Notice is hereby given that a Meeting of
the Around the Mountains Cycle Trail Project Subcommittee will be held on:
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Date:
Time:
Meeting Room:
Venue:
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Tuesday, 27
September 2016
3.00pm
Council Chambers
15 Forth Street
Invercargill
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Around the Mountains Cycle Trail Project
Subcommittee Agenda
OPEN
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MEMBERSHIP
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Chairperson
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Lyall Bailey
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Mayor Gary Tong
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Councillors
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Brian Dillon
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Rodney Dobson
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Paul Duffy
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Ebel Kremer
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IN ATTENDANCE
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Group Manager Services and Assets
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Ian Marshall
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Committee Advisor
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Fiona Dunlop
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Terms of
Reference for the Around the Mountains Cycle Trail Project Subcommittee
This subcommittee is a subcommittee of Activities
Performance Audit Committee and has responsibility for:
·
Project Completion - To ensure the cycle trail
project is completed to the standard expected on a no surprises basis, by
(i) Monitoring
progress and making decisions to allow completion to be achieved.
·
Project Progress - To monitor progress of the
project and make necessary decisions to keep the project on track in accordance
with the project plan. To ensure the project is completed on time in accordance
with the project plan, by
(i) Receive sufficiently detailed
progress reports from the Project Manager to be able to be fully informed of
progress towards the completion outcome
(ii) Making decisions on actions necessary
to overcome constraints that put achieving the planned outcome at risk.
·
Financial Management - To ensure the project is
completed to the agreed budget, by
(i) Receiving sufficiently detailed
progress reports from the Project Manager to be able to be fully informed of
the likely completion outcome
(ii) Making decisions on actions
necessary to overcome constraints that put achieving the completion within
budget at risk
(iii) Approving Procurement Plans and Let
Contracts in accordance with those plans for the purchase of goods and services
to complete the cycle trail project.
·
Risk Management - To monitor Risk Management
processes and ensure that risks are being identified, mitigated and managed, by
(i) Receiving reports on risk
management, assessing if all important risks are being managed properly
(ii) Flagging any unmanaged risks.
·
Health and Safety Management - To monitor Health
and Safety management and ensure it is being carried out appropriately, by
(i) Receiving reports on Health and
Safety management including evidence of proactive management and evidence of
safety observations and due diligence.
(ii) Ensuring unsafe practices are
eliminated from the project.
·
Compliance - To monitor consent compliance to
ensure all work is carried out under necessary consents and to ensure all
consent conditions are complied with, by
(i) Receiving confirmation reports of
consent compliance
(ii) Receiving exception reports on issues
of non-compliance and proposals to correct non-compliance.
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Around the Mountains Cycle Trail Project Subcommittee
27 September
2016
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TABLE OF
CONTENTS
ITEM PAGE
Procedural
1 Apologies 5
2 Leave of
absence 5
3 Conflict of
Interest 5
4 Public Forum 5
5 Extraordinary/Urgent
Items 5
6 Confirmation
of Minutes 5
Reports for Recommendation
7.1 Around
the Mountains Cycle Trail Review Action Plan 7
Reports
8.1 Financial
Report to 30 June 2016 17
Public Excluded
Procedural motion
to exclude the public 21
C9.1 Legal
Advice on Appeal process and Claim for Costs 21
At the close of
the agenda no apologies had been received.
2 Leave
of absence
At the close of
the agenda no requests for leave of absence had been received.
3 Conflict
of Interest
Committee
Members are reminded of the need to be vigilant to stand aside from
decision-making when a conflict arises between their role as a member and any
private or other external interest they might have.
4 Public Forum
Notification to
speak is required by 5pm at least two days before the meeting. Further
information is available on www.southlanddc.govt.nz
or phoning 0800 732 732.
5 Extraordinary/Urgent
Items
To consider, and if
thought fit, to pass a resolution to permit the committee
to consider any further items which do not appear on
the Agenda of this meeting and/or the meeting to be held with the public
excluded.
Such resolution is
required to be made pursuant to Section 46A(7) of the Local Government Official
Information and Meetings Act 1987, and the Chairperson must advise:
(i) the
reason why the item was not on the Agenda, and
(ii) the
reason why the discussion of this item cannot be delayed until a subsequent
meeting.
Section 46A(7A) of the Local Government Official Information and Meetings
Act 1987 (as amended) states:
“Where an item
is not on the agenda for a meeting,-
(a)
that item may be discussed at that meeting if-
(i) that
item is a minor matter relating to the general business of the local authority;
and
(ii) the
presiding member explains at the beginning of the meeting, at a time when it is
open to the public, that the item will be discussed at the meeting; but
(b)
no resolution, decision or recommendation may be made in respect
of that item except to refer that item to a subsequent meeting of the local
authority for further discussion.”
6 Confirmation
of Minutes
6.1 There are no minutes to confirm.
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Around the
Mountains Cycle Trail Project Subcommittee
27 September
2016
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Around the
Mountains Cycle Trail Review Action Plan
Record No: R/16/9/15047
Author: Steve
Ruru, Chief Executive
Approved by: Steve Ruru,
Chief Executive
☐
Decision ☒
Recommendation ☐
Information
Purpose
1 To
seek a recommendation from the Subcommittee to recommend adoption of the
proposed Action Plan which has been developed in response to the findings from
the Deloitte review of the way in which Council has managed the financial
aspects of the Around the Mountain Cycle Trail (ATMCT) project.
Executive
Summary
2 Deloitte
have recently completed their review of the way in which Council has managed
the financial aspects of the ATMCT. The report identifies a number of issues
with the way in which the project was managed. To ensure that the organisation
takes on board the lessons to be learnt from the review it is seen as
appropriate for a structured Action Plan to be put in place.
3 The
Action Plan attached to this report outlines the actions proposed to respond to
the report’s findings. While a number of these relate specifically to the
ATMCT project a number also apply to the organisation as a whole.
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Recommendation
That the Around the
Mountains Cycle Trail Project Subcommittee:
a) Receives
the report titled “Around the Mountains Cycle Trail Review Action
Plan” dated 21 September 2016.
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) Agrees
to recommend to the Activities Performance Audit Committee that it approves
the Improvement Action Plans attached to this report.
e) Recommends
to the Activities Performance Audit Committee that it asks officers to report
back to the Committee on a six monthly basis with an update on progress in
implementing the agreed actions.
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Content
Background
4 At
its 9 December 2015 meeting the Activities Performance Audit Committee (APAC)
agreed to commission an independent review of the way in which Council has
managed the financial aspects of the ATMCT. Deloitte were subsequently
appointed to undertake the review. A copy of the draft Deloitte report was
considered by Council at its 20 July 2016 meeting at which time they asked
officers to report to APAC with a proposed Action Plan to address the actions,
including improvement opportunities, which should be taken in response to the
report.
Issues
5 There
is a need for this Subcommittee to consider the draft Action Plan attached and
determine whether it addresses all of the actions and improvement opportunities
which it considers should be addressed.
6 In
developing the Action Plan officers have had regard to the Deloitte Project
Quality Assurance Framework which is outlined in section 10 of the Deloitte
report. Officers have also split the plan into actions that they believe should
be taken in relation to the ATMCT project and those which apply more
generically to organisational processes.
Factors to Consider
Legal
and Statutory Requirements
7 The
proposal to develop an Action Plan, including identifying improvement options,
is consistent with Council’s obligations under the Local Government Act
2002 to manage its business in a prudent and business-like manner.
Community
Views
8 The
community would expect Council to address the issues arising out of the
Deloitte review via a structured action plan. In this way they can be assured
that the organisation has learnt from the short-comings identified and that
there is an appropriate level of accountability for the short-comings
identified.
Costs
and Funding
9 The
costs associated with implementation of the Action Plan will be funded from
within existing budgets.
Policy
Implications
10 There
are no direct policy implications coming out of approving the proposed Action
Plan. Some of the proposed actions may lead to changes being proposed to
current policies. These will be identified at that time.
Analysis
Options Considered
Option 1 – Implement an
Action Plan
11 Under
this option the Subcommittee would, subject to any modifications that they wish
to see made, recommend to APAC that it approve the Action Plan attached.
12 Officers
would then report back to APAC on a regular basis to enable that Committee to
monitor the progress being made in implementing the actions identified.
Option 2: Do Nothing
13 Under
this option the Subcommittee would determine that no further action is required
and recommend to APAC that it not approve the Action Plan attached. A number of
the improvement opportunities flowing out of the review could be implemented
but on a more ad hoc basis.
Analysis of Options
Option
1 – Implement an Action Plan
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Advantages
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Disadvantages
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· Council
can take the actions, including improvements considered necessary, in
response to the Deloitte review via a structured plan.
· Council
can ensure that the lessons which need to be learnt from this review are
implemented in a structured way.
· Risks
associated with completing the ATMCT and other projects will be reduced.
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· There
will be costs associated with implementing the action plan albeit that these
will be absorbed within existing budgets.
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Option
2 – Do Nothing
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Advantages
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Disadvantages
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· Avoids
costs of implementing the actions identified.
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· Any
improvement actions will be implemented in an ad hoc manner.
· Risk
of similar mistakes being made in the future will be increased.
· Council
will not be seen as having taken an appropriate set of actions in response to
the Deloitte review.
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Assessment of Significance
14 This
report addresses the question of whether Council should put in place a plan to
address the short-comings identified through the Deloitte review. While there
will be a level of community interest in ensuring that Council takes
appropriate actions officers are of the view that a decision to adopt the Action
Plan would not be a significant decision.
Recommended
Option
15 It
is recommended that the Subcommittee adopt Option 1 and recommend to APAC that
it approve, subject to any changes the Committee may wish to make, the attached
Action Plan.
Next
Steps
16 The
recommendation of this Subcommittee will be provided for APAC for that
Committee to consider when reviewing the draft Action Plan.
ATMCT Action Plan
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Project
Assurance Framework/Improvement Action
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Current
Status
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Improvement
Programme
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Timeframe
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Comment
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Project
Governance
There
is a need to have a clearly defined project governance structure in place
that has the skills necessary to manage the project.
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An
ATMCT Project Sub-committee is in place as a sub-committee of APAC to provide
governance oversight for the project through to completion.
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Confirm
establishment of the Project Sub-Committee and the overall Project Management
structure to be used for remainder of the project.
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November
2016
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All
Council committees are, by law, disestablished at the end of each triennium.
As a result Council will need to re-establish the committee and approve its
terms of reference following completion of the triennial election.
This
will provide an opportunity to confirm the overall governance and project
management structure that is appropriate for the remainder of the capital
development phase of the project.
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Resource
Management
It
is important to ensure that the project has access to the skills and level of
resources that it needs.
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The
project currently has access to a range of internal and external resources to
drive the project.
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Review
the range and quantum of resources allocated to the project as part of the
review of project governance and management structure.
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Four
months after release of Environment Court decision.
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Risk/Issues
Management
It
is important to identify and appropriately manage project risks.
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A
number of project risks are being identified but have not been formally
reported through to APAC and/or the Project Steering Committee.
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Ensure
that the Project Risk Register is developed and reported through to the
Project Governance Committee.
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Each
Project Committee Meeting.
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Register
will be developed in accordance with the Council Risk Management
Policy.
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Probity
Auditor
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A
probity auditor has not been appointed to date.
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Consider
whether a Project Assurance/Probity Auditor should be appointed to provide
extra assurance over remaining stages of the project.
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Four
months after release of the Environment Court decision.
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Decision
will need to have regard to the procurement approach used for the final
stages of the project.
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Financial
Management
Ensure
regular financial reports and financial reforecasts are produced for the
project through to completion.
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New
financial reforecasts for the project were developed in 2015 given the change
in project status.
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Ensure
financial report is provided to each meeting of the Project Sub-Committee.
Financial
reforecasts to be produced twice per year or as required to reflect a
significant change in project status.
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October
and April.
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Financial
reforecasts will be completed quarterly as per current organisational policy.
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Procurement
Strategy
Develop
procurement strategy and business case for progressing completion of the
Trail.
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Projections
have been developed for completing trail based on existing resource
consent.
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Develop
business case addressing costs and benefits of proceeding with development of
remainder of the Trail once the Environment Court decision is released.
Develop
a procurement strategy detailing the nature of the contract proposed to be
used for remaining stages of the contract.
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Four
months after release of the Environment Court decision.
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The
projected cost of completing the ATMCT could change significantly following
release of the Environment Court decision.
It
will also be appropriate to review the procurement approach to be used given
that Council now has a significant level of information relating to the
likely construction costs and risks.
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Operating
Model
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Council
currently has a contract for operation of ATMCT booking system.
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Review
the proposed Operating Model and financial projections for future operation
and maintenance of the ATMCT.
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June
2017
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Current
trail operating model and financial projections were developed in 2009. It is
therefore appropriate for them to be updated to reflect current knowledge.
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Council Action Plan
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Action
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Current
Status
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Improvement
Programme Action
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Timeframe
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Comment
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Accountability
Workstream
Review
accountability options
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Report
to Council on options for ensuring steps are implemented to enforce an
appropriate level of accountability for the short-comings identified through
the report.
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April
2017
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Report
will cover different parties that have been involved with the project.
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Governance
Structure
Separate
Audit Committee and Services and Assets Committee functions
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APAC
currently performs the role of being both an Audit Committee and an
Operations Committee.
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Recommend
to Council the establishment of a separate Audit Committee and Services and
Assets Committee.
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November
2016
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Audit
Committee should be established in a manner that is consistent with good
practice. Revised terms of reference and work programme would be developed as
part of the new approach.
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Risk
Management
Internal
Audit programme
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Council
is part of a South Island internal audit pilot programme.
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Develop
Internal Audit programme based on organisational risk profile.
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June
2017
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Review
of pilot and other options is needed.
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Review
operation of risk management policy
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Risk
Management Policy has been operational for eighteen months.
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Review
operation of existing risk management policy.
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March
2017
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Procurement
and Contract Management Strategy
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Project
has been scoped and is currently underway.
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Develop
Procurement, Project and Contract management Framework.
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December
2017
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Project
scope and current status report will be bought to APAC in November.
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Attachments
There are no attachments for
this report.
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Around the
Mountains Cycle Trail Project Subcommittee
27 September
2016
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Financial
Report to 30 June 2016
Record No: R/16/9/14775
Author: Anne
Robson, Chief Financial Officer
Approved by: Steve Ruru,
Chief Executive
☐
Decision ☐
Recommendation ☒
Information
1 This
report summarises the financial position of the Around the Mountains Cycle
Trail to 30 June 2016 for costs incurred/accrued to date against budget.
2 Attached
is the full financial reconciliation of costs for the project to the notified
budgets of Council. The below is a summary of this document comparing
actual costs to the council budget of 8 December 2015.
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Actual
Costs to 30 June 2016
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Budget Council Workshop 8-12-15
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Key Variance (under)/over
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Notes
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Income
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5,793,960
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6,213,307
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(419,347)
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1
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Less Expenses
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Stage 0
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303,550
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303,550
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Stage 1 (incl interest on
negative reserve)
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5,575,102
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5,714,696
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(139,594)
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2
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Stage 2 (sections 6&7 plus
retentions)
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2,096,247
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2,099,832
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Stage 2 (Sections 8&9)
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1,686,832
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6,718,146
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(5,031,314)
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3
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Total Costs
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9,661,731
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14,836,224
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Net Deficit
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3,867,771
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8,622,917
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Less Operating Cost net surplus
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7,168
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Balance of Reserve at 30 June
2016
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($3,860,603)
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3 Note
1, an analysis of the income variation is as follows:
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Entity
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Key
Variance
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Notes
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Lotteries Commission
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500,000
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An extension to apply for the balance of funding
has been received from the Lotteries Commission until 31 December 2018.
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Walking Access Commission
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20,000
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On completion of registering access rights on
titles, this grant will be received.
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Grant from Mararoa-Waimea Ward
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(100,000)
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A contribution towards signage and other costs
of the trail was received from the Mararoa Waimea ward. This was unbudgeted.
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$420,000
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4 Note
2, of the $139,594 variance, $159,460 relates to the completion of the property
deviation that is in progress. To date $34,519 has been spent of a budgeted
$193,979. It is expected that the final cost will come within the
budget. Additionally, fencing has come in $16,407 over budget due to
additional fencing being undertaken on Menlove’s property in the area of
the deep railway cutting. When the fencing programme was initially
planned it was thought stock would not create a problem in this area.
However, this has proven not to be the case and in order to prevent ongoing
maintenance problems and conflict with stock issues it was decided that it was
prudent to fence this section.
5 Note
3, Stage 2 (sections 8 & 9) is broken down as follows:
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Actual
Costs to 30 June 2016
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Budget
Council Workshop 8-12-16
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Variance
under/(over)
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Consent & Appeal Costs
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1,518,144
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1,014,031
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(504,113)
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Consultants
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168,688
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468,811
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(300,123)
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Construction 8&9
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-
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5,704,115
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5,704,115
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Total
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1,686,832
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7,186,957
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6 The
Consent & Appeal costs are over budget by $504,113. Only one invoice
in relation to final legal advice is to be received and will add to the overall
actual cost. All other costs in relation to the Environment Court process
have been received.
7 Consultant
costs incurred to date are in relation to design work to inform the appeal
process. This work has also been of benefit to further define the scope
of works for sections 8 & 9.
8 Until
the Environment Court decision is released and Council has had the time to
consider the decision and any conditions and make a decision on the next steps,
no work is/will be undertaken in revising the estimated consultants and
construction costs of sections 8 & 9.
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Recommendation
That the Around the
Mountains Cycle Trail Project Subcommittee:
a) Receives
the report titled “Financial Report to 30 June 2016” dated 21
September 2016.
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Attachments
a Around
the Mountains Cycle Trail 30 June 2016 Financial Report, Financial Attachment ⇩
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Around the
Mountains Cycle Trail Project Subcommittee
|
27 September 2016
|
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Around the Mountains Cycle Trail Project Subcommittee
27 September
2016
|
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Exclusion of the Public: Local Government Official Information and
Meetings Act 1987
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Recommendation
That the
public be excluded from the following part(s) of the proceedings of this
meeting.
C9.1 Legal
Advice on Appeal process and Claim for Costs
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:
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General subject of each matter to be considered
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Reason for passing this resolution in relation to
each matter
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Ground(s) under section 48(1) for the passing of this
resolution
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Legal Advice on Appeal process and Claim for Costs
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s7(2)(g) - The withholding of the information is
necessary to maintain legal professional privilege.
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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.
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