finance and performance committee - agenda november, 2015

8/20/2019 Finance and Performance Committee - Agenda November, 2015

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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, 19 November 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

12 November 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 foundat 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

19 November 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 Council Performance Report for the period 1 July 2015 to 30

September 2015 9

10 Auckland Council Group first quarter financial results to 30 September

2015 41

11 Quarter one Māori transformational shift and co-governance activitiesand expenditure 49

12 Implementing the New Food Act for Environmental Health (Food

Premises) 65

13 Reports Pending Status Update 85

14 Annual Plan 2016/17 - Update 93

15 Alternative Sources of Financing - Feedback 97

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

16 Consideration of Extraordinary Items

PUBLIC EXCLUDED

17 Procedural Motion to Exclude the Public 99

C1 Restoration of St James Theatre 99

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Page 7

1 Apologies

At the close of the agenda no apologies had 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 Wednesday, 28 October 2015 asa 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 discretion

to 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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Auckland Council Performance Report for the period 1 July 2015 to 30 September 2015 Page 9

Auckland Council Performance Report for the period 1 July 2015 to 30September 2015

File No.: CP2015/22486

Purpose1. This report provides an overview of the Auckland Council parent performance results for the

period 1 July 2015 to 30 September 2015.

Executive Summary2. The performance results presented in this report are for the Auckland Council parent, not the

group. A separate report of the group financial results is included in this committee’s agendapapers.

3. The report includes an overview of the highlights and achievements in the key areas toachieve organisational objectives. There was a range of highlights and achievements overthe quarter which includes council being recognised at award ceremonies as follows:

- Wai Care programme at the LGNZ Excellence Awards,- Geospatial Future Mode of Operation programme awarded the Project Management

Institute NZ Public Sector project of the Year,- Devonport and Waiheke Libraries at the NZ Wood Resene Timber Design Awards.

This section of the report also includes information about the growth in demand for councilbuilding control and resource consent services.

Performance measure results

4. During the preparation of the Long-term Plan 2015-2025 (LTP) the levels of service andassociated performance measures were reviewed. There were some significant changeswhich included a refocussing and reduction in the number of measures. This report providesfirst quarter interim results on this new set of performance measures. Some of the measureswill only be reported on at year end, for example for those dependent on annual independentsurveys.

5. Of the 40 measures reported on 67% achieved the targeted level set, 10% substantiallyachieved the target and 23% did not achieve the target. The majority of measures which didnot achieve the target are within the regulatory activity, where the expectation is thatperformance will improve, as a result of improvement programmes currently beingimplemented.

6. The regulatory business recognised the challenges faced by customers and its ownoperation with unprecedented increases in demand for regulatory services and increasedleakage of technical staff to the private sector. The Consenting Made Easy programme wasimplemented in Q3 of FY2015. This program included the rollout of mobile technology and Active Workforce scheduling of inspections, Online Consenting and the implementation of aCustomer Enabled Consenting Process. Mobile technology has been rolled out to theCentral / South regions and the North / West regions rollout will go live early December. AnOnline consenting pilot was launched with group home builders delivering significantimprovements in consent processing times and the quality of Consent applications. Phase 3of this project goes live in early December and will be available to all building controlcustomers. Active workforce scheduling is planned for Q3 that will deliver a more efficient

utilisation of the inspection resource. The Customer Enabled Consenting process design hasbeen completed and it is expected that it will be rolled out in Q3 & Q4 of FY2016.


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Financial performance results

7. The financial performance results provide an indication of how the organisation is performingagainst the budget and associated financial risks. The quarterly net operating financialresults are largely on track compared to budget, with a $5 million variance to budget. Thebudget for the year includes a challenging target for efficiency gains for the council and thereare risks associated with achieving this.

8. Capital delivery performance is on track with an $88 million investment completed this year.

9. Treasury management performance is included in the report. Debt levels are on trackcompared to budgeted levels and average funding costs are tracking below budgeted levels.The Diversified Financial Assets portfolio performance for the year to date was a negative2.7% compared to a benchmark of negative 2.1% which is mainly due to a downturn in themarket.

Recommendation/sThat the Finance and Performance Committee:

a) receive the Auckland Council Performance report for the period 1 July 2015 to 30September 2015.

Comments10. This report provides an overview of the Auckland Council parent performance results for the

period 1 July 2015 to 30 September 2015. A separate report of the group financial results ispresented to this Committee.

Highlights and achievements

11. An overview of key highlights and achievements for the first quarter are summarised here.

These are sorted by the service delivery themes as expressed in the Long-term Plan (LTP). Auckland development

12. Auckland Council is partnering with Community Housing Aotearoa and New Zealand Councilfor Infrastructure Development on a website called "Making Affordable Homes Happen"(http://www.makinghomeshappen.co.nz/), which was launched on 5 October. The purpose ofthe website is to increase familiarity of developers around affordable/community housingmodels and bring together information on current and proposed plans and programmes todeliver on affordable housing in the Auckland region.

13. Housing Project Office - 11 new Special Housing Areas within Tranche 7 were announcedtaking the total number of SHA's to 97 with a potential yield of 47,000 sites and dwellings.

14. 'The Housing We’d Choose' study was completed, which is a comprehensive study into Aucklanders’ housing choices and trade-offs. It provides an insight into the types ofdwellings that households would choose to buy or rent if a wider range of housing types andsizes were available across Auckland.

15. ‘The Sustainability Hub’ was launched of the Auckland Design Manual. The manual waslaunched two years ago and additional hubs are being added. We engaged with over 1,000people at the Auckland Home Show on the manual.

16. Te Waka Angamua and RIMU co-hosted a seminar on defining Māori business, as a firststep in developing an evidence base of Māori business in Tamaki Makaurau. This evidencewill be used to develop baseline data for Auckland Council, central government agencies,businesses etc. to make well-informed decisions and direct investment to well-targeted

opportunities that can deliver Māori economic development return and benefit.

17. We signed a collaboration agreement with Energy Efficiency & Conservation Authority.


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34. The Reading Steps Project launched in September and is in response to customer feedbackto make it easier for parents to find books at a suitable reading age for their children.

35. Matariki was celebrated at libraries with events including kapa haka, kōrero pūrākau withmana whenua, Living Book sessions with Māori MPs, and Matariki star activities.

36. Te Wiki o Te Reo Māori / Māori Language Week saw inspiring events and activities taking

place at libraries across Auckland.37. Sir George Grey Special Collection - Pūtahitanga exhibition: A meeting of two worlds in the

North 1769-1842. The exhibition covered the history leading to the formation of Auckland.

38. Family History Month was celebrated in August at libraries. Talks and workshops took placeacross the region to help customers uncover their family tree and included a Family HistoryExpo.

Governance and support

39. Geospatial Future Mode of Operation (GFMO) programme was awarded ProjectManagement Institute NZ Public Sector Project of the Year.

40. The Group Annual Report was adopted by the Governing Body in September with an

unmodified audit opinion received from the auditors.

Performance measures

41. For each of the activities delivered by the council, the LTP includes level of servicestatements and associated performance measures. This section provides interim resultsshowing how we are tracking on the performance measures for the first quarter ended 30September. The year-end performance results will be reported in the Annual Report and willbe audited. The quarterly results presented here are not audited.

42. There is a significant change to the performance measures that are included in the new LTP.The Business units are working to ensure robust systems and processes are in place toensure quality results are reported against performance measures. The number of measureshas reduced by over 50% compared to the previous year. The results presented hererepresent the measures where the results are available to date. Some measures will only bereported at year end, for example for those dependent on annual independent surveys.

43.

2768%

410%

923%

Summary of performance measureresults

Achieved

Substantiallyachieved

Not achieved

Out of 40 measures available for reporting at the end of this first quarter, 27 measures (67%)achieved the targets set, 4 measures (10%) achieved a result close to target (termed‘substantially achieved’) and 9 were not achieved. The majority of measures that did notachieve the targets are within the regulatory activity, where the expectation is that

performance will improve in future months, as a result of an improvements programmecurrently being implemented.


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51. Percentage of non-notified resourceconsent applications processed within20 working days

95% 96%

100% 100%

40%

60%

80%

100%

FY15 FY16 Q1

Result Target

52. Percentage of notified resourceconsent applications processed within70 working days

62%49%

100% 100%

40%

60%

80%

100%

FY15 FY16 Q1

Result Target

53. Percentage of building consent

applications processed within 20 days

98% 97%

100% 100%

40%

60%

80%

100%

FY15 FY16 Q1

Result Target

54. Domestic kerbside refuse per capita

per annum

152 152

150160

100

120

140

160

180

FY15 FY16 Q1

Result Target (Kg/per capita)

55. The median response time to attend aflooding event, from the time that Auckland Council receives notificationto the time that service personnelreach the site

Noresult -

new KPI 1.1

2

0

0.5

1

1.5

2

FY15 FY16 Q1

Result Target (hours)

56. Percentage of threatened speciesunder active management

34% 34%

29%34%

0%

10%

20%

30%

40%

FY15 FY16 Q1

Result Target


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57. Facility utilisation – utilisation at off-peak times for council managedcommunity centres and venues for hire

Noresult -

new KPI 10%

15%

0%

10%

20%

FY15 FY16 Q1

Result Target

58. Facility utilisation – utilisation at peaktimes for council managed communitycentres and venues for hire

Noresult -

new KPI

29%

27%

0%

10%

20%

30%

FY15 FY16 Q1

Result Target

59. Percentage of community facilities

bookings used for health and wellbeingrelated activity

Noresult -

new KPI 13%

20%

0%

10%

20%

FY15 FY16 Q1

Result Target

60. Number of visits to library facilities per

capita

8.3

2.2

10

1.8

0

2

4

6

8

10

FY15 FY16 Q1

Result Target

61. Number of library items borrowed(millions)

4.0 3.9

0.2 0.4

3.75 3.75

3.0

3.5

4.0

4.5

FY15 Q1 FY16 Q1

Physical Issues eIssues Target

62. Rolling 10-year return for diversifiedassets portfolio, compared to referenceportfolio

13.2%

-2.7%

13.7%

-2.06%

-5%

0%

5%

10%

15%

FY15 FY16 Q1

Result Target


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Financial performance results

63. This next section provides an overview of the financial performance results for the council forthe three months ended 30 September 2015.

64. Year-to-date (YTD) results: The overall result shows a surplus of $1,005 million, which is$126 million unfavourable compared to the YTD budget. The net operating result included inthis of $1,161 million is $5 million favourable compared to budget.

65. The full rates generation income is recognised at the beginning of the year due to therevenue recognition requirements of the current accounting standards (International PublicSector Accounting Standards). This early revenue recognition of rates revenue results in alarge surplus at the beginning of the year which will reduce as the year progresses.

66. Operating revenue: is $2 million (2%) unfavourable to budget. This is mainly due to lossesincurred on the Diversified Financial Assets (DFA) portfolio of $16 million (due to a downturn

in the market) offset by additional dividend income received together with favourable resultsfor user charges revenue and property income.

67. Rates revenue: is slightly below budget mainly due to lower penalty income than budgeted.

68. Operating expenditure: is $9 million (2%) favourable to budget. This is mainly due toexpenditure expecting to be incurred later than originally planned across a number of areas.

69. Non-operating surplus/(deficit): is $131 million unfavourable compared to budget which ismainly due to accounting(non-cash) adjustments related to fair value of treasury derivativesportfolio of $131 million together with lower development contributions income thanbudgeted of $8 million offset by unbudgeted vested assets revenue.

70. Net operating performance results by theme

The next table provides a split of the net operating result by each of the LTP themes.

The net operating results presented by theme shows YTD underspends across all thethemes except for ‘Governance and support’. The underspends are largely due toexpenditure expected to be incurred later than planned. For ‘Governance and support’ theunfavourable variance of $7 million is largely due to organisational efficiency targetsbudgeted for in the LTP which have not been achieved in the first quarter. The LTP includesa challenging target for efficiency gains for the council for the year. Work is underway toprogress a range of initiatives to achieve this target, such as strategic procurement, fleetmanagement, shared services, workforce management etc.

$millions YTD

Actual

YTD

RevisedBudget

YTD

Variance

FY

RevisedBudget

FY

AnnualPlan

Operating revenue 121 123 (2) 518 513Operating expenditure 535 544 9 2,032 2,027

Net operating expenditure 414 421 7 1,514 1,514Rates revenue 1,575 1,577 (2) 1,584 1,584

Net operating surplus/(deficit)1,161 1,156 5 70 70

Net non-operatingexpenditure/(revenue)

156 25 (131) 275 275

Net surplus/(deficit) 1,005 1,131 (126) (205) (205)


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71. Net operating result by theme

$millionYTD

Actual

YTDRevisedBudget

YTD varianceFY

RevisedBudget

FY Annual

Plan

Auckland development 37 40 3 8% 146 147Economic and cultural development 21 23 2 9% 92 91Environmental management andregulation 71 76 5 8% 301 307

Parks, community and lifestyle 114 118 4 3% 478 476

Transport 97 97 0 0% 389 389

Governance and support 74 67 (7) 2% 109 105

Net operating expenditure 414 421 7 2% 1,515 1,515

Rates revenue 1,575 1,577 (2) 1,584 1,584

Net operating surplus 1,161 1,156 5 1% 70 70

72. Capital delivery performance

$millionYTD

Actual

YTDRevisedBudget

YTD varianceFY

RevisedBudget

FY Annual

Plan

Auckland development 18 31 13 42% 155 101Environmental management andregulation 22 18 (4) 22% 102 112

Parks, community and lifestyle 31 30 (1) 3% 217 252

Governance and support 17 20 3 2% 98 89

Capital expenditure 88 99 11 11% 572 554

73. Capital investment completed in the first quarter totals $88 million which is 15% of the fullprogramme approved for the year of $572 million.

74. Capital delivery performance to date is largely on track and progressing well for all areas.There are some delays in the Commercial property portfolio (part of the Aucklanddevelopment theme) where there have been delays mainly relating to timing of developmentprojects.

75. Balance sheet performance

$million Actual as at

Sept 2015 Projected per LTPJune 2016 Actual auditedJune 2015

Assets

Property, plant and equipment 12,129 12,077 12,064

Other assets and investments 25,249 23,992 24,161

Less Liabilities

Borrowings 6,775 7,175 6,557

Other liabilities 1,327 1,175 1,396

Net assets (ratepayers’ equity) 29,276 27,719 28,272

76. Property, plant and equipment - Asset revaluations at the year ended 30 June 2015 resultedin asset values higher than projected in the LTP.


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77. Other assets and investments – the increase in this category for the first quarter is due to anincrease in Accounts Receivable category for rates, being the rates generation billing for thefull year which is expected to reduce as we reach rates instalment due dates.

78. Total gross debt at the end of the quarter was $6.7 billion and forecast debt is expected tobe in line with the LTP.

Treasury management79. Treasury management information can be found in Appendix 3 - Treasury report. This report

includes treasury compliance information together with information about the performance oftreasury activities against benchmarks.

80. The focus of the treasury team continues to be on minimising funding costs, managingliquidity and interest rate risk, diversifying the investor base and lengthening the term ofdebt.

81. The council was fully compliant with all treasury management policy limits at 30 September2015.

82. Funding costs - the year to date average cost of funds was 5.1% which is below the

budgeted level of 5.6%.83. The DFA portfolio totaled $319 million at the end of the first quarter. The portfolio

performance for the year to date was a negative 2.7% compared to a benchmark of negative2.06% which is mainly due to a downturn in the market.

84. Further information available in the appendices to this report include:

Appendix 1 – Performance measure information

Appendix 2 – Auckland economic update

Appendix 3 – Treasury report

Appendix 4 – Professional services expenditure information

Appendix 5 – LGOIMA information

Appendix 6 – Customer service information.

Consideration

Local Board views and implications

85. Local Boards receive their own reporting for their respective areas.

Māori impact statement 86. The report details some high level activities delivered in the first quarter 2015/2016, of which

there are several initiatives with positive impacts on, or for, Māori. While this is not acomplete list, key activities with positive impacts on and for Māori include:

87. Te Waka Angamua and RIMU co-hosted a seminar on defining Māori business, as a firststep in developing an evidence base of Māori business in Tamaki Makaurau. This evidencewill be used to develop baseline data for Auckland Council, central government agencies,businesses etc. to make well-informed decisions and direct investment to well-targetedopportunities that can deliver Māori economic development return and benefit.

88. Matariki was celebrated at libraries with events including kapa haka, kōrero pūrākau withmana whenua, Living Book sessions with Māori MPs, and Matariki star activities.

89. Te Wiki o Te Reo Māori / Māori Language Week saw inspiring events and activities taking

place at libraries across Auckland.


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Implementation90. There are no financial or resourcing implications arising from receipt of this report.

91. Quarterly reporting on performance is not a legal requirement and there are no legislative

implications from the receipt of this request.

Attachments

No. Title Page

A Performance report appendices September 2015 21

Signatories

Author Jenny Livschitz - Manager Corporate Performance and Reporting

Authorisers Kevin Ramsay - General Manager FinanceSue Tindal - Group Chief Financial Officer


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Auckland Council Group first quarter financial results to 30 September 2015 Page 41

Auckland Council Group first quarter financial results to 30 September2015

File No.: CP2015/14177

Purpose1. This report presents the financial performance results of the Group for the three months to

30 September 2015.

Executive Summary2. This report is part of the regular quarterly reporting to the Finance and Performance

Committee on the Auckland Council Group’s financial performance for the year to date.

3. The Council Controlled Organisations report their individual performance to the Council

Controlled Organisations Governance and Monitoring Committee.4. The Auckland Council parent’s performance will be reported to this Committee today.

5. The results are in line with the phased budget and there are no significant items of concern.


a) receive the Auckland Council Group first quarter financial results to 30 September2015 report.

Comments6. The Auckland Council Group Financial Report 30 September 2015 attached to this report

compares the actual financial performance for the quarter against the phased three monthsbudget in the Long-term Plan.

7. This report is not formally released to meet any other external reporting requirements, and issimply for internal reporting on the performance of the group.

8. The results of this quarter’s group consolidation are used to support the rolling over ofEuropean Medium Term Notes (EMTN) programme. While the EMTN programme is subjectto an agreed-upon-procedures review, this result has not been reviewed or audited by Audit

New Zealand.9. The operating surplus before gains and losses is $1,183 million vs. budget of $1,235 million.

10. Actual results are in line with the phased budget and there are no significant items ofconcern.

11. The group continues to manage financial performance prudently according to the Long-termPlan.

Consideration


12. This report is for the Council Group. Local Boards receive reports specific to their area.


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Māori impact statement 13. The report is limited to financial performance. Council’s contributions to Māori outcomes are

reported in the annual report.

Implementation

14. There are no implementation issues.

Attachments

No. Title Page

A Auckland Council Group Quarterly Financial Report 30 September 2015 43

Signatories

Author Francis Caetano - Group Financial Controller

Authorisers Kevin Ramsay - General Manager FinanceSue Tindal - Group Chief Financial Officer


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Quarter one Māori transformational shift and co-governance activities and expenditure Page 49

Quarter one Māori transformational shift and co-governance activitiesand expenditure

File No.: CP2015/21969

Purpose

1. To report quarter one results for the 2015-16 Māori transformational shift activity and co-governance and co-management activity budget.

Executive Summary

2. In the 2015-2016 financial year, forty-four projects or activities with a combined budget of$9,131,000 have been identified as Māori transformational shift activity and will contribute to

‘significantly lift Māori social and economic well-being’. In addition, eight activities totaling$6,036,000 have been identified as co-governance or co-management activities for2015/2016. These activities are delivering on the priorities agreed in council’s 2015-2025Long-term Plan.

3. Year to date (YTD) expenditure for the 2015-2016 first quarter Māori transformational shiftactivity was $1074, 000 against an YTD budget of $1,934,000. This indicates a variance of$860,000. A majority of the variance is attributable to programmes and projects yet to startand grant payments yet to be allocated in the Whai Tiaki budgets. Expenditure will becarefully monitored over the remaining quarters to ensure agreed priorities stay on track.

4. YTD expenditure for the first quarter co-governance and co-management activity was$540,000 against a YTD budget of $882,000. This indicates a variance of $342,000. The

majority of this relates to delays in the development of the Integrated Management Plan forthe Tūpuna Maunga o Tāmaki Makaurau Authority and some to delays in capital projects.Expenditure will be carefully monitored over the remaining quarters to ensure agreedpriorities stay on track.

5. Council-controlled Organisation (CCO) results include YTD expenditure and estimates ofYTD budgets. Finance staff will work with CCOs to ensure that actual phased YTD budgetsare included for the remaining 2015/16 Māori transformational shift activity reports.

6. On 22 October, the Finance and Performance Committee agreed that as part of the AnnualPlan process, council would identify resources reallocated to new projects identified in TeToa Takitini portfolio for 2016/2017. Scoping work has identified other Māoritransformational activity proposals for potential inclusion in the 2015/2016 budget (year two

of the Long-term Plan) and staff will report back to the Finance and Performance Committeein April 2016 on these.

7. From quarter two onwards, staff will provide a consolidated Te Toa Takitini portfolio reportencompassing Māori transformational activity and expenditure; Co-governance/co-management activity and expenditure; and Treaty of Waitangi Audit response workprogramme.


a) receive the quarter one Māori transformational shift and co-governance activities andexpenditure report.

b) note that a consolidated Te Toa Takitini portfolio report, as outlined in paragraphseven, will be provided for quarter two.


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Comments

2015/16 Māori Transformational Shift Activity overview Te Toa Takitini

8. Te Toa Takitini is council’s strategic top-down council-family approach to Māoriresponsiveness and prioritises activities that increase Māori responsiveness and contributeto Māori outcomes. Te Toa Takitini encompasses five Māori transformational shiftprogrammes of action:

Whai Rawa – Māori Economic Well-being

Whai Painga – Māori Social Well-being

Whai Tiaki – Māori Cultural Well-being

Whai Tika – Effectiveness for Māori

Whai Tahinga – Treaty of Waitangi Settlements.

9. This approach enables the identification and tracking of progress on activities and budgetthat contribute to significantly lifting Māori, economic, social and cultural well-being,strengthen council’s effectiveness for Māori, and optimise post-Treaty settlementopportunities for the benefit of mana whenua and the wider public of Auckland.

10. In the 2015-2016 financial year, forty-four projects or activities totaling $9,131,000 havebeen identified as Māori tr ansformational shift activity and will contribute to ‘significantly liftMāori social and economic well-being’. These activities are delivering on the prioritiesagreed in Council’s 2015-2025 Long-term Plan. Table one shows the Māori transformationalshift activity budgets in the whai-well-being portfolio areas.

Māori Transformational Shift Activity Opex$000

Capex$000

Budget 2015/16$000

Whai Rawa – Economic Development 1,125 0 1125

Whai Tiaki - Māori Cultural Well-Being 5,623 359 5,982

Whai Tika-Māori Effectiveness 644 0 644

Whai Painga - Māori Social Well-Being 1,330 0 1330

Whai Tahinga –Treaty Settlement 50 0 50

GRAND TOTAL 8,772 359 9,131

Table one

2015/16 Co-governance and co-management overview

11. Auckland Council also partners with various mana whenua entities in delivering co-governance and co-management activities. These activities also deliver on the prioritiesagreed in Council’s 2015-2025 Long-term Plan and are reported separately from Māoritransformational shift activity. Eight activities totaling $6,036,000 have been identified as co-governance or co-management activities for 2015/2016, as shown in table 2.

Co- governance and co managementactivity

Opex Capex Budget 2015/16$000

Co-governance-co-management 3,371 2,665 6,036

GRAND TOTAL 6,036

Table two


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Summary of Quarter One Māori Transformational Shift Activity

12. Year to date (YTD) expenditure for the 2015-2016 first quarter Māori transformational shiftactivity was $1074, 000 against an YTD budget of $1,934,000. This indicates a variance of$860,000. A majority of the variance is attributable to programmes and projects yet to startand grant based payments such as papakainga and marae development funding yet to be

allocated. Payments based on contract deliverables yet to be completed have alsocontributed to the variance. Expenditure will be carefully monitored over the remainingquarters to ensure agreed priorities stay on track. Issues will be elevated to Te Toa TakitiniExecutive Leadership Group for resolution if required.

13. Table three provides a summary of the total expenditure for quarter one 2015/2016 acrossthe Māori transformational shift programmes of action for council.

Māori Transformational ShiftActivity

September YTD 2015/2016$000

Activities Budget$000

Actuals Variance

Māori Economic Well-being 300 144 156

Māori Social Well-being 325 174 151

Māori Cultural Well-being 1,158 681 477

Effectiveness for Māori 144 75 69

Treaty of Waitangi Settlements 7 0 7

OPEX TOTAL 1,844 978 866

CAPEX TOTAL 90 96 -6GRAND TOTAL 1,934 1,074 860

Table three

Summary of Whai Rawa - Māori Economic Well-being activity

14. The narrative below provides programme highlights from quarter one activity. Further detailof activity and expenditure is located in A.

15. Māori signature festival. Auckland Tourism, Events and Economic Development Limited(ATEED will deliver a Māori Signature Festival during the 2016 Auckland Anniversaryweekend. The Tāmaki Herenga Waka Festival will leverage off Auckland’s strong nauticalheritage, focusing on traditional and contemporary Māori waka culture. ATEED are working

with mana whenua entities to deliver this event, which will be an annual event celebratingthe importance of Māori culture to Tāmaki Makaurau.

16. Waka development programme. The waka development programme, led by mana whenuaand supported by Te Waka Angamua, is established. The Tāmaki Herenga Waka Trusts roleincludes building, operating, and maintaining waka with the ultimate purpose of:

a. revitalising a vibrant waka culture throughout Tāmaki Makaurau and associated harbours

b. promoting and supporting Māori participation and expression in cultural and sportingactivities in Tāmaki Makaurau through the use of waka;

c. utilising waka culture to promote and support educational opportunities, including culturaldevelopment, for Māori in Tāmaki Makaurau; and

d. promoting and supporting any other matter which is beneficial to Māori in TāmakiMakaurau, and the wider community more generally through the use of waka.

The first two waka built will support the Tāmaki Herenga Waka Festival signature event.


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17. Māori Business Intelligence Forum. Te Waka Angamua with support from the Research,Investigation and Monitoring Unit hosted a Māori business intelligence forum, which broughttogether Māori business people, central government agencies, Independent Māori StatutoryBoard (IMSB) representatives and council staff to develop metrics to measure Māoribusiness growth and development.

18. Emerging Iwi Leaders Programme. ATEED is developing a programme to grow Aucklandmana whenua capability to participate in iwi board, land trust and iwi asset discussions. Thiswork is ongoing and will support skills and capability development for iwi.

19. Māori-focused events at the waterfront- To showcase and support economic viability andhelp preserve traditional Māori carving, Panuku Development Auckland (Panuku) havearranged for Ngā Whaotapu o Tāmaki Makaurau (The Sacred Chisels of Tamaki Makaurau)to use facilities at the Percy Vos boat yard, Wynyard Quarter for their projects.

Summary of Whai Painga - Māori Social Well-being activity

20. The narrative below provides highlights from quarter one activity. Further detail of activityand expenditure is located in appendix A.

21. Whānau well-being-Whai Oranga Maori Sport and Recreation. As part of council’scontribution to Māori Social Well-being a draft Māori Sport and Recreation framework hasbeen developed, drawing on the Auckland Plan, Māori Plan, Auckland Sport and Recreation Action Plan and Sport New Zealand’s He Oranga Poutama Strategic Policy. The frameworkwill inform decision-making on Māori wellbeing outcomes that can be achieved and deliveredthrough sport and recreation activity. The next steps include re-engagement with thecommunity and linking to other social well-being initiatives such as Healthy Families, Healthy Auckland Together and Whānau Ora.

22. Te Waka Angamua are working with Arts Communities and Events, Parks and iwi Ngai Tai,

to host the nationally recognised Iron Māori Triathlon event in Tāmaki Makaurau in April,2016. Te Waka Angamua has met internal and external stakeholders for this event which willbe held at Umupuia and the Duder Regional Park.

23. Road safety programme - young Māori drivers and passengers. Statistics show thatyoung Māori drivers are disproportionately represented in transport offences leading to courtactions. Recognising this, Auckland Transport as part of a multi-agency approach with theMāori Regional Police liaison teams, Ruapotaka Marae and a specialist drug and alcoholhealth provider completed a pilot programme called Ready for the Road. The programmeaims to reduce offending through awareness and education. Another programme isscheduled to be delivered in December with Ngāti Whātua o Ōrākei Marae.

24. Māori wardens. Māori Wardens provide a customer service role on some of the Auckland

Transport train services as ambassadors.

Summary of Whai Tiaki- Māori Cultural Well-being activity

25. The narrative below provides highlights from quarter one activity. Further detail of activityand expenditure is located in appendix A.

26. Kaitaiki Ranger Programme. Council’s Southern Sector Regional Parks team inpartnership with the Department of Conservation and mana whenua have started a manawhenua kaitiaki ranger trainee program, with four positions based at the Ardmore office.Mana whenua entities across Auckland were invited to nominate candidates. Trainees willlearn all aspects of rangering including recreation and conservation land and asset

management, farming skills, and pest and weed management. Trainees will share Māorienvironmental and conservation concepts with their ranger coaches and mentors.


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27. The Environmental Services Unit has provided budget to operationalise the initiative. Thisactivity is well under way and $31,000 of budget now committed, including kaitiaki training,track clearance, water quality monitoring, post operational monitoring of rodent numbers,and ongoing co management of work programme.

28. Watercare Mana whenua Kaitiaki Forum (MWKF) The Watercare Mana whenua KaitiakiForum (MWKF) meets on regular basis to input into Watercare projects. In quarter one fiveWatercare programmes were presented to the forum. These included, updates on WaikatoRiver Projects, Wai Ora Wai Māori, Watercare wastewater network strategy, MangereWastewater Treatment Plant and discussions relating to the further development of theMWKF. The MWKF function does not devolve Watercare of the responsibility to work withindividual iwi who identify their interest in any particular project. Watercare have providedbudget to service that provision as noted in appendix A.

29. Kaitiakitanga for healthy waterways and harbours. To support mana whenua askaitiaki, Council’s Infrastructure, Environments and Stormwater team have a fundingagreement ($45k) with Te Uri O Hau. The agreement supports a programme manager roleand wider work programme for the Integrated Kaipara Harbour Management Group. This

builds on previous agreements with mana whenua related to the Kaipara HarbourManagement Group.

30. Māori sites of significance. Council’s Plans and Places team lead this program to supportthe protection of waahi tapu sites. Quarter one activity included consultancy work linked tothe hearing process for sites of significance selection process; the establishment of aspecialist team to support the Māori heritage programme; and engagement with manawhenua stakeholders on the hearing process.

Summary of Whai Tika - Effectiveness for Māori activity

31. The narrative below provides highlights from quarter one activity. Further detail of activity

and expenditure is located in Attachment A.

32. Effectiveness for Māori. - Council’s Treaty Audit response work programme for 2015/2016was approved by the Finance and Performance Committee on 22nd October. The workprogramme included detailed project level planning with business owners, ensuring thatincreasing Māori responsiveness is a transformational change owned and supported by thewhole of council.

33. A key Treaty Audit recommendation relates to progress with developing MāoriResponsiveness Plans (MRPs). Currently ten Māori Responsiveness Plan plans areunderway and four are completed. A MRP toolkit, outlining the methodology and frameworkfor developing these plans, has been developed and templates and process are being testedfor implementation with other council departments and CCOs.

34. Council and IMSB secretariat staff have established a Waharoa gate group to ensurealignment of Treaty Audit response project objectives with 2015 Treaty Auditrecommendations and to verify closure and acceptance of final deliverables.

35. Ngā Kete Akoranga. Learning and development activities that build council capability torespond effectively to Māori are on-going, including: e-learning modules; group learningworkshops; and role-specific training for elected members, senior managers,technical/professional roles, and Māori specialist roles. This has included te reo and waiatatraining, tikanga and marae training and Treaty of Waitangi Workshops.


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Summary of Whai Tahinga -Treaty of Waitangi Settlements activity

36. Treaty of Waitangi Settlement Programme. Māori transformational shift activity for quarterone encompassed ongoing engagement with crown, collective mana whenua groups and

individual mana whenua on treaty settlement negotiations. This included attendance bycouncil representatives at Te Kawerau ā Maki Claims Settlement Bill third reading. Nospecific expenditure beyond staff time was incurred. Activities, and expenditure, anticipatedfor quarters two and three, include those relating to harbour negotiations and across-councilprojects to enhance post-settlement engagement with mana whenua.

Summary of co-governance and co-management activity

37. The narrative below provides highlights from quarter one activity from the Parks, Sport andRecreation team. Further detail of activity and expenditure is located in Attachment B.

38. A total of $540,000 was spent in quarter one. This included $472,000 opex and $ 68,000capex. A majority of this related to Tūpuna Maunga o Tāmaki Makaurau Authority (Maunga

Authority) activities and the costs associated with the Whenua Rangatira, Ngāti WhātuaŌrākei Reserves Board.

39. Ngāti Whātua Ōrākei Reserves Board (opex) Orakei Marae hosted the 2015 HūiPoutama on 11 October. This focused on providing career pathways and educationaloutcomes for Māori. As a result of ongoing discussions with theNgāti Whātua ŌrākeiReserves Board, a feasibility study for a Wharewaka (waka facility) at the eastern end of TheLanding, Tamaki Drive will commence in the next quarter.

40. Tūpuna Maunga o Tāmaki Makaurau Authority (opex). Work on the IntegratedManagement Plan for the maunga Work has commenced, with a completion date of June2016. In November the Maunga Authority approved the planting of three Pohutukawa andsix Tōtara trees on Maungakiekie to replace the tree that was felled in 2000 after sustaining

damage in 1994 and 1999.

Consideration


41. Local boards through their advisors have been consulted in the identification of local boardMāori transformational shift activity. Local boards will be included in the business partneringprocess to support the implementation of the monitoring and reporting system Māoritransformational activity.

Māori impact statement 42. This report provides information on the quarter one activities for 2015/2016 identified as

Māori transformational shift activity. This report also provides information on the quarter oneidentified as co-governance or co-management activities for 2015/2016. These activities aredelivering on the priorities agreed in council’s 2015-2015 Long-term Plan.

Next steps

43. Additional Māori transformational activity proposals have been identified for potentialinclusion in council’s 2015/2016 budget. Decisions on these activities will be reported to theFinance and Performance Committee in April 2016.

44. Finance and Te Waka Angamua will work with CCOs to ensure that budget and expenditureresults are included in the remaining quarterly reports for the 2015-2016 financial year.


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Attachments

No. Title Page

A Māori Transformational Shift Activity 57

B Co-governance and co-management activities 63

Signatories

Author Shane Cook - Kaihautu Whakatuturu Puni - Senior Maori Effectiveness Advisor

Authorisers Johnnie Freeland - Paearahi Matua - Manager

Phil Wilson - Governance Director

Sue Tindal - Group Chief Financial Officer


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Implementing the New Food Act for Environmental Health (Food Premises) Page 65

Implementing the New Food Act for Environmental Health (FoodPremises)

File No.: CP2015/23645

Purpose1. This report advises on the options for the establishment of new fees for environmental health

services (food premises) as a consequence of the Food Act 2014 that comes into force on 1March 2016.

Executive Summary2. The Food Act 2014 introduces significant improvements to how food safety is addressed by

commercial establishments across New Zealand. The new Act places a greater emphasis onthe operator being responsible for food safety, and the regulator auditing and verifying thattheir plan is adequate and being followed correctly.

3. The new Act changes the way food premises are registered and managed by Council and arange of businesses will register for the first time with Council.

4. Changes are required to the way Council charges for the services it provides throughadministering the Food Act; due to amendments to the registration process and the additionof new verification, auditing and compliance services.

5. This report recommends the adoption of a Statement of Proposal for consultation with thepublic and food operators on the fixing of fees. It is proposed that operators will pay a fixed(minimum) fee upfront with additional officer time charged on an hourly rate basis.


a) adopt the statement of proposal to fix fees to recover the costs of the Council’sfunctions under the Food Act 2014.

b) agree the process for consultation as set out in the report. Staff will report back onsubmissions and the proposed fees to the Regulatory and Bylaws Committee in2016.

c) note that the December 2015 meeting of the Regulatory and Bylaws Committee will

appoint hearings panel members to consider the submissions.

Background6. The Food Act 2014 (The Act) was passed into law in June 2014, replacing the Food Act

1981. A three year transition starts on 1 March 2016. High risk food service businesses withan alcohol on-licence such as hotels, restaurants, bars and cafes will be among the first totransition to the new Act.


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Existing premises will transition

7. As at 30 June 2015, there were 8904 registered food premises in the region. The majority ofthese fall into the following categories:

A Grade High Risk premises (59%) A Grade Medium Risk premises (19%) A Grade Low Risk premises (14%) or B Grade High Risk premises (6%)

8. Most of these premises are expected to register with Food Control Plans. Some lower riskpremises such as dairies and fruit and vegetable stores will register with NationalProgrammes. The new categories are as follows:-

Food Control Plan – Food Service Sector (Restaurants/Cafes) National Programme 3 – Dairies, Fruit and Vegetable Stores National Programme 2 – Early Childhood Education providers National Programme 1 - Coffee Carts - Lowest Risk.

New types of businesses are now in scope

9. An additional number of premises will be required to register with Council, estimated ataround 1400 - 2000 premises. They will be registered under different risk based measures:-

Food Control Plan premises - rest homes (150), schools (100), hospitals (35), prisons(10), workplace cafeterias (200-600) and others.

National Programme premises – Early Childhood Education providers (900).

10. A national food grading system is provided for in the new Act but is still some time awayfrom being developed and implemented. Auckland Council is currently reviewing its existinggrading system to ensure it is in accordance with the new Act. This will be part of a separatereview which will be reported to the Regulatory and Bylaws Committee.

Implementing the new Food Act11. A project team has been established to implement the Act; both the transition of the nearly

9000 premises and the addition of extra premises required to be registered.

12. Mentoring sessions have been held with over 1000 operators. Currently, over 1500 earlyadopters are using a Food Control Plan. These VIP operators (Voluntary ImplementationProgramme) have provided valuable information to assist with the planning process, trainingof staff, mentoring of operators and modelling of time to complete tasks. This has alsoenabled the team to forecast staffing requirements and to better understand the newrequirements.

Principles for recovering costs under the new Food Act

13. Fees and charges are currently set under the Health Act 1956 and the Food HygieneRegulations 1974. Food premises subject to the requirements of the new Food Act have upto three years to transition and, until they do, will be subject to the current charging regime.

14. The new Food Act enables Council to fix fees to recover the direct and indirect costs of anyregistration, verification, compliance and monitoring functions performed under the Act.

15. The Ministry of Primary Industries has provided guidance on how fees and charges shouldbe determined. The Act states that fees must not recover more than the reasonable costsand must satisfy the follow criteria:


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Equity

Funding should come from the persons using or benefiting from the functions, power orservice.

16. Staff advise it is equitable to recover the full costs of the Council’s functions under the Actfrom the direct beneficiaries. The beneficiaries are determined as the owners of food

premises to which these functions apply. Users of food premises receive an indirect benefitfrom the functions performed by the Council under the Act. Conversely, it would not beequitable to recover the costs arising from a complaint that did not result in the issuing of animprovement notice. Rather a complaint service is of general benefit to the public and costsshould not be directly recovered from the food operator where a complaint is not justified.

Efficiency

Costs should be allocated and recovered so that maximum benefits are delivered atminimum cost.

17. Council is obliged to deliver its functions in the most efficient manner possible and to ensurethis efficiency is reflected in the costs to users.

JustifiableCosts should be collected only to meet actual and reasonable costs (including indirectcosts).

18. Fees and charged should be determined on the estimated time to process registration,verification and compliance functions. The hourly rate reflects a careful analysis of directcosts such as salary and operational expenditure, as well as indirect costs such as supportfunctions, IS and property costs. The indirect costs have been adjusted to be market relatedwhere possible .i.e. property charges have been based on the Colliers Public Sector peremployee property cost.

Transparency

Costs should be identified and allocated to the tangible service provision for the recovery period in which the service is provided.

19. The proposed fees are based on a calculated hourly rate charge. These have beendetermined, based on current timings, the associated time that is allocated to the individualfunctions of registration, verification and compliance. Included in the calculated $155 perhour charge are the direct, indirect and corporate support charges

20. Registration includes the administration work such as providing basic advice to newbusinesses, recording food premises details, processing licences and certificates.

21. Verification includes auditing of food premises, including preparation (booking ofappointments, checking prior history), travel time, actual on-site time, completing reports andrecording system entries.

22. All compliance and monitoring activity will be charged on a per hour basis in circumstanceswhere an improvement notice is issued.


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Options considered for fixing fees and charges

23. The Act provides options for fixing fees. These are presented below:

Option Positives Negatives Risks

Option 1:Minimum fixed fee basedon average time, withthe ability to recoveradditional costs asrequired.

Rewards goodcompliance &behaviour

Recovers costs foractual work performed

Minimum chargeremoves risk of notrecovering full costs

Consistent with MPIfees and chargesmethodology

Provides customer

guidance on total fees

Some averaging forsome operators

More invoicing thancurrent approach

Not accuratelyrecording time spentcould see costrecovery affected

Additional overheadsrequired withexplaining additionalhours

Option 2:Subsidised cost recoverywith rates funding tolower the hourly rate

Keeps costs foroperators lower

Encourages use ofCouncil as preferredverifier whencompetition isintroduced

Increases costs toratepayers

Inconsistent withFood Act principle ofequity, in thatalthough users offood premises arebeneficiaries, the realbenefit of safe foodpremises are the

business owners Lower incentive for

operators to beefficient

Ratepayers unhappysubsidising foodbusinesses

Increased demand forverification servicesunable to be met

Subsidised servicescould lead to businesscompetitor complaints

Option 3:Charging by the houronly (no upfront fixedfee)

Possible perceivedlower charges bycustomers

High administrationcosts which haven’t been factored intocosts

High transactionvolume

Uncertainty foroperators as to likelytotal charges

Higher debt collectioncosts

Overall lower revenueand possibly not allcosts recovered

New systems

(Newcore) will not beavailable initially Very limited transition

period for staff to moveto full time basedrecording

24. Option 1 provides customers with certainty on how much a service would cost on averagethrough a fixed fee, and at the same time provides the ability to recover additional costs asrequired through additional charges based on time spent.

25. Option 3 provides the greatest flexibility to users.


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Projected Financial Implication

26. There will be a level of fluctuation in the revenue as we transition applicants across to thenew Food Act over three years. We expect the revenue to meet the projected budgettargets for the next two years but this will need to be reforecast for year 3 (2018/19) once theregulations have bedded in . It is also important to note that the verification frequency forhigh performing operators will extend to every eighteen months. By 2018/19 the verification

trends and bedding in of new processes will enable an accurate assessment of the projectedoperating expenditure and revenue.

Special Consultative Procedure

27. Prior to fixing fees, the Council is required to consult on the proposed fees using the specialconsultative procedure as provided in section 83 of the Local Government Act 2002.

28. To meet the requirements of section 83, this report seeks adoption of the statement ofproposal to be released for special consultative procedure. The Statement of Proposal isincluded in attachment A of this report.

29. Key steps for the consultation include:

a. The consultation period will be from Friday 20 November to Monday 21 December.Whilst this is not an ideal time to call for submissions the need to get the new feeregime in place by March 2016 makes it unavoidable.

b. A Statement of Proposal will be published on the Shape Auckland website andavailable at service centres

c. A public notice will be publishedd. Current licensed premises and industry groups will be communicated with directlye. Public hearings will be available for those wishing to present oral submissions

Table 1: Proposed fee schedule for administering the Food Act 2014

Function Fee (inclusive of GST) Timing of PaymentRegistration

Application for registration ofFood Control Plan (FCP) basedon a template or model issued byMPI

$310 (includes two hours ofprocessing of application)

$155 per hour for every extrahour of registration activities

$310 payable on application

Remainder payable on invoice

Application for registration of abusiness subject to a nationalprogramme template

$155 (includes one hour ofprocessing of application)

$155 per hour for every extra

hour of registration activities



Application for renewal ofregistration

$155 (includes one hour ofprocessing of application)

$155 per hour for every extrahour of registration activities



Application for amendment toregistration

$155 (includes one hour forprocessing of application)

$155 per hour for every extrahour of processing theapplication




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Verification

Verification of a food control planbased on a template or modelissued by MPI

$620 (includes four hours ofverification activities)

$155 per hour for every extrahour of verification activities

Payable at registration (ifverification due within next 12months)


Verification of a food control planbased on a National ProgrammeThree (NP3) template

$465 (includes three hours ofverification activities)




Verification of a food control planbased on a National ProgrammeTwo or One (NP2 or NP1)template

$310 (includes two hours ofverification activities)




Compliance

Issue of improvement notice $155 per notice (includes onehour of improvement noticeactivity)

$155 per hour for every extrahour of improvement noticeactivity

Payable on invoice

Application for review of issue ofimprovement notice

$155 per application (includesone hour of review activity)

$155 per hour for every extrahour of review activity



All other Services for which a feemay be set under the Food Act

$155 per hour Payable on invoice

Additional points to consider

30. The initial verification fixed fee is based on an initial estimate of time. The actual officer timewill be subject to the size, complexity, level of compliance and the readiness of the business.

31. The registration frequency for National Programmes is every two years.

32. The verification frequency for high performing operators may extend to every eighteenmonths, further reducing compliance costs for food operators. Verifications for businesseson National Programmes may also be extended to twenty four months. Businesses on

National Programme One (businesses such as coffee carts) will only need to be verifiedonce.

33. The Council may also grant an exemption from, or waive or refund, any fee or charge inwhole or in part. For example, under the current fee schedule, approximately 500 premisessuch as clubs pay a nominal fee of approximately $300 to receive certificate of inspections. A similar method of recognising not for profit type organisations will be adopted.

34. Renewal of registration will be based on the annual anniversary date of registration underthe Food Act 2014.

35. Food businesses transitioning from the Food Hygiene Regulations 1974 to the Food Act2014 will be able to transfer fees on an annual pro-rata basis to the Food Act registration.


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Fee comparatives between existing & proposed charges

36. The new charges comprise registration, verifications and monitoring activity charges. Thenew Act and fee structure will enable high performing premises to receive lower chargesthrough fewer verification site visits. Noted below is an example of what operators will becharged based on option 1:

Most food premises are currently categorised as A Grade High Risk (59%) and arecurrently being charged $1,048. Most of these will need to register with a FoodControl Plan and be verified on an annual basis. This will cost $930 in the first year,and $775 in subsequent years. A proportion of these (estimated at up to 50%) willrequire extra time to verify, and Council are required to recover the extra costsassociated with this time. As time goes on, and operators become familiar with theirrequirements, some will become high performing and verifications will occur every 18months. Effectively this means over three years they will be registered each year butonly be verified twice, therefore paying average annual fees of $568 (Yr1 $775 + Yr2$775 + Yr3 $155).

For smaller, low risk businesses such as dairies and service stations, they currentlypay $407 or $542. Fees will reduce for these operators to $310 per year as they willonly need to register and be verified every two years unless they require additionaltime to complete the verification process.

37. Table 2 provides a full comparative of existing and proposed fees, refer attachment B.

Consideration


38. Local Boards views will be sought during the special consultative procedure and included inthe report following the analysis of responses.

Māori impact statement 39. Food prepared and served on a marae for customary activities is outside the scope of the

Act and will not be regulated as the food is not sold or traded.

40. Food businesses that operate from marae and sell food will be regulated under the Act in thesame way that food businesses operating elsewhere will be regulated.

41. The Food Act Transition project team has engaged with mana whenua, the IndependentMāori Statutory Board and will be sharing information with Mataawaka on 11 Nov at the TeMahurehure Marae in Point Chevalier. This session includes representatives from Te PuniKokiri and based on the feedback from this hui further engagement will be scheduled fornext year.

42. Marae that are raising funds for ‘charitable, benevolent, or cultural purposes’ would not needto operate with a Food Control Plan or under a National Programme provided the tradingt

finance and performance committee - agenda november, 2015

Documents