New Council Committee Conundrum

This blog considers the Committee Structure and Delegations of Auckland Council.

But first little bit of background to flavour and inform this blog....

Doug McKay has been appointed Interim Chief Executive of Auckland Council, and he (with Auckland Transition Agency assistance) has appointed three people to head up the main divisions of Auckland Council:

• the Chief Operating Officer is Patricia Reade, who is currently Deputy Chief Executive (responsible for Work and Income) at the Ministry of Social Development;


• the Chief Planning Officer: Dr Roger Blakeley. He is currently the Chief Executive at Porirua City Council;
  
• and the Chief Financial Officer: Andrew McKenzie, who is currently General Manager of Auckland City Council’s finance division.

So, Auckland Council has been set up with 3 divisions: Operations, Planning and Finance.

This contrasts with existing arrangements, which I am not going to look at chapter and verse, but take Manukau City council for example. Its CEO has 6 direct reports:

• Strategy - Grant Taylor;


• Economic - Rick Walden;


• Environment - Ree Anderson;


• Community - Ian Maxwell;


• Finance - Dave Foster;


• Organisational Performance - Robyn McCulloch.

A typical ratepayer might look at this and wonder who is responsible for the big ticket items of council expenditure which are roads, water, wastewater, and planning. In MCC's case you can find roads and transport under "Economic", but you can't find water and wastewater anywhere in its organisation chart. Unless, that is, you find CCOs, and there you will find "Manukau Water" (and several other CCOs).

It requires some local government knowledge to dig further into the MCC website to understand the political structure of MCC. I found a page which provides this information:

• Council meets monthly;


• Policy and Activities committee meets weekly for the first three weeks of the month;


• Grants and Events sub-committee meets monthly;


• Accountability and Performance committee meets quarterly;


• Audit and Risk sub-committee meets quarterly;


• Environmental Hearings Committee meets monthly;


• Te Tiriti O Waitangi Committee meets monthly.

However, if you were interested in wastewater - say - or even roads, you would still be none the wiser from looking at this list, as to which committee actually makes decisions about roads or wastewater, and which committee was accountable for decisions made about wastewater and/or transport.

The key word here is: delegations.

Under the Local Government Act it is Council (I mean Full Council) that has the power to do things and decide things, but it can decide to delegate powers and responsibilities to its own Committees, or - now - to Council Controlled Organisations, and also to its Chief Executive and to senior staff. This is a fundamental administrative nicety. Delegations are very important. It defines and determines who makes what decisions.

My experience has been this (and I've seen it now 4 times): One of the first things that happens when a new Council is elected, is that Council officers, under the leadership of the Chief Executive Officer, try for the maximum amount of delegated power to be transferred away from the political arm of council, to its corporate or executive arm. You can understand why. Officers worry that political meddling could muck up their careful plans for how ratepayer money should be allocated, what projects have priority, and so on.

Immediately post-election, councillors and the mayor stroll into office expecting to be able to implement their campaign brochure promises (new councillors), expecting to be able to change the system to better implement their expectations and goals (seasoned and committed councillors), and hoping and angling for a chair position. In short it's a bit of a bun fight which officers are easily able to exploit.

In the case of Manukau City Council, you can see this beginning to happen at the council meeting that was held on the 30th October 2007, just a couple of weeks after councillors were sworn into the new term. An item on the Council agenda reads like this:

GOVERNANCE ARRANGEMENTS FOR THE NEW TRIENNIUM

Two options for governance arrangements are contained in Appendix “A”. The first option is based on a committee of the whole of Council meeting weekly with Portfolio Leaders taking leadership roles. Proposed delegations to Committees under the first option are contained in Appendix “B”, should the Council decide to adopt this option.

The second option modifies the previous committee structure by reducing the number of committees. Delegations under the second option, will reflect a reduced committee structure and a detailed set of delegations will be available for the meeting.

I have been unable to find either of these appendicees on Manukau City Council's website. But the meeting minutes give a flavour of what happened. Here is an extract:

MINUTE NO. CL/OCT/1663/07 – HIS WORSHIP THE MAYOR/CR SU’A WILLIAM SIO
1. That a governance structure with delegations, membership, meeting times and quorums as detailed in Appendix B, as amended, and having the following
components be adopted:
(i) a “Policy and Activities Committee”, comprising of the Mayor and all
councillors, meeting weekly for three weeks each month and having a
smaller “Grants and Events Funding Subcommittee”;
(ii) an “Environmental Hearings” Committee, comprising nine members
dealing with hearings relating to environmental matters and with
enforcement issues, meeting monthly and as required for hearings;
(iii) “Te Tiriti o Waitangi” Committee, comprising nine elected members and
nine appointed members, meeting monthly;
(iv) an “Accountability and Performance Committee”, comprising the Mayor
and all councillors, meeting quarterly to receive and consider reports on
performance against the Annual Plan and having a smaller “Audit and
Risk Subcommittee”;
(v) a “Tenders Panel” dealing with contracts and other panels dealing with
CCOs and Executive Review;
(vi) a weekly Forum being held, with the opportunity for public attendance
as appropriate, to provide for informal work-shopping, including
receiving presentations and information items;
(vii) six “Portfolio Leaders” to provide leadership and to represent the
Council in terms of defined portfolio areas, in addition to a Portfolio
Area “Regional Sustainable Development” assigned to the Mayor and
Deputy Mayor.

Don't worry, it gets more interesting. Persist. If you read that minute quickly, you get the impression that it is all to do with committees, committee structures, how many councillors attend meetings, and so on. But that's not the real thrust of this Council decision at all. If you look closely at the first sentence, what it really says is this:

That a governance structure with delegations ... as detailed in Appendix B ... be adopted.

That's what this meeting and decision was really about. And if you look at the minutes of that meeting, Appendix B is attached (I was pleased to find it).

The current political decision-making structure of Manukau City Council dates back to the 2004-2007 term, when it set up a cluster of CCOs including Manukau Water. This structure, and the way decisions are taken, has been enshrined in these delegations (set out in Appendix B) since then. Councillors elected in 2007 had the opportunity to change any/all of those arrangements, but chose not to. This is important to appreciate because the establishment of council committees and their decision-making delegations (powers) fundamentally shapes how the council functions and what it allows itself to do.

You can have a read yourself of Manukau's delegations in these minutes. Scroll to the end to find that appendix. I want, here, to draw your attention to a critical matter.

Manukau's Policy and Activities Committee appears to have the most power. It deals with these areas: City Form & Environment; Safe City; Transport; Community Services; Economy; Regional Sustainable Development:

General purpose:
The Policy and Activities Committee will focus on policy but will also deal with any matters requiring political decision-making relating to Council’s activities and business that are not delegated elsewhere.
Areas of responsibility:
Policies, strategies, external relations, governance, property. All policy and strategy matters. This includes: Community outcomes including Tomorrows Manukau; LTCCP and Annual Plan (including the hearing of submissions); District Plan; Regional Governance; Policy programme; External relationships, including LGNZ, ARC, Government, appointment of representatives on other bodies; Purchase and disposal of strategic property in accordance with the LTCCP; Governance issues relating to the Council, Community Boards and CCOs. (Noting that final adoption of a formal policy or strategy is by recommendation to full Council.)

So, the key decisions of this committee are recommendations to a full council meeting, but that is typically a rubber stamp formaility. This committee is also able to sign off expenditure items in excess of $5,000,000 - which exceeds the procurement delegation to the Chief Executive. While this committee is powerful, what is of considerable interest are the delegations to the Accountability and Performance Committee which has "a monitoring and scrutiny focus". These are set out like this:

Areas of responsibility:
(i) Monitoring performance against the LTCCP / Annual Plan
(ii) Performance issues involving the Ombudsmens Office or the Auditor-General
(iii) Receiving and considering statements of Intent, and half yearly and annual reports from CCO’s
Powers:
All powers relating to the Committee’s purpose and areas of responsibility which are not retained by Council, otherwise delegated, or required by statute to be exercised only by the Council.

The key thing to note is that all matters to do with CCO's are dealt with by the Accountability and Performance Committee, while all matters to do with Policy Strategy are dealt with by another committee.

You might think this is a sensible and efficient way to deal with matters. I beg to differ, and I think Auckland Council needs to seriously rethink this. In my last term on North Shore City Council - as chair of Works and Environment - Councillors dealt with all policy matters to do with Transport and Wastewater at one meeting: projects, prioritisation, planning, performance. This provided for joined up thinking and decisions. In my first term as Chair of Transport Policy at ARC, that committee had the challenging relationship of ARTA (the regional CCO responsible for public transport service provision) to handle. Committee decisions included: Transport Policy, Transport Budgets, ARTA Statement of Intent consideration; Quarterly reports and issue reporting; and so on. That Committee handled all elements of public transport. The exception being the setting of the annual transport rate which was decided with full council.

Then in 2007 things changed at ARC, reflecting the decision model and delegations structure adopted by Manukau City Council. The delegations relating to the Statement of Intent for ARTA, and Quarterly reporting etc, all shifted to ARC's Finance Committee. No longer was it possible for there to be an integrated consideration of public transport strategy, policy, funding, priorities and performance. Decision-making became fragmented, and I would argue, less effective, and less accountable.

I have written to Grant Taylor at Auckland Transition Agency (ATA) because he is in charge there of designing Auckland Council's "Democracy Services". I have sought information about work that is being done at ATA to inform decisions about Auckland Council's committee structure and the delegations of those committees. The equivalent of Appendix A and Appendix B that were presented to Manukau City Councillors at their first Council meeting in 2007.

But he has advised me by email (30th August 2010) the following:

No reports have been prepared yet for or by ATA re committee structures.

The Governance workstream is preparing an induction program and material for the governing body and local boards. Doug McKay and his executive team will also be preparing for briefings of the incoming council.

The ATA has responsibility for preparing a report to Parliament at the end of of its existence (the ATA's that is) on its activities. In conjunction with the work for that report, information and recommendations arising out of all workstreams are being assembled for the incoming council.

I am aware that the legislation establishing Auckland Council, Local Boards, and CCO's prescribes with precision what Auckland Council can change (and what it can't). However incoming Councillors will carry the expectations of Aucklanders on their shoulders and will rightly expect to be able to make a difference and influence outcomes. It will not be appropriate for a committee and delegations structure to be imposed that restricts and confines the thinking and capability of that Council. It is essential to empower the council and its committees, and to enable integrated decision-making across the whole scope of its responsibilities.

CCOs Able To Run Themselves

In all of the criticism of Auckland's current local government regime there was a popular line that Auckland already had a heap of CCOs (I think 45 was the number mentioned), and that was (a) a good reason to have CCOs, and (b) a good reason to have fewer CCOs.

This week we learned who Central Government has appointed to those fewer, but bigger CCOs. As I went through the names a recurring thought came to me. It was that many of the names are the very people who should have stood for election to Auckland Council. They have the skills, experience and political nous - many of them - to make a contribution on Council - but they had neither the inclination, nor the time, to seek a popular mandate.

That thought also made me look at the people I know who are on CCOs now (like ARTA - the Auckland Regional Transport Authority, the Waitakere CCO that has over seen New Lynn, and Manukau's land development CCO). These appointees are experts in their fields. They are there to implement the policies of their respective governing councils. They are the last people to think of standing for council. It's not their strength. They work to a a strategic policy set by elected councillors, working with officers. These policies come through Statements of Intent and the like, but the key point I make here, is that these CCO director skills are often drawn from business life and they are on CCOs to implement council policies in an efficient and workmanlike way.

They are not there to set or determine Council policy. That is not their experience, nor their expertise, though Board Members may learn some of those skills with time. They were not appointed, nor needed, for their policy development or policy governance skills. They were appointed because of their skills at implementation, and acting cost-effectively.

In contrast, what I see in common among many of the great and the good appointments to Auckland's big and new CCOs is a lot of governance experience, a lot of political experience, and quite a lot of political reward. What I don't see is the kind of experience that was common among Auckland's previous CCO's - implementation skills and relevant on-the-ground experience.

By way of example. Sea + City is generally seen as a success. Certainly my experience of it has been of a learning organisation that has responded to pressures and public will responsibly and with integrity. The S + C Board is well populated with relevant implementation skills and experience - urban planning, design, waterfront industry - and suchlike. But those skills and that experience has been passed over for the new Waterfront Development Agency CCO. Oh dear yes. This Board is a terminated board. The new WDA apppointees have fallen over themselves to get appointed. The S+C experience and workmanlike approach has not met the cut for selection. Everybody loves the waterfront. Such fun. Man oh man.

And because these CCOs are going to be chaired by, and populated by many who have their own governance and political opinions about how things should be done - rather than being appointed for relevant technical expertise - the question has to be asked: do these CCOs need a Council at all?

Surely. With such appointees they can run themselves. They certainly have the individuals appointed there who would like to run them themselves. Without interference.

The danger is that the nature of these CCO beasts is that they are set up for a fight with Council. The reasonable expectation of these CCOs is that their directors have been appointed because they know best. And that they are there to protect the future of Auckland from the risk of Council decisions that go against the grain of "we who know best". The tragedy of democracy.

The people vote for who they want on Council at this local election, but those councillors will have little control over those who will really run Auckland, and who have been appointed to do just that, by Rodney Hide and Central Government.