Agenda of Activities Performance Audit Committee

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Notice is hereby given that a Meeting of the Activities Performance Audit Committee will be held on:

Date:

Time:

Meeting Room:

Venue:

Wednesday, 3 June 2015

10.30am

Council Chambers
15 Forth Street
Invercargill

Activities Performance Audit Committee Agenda

OPEN

MEMBERSHIP

Chairperson	Councillor Lyall Bailey
	Mayor Gary Tong
Councillors	Councillor Stuart Baird
	Councillor Brian Dillon
	Councillor Rodney Dobson
	Councillor John Douglas
	Councillor Paul Duffy
	Councillor Bruce Ford
	Councillor George Harpur
	Councillor Julie Keast
	Councillor Ebel Kremer
	Councillor Gavin Macpherson
	Councillor Neil Paterson

IN ATTENDANCE

Chief Executive	Steve Ruru
Committee Advisor	Fiona Dunlop

Contact Telephone: 0800 732 732

Postal Address: PO Box 903, Invercargill 9840

Email: emailsdc@southlanddc.govt.nz

Website: www.southlanddc.govt.nz

Full agendas are available on Council’s Website

www.southlanddc.govt.nz

Activities Performance Audit Committee

03 June 2015

Background

This report outlines the financial results to 31 March 2015.

Percentage of year gone: 75%.

OVERVIEW

Management Accountant March Finance Overview

As in prior years, all budget managers have been instructed to have a strong focus on their budget and expenditure items.

The financial commentary centres on the summary sheet which draws the totals from each of the key sections together. Although you are able to obtain more detailed key variance explanations from senior managers in these sections, these will be summarised below, concentrating on the YTD results.

Income

Overall for the YTD, income is 1% ($499K) under budget

Key variances are as follows:

The Council and Councillors’ activity is 1% ($20K) over budget for the year-to-date. This is the result of on charging other departments for catering ($13K) and the recovery of costs relating to the demolition of a dangerous building ($7K).

Other activities’ income is 11% ($162K) over budget for the year-to-date.
This is predominantly due to the timing of income received from interest on investments.

Within the Chief Executive section, income received is $317K (11%) under budget due to:

• Chief Executive - Income is $27K (6%) over budget due to proceeds from an unbudgeted vehicle sale and rates penalties.

• Stewart Island Visitors Levy - $16K (13%) under budget. With the cruise ship period completed, income is expected to be well under budget at year end.

• Around the Mountains Cycle Trail - $384K (26%) under budget due to substantial invoicing to the Ministry being completed last financial year.

Within the Environmental and Community Group, year-to-date income is $120K (2%) over budget; this is principally due to increased revenue in Dog and Animal Control from increased numbers of dog registrations $18K and infringement notices $57K.

Within the Financial Services Group, income is $295K (18%) under budget. As this activity is internally funded, this is a result of reduced expenditure.

Within the Information Management Group, year-to-date income is $100K (5%) over budget, predominantly due to internal photocopying charges $34K (forecast to be $17K over at year end) and internal computer hire $29K (forecast to be $37K over at year end).

Within the Policy and Community Group, year-to-date income is $46K (4%) under budget. As this activity is internally funded this is a result of reduced expenditure primarily on staff costs.

Within the Roading and Transport section, income is 2% ($335K) under budget; this is expected to align slightly before year end with a projection of $221K under budget by then.

Overall Services and Assets income (excluding roading) is tracking $91K (1%) above
year-to-date budget. This is due to:

• Overall Forestry income received is $108K (6%) over budget. This is expected to be the position at year end.

• District Water is $19K (1%) over budget due to unbudgeted water tanker charges ($3K), water connection fees ($2K), increased water meter income ($6K) along with rates adjustments ($5K)

• District Sewerage is $16K (1%) over budget due to unbudgeted sewerage connection fees ($5K) along with rates adjustments ($11K)

• Waste Management is $16K (1%) over budget due to a difference between the phasing of the budget for the Waste Minimisation Levy and when the income has been received. Income is expected to realign with the budget at the end of the year.

• District Reserves is $14K under budget as some reserve transfers for Curio Bay have yet to be actioned.

• Engineering Consultants is $57K (9%) under budget. As income is fully recovered and driven by expenditure levels the reduced expenditure impacts directly on income.

Expenditure

Overall for the year-to-date, expenditure is 5% ($1.94M) under budget.

The key variances are as follows:

The Council and Councillors’ activity is 2% ($54K) under budget primarily due to Grant Payments yet to be requested and lower Councillor salary costs due principally to the short-term vacancy in the Mararoa-Waimea Ward.

Other Activities expenditure is 45% ($528K) under budget as the calculation of interest on reserves is calculated as a year-end entry.

The Chief Executive activity is on budget. The funding rounds for Stewart Island Visitor Levy to occur in May, as this expenditure was not included in the budget any allocation will result in the group being over budget for the year (although there will be income available for allocation).

The Environment and Community Group is 5% ($269K) under budget. This is predominantly due to expenditure on the District Plan being lower than anticipated at this stage of the year, with some costs being incurred during April in relation to mediation. It is likely to be $400K under budget at the end of the year.

Within Financial Services, expenditure is $324K (20%) under budget, primarily due to the timing of audit services $106K and staff vacancies of $115K.

Within the Information Management Group, expenditure is $37K (2%) over budget. This is the result of $62K unbudgeted costs in relation to the Information Management Strategy Review which is offset by reduced phone calls and rentals ($27K).

Within the Policy and Community Group, expenditure is $76K (6%) under budget due to no expenditure to date for Community Outcomes ($30K) and lower than expected staff costs due to maternity leave.

Roading expenditure is currently 9% ($771K) over budget. This is due to Network and Maintenance costs which are over budget. These are to be monitored closely throughout the year but please note that it is forecast that the Repairs, Maintenance and Capital Expenditure will be over budget at year end. This is primarily driven by underspends in previous years and Council’s key objective of maximising New Zealand Transport Agency approved funding. Approval has been received by NZTA to shift funding from renewals to maintenance.

The Services and Assets Group is 11% ($1.49M) under budget. Key variances are as follows:

• District Water is $466K (20%) under budget as there has been minimal capital expenditure year-to-date ($270K actual v $785K budget).

• District Sewerage is $931K (26%) under budget. Year-to-date $2.7M actual versus $3.6M budget has been completed.

• Water Services is $124K (12%) under budget predominately due to less services of project consultant costs being required than budgeted.

Capital Expenditure

Overall for the year-to-date, capital expenditure is 6% ($902K) under budget.
The key variances are as follows:

• Capital Expenditure in the Chief Executive activity is over budget by $969K (63%)
due to the beginning of work for Stage 2 of the Around the Mountains Cycle Trail.

• Environment and Community is over budget by 60% ($85K). This is primarily due to an additional vehicle purchase for animal control and the timing of the replacement of a vehicle for environmental health.

• Information Management capital expenditure is under budget by 69% ($155K) due to minimal costs to date being incurred in the records improvement plan.

• Roading capital expenditure is under budget by 9% ($1.03M) due to timing on planned road renewal and pavement renewal. They are forecast to be $540K under budget at year end.

• Services and Assets are under budget by 72% ($764K) with minimal capital expenditure to date on projects planned in public conveniences, district reserves and forestry.

Funding Adjustments

Funding adjustments are significantly under budget as typically ‘balancing’ of business units is not undertaken until the end of the financial year.

Journals are being processed for reserve transfers, predominantly in relation to vehicle movements, and loan draw-downs (ie for project funding), throughout the year at the request of budget managers.

Key Financial Indicators

Indicator	Target*	Actual	Variance	Compliance
External Funding: Non rateable income/Total income	>39%	37%	-2%	x
Working Capital: Current Assets/Current Liabilities	>1.09	2.10	1.01	a
Debt Ratio:** Total Liabilities/Total Assets	<0.73%	0.89%	0.16%	x
Debt To Equity Ratio: Total Debt/Total Equity	<0.01%	0.00%	0.01	a

* All target indicators have been calculated using the 2014/15 Annual Plan figures.

** Excludes internal loans.

Financial Ratios Calculations:

External Funding:

	Non-Rateable Income
	Total Income

This ratio indicates the percentage of revenue received outside of rates. The higher the proportion of revenue that the Council has from these sources the less reliance it has on rates income to fund its costs.

Working Capital:

	Current Assets
	Current Liabilities

This ratio indicates the amount by which short-term assets exceed short term obligations. The higher the ratio the more comfortable the Council can fund its short term liabilities.

Debt Ratio:

	Total Liabilities
	Total Assets

This ratio indicates the capacity of which the Council can borrow funds. This ratio is generally used by lending institutions to assess entities financial leverage. Generally the lower the ratio the more capacity to borrow.

Debt to Equity Ratio:

	Total Debt
	Total Equity

It indicates what proportion of equity and debt the Council is using to finance its assets.

Activities Performance Audit Committee

03 June 2015

STRATEGIC TRANSPORT

Overall Financial Performance

A continued strong focus on making sure we fully utilise NZTA approved funding along with optimising “value for money” remains a challenge.

• Council Transport overheads are generally tracking in line with budgets.

• It is forecasted that our Operations and Maintenance costs will be over budget at year end. This will be partially offset by underspends in capital expenditure and underspends in the previous two years. The forecasted overspend can be also be contributed to unbudgeted emergency works projects Stewart Island Slips and the Ohai Clifden Slip.

• Council Transport Capital Expenditure is under budget primarily due to timing.
Final costs of resealing, rehabilitations, unsealed road metalling and bridge renewal work are expected to occur over the coming months.

Please note that we are forecasting that our Repairs, Maintenance and Capital Expenditure will be over budget at year end. This is primarily driven by underspends in previous years and our key objective of maximising New Zealand Transport Agency approved funding.

*Key*
	Largely on Track
	Monitoring
	Action Required

Maintenance and Operations:

Financial Tracking vs Plans
YTD	Forecast	Annual Plan	NZTA Approved
*75%*	*74%*	*77%*	*75%*

Maintenance and Operation costs are currently over budget. This is due to:

A holistic approach to Maintenance Management has seen Sealed Pavement and Unsealed Pavement Maintenance being over budget but offset with underspends in other activities. Plus we are bringing forward from 2015/16 our bi-annual data collection into 2014/15.

* Note that Council can only claim 30% of urban drainage. Unsubsidised work has being excluded from this forecast.

Council have had approval from NZTA to shift funding from renewals to maintenance.

Renewals and Minor Improvements:

Financial Tracking vs Plans
YTD	Forecast	Annual Plan	NZTA Approved
*75%*	*70%*	*68%*	*69%*

Renewals and Minor Improvement Commentary:

The above is highlighted in orange as Transport is monitoring these costs closely driven by the current volatility in the bitumen index.

It is expected that budgets will align over the next couple of months.

Three Year Programme:

As we have had formal approval from NZTA for more funding for the Lower Hollyford Road, this will not impact Local share as it is 100% funded by NZTA.

Activities Performance Audit Committee

03 June 2015

Description: sdclogo

Report to Activities Performance Audit Committee on outcome of 2015 International Accreditation New Zealand (IANZ) Reaccreditation Audit of Southland District Council Building Control Section

Record No: R/15/5/8389

Author: Bruce Halligan, GM - Environment and Community

Approved by: Steve Ruru, Chief Executive

☐ Decision ☐ Recommendation ☒ Information

1 This report provides information for the Committee on the outcome of the recent International Accreditation New Zealand (IANZ) 2015 reaccreditation audit of the Southland District Council (SDC) Building Control section.

2 I am pleased to report that the SDC Building Control section was reaccredited for a further two year period, with no Corrective Actions Required (known as CARs).

3 This is a very pleasing result, not only for the Building Control Section but also the wider organisation.

4 IANZ undertakes an intensive audit process of all Building Control Authorities (BCAs) on a two yearly basis. This audit process involves not only a thorough review of relevant documentation and processes, but also a field element where IANZ assessors accompany some staff in the field to observe their inspection processes first-hand.

5 For any Council to be able to issue building consents and Code Compliance Certificates under the Building Act 2004, that Council must be IANZ-accredited.

6 Councillors will no doubt be aware that some other local authorities elsewhere have lost their IANZ accreditation, which has meant that they have then had to make alternative arrangements for other councils to process consents on their behalf, with associated additional costs.

7 SDC has been accredited by IANZ since 2007, being one of the first councils to achieve this. During March 2015, the IANZ team was on site undertaking the reassessment/ reaccreditation audit.

8 In such an audit, IANZ has the option of either reaccrediting, or requiring corrective actions to be taken (CARs, as referred to above) prior to reaccreditation, or not reaccrediting at all.

9 It is a great credit to Kevin O’Connor and the whole of the Building Control team that SDC was reaccredited for a further two years with no corrective actions required, with March 2017 being the next reassessment audit.

10 While I take no credit for the reaccreditation, as Group Manager with responsibility for the Building Control section, I am really proud of the Building Control team for this significant achievement. This can also give confidence to our customers that SDC has thorough processes and technical competency in the Building Control area, which is very important as it is one of the key potential liability areas for any Council.

11 IANZ has made a series of strong recommendations which are NOT CARs, but rather are recommended areas for future improvement. These strong recommendations are very useful for the continuous improvement process. Mr O’Connor and the team will be working at taking the actions as specified in the schedule attached in Appendix B to address these strong recommendations.

12 Mr O’Connor will also be present at the APAC meeting to respond to any queries Committee members may have in that regard.

Recommendation

That the Activities Performance Audit Committee:

a) Receives the report titled “Report to Activities Performance Audit Committee on outcome of 2015 International Accreditation New Zealand (IANZ) Reaccreditation Audit of Southland District Council Building Control Section” dated 19 May 2015.

Attachments

a IANZ BCA Accreditation Regulations 4-18 has been achieved View

b Follow up from IANZ re-assessment of 17 - 19 March 2015 View

Activities Performance Audit Committee

03 June 2015

Follow up from IANZ re-assessment of 17 - 19 March 2015
Notes: · Corrective Actions are to be cleared by the specified date from International Accreditation New Zealand (IANZ). · Strong recommendations are to be actioned before the next biennial IANZ re-assessment. · Recommendations are to be considered for actioning before the next biennial IANZ re-assessment. · Responses are to be communicated to staff in monthly meeting agenda after completion. · Responses are recorded in section QA1 of the QAS Manual after completion.
Corrective Actions
Action required/recommended	Proposed response	Accepted yes/no	Date to be actioned	Date completed
No corrective actions identified by IANZ	N/A	N/A	N/A	N/A
Strong Recommendations
Action required/recommended	Proposed response	Accepted yes/no	Date to be actioned	Date completed
It is strongly recommended that the BCA always ensures that hard copy and electronic copies of public information are the same version.	The Building Consent Application Guide is to be reviewed and re-printed in hardcopy version.	yes	01/07/15
It is strongly recommended that the BCA consent processing checklists be revised to ensure they prompted review of producer statements and compliance schedule information.	Electronic processing check-sheets are to be reviewed to ensure that they prompt a review of producer statement and compliance schedule information.	yes	01/07/15
It is strongly recommended that the BCA ensures they do not include inappropriate “advice notes” on consents.	Training on appropriate use of construction prompts is to be undertaken at a monthly meeting.	yes	01/07/15
It is strongly recommended that the BCAs CCC procedures (checklist) prompt the BCO to review Producer Statements and Third Party Certificates to establish full compliance with the Building Consent.	Electronic processing check-sheets are to be reviewed to ensure they prompt a review of producer statement and compliance schedule information.	yes	01/07/15
It is strongly recommended that the BCA ensures they do not issue generic compliance schedules, or include any irrelevant standards on compliance schedules.	Compliance schedule processes are to be reviewed to require as much system information as possible is provided upfront at consent processing stage so relevant standards are referenced. The compliance schedule template is also to be reviewed.	yes	01/07/15
It is strongly recommended that the BCA ensures that the monitoring of the application of training is targeted to review the application of training received.	A training plan - outcome form is to be established to record application of training.	yes	01/07/15
It is strongly recommended that the BCA describes in their procedures the processes that they used to ensure contractors (such as engineers, the individual with specialist processing skills, and the individual that performed competency assessments, internal audits and training needs assessment) were technically competent, both when first engaged, and at regular (annual) review of competency.	QAS Manual section CA7 relating to contractors is to be reviewed to ensure provision is made for regular review technical competency.	yes	01/07/15

Strong Recommendations
Action required/recommended	Proposed response	Accepted yes/no	Date to be actioned	Date completed
It is strongly recommended that the BCA revise and implement procedures to require contractors to provide technically appropriate outcomes.	QAS Manual section CA7 referenced SLA template is to be amended to include reference to technically appropriate outcomes.	yes	01/07/15
It is strongly recommended that the BCA revise and implement procedures to require contractors to demonstrate compliance with an agreed level of quality assurance.	QAS Manual section CA7 SLA template is to be amended to require contractors to demonstrate they are meeting agreed level of quality assurance.	yes	01/07/15
It is strongly recommended that the BCA revise its contractor procedures to require the BCA to review the appropriateness of technical outcomes provided by contractors.	QAS Manual section CA7 SLA template is to be amended to require the BCA to review appropriateness of technical outcomes.	yes	01/07/15
It is strongly recommended that the BCA revise procedures to require the BCA to review whether the contractor continued to comply with an agreed level of quality assurance.	QAS Manual section CA7 SLA template is to be amended to require the BCA to review contractors agreed level quality assurance is being met.	yes	01/07/15
It is strongly recommended that the BCA revise and implement procedures to require the BCA to mark as superseded out-of-date versions of standards and product specifications.	Archived hardcopy technical information folders are to be stamped as “Superseded”.	yes	01/07/15
It is strongly recommended that the BCA revise procedures (property file checklist) to record where documents are located (i.e. hard copy or electronic file).	Form KM 3 Building Consent Coversheet is to be amended to record whether documents are also recorded electronically.	yes	01/07/15
It is strongly recommended that the BCA describe somewhere (possibly in job description) the responsibilities of the Quality Manager and refer in the Quality Manual to where the responsibilities are described.	The job description for the quality manager is to be amended to include quality assurance responsibilities.	yes	01/07/15
It is strongly recommended that the BCA specify (in the Quality Manual) the role of the quality assurance person and describe somewhere (possibly in job description) the responsibilities of the quality assurance person.	QAS Manual section CA8 technical/quality assurance manager reference will be amended to specify a quality coordinator role additional to the quality manager role.	yes	01/07/15
It is strongly recommended that the BCA specify in procedures where the BCA would record the names of those who were exempt from holding a qualification.	QAS Manual section CA5 shall be amended to require recording of BC office deemed exempted from obtaining a qualification.	yes	01/07/15

Recommendations
Action required/recommended	Proposed response	Accepted yes/no	Date to be actioned	Date completed
It is recommended that the BCA revise and implement procedures to ensure they require the BCA to periodically review all consents to see if there were any that had slipped through the alert system that was designed to prompt the 11 and 12 month letters.	BC Admin to have a report created to flag any granted consents that may slip passed the 12 month follow-up stage.	yes	01/07/15
It is recommended that the BCA revise and implement procedures to ensure that they require the BCA to periodically reviewed consents to see if there were any slipping through the alert system that was designed to prompt the 23 and 24 month letters.	BC Admin to have a report created to flag any granted consents that may slip passed the 24 month follow-up stage.	yes	01/07/15
It is recommended that the BCA Compliance Schedule Template be reviewed to facilitate the BCO’s when they are editing the Compliance Schedule.	The compliance schedule process is to be reviewed to require as much system information provided upfront at consent processing stage so relevant standards are referenced. The compliance schedule template is also to be reviewed.	yes	01/07/15
It is recommended that the BCA revise their “Document Authorisation Table (Dc2)” to record the limitations that individuals had in their competencies as well as having those limitations specified in the individuals competency assessments.	DC2 Document Authorisation Table is to be amended to include competency limitations as specified by Qualico in individual BC Officers competency assessments.	yes	01/07/15
It is recommended that the BCA revise their procedures to ensure they describe the BCA’s current process whereby they monitored the timely completion of all quality system functions on an on-going basis.	QAS Manual revision process – record table shall be modified to strengthen the biennial review process.	yes	01/07/15
It is recommended that the BCA ensure their contractor (performing competency assessments) states that an individual is under “distant supervision” only when they actually require supervision.	Instruction will be given to Qualico that competency assessments are only specify distance supervision where it is necessary for an individual competency rather than when it part of the BCA process.	yes	01/07/15
It is recommended that the BCA revise their training procedure that discusses supervision of site inspectors where the procedure inaccurately refers to processing in two places.	QAS Manual section CA3 is to be amended to reference supervision of site inspectors.	yes	01/07/15
It is recommended that in anticipation of the possibility that the BCA may require the services of other BCA’s, that SDC revise procedures to address establishing and reviewing technical competency when engaging the services of another BCA.	QAS Manual section CA7 is to be amended to include the process for reviewing technical competency of BC Officers engaged from elsewhere.	yes	01/07/15
It is recommended that in anticipation of the possibility that the BCA may require the services of other BCA’s, that the BCA revise procedures to specify expectations in more detail for when making such agreements (work briefs) with other BCA’s.	Investigate will be undertaken with the Southern Cluster into the possibility of establishing a work brief that is supplementary to the Resource Sharing Agreement.	yes	01/07/15
It is recommended that the BCA revise procedures to require the BCA to secure copies of relevant diplomas, degrees or certificates rather than just records.	QAS Manual section CA3 for SDC is to be revised to require for regular review of the G Drive individual training records to ensure BCO’s are copying training certificates into the training record register.	yes	01/07/15
It is recommended that in anticipation of the possibility that the BCA may require the services of other BCA’s, that the BCA revise procedures to require other contracted BCA’s to supply records that demonstrate the BCO’s have appropriate qualifications.	QAS Manual section CA7 is to be amended to require engaged BC Officers to provide verification of appropriate qualifications.	yes	01/07/15
It is recommended that the BCA may wish to consider sending moisture meters out for servicing and calibration only when they read outside the range specified on their dedicated moisture block.	Consider amending QAS Manual section AD3 so SDC has the option is testing moisture meters in house and only sending those failing the test to be sent away for calibration.	yes	01/07/15
It is recommended that the BCA review its application of the terminology “non-critical” in respect to measurements. The IANZ document “Specific Criteria for accreditation of Building Consent Authorities”, October 2012 specifies that “Measurements that are important to demonstrate compliance with the Building Code through acceptable solutions, alternative solutions, specifications etc.” are deemed “Critical”.	QAS Manual section AD3 is to be reviewed for critical applies to equipment such as moisture meters and thermometers in terms of calibration against a certified reference device or calibration by an external party .	yes	01/07/15
It is recommended that the BCA may wish to consider including in procedures the delegation of authorities from the Mayor and elected officials to the Building Consent Authority Manager.	Existing delegations under QAS Manual section CA8 are deemed sufficient.	no	n/a	n/a
It is recommended that the BCA consider revising their procedures for continuous improvements to ensure more than one person reviews proposed continuous improvements from a quality assurance perspective.	Not deemed necessary.	no	n/a	n/a
It is recommended that the BCA revise continuous improvement procedures to ensure proposed continuous improvements are entered onto the register at the point at the point at which it is decided to progress the improvement rather than after it has been resolved. The register then becomes a useful tool to monitor whether continuous improvements are being resolved in a timely fashion.	QAS Manual section QA1 continuous improvement register is to be amended to include an initiated and completion date for actioned corrective and preventative items.	yes	01/07/15

Activities Performance Audit Committee

03 June 2015

Description: sdclogo

Request for Council to Maintain Irthing Road, Five Rivers

Record No: R/15/4/7505

Author: Joe Bourque, Strategic Manager Transport

Approved by: Ian Marshall, GM - Services and Assets

☒ Decision ☐ Recommendation ☐ Information

Purpose

1 The purpose of this report is for the Activities Performance Audit Committee to consider taking on the maintenance of a previously unmaintained section of roadway.

Executive Summary

2 Irthing Road, located near Five Rivers, is partly maintained by Council. The maintained section is between State Highway 97 (Mossburn Five Rivers Road) and the intersection of Irthing and Mulholland Roads.

3 The Strategic Transport Department has received a request from an adjacent land owner to start maintaining the metalled roadway that extends beyond the intersection of Irthing and Mulholland Roads. This existing road is largely formed within the road reserve margins.

4 Based on Council’s current Extent of Network Policy, maintenance of this roadway is justified.

Recommendation

That the Activities Performance Audit Committee:

a) Receives the report titled “Request for Council to Maintain Irthing Road, Five Rivers” dated 26 May 2015.

b) Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c) Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d) Approves the Strategic Transport Department recommendation to maintain Irthing Road, beyond the intersection of Mulholland Road in accordance with the Extent of Network conditions of the Roading Policy.

Content

Background

5 The road reserve extending north-west on Irthing Road beyond the Mulholland Road intersection has never been maintained by the Southland District Council.

6 The road reserve in question serves access to three different land owners and ultimately terminates where access is gained to the applicants land. This also serves as the sole access point to the Mt Bee Department of Conservation recreational land. This DoC land includes the Mt Bee hut and several tracks for outdoor enthusiasts covering mountain biking and tramping. There is an access agreement in place between the applicant and DoC where access can be gained to the conservation land by notifying the applicant beforehand.

7 SDC Area Engineer Bruce Miller was initially approached by the land owners of 725 Irthing Road, Ben Walling and Sarah Flintoft. Ben and Sarah have owned this land since 2007.

8 The property at 725 Irthing Road was previously owned by Rayonier Forestry and was planted out as a forestry block.

9 In 2006 a large wind event felled many trees within this forestry block and Rayonier constructed a formed road along the paper road reserve and removed the trees from this block before they went to waste. It is not known what condition (if there even was a formed road) this road reserve was in before Rayonier invested and upgraded the existing road.

10 Rayonier constructed this roadway on the road reserve and they outlined this in a letter addressed to Kevin McNaught of the SDC property department. The SDC contributed no money towards this and made no agreement to maintain the road.

11 Bruce Miller (Area Engineer) received an initial enquiry about Council taking over maintenance of this road from Ben and Sarah, however he requested this be put in writing to Council as to how the situation has changed and why Council should now maintain the road.

12 As part of the justification put forward, Ben Walling and Sarah Flintoft explained that the road generates a lot of traffic due to the Department of Conservation recreational land at the end of the road and that they themselves had invested money in upgrading the road so they could access their own land (which is landlocked by other land owners and the road reserve provides the only access for them).

13 After careful review and consideration of Councils Extent of Network conditions within the Roading Policy and discussions with the Department of Conservation, the Strategic Transport Department concluded it would be appropriate to put the decision to the Activities Performance Audit Committee with the recommendation of taking over maintenance of this section of road.

14 This section of road would be classified and maintained as a low volume access road.

Issues

15 Responsibility – maintenance of the currently unmaintained section of Irthing Road and what level of service this should receive.

Factors to Consider

Legal and Statutory Requirements

16 There are no statutory requirements in regards to this issue.

17 Council are meeting the statutory requirement of providing legal access to 725 Irthing Road with the road reserve in place. Council is obligated to provide legal access, but not obligated to provide formed access.

18 The road is currently formed largely over the legal road reserve and although it is not currently maintained by Council, it is still Council land that they are using and Council cannot avoid liability regardless of how safe or unsafe the road currently is.

Community Views

19 No formal community views have been sought up to this point of time, however discussions have been held with Department of Conservation and how it affects the community accessing facilities and features around Mt Bee. DoC had no objections or concerns with Council potentially taking over maintenance of this section of road.

Costs and Funding

20 To upgrade the existing road to the required standard the Strategic Transport Department estimate this cost to be in the vicinity of $11,000.

21 Ongoing maintenance costs will range between $300-500 per year (based on 1-2 grades maximum per year).

22 This estimate was compiled with Councils Maintenance contractor SouthRoads and it is deemed to be a reasonable estimate.

Policy Implications

23 Taking over maintenance of this section of roadway would be in line with the Extent of Network Policy currently in place.

24 The Policy indicates Council should maintain a road where it is built within a legal road reserve, it is the only reasonable access for more than one property owner and where it provides the only reasonable access to a popular recreational area.

Analysis

Options Considered

25 Option 1 – Council take over maintenance of Irthing Road beyond the intersection of Mulholland Road

26 Option 2 – Council do not take over maintenance of Irthing Road beyond the intersection of Mulholland Road

Analysis of Options

Option 1 – Council take over maintenance of Irthing Road beyond the intersection of Mulholland Road

Advantages

Disadvantages

· Provide a safe roadway surface for neighbouring land owners and community to access the Mt Bee recreational reserve.

· Promoting the area for the wider community with a safe access.

· This option would be conforming to the current Extent of Network Policy.

· To take over this section of roadway will come at a cost of approximately $11,000

· Ongoing maintenance costs in the vicinity of $300-500 per year.

Option 2 Council do not take over maintenance of Irthing Road beyond the intersection of Mulholland Road

Advantages

Disadvantages

· No up-front cost to upgrade the existing road ($11,000).

· No ongoing maintenance costs ($300-500).

· Unable to provide a safe roadway surface for users who currently use this road

· This option would not be conforming to the current Extent of Network Policy

Assessment of Significance

27 This decision is not seemed to be significant.

Recommended Option

28 The Strategic Transport Department recommend that Irthing Road should be maintained beyond the intersection of Mulholland Road to a level appropriate of a low volume access road. Maintaining this section of roadway allows existing users a more comfortable and reliable level of service to an area of recreational interest.

Next Steps

- 3 June 2015 - Council to consider taking over the maintenance of Irthing Road beyond the Mulholland Road intersection

- July 2015 - Notification of decision to affected land owners and Department of Conservation

Attachments

a Request for Council to Maintain Irthing Road Five Rivers - Location Plan and Photos View

Activities Performance Audit Committee

03 June 2015

Description: sdclogo

Southland District Council 2015/2016 Resurfacing Contract - Contract 15/21

Record No: R/15/5/8622

Author: Joe Bourque, Strategic Manager Transport

Approved by: Ian Marshall, GM - Services and Assets

☒ Decision ☐ Recommendation ☐ Information

Purpose

1 The attached report seeks endorsement from the Activities Performance Audit Committee (APAC) for the proposed tendering methodology planned for the 2015/2016 Southland District Council’s (SDC) Resurfacing Programme. This includes seeking delegated approval for the Chief Executive to let the tender.

Executive Summary

2 This report covers the procurement methodology proposed for Contract 15/21 - SDC 2015/2016 Resurfacing. It is proposed that the full 2015/2016 resurfacing programme that SDC is responsible for of approximately 950,000 m²be let under authority delegated to the Chief Executive as a single District-wide one year contract.

Recommendation

That the Activities Performance Audit Committee:

a) Receives the report titled “Southland District Council 2015/2016 Resurfacing Contract - Contract 15/21” dated 26 May 2015.

b) Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

d) Endorses the procurement methodology proposed for Contract 15/21 for the 2015/2016 Southland District Council Resurfacing Programme, and in particular:

i. The work be let as a single contract.

ii. The contract cover only the 2015/2016 programme.

iii. The Chief Executive be delegated authority to let the contract subject to being satisfied that it provides suitable value for money.

Content

Background

3 A programme of resurfacing requirements has been developed for the 2015/2016 year which seeks to maintain the existing sealed network from both an asset preservation and safety (skid resistance) point of view.

4 This programme has sought to balance the risks of seal failure, which can lead to pavement degradation and expensive repair, and loss of skid resistance, which can increase crash risk, with the most efficient use of the available resurfacing budget.

5 The work, involved in the contract, includes texturising of preseal patching, temporary traffic management, sweeping, supply and spraying of bitumen, supplying, placement and rolling of chips and the pavement marking.

Issues

6 In the past, contracts have been tendered for the SDC Resurfacing Programme based on splitting the District into two or three areas and for either one or two years.

7 Out of the last five resealing seasons, four of them have been completed by a single contractor due to them winning all of SDC’s contracts on offer.

8 Based on the analysis below, it is proposed to combine the full Resurfacing Programme into a single one year contract for 2015/2016.

9 It is hoped that by having a single contract, this will increase competition between the only two likely tenderers for this work.

10 It is also proposed to retain the bulk of the features of the previous year’s performance based resurfacing contracts, which have worked reasonably successfully.

11 This will include continuing to apply the standard NZTA cost fluctuation formula. As always, predicting what this will do during the season is very difficult as it depends on changes in bitumen prices and the value of the $NZ versus the $US. Very few would have predicted the major drop in bitumen costs which occurred in the 2014/2015 season.

12 Also similar to previous years, the cost of spraying the bitumen will be included in with the supply, cart and laying of chips. This has been done so that the bitumen cost is a supply only rate and can be more easily identified when adjusting for cost fluctuations

13 It is proposed to let the tender using the Price Quality Method, with a non-price weighting of 30%. This will allow the Tenderer Evaluation Team to consider the quality aspects of the tenders submitted as well as the price. This methodology has been used in the past and received strong support from both local resurfacing contractors.

14 It is also proposed that authority be delegated to the Chief Executive to let this contract.
This will enable the tender to be let as soon as possible after the tenders close, enabling the successful tenderer to start the extensive detailed preparation required.

Factors to Consider

Legal and Statutory Requirements

15 The project is part of the Southland District Council 2015/2016 Resurfacing Programme.
It fits within the overall Land Transport Activity Management Plan and the Long Term Plan.

16 No unusual legal considerations are involved with this project. As with all projects, but larger value projects in particular, there is the risk of a legal challenge regarding the tender results from unsuccessful Tenderers. To reduce this risk the Tender Evaluation Team will carefully follow the NZTA procurement procedures.

17 The Request for Tender will clearly state that the Principal reserves the right to consider or reject any alternative tender, at the Principal’s sole discretion.

Community Views

18 The final resurfacing treatments selected will take account of the existing seal, road and environmental conditions, traffic loading, community expectations and available sealing budget. This will result in use of smaller chips in urban and built up areas where possible, to cut down traffic noise.

Costs and Funding

19 The budget for the 2015/2016 Resurfacing Programme is still be to confirmed, as the full details of the New Zealand Transport Agency’s approval of Southland District Council’s programme have not been provided. Initially a budget of $4.5M has been set for the 2015/2016 Resurfacing Programme, including the costs of professional services and SDC’s share of boundary roads resealing being carried out by the Invercargill City Council.
The estimated value of the tender is approximately $4.45M including contingencies, and depending on the final treatments selected.

20 Treatment sites have been priorities to more easily allow adjusting the programme to accommodate any budgetary changes, should it be required.

Policy Implications

21 The project is part of the Southland District Council 2015/2016 Resurfacing Programme. It fits within the overall Asset Management Plan and the Long Term Plan.

Analysis

Options Considered

22 In developing the proposed procurement methodology a range of options have been considered as detailed below:

Analysis of Options

Option 1 - Single Contract covering the full District

Advantages

Disadvantages

· With only one contract the tenderers only have one chance to win this work so they have to put their best submission forward. This may maximise competition in a market with just two players.

· There is a slight reduction in contract administration with only one contract rather than two.

· There is risk to SDC in having its whole programme with one contractor if that contractor does not perform. This risk has been successfully managed over the last five years.

· The unsuccessful tenderer has to find work elsewhere for a year.

Option 2 - Single Year Contact

Advantages

Disadvantages

· A single year contract provides SDC with greater flexibility to consider the outcome of the project delivery review currently being carried out and to monitor the effects of the NZTA NOC Contract on the local market.

· This also provides more opportunity to better develop a longer term programme using the latest SCRIM (skid resistance data), high speed data and condition rating data.

· A single year contract makes business less difficult for the unsuccessful tenderer with a single contract covering all of SDC.

· There is more work involved for all parties in tendering this contract each year.

· There are fewer options for successful tenderers to gain the benefits of more than one year of committed work.

Assessment of Significance

23 While the size of this proposed contract is large, the proposed procurement through an open tender process, utilising the budget in the Long Term Plan, means that the letting of this contract is not significant in terms of Section 76 of the Local Government Act.

Recommended Option

24 It is recommended that the Activities Performance Audit Committee endorse the procurement methodology proposed for Contract 15/21 for the 2015/2016 SDC Resurfacing, and in particular:

(a) The work be let as a single contract.

(b) The contract cover only the 2015/2016 programme.

(c) The Chief Executive be delegated authority to let the contract subject to being satisfied that it provides suitable value for money.

(d) That the Strategic Manager Transport be authorised to approve payments under this unit rate contract for up to a total budget for physical works of $4,500,000 for 2015/2016.

Next Steps

25 Subject to Activities Performance Audit Committee endorsement, the tender for Contract 15/21 will close on 11 June. The Tenderer Evaluation Team of Hartley Hare of SDC and John Laskewitz and Michael Duggan of MWH will then evaluate the tenders and provide a recommendation to the Chief Executive, via the Strategic Manager Transport and
Group Manager Services and Assets.

26 If this recommendation is accepted the contract will be let and the tender results will be reported to the 15 July APAC meeting.

Attachments

There are no attachments for this report.

Activities Performance Audit Committee

03 June 2015

Description: sdclogo

Health and Safety

Record No: R/15/4/7081

Author: Janet Ellis, Human Resources Manager

Approved by: Steve Ruru, Chief Executive

☐ Decision ☐ Recommendation ☒ Information

Purpose

1 To provide an update to the Activities Performance Audit Committee on health and safety activity within Southland District Council.

Recommendation

That the Activities Performance Audit Committee:

a) Receives the report titled “Health and Safety” dated 18 May 2015.

Content

New Health and Safety Legislation

2 In the second half of 2015 it is envisaged that the new Health and Safety legislation -
the Health and Safety at Work Act, will be passed. The Bill is currently before parliament. The new Select Committee will report back on 29 May 2015 and then the Bill will continue on its progression through the parliamentary process. The Bill is on course to be passed in the second half of 2015. The government has announced that there will be adequate time of some months between when the Bill is passed and when it comes into force to make sure all duty holders are aware of their responsibilities under the new law.

3 The Bill has a number of key changes.

4 Person Conducting a Business or Undertaking (PCBU) replaces definitions of “employer” and “principal”. The PCBU will have the Primary Duty of Care, so far as is reasonably practicable, for the safety of the workers they have engaged or workers whose activities are influenced or directed by the PCBU or other persons.

5 The “all reasonable practicable steps” will be replaced with “so far as reasonably practicable”. This is a big change and puts more responsibility on Officers and PCBU’s to make decisions based on providing a healthy and safe workplace.

The focus will be on likelihood of risk and the degree of harm, what is known or ought to have been known and then eliminating or isolating the risk. Cost is no longer an equal consideration.

6 Introduction for due diligence obligations for Officers (which currently includes Councillors, elected Community Board Members and some Senior Managers, dependant on positions). Under due diligence requirements, Officers will be required to keep up to date with health and safety matters, ensure the person running the business has appropriate resources and processes to manage risks to health and safety, understand the nature of the business audit its hazards and risks, ensure there are appropriate reporting and investigation processes in place, monitor and verify. Council will need to design and implement a Governance Framework to ensure these conditions are being met.

7 Increased worker participation requirements, including changing rules and requirements for health and safety committees and union involvement.

8 Increased enforcement tools for WorkSafe New Zealand, including the power to issue improvement notices.

9 Significantly increased penalties for both Entities (PCBU’s) and Officers.

Health and Safety at Southland District Council

10 Currently the Southland Council has a number of key health and safety areas it has been focusing on now and for future improvements.

Development of a Health and Safety Workplace Culture

Southland District Council, through the Council, Chief Executive, the Executive Leadership Team and the Health and Safety Committee is working on developing a workplace culture where health and safety is at the core of everything it does.

Establishment of Southland Councils Health and Safety Management Group

11 Southland District Council, Invercargill City Council, Gore District Council and Environment Southland have established a Southland Council Health and Safety Management Group.

12 The purpose of this group is to define and integrate the areas of commonality in regards to health and safety matters at both a strategic and operational levels and to promote a regional approach to health and safety.

13 A draft Memorandum of Understanding is currently being circulated around the
Chief Executives of the Councils, through the Chief Executives Forum. It is envisaged that a vision for health and safety in Southland, a health and safety charter and an action plan will be developed once the MOU is signed and agreed.

14 As part of the draft MOU, all administration and costs will be shared between the parties.

Audit of Council’s current Health and Safety Systems

In May 2015, an independent auditor from ACC will audit the Council on their Health and Safety Management Systems. A verbal update on the outcome from this audit will be provided at the Committee meeting.

Contractor Management Project

15 Southland District Council has been undertaking a review and implementing improvements in aspects of the Contractor Management Process in terms of health and safety.

16 There is currently a relatively robust process at Council for the contract engagement process of our big contracts but improvements were needed in terms of how we managed our secondary and auxiliary contractors in terms of health and safety.

17 Currently new processes have been implemented for the Services and Assets contractors, including requirements for health and safety plans and inductions. Future plans include the roll out of these processes for all departments across Council, work on safety observations and the development of audits and processes to be followed.

Future Improvements

18 Community Groups inclusive of Boards, CDA’s, Community Trusts, Water Supply Committees, and incorporated societies need to be evaluated as to their health and safety risks and exposure. Considerations will be on two fronts, firstly contractor engagement (to give consistency to Council’s new process as a PCBU and the establishment of the due diligence responsibilities of the Officers involved), and then the education and training of their health and safety responsibilities in general under the proposed new Act and the required culture needed to ensure health and safety is at the core of everything we do.

19 Development of workplace observations, accident/incident management protocols and contractor review/evaluation processes.

20 Implementation of a Health and Safety System. Currently, the Health and Safety System within the Council is paper based. A computerised system would allow a more effective management of health and safety within the Council. This system and review is budgeted within the Core Systems Review budget that has been proposed as part of the Long Term Plan.

21 Governance Framework - The due diligence obligations of the proposed new Act will require a robust set of reporting structures and the development of an architecture that supports these and incorporates the requirements of these throughout all levels of Council.

22 Development of a KPI Framework - Once the systems and architecture are established there is a need to monitor them and ensure that Council is delivering on key measurements and that the processes are working well. Meaningful goals that target an individual’s area of influence need to be established and these included as part of a performance management strategy. It is also important that there is a clear linkage between our health and safety goals and the actions and priorities for Senior Managers.

23 Continued Education - Education for all SDC staff will be ongoing with the changes to the new legislation and proposed changes above.

24 Work Programme – work is well advanced with the development of project definitions and an overall work programme for driving improvements to Council’s health and safety processes. Officers will report back to the Committee on this overall programme at a later date.

Attachments

There are no attachments for this report.

Activities Performance Audit Committee

03 June 2015

COUNCIL’S INSURANCE PROGRAMME

Type	Insurer	Cover	Excess	Exclusions	Limits of Cover
Material Damage Insurance	Vero Insurance (lead) Lumley General Insurance ACE Insurance Ltd QBE Insurance	Buildings, Contents, Plant and Machinery, and Stock as stated in the Property Schedule	$10,000 in respect to each and every loss except for Landslip, Subsidence, Natural Disaster	• Property in the course of installation, construction, demolition, capital additions costing over $1M • Vehicles • Standing timber • Underground services, water, stormwater, drainage or sewerage reticulation systems, free standing structures not otherwise described in the Statement of Property Insured • Wharves, tunnels, seawalls, roads, bridges, and other land beneath insured property, unless specified in the Statement of Property Insured • Water	Covers $154M worth of assets including non-Council owned worth $34M in total. (Non-Council owned buildings - principally halls - are invoiced annually the cost of insuring these assets). Pls. note that there are specific sub-limits of indemnity under this policy such as:$1M for properties in the course of construction, installation, capital additions; $500K for unspecified contents; $2M for Landslip and Subsidence (combined limit any one loss for Material Damage Insurance and Business Interruption); and the rest as detailed in the policy
Business Interruption	As per the Material Damage Insurance Policy	Interruption to operational activities following damage to property that is insured under the Material Damage Policy, and results in losses or increased costs	$10,000 in respect to each and every loss except for Landslip, Subsidence, Natural Disaster	• As per the Material Damage Insurance Policy
Motor Vehicle	Lumley General Insurance Ltd	All vehicles, other mobile plant and equipment, vehicular equipment every description registered and unregistered owned or otherwise the responsibility of the insured	1% of vehicle sum insured at time of loss, minimum of $1,000 except for those specified in the policy	• Depreciation, wear and tear, mechanical breakdown, etc. • As to vehicle use such as racing, speed tests, illegal use, etc. • Liabilities such as damage or loss to your own property etc.	Cover for $2.2M at estimated market value
Fidelity Guarantee	AIG Insurance NZ Ltd	Loss of money or goods, belonging to you or held jointly in trust which the insured otherwise has an interest as a result of an act of dishonesty by an insured person with the following insuring clauses: • Employee fraud or dishonesty • Third party crime • Electronics and computer crime	$25,000 in respect to each and every loss	• Earthquake • Interest or consequential loss of any kind	Cover for $500K aggregate limit of indemnity
Standing Timber (Forestry Insurance)	Primacy Underwriting Management Ltd	Standing timber located in Ohai, Gowan Hills, Waikaia and Dipton	1.5% of the sum insured of the block declared value of all damaged blocks subject to a minimum loss occurrence of $10,000	• Windstorm • Earthquake • Impairment Costs • Other exclusions such as set burns, fires ordered by public authority, liability to third parties, consequential loss, rain, flood, snow, ice, dead or dying trees	Cover for $12M worth of Council’s forests
Airport Owner’s and Operator’s Liability	AIG Insurance NZ Ltd	Legal liabilities arising in connection with ownership, operation, management of Manapouri Airport as a result of accident	$2,500 in respect of each and every loss	• Liability assumed by agreement • Bodily injury engaged in the service of the insured or employees of the insured except where allowed for under Personal Injury Extension • Liability to loss or damage to insured property • Bodily injury or property damage caused by mechanically propelled vehicles, craft or aircraft, owned chartered, used operated by you or on Council’s account • Bodily injury or property damage arising out of construction of, demolition of buildings or runways • Noise and pollution and other Perils exclusion clause	Cover for $10M limit of liability
Statutory Liability	Vero Liability Insurance Ltd	The defence costs and fines arising out of an allegation of or breach of any Act of Parliament other than an ‘excluded’ Act	$10,000 for each and every claim (costs inclusive)	• Deliberate disregard to comply with any Act or failure to comply with any abatement notice or enforcement order • Fines under Health and Safety in Employment Act 1992 • The cost of remedial or compliance order imposed by a court of civil jurisdiction	Cover for $1M limit of liability
Employers Liability	Vero Liability Insurance Ltd	All claims for damages and defence costs as a result of any employee sustaining Personal Injury in the course of employment NOT COVERED under Accident Insurance Act Punitive or exemplary damages as a result of any employee sustaining Personal Injury in the course of employment COVERED under Accident Insurance Act	$5,000 - In respect of each and every claim (costs inclusive)	• Any personal injury for which cover is provided by the Accident Rehabilitation and Compensation Act 1992	Cover for $1M limit of liability
Travel Insurance	ACE Insurance Ltd	Elected members, Directors, Executives, Employees, and accompanying family members on authorised business or associated private travel	As specified in each section of the policy	• Travels within New Zealand • Activities such as professional sport, motor racing, micro light flying, etc. • Persons 75 years and over • Terminal condition • Expenses arising from obligations • Disinclination to travel • War, political evacuation	Cover for the following: • Personal accident and sickness • Medical and additional expenses, cancellation and curtailment expenses • ACE assistance • Loss of deposits • Baggage, electronic equipment, money • Kidnap and extortion • Personal liability • Missed transport connection
Personal Accident Insurance	ACE Insurance Ltd	Executives and staff	Nil except on Parts B and C, H and M of the policy	• Age 75 years and over • War, invasion • Terrorism • Venereal Disease • Pregnancy, and child birth, miscarriage • Flying other than as passenger in an aircraft to carry passengers • Training for professional sports • Intentional self-injury or attempt suicide, illegal, or criminal act	Cover for all claims not to exceed $1M ($500K for non-schedule flights)
Public Liability	Riskpool	Protection for Civil Liability in connection with the Member’s business and arising from occurrences resulting in Accidental Personal Injury or Property Accidental Damage occurring within the Territorial Limits	$10,000 each and every claim		Cover for $200M limit of indemnity
Professional Indemnity	Riskpool	Protection for Civil Liability in respect of any claim made against the Member during the Period for breach of Professional Duty arising out of any negligent act, negligent error or negligent omission, of the Member including Defence Costs	$10,000 each and every claim		Cover for $200M limit of indemnity

Activities Performance Audit Committee

03 June 2015

Description: sdclogo

Venture Southland - Relationship Management and Approach

Record No: R/15/4/7163

Author: Rex Capil, Group Manager, Policy and Community

Approved by: Steve Ruru, Chief Executive

☒ Decision ☐ Recommendation ☐ Information

Purpose

1 To brief the Committee on changes made to improve management of the Venture Southland relationship and work programme.

Executive Summary

2 The following is a summary to inform of the progress made in implementing key areas identified in the Letter of Expectation and also some detail around certain projects for
2015/2016.

3 SDC has two distinct roles with VS - as an owner and as a purchaser of services. It is important these two roles are acknowledged and understood.

Recommendation

That the Activities Performance Audit Committee:

a) Receives the report titled “Venture Southland - Relationship Management and Approach” dated 22 May 2015.

b) Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

d) Supports Option 1 to progress the Southland District Council-Venture Southland partnership approach.

Content

Background

4 Following the development of the Venture Southland (VS) Letter of Expectation 2015/2016 and the introduction of the Group Manager Policy and Community role at Southland District Council (SDC) there has been further work undertaken to define and develop the SDC and VS relationship. This has involved extensive liaison between SDC and VS staff. The SDC Group Manager Policy and Community has responsibility for managing the VS relationship.

Letter of Expectation 2015/2016 - Implementation of Key Areas for Consideration as an Owner

5 The VS Heads of Agreement 2014-2017 establishes clear arrangements for SDC as an owner. This Agreement is an agreement between SDC, ICC and GDC and if it is to be amended must have the agreement of the three parties.

6 Currently VS is expected to produce a Business Plan on an annual basis. It is expected VS will move to a longer term planning approach and to have this in place for the SDC’s next Long Term Plan in 2018.

7 It is anticipated the completion of the Southland Regional Development Strategy currently being undertaken will assist in providing direction for the region and assist in determining how VS will contribute to those agreed outcomes.

8 Currently, it is expected that VS will report at least quarterly to SDC with each report providing an update on work streams against the Business Plan and year to date expenditure against budget.

9 From a governance perspective the Chair of the Joint Committee and independent representatives are to meet with SDC informally at least every six months. It is suggested these meetings occur in October and March each year.

10 Currently, the Community Development team report on regional and local project issues
bi-monthly. Does the Committee wish for these presentations to continue?

11 Changes have been implemented with regard to branding. VS has redesigned its letterhead to include the logos of all councils - this shows that VS is part of all the councils.

Letter of Expectation 2015/2016 - Implementation of Key Areas for Consideration as a Purchaser of Services

12 The following provides an update on the status of the SDC expectations as a purchaser of services for 2015/2016. These will be monitored and reviewed regularly and the relationship is of a nature that allows for flexibility and additional projects to be considered as circumstances change and demand determines. This is not to be taken as the only projects SDC requires VS to deliver.

13 Specific priority project updates include:

Joint Projects

14 Participating in the development of the Regional Development Strategy as led by the Mayoral Forum:

Update: VS Joint Committee Chair is a member of Steering Group and VS Chief Executive Officer is Chair of the Working Group and VS Group Manager Strategic Projects and Development a member.

15 Production of economic data at a regional and territorial local authority level in time for SDC’s planning processes:

Update: VS staff to work with SDC Policy staff to determine data and statistical information required and incorporate as part of a joint project.

16 Development of a Regional Cycleway Strategy:

Update: SDC will provide input via VS to contribute to the scope of work currently being proposed by Sport Southland - especially relating to built infrastructure requirements, geographical coverage, categorisation of trails - Grades 1, 2, 3, 4, and 5 and cycle touring routes as per NZCT Inc. guidelines.

17 Preparation of a Tourism Strategy that demonstrates a greater focus on marketing Invercargill, including the development of marketing materials. The strategy should have a particular focus on the China market:

Update: VS to seek involvement from SDC in this project as this needs to be a wider Tourism Strategy than just a focus on Invercargill and China. SDC requires personnel on the project team to define the scope and monitor the project development.

18 Review of the i-site:

Update: SDC is interested in the outcome of this review and while not required to participate in the process of the review, is requesting SDC personnel involvement and input into the development of any approach going forward as a result of the review fundings.

SDC Community Development Projects

19 Development and implementation of the Around the Mountains Marketing and Business Strategy:

Update: VS to include SDC staff in project team as required and/or appropriate.

20 Research and viability of communities experiencing declining populations:

Update: To include modelling and scenario planning to inform future infrastructure service delivery requirements and future community service requirements. SDC technical staff to form part of this VS project team.

21 Further development of the community planning approach to link in with the development of the Regional Development Strategy.

Update: SDC to refine this approach with VS in conjunction with the Regional Development Strategy key recommendations.

22 Research around providing community development incentives such as dollar for dollar subsidy requirements:

Update: Project to be put on hold - not a priority at present.

23 Programme to promote the benefits of community volunteering:

Update: Project to be put on hold - not a priority at present.

24 An ongoing community development coaching programme to encourage and support Southland District communities to develop local initiatives:

Update: Project to be put on hold - not a priority at present.

SDC - VS Relationship and Future Opportunities

25 As a means of monitoring and developing the relationship of VS as SDC’s agent for regional development there is an understanding of building on the concept of continual improvement.

26 To this end and to ensure that the work of VS Community Development resources aligns with SDC’s priorities the following are to be further developed in 2015/2016:

(a) Protocols and processes to align the work programme of the VS Community Development team with SDC work priorities are to be developed and agreed.

(b) An evaluation of the current VS approach to community planning is to be undertaken to ensure that it aligns with the approach that SDC wishes to adopt in the future.

(d) Implementation of the Community Planning Strategy across agreed Southland communities to be progressed.

(e) Development of a reporting and accountability mechanism to promote efficiencies and effectiveness for VS as a SDC agent.

27 It is intended the revision of priority projects and planned opportunities for the future will enhance the SDC/VS relationship and ensure that VS is delivering to SDC expectations.

28 These requirements as a purchaser of services is linked with SDC’s expectations as an owner of VS.

Issues

29 It is anticipated there are no issues to consider as these amendments and alterations have been discussed with VS staff.

Factors to Consider

Legal and Statutory Requirements

30 No legal or statutory requirements to be further considered outside of the VS Heads of Agreement 2014-2017.

Community Views

31 Community views are provided for as part of the various consultation requirements of SDC and VS.

Costs and Funding

32 No impact on existing budgets.

Policy Implications

33 No impact on existing budgets.

Analysis

Options Considered

34 There are two options to consider:

1. To agree with the suggested approach for the SDC to further develop and monitor the VS relationship.

2. To continue with the status quo.

Analysis of Options

Option 1

Advantages

Disadvantages

· Supports SDC and VS to deliver the Letter of Expectation priority projects in 2015/2016.

· Provides clarity and confirmation of measurable deliverables.

· Assists in SDC and VS delivering projects of relevance as demanded.

· Promotes a collaborate approach to SDC-VS relationship management.

· May increase pressure on existing resource allocation for VS.

· May create tension between SDC and VS as to what are priority projects required.

Option 2

Advantages

Disadvantages

· Allows processes to continue as developed.

· Lose the opportunity for greater relationship management and involvement.

· Less opportunity for project definition.

Assessment of Significance

35 Not considered of significance as per policy.

Recommended Option

36 APAC supports Option 1 to progress the SDC-VS partnership approach.

Next Steps

37 Implement and monitor as required to further develop and manage the VS relationship.

Attachments

There are no attachments for this report.

Activities Performance Audit Committee

03 June 2015

Description: sdclogo

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

Recommendation

That the public be excluded from the following part(s) of the proceedings of this meeting.

C9.1 Public Excluded Minutes of the Activities Performance Audit Committee Meeting dated 22 April 2015

C9.2 Milford Development Authority Update

C9.3 Professional Services Contract 12/03 Extension

The general subject of each matter to be considered while the public is excluded, the reason 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 are 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) for the passing of this resolution
Public Excluded Minutes of the Activities Performance Audit Committee Meeting dated 22 April 2015	s7(2)(a) - The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person. s7(2)(b)(ii) - The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information. s7(2)(f)(ii) - The withholding of the information is necessary to maintain the effective conduct of public affairs through the protection of such members, officers, employees and persons from improper pressure or harassment. s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities. s7(2)(i) - The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations). s7(2)(j) - The withholding of the information is necessary to prevent the disclosure or use of official information for improper gain or improper advantage.	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 exists.
General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Ground(s) under section 48(1) for the passing of this resolution
Milford Development Authority Update	s7(2)(b)(ii) - The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information. s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.	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 exists..
General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Ground(s) under section 48(1) for the passing of this resolution
Professional Services Contract 12/03 Extension	s7(2)(b)(ii) - The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.	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 exists..