Finance and Performance Committee - Agenda - Sept 15

8/20/2019 Finance and Performance Committee - Agenda - Sept 15

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Note: The reports contained within this agenda are for consideration and should not be construed as Council policyunless and until adopted. Should Members require further information relating to any reports, please contactthe relevant manager, Chairperson or Deputy Chairperson.

I hereby give notice that an ordinary meeting of the Finance and Performance Committee will beheld on:

Date:Time:Meeting Room:Venue:

Thursday, 17 September 2015 9.30am Reception LoungeAuckland Town Hall301-305 Queen StreetAuckland

Finance and Performance CommitteeOPEN AGENDA

MEMBERSHIP

Chairperson Cr Penny Webster Deputy Chairperson Cr Ross Clow Members Cr Anae Arthur Anae Cr Calum Penrose

Cr Cameron Brewer Cr Dick Quax

Mayor Len Brown, JP Cr Sharon Stewart, QSM Cr Dr Cathy Casey Member David Taipari Cr Bill Cashmore Member John Tamihere Cr Linda Cooper, JP Cr Sir John Walker, KNZM, CBE Cr Chris Darby Cr Wayne Walker Cr Alf Filipaina Cr John Watson Cr Hon Christine Fletcher, QSO Cr George Wood, CNZM Deputy Mayor Penny HulseCr Denise KrumCr Mike Lee

(Quorum 11 members)

Mike GiddeyDemocracy Advisor

11 September 2015

Contact Telephone: (09) 890 8143Email: [email protected]: www.aucklandcouncil.govt.nz

Please note: Any attachments listed within this agenda as “Under Separate Cover” can be found

at the Auckland Council website http://infocouncil.aucklandcouncil.govt.nz/ .

http://infocouncil.aucklandcouncil.govt.nz/http://infocouncil.aucklandcouncil.govt.nz/http://infocouncil.aucklandcouncil.govt.nz/http://infocouncil.aucklandcouncil.govt.nz/


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TERMS OF REFERENCE

Responsibilities

This committee will be responsible for monitoring overall financial management and theperformance of the council parent organisation and the financial monitoring of the AucklandCouncil Group. It will also make financial decisions required outside of the annual budgetingprocesses. Key responsibilities include:

Financial management

Approval of non-budgeted expenditure

Write-offs

Acquisition and disposal of property relating to the Committee’s responsibilities

Monitoring achievement of financial and other measures of performance and servicelevels

Recommending the Annual Report to the Governing Body

Development of the 2016/17 Annual Plan and amendments to the LTP including:

- Local Board agreements

- Financial Policy related to AP (recommendation to the Governing Body)

- Setting of rates (recommendation to the Governing Body)

- Preparation of the consultation document and supporting information for the LTP and Annual Plan (recommendation to the Governing Body)

Financial policy outside the LTP and AP

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) Approval of a submission to an external body

(iii) Powers belonging to another committee, where it is necessary to make a decision priorto the next meeting of that other committee.

(iv) Power to establish subcommittees.


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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 aresolution is passed permitting a person to remain because their knowledge will assist themeeting.

Those who are not members of the public

General principles

Access to confidential information is managed on a “need to know” basis where accessto 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 isnecessary 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 aGoverning Body meeting; all members of the committee if the meeting is a committeemeeting).

However, standing orders require that a councillor who has a pecuniary conflict ofinterest leave the room.

All councillors have the right to attend any meeting of a committee and councillors whoare 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 thecommittee remain.

Independent Māori Statutory Board members and staff remain if this is necessary inorder 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 performtheir role may remain. This will usually be if the matter affects, or is relevant to, aparticular Local Board area.

Council Controlled Organisations

Representatives of a Council Controlled Organisation can remain only if required to fordiscussion of a matter relevant to the Council Controlled Organisation.


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Finance and Performance Committee

17 September 2015

Page 5

ITEM TABLE OF CONTENTS PAGE

1 Apologies 7

2 Declaration of Interest 7

3 Confirmation of Minutes 7

4 Petitions 7

5 Public Input 7

6 Local Board Input 7

7 Extraordinary Business 8

8 Notices of Motion 8

9 Auckland Regional Amenities Funding Act (ARAFA) Funding Model

Review - Evaluation Report 9

10 Government Broadband Investment - Digital Enablement Plan 79

11 Approval of and recommendation for adoption of the 2014/2015 Annual

Report and Summary Annual Report for Auckland Council and Group 117

Please note: The attachments listed within this report as “Under Separate Cover” can befound at the Auckland Council website http://infocouncil.aucklandcouncil.govt.nz/ .

12 Budget Update

This report will be provided in an addendum agenda.

13 Rating small accommodation providers 119

14 Procurement Strategy Implementation Update 123

15 Independent Review of Operating Costs of the Rail Network in Auckland

Compared to Wellington 125

16 Consideration of Extraordinary Items

http://infocouncil.aucklandcouncil.govt.nz/http://infocouncil.aucklandcouncil.govt.nz/http://infocouncil.aucklandcouncil.govt.nz/http://infocouncil.aucklandcouncil.govt.nz/


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Page 7

1 Apologies

Apologies from Cr CE Brewer, Cr GS Wood, Deputy Mayor PA Hulse and DeputyChairperson Cr RI Clow have been received.

2 Declaration of Interest

Members are reminded of the need to be vigilant to stand aside from decision makingwhen a conflict arises between their role as a member and any private or other externalinterest they might have.

3 Confirmation of Minutes

That the Finance and Performance Committee:

a) confirm the ordinary minutes of its meeting, held on Thursday, 20 August 2015,including the confidential section, as a true and correct record.

4 Petitions

At the close of the agenda no requests to present petitions had been received.

5 Public Input

Standing Order 7.7 provides for Public Input. Applications to speak must be made to theDemocracy Advisor, in writing, no later than one (1) clear working day prior to themeeting and must include the subject matter. The meeting Chairperson has the discretionto decline any application that does not meet the requirements of Standing Orders. Amaximum 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.

6 Local Board Input

Standing Order 6.2 provides for Local Board Input. The Chairperson (or nominee of thatChairperson) is entitled to speak for up to five (5) minutes during this time. TheChairperson 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 thediscretion to decline any application that does not meet the requirements of StandingOrders.

This right is in addition to the right under Standing Order 6.1 to speak to matters on theagenda.

At the close of the agenda no requests for local board input had been received.


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7 Extraordinary Business

Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (asamended) 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 thepublic,-

(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 asubsequent meeting.”

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (asamended) 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 localauthority; and

(ii) the presiding member explains at the beginning of the meeting, at a timewhen 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 itemexcept to refer that item to a subsequent meeting of the local authority for furtherdiscussion.”

8 Notices of Motion

At the close of the agenda no requests for notices of motion had been received.


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I t e m 9


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Auckland Regional Amenities Funding Act (ARAFA) Funding Model Review - Evaluation Report Page 9

Auckland Regional Amenities Funding Act (ARAFA) Funding ModelReview - Evaluation Report

File No.: CP2015/18106

Purpose1. To consider options arising from the Auckland Regional Amenities Funding Act 2008

(ARAFA) Funding Model review (the review).

Executive Summary1. Auckland Council initiated a review of the funding model under the Auckland Regional

Amenities Funding Act 2008 (the Act) in the context of Auckland Council’s establishment. Auckland Council approved the Terms of Reference of this review on 26 February 2015(GB/2015/5).

2. The review sought to determine whether the funding model remains fit for purpose and toidentify any changes that enhance its effectiveness. The review did not consider whichorganisations should receive funding under the Act.

3. In addition to the status quo, six different options were developed that sought to address theidentified issues. These options were endorsed by the Finance and Performance Committeeon 18 June 2015 (FIN/2015/50) and have now been evaluated.

Preferred Option

4. The recommended option is to establish a framework to define ‘sustainable funding’ and

implement medium term plans that will enhance the Act’s annual decision-making process.

5. This framework would define sustainability in the context of the Act, how it is substantiated,the information required to determine sustainability for each amenity, and other relatedmatters.

6. The Funding Board will be responsible for leading the process to develop and establish thisframework. The work required to develop the framework should be scoped to determine theassociated time frames and costs.

7. Once the framework is established, each amenity would follow the agreed process todevelop a medium term (suggested 3-5 year) plan, which would consider:

i. Appropriate levels of reserves an amenity would be able to build-up and maintain tohelp manage the peaks and troughs of its funding requirements.

ii. The level of surpluses an amenity needs to generate in order to meet its future funding

requirements, including for capital projects.

iii. Outline the planned levels of service that the amenities intend to provide, and how

projected needs will be met.

iv. Strategic outcomes that the amenity is looking to achieve.

8. Once the framework is established the council would make a new funding principle undersection 22 of the Act. The principle would require the Funding Board to have regard to anymedium term plans that have been agreed when making its annual funding decisions.


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Recommendation/sThat the Finance and Performance Committee:

a. note the evaluation of options and conclusions drawn from the Auckland Regional Amenities Funding Act 2008 Funding Model review.

b. endorse the development of a framework for sustainable funding as the preferredoption for the Auckland Regional Amenities Funding Act 2008 - Funding Model review.

c. request Auckland Council staff to continue to work with the Funding Board and theamenities to develop an implementation plan for the framework and report backregarding costs and time frames.

d. note that developing and establishing a framework for sustainable funding may result ina new funding principle being added to those that need to be considered inimplementing the Auckland Regional Amenities Funding Act 2008.

Comment9. The Auckland Regional Amenities Funding Act 2008 (the Act) established a model for

providing adequate, sustainable and secure funding to the specified regional amenities. The Act also ensured that the former councils of the Auckland region contributed to that funding.Following amalgamation in 2010, Auckland Council is the sole funder under the Act.

10. Auckland Council initiated a review of the Acts funding model in the context of AucklandCouncil’s establishment, having regard to the legislative framework for local government. Auckland Council approved the Terms of Reference for this review on 26 February 2015,

which stated that the overall objective of the review is:

“to achieve long term sustainable affordable and predictable funding of the existingamenities while recognising the Council’s purpose and responsibilities under the LocalGovernment Act 2002 and other legislation.”

11. The review sought to determine whether the funding model remains fit for purpose and toidentify any changes that enhance its effectiveness. The review started from the premisethat council would provide funding to the regional amenities, and sought to find the bestmodel to provide that funding.

12. This review did not consider which organisations should receive funding under the model.Such considerations were outside the scope of the terms of reference. However, a numberof different options for funding models were evaluated as part of the review. One of theconsiderations when evaluating these different options was whether the funding model wasflexible enough to allow amenities to be added or removed from the model.

13. It was agreed from the outset that council staff would work with representatives of theamenities, and consult with the Funding Board, when undertaking the review. A series ofmeetings and workshops were held with the amenities representatives during the course ofthe review. There were also meetings and workshops with the Funding Board, and otherparties involved or interested in the funding of not-for-profit organisations.

14. Working with a range of stakeholders helped to develop an understanding of the currentfunding model from different perspectives – funder, recipient, and the bodies that administer

the Act. The views of the various parties have informed the review.


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Issues

15. A number of issues were identified with the current model of which the following emerged asthe most significant through the review:

i. The Act explicitly prevents funding being provided for capital expenditure. However,

some of the amenities have significant requirements for capital funding. This has

caused issues in the past, as funds that could have been used for operating expenses

were put towards capital projects.

ii. The Act requires the Funding Board to provide “adequate, sustainable, and secure”

funding to the amenities. What is “adequate” funding for each amenity is determined

through the annual application process, which largely focuses on the needs of the

amenity in the following financial year. This limits consideration of longer term plans

when making the annual funding decisions, and does not provide the best

understanding of what is financially sustainable for each amenity over the medium term.

iii. Whilst Auckland Council is compelled to provide funding to the amenities, the

opportunities for Auckland Council to ensure funding is directed towards its highest

priority strategic outcomes and goals for the region are relatively weak.Options

16. In addition to the status quo, six different options were developed that sought to address theidentified issues. These options covered a spectrum, ranging from enhancements to thestatus quo that could be implemented within the framework of the Act, through options thatrequired amendments to the current legislation, and one option that would repeal andreplace the Act. The options were endorsed by the Finance and Performance Committee on18 June 2015 (FIN/2015/50). They were evaluated against the following criteria, endorsedby the Finance and Performance Committee on 21 May 2015 (Fin/2015/33):

Financial sustainability and certainty

Affordability

Independence and continuity

Accountability and transparency

Administrative efficiency

Alignment of outcomes and goals

Fairness

Flexibility.

17. During the evaluation phase, the status quo was used as the benchmark against which thedifferent options were assessed.

Evaluation

18. The evaluation of the different options is summarised:

i. The Status Quo (Option 1) is not a preferred option as available enhancements havebeen identified.

ii. The Pathway to Capital (Option 2) is not a preferred option as applications can bemade to Auckland Council, perceptions that additional funding would be provided by Auckland Council, the potential retreat of other funders, and the ability of thepreferred option to alleviate the issues.

iii. The Sustainable Funding component (of Option 3) is the preferred option under

which a framework will be developed and established to define ‘sustainable funding’and implement medium term plans that will enhance the Act’s annual decision -making process.


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It is preferred as it can clarify and strengthen the rationale underpinning the fundingmodel, clarify appropriate reserves and surpluses (alleviating concern about capitalexpenditure), supports better alignment of strategic goals and outcomes andcommunication between the key stakeholders and their relationships.

iv. The Alignment/Groups (option 4) is not a preferred option as it is unworkable,potentially inconsistent with the Act and the risk of confusing accountabilities limits

further gains.

v. The Baseline + CPI (option 5) is not a preferred option as it was incomplete, ofindeterminate effect and rated poorly when considered against criteria.

vi. The Strong Funder (Option 6) and is not a preferred option due the perception that Auckland Council was exercising greater control and taking greater responsibilitythan intended, the potential retreat of other funders, improvement has been identifiedwithin the Act, and insufficient clarity that the benefits of legislative change wouldoutweigh the significant costs.

vii. The Auckland Council Dedicated Fund (Option 7) is not a preferred option due to thepotential risk to continuity of funding and the amenities financial sustainability, the

time and resources to effect the legislative change without sufficient clarity that thebenefits would outweigh the likely significant cost and the availability of benefits byalternative, less costly means.

Preferred Option

19. The evaluation determined that overall the current funding model is fit for purpose andimprovements are available through the sustainable funding component of this optionwithout recourse to legislative change. The Sustainable Funding component of Option 3 isthe preferred option.

20. During the evaluation phase this option was refined in response to discussions with keystakeholders and analysis of the requirements of the Act. The refined option that has been

developed is to establish a framework to define ‘sustainable funding’ and implement mediumterm plans that will enhance the Act’s annual decision-making process.

21. In under taking the review, the question of what ‘sustainability’ meant in the context of thefunding model and the amenities was a recurring question that became central to the review.

22. A consensus emerged amongst the key stakeholders (amenities representatives and theFunding Board) about the value of clarifying levels of sustainable funding in the context ofeach amenity. The Funding Board indicated that it has considered this matter on severaloccasions and are of the view that implementation of the Act has reached a point whereundertaking this work is feasible and would deliver practical benefits in terms of clarity andfocus for funding and performance management.

23. Financial sustainability is at the heart of the Act. The Act is also focused on the annualfunding process determining the funding to be provided to the amenities in the followingyear. One of the most significant improvements that could be made to the current fundingmodel is to undertake additional work to help determine what is required to make theamenities financially sustainable in the medium term (3 – 5 years depending on the nature ofthe amenity).

24. To help determine what is required for the amenities to be financially sustainable, it isenvisaged that the individual amenities would develop medium term plans that can then bediscussed with the Funding Board and council. These discussions would provide greaterclarity about the planned activities of the amenities (and potential alignment to councilobjectives), proposed levels of service, future activities that may require additional funding,

appropriate levels of reserves and surpluses, and any planned capital projects that mayhave an impact on operating funding requirements.


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25. Once these plans have been developed, and approved by the Funding Board, they could beused as a guide to future funding decisions.

Observations

26. In reaching these conclusions the following observations were made in regard to the Act andits funding model.

27. This review represents a continuation of a consideration of issues and options in 2012 whichresulted in the inclusion of a new funding principle.

28. From this review it is considered drivers for change are less likely to arise from within thefunding model itself than from outside it; notably with regard to current and futuremembership under the Act from external stakeholders and from within sectors to whichindividual amenities may belong.

29. Given the complexity and commitment required in terms of time and resources it isconsidered that (all things being equal) legislative change should not be undertaken lightly,with implication that any change sought would most likely be significant.

Consideration

Local Board views and implications

30. At the time of writing, input was received by sixteen local boards. Two local boardsexpressed the view that the criteria and the options provided a sound basis for the review.Seven local boards received the report or resolved that they were unable to providemeaningful feedback in the absence of the evaluation.

31. Local input covered the spectrum of ideas canvassed in the options. Some local boardsopted for specific options discussed under each option. Two local boards supported option1, two boards supported option 3, and one board supported option 4 (in the absence of

legislative change) or option 7 (with legislative change). Two local boards directly supportedoption 7 while another indirectly provide support through referencing some of its componentsparts. There was no support for option 2, option 5 or option 6.

32. Specific comments addressed operational and capital expenditure, support for the purposeof the Act, the relationship between Auckland Council (as funder) and the amenities (asfunder recipients), alignment of strategic outcomes and goals, membership and support forother organisations who may not be members, contestability of funder and support forspecific amenities.

33. Accountability, transparency, certainty of funding and levels of service were referred to. Thenewness of the legislation, skills and experience of the Funding Board and stability were

discussed. So was alignment with the Auckland Council’s long term Plan/Annual Planprocess.

34. One board requested that the Auckland War Memorial Museum and the Museum ofTransport and Technology be included in the review. Membership was an issue referred toby five local boards.

35. These matters have been considered and incorporated into the evaluation.

Māori impact statement

36. Enquiries were made of mana whenua in March 2015 to ascertain whether the ARAFAfunding model review held any interest. No interests were identified.

37. Viewing work on the ARAFA Funding Model review through Whiria Te Muka Tangata: TheMāori Responsiveness Framework as a lens, no statutory or treaty obligations nor directMāori or value Te Ao Māori outcomes were identified as affected by the review.


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38. When reporting on the options, representatives of the Independent Māori Statutory Board(IMSB) spoke to the need for inclusion of organisations representing Māor i arts and culture,or community groups within the Act’s specified amenities. These comments are noted butare unable to be actioned through this process as they are beyond the scope of this review.

Implementation

39. The Funding Board will be responsible for leading the process to develop this framework.The work required to develop the framework should be scoped to determine the associatedtime frames and costs.

40. Once the framework is established, each amenity would follow the agreed process todevelop a medium term (suggested 3-5 year) plan. These plans should consider matterssuch as:

i. Appropriate levels of reserves an amenity would be able to build-up and maintain to

help manage the peaks and troughs of its funding requirements.

ii. The level of surpluses an amenity needs to generate in order to meet its future funding

requirements, including for capital projects.

iii. Outline the planned levels of service that the amenities intend to provide, and how

projected needs will be met.

iv. Strategic outcomes that the amenity is looking to achieve.

41. Once the framework is established the council would create a new funding principle undersection 22 of the Act. The principle would require the Funding Board to have regard to anymedium term plans that have been agreed when making its annual funding decisions.

42. Auckland Council staff will continue to work with the Funding Board and the amenities on thedevelopment of the implementation plan and report.

AttachmentsNo. Title Page

A Evaluation Report 15

Signatories

Authors Wayne Brown - Lead Strategic Advisor Strategic Scanning

Alastair Cameron - Principal Advisor CCO Governance and External Partnerships

Authorisers Jacques Victor - GM Auckland Plan Strategy and Research

Jim Quinn - Chief of StrategyMatthew Walker - Acting Chief Financial Officer


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Government Broadband Investment - Digital Enablement Plan Page 79

Government Broadband Investment - Digital Enablement Plan

File No.: CP2015/15854

Purpose1. The purpose of this report is to:

seek endorsement of Auckland Council’s Digital Enablement Plan (the Plan) forsubmission to the Ministry of Business, Innovation & Employment (MBIE) in support ofthe MBIE’s funding allocation process for broadband infrastructure

introduce the next steps in Auckland Council’s rural broadband work programme andseek input from elected members.

Executive Summary2. In March 2015 the Ministry of Business, Innovation & Employment (MBIE) announced $210

million of additional funding to extend Ultrafast Broadband (UFB), $100 million to extend the

Rural Broadband Initiative (RBI), and $50 million to address mobile coverage black spots.

3. MBIE announced that funding would be allocated through a contestable process. The firstpart of this was for local authorities to identify and prioritise communities that would benefitfrom an infrastructure upgrade. Auckland Council completed this and submitted theinformation in a Registration of Interest – Support on 10 July 2015.

4. The latest information from MBIE indicates that announcements on areas to receive newbroadband or mobile investment will be made when deployment contracts are finalised. Thisis likely to take place in the first half of 2016 for UFB, and the second half of 2016 for RBIand the Mobile Black Spot Fund.

5. As part of the funding allocation process MBIE has invited local authorities to submit a

Digital Enablement Plan by 18 September 2015. This Plan is intended to outline what alocal authority would do to support the uptake and use of better broadband where it is madeavailable. Commitments in this Plan will help to inform MBIE’s decision on which areas willreceive investment.

6. With oversight from the Rural Broadband Working Party, staff have developed a DigitalEnablement Plan that supports community enablement and business growth. This draws onexisting activity from across the council family with a focus on access to broadband andtechnology, digital skills, and awareness.

7. In developing the Digital Enablement Plan the council has identified that government fundingwill not be sufficient to address all of the broadband issues in rural Auckland. To that endstaff, working with the Rural Broadband Working Party, have started exploring what else the

council can do to support better rural broadband. This ‘rural broadband work programme’looks at what council can do to support better access to broadband in rural Auckland, andfocuses on building the case for further telecommunications industry and central governmentinvestment.


a) endorse the Digital Enablement Plan, inclusive of minor amendments and changesthe Committee makes, for submission to the Ministry of Business, Innovation &Employment on 18 September 2015

b) request staff to work with the Rural Broadband Working Party to continue to develop Auckland Council’s rural broadband work programme.


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CommentsFunding Allocation Process for Government Investment in Broadband

8. Despite government investment in Ultrafast Broadband (UFB) and the Rural BroadbandInitiative (RBI) there continue to be communities that experience limited access to goodquality broadband. These are concentrated in rural areas. In March 2015 governmentannounced additional funding to address these issues.

9. $210 million was announced to extend the UFB footprint from 75 percent to 80 percent ofNew Zealanders, and $100 million was announced to extend RBI coverage. A new $50million Mobile Black Spot Fund (MBSF) was also announced to address black spots inmobile coverage. This funding will be allocated by central government through acontestable process.

10. On 10 July 2015 Auckland Council submitted a registration of interest to MBIE highlightingcommunities that would benefit from investment. This was endorsed by the RegionalStrategy and Policy Committee on 2 July 2015 (resolution number REG/2015/53).

11. The next step for local authorities is to submit a Digital Enablement Plan that outlinescommitment to supporting the uptake and use of broadband. Digital Enablement Plans arenot mandatory; however they form a key part of MBIE’s decision making process.

12. The final allocation of funding will be informed by the registration of interest and the DigitalEnablement Plan. This is expected to be announced in the first half of 2016 for UFB, andthe second half of 2016 for RBI and the mobile black spot fund. Following this funding willthen be made available to the successful supplier(s).

13. MBIE’s final decision will take into account:

local authorities’ commitments to supporting the deployment of infrastructure

the scope and scale of issues in the communities that are identified

the economic and social impact of addressing those issues

local authorities’ commitment to support the uptake and use of broadband in their digitalenablement plan.

Auckland Council’s Digital Enablement Plan

14. A Digital Enablement Plan is a way for local authorities to outline activities that support theuptake and use of better broadband (UFB and RBI) and the technologies and services thatthat enables. These activities can be planned or underway. Likewise, the Plan can draw onexisting council plans and strategies.

15. MBIE has indicated it expects activity in the Plan to cover commitment to leadership,community enablement, and business growth. Auckland Council’s Plan (see attachment

one) addresses all three of these areas. However, while the council’s Plan includes discretecommunity enablement and business growth activities, leadership is instead embedded inthe approach to implementing the Plan. Rather than establishing a programme of workparallel to and competing with existing digital enablement activity, Auckland Council isdemonstrating leadership by focusing on coordination and oversight.

16. This reflects the fact that Auckland Council’s Digital Enablement Plan draws on existingplans and strategies, and activities that are already underway or already being scoped. Thisis only possible because of the extensive activity already underway across the councilfamily.

17. The community enablement and business growth activities that have been included in Auckland Council’s Digital Enablement Plan focus on:

access – making broadband and digital technology more accessible

skills – supporting people to develop the skills they need to use digital technology

http://infocouncil.aucklandcouncil.govt.nz/Open/2015/07/REG_20150702_MIN_5832_WEB.HTMhttp://infocouncil.aucklandcouncil.govt.nz/Open/2015/07/REG_20150702_MIN_5832_WEB.HTMhttp://infocouncil.aucklandcouncil.govt.nz/Open/2015/07/REG_20150702_MIN_5832_WEB.HTMhttp://infocouncil.aucklandcouncil.govt.nz/Open/2015/07/REG_20150702_MIN_5832_WEB.HTM


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awareness – helping people understand broadband and digital technology, and makeinformed decisions.

18. While a key role of the Digital Enablement Plan is to support the case for further governmentinvestment in broadband infrastructure, Auckland Council’s Plan is also applicable:

in areas that will not receive investment

in areas that have already received investment e.g. areas that received funding under thefirst round of UFB and RBI

across both urban and rural Auckland.

19. The only activity that is out of scope of the Plan is addressing the undersupply of broadbandinfrastructure and services. Council is responding to this issue separately under the ruralbroadband work programme and so there are no activities addressing this in the DigitalEnablement Plan.

Next Steps – Rural Broadband Work Programme

20. Despite government investment, rural communities continue to experience limited access tobroadband, and a lower quality of service, compared with their urban counterparts. Theseissues persist because of:

lower population density – this means a lower return on investment which in turn hasmeant less investment in building and maintaining infrastructure

industry sweating assets – infrastructure is usually outdated and over-subscribed whichresults in a high contention ratio i.e. demand for bandwidth is higher than theinfrastructure can support

limited consumer recourse – consumers can lay a complaint against internet serviceproviders but not network operators, meaning a connection can be terminated but notupgraded

government’s definition of broadband – the focus continues to be on download speedwith no reference to a minimum speed or network stability

no service obligation – there is no Telecommunications Service Obligation (or any othermechanism) requiring network operators to make broadband available to all properties.

21. While providing telecommunications infrastructure is not core business, the council has animportant role to play in advocating for rural communities. The focus of this advocacy is onbuilding a case for further investment, from the telecommunications industry andgovernment, in rural broadband infrastructure. Success depends on a detailedunderstanding of scope and scale of coverage issues.

22. Accordingly next steps for Auckland Council in the proposed work programme include:

filling in the gaps in our understanding of rural broadband issues and demand

building relationships with telecommunications network operators and understanding the

barriers to investment in broadband infrastructure in rural areas

facilitating relationships between rural communities and the telecommunications industry

advocacy to central government around the need for further investment and / orregulation in support of better broadband for rural communities.

Consideration


23. Since the announcement of the UFB and RBI programmes in 2011 all Local Boards haveshown an interest in broadband, and what they can do to help realise the associated

benefits.24. All rural Local Boards have been updated about government’s investment programme and

are positive about the prospect of additional government funding. They have noted that this


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is an opportunity to address some of the persistent quality of service issues experienced bymany rural communities. Local Board input has helped identify communities that wouldbenefit from an infrastructure upgrade.

25. The Digital Enablement Plan supports the case for investment in those communities. Theactivity in the Plan will be able to be implemented in rural communities as better broadbandservices become available.

26. Local Boards will have an important role to play as Council’s rural broadband workprogramme develops. This is likely to include:

informing the understanding of rural broadband issues

facilitating relationships between communities and network operators.


27. Access to broadband is critical for social and economic inclusion in rural and remotecommunities. For rural Papakainga better broadband will be fundamental. Without itresidents will not have equitable access to education, healthcare, public services, andemployment opportunities as these move online.

28. Better broadband also has the potential to transform rural Marae. As community hubs,connected Marae will be better equipped to engage children and young people.Connections will also enable exploration of the role of Marae in the 21st century.

29. All of these opportunities depend on people using services that are made available. To thatend the Digital Enablement Plan includes community enablement activity that will benefitrural Māori, and business growth activity that will benefit rural Māori businesses.

30. Central government timeframes for the Digital Enablement Plan (and for the Registration ofInterest) have limited the council’s ability to complete robust community engagement,including with Māori. However, the council recognises the importance of engaging withMāori to ensure the broadband services that are available are appropriate.

31. As an interim measure staff have engaged with both Te Waka Angamua and TheIndependent Māori Statutory Board. Te Waka Angamua has provided advice aboutengaging Mana Whenua, and staff sought input from Mana Whenua as part of theRegistrations of Interest process. Some input was received from Te Kawerau a Maki andNgati Rehua. It is most likely that input was not provided by other groups because of theshort timeframes.

32. Staff have sought and received comments on the Digital Enablement Plan from theIndependent Māori Statutory Board (IMSB). It is expected that input from IMSB will also beimportant in shaping the rural broadband work programme.

33. As the rural broadband work programme develops there will be fewer time constraints andstaff intend to build relationships with Mana Whenua and Mataawaka.

Implementation34. On 24 March 2015 the Economic Development Committee passed resolution number

ECO/2015/9 establishing the Rural Broadband Working Party (Councillors Anae, Cashmore,Cooper, and Webster).

35. This working party has responsibility for overseeing Council activity that supports betterbroadband in rural Auckland. Initial activity has included developing Auckland Council’sRegistration of Interest – Support in response to additional government funding for UFB andRBI.

36. Current activity includes:

developing a Digital Enablement Plan in support of the Registration of Interest

developing alternative options for Council to support better broadband in rural Auckland.

http://infocouncil.aucklandcouncil.govt.nz/Open/2015/03/ECO_20150324_MIN_5695_WEB.HTMhttp://infocouncil.aucklandcouncil.govt.nz/Open/2015/03/ECO_20150324_MIN_5695_WEB.HTMhttp://infocouncil.aucklandcouncil.govt.nz/Open/2015/03/ECO_20150324_MIN_5695_WEB.HTM


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Digital Enablement Plan

37. Auckland Council’s Digital Enablement Plan draws on existing activity across the councilfamily. This means the Plan will be implemented through Council’s ‘business as usual’activity. The groups responsible for implementing the Digital Enablement Plan include:

Auckland Council Business Improvement Districts Team

Auckland Council Communications and Engagement Department Auckland Council Libraries & Information Department

Auckland Council Resource Consents, Major Infrastructure Projects Team

Auckland Tourism, Events & Economic Development

Auckland Transport Road Corridor Delivery Team

Auckland Transport Travel Demand Team.

38. The main functions of the Plan are coordination and oversight. By leveraging existingactivity no additional funding is required.

Attachments

No. Title Page

A Auckland Digital Enablement Plan 85

Signatories

Authors Robert Lundberg - Digital Advisor

Anthony Acres - Digital Advisor

Authorisers Jacques Victor - GM Auckland Plan Strategy and Research

Jim Quinn - Chief of Strategy

Matthew Walker - Acting Chief Financial Officer


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Approval of and recommendation for adoption of the 2014/2015 Annual Report and Summary Annual Report for Auckland Council and Group

Page 117

Approval of and recommendation for adoption of the 2014/2015 AnnualReport and Summary Annual Report for Auckland Council and Group

File No.: CP2015/14176

Purpose1. Receipt of the draft 2014/2015 Annual Report and Summary Annual Report for Auckland

Council and Group and recommendation of adoption to the Governing Body.

Executive Summary2. The Governing Body, at the meeting to be held on 24 September 2015, will receive for

adoption the 2014/2015 Annual Report and Summary Annual Report for Auckland Counciland Group.

3. Preparing and publishing an Annual Report is a legislative requirement. The Full AnnualReport (FAR) and Summary Annual Report (SAR) covering the year to 30 June 2015 hasbeen prepared by Council Officers and audited by Audit New Zealand. The FAR and SARcompares and comments on the performance of Council and Group against budgets andoperating targets set in the Annual Plan.

4. The Audit and Risk Committee will review the report at its meeting on 15 September 2015and will provide its recommendation to this Committee.


a) note the confirmation by the Audit and Risk Committee that the audit process hasbeen completed satisfactorily; and

b) agree to recommend adoption of the 2014/2015 Full Annual Report and Summary Annual Report to the Governing Body subject to editorial and technical changes tothe document to be approved by the Chief Financial Officer and the Chairperson.

Comments5. The Local Government Act 2002 requires Auckland Council to prepare and adopt a FAR and

SAR each year. Auckland Council is also required under the New Zealand Stock Exchange

listing rules to publish an annual report. The FAR, SAR and Financial Statements for theyear to 30 June 2015 have been prepared by Council Officers and audited by Audit NewZealand on behalf of the Auditor-General.

6. The Audit and Risk Committee reviews the quality of the FAR and SAR, the processes usedby management, and compliance with legislation and the financial reporting standards.They also review the audit risk process with the Office of the Auditor-General and Audit NewZealand. The Audit and Risk Committee will carry out their review on 15 September 2015.

7. The terms of reference for the Finance and Performance Committee includes recommendingthe Annual Report to the Governing Body. This report enables the committee to executethat responsibility.

8. The FAR and SAR is for the Auckland Council Group. The Group is the result of

consolidating Auckland Council and all of its CCOs. For legislative compliance purposes thefinancial statements of Auckland Council entity are also included. All budgets andperformance targets are those set out in the 2014/2015 Annual Plan.


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Approval of and recommendation for adoption of the 2014/2015 Annual Report and Summary Annual Report for Auckland Council and Group

Page 118

9. During the year the CCO Governance and Monitoring Committee monitored theperformance of the group through the reporting of quarterly consolidated financial resultsand quarterly reporting by Auckland Council and the substantive CCOs. The FAR and SARfollows the same pattern and completes the reporting for the financial year to 30 June 2015. At the 1 September 2015 meeting the CCO Governance and Monitoring Committee receivedreports for the substantive CCOs. The Finance and Performance Committee received a

report on the performance of Council at the meeting held on 20 August 2015.10. On 28 August 2015 Council released preliminary results to the New Zealand Stock

Exchange as required by listing rules. The release was approved by the Chair and DeputyChair of the Finance and Performance Committee under delegation. The preliminaryannouncement was provided to all Councillors at the time of release.

11. The FAR and SAR documents (which were not available at the time of compiling the agendaand will be circulated prior to the meeting) are currently undergoing a final review by AuditNew Zealand and may be subject to some editorial and technical changes prior to finalsubmission to the Governing Body and subsequent publication.

12. The format of the FAR and SAR package has been amended this year. The year’s FARconsists of three volumes; Overview, Themes and Groups of Activities – Volume 1, Local

Boards – Volume 2 and Financial Statements – Volume 3.

Consideration


13. The FAR includes a section featuring the achievements in each local board area. Localboards were engaged to collect and review this information and each Chair has prepared astatement which is included in the FAR.


14. The FAR and SAR covers all aspects of Council’s governance and public accountability.The reports include commentary on Council’s contribution to outcomes for Māori, the role ofand contribution from the Independent Māori Statutory Board and Council’s Te Waka Angamua – Māori Strategy and Relations Department.

Implementation15. There are no implementation issues.

Attachments

No. Title Page

A Draft Summary Annual report (Under Separate Cover) B Draft Annual report volume 1 (Under Separate Cover)

C Draft Annual report volume 2 (Under Separate Cover)

D Draft Annual report volume 3 (Under Separate Cover)

Signatories

Author Francis Caetano - Group Financial Controller

Authorisers Kevin Ramsay - General Manager Finance

Sue Tindal - Chief Financial Officer


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Rating small accommodation providers Page 119

Rating small accommodation providers

File No.: CP2015/16141

Purpose1. This report recommends that no change be made to the rating treatment of residential

properties used for commercial accommodation purposes.

Executive Summary2. Providers of commercial temporary accommodation such as hotels and motels are charged

business rates. Residential parts of these properties, such as on-site manager’saccommodation, are charged residential rates, and an additional UAGC.

3. Many smaller accommodation providers operating from residential properties are charged

residential rates. This includes small bed and breakfast operations and private holidayhomes that are available for rent for only part of the year. The council charges businessrates where there is a clearly identifiable separate part of the property that is used forcommercial accommodation.

4. The Motel Association’s submission to the Long-term Plan noted the disparity in ratingtreatment between motels and residential providers of accommodation. They haverequested the council consider rating smaller accommodation providers on the same basisas motels.

5. The council identifies ratepayers and establishes rating liability based on data that isverifiable and tangible such as: land titles, building consents, resource consents and licenses

physical characteristics of the premises or business activity.Decisions are therefore not perceived as arbitrary, can be applied consistently and arerepeatable.

6. There is a lack of tangible markers to identify the extent to which small accommodationproperties are put to commercial use. Residential consents apply to properties thataccommodate fewer than six guests, and there is usually no physical change to the propertywhen accommodation is offered. Unlike other multi-use properties, it is difficult or impossibleto identify a separate part of the property being used for accommodation in order to apply arating apportionment.

7. The council could apply a fixed apportionment or targeted rate to small accommodationproperties. This would ensure smaller accommodation providers make an additional

contribution to the council’s costs. However, this would not be connected to the impact theyhave on council services nor to their ability to pay. Some small and infrequent operatorswould pay as much as those operating on a more permanent basis and at a l

Finance and Performance Committee - Agenda - Sept 15

Documents

Transcript of Finance and Performance Committee - Agenda - Sept 15