Rodney Hide
24 May, 2010
Community Concerns Addressed as Auckland Council Reforms Enter Final Phase
Today's report back of the Local Government (Auckland Law Reform) Bill by the Auckland Governance Legislation Committee shows the Government is listening to community concerns and acting on them says Local Government Minister Hon Rodney Hide.

"The Select Committee has worked long and hard, analysing 786 submissions and 348 of these were in person. I am very pleased with the result which has successfully addressed community concerns, boosted transparency and made some constructive changes - which is exactly what New Zealand democracy is all about.

"We can now get on with uniting Auckland, with one Mayor and with an efficient and effective single council which will produce a better place for Aucklanders to live and work."

This is the third and final bill that will complete the legislative framework for the reform of Auckland governance. The Bill will go through its remaining Parliamentary stages over the next couple of weeks.

"The Bill will ensure that Auckland grows in stature and efficiency to become a truly international city. It lays a solid democratic foundation which will boost our regional growth and prosperity for generations to come."

Aucklanders will go to the polls in October to vote for their Mayor, councillors and local board members, who will now have the necessary tools to best represent the interests of the region as a whole.

"This report back of the Bill represents a significant and positive milestone for Aucklanders; it is one of the biggest shake-ups the sector has ever seen," says Mr Hide.

"I am hugely excited for the future of Auckland. We are now on the verge of turning around its fortunes, making it a united, prosperous and dynamic region that all New Zealanders can be proud of," says Mr Hide.

The report is available for viewing on the Parliament website at

http://www.parliament.nz/en-NZ/PB/Legislation/Bills/b/6/b/00DBHOH_BILL9729_1-Local-Government-Auckland-Law-Reform-Bill.htm [Scoop copy: DBSCH_SCR_4748_LocalGovernmentAucklandLawReformBil.pdf]

Local Government (Auckland Law Reform) Bill Questions and Answers

Why is the Government setting up CCOs rather than delivering services from within the Council itself?

CCOs are council-owned or council-controlled organisations that enable councils to make use of commercial disciplines and specialist expertise that may not be available within the Council itself.

To achieve effective and integrated service delivery across the region the Government's objective is to group and integrate like activities and entities. The Auckland Council will be democratically accountable for the delivery of those services.

Are CCOs new?

No. Councils around New Zealand have been able to establish CCOs since the Local Government Act was enacted in 2002.

Do CCOs already exist in Auckland?

Yes. Auckland has approximately 40 CCOs in the Auckland Region, including Council Controlled Trading Organisations (CCTOs). They are primarily companies or trusts that have been established for community, service delivery or commercial purposes.

How will CCOs function in the new Council?

The Auckland Transition Agency (ATA) is in the process of rationalising existing CCOs. To date, the Government has approved three CCOs: Watercare, Auckland Transport and the Waterfront Development Agency. The ATA is preparing proposals for Cabinet consideration to cover the possible establishment of four more CCOs: Council Investments; Economic Development, Tourism and Events; Major Regional Facilities, and Property Holdings. Final decisions on the CCO structure for Auckland are likely to be made in July.

The CCO directors will be appointed in advance of the new Council being formed. Will the newly elected councillors be able to sack any or all of those directors and replace them with people of their own choice?

Yes. It will also be able to replace the board of any of the CCOs with people of their own choice as from Day One. With high-quality, independent boards appointed, this is most unlikely to occur. But it is within the powers of the Council if required.

What powers will the Council have over the boards of CCOs?

The Select Committee has recommended that the Council appoint both the chair and the deputy chair of the CCOs. The governing body of mayor and councillors are responsible for governance of the Council's CCOs. Statements of Intent (SOI) are required by existing law, and CCOs are required to account to the Council for meeting the objectives set out in their SOI.

Only Auckland Transport is being set up as a statutory CCO, requiring an Act of Parliament to disband it. Watercare Services Ltd could be disbanded by Auckland Council after 2015, and there is no statutory impediment to disestablishing any other CCO that may be created (subject to following a process through the Council's long-term council community plan in 2012).

How will the council control what the CCOs do?

Auckland Council's control over its substantive CCOs will be significantly greater than that of other councils in New Zealand.
The Select Committee has recommended that the Council have a specific accountability policy allowing it to spell out exactly what is expected from substantive CCOs. The policy must:

• Include the Councils expectations for each substantive CCO's contribution to, and alignment with Auckland Council's and the Government's objectives and priorities;

• Specify reporting requirements in addition to those in Part 5 of the Local Government Act 2002; and those proposed in the Bill;

• Set out the circumstances in which each CCO must conduct their business in public (as if part 7- the meetings provisions - of the Local Government Official Information and Meetings Act 1987 applied) ; and

• Specify any requirements in relation to management of assets.

Other recommendations are that all CCOs are subject to the Council's long-term plan and other strategic plans; Auckland Council will appoint the Chair and Deputy of each CCO and a policy decision should be made to leave two positions vacant for appointment by the Auckland Council.

How open will the CCOs be?

Under the Local Government Act 2002, CCOs are required to operate under Parts 1 to 6 of the Local Government Official Information and Meetings Act 1987.

This means that all CCOs in New Zealand, including those in Auckland, must comply with that Act in respect of requests for meeting minutes or decisions. They are not required to hold their meetings in public under the 2002 Act.

The Select Committee recommends that the Auckland Council may require in its accountability policy that its substantive CCOs must hold meetings in public.

The Government has decided that Auckland Transport should hold in public any meeting at which bylaws are proposed.

Why has the Government decided on CCOs for Transport, Water and Waterfront Development?

Transport and water are essential services which must continue to function smoothly throughout, and following, this transition to the new Council.
The Royal Commission into Auckland's governance recommended a specialist waterfront development agency to be consistent with international best practice.

Transport is a major issue in Auckland. How will Auckland's elected representatives influence transport decisions in Auckland?

In addition to the two Councillors who will sit on Auckland Transport's board, Auckland Council will be responsible for decision-making regarding transport objectives and funding.

Auckland Transport will be responsible for management and control of the transport system.

The Auckland Council has complete control over the agency, it will be able to appoint or dismiss any member of the Auckland Transport board at any time. It will approve Auckland Transport's funding and statement of intent. Auckland Transport will have to comply with statutory land use plans, and its decisions must be consistent with the council's transport strategy.

What role will Local Boards play in the transport area?

Auckland Transport will be required to consider the views and preferences of local boards before making its decisions.

Will Auckland Transport actually own the roads?

No. Auckland Transport will have control, not ownership. Ownership of the roads will rest explicitly with the Council.

Can the Council sell assets?

The Local Government Act 2002 provides the general framework around the sale of assets. Any proposal to sell strategic assets must be included in the Council's long-term council community plan and must be subject to consultation using the special consultative procedure. There is a general prohibition on the sale of water assets.

In addition to this general approach, the Bill contains a moratorium on the sale of its company shareholdings, lands and buildings designated for service delivery and any other land or buildings with a rating valuation of $250,000 or more. Such property can of course be transferred between council organisations of the Auckland Council.

Do these changes allow for the privatisation of Watercare?

No. Under the Local Government Act, Auckland Council, as is the case with any other local government organisation, cannot divest ownership or other interests in such a water service other than to another local government organisation.

If, after 2015, the Auckland Council decided it did not want Watercare to be the water and wastewater service provider, any assets owned by Watercare would have to revert to the Council.

Will the Auckland Council then be able to sell Watercare to a private entity?

No.

Can the new Council instruct Watercare to hike prices above the statutory minimum?

No. The Auckland Council cannot direct Watercare to do anything that would contravene Watercare's statutory duty to keep the overall costs of water services at minimum levels.

What powers do Local Boards have?

Before the Local Government election in October the Auckland Transition Agency will publish the Local Board's baseline list of responsibilities and functions, and their baseline funding. Any minor changes will be negotiated and agreed between the Auckland Council and the local boards at the time of developing the 2012 Long Term Council Community Plan (LTCCP).

In future the number of Local Board members can be increased to a range of 5- 12 members, from the current range of 4-9 members. This can occur at the next representation review after the 2013 elections.

Local boards will also propose bylaws and are expected to undertake a range of regulatory functions delegated by the governing body.

Why has the maximum number of local board members been raised to 12?

The initial plan was to have no fewer than four and no more than nine members of local boards. However, because of concerns that a four-member board would require a quorum of only two members to make often significant decisions, the Select Committee has recommended a minimum of five.
In addition, as the local boards will have greater responsibilities and serve larger populations than the current community boards, it seemed prudent to mirror their maximum of 12 members in future.

The increases to statutory minimum and maximum numbers (range of 5-12) of board members will occur at the time of future representation reviews - after the 2013 elections.

What happens to the funding community groups currently receive from existing local councils to deliver a range of social and economic activities?

It is important to ensure that funding to the community is maintained during the transition to the Auckland Council.

Before the election the Auckland Transition Agency will publish a planning document. It will set the first local board budgets. Community funding will be allocated between the governing body and local boards, depending on whether the objectives of the funding are region-wide or local.

These allocations will be based on current allocations of contestable community funding made by Auckland's councils and community boards.

When the Auckland Council determines its new funding policy and long term council community plan (LTCCP) in 2012, it will make future decisions about community funding. Local boards will agree future community funding available for their communities in their local board agreements.

Will people across the Auckland region be paying rates on the same basis?

From 1 July 2012, there will be a single rating system across Auckland. Until then, the Council will collect rates on the basis set by existing councils. However, the changes don't mean all land in Auckland will be rated the same. The Council will decide on the mix of several categories of rates it considers most appropriate for the region. Their decisions will be based on the Council's long-term plan and consultation with residents.

ENDS

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