerships |
Council Controlled Organisation Oversight Committee 22 March 2022 |
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Exclusion of the Public: Local Government Official Information and Meetings Act 1987
a) exclude the public from the following part(s) of the proceedings of this meeting.
The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution follows.
This resolution is made in reliance on section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public, as follows:
C1 CONFIDENTIAL: Defining Auckland Council's Ownership Objectives for the Ports of Auckland Limited
Reason for passing this resolution in relation to each matter |
Particular interest(s) protected (where applicable) |
Ground(s) under section 48(1) for the passing of this resolution |
The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7. |
s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities. In particular, the report contains information that could prejudice Auckland Council and Ports of Auckland Limited's commercial activties. |
s48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7. |