Finance
Committee - 20 March 2018
- Open Agenda Item
1
Agenda Items
1. Hawkes
Bay Local Authority Shared Services - Structure change
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Type of Report:
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Legal
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Legal Reference:
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Local Government Official Information and
Meetings Act 1987
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Document ID:
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447078
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Reporting Officer/s & Unit:
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Adele Henderson, Director Corporate Services
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1.1 Purpose of Report
To propose the legal structure of
Hawke’s Bay Local Authority Shared Services Limited (HBLASS) become
dormant in order to focus attention and resources on the purpose of HBLASS and
reduce compliance costs for all the councils.
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Officer’s
Recommendation
That the Council:
a. Agree
HBLASS, as a legal entity will be dormant in the short term; with the ability
for the legal entity able to be reactivated in the future.
b. Note
that the dormant status of HBLASS is effective on receipt of agreement by all
members of the Board.
c. Note
that the decision on the dormant status of HBLASS will be determined by the
majority of councils.
d. Note
that each Council will continue its participation in a Collaborative approach
that has proven effective in a pilot: Hawke’s Bay Councils delivering
Service and Value.
e. That
the Councils approve the exemption of HBLASS from the Council Controlled
Organisation requirements (Local Government Act Section 7(3))
f. Note
that each Council will actively support shared and common goal setting,
decision-making, resourcing including financial contribution, staff and
communication.
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Chairperson’s
Recommendation
That the Chairperson resolve that
the officer’s recommendation be adopted.
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1.2 Background Summary
Since 2012, when HBLASS was
incorporated as a legal entity (see the Constitution at Attachment A),
there has been significant effort to identify functions and analyse
opportunities for shared services and joint procurement across the
Hawke’s Bay Councils.
The effort and the results,
through HBLASS have been focused largely on procurement and the development of
shared IT services. HBLASS funded a Chairperson for IT shared services,
minutes, and governance as well as selective consulting studies and plans.
Because structural change and cost reduction are implicit in Shared Services,
an “all in” model was met with resistance when timing and
opportunities didn’t align with councils direction at a particular point
in time.
In early 2017, there was a review
leading to a recommitment to HBLASS efforts with Collaboration as an approach
to improving Hawke’s Bay wide Service and Value. As part of the review, a
new wider role of HBLASS Collaborator was introduced on a 6 month
contract.
The principles of
Collaboration are:
§ Discover who is doing what
§ Connect with others that share the
same objective
§ Collaborate to delivery more for
less.
The following summarises the
Collaboration and outcomes in 2017:
The focus on collaboration versus
Shared Services is consistent with the direction that a number of the Councils
are taking in other regions. Bay of Plenty for example has a
collaboration portal that has resulted in improved knowledge sharing and
efficiencies been delivered within projects and service delivery. This portal
is now widely used by local Councils.
Staff involved have delivered
improved Service and Value across Hawke’s Bay in the following areas:
§ IT: Shared Infrastructure Services
including Wide Area Network, Desktop and Web Services.
§ GIS: Shared Aerial Photography.
§ Open Spaces: Opportunities for One
View of Information and Shared approaches to operations.
§ Animal Control: Opportunities for
Shared Education and License Data.
§ Training and Development: Common
Requirements and Shared Onsite Training.
§ Shared Internal Audit Services.
Improved quality, value and efficiency.
§ Records Management: Common
approaches.
1.3 Proposed Structure
The Chief Executive (CE) Forum,
will replace the HBLASS board structure with the same five Council CEOs and
independent chair – the function of HBLASS will continue but without the
legislative requirements of operating a Company. The CE Forum group is fully
committed to working together focusing on improving Service and Value for the
Hawke’s Bay region through collaboration. The primary difference in the
structure change is less time and resource spent on the requirements for an
active Council-owned, legal entity and more focus on setting direction and
enabling staff to achieve Service and Value. At the same time, the CE Forum
provides an umbrella and common way of operating for the many collaborative
initiatives across Hawke’s Bay, beyond HBLASS.
The administrative function is
also significantly reduced. A lead council would be identified to maintain a
ledger with invoicing to each council to recover agreed and shared costs for
the Collaboration Program and any project expenses.
To deactivate a councils-owned
company requires the following steps to be undertaken:
1. Obtain
a special resolution of shareholders (in writing and signed) stating the
shareholders agree to shelve the company.
2. Pay
final GST return to Inland Revenue (HBLASS is not registered for FBT but this
would apply if it were).
3. Make
final payouts as determined by above resolution (if applicable) to clear the
bank accounts.
4. Close
bank accounts with Westpac.
5. Deregister
for GST with Inland Revenue.
6. File
the final income tax return (IR4) for the tax year (includes company accounts
up to the point when business ceased, but note this cannot be filed early and
is due after the end of the financial year in which HBLASS closed).
7. File
the IR433 Non-Active Company Declaration form with Inland Revenue.
The HBLASS Limited legal entity can
be reactivated in the future if business models, organisational, contract or
procurement changes require a separate legal entity
1.4 Issues
There are no foreseen issues or
risks at this time. This structural change will cost less and focus attention
on the purpose of the LASS.
1.5 Significance and
Consultation
The Board is comprised of the
five Chief Executives of the Hawke’s Bay Councils. All Chief
Executives agree with the recommendation to make the HBLASS company dormant and
have approved a motion at their meeting on December 8, 2017.
Each Council is now being
consulted with a recommendation to make the HBLASS company dormant. The
Chief Executives intend to still refer to their activities and undertaking as a
group as HBLASS, but not as a separate legal entity. The Councils are
requested to provide a response to this proposal by the end of March 2018.
1.6 Implications
Financial
There will be residual funding from the current
years subscription, and it is proposed to transfer this to Napier City Council,
where it will provide an accountability report. The residual fund will be
to pay for the continued services of the Chairman and Collaborator roles.
Social & Policy
Through the Collaboration pilot
in 2017, there has been a significant interest shown by staff in the
opportunities for improved Service and Value across Hawke’s Bay that will
contribute to the outcome of health and prosperity of the region.
Risk
The requirements of being a CCO will still
need to be met if the Councils wish to continue with the Company in its current
format, including the preparation of a Statement of Intent. This work has
currently been put on hold.
Councils may decide not to
continue to fund the Chairperson and Collaborator role and further
opportunities on effective and efficient services may be missed.
1.7 Options
The options available to Council
are as follows:
a. Approve
the recommendation to make dormant HB Local Authority Shared Services Limited.
b. Not
approve the recommendation with HBLASS Limited to continue in its current form.
c. Recommend
that all shared service/collaboration activities cease immediately.
1.8 Development of
Preferred Option
Option A – Make the HBLASS
legal entity dormant as this will result in a lower financial and
administration burden to the councils while improving the focus to meet Service
and Value outcomes.
As
noted above during the review of HBLASS in 2017, LASS organizations around New
Zealand were approached to share their experience. Success was linked directly
with a collaborative approach. Other LASS organizations that have taken the traditional
structural/cost reduction approach with services being operated and contracts
run through the LASS, are currently assessing the change to a collaborative
approach for more robust and relevant solutions.
HBLASS has taken the initiative to test collaboration
in the Hawke’s Bay environment during 2017. There has been considerable
success over the six months of this pilot to test collaboration. In order for
further improvement, there must be greater engagement, client focus, leadership
accountability and strengthening of a collaborative culture.
1.3 Attachments
a HBLass
Constitution 2012 ⇩
Finance Committee - 20 March 2018 - Open Agenda Item
2
2. Representation
Review
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Type of Report:
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Legal
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Legal Reference:
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Local Electoral Act 2001
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Document ID:
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441536
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Reporting Officer/s & Unit:
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Jane McLoughlin, Team Leader Governance
Rachael Horton, Manager Business Excellence &
Transformation
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2.1 Purpose
of Report
To determine Council’s initial
proposal for representation arrangements for the 2019 and 2022 elections.
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Officer’s
Recommendation
That Council:
Approve the initial proposal for
representation arrangements for the 2019 and 2022 elections, and that the proposal
be distributed for public consultation, that initial proposal being:
a. the
basis of election is Ward-only based on the current Ward structure:
i. that
two Elected Members be elected by the electors of the Ahuriri Ward
ii. that
two Elected Members be elected by the electors of the Onekawa-Tamatea Ward
iii. that
four Elected Members be elected by the electors of the Nelson Park Ward
iv. that four
Elected Members be elected by the electors of the Taradale Ward
b. the
total number of Elected Members is 12 and the Mayor
c. that
there be no community boards within Napier City.
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Chairperson’s
Recommendation
That the Council discuss the paper
and vote on the preferred option of Council.
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2.2 Background
Summary
What are representation
arrangements?
Representation arrangements are
the way the public are represented for local government elections for a Local
Authority such as Napier City Council, including the following options:
· The basis of election; that is, whether the election of members
(also known as councillors, other than the Mayor) is by:
o the
entire electoral district (called ‘at large’),
o the
division of the district into wards for electoral purposes, or
o a
mix of ‘at large’ and ward representation.
· If wards are used, the boundaries of wards, the names of the wards,
and the number of members that will represent each ward.
· The total number of members that are elected to the governing body
of the Council (the legal requirement is no less than 6 and no more than 30
members, including the Mayor), and
· Whether to have community boards, and if so, how many, and what
their boundaries and membership will look like.
What are the benefits of
undertaking a representation review?
Quality democratic processes are
important and foster a richer form of citizenship and civic engagement.
Electoral arrangements need to be representative and fair so that communities
feel that they have influence and can effect change.
Both the Local Government Act
2002 (Act 2002) and the Local Electoral Act 2001 (Act 2001) highlight that
diversity of communities’ matters in local government decision-making
(see sections 3, 10(1), 14(1), of the Act 2002 and section 4, (1), of the Act
2001).
As outlined above, there are
different options for representation arrangements, and the Act 2001, section
3(c) enshrines a review of these options to allow diversity in local
decision-making.
Principles outlined in the Act
2001 that govern the requirement to undertake a representation review include:
· Fair
and effective representation for individuals and communities,
· Reasonable
and equal opportunity:
o to vote
o nominate, or be nominated as
candidates, and
· Public
confidence in, and public understanding of local electoral processes.
A key outcome of undertaking a
representation review is that communities of interest within a district are
well represented on the governing body of Council and that voters have an equal
vote.
What is the process officers
have undertaken to inform this representation review?
At least every six years, a Local
Authority must review its arrangements. Napier City Council last reviewed its
arrangements in 2012 and therefore was required to review in 2018 and decide on
any changes.
For this review, Officers have
undertaken data-gathering and pre-consultation with Napier residents, and
analysis of fair and effective representation, resulting in the Representation
Review Analysis Paper (Attachment A). For more information on the
process refer to the methodology section of the Analysis
paper.
The process undertaken reflects
the Local Government Commission’s best practice guidelines that state
that Councils should undertake pre-consultation with the public and undertake
analysis on fair and effective representation. This is because the
decision on representation arrangements must not be limited to reflecting
community views, but must seek to achieve fair and effective representation for
all individuals and communities.
A key part of the analysis is to
identify communities of interest within Napier, and then identify how these
communities could be most effectively and fairly represented.
Officers have updated Elected
Members in Committee meetings in August and December 2017 on the process being
undertaken and the results of pre-consultation (Attachment B provides the
Representation Review survey report, Attachment C provides the survey responses
on Community Boards).
What are the next steps in the
process?
This report presents the analysis
of the review to inform Council’s decision on the initial proposal; this
will then be publicly notified, and submissions invited.
Once Council makes a decision on
the initial proposal, the statutory process commences.
Napier residents will have an
opportunity to provide their thoughts on the proposal via submissions once the
initial proposal is released. A hearing will be held where Council can
consider feedback from Napier residents, and decide whether to modify their
initial proposal or not. The initial proposal then becomes the final
proposal.
The final proposal will be
publically notified, and Napier residents will have the opportunity to make an
appeal or objection on the final proposal to the Local Government
Commission. At this point, it is the Commission which makes a final
determination on Napier’s representation arrangements, and Council has no
further role in deciding.
Indicative timeframes for the
statutory process include:
· Council
decision 3 April and public notice (April)
· Submission
period and consideration (April/May)
· Public
notice of final proposal (June)
· Appeals and
objections to Local Government Commission (June-December)
· Local
Government Commission considers appeals and objections (January to April 2019)
· Implementation
of determination (April-June 2019).
What were the key findings
from the analysis report?
Key findings of the analysis
include:
History of
Napier’s representation arrangements
· Strong local
democracy can be measured by high voter turnout, more than one candidate for each
seat, and diversity of candidates.
· Survey
respondents prefer the current mixed election system made up of six at large
and six ward Elected Members.
· Of the three
election systems Napier has had over the last 40 years, the ward system
followed by the mixed system created more fair and effective representation
than the at large system.
· Napier’s
mixed system is unusual; most councils have a ward system.
Communities of
interest
· Napier is
made up of diverse communities.
· Napier’s
suburbs have their own community characteristics.
· The current
ward system mostly caters for suburbs that share community characteristics.
· Suburbs that
are distinct have sufficient commonality among other suburbs within the current
ward structure.
Effective representation
· Using the
existing ward structure, the most effective system for representing communities
of interest is the ward system, followed by the mixed system.
· The at large
system best reflects Napier residents’ feedback that their community of
interest is “Napier”, but has in the past led to less candidates,
less diversity among candidates, and lower voter turnout.
· The mixed
system has in the past led to single candidates for a ward seat being elected
unopposed; giving no choice to voters.
· The ward
system has in the past provided higher number of candidates and more diverse
candidates.
· Napier could
feasibly reduce the number of Elected Members to 10 and still be in line with
other city councils for representation ratios.
Fair representation
· Napier’s
current rate of elected members is higher in comparison to other city councils.
· Nelson Park
Ward residents are the least engaged in local democracy and have the highest
deprivation levels which can be a barrier to their engagement.
· Avoiding
single member wards helps to improve voter choice and representation for ward
residents.
Community Boards
· Bayview and
Maraenui are distinct communities of interest for a community board.
· Survey
respondents do not have a strong preference to establish community boards, and
there is even less appetite by ratepayers to pay for them.
· Survey
respondents have identified they are seeking an improved council to community
connection.
· Improvements
to existing mechanisms can achieve the same outcomes for better
representation as a
community board might do.
The analysis paper contains
detailed information to support the key findings, and provides feasible options
for consideration.
2.3 Issues
At a seminar with Elected Members
on 7 March 2018, Elected Members asked officials to look into the following:
A) Whether three wards could be justified in
terms of fair and effective representation, used in a mixed system with no
single-member wards, and the total of Elected Members remaining at 12.
B) Whether there are any options for
retaining a mixed system with the current ward structure, with no single-member
wards, and reducing the number of At Large Elected Members (possibly to four)
to retain a total of 12 Elected Members.
Officials considered both A and B
and presented the analysis to these in Attachment D.
2.4 Significance
and Consultation
Representation arrangements
affect all Napier residents and have a high degree of significance. As
outlined earlier, pre-consultation was undertaken with all of Napier’s
residents, firstly via a commissioned survey covering all representation
arrangements, and secondly via a survey undertaken by Officers on community
boards.
The statutory process under the
Act 2001 and Act 2002 includes a high level of community engagement in it, as
already outlined in this report. The statutory process will commence following
Council’s decision on the initial proposal.
2.5 Implications
Financial
There are no financial
implications with the Officer’s recommendation.
It is estimated that the cost to
establish community boards for options d ii – iv, would add up to $200,000
to rates per annum.
Social &
Policy
N/A
Risk
There is a risk that residents in
higher deprivation areas may end up with lower population-member ratios than
those residents from low deprivation areas. To mitigate this risk, the
analysis report clearly states that consideration should be given when calculating
options for fair representation to ensuring that residents from high
deprivation areas are given an adequate voice.
2.6 Options
The options available to Council
are as follows:
a. (preferred
option) Retain the current ward structure and total number of Elected Members
and move to a ward only system. No community boards are
established. Under this option:
i. current
ward structure is retained which gives particular representation to voters in
high deprivation areas, does not split recognised communities of interest
between electoral sub-divisions, and does not group together two or more
communities of interest that have few common interests.
ii. it
is more likely there will be a choice of candidates for each seat, avoid single
member wards, and provide more diverse candidates.
iii. the
number of Elected Members would remain at 12.
b. Status
Quo - Retain the status quo of representation arrangements as they currently
stand; 12 Elected Members, current ward structure, mixed system of six Elected
Members elected at large, and six Elected Members elected via wards. No
community boards.
Under this option:
i. it
is likely that there will be Elected Members who stand unopposed, thus giving
no choice for voters.
c. Retain
status quo, except for reducing the total number of Elected Members to 10 or 11
by reducing at large Elected Members to four or five. No community boards are
established. Under this option:
i. Population-member
ratios would be more in line with other city councils.
d. Community
Boards are either:
i. Not
established (preferred option).
Under this option, improvements to
existing mechanisms for the public to engage with Council, and a full ward
system with actively engaged Elected Members would provide the types of improvements
to Council/community connection that are being looked for in community
boards.
ii. Established
in Bayview.
iii. Established
in Maraenui.
iv. Established
in Maraenui and Bayview.
e. Three
ward system, based on:
i. Ward
configurations:
1. Ahuriri
Ward: Bayview, Ahuriri, Hospital Hill, Bluff Hill,
Westshore, Nelson Park, McLean Park, Meeanee, Awatoto, Poraiti (three Elected
Members)
2. Onekawa Ward: Onekawa West, South, Central, Marewa,
Maraenui, Tamatea North & South, Pirimai (four Elected Members)
3. Taradale Ward: Taradale North & South, Greenmeadows.
(three Elected Members)
ii. 12
Elected Members in total, including two at large Elected Members.
iii. No
community boards.
Under
this option: two at large Elected Members are retained which all voters can
vote for, so gives them a choice beyond the candidates standing for their ward;
it avoids single-member wards. It is a new ward configuration, and
therefore voters would need to become aware of it.
f. Three
ward system, based on:
i. Ward
configurations:
1. Ahuriri
Ward: Bayview, Ahuriri, Hospital Hill, Bluff Hill,
Westshore, Nelson Park, McLean Park, Meeanee, Awatoto, Poraiti (three Elected
Members)
2. Onekawa Ward: Onekawa West, South, Central, Marewa,
Maraenui, Pirimai (three Elected Members)
3. Taradale Ward: Taradale North & South, Greenmeadows,
Tamatea North & South (four Elected Members)
ii. 12
Elected Members in total, including two at large Elected Members.
iii. No
community boards.
Under
this option: two at large Elected Members are retained which all voters can
vote for, so gives them a choice beyond the candidates standing for their ward;
it avoids single-member wards. It is a new ward configuration, and
therefore voters would need to become aware of it.
For the particular sections in the
Analysis Report that support the options as outlined above, the following pages
refer:
· Pages 35-36:
Based on effective representation, the key advantages and disadvantages of each
system (e.g. at large, mixed, and wards). The two most effective options
are considered to be to retain the mixed system, or move to a ward system.
· Pages 37-38:
For Council size, the two most effective options are considered to retain the
status quo of 12 or reduce to 11 or 10.
· Pages 41-43:
For fair representation, the two options are to retain the mixed system and
current ward configuration and number of Elected Members per wards, and reduce
the number of at large Elected Members to 11, or to move to a ward only
system based on the current ward configuration.
· Pages 53-54:
For analysis on Community Boards.
Pages 1-7:
Addendum (Attachment D) for analysis on three ward configuration.
2.7 Development
of Preferred Option
Option A is the preferred option due
to the benefits as outlined above.
2.8 Attachments
a Representation
Review: Analysis Report ⇩
b Representation
Review survey report ⇩
c Community
Board survey responses ⇩
d Representation
Review addendum ⇩
