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Water Augmentation Project delivery; and
4. endorses the Memorandum of Understanding on regional landfill operations.
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3 Purpose of the Report
3.1 The purpose of this report is to inform Council about my activities since Council’s 30 May 2014 meeting. This is a decision report.
4 Strategy and Planning – vision, direction, plans and policies, Long Term Plan, implementing
Waimea Water Augmentation Project
4.1 The Council has previously been advised about challenges that the company governance model for this project (a private cooperative company) presented if it was intended to use the Public Works Act to obtain the land needed for the project and the Council’s rating powers to fund it. A council controlled organisation model was proposed as a compromise in order to retain a significant degree of water user ownership while providing a legal framework for accessing the Councils statutory powers. The model still presents its challenges. At the time of the Council’s 30 June 2014 meeting the Waimea water Augmentations Committee’s response to the proposals was awaited.
4.2 On 30 June 2014 the Waimea Water Augmentation Committee agreed to a proposal to constitute the Waimea Community Dam Company Limited (WCDL) as a council controlled organisation rather than a private cooperative company. The company has also asked that the Council formally take responsibility for overall project delivery. A funding and support agreement has been drafted to give effect to that request. The draft is being reviewed by senior staff and advisers as well as WCDL directors before being reported to Council for approval.
4.3 A project control group has been set up comprising Murray King and Mayor Kempthorne representing the two key ‘sponsors’ of the project (a Crown Irrigation Investments Limited term). A project management team made up of the senior management team and key staff and advisors is also up and running. Additional resources in finance and strategic policy have been employed on part time/fixed term agreements. I will need to recruit someone to work within the Engineering Services Department Programme Delivery team to pick up the final design, procurement and construction supervision roles. All of the contractual
arrangements will provide for the possibly that the project does not proceed. Much of the work is however a precursor to a go/no go decision by Council.
4.4 The directors of WCDL are pressing to have the funding and support agreement finalised and that is a priority along with completing the project plan, the finance and governance work, redefining roles and responsibilities and reworking the budgets
Able Tasman Programme
4.5 The ‘Able Tasman – Changing for Good’ programme of organisational development was launched in early 2013. It may be familiar to you from earlier briefings. Here is a brief overview of progress to date. Within the next 6-8 weeks the full set of programme documents including success measure reporting will be updated and I’m happy to share them with you.
4.6 The overall purpose of the programme is to ensure that the organisation knows what the strategic challenges are that need to be met in order for the Council to achieve its vision for
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the community and that it is capable of delivering. The Senior Management Team proposed eight strategic challenges to address those issues and they have been adopted by Council.
4.7 With Mark Tregurtha’s Strategic Development team now fully resourced, the Able Tasman initiative has received a fresh injection of enthusiasm and energy. Within Mark’s team Maxine Day has been tasked with coordination of the initiative and tracking of progress.
4.8 The Senior Management Team is back meeting fortnightly on project governance. Our recent task was a stock take of the objectives, actions and measures that have been set within the 8 strategic challenges. Those challenges are: 1. Service to Customers and Citizens; 2. Financial Stability; 3. Staff Engagement; 4. Working Together; 5. Building Competency; 6. Partnerships and Neighbours; 7. Managing Growth; 8. Coping with Natural Hazards.
4.9 There are 101 actions set within the eight challenges. Even though the Senior Management Team (myself included) has been somewhat distracted of late with the preparation of budgets and the 2014/2015 Annual Plan, work has still progressed.
4.10 The graph shows that all the strategic challenges are progressing. Many are complete and have become business as usual such as improved communication through ‘On The Same Page’, supporting lean thinking and innovation through the ideaXchange, the NAX or the agreement on leadership competencies for performance assessment.
4.11 Others challenges are being worked on through the development of the Long Term Plan such as the work around a financial strategy, the growth model and reviews of levels of service.
4.12 Some challenges are more complex actions with multiple aspects, significant cost implications or deliverables that rely on our neighbours. These include the challenge of coping with natural hazards; the process of improving cross Council project delivery involves; and the relationships with Nelson City Council and Marlborough District Council over the shared service arrangements, regional advocacy, and memorandums of
understanding with Top of the South iwi.
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Visitor Information Centres
4.13 Following Council’s decisions on the 2014/2015 Annual Plan and budgets, proposals were sought from the Murchison community to operate a visitor information service. Three proposals were received. Councillors will recall that the decision was to provide up to
$12,000 in 2014/15 to support the delivery of a service. No funding is to be provided beyond the 2014/15 year. Proposals were requested to be submitted by 15 July 2014.
4.14 On 24 July 2014 Councillors Bryant and Edgar and I met to evaluate the proposals. The proposal were assessed against the following criteria –
Location of business
Grant sought
Financial sustainability especially beyond the 14/15 financial year
Conflicts of Interest
Experience
Supporting facilities, processes and people
Accessibility
Locally based solution
4.15 One of the proposals is a good fit with the criteria and we are minded to make a grant of up to $12,000 to them subject to a simple form of agreement on the deliverables. As the parties have not been advised of our thinking it will be necessary to brief Councillors privately on the proposals.
4.16 Meanwhile talks with Nelson Tasman Tourism and the Nelson City Council on the Nelson Tasman Tourism company’s statement of intent as well as future funding and governance continue. A further meeting between representatives of the two councils will be needed so that the objectives that the councils are developing can be shared with the company.
5 Advice and Reporting – Long Term Plan, annual report, current issues, governance support
Coastal Erosion Issues – Parapara and Pakawau
5.1 Councillors will be aware that following the tail of Cyclone Ita in April this year there was severe erosion to the coastal areas of Parapara and Pakawau.
5.2 Councillors and staff have been in communication with property owners in this coastal area, both by letter and at community meetings held June. The Golden Bay Community Board has received its own briefing from Susan Edwards, and has been strongly involved in the community meetings.
5.3 The impacts of the storm event differ along the coastline. In Parapara South Council staff have outlined works that they are happy for the landowners to undertake in the short term.
Longer term measures are still the subject of discussion. It is proposed that Council fund initial works but this will be subject to an agreement with the landowners that costs be recovered either by a one off payment by the landowner or via a targeted rate.
5.4 In Pakawau North Council proposes to undertake an initial beach push-up to help protect the eroded foredune. Following this preliminary work staff will outline complementary structural
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and planning measures with triggers for implementation. Continued erosion may require the construction of a rock wall funded by landowners to protect dwellings until long term
solutions are clarified. It is proposed that the construction of a rock wall by landowners could occur if erosion reaches an identified “trigger point”.
5.5 Staff acknowledge that the situation is complex and that their proposals may be difficult for landowners to accept. However, given that no property is in immediate danger, that a reasonable width of reserve buffer remains and that Council is also required to have regard to both National and Council Policy Statements, the proposed works are considered to be the most appropriate at this time. Staff have indicated that they cannot ignore the interests of the wider community and the ongoing lifecycle costs of any physical structures in its decision making.
5.6 A final recommendation report from Jim Dahm, Council’s coastal consultant, has been received. Jim Dahm will be speaking to Council at the August Environment and Planning Committee meeting (this is the earliest time that he could fit into a Council meeting).
5.7 I have a sense that this issue is going to require ongoing input and effort from Councillors and staff. It is still seen by some, perhaps even by many, as the Council’s problem and the council’s obligation to fix.
6 Management of Council Resources – finance, operations, systems and processes 6.1 The Council’s financial position at the end of the financial year is positive compared to
budget but please note that the figures in this report are provisional as the final dividend from the Port Nelson and the expected surplus form Joint Ventures have not been accounted for.
6.2 The statement of comprehensive financial performance as at June 2014 shows an
accounting surplus of $10,343m compared with a budgeted accounting surplus of $8.642m.
6.3 The below table shows a reconciliation of the accounting surplus with the concept of the controllable operational surplus. This table strips out non cash items and items that can only be used to fund capital expenditure (i.e. Development Contributions).
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6.4 The table shows that the Council had a surplus of $0.886m over and above budget expectations for operating activities. In the May report the variance was $2.241m. There has been an unfavourable movement of $1.375m in the month of June. The adverse movement associated with the Joint Ventures contributes $0.955m to the unfavourable movement. This number is not finalised until the end of August. While income is above budget by $1.316m on a YTD basis Council received $0.641m less than expected in the month of June. The major reason for this is the recognition of the final dividend for Port Nelson. This number is not finalised until the end of August.
6.5 The Statement of Financial Position shows the balance sheet to be in a reasonable position. While the Working Capital surplus is less than expected this is driven by cash up our investments to pay off debt quicker. External debt is $149.1m and forecast to be
$171.3m at 2014/15 year end. These figures are in line with the recent total debt discussions.
6.6 Total employee related expenses are below budget by $0.04m. The legal expenditure associated with the VPCL case was incurred in April and has had an adverse impact on the overall Council results.
6.7 Capital expenditure is $21.554m, considerably under the annual budget of $43.9m. The underspend equates to $22.346m the majority of which will be carried over to the 2014/15 financial year. Further accruals may be posted as a result of Budget managers reviewing expenditure, and advising the Finance team.
6.8 The major contributors to the carryover were:
Water $6.4m
Wastewater $6.8m
Roading $4.0m
Solid Waste $1.7m
Stormwater $0.5m
Rivers $0.4m
Please do note again that these are preliminary figures and that some of them are the major drivers of the variances, not the complete picture.
7 Managing People – good employer, performance, health and safety, policies
7.1 At 30 June 2014 we employed 234.5 full time equivalent staff members. The headcount was 262. The increase from 255 (June 2013) is due to new positions in the Finance, Strategic Policy and Reserves and Facilities Sections. Our annual turnover for has averaged 7% per annum for the past four years. Further information about our staffing statistics will be reported to the Corporate Services Committee meeting on 28 August.
7.2 Since my last activity report three staff have resigned, one has retired and ten appointments have been made:
• Records Services Officer – commenced 16 June
• Consent Planner – commenced 24 June
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• Democracy Support Officer / Executive Assistant to the Mayor (new position) commenced 23 June
• Administration Assistant – Finance – commenced 30 June
• Assistant Librarian – Youth Services – commenced 7 July
• Assistant Librarian – Collection Services – commencing 4 August
• Senior Policy Planner – internal
• Branch Librarian Motueka – commencing 15 September
• Building Inspector – Golden Bay – commencing 15 September
7.3 We are currently at various stages of recruiting for a Harbourmaster and a Development Engineering Officer (new position). This new position is the result of a series of staff changes within the Engineering Services Department that have as their purpose resourcing the Golden Bay contract with NZTA, a transition to retirement arrangement, and a reshuffle of resources between the Transportation and Activity Planning teams. The resourcing has been arranged so that the staffing numbers can return to status quo once the contract with NZTA expires.
7.4 The new structure for the Finance Section in the Corporate Services Department has been operational since late July and all affected staff were offered and accepted positions in the new structure.
7.5 Collective employment agreement bargaining with the PSA is progressing slower than in previous years due to the difficulty of finding meeting dates that suit the availability of both parties. As this year’s negotiations are expected to, in part, set the scene for the salary budgets for the 2015-2025 Long Term Plan, we also need to conclude bargaining with the PSA before we can inform all non-union staff of any market movement adjustments that will apply to them.
7.6 During the last two weeks of August we will be participating in our seventh Kenexa Employee Opinion Survey which enables us to benchmark ourselves against the Local Government Workplace and Best Workplace Surveys. Participation is open to all staff and I will provide a summary of the results in my report to Full Council on 18 September.
8 Relationship Management – Iwi, customers/ratepayers, media, other councils, CCOs Joint Waste Management
8.1 A Joint Waste Management and Minimisation Plan was developed by a working party of the two councils and others and adopted following public consultation on 26 April 2012. The Plan identified the need for the two councils to review the appropriateness of operating separate landfills in the region. A single landfill option was favoured.
8.2 In June last year our Engineering Services Committee delegated authority to the chief executive to negotiate an agreement with Nelson City Council to give effect to the Plan. The Nelson City Council chief executive was given a similar delegation.
8.3 Councils will recall receiving reports on progress over the past year or so. The proposal faltered when the Tasman District Council included the proposal for a single landfill
operation in its draft Annual Plan and Nelson City Council did not. As a result of further work
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at a staff level and advocacy at a council level the Engineering and Infrastructure Committee at Nelson City adopted a Statement of Proposal to consult the community using the special consultative procedure on 24 July 2014. The proposal is, in summary, to receive Tasman District waste at York Valley.
8.4 Prior to the 24 July 2014 meeting a Memorandum of Understanding (MOU) was agreed at a staff level, then signed by Mayor Kempthorne on advice. At and following the 24 July 2014 Engineering and Infrastructure Committee meeting at Nelson changes were proposed to the MOU. The Nelson Mayor or her deputy were delegated the power to sign it off. Relying on the earlier delegation, Deputy Mayor King and I have also now agreed to the terms of the MOU so that the matter can be progressed. A copy of the MOU will be sent to councillors separately.
8.5 The MOU is not legally binding. Assuming that the Nelson City Council adopts the proposal after hearing public submissions a formal contract will be drafted to give effect to the MOU.
That agreement will need Councils’ approval. I propose that Tasman District Council submits in support of the proposal.
Other Contacts and Issues included the -
8.6 Society of Local Government Managers CEO Forum - The highlight was hearing from the four recently appointed CEOs of our four major cities about their roles and priorities – scale in Auckland, investment in the Wellington economy, the culture in Christchurch and fraud and entitlement in Dunedin. Dame Margaret Bazley’s was as insightful as always with her take on what holds CEs and organisations back.
8.7 Joint Central and Local Government CEO Meeting - This event is convened by the Department of Internal Affairs twice yearly. It is attended by 8 CE’s from each sector. The issues dealt with included the Governments proposed stock take of central/local government relationships and an evaluation of their effectiveness; transport investment decisions and the Government’s growth agenda; lessons from the rapid scale up of EQC following the
Christchurch earthquakes. The next meeting will be about two weeks after the general election.
8.8 Best Island – A heads of agreement was sent to the two potential vendor families at the end of June for them to consider. The agreement sets out the understandings of the parties to date, their price expectations and the process from her on. I met with the Ashton Family on 31 July 2014. The process remains challenging for everyone. I fear that time is running out to get an agreement in time for the draft 2015-2025 Long Term Plan.
8.9 Kina Leases – The matter currently rests with the lawyers for the donor families. We are pressing for a response to the proposals for the hearing committee and Council about the proposed clauses dealing with lease transfers.
8.10 Nelson Regional Sewerage Business Unit - The terms of reference for this joint committee of the Nelson and Tasman Councils has been reviewed and the outcome reported to the NRSBU. There has been a follow up meeting with industrial water users.
The Mayors have requested that the joint CEs report to both Councils in the same terms with a view to making changes before the end of the calendar year.
Tikanga Maori and the Treaty
8.11 Council has asked for the opportunity to develop the knowledge of Tikanga Maori and the Treaty at both staff and Council level. Mark Tregurtha has been negotiating with Nelson City to access an appropriate trainer to server both of our needs. He has been successful and
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you will be advised of some dates for training asap. Our aim has been to provide you with more advanced knowledge rather than repeat the (101) experience.
9 Local Government New Zealand (LGNZ) Conference
9.1 The LGNZ conference was held in Nelson from 21-23 July 2014. The Regional Sector Group toured the Tasman and Upper West Coast regions ahead on the conference starting in Westport on the Friday night. Rather than have all of the Tasman attendees write reports I undertook to list the events and speakers and to provide the opportunity through this report for those who went to report verbally.
AGM
9.2 Mayor Brendan Duffy of Horowhenua was elected as vice president in a vote with Mayor John Forbes of Opotiki. The President’s speech focused on the reputational survey LGNZ had conducted that showed low recognition; low value for money for rates and so on. This survey data is hard to reconcile against our Communitrak results.
9.3 The remit dealing with various financial incentives to encourage strengthening of earthquake buildings was carried as was a remit proposing that fluoridation of drinking water be a
decision for the Director General of Health.
9.4 A three part remit proposing that LGNZ advocate for amalgamation proposals to be subject to a majority vote in each affected area was passed except for the part that required this to be LGNZ’s number one priority. A related general business item calling on the Government in partnership with LGNZ to carry out a first principles review of local government’s role, functions and structure was lost narrowly.
Key Note Speakers
9.5 Paul Pisasale – Mayor of Ipswich: An entertaining speaker with lots of positive messages and ‘outside the square’ ideas and a track record of positive growth and achievement. One liners included “predict where the game is going; Council doesn’t argue in public; we don’t subdivide, we create communities; the future – we’re creating it not going there.”
9.6 Shamubeel Eaquab – NZIER: You’ve heard it before.
9.7 Rod Drury – CEO Xero: ‘Hello, my name is Rod Drury and you know the Xero story - any questions?’ There were and the session was worthwhile. One liners included “location independent businesses; Google- use it for everything; earn globally, live locally; I don’t give an f... about Auckland house prices, if you can afford to live there move – that’s the market working’.
Lifting Governance and Financial Performance
9.8 Three presentations from Arihia Bennett, CEO Te Runanga o Ngai Tahu; Craig Stobo, Chair of LGFA and AIG; Andrew McKenzie CFO Auckland Council
9.9 Caroline Saunders -Lincoln and Ganesh Nana – NZIER: The topic was ‘future economic thinking’. Consumers in China and India care more about food safety and quality than our traditional European markets especially the UK. NZ sourced food is highly rated in these markets that were previously thought to be undiscerning. I missed most of this session due to commitments at Nelson City.