Agenda of Finance Committee

Finance Committee - 02 April 2019 - Open Agenda Item 2

2. Elected Members' Remuneration - 2019 Information Update

Type of Report:	Operational
Legal Reference:	Local Government Act 2002
Document ID:	713356
Reporting Officer/s & Unit:	Devorah Nícuarta-Smith, Team Leader Governance

2.1 Purpose of Report

To present to Council an information update on the 2019 process provided by the Remuneration Authority, the national body charged with matters in relation to elected members’ remuneration.

Officer’s Recommendation

The Finance Committee:

a. Receive the information update on the 2019 elected members’ remuneration process provided by the national Remuneration Authority.

Chairperson’s Recommendation

That the Council resolve that the officer’s recommendation be adopted.

2.2 Background Summary

In 2018, the Remuneration Authority (‘the Authority’) advised of changes to be made to the approach to elected members’ remuneration following a two year review and consultation process with Councils.

An updated communication has now been received from the Authority which provides greater clarity on the new process such as it impacts for the 2019/20 year and following the 2019 Local Government Elections.

2.3 Issues

Following the review, the Authority implemented phase one of three stages to its approach – an adjusted remuneration allocation based on the resizing and ranking of Councils based on an expanded number of criteria from previous years.

They also signalled that there would be a move from the existing “partial pool” approach (whereby the Authority determines base councillor pay but each council has a pool to "top up" remuneration for councillors holding positions of responsibility) to a full pool approach.

This new approach, which takes effect following this year's election, means that each council is allocated a pool related to the ranking of the council on the new size index, and then the incoming council proposes to the Authority the councillor base pay and the additional pay for positions of responsibility.

The Authority have set a minimum base pay level which applies to all councils, but many councils may choose to set the base pay above this as part of their allocation process.

It should be noted that the total pool does not apply to the remuneration of Mayors (or Regional Chairs or community board members where those exist). The Authority will continue to set remuneration for these positions directly.

At the end of June 2019, the Authority will release its determination which will be presented in two parts in recognition of the election year. The Authority has provided its proposed remuneration allocation for Part 1 (1 July 2019 to day of official election result declaration), and total councillor pool for Part 2 (day after official election result declaration and onwards) in advance of their final determination to aid councils in preparing for the budgetary implications of the change.

It should be noted that these figures may change as the Authority works towards their final determination.

Proposed 2019/20 Determination Part 1

Effective from 1 July 2019 up to and including the day the official result of the 2019 election of members for the Council is declared.

Current (2018/19) annual remuneration for comparison:

Proposed 2019/20 Determination Part 2

Effective from the day after the date on which the official result of the 2019 election of members for the council is declared.

Post- Election Allocation Process

Change to proposed approach outlined in 2018

In 2018 the Authority suggested that each outgoing council would be asked to consider the quantum of the pool allocated and let them know prior to July 2019 how they proposed that the pool be distributed following the election. They acknowledged that incoming councils might need to change those proposals and said that provision could be made for that. However, on further reflection and after some feedback, the Authority have decided not to ask outgoing councils to make a proposal and the sole responsibility for this will now sit with the incoming Council.

How the pool will work

The pool approach will start after the 2019 local government election and, following that, each council will be allocated a pool at the beginning of each triennium.

The dollar amount of the annual pool being considered for Napier City council is outlined in the green table above – this may change as the Authority works towards its determination in June 2019, but is a useful ball park figure for budgetary purposes.

The pool will cover remuneration for councillors only. Mayor and regional council chair remuneration will continue to be set by the Authority, as will remuneration for community boards for the time being.

In the remaining two years of the triennium the Authority will make Determinations that may include adjustments based on a narrower set of indicators relevant at the time, but will not resize the councils.

Timeline

· By 1 July 2019: Council will be advised of the exact dollar figure of the full councillor pool to apply from the day after the election result is declared.

· 1 July 2019: The July 1 Determination will include the minimum base councillor remuneration for your council following the election. It will also include the revised remuneration for the Mayor to take effect from the day after the date on which the official result is declared.

· By 20 November 2019: Incoming councils will decide on the distribution of the pool and will send their proposals to the Authority.

Important considerations in this process are:

o Base councillor remuneration must NOT be set below the minimum prescribed in Part 2 of the July 1 2019 Determination, but can certainly be higher if it fits within the pool.

o Positions that a council decides to remunerate may include those on outside groups to which a councillor has been formally appointed by a councils - i.e. the remuneration is not necessarily solely attached to official council committees. Councillors are expected to be involved in a variety of community and cross-council groups as part of their basic role but, in some cases, if the extra work involved is extraordinary it can be recognised in remuneration.

o Any remuneration for councillors serving as directors on CCOs should paid directly by the company and will not fall within the ambit of the councillor pool.

o Councils MUST spend the whole of the pool allocated. The quantum for each council has been set by the Authority following a comprehensive review of the relative size of workloads of all councils and it would be unfair to elected members to withhold any of the available remuneration.

o The pool does not apply to non-elected people who are appointed to be members or chairs of council committees. The Authority cannot legally prescribe remuneration of payments for non-elected people.

o Councils may distribute the pool using ratios rather than dollar figures. For example, they may decide that a committee chair should be paid 1.5 times that of a councillor without additional responsibilities. A calculation tool has been provided should Council choose this approach.

· Mid-December 2019: The Authority will check the proposals of all councils and send the assembled list to the Parliamentary Council Office for inclusion into a formal amending Determination.

Their aim is to have the first amending Determination published by mid-December so councils can incorporate the new figures into their pre-Christmas payroll runs.

It is important to note that all amending Determinations related to the councillor pool will be backdated so that the confirmed final level of base remuneration will take effect from the day after the date on which the official result of the 2019 election was declared by public notice and remuneration for positions of responsibility from the day after the council formally votes to confirm the recommendation.

· By 18 December 2019: If the information is not submitted on time to include in the first amending Determination, it will have to wait for a further amendment which the Authority anticipates will be in late January 2020 at the earliest, and most likely February 2020.

Other notes

The Authority will be consulting on the issue of potential childcare subsidy for elected members in 2019, and are currently concluding an updated approach to community boards.

2.4 Significance and Engagement

As the Mayor’s total remuneration, and the total pool from which councillor remuneration is allocated, are both set by the Remuneration Authority at a national level, this matter does not trigger our Significance and Engagement Policy, and no consultation of other kinds are required.

2.5 Implications

Financial

Council must budget appropriately to meet the expectations on elected member remuneration outlined by the Authority.

Social & Policy

N/A

Risk

N/A

2.6 Options

The options available to Council are as follows:

a. To receive the updated information from the Remuneration Authority in relation to elected members’ remuneration.

2.7 Development of Preferred Option

To receive the updated information from the Remuneration Authority in relation to elected members’ remuneration.

2.8 Attachments

Nil

Finance Committee - 02 April 2019 - Open Agenda Item 4

4. Consent to land being declared road

Type of Report:	Legal
Legal Reference:	Public Works Act 1981
Document ID:	715741
Reporting Officer/s & Unit:	Jenny Martin, Property and Facilities Officer

4.1 Purpose of Report

Seek approval by Council under the Public Works Act to consent to the land at 243 Awatoto Road be declared road.

Officer’s Recommendation

The Finance Committee:

a. Recommends that Council Resolve:

i. That in accordance with the provisions of Section 114(2) of the Public Works Act 1981, to consent to the land described in the Schedule hereto to be declared road and vested in the Napier City Council.

SCHEDULE

Hawkes Bay land District – Napier City

Area

(hectares)

Legal Description

Part of Record

Of Title

0.0039

Section 1 SO Plan 531110

651679

Chairperson’s Recommendation

That the Council resolve that the officer’s recommendation be adopted.

4.2 Background Summary

In early 2017 it was identified that the fence on the corner of the property at 243 Awatoto Road needed to be moved back from the legal boundary to enable better sight for drivers. Council officers consulted with the owners of the property who agreed to this. The fence was subsequently moved further back into their property.

Section 1 of the attached SO Plan 531110 shows the area of land taken. Compensation has been agreed with the owners.

In order to finalise matters it is now necessary to obtain the appropriate declaration.

4.3 Issues

There are no issues.

4.4 Significance and Engagement

Not applicable.

4.5 Implications

Financial

Finance for the compensation is available with the current Road Asset budget.

Social & Policy

Not applicable.

Risk

Not applicable.

4.6 Options

The options available to Council are as follows:

a. (Preferred option): That Council, in accordance with the provisions of Section 114(2) of the Public Works Act 1981 resolves to consent to the land described in the Schedule hereto to be declared road and vested in the Napier City Council.

b. That Council declines, in accordance with the provisions of Section 114(2) of the Public Works Act 1981 to consent to the land described in the Schedule hereto to be declared road and vested in the Napier City Council.

4.7 Development of Preferred Option

Option A is the preferred option.

4.8 Attachments

a 243 Awatoto Road SO Plan ⇩

Finance Committee - 02 April 2019 - Open Agenda

Finance Committee

Open Minutes

Meeting Date:	Tuesday 27 November 2018
Time:	3.00pm-3.37pm
Venue	Council Chamber Hawke’s Bay Regional Council 159 Dalton Street Napier

Present	Mayor Dalton, Councillor Wise (In the Chair), Councillors Boag, Brosnan, Dallimore, Hague, Jeffery, McGrath, Price, Tapine, Taylor, White and Wright
In Attendance	Chief Executive, Chief Financial Officer, Director Community Services [from 3.05pm], Director Infrastructure Services, Director City Strategy, Manager Communications and Marketing, Manager Community Strategies, Libraries Manager, National Aquarium of New Zealand Director, Community Advisor
Administration	Governance Team

Apologies

Nil

Conflicts of interest

Councillor Wright in relation to Agenda Item 5.

Public forum

Steph Kennard – Napier Business Inc.

Steph Kennard provided an update to Council on the activities and events undertaken by Napier Business Inc. for the year.

In response to questions from Councillors the following points were clarified:

· The fashion parade occurs twice a year, in spring and autumn.

· As the cruise ship season is now starting, the effectiveness of security in the CBD will be monitored closely by both Napier Business Inc. and Council officers.

· Next year the Napier Business Inc. plan to review CBD boundary lines and the targeted levy charged to members.

Announcements by the Mayor

The Mayor invited Councillors to attend the blessing of the Māori Pou and other significant artefacts around the airport at 4am on Sunday, 2 December 2018.

Announcements by the Chairperson

Nil

Announcements by the management

The Chief Executive introduced the new National Aquarium of New Zealand Director to Council.

Confirmation of minutes

Councillors Hague / Price

That the Minutes of the meeting held on 16 October 2018 were taken as a true and accurate record of the meeting.

Carried

Questions from Councillors for Further Action

Item	Requestor	Action
5	Cr White	Has development in the surrounding areas been considered when looking at the ground lease arrangement for Taradale Park, and have the Parks and Reserves team been consulted?
5	Cr Boag	How many other kindergartens in Napier have ground leases and when are they due?

Agenda Items

1. Three Waters Review

Type of Report:	Information
Legal Reference:	N/A
Document ID:	667489
Reporting Officer/s & Unit:	Wayne Jack, Chief Executive

1.1 Purpose of Report

This report seeks Council approval to develop a regional business case assessing options to improve the management of drinking water, storm water and wastewater (“Three Waters”) in the Hawkes Bay region and in doing so, address Central Government concerns associated with these activities. This review will develop recommendations for performance improvements to our Regional Three Waters systems with a view to guiding Central Governments Three Waters strategy.

At the Meeting

The Chief Executive provided an update to Councillors on central government’s current position on the three waters review, addressing the LGNZ position paper received a few weeks ago as well as the Cabinet paper released last week.

It was noted that Council officers have been in close contact with the Department of Internal Affairs regarding our review, and there is potential for them to support the next phase in terms of what we come out with. However, we need to undertake a robust process first, considering all options and identifying what the specific risks and challenges are in Hawke’s Bay.

In response to questions from Councillors, the following points were clarified:

· Mandatory aggregation means taking current three waters service delivery from the local authorities across New Zealand and bringing them together into an unknown number of agencies to deliver three waters services.

· Other Councils are now also preparing business cases in relation to three waters.

· Council is looking for some direction from this review as to what the best delivery model is to manage the challenges and risks that we have across the region.

· Under a mandatory aggregation system community ownership of our waters could be lost but more importantly the ability to have a say on what is a community priority would be impacted.

· Collaboration models can sometimes mean increased costs but they can also result in a better service and reduce risk; it is important to focus on the outcomes.

Committee's recommendation

Mayor Dalton / Councillor Taylor

That the Finance Committee:

a. Endorse the development of a regional business case on Three Waters management.

b. Note the cost of the review is apportioned across the Hawkes Bay Councils as follows:

· 35% NCC, 35% HDC, 15% HBRC, 7.5% WDC, 7.5% CHBDC

c. That a DECISION OF COUNCIL is required urgently to enable the review to be commenced and completed within the required timeframe.

Carried

Council Resolution

Councillors Price / Wright

That the Finance Committee:

a. Endorse the development of a regional business case on Three Waters management.

b. Note the cost of the review is apportioned across the Hawkes Bay Councils as follows:

· 35% NCC, 35% HDC, 15% HBRC, 7.5% WDC, 7.5% CHBDC

Carried

2. District Plan Review Funding Options

Type of Report:	Operational
Legal Reference:	Local Government Act 2002
Document ID:	669135
Reporting Officer/s & Unit:	Paulina Wilhelm, Manager City Development

2.1 Purpose of Report

The purpose of this report is to allow the use of the funds available in the Financial Contributions Special Fund to enable the production of Structure Plans and other work streams for servicing development in Napier. The Structure Plans will inform any future rezoning decision for the Napier District Plan and enable the city to grow.

At the Meeting

It was agreed that this should have been addressed through the Long Term Plan. Council officers confirmed they have taken learnings from this and will ensure in future that costs of this nature are captured in the appropriate planning processes.

Committee's recommendation

Councillors Jeffery / Wright

That the Finance Committee:

a. Approve $1.2m from the Financial Contributions Special Fund to fund the District Plan Review work programme which will allow future city growth.

Carried

3. Budgets to be carried forward to 2018/19

Type of Report:	Operational
Legal Reference:	Local Government Act 2002
Document ID:	637309
Reporting Officer/s & Unit:	Caroline Thomson, Chief Financial Officer

3.1 Purpose of Report

To seek Council approval to carry forward budgets into 2018/19.

At the Meeting

In response to questions from Councillors, officers confirmed that this is a very good result in relation to past trends.

Committee's recommendation

Councillor Wright / Mayor Dalton

That the Finance Committee:

a. Approve carrying forward budgeted expenditure of $3,796,408 from 2017/18 into 2018/19.

Carried

4. Rating Outturn Surplus 2017/18

Type of Report:	Operational
Legal Reference:	Local Government Act 2002
Document ID:	637305
Reporting Officer/s & Unit:	Caroline Thomson, Chief Financial Officer

4.1 Purpose of Report

To report on the Rating Account to 30 June 2018, and to approve allocations from the Rating Surplus

At the Meeting

In response to questions from Councillors, management confirmed that where Council holds funds allocated to activities at present is appropriate. It was noted that requests to fund projects out of Capital Reserve funds can be made by asking Council officers to prepare a report to Council; the Capital Reserves Fund is used to fund one-off activities.

Committee's recommendation

Mayor Dalton / Councillor Taylor

That the Finance Committee:

a. Approve transferring the 2017/18 net rating surplus of $926,578 to the Capital Reserve Account where it is available for future commitments.

Carried

5. Leases of Reserve - Napier Free Kindergarten Association Incorporated

Type of Report:	Legal
Legal Reference:	Reserves Act 1977
Document ID:	665671
Reporting Officer/s & Unit:	Bryan Faulknor, Manager Property Jenny Martin, Property and Facilities Officer

5.1 Purpose of Report

To obtain a Council decision to enter into three new ground leases with the Napier Free Kindergarten Association Incorporated for the Taradale Kindergarten, Greenmeadows Kindergarten and Marewa Kindergarten.

At the Meeting

In response to questions from Councillors, officers will follow up on the following points:

· Has development in the surrounding areas been considered when looking at the ground lease arrangement for Taradale Park, and have the Parks and Reserves team been consulted?

· How many other kindergartens in Napier have ground leases and when are they due?

Committee's recommendation

Councillors Brosnan / Hague

That the Finance Committee:

a. Recommend that Council resolve to enter into a new ground lease with the Napier Free Kindergarten Association Incorporated for the Taradale Kindergarten, Greenmeadows Kindergarten and the Marewa Kindergarten each for a term of 15 years with one 15-year right of renewal.

Due to an expressed conflict of interest, Councillor Wright did not participate in the discussion or vote on this agenda item.

Carried

6. Fire Hydrant Use Policy 2018

Type of Report:	Operational
Legal Reference:	N/A
Document ID:	662412
Reporting Officer/s & Unit:	Anze Lencek, Water Quality Lead

6.1 Purpose of Report

To seek Council approval of the proposed Fire Hydrant Use Policy 2018.

At the Meeting

Councillors acknowledged the importance of this Policy being adopted.

Committee's recommendation

Councillors Price / White

That the Finance Committee:

a. Adopt the Fire Hydrant Use Policy 2018.

Carried

PUBLIC EXCLUDED ITEMS

Mayor Dalton / Councillor Hague

That the public be excluded from the following parts of the proceedings of this meeting, namely:

1. Land Sale

Carried

The general subject of each matter to be considered while the public was excluded, the reasons for passing this resolution in relation to each matter, and the specific grounds under Section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution were 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(1) to the passing of this resolution.
1. Land Sale	7(2)(i) Enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	48(1)A That the public conduct of the whole or 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: (i) Where the local authority is named or specified in Schedule 1 of this Act, under Section 6 or 7 (except 7(2)(f)(i)) of the Local Government Official Information and Meetings Act 1987.

The meeting moved into committee at 3.37pm.

Approved and adopted as a true and accurate record of the meeting.

Chairperson .............................................................................................................................

Date of approval ......................................................................................................................

Committee Members	Councillor Wise (In the Chair), Mayor Dalton, Councillors Boag, Brosnan, Dallimore, Hague, Jeffery, McGrath, Price, Tapine, Taylor, White and Wright
Officer Responsible	Director Corporate Services
Administration	Governance Team
	Next Finance Committee Meeting Tuesday 14 May 2019

Meeting Date:	Tuesday 2 April 2019
Time:	3.00pm
Venue:	Graeme Lowe Stand Corporate Lounge 2 McLean Park Latham Street Napier