Finance and Corporate Committee - wdc.govt.nz · Finance and Corporate Committee Notice of Meeting...

Finance and Corporate Committee

Notice of Meeting A meeting of the Finance and Corporate Committee will be held in the Council Chamber, Forum North, Whangarei on:

Thursday

25 May 2017 9.00 am

Committee Cr Shelley Deeming (Chairperson) Her Worship the Mayor Sheryl Mai

Cr Stu Bell Cr Crichton Christie Cr Vince Cocurullo

Cr Tricia Cutforth Cr Sue Glen

Cr Jayne Golightly Cr Phil Halse

Cr Cherry Hermon Cr Greg Innes

Cr Greg Martin Cr Sharon Morgan

Cr Anna Murphy

Finance and Corporate Committee – Terms of Reference Membership Chairperson: Councillor Shelley Deeming

Members: Her Worship the Mayor Sheryl Mai

Councillors Stu Bell, Crichton Christie, Vince Cocurullo, Tricia Cutforth, Sue Glen, Jayne Golightly, Phil Halse, Cherry Hermon, Greg Innes, Greg Martin, Sharon Morgan, Anna Murphy

Meetings: Monthly Quorum: 7 Purpose:

To oversee Council and CCO’s financial management and performance, including operation of the administrative and internal support functions of council.

Key responsibilities include: • Progress towards achievement of the council’s financial objectives as set out in the

Long Term Plan.

• Preparation for recommendation to council:

- Advising and supporting the mayor on the development of the Long Term Plan (LTP) and Annual Plan (AP)

- Financial policy related to the LTP and AP - Setting of rates - Preparation of the consultation document and supporting information, and

the consultation process for the LTP and AP - Annual Report

• Financial/Planning and Control - Corporate accounting services - Treasury – debt and interest risk management - Procurement

• CCO Monitoring and Performance

- Monitoring the financial and non-financial performance targets, key

performance indicators and other measures of each Council Controlled Organisation (CCO) to inform the committee’s judgement about the performance of each organisation.

- Advising the mayor on the content of the annual Letters of Expectations (LoE) to CCOs.

• Overseeing and making decisions relating to an ongoing programme of service

delivery reviews as required under section 17A of the Local Government Act 2002

• Shared Services – investigate opportunities for Shared Services for

recommendation to council.

Delegations (i) All powers necessary to perform the committee’s responsibilities, including, but

not limited to:

(a) the approval of expenditure of less than $5 million plus GST. (b) approval of a submission to an external body. (c) establishment of working parties or steering groups.

(d) power to establish subcommittees and to delegate their powers to that

subcommittee.

(e) the power to adopt the Special Consultative Procedure provided for in Section 83 to 88 of the LGA in respect of matters under its jurisdiction (this allows for setting of fees and bylaw making processes up to but not including adoption).

(f) the power to delegate any of its powers to any joint committee established

for any relevant purpose under clause 32, Schedule 7 of the Local Government Act 2002

OPEN MEETING

APOLOGIES

DECLARATIONS OF INTEREST Members are reminded to indicate any items in which they might have an interest.

INDEX

Item No Page No

1. Minutes of Meeting Held 27 April 2017 ................................................................... 1

2. Financial Report for the 10 Months Ending 30 April 2017 ........................................ 3

3. Corporate Capital Projects Report for the Month Ending30 April 2017 ....................................................................................................... 10

4. Operational Report – Finance and Corporate – May 2017..................................... 13

5. Service Delivery Review – Legal Services ............................................................ 22

Recommendations contained in this agenda may not be final decisions. Please refer to the minutes for resolutions.

Local Government Act 2002 Amendment Act 2012 Full consideration has been given to the provisions of the Local Government Act 2002 Amendment Act 2012 in relation to decision making and in particular the current and future needs of communities for good quality local infrastructure, local public services and performance of regulatory functions in a way that is most cost effective for households and businesses. Consideration has also been given to social, economic and cultural interests and the need to maintain and enhance the quality of the environment in taking a sustainable development approach.

Finance and Corporate Committee 25 May 2017

1. Minutes: Finance and Corporate CommitteeThursday 27 April 2017

Minutes of a meeting of the Finance and Corporate Committee held in the Council Chamber Forum North on Thursday 27 April 2017 at 9.00am

Present: Cr Shelley Deeming (Chairperson)

Her Worship the Mayor Sheryl Mai, Crs Stu Bell, Vince Cocurullo, Tricia Cutforth, Sue Glen, Jayne Golightly, Phil Halse, Cherry Hermon, Greg Innes, Greg Martin, Sharon Morgan and Anna Murphy

Apology:

Cr Christie

Moved: Cr Martin Seconded: Cr Glen

“That the apology be sustained.” CARRIED

In Attendance: Chief Executive (Rob Forlong), General Manager Finance and Corporate (Alan Adcock), General Manager Strategy and Democracy (Jill McPherson), General Manager Community (Sandra Boardman), Democracy Manager (Jason Marris), Financial Controller (Rich Kerr), Financial Accountant (Delyse Henwood), Treasury & CCO Accountant (Nathan Wright), and Senior Meeting Coordinator (C Brindle)

1. Confirmation of minutes of a Meeting of the Finance and Corporate Committeeheld on 30 March 2017Moved Cr InnesSeconded Cr Morgan

“That the minutes of the Finance and Corporate Committee Meeting held on Thursday30 March 2017, have been circulated, be taken as read and now confirmed andadopted as a true and correct recording of proceedings of that meeting.”

CARRIED

2. Financial Report for the 9 Months Ending 31 March 2017

Moved Cr BellSeconded Cr Cocurullo

“That the Finance and Corporate Committee receives the financial report for the nine monthsending 31 March 2017.”

CARRIED

1


3. Corporate Capital Projects Report for the Month Ending 31 March 2017

Moved Cr Hermon Seconded Cr Glen “That the Finance and Corporate Committee:

a) Receive the Corporate Capital Projects Report for the month ending 31 March 2017.”

CARRIED

4. Operational Report – Finance and Corporate – April 2017

Moved Cr Innes Seconded Cr Cutforth “That the Finance and Corporate Committee notes the operational report for April 2017.

CARRIED

The meeting closed at 9.22am

Confirmed this 25th day of May 2017

Shelley Deeming (Chairperson)

2


2 Financial Report for the 10 Months Ending 30 April 2017

Reporting officer: Alan Adcock (General Manager - Corporate/CFO) Date of meeting: 25 May 2017

1 Purpose To provide the financial report for the ten months ending 30 April 2017.

2 Recommendation/s That the Finance and Corporate Committee receives the financial report for the ten months ending 30 April 2017.

3 Background Council remains on track to achieve a positive financial result for the 2016-2017 year.

3.1 Operating Result – Full Year Forecast

The forecast net surplus for the financial year ending 30 June 2017 is $7.0m compared with a budgeted surplus of $5.3m, resulting in a favourable variance of $1.7m.

3.2 Capital Project Expenditure – Full Year Forecast

The Capital Projects expenditure as at 30 April 2017 is currently $12.5m less than budget. Council is forecasting to spend a total of $41.6m against the $56.8m budget, with a forecast carry forward of $15.5m to the next financial year (the major carry forwards relate to One Building $3.0m, Cycleways $1.0m, Whau Valley Water Treatment Plant $1.9m, Tarewa Tank (Wastewater) $2.0m, Pohe Island Projects (Sports and Recreation) $1.3m and IT Projects $2.7m.

3.3 External Net Debt and Treasury

Total net external debt at the end of April 2017 was $122.2m compared to revised budgeted net debt of $152.8m, resulting in net debt being $30.6m under budget.

This positive variance is a result of several factors including:

• Difference in the 2016/17 opening debt compared to the annual plan• Year to date operating result (see 3.1)• Unbudgeted property sales• Timing of capital expenditure.

3

YTD

Revis

edBu

dget

Varia

nce

YTD

YTD

Full Y

earFo

recast

Revis

edBu

dget

Varia

nce

YTD

(Surpl

us)/

Defic

it(Su

rplus)

/ De

ficit

(Surpl

us)/

Defic

itInd

icator

(Surpl

us)/

Defic

it(Su

rplus)

/ De

ficit

(Surpl

us)/

Defic

itInd

icator

$ m$ m

$ m$ m

$ m$ m

OPER

ATING

Total

Rates

(72.9)

(72.7)

(0.2)

(88.1)

(88.0)

(0.1)

Favou

rable t

o budg

etUs

er Fe

es(16

.6)(16

.8)0.2

(20.6)

(20.1)

(0.5)

Opera

ting S

ubsid

ies an

d Gran

ts(5.

5)(5.

2)(0.

3)(6.

5)(6.

6)0.1

Total

Opera

ting In

come

(98.3)

(98.2)

(0.1)

(119.8

)(11

9.1)

(0.7)

Perso

nnel C

osts

21.2

21.7

(0.5)

25.3

25.7

(0.4)

Unfav

ourabl

e to pr

evious

month

21.1

20.7

0.428.

426.

22.2

Other

Opera

ting E

xpen

diture

22.8

24.2

(1.4)

30.0

31.2

(1.2)

Total

Opera

ting E

xpen

diture

102.6

104.7

(2.1)

130.1

129.9

0.2(Su

rplus

)/Defi

cit fro

m Ope

ration

s4.3

6.5(2.

2)10.

310.

8(0.

5)

CAPIT

ALCa

pital S

ubsid

ies(9.

2)(8.

1)(1.

1)(9.

9)(10

.7)0.8

Devel

opme

nt Co

ntribu

tions

(4.3)

(2.7)

(1.6)

(4.6)

(3.0)

(1.6)

Total

Capit

al Inc

ome

(13.9)

(11.2)

(2.7)

(17.5)

(16.7)

(0.8)

Exter

nal N

et De

bt122

.2152

.8(30

.6)Ne

t Inter

est on

debt

5.9 6.7

(0.8)

7.1 8.0

(0.9)

Total

(Surp

lus) / D

eficit

(9.6)

(4.6)

(5.0)

(7.0)

(5.3)

(1.7)

Key C

ontrib

utors

to Ye

ar En

d Fore

cast U

nfavou

rable

Varia

nces:

Opera

ting S

ubsid

ies an

d Gran

tsTh

eunfa

vourab

levaria

nceisd

ueto t

he $1.

3m of

expend

iture

(53%

subsid

y) for

Manga

kahiaR

oadbei

ngrem

ovedfr

omthe

for

ecast.

Some

ofthis

hasb

eenoffs

etbya

ddition

alsubs

idiesd

ue tof

loodd

amage

.Pro

fessio

nal Fe

es / R

&M / A

sset O

perat

ing Ex

pend

iture

Theu

nfavou

rablev

ariance

isdue

toprof

ession

al fees

for lea

ky bui

ldingli

tigation

,renta

larbitr

atione

xpense

s,Mars

denCit

ylegal

exp

enses,

resour

cecon

sentsp

rocess

ing,an

denvi

ronme

ntal

policy

planc

hanges

curren

tlytra

cking

higher

thanb

udget.

Some

oft

his is

duetos

taffvac

ancies

andpar

tiallyo

ffsetby

afavou

rable

varian

ceins

alaries

.Ca

pital S

ubsid

iesTh

eunfa

vourab

levaria

nce is

due to

the su

bsidy

budget

ed for

rep

lacem

entofb

ridges

which

didnot

getNZ

TAfun

dinga

pprove

d, and

carryf

orward

ofcycl

eways

.

Note:

The a

bove in

forma

tion inc

ludes

excerp

ts take

n from

the Mo

nthly I

ncome

State

ment.

The s

haded

lines a

bove r

eprese

nt key

totals f

rom the

Month

ly Inco

me

Statem

entbut

arenot

totals o

ftheli

nesabo

ve.

MONT

HLY K

EY IN

DICAT

ORS

APRIL

2017

YTD t

o 30 A

pril 20

17Fu

ll Year

Forec

ast

Profes

siona

l Fees

/ R&M

/ Asse

t Op

eratin

gExp

endit

ure

Trend

Curre

nt /

previo

us

month

Unfav

ourabl

e, but w

ithin 5

% of

budget

KEY

Unfav

ourabl

e, over

5% of

budget

Favou

rable t

o prev

ious m

onth

5 ATTACHMENT 1

Actual YTDBudget

YTD Variance YTDYTD

TrendFull Year Forecast

RevisedBudget Variance Full Year

(Surplus) / Deficit

(Surplus) / Deficit

(Surplus) / Deficit Indicator

(Surplus) / Deficit

(Surplus) / Deficit

(Surplus) / Deficit Indicator

$m $m $m $m $m $m

Total Council (9.6) (4.6) (5.0) (7.0) (5.3) (1.7)

Transportation 10.1 11.4 (1.3) 15.3 15.2 0.1

Water (2.7) (0.2) (2.5) (2.9) (1.5) (1.4)

Solid Waste (2.5) (2.6) 0.1 (2.4) (2.3) (0.1)

Waste Water (5.1) (4.5) (0.6) (4.9) (4.2) (0.7)

Storm Water 4.2 3.7 0.5 4.2 3.4 0.8

Flood Protection (0.1) 0.0 (0.1) (0.1) 0.0 (0.1)

Community Facilities 17.9 18.5 (0.6) 26.3 26.7 (0.4)

Economic Growth 1.9 2.2 (0.3) 1.9 2.1 (0.2)

Planning & Regulatory 6.3 6.5 (0.2) 8.4 7.9 0.5

Support Services (39.4) (39.4) 0.0 (52.8) (52.7) (0.1)

KEY:Favourable to budget

Favourable to previous month Unfavourable to previous month

Key Contributors to Year End Forecast Unfavourable Variances: Storm WaterThe unfavourable year end position due to legal expenses for Marsden City legal case.Planning & RegulatoryThe unfavourable year end position is mainly due to WOF/Rego infringement revenue continuously tracking below budget, as well as professional fees for leaky building litigation, resource consents processing and environmental policy plan changes currently tracking higher than budget.

APRIL 2017MONTHLY ACTIVITY SUMMARY

YTD to 30 April 2017 Full Year Forecast

Unfavourable, over 5% of budgetUnfavourable, but within 5% of budget

TrendCurrent /previous

month

6 ATTACHMENT 2

Actual Revised Budget Forecast Revised

Budget VarianceYTD YTD 2016-17 2016-17 2016-17$000 $000 $000 $000 $000

Operating IncomeGeneral Rates (41,769) (42,327) (50,504) (51,064) 559Activity Targeted Rates (20,311) (20,153) (24,422) (24,275) (147)Metered water (10,830) (10,246) (13,124) (12,634) (491)User Fees (16,645) (16,834) (20,559) (20,073) (486)Other Income (2,682) (3,394) (3,938) (4,433) 495Interest Received - Cash Balances (576) (46) (754) (55) (699)Operating Grants & Subsidies (5,490) (5,224) (6,467) (6,575) 108Total Operating Income (98,304) (98,225) (119,768) (119,108) (660)

Operating ExpenditurePersonnel Costs 21,194 21,689 25,262 25,694 (433)Professional Fees 4,719 3,556 6,936 4,681 2,255Repairs and Maintenance 12,589 13,480 16,493 16,612 (119)Asset Operating Expenditure 3,753 3,713 4,973 4,890 83Other Operating Expenditure 22,771 24,243 30,029 31,205 (1,176)Depreciation 31,147 31,342 38,528 38,714 (186)Interest Expense - External Borrowings 6,448 6,704 7,853 8,086 (233)Total Operating Expenditure 102,621 104,727 130,073 129,883 191

(Surplus)/Deficit from Operations 4,317 6,501 10,305 10,774 (470)

Capital IncomeCapital Subsidies (9,162) (8,139) (9,862) (10,724) 861Capital Scheme Rates (346) (339) (413) (407) (6)Lump Sum Contributions (135) (49) (148) (49) (99)Development Contributions (4,292) (2,672) (4,619) (3,000) (1,619)Non Cash - Vested Assets 0 0 (2,500) (2,500) 0Total Capital Income (13,936) (11,200) (17,543) (16,680) (863)

Capital Grant ExpenditureCapital grant expenditure 60 130 249 580 (331)Total Capital Grants 60 130 249 580 (331)

(Surplus)/Deficit from Operating Capital (13,876) (11,070) (17,295) (16,100) (1,195)

Total (Surplus)/Deficit (9,558) (4,568) (6,990) (5,325) (1,664)

Council Summary

MONTHLY INCOME STATEMENT 30 APRIL 2017

7 ATTACHMENT 3

CAPITAL PROJECT EXPENDITURE AS AT 30 APRIL 2017

$2,602

$42

$4,739

$1,452

$3,690

$58

$1,357

$15,866

$29,805

0% 20% 40% 60% 80% 100% 120%

Support Services

Economic Growth

Community Facilities & Services

Storm Water

Waste Water

Solid Waste

Water

Transportation

Total Complete YTD

% of YTD Capital Projects Completed v YTD Revised Budget

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Forecast

Cumulative YTD Project Expenditure vs. Revised Budget

CarryforwardsForecastRevised Budget YTDActual YTD

8 ATTACHMENT 4

As at 30 April 2017162,000,000

Plus loans raised during month 5,000,000 Less loan repayments made during month (Note: Facility movement has been netted) (5,000,000)

- 162,000,000

Less: Cash balances (excluding funds held on behalf) 2,316,489 Term deposits (Funds held on deposit until required for project funding) 37,500,000

39,816,489122,183,511

30,000,00039,000,000

3-5 Years 33,000,00060,000,000

162,000,000

9,889,252Property Reinvestment Reserve - Available for Reinvestment 3,576,672Property Reinvestment Reserve - Accumulated 28,136,929

31,713,601Water Reserve 26,282,501

67,885,353

TREASURY REPORT

External DebtOpening public debt as at 1 April 2017

DEBT SUMMARY:

STANDARD AND POORS CREDIT RATING: AA Outlook: Stable

30 APRIL 2017

Note: Reserves Funding is disclosed to ensure transparency of Council’s use of cashflow management to fund capital works. Where funds are raised through property sales or targeted rates for Water, but they are not required for immediate investment in that asset category, Council’s Revenue and Financing policy allows them to be used for other purposes, rather than being held on deposit.To ensure total transparency of this we create Reserve Accounts so that the appropriate funding can be made available and transferred back when it is required. The timing of projects requiring these funds is set out in our Long Term Plan (LTP) and/or Annual Plan (AP). These Reserves are not a liability to an external party, and are not part of Council’s debt obligations.The Property Reinvestment Reserve is split to record funds that were used specifically for capital works in previous years; and a smaller amount representing recent unbudgeted sales where the funds received have offset external debt.The only situation where our Net Debt would increase as a result of these Reserves is if major expenditure on Water Assets or property purchases is brought forward from the dates set out in the LTP/AP.

Net movement in external debtTotal External Debt

Total Net External DebtTotal cash and term deposits

Total

Internal Funding

Note: Council also holds $2.3m of LGFA borrower notes. These are not included in net external debt as per Council's Treasury Risk Management Policy.

NET EXTERNAL DEBT COMPARED TO BUDGET:

External debt is represented by:Less than 1 Year1-3 YearsGreater than 5 YearsTotal

Community Development Funds

100.00

110.00

120.00

130.00

140.00

150.00

160.00

June Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

$ Millio

ns

Months

Net Debt 2015-2016Revised Bugeted Net Debt 2016-2017Net Debt 2016-2017Net Debt Target (Annual plan,$156M)

9 ATTACHMENT 5


3. Corporate Capital Projects Report for the Month Ending30 April 2017

Reporting officer: Alan Adcock (General Manager - Corporate) Date of meeting: 25 May 2017

1 Purpose To provide the Corporate Capital Projects Report for the month ending 30 April 2017.

2 Recommendation/s That the Finance and Corporate Committee receive the Corporate Capital Projects Report for the month ending 30 April 2017.

3 Background An update on Corporate projects expenditure to date, and forecast spend and carry forwards against budget.

3.1 Capital Project Expenditure to date and Full Year Forecast

The Capital Projects expenditure for Corporate as at 30 April 2017 is currently $3.9m less than budget. Corporate is forecasting to spend a total of $2.7m against the $8.4m budget, with a forecast carry forward of $5.7m to the next financial year.

The main variance to budget and forecast carry forward is for the Council Premises of $3m as this project is still in its preliminary phase.

Information Services projects also have some delays with the:

• Digitisation project, largely due to resourcing, forecasting a carry forward of $1.2m

• One Council (OC) project, which is forecasting a carry forward of $0.7m due to delaysin the availability of TechnologyOne’s CiA Property and Rating Module.

10


4 Significance and engagement The decisions or matters of this Agenda do not trigger the significance criteria outlined in Council’s Significance and Engagement Policy, and the public will be informed via agenda publication on the website.

5 Attachments 1. Corporate Capital Projects Report to 30 April 2017

11

1 of

1

Actu

alYT

D

Rev

ised

B

udge

t YT

D

Varia

nce

YTD

Full

Year

Fo

reca

st

Full

Year

R

evis

ed

Bud

get

Fore

cast

(U

nder

spen

t)/

Ove

rspe

nt

Fore

cast

C

arry

Fo

rwar

ds

Tota

l (U

nder

spen

t)/

Ove

rspe

nt$0

00$0

00$0

00$0

00$0

00$0

00$0

00$0

00

Supp

ort S

ervi

ces

Cou

ncil

Offi

ces

Cou

ncil

Prem

ises

03,

010

(3,0

10)

03,

010

(3,0

10)

3,01

00

Info

rmat

ion

Cen

tre U

pgra

de0

70(7

0)80

150

(70)

50(2

0)C

ounc

il O

ffice

s T

otal

03,

080

(3,0

80)

803,

160

(3,0

80)

3,06

0(2

0)

Gov

erna

nce

Cou

ncil

Cha

mbe

rs U

pgra

des

00

010

00

100

010

0C

ounc

illor M

obile

Dev

ices

360

3636

036

036

Gov

erna

nce

Tot

al36

036

136

013

60

136

Hum

an R

esou

rces

Cou

ncil

Vehi

cle

Rep

lace

men

ts65

142

(77)

135

204

(68)

0(6

8)O

ffice

Fur

nitu

re15

015

90

90

9H

uman

Res

ourc

es T

otal

8014

2(6

2)14

420

4(5

9)0

(59)

Info

rmat

ion

Serv

ices

Asse

t Man

agem

ent S

oftw

are

Upg

rade

820

(12)

816

1(1

53)

153

(0)

Com

pute

r Tec

h fo

r Bui

ldin

g, A

nim

al C

ontro

l & P

arki

ng0

00

012

9(1

29)

129

0C

usto

mer

Acc

ess

- Onl

ine

Serv

ices

00

00

213

(213

)21

30

Dec

isio

n Su

ppor

t Sys

tem

Dev

elop

men

t0

65(6

5)0

215

(215

)21

50

Dig

itisa

tion

of R

ecor

ds14

21,

084

(942

)28

01,

545

(1,2

64)

1,23

9(2

5)El

ectro

nic

Agen

da M

anag

emen

t Sys

tem

1360

(47)

108

6048

048

IB P

roje

ct92

345

147

293

745

148

70

487

InC

ompa

ss83

854

029

983

854

029

90

299

OC

Pro

ject

150

518

(367

)15

01,

581

(1,4

30)

715

(716

)So

ftwar

e Ap

plic

atio

n In

tegr

atio

n0

150

(150

)0

150

(150

)0

(150

)In

form

atio

n Se

rvic

es T

otal

2,07

52,

886

(812

)2,

323

5,04

5(2

,721

)2,

665

(57)

Prop

erty

Wat

er S

ervi

ces

Build

ing

Ren

ewal

s0

20(2

0)0

20(2

0)0

(20)

Prop

erty

Tot

al0

20(2

0)0

20(2

0)0

(20)

Supp

ort S

ervi

ces

Tota

l2,

191

6,12

8(3

,937

)2,

684

8,42

8(5

,744

)5,

725

(20)

Tot

al2,

191

6,12

8(3

,937

)2,

684

8,42

8(5

,744

)5,

725

(20)

CO

RPO

RAT

E C

APIT

AL P

RO

JEC

TS R

EPO

RT

AS A

T 30

Apr

il 20

17(F

igur

es in

clud

e bo

th O

pera

ting

and

Cap

ital E

xpen

ditu

re)

12 ATTACHMENT 1


4 Operational Report - Finance and Corporate - May 2017

Reporting officer: Alan Adcock (General Manager - Corporate/CFO) Date of meeting: 25 May 2017

1 Purpose To provide a brief overview of work across services that the Finance and Corporate Committee is responsible for.

2 Recommendation That the Finance and Corporate Committee notes the operational report for May 2017.

3 Background The purpose of the Finance and Corporate Committee is to oversee Council and CCOs financial management and performance, including operation of the administrative and internal support functions of Council.

This report provides a brief overview of some of the operational highlights for May 2017 and provides further comment on future activities planned for this financial year.

4 Significance and engagement The decisions or matters of this report do not trigger the significance criteria outlined in Council’s Significance and Engagement Policy, and the public will be informed via report publication.

5 Attachment Operational Report – Finance and Corporate – May 2017

13

1

Operational Report – Finance and Corporate – May 2017

Information Services We are now seeing a wide level of adoption and general use of all the system changes implemented via Trilogy last year in November. The team are now focusing on understanding where the first phase of Trilogy change has made a positive impact and reporting against key performance indicators to make sure the benefits expected are realised.

Much of the next stage roadmap for the ICT strategic plan has been drafted over the last month. In the next month, there will be a focus on:

• Adopting a strong ICT governance structure

• Reviewing the ICT Information Services Strategic Plan (ISSP)

• Reviewing the Long Term Plan commitments for the ongoing ICT programme.

At a high level the regional ICT teams continue to be engaged in the Regional Shared Services (ICT) work stream, however there is still much work required at an executive level to describe the benefits sought and objectives (i.e. cost savings or increased services or availability) before opportunities can be identified and aligned.

IT Infrastructure

The infrastructure functions are continuing to operate within normal workload levels with nil disruption to our infrastructure platform services provided via the Cloud during the month of April. The key activities include:

• Updating ICT policies and procedures to align with Trilogy changes

• Finalising the updated Business Continuity Plans

• Decommissioning and disposal of the WDC Server Room assets and surplusdesktop assets (Citrix thin clients)

• Support for various business operations projects

• Continuous monitoring of intrusion attempts (computer viruses etc).

14 ATTACHMENT 1

2

IT Applications

There has been little change in activities since the last reporting period for the IT Applications. The team have been largely focused on training, reviewing the ISSP in preparation for the next phase of projects in addition to day to day support. Strong focus remains on the following activities:

• Delivery of E-scribe – final configuration activities are now underway.

• Preparing for the next upgrade of the Technology One Cloud platform.

• Implementing approved KETE changes.

• Rolling out the upgraded Technology One Mobility system with the BuildingConsent team.

• Reviewing the automation of Accounts Payable processing.

• Providing IT support for up-coming end of fiscal year changes and activities.

• Rollout of the District Plan processing functionality in Technology One.

Information and Records

There is a strong focus this month on the final push to implement the Retention and Disposal rules into KETE. This piece of work will ensure WDC compliance with Archive NZ requirements and is a key outcome from the Trilogy programme. Work on this is expected to complete and be ready for implementation in July.

Digitisation of our property files remains a key focus and continues to progress well and to plan. Currently all our building consent files through to code compliance stage are on track to be fully digitised by the end of May.

Other key activities include:

• Ongoing review of how we provide GIS (Graphical Information Services)services to the organisation and wider stakeholders.

• Providing data services for legislative requests – for example boundary/warddata.

15

3

Finance

Financial Management

Final adjustments are being made to the budget pack for the 2017/18 Annual Plan. Finance is working through its other deliverables for finalising the Annual Plan.

Planning is in progress for the financial aspects of the LTP.

Planning for this year’s Annual Report is well underway. Audit NZ had their interim visit in the first couple of weeks in May.

The payables process has experienced some pressure in terms of processing over the last few months so resource has been directed at this to ensure that approved payments to suppliers are completed on time.

Revenue and Rates

Work towards finalising the rates ready for the strike in early July is progressing. The Council website will have the ability for ratepayers to view their proposed rates from mid May.

The rates review is underway and various public meetings have been held around the district to gather valuable public feedback for Council to consider.

We continue to see a high volume of property activity in the District, which flows onto settlement statements and database administration.

Procurement

Finalisation of contracts is still to be completed with the selected rating valuation service provider but other planning and process work for handover on 1 August 2017 is well under way.

In addition, we are supporting numerous other procurement processes across Council.

Staff have also begun preparatory work for a planned review of the Procurement Policy.

16

4

Communications Key activities this period have been focussed on producing content for the Rates Review public meetings, and the Long Term Plan Early Engagement. Graphics have continued to work on material for the DHL New Zealand Lions Series, Festival of Motorsport – International Rally of Whangarei, Claphams Clocks (Wilkinson Collection) and The Positive Aging Strategy.

Media Relations

Council was approached for comment on the following topics in April:

• Burst watermain on State Highway One near Bunnings (photo caption)

• Freedom Campers at i-Site over Easter

• Slip and drop out on Rauhomaumau Road Tutukaka following storm (this wasan on-going story)

• Flag at Rose Street needed replacing prior to ANZAC day

• Parihaka Monument needed cleaning prior to ANZAC day

• Mayor’s presence at ANZAC day commemorations

• Shutter Room – Love It Here photo competition winners

• Illegal dumping of rubbish at Saleyards Road and in Onerahi

• Pop up café at Bascule park

• Annual Jewel of the City report on use of the Hatea Loop

• National Award for Parihaka lookout

• International Rally of Whangarei

• Fair Trade District

• Boat ramp and stormwater pipe, Bream Bay

• Kensington Avenue to Manse Street roadworks.

17

5

People and Capability

Review

Over the last month we have been working on the processes required for the review of the organisation.

Learning and Development

There have been a number of courses run by Laracy Communications on Business Communication and Political Report Writing.

Our participation in the Northland Councils SOLGM Leadership Course has continued.

Governance

Service Delivery Reviews

Since the last report, two further reviews have been completed for approval by the relevant General Manager. These will be reported to the appropriate committee in due course. An external contractor has continued to help complete reviews for some areas.

The steering group are actively engaging with staff to ensure these are a priority, and we are confident reviews are progressing to meet the August 2017 statutory deadline.

Official Information Requests

This month there has been a noticeable increase in official information requests from the New Zealand Taxpayers Union. These requests have been for information on the following:

- spending on tourism and economic development- rating information- spending on advertising- spending on rural fire- membership of the Audit and Risk Committee- Staff code of conduct and requirement for political neutrality- Staff performance- Remuneration of elected members.

18

6

Annual Plan and Long Term Plans (LTP)

Annual Plan

The project team have continued to work on ensuring that the plan can be adopted at the 29 June Council meeting. A public briefing has been scheduled on 20 June to review the preliminary document, prior to adoption.

Long Term Plan

We are continuing to prepare the early engagement schedule, based upon the approved engagement plan. The theme for the LTP engagement will be ‘Whangarei: Here to where’. The LTP website is being developed with an external contractor, and it is scheduled to be live in early June. A series of LTP briefings have been scheduled and asset managers are continuing their work on their Asset Management Plans which feed into the LTP process.

Consultation for the proposed Fees and Charges closed at 5pm on 10 May 2017.

Democracy

We operated the first Te Kārearea meeting for the triennium on 19 April, and we held the second public briefing on the elected members code of conduct on 10 May.

Audit

The next internal audit commenced on 15 May which focuses on discretionary expenditure compliance against Council’s Sensitive Expenditure Policy. The recruitment of an independent advisor to the Audit and Risk Committee closed on 10 May, and the delegated panel will hold interviews and make a decision prior to the next Audit and Risk Committee on 28 June.

Delegations

We have commenced the triennial review of the delegations register, to also incorporate changes to the organisational structure. A project team has been formed and has been working with the organisation to ensure the current register is as up to date as possible. We are planning on changing the format of the register so that the delegations from Council to the Chief Executive, and then from the Chief Executive to staff are much clearer than what is provided now. The ability for the Chief Executive to administer the delegations efficiently and effectively will be improved through this process. It is intended that delegations from Council to staff will not change, however, if there are opportunities to improve the delegations, these will be presented to Council for approval with the entire register in June/July. Internally, we are also investigating ways of using our new IT platform to best display the register to make it more useable.

19

7

Maori Liaison and Development

Council Priorities

At the Whangarei District Council Workshop on 13 April 2017 Councillors brainstormed then scored using a points system to prioritise 25 tangible priorities that Council can achieve in the foreseeable future in its relationship with Te Huinga.

According to the ranking system adopted, the following three issues ranked the highest:

1. Effective 2-way communication2. Hihiaua Cultural Centre3. Focus on youth in a joint initiative with the Youth Advisory Group and the

Mayors Taskforce for jobs.

Ture Whenua Bill 126 aims to address inequities in Maori Land law

Currently the Bill is being discussed in the Committee of the Whole House. It will then move to its Third reading and finally the Royal assent is given.

The primary objective of the Ture Whenua reform is to restate and reform the law relating to Maori land.

The primary purpose of the reforms is to keep Maori land in Maori ownership for future generations and supporting owners’ aspirations for their land.

The new legislative powers and a dedicated Maori Land Service will enable Maori landowners to plan for their futures by removing barriers and addressing issues that for years have unfairly alienated owners from their land and restricted the development of Maori land.

The primary changes to the law emphasise the three pou or principles of:

• Taonga tuku iho• Mana motuhake• Whakawhanake

Taonga tuku iho will enhance protections to ensure that the remaining Maori land stays in Maori hands while manamotuhake will provide Maori land owners with greater autonomy to make decisions about their land and whakawhanake will provide better support to land owners to develop their land.

20

8

Other issues being addressed at the same time are:

• The public Works Act 1981• Rating of Maori Land• Family Protection Act 1955• Resource Legislation Amendment Act 2017 (RMA) currently in its

Third Reading stage

The Whangarei District Council will be affected by these changes and will need to collaborate more closely with Hapu/Iwi in the district.

Te Tiriti o Waitangi – Te Paparahi o Te Raki claims process

The hearings are fast approaching its final stages where counsel are wrapping up the finer points that have emerged throughout the entire 22 weeks of hearings.

To date the major issues that have emerged in the Stage 2 inquiry include:

1. Tino rangatiratanga, kawanatanga and autonomy: political engagementbetween Maori and the Crown.

2. The immediate aftermath of the Treaty of Waitangi (in particular the Old LandClaims process 1841 – 1843, scrip and surplus lands, Crown pre-emption, andthe Northern War 1844 – 46.

3. The operation of the Maori Land Court and the alienation of Maori Land in the19th and 20th centuries.

4. The management of Maori land in the twentieth century, including localgovernment and rating, waterways, environment impacts, and public workstakings.

5. Takutai moana/foreshore and seabed.6. Economic development and socioeconomic issues and capability.7. Te reo Maori, wahi tapu, taonga, and tikanga.8. Specific local issues including the Port of Whangarei/Northport, Marsden Point

Refinery, Hauturu (Little Barrier island) and Hato Petera College – sale ofCrown Lands.

Many of the above issues will impact on the Whangarei District Council and this highlights the need for closer and effective 2-way communication with the Hapu/Iwi in the district.

21

Finance and Corporate 25 May 2017

5 Service Delivery Review - Legal Services

Reporting officer: Jason Marris (Governance Manager) Date of meeting: 25 May 2017

1 Purpose To provide an overview of the completed service delivery review for legal services

2 Recommendation/s That the Finance and Corporate Committee notes the completed Service Delivery Review for legal services.

3 Background Section 17A of the Local Government Act 2002 requires local authorities to periodically review the way they govern, fund and deliver their services. This means considering alternative ways of providing the service, analysing any of those options that could prove beneficial and providing a recommendation as an outcome of the review.

The first round of these reviews are due to be completed by August 2017.

How is Whangarei District Council meeting this requirement?

1. A steering group was set up to provide structure around the review programme including creating and approving templates to complete the reviews.

2. The steering group reports the programme to the Audit and Risk Committee, who providegovernance oversight.

3. Department managers identified and resourced functional team leads to complete thereviews.

4. Functional leads reviewed each service against a list of selection criteria and whereapplicable completed a service delivery review.

5. Once completed, the reviews are checked and approved by the relevant Group Manager,with oversight by the Steering Group. If required either or both of the below actions taken:

a. If a change to the service delivery model is recommended, the approach will bepresented to the appropriate committee for a decision.

b. If the change requires delegated financial authority then it will also need to go througha full council meeting as per the current procurement policy.

22


4 Overview of the Legal Services Review As Council has functions and powers under many different statutes, legal providers are consistently engaged for advice and guidance. The current model for providing these services is a mix of in-house and external firms and individuals.

The external firms and individuals are engaged on a case by case basis depending on the issue and the expertise required.

Our Service Delivery Review considered the following options for the provision of legal services:

- All in-house and possibly sharing resources with other Councils in the region- Contracting all legal services to an external firm or individual- Council-controlled organisation.

Due to the scale and nature of legal services, as well as the Law Society Rules around in-house counsel (i.e. in-house counsel can only act for its employing Council or its subsidiaries), the CCO model was not considered to be a viable option so was not considered in the review.

The review therefore concentrated on the different functions of Council and whether legal support should be provided in-house or by an external provider. 12 areas of law were reviewed and the table below provides the high-level outcome of the review.

Area of Law Outcome

Local Government Act In-house with external support

Building Act External lawyers supported by in-house

RMA and District Plan External lawyers supported by in-house

Rating External lawyers supported by in-house

Bylaws, Dog Control, Sale of Alcohol More in-house

Construction Act, contracts More in-house

Reserves Act External lawyers supported by in-house

Public Works Act, NZTA (Roading) More in-house

Property More in-house

Mediation External lawyers supported by in-house

Trusts/Societies In-house with external support

Human Resources External lawyers supported by in-house

23


The conclusion from the review is that there should continue to be a mix of in-house and external resource for legal services, but that there are several areas where more in-house resource would provide a better value for money service. The need for further in-house legal resource is being managed through the current organisation restructure.

5 Significance and engagement The decisions or matters of this report do not trigger the significance criteria outlined in Council’s Significance and Engagement Policy, and the public will be informed via report publication on the website.

6 Attachments Legal Services – section 17A Review report

24

©The Integral Group Limited, 2017

Whangarei District Council

LGA Section 17A Review

Legal

Workshop Report

Prepared by: Frank Aldridge - Director

26 March 2017

Commercial in Confidence

25 ATTACHMENT 1

WDC LGA Section 17A Review – Legal - Workshop Report 26/03/2017

© The Integral Group Limited, 2017 Commercial In Confidence Page 2 of 36

Table of Contents

1. Introduction ................................................................................................................... 3

2. Local Government Act Section 17(A) Review ............................................................. 4

3. Generic Findings ........................................................................................................... 6

3.1 Local Government Act .................................................................................................. 9

3.2 Building Act ................................................................................................................ 11

3.3 Resource Management Act and District Plan.............................................................. 12

3.4 Local Government Rating ........................................................................................... 13

3.5 Bylaws, Dog Control, Sale of Liquor Act ................................................................... 15

3.6 Construction Act ......................................................................................................... 17

3.7 Reserves Act ................................................................................................................ 19

3.8 Public Works Act, NZTA (Roading) .......................................................................... 20

3.9 Property ....................................................................................................................... 21

3.10 Mediation .................................................................................................................... 23

3.11 Trusts & Societies ....................................................................................................... 24

3.12 Human Resources ........................................................................................................ 26

4. Summary ..................................................................................................................... 27

Appendix One – Background Information ............................................................................ 30

Appendix Two – Briefing Material for Evaluation ............................................................... 33

Appendix 2.1 - In-House Option ........................................................................................... 34

Appendix 2.2 - Council Controlled Organisation .................................................................. 35

Appendix 2.3 - Contractor Model.......................................................................................... 36

26



1. Introduction

Introduction Whangarei District Council (WDC) are reviewing the provision of their legal services as per Section 17(A) of the Local Government Act. They have engaged The Integral Group Limited (TIGL) to assist with this process.

WDC uses legal services in most areas of its business. Background information in regard to the legal services provided, who does it and costs are set out in Appendix One.

There are a number of types of legal services, or areas of law, that are provided internally or externally to WDC. These areas of law have been summarised into 12 areas:

� Local Government Act � Building Act � RMA & District Plan � Local Government Act Rating � Bylaws, Dog Control, Sale of Liquor Act � Construction Act, Contracts � Reserves Act � Public Works Act, NZTA (roading) � Property � Mediation � Trusts/Societies � HR.

The process involved running workshops with key staff and this report captures the key findings from the workshops.

The process followed was:

� Initial workshop with key stakeholders to: � provide background � describe the different areas of legal services required by WDC � develop and rank the evaluation criteria for each of the types of

legal services to evaluate the different business models against. � A briefing note was provided to the attendees of the evaluation workshop

that set out the pros and cons for each business model for each evaluation criteria. This is attached as Appendix Two.

� An evaluation workshop involving a wider group of key stakeholders was run to evaluate and score the different business models for each of the type of legal services.

Audience The audience for this note is:

� Jason Marris

� Kathryn Candy

27



2. Local Government Act Section 17(A) Review

Group: Strategy and Democracy

Department: Governance

Activity: Legal Services

Activity Scope

There are a number of types of legal services, or areas of law, that are provided internally or externally to WDC. These are:

� Local Government Act � Building Act � RMA & District Plan � Local Government Act Rating � Bylaws, Dog Control, Sale of Liquor Act � Construction Act, Contracts � Reserves Act � Public Works Act, NZTA (roading) � Property � Mediation � Trusts/Societies � HR.

Current Supplier/s

Legal services are currently provided internally or externally by third-party suppliers. These suppliers include:

� Alan Dormer QC � Buddle Findlay � Heaney & Partners � Julian Dawson � Katharine Taurau

� Matt Casey QC � Richard Kettlewell (Sharp

Tudhope) � Simpson Grierson � Thomson Wilson

Continued on next page

28



2. Local Government Act Section 17(A) Review, Continued

Business model

When considering the current business model, the following options were identified for comparison. These include:

� In-house:

� WDC doing all the services in-house � Neighbouring councils doing in-house together or one council

providing the services to the others

� Contracting the services out to a third party – various contract models could apply:

� standard service panel of suppliers � one contract for the neighbouring councils

� Council controlled organisation.

29



3. Generic Findings

Workshop 1 At the first workshop we identified what the needs and wants were andagreed on several criteria and relative weightings to assist in making decisions about direction for each area of law reviewed.

A complete list of the attributes assigned to these needs and wants is set out in the table below.

Agreed needs and wants

The agreed needs and wants were:

Needs Definition

Health and safety � Compliant

Sustainable and Viable � Stable

� Profitable

� Enduring

Wants Definition

Skills � Best people

� Experience

� Access to Best Practice

Reliable � Reliable

� Consistent

Aligned � Control the alignment with council vision

� Collaborative

Best Value for Investment � Costs

� Innovation

� Value add

Agility and Flexibility � Change

� Legislative and Political

� Weather

� Innovation

Governance, Management and Administration

� Clarity

� Reporting

� Efficient


30



3. Generic Findings, Continued

Findings: Needs

The comparison of needs was carried out across all areas of law and the relevant business models. There was only one need identified and that was: � that the business model needed to be sustainable and viable.

Findings: Wants

There were a set of agreed wants. These were then ranked in order of importance for that each area of law (10 being the highest). The rankings for each area of law are set out in the table below.

Workshop 2

The needs were evaluated and the outcomes were the same for all areas of law.

Needs In-house CCO Contractor Sustainable and Viable Y N Y

The scale of the legal services for WDC would not be sustainable and viable for a CCO to provide legal services to WDC. As such the CCO model was not evaluated at an area of law level.

Scoring The next sections of the report set out the scoring for each area of law.


Wants/Weighting Skills Reliable Aligned

Best value

for

investment

Agility and

Flexibility

Governance,

Management and

Administration

Local Government

Act 9 10 7 6 8 5

Building Act 10 9 7 6 8 5

RMA & District Plan 8 9 7 6 10 5

Local Government

Act Rating 9 10 7 6 8 5

Bylaws, Dog Control,

Sale of Liquor Act 10 8 7 6 9 5

Construction Act,

Contracts 9 8 7 6 10 5

Reserves Act 9 8 7 6 10 5

Public Works Act,

NZTA (roading) 10 8 7 6 9 5

Property 8 10 7 9 6 5

Mediation 10 9 7 6 8 5

Trust/

Societies 10 8 9 6 7 5

HR 10 9 7 6 8 5

31



3. Generic Findings, Continued

Top 3 wants When considering legal services the top 3 criteria shown in the table below

were the same for all areas except Property Services and Trusts and Societies. As such there is a generic comment here supported by specific comments for each area of law. As noted above the different areas of law might rate the criteria slightly differently depending largely on: � how important it is to get the answer right � how specialised the area is � how often you need the resource � how urgent it is when you do need them.

# Want Reason 1. Reliable In most areas it is very important that the legal

advice is sound and protects the council. The advice needs to able to be relied upon as it often sets precedent.

2. Skills Legal services are quite specific and specialist knowledge is important in most areas. The ability to attract and retain this knowledge is an element. Often the skills are associated with the individual person more than who they work for.

3. Agility and Flexibility This is largely in regard to how often you need the particular type of advice, the size of the projects and how urgent they are.

Weighted score

Each area of law was scored across the business models for each criteria. A score out of 10 was allocated – 0 (poor) to 10 (excellent). These were then multiplied by the relative weightings to get a weighted score that could be used to assist with decision making.

32



3.1 Local Government Act

Introduction This section compiles the results of the wants, their ranking and weighted scores, comment, and conclusion.

Top 3 wants In this area the top three wants in order were: � reliable � skills � flexibility. The reasons being: � for the types of issues addressed getting the right answer is very important � having the skills to get that right answer was next � having the ability to get advice at short notice was important too, this can

extend to getting back up from external lawyers.

Weighted score


Wants Rankings Scores Weighted Scores Weighted Scores Weighted

Reliable 10 7 70 0 5 50

Skills 9 7 63 0 5 45

Agility and Flexibility 8 7 56 0 7 56

Aligned 7 8 56 0 5 35

Best value for investment 6 7 42 0 5 30

Governance, Management

and Administration 5 7 35 0 7 35

Totals Totals 322 0 251

Local Govt Act In-House CCO Contractor

33



3.1 Local Government Act, Continued

Comments Comments in regard to the comparative scores are:

Wants Rationale for Scores Reliable The type of law is very council orientated. In-

house legal are doing this type of law on a day to day basis. It is a core part of the in-house service.

Skills There are limited external skills in the area locally. Graham Mathias is the only external resource locally.

Agility and Flexibility

Advice is often required almost immediately, potentially from councillors, so being on hand is important.

Aligned In-house is totally aligned. External could be but would have to be brought up to speed.

Best value for investment

In-house is salaried and better value for money in this area.


Same for in-house versus external. Law firms on the whole are very customer focused and easy to manage. They survive by serving clients.

Conclusion This area is a hybrid of:

� base work being done in-house � top up or very specialised work being provided by external.

The in-house model should be retained. If there was more internal resource more of this work could be done internally. This would be more cost effective.

34



3.2 Building Act


Top 3 wants In this area the top three wants in order were: � skills � reliable � flexibility. The reasons being: � it was most important to get the right people with the right skills as it is a

very specialist area � for the types of issues addressed getting the right answer is very important

as they can set precedent (leaky buildings) that might have repercussions on the council

� flexibility was more in regard to these being large matters that can take a long time.

Weighted score


Wants Rationale for Scores Skills Specialist area including High Court work, so

external best suited.

Reliable More specialist skills and external able to provide better advice.


Horsepower available when required from external.

Aligned Equally aligned provided well briefed.


Higher cost, but high value from external.



Conclusion External lawyers briefed and supported by in-house to make sure of alignment with council objectives.


Skills 10 4 40 0 8 80

Reliable 9 5 45 0 8 72


Aligned 7 7 49 0 7 49





Building Act In-House CCO Contractor

35



3.3 Resource Management Act and District Plan


Top 3 wants In this area the top three wants in order were: � flexibility � skills � reliable. The reasons being: � need to be able to get them when you need them and large pieces of work � high level of skills with little internal involvement; specialist area where

working with multiple clients adds to experience � for the types of issues addressed getting the right answer is important, but

answers are less black and white.

Weighted score


Wants Rationale for Scores


Horsepower available when required from external. Large pieces of work.

Reliable Getting robust answers is important, specialist external skills more likely to get it right.

Skills High level of skills with little internal involvement. Specialist area where working with multiple clients adds to experience.









Reliable 9 5 45 0 8 72

Skills 8 5 40 0 8 64

Aligned 7 7 49 0 7 49





RMA & District Plan In-House CCO Contractor

36



3.4 Local Government Rating


Top 3 wants In this area the top three wants in order were: � reliable � skills � flexibility. The reasons being: � for the types of issues addressed getting the right answer is very important

as they have impacts on revenue that can’t be recovered in the short term; outcomes can set precedent

� having the skills to get that right answer was next, very specialist skills � having the ability to get advice at short notice was important too, this can

extend to getting back up from external lawyers.

Weighted score


Wants Rationale for Scores Reliable Getting robust answers is important, specialist

external skills more likely to get it right as they are working across the whole sector.

Skills High level of skills with little internal involvement. Specialist area where working with multiple clients in the sector adds to experience.


Horsepower available when required from external.

Aligned Almost aligned, external might be working in the sector’s interest not just the council’s.







Reliable 10 5 50 0 8 80

Skills 9 5 45 0 8 72


Aligned 7 7 49 0 6 42





Local Government Act Rating In-House CCO Contractor

37



3.4 Local Government Rating, Continued


38



3.5 Bylaws, Dog Control, Sale of Liquor Act


Top 3 wants In this area the top three wants in order were: � skills � flexibility � reliable. The reasons being: � some specialist work in regard to gambling and liquor � high volume of smaller matters; so availability is important � right answer is important and usually high visibility for these types of

issues.

Weighted score


Wants Rationale for Scores Skills Slightly in external suppliers’ favour, if more in-

house was available more could be done in-house.


If the resource was available in-house it would provide greater flexibility in terms of immediate support to smaller matters.

Reliable Equally as reliable.

Aligned Stronger internal alignment. With community responses to these areas being very vocal this is important.


Could be done more cost effectively in-house if available.





Skills 10 6 60 0 7 70


Reliable 8 7 56 0 7 56

Aligned 7 9 63 0 6 42





Bylaws, Dog Control, Sale of

Liquor Act In-House CCO Contractor

39



3.5 Bylaws, Dog Control, Sale of Liquor Act, Continued

Conclusion This is an area where more in-house capacity would produce a better outcome and more cost effectively.

40



3.6 Construction Act


Top 3 wants In this area the top three wants in order were: � flexibility � skills � reliable. The reasons being: � small spend, mostly in the Infrastructure and Services area � not required often, therefore on demand flexibility is important � specific types of contracts � reliable answers are important due to the large amounts associated with

these types of contracts.

Weighted score


Wants Rationale for Scores Agility and

Flexibility

Small spend so not a large demand to be filled, in-house and external can provide equally.

Skills External would have more specialist skills.

Reliable Experience from multiple clients means more robust outcomes.



Neutral balance of costs versus outcomes works out about the same.






Skills 9 5 45 0 7 63

Reliable 8 5 40 0 7 56

Aligned 7 6 42 0 6 42





Construction Act In-House CCO Contractor

41



3.6 Construction Act, Continued

Conclusion More of this could be done internally if the resource was available.

Early involvement from in-house legal team would be beneficial. The low costs in this area could be that there is not enough early involvement from legal and potential risk might not be being identified.

42



3.7 Reserves Act

Introduction This section compiles the results of the wants, their ranking and weighted

scores, comment, and conclusion.

Top 3 wants In this area the top three wants in order were: � flexibility � skills � reliable. The reasons being: � ability to get resources when required; no frequently used area, therefore

on demand flexibility is important � Crown Property Services work in this space – knowledgeable and

specialist � reliable outcomes as visible outcomes.

Weighted score


Wants Rationale for Scores Agility and

Flexibility

Not frequently used, need access quickly when required, therefore external stronger.

Skills Crown Property Services work in this space – knowledgeable and specialist.

Reliable External knowledgeable and specialist. Better outcomes.



Higher cost, higher value.



Conclusion External model supported by in-house.



Skills 9 5 45 0 7 63

Reliable 8 5 40 0 7 56

Aligned 7 7 49 0 7 49





Reserves Act In-House CCO Contractor

43



3.8 Public Works Act, NZTA (Roading)


Top 3 wants In this area the top three wants in order were: � skills � flexibility � reliable. The reasons being: � some specialist work in regard to roading and NZTA requirements � process driven so need skills on demand � right answer is important and usually high visibility for these types of

issues.

Weighted score


Wants Rationale for Scores Skills Internal could be as strong as external if there was

additional resource.


Process driven, so could be done internally if resourced.

Reliable Quality of outcomes is neutral.



Neutral balance of costs versus outcomes works out about the same.



Conclusion Additional in-house would reduce costs in a process driven area. This could be backed by external support.


Skills 10 7 70 0 7 70


Reliable 8 7 56 0 7 56

Aligned 7 7 49 0 7 49





Public Works Act, NZTA (roading) In-House CCO Contractor

44



3.9 Property


Top 3 wants When considering legal services for Property, the top 3 wants shown in the table below were deemed most important, and were assigned the highest ranking.

# Want Reason 1. Reliable Getting the right answer is important as it

can set precedent and can be very visible. Specific knowledge of the council’s requirements is important

2. Best value for investment

A lot can be transactional and lower cost options used. Fast turnaround is important.

3. Skills Having access to the right skills is important. Regular work.

Weighted score


Wants Rationale for Scores

Reliable Specific institution knowledge held in-house is important.


A lot can be transactional and lower cost options used with in-house team.

Skills In-house have appropriate skills.



Resourced in-house model would be more on demand.





Reliable 10 8 80 0 6 60


Skills 8 8 64 0 6 48

Aligned 7 7 49 0 7 49





Property In-House CCO Contractor

45



3.9 Property, Continued

Conclusion This is an area that could be done largely in-house with support from external.

46



3.10 Mediation



Top 3 wants In this area the top three wants in order were: � skills � flexibility � reliable. The reasons being: � some specialist work in regard to roading and NZTA requirements � process driven so need skills on demand � right answer is important and usually high visibility for these types of

issues.

Weighted score


Wants Rationale for Scores Skills Highly skilled specialists – external has better

access to.

Reliable Specialist skills to deliver required outcomes.


Needed on as required basis. Large volumes of work on specific matters.



High cost, high value.



Conclusion Largely external as the high workloads and specialist skills for this type of work mean that there isn’t internal capacity.


Skills 10 4 40 0 9 90

Reliable 9 4 36 0 9 81


Aligned 7 6 42 0 6 42





Mediation In-House CCO Contractor

47



3.11 Trusts & Societies



Top 3 wants When considering legal services for Trusts & Societies, the top 3 wants shown in the table below were deemed most important, and were assigned the highest ranking.

# Want Reason 1. Skills This is a very council specific and political area. The

council knowledge is important.

2. Aligned The strong political aspect means that a stronger than normal alignment is required.

3. Reliable The outcomes need to be robust with governance being a significant factor to keep public integrity high.

Weighted score


Wants Rationale for Scores Skills This is a very council specific and political area.

The council knowledge is important and in-house is stronger in this area.

Aligned In-house has stronger alignment with the political drivers.

Reliable Specific in-house knowledge and institutional knowledge means more robust outcomes.


Immediate access to in-house services by politicians gives in-house greater flexibility.


Internal costs balanced with stronger outcomes means in-house is stronger.





Skills 10 7 70 0 5 50

Aligned 9 7 63 0 6 54

Reliable 8 7 56 0 5 40






Trust/Societies In-House CCO Contractor

48



3.11 Trusts & Societies, Continued

Conclusion This is an area that should be in-house with external support to meet demand.

49



3.12 Human Resources



Top 3 wants In this area the top three wants in order were: � skills � reliable � flexibility. The reasons being: � it is important that the specialist skills are provided, and often need to be

from outside the area to avoid conflicts of interest � for the types of issues addressed getting the right answer is very important

as they can set precedent and reputational damage � flexibility also about avoiding conflicts of interest, work is on demand and

irregular.

Weighted score


Wants Rationale for Scores Skills External has specific specialist skills and ability to

avoid conflicts.

Reliable Specialist knowledge gained across a lot of clients provides better outcomes.


Ability to get external advice on infrequent basis. External is better for avoiding conflicts.



High cost, high value.



Conclusion This area should largely be external with internal support.


Skills 10 5 50 0 7 70

Reliable 9 5 45 0 7 63


Aligned 7 7 49 0 7 49





HR In-House CCO Contractor

50



4. Summary

Introduction There are some specific objectives that relate to procuring legal services, internally and externally:

� that WDC has a high level of confidence in the advice that it gets

� the appropriate advice and work is done for WDC

� the model and lawyers are the best value for money

� WDC is not captured by institutional knowledge

� lawyers are used in an efficient way - get it once, get it right

� the process doesn’t become the problem by getting in the way of delivering what the business needs – slowing down the process or becoming a bottleneck

� the process and model are open and transparent.

Outcomes The key outcome from this review is that there are a number of areas where more in-house resource would provide a better value for money service. These are set out in the table below. Some additional cost modelling would need to be done to fulfil a business case for additional internal legal staff.

Area Comments

Local Government Act Internal with external support

Building Act External lawyers supported by in-house

RMA & District Plan External lawyers supported by in-house

Local Government Act Rating External lawyers supported by in-house

Bylaws, Dog Control, Sale of Liquor Act

More in-house

Construction Act, Contracts More in-house

Reserves Act External lawyers supported by in-house

Public Works Act, NZTA (roading)

More in-house

Property More in-house

Mediation External lawyers supported by in-house

Trusts/Societies Internal with external support

HR External lawyers supported by in-house


51



4. Summary, Continued

Other key points

There are a few other areas where I think there needs to be attention in regard to this business model. These are:

� There are potentially areas of the business that are not getting early legal advice that could have a potential for greater cost further down the track if things go wrong.

� Having decided what the mix of internal versus external skills are there

needs to be an engagement model developed going forward to make sure that requests for legal services are being allocated to the right supplier (internal or external and if external which one). Also that these are costed properly.

� There also needs to be a system set up to manage matters and advice in an

efficient and effective way.

Engagement model

The current law firm engagement model is not well controlled. In-house legal only has visibility of about 50% of the work allocated to law firms. In a lot of cases the business allocates work to law firms directly. What this means is:

� some of the work could be done in-house more cost effectively � issues that should have gone to a lawyer aren’t addressed properly

(business not aware of true risks) � there could be duplication of advice � costs could run away � no overall visibility of costs, quality and performance of law firms � WDC has no overall view of legal matters and risk, there is no single

database of matters.

Engagement model

There are some key decisions that need to be made with respect to the engagement model:

� how matters will be logged and tracked � a gatekeeper role to manage matters � external panel composition � how work is allocated to the panel.


52



4. Summary, Continued

Other councils

Another point for consideration is whether there is potential to share services with the other councils in the region. This would need to be workshopped with those councils to:

� develop the objectives of the shared services model � develop needs and wants to evaluate different options against � develop options � review the options against the needs and wants criteria and weightings.

A Right Track Workshop (model that we have developed to start projects and have used many times with WDC) would be the ideal way to start that review.

The areas where this might provide benefits are those where there are peaks and troughs in demand, and where these could be offset with the other councils. This would be for the areas where it makes sense to have it in-house, but there isn’t the volume for one council alone to warrant it.

There are also issues to consider:

� where would the resource reside? � who employed by? � how is work logged and tracked? � how are allocation decisions made? � how are prioritisation decisions made? � would this slow the process down?

53



Appendix One – Background Information

Background Information

Description of all the services and how they are currently delivered.

Area Services How delivered

$ Who delivers?

Who could deliver?

Governance Local Government Act

General Advice

Local Government Official Information and Meetings Act

Elected Members

In-house

External

� 13/14: $21,576 (TW)

� 14/15: $10,897 (TW $5907, SG $4990)

� 15/16: $14,288 (TW)

Total: $46,761

Thomson Wilson

Simpson Grierson

Matt Casey QC

Building Building Act In-house

External

� 13/14: $42,988 � 14/15: $95,689 � 15/16: $208,374 � 16/17: $114,794

Julian Dawson

Heaney & Partners

Richard Kettlewell (Sharp Tudhope)

Thomson Wilson

Resource Consents

Resource Management Act

External 13/14: $57,384

14/15: $46,649

15/16: $54,746

16/17: $57,858

Total: $216,637

Julian Dawson

Thomson Wilson

Simpson Grierson

Customer Services

General Advice In-house

Finance Local Government (Rating) Act

Remission/

Postponement policies

General Advice

In-house

External

� 13/14: $10,724 � 14/15: $16,709 � 15/16: $18,429 � 16/17: $34,842

Total: $80,704

Simpson Grierson

Thomson Wilson

Buddle Findlay

Planning and Policy

District Plan

Resource Management Act

External � 13/14: $46,103 � 14/15: $139,357 � 15/16: $236,834 � 16/17: $66,862

Total: $489,156

Thomson Wilson


54



Appendix One – Background Information, Continued


$ Who delivers?

Who could deliver?

Regulatory Services

Bylaws

Dog Control Act

Sale and Supply of Alcohol Act

In-house

External

� 13/14: $66,001 � 14/15: $69,666 � 15/16: $64,412 � 16/17: $55,676

Total: $255,755

Thomson Wilson

Julian Dawson

Alan Dormer QC

Infrastructure Projects & Support

Construction Contracts Act

Contract advice

In-house

External

13/14: $7738

14/15: $9642

15/16: $480

16/17: $2370

Total:$20,230

Thomson Wilson

Simpson Grierson

Parks Reserves Act

Property advice

In-house

External

� 13/14: $17,252 � 14/15: $17,938 � 15/16: $21,898 � 16/17: $5,730

Total: $62,818

Thomson Wilson

Libraries Contracts In-house

External

� 14/15: $793 � 15/16: $1543

Total: $2336

Thomson Wilson

Water Local Government Act

In-house

External

� 14/15: $2029 � 15/16: $5997

Total: $8,026

Thomson Wilson

Heaney & Partners

Water & Drainage

Local Government Act

� 13/14: $61,469 � 14/15: $20,274 � 15/16: $5,823 � 16/17: $195,848

Total: $283,414

Katharine Taurau

Thomson Wilson

Roading LGA ‘74

Public Works Act

NZTA

External � 13/14: $21,708 � 14/15: $38,619 � 15/16: $3,630 � 16/17: $80,763

Total: $144,720

Thomson Wilson

Simpson Grierson

Maori LGA

RMA


55



Appendix One – Background Information, Continued


$ Who delivers?

Who could deliver?

Property Leases/licences

Contracts

Mediations

External

In-house

� 13/14: $95,111 � 14/15: $42,238 � 15/16: $22,269 � 16/17: $251,632

Total: $411,250

Thomson Wilson

Liam Macintagert

Wayne Peters

Marsden Woods

(these could be fees passed on)

Information Services

Contracts

Public Records Act

In-house

Economic Development

Contracts

Trusts

In-house

External

� 13/14: $8,864 � 14/15: $1556

Thomson Wilson

District Promotions & Tourism

Contracts

In-house

Community Services

Trusts/Societies In-house

External

� 16/17: $3060

Total: $3060

Thomson Wilson

Venues & Events

Contracts In-house

External

� 14/15: $744

Total: $744

Thomson Wilson

Human Resources

Disputes

Contracts

External � 13/14: $71,759 � 14/15: $97,109 � 16/17: $2801

Total: $171,669

Simpson Grierson

Marsden Woods Inskip and Smith

Organisational Management

CEO review

Harbour Board building – Mayoralty issues

External � 13/14: $12,738 � 14/15: $24,720 � 15/16: $5,396

Total: $42,854

Thomson Wilson

Positive Growth

15/16: $423

16/17: $4262

Total: $4,685

Thomson Wilson

Council Buildings

� 14/15: $300 � 15/16: $9,275 � 16/17: $926

Total: $10,501

Webb Ross

Thomson Wilson

56



Appendix Two – Briefing Material for Evaluation

Business model

There are various options that the council could apply. There are also variants for the different options. These include: � In-house:

� WDC doing all the services in-house � Neighbouring councils doing in-house together or one council

providing the services to the others. � Contracting the services out to a third party – various contract models

could apply:

� standard service contract – like current � one contract for the neighbouring councils.

� Council controlled organisation. The following sections will provide comments in regard to the different business models for each of the criteria.

57



Appendix 2.1 - In-House Option

In-House Area Pros Cons

Sustainable

� Enduring � Stable

� Profitable

� Council shouldn’t go into liquidation

� More potential for political interference

� Council might have greater costs which may have to be passed on to rate-payers

� Retaining staff issues � Doesn’t necessarily

deliver levels of service

Skills

� Best people � Experience � Access to Best

Practice

� Retain institutional knowledge

� Would have to recruit staff

� Key staff leave, the council is responsible for the gap

� Harder to attract specialist skills to country towns

� May not have specialist skills

� Key people risks � Harder to get rid of non-

performing staff � Don’t have the same

access to specialist skills (as a contractor does)

Reliable and consistent

� Council has control of staff

� Retaining staff issues � Not the same

commercial drivers on performance

58



Appendix 2.2 - Council Controlled Organisation

CCO Area Pros Cons

Sustainable


� Profitable

� Will be enduring if run well and profitable

� Less political interference

� Can earn a profit

� Has ability to go into liquidation

� Harder to get rid of them as a supplier if not performing

Skills


Practice

� Retain institutional knowledge provided they remain the supplier

� Can leverage skills by doing business for other councils

� May get better people on the Board

� Key staff leave, the CCO is responsible for the gap

� Potentially harder to attract specialist skills to country towns

� May not have specialist skills

� Will have to find and attract new staff to set up

� High reliance on key people

� Also have to find good Governance people


� Will be reliable if run well and profitable



� Harder to get rid of them as a supplier if not performing

� Doesn’t necessarily have better performance

59



Appendix 2.3 - Contractor Model

Contractor Area Pros Cons

Sustainable


� Profitable

� Will be enduring if run well and profitable

� Fair pricing and contract required


� Longer term contract required for greater stability and investment

Skills


Practice

� Contractor’s core business

� Can leverage off skills across whole organisation

� Can attract staff into town as part of progression path

� Contractor responsible for finding and retaining staff to meet performance standards

� Contractor can bring innovation and improvements

� Professional development greater

� Responsible for all HR aspects

� Key management may be out of town

� Council might lose institutional knowledge


� Will be reliable if run well and profitable


� If right contractual model then incentivised to be consistently good

� May have more commercial drivers

� Might perform poorly if wrong contractual model

60

Finance and Corporate Committee - wdc.govt.nz · Finance and Corporate Committee Notice of Meeting...

Documents

Transcript of Finance and Corporate Committee - wdc.govt.nz · Finance and Corporate Committee Notice of Meeting...