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MINUTES OF A MEETING OF THE FINANCE AND STRATEGY COMMITTEE

HELD ON WEDNESDAY, 15 OCTOBER 2008 AT 9:30AM

PRESENT: Councillors: Douglas Armstrong, QSO Chairperson
        [until 11:48am, item 12; from 11:52am, item 12]
    His Worship the Mayor, Hon John  Banks, QSO [until 9:50am, item 10; from 9:53am, item 6; until 10:24am, item 7]
    Deputy Mayor David Hay, JP [from 9:53am, item 6; until 10:17am, item 7; from 10:20am, item 7]
    Aaron Bhatnagar  
    Dr Cathy Casey [until 10:43am, item 8; from 10:44am, item 8]
    Mark Donnelly [until 11:13am, item 10; from 11:15am, item 10; until 11:58am, item 12; from 11:59am, item 12]
    Paul Goldsmith [until 10:52am, item 9; from 10:53am, item 9]
    Richard Northey, ONZM [until 11:04am, item 9; from 11:05am, item 9]
ALSO PRESENT:   Leila Boyle  
    Bill Christian [until 11:13am, item 14]
    Graeme Easte [from 9:45am, item 5; until 10:20am, item 7; from 10:21am, item 7]
    Denise Roche [from 10:03am, item 7; until 12:08pm]

  1. Top APOLOGIES

    That the apology from Councillor Lotu-Iiga for non attendance be accepted.

    CARRIED

  2. Top CONFIRMATION OF MINUTES

    That the minutes of the Finance and Strategy Committee meeting held on Wednesday, 24 September 2008 be confirmed as a true and correct record.

    CARRIED

  3. Top EXTRAORDINARY BUSINESS

    There was no extraordinary business.

    The meeting adjourned at 9:32am and reconvened at 9:52am due to a fire evacuation.

  4. Top PUBLIC FORUM

    There were no requests to speak in public forum.

  5. Top REPORTS REQUESTED PENDING

    That the reports requested pending of the Democracy Advisor, dated 8 October 2008, be received.

    CARRIED

  6. Top REVIEW OF POLICY ON AUCKLAND AIRPORT SHARES FOR 2009-2019 LONG-TERM COUNCIL COMMUNITY PLAN (LTCCP)

    That it be a recommendation to the Long-term Council Community Plan (LTCCP) Direction Setting 18 November meeting:

    1. That the Finance and Strategy Committee agrees there are limited number of scenarios where the purchase of additional shares in Auckland International Airport Limited (AIAL) would be prudent for council, and requests that this be included as an option in the Policy on Auckland Airport Shares to enhance the council's ability to respond to opportunities and mitigate threats as they arise.
    2. That the Finance and Strategy Committee notes that under the proposed changes to the council's Policy on Auckland Airport Shares, any proposal to buy more shares in Auckland International Airport Limited (AIAL) would be subject to Council approval following rigorous analysis against the objectives and criteria outlined in the policy.
    3. That the Finance and Strategy Committee approves the draft Policy on Auckland Airport Shares for consultation as part of the draft 2009-2019 Ten-year plan with the following amendments to the current policy:
      1. update and minor edits;
      2. inclusion of an option to buy more shares outside of a restructuring transaction.

    CARRIED

  7. Top DIRECTION SETTING FOR METROWATER'S 2009 STATEMENT OF INTENT

    The Chairperson moved:

    1. That the Finance and Strategy Committee notes that Metrowater's 2008 Statement of Intent (SOI) incorporates new, more strategic performance measures and targets, and is a sound basis for developing the 2009 SOI.
    2. That the Finance and Strategy Committee endorses new or expanded areas of focus for Metrowater in 2009 including social responsibility, water efficiency initiatives, and regional leadership in relation to retail issues.
    3. That the Finance and Strategy Committee notes the following difficulties associated with developing a meaningful measure of affordability that relates specifically to low income households:
      • The unavailability of household income data below the level of statistical meshblocks;
      • The difficulty in assessing the number of people in each household;
      • The range of other factors that can affect and influence affordability for individual households including rates rebates, and water efficiency measures; and
      agrees, in light of these difficulties, to request that Metrowater retains the current measure of affordability, relating the average household bill to the average household income.
    4. That the Finance and Strategy Committee requests that Metrowater consider replacing or supplementing the measure of staff turnover with a measure of staff engagement or satisfaction, measured through a recognised survey methodology.

    Councillor Northey moved the following amendments:

    1. That the Finance and Strategy Committee notes the following difficulties associated with developing a meaningful measure of affordability that relates specifically to low income households:
      • The unavailability of household income data below the level of statistical meshblocks;
      • The difficulty in assessing the number of people in each household;
      • The range of other factors that can affect and influence affordability for individual households including rates rebates, and water efficiency measures; and
      agrees, in light of these difficulties, to request that Metrowater retains the current measure of affordability, relating the average household bill to the average household income, and requesting that it be measured, and reporting on the average Metrowater household bill for households for both the 25% and the 10% of household income.
      The amendment was put by show of hands and declared LOST by 6 votes to 2.
    2. That the Finance and Strategy Committee requests that Metrowater consider changing the measure of staff turnover to eliminate the 10% minimum measure and to supplement this with a measure of staff engagement or satisfaction, measured through a recognised survey methodology.
    3. That the Finance and Strategy Committee requests that Metrowater investigate the viability of amending the unaccounted for water targets to 12.7% in 2009-2010 and to 12.0% in 2010-2011 and report back to this Committee.

    CARRIED

    Councillor Casey moved the following amendment:

    1. That the following measure from the Statement of Intent (SOI) be moved up to be included as a key performance indicator:
      Metrowater is to reduce the volume of polluted water entering the environment by 35% over the six year period 2005-2011.
      and that Metrowater be required to report comprehensively on actions to achieve this not only the actions taken through the Clear Harbour Alliance.
    2. That Metrowater be required to cease using water restrictions as a means of debt collection except with the specific consent of the customer.
    3. That the Finance and Strategy Committee request that Metrowater enter into constructive mediation with the Water Pressure Group as suggested by the Mayor at the October CCO Finance and Strategy Committee meeting.

    A division was called for, voting on which was as follows:

    For the Amendment: Against the Amendment:
    Cr Dr Cathy Casey

    Cr Richard Northey

    		 Cr Douglas Armstrong

    Cr Aaron Bhatnagar

    Cr Mark Donnelly

    Cr Paul Goldsmith

    Deputy Mayor David Hay


    His Worship the Mayor and Councillor Peseta Sam Lotu-Iiga were absent.

    The amendment was declared LOST by 5 votes to 2.

    The Chairperson put the following substantive motion:

    1. That the Finance and Strategy Committee notes that Metrowater's 2008 Statement of Intent (SOI) incorporates new, more strategic performance measures and targets, and is a sound basis for developing the 2009 SOI.
    2. That the Finance and Strategy Committee endorses new or expanded areas of focus for Metrowater in 2009 including social responsibility, water efficiency initiatives, and regional leadership in relation to retail issues.
    3. That the Finance and Strategy Committee notes the following difficulties associated with developing a meaningful measure of affordability that relates specifically to low income households:
      • The unavailability of household income data below the level of statistical meshblocks;
      • The difficulty in assessing the number of people in each household;
      • The range of other factors that can affect and influence affordability for individual households including rates rebates, and water efficiency measures; and
      agrees, in light of these difficulties, to request that Metrowater retains the current measure of affordability, relating the average household bill to the average household income.
    4. That the Finance and Strategy Committee requests that Metrowater consider changing the measure of staff turnover to eliminate the 10% minimum measure and to supplement this with a measure of staff engagement or satisfaction, measured through a recognised survey methodology.
    5. That the Finance and Strategy Committee requests that Metrowater investigate the viability of amending the unaccounted for water targets to 12.7% in 2009-2010 and to 12.0% in 2010-2011 and report back to this Committee.

    CARRIED

    [Councillor Casey requested her vote against the motion be recorded]

  8. Top REVIEW POLICY ON SIGNIFICANCE FOR 2009-2019 LONG-TERM COUNCIL COMMUNITY PLAN (LTCCP)

    That it be a recommendation to the Long-term Council Community Plan (LTCCP) Direction Setting 18 November meeting:

    1. That the Finance and Strategy Committee notes that while there are a number of proposed improvements to the Policy on Significance, they are minor in nature with the key tenets of the current policy remaining.
    2. That the Finance and Strategy Committee approves the draft Policy on Significance for consultation as part of the draft 2009-2019 Ten-year plan including amendments related to the following:
      1. The council's approach to decision-making;
      2. The council's approach to determining significance;
      3. Reviewing proposals of higher significance;
      4. Consultation requirements;
      5. Exclusions;
      6. Special consultative procedure overview;
      7. Council outputs; and
      8. (General editing.

    CARRIED

  9. Top REPORT ON THE SEVEN STRATEGIES

    That it be a recommendation to Council:

    1. That Council endorses the amendments to the organisation's seven draft strategies as listed below and highlighted on the attached strategy leaflets:

    Lifestyle Choices

    • Added description of Aotea Quarter: 'our unique arts, cultural and entertainment hub covering the area around Aotea Square' (see p. 4).
    • Replaced 24/7 CBD with: 'CBD that is open late' (see p. 3)

    Transport Choices

    •   Amended introduction to include 'making roads safer for cyclists and vehicles' (see p. 2)
    •   Added 'improvement in walkability' to measures (see p. 3).

    Economic Development

    •   Recommended benefit added to the Rugby World Cup 2011 project (see p. 7)

    Quality Natural Environment

    •   Amended the first priority of Objective 1 to: 'Identify, celebrate and protect key landscapes and features including volcanoes and the viewshafts to and from volcanoes and the harbours, cliff lines, beaches and coastal margins'. (see p. 4)
    •   Added the following words to the first priority of Objective 3: 'including continuous walkways on both harbours' (see p. 5)

    Quality Built Environment

    • Added the following words to the Tamaki Transformation project:
    • 'Avondale will be the next area of focus through the Development with Vision programme. The objective of Project Avondale is to integrate land use with transport planning and infrastructure improvements that will achieve an attractive and high performing liveable community'. (see p. 7)

    Efficient, Capable and User-friendly Council

    •   Amended first priority of Objective 1 priority to replace the word 'brand' with 'identity' (see p. 4)
    •   Amended Objective 1 heading to 'Our customers and constituents' (see p. 4)
    •   Amended first priority of Objective 3 to 'design systems and processes that are quick and easy for customers and constituents to access' (see p. 4)
    •   Added 'and Pacific peoples' to fourth priority under Objective 2 (see p. 4)
    •   Amended Objective six to 'Our staff' (see p. 5)
    •   Added the words 'better quality advice is provided to decision-makers' under finance roadmap project (see p. 7)
    •   Amended 'automating the political reporting process' to 'automating the systems for political reporting' (see p. 7).
    •   Amended the fourth challenge to read 'the organisation is not sufficiently user-friendly' (see p. 3).

    Strong and Healthy Communities

    •   Priority 1: Noting minor editorial changes.
    1. That it be noted the further work, including investigation of alternative measures proposed by the standing committees, that is to be carried out by officers to confirm the final strategy measures to be published in the Ten Year Plan 2009-2019; and notes that these measures will form the basis of council reporting in subsequent years.
    2. That it be noted that the list of projects and initiatives profiled in each strategy leaflet are illustrative only and will be finalised following the 18 November Long-term Council Community Plan (LTCCP) Direction Setting meeting.

    CARRIED

  10. Top WEATHERTIGHT UPDATE FINANCIAL

    That it be a recommendation to Council:

    1. That it be noted that the weathertight homes problem is a major issue and liability for citizens of Auckland and this council:
      1. Estimated cost to Council of $321.3 million, and
      2. Estimated cost to homeowner of $514.8 million.
    2. That the desire to invest in a process that fixes houses rather than pursuing a litigation approach be confirmed.
    3. That officers continue to advocate in support of the no-fault strategy developed by Local Government New Zealand which is based on a process where Council and owners will each meet 25% of the repair costs and Government will meet 50% of the cost, less what they recoup from the other defendants (building industry such as architects, builders, developers etc).
    4. That until such time as central government responds, council continue with its strategy of participating in the settling of weathertight claims, but only to the extent of council's involvement on site and to the extent it can be proved defects resulted from council's action or inaction.
    5. That officers continue to actively explore all options to mitigate the burden on homeowners and ratepayers and to encourage an appropriate contribution to the cost of repairing homes from all other responsible parties.
    6. That deep concern be expressed that the central government has not met its obligations on the weathertight homes problem and request that the Chief Executive prepare a letter for approval by Council drawing particular attention to the issues raised in the 'Weathertight Update Financials' report dated 22 September 2008.

    CARRIED

  11. Top FINANCIAL REPORT FOR THE TWO MONTHS ENDED 31 AUGUST 2008

    That the financial report for the two months ended 31 August 2008 be noted highlighting an unfavourable operating variance of $1.6 million against budget, and a capital expenditure under spend of $9.4 million against budget, noting that September's financial operating results indicate a favourable performance against budget.

    CARRIED

    [Secretarial note: Councillor Armstrong declared a conflict of interest and did not partake in discussion or voting on item 12. Councillor Armstrong vacated the Chair at 11:49am and Deputy Mayor Hay assumed the Chair.]

  12. Top RATEPAYER DIFFERENTIALS AND DEFINITIONS

    Deputy Mayor Hay moved:

    1. That the Finance and Strategy Committee confirms that the amended residential ratepayer group definition include hotels, motels, serviced apartments, boarding houses and hostels, if the property owner can provide proof of exclusive or almost exclusive residential use, according to set criteria (property owners must provide proof of long-term stay (at least 90 days) for over 50 per cent of the units in the form of a residential tenancy agreement or similar documentation as at 30 June each year).
    2. That the Finance and Strategy Committee confirms that the 'Rural 1' ratepayer group be renamed 'Farming and open space' and that the definition includes vacant land and bush blocks on Waiheke, Great Barrier and Rakino islands greater than five hectares to better accommodate these types of properties into the Rating Differential Policy.
    3. That the Finance and Strategy Committee confirms that the 'Rural 2' ratepayer group be renamed 'Limited Access' and that the definition remains unchanged.
    4. That the Finance and Strategy Committee confirms that the 'Rural 3' ratepayer group be renamed 'Remote Islands' and that the definition remains unchanged.
    5. That the Finance and Strategy Committee confirms applying the next step of the long-term general rate differential strategy, which transfers around $2.7 million from non-residential groups to the residential group for 2009/2010.
    6. That the Finance and Strategy Committee notes that there are no budget changes resulting from the proposed policy changes.

    Councillor Northey moved the following amendment:

    1. That the Finance and Strategy Committee request officers to investigate a report on a possible rebate for owners of heritage buildings on the A or B schedule which would be modelled on the rebate currently applying to farm land and report their findings to the City Development Committee.

    CARRIED

    Councillor Casey moved the following amendment by way of replacement:

    That this report and recommendations be deferred to the November 18 Long-term Council Community Plan (LTCCP) Direction Setting meeting to enable consultation with community boards.

    LOST

    Deputy Mayor Hay put the following substantive motion:

    1. That the Finance and Strategy Committee confirms that the amended residential ratepayer group definition include hotels, motels, serviced apartments, boarding houses and hostels, if the property owner can provide proof of exclusive or almost exclusive residential use, according to set criteria (property owners must provide proof of long-term stay (at least 90 days) for over 50 per cent of the units in the form of a residential tenancy agreement or similar documentation as at 30 June each year).
    2. That the Finance and Strategy Committee confirms that the 'Rural 1' ratepayer group be renamed 'Farming and open space' and that the definition includes vacant land and bush blocks on Waiheke, Great Barrier and Rakino islands greater than five hectares to better accommodate these types of properties into the Rating Differential Policy.
    3. That the Finance and Strategy Committee confirms that the 'Rural 2' ratepayer group be renamed 'Limited Access' and that the definition remains unchanged.
    4. That the Finance and Strategy Committee confirms that the 'Rural 3' ratepayer group be renamed 'Remote Islands' and that the definition remains unchanged.
    5. That the Finance and Strategy Committee confirms applying the next step of the long-term general rate differential strategy, which transfers around $2.7 million from non-residential groups to the residential group for 2009/2010.
    6. That the Finance and Strategy Committee notes that there are no budget changes resulting from the proposed policy changes.
    7. That the Finance and Strategy Committee request officers to investigate the possibility of rebate for owners of heritage buildings on the A or B schedule which would be modelled on the rebate currently applying to farm land and report their findings to the City Development Committee.

    CARRIED

    [Secretarial note: Councillor Armstrong resumed the Chair at 12:07pm.]

  13. Top ZOO BOARD RESOLUTIONS - HOLDING COMPANY FOR THE ZOO

    The Chairperson moved:

    That the resolutions of the Zoo Board's dated 18 September 2008 be noted.

    Councillor Northey moved the following amendment:

    That the resolutions of the Zoo Board's dated 18 September 2008 be noted and adopted by the Finance and Strategy Committee.

    The amendment was put by show of hands and declared LOST by 4 votes to 2.

    The Chairperson put the following substantive motion:

    That the resolutions of the Zoo Board's dated 18 September 2008 be noted.

    The motion was put by show of hands and declared CARRIED by 4 votes to 2.

  14. Top DRAFT COMMUNITY OUTCOMES PROGRESS REPORT

    The Chairperson moved:

    1. That the Finance and Strategy Committee notes the contents of the draft community outcomes three-year progress report and the requirement for council to prepare this report under the Local Government Act 2002.
    2. That the Finance and Strategy Committee endorses the community outcomes three-year progress report as council's first progress report against the Auckland community outcomes identified in 2005.

    That it be a recommendation to Council:

    1. That Council approves the public release of the community outcomes three-year progress report via council's website in December 2008, with hard copies of the report to be made available to councillors, community board chairs, and key external stakeholder organisations that endorsed the community outcomes in 2005 and be made available in council libraries.
    2. That the Chairperson of the Finance and Strategy Committee together with the Manager Strategy be authorised to make any changes to the community outcomes three-year progress report as drafted to rectify non-material errors and/or omissions.

    Councillor Casey moved the following amendment by way of addition:

    1. That the following be added to key community outcome stakeholders, noting that 4 should be referred to as the Auckland Regional Refugee and Migrant Service:
      • Environment Defence Society
      • Auckland University of Technology
      • Unitec
      • Royal Forest and Bird Society
      • Auckland District Council of Social Services
      • Volunteering Auckland
      • Salvation Army
      • Council of Trade Unions
      • Child Poverty Action Group
      • Lifewise (formerly Methodist Mission - Northern)

    LOST

    The Chairperson put the following substantive motion:

    1. That the Finance and Strategy Committee notes the contents of the draft community outcomes three-year progress report and the requirement for council to prepare this report under the Local Government Act 2002.
    2. That the Finance and Strategy Committee endorses the community outcomes three-year progress report as council's first progress report against the Auckland community outcomes identified in 2005.

    That it be a recommendation to Council:

    1. That Council approves the public release of the community outcomes three-year progress report via council's website in December 2008, with hard copies of the report to be made available to councillors, community board chairs, and key external stakeholder organisations that endorsed the community outcomes in 2005 and be made available in council libraries.
    2. That the Chairperson of the Finance and Strategy Committee together with the Manager Strategy be authorised to make any changes to the community outcomes three-year progress report as drafted to rectify non-material errors and/or omissions.

    CARRIED

  15. Top EXCLUSION OF THE PUBLIC : LOCAL GOVERNMENT OFFICIAL INFORMATION AND MEETINGS ACT 1987

    That the public be excluded from the following part(s) of the proceedings of this meeting.

    The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under Section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution follows.

    This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public, as follows:

    Item No. General subject of each matter to be considered Reason for passing this resolution in relation to each matter Particular interest(s) protected (where applicable) Ground(s) under section 48(1) for the passing of this resolution
    C1. VOTING AT AUCKLAND INTERNATIONAL AIRPORT LIMITED'S 2008 ANNUAL GENERAL MEETING Public conduct of matter would be likely to result in disclosure of information for which good reason to withhold exists under section 7. Section 7(2)(a)

    The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

    In particular, the report contains specific information about the directors of Auckland International Airport Ltd.

    		 Section 48(1)(a)

    The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

    C2. REVIEW OF BOARD MEMBERS' REMUNERATION Public conduct of matter would be likely to result in disclosure of information for which good reason to withhold exists under section 7. Section 7(2)(a)

    The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

    In particular, the report contains specific information about members of Auckland City Council's Boards and their remuneration.

    		 Section 48(1)(a)

    The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

    C3. CITY PARKS SERVICES SIX MONTHLY REPORT Public conduct of matter would be likely to result in disclosure of information for which good reason to withhold exists under section 7. Section 7(2)(b)(ii)

    The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.

    In particular, the report contains information relating to the overall operating performance of City Parks Services, which if released to the public, would disadvantage Auckland City's position against competitors.

    		 Section 48(1)(a)

    The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

    C4. DELEGATED DECISIONS OF THE PROPERTY GROUP MANAGER Public conduct of matter would be likely to result in disclosure of information for which good reason to withhold exists under section 7. Section 7(2)(h)

    The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

    In particular, the report contains references to the property's value and information that may impact on the property owner's commercial activities; identification of the site and contract terms which form the basis of negotiations between council and the landowner; sensitive information about council's proposed intentions for the site, which could prejudice or disadvantage its commercial activities.

    		Section 48(1)(a)

    The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

    CARRIED

    There being no further business the Chairperson declared the meeting closed at 12:37pm.