Tagged: Annual report

Full council (27 October) – appointments and easter trading

A full council meeting was held on 27 October 2016. All councillors were present.

The agenda included: (1) committee structure, (2) appointments, (3) annual report 2015-16 adoption, (4) Easter Sunday trading, (5) remuneration, and (6) Local Government Fund AGM.

Public forum

Public forum was attended by Joanna Santa-Barbara, Fran Deech, Iona Jeff, Murray Dawson, and Maxwell Clarke.

Joanna Santa-Barbara requested council oppose deep sea prospecting and briefed council on Co2 limits and capacity to stay under a 2 celsius increase.

Fran Deech (and Iona Jeff) asked for council to make submissions to government on behalf of concerned residents expressing concerns about the proposed Taranaki basin zone. She explained that exploratory drilling could occur within 10km of Tasman coastline. Fran suggested the Rena disaster was a possible outcome for Tasman? She asked if council was prepared. Asking for submission to govt expressing concerns.

Murray Dawson asked council to undertake an organisational review, as one was well over due. He also raised concerns about water flow data being presented to councilors, which he suggested was incorrect.

Maxwell Clarke congratulated councillors on their appointment. He congratulated council on providing 5 minutes speaking time, but asked that the clock be returned to the chamber so speakers are able to monitor their speaking time. Maxwell asked that the makeup of standing committees be reviewed. He also suggested that council review the appointment of advisors, in light of the Mapua debacle.

Committee structure

A proposed committee structure was presented to council for adoption by the mayor. This new structure sought to reduce the four standing committees (reflecting the four departments of council) to three standing committees (Community development, Engineering, and Environment) with the fourth former standing committee (Corporate services) being retired.

Those sub-committees (ie Audit and Risk, Commercial, and CEO review) that reported through to the former Corporate services committee, would now report directly into the full council. Accordingly, these three sub-committees would be reclassified as “council committees”.

The structure is illustrated below.

See also www.tasman.govt.nz/council/council-structure/committees-and-subcommittees/.

Appointments

As expected, the mayor remained true to his election campaign and has kept to the same path – reappointing the same “remaining” long established councillors to the primary expenditure portfolios (ie engineering, environment, commercial), under the mantra of “experience”. The fact a number of councillors are highly experienced professionals and business people appears to be conveniently over-looked, in order to justify the desired outcome.

This is disappointing, but not surprising. Its quite obvious that the mayor is working hard to preserve his influence (and culture) over council decision making, by ensuring key positions continue to be filled by the old guard. This has even extended to re-appointing a former councillor (Cr Higgins) to the NRSBU for 12 months as a paid advisor. As I said during the election campaign, until council gets new leadership, the culture within the governance group will not change to the degree the majority of the public want. In my opinion, it is never a good look, for former councillors (or the council), to be in paid roles, when they have not been elected by their community.

For a council still working on getting out of the financial chaos of the preceding nine years (under the Mayor’s first three terms), I remain to be convinced that these appointments will deliver the outcome the community want – more progress on reducing debt and rate charges.

In contrast, the new mayor of Wellington city council (WCC) Justin Lester has replaced “experience” with councillors who have shown a drive, expertise, and intellectual capacity to make a positive difference to the portfolios they have been given (see www.wellington.scoop.co.nz/?p=93643). In effect, giving a number of portfolios a well needed shake-up. For example, one long term councillor (Cr Foster) who has lead the critically important transport committee in Wellington for over a decade was replaced with a newly elected councillor. Experience is only one element (amongst many others) to a successful appointment.

Nelson city council (NCC) is also embracing succession planning, placing new councillors in deputy roles or in chair roles supported by experienced deputies. That is a good sign of healthy governance, succession planning, and leadership. A council planning for the future, rather than clinging to the past.

In my opinion, the danger of appointing long established councillors, is they are less likely to challenge current thinking – as they are often susceptible to being captured by the organisation they are suppose to be governing. If you don’t like change, then these are all good appointments. But in my opinion, its very healthy for an organisation to have a periodic shake-up. Telecom (now called Spark) use to do it quite regularly. Had we had some new leadership, I suspect we probably would have got it.

Interestingly, Cr Maling was not appointed to any key portfolios. This in my opinion, was a massive missed opportunity. Cr Maling has shown he has the experience to make a massive difference. One only needs to look at the Waimea Village u-turn in performance. So to Cr Tuffnell, who has years of business experience that could have been called upon in the commercial portfolio (although I don’t share his enthusiasm for traffic lights!?).

I am not alone in my thinking. In the public forum Maxwell Clarke mentioned that he was hopeful that councillors who might challenge existing portfolio’s would be appointed. Sadly, this does not appear to have happened.

Of course criticism could be laid at councillors for not challenging these appointments. However, I believe, it is for the mayor to make appointments and to put their stamp on the council. After all it is the mayor’s vision (or lack of one) that people often vote for (or against).

In my opinion what is needed is a task force approach that shines a light on each department and questions not only structure (how we are doing things), but activities (why we are doing things).When was the last time a task force was commissioned to seek out cost saving opportunities? Why hasn’t the mayor ever sought to initiate one?

Finally, unlike the previous term, where councilors came together early in the process to outline their vision (and bond), new councilors have not been given that early opportunity to unite on common values and objectives. This has resulted in the leadership team having time and room to set the agenda (and path), rather than councilors.

For example, last term Judene Edgar was put forward by councillors as a candidate for deputy (although she subsequently turned it down, appearing to favour an airport directorship instead). Last term councillors also met for a workshop on what they wanted to achieve. This term, councillors did not have the opportunity to discuss who they might have wanted as deputy, nor their own aspirations. Leaving the mayor to make all the recommendations – and for councillors to approve them in the absence of any other recommendations, or the time to share opinion.

I have raised my concerns with the mayor  about the absence of a councillor lead workshop to set the direction for council. He continues to reassure me this will happen. Although I suspect well after the decision making infrastructure is locked in.

Appointments

The following appointments were made:

Mayor: Richard Kempthorne (as elected).

Deputy: Cr King.

Standing committees

  • Engineering services chair: Cr Bryant (deputy Cr Sangster)

  • Environment and planning chair: Cr King (deputy Cr Brown

  • Community development chair: Cr Canton (deputy Cr Wensley).

Council committees

  • Audit and risk chair: Cr Ogilvie (plus Cr Brown, Cr Greening, Cr King, and 1 independent member)

  • Commercial chair: Cr Sangster (plus Cr King, Cr MacNamara, Cr Ogilvie, Cr Wensley, and 3 independent members).

  • CEO review: Mayor, Cr King, and Cr Brown.

Subcommittees

  • Community grants chair: Cr Canton (plus Cr Wensley, Cr Turley, Cr Hawkes, and Cr Sangster)

  • Community awards chair: Cr Canton (plus Cr Turley, Cr Hawkes, and Cr Sangster)

  • Creative communities: Cr Wensley, Cr Turley, and Cr Canton.

Joint committees

  • Joint shareholders (chairs of standing and council committees): Mayor, Cr Tuffnell, Cr King, Cr Canton, Cr Bryant, Cr Ogilvie.

  • Nelson Regional Sewerage Business Unit (NRSBU) chair: Cr Maling (plus independent member Michael Higgins).

  • Civil defence: Mayor and Deputy mayor.

  • Regional pest control: Cr Bryant, Cr Brown, and Cr MacNamara.

  • Land development manual steering group. Cr Bryant and Cr King.

Other committees

  • Tasman Regional transport chair: Cr Bryant (plus Cr Maling, Cr MacNamara, Cr Ogilvie, Cr Sangster, and 1 NZTA member).

  • District licensing chair: Cr Ogilvie (plus Cr King and 3 independent members).

  • Tenders panel: Cr Bryant, Cr Tuffnell, Cr Maling, and CEO.

Community representatives

  • Accessibility for all: Cr Wensley

  • Friendly towns: Cr Tuffnell, Cr Canton

  • Iwi liaison: Mayor, CEO

  • Mapua water and wastewater business case working group: Cr Bryant, Cr King, Cr McNamara

  • Mapua waterfront advisory committee: Cr King

  • Motueka airport advisory group: Cr Canton

  • Native habitats: Cr Ogilvie

  • Nelson-Tasman business trust liaison: Cr Tuffnell, Cr Maling

  • Nelson-Tasman cycling trust liaison: Cr Canton

  • Positive ageing: Cr Wensley

  • Port Tarakohe advisory group: Cr King, Cr Sangster

  • Regional TB free: Cr Bryant

  • Richmond bridge and croquet club liaison: Cr Greening

  • Richmond transportation business case working group: Cr Bryant, Cr Tuffnell, Cr Greening,

  • Takaka airport advisory group: Cr Sangster

  • Tasman bays heritage trust appointments committee: Mayor, CEO

  • Tasman environmental trust liaison: Cr Tuffnell

  • Tasman regional sports trust: Mayor

  • Tasman youth council: Cr Canton, Cr Turley

Easter trading – first round

One of the first major issues to confront the new council was the potential introduction of easter trading. In my opinion, I could not fathom why staff (or the mayor) would be keen to introduce a major policy initiative so early into the new term of council, that would have resulted in consultation having to be conducted over the Christmas break. But here we were.

Background

By way of background, the government had recently amended the Shop Trading Hours Act 1990 to enable councils to decide whether retailers in their districts could open for business on Easter Sunday. This effectively shifted a rather controversial political issue (and associated consultation costs) from central government to local government. According to the Act, territorial authorities could create local policies to allow shop trading on Easter Sunday across their entire districts, or limited (specified) areas (see www.mbie.govt.nz/info-services/employment-skills/legislation-reviews/easter-sunday-shop-trading).

Its important to note that the Act (section 4) already allows gardening shops and shops selling certain types of goods (examples include dairies, service stations, take away bars, restaurants and cafes, and duty free stores) to remain open on Easter Sunday. Some tourist areas throughout New Zealand also have exemptions to open on Easter Sunday. For example, Nelson City holds an exemption for craft trading at Founders Park when it is open. See www.legislation.govt.nz/act/public/1990/0057/latest/DLM212351.html.

The Act also has implications for employers and employees. Employers who want employees to work on Easter Sunday must advise the employees that they have the right to refuse to work. This must be done by notice in writing between 4 and 8 weeks of the Easter Sunday (or in the case of a shop employee whose employment with the employer started 4 weeks or less before the relevant Easter Sunday, as soon as is reasonably practicable after the shop employee’s employment with the employer starts).

Employees who intend to refuse to work on an Easter Sunday are required to inform their employer by a notice in writing no later than 14 days after they receive the notification from their employer (or as soon as reasonably practicable after the employee receives notice if their employment started 4 weeks or less prior to the relevant Easter Sunday). The emplpoyee does not have to give a reason for refusing to work on Easter Sunday.

The employer must not treat the shop employee adversely because the shop employee refuses to work on an Easter Sunday. If an employer treats an employee adversely because the employee refuses to work on an Easter Sunday, or compels an employee to work on an Easter Sunday, the employee now has grounds to raise a personal grievance against the employer.

Employees would also not be entitled to a day in lieu or additional remuneration, should they choose to work on Easter Sunday. Easter Sunday is the only day that is a restricted trading day, but is not a public holiday. Under the Holidays Act 2003, employees are not entitled to any additional payment for working or not working Easter Sunday.

So, even if an Easter trading policy was put in place, there is no guarantee that a business would have staff available to be open.

Policy implementation

Staff recommend that before a decision was made whether to adopt a policy (or not), council should first undertake an informal (low cost) community survey to gauge community opinion. Staff proposed to report back to the Council on 1 December 2016 with the survey results and a Draft Policy for consideration as to whether to proceed to formal consultation.

If council decided to consult (on 1 December), staff recommended that an Easter trading policy be put in place for Easter 2017. For that to happen the following time frames would need to be met: (1) an informal community engagement period (3-17 November 2016); (2) the council considers community feedback and whether it wishes to release a Draft Easter Sunday Shop Trading Policy for public submissions (1 December 2016); (3) draft policy open for submissions for two months (December 2016 – February 2017); (4) hearings and deliberations (late February 2017); (5) staff amend Policy as per hearing panel instructions (March 2017); and (6) council adopts final Policy (before 19 March 2017).

In support of council consulting on an Easter trading policy, staff reported that Marlborough District Council had already adopted a draft policy that permitted shop trading on Easter Sunday throughout the entire Marlbourough region. However the drive for urgent adoption (for Easter 2017) had much more to do with the Omaka Air Show – an event that happens at Easter every 2 years (see www.marlborough.govt.nz/Your-Council/Shop-Trading-Policy.aspx,

www.marlborough.govt.nz/Your-Council/~/media/Files/MDC/Home/Your%20Council/LocalEasterSundayShopTradingProposal.pdf).

From my own research, I noted that Rangitikei Council had also entertained consultation on easter trading (see www.rangitikei.govt.nz/council/consultation/easter-sunday-shop-trading-policy, www.rangitikei.govt.nz/files/general/Consultation-Documents/Statement-of-Proposal-Local-Easter-Sunday-Shop-Trading-Policy.pdf).

Defer consultation – a proposed amendment

In my opinion, the entire process – an informal consultation (online survey) and the formal consultation (a statutory process), should have been deferred until 2017. At that point, council could then decide whether it wanted to consult (informally or formally, or both) or not to proceed at all.

My reasoning for deferring consideration was: (1) kicking off this process now was premature, given many other more pressing issues council needed to deal with; (2) staff were apparently already under work load pressures (at least according to staff), and adding more consultation work this year, seemed to me, poor management – better to spread the consultation workload than intensify it; (3) moving this process to 2017 meant there was no risk of consultation occurring over Christmas (assuming council decided to consult); and (4) councillors were still finding their feet, so rushing consultation on a controversial issue was probably not a good idea.

Councils are often criticised for giving lip service to public consultation. Far better to have a reasonable amount of open (and transparent) public consultation on this issue – given the fact the government had been hesitant to step in themselves. Waiting an extra year also gave council the benefit of seeing how other councils drafted policy and engaged, and whether there were any teething issues.

Given the public have been waiting for a government decision on this issue since 2002, I was confident that the public could wait another 12 months.

While I noted my concern about staff spending time on preparing a draft policy in advance (that might not proceed to public consultation, due to lack of public support), I was open to staff preparing such a draft. This was because a draft policy document should not take long to assemble, given staff could utilise drafts already prepared by other councils.

Accordingly, I proposed an amendment (seconded by Cr Canton) to defer consideration of this issue until 2017. Unfortunately, the amendment was lost (Cr Canton and myself in the minority), and staff were instructed to undertake an informal survey to inform councillors at the next full council meeting on 1 December, whether to proceed (or not) with formal consultation.

Annual report

The 2015-16 annual report and summary annual report were received and unanimously adopted by council. Councillors Brown, Hawkes, Maling, McNamara, Ogilvie, Tuffnell, Turley, and Wensley abstaining on the basis they had no involvement in preparing that annual plan.

The delayed adoption of the annual plan (at the end of the previous term of council) was principally due to a delay in the adoption of the Nelson Airport financial statements, due to the Auditor General querying the revaluation of the Nelson Airport assets (ie, land), which had been revalued on the basis of “fair value” (according to the new accounting standard).

Remuneration

The remuneration authority sets the remuneration for each district and regional council (under statutory declaration). The current rates are:

Mayor

$132,378.00

Deputy Mayor

$47,470.00

Standing Committee Chairperson

$43,819.00

Committee Chairperson

$40,168.00

Councillor

$36,516.00

Motueka Community Board Chair

$13,872.00

Motueka Community Board member

$6,936.00

Golden Bay Community Board Chair

$12,444.00

Golden Bay Community Board member

$6,222.00

See Local Government Elected Members (2016/17) (Certain Local Authorities) Determination 2016 www.legislation.govt.nz/regulation/public/2016/0158/latest/DLM6880662.html?search=ad_regulation__certain+local+authorities_2016___25_an%40bn%40rc%40dn%40apub%40aloc%40apri%40apro%40aimp%40bgov%40bloc%40bpri%40bmem%40rpub%40rimp_rc%40ainf%40anif%40bcur%40rinf%40rnif%40raif%40rasm%40rrev_a_aw_se&p=1#DLM6880666

Agenda and minutes

The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/committees-and-subcommittees/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2016/2016-10-27.

Media

www.nelsonlive.co.nz/2016/10/tasman-council-finances-improving/

www.nelsonlive.co.nz/2016/10/councils-seek-views-on-easter-sunday-trading/

www.stuff.co.nz/nelson-mail/news/85864969/pay-rates-rise-for-tasman-district-councillors

http://tdcme.nz/easter-sunday-trading/2016/

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Full council meeting (24 September)

The full council meeting was held on 24 September 2015 (immediately after the conclusion of the engineering meeting). All councillors were present.

The agenda comprised two items: (1) the annual report, and (2) the navigation safety bylaw.

At the conclusion of this meeting 2 workshops were held. The first on the reinstatement of Richmond’s central business district after storm water initiatives have been completed. The second reviewing grass cutting and tree removal across the district.

Annual report

The 2015 annual report (together with a number of amendments tabled at the meeting) was received and adopted by council. I briefly touched on the main highlights in my earlier audit subcommittee post (see www.greeningtasman.wordpress.com/2015/09/21/audit-subcommittee-meeting-16-september/).

The annual report provides an annual snapshot of the financial (ann non-financial) performance of council for the period 1 July 2014 to 30 June 2015. This is the normal financial period for government organisations (including council).

Council has again received an unmodified audit opinion and has maintained its AA- credit rating. In my opinion, both are good indicators of good management and governance. Many of the issues identified in the previous audit report have been addressed, and the auditor specifically made mention of the improved management of the audit process.

What is an unmodified audit opinion you might ask?

Generally, auditors are charged with the task of verifying the effectiveness of a business’s internal controls and must report any incidences they find that suggest mis-management, waste, or fraud. After the audit, the auditor must express a formal opinion on the records they have reviewed in their report, which may be either a modified or unmodified audit opinion.

When the financial statements “give a true and fair view” and the organisation under audit has complied with all the statutory and prescribed requirements, the auditor will issue an un-modified audit opinion. A modified audit opinion is issued when there are identified issues. For example, there is a possibility of a material mis-statement (or actual material mis-statement) in the financial records, or there is a material deviation from the financial reporting standards. Material mis-statements are differences or omissions of amounts and disclosures that are considered likely to influence a reader’s understanding of the financial statements.

Overall, the annual report shows that the council is in a very healthy position and the long term outlook looks good.

Financial highlights include:

  • debt was $145 million ($27 million less than the forecasted $172 million).
  • total income was $121.7 million, comprising general and targeted rates income of $65.1 million and other income (charges, fees, development contributions, revaluations, dividends) of $56.6 million.
  • expenditure was $100.3 million.
  • operational surplus was $21.4 million ($12.3 million above a forecasted surplus of $9.1 million), or $5.8 million (when capital and non-cash items are removed).
  • assets were worth $1.43 billion (this was an adjustment from the figures in the draft report presented to the audit subcommittee).

General rates income grew $310,000. However, net rates growth was around $146,000 when remissions (of $170,000) are taken into account.

The operating surplus of $5.8 million (cash) might initially be seen as council over-rating. However, the surplus can in part be attributed to council’s drive towards reducing operational costs during the year. Remembering that rates are set in the preceding year based on planned spending budgets. Other factors include: increased income from development contributions (as higher levels of development activity occurred), lower interest rate costs (as a result of improved treasury management), and increased income from commercial activity (port and forestry dividends).

The test for council going forward will be how it invests this surplus. I would hope that it is used to reduce debt (and interest repayments), bring forward investment in addressing Richmond’s residential storm water concerns (to reduce the risk for Richmond residents), and provide an increased buffer in the emergency fund should their be another natural disaster (while we address the storm water concerns of Richmond’s central business district).

Navigation safety bylaw

As discussed in an earlier post (see www.greeningtasman.wordpress.com/2015/09/20/full-council-meeting-10-september/) the navigation safety bylaw was expected to come into effect on 14 September 2015, after public notification on 11 September 2015. However, public notification did not occur.

Because adoption of a public bylaw requires public notification the notified dates require modification. Accordingly, council resolved that the navigation safety bylaw would not come into effect from 28 September 2015. Staff confirmed that this was sufficient time for public notification, as the public notice had already been drafted and was now waiting to be released.

Mistakes happen, but its the putting right that counts!

Agenda and minutes

The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-09-24.