Finance and Performance Committee

I hereby give notice that an ordinary meeting of the Finance and Performance Committee will be
held on:
Date:
Time:
Meeting Room:
Venue:
Thursday, 17 September 2015

9.30am
Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland
Finance and Performance Committee

OPEN AGENDA
MEMBERSHIP
Chairperson
Deputy Chairperson
Members
Cr Penny Webster
Cr Ross Clow
Cr Anae Arthur Anae
Cr Cameron Brewer
Mayor Len Brown, JP
Cr Dr Cathy Casey
Cr Bill Cashmore
Cr Linda Cooper, JP
Cr Chris Darby
Cr Alf Filipaina
Cr Hon Christine Fletcher, QSO
Deputy Mayor Penny Hulse
Cr Denise Krum
Cr Mike Lee
Cr Calum Penrose
Cr Dick Quax
Cr Sharon Stewart, QSM
Member David Taipari
Member John Tamihere
Cr Sir John Walker, KNZM, CBE
Cr Wayne Walker
Cr John Watson
Cr George Wood, CNZM
(Quorum 11 members)
Mike Giddey
Democracy Advisor
11 September 2015
Contact Telephone: (09) 890 8143
Email: mike.giddey@aucklandcouncil.govt.nz
Website: www.aucklandcouncil.govt.nz
Please note: Any attachments listed within this agenda as Under Separate Cover can be found
at the Auckland Council website http://infocouncil.aucklandcouncil.govt.nz/.
Note:
The reports contained within this agenda are for consideration and should not be construed as Council policy
unless and until adopted. Should Members require further information relating to any reports, please contact
the relevant manager, Chairperson or Deputy Chairperson.
TERMS OF REFERENCE
Responsibilities
This committee will be responsible for monitoring overall financial management and the
performance of the council parent organisation and the financial monitoring of the Auckland
Council Group. It will also make financial decisions required outside of the annual budgeting
processes. Key responsibilities include:
Financial management
Approval of non-budgeted expenditure
Write-offs
Acquisition and disposal of property relating to the Committees responsibilities
Monitoring achievement of financial and other measures of performance and service

levels
Recommending the Annual Report to the Governing Body
Development of the 2016/17 Annual Plan and amendments to the LTP including:
- Local Board agreements
- Financial Policy related to AP (recommendation to the Governing Body)
- Setting of rates (recommendation to the Governing Body)
- Preparation of the consultation document and supporting information for the LTP and
Annual Plan (recommendation to the Governing Body)
Financial policy outside the LTP and AP
Powers
(i)
All powers necessary to perform the committees responsibilities.

Except:
(a)
powers that the Governing Body cannot delegate or has retained to itself
(section 2)
(b)
where the committees responsibility is limited to making a recommendation
only
(ii)
Approval of a submission to an external body
(iii)
Powers belonging to another committee, where it is necessary to make a decision prior

to the next meeting of that other committee.
(iv)
Power to establish subcommittees.
EXCLUSION OF THE PUBLIC WHO NEEDS TO LEAVE THE MEETING

Members of the public
All members of the public must leave the meeting when the public are excluded unless a
resolution is passed permitting a person to remain because their knowledge will assist the
meeting.
Those who are not members of the public
General principles
Access to confidential information is managed on a need to know basis where access

to the information is required in order for a person to perform their role.
Those who are not members of the meeting (see list below) must leave unless it is
necessary for them to remain and hear the debate in order to perform their role.
Those who need to be present for one confidential item can remain only for that item
and must leave the room for any other confidential items.
In any case of doubt, the ruling of the chairperson is final.
Members of the meeting
The members of the meeting remain (all Governing Body members if the meeting is a
Governing Body meeting; all members of the committee if the meeting is a committee
meeting).
However, standing orders require that a councillor who has a pecuniary conflict of
interest leave the room.
All councillors have the right to attend any meeting of a committee and councillors who
are not members of a committee may remain, subject to any limitations in standing
orders.
Independent Mori Statutory Board
Members of the Independent Mori Statutory Board who are appointed members of the
committee remain.
Independent Mori Statutory Board members and staff remain if this is necessary in
order for them to perform their role.
Staff
All staff supporting the meeting (administrative, senior management) remain.

Other staff who need to because of their role may remain.
Local Board members
Local Board members who need to hear the matter being discussed in order to perform
their role may remain. This will usually be if the matter affects, or is relevant to, a
particular Local Board area.
Council Controlled Organisations
Representatives of a Council Controlled Organisation can remain only if required to for

discussion of a matter relevant to the Council Controlled Organisation.

17 September 2015
ITEM TABLE OF CONTENTS
PAGE
Apologies
Declaration of Interest
Confirmation of Minutes
Petitions
Public Input
Local Board Input
Extraordinary Business
Notices of Motion
Auckland Regional Amenities Funding Act (ARAFA) Funding Model

Review - Evaluation Report
10
Government Broadband Investment - Digital Enablement Plan
11
Approval of and recommendation for adoption of the 2014/2015 Annual

Report and Summary Annual Report for Auckland Council and Group
79
117
Please note: The attachments listed within this report as Under Separate Cover can be
found at the Auckland Council website http://infocouncil.aucklandcouncil.govt.nz/.
12
Budget Update
13
This report will be provided in an addendum agenda.

Rating small accommodation providers
119
14
Procurement Strategy Implementation Update
123
15
Independent Review of Operating Costs of the Rail Network in Auckland

Compared to Wellington
125
16
Consideration of Extraordinary Items
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1
Apologies
Apologies from Cr CE Brewer, Cr GS Wood, Deputy Mayor PA Hulse and Deputy
Chairperson Cr RI Clow have been received.
Declaration of Interest
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.
Confirmation of Minutes
That the Finance and Performance Committee:
a)
confirm the ordinary minutes of its meeting, held on Thursday, 20 August 2015,
including the confidential section, as a true and correct record.
Petitions
At the close of the agenda no requests to present petitions had been received.
Public Input
Standing Order 7.7 provides for Public Input. Applications to speak must be made to the
Democracy Advisor, in writing, no later than one (1) clear working day prior to the
meeting and must include the subject matter. The meeting Chairperson has the discretion
to decline any application that does not meet the requirements of Standing Orders. A
maximum of thirty (30) minutes is allocated to the period for public input with five (5)
minutes speaking time for each speaker.
At the close of the agenda no requests for public input had been received.
Local Board Input

Standing Order 6.2 provides for Local Board Input. The Chairperson (or nominee of that
Chairperson) is entitled to speak for up to five (5) minutes during this time. The
Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical,
give one (1) days notice of their wish to speak. The meeting Chairperson has the
discretion to decline any application that does not meet the requirements of Standing
Orders.
This right is in addition to the right under Standing Order 6.1 to speak to matters on the
agenda.
At the close of the agenda no requests for local board input had been received.
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7
Extraordinary Business
Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as
amended) states:
An item that is not on the agenda for a meeting may be dealt with at that meeting if(a)
The local authority by resolution so decides; and
(b)
The presiding member explains at the meeting, at a time when it is open to the
public,(i)
The reason why the item is not on the agenda; and
(ii)
The reason why the discussion of the 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)
(b)
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
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.
Notices of Motion
At the close of the agenda no requests for notices of motion had been received.
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Item 9
Auckland Regional Amenities Funding Act (ARAFA) Funding Model

Review - Evaluation Report
File No.: CP2015/18106
Purpose
1.
To consider options arising from the Auckland Regional Amenities Funding Act 2008
(ARAFA) Funding Model review (the review).
Executive Summary
1.
Auckland Council initiated a review of the funding model under the Auckland Regional
Amenities Funding Act 2008 (the Act) in the context of Auckland Councils establishment.
Auckland Council approved the Terms of Reference of this review on 26 February 2015
(GB/2015/5).
2.
The review sought to determine whether the funding model remains fit for purpose and to
identify any changes that enhance its effectiveness. The review did not consider which
organisations should receive funding under the Act.
3.
In addition to the status quo, six different options were developed that sought to address the
identified issues. These options were endorsed by the Finance and Performance Committee
on 18 June 2015 (FIN/2015/50) and have now been evaluated.
Preferred Option
4.
The recommended option is to establish a framework to define sustainable funding and

implement medium term plans that will enhance the Acts annual decision-making process.
5.
This framework would define sustainability in the context of the Act, how it is substantiated,
the information required to determine sustainability for each amenity, and other related
matters.
6.
The Funding Board will be responsible for leading the process to develop and establish this
framework. The work required to develop the framework should be scoped to determine the
associated time frames and costs.
7.
Once the framework is established, each amenity would follow the agreed process to
develop a medium term (suggested 3-5 year) plan, which would consider:
i.
8.
Appropriate levels of reserves an amenity would be able to build-up and maintain to

help manage the peaks and troughs of its funding requirements.
ii.
The level of surpluses an amenity needs to generate in order to meet its future funding
requirements, including for capital projects.
iii.
Outline the planned levels of service that the amenities intend to provide, and how
projected needs will be met.
iv.
Strategic outcomes that the amenity is looking to achieve.
Once the framework is established the council would make a new funding principle under
section 22 of the Act. The principle would require the Funding Board to have regard to any
medium term plans that have been agreed when making its annual funding decisions.
Auckland Regional Amenities Funding Act (ARAFA) Funding Model Review - Evaluation Report
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17 September 2015
Recommendation/s
a. note the evaluation of options and conclusions drawn from the Auckland Regional
Amenities Funding Act 2008 Funding Model review.
b. endorse the development of a framework for sustainable funding as the preferred
option for the Auckland Regional Amenities Funding Act 2008 - Funding Model review.
c. request Auckland Council staff to continue to work with the Funding Board and the
amenities to develop an implementation plan for the framework and report back
regarding costs and time frames.
d. note that developing and establishing a framework for sustainable funding may result in
a new funding principle being added to those that need to be considered in
implementing the Auckland Regional Amenities Funding Act 2008.
Comment
9.
The Auckland Regional Amenities Funding Act 2008 (the Act) established a model for
providing adequate, sustainable and secure funding to the specified regional amenities. The
Act also ensured that the former councils of the Auckland region contributed to that funding.
Following amalgamation in 2010, Auckland Council is the sole funder under the Act.
10.
Auckland Council initiated a review of the Acts funding model in the context of Auckland
Councils establishment, having regard to the legislative framework for local government.
Auckland Council approved the Terms of Reference for this review on 26 February 2015,
which stated that the overall objective of the review is:
to achieve long term sustainable affordable and predictable funding of the existing
amenities while recognising the Councils purpose and responsibilities under the Local
Government Act 2002 and other legislation.
11.
The review sought to determine whether the funding model remains fit for purpose and to
identify any changes that enhance its effectiveness. The review started from the premise
that council would provide funding to the regional amenities, and sought to find the best
model to provide that funding.
12.
This review did not consider which organisations should receive funding under the model.
Such considerations were outside the scope of the terms of reference. However, a number
of different options for funding models were evaluated as part of the review. One of the
considerations when evaluating these different options was whether the funding model was
flexible enough to allow amenities to be added or removed from the model.
13.
It was agreed from the outset that council staff would work with representatives of the
amenities, and consult with the Funding Board, when undertaking the review. A series of
meetings and workshops were held with the amenities representatives during the course of
the review. There were also meetings and workshops with the Funding Board, and other
parties involved or interested in the funding of not-for-profit organisations.
14.
Working with a range of stakeholders helped to develop an understanding of the current

funding model from different perspectives funder, recipient, and the bodies that administer
the Act. The views of the various parties have informed the review.
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15.
A number of issues were identified with the current model of which the following emerged as
the most significant through the review:
i. The Act explicitly prevents funding being provided for capital expenditure. However,
some of the amenities have significant requirements for capital funding. This has
caused issues in the past, as funds that could have been used for operating expenses
were put towards capital projects.
ii. The Act requires the Funding Board to provide adequate, sustainable, and secure
funding to the amenities. What is adequate funding for each amenity is determined
through the annual application process, which largely focuses on the needs of the
amenity in the following financial year. This limits consideration of longer term plans
when making the annual funding decisions, and does not provide the best
understanding of what is financially sustainable for each amenity over the medium term.
iii. Whilst Auckland Council is compelled to provide funding to the amenities, the
opportunities for Auckland Council to ensure funding is directed towards its highest
priority strategic outcomes and goals for the region are relatively weak.
Options
16.
17.
In addition to the status quo, six different options were developed that sought to address the
identified issues. These options covered a spectrum, ranging from enhancements to the
status quo that could be implemented within the framework of the Act, through options that
required amendments to the current legislation, and one option that would repeal and
replace the Act. The options were endorsed by the Finance and Performance Committee on
18 June 2015 (FIN/2015/50). They were evaluated against the following criteria, endorsed
by the Finance and Performance Committee on 21 May 2015 (Fin/2015/33):
Financial sustainability and certainty
Affordability
Independence and continuity
Accountability and transparency
Administrative efficiency
Alignment of outcomes and goals
Fairness
Flexibility.
During the evaluation phase, the status quo was used as the benchmark against which the
different options were assessed.
Evaluation
18.
The evaluation of the different options is summarised:

i.
The Status Quo (Option 1) is not a preferred option as available enhancements have
been identified.
ii.
The Pathway to Capital (Option 2) is not a preferred option as applications can be

made to Auckland Council, perceptions that additional funding would be provided by
Auckland Council, the potential retreat of other funders, and the ability of the
preferred option to alleviate the issues.
The Sustainable Funding component (of Option 3) is the preferred option under
which a framework will be developed and established to define sustainable funding
and implement medium term plans that will enhance the Acts annual decisionmaking process.
iii.
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Item 9
It is preferred as it can clarify and strengthen the rationale underpinning the funding
model, clarify appropriate reserves and surpluses (alleviating concern about capital
expenditure), supports better alignment of strategic goals and outcomes and
communication between the key stakeholders and their relationships.
iv.
The Alignment/Groups (option 4) is not a preferred option as it is unworkable,

potentially inconsistent with the Act and the risk of confusing accountabilities limits
further gains.
v.
The Baseline + CPI (option 5) is not a preferred option as it was incomplete, of

indeterminate effect and rated poorly when considered against criteria.
vi.
The Strong Funder (Option 6) and is not a preferred option due the perception that
Auckland Council was exercising greater control and taking greater responsibility
than intended, the potential retreat of other funders, improvement has been identified
within the Act, and insufficient clarity that the benefits of legislative change would
outweigh the significant costs.
vii.
The Auckland Council Dedicated Fund (Option 7) is not a preferred option due to the
potential risk to continuity of funding and the amenities financial sustainability, the
time and resources to effect the legislative change without sufficient clarity that the
benefits would outweigh the likely significant cost and the availability of benefits by
alternative, less costly means.
Preferred Option
19.
The evaluation determined that overall the current funding model is fit for purpose and
improvements are available through the sustainable funding component of this option
without recourse to legislative change. The Sustainable Funding component of Option 3 is
the preferred option.
20.
During the evaluation phase this option was refined in response to discussions with key
stakeholders and analysis of the requirements of the Act. The refined option that has been
developed is to establish a framework to define sustainable funding and implement medium
term plans that will enhance the Acts annual decision-making process.
21.
In undertaking the review, the question of what sustainability meant in the context of the
funding model and the amenities was a recurring question that became central to the review.
22.
A consensus emerged amongst the key stakeholders (amenities representatives and the
Funding Board) about the value of clarifying levels of sustainable funding in the context of
each amenity. The Funding Board indicated that it has considered this matter on several
occasions and are of the view that implementation of the Act has reached a point where
undertaking this work is feasible and would deliver practical benefits in terms of clarity and
focus for funding and performance management.
23.
Financial sustainability is at the heart of the Act. The Act is also focused on the annual
funding process determining the funding to be provided to the amenities in the following
year. One of the most significant improvements that could be made to the current funding
model is to undertake additional work to help determine what is required to make the
amenities financially sustainable in the medium term (3 5 years depending on the nature of
the amenity).
24.
To help determine what is required for the amenities to be financially sustainable, it is

envisaged that the individual amenities would develop medium term plans that can then be
discussed with the Funding Board and council. These discussions would provide greater
clarity about the planned activities of the amenities (and potential alignment to council
objectives), proposed levels of service, future activities that may require additional funding,
appropriate levels of reserves and surpluses, and any planned capital projects that may
have an impact on operating funding requirements.
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25.
Once these plans have been developed, and approved by the Funding Board, they could be
used as a guide to future funding decisions.
Observations
26.
In reaching these conclusions the following observations were made in regard to the Act and
its funding model.
27.
This review represents a continuation of a consideration of issues and options in 2012 which
resulted in the inclusion of a new funding principle.
28.
From this review it is considered drivers for change are less likely to arise from within the
funding model itself than from outside it; notably with regard to current and future
membership under the Act from external stakeholders and from within sectors to which
individual amenities may belong.
29.
Given the complexity and commitment required in terms of time and resources it is
considered that (all things being equal) legislative change should not be undertaken lightly,
with implication that any change sought would most likely be significant.
Consideration
Local Board views and implications
30.
At the time of writing, input was received by sixteen local boards. Two local boards
expressed the view that the criteria and the options provided a sound basis for the review.
Seven local boards received the report or resolved that they were unable to provide
meaningful feedback in the absence of the evaluation.
31.
Local input covered the spectrum of ideas canvassed in the options. Some local boards
opted for specific options discussed under each option. Two local boards supported option
1, two boards supported option 3, and one board supported option 4 (in the absence of
legislative change) or option 7 (with legislative change). Two local boards directly supported
option 7 while another indirectly provide support through referencing some of its components
parts. There was no support for option 2, option 5 or option 6.
32.
Specific comments addressed operational and capital expenditure, support for the purpose
of the Act, the relationship between Auckland Council (as funder) and the amenities (as
funder recipients), alignment of strategic outcomes and goals, membership and support for
other organisations who may not be members, contestability of funder and support for
specific amenities.
33.
Accountability, transparency, certainty of funding and levels of service were referred to. The
newness of the legislation, skills and experience of the Funding Board and stability were
discussed. So was alignment with the Auckland Councils long term Plan/Annual Plan
process.
34.
One board requested that the Auckland War Memorial Museum and the Museum of
Transport and Technology be included in the review. Membership was an issue referred to
by five local boards.
35.
These matters have been considered and incorporated into the evaluation.
Mori impact statement

36.
Enquiries were made of mana whenua in March 2015 to ascertain whether the ARAFA
funding model review held any interest. No interests were identified.
37.
Viewing work on the ARAFA Funding Model review through Whiria Te Muka Tangata: The
Mori Responsiveness Framework as a lens, no statutory or treaty obligations nor direct
Mori or value Te Ao Mori outcomes were identified as affected by the review.
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38.
When reporting on the options, representatives of the Independent Mori Statutory Board
(IMSB) spoke to the need for inclusion of organisations representing Mori arts and culture,
or community groups within the Acts specified amenities. These comments are noted but
are unable to be actioned through this process as they are beyond the scope of this review.
Implementation
39.
The Funding Board will be responsible for leading the process to develop this framework.
The work required to develop the framework should be scoped to determine the associated
time frames and costs.
40.
Once the framework is established, each amenity would follow the agreed process to
develop a medium term (suggested 3-5 year) plan. These plans should consider matters
such as:
i.
41.
42.
Appropriate levels of reserves an amenity would be able to build-up and maintain to

help manage the peaks and troughs of its funding requirements.
ii. The level of surpluses an amenity needs to generate in order to meet its future funding
requirements, including for capital projects.
iii. Outline the planned levels of service that the amenities intend to provide, and how
projected needs will be met.
iv. Strategic outcomes that the amenity is looking to achieve.
Once the framework is established the council would create a new funding principle under
section 22 of the Act. The principle would require the Funding Board to have regard to any
medium term plans that have been agreed when making its annual funding decisions.
Auckland Council staff will continue to work with the Funding Board and the amenities on the
development of the implementation plan and report.
Attachments
No.
Title
Evaluation Report
Page
15
Signatories
Authors
Wayne Brown - Lead Strategic Advisor Strategic Scanning

Alastair Cameron - Principal Advisor CCO Governance and External Partnerships
Authorisers
Jacques Victor - GM Auckland Plan Strategy and Research

Jim Quinn - Chief of Strategy
Matthew Walker - Acting Chief Financial Officer
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Item 10

File No.: CP2015/15854
Purpose
1.
The purpose of this report is to:

seek endorsement of Auckland Councils Digital Enablement Plan (the Plan) for
submission to the Ministry of Business, Innovation & Employment (MBIE) in support of
the MBIEs funding allocation process for broadband infrastructure
introduce the next steps in Auckland Councils rural broadband work programme and
seek input from elected members.
Executive Summary
2.
In March 2015 the Ministry of Business, Innovation & Employment (MBIE) announced $210
million of additional funding to extend Ultrafast Broadband (UFB), $100 million to extend the
Rural Broadband Initiative (RBI), and $50 million to address mobile coverage black spots.
3.
MBIE announced that funding would be allocated through a contestable process. The first
part of this was for local authorities to identify and prioritise communities that would benefit
from an infrastructure upgrade. Auckland Council completed this and submitted the
information in a Registration of Interest Support on 10 July 2015.
4.
The latest information from MBIE indicates that announcements on areas to receive new
broadband or mobile investment will be made when deployment contracts are finalised. This
is likely to take place in the first half of 2016 for UFB, and the second half of 2016 for RBI
and the Mobile Black Spot Fund.
5.
As part of the funding allocation process MBIE has invited local authorities to submit a
Digital Enablement Plan by 18 September 2015. This Plan is intended to outline what a
local authority would do to support the uptake and use of better broadband where it is made
available. Commitments in this Plan will help to inform MBIEs decision on which areas will
receive investment.
6.
With oversight from the Rural Broadband Working Party, staff have developed a Digital
Enablement Plan that supports community enablement and business growth. This draws on
existing activity from across the council family with a focus on access to broadband and
technology, digital skills, and awareness.
7.
In developing the Digital Enablement Plan the council has identified that government funding
will not be sufficient to address all of the broadband issues in rural Auckland. To that end
staff, working with the Rural Broadband Working Party, have started exploring what else the
council can do to support better rural broadband. This rural broadband work programme
looks at what council can do to support better access to broadband in rural Auckland, and
focuses on building the case for further telecommunications industry and central government
investment.
Recommendation/s
a)
endorse the Digital Enablement Plan, inclusive of minor amendments and changes
the Committee makes, for submission to the Ministry of Business, Innovation &
Employment on 18 September 2015
b)
request staff to work with the Rural Broadband Working Party to continue to develop
Auckland Councils rural broadband work programme.
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Comments
Funding Allocation Process for Government Investment in Broadband
8.
Despite government investment in Ultrafast Broadband (UFB) and the Rural Broadband
Initiative (RBI) there continue to be communities that experience limited access to good
quality broadband. These are concentrated in rural areas. In March 2015 government
announced additional funding to address these issues.
9.
$210 million was announced to extend the UFB footprint from 75 percent to 80 percent of
New Zealanders, and $100 million was announced to extend RBI coverage. A new $50
million Mobile Black Spot Fund (MBSF) was also announced to address black spots in
mobile coverage. This funding will be allocated by central government through a
contestable process.
10.
On 10 July 2015 Auckland Council submitted a registration of interest to MBIE highlighting

communities that would benefit from investment. This was endorsed by the Regional
Strategy and Policy Committee on 2 July 2015 (resolution number REG/2015/53).
11.
The next step for local authorities is to submit a Digital Enablement Plan that outlines
commitment to supporting the uptake and use of broadband. Digital Enablement Plans are
not mandatory; however they form a key part of MBIEs decision making process.
12.
The final allocation of funding will be informed by the registration of interest and the Digital
Enablement Plan. This is expected to be announced in the first half of 2016 for UFB, and
the second half of 2016 for RBI and the mobile black spot fund. Following this funding will
then be made available to the successful supplier(s).
13.
MBIEs final decision will take into account:

local authorities commitments to supporting the deployment of infrastructure
the scope and scale of issues in the communities that are identified
the economic and social impact of addressing those issues
local authorities commitment to support the uptake and use of broadband in their digital
enablement plan.
Auckland Councils Digital Enablement Plan
14.
A Digital Enablement Plan is a way for local authorities to outline activities that support the
uptake and use of better broadband (UFB and RBI) and the technologies and services that
that enables. These activities can be planned or underway. Likewise, the Plan can draw on
existing council plans and strategies.
15.
MBIE has indicated it expects activity in the Plan to cover commitment to leadership,
community enablement, and business growth. Auckland Councils Plan (see attachment
one) addresses all three of these areas. However, while the councils Plan includes discrete
community enablement and business growth activities, leadership is instead embedded in
the approach to implementing the Plan. Rather than establishing a programme of work
parallel to and competing with existing digital enablement activity, Auckland Council is
demonstrating leadership by focusing on coordination and oversight.
16.
This reflects the fact that Auckland Councils Digital Enablement Plan draws on existing
plans and strategies, and activities that are already underway or already being scoped. This
is only possible because of the extensive activity already underway across the council
family.
17.
The community enablement and business growth activities that have been included in
Auckland Councils Digital Enablement Plan focus on:
access making broadband and digital technology more accessible
skills supporting people to develop the skills they need to use digital technology
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18.
19.
awareness helping people understand broadband and digital technology, and make
informed decisions.
While a key role of the Digital Enablement Plan is to support the case for further government
investment in broadband infrastructure, Auckland Councils Plan is also applicable:
in areas that will not receive investment
in areas that have already received investment e.g. areas that received funding under the
first round of UFB and RBI
across both urban and rural Auckland.
The only activity that is out of scope of the Plan is addressing the undersupply of broadband
infrastructure and services. Council is responding to this issue separately under the rural
broadband work programme and so there are no activities addressing this in the Digital
Enablement Plan.
Next Steps Rural Broadband Work Programme

20.
21.
22.
Despite government investment, rural communities continue to experience limited access to

broadband, and a lower quality of service, compared with their urban counterparts. These
issues persist because of:
lower population density this means a lower return on investment which in turn has
meant less investment in building and maintaining infrastructure
industry sweating assets infrastructure is usually outdated and over-subscribed which
results in a high contention ratio i.e. demand for bandwidth is higher than the
infrastructure can support
limited consumer recourse consumers can lay a complaint against internet service
providers but not network operators, meaning a connection can be terminated but not
upgraded
governments definition of broadband the focus continues to be on download speed
with no reference to a minimum speed or network stability
no service obligation there is no Telecommunications Service Obligation (or any other
mechanism) requiring network operators to make broadband available to all properties.
While providing telecommunications infrastructure is not core business, the council has an
important role to play in advocating for rural communities. The focus of this advocacy is on
building a case for further investment, from the telecommunications industry and
government, in rural broadband infrastructure.
Success depends on a detailed
understanding of scope and scale of coverage issues.
Accordingly next steps for Auckland Council in the proposed work programme include:
filling in the gaps in our understanding of rural broadband issues and demand
building relationships with telecommunications network operators and understanding the
barriers to investment in broadband infrastructure in rural areas
facilitating relationships between rural communities and the telecommunications industry
advocacy to central government around the need for further investment and / or
regulation in support of better broadband for rural communities.
Consideration
23.
Since the announcement of the UFB and RBI programmes in 2011 all Local Boards have
shown an interest in broadband, and what they can do to help realise the associated
benefits.
24.
All rural Local Boards have been updated about governments investment programme and
are positive about the prospect of additional government funding. They have noted that this
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is an opportunity to address some of the persistent quality of service issues experienced by
many rural communities. Local Board input has helped identify communities that would
benefit from an infrastructure upgrade.
25.
The Digital Enablement Plan supports the case for investment in those communities. The
activity in the Plan will be able to be implemented in rural communities as better broadband
services become available.
26.
Local Boards will have an important role to play as Councils rural broadband work
programme develops. This is likely to include:
informing the understanding of rural broadband issues
facilitating relationships between communities and network operators.

27.
Access to broadband is critical for social and economic inclusion in rural and remote
communities. For rural Papakainga better broadband will be fundamental. Without it
residents will not have equitable access to education, healthcare, public services, and
employment opportunities as these move online.
28.
Better broadband also has the potential to transform rural Marae. As community hubs,
connected Marae will be better equipped to engage children and young people.
Connections will also enable exploration of the role of Marae in the 21st century.
29.
All of these opportunities depend on people using services that are made available. To that
end the Digital Enablement Plan includes community enablement activity that will benefit
rural Mori, and business growth activity that will benefit rural Mori businesses.
30.
Central government timeframes for the Digital Enablement Plan (and for the Registration of
Interest) have limited the councils ability to complete robust community engagement,
including with Mori. However, the council recognises the importance of engaging with
Mori to ensure the broadband services that are available are appropriate.
31.
As an interim measure staff have engaged with both Te Waka Angamua and The
Independent Mori Statutory Board. Te Waka Angamua has provided advice about
engaging Mana Whenua, and staff sought input from Mana Whenua as part of the
Registrations of Interest process. Some input was received from Te Kawerau a Maki and
Ngati Rehua. It is most likely that input was not provided by other groups because of the
short timeframes.
32.
Staff have sought and received comments on the Digital Enablement Plan from the
Independent Mori Statutory Board (IMSB). It is expected that input from IMSB will also be
important in shaping the rural broadband work programme.
33.
As the rural broadband work programme develops there will be fewer time constraints and
staff intend to build relationships with Mana Whenua and Mataawaka.
Implementation
34.
On 24 March 2015 the Economic Development Committee passed resolution number

ECO/2015/9 establishing the Rural Broadband Working Party (Councillors Anae, Cashmore,
Cooper, and Webster).
35.
This working party has responsibility for overseeing Council activity that supports better
broadband in rural Auckland. Initial activity has included developing Auckland Councils
Registration of Interest Support in response to additional government funding for UFB and
RBI.
36.
Current activity includes:

developing a Digital Enablement Plan in support of the Registration of Interest
developing alternative options for Council to support better broadband in rural Auckland.
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Digital Enablement Plan

37. Auckland Councils Digital Enablement Plan draws on existing activity across the council
family. This means the Plan will be implemented through Councils business as usual
activity. The groups responsible for implementing the Digital Enablement Plan include:
38.
Auckland Council Business Improvement Districts Team

Auckland Council Communications and Engagement Department
Auckland Council Libraries & Information Department
Auckland Council Resource Consents, Major Infrastructure Projects Team
Auckland Tourism, Events & Economic Development
Auckland Transport Road Corridor Delivery Team
Auckland Transport Travel Demand Team.
The main functions of the Plan are coordination and oversight. By leveraging existing
activity no additional funding is required.
Attachments
No.
Title
Auckland Digital Enablement Plan
Page
85
Signatories
Authors
Robert Lundberg - Digital Advisor

Anthony Acres - Digital Advisor
Authorisers
Jacques Victor - GM Auckland Plan Strategy and Research

Jim Quinn - Chief of Strategy
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Approval of and recommendation for adoption of the 2014/2015 Annual

Report and Summary Annual Report for Auckland Council and Group
File No.: CP2015/14176
Purpose
1.
Receipt of the draft 2014/2015 Annual Report and Summary Annual Report for Auckland
Council and Group and recommendation of adoption to the Governing Body.
Executive Summary
2.
The Governing Body, at the meeting to be held on 24 September 2015, will receive for
adoption the 2014/2015 Annual Report and Summary Annual Report for Auckland Council
and Group.
3.
Preparing and publishing an Annual Report is a legislative requirement. The Full Annual
Report (FAR) and Summary Annual Report (SAR) covering the year to 30 June 2015 has
been prepared by Council Officers and audited by Audit New Zealand. The FAR and SAR
compares and comments on the performance of Council and Group against budgets and
operating targets set in the Annual Plan.
4.
The Audit and Risk Committee will review the report at its meeting on 15 September 2015
and will provide its recommendation to this Committee.
Recommendation/s
a)
note the confirmation by the Audit and Risk Committee that the audit process has
been completed satisfactorily; and
b)
agree to recommend adoption of the 2014/2015 Full Annual Report and Summary
Annual Report to the Governing Body subject to editorial and technical changes to
the document to be approved by the Chief Financial Officer and the Chairperson.
Comments
5.
The Local Government Act 2002 requires Auckland Council to prepare and adopt a FAR and
SAR each year. Auckland Council is also required under the New Zealand Stock Exchange
listing rules to publish an annual report. The FAR, SAR and Financial Statements for the
year to 30 June 2015 have been prepared by Council Officers and audited by Audit New
Zealand on behalf of the Auditor-General.
6.
The Audit and Risk Committee reviews the quality of the FAR and SAR, the processes used
by management, and compliance with legislation and the financial reporting standards.
They also review the audit risk process with the Office of the Auditor-General and Audit New
Zealand. The Audit and Risk Committee will carry out their review on 15 September 2015.
7.
The terms of reference for the Finance and Performance Committee includes recommending
the Annual Report to the Governing Body. This report enables the committee to execute
that responsibility.
8.
The FAR and SAR is for the Auckland Council Group. The Group is the result of
consolidating Auckland Council and all of its CCOs. For legislative compliance purposes the
financial statements of Auckland Council entity are also included. All budgets and
performance targets are those set out in the 2014/2015 Annual Plan.
Approval of and recommendation for adoption of the 2014/2015 Annual Report and Summary
Annual Report for Auckland Council and Group
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During the year the CCO Governance and Monitoring Committee monitored the
performance of the group through the reporting of quarterly consolidated financial results
and quarterly reporting by Auckland Council and the substantive CCOs. The FAR and SAR
follows the same pattern and completes the reporting for the financial year to 30 June 2015.
At the 1 September 2015 meeting the CCO Governance and Monitoring Committee received
reports for the substantive CCOs. The Finance and Performance Committee received a
report on the performance of Council at the meeting held on 20 August 2015.
10.
On 28 August 2015 Council released preliminary results to the New Zealand Stock
Exchange as required by listing rules. The release was approved by the Chair and Deputy
Chair of the Finance and Performance Committee under delegation. The preliminary
announcement was provided to all Councillors at the time of release.
11.
The FAR and SAR documents (which were not available at the time of compiling the agenda
and will be circulated prior to the meeting) are currently undergoing a final review by Audit
New Zealand and may be subject to some editorial and technical changes prior to final
submission to the Governing Body and subsequent publication.
12.
The format of the FAR and SAR package has been amended this year. The years FAR
consists of three volumes; Overview, Themes and Groups of Activities Volume 1, Local
Boards Volume 2 and Financial Statements Volume 3.
Item 11
9.
Consideration
13.
The FAR includes a section featuring the achievements in each local board area. Local
boards were engaged to collect and review this information and each Chair has prepared a
statement which is included in the FAR.

14.
The FAR and SAR covers all aspects of Councils governance and public accountability.
The reports include commentary on Councils contribution to outcomes for Mori, the role of
and contribution from the Independent Mori Statutory Board and Councils Te Waka
Angamua Mori Strategy and Relations Department.
Implementation
15.
There are no implementation issues.
Attachments
No.
Title
Draft Summary Annual report (Under Separate Cover)
Draft Annual report volume 1 (Under Separate Cover)
Page
Signatories
Author
Francis Caetano - Group Financial Controller
Authorisers
Kevin Ramsay - General Manager Finance

Sue Tindal - Chief Financial Officer
Approval of and recommendation for adoption of the 2014/2015 Annual Report and Summary
Annual Report for Auckland Council and Group
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Item 13

File No.: CP2015/16141
Purpose
1.
This report recommends that no change be made to the rating treatment of residential
properties used for commercial accommodation purposes.
Executive Summary
2.
Providers of commercial temporary accommodation such as hotels and motels are charged
business rates. Residential parts of these properties, such as on-site managers
accommodation, are charged residential rates, and an additional UAGC.
3.
Many smaller accommodation providers operating from residential properties are charged
residential rates. This includes small bed and breakfast operations and private holiday
homes that are available for rent for only part of the year. The council charges business
rates where there is a clearly identifiable separate part of the property that is used for
commercial accommodation.
4.
The Motel Associations submission to the Long-term Plan noted the disparity in rating
treatment between motels and residential providers of accommodation. They have
requested the council consider rating smaller accommodation providers on the same basis
as motels.
5.
The council identifies ratepayers and establishes rating liability based on data that is
verifiable and tangible such as:
land titles, building consents, resource consents and licenses
physical characteristics of the premises or business activity.
Decisions are therefore not perceived as arbitrary, can be applied consistently and are
repeatable.
6.
There is a lack of tangible markers to identify the extent to which small accommodation
properties are put to commercial use. Residential consents apply to properties that
accommodate fewer than six guests, and there is usually no physical change to the property
when accommodation is offered. Unlike other multi-use properties, it is difficult or impossible
to identify a separate part of the property being used for accommodation in order to apply a
rating apportionment.
7.
The council could apply a fixed apportionment or targeted rate to small accommodation
properties. This would ensure smaller accommodation providers make an additional
contribution to the councils costs. However, this would not be connected to the impact they
have on council services nor to their ability to pay. Some small and infrequent operators
would pay as much as those operating on a more permanent basis and at a larger scale.
8.
Staff recommend that there be no change to the rating of accommodation providers

operating from residential premises. This will ensure that the rating system continues to
determine liability based on verifiable and tangible factors. The council will continue its
current process of investigating commercial activity operated from residential premises to
ensure they are being rated appropriately.
9.
The Motel Association also requested that motels be charged one Uniform Annual General
Charge (UAGC) where there is on-site managers accommodation rated separately on a
residential basis. Staff recommend that motels continue to be charged a UAGC for each
separately used part of the property as this is consist with the treatment of all other multi-use
properties.
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Recommendation/s
a)
not recommend any change to the rating treatment of residential properties used for
commercial accommodation purposes.
Comments
Background
Motel Association submission to Long-term Plan 2015-2025
10.
The Motel Association submission to the Long Term Plan raised the concern that many of
their competitors (BnBs and holiday homes for rent) were paying residential rates and were
not required to meet the same building standards or undertake regular compliance checks.
They considered that the council should charge other providers of short term
accommodation business rates. They also argued that motels should pay only one UAGC
where there is on-site managers accommodation rated separately on a residential basis.
11.
At its meeting on 7 May 2015 the Budget committee resolved to direct staff to report back on
rating options for motels and other temporary accommodation.
Current rating treatment

12.
The table below sets out the differences between small and large accommodation providers:
Includes
Compliance
Separately
used parts
Rated as
Large accommodation providers

Hotels, motels, lodges and BnBs able to
accommodate 6 or more guests
Small accommodation providers

BnBs able to accommodate no more
than 5 guests, holiday homes where the
whole property is rented
Must comply with building code
Built to residential standards; no annual
standards for communal accommodation, compliance checks
and undertake annual compliance
checks
Separate identifiable part of the property Often do not have an identifiable
used to accommodate guests
separate part for accommodation (at
times properties will be fully residential
use, at other times commercial use).
Business (any separate residential part
Residential if no separate part
of the property e.g. managers or owners (Can be part charged as business if
accommodation rated as residential and
identifiable separate part used for
charged a separate UAGC)
accommodation)
Discussion
13.
Commercial accommodation providers benefit from council investment in regional facilities,

major events, regional parks, visitor services. They can claim back GST and treat rates as
an expense. It is reasonable that they are charged business rates. Council identifies large
accommodation providers through the consenting process. Valuers can identify the part of
the property used for commercial accommodation through inspections.
14.
Small accommodation providers receive the same benefits as larger providers, to the extent
that they are run on a commercial basis. Some properties may be rented on a very limited
basis however. Operations with turnover less than $60,000 per annum may not be GST
registered. Holiday homes that are vacant for much of the year could also be considered to
receive less benefit from council services than occupied residential properties.
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15.
Small accommodation providers are primarily residential in nature. These properties are only
required to meet residential building standards, so are not identified through the consenting
process. While such properties can be found through accommodation websites, it can be
difficult to establish the extent to which any property is used for commercial purposes. Unlike
other types of commercial activity, there is a lack of physical characteristics to determine
whether the property is being used for residential or commercial purposes.
16.
Small accommodation properties generally do not have identifiable parts of the property
used exclusively for accommodation. As such it is not possible to apply a rating
apportionment for the commercial areas of the property. The only way to rate these
properties would be by applying a fixed apportionment, or a targeted rate. This approach is
problematic because the amount of rates charged would not relate to level of commercial
activity being undertaken. A property rented out for a couple of weekends each year would
pay the same another property with high levels of occupancy.
17.
While there are equity reasons to levy business rates on small accommodation providers
there are substantial administrative issues with levying a rate on this activity. The lack of
verifiable and tangible identifiers to establish the extent to which properties are used for
commercial purposes makes it difficult to ensure that such a rate is being applied in a
consistent and equitable manner.
18.
Auckland Councils rating of small accommodation properties is consistent with other New
Zealand councils. Only Queenstown Lakes District Council (QLDC) targets these properties.
It does this by treating the operation of small bed and breakfasts and holiday lets as an
activity under the district plan that requires registration. These properties are then defined
as being 75 per cent residential and 25 per cent accommodation for rating purposes.
Accommodation properties are charged more for general, recreation and events and roading
rates than residential properties. They are also rated for tourism promotion.
19.
The QLDC approach resolves the issue of identifying liability for rating. It also provides a
mechanism to encourage compliance, as failure to register may attract fines. QLDC
reporting notes difficulties in identifying qualifying properties, and that some properties are
only rented on a very limited basis, such as when normally resident owners are themselves
on holiday. Identification of properties is made easier by QLDC setting a very low threshold
for registration. Any property let for more than two nights in a year required to register.
Amending the Unitary Plan to require registration of small accommodation providers

20.
The Council could opt to follow the Queenstown Lakes District Council in its treatment of
small accommodation properties. This would require the Council to provide for small bed
and breakfast accommodation and homes available for short term rentals as permitted
activities in the Unitary Plan, with a permitted activity control requirement that these
businesses register with the council. Requiring small accommodation providers to register
under the Unitary Plan would enable the council to define the level of activity that requires
registration, and to apply penalties for non-compliance. The council could then charge these
properties either business rates based on a fixed apportionment of each propertys value, or
a fixed targeted rate.
21.
The Unitary Plan is not due to become operative until the end of the next year at the earliest,
but may not become operative for another three to four years. At this stage of the process,
amendments to the Plan require the Council to make legal submissions supported by
evidence to the Hearings Panel for the Plan. The Panel then decides whether to include the
amendments. Alternatively the Council can choose to wait until the Plan is operative and
then initiate a Plan change.
Charging motels one UAGC only

22.
Staff do not consider that motels should be exempt the additional UAGC that applies where
the managers accommodation is rated as residential. This treatment is consistent with
approach to other types of multi-use properties which also receive multiple UAGC charges. It
ensure that business owners who live in on-site accommodation are treated the same as
those who have a residential property located elsewhere. The council will continue its
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current process of investigating commercial activity operated from residential premises to
ensure they are being rated appropriately.
Consideration
23.
This report recommends no change in policy so there are no implications for Local Boards.

24.
This report recommends no change in policy, so there are no implications for Mori.
Implementation
25.
There are no implementation issues arising from this report.
Attachments
There are no attachments for this report.
Signatories
Authors
Beth Sullivan - Principal Advisor Policy

Andrew Duncan - Manager Financial Policy
Authorisers
Ross Tucker - Acting General Manager Financial Planning, Policy and Budget
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Item 14

File No.: CP2015/18210
Purpose
1.
To inform the Committee about progress on the Procurement Strategy implementation at

Auckland Council.
Executive Summary
2.
This report provides a business improvement update as requested by the Finance and
Performance Committee in 2014.
3.
In 2014 a new Procurement Strategy and Policy was developed and approved by the
Governing Body. In February 2015, a new General Manager of Procurement was appointed
to lead the implementation of the changes.
4.
A presentation will be provided at the Finance and Performance Committee meeting which
details the approach, progress to date and roadmap for the next 12 months.
Recommendation/s
a)
receive the Procurement Strategy implementation report and presentation.
Attachments
There are no attachments for this report.
Signatories
Author
Sara Hay - GM Procurement
Authoriser
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17 September 2015
Item 15
Independent Review of Operating Costs of the Rail Network in

Auckland Compared to Wellington
File No.: CP2015/18625
Purpose
1.
This report presents an independent review of the operating costs of the rail network in
Auckland compared to Wellington as directed by the governing body in June 2015.
Executive Summary
2.
During deliberations on the 2015 2025 LTP the governing body resolved that additional
work would be undertaken to inform the 2016/2017 Annual Plan on a number of issues, one
of which was an independent review of rail costs (resolution number GB/2015/60).
3.
Subsequently, Mr. Paul Callow, an independent consultant, was engaged to undertake the
review. Attachment A contains the findings of the independent review of operating costs of
the rail network in Auckland compared to Wellington.
4.
Mr. Callow will present the review to the committee and address any questions the
committee may have.
Recommendation/s
a)
receive the independent review of operating costs of the rail network in Auckland
compared to Wellington, and
b)
thank Mr. Paul Callow for his attendance and presentation.
Attachments
No.
Title
Auckland Rail Cost Review
Page
127
Signatories
Author
Neil Huang - Senior Analyst
Authorisers
Ross Tucker - Acting General Manager Financial Planning, Policy and Budget
Independent Review of Operating Costs of the Rail Network in Auckland Compared to Wellington
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Thursday, 17 September 2015

Approval of non-budgeted expenditure

Acquisition and disposal of property relating to the Committees responsibilities

Monitoring achievement of financial and other measures of performance and service

Recommending the Annual Report to the Governing Body

Financial policy outside the LTP and AP

All powers necessary to perform the committees responsibilities.

Approval of a submission to an external body

Powers belonging to another committee, where it is necessary to make a decision prior

Power to establish subcommittees.

EXCLUSION OF THE PUBLIC WHO NEEDS TO LEAVE THE MEETING

Access to confidential information is managed on a need to know basis where access

Members of the meeting

Independent Mori Statutory Board

All staff supporting the meeting (administrative, senior management) remain.

Local Board members

Council Controlled Organisations

Representatives of a Council Controlled Organisation can remain only if required to for