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27. 11. 96
STRATEGY AND RESOURCES COMMITTEE
18 NOVEMBER 1996
A meeting of the Strategy and Resources Committee
was held on Monday 18 November 1996 at 4.00 pm
PRESENT: Councillor David Close (Chairman), The Mayor, Councillors Oscar Alpers, Carole Evans, Gordon Freeman, Pat Harrow, Ian Howell, Alister James, Garry Moore, Denis O'Rourke and Ron Wright.
IN ATTENDANCE: Councillor Graham Berry.
APOLOGIES: An apology for absence was received and accepted from Councillor Margaret Murray.
An apology for lateness was received and accepted from Councillor Oscar Alpers.
Councillor Alpers arrived at 4.25 pm during discussion on clause 8 and was present for all clauses.
Councillor Moore temporarily retired at 5.20 pm, returned at 5.25 pm and was present for all clauses except clause 1.
The Mayor temporarily retired at 5.25 pm, returned at 5.50 pm and was present for all clauses except clause 3.
The Committee reports that:
PART A - MATTERS REQUIRING A COUNCIL DECISION
1. LOCAL ELECTIONS (SINGLE TRANSFERABLE VOTE OPTION) BILL RR 4086
| Officer responsible | Author |
| Legal Services Manager | Peter Mitchell |
| Corporate Plan Output: Legal Advice |
1. Introduction
The purpose of this report is to advise elected members of the current situation regarding the Local Elections (Single Transferable Vote Option) Bill after consideration by the Electoral Law Committee earlier this year.
Members will recall that this Bill was introduced as a Private Members' Bill into the House of Representatives by Mr Richard Northey MP in July 1995.
In December 1995 the Council approved submissions on the Bill and appeared before the Electoral Law Committee in support of those submissions on 28 February 1996.
In its submissions the Council stated that it supported the Bill in providing a choice of a voting system to the public between the current system and the single transferable vote (STV)system.
However the Council went on to say that it believed that it was premature for the Bill to be enacted at the present time for the following reasons:
(a) There had been no independent research carried out in New Zealand as to what is the most appropriate voting system for local government;
(b) There may be confusion with the public if they were asked to use two different voting systems at the same election; that is, if a territorial authority were to adopt one voting system and a regional council another;
(c) There needed to be a full discussion by way of a national education campaign for the public if STV were to be available as an option;
(d) Research needed to be carried out on the availability of computer technology for counting under the STV system and the likely costs of that technology.
The Council then went on to make a number of substantive submissions concerning the provisions of the Bill as it was originally introduced in to the House.
Those major submissions were:
(i) That a change to the STV system not occur at the same time as a local authority was carrying out the statutory review of the basis of its elections which must be completed by 31 August in the year preceding the triennial local body elections.
(ii) That if a local authority wished to introduce the STV system then it do so by way of the special consultative procedure;
(iii) Similarly a local authority could revert to the present at large voting system by the same method after at least two elections held under the STV system;
(iv) That such a resolution to change the voting system be passed not later than 15 May in the year before the triennial general elections;
(v) Any public demand for a poll to change the voting system be filed with the Council not later than 15 February in the year preceding the triennial elections;
(vi) That if an extraordinary vacancy arose during the term of the local authority that it not be obligatory to re-count the voting papers, but that the local authority have the option of holding a by-election or re-counting the voting papers.
2. Select Committee Report
After hearing submissions the Electoral Law Committee has reported back to Parliament on the Bill and has recommended to Parliament that the Bill be passed with the amendments shown in the Committee's report. The Committee noted that for the Bill to be able to apply to the 1998 local body elections it was necessary that it be passed through its remaining stages in the House of Representatives as soon as possible. The Committee stated:
"The recommended amendments will require that the Bill be enacted before 28 February 1997 if local authorities are to be able to resolve to use the single transferable vote (STV) electoral system for that election. An enactment before 7 March will be required if electors are able to demand a poll on STV, but enactment by 8 May 1997 will still allow a binding poll at the instigation of the local authority. Accordingly, we recommend that the Bill be passed on 1 February 1997."
In its amendments on the Bill the select committee has clarified a number of practical issues raised by the Council.
The Committee has not acceded to the Council's request that there be independent research carried out on appropriate voting systems for local government, nor that there be an education campaign for the public, nor that research be carried out on the availability of computer technology.
With regard to the concerns about the use of different voting system and the potential to cause confusion among voters the Committee has taken the view that clear instructions on the ballot paper would mitigate against this.
The Bill as amended by the Committee would still provide that the STV voting procedure is an option for local authorities or their electors. The Committee has re-written the provisions concerning adoption of the STV system and there are now three methods in the Bill by which STV can be put in place. These are:
(a) That the local authority itself may, not later than 28 February in the year preceding the triennial election, resolve that that election be held under the STV.
Where such a resolution is passed a poll can be demanded by 5% (in the case of Christchurch City 10,800 electors) to countermand that resolution. Such a poll is decided by a simple majority of votes.
This resolution is not by way of the special consultative procedure and if it is passed and no poll is demanded then the STV system must remain in place for at least two elections before the local authority can resolve to change the voting system.
(b) The Bill requires that a local authority, not later than 8 March in the year immediately preceding the election, give public notice of the public's right to demand a poll on the voting system to be used for the next two elections.
The public then has 22 working days after the date of that public notice to demand a poll and the poll must be held not later than approximately at the end of June in the year immediately preceding the triennial election.
A simple majority of votes in favour of change will bind the Council.
(c) The local authority itself may, not later than 8 May in the year preceding the election, resolve that a poll be held and again a simple majority of votes will effect the change.
With regard to the issue of extraordinary vacancies and how they are to be filled the Bill as reported back by the Committee now provides that a local authority "Ömay direct that an indicative recount of the voting papers used in the election in respect of the office in which the extraordinary vacancy has occurred shall be held to ascertain the candidate who would have been next to be declared elected at that election. Such candidates must give their written consent to the Returning Officer of being included in such an indicative recount."
By implication the local authority, given that it has a discretion, may also decide to hold a by-election or resolve to fill by appointment.
The Committee has also clarified the position of community board elections and the Bill makes it explicit that community board elections shall be conducted using the same voting method as the territorial authority. So that resolutions by the territorial authority, or the results of a poll, would also bind community boards.
Although not part of the Bill the Committee has recommended changes to the filling of vacancies by appointment by territorial authorities. The Committee recommends that the resolution by the territorial authority to fill by appointment identify the person to be appointed. Although the present Christchurch City Council has not needed to resolve to fill a vacancy by appointment I understand that identifying the person to be appointed in the public notification of that decision is common practice amongst territorial authorities.
The original Bill provided that the number of members to be elected in any ward when the STV system was adopted should not be less than three. The Committee has recommended that the Bill be amended to remove this requirement. However the committee has recommended an amendment to the Local Government Act so that when the local authority carries out its annual review of the voting system which includes the number of wards and the number of councillors, then it must have regard in that review to the voting method to be used at the next election of the local authority.
3. Future Steps
The Bill must go through its second and third readings before receiving the Royal Assent. Given the present political situation it is unclear whether STV will be available as a voting option for local authorities in 1998.
The Committee noted, with disappointment, the Select Committee's decision not to support the Council's submission regarding the public education campaign on STV and endorsed a suggestion by Councillor Alpers that this issue be raised with local MPs.
Recommendation: 1. That the Council draw to the attention of local Members of Parliament the confusion which could arise from the use of a range of voting systems if a public education campaign is not put in place.
2. That a meeting to discuss this issue with local MPs be held prior to the Bill coming before the House of Representatives.
2. OFFICIAL INFORMATION REQUESTS CHARGING POLICY RR 3455
| Officer responsible | Author |
| Legal Services Manager | Peter Mitchell |
| Corporate Plan Output: Legal Advice |
The purpose of this report is to seek the approval of the Council to a charging policy for the supply of information in response to requests under the Local Government Official Information and Meetings Act 1987.
This report has come about through the publication by the Council shortly of a directory of official information. One of the aspects of that directory is that the Council has to advise the public of its charging policy for official information requests.
While historically the Council has not charged for supplying information to the public, section 13 of the Local Government Official Information and Meetings Act 1987 provides that the Council may charge for the supply of official information under the Act.
Section 13(3) provides that any charge fixed is to be reasonable, and regard may be had to the cost of the labour and materials involved in making the information available and to any costs incurred pursuant to a request of the applicant to make the information available urgently.
The Act gives the Ombudsman the power to review any charge which may be made by the Council.
Within the Council the writer is responsible for making decisions on official information requests on a day-to-day basis and would also make decisions on charging for such information.
The Ombudsman's Office has stated in guidelines on the administration of the 1987 Act in respect of charging :
"The Ombudsmen have consistently taken the view that charges cannot be fixed for time spent deciding on whether or not or to what extent information can be made available. The charging guidelines issued by Cabinet provide a reasonable basis for assessing charges, not only by department and organisations subject to the Official Information Act, but also by local authorities subject to the Local Government Official Information and Meetings Act.
At a general level, the Ombudsmen have taken the view that charges assessed in accordance with guidelines are reasonable. However, there may be factors in a particular case which warrant waiver of the charges or some other departure from the guidelines. The role of an Ombudsman when reviewing charges is to form a view as to whether the charge was reasonable in all the circumstances of the request.
Where a department, ministry or organisation decides that information requested can be made available, but that charges assessed in accordance with the Cabinet guidelines are likely to be substantial, the standard practice which an Ombudsman would expect to be followed is for the requester to be advised of the likely charges before the request is processed and invited to decide whether he or she wishes the request to proceed on this basis, or whether he or she wishes to modify the request."
Attached to this report is a proposed Council policy based upon the Cabinet Office Guidelines relating to charging for the supply of official information.
Recommendation: That the Council adopt as its policy on charging for official information requests the attached charging policy.
3. CCC ENERGY STRATEGY 2020 RR 4094
| Officer responsible | Author |
| Inventory Manager | Dr Leonid Itskovich |
| Corporate Plan Output: Energy Advice to Units and Corporate Office, Volume I Page 5.5.text.11 |
The purpose of this report is to advise Councillors on the internal strategic energy plan and to seek the Council's approval of subsequent policies.
ENERGY STRATEGY PLAN
One of the methods for achieving the energy conservation objective set by the City Plan is the implementation of the Council's internal energy management programme including the strategic energy plan. A discussion draft of the plan, CCC Energy Strategy 2020, was developed and presented at the Management Group meeting of 3 May 1996. Subsequently, submissions were received from members of the Management Group, and the draft document was reviewed, finalised and approved by the City Manager for promulgation and implementation.
The plan will also facilitate the formulation and implementation of an Urban Energy Strategy for the City.
Policies deriving from CCC Energy Strategy 2020 need to be approved by the Council in the following areas:
1. The Council's commitment to energy conservation.
2. Energy Efficiency and Sustainability Assessments for projects.
3. Funding of energy efficiency projects.
1. Energy Efficiency and Conservation
The Council is committed, in its internal operations, to the efficient use of energy and energy conservation.
Reasons
Section 3 of the City Plan (ENERGY) addresses the role that the Council should play in achieving efficient energy use locally through encouragement, promotion and practical demonstration. The City Plan sets an objective - energy conservation, and links the efficient use of energy with the reduction of the City's air pollutants. The Council's policies of energy efficiency and the promotion of public awareness of the need for energy efficiency include the encouragement of others through the Council's own energy management practices.
2. Energy Efficiency and Sustainability Assessments
New projects and major retrofits must be assessed for their efficient and sustainable use of energy.
Explanation
Policy 3.1.5 of the City Plan: To minimise energy use through improved building design should be implemented in the design of the Council's own buildings.
An Energy Efficiency and Sustainability Assessment (or EESA) will be done for every major proposed facility or activity, which includes both new projects and retrofits. An EESA will be conducted during the preliminary design phase of the project.
The design Consultant shall be responsible for conducting an EESA.
The requirement of conducting EESA will be included in the Consultant's brief.
An energy efficiency and sustainability assessment will include:
Major Retrofits: a major retrofit (affecting the energy consumption of the facility) is defined as one having an energy consuming component (plant, equipment, etc) of greater than $10,000 in value. Major retrofits will require:
3. Funding Allocation For Energy Efficiency Projects
Objective: to establish procedures for funding the implementation of energy efficiency projects.
Background
The aim of energy efficiency projects is minimising energy costs and/or energy consumption by the Council's facilities. The projects mostly consist of engineering system upgrades and modifications using modern technologies and equipment. In some cases an energy efficiency component is considered (e.g. the additional cost of installing a high efficiency motor to a pump which is being replaced anyway).
Current Experience
In 1995/96 a number of energy efficiency projects were completed by the Council. The total capital cost of these projects was in excess of $2,000,000. The projects were financed from an EECA (Energy Efficiency and Conservation Authority) interest free loan of $500,000 and from Council funds. The energy cost savings which resulted from the implementation of the projects were $467,500 per annum, and a significant positive environmental effect was achieved.
For the 1996/97 financial year, a portfolio of energy efficiency projects already exists with a total capital value of about $900,000 and annual energy cost savings of $283,000. A measurable environmental effect (reduced emissions of air pollutants and CO2 in Christchurch) will also be achieved. The portfolio will be replenished with new projects as new energy saving opportunities are identified and further energy audits are conducted. The projects will be partly financed from EECA interest free loans. Loans for $128,500 have already been approved by EECA for the Convention Centre and for the replacement of water pumps with new energy efficient units. Another application for $180,000 is pending for the lighting upgrade at the Central Library.
Future Funding of Energy Efficiency Projects
For the Council, to maintain its position of efficient energy use, it will be necessary in the near future to continue investing in energy efficiency. Energy efficiency projects can be funded from the following sources:
Ideally the Council should budget for specific energy efficiency projects. However, this is not always practicable as projects emerge throughout the year. The energy efficiency projects are such that when an opportunity is identified and proved to meet the acceptable financial criteria, the sooner it is implemented the better for the Council. Any delay will result in higher monthly energy bills.
At present there is no established policy for funding energy efficiency projects. Unit Managers and Facility Managers may not have allocated funds in their capital expenditure programmes, and they cannot justify an over-expenditure of capital by achieving savings in their operational budgets. Interest free EECA loans have helped in a number of cases but this source of finance is limited and not guaranteed in the future.
A policy is needed on the funding of Energy Efficiency Projects.
3.1 Proposed Procedures for 1996/97
(a) Substitution of capital items within a Unit budget (e.g. the implementation of an energy efficiency measure instead of replacing a carpet), approved by the Unit Manager provided the total cost is no greater than $100,000.
(b) Capital expenditure is substituted by savings within the Units operational budget. This only applies to projects with a payback period within the current year.
(c) Where the capital cost is greater than $100,000 or the payback period greater than one year, the Council's approval will be sought provided a source of finance can be identified.
3.2 Proposed Funding Source for 1997/98 and the Future
Option A
Energy Efficiency Fund of $300,000 per year.
That a fund be created in the 1997/98 budget by putting aside $600,000 over three years, topping it up with savings from operating budgets for three years and then returning the savings to the corporate operating budget, in subsequent years.
A Review Panel (Director of Operations, Accounting Services Manager, Financial Planning Manager, Energy Manager) will approve expenditure from the fund, subject to the following guidelines:
A scenario for the operation of the fund is set out below. It is based on the assumption that energy efficiency projects financed from the fund will have an average payback period of three years. It is envisaged that a review will be carried out at the end of year 2 to decide whether it is necessary to continue the Fund in year 4 and subsequent years.
| Financial year | Invested from CCC budget | Savings returned to Fund | Savings returned to CCC Operating Budget | Spent on Energy Efficiency Measures | Fund balance at the end of the year |
| 1997/98 | $300,000 | 0 | 0 | $300,000 | 0 |
| 1998/99 | $200,000 | $100,000 | 0 | $300,000 | 0 |
| 1999/2000 | $100,000 | $200,000 | 0 | $300,000 | 0 |
| 2000/01 | 0 | 0 | $300,000 | 0 | 0 |
| 2001/02 | 0 | 0 | $300,000 | 0 | 0 |
| Interim (5 years) totals |
$600,000 | $300,000 | $600,000 | $900,000 | |
| 2002/03 | 0 | 0 | $300,000 | 0 | 0 |
| 2003/04 | 0 | 0 | $300,000 | 0 | 0 |
| 2004/05 | 0 | 0 | $300,000 | 0 | 0 |
| Total after 8 years |
$600,000 | $1,500,000 |
In year one $300,000 will be invested in the fund, in year 2 $200,000 and in year 3 $100,000. The rate of investment diminishes because the savings in energy costs return to the fund during the payback period. After three years the fund will become self-sufficient and will not need any further injections from the Council's budget. The table shows that after a five year period the financial parameters will be neutral ($600,000 investment returned in full). Every subsequent year the Council will have a net benefit of $300,000.
The fund budget will be reviewed and reported to the Committee annually.
Option B
That an Energy Efficiency Projects item of $300,000 pa be provided in the corporate budget. This would see the savings reflected immediately in the unit budgets. The amount of savings could still be measured and reported on.
The same review panel would approve expenditure from the budget on the same criteria as for the Energy Efficient Fund above.
Discussion took place on the environmental benefits of the energy strategy, in particular the need for the Council to take a lead in reducing CO2 and other pollutant emissions. The view was expressed that the environmental, as well as economic gains should be given weight in assessing the merits of new projects. It was generally agreed that the City Manager prepare a draft policy on this issue.
Recommendation: 1. That the following policy be adopted:
The Council is committed, in its operations, to the efficient use of energy and to energy conservation.
2. That the following policy be adopted:
For new projects and major retrofits with a significant energy component an Energy Efficiency and Sustainability Assessment (EESA) must be carried out.
3. That provision of $300,000 pa be made as a line item in the draft 1997/98 Annual Plan for energy efficiency projects.
4. That a review panel of appropriate officers as determined by the City Manager be set up to approve expenditure on energy efficiency projects.
5. That the expenditure and savings be reported to the Strategy and Resources Committee annually.
4. HEALTH AND SAFETY IN EMPLOYMENT RR 4103
| Officer responsible | Author |
| City Manager | Mike Richardson |
The purpose of this report is to bring to the attention of elected members the firm conclusion which I have reached in recent weeks that in order to achieve our responsibilities both statutorily and as a good employer that an additional resource (not provided for in the current Annual Plan) is needed, specifically, the appointment of a Health and Safety Auditor to report to me. Given the nature of health and safety in employment I would like to be able to move on this matter immediately rather than bring it forward as a "bid" for the 1997/98 year.
LEGAL CONTEXT
As the employer, I have a duty under the Health and Safety in Employment Act 1992 to take all practicable steps to ensure the safety of employees while at work and in particular to ensure that all practicable steps are taken to:
There are also specific duties with regard to identifying and assessing existing and new hazards in the workplace, investigating accidents, and more generally having in place hazard management, information, training and supervision systems.
Breaches of the Health and Safety Act can lead to criminal prosecution of the Council and/or management staff.
OUR APPROACH TO DATE
In advance of the Health and Safety in Employment Act 1992, health and safety committees were established within the Council's structure in 1990. The structure was put in place in accordance with guidelines issued by the Labour Department. It comprised a steering committee chaired by the Personnel Manager (Marshall Wright). Five separate working committees were then established in different functional areas. These were:
Offices, libraries, art gallery and service centres; workshops; works operations, bitumen plant and parks; sport, recreation and pools; town hall.
An overarching occupational health and safety policy was established in 1992. Since 1990 a wide variety of health and safety documents have been prepared within this committee structure and appropriate training programmes delivered.
Much valuable work has been done.
1996 REVIEW
In July this year a thorough review of the operation of the health and safety committees was concluded by a staff project team. Their report has subsequently been adopted by one of our key corporate standing teams, the Risk Management Team, which is chaired by Jim Williamson and includes a cross-section of seasoned managers and team leaders.
The report indicates that the existing system has been seriously deficient in that the health and safety committees were generally established at too global a level, and their existence diminishes the actual and perceived accountability of the unit managers and team leaders for ensuring safe work practices and hazard monitoring on a day-to-day basis in their work areas. The report recommends:
"Set health and safety as a responsibility in unit manager's contracts and their performance development forms.
Educate managers so that health and safety becomes part of normal business practice.
Need to see visible commitment from the top. This includes unit managers setting the example.
Responsibility also needs to be defined for supervisors.
Health and safety teams should have sufficient power/responsibility to approach the unit manager or whoever may be necessary to ensure action is taken.
Supervisors need to lead by example and should be actually disciplining those, for example, who are not wearing personal protective equipment."
Along with these and other recommendations the team propose that health and safety teams be established within all units or significant work locations of the Council, that unit managers be responsible for ensuring this happens and continue to be committed and involved with their teams. There are also significant recommendations with regard to the way the team should operate and the way staff training should be organised in this area.
IMPLEMENTATION OF NEW APPROACHES
The recommendations contained in the lengthy report have been widely welcomed. We are currently moving to implement them and aim to do so within the existing budget provisions. In this implementation some wider relationships between health and safety and risk management more generally are being worked through. For instance, the importance of reducing motor vehicle accidents or of securing loose equipment against earthquake have health and safety implications but are more traditionally thought of in the context of managing our plant and resources. These issues are being worked through under the leadership of the Director of Operations (Jim Williamson).
In broad terms the approach we are taking is to heighten the responsibility for health and safety practice at the unit level and at the "coalface". A small team of three which include our Occupational Health Nurse and Safety Adviser located within the Council's Personnel Unit will act as internal advisers/consultants to the unit managers and frontline staff. They will undertaken tasks such as specialist training, review of practices, specialist input into analysis of hazards, etc.
The underlying management philosophy therefore is to make sure that unit managers and team leaders recognise their accountabilities in this area and then to support them with necessary specialist resources to help them to discharge their accountability and ensure our workplace is safe and healthy.
MORE IS NEEDED
I have been reviewing this matter myself in recent weeks and have been consulting relatively widely on the issue of health and safety in the organisation. As a result of this I have firmly reached the conclusion that the approach we are intending to take is appropriate but that something additional is required. The reality of an organisation the size of ours with some 30 business units and 2,000 staff is that commitment can be encouraged but will inevitably be variable.
There are also difficulties that acceptable health and safety practice can sometimes conflict with the drive to minimise costs.
I am concerned therefore that even with structures and accountabilities in place which will be more effective than in the past there will inevitably remain a gap between what is known to be safe practice and what actually happens. There will be instances where supervisors and unit managers simply turn a blind eye because they want to get the job done and keep costs down. We have responsibilities in health and safety with regard to our own staff and also with regard to contractors. To date we have addressed the latter by inserting an appropriate clause in contract documentation which requires the contractor to have in place appropriate health and safety programmes and procedures etc. It is important that as we "tighten up" on health and safety that we do so not only with our own staff but also with the outside contractors, partly because we have responsibilities with regard to them and partly because failing to do so threatens the price competitiveness of our in-house business units and thereby sets up a dynamic which encourages "the turning of a blind eye".
Further, the nature of the duty imposed on the employer by health and safety legislation is such that I do not believe it is adequate to rely simply on clearly stated accountabilities and provision of appropriate resources. It is also very much in my mind that protecting health and life has to be at the top of our priority list within the staff organisation just as it is for elected members in consideration of priorities for delivery of services to the community.
I therefore wish to put in place a Health and Safety Auditor whose principal focus will be ensuring not just that appropriate programmes and systems have been designed but are actually being implemented on a day-to-day basis. This position would report directly to me and his/her brief would extend to all Council employees and contractors. In this context breaches of health and safety requirements would be regarded as warranting counselling and, when need be, disciplinary action within the staff organisation, and discussion and actions for breach of contract in the case of external contractors working for us. The health and safety auditor would receive reports on all accidents (own staff and contractors) and investigate as appropriate; he/she would undertake routine health and safety audits and also random visits to operational areas.
For the balance of this financial year I am seeking approval for expenditure of approximately $30,000 which will enable an appointment to be made. The health and safety audit function will be included in the draft 1997/98 Corporate Plan as a separate cost centre. I propose that from July 1997 onwards the position be part funded by a small levy on capital projects (we will need to work out the detail to ensure that such a levy is not administratively cumbersome), and must also recognise that the issue spans all Council activities, not just outside work. In the medium term I would look to the position providing a payback in accident reduction and so a further reduction of ACC levy. In the final analysis however my recommendation is not based on a principle of medium term cost recovery but one of ensuring that we reduce the risk of illness and accident as much as is reasonably possible.
Recommendation: 1. That $30,000 be set aside from the four monthly financial review for a health and safety audit function.
2. That a health and safety audit function be included in the draft Annual Plan for 1997/98, part funded by a levy on capital projects.
5. CORPORATE PLAN FORMAT RR 4079
| Officer responsible | Author |
| Financial Planning Manager | Paul Melton |
| Corporate Plan Output: Corporate Plan Volume I 5.1.text.3 |
The purpose of this report is to consider a change to the Corporate Plan Format. The change was recommended by the Parks and Recreation Committee at its October meeting.
BACKGROUND
The proposed change involves the inclusion of the following figures in the 1997/98 Corporate Plan:
1995/96 Actuals
1995/96 Budget
1996/97 Actuals for six months
These figures would be in addition to the 1996/97 and 1997/98 budget figures. This would mean five columns of figures on each financial page of the Plan.
This approach is similar to the format followed by some local authorities prior to the 1989 reforms. In pre-reform days there was no requirement to consult with the community and budgets were often not approved until several months into the new financial year. This meant that the previous year's actuals were available for comparative purposes. This worked well as everything was on a cash basis and there were no depreciation charges, cost of capital charges or accruals which can often delay the finalising of the end of year figures.
THE PROPOSAL
Under the present system the Annual Plan process is almost complete by the start of the new financial year. The previous year's actuals only become available in late August or early September after the Plan has been adopted.
The recommendation is that both the 1995/96 actuals and the six-monthly actuals for 1996/97 be included. There are however a number of difficulties with both sets of figures.
The 1995/96 actuals are two years previous to the 1997/98 budget. They also include a cost of capital component of $134M which is not included in any of the 1996/97 or 1997/98 figures. The absence of cost of capital from the more recent figures means that any comparisons with earlier figures would be meaningless.
Similarly the seasonal nature of many activities and projects carried out by units such as LACSU, Communications and Promotions and Parks means that any comparisons with the six-monthly actuals for 1996/97 are also not likely to be valid.
AN ALTERNATIVE APPROACH
In previous years the pink pages of the Corporate Plan have listed the changes between budget periods. This year it is proposed to strengthen this form of reporting and Managers have been asked to note changes between budget periods using the following headings:
| Key Changes | A summary of the key changes relating to resources, charges, operational outputs and capital outputs. | |
| New Fees for 1997/98 | The previous year's figures will also be included for comparative purposes. | |
| Committed Costs | Each year there will be costs which fall into this category. Last year this included items such as ACC levies and electricity cost increases. | |
| Additional Costs due to Growth | These costs may reflect increased demand due to population growth or a growth in building activity. They do not involve any changes to current service levels. | |
| New Operating Initiatives | These represent the operating costs associated with a totally new service which may have been requested by a Standing Committee, Community Board or Unit. These items will be listed on the pink pages but will not be included in the draft budgets. | |
| Priority Projects | They represent bids for the unspecified capital sums. Like the new operating initiatives they will not be included in the capital budgets. They can be likened to optional extras. | |
| Project Substitutions | Proposed substitutions in the capital programme. These will be listed but not included until approved. |
The pink page format will therefore highlight the changes between years as well as giving reasons for many of these changes.
In addition to the pink pages there are four further measures which are designed to prevent inefficiencies being transferred to subsequent years.
Managers are expected to prepare budgets using a zero based approach rather than an incremental approach. In practical terms this means building up line item budgets using known costs. While transaction listings are used for information purposes the transaction totals are not used as a base onto which the projected level of inflation is added.
Over the last three years management has put in place an annual strategy as part of the planning process. These strategies have been very successful in limiting cost increases and ensuring that realistic budgets are prepared. Any increases over and above the strategy parameters are scheduled on the pink pages.
The third measure is the process of service level review. This process is an ongoing one and enables the Council to make carefully considered decisions on its activities and whether they are aligned with and will best contribute to achieving the Council's objectives and policies.
Finally the Council has in place a well established separate monitoring system which takes place in March and October of each year. At the monitoring meeting actual expenditure trends are highlighted and corrective action can be taken when appropriate.
Recommendation: That the Council endorse the approach outlined above in preference to the inclusion of additional figures in the Corporate Plan.
6. ORDERS FOR SUPPLIES EXCEEDING 50% OF DELEGATED AUTHORITY RR 4081
| Officer responsible | Author |
| Director of Finance | Bob Lineham |
| Corporate Plan Output: Financial Advice Volume I Page 4.5.2 |
The purpose of this report is to comply with Section 4 of the Public Bodies Contracts Act which requires that a schedule of orders for supplies and works approved under delegated authority and exceeding 50% of that authority be reported to the next meeting of the Council. The following schedule lists items in that category since the last report:
| Name of Supplier | Description | Amount | Delegated Authority |
|---|---|---|---|
| Greg Walker Enterprises | Wainoni Community Centre Extensions to Meeting/Resources Rooms | $61,253.13 | Property Manager |
| Ashleigh Locker | Sports Lockers and Controller Units | $72,000.00 | Leisure and Community Services Manager |
| Benny Concrete Ltd | Beaumont Street Reconstruction 96/97-65 | $51,001.00 | City Streets Manager |
| Works Operations Unit | Mathesons Road Kerb & Channelling 96/97-81 | $217,713.00 | Director of Operations/ Director of Finance |
| Higgs Builders | Civic Offices - 4th Floor Alterations 1996 96/97-97 |
$76,348.00 | City Design Manager |
| Maxwell Plumbing Co Ltd | Colombo Street Sewer Renewal 96/97-98 |
$88,315.00 | City Design Manager |
| B D Construction | Tuam Street Pedestrian Crossing 96/97-101 |
$95,635.90 | City Streets Manager |
| Fulton Hogan Ltd | Carriageway Chipsealing - Various City Streets 96/97-104 |
$199,963.55 | Director of Operations/ Director of Finance |
| Local Construction Ltd | Rawhiti Domain Car Park 96/97-137 |
$85,134.00 | City Design Manager |
Recommendation: That the information be received.
7. DEPUTATIONS BY APPOINTMENT
APPLE FIELDS DISPUTE
Mr Tom Kain, Managing Director of Apple Fields, briefed the Committee on the background to his company's application for an export licence to enable Apple Fields to enter into a joint venture arrangement with an international distributor to export its product to overseas markets. Mr Kain confirmed that the direct marketing option would produce a gross return of $28 million compared with the $15.3 million payout from the New Zealand Apple and Pear Marketing Board. This return was not commercially viable and would involve Apple Fields in a significant financial loss.
Mr Kain advised that failure to secure an export licence would result in the company closing its Christchurch orchards with the consequent loss of approximately 120 full time and 1,800 part time jobs.
Miss Maria Te Au, Apple Fields Workers' representative, then addressed the Committee and confirmed that Apple Fields' staff totally supported the company's export application. Ms Te Au then outlined the repercussions to both the staff and the local economy of the closure option.
Both speakers advised that the company and staff would welcome any support from the Council for its application for an export licence.
Consideration was then given to the report by the Chairman on a meeting organised by Apple Fields workers and held on Saturday 16 November. The meeting was attended by six Councillors and several Members of Parliament.
After considering the representations from the deputations and the Chairman's report, the Committee resolved as follows:
1. That speaking rights be sought at the New Zealand Apple and Pear Marketing Board hearing on Friday 22 November for a joint deputation led by the Mayor and comprising representatives of the Canterbury Development Corporation, the Canterbury Employers' Chamber of Commerce and the University of Canterbury Students' Association, to make submissions in support of the application from Apple Fields Limited for an export licence.
2. That the following statement, prepared by the City Manager, be approved as the basis for the Council's representations to the New Zealand Apple and Pear Marketing Board:
"The Christchurch City Council is extremely concerned at the potential loss of the apple growing industry from Christchurch. The Council does not wish to challenge the marketing role of the Apple and Pear Marketing Board but at the same time urges the Board to grant an export licence to Apple Fields.
The Council understands that should the Board fail to grant such a licence the cost to Christchurch from the cessation of apple growing may be up to $28.5 million directly, indirectly some $55 million. The Council notes that Apple Fields Ltd is the only apple grower in New Zealand with ISO 9000 quality accreditations and so is excellently placed to ensure the good name of New Zealand products. The City Council requests that it and other representative Christchurch groups meet with the Board as part of its decision-making process. Should the Board fail to grant the licence as requested, the Council requests the Board demonstrates how such a decision will produce benefits which more than offset this loss of $55 million per annum to the Christchurch economy."
3. That contact be made with Christchurch Members of Parliament to seek their support for the Apple Fields' application for an export licence.
4. That the issue be included on the agenda for the forthcoming meeting with MPs.
Recommendation: That the action taken by the Strategy and Resources Committee be confirmed.
PART B - ITEMS DEALT WITH BY THE COMMITTEE AND
REPORTED FOR INFORMATION ONLY
8. SUPPLEMENTARY ITEMS
The Chairman sought approval to introduce supplementary reports on the topics detailed below. The reasons why the reports had not been included on the main agenda and why they could not wait for the December meeting were explained to the Committee.
The Committee resolved that the reports be received and considered at the present meeting.
9. NEW ZEALAND LOCAL GOVERNMENT INSURANCE CORPORATION - RE-REGISTRATION AND APPROVAL OF CONSTITUTION RR 4101
The Committee gave consideration to a report from the Accounting Services Manager detailing the proposed re-registration procedure and new constitution of the New Zealand Local Government Insurance Corporation.
The Committee's support was sought for the new constitution which will be considered at a special meeting of the company to be held in Wellington on 28 November 1996.
The Committee resolved:
1. That the adoption of the proposed new constitution be supported.
2. That a proxy be issued in favour of Bob Lineham to represent the Council at the special general meeting to vote on this matter.
10. ITEM DEFERRED
PLUNKET SOCIETY BUILDING
The Committee deferred consideration of reports from the Chairman and the Property Manager relating to the upgrading and leasing of the Plunket Society building at 211 Oxford Terrace. The Committee requested staff to report back on issues raised by the Committee including alternative uses for the site, the process for seeking an amendment to the legislation to permit the building to be used for other purposes, and alternative premises for the Plunket Society.
The meeting concluded at 6.20 pm
CONSIDERED THIS 27TH DAY OF NOVEMBER 1996
MAYOR