Agenda of Corporate and Strategic Committee

Meeting of the Corporate and Strategic Committee

Date: Wednesday 6 March 2019

Time: 9.00am

Venue:

Council Chamber

Hawke's Bay Regional Council

159 Dalton Street

NAPIER

Agenda

Item Subject Page

1. Welcome/Notices/Apologies

2. Conflict of Interest Declarations

3. Confirmation of Minutes of the Corporate and Strategic Committee held on 12 December 2018

4. Follow-ups from Previous Corporate and Strategic Committee meetings 3

5. Call for Minor Items of Business Not on the Agenda 7

Decision Items

6. Report and Recommendations from the Finance Audit and Risk Sub-committee 9

7. 2019 Local Governance Statement Update 13

8. Financial Delegations 33

Information or Performance Monitoring

9. HB Tourism Update 37

10. Matters Arising from Audit NZ 2018-28 Long Term Plan Audits 49

11. Organisational performance update for the period 1 July 2018 to 31 January 2019 65

12. Health and Safety Work Programme 103

13. Discussion of Minor Items Not on the Agenda 121

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 06 March 2019

Subject: Report and 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 meeting on 12 February 2019 and are now presented for the Committee’s consideration.

Agenda Items

Six Monthly Report on Risk Assessment and Management

2. This item provided the sub-committee with the key changes to internal processes and to the register itself, with discussions at the meeting covering:

2.1. attracting and retaining appropriately qualified staff

2.2. the level of detail provided in the reports to the sub-committee and whether the reporting provides sufficient awareness of the underlying detail contained within the risk management software

2.3. Wider societal risks and whether those risks that are currently considered at a national level should be noted or included in Council’s risk register and framework in some way

2.4. whether Civil Defence risks are adequately addressed and sufficiently detailed in the Council’s risk register

2.5. considerations to be taken into account through the Risk Assessment and Management review scheduled for the 2019-20 financial year.

3. The sub-committee resolved:

3.1. confirms the Sub-committee’s confidence that Council management has a current and comprehensive risk management framework and associated procedures for effective identification and management of the Council’s significant risks

3.2. recommends that the Corporate and Strategic Committee receives and notes the resolutions of the sub-committee, confirming the robustness of Council’s risk management systems, processes and practices

3.3. notes that a review of the Risk Assessment and Management framework will be undertaken in the 2019-20 financial year.

Proposed Scope for Follow-up Water Management Internal Audit

4. This item proposed the scope for an internal audit to review Council’s progress of implementing and maintaining agreed action points that were stated as a response to the original audit report. The scope proposed by Crowe Horwath was accepted without change, and the sub-committee resolved:

4.1. Receives and notes the “Proposed Scope for the Follow-up Water Management Internal Audit” staff report.

4.2. Confirms the proposed Scope for the Follow-up Water Management Internal Audit.

Data Analytics Internal Audit Report

5. This item provided the Crowe Horwath report on the Council’s financial data analytics internal audit, essentially following up on the previous internal audit. This second audit demonstrated progress has been made to improve internal controls and process through a significant reduction of the number of duplicate payments made and a decrease in the number of duplicate vendors contained in Council’s accounts payable system. The Sub-committee resolved:

5.1. receives and notes the “Data Analytics Internal Audit Report”

5.2. confirms its confidence that appropriate action has been taken by management in response to the Data Analytics Internal Audit recommendations

5.3. recommends that the Corporate and Strategic Committee receives and notes the resolutions of the sub-committee, confirming that appropriate action has been taken by management in response to the Data Analytics Internal Audit recommendations.

Financial Delegations

6. Separate paper brought to the Corporate and Strategic Committee.

2017-18 Audit NZ Management Report

7. This item provided the Audit NZ “Report to the Council on the Audit of Hawke’s Bay Regional Council for the year ended 30 June 2018” to the sub-committee for review and discussion, with discussions on the day covering:

7.1. Qualified Audit issued due to insufficient evidence provided by HBRIC to determine the tax effects of losses on the sale of Ruataniwha assets

7.2. HBRIC tax write-off has received a binding ruling from IRD subsequent to Audit having been completed

7.3. Napier Port valuations and tax/financial treatment of sea defences

7.4. Inconsistencies identified in relation to the way staff apply contract management policies and processes

7.5. Flow of information required for the Audit process from Napier Port (via special purposes financial statements) and HBRIC Ltd to HBRC to proactively deal with any issues that may be influenced by the IPO transaction process and October elections.

8. The resolutions of the sub-committee were:

8.1. That the Finance, Audit and Risk Sub-committee receives and notes the “2017-18 Audit NZ Management Report”.

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

8.2.1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, and that the Committee can exercise its discretion and make decisions on this issue without conferring directly with the community or persons likely to be affected by or have an interest in the decision.

8.2.2. Confirms the Finance, Audit and Risk Sub-committee’s satisfaction that the “2017-18 Audit NZ Management Report” is sufficient and that there are no outstanding issues of concern.

Treasury Report

9. This report was essentially an update on the processes associated with transferring funds to the Investment managers, with the funds to be fully allocated by 22 February, and Council’s accession to the Local Government Funding Agency (LGFA) as an unrated guaranteeing Local Authority, which should be complete by the end of March.

Resource Management Information System (IRIS) Implementation Update

10. This update on progress with the implementation of IRIS advised:

10.1. Phase 1 of the project is on schedule and will finish on 31 March 2019

10.2. the Incidents and Enforcements modules ‘went live’ on 11 February 2019

10.3. the Water Information Services module has been deferred to Phase 2

10.4. learnings from a lessons learnt workshop in mid-February will be used in the planning and implementation of Phase 2

10.5. Phase 2 of the project will be initiated shortly, with scoping, planning and budgeting under way to deliver modules for Biosecurity, Integrated Catchment Management and Water Information Services.

February 2019 Sub-Committee Work Programme Update

11. This standing item provides the sub-committee with an update on the status of the work programme and schedule of internal audits. Of note at this meeting, was advice that staff are currently undertaking a review of supplier contracts and a survey of suppliers to gather data for undertaking an exercise to quantify the financial impact of enforcing a Council procurement policy which requires suppliers to pay the Living Wage.

Decision Making Process

12. These matters have all been specifically considered at the Committee level except where specifically noted.

Recommendations

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

1. Receives and notes the “Report and Recommendations from the 12 February 2019 Finance, Audit and Risk Sub-committee Meeting”

2. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, and that the Committee can exercise its discretion and make decisions on this issue without conferring directly with the community or persons likely to be affected by or have an interest in the decision.

Six Monthly Report on Risk Assessment and Management

3. Receives and notes the resolutions of the sub-committee, confirming the robustness of Council’s risk management systems, processes and practices

4. Notes that a review of the Risk Assessment and Management framework will be undertaken in the 2019-20 financial year.

Data Analytics Internal Audit Report

5. Receives and notes the resolutions of the sub-committee, confirming that appropriate action has been taken by management in response to the Data Analytics Internal Audit recommendations.

Financial Delegations

6. Reviews and considers the proposed Financial Delegations and provides feedback for recommendations to Council for decision.

2017-18 Audit NZ Management Report

7. Confirms the Finance, Audit and Risk Sub-committee’s satisfaction that the “2017-18 Audit NZ Management Report” is sufficient and that there are no outstanding issues of concern.

Reports Received

8. Notes that the following reports were provided to the Finance Audit and Risk Sub-committee.

8.1. Proposed Scope for Follow-up Water Management Internal Audit (resolved: Confirms the proposed Scope for the Follow-up Water Management Internal Audit)

8.2. Treasury Report

8.3. Resource Management Information System (IRIS) Implementation Update

8.4. February 2019 Sub-Committee Work Programme Update.

Authored by:

Leeanne Hooper

Principal Advisor Governance

Approved by:

Jessica Ellerm

Group Manager Corporate Services

James Palmer

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 06 March 2019

Subject: 2019 Local Governance Statement Update

Reason for Report

1. This item proposes an updated Local Governance Statement for consideration and recommendation to Council for adoption and publication to the HBRC website.

Background

2. Within 6 months after each triennial general election, the Local Government Act (section 40) requires that each Council prepares and makes publicly available a “Local Governance Statement” that includes (but is not limited to) information on the functions, responsibilities, and activities of the local authority, any legislation that confers powers on the local authority, representation arrangements, including the option of establishing Māori wards or constituencies, and the opportunity to change them, members’ roles and conduct (with specific reference to the applicable statutory requirements and code of conduct) and key approved planning and policy documents and the process for their development and review.

Options Assessment

3. Several changes over the past few months suggest to staff that it is appropriate to update the statement now, to reflect:

3.1. Establishment of the Hawke’s Bay Drinking Water Governance Joint Committee in October 2017

3.2. Adoption of new 2018 Navigation Safety Bylaw (replacing 2012 Bylaw)

3.3. Confirmation of the electoral system (First Past the Post) to be used for the 2019 elections

3.4. LGC determination issued December 2018 that changes the constituency boundaries of the Hastings and Ngaruroro constituencies.

4. Council could choose to leave the update until after the election, when the LGA requires preparation of a new Local Governance Statement, however staff recommend that an update is published prior to the upcoming elections so that candidates and voters have access to the most up to date information about Council that is available.

Strategic Fit

5. In addition to governance and organisational structure changes, Council adopted a new “2017 Strategic Plan” and it is timely for this to be incorporated in an updated Local Governance Statement.

Suggested Changes

6. The changes suggested (as attached) are to:

6.1. Include the updated committee structure with the HB Drinking Water Governance Joint Committee and updated membership as appropriate

6.2. Include the updated organisational structure

6.3. Update date references for Navigation Safety Bylaw, Regional Pest Management Plan, transport plans, LTP, annual plans, etc as appropriate

6.4. Include updated vision, goals, etc from 2017-21 Strategic Plan

6.5. Include updated population statistics and constituencies map from December 2018 Local Government Commission determination of HBRC representation arrangements

6.6. Include updated Significance and Engagement Policy as per 2018-28 LTP.

Decision Making Process

7. 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:

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

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

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

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

Recommendations

1. That the Corporate and Strategic Committee receives and notes the “2019 Local Governance Statement Update” staff report.

2. The Corporate and Strategic Committee recommends that Hawke’s Bay Regional Council:

2.1. 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 this decision without conferring directly with the community.

2.2. Accepts the “2019 Local Governance Statement” incorporating amendments as agreed by the Corporate and Strategic Committee on 6 March 2019, for publication to the Hawke’s Bay Regional Council website.

Authored by:

Leeanne Hooper

Principal Advisor Governance

Approved by:

Joanne Lawrence

Group Manager Office of the Chief Executive and Chair

Attachment/s

⇩1

Proposed Updated 2019 Local Governance Statement

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 06 March 2019

Subject: Financial Delegations

Reason for Report

1. To provide the Corporate and Strategic Committee with the opportunity to discuss the current financial delegations for the Chief Executive (CE) and Group Managers.

2. Any changes to financial delegations need to be approved by Council, so this item enables debate thought the Corporate and Strategic Committee and then recommendations to Council.

Background

3. Council last changed the financial delegations for the CE and Group Managers in 2009, and the levels decided then are still current as below.

4. Since 2009 Council’s annual expenditure has increased from $32 million to $45 million but the delegation limits have remained the same. Staff believe that an update of the financial delegations is well overdue and should be updated to allow for efficient operation, especially to implement the ambitious workload of the 2018-28 long term plan.

5. Staff have investigated the delegation limits of other regional councils whose delegations were online, with the results shown below.

Council	Role	Delegation
Greater Wellington	CE	Authority to implement the Annual Plan
Greater Wellington	Group Managers	$200,000
Environment Canterbury	CE & Group Manager (Jointly)	Authority to implement the Annual Plan
	CE	$250,000
	Group Manager	$250,000
Bay of Plenty	CE	$2,000,000
Bay of Plenty	Group Manager	Delegated by CE

Proposal

6. Staff propose that the financial delegation levels for the CE and Group Managers be increased to levels that reflect the organisational growth over the last 10 years, align more closely to other regional councils and allow for the organisation to operate efficiently.

7. The following recommendations are based on simplifying the current system and allowing for practical governance.

Financial Delegations – Where provision is made in the LTP / Annual Plan
CE	Authority to implement the LTP/Annual Plan as approved by Council
Group Manager - Office of the Chair and Chief Executive	Up to $200,000 for any one commitment
Other Group Managers	Up to $150,000 for any one commitment
Emergency Management – Group and Local Controllers	Up to $100,000 for any one commitment
Staff	Delegations provided by their Group Manager up to a level of $100,000 for any one commitment

Financial Delegations – Where no provision is made in the LTP / Annual Plan
Operating Expenditure
Council	In excess of $50,000 for any one commitment from contingency provision
CE	Up to $50,000 for any one commitment from contingency provision

Capital Expenditure
Council	In excess of the limits below
CE	Up to $50,000 per asset if funded via asset replacement reserve Up to $20,000 if funded elsewhere
Group Managers	Up to $20,000 per asset if funded via asset replacement reserve Up to $5,000 if funded elsewhere

8. The Tenders Committee is only used for competitive procurement processes over $400,000.

Decision Making Process

9. Council and its committees are 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:

9.1. The decision does not significantly alter the service provision or affect a strategic asset, and is not inconsistent with an existing policy or plan.

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

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

9.4. The decision of the sub-committee is in accordance with the Terms of Reference and decision making delegations adopted by Hawke’s Bay Regional Council 9 November 2016, specifically:

9.4.1. The purpose of the Audit and Risk Sub-committee is to report to the Corporate and Strategic Committee to fulfil its responsibilities for the provision of appropriate controls to safeguard the Council’s financial and non-financial assets, the integrity of internal and external reporting and accountability arrangements.

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

9.6. 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

That :

1. That the Corporate and Strategic Committee receives and notes the “Financial Delegations” staff report.

2. That the Corporate and Strategic Committee provides feedback on the “Financial Delegations” levels proposed.

3. The Corporate and Strategic Committee recommends that Council:

3.1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, and that the Committee can exercise its discretion and make decisions on this issue without conferring directly with the community or persons likely to be affected by or have an interest in the decision.

3.2. Reviews and considers the proposed Financial Delegations and provides feedback for recommendations to Council for decision.

Authored by:

Manton Collings

Chief Financial Officer

Approved by:

Jessica Ellerm

Group Manager Corporate Services

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 06 March 2019

Subject: HB Tourism Update

Reason for Report

1. This information paper provides the Corporate and Strategic Committee with:

1.1. An update on the joint funding review of Hawke’s Bay Tourism (HBT).

1.2. An update on some national industry developments (provided as Appendix 1).

1.3. Hawke’s Bay Tourism update report for March 2019 is attached hereto.

Executive Summary

2. The regional review of HBT’s funding model is taking place in the wider context of a national debate about tourism funding. This debate is investigating at the national level some funding solutions, including a visitor levy and/or bed tax, that HBRC was investigating at a regional level.

3. On 25 February 2019 the Regional Leader’s Forum endorsed the development of a targeted Regional Visitor Strategy to develop a funding framework that addresses how a new national funding model would be sensibly allocated in Hawke’s Bay between organisations charged with marketing, infrastructure and event attraction.

4. Notwithstanding these initiatives, staff will continue to progress analysis of changes to HBT’s targeted rate formula to ensure that those who benefit commercially from tourism contribute more to the promotion and marketing of the region as a tourism destination in the next LTP in the event that these issues are not resolved through the review.

Background

5. Following consultation on the 2018 - 2028 Long Term Plan (LTP) Council decided to support HBT at a rate of $1.52 million (M) per annum, for three years, with subsequent funding levels to be reviewed through the 2021 - 2031 LTP process. HBRC also agreed to adjust the economic development rating split (where funding for HBT comes from) to become more weighted to the commercial sector, as consulted on.

6. Council also requested that:

6.1. Hawke’s Bay Tourism examine levels of accommodation in private homes achieved through hosting websites to recommend to HBRC possible differentiated rating levels for accommodation providers based on occupancy rates.

6.2. HBRC staff work with Hawke’s Bay Tourism to investigate the possibility of introducing a bed tax via enabling legislation to support the activities of HB Tourism.

7. Council staff and Hawke’s Bay Tourism (HBT) are working together on this funding review. The objectives being:

7.1. To develop a long-term sustainable funding model for Hawke’s Bay Tourism that ensures those who benefit commercially from tourism contribute to the promotion and marketing of the region.

7.2. To lessen the burden on the Hawke’s Bay ratepayer.

8. A joint HBRC and HBT item was provided to the Corporate and Strategic Committee on 12 December 2018. This identified:

8.1. The issue of tourism funding, for both infrastructure and tourism promotion, is a national issue and one for which there are multiple national and regional initiatives under active consideration and review.

8.2. While the current funding model can be improved to ensure better linkages between HBT funding and the beneficiaries and/or users of tourism activities, the complexities, and transaction costs of more targeted funding models, particularly at a regional level, should not be underestimated and perhaps point to the need to retain a degree of core community funding via the economic development rate.

8.3. There is no one-size fits all approach. A review of international case studies of peer-to-peer accommodation and how some councils in New Zealand treat peer-to-peer accommodation by HBT and council staff has confirmed the complexity of the issues.

8.4. The introduction of a local bed tax/visitor levy would require legislation meaning change could be slow. Discussions with the region’s Mayors and Chair indicated strong support for an all-of region approach to the development of a sustainable funding model and strategy that encompasses not only visitor attraction but also tourism infrastructure and event management.

9. The December report outlined HBT’s objective is to raise $2M per annum to fund the promotion of Hawke’s Bay and ensure a long-term sustainable approach to marketing of the region. This is in-line with HBT’s current revenue from all sources.

Funding Review Developments

10. Regional Visitor Strategy: In anticipation of the introduction of a visitor tax/bed levy either at a national or local level, HBT is recommending the development of a targeted Regional Visitor Strategy to inform the development of a sustainable multi-agency funding model and strategy that encompasses not only visitor attraction but also tourism infrastructure and event management. The Hawke’s Bay Local Government Leaders’ Forum formally endorsed the development of the strategy at its meeting on 25 February 2019 and agreed that Councils and HBT would contribute financially to the cost of engaging a consultant for the development of the strategy.

11. Note that the scope of this initiative falls short of a fully-fledged Regional Tourism Strategy. While HBT envisages the strategy will be developed in conjunction with iwi, all Councils and the wider tourism industry the primary engagement will rest with the principle organisations involved in regional visitor attraction, the provision of tourism infrastructure and regional event management.

12. Tourism Industry Aotearoa (TIA) - Regional Funding Project: Of note, is the selection of HBT’s General Manager Annie Dundas to join a national group for a project run by TIA to identify preferred regional funding models to support long-term local government funding and investment. The group is meeting in mid-March for five days with the work to be considered be the Productivity Commission ahead of releasing its draft report of its inquiry into Local Government Funding and Financing.

13. Local Government New Zealand (LGNZ): HBT is also participating in a visitor levy workshop LGNZ is holding later this month. HBT has advised LGNZ intends to undertake economic work to understand the costs and benefits of a visitor tax/levy up and down the delivery chain. HBT is a trustee of Regional Tourism New Zealand and will be part of the working group providing input and feedback on this work.

Next Steps

14. Hawkes’ Bay Tourism to develop Terms of Reference and Request for Proposal for the development of a Regional Visitor Strategy, and get a costing for this work.

15. HBT and HBRC to identify, if necessary, further potential funding opportunities for the development of the strategy.

16. Hawkes Bay Tourism to provide feedback on TIA’s regional funding model work and LGNZ’s visitor levy workshop.

17. HBRC staff to continue to progress analysis of changes to HBT’s targeted rate formula to ensure that those who benefit commercially from tourism contribute more to the promotion and marketing of the region as a tourism destination in the next LTP in the event that issues are not resolved through the review.

18. Continue to closely track industry developments and report back to the Corporate and Strategic Committee when new information comes to light.

Decision Making Process

19. 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 Meeting receives the “HB Tourism Update” report.

Authored by:

Mandy Sharpe

Project Manager

Approved by:

Tom Skerman

Group Manager Strategic Planning

Attachment/s

⇩1	HBT - Appendix 1
⇩2	Hawkes Bay Tourism Report - March 2019

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 06 March 2019

Subject: Matters Arising from Audit NZ 2018-28 Long Term Plan Audits

Reason for Report

1. This item provides the opportunity for the Committee to consider and discuss the Auditor General’s report on Matter arising from our audits of the 2018-28 long-term plans.

Background

2. The Office of the Auditor General (OAG) has released a 91-page report on common themes from the 2018 long term plans. The OAG publish such a report after each LTP of which there have been five audited LTPs completed to date. The OAG is required to present this report to the House of Representatives under the Public Audit Act 2001.

Headline points

3. Three key points noted in the report include:

3.1. Rising capital expenditure;

3.2. Increased debt to fund it based on the principle of intergenerational equity; and

3.3. Uncertainty and cost of addressing the effects of climate change.

4. The 2018-28 LTPs show significant forecast capital expenditure compared with previous LTPs. This was in response to unprecedented levels of growth (particularly 11 “high-growth” councils, none of which are in Hawke’s Bay), increased levels of service to meet growing community expectations, and historical underinvestment.

5. Like the national trend, HBRC’s long-term plan included significant new capital expenditure for projects with intergenerational benefits, such as the erosion control scheme, funded through debt with total new borrowing of $71 million over the ten years. HBRC forecasts a debt balance of $38 million by the end of the plan after repayments.

6. Unlike some “high-growth” councils, even at the height of its borrowing, HBRC will remain conservatively under the debt limit it has set itself which is net external debt not exceeding 150% of total revenue. Regional Council staff highlighted throughout the 2018-28 Long term plan development and consultation that its balance sheet will very likely be called upon heavily in future long term plans as the region begins to future proof its infrastructure in response to climate change.

7. For the 2021-31 LTP, the OAG consider that there is a need for a comprehensive discussion about resilience and climate change issues with the community, and that it makes little sense for all councils to individually think about how to improve reporting on these particular issues.

8. We expect climate change to feature strongly in the next iteration of HBRC’s Strategic Plan and to form the basis of early engagement with the community and a call to action leading up to the next LTP.

Specific mention of HBRC

9. HBRC is specifically mentioned twice in the report. On p12 it is noted that HBRC disclosed 23 specific outcomes measures. This is referred to as a good example of how to demonstrate achievement of, or progress towards, the outcomes that council seek.

10. On page 44, it is noted that HBRC referred in its Infrastructure Strategy to the work it is doing to implement the Clifton to Tangoio Coastal Hazards Strategy 2120. This is used as a good example of a council disclosing risk and how it plans to address it.

Non-standard audit reports

11. Only once council received a modified audit opinion, being Westland District Council because the auditors believed the council did not have reliable information about the condition of its three water assets.

12. Nine councils received unmodified opinions with “emphasis of matter” paragraphs, including Central Hawke’s Bay (CHBDC) and Wairoa District Councils.

13. The auditors drew attention to disclosures in the Central Hawke’s Bay District Councils LTP about the resource consent breach for the Waipukurau and Waipawa wastewater treatment plants. It noted that more investigative work is required to find a viable solution before remedial work can be carried out that will meet resource consent requirements and that the cost of this work is uncertain and could be significant. These costs will be in addition to those included in the financial forecasts in the plan. As a result, the Council expects to carry out formal consultation with the community once viable options have been identified and funding options determined.

14. Wairoa District Council’s audit report drew attention to its failure to adopt the plan before 1 July 2018, which is a breach of section 93 of the Local Government Act.

Areas for improvement for HBRC

15. Staff completed a project review or lessons learnt exercise shortly after the LTP was adopted. This covered what went well, what didn’t and areas for improvement. The lessons learnt session was split by deliverables including:

15.1. Project management

15.2. Reviews of existing project/workstreams, business cases for new projects and budgeting

15.3. Council workshops and meetings

15.4. Consultation document

15.5. Financial Strategy and Funding Policies

15.6. Infrastructure Strategy

15.7. Performance framework (Groups of Activities, levels of service and measures)

15.8. Stakeholder management and consultation, submissions and hearings

15.9. Audit process

15.10. Final document

16. The findings from this OAG report will be combined with the lessons learnt exercise to improve the approach for the 2021 LTP. In particular, staff have noted the increasing use of spatial planning highlighted in the OAG report as a means to better communicate information to the public (e.g. in Infrastructure Strategies) and the challenge set by the Auditor-General to prepare a financial strategy in up to five pages (our current Financial Strategy is 13 pages).

Decision Making Process

17. 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 “Matters Arising from Audit NZ 2018-28 Long Term Plan Audits” staff report and the Auditor General’s report titled “Matters arising from our audits of the 2018-28 long-term plans”.

Authored by:

Manton Collings

Chief Financial Officer

Approved by:

Jessica Ellerm

Group Manager Corporate Services

Attachment/s

⇨1	Auditor General Matters arising from 2018-28 LTP audits Report		Under Separate Cover
⇩2	HBRC Project Review and Closure template

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 06 March 2019

Subject: Organisational performance update for the period 1 July 2018 to 31 January 2019

Reason for Report

1. This report provides an update on operational activities and performance (financial and non-financial) for the first seven months of the 2018-19 financial year to 31 January 2019.

Decision Making Process

2. 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 of the “Operational Update for Seven Months Ending 31 January 2019” and provides feedback to Council staff.

Authored by:

Kelly Burkett

Business Analyst

Manton Collings

Chief Financial Officer

Peter Wallwork

Principal Advisor - Organisational Performance

Approved by:

James Palmer

Chief Executive

Jessica Ellerm

Group Manager Corporate Services

Attachment/s

⇩1

Organisational Performance Report 1 July 2018 - 31 Jan 2019

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 06 March 2019

Subject: Health and Safety Work Programme

Reason for Report

1. This item updates the Committee on progress with activities on the Health & Safety (H&S) work programme in response to the 2018 internal audit of Council’s H&S processes.

Background

2. The Finance, Audit and Risk Sub-committee (FARS) were presented with a report on 21 November 2018 which was completed by Crowe Horwath resulting from their audit of health and safety practices and processes in Council.

3. The audit did not include any ‘field’ monitoring.

4. The audit noted, “It is important to note that our findings are written on an exception basis, there were many examples of good practice within Council” and further, “Throughout our review, it is clear that staff were engaged in health and safety and truly understood its importance”.

5. This report focuses on progress against the audit recommendations. Health and Safety metrics are recorded separately in the overall Council performance report.

6. The following documents have been prepared in draft form:

6.1. An Implementation Plan has been prepared to address the high risk issues and recommendations identified in the Crowe Horwath audit report (Attached).

6.2. A draft Health and Safety Charter for councilors has been created to meet one of the recommendations from the audit for councilors to consider and ‘sign off’ (Attached).

6.3. A draft Strategic Plan has been developed which is linked to the government’s Health and Safety at Work Strategy 2018-2028 and draws on strategic health and safety planning guidelines in the Business Leaders’ Health and Safety Forum Strategic Plan. It provides some high level targets and will be focused, in the first 12 to 18 months, on the objectives set in the Implementation Plan (Attached).

7. Work has commenced on reviewing risks across the organisation with a view to identifying Council wide risks, Group risks and section risks and associated controls at each level. This ‘cascading’ approach should encourage strong discussion at each level and ensure improved focus on relevant risks in the workplace.

8. The classification of risks required in Hasmate, (Council’s health and safety software tool), to ensure they are classified in terms of significance, will commence shortly.

9. In relation to the recommendation that Executive members should undertake ‘regular’ monitoring visits to work sites with higher level risks, it is proposed to have the executive assistants schedule appropriate times for these visits to occur when the work visits are relevant and appropriate e.g. high risk site or operation. They will be scheduled when the group manager is available and staff from a relevant section are visiting a relevant site. This will need some flexibility to arrange.

10. Another part of this recommendation was to have councilors visit various work sites to ensure they have an improved understanding of the risks staff face and their role in governance responsibilities under health and safety requirements. In the past, councilors would undertake a day or two ‘tour’ of various activities and workplaces which would go a significant way to meeting the recommendation for health and safety awareness reasons. Councilors’ feedback on how best to implement the requirements of this recommendation will help determine a course of action.

Decision Making Process

11. 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 Work Programme” staff report.

Authored by:

Viv Moule

Human Resources Manager

Joanne Lawrence

Group Manager Office of the Chief Executive and Chair

Approved by:

James Palmer

Chief Executive

Attachment/s