Agenda of Corporate and Strategic Committee

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: Call for Items of Business Not on the Agenda

Reason for Report

1. Standing order 9.12 states:

“A meeting may deal with an item of business that is not on the agenda where the meeting resolves to deal with that item and the Chairperson provides the following information during the public part of the meeting:

(a) the reason the item is not on the agenda; and

(b) the reason why the discussion of the item cannot be delayed until a subsequent meeting.

Items not on the agenda may be brought before the meeting through a report from either the Chief Executive or the Chairperson.

Please note that nothing in this standing order removes the requirement to meet the provisions of Part 6, LGA 2002 with regard to consultation and decision making.”

2. In addition, standing order 9.13 allows “A meeting may discuss an item that is not on the agenda only if it is a minor matter relating to the general business of the meeting and the Chairperson explains at the beginning of the public part of the meeting that the item will be discussed. However, the meeting may not make a resolution, decision or recommendation about the item, except to refer it to a subsequent meeting for further discussion.”

Recommendations

1. That the Corporate and Strategic Committee accepts the following “Items of Business Not on the Agenda” for discussion as Item 14:

1.1. Urgent items of Business

Item Name

Reason not on Agenda

Reason discussion cannot be delayed

1.2. Minor items for discussion

Item	Topic	Councillor / Staff
1.
2.
3.

Leeanne Hooper

GOVERNANCE & CORPORATE ADMINISTRATION MANAGER

Liz Lambert

GROUP MANAGER
EXTERNAL RELATIONS

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: Submission on Remuneration Authority Elected Representatives' Remuneration Review

Reason for Report

1. To enable the Committee to consider lodging a Council submission on the Remuneration Authority Elected Representatives Remuneration review.

Background

2. Earlier in 2017 the Remuneration Authority made some changes to communications allowances, plan hearing payments and mileage for elected representatives. In their determinations for 2018 and 2019 the Remuneration Authority will be looking at the pay for elected representatives.

3. The three issues being considered currently by the Authority are:

3.1. Council “sizing”

3.2. Setting remuneration

3.3. Benchmarking local government pay scale

4. Feedback is sought by the Authority on these three matters by 15 December 2017.

5. Local Government New Zealand has prepared a draft submission on behalf of its constituent councils. A copy of the draft submission is attached. It is proposed that the Hawke’s Bay Regional Council considers endorsing the views expressed in the LGNZ submission, with the option of adding additional information if agreed, to the Authority.

Discussion

Council sizing

6. Currently the Remuneration Authority uses population and operational expenditure to differentiate the size of councils (and therefore the remuneration).

7. In addition to these factors the Authority is also considering the use of the following factors:

7.1. Total asset value

7.2. Land area

7.3. Socioeconomic deprivation index

7.4. Number of guest nights

8. The LGNZ draft submission supports these identified factors (which are in addition to population and operational expenditure) and proposes two additional factors:

8.1. The degree of heterogeneity within a jurisdiction

8.2. The rate of population changes, whether increasing or declining.

9. LGNZ has acknowledged that for regional councils the land area factors is likely to have greater weight than it would for territorial councils (with the possible exception of large, sparsely populated, rural territorial authorities). Regional Councils have major responsibilities for land and water regulation and land management. The complexities in decision making and governance on these matters are linked strongly to the extent of the land area.

10. It is recommended that HBRC endorses LGNZ’s views on Council sizing and that it submits support for additional weighting to be given to land areas for regional councils.

Setting Remuneration

11. Currently the Remuneration Authority sets the remuneration for mayors and chairs, the base remuneration for councillors, and the full remuneration for community board members. The extra pay given to councillors with additional positions of responsibility (e.g deputy chair of council or committee chair) is decided by the council from the pool allocated to them by the Authority. The council decisions are generally accepted by the Authority and included in the determination.

12. The Authority is proposing to change the method of remuneration as follows:

12.1. It will continue to decide the pay for mayors and regional chairs. It will treat these all as full-time positions and will relate the remuneration to the size of the council.

12.2. The Authority will then calculate a pool of money also related to the size of council, for councillor remuneration. Councillors will discuss and make recommendations to the Authority as to how this is allocated to the different positions on council, including community board members.

12.3. Councils are then expected to debate this and come to a decision. The main proviso of the Authority is that Council needs to spend all the money in the pool.

12.4. The Council advice would then be forwarded to the Authority (as currently occurs) for inclusion in the determination.

13. The Remuneration Authority would require a written description of all positions (including for a councillor without a position of responsibility). There would need to be majority agreement (the Authority thinks that 75% sounds fair) and the Authority would step in if agreement could not be reached.

14. One matter which this Council should be aware of ahead of the Representation Review is that under this proposed new approach any change in the number of councillors (either an increase or decrease) would not be reflected in the Authority determination of pool money (that would be based on Council “size”). So the remuneration pool would remain the same because it would not be related to the number of elected people.

15. The LGNZ draft submission expresses some concerns about the proposed ‘pool approach’ and identifies issues which the Authority would need to address as part of any new pool approach.

16. It is recommended that HBRC endorses LGNZ’s views on setting remuneration while noting that HBRC does not have a collective view on the remuneration of community board members.

Benchmarking local government pay scale

17. The focus of this review area is on what comparator sector the Authority should use to benchmark local government pay. The Authority considered a wide section of the labour market, including NGO Boards, commercial boards and local and central government officials. In the end they settled on members of Parliament.

18. While members of parliament are fulltime not all councillors are and the Authority is not presently convinced that all councillors should be paid as if they were doing a full time role. Conversely the Authority understands the need to have sufficient remuneration that allows a full range of people to seek a role in local government.

19. The Authority’s proposal is that the largest role in local government – the mayor of Auckland – should be capped at the equivalent of a cabinet minister’s remuneration, and that remuneration for all other roles would sit below that.

20. At the other end of the scale the Authority seeks feedback on whether or not there should be a “base” rate for mayors and chairs i.e. a minimum they all get regardless of the size of their council. The scaled amount would cut in on top of the base rate.

21. The LGNZ submission does not offer any advice on how a local government pay scale should be determined. If HBRC wishes to put forward any suggestions this could be included in a covering letter to the Authority.

Considerations of Tangata Whenua

22. Remuneration of tangata whenua representatives on Council committees is not covered by the Remuneration Authority mandate and so does not affect their remuneration or have any consequence needing consideration.

Decision Making Process

23. Council is required to make every decision in accordance with the requirements of the Local Government Act 2002 (the Act). Staff have assessed the requirements in relation to this item and have concluded:

23.1. The decision does not significantly alter the service provision or affect a strategic asset.

23.2. The use of the special consultative procedure is not prescribed by legislation.

23.3. The decision does not fall within the definition of Council’s policy on significance.

23.4. The persons affected by this decision are the elected representatives themselves.

23.5. The decision is not inconsistent with an existing policy or plan.

23.6. Given the nature and significance of the issue to be considered and decided, and also the persons likely to be affected by, or have an interest in the decisions made, Council can exercise its discretion and make a decision without consulting directly with the community or others having an interest in the decision.

Recommendations

1. That the Corporate and Strategic Committee receives and notes the “Submission on Remuneration Authority Elected Representatives' Remuneration Review” staff report.

2. The Corporate and Strategic Committee recommends that Council:

2.1. Agrees to support the submission by Local Government New Zealand in respect of the Review of Elected Members’ Remuneration.

2.2. Agrees to advise the Remuneration Authority of its support for the LGNZ submission while also noting additional views on council sizing and setting remuneration.

Authored and Approved by:

Liz Lambert

Group Manager
External Relations

Attachment/s

⇩1

Draft LGNZ submission to Remuneration Authority

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: Recommendations from the Finance, Audit and Risk Sub-committee

Reason for Report

1. The following matters were considered by the Finance, Audit and Risk Sub-committee on 4 December 2017.

Decision Making Process

2. These items were specifically considered by the sub-committee.

Recommendations

The Finance, Audit and Risk Sub-committee recommends that the Corporate and Strategic Committee:

1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy and that Council can exercise its discretion and make decisions on these issues without conferring directly with the community.

Audit NZ Management Report for HBRC Annual Report for Year Ending 30 June 2017

2. Forwards a letter to the Port of Napier requesting that they change their annual reporting date to 30 June to align with the Group and Council financial year dates.

December 2017 Update on the Sub-committee Work Programmes

3. Agrees to the scope for the Water Management internal audit as attached.

4. Receives and notes the “Controller and Auditor General Water Management Work Programme” report.

Reports Received

5. Notes that the following reports were provided to the Finance, Audit and Risk Sub-committee meeting:

5.1. Data Analytics Internal Audit Report

5.2. ACC Lease Receivables Agreement Audit

5.3. Risk Management Update

5.4. December 2017 Update on the Sub-Committee Work Programmes

Authored by: Approved by:

Leeanne Hooper

Governance Manager

Jessica Ellerm

Group Manager
Corporate Services

Attachment/s

⇩1	Water Management Internal Audit Scoping Document
⇨2	Controller and Auditor General Water Management Work Programme		Under Separate Cover

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: Compliance and Land Management Departmental Review Findings

Reason for Report

1. To provide the findings of the departmental reviews undertaken of the Compliance (Resource Use) and Land Management sections of Council.

Compliance Departmental Review

2. An increasing focus on compliance with Council’s resource consent requirements, as well as on permitted activities, has led to a review of the focus and level of compliance monitoring being undertaken and the resourcing required to meet governance and community expectations.

3. The recommendations from the review include additional resourcing, which has been factored in to the Draft Long Term Plan, and the development of a Resource Use Strategy which will require input at a governance through the identification of Council’s priorities.

4. The author of the report, Sue Powell of Tregaskis Brown, will be attending the meeting to present her findings. A copy of her report is attached.

Land Management Departmental Review - Background

5. Across New Zealand there are growing expectations for better freshwater outcomes such as improved water quality, healthier water ecosystems, recognition of Te Mana o Te Wai and reduced risks to human health. Under the National Policy Statement on Freshwater Management (NPS-FM) all regions are required to maintain or improve water quality and to address over-allocation.

6. Key features of the recommended approach out of the review are:

6.1. Establish catchment managers to connect all freshwater-related actions and relationships

6.2. Implement action plans at the scale of community, hapū, school areas

6.3. Establish catchment advisory groups involving iwi, district/city councils, environmental, primary sector, and community leaders

6.4. Provide ways to measure and report on progress including a Mauri monitoring tool and monitoring by communities

6.5. Actively involve other agencies and supporting them in extension roles

6.6. Set out how all teams within HBRC can support the catchment managers including establishment of a senior role to oversee regulatory implementation

6.7. Communication to manage public expectations and shift the focus to reporting action.

7. The report highlights the potential to integrate other functions into the recommended approach such as biodiversity, urban water issues and climate change either now or in the future.

8. Across the country, regional councils are finding that the resourcing required to give effect to the NPS-FM is more substantial than anticipated. It creates high demand on science and policy teams, but there is also growing awareness that regulation on its own does not drive behaviour change, further increasing the demand on farm system, engagement and relationship skills.

9. Alignment of resources provides an opportunity to see greater efficiency and impact on freshwater outcomes. Given the current and upcoming resourcing challenges, there is a need to look at the capacity and capability within Council, to identify gaps and to see if different approaches either internally or with others could enhance delivery. Are there different ways to work that would get more quickly to practical actions that improve water quality and other freshwater outcomes?

10. While the current focus is on freshwater, there may be opportunities to address biodiversity and climate change outcomes as well either by deliberately choosing actions which have multiple benefits or simply by aligning effort in (say) land owner engagement.

11. Christina Robb was engaged to review Council’s approach to this work with a specific focus on the Land Management team. Christina was chosen given her extensive experience in this work in Canterbury (she worked at Environment Canterbury 2008-2016) as the Programme Manager/Director – Land and Water, advising the Executive and Councillors/Commissioners on all aspects of land and water management.

12. Christina will be in attendance at the meeting to explain and expand on her recommendations and a copy of her report will be distributed 6 December, as a late attachment to the Agenda.

Decision Making Process

13. Staff have assessed the requirements of the Local Government Act 2002 in relation to this item and have concluded that, as this report is for information only, the decision making provisions do not apply.

Recommendations

That the Corporate and Strategic Committee:

1. Receives and notes the “Compliance and Land Management Departmental Review Findings” staff report.

2. Notes that the Chief Executive will be taking the recommendations and advice of the reviews into account when considering the Council’s structure and operating model going forward.

3. Notes that the additional resourcing requirements highlighted in the reports will be considered as part of the Long Term Plan development process.

Authored by:

Liz Lambert

Group Manager
External Relations

Iain Maxwell

Group Manager
Resource Management

Approved by:

James Palmer

Chief Executive

Attachment/s

⇨1

Resource Use Capability Review Report

Under Separate Cover

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: Motor Vehicle Fleet Efficiency & Policy; Responses to Woodham Efficiency; Council S17A Activities and Information Technology Review Updates

Reason for Report

1. To provide an update and findings to date from the vehicle efficiency review, the Woodham Efficiency review, Information Technology and s17a Activities reviews.

Motor Vehicle Fleet Efficiency & Policy Review

2. This section provides an overview of Council’s current Motor Vehicle practices and provide an update on possible purchasing and utilisation efficiencies.

3. HBRC currently has a vehicle fleet of 59 permanent vehicles, 6 additional vehicles will be retained past disposal date for the use of students over the summer months. The fleet has an estimated market value of near $1,856,000. A breakdown of the Council vehicle fleet makeup is:

Vehicle type	Quantity
Utilities	41 x 4WD utes 1 x 2WD for Roadsafe HB
SUVs	9 x AWD SUV’s 1 x AWD Plug in electric hybrid
Sedans/Station wagons	7 (two of which are petrol hybrids)

Current Motor Vehicle Procurement Practices

4. In 2014, Council joined an All of Government (AoG) vehicle procurement contract. The collective group purchasing power of government agencies sees on average, a 27% discount off recommended retail price, compared to the traditional method of approaching local vehicle dealers for a best price offer.

5. Through the AoG contract, Government agencies gain access to discounted vehicles from the following suppliers who are part of the collective agreement - Ford, Mazda, Holden, Hyundai, Mitsubishi, Suzuki, Toyota and Renault.

6. The AoG reduces overall administration time by avoiding duplication information collection across govt agencies. Vehicle specifications such as: safety rating, fuel efficiency, towing load, emissions etc. are collated to enable parties to easily select a vehicle that meets their requirements.

7. The contract specifies that vehicle prices must be kept confidential, so specific prices cannot be made public. However, compared to traditional tendering requests direct to local dealers, a discount of approximately $4k per 4x4 utility is achieved through the AoG contract.

8. The vehicle purchasing policy was updated in August to reflect that HBRC recognises the importance of using natural resources responsibly and efficiently. Given the negative impact transport has on our emissions profile and our desire to reduce this, vehicle purchases will be electric by default where practical and as follows.

9. Council will purchase vehicles that:

9.1 Are supplied through the All of Government (AoG) vehicle procurement contract by approved suppliers, allowing an exception for a vehicle to be purchased used/and or off the AoG list if it is deemed better value for money (e.g. a low km second hand electric vehicle).

9.2 Are appropriate for their intended use

9.3 Have a high standard of safety

9.4 Have a reasonable purchase and lifetime cost

9.5 Where reasonable, electric or plug in hybrid vehicles will be purchased over fuel types. Where electric vehicles are not practical, vehicles with lower emissions will be given preference.

10. Given the nature of work Council undertakes and the lack of 4x4 utility options on the market there has been limited opportunity to introduce electric vehicles into the fleet so far, however Council currently has one plug in hybrid electric vehicle with an additional two on order.

Vehicle Utilisation Approach

11. Generally, the average or benchmark for normal utilization in a commercially used vehicle is 20,000km per annum. The highest annual kms travelled by any vehicle in Council fleet is around 35,000km, with the lowest around 11,000km.

12. Due to increasing staff numbers, 15 vehicles identified as under-utilized (less than 20,000 km per annum) are now included in a fleet booking system to encourage departmental sharing of vehicles to better utilise the existing fleet before looking to purchase additional vehicles.

13. With anticipated growth of the organisation as indicated in the LTP, ongoing review for better utilisation continues, and any opportunity for interdepartmental sharing of vehicles will be explored in the first instance, before any vehicles are purchased for new hires.

Fuel Efficiency and Emissions

14. In August 2014 Council signed an agreement to become part of the New Zealand Defence Force fuel procurement contract which allowed access to group buying discounts through BP. Compared to regular BP pump prices, Council has saved $90,711 since signing the agreement. On average, Council achieves a saving of 25 – 30 cents per litre off petrol and 30 and 35 cents per litre off diesel. The following graph tracks Council spend.

15. This year, fuel consumption appears to be trending downwards despite staff and vehicle numbers increasing. This trend could be attributed a combination of; monitoring of driver behavior including speeding, newer more fuel efficient vehicles, and monthly tyre checks monitoring tread and pressure. Emissions for the same period year to date have decreased accordingly as evidenced below.

Fuel	Jan - Sept 16 emissions	Jan – Sept 17 emissions
Petrol	42	30
Diesel	182	179

16. As the opportunity arises for more electric vehicles to be incorporated into the fleet and as new more fuel efficient models are introduced, Council should be able to achieve further reductions to vehicle related emissions.

Additional Vehicle Efficiency Procurement Options

17. Council has undertaken an exercise to assess any potential cost savings by selling its vehicles after three years as opposed to current practice of five years.

18. Initial modelling indicated in some instances Council could actually make a small profit through selling utilities at three yearly intervals instead of five. Due to the substantial discount Council obtains through the AOG contract, it would make a slight gain on utility vehicle resale after three years. Currently Council makes a loss after sale of these vehicles at five years.

19. Sedans have also been assessed however it was determined that there was no real benefit to selling at three years versus five years.

20. An example of resale price of a standard Council double cab ute at both 3 versus 5 year internals is provided below.

Example - Double Cab Ute	Per Vehicle		Per 15 x Vehicles
	3 years	5 years	3 years	5 years
	60,000km	100,000km	60,000km	100,000km
Cost	$30,000	$30,000	$450,000	$450,000
Resale	$30,500	$23,500	$457,500	$352,500
Net Loss/(Gain) after 3 v 5 year period	($500)	$6,500	($7,500)	$97,500

21. This example highlights that Council would make a profit of $500 if it sold the utility after a three years, compared to a loss of $6,500 after a five years.

22. Vehicles do not tend to depreciate/devalue in a linear manner. After three years of ownership, the value of each vehicle diminishes at a more significant rate.

23. Market estimates from a reputable vehicle dealer have been used, however may fluctuate with trends in the market.

24. An added benefit of a three year replacement model would mean early access to the ever improving safety features and fuel efficiencies of newer vehicles.

25. Staff plan to investigate this further to confirm the 3 year replacement benefit outlined above out-weighs any additional administrative costs involved and will then reflect the relevant saving in the LTP.

HBRC Responses to the Woodham Efficiency Review

26. The purpose of this section is to provide an update on the Woodham Efficiency Review, originally presented to the Corporate & Strategic Committee 24 May 2017.

27. Responses to each recommendation, with comments and relevant actions follows.

Council s17A Activities Reviews

28. This section provides an update on the status of Council’s section 17a review and compliance with this legislation.

29. This issue arises from the requirement under Section 17a of the Local Government Act (2002) for Council to review “the cost effectiveness of current arrangements for meeting the needs of communities within its district or region for good quality local infrastructure, local public services, and the performance of regulatory functions”.

30. These reviews were introduced as part of the Government’s 2012 Better Local Government reform programme, designed to encourage and enable local authorities to improve the efficiency and effectiveness of their operations and processes.

31. Council is required to give effect to the purpose of local government as prescribed by Section 10 of the LGA. That purpose is to meet the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost effective for households and businesses. Good quality means infrastructure, services and performance that are efficient and effective and appropriate to present and anticipated future circumstances.

Proposed Approach to s17A Review Activities

32. The first formal review was due for completion by August 2017. Council has been actively reviewing various aspects of the organization’s efficiency through the various functional reviews that have taken place over the last 6 months, and staff expect to have a formal proposal which complies with legislation available for discussion at the March 2018 Corporate & Strategic Committee meeting.

33. Initial steps include proposing a materiality threshold value for the reviews to the committee meeting, as determined through Executive team discussions.

34. The proposal will also recommend a programme of work for Council to adopt at the same meeting, which will include the priorities and objectives for each review.

35. Council’s proposed approach in determining a review programme is to seek out opportunities to add practical value to the services and activities that the Council provides or undertakes for and on behalf of its community. This will include:

35.1 Understanding the nature of and rationale for services or activities currently provided or undertaken

35.2 Looking at the context (including service demand) in which these services are and will be delivered now and into the future

35.3 Identifying opportunities that might arise for improving the efficiency or effectiveness of the services or activities, including opportunities that might arise from a collaborative approach with other parties

35.4 Assessing those opportunities to see if they might add value for the Hawke’s Bay community

36. This work will also involve collaboration with local TAs, as well as other regional Councils and will be discussed at the LGNZ Finance and Corporate Services Special Interest Group meeting on 8 December 2017.

37. SOLGM guidance will also be applied where appropriate, including using activities (not groups) disclosed for reporting in LTP as a starting point for ‘services’ to be reviewed along with consideration of bundling like services together based on the interconnection between services, common rationale for service delivery, and patterns of benefit.

38. Once a programme has been agreed it is anticipated that this review will be conducted during the second half of 2018. It is intended that most reviews will be conducted internally however external consultants will be engaged where appropriate and within budgets.

Information Technology Review

39. This section provides an update on the status of the external review recently completed by Effectus of Councils ICT services.

40. Information-gathering exercises conducted with Council included an IT management and governance assessment, internal staff survey, GIS benchmarking survey, management interviews and an executive workshop, in addition to Effectus market and sector knowledge.

41. A full report of the review including proposed IT strategy roadmap and forecast capital expenditure and other recommendations will be circulated to Councillors in due course for discussion. Unfortunately timing did not permit the inclusion of a final report for this meeting

Decision Making Process

42. Staff have assessed the requirements of the Local Government Act 2002 in relation to this item and have concluded that, as this report is for information only, the decision making provisions do not apply.

Recommendation

That the Corporate and Strategic Committee receives and notes the “Motor Vehicle Fleet Efficiency & Policy; Responses to Woodham Efficiency; and Council S17A Activities Reviews” staff report.

Authored by:

Stacey Rakiraki

Facilities and Fleet Manager

Melissa des Landes

Management Accountant

Approved by:

Jessica Ellerm

Group Manager
Corporate Services

Attachment/s

⇨1

Staff Policy 021 Motor Vehicle Use and Safe Driving

Under Separate Cover

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: HBRC Procurement Policy Review and GoBus Contract

Reason for Report

1. To provide an update on the review of Council’s Procurement Policy and the bus service contract, specifically:

1.1. on progress of Council's tendering policy review

1.2. when the Go Bus tender is due for renewal

1.3. if it is possible to renegotiate the Go Bus tender to reflect any pertinent changes to Council's tendering policy.

Background

2. In response to a petition in relation to GoBus bus drivers submitted by Cr Bailey at the 20 September 2017 Corporate & Strategic meeting, staff were asked to report on the review of the council’s procurement policy and the implications of that policy on the wage rates paid by GoBus to its drivers. The petition presented to Cr Bailey sought payment of the “living wage” to all bus drivers, currently $20.20 an hour (updated annually) based on an analysis of movements in expenditure items, wages and inflation.

3. Council’s current Procurement Policy states that “HBRC will act within the law, and meet its legal obligations, when procuring assets, goods, works and services” – meaning minimum wage must be met under all contracts taken out by HBRC. The policy does not currently state that all contractors pay their staff the “living wage”.

4. The current Procurement Policy also states that for NZTA contracts specifically, “HBRC will comply with all NZTA requirements for the purpose of gaining NZTA approval for HBRC’s transport related procurement”. The GoBus contract falls under this requirement.

Review of the HBRC Tendering Policy

5. An internal audit on procurement is scheduled for early-mid 2018, to review Council’s current procurement policies, procedures and strategies (attached). It is intended for the scope to be extended to include a review of implications surrounding a requirement for Council to pay contractors the living wage.

6. Findings from the review will be reported to the 6 June 2018 Finance, Audit and Risk Sub-committee meeting, for recommendation to the13 June Corporate and Strategic Committee meeting. The policy will then be updated in line with the review findings and Committee recommendations.

The Public Transport Operation Model (PTOM)

7. The Land Transport Management Amendment Act 2013 established the Public Transport Operating Model (PTOM) in legislation, and specifies that all public transport services must be contracted by regional councils, even if commercially viable i.e. no subsidy is required. Among a range of other requirements, it specifies that contracts for larger services must be nine years ( although with a price reset after six years) in order to provide tenderers with the security of a long tenure, which should result in lower annual costs.

8. PTOM has two objectives (Ministry of Transport website)

8.1. To grow the commerciality of public transport services and create incentives for services to become fully commercial

8.2. To grow confidence that services are priced efficiently and there is access to public transport markets for competitors.

6. This emphasis on competition and the division of public transport services into units has resulted in some quite significant changes in public transport operators around the country, with large Auckland and Wellington contracts no longer held by the previously incumbent operators.

7. Radio New Zealand reported on 2 November that the Minister of Transport has ordered a review of PTOM and that he has asked for advice from officials on options for reform of the contracting model. However, we have not received official confirmation of a review.

The GoBus Contract

9. Tenders were called for the provision of the Napier-Hastings bus service in July 2015 and seven tenders received from five different companies. All tendering procedures were carried out in accordance with the requirements of PTOM and the NZ Transport Agency’s Procurement Manual, with the tender documents approved by the Agency prior to their release. The contract was awarded to GoBus Ltd in September 2015 and, as required by PTOM, is for a nine-year period. The contract commenced on 1 August 2016 and will end on 31 July 2025.

10. GoBus Ltd also has significant bus contracts in Bay of Plenty, Waikato, Auckland, Christchurch, Otago and Invercargill. The company is aware of the petition presented to HBRC, as similar petitions have been presented in other areas. GoBus states that all its drivers are paid above minimum wage and receive regular cost of living adjustments.

11. As HBRC already has a contract in place with GoBus for a further 8 years, higher wage rates could only be required through a variation to the contract. Contract variations are usually in relation to levels of service and are negotiated according to rates already specified and evaluated in the tender. The legal implications of this ‘other’ type of variation would need to be examined carefully, both in relation to PTOM and because of possible legal challenge from unsuccessful tender applicants.

12. There would also be financial implications from such a variation, both for the NZ Transport Agency (which provides 51% of the funding for the bus service) and HBRC.

13. These legal and financial implications would need to be extensively investigated if pertinent changes were made to HBRC’s procurement policy.

Other Regions

14. Bay of Plenty and Waikato Regional Councils have received similar petitions from First Union seeking to ensure that all bus drivers are paid the living wage.

15. Waikato Regional Council’s response was that this is a national and multi-agency issue and the petition should be forwarded to central government for consideration as joint funders of public transport in Waikato.

16. The Bay of Plenty Regional Council is about to re-tender its services and has not included a requirement for the living wage in its tender documents. However, drivers’ wages will have a 4% weighting in the evaluation of tenders.

17. The GoBus North Island Manager has offered to speak to the council to answer questions about staff payment and welfare.

Summary

18. A review of HBRC’s procurement policy will consider the implications of requiring the living wage for all HBRC contractors.

19. HBRC’s contract with GoBus Ltd ends on 31 July 2025. The HBRC procurement review would need to take the legal and financial implications of a variation to HBRC’s contract with GoBus Ltd into consideration.

20. The Minister of Transport has signaled a possible review of PTOM, the tendering and contracting model that regional councils are currently required to use when contracting for public transport services. Staff are in regular contact monitoring this issue locally and nationally with the GoBus National Manager.

Decision Making Process

21. Staff have assessed the requirements of the Local Government Act 2002 in relation to this item and have concluded that, as this report is for information only, the decision making provisions do not apply.

Recommendation

That the Corporate and Strategic Committee receives and notes the “HBRC Procurement Policy Review and GoBus Contract” staff report.

Authored by:

Melissa des Landes

Management Accountant

Anne Redgrave

Transport Manager

Approved by:

Jessica Ellerm

Group Manager Corporate Services

Liz Lambert

Group Manager External Relations

Attachment/s

⇨1

HBRC Procurement Policy

Under Separate Cover

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: Health and Safety Update Report for the Period 1 May through 30 November 2017

Reason for Report

1. This report provides the Committee with an update of key health and safety information for the period 1 May through 30 November 2017.

Background

2. An updated copy of the Health and Safety Reporting Dashboard is attached for the Committee’s information.

3. There are no trends of concern resulting from the information provided for this period.

4. Council has yet to hear the outcome of Worksafe’s investigation into Michael Taylor’s fatal accident. The latest correspondence indicated they hoped to get it to us by Christmas.

5. The influx of students for vacation work increases the need for health and safety vigilance. A number of measures have been improved to provide a more proactive approach including health and safety briefings, requirements to read relevant codes of practices for work they may undertake and driving assessments to determine a satisfactory level of competence driving in the vehicles council provides for their work. Vehicle use is one of the highest health and safety risks faced by Council staff.

6. Compliance with Sitewise pre-qualification for contract work with Council is at a satisfactory level with 75% being the average score achieved. This is still a work in progress to get all relevant contractors pre-qualified through Sitewise to the required level.

7. In early December the majority of field staff were provided training in the new lone worker devices Council has moved to which provide satellite coverage when cellular coverage is not available. These devices will be externally monitored to provide an assurance of an immediate response should the device be triggered.

Decision Making Process

8. Staff have assessed the requirements of the Local Government Act 2002 in relation to this item and have concluded that, as this report is for information only, the decision-making provisions do not apply.

Recommendation

That the Corporate and Strategic Committee receives and notes the “Health and Safety Update Report for the Period 1 May through 30 November 2017”.

Authored by: Approved by:

Viv Moule

Human Resources Manager

James Palmer

Chief Executive

Attachment/s

⇩1

Health and Safety Reporting Dashboard

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: Community Engagement and Communications Quarterly Update

Reason for Report

1. This report gives an update on Council’s communications activities focused on the first quarter (Q1) of 2017-18, including October-November due to the timing of this item.

Background

2. Communications during Q1 gave attention to the TANK Plan for Heretaunga water, Pest Management and HotSpot projects – notably Lake Tūtira and Ahuriri Estuary. Media issues were given priority.

3. Continuing support was provided to the Strategic Plan, Tukituki Plan, Biodiversity, Coastal Hazards and Civil Defence projects – in particular EastCoast LAB, liquefaction risk and Emergency Mobile Alerts.

4. Issues in the public spotlight during Q1 were the Water Conservation Order (32 articles in print/ online), water quality (26 – such as shellfish, drinking water and aquifers), the Ruataniwha scheme (25 - noting no RWS reporting in October/ November); to a lesser degree water quantity and hotspot projects (10 each), compliance (9), biosecurity (8) and transport (7).

Summary: July - November 2017

5. Media ran 219 articles on HBRC activities (July to November, compared to 192 in the preceding quarterly report).The increase in media reports during September was linked to the Water Conservation Order (17).

6. The main media outlets were Hawke’s Bay Today (135), Wairoa Star (31), DomPost-Stuff (11), Napier-Hastings Mails (10), BayBuzz (10), CHB Mail (6), TVNZ (3), Radio NZ (3), National Business Review (3), Newstalk ZB (3) and miscellaneous (4).

7. The majority of media reporting is typically neutral. However, a burst of negative items during September (7) and November (2) related to CHB water (4), the ex-CEO’s remuneration, Havelock North water compensation, river raking and the living wage.

8. Coverage

9. Media Positioning

10. Communications Overview

July

10 releases

44 media articles

1 video

5 e-newsletters

66 social posts

61,459 impressions

August

8 releases

41 articles

6 e-news

85 social posts

151,382 impressions

September

10 releases

61 articles

1 video

6 e-news

52 social posts

113,454 impressions

October

10 releases

23 articles

6 videos

8 e-news

63 social posts

149,157 impressions

November

4 releases

50 articles

3 videos

5 e-news

50 social posts

112,720 impressions

Looking Ahead – the next three months

11. The Communications team is developing video production expertise, noting the recent increase in video delivery.

12. The focus for the coming months is Council’s inaugural ‘Swim thru Summer’ campaign using social media and radio, alongside www.LAWA.org.nz and the pending ‘Can I swim here?’ application.

13. Staff will continue to grow public awareness of the collaborative Heretaunga Water (TANK) Plan. Early 2018 will include a focus on building momentum to the mid0March release of Long Term Plan 2018-28 consultation materials and events.

14. Staff will further promote community engagement for the Coastal Hazards project and uptake for farm environment management plans in the Tukituki catchment.

15. Communications staff continuously review emerging issues with the Executive and cuncillors.

Decision Making Process

16. Staff have assessed the requirements of the Local Government Act 2002 in relation to this item and have concluded that, as this report is for information only, the decision making provisions do not apply.

Recommendation

That the Corporate and Strategic Committee receives the “Community Engagement & Communications Quarterly Update” staff report.

Authored by: Approved by:

Drew Broadley

Community Engagement and Communications Manager

Liz Lambert

Group Manager
External Relations

Attachment/s There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: Discussion of Items Not on the Agenda

Reason for Report

1. This document has been prepared to assist Committee Members to note the Items of Business Not on the Agenda to be discussed as determined earlier in Agenda Item 5.

1.1. Urgent items of Business (supported by tabled CE or Chairman’s report)

Item Name

Reason not on Agenda

Reason discussion cannot be delayed

1.2. Minor items (for discussion only)

Item	Topic	Councillor / Staff
1.
2.
3.

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Monday 11 December 2017

Subject: CAPITAL STRUCTURE STAGE 1 REVIEW FINDINGS

That the Committee excludes the public from this section of the meeting, being Agenda Item 15 Capital Structure Stage 1 Review Report with the general subject of the item to be considered while the public is excluded; the reasons for passing the resolution and the specific grounds under Section 48 (1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution being:

GENERAL SUBJECT OF THE ITEM TO BE CONSIDERED

REASON FOR PASSING THIS RESOLUTION

GROUNDS UNDER SECTION 48(1) FOR THE PASSING OF THE RESOLUTION

Capital Structure Stage 1 Review Report

7(2)(b)(ii) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of that information is necessary to protect information which otherwise would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.

7(2)(i) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of the information is necessary to enable the local authority holding the information to carry out, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

7(2)(j) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage.

The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.