Agenda of Council - Wednesday, 14 December 2022

Council

14 December 2022

6. Proposed Alcohol Ban for Woolston Village Area
Reference / Te Tohutoro:	22/1626574
Report of / Te Pou Matua:	Evangeline Dispo, Policy Analyst, Evangeline.Dispo@ccc.govt.nz Ruth Littlewood, Senior Policy Analyst, Ruth.Littlewood@ccc.govt.nz
General Manager / Pouwhakarae:	Lynn McClelland, Assistant Chief Executive Strategic Policy and Performance (lynn.mcclelland@ccc.govt.nz)

1. Nature of Decision or Issue and Report Origin

1.1 This report actions Council resolution CNCL/2002/103 asking staff to investigate an alcohol ban for Woolston Village.

1.2 The origin of this report is a request from Woolston community members for an alcohol ban around Woolston Village. This request, which included a petition signed by 173 people, was considered by the Linwood-Central-Heathcote Community Board. The Board made a recommendation to Council that staff carry out further investigations into an alcohol ban for the area.

1.3 Staff have assessed evidence for an alcohol ban, consulted key stakeholders and carried out a survey of community views. Having considered the evidence and community feedback, staff recommend the Council establish a temporary alcohol ban in the Woolston Village area for a period of six months.

1.4 The decisions in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.

1.4.1 The proposed ban is temporary and relatively easy to reverse. The people most impacted by the current proposal will be those wanting to drink alcohol in public places in and around Woolston Village. If a permanent ban is considered at a later time then the significance of that decision will be considered.

1.4.2 The level of significance was determined by the relatively small group of people affected. Therefore, targeted consultation has been undertaken for this proposal for a temporary alcohol ban.

2. Officer Recommendations Ngā Tūtohu

That the Council:

1. Resolves it is satisfied that:

a) There is evidence that the area to which the temporary Alcohol Ban will apply has experienced a high level of crime or disorder and that this can be shown to have been caused, or made worse, by the consumption of alcohol in public spaces within the area; and

b) The ban, made under the Council’s Alcohol Restrictions in Public Places Bylaw, as applied by the resolution:

i. is appropriate and proportionate in the light of the evidence; and

ii. can be justified as a reasonable limitation on people’s rights and freedoms.

2. Resolves to impose under Clause 5 of the Christchurch City Council Alcohol Restrictions in Public Places Bylaw 2018 a temporary alcohol ban to both sides of the streets in the area bounded by: Hargood Street, Glenroy Street, St. Johns Street, Ferry Road, Rutherford Street, Heathcote River (running along Radley Park), Cumnor Terrace, Riley Crescent, Laura Kent Park walkway, and back to Hargood Street (see Attachment A – map), 24 hours a day, seven days a week six months from adoption of this resolution.

3. Requests staff review the effectiveness of the temporary ban in 2023 and report back to Council on whether the ban should be made permanent.

3. Reason for Report Recommendations Ngā Take mō te Whakatau

3.1 Staff have considered the evidence for a ban, including that provided by the petition which secured 173 signatories asking the Council to put in place an alcohol ban in the Woolston Village area. The petitioners consider public drinking is having a negative impact on the area and results in people not feeling safe. Additional evidence provided with the request for the ban included photos of empty alcohol bottles and cans littering the village and its surroundings, and statements on the disorderly behaviour of members of the public drinking in public places in the village.

3.2 The Police strongly support the proposal for a temporary alcohol ban and undertake to enforce the ban as their resources allow. The Police consider alcohol bans effective and appropriate in mitigating antisocial behaviour in the community.

4. Alternative Options Considered Ētahi atu Kōwhiringa

4.1 Do not impose a temporary alcohol ban: if the Council were to decide not to impose a ban, it would not incur the costs associated with alcohol ban signage. However, this option is not recommended given the evidence provided of alcohol-related harm, the feedback from the community and the Police support for a temporary ban. The temporary ban enables us to test the effectiveness of an alcohol ban.

4.2 Impose a temporary ban at a later date: this is an option however the Community Board strongly supports a temporary ban being in place for summer, as they expect alcohol-related damage and incidents to increase over the summer period.

5. Detail Te Whakamahuki

5.1 The Christchurch City Council Alcohol Restrictions in Public Places 2018 allows the Council to put a Temporary Alcohol Ban area in place by resolution. Clause 5 of the Bylaw specifies the matters the Council must consider before it imposes a temporary alcohol ban area, and requires the Council to describe the specific area of the Temporary Alcohol Ban Area and the times during which the alcohol restrictions apply. The purpose of alcohol restrictions is to reduce alcohol-related harm, damage, disorder and crime, and to improve community safety in public spaces such as footpaths, streets, parks, reserves, and riverbanks or beaches.

5.2 A petition with 173 signatories from community residents was presented to the Linwood-Central-Heathcote Community Board in July 2022 asking for an alcohol ban in Woolston Village. In response, the Board recommended the Council ask staff to investigate an alcohol ban. This was considered by Council on 8 September 2022 (see Supplementary Agenda item #24), and Council resolved to ask staff to investigate a ban.

5.3 The petitioners highlighted the negative impacts of public drinking on the amenity and safety of the village. The community observe antisocial behaviour in the area on an almost-daily basis and report instances of people drinking alcohol on public seating while intoxicated. A number of photos presented to the Board show substantial littering with cans, bottles and rubbish left on the footpaths and in the public spaces in the Village.

5.4 In preparing this report, staff have considered the views expressed by the Police, the Medical Officer of Health, Council Alcohol Licensing officers, statements and photos from the community petition, Coastal-Burwood-Linwood Community Board, local residents, businesses, and other local organisations working in the area.

Community views and preferences

5.5 The Police, Council Alcohol Licensing, and the Medical Officer of Health have all expressed support for a temporary alcohol ban in the area for an initial period of six months. Both Council Alcohol Licensing and the Medical Officer of Health believe an alcohol ban will help address alcohol-related problems in the community. The Police note that while the volume of calls for service is not significant in relation to crime/disorder arising from alcohol consumption, they acknowledge community members have expressed concerns and provided evidence of the occurrence of misbehaviour in the area. Police believe that mental health issues, drugs and alcohol were responsible for worsening begging issues in Woolston. The Police strongly support an alcohol ban in the proposed area and have committed to enforce the ban, including regular patrolling the area as a deterrent measure.

5.6 Staff also met the Roimata Foods Common, a community group operating a food garden in Radley Park. The Roimata group welcomes the inclusion of Radley Park in the ban to protect other users of the park and to ensure the safety of local school children. The Roimata group reported issues in the park resulting from alcohol consumption, including alcohol containers littering the garden area.

5.7 On 31 October 2022, Council staff attended a Woolston community meeting hosted by Dr Tracey McLellan MP. At that meeting, local residents and business owners expressed their growing concern at the daily occurrence of people begging, reporting abuse, threats, and public drinking of alcohol. A suite of community initiatives have been identified to improve safety and make the area more welcoming including increasing the Police presence and the frequency of community patrols monitoring the area. The temporary ban would compliment these other steps.

5.8 Staff ran a community survey to get the views of Woolston residents and businesses on the proposed ban. The results of the survey are summarised in Attachment B – Summary of feedback received.

5.9 Recent media reports have noted alcohol-related incidents in the Woolston Village area. The Otago Daily Times on 26 July 2022 reports “a group of people frequently sit on street furniture drinking alcohol, leering at women, scaring school children, begging for money so they can purchase cheap alcohol from local off-licences”. The Press dated 14 October 2022 reported a security guard working at the Ferry Road supermarket “received the worst of the abuse when he asks people to leave the supermarket premises and caught people drinking in the carpark, taking drugs in the store bathroom and one person defecating on the property”.

5.10 The Council decision affects the Linwood Ward, and Waitai Coastal-Burwood-Linwood Community Board. When briefed on the alcohol ban proposal for Woolston Village, the Board expressed strong support for the proposed ban and asked for the ban to be in place for summer.

6. Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic AlignmentTe Rautaki Tīaroaro

6.1 This report is aligned to Christchurch Alcohol Action Plan Priorities (creating safer spaces).

6.2 This report supports the Council's Long Term Plan (2021 - 2031):

6.2.1 Activity: Strategic Planning, Future Development and Regeneration

· Level of Service: 17.0.19.4 Bylaws and regulatory policies to meet emerging needs and satisfy statutory requirements - Carry out bylaw reviews in accordance with ten-year bylaw review schedule and statutory requirements

Policy Consistency Te Whai Kaupapa here

6.3 The decision is consistent with Council’s Plans/bylaws – Alcohol Restrictions in Public Places Bylaw 2018.

Impact on Mana Whenua Ngā Whai Take Mana Whenua

6.4 The decision does not involve a significant decision in relation to ancestral land or a body of water or other elements of intrinsic value, therefore this decision does not specifically impact Mana Whenua, their culture and traditions.

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.5 The Council decision does not have direct relevance to climate change.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.6 The Council decision does not have direct relevance to accessibility.

7. Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1 Cost to Implement – The approximate cost of $1200 to cover alcohol ban signs will be met from existing budgets.

7.2 Maintenance/Ongoing costs – the cost of enforcement rests with the New Zealand Police under powers in the Local Government Act 2002.

7.3 Funding Source – ban signage cost will be covered from existing budgets of Transport Unit and Parks Unit.

8. Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1 Local Government Act 2002 (the Act) allows the Council to declare a Temporary Alcohol Ban Area through a resolution relating to the Alcohol Restrictions in Public Places Bylaw 2018 under section 147B of the Act.

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2 There is legal context, issue or implication relevant to this decision. The legal consideration is detailed below.

8.3 Before making a resolution under the Bylaw, the Local Government Act 2002 (s147B) requires that the Council must be satisfied that –

(a) There is evidence that the area to which the bylaw applies (or will apply by virtue of the resolution) has experienced a high level of crime or disorder that can be shown to have been caused or made worse by alcohol consumption in the area; and

(b) The bylaw, as applied by the resolution, -

(i) Is appropriate and proportionate in the light of the evidence; and

(ii) Can be justified as a reasonable limitation on people’s rights and freedoms.

8.4 In terms of paragraph 8.3(a), the submitted petition outlines a number of alcohol related incidents of nuisance and antisocial behaviour directly or indirectly experienced by the local community such as: intimidation, threats, verbal abuse, and assaults have potentially been made worse by people drinking in public places. Please refer to staff report to 8 September Council meeting (see Supplementary Agenda item #24) to view the petition. Further, the newspaper articles referred to in paragraph 5.9 speak directly of incidents of disorderly and inappropriate behaviour involving persons consuming alcohol in public places in the Woolston Village area.

8.5 In terms of 8.3(b)

(i) Is appropriate and proportionate in the light of evidence

The evidence of the anti-social behaviour caused by persons consuming alcohol in public places in the Woolston Village area that have previously been alluded to and the Police observations of people congregating in carparks in the Woolston Village area and the community library consuming alcohol drinking suggest that a temporary ban is appropriate and proportionate.

(ii) Can be justified as a reasonable limitation on people’s rights and freedoms.

Given the support from the Community Board, the Alcohol Tri-agency (Licensing Inspector, Police, and Health Medical Officer) including local businesses and residents for a temporary ban in Woolston Village area, it is apparent that many residents in the area consider the benefits of a ban outweigh the restrictions. As the restriction on drinking behaviour applies only to public areas within the ban boundary, it can be justified as a reasonable limitation on people's rights and freedoms.

It is anticipated that the imposition of an alcohol ban area will reduce the incidents of disorderly and inappropriate alcohol related behaviour in the area, thus enabling local residents and other members of the public to use the common spaces within the area without fear of encountering such behaviour. The behaviour complained of is not just limited to the weekends or evenings, so a proportionate response is to impose the ban 24 hours per day for six months.

8.6 This report has been reviewed and approved by the Council’s Legal Services Unit.

9. Risk Management Implications Ngā Hīraunga Tūraru

9.1 Not all community stakeholders including visitors are aware of the alcohol ban conditions put in place on Woolston Village and its premises – which may undermine the effectiveness of the ban. To mitigate the risk, the Council will ensure good communication and information (i.e., through social media, Council website, Newsline) is provided to relevant stakeholders.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Proposed Woolston Village Alcohol Ban Area	22/1676621	17
b	Summary of feedback received (To be separately circulated)

In addition to the attached documents, the following background information is available:

Document Name – Location / File Link

Not applicable

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i) sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

Signatories Ngā Kaiwaitohu

Authors

Evangeline Dispo - Policy Analyst

Ruth Littlewood - Senior Policy Analyst

Ron Lemm - Manager Legal Service Delivery, Regulatory & Litigation

Approved By

Elizabeth Wilson - Team Leader Policy

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

Council

14 December 2022

8. Footpath repairs - options, costs and risks
Reference / Te Tohutoro:	22/1652300
Report of / Te Pou Matua:	Lynette Ellis, Head of Transport & Waste Management (Lynette.Ellis@ccc.govt.nz)
General Manager / Pouwhakarae:	Jane Davis, General Manager Infrastructure, Planning & Regulatory Services (jane.davis@ccc.govt.nz)

1. Nature of Decision or Issue and Report Origin

1.1 This decision is proving guidance to staff on the best options for achieving improved resident satisfaction with footpath condition.

1.2 This is a staff generated report to provide options for improving resident satisfaction in footpath condition.

1.3 The decisions in this report are of medium significance in relation to the Christchurch City Council’s Significance and Engagement Policy. The level of significance was determined by the city wide nature of the impact, the feedback received relating to the condition of footpaths and the fact that any financial implications will be addressed as part of the Annual Plan engagement process.

2. Officer Recommendations Ngā Tūtohu

That the Council:

1. Receives the report and confirms staff will work with the maintenance contractors to plan and cost the implementation of roving footpath crews in the city (option 3).

2. Notes that any decisions on additional funding will be progressed as part of the FY24 Annual Plan.

3. Notes that staff will undertake more detailed analysis of the preferred option to inform both the Annual Plan and the Long Term Plan.

4. Notes that staff will continue to work with the University of Canterbury to progress options for efficient and cost effective collection of footpath condition data.

5. Notes that staff will start a review of the tree removal process in Q1 of 2023, with the aim of improving the customer experience.

3. Reason for Report Recommendations Ngā Take mō te Whakatau

3.1 Resident satisfaction with footpath condition is low (less than 50%) and this is a factor that is consistently seen as an area for improvement for Council. The Council’s current levels of service directly related to footpath condition are: and at least 77% of footpaths are rated as condition grade 3 or better; and at least 40% resident satisfaction with footpath conditions.

3.2 Using current information (2017 condition assessment), 84% of footpaths are rated as condition grade 3 or better^{^[1]} and 35% of residents are satisfied with the condition of the footpaths.

3.3 Council receives on average 1,500 customer service requests a year relating to footpath condition. Approximately 70% of these will requires some action to be undertaken by the Council’s maintenance contractors. The remaining 30% are completed with no action required as they do not breach the agreed levels for intervention or are the responsibility of a third party.

3.4 Officers have reviewed options for:

· Quicker resolution of complaints

· Opportunities for more efficient repairs (ie reviewing the trigger to resurface rather than patch repair)

· More efficient street tree damage decisions (ie when to remove a tree and when to just repair, to avoid repeated repairing where damage is going to be too frequent)

· More footpaths improved across the city and Banks Peninsula.

3.5 Apart from changes to the street trees decision-making processes, all options to raise levels of service to improve resident satisfaction will require addition funding and cannot be absorbed into “business-as-usual” budgets. Four options have been identified for Council consideration. These are described and discussed below. The preferred option is to establish contractor based crews to address cyclic footpath maintenance across the network. This will mean the contractor progressively works across their contract area to ensure there is acceptable coverage and the network is maintained to the levels dictated in the contract.

4. Alternative Options Considered Ētahi atu Kōwhiringa

4.1 The options considered have been outlined in detail in sections 5.

4.2 Increase capital programme budgets only.

· This would allow for an increased amount of the footpath network to be resurfaced over the sealing season.

· This solution has no significant impact on operations budgets and limited impact on rates.

· The identified fixes and “make safe” activities will not be addressed and it is likely that resident satisfaction will not be addressed.

4.3 Change the contractual levels of service for the existing maintenance contracts.

· This option will result in more works being undertaken on the network, which will possibly result in improved resident satisfaction.

· The altered levels of service will not be aligned with other major metros and when benchmarked across the country will not demonstrate value for money.

· Increased maintenance works will have an increased operational cost, the scale of which depends on the scale of change ($250,000 to $2,000,000). It is unlikely that these costs will be subsidised by Waka Kotahi.

4.4 Provide in-house crews to address cyclic footpath maintenance across the network.

· The provision of cyclic maintenance to address footpath concerns raised by residents as customer service requests using in-house resources. This will likely have a positive impact on the level of resident satisfaction.

· This is the most expensive option at between $3,500,000 and $6,000,000, excluding initial capital and site set up costs.

4.4.2 The costs of this option would not be subsidised by Waka Kotahi as the costs have not been market tested and there are other more cost effective options.

4.5 This option carries the most risk for Council, including the insurance risk, health and safety risk and down-time risk. There is also risk that Council would be liable for costs relating to the existing maintenance contracts.

5. Detail Te Whakamahuki

Problem Statement

5.1 Public perception of how council maintains the condition of footpaths has remained relatively steady over the last four years. It has consistently scored lower than 50% and been identified as an activity that Council needs to look to improve.

5.2 Council receives between 1,300 and 1,800 customer service requests (CSRs) a year relating to condition of footpaths. In the last 4 years these requests have remained relatively steady.

Waka Kotahi Funding

5.3 The majority of maintenance, operations and renewals is subsidised at 51% by Waka Kotahi as part of the National Land Transport Programme (NLTP).

5.4 A requirement of our funding is that we follow Waka Kotahi procurement guidelines. This requires us to develop a procurement policy that must be approved by the Waka Kotahi Board and must be designed to obtain the best value for money possible.

5.5 The funding Council receives for the maintenance, operations and renewals programmes (Waka Kotahi continuous programmes) is reliant on Council following the One Network Framework (ONF). This is to ensure we are providing an appropriate level of service for the road (and footpath) use and is consistent relative to other Councils. Council is required to provide evidence of how our levels of service relate to the ONF levels of service and where there is evidence of low returns on investment then funding could be at risk. To this end Waka Kotahi applies cost efficiency benchmarking to assess the costs and beneﬁts of continuous programmes such as road/footpath maintenance, public transport and road safety promotion.

What has Council been doing?

5.6 Council has approximately 2800km of footpaths in the transport network. Each year approximately 12km is added to the network via the completion and vesting of subdivisions.

5.7 A complete condition assessment of the footpath network was last completed in 2017.

5.8 It is difficult and time consuming to undertake a complete condition assessment of the footpath network that is owned by Council. This is because to get accurate data the entire length of the network must be walked. There is not currently a legal option to use a vehicle to collect this data.

5.9 Council staff are currently working with the University of Canterbury to assess and develop efficient and cost effective options for collecting this data. This work is ongoing and a final solution is expected to be up and running by the end of September 2023.

5.10 Whilst the footpath condition data information is old, staff have also been using a combination of service request/complaint data, observation data, repair information and age data to create work programmes for footpath renewals. The footpaths in the proposed programme are visually inspected before it is finalised and set with the contractor.

The proposed renewal programme can be found at Road and footpath resurfacing map : Christchurch City Council (ccc.govt.nz)

5.11 By way of example, Wingate Street had a high footpath age, numerous completed footpath repairs and service requests relating to tree root concerns.

5.12 In order to ensure future maintenance requirements are minimised where street trees are retained, a whole section of path was replaced with articulated concrete sections (‘TripStops’) to minimise future costs. The photos below the before and after of this project.

5.13 Response to complaints and trip hazards is the responsibility of the maintenance contractor for the area – Council has three contractors across the four maintenance areas of the city. All of the contracts have been procured in line with Council’s procurement policy and Waka Kotahi rules.

· HEB construction – North and Central

· Higgins – South

· Fulton Hogan – Banks Peninsula

5.14 The maintenance contracts have defined factors that determine whether there will be works undertaken by the contactor. These are referred to as contractual level of service and combine with all other works in the programme to help Council deliver on the Levels of Service defined in the LTP.

5.14.1 The approach to all contract work is that only work that breaches the agreed contractual level of service is undertaken. This ensures that Council are achieving best value for the dollar spent and that we meet the requirements of the funding agreements that we have with Waka Kotahi.

5.14.2 Below is an example of a typical aged footpath that has had numerous repairs from third parties (e.g. Enable) as well as issues with tree root intrusion. In this situation articulated concrete ‘TripStops’ were constructed to minimise risk of tree root damage.

When concrete footpaths are installed, they are colour dyed to closer match the colour of aged asphalt. This is shown in the photos below. Where required repairs are also made to the kerb and channel and road surface.

5.14.3 Examples of requests that do not meet the contract levels of service include the following:

The following picture is from a resident that advised that the stretch of footpath was “appalling” and they had almost tripped many times. The hazards were less than 15mm and as such no action was taken by the contractor.

The following picture is an example where a resident complained about the level of the footpath going into a development driveway. This was constructed as part of the development and did not breach contractual levels of service.

5.15 Between October 2017 and October 2022 there were 6,789 footpath jobs for the Transport Unit loaded into the Council’s Road Asset Management Maintenance (RAMM) database. The resolution of these is as follows:

COUNT	%	STATUS		NOTES
6,259	92%	Completed	68% (4,262)	Were actioned and completed by the contractor. Of these fixes approximately 20% (857) were tree root related.
6,259	92%	Completed	32% (1,997)	Were closed with “no action required” as they did not fail the contractual level of service.
530	8%	Open		These are either under construction, on hold or have been transferred to the new maintenance contracts.

Note: There are a number (>1,000) of service requests that are the responsibility of another Council Unit (e.g. Parks) or another authority (e.g. utility provider or Waka Kotahi).

5.16 The following table outlines the expenditure on footpath maintenance and renewals in financial year 2021/22.

Cost Type	Available Budget ($)	Budget spent ($)	%
CAPEX	3,500,000	3,000,000	86%
OPEX	1,320,000	1,230,000	93%

Capital expenditure (CAPEX) is used for the renewal and replacement of existing assets and will require depreciation. Operational expenditure (OPEX) is used for the ongoing day to day maintenance of those same assets.

For financial year 2022/23 the CAPEX budget available is $2,650,000 and the available OPEX budget is $1,420,000.

Under current valuations, footpaths are being depreciated at $7million per year. This year Council is spending less than half of that on renewals. This is less than other metros, such as Wellington City and Dunedin City, who have budgeted between $4 million and $5 million for renewals on a lesser length of network.

5.17 Within our current contracts Council provides for the provision of cyclic response crews working across the contract areas. These cyclic crew not only respond to customer service requests, they also actively monitor the network to repair faults. One example is pot holes – approximately 80% of potholes that are fixed are found by the crews, the remaining 20% are those that are called in by customers. These teams currently address “make safe” issues with pot holes, litter, signs, etc. on a rotational basis across their contract area to ensure the network is regularly covered. If required the job is then entered into the system to enable the permanent repair to be programmed.

5.18 This cyclic work is paid for on a lump sum basis and the advantage is that health and safety issues are made safe immediately and the larger work is able to be programmed appropriately to contractor maintain productivity and value to the rate payer.

5.19 Under the current contract, footpath work and other asset maintenance repairs are reimbursed through a schedule of rates, e.g. footpath repairs are based on a square meter rate. The make-up of these scheduled rates includes labour, plant, materials and overheads to give a unit rate. The factor that has the biggest impact on price is productivity. The longer it takes a crew to complete work the more it costs. Therefore programming of works is undertaken to ensure the crews are as effective and efficient as possible. This also ensures that works minimise disruption.

Challenges – Cost Increases

5.20 Cost increases have affected all parts of Council business and the Transport and Waste Management Unit is no exception. While inflation has been historically running at approximately 2%, inflation in the construction industry has historically been running at 8%.

5.21 Cost increases, over the last five years, that have affected construction include increasing compliance costs (temporary traffic management, health & safety, archaeological), material, plant and labour costs and the cost of borrowing.

5.21.1 Compliance costs – Changes to legislation, such as the Health & Safety at Work Act, and increased expectation for consent compliance, environmental compliance, third-party oversight and archaeological compliance have added significant costs to all projects and the maintenance contracts. This can be thousands of dollars for a small contract to hundreds of thousands for a large contract. It could reach millions for a very complex contract.

5.21.2 Material costs – Since the pandemic material costs have increased significantly as the infrastructure industry is heavily reliant on both natural resources and fossil fuel products and machinery. Apart from the increasing cost of diesel, the predominant fuel for plant, the cost of bitumen has increased 17% in the last twelve months.

5.21.3 Plant and borrowing costs – The increasing official cash rate (OCR) and the increased cost of borrowing is making it more expensive to renew and update all plant. There are also increased costs of landing new plant in the country. This has increased significantly in a post pandemic environment. This increased cost of purchasing, landing and borrowing for plant has to be passed on to customers to recover.

5.21.4 Labour costs – Post-covid labour markets have been challenging with significant movement and demand for increased wages. These costs have been influential in the recent assessment of construction inflation running as high as 15%.

Challenges - Trees

5.22 Council has an existing tree policy and a draft urban forest strategy. Street trees play a large role in the success of these strategies, an important factor is the species type – right species, right environment.

5.23 The road corridor is a challenging environment for trees to grow and there are competing demands for the underground space – trees/tree roots and utility/telecommunication services.

5.24 As well as their aesthetic value street trees provide a range of environmental, cultural and community benefits and many residents value them highly for those reasons.

5.25 At the same time tree roots can be very destructive and are a challenge for services providers and can damage infrastructure. Council’s tree policy clearly outlines that significant damage to infrastructure is a reason for considering tree removal. This is balanced in the policy against the value of the tree and the cost of fixing the infrastructure. Looking at historical data approximately 20% of issues addressed with footpaths relate to trees.

5.26 Where a resident has a desire to have a tree removed from their street or alternatively a new one planted there is an application process that is followed. This is available at Apply to renew or remove a tree : Christchurch City Council (ccc.govt.nz). The details of the process that needs to be followed is outlined in the documentation.

5.27 Staff are planning a review of this process in early 2023 and will update internal processes to ensure a more streamlined approach to decision making.

Possible solutions

5.28 There are four options available to Council to improve the physical condition of footpaths and address the low levels of resident satisfaction with regard to footpath concerns. All have cost and resource implications. There are 4 options detailed below.

5.29 Option 1: Increase capital expenditure (CAPEX) and extend renewals programme:

5.29.1 Increase the capital budget for footpath resurfacing as part of the Annual Plan process. This would fund an increased renewals programme, with a focus on areas where there are a substantial number of ongoing maintenance issues. Initially work would be prioritised on the basis of both service requests and age.

5.29.2 CAPEX budgets are set as part of the Long Term Plan and Annual Plan processes.

5.29.3 CAPEX involves the renewal and replacement of large sections of footpath. Footpath resurfacing.

5.29.4 Cost implications:

· Increasing the capital budget by $1,000,000 a year will allow for an additional 8km to 11km of footpath resurfacing to be undertaken in a year.

· This would have a minimal impact on rates and would have limited cost implications for the contractors. As a change of this scale is published the contractors would look to resource to ensure that they can deliver.

· The impact of $1,000,000 of increased CAPEX on rates is 0.01% per year.

5.29.5 Opportunities:

· Sustained increases in budgets will allow the contractors to resource up to ensure more footpath renewals can be delivered (i.e. a larger proportion of the network addressed each year).

· There is limited impact on rates or on Waka Kotahi subsidy.

5.29.6 Risks:

· This solution will not address the issue of fixing the “annoying” daily issues that are raised by residents and will not address increasing the “make safe” activities.

· It is likely that this option will not result in a lift in customer satisfaction and improved results in the resident satisfaction survey.

5.30 Option 2: Change contractual levels of service:

5.30.1 This would involve changing the agreed intervention levels with the maintenance contractors. An example would be changing level of surface discontinuity from 15mm to 5mm or the crack with from 10mm to 5mm.

5.30.2 This would be a variation to the existing contracts and would have an operational cost implication depending on the extent of the change proposed.

5.30.3 Cost Implications:

· It is difficult to quantify the cost until the exact changes are known. Any change will have a cost implication and it could be between $250,000 for a relatively small change to $2,000,000 - $3,000,000 for significant changes.

· All cost changes will be changes to OPEX budgets and will have an impact on rates.

· The impact of $1,000,000 of increased OPEX on rates is 0.16% per year.

5.30.4 Opportunities:

· The community would see more perceived faults being addressed. This may have a positive impact on resident satisfaction.

5.30.5 Risks:

· The current contractual levels of service are consistent with other major cities across the country and are accepted by Waka Kotahi as an appropriate intervention level to achieve value for money. Changing them will mean that Christchurch is out of alignment with national benchmarking.

There is a risk that Waka Kotahi do not agree with altered levels of service and it is probable that they will not fund the additional work. Therefore the additional OPEX cost should be seen as 100% Council funded.

5.31 Option 3: Roving crews – contractor provided:

5.31.1 In line with other cyclic work, create a crew of experienced tradespeople that have the skill and equipment to complete a number of different tasks relating to footpath repairs. They would also be able to engage directly with residents to ensure that the steps being taken and the next steps are clear.

5.31.2 This crew would provide a response that would be faster than the larger construction crews. They would be able to assess the job and either provide a permanent fix or a temporary “make safe” solution until the permanent repair is programmed. In order to ensure the larger construction crews are as effective and efficient as possible their work is planned and programmed on a monthly basis. The relative prioritisation of any work feeds into this planning process in a three month cycle.

5.31.3 These crews will work closely with Council staff to collect condition data, respond to service requests and prioritise work. They would essentially be firefighting and getting the resources to the areas they provide a faster response to customer concerns.

5.31.4 Cost Implications:

· The table below outlines the anticipated cost implications. It should be noted that the costs are estimates based on current contract rates and would need to be negotiated with the contractor.

	Gross Annual Cost $	Assumptions
People	1,500,000 – 2,000,000	2 crews, support staff included in overhead.
Plant and Materials
Compliance Costs		Includes H&S, traffic management
Overheads		Includes insurance, borrowing, depreciation, etc.
TOTAL	1,500,000 – 2,000,000
Set up costs (Capital Investment)		These are covered in the overheads for the contractor
Site Costs		These are covered in the overheads for the contractor

Note: the net annual cost to Council (after Waka Kotahi subsidy) is $750,000 to $1,000,000.

· It is anticipated that this work would be paid as a lump sum in line with other cyclic work. The actual costs would need to be negotiated with the contractor.

· The annual costs will be eligible for Waka Kotahi subsidy of 51%.

· The exact impact on OPEX budgets is not established at this stage as the balance of costs and savings has not been able to be worked through.

· An increase in OPEX of $1,000,000 has a 0.16% impact on rates.

5.31.5 Opportunities:

· Residents will see an increased response level to requests for service. There will also be improved communication around why a request is or is not being actioned. Over time Council should see a reduction in requests for service and an increase in resident satisfaction relating to footpath condition.

· The established crews will be able to be diverted to other work should priorities change or factors such as weather influence the work programme. Council does not carry the risk of “down time”.

· Increased network knowledge with contractors collecting information and adding it to the RAMM database.

· There will be improved linkages between the cyclic maintenance work and the programmed larger maintenance works. This will support improved working within the contractor teams and increased buy-in to achieving best for community solutions.

5.31.6 Risks:

· It will take time to negotiate a change to the existing contracts, establish the crews and work through the back log of work. It is anticipated that this option will be able to be operational within six months, with potential cost implications addressed as part of the FY24 Annual Plan process.

5.32 Roving crews – in-house provision:

5.32.1 The provision of in-house cyclic work crews as described in Section 5.41.

5.32.2 These teams would provide the same service described in Section 5.41.

5.32.3 Cost implications:

· The table below outlines the anticipated cost implications. It should be noted that the costs are estimates based on current contract rates and costs that are known to Council.

	Gross Annual Cost $	Assumptions
People	1,500,000 – 2,500,000	2 crews, admin and support staff, compliance staff 9 – 12 FTE
Plant and Materials	1,500,000 – 2,500,000	Small excavator, truck, utes, TTM signs, tools
Compliance Costs	1,000,000 to 1,500,000	Includes H&S, traffic management
Overheads	1,000,000 to 2,000,000	Includes insurance, office costs, borrowing, etc
TOTAL	3,500,000 – 6,000,000
Set up costs (Capital Investment)	1,500,000 – 3,000,000	One-off capital cost
Site Costs	This could be an annual lease cost or a one off property purchase with on-going maintenance costs.

Note: this option will not be eligible for Waka Kotahi subsidy.

· These costs would be a direct cost to Council and will not be eligible for Waka Kotahi subsidy as the cost will not have been market tested and there is potentially a more cost effective delivery method.

· The impact of $6,000,000 of increased OPEX on rates is 0.96% per year.

5.32.4 Opportunities:

· With current in-house maintenance teams in the parks team, there will be some systems and processes that can be leveraged during set up. The main difference is that none of the Parks teams undertake work that involved the need for temporary traffic management.

5.32.5 Risks:

· Bringing the work in house means that the works are unlikely to be eligible for Waka Kotahi subsidy. As a result all costs will be OPEX costs to Council.

· There is a risk of increased disconnection between the small maintenance works and the programming of larger permanent repairs. This would increases inefficiencies and could result in redundant work being undertaken.

· The works identified are currently within scope of the new (October 2022) maintenance contracts. Assigning this work to in-house teams will be deemed to be a breach of the existing contract. Council could expect variations to cover both potential rate changes and loss of profit. Over the five year term of the contract, this could be substantial.

· With in-house staff, Council carry the risk of down time for the teams, particularly in relation to weather events. Council also carries the insurance and health and safety risk directly.

Other considerations

5.33 Council staff are continuing to work with the University of Canterbury to find cost effective and efficient methods to collect footpath condition data. Staff will also undertake detailed planning to ensure the requirements for and costs of collecting increased levels of condition data are allowed for in the Annual Plan and Long Term Plan processes.

5.34 The decision affects all wards/Community Board areas across the city.

6. Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic AlignmentTe Rautaki Tīaroaro

6.1 This report supports the Council's Long Term Plan (2021 - 2031):

6.1.1 Activity: Transport

· Level of Service: 16.0.9 Improve resident satisfaction with footpath condition - >=41% resident satisfaction

Policy Consistency Te Whai Kaupapa here

6.2 The decision is consistent with Council’s Plans and Policies and aligns with the levels of service to address and improve resident satisfaction with footpath condition. It will also address the general level of satisfaction with Council services – as roads and footpaths are often cited as reasons for dis-satisfaction.

Impact on Mana Whenua Ngā Whai Take Mana Whenua

6.3 The decision does not involve a significant decision in relation to ancestral land or a body of water or other elements of intrinsic value, therefore this decision does specifically impact Mana Whenua, their culture and traditions.

6.4 Discussions to date with Mana Whenua have identified transport priorities as low level and mainly focussed on improving access to local marae and housing. This includes walking, public transport and road safety. This proposal will support these priorities.

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.5 Improving resident satisfaction with footpath condition will decrease the perceived barriers to active travel. This should result in more people choosing to take short trip by active methods – walking or micro mobility.

6.6 Construction methodologies and materials will need to be considered in the assessment of climate change impacts. This is assessed as part of the tender process for the maintenance contractors.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.7 Improving resident satisfaction with footpath condition will decrease the barriers to being able to easily and safely walk in local neighbourhoods. This is particularly a concern for mobility impaired and elderly people.

7. Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1 Cost to Implement – there will be a resource cost to negotiate a change to maintenance contracts. This cost can be covered from within existing budgets.

7.2 Maintenance/Ongoing costs – estimated to be between $1,500,000 and $2,000,000 excluding Waka Kotahi subsidy.

7.3 Funding Source – the detailed costs and changes would need to be addressed as part of the Annual Plan or Long Term Plan process.

Other He mea anō

7.4 Not applicable.

8. Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1 Council has the delegated authority to make the decisions referenced in this report.

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2 There is no legal context, issue or implication relevant to this decision.

9. Risk Management Implications Ngā Hīraunga Tūraru

9.1 There is a risk that the proposed changes and investment do not have the effect of increasing resident satisfaction.

9.1.1 This can be mitigated through clear and regular communication with the customers and by gathering direct feedback from affected customers.

9.2 There is a risk that Council is not able to negotiate a reasonable and cost effective variation to the new contracts.

9.2.1 This is a low risk as the contractors are very focussed on delivering high quality service to the communities they serve.

Attachments Ngā Tāpirihanga

There are no attachments to this report.

In addition to the attached documents, the following background information is available:

Document Name – Location / File Link

Not applicable

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i) sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

Signatories Ngā Kaiwaitohu

Authors

Lynette Ellis - Head of Transport & Waste Management

Steve Guy - Manager City Streets Maintenance

Approved By

Jane Davis - General Manager Infrastructure, Planning & Regulatory Services

Council

14 December 2022

9. Review of solid waste bylaws and proposed replacement Waste Management and Minimisation Bylaw
Reference Te Tohutoro:	22/82361
Report of Te Pou Matua:	Ruth Littlewood, Senior Policy Analyst, ruth.littlewood@ccc.govt.nz Ross Trotter, Team Leader, Resource Recovery, ross.trotter@ccc.govt.nz
General Manager Pouwhakarae:	Lynn McClelland, Assistant Chief Executive Strategic Policy and Performance (lynn.mcclelland@ccc.govt.nz)

1. Purpose of the Report Te Pūtake Pūrongo

1.1 The purpose of this report is for the Council to

· Consider the review of the Council’s solid waste bylaws, the Waste Management Bylaw 2009 and Cleanfill and Waste Handling Bylaw 2015.

· note that as a result of the review, the proposal is to combine the two bylaws,

· consider the draft replacement bylaw- the Waste Management and Minimisation Bylaw 2023 (attachment ) and the terms and conditions (attachment), and to

· approve consultation on the draft replacement bylaw and terms and conditions.

1.2 Currently there are two bylaws for solid waste; the Waste Management Bylaw 2009 regulates the Council’s kerbside collection services and collection points for rural communities without a kerbside service, while the Cleanfill and Waste Handling Operations Bylaw 2015 sets out controls on waste handling operations including landfill operations within the Christchurch District.

1.3 The Council’s solid waste bylaws were last reviewed in 2015 and under the Local Government Act 2002, they should be reviewed no later than 2025. The reviews outlined in this report have been scheduled for this year as part of the Council’s ongoing bylaw review programme. Bringing forward these reviews enables us to ensure replacement bylaw provisions are better aligned with the Council’s Waste Minimisation and Management Plan 2020 and are consistent with recent changes to the national regulatory framework for waste management, including changes to the regulation of landfills. This report is staff generated.

1.4 The main change being proposed is:

· Replacing two bylaws with one bylaw which provides for integrated regulation of all waste collection services and waste operations including landfills.

1.5 While many of the clauses of the draft bylaw are to the same or very similar effect as those of the current bylaws the replacement bylaw introduces significant changes including:

· Enabling staff (the Chief Executive) to make changes to the detailed terms and conditions under the bylaw. Under the current Waste Management Bylaw 2009 even minor changes to the terms and conditions require a Council resolution.

· Provision for residents to opt out of (and not to pay the targeted rate for) the Council’s kerbside collection services where they have access to an equivalent service.

· Amending the standards for the use of the Council’s kerbside waste collection services and community collection points including allowing for a wider range of bin options in the Council kerbside collection service.

· A requirement for some new multi-unit residential developments with more than 10 units to have waste management plans.

· Requirements for waste management plans for certain construction and demolition activities and for large public events.

· Provisions to address problems caused by unaddressed mail and advertising material and to deal with nuisance from litter, including litter around donation boxes for clothing and household goods.

· Enabling the Council to set standards for the collection points for recycling and diverted materials.

· Revised provisions for waste handling and disposal facilities to support the diversion of materials from landfill and to ensure that all waste materials are disposed of appropriately.

· Amendments to the licensing requirements for waste operators including for the collection of data, to enable more effective monitoring of the effectiveness of the Council’s Waste Management and Minimisation Plan.

1.6 The decisions in in this report are of medium significance in relation to the Christchurch City Council’s Significance and Engagement Policy. The level of significance was determined by the large number of people with an interest in matters relating to waste management, especially in the kerbside collection of waste, as well as the impact of some amended requirements for waste handling operations.

2. Officer Recommendations Ngā Tūtohu

That the Council:

1. Note that this report relates to the review of the Waste Management Bylaw 2009 and Cleanfill and Waste Handling Bylaw 2015.

2. Receive in accordance with section 160 of the Local Government Act 2002 the attached report on the review of the current bylaws including the Section 155 analysis of the current bylaws (Attachment C).

3. Receive the Clause by Clause Analysis of the proposed draft 2023 bylaw (Attachment D).

4. Agree, as a result of the review, to revoke the 2009 and 2015 bylaws and replace them with one integrated bylaw, the Waste Management and Minimisation Bylaw 2023 (Attachment A) together with terms and conditions made under the bylaw (Attachment B), noting both will be subject to consultation as outlined in recommendation 6 and 7.

5. Resolve, in accordance with section 155 of the Local Government Act 2002, that the proposed draft Waste Management and Minimisation Bylaw 2023:

a. is the most appropriate way of addressing the perceived problems; and

b. is the most appropriate form of bylaw; and

c. does not give rise to any implications under the New Zealand Bill of Rights Act 1990.

6. Adopt the proposed draft Waste Management and Minimisation Bylaw 2023 (Attachment A), for consultation.

7. Adopt the draft terms and conditions (Attachment B) for consultation.

8. Note that staff will prepare a consultation document for the proposal.

9. Note that the consultation process will include:

· advertising the proposal in social and print media, Council’s website and ‘Newsline’,

· direct notification of parties identified as being affected and/or interested,

· making available the consultation document and proposed bylaw and terms and conditions online and through libraries and service desks,

· allowing a four week period for submitters to provide their views via ‘HaveYourSay’, by email or in writing, and

· provision for submitters to be heard on their views.

10. Convene a hearings panel to receive and hear submissions on the proposed replacement bylaw, deliberate on these submissions, and make recommendations to the Council on the final form of the bylaw and terms and conditions.

3. Reason for Report Recommendations Ngā Take mō te Whakatau

3.1 Legislation requires that certain processes are followed, and determinations are made in order to make or review bylaws. The recommendations in this report reflect these statutory requirements.

4. Alternative Options Considered Ētahi atu Kōwhiringa

Option 1-Replace the two current waste bylaws with one bylaw

4.1 This is the preferred option and is discussed in this report.

Option 2- Retain the current bylaws for ten years

4.2 Option 2 is to (having reviewed the current bylaws), to retain them without amendment for a further ten years. This is not the preferred option because the current bylaws do not adequately address some existing and new problems.

Option 3- Revoke the bylaws

4.3 Option 3 is to revoke the bylaws, and not replace them. The Council would rely on existing legislation and non-regulatory measure (e.g. education campaigns on the correct use of Council’s kerbside collection system) to manage the use of the Council’s waste services and the management and monitoring of waste services provided by others. This is not the preferred option because:

· The analysis undertaken in this and previous reviews have found that bylaws are necessary and valuable regulatory tools to manage waste services.

· Alternative options would rely on voluntary compliance, which would not be effective to address a range of actual and potential problems.

· Most of the issues addressed by the bylaws and their terms and conditions are not adequately covered by legislation.

5. Detail Te Whakamahuki

Current bylaws-context

5.1 The Council has two bylaws which regulate the collection, handling and disposal of waste.

5.2 The Council’s Waste Management Bylaw 2009 came into force on 1 February 2009. It replaced earlier bylaws for Christchurch city (1995) and Banks Peninsula (2002). Its purpose is

· To prevent the contamination of recoverable resources,

· To maximise the recovery of recyclable resources,

· To ensure that waste is collected in a safe and efficient manner, and that

· Waste does not cause a nuisance.

The bylaw provides a framework for regulating the use of Council provided waste collection services while the terms and conditions under the bylaw provide the detail of the rules which apply to users of Council’s waste collection services. A resolution of the Council is required to make any change to the terms and conditions of the 2009 bylaw.

5.3 When the Waste Management Bylaw was last reviewed in 2015, the Council did not amend the bylaw but made some minor changes to the terms and conditions.

5.4 The Cleanfill and Waste Handling Operations Bylaw 2015 applies to commercial waste handling operations including landfill operations involving the deposition of ‘clean-fill’ material. The bylaw defines cleanfill, to include both natural and manufactured materials that, when buried, will have no adverse effects on people or the environment. The bylaw’s purpose is to

· Regulate and monitor operators collecting,

· Protect, promote and maintain public health and safety and

· Provide comprehensive data and information for planning and waste management and minimisation purposes”.

The 2015 bylaw replaced earlier bylaws (Licenced Waste Handling Facilities Bylaw 2007 and Cleanfill licensing Bylaw 2008), with minor changes in terms of content.

5.5 All bylaws must be made under legislation. These particular bylaws are made under sections 145 and 146(a)(ii) of the Local Government Act 2002 (LGA) and section 56 of the Waste Minimisation Act 2008 (WMA). Section 145 of the LGA contains the general by-law making powers and s146(a)(ii) enables territorial authorities to make bylaws for the purpose of regulating waste management. The LGA powers are in addition to the specific bylaw making powers under the WMA. The WMA enables the Council to make bylaws for a variety of waste related purposes including to,

· Prohibit or regulate the deposit of waste (in landfills),

· Regulate the collection and transportation of waste,

· Prescribe charges for the use of waste facilities (and services),

· Control access to waste facilities,

· Provide for the licensing of persons who collect or transport waste,

· Require licensees to provide data on their operation to the Council.

5.6 Without bylaws to regulate these matters we would not have clear and enforceable expectations about what is appropriate or acceptable in terms of the use of Council waste services, the management of waste operations including landfills or the provision of data for waste management and minimisation purposes.

5.7 Licensing conditions under the bylaws sit alongside other approvals that may be required such as resource consents under the Resource Management Act e.g. for cleanfill operations. For example, in 2015, as part of the review of the Cleanfill licensing Bylaw 2008, staff reviewed the (RMA) resource consents for each of the licensed cleanfill operations to determine whether controls under the bylaw were (still) necessary and appropriate. The review found that the bylaw controls were still required to address on-going problems; the resource consent (RMA) conditions varied greatly (between landfills), and for some ‘cleanfill’ sites the RMA consent would have allowed the deposit of putrescible or contaminated material into the disposal site. In addition several old but still operating cleanfill sites did not appear to hold resource consents but were operated under ‘existing use rights’ under the RMA.

Reason for early review

5.8 The Council is required by the Act to review these bylaws by 26 November 2025, but the review has been brought forward in line with the Council’s ongoing bylaw review programme and to enable the Council to respond to recent changes to regulations for landfills under the WMA. While the full review of the WMA is considered as unlikely to be progressed within next 2 years, staff have endeavoured to ensure that the draft replacement bylaw is sufficiently flexible to accommodate some already foreshadowed changes to the national waste management framework e.g. introduction of a Container Return Scheme.

5.9 The review provides an opportunity to ensure bylaws remains up-to-date and fit-for-purpose.

Structure of the bylaw

5.10 Staff recommend the current bylaws are revoked and replaced with one integrated bylaw. The reasons for this recommendation are that staff consider that all waste operations should have consistent licensing requirements under a single bylaw and that reducing the number of bylaws is likely to reduce the administrative burden of bylaw reviews.

Review summary

5.11 The 2009 and 2015 bylaws have undergone internal review to assess the current bylaw provisions and whether they are still relevant, and identify any new issues (actual or perceived).

5.12 Information for the review was sought from staff in the legal, building services, and resource management teams in addition to the evidence provided by the Resource Recovery Team and team responsible for the monitoring and compliance of (‘cleanfill’) waste operations.

5.13 Section 160 of the Act requires the Council to review each bylaw by making the determinations required by section 155 of the Act. Section 155 sets out the analysis and determinations a council must make as part of reviewing a bylaw. These are:

· Whether a bylaw is the most appropriate way to address a perceived problem;

· Whether the bylaw is the most appropriate form of bylaw; and

· Whether the proposed bylaw gives rise to any implications under the New Zealand Bill of Rights Act 1990.

5.14 The Bylaw Review Report and Section 155 Analysis (Attachment C) makes recommendations on the determinations required by section 155 of the Act. It analyses the current bylaw, whether the issues it aims to address are still relevant, identifies new issues, explores whether bylaw regulation is appropriate for those issues, and sets out the proposed changes and rationale for those changes.

5.15 A summary of the Bylaw Review Report is as follows:

· Overall, the bylaws are working well and achieving their purpose

· The existing key issues are still relevant, and require bylaw provisions to be retained

· A number of new issues have been identified as matters that should also be addressed in a replacement bylaw.

Proposed replacement bylaw

5.16 The internal review has resulted in proposing a replacement bylaw- the Waste Management and Minimisation Bylaw 2023. (Attachment A). The Section 155 Report and Clause by clause Analysis (Attachments C and D) set out the content and rationale for each clause of the replacement bylaw. The major changes to the current bylaws are outlined above in section 1.5 above, of this report.

Next steps

5.17 In order to complete the review of the current bylaws, the Council needs to approve the draft replacement bylaw and consult with the public. In terms of the Council’s standard procedure for the review of bylaws this includes notification of the bylaw, provision for (written) submissions and a public hearing.

5.18 The proposed timeline for consultation, hearings and final bylaw adoption is as follows:

Draft bylaw to Council for adoption for consultation	14 December 2022
Consultation – submissions open	Late January-February 2023
Hearings and deliberations	End March 2023
Council adopts final bylaw	May 2023
Bylaw comes into force	1 July 2023

6. Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic Alignment Te Rautaki Tīaroaro

6.1 This report reflects the importance attached by the Council to minimising waste, highlighted in the existing Strategic Framework within the community outcomes and reflects the strategic priority of meeting the challenge of climate change through every means available.

6.2 This report supports the Council's Long Term Plan (2021 - 2031):

6.2.1 Activity: Strategic Planning, Future Development and Regeneration

Policy Consistency Te Whai Kaupapa here

6.3 The decision is consistent with Council’s plans and policies in particular the waste Management and Minimisation Plan 2020. It is also consistent with the Council’s Climate Resilience Strategy which underlines the importance of moving towards zero waste.

Impact on Mana Whenua Ngā Whai Take Mana Whenua

6.4 The advice of the Council’s Treaty of Waitangi advisers was sought in relation to this bylaw. The decision does not involve a significant decision in relation to ancestral land or a body of water or other elements of intrinsic value, therefore this decision does specifically impact Mana Whenua, their culture and traditions.

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.5 The proposed replacement bylaw is intended to contribute towards the reduction of greenhouse gas emissions from waste including by promoting the diversion of waste from landfill and from the transport of waste to landfills.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.6 There are no accessibility considerations associated with this decision.

7. Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1 Cost to Implement - The cost of reviewing the bylaws including consulting on the draft bylaw, finalising a replacement bylaw and its implementation will be met within existing budgets.

7.2 Funding Source – Existing operational budgets.

8. Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1 The statutory power to put in place the replacement bylaw are outline in Section 5 above.

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2 This report has been reviewed and approved by the Legal Services Unit.

8.3 The Legal Services Unit has considered both the Bylaw Review Report and Section 155 Analysis and the proposed replacement bylaw. It is the view of the Legal Services Unit that the proposed new bylaw is within the authorising provisions of the Waste Minimisation Act 2008 and Local Government Act 2002, and is certain and reasonable.

8.4 It is also the view of the Legal Services Unit that the attached Bylaw Review Report and Section 155 analysis report and clause-by-clause analysis show how the Council has considered its section 155 obligations for the purposes of the review of the bylaw.

8.5 The recommendations in this report reflect that the requirements in sections 155 and 160 of the Act have been met.

9. Risk Management Implications Ngā Hīraunga Tūraru

9.1 The risks of consulting on and then adopting some form of proposed replacement bylaw are low. The consultation process will allow the public to have their say on the proposal.

9.2 As with any bylaw, there is a risk of legal challenge. The Council’s Legal Services Unit has been engaged in the review of this bylaw, and is satisfied that the proposed replacement bylaw is proportionate, reasonable, and that the Council’s proposed replacement bylaw is justifiable in relation to the Council’s bylaw making powers.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Draft Waste Management & Minimisation Bylaw	22/1724920	47
b ⇩	Draft Terms and Conditions	22/1339050	65
c ⇩	Section 155 Report	22/1724921	75
d ⇩	Clause by clause analysis of draft bylaw	22/1258172	80

Additional background information may be noted in the below table:

Document Name	Location / File Link

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i) sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

Signatories Ngā Kaiwaitohu

Authors

Ruth Littlewood - Senior Policy Analyst

Maryem Al Samer - Legal Counsel

Elizabeth Wilson - Team Leader Policy

Ross Trotter - Manager Resource Recovery

Approved By

David Griffiths - Head of Strategic Policy & Resilience

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

Council

14 December 2022

11. Residual disinfection (chlorine) exemption for drinking water
Reference / Te Tohutoro:	22/518026
Report of / Te Pou Matua:	Helen Beaumont, Head of Three Waters, (helen.beaumont@ccc.govt.nz)
General Manager / Pouwhakarae:	Jane Davis, General Manager Infrastructure, Planning & Regulatory Services (jane.davis@ccc.govt.nz)

1. Brief Summary

1.1 The purpose of this report is to provide an update about the requirements for and process to apply for an exemption from residual disinfection for selected Christchurch City Council drinking water supplies.

Legislative framework

1.2 The main purpose of the Water Services Act 2021 is to ensure that drinking water suppliers provide safe drinking water to consumers.

Safe, in relation to drinking water, means drinking water that is unlikely to cause a serious risk of death, injury or illness.

Drinking water means water that is used for human consumption, oral hygiene, preparing food and drink, or washing utensils that are used for eating and drinking.

1.3 The Act requires the owner of a drinking water supply to have a Water Safety Plan and to comply with legislative requirements, such as the drinking water standards and rules, on a consistent basis. The Water Safety Plan requires the use of residual disinfection unless an exemption is obtained.

1.4 Section 58 of the Act allows the drinking water supplier (the Council) to apply to Taumata Arowai for an exemption from residual disinfection. Taumata Arowai guidance outlines that a drinking water supplier may apply for a residual disinfection exemption for a supply, parts of a supply and/or a process:

Taumata Arowai requirements	Council’s comments
A supply that includes reticulation	All Council’s water supplies include reticulation
A part or parts of a supply that includes reticulation, including treatment plants and distribution zones, that can be distinguished from the rest of the supply	This statement allows the Council to apply for an exemption on a distribution zone by zone basis. However, it will require a thorough risk assessment of the nearby connected zones, as well as ensuring high reliability of each zone border valves.
For a process, such as a requirement for contact time, that is part of a supply that includes reticulation	Majority of water treatment plants (pump stations) in Christchurch do not comply with the minimum required chlorine ‘contact time’ (mixing time following the introduction of chlorine) under the new Drinking Water Quality Assurance Rules. This statement allows the Council to apply for contact time requirement exemption, for example, in the distribution zones where we still need to disinfect (e.g. due to reservoir condition).

Application process

1.5 The Council starts by sending the application form for an exemption to Taumata Arowai along with all the required information. Taumata Arowai sends an email to Council outlining the fee, how to pay, next steps and the invoice for the non-refundable application fee ($5,200 + GST) which includes 40 assessment hours.

1.6 Taumata Arowai will seek independent technical advice from an external advisory panel, including international experts. The role of the external advisory panel in assessing applications will be proportionate to the scale, complexity, and risk of the supply.

1.7 Additional charges may be applied to applications and will be invoiced after the decision has been made and notified to the applicant.

1.8 After the application payment is accredited, Taumata Arowai does an initial assessment to confirm if the fee covers the estimated assessment process. In case the fees are insufficient, Taumata Arowai will advise the estimated final charges and the process will continue in the case that Council accepts additional charges.

1.9 The assessment process will take about 50 to 65 working days, depending on the size and complexity of the supply.

Minimum requirements

1.10 Taumata Arowai has recently published guidance covering the minimum information to be included in each application for the residual disinfection exemption:

· the reasons why an exemption is sought

· a history of the drinking water supply

· a comprehensive description of the drinking water supply

· a comprehensive assessment of the source water, risks associated with the source water and how they are managed

· a comprehensive description of the water supply distribution system, including how it is managed, what organisations undertake work on it how people are authorised to work on it, operating procedures, maintenance procedures and hygiene procedures that are relevant to it

· details about the performance of the distribution system including matters like water loss and how it has been assessed, pipe age, materials, criticality, breakage rates etc.

· an inventory of risks associated with the drinking water supply

· the steps that the water supplier will take to manage the risks to contamination of the water supply in the absence of a residual disinfectant

· details of emergency disinfection procedures for the treatment and distribution and the circumstances that would require its use

· details of communications plans for alerting consumers if poor quality water is provided

· a current or draft drinking water safety plan

· a history of water testing results for the supply including any results that have exceeded maximum acceptable values (MAVs), reports into those exceedances, the reasons exceedances have occurred, and the remedial actions taken in response to those

· any other information that the water supplier considers relevant.

Most of this information is available in the Water Safety Plan and is generic information across the overall management of the supply.

1.11 The relevant attributes to be assessed for each specific water supply/or zone of a water supply are outlined below:

Attribute	Consideration
Cross-connection control and backflow prevention	Demonstration of an effective cross-connection control and backflow prevention programme
Pressure management	Demonstration of comprehensive understanding of network pressures and best practice for pressure management
Hygienic practices	Demonstration that hygiene best practices for planned and unplanned repairs are always used
Water storage	Demonstration of best practice for operation, inspection, and maintenance of water storage
System condition	Demonstration of regular assessment of system condition and that overall system is sound
Sanitary sewers	Demonstration of sufficient separation of sanitary and water networks
Seismic design	Demonstration of best practice in system design for seismic resiliency
Operational staff	Demonstration of staffing level adequacy, technical competency, awareness of risk, involvement in quality management and continuous improvement, and continual training
Network cleaning	Demonstration of best practice in regular and effective network cleaning programme
Water loss	Demonstration of best practice in leak detection and loss control programme and minimal non-revenue water
Online monitoring	Demonstration of effective online monitoring capability for key water quality parameters in the network at key locations
Continuous improvement	Demonstration of best practice in asset management and capital improvements, including repair, rehabilitation, and replacement planning and activities
Electrical power	Demonstration of best practice for reliability of electrical power system, including emergency backup and standby capabilities
Emergency chlorination	Demonstration of provision of emergency chlorination capability for network
Incident and emergency response	Demonstration of effective emergency response capabilities, including communication, contingency supply, response protocols, regular training exercises
Public communications	Demonstration of effective public communications strategy and capability
Customer complaints	Demonstration of effective capability to receive and rapidly respond to customer complaints
Organisational awareness and commitment	Demonstration of organisational awareness of system risks and commitment to water quality protection from all levels of personnel

1.12 The new legislation and the guidance issued by Taumata Arowai provide a comprehensive framework for any exemption from residual disinfection. The requirements are onerous and there is a considerable amount of work required to improve our infrastructure as well as document our systems and procedures for the management and operation of our networks.

1.13 Although the attributes that will be considered are detailed, the criteria that will be applied to each attribute are not. For example, while water loss is to be considered the maximum leakage rate that would be acceptable for an exemption is not specified. Feedback received from initial applications will help in building up a picture of what the detailed criteria are going to be for a successful residual disinfection exemption application.

1.14 The infrastructure attribute for ‘cross connection and backflow’ has been addressed. The attribute for ‘storage’ is being addressed through our reservoirs and tanks programme. The attributes for ‘system condition’ and ‘water loss’ will be a particular challenge. While our renewals programme is addressing the backlog of pipe renewals it will be a number of years before interruptions to service (due to major leaks and breaks) reduce in frequency and our leakage rate reduces.

1.15 It is worth noting that the ‘emergency chlorination’ attribute in the guidance will require provision for rapid implementation of chlorine dosing in response to any incident or detection of contamination in the drinking water network. This means having chlorine dosing equipment installed, maintained and on standby at each of our pump stations.

1.16 Our water safety plan is the foundation document for any exemption. We sent the water safety plan for Christchurch to Taumata Arowai, in May 2022, for informal feedback and further discussion. No feedback has yet been received.

The Christchurch city supply

1.17 The Water Safety Plan for the Christchurch supply does not provide for residual disinfection with chlorine throughout the reticulation. We do use chlorine on a temporary and targeted basis to address unacceptable risks due to below ground wellheads, poor condition reservoirs and tanks, and/or inadequate backflow prevention. We also use chlorine in response to incidents and/or detection of bacteria in the water supply.

1.18 We have 51 pump stations across the city and there is no routine chlorine dosing at 18 of these: Brooklands, Kainga, Thomsons, Gardiners, Farrington, Burnside, Crosbie, Avonhead, Tara, Picton, Wrights, Prestons, Marshlands, Lake Terrace, Parklands, Aston, Effingham, and Keyes. These pump stations provide around 30 per cent of the drinking water for the city.

1.19 Our water supply security programme has been working through the unacceptable risks:

1.19.1 the programme for well heads is substantially complete and we have sufficient secure well heads to supply the city under the usual demand for drinking water

· some older pump stations with below ground well heads are on standby for periods of high demand over the summer; these will be abandoned once new wells and pump stations have been fully commissioned.

1.19.2 the rollout of backflow prevention to high risk commercial and industrial premises is complete and we are now working through the medium and low risk premises.

1.19.3 the reservoir (109) and suction tank (24) programme is substantial and programmed over the next 3 to 5 years

· the standard required by our revised Water Safety Plan and the expectations of risk management by the new regulator are considerably higher

· we have completed most of the external inspections (94 reservoirs and 24 tanks) and are now working through a prioritised programme of internal inspections –

· sixteen internal inspections completed so far and 30 inspections planned per year over the next 3 years.

1.20 Following the initial inspections, there are three tranches of work underway or planned on our reservoirs and suctions tanks:

1.20.1 Five at Quarry, Denton, Sockburn, Hackthorne and Estuary – budget $5.3 million

1.20.2 Five at Halswell, Grassmere, Mays, and Mt Pleasant (x2) – estimate $2.6 million

1.20.3 Nine at Main Pumps, Grampian, Auburn, Clifton (x2), Huntsbury, Major Aitken, Halswell and Takahe – estimate $5 million

Depending on the extent of remedial works required it is expected to take at least five years to bring all reservoirs and tanks up to meet the ‘demonstrably safe’ criteria.

1.21 Christchurch’s water supply currently has the following 11 zones registered:

Brooklands-Kainga, Central Christchurch, Diamond Harbour, Ferrymead, Governors Bay, Lyttelton, Northwest, Parklands, Rawhiti, Riccarton and West Christchurch.

1.22 Applying on a zone by zone basis will require specific information for each zone relating to attributes such as the water loss, system condition, separation from sanitary sewers etc. Other attributes such as how customer complaints and public communications are handled will be the same across all zone applications.

1.23 The initial understanding from discussions with Taumata Arowai staff was that an exemption could only be applied for once all work had been completed to address any risks in the water safety plan that were mitigated by residual disinfection.

1.24 In late June 2022, Council received an email from Bill Bayfield, Chief Executive Officer of Taumata Arowai, stating that after careful consideration Taumata Arowai are comfortable that proposed works can be taken into account in exemption applications. The email detailed that any exemption that takes account of proposed works would be subject to conditions requiring the proposed works to be carried out and for those works to be functioning effectively in order for the exemption to be able to be put into effect.

Banks Peninsula supplies

1.25 The requirement for residual disinfection applies equally to all council owned supplies. Taumata Arowai staff indicated that a supply with a surface water source would be unlikely to be considered for a chlorine exemption.

1.26 Akaroa and Duvauchelle are routinely disinfected. Little River and Pigeon Bay recently had temporary chlorination units installed at the treatment plants. Wainui currently uses temporary chlorination while backflow and storage risks are reviewed and addressed.

1.27 Wainui’s drinking water source currently meets the Drinking Water Standards 2005 (revised 2018) definition of being ‘secure’ (and therefore not requiring protozoa treatment to be installed). Unfortunately, it will not meet the equivalent Class one definition in the new Rules and therefore additional protozoa treatment will need to be installed.

1.28 Birdlings Flat requires upgrades to the treatment plant and an upgrade of the wellhead before being considered for an exemption from chlorine. A chlorination dosing system has been installed and is on stand-by.

Key Dates

1.29 The requirement for residual disinfection within the Water Services Act appears in section 31 which describes what must be included in a Water Safety Plan. Section 31(1)(J) states:

where a drinking water supply includes reticulation, require, and provide for the use of, residual disinfection in the supply unless an exemption is obtained under section 58.

1.30 Drinking water supplies who were registered under the Health Act 1956 immediately before 15 November 2021 have one year in which to prepare Water Safety Plans that comply with the Act. A copy of the Plans must be lodged with Taumata Arowai by 15 November 2022.

1.31 The revised Standards were released on 1 July 2022. The new Drinking Water Quality Rules, which are be the companion document to the revised Drinking Water Standards were released on 25 July 2022. The Rules set out how, at our sources, treatment plants and within the reticulation, Taumata Arowai requires us to demonstrate that we are adequately managing our supplies, including the provision of residual disinfection.

1.32 The Council submitted updated and revised Water Safety Plans for each of its community water supplies to Taumata Arowai, by 15 November 2022, as required.

Requirement to chlorinate

1.33 The temporary chlorination equipment, and the associated monitoring, at our pump stations in Christchurch does not meet the Drinking Water Quality Rules. We will continue to use this equipment and will apply for an exemption to the (continuous) monitoring requirements until we can upgrade our systems.

1.34 If a supply does not have an exemption for residual disinfection by 15 November 2022 then residual disinfection should be present in the supply from that date. Not having residual disinfection by 15 November 2022 would mean that Council, as the water supplier, would be in breach of the Water Services Act 2021.

1.35 However, following discussions between Council staff and Taumata Arowai, it has been agreed that we will continue to operate our supplies in accordance with our current Water Safety Plans until our exemption applications have been considered.

Communications

1.36 The Strategic Communications Team have prepared a communications strategy. Our goal is to instil confidence in the delivery of safe and reliable drinking water for residents across Christchurch and Banks Peninsula.

1.37 We will provide information about the change in the requirements for water supplies under the Water Services Act making it clear that the Council would not be managing the supply in accordance with the legislation if chlorination were not included – either on stand-by, as a temporary measure or on a permanent basis depending on the supply or supply zone.

1.38 We will provide our communities with up-to-date and easy-to-digest information about chlorination status across our 11 water zones in Christchurch and six independent water supplies across Banks Peninsula.

1.39 We will provide information on our plans to apply for exemption applications, and the water supply upgrade work that will enable this.

1.40 We aim to connect with our communities, through a wide range of channels to ensure they can receive local, timely, factual, and easy to understand information.

2. Conclusion

2.1 The Council has applied for a number of exemptions, under the Water Services Act 2021, from the requirement to have residual disinfection. Some of these are technical and relate to the ‘temporary/ emergency’ chlorination systems that will operate until an exemption is secured, for example, relating to contact time and monitoring requirements.

2.2 A communications strategy is being developed to support residents’ understanding of the chlorine exemption process and the requirement to extend chlorination across some of our supplies.

2.3 Applications for chlorine exemptions for the Christchurch supply will be made progressively for supplies and/or zones once risks addressed and/or the work required is clarified and scoped.

2.4 Anticipated timetable:

Zone	Consideration	Anticipated Time line
Brooklands-Kainga	No storage, wells ‘secure’, currently not chlorinating	Sept 2022 – exemption application submitted to TA
Central Christchurch	Relies on completion of reservoirs and suction tank inspections and repairs	At least 5 years – exemption application once repair programme scoped
Lyttelton, Diamond Harbour, Governors Bay	Relies on completion of reservoirs and suction tank inspections and repairs	At least 5 years – exemption application once repair programme scoped
Ferrymead	St Johns and Woolston suction tanks ‘demonstrably safe’	Two years (as works with Central zone)
Northwest Christchurch	Replacement Redwood wells being drilled currently. Grampian, Auburn suction tanks replacement. Jeffreys Road new tank completed. Gardiners suction tank ‘demonstrably safe' sign off	Three to five years – exemption application mid 2023
Parklands	Prestons suction tank needs ‘demonstrably safe’ signoff. Burwood, Mairehau – below ground wells – replace/abandon.	Two years – exemption application mid 2023
Rawhiti	Aston below ground well. Suction tanks – Carters, Estuary, Keyes signed off as ‘demonstrably safe’	Three years – exemption application once repair programme scoped
Riccarton	Two pump stations: Tara and Picton, but relies on some flow from Central zone. Improved automation of Tara would address Central reliance	Late 2023 – if automation of Tara PS project is progressed to stop reliance on Central zone at times
West Christchurch	Relies on completion of reservoirs and suction tank inspection and repairs for West storage and confirming reliance on Central zone	Three years – exemption application once repair programme scoped
Banks Peninsula Wainui	Reservoirs need sign off as ‘demonstrably safe’	New Rules now mean Class 1 not achievable, resolution needed
Banks Peninsula Birdlings Flat	Wellhead repairs to make ‘secure’ programmed winter 2023; treatment plant upgrades required	Exemption application early in 2023.

3. Officer Recommendations Ngā Tūtohu

That the Council:

1. Receive the information in the Residual disinfection (chlorine) exemption for drinking water Report.

Attachments / Ngā Tāpirihanga

There are no attachments to this report.

In addition to the attached documents, the following background information is available:

Document Name	Location / File Link
Not applicable

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i) sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

Signatories / Ngā Kaiwaitohu

Author

Judy Williamson - Water Supply Security Engineer

Approved By

Helen Beaumont - Head of Three Waters

Jane Davis - General Manager Infrastructure, Planning & Regulatory Services

Council

14 December 2022

13. Council Portfolios
Reference / Te Tohutoro:	22/1720934
Report of / Te Pou Matua:	Mary Richardson, General Manager Citizens & Community
General Manager / Pouwhakarae:	Mary Richardson, General Manager Citizens & Community (Mary.Richardson@ccc.govt.nz)

1. Nature of Decision or Issue and Report Origin

1.1 Present the Terms of Reference for the Portfolios established by the Mayor and Council, and provide advice regarding additional portfolios and committees.

1.2 The report has been writen in response to Council resolution CNCL/2022/00162.

1.3 The decisions in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.

2. Officer Recommendations Ngā Tūtohu

That the Council:

1. Adopts the Terms of Reference for Portfolio roles.

2. Agrees to allow time for the five adopted Portfolios to ‘bed in’, so that their effectiveness and workload commitments can be assessed before any additional ones are considered.

3. Note the staff advice that Council has a Multicultural Advisory Group and a Youth Council in place which negate the requirement for Multicultural and Youth committees.

3. Reason for Report Recommendations Ngā Take mō te Whakatau

3.1 The Council received the Mayor’s memorandum on governance committee structure at its meeting on 2 November 2022. This structure included the introduction of Portfolios to ensure Council engages appropriately with particular population groups/issues. The Portfolios are: Accessibility; Central City Revitalisation; Climate Change; Multicultural; and Youth. The Mayor proposed that Portfolios would allow Councillors to be the champion for a particular population group or issue.

3.2 The Council noted that the Terms of Reference for Portfolio leads would be further refined and agreed by Council (Attachment 1).

3.3 The Council requested staff advice on the nature and benefits of any additional portfolios, including Suburban Regeneration, Arts and Culture, and Homelessness, and also noted that Terms of Reference for all portfolios will be further refined and agreed by Council.

3.4 The Council also requested that staff provide advice regarding the option to establish a Multicultural Committee and a Youth Committee, including the potential Terms of Reference and membership.

4. Detail Te Whakamahuki

Portfolios Established by Mayor

4.1 The Mayor established five Portfolios on 2 November 2022. These portfolios focused on

4.1.1 particular population groups; or

4.1.2 a strategic issue which spans Council activities

4.2 The roles and responsibilities set out in the Terms of Reference (Attachment 1).

4.3 The following are suggested areas of focus specific to each Portfolio, appropriate to Councillors’ governance role.

Accessibility Portfolio

4.4 Advocate for equitable access to Council activities and services for people with a disability, and the reduction of barriers to participating in and contributing to Council services, activities and processes, and community life, and ensure they are prioritised in Council planning and decision-making.

4.5 Retain oversight of work programmes and progress with implementation of relevant Council strategies, plans and policies; in particular the Equity and Access for People with Disabilities Policy 2001.

4.6 Be involved in the development of the proposed omnibus Equity policy, which will incorporate and replace the 2001 policy (as above).

Youth Portfolio

4.7 Advocate for the prioritisation of youth wellbeing and participation in Council planning and decisions.

4.8 Retain oversight of effective implementation of relevant Council strategies, plans and policies and agreed work programmes; in particular Te Haumako Te Whitingia Strengthening Communities Together Strategy 2022.

Multicultural Portfolio

4.9 Advocate for planning and decision-making processes to reflect the Council’s commitment to welcome and celebrate diversity and support specific needs of multicultural communities.

4.10 Retain oversight of effective implementation of relevant Council strategies, plans and policies and agreed work programmes; in particular the Multicultural Strategy and Annual Diversity and Inclusion report.

Climate Change Portfolio

4.11 Advocate for effective climate resilience actions to be included in the Draft Christchurch Transport Plan, Draft Urban Forest Plan and Draft Ōtautahi Christchurch Plan and in all Council planning and policy decision-making.

4.12 Have oversight of effective implementation of relevant Council strategies, plans and policies; in particular Kia tūroa te ao, Ōtautahi Christchurch Climate Resilience Strategy 2021.

Central City Revitalisation Portfolio

4.13 Advocate for Council planning, policy and decision-making to include actions, where appropriate for the central city, that stimulate and sustain its development and growth.

4.14 Retain oversight of effective implementation of relevant Council strategies, plans and policies; in particular the Central City Action Plan, 2020.

5. Assessment of Additional Portfolios

5.1 Staff have assessed benefits of the establishment of additional Portfolios.

Allowing time to embed new Portfolios

5.2 Portfolios are a new component of the Council’s governance structure. Understandably, neither elected members nor the organisation have a full understanding of how they will operate.

5.3 The time commitment required of Executive Team members to support Portfolio Councillors’ interests is unknown; as is the extent to which additional officer support may be required, where appropriate.

5.4 Given this, it would be preferable to allow time for the five adopted Portfolios to ‘bed in’, so that their effectiveness and the workload commitments can be assessed before any additional ones are considered.

Nature of Portfolios

5.5 Three additional Portfolios were suggested by Councillors. At the 2 November 2022 Council meeting, staff were asked to provide advice on the “nature and benefits” of these.

5.6 The three suggested Portfolios and the five adopted Portfolios have been assessed against four criteria:

1) Does it focus on a particular population group which Council it needs a focus on or is currently?

2) Is it a strategic issue or priority for Council?

3) Is there potential for a Portfolio role to have an impact?

4) Does the issue/matter already have an Activity Plan, Level or Service/s (LOS) and reporting process against which delivery of activity and progress is monitored?

Portfolio	Nature of Role		Benefits of Portfolio
Portfolio	Population group	*Identified strategic* issue/priority**	Potential for impact on outcomes	Activity plan, LOS & reporting process
Approved by Council
- Accessibility	Yes	Yes	High	No
- Youth	Yes	Yes	High	No
- Multicultural	Yes	Yes	High	No
- Climate Change	No	Yes	High	No
- Central City Revitalisation	No	Yes	High	Part
Suggested by Councillor/s
- Homelessness	No	No	Low	Part
- Suburban Regeneration	No	No	Moderate	Yes
- Arts and Culture	No	No	High	Yes

Key

Low	Low potential impact from Council decisions on desired outcomes = less benefit of a portfolio focus
High	High potential impact from Council decisions on desired outcomes = more benefit from a portfolio focus
Yes	Existing service plan, LOS or reporting mechanism = less benefit from/need for a portfolio focus
No	Absence of service plan, LOS or reporting mechanism = potentially more benefit from a portfolio approach.

Establishment of a Multicultural Committee and a Youth Committee

5.7 The Council also requested that staff provide advice regarding the option to establish a Multicultural Committee and a Youth Committee, including the potential Terms of Reference and membership.

5.8 Staff advise that the Council has a Multicultural Advisory Group and a Youth Council in place which negate the requirement for Multicultural and Youth committees.

6. Policy Framework Implications Ngā Hīraunga ā- Kaupapa

Strategic AlignmentTe Rautaki Tīaroaro

6.1 This report supports the Council's Long Term Plan (2021 - 2031):

6.1.1 Activity: Governance and decision-making

· Level of Service: 4.1.18 Participation in and contribution to Council decision-making - Percentage of respondents who understand how Council makes decisions: At least 32%

Impact on Mana Whenua Ngā Whai Take Mana Whenua

6.2 The governance structure for the 2022-2025 triennium, including Portfolios, is underpinned by our statutory obligation to facilitate participation by Māori in Council’s decision-making processes. It is noted that the Council’s governance structure includes Te Hononga Council – Papatipu Rūnanga Committee, which has the purpose of developing an enduring and collaborative relationship between Council and mana whenua.

6.3 This report does not involve a significant decision in relation to ancestral land or a body of water or other elements of intrinsic value, therefore does not specifically impact Mana Whenua, their culture and traditions.

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.4 A Climate Change Portfolio was established by the Mayor on 2 November 2022.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.5 An Accessibility Portfolio was established by the Mayor on 2 November 2022.

7. Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1 No additional resource (financial) is anticipated to support the Portfolios.

Other He mea anō

7.2 Advice to Portfolio Councillors will be provided by appropriate senior managers, as part of their management-governance relationships.

8. Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1 The Portfolios are part of the Council-approved governance structure for the 2022-2025 triennium, which is in accordance with statutory requirements.

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2 There is no legal context, issue or implication relevant to this decision.

9. Risk Management Implications Ngā Hīraunga Tūraru

9.1 The Terms of References for Portfolios set out their role and responsibilities. There are no risks from their establishment that require specific management.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Terms of Reference - Portfolios	22/1720949	144

In addition to the attached documents, the following background information is available:

Document Name – Location / File Link

Not applicable

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i) sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

Signatories Ngā Kaiwaitohu

Authors

Mary Richardson - General Manager Citizens & Community

Adair Bruorton - Principal Advisor Citizens and Community

Approved By

Mary Richardson - General Manager Citizens & Community

Council

14 December 2022

15. Review of the Council's Policy for the Appointments and Remuneration of directors of Council Organisations
Reference / Te Tohutoro:	22/1642881
Report of / Te Pou Matua:	Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz).
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)

1. Nature of Decision or Issue and Report Origin

1.1 This report proposes amendments to the Council's governance settings in its Policy for the Appointment and Remuneration of Directors of Council Organisations (the Appointments' Policy).

1.2 This report has been written with a view to bringing the Appointments' Policy up to date following its last review in 2017, in recognition that best practice governance as it relates to local government has continued to evolve since that time.

1.3 The Appointments’ Policy (at Attachment A) largely affects Christchurch City Holdings Ltd (CCHL) and its subsidiaries, ChristchurchNZ Holdings Ltd (CNZHL), Venues Ōtautahi (VŌ), Civic Building Ltd and Te Kaha Project Delivery Ltd.

1.4 Other Council-controlled organisations (CCOs) – Local Government Funding Agency (LGFA) and Transwaste Canterbury Ltd are excluded from the Appointments’ Policy as they each have their own entity-specific appointments’ policies and/or practices as a result of their multiple ownership.

1.5 Trusts are also exempted from the Appointments' Policy as their governance needs are quite different to those of commercial or quasi-commercial CCOs.

1.6 Council staff have reviewed the Appointments' Policy and recommendations are made taken into account the following:

· decisions made by the Council on 7 December 2022 on the Northington Partners’ strategic review of CCHL (NP CCHL strategic review);

· legislative governance requirements, including Companies Act 1993, Local Government Act 2002 (LGA) and CCO constitutions;

· Royal Commission on Auckland Governance, 2009;

· best practice governance settings recommended by independent governance experts (e.g. Institute of Directors (IoD) and Financial Markets Authority (FMA));

· Office of the Auditor-General (OAG) advice ‘Governance and accountability of CCOs’ 2015;

· the appointments’ policies and practices of Auckland, Wellington, Dunedin, Queenstown Lakes, Hamilton and Tauranga councils;

· independent review of the CCHL parent company board, 2021; and

· advantages and disadvantages of any proposed changes to the Appointments’ Policy’s governance settings.

1.7 At its meeting on 7 December 2022, the Council resolved to reduce the number of Councillor-directors on the CCHL board, from four to two, based on the NP CCHL strategic review recommendations.

1.8 This in turn raises the question as to whether the number of councillor-directors on the CNZHL board should also be reconsidered. There are currently two, but could be reduced to one. Staff assume that the three councillor-directors on the Civic Building Ltd board would be retained given there are no independent directors and the one councillor-director on the VŌ board would also be retained.

1.9 In 2020, the Council’s Legal Services Unit sought a declaration from the OAG as to the ability of all councillors, whether directors of CCHL or other Council organisations or not, to vote participate in decision-making regarding the Appointments’ Policy. The OAG advised that all members of the governing body of the Council could participate on the grounds that it is in the interests of the electors or inhabitants of the area (Christchurch) that they be allowed to do so. The OAG’s advice is at Attachment B. The Legal Services Unit has sought the OAG’s confirmation that this advice remains valid and will update the Council at the meeting.

1.10 The decisions in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy. The level of significance was determined by assessing the extent to which the decisions might impact the community.

2. Officer Recommendations Ngā Tūtohu

That the Council:

1. Approves the following governance changes to be reflected in the Council’s Policy for the Appointment and Remuneration of Directors of Council Organisations to apply to all Council-controlled organisations’ boards:

a. Prohibit staff appointments to operational Council-controlled organisation boards, but retain the ability to appoint staff to non-trading shelf Council-controlled organisations;

b. Elaborate on diversity guidance to include gender, ethnicity, Māori whakapapa, LGBTI affinity, age, culture, disability, background and experience;

c. Require all Chair appointments to be approved by the Council (including where an incumbent director of a board is appointed);

d. Require all proposed re-appointments of incumbent directors to be approved by the Council;

e. Reduce the number of terms that directors can serve on a Council-controlled organisation’s board to two terms of three years with a third if the Council considers it is warranted;

f. Include in core skills and capabilities for Council-controlled organisation board members – sector knowledge, understanding and commitment to the Council’s obligation to Te Tiriti o Waitangi, reliability and dependability;

g. All proposed appointments and re-appointments to Council-controlled organisation boards to be accompanied by a skills and expertise matrix of the board’s governance requirements and how the proposed mix of directors meet the requirements.

2. Agrees to the treatment of fees to elected members who are appointed to Council-controlled organisation boards as follows:

EITHER:

a. Status quo - fees are not received personally by councillor-directors and Christchurch City Holdings Ltd, ChristchurchNZ Holdings Ltd and Transwaste Canterbury continue to make donations to Tahua Taupua Mayor’s Welfare Fund in lieu of councillor-director’s fees;

b. Councillor-directors of Christchurch City Holdings Ltd only be entitled to receive fees personally as recompense for the workload, liabilities and reputational risk faced as directors;

c. OR

d. Councillor-directors of all Council-controlled organisations be entitled to receive fees personally as recompense for their governance work on the boards;

3. if recommendation 2a. is agreed - EITHER:

i. Council-controlled organisations need not donate amounts equal to the fees and can instead retain the value of the fees within the organisation;

ii. Only commercially profitable Council-controlled organisations donate the value of fees not paid to councillor-directors to the Tahua Taupua Mayor’s Welfare Fund or other recipient the Council may choose;

iii. All Council-controlled organisations, whether profitable or not make donations in lieu of paying fees to the Tahua Taupua Mayor’s Welfare Fund, and bear the costs of doing so;

iv. Councillor-directors who receive fees from Council-controlled organisations as a result of board membership determine and declare the recipients of donations in lieu of fees, but cannot retain the value personally;

4. Consider whether to reduce the number of elected member appointments to the ChristchurchNZ Holdings Ltd board from two to one; and

5. Notes that in 2022, the value of fees donated in lieu of director’s fees for Councillor-directors was $291,600 and if reduced to profitable Council-controlled organisations only would be $122,000 based on two councillor-directors for Christchurch City Holdings Ltd and one for Transwaste Canterbury Ltd.

3. Reason for Report Recommendations Ngā Take mō te Whakatau

3.1 To ensure the Council is adhering to best practice governance (in the local government context) principles to the greatest extent possible.

4. Alternative Options Considered Ētahi atu Kōwhiringa

4.1 The only alternative option is to retain the status quo, which is less reflective of contemporary best practice governance.

5. Detail Te Whakamahuki

Background

Legal

5.1 Section 57(1) of the LGA requires a local authority to adopt a policy that sets out an objective and transparent process for:

(a) the identification and consideration of the skills, knowledge, and experience required of directors of a council organisation (CO); and

(b) the appointment of directors to a CO; and

5.2 Section 57(2) of the LGA provides that a local authority may appoint a person to be a director of a CO only if the person has, in the opinion of the local authority, the skills, knowledge, or experience to guide the organisation, given the nature and scope of its activities and contribute to the achievement of the objectives of the organisation.

5.3 Section 57(3) requires that when identifying the skills, knowledge, and experience required of directors of a CCO, the local authority must consider whether knowledge of tikanga Māori may be relevant to the governance of that CCO. This was a new requirement added in at the time of the 2019 LGA amendments and will be included in the revised Appointments' Policy.

Holding companies

5.4 The diagram over the page shows the holding company, subsidiaries and Council relationship.

Operational and commercial expertise

Governance expertise

5.5 The OAG notes in its 2015 ‘Governance and accountability of CCOs’ report the following relating to holding companies:

“there is a view that the potential for conflict between a councillor-director’s interests and responsibilities as a councillor and as a CCO director is reduced where the councillor is a director of a CCO holding company. The reasoning is that the holding company will be focussed on managing the local authority’s investment in its CCOs, rather than on the specific business of each CCO. However, a director of a holding company has a particular need for business acumen and governance experience”.

5.6 For the holding company model to be effective, it is important that the parent company has the mandate to act as would an ordinary shareholder (to the greatest extent possible), and that the Council limits its interventions to those that are of the utmost importance.

5.7 For CCHL and CNZHL, their governance decision-making without Council involvement relates to their subsidiary boards - re-appointment of directors, appointment of the boards’ chairs and remuneration of subsidiary boards’ directors. The only subsidiary board-related decisions not made by the parent company boards is the appointment of new directors which is retained by the Council.

5.8 In addition, the Council has the decision rights for new appointments, re-appointments, chair appointment and remuneration of directors to the parent company boards.

5.9 While on one hand, CCHL has responsibility for a number of the key governance decisions, it also has accountability for the effectiveness of those arrangements across the group. The accountability can be characterised as being for the overall performance of the group in meeting shareholders’ expectations, including commercial returns on capital invested and social, environmental and cultural outcomes.

5.10 Dunedin City Holdings Ltd (DCHL) is Dunedin City Council’s (DCC’s) holdings company for its commercial investments. Most of the governance decision-making is the same across the two councils and holding companies but with two key exceptions - DCC prohibits councillors from being appointed to the DCHL and its subsidiaries’ boards and DCC approves re-appointments of directors (all independent) to the DCHL board.

5.11 DCC’s Appointments’ Policy also provides two clear differences in the holding company framework - directors of DCHL are also the directors of its subsidiaries and the DCC is more actively involved in the appointments’ process.

Appointments' Policy

5.12 Recognising that in general elected members and Council staff are very unlikely to have the in-depth knowledge and understanding of the subsidiaries’ businesses, and likely other core governance skills and capability, the following clauses are in the Appointments' Policy:

· clause 8.3 – CCHL has responsibility for the appointment of directors to its subsidiaries, Civic Building Ltd, Venues Ōtautahi and CNZHL; and

· clause 8.14 - elected members are not eligible for appointment to CCOs other than the CCHL parent company unless there are compelling reasons for the Council deciding otherwise, or it is provided for in an entity’s constitution, rules or specific legislation.

5.13 In effect, the Appointments’ Policy is, or should be an articulation of the Council’s views of good governance practices in the local government context. To the extent possible, it should seek to mimic governance outcomes in the private sector. The OAG, in its 2015 report entitled “Governance and accountability of CCOs” advises that a local authority’s Appointments’ Policy should cover those matters shown in the following table:

Policy inclusion	CCC Policy
Who is eligible for appointment (or who is not eligible)	ü
Process for identifying which skills appointees should have	ü
How candidates will be identified	ü
How candidates’ skills will be assessed	ü
Composition of the appointments’ panel	ü
Role of the board chair	ü
Remuneration of directors	ü

Governance fundamentals

5.14 Governance commentators generally note that a company’s compliance with strong governance practices can lead to a lower cost of capital, higher company value as well as better performance in meeting other corporate objectives, for example sustainability and community outcomes.

5.15 Key characteristics of good boards include:

· it is an optimal size for the company’s size, nature, diversity and complexity;

· its members have an appropriate mix of skills and expertise between them to govern the business including navigating the challenges that are emerging for the future;

· remuneration is fair and equitable;

· conflicts of interest, if any are minimal; and

· the roles of shareholders, the board and management are clear and relationships between them are respectful.

5.16 The extent to which value could be adversely impacted by sub-optimal board arrangements should not be under-estimated, given the total value of CCHL’s assets of circa $5 billion and issued debt securities of around $2 billion.

5.17 For the most part, the settings the Council has reflect good governance practice. Each of the issues that have been explored as part of the review of the Appointments' Policy follow.

Appointment of elected members to CCO boards

5.18 In the local authority context, it is likely the most common reasons for appointing councillors to CCO boards are to allow them to influence the strategic direction of the CCO and/or to provide the Council with an inside view of what the CCO is doing. Neither of these objectives require board membership. There are ex-ante accountability processes that allow shareholders to influence the strategic direction of the CCO (Letter of Expectations, Statement of Intent (SOI)) and ex-post statutory reporting obligations which, coupled with a robust council monitoring function should provide these opportunities in a more transparent way.

5.19 At its meeting on 7 December 2022, the Council resolved to reduce the number of Councillor-directors on the CCHL board, from four to two, based on the NP CCHL strategic review recommendations. Among a number of reasons that NP notes in favour of reducing councillor-director representation on the CCHL board is that they potentially have less time to commit to CCHL leading to unequal workloads among directors and that not all councillor-directors have the skills and experience for the CCHL governance role.

5.20 This in turn raises the question as to whether the number of councillor-directors on the CNZHL board should also be reconsidered. There are currently two, but could be reduced to one. Staff assume that the three councillor-directors on the Civic Building Ltd board would be retained given there are no independent directors and the one councillor-director on the VŌ board would also be retained.

Independent advice

5.21 From a variety of research, the following summarises various positions on the matter of councillors being appointed to boards:

OAG, ‘Governance and accountability of CCOs’ 2015 – appointing elected members to CCO boards should be the exception and any appointments should be open and transparent, and subject to the same selection criteria as for independent directors. As part of its work culminating in the report, the OAG engaged with independent directors of CCO boards.

The OAG’s report notes the following:

· most independent directors and CCO board chairs believed that the disadvantages of councillor appointments outweigh the benefits;

· acknowledgement of the argument that elected members can make a contribution to CCO governance and that councillor-directors may add value to a board by being a Council voice, by ensuring the CCO’s objectives are aligned to those of the local authority and by providing community perspective;

· however a councillor-director must have the necessary skills and experience to contribute fully to the governance of the CCO;

· effective monitoring and oversight, including setting clear expectations about the CCO’s purpose and strategic alignment should obviate any need for councillor-directors to provide an additional layer of oversight; and

· many of the advantages and disadvantages will apply also to staff being appointed as directors, exacerbated by the real potential for a manager’s role as adviser to the council to conflict with his or her obligations to the CCO as a director.

Royal Commission on Auckland Governance, 2009 - the size of the CCOs - Watercare, Auckland Transport, Panuku Development, Regional Facilities - requires the very highest standards of governance practice and commercial directors of the highest quality; and councillors or council staff should not be able to be appointed to the CCO boards.

Section 93 of the Local Government (Auckland Council) Act 2009 prohibits councillors and local board members from appointment as directors of substantive CCOs, other than to Auckland Transport which Auckland Council can appoint two members to. It is unclear why this exception was made. However, the Review of Auckland Council’s CCOs in July 2020 noted that Auckland Council has not made any appointments to Auckland Transport since 2016 (p.30).

FMA’s ‘Corporate Governance Handbook’ 2018 provides guidelines that include directors should be selected and appointed using rigorous, formal processes designed to give the board a range of relevant skills and experience; and all directors should, except as permitted by law and disclosed to shareholders, act in the entity’s best interests.

IoD, in its publication ‘Four pillars of Governance Best Practice’ 2021 the IoD notes that:

· board composition is a major consideration for the effectiveness and performance of the board (p.82);

· the composition of the board is the deciding factor in its success (p.82); and

· directors are required to act in the best interests of the company by law, fiduciary duty and best practice in corporate governance (p.100).

5.22 The following is extracted from the NP CCHL strategic review, presenting the advantages and disadvantages/risks of having councillor-directors on the CCHL board:

5.23 NP notes that “on balance, we believe that the benefits of having councillor-directors on the CCHL board can be achieved through having a smaller number of councillor appointees”.

5.24 Staff recommend that the Council considers whether councillor-directors on the CNZHL board be reduced from two, to one. In part this reflects the need the company has for a suite of strong financial, economic, commercial, place making and urban development skills and expertise at the board level as its functions have grown as an expanded economic development agency.

Benchmarking with other councils

5.25 A selection of other councils’ appointments’ policies and practices were reviewed (from information on their websites) including Auckland, Wellington, Hamilton, Tauranga and Dunedin and Queenstown Lakes.

5.26 Their respective policies and practices are shown in the following table:

Council	Appointments’ Policy – councillors on CCO boards	Practice – councillors on CCO boards
Auckland	Auckland Transport only.	None, including Auckland Transport. Liaison councillors have been appointed for each substantive CCO.
Dunedin City	No.	None.
Hamilton City	No, unless exceptional circumstances.	None.
Queenstown Lakes District	Yes.	None.
Tauranga City	No, unless exceptional circumstances.	None - the council is run by a commissioner and so there are no elected members. The CE is appointed to a JV CCO for shared services between nine Bay of Plenty councils.
Wellington City	Yes*.	Yes (excl WellingtonNZ).

*Wellington City Council provides for two councillors on boards that have more than four directors, and one councillor for boards with four or less.

Appointment of Council staff to CCO boards

5.27 The Appointments’ Policy provides for a staff member of a local authority to be appointed to a CO board and to the CCHL parent board. It is silent with respect to CCOs but as it prohibits councillors from being appointed to CCO boards, it is assumed this applies to staff also.

5.28 The OAG’s report (2015) notes that many of the same advantages and disadvantages of councillor-directors apply also to local authority managers as directors. The conflict of interest between being on one hand the monitor and on the other, the monitored is a real risk. In a 2001 report, the OAG said that to ensure the local authority’s chief executive is able to discharge his/her advisory responsibilities he/she should take no part in the internal governance of subsidiary entities so that he/she remains independent when assessing entity performance against expectations and in providing strategic advice to the council. This applies also to local authority employees, and therefore they “should not, as a rule sit on the governing bodies of such organisations” (p. 18/19 of OAG report Local Authority Governance of Subsidiary Entities, 2001).

5.29 The Royal Commission on Auckland Governance advised that to avoid conflict of interest concerns, the Commission considers that Auckland Council employees and those of its COs and CCOs and councillors should be prohibited from appointment to Auckland Council COs and CCO boards (p.469).

5.30 The Council has seldom appointed staff to CO and CCO boards. A key exception is the Chief Executive who has been appointed as a director of the Council’s shelf CCOs – CCC One Ltd, CCC Five Ltd, CCC Seven Ltd and Ellerslie International Flower Show Limited. These CCOs are not operational, and as soon as they become so, new directors are appointed.

5.31 Staff consider that the shelf company arrangement is practical and should continue, but that staff should not be appointed to any CCOs. As with the elected member appointment clause 8.14 in the Appointments' Policy, the condition “unless the Council decides otherwise” would be included for flexibility.

Auckland council’s ‘liaison councillor’ roles

5.32 The 2020 review of Auckland Council’s CCOs notes that Council has appointed ‘liaison councillors’ for each of its substantive CCOs in an effort to improve the relationship between CCOs and the council and also improve the flow of timely information between the two. The five liaison councillors have a range of options available to them to carry out their role, including attending some or all board meetings, attending committee meetings (such as audit and risk) and meeting the chair and/or chief executive from time to time (page 50).

5.33 The review advised “we are not convinced about the usefulness of the role of liaison councillor because, like the Auditor-General, we think the role of observer is “unlikely to add anything” if effective monitoring and good council-CCO relationships are in place” (p.64).

Remuneration of councillor-directors

5.34 The Council’s current policy is that councillor-directors do not benefit personally from their roles on CCO boards to ensure even-handed treatment with other councillors who participate on the Council’s committees, panels, and non-CCO organisations, all of which do not pay fees.

5.35 The Council has required some CCOs with councillor-directors to donate an amount equal to the fees to the Tahua Taupua Mayor’s Welfare Fund Charitable Trust. This was considered to be a fairer way of making the fees available to priority council spending requirements, as opposed to having the few councillor-directors getting personal benefit or donating to their individual specific causes.

5.36 The only CCOs that donate under the Appointments' Policy are CCHL and Transwaste Canterbury both of which are commercially profitable, and CNZHL which, in effect donates from the Council’s annual funding. Other CCOs do not pay fees to their councillor-directors (VŌ, CBL, trusts). For the year ending 30 June 2022, the donations in lieu of fees totalled $291,600. With the reduction of two councillor-directors on the CCHL board, the donations will reduce to $194,700. If the CNZHL board was to have one fewer councillor-directors, the donations would reduce further to $158,700.

5.37 The OAG in its 2015 report ‘Governance and accountability of CCOs’ commented that “the usual practice is that councillor-directors receive directors’ remuneration in addition to their remuneration as councillors. A CCO director is responsible for the governance of the CCO. The position, if discharged properly, involves work, so remuneration is appropriate”.

5.38 In its strategic review, NP noted that “all directors should receive fees for their services, obligations and liabilities” (page 55).

5.39 Of the other councils surveyed, none provided for councillor-directors to receive fees, noting however that most do not permit the appointment of councillors to director positions in any event. Wellington City Council (which does allow for councillors to be appointed to boards all of which are relatively minor) requires fees to be remitted back to the Council.

5.40 Several key points for noting include:

· Directors attract liabilities and obligations, as well as potential reputational damage that members of panels, committees and other non-corporate organisations do not. Some of the financial risk can be managed by directors’ and officer’s liability insurance but not all (e.g. improper activity and unjustified decision-making). There is therefore an argument of there being some legitimate call for remuneration to be awarded.

· Transwaste does not donate councillor-director fees itself, preferring to treat all of its directors the same. The councillor-director donates the fees received to the Tahua Taupua Mayor’s Welfare Fund Charitable Trust, in accordance with Council policy.

· If councillor-directors are to be paid fees for their directorships (and retain them personally), donations of $194,700 (plus $96,000 already forgone as a result of the 7 December Council resolutions on the NP CCHL strategic review) would no longer be made to the Tahua Taupua Mayor’s Welfare Fund Charitable Trust.

· If councillor-directors in principle are to be able to retain fees for director positions, the Council is likely to come under pressure to both:

o fund fees for councillor-directors of unprofitable CCOs (or allow them to reduce other organisational expenditure to fund the fees); and

o fund fees for councillors participating on other council external bodies (e.g. panels and committees).

5.41 This matter is one for Councillors’ discretion. However, in the event the donation of fees continues, it is proposed that it apply only to CCHL on the basis that it is governing $5 billion of assets and $2 billion of debt, and is highly visible to the public and the potential governance risks that go with that. If this is accepted, the other CCOs with councillor-directors would neither pay fees nor make donations in lieu of payment since these donations are not made from commercial profits.

Appointments

Diversity

5.42 The Appointments’ Policy provides that the assessment of candidates as directors of its CCOs must take into account encouraging diversity, the CCO’s objectives, the CCO’s relationship with the Council and succession planning.

5.43 The Council has in recent years sought an increase in the diversity of its CCO boards. To date the focus of most boards has been on gender diversity. The IOD, in its 2021 edition of its Four Pillars publication notes that boards are at their best when they are distinguished by diversity of thought and capability. Diversity goes beyond gender to include ethnicity, Māori whakapapa, LGBTI affinity, age, culture, disability, background and experience (refer page 83). This said, the IOD is very clear that demonstrated competency is above all else when considering board appointments.

5.44 The Council may wish to provide more specification of its expectations regarding diversity on boards that is consistent with the IOD’s advice.

New directors

5.45 CCHL is charged with running appointment processes for its group of companies, CNZHL and VŌ and any other of the Council’s CCOs that the Council may request it to from time to time.

5.46 The Appointments’ Policy requires a specialist panel/committee to be established (with Council approval as to membership) to undertake the work necessary to make recommendations for director appointments, including identifying the membership requirements of the boards and assessing the skills, knowledge and experience of director candidates (the core skills, knowledge and experience for director appointees to CCOs are identified in the Appointments' Policy).

5.47 The Council is the final decision-maker on the appointment of new directors to all CCOs, including CCHL’s subsidiaries.

5.48 The Council might wish to consider whether CCHL should be asked to provide a short list of suitable candidates for Council selection. However, the disadvantages of this may outweigh the benefits by bringing political considerations into what is mostly a commercial decision.

5.49 Staff consider that what is important is that there is a robust process conducted to identify preferred director candidates. Councillors and staff are in no better position than the CCHL board to determine the most appropriate candidate for a director role.

Chair

5.50 The following examples underpin decisions of who should appoint the board chair:

· schedule 3 of the Companies Act 1993 provides that directors may elect one of their number as chair of the board;

· the Crown appoints the chair and deputy to State-owned Enterprise (SOE) boards;

· the parent board of a SOI appoints directors to its subsidiaries;

· of the councils surveyed, two did not include any provisions in their appointments’ policies for chairs of CCO boards, Auckland Council’s substantive CCO boards appoint chairs, and the other councils in the survey approve chair appointments; and

· the IoD’s constitution provides for the board to appoint the chair and deputy.

5.51 The Council appoints the chair of the boards of its directly-owned CCOs including the CCHL parent. The CCHL board appoints the chairs of its subsidiaries’ boards). Any change in these settings will require a shareholders’ resolution to amend the constitution.

5.52 In practice, CCHL notifies the Council when it is proposing an external appointment to the role of chair or chair-elect.

5.53 Currently there is a requirement for an external appointee to the position of chair to serve at least one year on the board before taking on the chair role. This requirement does not recognise that directors bring different experience with them and some may be more ready and able than others to take up the chair role immediately.

5.54 Staff propose that the Appointments' Policy is amended to reflect the status quo with respect to chair appointments, for the purposes of clarity and that the requirement for a one year lead time to take on a board’s chair role is removed.

Re-appointments

5.55 CCHL has the right to re-appoint directors to the organisations it has appointments’ responsibility for. The Appointments’ Policy provides that matters to be considered when deciding about a re-appointment are whether the skills of the incumbent add value to the work of the governing body or other skills are needed, the director’s length of tenure to date and succession planning.

5.56 Of the other councils surveyed, only Queenstown Lakes does not require Council approval to re-appointments (possibly as the committee making the recommendation includes the Mayor and a councillor). Two of the councils did not address re-appointments in their policies.

5.57 The Crown approves re-appointments to State-owned Enterprise (SOE) boards.

5.58 Staff consider it appropriate that the Council, as shareholder has the right to consider re-appointments to its CCOs and to CCHL’s subsidiary companies in the same way it has the right to approve new appointments.

Terms of appointment

5.59 The Appointments’ Policy provides that CCO directors can serve up to three terms of three years each, with a fourth at the Council’s discretion. It also provides that a director who is appointed as chair in his/her third term may serve two further terms in that role.

5.60 There is no definitive guidance as to how many terms constitute good practice. Many commentators instead advise the importance of striking a balance between institutional knowledge and fresh thinking, as well as ensuring the board has the right mix of skills.

5.61 Of the councils surveyed, most provide for two terms of three years with a third if advisable. Dunedin City and Queenstown Lakes’ councils provide for three terms of three years. The Crown’s policy is two terms of three years each for SOEs and further terms where there is a strong business need.

5.62 The IoD’s constitution provides a maximum of nine years continuous tenure for its directors.

5.63 Staff consider that two terms of three years each facilitates the board being refreshed more regularly, which may help with goals such as achieving diversity of membership, creating flexibility for the board to bring on new skills and competencies in line with emerging issues, trends or demands. It may also over time deepen the pool of capable directors in general.

5.64 The downside of reducing the number of terms could be the early loss of experience and knowledge that is highly valued by a board, and potential directors preferring to seek the certainty of longer tenure from other boards. There would also be higher administration costs incurred in running appointments’ processes more frequently.

5.65 Staff recommend that on balance, two terms of three years with a third if the Council consider it appropriate is preferable.

Core skills and expertise sought

Staff have reviewed the core skills and expertise sought by the Council in all appointments to its CCO boards, as well as those sets that other councils seek. This leads to a recommendation for three additional competencies, as shown in the shaded rows:

Core skills and competencies for directors	CCC	NZ Treasury	Auckland Council – substantive CCOs	Dunedin City Holdings Ltd	IOD
Sound judgement and decision-making including common sense and strong sense of ethics	ü	ü	ü	ü	ü
Public sector ethos including adapting to the political context of the day	ü		ü	ü	ü
High standard of personal integrity	ü	ü	ü	ü	ü
Commercial and governance experience, including commercial acumen and financial literacy	ü	ü	ü	ü	ü
Clear communications skills and ability to debate in reasoned manner	ü	ü	ü	ü	ü
Effective teamwork and collaboration	ü	ü	ü	ü	ü
Ability to think strategically including organisational and strategic awareness	ü	ü	ü		ü
Risk assessment and contingency management	ü		ü	ü	ü
Commitment to principles of good corporate citizenship (fairness, accountability, responsibility, transparency)	ü		ü	ü
Understanding of wider interests of the Council/ Crown as a publicly accountable shareholder	ü	ü	ü	ü
Sector knowledge relevant to the specific board opportunity		ü			ü
Confidence to ask questions		ü			ü
Awareness of a public media profile			ü	ü
Understanding and commitment to the Council’s obligation to Te Tiriti o Waitangi			ü	ü
Intellectual ability				ü
Commitment to knowledge building and professional development					ü
Reliability and dependability					ü

5.66 It is important that the core skills and competencies sought are not overly prescribed so as to create a barrier to achieving good appointments. Most of the requirements that the Council (and other councils) have not included as core competencies are in fact intrinsic to several that are – for example, intellectual ability and confidence to ask questions are included in commercial and governance experience, strategic thinking, and risk assessment. Commitment to Te Tiriti o Waitangi is highly correlated to ‘understanding of wider interests of the Council (Crown) as a publicly accountable shareholder’. Reliability and dependability is linked to a high standard of personal integrity and effective teamwork and collaboration.

5.67 Nevertheless staff consider the three shaded competencies could usefully be added to the Council’s expectations of core skills and competencies.

5.68 Staff also recommend that proposals for appointments to boards should be supported with a skills and competencies matrix for the board which demonstrates the balance held by the incumbent directors and how the candidate adds value to that board.

6. Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic AlignmentTe Rautaki Tīaroaro

6.1 This report is consistent with the Council’s commitment to good governance of its CCOs. This is aligned to the efficient delivery of the outcomes sought by the Council's Long Term Plan (2021 - 2031).

Policy Consistency Te Whai Kaupapa here

6.2 The decision relates directly to the Council’s Plans and Policies – the Council’s Policy for the Appointment and Remuneration of Directors of Council Organisations.

6.3 This report does not support the Council's Long Term Plan (2021 - 2031).

Impact on Mana Whenua Ngā Whai Take Mana Whenua

6.4 The decision does not involve a significant decision in relation to ancestral land or a body of water or other elements of intrinsic value, therefore this decision does specifically impact Mana Whenua, their culture and traditions.

6.5 The decision does not involve a matter of interest to Mana Whenua and will not impact on our agreed partnership priorities with Ngā Papatipu Rūnanga.

6.6 The recommendations in this report are of a governance nature, although some touch on issues such as including in the core skills and capabilities sought from CCO directors an understanding and commitment to the Council’s obligation to Te Tiriti o Waitangi (in addition to the LGA’s provision that a local authority must consider whether knowledge of tikanga Māori may be relevant to the governance of a CCO (section 57(3))).

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.7 Not relevant.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.8 Not relevant.

7. Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1 Cost to Implement – there are no material direct costs of implementing the recommendations in this paper.

7.2 Maintenance/Ongoing costs – nil.

7.3 Funding Source – not required.

Other He mea anō

7.4 Not applicable.

8. Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1 Section 57(1) of the LGA requires a local authority to adopt a policy that sets out an objective and transparent process for appointing directors to Council organisations.

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2 Other corporate legislation such as the Companies Act 1993 and CCO constitutions provide governance guidance that contributes toward this policy.

9. Risk Management Implications Ngā Hīraunga Tūraru

9.1 Ensuring the Appointments' Policy reflects contemporary good practice governance minimises the risks associated with the CCO businesses.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Council's Policy for the Appointments and Remuneration of Directors of Council Organisations	22/1724580	166
b ⇩	OAG Declaration 2020	22/1722059	175

In addition to the attached documents, the following background information is available:

Document Name – Location / File Link

Not applicable

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i) sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

Signatories Ngā Kaiwaitohu

Author	Linda Gibb - Performance Monitoring Advisor CCO
Approved By	Leah Scales - General Manager Resources/Chief Financial Officer

Council

14 December 2022

16. Venues Ōtautahi - Annual Report 2021/22 and 2022 Annual General Meeting by Shareholders' Resolution
Reference / Te Tohutoro:	22/1687219
Report of / Te Pou Matua:	Linda Gibb, Performance Advisor, Resources (linda.gibb@ccc.govt.nz).
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)

1. Nature of Decision or Issue and Report Origin

1.1 This report presents Venues Ōtautahi's (VŌ's) Annual Report for the year ending 30 June 2022 and Quarter 1 2022/23 Performance Report and It also requests that the Council agrees to VŌ holding its Annual General Meeting (AGM) for 2022 by written shareholders' resolution.

1.2 This report has been written following receiving VŌ's documentation on 30 November 2022.

1.3 VŌ’s Annual Report for 2021/22 is at Attachment A and it’s Quarter 1 2022/23 Performance Report is at Attachment B. Its signed director’s resolution for holding its AGM by written shareholders’ resolution is at Attachment C.

1.4 The decisions in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy. The level of significance was determined by considering the extent to which the decisions in this report might impact the community.

2. Officer Recommendations Ngā Tūtohu

That the Council:

1. Receives Venues Ōtautahi’s Annual Report for the year ended 30 June 2022;

2. Receives Venues Ōtautahi Quarter 1 2022/23 Performance Report for the quarter 1 July to 30 September 2022; and

3. Resolves in favour of Venues Ōtautahi holdings its Annual General Meeting for 2022 by written shareholder resolution.

3. Reason for Report Recommendations Ngā Take mō te Whakatau

3.1 The requirement to call an annual meeting of shareholders not later than six months after the balance date of the company is a legal requirement (section 120 of the Companies Act 1993). The recommendation to hold the AGM by written shareholder resolution is based on the transaction cost of holding a formal meeting being likely to outweigh the benefit.

4. Alternative Options Considered / Ētahi atu Kōwhiringa

4.1 The only alternative option is for VŌ to hold a formal AGM.

5. Detail Te Whakamahuki

Background

5.1 VŌ’s primary activities are the attraction, planning and delivery of events and management of assets at the following Council-owned venues – Christchurch Town Hall and Christchurch Arena and at venues under VŌ management – Air Force Museum of New Zealand, Hagley Oval and Orangetheory Stadium.

5.2 VŌ operates commercially but relies on Council funding support of circa $4 million to contribute to the significant fixed costs associated with asset management, repairs and maintenance of the city-owned venues and to fund legacy debt from Lancaster Park.

5.3 VO’s business is, in large part a commercial undertaking but an important aspect of its activities is the public good they provide to the residents of Christchurch - social, cultural, environmental and economic benefits to the city from holding events.

5.4 One of VŌ’s key deliverables for 2021/22 and continuing in 2022/23 was its contribution to the design of Te Kaha from its perspective as operator, as well developing and executing commercial, communications and stakeholder strategies for the venue.

5.5 The type of events held at the venues is an important profitability driver for VŌ – flat floor multi-day events (e.g. conferences) attract a higher margin than retail catering at ticketed events for example.

Annual Report

5.6 COVID-19 restrictions at the borders, restrictions on mass gatherings and subsequently the number of people able to attend events has had a major impact on VŌ’s financial outcomes in the past two years. Since pre-COVID-19 in 2018/19, operational revenue has reduced by an average of 25% and operating costs by slightly more – on average 29%. Overheads have almost halved as VŌ sought to eliminate costs where it possibly could.

Annual financial results

5.7 VŌ’s financial outturn for 2021/22 compared with its performance the previous year and its performance in 2018/19 (pre-COVID-19) is shown in the following table (taken from VŌ’s audited financial statements):

Operating performance	Actual 2021/22 $m	Prior year 2020/21 $m	Pre-COVID-19 2018/19 $m	Average annual change
Operational revenue*	12.4	13.2	17.2	-25%
Operational costs	(15.7)	(14.6)	(21.4)	-29%
Overheads	(9.4)	(9.5)	(17.2)	-45%
Deficit before CCC grants	(12.7)	(10.9)	(21.4)	-45%

*operational revenue includes Government COVID-19 funding support of $1.9 million and $1.2 million in 2021/22 and 2020/21 respectively.

Events and attendances		Actual 2021/22	Prior year 2020/21	Pre-COVID-19 2018/19	Average annual change
Events (numbers held)	207		272	374	-36%
Attendance numbers	307,193		499,350	713,393	-43%

5.8 Of its overhead costs of around $9.5 million in both 2020/21 and 2021/22, depreciation of $8 million for venues, plant and equipment was the largest cost. In 2018/19, Town Hall repair was still underway, the costs of which were $12 million. Depreciation of $3.8 million on VŌ’s other assets was incurred.

5.9 Until 2020/21 VŌ had managed its financial position without Council operating grants due to its significant cash holdings from insurance payouts on earthquake-damaged venues. In the 2021-31 Long Term Plan VŌ was allocated Council funding of around $4 million per annum which is allocated in large part to meeting unrecoverable costs of repairs, maintenance, rates, utilities and insurance for the Christchurch Town Hall , Christchurch Arena and Orangetheory Stadium. An annual payable of around $1.1 million is incurred to finance interest only on a historical loan of $14 million associated with the Deans Stand at Lancaster Park.

5.10 VŌ and Council staff are to undertake a review in the new year towards gaining a better understanding of the nature of the costs that the Council grant covers.

Financial performance against SOI targets

5.11 The following table shows VŌ’s performance against its SOI targets.

	Actual 2021/22 $m	SOI target 2021/22 $m	Variance $m
Net operating income	2.4	2.7	(0.3)
CCC grant	4.0	4.0	0
Operating overheads and fixed costs	(5.8)	(6.3)	0.5
EBITDA	0.6	0.4	0.2

Events and attendances

Actual

2021/22

SOI target

2020/21

Average annual change

Major events (numbers held)

-38%

Attendance numbers

300,000

500,000

-40%

5.12 The better than expected performance against SOI targets largely reflects the following:

· lower net operating income from events due to a period of 31 weeks in the year when COVID-19 restrictions prevented events being held, the organisational costs of which were only in part covered by the Government’s wage subsidy;

· higher contribution from implementation of an in-house catering model instead of outsourcing; and

· VŌ’s variable cost operational model implemented in 2020/21 has provided greater flexibility for it to turn on and off resources to match demand for events.

5.13 Total assets are valued at $261 million, up from $236 million in the previous year (+$25 million). This is attributable largely to an increase in the value/replacement cost of the Christchurch Arena and Christchurch Town Hall of circa 12%.

5.14 The Council provided a capital grant $5.2 million to VŌ to deliver the asset management plan for the city-owned assets. There is a timing mismatch between the receipt of the grant and the completion of the capital works which has led to a $4 million increase in cash held. This is due to the current constraints on supply of materials and services. VŌ advises that the operational asset management plan is on track and the capital asset management plan is forecast to be back on track in February 2023.

Non-financial performance targets

5.15 Ongoing COVID-19 restrictions for 31 weeks of the year has inevitably prevented VŌ from meeting its SOI targets for numbers of events to be held and numbers of visitors to venues.

5.16 Based on the Events Economics Tool, VŌ estimates its ticketed Women’s Cricket World Cup provided benefits to the Canterbury region of $8.9 million.

5.17 Against a target of $50,000, VŌ’s discounts to community groups to use the venues amount to $116,000. This reflects the costs incurred by VŌ directly such as post-event cleaning, utilities and insurance contribution and the opportunity cost of lost revenue in the event the venue would have otherwise been hired out for commercial return.

5.18 VŌ does not cap the discounts it provides, and as a result has provided discounts of around $166,000 against a target of $50,000. It is difficult to have a community use policy that closes off the discount available once the budget allocation has been reached. Nevertheless consideration needs to be given to how it is managed as it represents real costs to VŌ.

5.19 VŌ is contractually bound to ensure the privacy of all groups and individuals hiring the venues and therefore does not report the names or purposes of community groups using the facilities.

Quarter 1 – July-September 2022/23 Performance

5.20 VŌ’s Quarter 1 2022/23 performance report is at Attachment B. Notably events have rebounded with 118 staged against a budget of 89 and 150,000 guest attendances against a target of 100,000. The following table sets out VŌ’s Quarter 1 results against the same period last year and SOI targets:

Operating performance

Actual

2022/23

SOI target

2022/23

Prior year Q1

2021/22

Deficit before CCC grant

(831)

(1,049)

(352)

EBITDA (after CCC grant)

182

(36)

661

Events (numbers held)

118

5.21 The table above shows the strong rebound in the Canterbury region’s appetite for events as well as a change in client behaviour for short-lead corporate events post COVID-19.

5.22 In Quarter 1 2018/19 (pre-COVID-19 environment) there were 102 events.

5.23 Community events are running well ahead of target, with 22 community groups receiving the benefit against a full year budget of 40.

AGM by written shareholder’s resolution

5.24 Section 120 of the Companies Act 1993 requires the board of a company to call an annual meeting of shareholders not later than six months after the balance date of the company. VŌ’s balance date is 30 June.

5.25 Section 122(4) of the Companies Act 1993 provides that it is not necessary for the board of a company to call, or for a company to hold an annual meeting of shareholders if everything required to be done at that meeting is done by resolution.

5.26 Business to be conducted at the AGM is non-controversial – adopting the financial statements of the company, appointment of auditors (the Auditor-General or his/her appointee pursuant to section 14 of the Public Audit Act 2001) and setting directors’ remuneration (which will be set in line with CCHL’s last three year fees’ review). Fees are due to be reviewed against next year for implementation from 1 July 2023.

5.27 VŌ’s signed director’s resolution is at Attachment C.

6. Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic AlignmentTe Rautaki Tīaroaro

Policy Consistency / Te Whai Kaupapa here

6.2 The decision is not relevant to the Council’s Plans and Policies.

Impact on Mana Whenua Ngā Whai Take Mana Whenua

6.4 The decision does not involve a matter of interest to Mana Whenua and will not impact on our agreed partnership priorities with Ngā Papatipu Rūnanga.

6.5 The decisions sought in this report are administrative only.

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.6 Not relevant.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.7 Not relevant.

7. Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1 There are no costs associated with the decisions in this report.

8. Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1 Local Government Act 2002.

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2 Section 67 of the Local Government Act 2002 (LGA) provides that a Council-controlled organisation (CCO) must complete a report on the company’s operations for the year and deliver the report to its shareholders.

8.3 Section 120 of the Companies Act 1993 requires the board of a company to call an annual meeting of shareholders not later than six months after the balance date of the company. VŌ’s balance date is 30 June. Section 122(4) provides that it is not necessary for the board of a company to call, or for a company to hold an annual meeting of shareholders if everything required to be done at that meeting is done by resolution.

9. Risk Management Implications Ngā Hīraunga Tūraru

9.1 Not relevant.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a	Venues Ōtautahi - Annual Report for year ending 30 June 2022 (Under Separate Cover)	22/1713539
b	Venues Ōtautahi - Quarter 1 2022/23 Performance Report (Under Separate Cover)	22/1713540
c	Venues Ōtautahi - Resolution to hold Annual General Meeting by written resolution (Under Separate Cover)	22/1713536

In addition to the attached documents, the following background information is available:

Document Name – Location / File Link

Not applicable

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i) sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

Signatories Ngā Kaiwaitohu

Author	Linda Gibb - Performance Monitoring Advisor CCO
Approved By	Leah Scales - General Manager Resources/Chief Financial Officer

Council

14 December 2022

18. ChristchurchNZ Holdings Ltd - Draft Letter of Expectations for 2023/24
Reference / Te Tohutoro:	22/1718899
Report of / Te Pou Matua:	Linda Gibb, Performance Advisor, Resources (linda.gibb@ccc.govt.nz).
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)

Secretarial Note: This item was deferred from 7 December 2022 Council meeting.

1. Purpose of the Report Te Pūtake Pūrongo

1.1 The purpose of this report is to seek the Council’s approval to issue the draft Letter of Expectations (LOE) at Attachment A to the board of ChristchurchNZ Holdings Ltd (CNZHL) for 2023/24.

1.2 This report has been written to meet the LOE milestone in the Council’s annual end-to-end governance and accountability process.

1.3 The decision in this report is of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy. The level of significance was determined by considering the extent to which the content of the draft LOE would impact the community.

2. Officer Recommendations Ngā Tūtohu

That the Council:

1. Approves the draft Letter of Expectations for ChristchurchNZ Holdings Ltd for 2023/24.

3. Reason for Report Recommendations Ngā Take mō te Whakatau

3.1 To allow the Council as shareholder of CNZHL to influence the company’s direction through its Statement of Intent (SOI). The LOE will inform the 2023/24 Statement of Intent (SOI).

4. Alternative Options Considered Ētahi atu Kōwhiringa

4.1 The only alternative option is to not issue a LOE in which case the Council would need to communicate any expectations it may have as part of feedback on the draft SOI. This would be a less efficient way of engaging with the company on the shareholder’s expectations.

5. Detail Te Whakamahuki

5.1 The LOE is an administrative tool that the Council, as shareholder of CNZHL uses to influence the strategic direction of the company. The expectations:

· are pitched at a governance level;

· are a matter for the CNZHL board to determine the acceptability of, taking into account, among other things its requirement under section 131(1) of the Companies Act 1993 to act in the best interests of the company;

· if acceptable to the board will be reflected in CNZHL’s SOI for 2023/24, a draft of which is due on 1 March 2023, and which councillors have the opportunity to review and formally comment on within two months of receiving it (refer clauses 1-3 of part 1, schedule 8 of the LGA); and

· leaves decisions their operationalisation to CNZHL to determine based on its expertise and experience in the delivery of activities and services to meet its strategic objectives.

5.2 The draft LOE was reviewed by councillors at a workshop on 29 November 2022. The following issues were raised by councillors and have been reflected in the draft LOE (in track changes):

· Develop performance targets to demonstrate progress in achieving mana whenua outcomes - growth of Māori business and Māori economic excellence including removing barriers to accessing business support and opportunities;

· Reiterating the Council’s desire for CNZHL to report returns on Council investment (land and/or capital) for urban development, (noting that CNZHL has advised its commitment to doing so);

· Clarity of the three-way partnership - CNZHL, Venues Ōtautahi and the Council’s events’ team - in attracting events to the city including for Te Kaha; and

· Reporting annually to the Council on the diversity of the CNZHL board.

5.3 Several other issues were raised which have not been included in the draft LOE. CNZHL will address these issues at the Council meeting should they be asked. These included CNZHL’s activities, if any in the creative sector in Christchurch (particularly music) and development activity in the eastern suburbs of Christchurch.

5.4 Work will begin next year on developing the LTP for 2024-34, and this will be the appropriate mechanism for the Council to review funding levels and prioritisation of the services delivered by CNZHL on behalf of Council.

6. Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic Alignment Te Rautaki Tīaroaro

6.1 LOEs are strongly aligned to the strategic objectives of the Council and to its Long Term Plan.

Policy Consistency / Te Whai Kaupapa here

6.2 The decision is consistent with Council’s Plans and Policies – in particular a LOE is part of the governance and accountability framework for CCOs.

6.3 This report does not supports the Council's Long Term Plan (2021 - 2031).

Impact on Mana Whenua Ngā Whai Take Mana Whenua

6.5 The decision does not relate to a matter of interest to Mana Whenua and will not impact on our agreed partnership with Ngā Papatipu Rūnanga.

6.6 Although the draft LOE contains expectations relating to Mana Whenua, they are entirely consistent with the expectations set out in the Council’s enduring Statement of Expectations issued to all CCOs in 2021.

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.7 The draft LOE contains climate change expectations.

7. Resource Implications Ngā Hīraunga Rauemi

Capex/Opex / Ngā Utu Whakahaere

7.1 Cost to Implement – there is no identifiable cost of implementation. Whether there are hidden costs associated with the expectations is a matter for CNZHL to advise on as part of the accountability and governance process.

7.2 Funding Source - CNZHL would be expected to identify how the costs, if any could be met without new Council funding.

8. Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report / Te Manatū Whakahaere Kaupapa

8.1 Local Government Act 2002 (LGA).

Other Legal Implications / Ētahi atu Hīraunga-ā-Ture

8.2 There is no legal context, issue or implication relevant to this decision. Note that the LOE is an administrative accountability and governance tool and is therefore non-mandatory.

9. Risk Management Implications Ngā Hīraunga Tūraru

9.1 The recipient CCO board of a LOE is able to raise issues of concern with the content of the draft LOE if risks should become known. However, Council staff socialise the draft LOE with the company and therefore risks needing managing are likely to be raised at that point.

Attachments / Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	ChristchurchNZ Holdings Ltd - Draft Letter of Expectations for 2023/24	22/1678860	195

In addition to the attached documents, the following background information is available:

Document Name	Location / File Link
Not applicable

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i) sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

Signatories / Ngā Kaiwaitohu

Author	Linda Gibb - Performance Monitoring Advisor CCO
Approved By	Leah Scales - General Manager Resources/Chief Financial Officer

[1] Grades 1-3 are generally considered acceptable, grades 4 and 5 are poor and very poor condition

Organisation	Project Name	Amount Requested	Amount Recommended
Oxford Terrace Baptist Church	Fit out of Social Housing Units	$150,000	$120,000

Total Budget 2022/23	Granted To Date	Available for allocation	Balance If Staff Recommendation adopted
$568,223	$125,000 (COCA $75,000 and Santa Parade $50,000)	$443,223	$323,223

ITEM NO.	GENERAL SUBJECT OF EACH MATTER TO BE CONSIDERED	SECTION	SUBCLAUSE AND REASON UNDER THE ACT	PLAIN ENGLISH REASON	WHEN REPORTS CAN BE RELEASED
20.	Public Excluded Audit and Risk Management Committee Minutes - 22 November 2022			Refer to the previous public excluded reason in the agendas for these meetings.
21.	Christchurch City Holdings Ltd - Recommended appointment of new board members to ChristchurchNZ Holdings Ltd	s7(2)(a)	Protection of Privacy of Natural Persons	To protect the identities of individuals until such time as approvals are made.	As soon as the Council makes decisions on the recommendations in this report.

5. Audit and Risk Management Committee Minutes - 22 November 2022
Reference / Te Tohutoro:	22/1708516
Report of / Te Pou Matua:	Luke Smeele, Committee and Hearings Advisor, luke.smeele@ccc.govt.nz
General Manager / Pouwhakarae:	Lynn McClelland, Assistant Chief Executive Strategic Policy and Performance (lynn.mcclelland@ccc.govt.nz)

7. 2022/2023 Capital Endowment Fund
Reference / Te Tohutoro:	22/1630387
Report of / Te Pou Matua:	Lexie Reuben, Team Leader Community Funding, (Lexie.Reuben@ccc.govt.nz)
General Manager / Pouwhakarae:	Mary Richardson, General Manager Citizens & Community (Mary.Richardson@ccc.govt.nz)

10. Three Waters activities report July, August, September and October 2022
Reference / Te Tohutoro:	22/1621447
Report of / Te Pou Matua:	Helen Beaumont, Head of Three Waters, (helen.beaumont@ccc.govt.nz)
General Manager / Pouwhakarae:	Jane Davis, General Manager Infrastructure, Planning & Regulatory Services (jane.davis@ccc.govt.nz)

12. Appointment of Recess Committee 2022/2023
Reference / Te Tohutoro:	22/1555968
Report of / Te Pou Matua:	Samantha Kelly, Team Leader Hearings and Committee Support (Samantha.kelly@ccc.govt.nz)
General Manager / Pouwhakarae:	Lynn McClelland, Assistant Chief Executive Strategic Policy and Performance (lynn.mcclelland@ccc.govt.nz)

14. Mayor's Monthly Report - November - December 2022
Reference / Te Tohutoro:	22/1677140
Report of / Te Pou Matua:	Phil Mauger, Mayor
General Manager / Pouwhakarae:	Lynn McClelland, Assistant Chief Executive Strategic Policy and Performance (lynn.mcclelland@ccc.govt.nz)

17. Venues Ōtautahi - Draft Letter of Expectations for 2023/24
Reference / Te Tohutoro:	22/1718883
Report of / Te Pou Matua:	Linda Gibb, Performance Advisor, Resources (linda.gibb@ccc.govt.nz).
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)