Council-Controlled Organisations Discussion Doc
MEDIA RELEASE
1 March 2010
Council-Controlled Organisations of the Auckland Council – Discussion Document
A discussion document containing detail on the roles and accountabilities of proposed council-controlled organisations (CCOs) of the Auckland Council has been released today (Monday) for feedback.
The
document, released by the Auckland Transition Agency (ATA),
considers the structure of five Auckland Council
subsidiaries that were approved in principle by Cabinet last
year. These are:
• Council Investments
• Economic
Development, Tourism and Events
• Major Regional
Facilities
• Property Holdings
• Waterfront
Development Agency
These entities will be owned by, and report to, the new Auckland Council.
The discussion
document – available at www.discussiondocuments.co.nz –
outlines the accountability mechanisms which exist between
the council and its CCOs. Specifically, each CCO
must:
• Give effect to the Auckland Council’s Spatial
Plan and other plans
• Have its Statement of Intent
(SOI) agreed by the council and made public
• Report
regularly to the Auckland Council, with an audit by the
Auditor-General
• Have its performance monitored by the
council’s Governance and Monitoring Unit
Additionally, CCOs are subject to the access to information provisions of the Local Government Official Information and Meetings Act 1987 and the Ombudsman Act 1975. The Auckland Council will appoint CCO board members (after the initial boards have been appointed by Ministers) and the council has the power to remove board members.
The ATA is recommending that CCOs must take account of the views expressed by local boards as a requirement of the SOI approved by the Auckland Council.
There are currently around 40 CCOs operating under existing local authorities in Auckland. Under the new Auckland Council it is planned to rationalise and streamline these.
ATA advisor John Dragicevich said: “It will be the Auckland Council, in conjunction with the community, that sets the objectives and accounts to the ratepayers for the performance of these CCOs. They exist under the democratic process and the ultimate accountability of the elected council to the ratepayers.”
The discussion document invites feedback on the structure and responsibilities of the CCOs, their accountability and governance arrangements, and the assets and activities associated with individual entities.
Feedback can be submitted online at www.discussiondocuments.co.nz or in writing to Auckland Council CCO Feedback, Auckland Transition Agency, PO Box 99394, Newmarket 1149, Auckland.
The deadline for feedback is March 26, 2010.
The ATA will analyse feedback before making its final recommendations to Cabinet.
Ends
Feedback on discussion documents on local boards and council-controlled organisations (CCOs) of the Auckland Council are available at www.discussiondocuments.co.nz
ata021_CCO_Discussion_Document_10.pdf
QUESTIONS AND ANSWERS
What is the purpose of the discussion document?
The discussion
document:
• provides background information on
council-controlled organisations (CCOs) and their structure
• outlines the ATA’s proposals for the
rationalisation of CCOs in the region
• looks at how
the Auckland Council, including local boards, and CCOs would
formally interact with each other to ensure public
transparency and accountability
• seeks feedback on
these and other matters.
What is a
CCO?
A council-controlled organisation (CCO) is a company or organisation in which the Auckland Council will control at least 50% of the votes on the board or appoint at least half of its directors (or trustees). CCOs exist under the democratic process and the ultimate accountability of the elected council to the ratepayers. It is the council, in conjunction with the community, that sets the objectives and accounts to the ratepayers for the performance of the CCO.
Is the proposal to create more of
them?
No – the proposal is to rationalise CCOs in the wider Auckland area. There are currently some 40 CCOs across the region. Under the new Auckland Council, the following CCOs are provided for in legislation or approved by Cabinet:
• Auckland Transport (provided for in
legislation)
• Watercare Services Ltd (provided for in
legislation)
• Waterfront Development Agency (approved
by Cabinet)
The following CCOs are approved in principle
by Cabinet:
• Council investments
• Economic
development, tourism and events
• Major regional
facilities
• Property holdings
Why have
CCOs?
The Royal Commission on Auckland Governance identified several benefits of placing certain activities in council-controlled organisations (CCOs) including: achieving operating efficiencies, tax and financial benefits and empowering local communities – eg, by creating a trust with a set budget funded by a council but managed by a community for a specific purpose.
CCOs are a model for introducing, through board appointments, commercial disciplines and specialist expertise. Economies of scale can be achieved by aggregating similar activities of various local councils into one regional CCO. Depending on the individual CCO, there are also opportunities to streamline bureaucracy, attract commercial sponsorship and recruit and retain specialist staff where required.
Specific benefits attached to each of the CCOs are described in the discussion document.
How will their activities be controlled
or managed?
In Auckland the overall direction
for CCOs will be set by the governing body of the Auckland
Council within the Long Term Council Community Plan (LTCCP).
This integrates local board plans and, where applicable,
Government policy statements.
The Statements of Intent
(SOI) for CCOs must give effect to the council’s Spatial
Plan and other strategic documents prepared as part of the
council’s annual planning process. When an SOI is
agreed between the council and the CCO it is approved by the
council under the Local Government Act 2002. The SOI
publicly states the activities and intentions of the CCO for
the year and the objectives to which these activities will
contribute. In addition to negotiating and complying with
its SOI, the CCOs are required to prepare regular reports
for the councils. A statement of service performance
comparing actual performance against the SOI will be audited
by the Auditor General.
How are board members
appointed?
The Third Bill provides for the
initial boards of CCOs to be appointed by the relevant
Minister(s) following recommendations by the ATA. After
that, board members will be appointed by the Auckland
Council.
Can the Auckland Council change members of the board?
Yes. Board members will be appointed for staggered terms. Council can reappoint board members or replace them. There is a wider power to remove board members at any time for good reason.
Will
councillors be eligible to be board
members?
Generally, no.
The Auckland Council will appoint board members but these
will not include councillors. The exception to this is at
Auckland Transport, where Cabinet has decided that up to two
councillors can sit on the board to provide a strong link
between the funding and provision roles.
What is the role of the Council Committee?
The Committee will have oversight of the CCOs including SOIs, performance monitoring and making director appointments. It may make recommendations to the council governing body in accordance with its delegations. The Council Committee will also appoint a three to four-member advisory board.
What is the role of the advisory board?
The advisory board is appointed by the Council Committee to provide governance advice on SOIs, recommending directors and reviewing performance. Its members will be appointed by the council committee for their particular expertise and experience.