Agenda of Ordinary Council Meeting

MINUTES

Ordinary Council Meeting

Monday, 12 April 2021

Order of Business

1 Opening Karakia. 3

2 Apologies. 3

3 Public Forum.. 3

3.1 Mr Andy Wichers - No. 1 Road. 3

3.2 Mr Rob Paterson - Māori Ward. 4

3.3 Mr Richard Prince - Māori Ward. 4

3.4 Mr Buddy Mikaere - Māori Ward. 5

4 Acceptance of late items. 5

5 Confidential business to be transferred into the open. 5

6 Change to the order of business. 5

7 Confirmation of Minutes. 5

7.1 Minutes of the Council meeting held on 29 March 2021. 5

8 Declaration of conflicts of interest 5

9 Deputations, Presentations, Petitions. 6

10 Recommendations from Other Committees. 6

10.1 Māori Ward. 6

11 Business. 6

11.1 Executive Report 6

11.2 Meetings schedule April - December 2021. 8

11.3 2020 Speed limit review.. 9

11.4 Capital Programme Reporting. 10

11.5 CCO Draft Statements of Intent 2021/2022 to 2023/2024. 11

12 Discussion of Late Items. 12

13 Public excluded session. 12

13.1 Public Excluded Minutes of the Council Meeting held on 29 March 2021. 12

13.2 2021 Appointment of Trustees to the Boards of Tauranga Art Gallery Trust and Tourism Bay of Plenty. 13

13.3 Cameron Road procurement and delivery model 13

14 Closing Karakia. 13

MINUTES OF Tauranga City Council

Ordinary Council Meeting

HELD AT THE Tauranga City Council, Council Chambers, 91 Willow Street, Tauranga

ON Monday, 12 April 2021 AT 10.30am

PRESENT: Commission Chair Anne Tolley, Commissioner Shadrach Rolleston, Commissioner Stephen Selwood, and Commissioner Bill Wasley

IN ATTENDANCE: Marty Grenfell (Chief Executive), Paul Davidson (General Manager: Corporate Services), Barbara Dempsey (General Manager: Regulatory & Compliance), Nic Johansson (General Manager: Infrastructure), Christine Jones (General Manager: Strategy & Growth), Gareth Wallis (General Manager: Community Services), Carlo Ellis (Manager: Strategic Maori Engagement), Russell Troup (Director of Transport), Clare Cassidy (Team Leader: Transport Safety), James Woodward (Delivery Manager), Jane Groves (Stormwater Programme Leader), Anne Blakeway (Manager: Community Partnerships), Josephine Meuli (Council Controlled Organisations Specialist), Coral Hair (Manager: Democracy Services), Robyn Garrett (Team Leader: Committee Support), Raj Naidu (Committee Advisor), and Jenny Teeuwen (Committee Advisor)

EXTERNAL: Warwick Lampp (Electoral Officer)

1 Opening Karakia

Carlo Ellis, Manager: Strategic Maori Engagement, opened the meeting with a Karakia.

2 Apologies

Nil

3 Public Forum

3.1 Mr Andy Wichers - No. 1 Road

Key points

· Residents at the lower end of No. 1 Road wanted to convey their concerns about the community engagement for the Waiāri water pipeline project and the effect it would have on residents and road users of No. 1 Road.

· Communication from the contractor at the beginning of the project stated that the impact to residents and road users would be minimal as the road did not require to be dug up.

· Tauranga City Council’s (TCC) communication stating that a lane closure was actually required and for up to five weeks, came unexpectantly a few days before Christmas and stated work would begin in mid February. The lane closure would require vehicles to make a loop trip of around 18 kilometres. New Zealand’s largest kiwifruit packing operation was on the road and up to 1,000 vehicles used the road daily. The added travel and time cost had a large impact on the regular road users and was a significant disincentive to employees.

· The project was then delayed to end of March, at the beginning of the kiwifruit harvest.

· All attempts by the residents to get TCC to work with them to find better solutions were responded to in an authoritarian manner.

· Residents observed that the contractor was not adhering to the health and safety requirements for the site that had been given as the main reason for the lane closure. They responded by ignoring the traffic safety management plan and the situation quickly escalated. CCTV cameras were close by so the escalation had been recorded.

· The residents asked that a review be undertaken in to how the communications for this project was managed so that lessons could be learned and such escalations did not happen again.

The Commission Chair thanked Mr Wichers for his presentation.

3.2 Mr Rob Paterson - Māori Ward

A copy of the document tabled by Mr Paterson can be viewed on Tauranga City Council’s website in the Minutes Attachments document for this council meeting.

Key points

· A petition against the adoption of a Māori Ward in Tauranga had contained over 6,200 signatures.

· Mr Paterson understood that TCC already had at least one Māori liaison officer, a joint Māori committee, and iwi representatives on all TCC committees.

· Mr Paterson observed that a Māori seat could be gained with less than 1,000 votes, whereas a general council seat would require around 8,000 votes.

· There was no public mandate for Māori wards with usually around 70-80% of people opposed to Māori wards.

· Mr Paterson advocated for a public referendum to decide the matter.

In response to questions

· Only those on the Māori electoral roll could vote for a Māori ward seat; however, being on the Māori roll was not a requirement to stand as a candidate for the Māori ward seat in a local body election.

The Commission Chair thanked Mr Paterson for his presentation.

Attachment

1 Presentation - Mr Paterson - Māori Ward

3.3 Mr Richard Prince - Māori Ward

A copy of the document tabled by Mr Prince can be viewed on Tauranga City Council’s website in the Minutes Attachments document for this council meeting.

Key points

· Mr Prince was opposed to the removal of the right to petition for a poll that had achieved the 5% level to demand a referendum.

· Mr Prince had been involved in the collection of the signatures for the petition opposing a Māori ward in Tauranga.

· Māori had the same rights as everyone else and did not need patronising or undemocratic leg-ups.

· The community had overwhelmingly spoken; it did not want councils divided by ethnicity and expected councils to honour the democratic principles.

The Commission Chair thanked Mr Prince for his presentation.

Attachment

1 Presentation - Mr Prince - Māori Ward

3.4 Mr Buddy Mikaere - Māori Ward

Key points

· Mr Mikaere spoke in support of the affirmative decision for a Māori ward in Tauranga, on behalf of all tangata whenua.

· The Māori ward was established under due process and in accordance with legislation enacted by a democratically elected government.

· The had been a positive impact from having Māori input into, and votes on, council committees.

· Locally, the Bay of Plenty Regional Council was a good example of having successful Māori ward representation.

· Mr Mikaere expressed thanks and gratitude to the previous mayor and those councillors who had voted for the establishment of a Māori ward in Tauranga.

The Commission Chair thanked Mr Mikaere for his presentation.

4 Acceptance of late items

Nil

5 Confidential business to be transferred into the open

Nil

6 Change to the order of business

Nil

7 Confirmation of Minutes

7.1 Minutes of the Council meeting held on 29 March 2021

Resolution CO5/21/1

Moved: Commissioner Bill Wasley

Seconded: Commissioner Shadrach Rolleston

That the minutes of the Council meeting held on 29 March 2021 be confirmed as a true and correct record.

Carried

8 Declaration of conflicts of interest

Nil

9 Deputations, Presentations, Petitions

Nil

10 Recommendations from Other Committees

10.1 Māori Ward

Staff Coral Hair, Manager: Democracy Services

Carlo Ellis, Manager: Strategic Maori Engagement

Resolution CO5/21/2

Moved: Commissioner Shadrach Rolleston

Seconded: Commissioner Bill Wasley

That the Council:

(a) Receives the report “Māori Ward”.

(b) Adopts the recommendation of the Tangata Whenua/Tauranga City Council Committee and confirms the decision of 25 August 2020 to establish a Māori ward for the 2022 election (Option 1).

Carried

11 Business

11.1 Executive Report

Staff Paul Davidson, General Manager Corporate Services

Barbara Dempsey, General Manager: Regulatory & Compliance

Susan Jamieson, General Manager: People & Engagement

Nic Johansson, General Manager: Infrastructure

Christine Jones, General Manager: Strategy & Growth

Gareth Wallis, General Manager: Community Services

Jane Groves, Stormwater Programme Leader

Commissioner comments and responses to Commissioner questions

· Strategy and Growth

- City Plan review

o The Ministry for the Environment had confirmed that TCC should be proceeding with the City Plan review.

o It was requested that the Resource Management Act 1991 (RMA) review and the impacts that would have on how growth and development was managed in our cities and regions, be discussed at the next Zone Two meeting. The Chief Executive would request that this be included on the agenda.

· Infrastructure Services

- Kerbside recycling

o More communication regarding the benefits of the scheme was needed e.g. most residents (80%) would end up paying considerably less than going through private contractors, the amount of waste going to landfill would be halved, and a culture of recycling would be started that had already existed in many cities throughout the country for decades. Communications would ramp up over the next few weeks. Another benefit was also highlighted - a large proportion of health and safety incidents/accidents under the umbrella of council work was rubbish collection related. The new trucks were better designed ergonomically and it was expected that health and safety issues for those working on the trucks would be significantly reduced.

o There had been 7,500 sign ups to the garden waste bin option to date – there was a fortnightly or monthly option for this.

o The opportunity to opt for a smaller sized rubbish bin would be available for year two.

- Cameron Road

o Bus shelters - there were a number of suppliers for 3D printed concrete that could be used for bus shelters. This innovation was still in the early stages and there were issues including structural integrity and sustainability. Any 3D printed bus shelter model would still have to adhere to code before they could be installed. It was worthwhile to investigate this option further to ensure the best use of modern technology was being made, particularly in terms of cost effectiveness.

o A public and factual report which provided evidence of the consultation process for the Cameron Road project over the last few years including the feedback from workshops and drop-in sessions would be provided to the Commissioners that could then be used as a reference document to guide future discussion.

o The multi-modal objective of Stage One would be carried into Stage Two. Stage One and the business case for Stage Two had been Crown Infrastructure Partners (CIP) funded. Stage Two would begin immediately following Stage One. Future messaging needed to be about the whole Cameron Road project (Stage One and Stage Two) which would take place over the next five to six years.

o Messaging for the project going forward also needed to better connect the improvements to public amenities with the intensification of the corridor. The City Plan changes that were currently under review would offer the greatest opportunity for change and an opportunity for TCC to tell a story about what the peninsula would look like in the future.

- Three waters reform

o Tangata whenua would be kept informed and have an active role in the process to avoid issues and challenges in the future.

o It was requested that the Three Waters Reform be discussed at a future TCC/Tangata Whenua informal meeting to allow all parties to move forward on the same page.

o Third tier staff were acknowledged for the work carried out on the Three Waters Contract 2021 project, the collaborative approach taken, and their ability to look forward regarding the operations and maintenance.

- Planting at Palm Beach West Reserve

o The Stage One Landscape Plan was part of the stormwater discharge consent. If changes to the Landscape Plan were to be made, TCC would need to go back to the Bay of Plenty Regional Council (BOPRC) for advice on whether re-consultation of the Landscape Plan was required.

o The planting was an ecological enhancement programme of work which had benefits for the stormwater corridor and had general wide-spread public support.

o Eight and a half hectares of planting had already been completed without complaint, with only one further hectare to go, which was in the area of contention.

o The views of tangata whenua had also been taken into account.

o A resolution passed by Council in mid-2020 had requested that staff re-engage with the residents, tangata whenua and the wider community. The result of the re-engagement and the advice received from BOPRC regarding not planting out the remaining one hectare would be reported back to Council in early August 2021.

· People and Engagement

- The restructure of the Communications and Engagement team would provide a more geographical community focus to each piece of engagement, rather than a project focus. For larger issues, the Commissioners would be consulted on, and have input into, the type of engagement approach that was being proposed. Further information on specific engagement approach styles that might be taken or were available would be workshopped with Commissioners.

- It was important that Te Rangapū Mana Whenua o Tauranga Moana and tangata whenua were kept up to date, not just on issues happening locally, but also the RMA reform and other things coming out of central government.

- The Commissioners acknowledged and thanked Ceilidh Dunphy for her assistance to the commissioners and congratulated her on her new role as Community Relations Manager.

· Regulatory and Engagement

- Emergency Management - a report which included current thinking regarding tsunami sirens and other methods available for warning people, would be presented to Council on 27 April. The Emergency Management team had a role in community training and awareness and they would be working with communities to develop their own specific community response plans.

· Community Services

- Venues and Events – the Historic Village team were commended for the role they played in the successful multi-ethnic event held at the Village a few weeks ago.

· Corporate Services

- Elder Housing – staff would investigate and report back whether the land at Hinau St was gifted to the Mt Maunganui Borough Council for the purpose of elder housing.

Resolution CO5/21/3

Moved: Commissioner Bill Wasley

Seconded: Commissioner Stephen Selwood

That the Council receives the Executive Report.

Carried

Staff Action

The following report be provided to the Commissioners:

· A factual report providing evidence of the consultation process for the Cameron Road project over the last few years including the feedback from workshops and drop-in sessions.

The report is to be made available to the public.

11.2 Meetings schedule April - December 2021

Staff Coral Hair, Manager: Democracy Services

Resolution CO5/21/4

Moved: Commissioner Stephen Selwood

Seconded: Commissioner Bill Wasley

That the Council:

(a) Receives the report “Meetings schedule 2020”.

(b) Adopts Attachment 1 as the meetings schedule for the period April to December 2021.

Carried

11.3 2020 Speed limit review

Staff Nic Johansson, General Manager: Infrastructure Services

Russell Troup, Director of Transport

Clare Cassidy, Team Leader: Transport Safety

Commissioner comments and responses to Commissioner questions

· Links Ave - although Links Ave met the criteria for a speed limit reduction, this would have a significant flow on effect on nearby roads which were already over-burdened.

· Papamoa Beach Road – the proposed speed reduction to 50km was to gain consistency along the length of the route and also to accommodate a large number of pedestrian crossing movements, particularly from the retirement villages. The reduction was in line with Waka Kotahi guidance and also consistent with some community feedback received. Noise was also a factor in this area; there was evidence to support that lower speeds reduced noise.

· Papamoa Beach Road, Tara Road and Totara Street had all been identified as having a high safety risk by Waka Kotahi Mega Maps. There was an opportunity on Tara Road to make engineering changes. There was no opportunity on Papamoa Beach Road and Totara Street to change the engineering environment due to the number of pedestrians and cyclists and a high volume of entrances with slow moving heavy vehicles entering and exiting onto the road, particularly on Totara Street.

· Variable speed zones like the ones outside schools and over the Kaimais acted as a warning that something had changed in terms of the conditions.

· Although Totara Street was very busy at peak times and during the day, it was much quieter at night and could benefit from a variable speed limit. Links Ave would also benefit from having a variable speed limit with traffic being greatly reduced out of normal peak school opening and closing times.

· All speed changes went through a consultative process and also sign-off by Waka Kotahi and any trials for variable speed limits on Totara Street and Links Ave would also need to go through this process.

· The overall objective was to generally improve safety and one way to measure the success or otherwise of speed limit changes was to monitor the crash rates on these roads. Before and after speeds were also monitored looking at the 85^th percentile - what speed the most people travelled at, as well as the standard deviation.

· It was suggested that this type of monitoring could be undertaken for Totara Street in peak and off-peak times to ascertain the variance of speeds and whether a variable speed limit would work before any changes to the speed limit were made.

· It was recommended that a decision on Totara Street be deferred pending further investigation.

· It was also recommended that a trial of variable speed be undertaken for Links Ave. This would require Waka Kotahi approval and community consultation in the local area.

· At a site visit of Links Ave, the Commissioners noticed and commented on the speed of the buses. Staff would feed this information back to BOPRC.

Resolution CO5/21/5

Moved: Commissioner Stephen Selwood

Seconded: Commission Chair Anne Tolley

That the Council:

(a) Receives the 2020 Speed limit review report.

(b) Receives submissions on the proposed speed limit changes.

(c) Resolves that, pursuant to Land Transport Rule Setting of Speed Limits 2017, Rule 54001/2017 and the Speed Limit Bylaw 2009, be amended by making changes to the Schedules (as shown in attachment A) to reflect the following:

(i) Ohauiti Road: Extend existing 50km/h south to 100m south of Adler Drive.

(ii) Welcome Bay Road: Remove existing 60km/h zones so that the urban 50km/h limit extends from Welcome Bay Lane to 260m east of Ranginui Road.

(iii) Kaitemako Road: Extend existing 50km/h limit south to 300m south of Panorama Drive; install 80km/h Limit between 300m south of Panorama Drive and the Western Bay of Plenty Boundary.

(iv) Pyes Pa Road: Install 50km/h limit from the SH29A intersection to 80m south of Kennedy Road.

(v) Oropi Road: Install 60km/h limit between the SH29A intersection and the intersection with Wood Road.

(vi) Parton Road: Extend 50km/h limit from east of Gordon Spratt Reserve to 200m south of the Tara Road Roundabout.

(vii) Tara Road: Install a 60km/h limit in the section between Doncaster Drive and Parton Road. Retain the existing 80km/h speed limit on the section west of Doncaster Drive.

(viii) Domain Road: No change.

(ix) Maranui Street and Papamoa Beach Road: Change existing 60km/h sections to 50km/h so that Papamoa Beach Road and Maranui Street are 50 km/h for the full length.

(x) Aquinas College: Install variable 40km/h limit on Pyes Pa Road from a point 200m north of Joyce Road to 35m north of Freeburn Road.

(xi) Tauranga Intermediate School: Install variable 40km/h limit on Fraser Street from a point 100m north of Brook Street to 17^th Avenue; Eighteenth Avenue from Fraser Street to Grace Road; Grace Road from Eighteenth Avenue to Kaka Street.

(xii) Matua School: Install variable 40km/h limit on Levers Road from a point 25m south-west of Sylvania Drive to 30m east of Woods Avenue.

(xiii) Golden Sands School: Install variable 40km/h limit on Golden Sands Drive from a point 200m east of Kapuka Street to 20m south of Wairakei Avenue.

(xiv) Taumata School: Install variable 40km/h limit on Kennedy Road between the western end of Mortlake Heights and Flack Street; Mortlake Heights from 15m west of Audax Lane to Kennedy Road; Te Ranga Memorial Drive from Kennedy Road to Tunbridge Street.

(d) Requests staff provide a report on Totara Street with regards to crash, variable speed, and community consultation data.

(e) Requests staff undertake consultation on variable speed limits on Links Avenue aorund the school, and provide a report.

Carried

11.4 Capital Programme Reporting

Staff Nic Johansson, General Manager: Infrastructure Services

Commissioner comments and responses to Commissioner questions

· Cameron Rd Stage One – a significant budget amount had been brought forward into this financial year in order to carry out the renewal of a significant amount of buried pipe work; the extent of which had not been known when the budget had been originally set.

· The reason for the variance for the historic development contributions funded neighbourhood reserve would be reported back.

· Streetlight LED Upgrade – the risk that Waka Kotahi funding may be taken away was being highlighted. The funding needed to be drawn down by the end of this financial year but there were COVID related supply issues that were putting that timeline at risk. The Commissioners would raise this with Waka Kotahi when they met.

· Te Maunga and Waiāri Treatment Plants – it was important to understand the risks upfront; however, it had been difficult to foresee all the risks that had arisen. The provisions for the Long Term Plan (LTP) needed to be sufficiently robust in terms of risk assessment.

· Western Active Reserve Capital Works – the planning component for this was still being worked on, and was about getting an active reserve in the western corridor area.

· Suggested additions and improvements to the report included:

- show “on time” and “on budget” for projects

- report back on project benefits realisations for the future

- add a column to the supporting spreadsheets around Risk and Mitigation (before the Commentary column)

· It was announced that David Moore had been appointed as the manager for the Capital Projects Assurance Division (CPAD).

Resolution CO5/21/6

Moved: Commission Chair Anne Tolley

Seconded: Commissioner Stephen Selwood

That the Council receives the report, Capital Programme Reporting.

Carried

Staff Action

The following additions and improvements to be considered for inclusion in the Capital Programme Reporting report:

· show “on time” and “on budget” for projects

· report back on project benefits realisations for the future

· add a column to the supporting spreadsheets around Risk and Mitigation (before the Commentary column)

At 1.07pm, the meeting adjourned.

At 1.47pm, the meeting resumed.

11.5 CCO Draft Statements of Intent 2021/2022 to 2023/2024

Staff Anne Blakeway, Manager: Community Partnerships

Josephine Meuli, Council Controlled Organisations Specialist

Commissioner comments and responses to Commissioner questions

· The Statements of Intent were still only in draft form and TCC would provide feedback on required amendments to the Council Controlled Organisations. Amendments would be incorporated into the final Statement of Intent documents.

· Feedback for the Tauranga Art Gallery Trust included:

- It was expected that a requirement to engage with iwi, tangata whenua or mana whenua be enunciated in the Statement of Intent. It was also expected that there would be tangata whenua representation on the Board.

- When the revenue received from Council was divided by the visitor numbers, this currently worked out as a subsidy of $25 per visit which was quite high. It was suggested that a Key Performance Indicator (KPI) be added around cost per visit and that reducing over time.

- Online and physical visits were recorded as one total. It would be helpful to know what the split was and where increases were happening.

· The Community Outcomes had been revised since the letters of expectation had been sent out in December 2020. The new revised Community Outcomes would be included in the feedback so that Statements of Intent could be updated to align with these.

Resolution CO5/21/7

Moved: Commissioner Bill Wasley

Seconded: Commissioner Shadrach Rolleston

That the Council:

(a) Receives the CCO Draft Statements of Intent 2021/2022 to 2023/24 report.

(b) Receives the draft Statements of Intent (SOIs) for Tauranga City Council’s council-controlled organisations (CCOs); Bay of Plenty Local Authority Shared Services Limited (BOPLASS), Tauranga Art Gallery Trust (TAGT), Tourism Bay of Plenty (TBOP), and the Local Government Funding Agency (LGFA) for 2021/22 to 2023/24, and include feedback from the Commissioners into the shareholders feedback.

(c) Notes that the draft Statement of Intent for Bay Venues Limited (BVL) will come to Council separately on 27 April 2021, along with shareholder feedback that incorporates the recommendations from the recent BVL strategic review.

(d) Notes that as joint shareholder of TBOP, Western Bay of Plenty District Council (WBOPDC) will be asked to approve the shareholder comments on the draft Statement of Intent for TBOP at their 27 April 2021 Council meeting.

Carried

12 Discussion of Late Items

Nil

13 Public excluded session

Resolution CO5/21/8

Moved: Commissioner Shadrach Rolleston

Seconded: Commissioner Bill Wasley

That the public be excluded from the following parts of the proceedings of this meeting.

The general subject matter 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 of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Ground(s) under section 48 for the passing of this resolution
13.1 - Public Excluded Minutes of the Council Meeting held on 29 March 2021	s7(2)(a) - the withholding of the information is necessary to protect the privacy of natural persons, including that of deceased natural persons s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege s7(2)(h) - the withholding of the information is necessary to enable Council to carry out, without prejudice or disadvantage, commercial activities s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) s7(2)(j) - the withholding of the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage	s48(1)(a) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
13.2 - 2021 Appointment of Trustees to the Boards of Tauranga Art Gallery Trust and Tourism Bay of Plenty	s7(2)(a) - the withholding of the information is necessary to protect the privacy of natural persons, including that of deceased natural persons	s48(1)(a) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
13.3 - Cameron Road procurement and delivery model	s7(2)(h) - the withholding of the information is necessary to enable Council to carry out, without prejudice or disadvantage, commercial activities s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	s48(1)(a) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7

Carried

At 2.16pm, the meeting resumed in the open session.

14 Closing Karakia

Commissioner Shadrach Rolleston closed the meeting with a Karakia.

The meeting closed at 2.17pm.

The minutes of this meeting were confirmed as a true and correct record at the Ordinary Council meeting held on 27 April 2021.

........................................................

CHAIRPERSON

11 Business

11.1 Governance Structure - establish Strategy, Finance and Risk Committee

File Number: A12384221

Author: Coral Hair, Manager: Democracy Services

Carlo Ellis, Manager: Strategic Maori Engagement

Authoriser: Susan Jamieson, General Manager: People & Engagement

Purpose of the Report

1. The purpose of this report is to establish the Strategy, Finance and Risk Committee as a standing committee of Council and adopt its terms of reference and delegations.

Recommendations

That the Council:

(a) Receives the report “Governance Structure – establish Strategy, Finance and Risk Committee”.

(b) Pursuant to clause 30(1)(a) Schedule 7 of the Local Government Act 2002, establishes a Strategy, Finance and Risk Committee as a Standing Committee of the Council.

(c) Adopts the Terms of Reference for the Strategy, Finance and Risk Committee in Attachment 1 and delegates to it the role, scope and powers specified therein (pursuant to clause 32 Schedule 7 of the Local Government Act 2002).

(d) Appoints the following members to the Strategy, Finance and Risk Committee and appoints Commission Chair Anne Tolley as Chairperson and (insert name) as Deputy Chairperson.

Name	Position
Commission Chair Anne Tolley	Chairperson
Commissioner Shadrach Rolleston	Member
Commissioner Stephen Selwood	Member
Commissioner Bill Wasley	Member
Matire Duncan	Te Rangapū Mana Whenua o Tauranga Moana Chairperson
To be appointed	Tangata Whenua representative
To be appointed	Tangata Whenua representative
To be appointed	Tangata Whenua representative
To be appointed	External independent appointee

(e) Acknowledges that the externally appointed members of the Strategy, Finance and Risk Committee have the skills, attributes or knowledge that will assist the work of the Committee.

(f) Approves voting rights for the four commissioners, the three tangata whenua representatives and the external independent appointee of the Strategy, Finance and Risk Committee. For the avoidance of doubt, the Te Rangapū Mana Whenua o Tauranga Moana Chairperson will not be a voting member.

(g) Requests the Chief Executive review the remuneration for the external representatives and reports back to the Council as soon as practicable.

(h) In the interim until the remuneration has been reviewed, approves the remuneration for the external members of the Strategy, Finance and Risk Committee as follows:

· Tangata Whenua Representatives $8,000 per annum

· Chairperson Te Rangapū Mana Whenua o Tauranga Moana $8,000 per annum

· External independent appointee - Chief Executive to negotiate an amount

(i) Delegates to the Chief Executive the authority to determine the contractual terms and conditions of appointment for the externally appointed members, excluding remuneration.

(j) Confirms the Strategy, Finance and Risk Committee will meet six weekly when members are appointed.

Executive Summary

2. The Strategy, Finance and Risk Committee (the Committee) will be established to undertake a strategic and significant governance function that oversees the organisations strategic direction, risk management, internal control and financial management practises. Membership will include the four commissioners and five external members, with voting rights afforded to four of the five external members in addition to the Commissioners. Remuneration for external representatives will be reviewed by Strategic Pay and reported back to Council.

Background

3. The Minister of Local Government has exercised her powers under Section 258F of Part 10 of the Local Government Act 2002 (LGA 2002) and appointed a Commission to govern Tauranga City Council from 9 February 2021.

4. The Council (the Commission) considered reports on the governance structure on 22 February 2021 and the 29 March 2021. All but three of the committees of council were discharged. The Tangata Whenua/Tauranga City Council Committee, City Plan Hearings Committee and Wastewater Management Review Committee were confirmed, with elected members discharged and commissioners appointed in their stead. The Council signalled that they may establish a further committee at a later stage.

Strategic / Statutory Context

5. Clause 30 (1) (a) Schedule 7 of the LGA 2002 provides for the Council to appoint any committees it considers appropriate. Clause 32(1) Schedule 7 of the LGA 2002 provides for the Council to delegate (unless expressly provided otherwise in the LGA 2002 or any other Act) to a committee any of its responsibilities, duties or powers, except for certain specified exceptions.

6. Clause 31(1) Schedule 7 of the LGA 2002 provides that Council may appoint or discharge any member of a committee. Clause 31(3) provides for the Council to appoint persons who are not members of the Council to its committees if, in the opinion of the local authority, that person has the skills, attributes, or knowledge that will assist the work of the committee.

7. Clause 32(4) Schedule 7 of the LGA 2002 provides for a committee to exercise or perform its delegated responsibilities, duties or powers in like manner and with the same effect as the local authority could have exercised or performed them without referring back to the Council for confirmation. Clause 32(7) states that no delegation relieves the local authority of the legal liability or responsibility to perform or ensure performance of any function or duty.

8. Section 14 of the LGA 2002 requires a local authority, in performing its role, to act in accordance with the principles specified. These principles include, in subsection 14(1)(d), that a local authority should provide opportunities for Māori to contribute to its decision-making processes.

9. Section 81(1)(a) and (b) of the LGA 2002 require that a local authority must (a) establish and maintain processes to provide opportunities for Māori to contribute to the decision-making processes of the local authority; and (b) consider ways in which it may foster the development of Māori capacity to contribute to the decision-making processes of the local authority.

TERMS OF REFERENCE AND MEMBERSHIP

10. The Strategy, Finance and Risk Committee’s (the Committee) Terms of Reference are set out in Attachment 1. The role of the Committee is:

(a) to assist and advise the Council in discharging its responsibility and ownership of health and safety, risk management, internal control, financial management practices, frameworks and processes to ensure these are robust and appropriate to safeguard the Council’s staff and its financial and non-financial assets;

(b) to consider strategic issues facing the city and develop a pathway for the future;

(d) to review and determine the policy and bylaw framework that will assist in achieving the strategic priorities and outcomes for the Tauranga City Council.

11. It is recommended that this Committee meet six weekly.

12. Five external members are recommended to be appointed in addition to the four Commissioners on the Committee:

(a) Matire Duncan, Te Rangapū Mana Whenua o Tauranga Moana Chairperson.

(b) Three Tangata Whenua representatives to be recommended by Te Rangapū Mana Whenua o Tauranga Moana.

13. The appointment of Tangata Whenua representatives and the Chairperson of Te Rangapū Mana Whenua o Tauranga Moana to the standing committee will ensure that Māori voices are continued to be heard at a committee of Council, as per the principles of the Treaty of Waitangi (Te Tiriti o Waitangi) and the requirements of the LGA 2002 and reflects the valued partnership of Tauranga City Council with Te Rangapū Mana Whenua o Tauranga Moana.

QUORUM

14. Clause 23(3)(b) of Schedule 7 LGA 2002 specifies the requirements for a quorum for a committee. Council can determine how many members are required for a quorum of a committee, but it must be at least two members, and one must be an elected member (Commissioner).

15. It is recommended that the minimum quorum for this Committee be five (5) members physically present, and that at least three (3) commissioners and two (2) externally appointed members must be present. This would mean that a majority of the members have to be physically present and that three commissioners would need to be present for the meeting to be held. This quorum provision would ensure that decisions are made with a majority of Commissioners present.

Voting rights for external appointees

16. The Council has the option to provide voting rights for the external appointees. The Council previously provided for external appointees to exercise voting rights on the standing committees and it is recommended that voting rights continue to be provided to four of the five external appointees.

17. The Chairperson of Te Rangapu Mana Whenua o Tauranga Moana is an advisory position, without voting rights, designed to ensure mana whenua discussions are connected to the committee.

18. The Chairperson of the Committee has a casting vote in accordance with Standing Orders.

Options Analysis

19. The Council has the option of establishing this and/or other standing committees of Council.

20. The Council has the option of appointing external members to this committee or any other standing committee if in the Council’s opinion they have the skills, attributes or knowledge that will assist the work of the Committee.

21. The Council has the option to provide voting rights to the external appointees where it deems appropriate and to set the quorum requirements above the minimum set by the LGA.

Financial Considerations

22. There are no financial impacts on the establishment of the Strategy, Finance and Risk Committee as the democracy services budgets provided for payment for external members of standing committees. There is sufficient budget provision to accommodate an increase in the remuneration for the Chairperson of Te Rangapū Mana Whenua o Tauranga Moana.

23. In 2019 Strategic Pay reviewed and benchmarked remuneration levels for external representatives of standing committees, including the independent chairperson of the Finance, Audit and Risk Committee (FARC) and the Tangata Whenua representatives.

24. It is recommended that Strategic Pay review the remuneration for the external representatives and that the Chief Executive reports back to the Council as soon as practicable. In the interim the remuneration for the external members of the Strategy, Finance and Risk Committee is recommended as follows:

· Tangata Whenua Representatives $8,000 per annum

· Chairperson Te Rangapū Mana Whenua o Tauranga Moana $8,000 per annum

· External independent appointee – Chief Executive to negotiate an amount

25. It is also recommended that the Chief Executive be delegated authority to determine the contractual terms and conditions of appointment for the externally appointed members.

Legal Implications / Risks

26. Affording voting rights to four of the five external representatives on the SFRC creates a situation where there is an equal number of external representatives with voting rights as the Commissioners. There is a risk that this could be perceived by members of the public as a shift in the balance of power away from the Commission to external people who are neither elected nor appointed by the Minister of Local Government.

Significance

27. The Local Government Act 2002 requires an assessment of the significance of matters, issues, proposals and decisions in this report against Council’s Significance and Engagement Policy. Council acknowledges that in some instances a matter, issue, proposal or decision may have a high degree of importance to individuals, groups, or agencies affected by the report.

28. In making this assessment, consideration has been given to the likely impact, and likely consequences for:

(a) the current and future social, economic, environmental, or cultural well-being of the district or region

(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision, or matter

29. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the decision is of low significance.

ENGAGEMENT

30. There is no requirement to engage or consult with the public about the governance structure. Taking into consideration the above assessment, that the decision is of low significance, officers are of the opinion that no further engagement is required prior to Council making a decision.

Click here to view the TCC Significance and Engagement Policy

Next Steps

31. Schedule meetings every six weeks once external representatives are appointed.

32. Review remuneration of external representatives.

33. Contracts detailing the terms and conditions of appointment to be entered into with the external representatives.

Attachments

1. Strategy, Finance and Risk Committee - draft Terms of Reference - A12462838 ⇩

Strategy, Finance and Risk Committee – draft Terms of Reference

Strategy, Finance and Risk Committee

Membership

Chairperson	Commission Chair Anne Tolley
Deputy chairperson	To be decided
Members	Commissioner Shadrach Rolleston Commissioner Stephen Selwood Commissioner Bill Wasley
	Te Rangapū Mana Whenua o Tauranga Moana Chairperson Tangata Whenua representative Tangata Whenua representative Tangata Whenua representative External appointee
Quorum	Five (5) members must be physically present, and at least three (3) commissioners and two (2) externally appointed members must be present.
Meeting frequency	Six weekly

Role

The role of the Strategy, Finance and Risk Committee (the Committee) is:

(b) to consider strategic issues facing the city and develop a pathway for the future;

(d) to review and determine the policy and bylaw framework that will assist in achieving the strategic priorities and outcomes for the Tauranga City Council.

Membership

The Committee will consist of:

· four commissioners with the Commission Chair appointed as the Chairperson of the Committee

· the Chairperson of Te Rangapū Mana Whenua o Tauranga Moana

· three tangata whenua representatives (recommended by Te Rangapū Mana Whenua o Tauranga Moana and appointed by Council)

· an independent external person appointed by the Council.

Voting Rights

The tangata whenua representatives and the independent external person have voting rights as do the Commissioners.

The Chairperson of Te Rangapu Mana Whenua o Tauranga Moana is an advisory position, without voting rights, designed to ensure mana whenua discussions are connected to the committee.

Committee’s Scope and Responsibilities

A. STRATEGIC ISSUES

The Committee will consider strategic issues, options, community impact and explore opportunities for achieving outcomes through a partnership approach.

A1 – Strategic Issues

The Committee’s responsibilities with regard to Strategic Issues are:

· Adopt an annual work programme of significant strategic issues and projects to be addressed. The work programme will be reviewed on a six-monthly basis.

· In respect of each issue/project on the work programme, and any additional matters as determined by the Committee:

· Consider existing and future strategic context

· Consider opportunities and possible options

· Determine preferred direction and pathway forward and recommend to Council for inclusion into strategies, statutory documents (including City Plan) and plans.

· Consider and approve changes to service delivery arrangements arising from the service delivery reviews required under Local Government Act 2002 that are referred to the Committee by the Chief Executive.

A2 – Policy and Bylaws

The Committee’s responsibilities with regard to Policy and Bylaws are:

· Develop, review and approve bylaws to be publicly consulted on, hear and deliberate on any submissions and recommend to Council the adoption of the final bylaw. (The Committee will recommend the adoption of a bylaw to the Council as the Council cannot delegate to a Committee the adoption of a bylaw.)

· Develop, review and approve policies including the ability to publicly consult, hear and deliberate on and adopt policies.

A3 – Monitoring of Strategic Outcomes and Long Term Plan and Annual Plan

The Committee’s responsibilities with regard to monitoring of strategic outcomes and Long Term Plan and Annual Plan are:

· Reviewing and reporting on outcomes and action progress against the approved strategic direction. Determine any required review/refresh of strategic direction or action pathway.

· Reviewing and assessing progress in each of the six (6) key investment proposal areas within the 2021-2031 Long Term Plan.

· Reviewing the achievement of financial and non-financial performance measures against the approved Long Term Plan and Annual Plans.

B. FINANCE AND RISK

The Committee will review the effectiveness of the following to ensure these are robust and appropriate to safeguard the Council’s financial and non-financial assets:

· Health and safety.

· Risk management.

· Significant projects and programmes of work focussing on the appropriate management of risk.

· Internal and external audit and assurance.

· Fraud, integrity and investigations.

· Monitoring of compliance with laws and regulations.

· Oversight of preparation of the Annual Report and other external financial reports required by statute.

· Oversee the relationship with the Council’s Investment Advisors and Fund Managers.

· Oversee the relationship between the Council and its external auditor.

· Review the quarterly financial and non-financial reports to the Council.

B1 - Health and Safety

The Committee’s responsibilities with regard to health and safety are:

· Reviewing the effectiveness of the health and safety policies and processes to ensure a healthy and safe workspace for representatives, staff, contractors, visitors and the public.

· Assisting the Commissioners to discharge their statutory roles as “Officers” in terms of the Health and Safety at Work Act 2015.

B2 - Risk Management

The Committee’s responsibilities with regard to risk management are:

· Review, approve and monitor the implementation of the Risk Management Policy, Framework and Strategy including the Corporate Risk Register.

· Review and approve the Council’s “risk appetite” statement.

· Review the effectiveness of risk management and internal control systems including all material financial, operational, compliance and other material controls. This includes legislative compliance, significant projects and programmes of work, and significant procurement.

· Review risk management reports identifying new and/or emerging risks and any subsequent changes to the “Tier One” register.

B3 - Internal Audit

The Committee’s responsibilities with regard to the Internal Audit are:

· Review and approve the Internal Audit Charter to confirm the authority, independence and scope of the Internal Audit function. The Internal Audit Charter may be reviewed at other times and as required.

· Review and approve annually and monitor the implementation of the Internal Audit Plan.

· Review the co-ordination between the risk and internal audit functions, including the integration of the Council’s risk profile with the Internal Audit programme. This includes assurance over all material financial, operational, compliance and other material controls. This includes legislative compliance (including Health and Safety), significant projects and programmes of work and significant procurement.

· Review the reports of the Internal Audit functions dealing with findings, conclusions and recommendations.

· Review and monitor management’s responsiveness to the findings and recommendations and enquire into the reasons that any recommendation is not acted upon.

B4 - External Audit

The Committee’s responsibilities with regard to the External Audit are:

· Review with the external auditor, before the audit commences, the areas of audit focus and audit plan.

· Review with the external auditors, representations required by commissioners and senior management, including representations as to the fraud and integrity control environment.

· Recommend adoption of external accountability documents (LTP and annual report) to the Council.

· Review the external auditors, management letter and management responses and inquire into reasons for any recommendations not acted upon.

· Where required, the Chair may ask a senior representative of the Office of the Auditor General (OAG) to attend the Committee meetings to discuss the OAG’s plans, findings and other matters of mutual interest.

· Recommend to the Office of the Auditor General the decision either to publicly tender the external audit or to continue with the existing provider for a further three-year term.

B5 - Fraud and Integrity

The Committee’s responsibilities with regard to Fraud and Integrity are:

· Review and provide advice on the Fraud Prevention and Management Policy.

· Review, adopt and monitor the Protected Disclosures Policy.

· Review and monitor policy and process to manage conflicts of interest amongst commissioners, tangata whenua representatives, external representatives appointed to council committees or advisory boards, management, staff, consultants and contractors.

· Review reports from Internal Audit, external audit and management related to protected disclosures, ethics, bribery and fraud related incidents.

· Review and monitor policy and processes to manage responsibilities under the Local Government Official Information and Meetings Act 1987 and the Privacy Act 2020 and any actions from the Office of the Ombudsman’s report.

B6 - Statutory Reporting

The Committee’s responsibilities with regard to Statutory Reporting relate to reviewing and monitoring the integrity of the Annual Report and recommending to the Council for adoption the statutory financial statements and any other formal announcements relating to the Council’s financial performance, focusing particularly on:

· Compliance with, and the appropriate application of, relevant accounting policies, practices and accounting standards.

· Compliance with applicable legal requirements relevant to statutory reporting.

· The consistency of application of accounting policies, across reporting periods.

· Changes to accounting policies and practices that may affect the way that accounts are presented.

· Any decisions involving significant judgement, estimation or uncertainty.

· The extent to which financial statements are affected by any unusual transactions and the manner in which they are disclosed.

· The disclosure of contingent liabilities and contingent assets.

· The basis for the adoption of the going concern assumption.

· Significant adjustments resulting from the audit.

Power to Act

· To make all decisions necessary to fulfil the role, scope and responsibilities of the Committee subject to the limitations imposed.

· To establish sub-committees, working parties and forums as required.

· This Committee has not been delegated any responsibilities, duties or powers that the Local Government Act 2002, or any other Act, expressly provides the Council may not delegate. For the avoidance of doubt, this Committee has not been delegated the power to:

o make a rate;

o make a bylaw;

o borrow money, or purchase or dispose of assets, other than in accordance with the Long Term Plan (LTP);

o adopt the LTP or Annual Plan;

o adopt the Annual Report;

o adopt any policies required to be adopted and consulted on in association with the LTP or developed for the purpose of the local governance statement;

o adopt a remuneration and employment policy;

o appoint a chief executive.

Power to Recommend

· To Council and/or any standing committee as it deems appropriate.

11.2 Council Controlled Organisations Half Yearly Reports to 31 December 2020

File Number: A12314896

Author: Anne Blakeway, Manager: Community Partnerships

Josephine Meuli, Council Controlled Organisation Specialist

Authoriser: Gareth Wallis, General Manager: Community Services

Purpose of the Report

1. To present the half yearly reports to 31 December 2020 of Tauranga City Council’s five council-controlled organisations.

Recommendations

That the Council:

(a) Receives the council-controlled organisations Half Yearly Reports to 31 December 2020 Report.

(b) Receives Bay Venues Limited’s report on its performance for the six months to 31 December 2020, as required by the 2020-2021 Statement of Intent.

(c) Receives Bay of Plenty Local Authority Shared Services Limited’s report on its performance for the six months to 31 December 2020, as required by the 2020-2021 Statement of Intent.

(d) Receives Tauranga Art Gallery Trust’s report on its performance for the six months to 31 December 2020, as required by the 2020-2021 Statement of Intent.

(e) Receives Tourism Bay of Plenty’s report on its performance for the six months to 31 December 2020, as required by the 2020-2021 Statement of Intent, noting that Western Bay of Plenty District Council as joint shareholder, will receive the report at their Council meeting also on 27 April 2021.

(f) Receives the Local Government Funding Agency’s report on its performance for the six months to 31 December 2020, as required by the 2020-2021 Statement of Intent.

Executive Summary

2. Bay Venues Limited (BVL), Bay of Plenty Local Authority Shared Services Limited (BOPLASS), Tauranga Art Gallery Trust (TAGT), Tourism Bay of Plenty (TBOP) and Local Government Funding Agency (LGFA) are council-controlled organisations of Tauranga City Council (TCC).

3. In accordance with the Statement of Intent and the Local Government Act 2002 (LGA), they are required to report to Council on their financial and non-financial performance six monthly and annually. All the council-controlled organisations provided their reports by the end of February as required.

4. Each council-controlled organisation report for the six months to 31 December 2020 is provided as Attachments 1 to 5, with a brief summary in the main body of this report. The reports summarise the financial performance for the period ended 31 December 2020 and service performance against objectives/targets.

Background

Bay Venues Limited (BVL)

5. BVL’s report for the six months to 31 December 2020 was received by Council on 25 February 2021 and is included as Attachment 1.

6. BVL notes the first six months being dominated by COVID-19 recovery. BVL notes its response became a positive focus on the mental health and wellbeing of its employees and customers, taking the opportunity to focus on communication during this period.

7. Additionally, BVL had a focus on improving financial sustainability by securing alternative revenue streams and growing a new business unit, resulting in the opportunity to work with the Ministry of Education to provide free healthy school lunches across eight schools, or around 4,000 lunches daily across BOP region. This highlights BVL’s success in identifying opportunities to contribute to the community to reduce food insecurity, improving wellbeing for tamariki and providing jobs for 12 people in the Healthy School Kai initiative.

8. BVL staff have worked closely with council staff on the LTP budget input, cognisant of the financial constraints on the council that have been compounded by COVID-19. BVL also collaborated on the Community Facilities Investment Plan across the six-month period.

9. The Trustpower Baypark team have worked with their customers to reschedule events that were postponed from earlier in the year, resulting in a packed calendar of events. Community, regional and national stakeholders have worked to reschedule postponed multi-day events through to the end of the school year.

10. BVL launched Envibe, a new Leisure Management software in December 2020. The software update brought together different groups within the venues and programmes teams, including finance, communications and information technology teams. The Document Management System migration completed the first of many projects for BVL in its digital transformation strategy.

11. Mount Hot Pools closed at the end of January 2021 for a ten-week period for scheduled maintenance and renewals shutdown. Taking advantage of the closedown, other improvements to the external face of the facility are also scheduled to take place.

12. BVL have worked with TCC on the review of the strategic alignment and will work with council on any changes to the organisation and governance structure.

13. A balanced scorecard (on Page 6 of the attached six-monthly report) shows BVL’s performance against Statement of Intent measures. Five Statement of Intent targets are on track with the exception of staff engagement, which BVL links to the post-COVID remuneration and training freeze, and for which an action plan is in place. The annual customer satisfaction survey is not due until Q4.

14. Financial performance for the year shows that BVL has achieved operating revenue for the first six months of $10.8 million (against a budget of $17.4 million), with operating expenditure also down to $9.9 million from a budgeted $18.9 million. Year to date EBITDA is currently over budget, at a surplus of $847,000 against a budgeted deficit of $1.4 million. Total operating losses (after interest and depreciation) are $636,000, an improvement on the budgeted $2.1 million.

15. BVL look forward to the second six months of 2020/21 and working towards a strong finish for the financial and non-financial targets.

Bay of Plenty Local Authority Shared Services Limited (BOPLASS)

16. BOPLASS’s report for the six months to 31 December 2020 was received by Council on 19 February 2021 and is included at Attachment 2.

17. Financial performance for the year to date shows an operational deficit of $18,067, which BOPLASS puts down to the previous year’s adjustment for Tax Payable and Receivable. Variances with Project Recoveries revenue and expenditure are due to project and invoice timing.

18. Total operating revenue of $907,322 was under the budgeted $1,501,505 (40%), with total operating expenditure of $925,388 also under the budgeted expenditure of $1,485,838 (38%).

19. Of interest to TCC are the following initiatives and projects:

· The MahiTahi local government Collaboration Portal continues to add national value providing an easily accessible platform sharing council and project information. It is hoped this will improve visibility and opportunities for further collaboration

· COVID-19 saw a greater number of natural disaster claims in the global insurance market. This provided the right opportunity for BOPLASS to ensure council provides quality data to their insurers and underwriters for their insurance programmes. This also meant some of the programmes renewed receiving more favourable terms and competitive rates.

· BOPLASS was actively involved in submitting proposed changes to Ministry of Business, Innovation and Employment (MBIE) on the All of Government procurement rules that could have a significant impact on local government entities.

Tauranga Art Gallery Trust (TAGT)

20. TAGT’s report for the six months to 31 December 2020 was received by Council on 26 February 2021 and is included as Attachment 3.

21. With COVID restrictions, the closure of borders and additional disruptions experienced by the redevelopment of Wharf Street (now complete), visitor numbers totalled 20,056, or 67% of TAGT’s reduced visitation target of 30,000. This was down on last year’s total of 36,788 for the same period, although TAGT expect to see a steady increase in visitor numbers by year end.

22. The visitor satisfaction survey completion rate is down by 40%, which TAGT attributes to the impact of COVID-19 and redevelopment of Wharf Street. Of the 735 visitors surveyed, 77% indicate an above average satisfaction with their experience. 50% indicated their reason for visiting was ‘walking past’ and 65% of those visitors surveyed were residents of Tauranga and the western Bay of Plenty.

23. Thirteen exhibitions were delivered during the six-month period against a target of 12 set for the financial year, including one touring exhibition, ‘Terminus’ by Jess Johnson and Simon Ward.

24. Innovative art experiences targets have not yet been met due to rescheduling undertaken during the reporting period and as a follow on from the COVID-19 lockdown period but are likely to be met by year end.

25. 4,315 students participated in Tauranga Art Gallery LEOTC (Learning Experiences Outside the Classroom) programmes during the period, with TAGT expecting to exceed their target of 7,500 by year end.

26. The TAGT report shows that the Statement of Intent performance measures are on track and remaining so, or off track but likely to be on target at year end (see pages 11-14 of the attached six-monthly report).

27. Despite closed borders and considerable disruptions during the six-month period, TAGT has successfully achieved its KPI securing 20% of its revenue from non-TCC sources.

28. Due to the fiscal implications of COVID-19, TAGT has been unable to move towards a living wage for all staff but is expected to meet this target by FYE 2022.

29. Overall financial performance for the six months shows a surplus of $12,144 (including depreciation and finance costs) against a budgeted surplus of $24,986 for the six-month period, the difference being attributable to a one-off exhibition expense. The forecast is indicating a return to a deficit of $20,000 at year end.

Tourism Bay of Plenty (TBOP)

30. TBOP’s report for the six months to 31 December 2020 was received by Council on 25 February 2021 and is included as Attachment 4.

31. TBOP highlight the significant and continuing impact of the Whakaari/White Island eruption and COVID-19 on the tourism industry, both regionally and globally. This has resulted in a domestic tourism focus for TBOP, competing with other destinations for a relatively small market.

32. TBOP were successful in securing $700,000 of Strategic Tourism Assets Protection Programme (STAPP) funding from MBIE to help the industry through the challenges, becoming integral to the economic development recovery and industry support. The additional funding is being used for destination management and planning, industry capability building and product development, and domestic marketing.

33. In addition, $2 million from central government’s Regional Events Fund was allocated to the Pacific Coast Highway alliance (the Coastal Bay of Plenty, the Coromandel, Tairāwhiti Gisborne and Hawke’s Bay), to be used over the next two to four years, with the lead entity, TBOP securing $865,307.

34. The visitor economy experienced some growth during the first six months, with a 10% increase in total visitor spend in the region compared to the same period in 2019, against a 7% decrease in visitor spend nationally. The region is also seeing greater domestic visitor spend growth (16% locally, compared to 13% nationally) and less impact by the fall in international visitor spend (down 49% locally, compared to 74% nationally).

35. An additional challenge has been MBIE’s suspension of the key dataset, the Monthly Regional Tourism Estimates (MRTEs), used by the industry to measure visitor spend. TBOP has moved to using the Marketview Tourism Dashboard instead, which unfortunately only accounts for a partial view of total visitor spend.

36. At the end of the first six months, TBOP’s overall surplus is $754,322 compared to budget of $470,635 (an increase of $283,687), supplemented by the additional one-off STAPP funding of $700,000. TBOP expect to be on budget by year end.

37. A 92% reduction in retail sales, cruise and i-Site income has been offset by a 47% reduction in i-Site expenses.

38. As per key performance indicators in the Statement of Intent, TBOP has maintained a working capital ratio of not less than 1 (actual 3.7) and equity ratio above 0.5 (actual 0.8).

39. TBOP report that 48 performance measures in the Statement of Intent, two have been achieved, 39 are on track to be completed, and seven are delayed or off track. Due to COVID-19, three planned activities related to the cruise sector are indefinitely delayed, the Te Tomokanga visitor centre project has been indefinitely suspended and there has been no further progress with the alternative funding mechanisms initiative. TBOP is not yet paying the living wage to all employees due to a remuneration freeze, but this will be reviewed in February 2021.

Local Government Funding Agency (LGFA)

40. The LGFA half year report to 31 December 2020 was received by Council on 26 February 2021 and is included as Attachment 5.

41. LGFA’s total interest income for the six-month period of $190.4 million was a 2.9% increase on the previous year, while net operating profit for the six months ended 31 December 2020 was $5.92m, a 2.5% decrease on the same period in the last financial year result of $6.1 million. This is mainly as a result of the current lower interest rate environment, although it was ahead of the Statement of Intent forecast due to the early refinancing of council loans maturing in May 2021, and a higher level of new council borrowing.

42. LGFA issued a record $1.9 billion of bonds over the six month period. Total bonds and bills on issue now sits at $14.3 billion (includes $950 million of Treasury Stock).

43. Interest cost savings to council are estimated at $1.5 million for the current financial year.

44. There have been no events of review in respect of any participating council.

Council-controlled organisations Annual Reports 2019/20

45. Annual reports for the year ended 30 June 2020 for BVL, TBOP, TAGT and BOPLASS are publicly available here on the TCC website.

Strategic / Statutory Context

46. In accordance with the Statement of Intent and the LGA 2002, council-controlled organisations are required to report to Council on their financial and non-financial performance six monthly and annually.

47. Council’s partnerships with its council-controlled organisations help us successfully deliver our community outcomes and be a city that attracts businesses, people and visitors, is well planned, with a variety of successful and thriving compact centres, and is inclusive, safe, resilient and healthy.

48. As Council develops its strategic priorities and works with council-controlled organisations on how they can help achieve these, the Letters of Expectation (LOEs) and Statements of Intent will become more aligned with our strategic outcomes.

Options Analysis

49. As this report, and the half yearly reports received from the council-controlled organisations are for receipt only; there are no options.

Financial Considerations

50. The financial implications are outlined in the above report and attachments.

Legal Implications / Risks

51. There are no legal implications.

52. While this report outlines council-controlled organisation performance against Statement of Intent measures for the first half of the year, with the ever-changing economic climate as a result of the global pandemic of COVID-19, there is some risk that the council-controlled organisations may not meet all their Statement of Intent measures by the year end.

Significance

53. The Local Government Act 2002 requires an assessment of the significance of matters, issues, proposals and decisions in this report against Council’s Significance and Engagement Policy. Council acknowledges that in some instances a matter, issue, proposal or decision may have a high degree of importance to individuals, groups, or agencies affected by the report.

54. In making this assessment, consideration has been given to the likely impact, and likely consequences for:

(a) the current and future social, economic, environmental, or cultural well-being of the district or region

(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision, or matter

55. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the matter is of low significance.

ENGAGEMENT

56. Taking into consideration the above assessment, that the matter is of low significance, officers are of the opinion that no further engagement is required prior to Council making a decision.

Next Steps

57. A copy of this report and the resolutions will be sent to each of the Council Controlled Organisations.

58. As required by the amendment to the LGA, following receipt by Council, the half yearly reports to 31 December 2020 for BVL, TBOP, TAGT and BOPLASS will be publicly available on the TCC website for the next seven years.

Attachments

1. BVL Half Yearly Report to 31 December 2020 - A12455665 ⇩

2. BOPLASS Half Yearly Report to 31 December 2020 - A12393375 ⇩

3. TAGT Half Yearly Report to 31 December 2020 - A12393388 ⇩

4. TBOP Half Yearly Report to 31 December 2020 - A12393379 ⇩

5. LGFA Half Yearly Report to 31 December 2020 - A12455704 ⇩

11.3 Strategic review of Bay Venues Limited and shareholder feedback to the draft Statement of Intent 2021-2024

File Number: A11941799

Author: Anne Blakeway, Manager: Community Partnerships

Frazer Smith, Manager: Strategic Finance & Growth

Authoriser: Gareth Wallis, General Manager: Community Services

Purpose of the Report

1. The purpose of this report is to present the findings and recommendations of the McGredy Winder Strategic Review of Bay Venues Limited, along with the Price Waterhouse Coopers’ options analysis, and the Recreation, Sport & Leisure Consultancy Benchmarking report.

2. The recommendations are incorporated into Council’s shareholder feedback to the draft Statement of Intent for Bay Venues Limited, a council-controlled organisation of Tauranga City Council, which is required by the Local Government Act (2002) to be provided by 1 May.

Recommendations

That the Council:

(a) Receives the Strategic Review of Bay Venues Limited report.

(b) Receives the McGredy Winder Strategic Review of Bay Venues Limited (Attachment 1), the Price Waterhouse Coopers’ Options Analysis (Attachment 2), and the Recreation, Sport & Leisure Consultancy Benchmarking Report (Attachment 3).

(c) Supports a modified version of Option 1 as outlined in the McGredy Winder Strategic Review – an enhanced status quo – continuing with current operational arrangements, strengthened by clearer Key Performance Indicators.

(d) Confirms changes to the current Bay Venues Limited Board structure and directs staff to develop a process to appoint a new, leaner Board, including a senior staff member from Tauranga City Council, with a stronger community focus and reviewed director remuneration, to be in place from 1 July 2021, as detailed in the Next Steps section of this report (paragraphs 60-65).

(e) Notes that the required additional rates funding will be confirmed by staff, following a review of Council funding, to ensure ongoing sustainability and will include the amount of community subsidy not currently being funded to Bay Venues Limited in the Long-term Plan 2021-31.

(f) Receives the Bay Venues Limited Draft Statement of Intent 2021/22 to 2023/24.

(g) Confirms shareholder feedback to the Draft Statement of Intent with some additional specific areas of early focus for the new Bay Venues Limited Board (as outlined in paragraph 38 of this report), including but not limited to; restructuring the organisation’s finance structure and funding model to be more transparent, simple and easy to understand; investigating the viability of moving community halls and community centres back under the direct control of Council; and looking for opportunities to deliver operational efficiencies through shared service delivery models with Council.

Executive Summary

3. Following a request by the Finance, Audit and Risk Committee at a meeting on 12 May 2020, and confirmation of the brief at the Finance, Audit and Risk Committee meeting on 26 May 2020, the Chief Executive engaged McGredy Winder to undertake a review that prioritised the strategy and alignment of Tauranga City Council and Bay Venues Limited.

4. This request was as a result of a number of issues and recommendations coming out of three previous pieces of work, undertaken to review the performance and strategic alignment of Bay Venues Limited (BVL) and its Board.

5. Attachment 1 provides the findings and recommendations of the McGredy Winder Strategic Review of BVL, which was presented to elected members, the Board and interim CEO of BVL at an executive briefing on 14 October 2020.

6. At an additional executive briefing with elected members on 10 November 2020, Price Waterhouse Coopers (PWC) presented further analysis of the financial and non-financial impact of the three options outlined in the McGredy Winder Strategic Review (Attachment 2), to provide elected members with detailed information to inform their decision-making as part of the 2021-31 Long-term Plan process.

7. At this briefing, elected members requested that staff attempt to provide a benchmark for comparison of sport and recreation facility operations across different councils in New Zealand. Subsequently, Recreation, Sport & Leisure Consultancy (RSLC) were contracted to undertake this piece of work (Attachment 3).

8. This report and its recommendations are the result of the McGredy Winder Strategic Review and further analysis and benchmarking by PWC and RSLC.

9. BVL is required to prepare a draft Statement of Intent and provide a copy to its shareholder, Tauranga City Council (TCC), by 1 March each year.

10. The draft Statement of Intent for BVL (Attachment 4) has been assessed against Council’s Letter of Expectation to BVL for 2021/22 (Attachment 5).

11. The recommendations of Council’s recent strategic review of BVL have been incorporated into Council’s shareholder feedback to the draft Statement of Intent for BVL, which must be provided to the Board by 1 May 2021, in accordance with the Local Government Act (2002).

Background

Strategic Review of BVL

12. Since the establishment of BVL in 2013, three independent reviews have been completed; the Symes Review of BVL (December 2017), the Pedersen Council-Controlled Organisation Review (February 2020), and the Mueller BVL Board Performance Review (February 2020).

13. While all three reviews have identified a variety of successes and opportunities, a common theme was evident:

“an ongoing strategic tension that results from trying to balance efficient community service delivery with the current need to maximise commercial returns for the shareholder, in the absence of clear strategic direction” (Attachment 1, page 4).

14. At the Finance, Audit and Risk Committee meeting on 12 May 2020, a resolution was passed requesting:

“the Chief Executive to engage with the Board of BVL regarding the implementation of a review that prioritises the strategy and alignment of TCC and BVL, to understand the role of BVL, including the governance, management, organisation and ownership structure, taking into account the impact and implications of the operating environment created by COVID-19.”

15. At the Finance, Audit and Risk Committee meeting on 26 May 2020, the Committee received and confirmed the brief of the strategic review of BVL. It was agreed that this work should be completed at the earliest opportunity, in time to inform the 2021-31 Long-term Plan.

McGredy Winder Strategic Review

16. The review highlighted a number of issues within the current context:

(a) The BVL operating and financial structure is complex, and it is unclear what is ratepayer funded.

(b) As BVL venues approach capacity and opportunities to build on the significant growth of 2014-18 become limited, the EBITDA profitability situation will worsen.

(d) While community objectives are expected to take precedence, in reality, fixed Council contributions mean commercial objectives are necessarily prioritised.

(e) Debt-funded investment into BVL facilities is constrained by the borrowing limits of Council.

(f) The emphasis on commercial skillsets of the current Board does not match the unique challenges of delivering community-focused facilities and services.

17. The report summarised that the current business model, with the current level of Council contribution, is not sustainable.

18. The review suggested three options:

(a) Option 1: Enhanced status quo – continuing with current operational and governance arrangements.

(b) Option 2: Stronger commercial focus – restructuring the current business, with a greater focus on commercial activities, including potentially transferring other commercial assets to BVL.

(c) Option 3: Bring community facilities and services back in-house with Council – this would include disestablishing BVL, tendering management contracts to enhance delivery, and looking to package up stand-alone, commercially viable business units currently operated by BVL (and potentially Council) for sale or lease.

19. While the review recommended that Option 3 was the optimal and preferred way forward, it is important to note that there are currently positive tax implications for TCC of BVL being a council-controlled organisation, and that any restructure that would bring at least part of BVL in house, would require an increase in rates funding.

20. Regardless of the chosen direction, the review suggested that future arrangements must include:

· development of clearer Key Performance Indicators;

· a review of Council funding to ensure sustainable provision of community facility-based services, and on-going commercial viability of the commercial network; and

· rebalancing the skills matrix of the Board to align it with the nature of the services provided by BVL, and the community-focused expectations of Council.

Price Waterhouse Coopers (PWC) financial and non-financial analysis

21. PWC worked with BVL and TCC staff to provide a baseline to compare the relative impact of the three options presented in the McGredy Winder Strategic Review. Their report is provided as Attachment 2.

22. PWC have commented on how community outcomes could be impacted in relation to; (1) maintaining and enhancing community access, and (2) maintaining levels of service, as per the expectations outlined in Council’s Enduring Statement of Expectations with BVL and in BVL’s Statement of Intent.

23. Figure 1 below (taken from Page 6 of Attachment 2) provides a high-level summary of the findings in relation to the three options:

Figure 1: PWC’s high-level summary of the three options presented in the McGredy Winder Review.

24. PWC have also provided some analysis of the complex operating and funding structure under which BVL operates.

25. Figure 2 below (taken from Page 7 of Attachment 2) seeks to explain that:

· BVL has made net losses year-on-year as the level of grant funding has been insufficient to fund operating losses. This is driven by operating grants not covering losses of the ‘funded’ business and due to high deprecation costs; and

· the true ‘cost to ratepayer’ is not the same as the P&L loss or total grant funding. It includes various elements that TCC raises rates directly to fund.

Figure 2: PWC – Operating and funding structure of BVL (FY18-FY20).

26. The report also provides commentary on the steps and potential ‘transaction costs’ required to validate and implement each option, the indicative change in cost following implementation, and the overall change in costs to the ratepayer.

27. It should be noted that the PWC report does not provide a forecast of operating performance under each option, nor does it provide a recommended course of action.

Impact on rates requirements and the Long-term Plan

28. Additional high-level financial modelling undertaken by TCC staff to identify the potential impact on rates requirements of the three options reviewed (Figure 3 below), indicates that any restructure that brings even part of BVL in-house would require an increase in rates funding above the level currently sitting in the Long-term Plan 2021-31.

Figure 3: Comparison of Required Rates for the BVL restructure options.

29. Option 1 has the least cost of the three options as it focuses on a change in emphasis, compared to Option 2 and Option 3, which would bring the non-funded activities in-house and lead to a likely less commercial focus.

30. Figure 3 suggests that it would require a $1.8 million* increase in rates to get from the base figure currently being funded by TCC to BVL, to cover EBITDA plus BVL’s interest costs. The modelling also suggests that Option 3 would potentially require another $600,000 on top of that.

*It should be noted that another $1.8 million of rates funding (i.e. $3.6 million total) would be required to fund depreciation on Baypark Stadium, should the Commission decide to overturn the previous resolution by elected members and start funding depreciation on that particular asset.

31. Council will need to consider whether the community will value the anticipated increase in community benefit more than the likely increase in rates that it will bring.

32. The implementation of either Option 2 or Option 3 of the McGredy Winder Strategic Review of BVL would require the development of a transition plan, which would explore all opportunities for success including the full financial impact, taking into account the sub-regional work currently in development.

Recreation, Sport and Leisure Consultancy Benchmarking Report

33. RSLC worked with BVL and staff from various local authorities to try and provide a benchmark for comparison of sport and recreation facility operations across different councils in New Zealand, specifically Auckland, Hamilton, Queenstown and Dunedin.

34. The types of facilities considered were:

· aquatic facilities;

· indoor court/stadia facilities; and

· community centres/halls.

35. The RSLC report is provided as Attachment 3. As indicated in the report, there is wide variation in the different facilities provided in each Council area and how revenue, expenditure and visits are accounted for, meaning it is not possible to make direct comparisons at a network level. Even direct comparisons on a facility-by-facility basis have limitations due to the variations between facilities.

36. However, the RSLC benchmarking report shows that overall, BVL-managed facilities appear to fare well against other comparable Council sport and recreation facility networks. Further, RSLC conclude that Tauranga’s network appears to be demonstrating reasonable value.

Shareholder Feedback to the Draft Statement of Intent 2021/22 to 2023/24

37. There was general agreement with the content of BVL’s draft Statement of Intent (Attachment 4), noting BVL’s specific reference to matters included in this year’s Letter of Expectation (Attachment 5).

38. From 1 July 2021, specific areas of focus for the BVL Board, working in close collaboration with TCC staff, should include:

· Working to position the organisation, and the public perception of the organisation as an integral part of Council’s business-as-usual operations;

· Reorganising BVL’s finance structure and funding model to be more transparent, simple and easy to understand;

· Moving the organisation towards paying the living wage for all staff (currently 355 full-time, fixed-term, part-time and casual staff in 2021);

· Developing a clearer Statement of Intent and more focused Key Performance Indicators, in particular in the delivery of identified community outcomes;

· Investigating the viability of moving community halls and community centres back under the direct control of Council;

· Going to the market to recruit a permanent Chief Executive for the organisation;

· Looking for opportunities to deliver operational efficiencies through shared service delivery models with Council; and

· Working with Council to review the new Board arrangements within 12 months of establishment.

39. It is noted (page 16 of Attachment 4) that three-year financial forecasts will be included in the final Statement of Intent being presented to Council in June 2021.

40. Compensation from local authority (page 20, section 15) is likely to change once the required additional rates funding, including the amount of community subsidy not currently being funded to BVL, has been confirmed by TCC staff in the Long-term Plan 2021-31.

Strategic / Statutory Context

41. Council’s partnerships with its council-controlled organisations help us deliver our community outcomes. Engaging with council-controlled organisations throughout the development of the annual Statement of Intent is one of the main ways Council can have some influence, while ensuring that its council-controlled organisations are aligned with Council’s strategic outcomes.

42. BVL is a key stakeholder in the Council-facilitated City Futures Project, a multi-agency partnership project which will develop a strategic framework for Tauranga City that clearly outlines:

· the issues/challenges and opportunities that the city faces (current and future);

· a vision of where we want to be, including a set of community outcomes;

· key actions to achieve the vision with lead agencies identified; and

· measures for success.

Options Analysis

Option 1: Enhanced status quo with some additional recommendations – RECOMMENDED

43. Enhanced status quo, continuing with current operational arrangements, strengthened by clearer Key Performance Indicators and a review of Council funding to ensure ongoing sustainability, and to include the amount of community subsidy not currently being funded to BVL in the Long-term Plan 2021-31.

44. In addition, the existing BVL Board structure will be discontinued with TCC staff directed to develop a process to appoint a new, leaner BVL Board (minimum four directors, maximum five) with a stronger community focus, to be in place from 1 July 2021. Specific areas of early focus for the new Board are detailed in paragraph 38 of the shareholder feedback to the draft Statement of Intent and also includes the need to review ongoing levels of remuneration for the new BVL Board.

Advantages

Disadvantages

· Has the lowest restructure costs with minimal change and disruption.

· Expected to have the lowest impact on rates of the three options, as it focuses on a change in emphasis.

· Communities know and understand the model and form of delivery.

· TCC continues to benefit from the positive tax implications of running community facilities via a council-controlled organisation model (noting that a recent legislation change may negate this benefit in the near future).

· While balancing a commercial focus with community outcomes has always been difficult, providing BVL with greater strategic direction and clearer Key Performance Indicators ensures that community accessibility is maintained.

· Review of Council funding will ensure ongoing sustainability of BVL, and greater transparency and clarity in terms of ratepayer funding.

· Some institutional knowledge, capacity and experience is maintained, but with a better balance of community/commercial skills on the Board.

· A leaner Board and a reduction in director fees will lead to reduced governance costs.

· Rebalancing the Board skills matrix will ensure a greater community focus.

· Retention of brand equity and current marketing/online presence.

· Avoids restructuring costs, both financial and in terms of lost focus and productivity.

· Avoids the public, political and media challenges associated with driving major change.

· Continued issues in rationalising conflicting community/commercial objectives and operational pressures.

· Potential inability to invest in renewals and network development to the extent necessary to mitigate commercial sustainability risks.

· Questions about crowding out of private sector activity and investment likely to remain.

Option 2: Stronger commercial focus

45. Restructure current business with greater focus on commercial activities, potentially transferring other commercial assets to BVL. Strengthened by clearer Key Performance Indicators, a review of Council funding to ensure on-going sustainability, and a review of the skills matrix of the Board.

Advantages

Disadvantages

· Community services delivered with more direct accountability to the community.

· A rebalancing of the use between commercial and community activities.

· Ability to prioritise community facilities’ expenditure alongside and on the same basis as other Council priorities.

· The actual cost to Council of managing a sustainable network of community facilities will become both obvious and transparent.

· Ability for BVL to focus exclusively and unambiguously on commercial operations and outcomes.

· Brand equity and marketing/online presence maintained and potentially, over time, enhanced.

· Enables the Council to address the contribution to community wellbeing across the non-commercial facilities.

· Restructure costs, including financial costs ($70k-$300k), uncertainty and organisational distraction (both Council and BVL).

· Potential per annum change in cost to ratepayer.

· Potential loss of institutional knowledge, capacity and experience.

· Commercial sustainability questions will remain in relation to mature revenue streams and increasing costs.

· Need to invest in upgrading facilities to strengthen commercial potential remains a challenge.

· Issues associated with conflicting use of facilities will remain and, in fact, could be heightened.

· Community confusion and uncertainty about what is delivered, by who and on what basis.

· Potential exposure to public, political and media challenges associated with driving major change.

· Likelihood that a revised BVL will generate a taxable revenue, with tax losses likely to preclude tax payments for some time.

Option 3: Bring community facilities and services back in-house with Council

46. Disestablish BVL and bring all facilities and services in-house with a view to, as appropriate, tendering management contracts to enhance delivery. In addition, commercial business units currently operated by BVL are packaged up for either sale or lease.

Advantages

Disadvantages

· Commercial relationships managed consistently and in-line with Council expectations, including expectations relating to probity and risk.

· Provides scope to rebalance activity between commercial and community uses across the whole network of Council facilities.

· Ability to realise efficiencies in the management and operation of the entire network of community facilities.

· Reduced governance costs and complexity.

· Opportunity to structurally address usage conflict issues.

· Reduced potential for crowding out of private sector activity and potentially a catalyst for an increase in private investment.

· Potentially generate gains on sale to invest in facilities upgrades.

· Enable a comprehensive consideration of the levels of service needed to support the wellbeing of the Tauranga community.

· Enable a comprehensive, across-the-board review of Council facilities, in a manner consistent with Council’s overall strategic imperatives, priorities and levels of service.

· Community services and facilities delivered closer and with greater accountability to communities.

· Ability to prioritise expenditure on the development and operation of community facilities alongside, and on the same basis, as other Council priorities.

· The actual cost to Council of managing a sustainable network of community facilities will become both obvious and transparent.

· Restructure costs, including financial costs ($100k-$390k+), uncertainty and organisational distraction (both Council and BVL).

· Potential greater per annum change in cost to ratepayer.

· Potential loss of institutional knowledge, capacity and experience.

· Potential for community confusion and resistance.

· Perceived failure of the BVL model and questions about the organisation’s performance.

· Loss of brand equity and online presence.

· Weakening of existing commercial relationships.

· Reduced focus on commercial outcomes within facilities.

· Potential exposure to public, political and media challenges associated with driving major change.

· Likely loss or reduction in commercial revenue due to greater emphasis being placed on community activities.

Financial Considerations

47. The high-level financial considerations of each option are outlined in the options analysis above.

48. Option 1 has the least cost of the three options as it focuses on a change in emphasis, compared to Option 2 and Option 3, which would bring the non-funded activities in-house and lead to a likely less commercial focus.

49. The financial modelling has been completed by staff using the best information currently available, but there is a considerable level of variability in predicting future outcomes.

50. Additional rates funding will be required in the Long-term Plan 2021-31, to reflect the amount of community subsidy not currently being funded to BVL. It is acknowledged that this funding has not been included in the draft Long-term Plan 2021-31, until such time as the full impact has been determined by staff.

Legal Implications / Risks

51. Initial external advice received suggested that the legal implications/risks of Options 2 and 3 were greater than for Option 1. Further advice would be sought once Council has agreed on the preferred option

52. With regard to the dissolution of the current Board, Council’s Appointment of Directors to Council Organisations Policy (section 4.6) states that “directors appointed to council-controlled organisations by Council are in the role at the pleasure of Council.”

Section 4.6 enables a director to be “terminated at any time by Council (or by the director/trustee) by way of written notice. There will be no compensation payable to directors for early termination.”

53. In addition, section 6.1 of BVL’s Enduring Statement of Expectations with Council, which all directors receive a copy of in their initial information pack prior to being appointed, outlines that one of the roles of Council includes “appointing and removing BVL directors (including chair and deputy chair).”

54. Further, clause 9.2 of BVL’s Constitution makes it clear that directors can be removed from office at any time by notice in writing from Council.

55. Additional legal advice received regarding the appointment to the BVL Board of a senior staff member from T CC, to be appointed at the sole discretion of the Commission (paragraph 64 below), is as follows:

· “In most cases a Council employee acting as director will be able to act in the best interests of both BVL and Council” and “there will be a high degree of alignment between BVL and TCC in any event.”

· “To the extent that the interests do diverge…it is clear that [BVL’s] Constitution permits directors of BVL (including any Council employee) to act in the best interests of Council rather than BVL.”

Significance

56. The Local Government Act 2002 requires an assessment of the significance of matters, issues, proposals and decisions in this report against Council’s Significance and Engagement Policy. Council acknowledges that in some instances a matter, issue, proposal or decision may have a high degree of importance to individuals, groups, or agencies affected by the report.

57. In making this assessment, consideration has been given to the likely impact, and likely consequences for:

(a) the current and future social, economic, environmental, or cultural well-being of the district or region;

(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision, or matter; and

58. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the matter is of low significance if the recommended modified Option 1 is approved by Council – or if Option 2 is approved. The level of significance will likely change to medium if Council decides to support Option 3 instead.

ENGAGEMENT

59. Taking into consideration the above assessment, that the matter is of low significance, officers are of the opinion that no further engagement is required prior to Council making a decision. Again, this requirement is likely to change if Option 3 is approved instead of the recommended Option 1.

Next Steps

60. A copy of this report and the shareholder feedback to the draft Statement of Intent will be provided to the BVL Board. Any feedback provided in this report should be given consideration by BVL when producing their final Statement of Intent, which is to be delivered to Council by 30 June 2021.

61. The non-retiring BVL Board members will receive written notice from Council of the cessation of their appointments as of 30 June 2021.

62. TCC staff will commence an appointment process, as per Council’s Appointments to Council Organisations Policy, to appoint a new BVL Board, for a three-year term, commencing 1 July 2021.

63. TCC staff will undertake a review of BVL Board remuneration, in line with the methodology used for the recent remuneration review for the boards of the Tauranga Art Gallery Trust and Tourism Bay of Plenty, approved by Council on 10 December 2020.

64. The number of directors would be reduced to a minimum of four and a maximum of five. The skills and experience sought, and the appointment panel will be confirmed by the Chief Executive, as per the Appointments Policy but would include a particular focus on community service delivery and health and safety, along with commercial acumen. Current directors would be welcome to submit an expression of interest as some continuity of institutional knowledge would be an advantage.

65. The new Board would include one senior staff member from Tauranga City Council, to be appointed at the sole discretion of the Commission and receiving no additional remuneration.

Attachments

1. McGredy Winder - Strategic Review of Bay Venues Limited, September 2020 - A12159242 ⇩

2. PriceWaterhouseCoopers (PWC) - Options Analysis of Bay Venues Limited Strategic Review, November 2020 - A12159246 ⇩

3. Recreation, Sport & Leisure Consultancy (RSLC) - Bay Venues Limited Benchmarking Report, December 2020 - A12159247 ⇩

4. Bay Venues Limited Draft Statement of Intent 2021-2024 - A12393350 ⇩

5. Letter of Expectation to Bay Venues Ltd 2021-22 - A12393659 ⇩


AGENDA Ordinary Council Meeting Tuesday, 27 April 2021
I hereby give notice that an Ordinary Meeting of Council will be held on:
Date:	Tuesday, 27 April 2021
Time:	10.30am
Location:	Tauranga City Council Council Chambers 91 Willow Street Tauranga
Please note that this meeting will be livestreamed and the recording will be publicly available on Tauranga City Council's website: www.tauranga.govt.nz.
Marty Grenfell Chief Executive

Type	Estimated Percentage	Rate	Total
Standard fee	85% (12963)	$92.00	$1,192,596
Penalty Fee	15% (2287)	$139.00	$ 317,893
TOTAL REVENUE	100% (15250)		$1,510,489

· To ensure the effective and efficient governance of the City

· To enable leadership of the City including advocacy and facilitation on behalf of the community.

· Oversee the work of all committees and subcommittees.

· Exercise all non-delegable and non-delegated functions and powers of the Council.