Mayor Elect and CEO Talk Committees

Imagine: The election is over and we know who the mayor of Auckland Council is, and who the Councillors and Board Members are. But this Mayor has different powers from previous mayors we have seen. Among other things the Mayor of Auckland Council has the power:

to establish the committees of the governing body;
to appoint the chairperson of each committee of the governing body and, for that purpose, the mayor—
(i) may make the appointment before the other members of the committee are determined; and
(ii) may appoint himself or herself (Local Government (Auckland Council) Bill 36-2 (2009))

So let's listen in on the conversation between Doug McKay (Auckland Council's Interim CEO), and the Mayor Elect..... This is an imaginery conversation....

CEO: Congratulations on your result. Welcome to Auckland Council.

Mayor: Thanks Doug. Yep, the people have spoken. Time to get down to business.

CEO: Agreed. My people have prepared substantial briefing materials. Briefing to incoming Council. She's a bit of a beast to get on top of.

Mayor: Tell me about it. But before we do that I want to talk Committees.

CEO: Yep. Thought you would. We've looked at a few options and can go through that analysis with you. We know it's your call. How do you want to play this?

Mayor: I've got a few ideas and had a few conversations but I'm keen to hear what you recommend. How you see it.

CEO: Well we're all set up in here, and up and running as you know. I've got three very good people running Council's Operations, Planning and Finance divisions. They're outside ready to meet you by the way....

Mayor: Saw them on my way in actually. Place has a good feel. You're doing a good job. So give me a flavour. What's your recommendation?

CEO: Well as I say we've had a long hard look at this and I've got a power point I'd like to go through with you, but in summary we think less is more. Three Committees of the whole, Council, and independent commissioners for hearings. That's it in a nutshell. Of course there's always room for a few sub-committees if you saw the need...

Mayor: Less is more. Hmmm. Sub committees. Hmmm. The Council I used to be Mayor of had a hell of a lot more committees than three, and we were responsible for a quarter of what we're doing in here. What makes you think three Committees will cut it?

CEO: Well it's not three Committees when you think about it. There's 21 Boards as well. They'll decide the local stuff. Make the grass-roots decisions. Community Development decisions. And the big decisions around the Waterfront, the Port, Water, Wastewater, Transport, Public Transport - they'll all be well handled by Council's very capable CCO's. As you know.

Mayor: I thought you might say that. But I'll tell you this. I haven't bust a gut getting in here, along with a whole bunch of capable councillors, just to leave decisions to someone else. To a bunch of CCO Boards. And even if I did have some sympathy with your three Committee idea, you can bet your bottom dollar my Councillors won't tolerate being side-lined over major decisions. They won't want to delegate everything to your officers and CCO's - no matter how good they are.

CEO: But you won't be delegating everything. That's the point. Council will decide strategy. Transport strategy, Water strategy, Long Term Council Plan, Spatial Plan, Waterfront Development Strategy, Finance Strategy. Statements of Intent. The lot. That won't be delegated. The CCO's and the Council will then implement those strategies. Your strategies. You will control Council and its CCO's through strategy. And you will monitor our delivery, and CCO deliveries, through reporting that's as detailed as you want it to be.

Mayor: Well I'm not so sure about that. This is a whole different ball game and the public and councillors want to understand better what's going on so they can influence it. I think we need to be looking at some options.

CEO: We can do that. But give me a flavour of what you want. Have you got an example?

Mayor: Well I've taken an interest in Watercare and that's all well and good for trunk sewers and the like, but I can't see how that model - that hands off model - is going to work for transport projects. There's too much public interest and too many different interests when it comes to transport.

CEO: But isn't that the point? Councils haven't done anything because they've been too busy worrying about local concerns. This model reduces that impact on getting things done. I'm not saying Council can hide behind the Transport CCO, while it steamrolls through, but it will have a focus on getting things done. We can open up meetings and be transparent about decisions so people know what's going on. This will free up Councillors so they can concentrate on the Spatial Plan. That really needs political attention, and once it's done then Auckland Transport will be required to implement it. I think it would be a waste of councillor's time if they got into the detail of every roading project and road asset management plans and all that.

Mayor: It sounds great the way you put it. But it ignores the fact that people own land and run businesses and live and go to school and shop by these roads. Roading projects affect them and their assets like nothing else Councils do. It's the whole land use and transport integration thing. You can't fix one without affecting the other. I buy into keeping councillors away from little projects. But they will want to have a say on the big ones. Like Dominion Road, like AMETI, like the Britomart Rail Loop and those new stations. The list is a big one. I'm thinking of something like a delegation. Something like if the value of a transport project is more than $10 million - to pluck a figure out of the air - then Council must be consulted.

CEO: Hmmm. I'll have to get advice on what the law says about this. My understanding is that parliament intended for there to be a strong separation between Council and Auckland Transport juridictions. I think before we go any further with this we need to have a chat with Mark Ford. You OK with that?

Mayor: Absolutely. We need to get this right. No point in rushing now we've got this far.

CEO: OK. I take it you're happy with Watercare then?

Mayor: I'm no expert on it. We have had the odd report back at Council. Once over lightly. But word is everything that's been going on there has been under the public radar for years. No-one really knows what's what. On the face of it looks like a tight ship. The Watercare Shareholder Representative Group has been controlled for years so that Watercare get's what it wants, but who knows if it's the best option. I mean take that water tariff announcement a few weeks ago. $1.30/cubic metre across the region. Everybody pays the same. Has a ring of confidence about it. Everybody likes a cut in rates. I don't know the basis for it. Watercare has a revenue requirement that must be met. I suspect tariffs are just the sort of thing that Council will want to understand and decide. How does that fit with your committee plan?

CEO: These are highly complex technical matters, but I'm sure we can pick them up in the Statement of Intent. Or maybe a Sub Committee when needed.

Mayor: I had a flick through Watercare's SOI before coming in today. Someone gave it to me. Here's what it says about tariffs. Objective 18 is "To ensure that the regime for the pricing of water and wastewater services is enduring, transparent and reliable.".... Fantastic, what does that mean?.... And its performance target - I don't know who writes these things - is: "The pricing methodology enables the revenue to be set to recover all costs and provide for an adequate level of debt servicing."

CEO: What's wrong with that? Sounds sensible to me.

Mayor: It may be sensible, but where in there is the need for a conservation pricing message, where in there is any need to consider developer levies so infrastructure costs get allocated where they are incurred. I suspect the whole thing needs a rethink. Sure business must continue. But you can't expect us all to troop in here and accept everything as a done deal. There is a need in my opinion for us to set up committees which allow the Council to take control of what is happening. Councillors may be happy to accept the status quo - once they understand the options and alternatives. But you can't assume that.

CEO: So where from here?

Mayor: Well I'd like to to see your power point presentation, and I'd like another meeting maybe tomorrow, where I'd like to bring in a few more councillors, and I want to see Committee options which at the very least include a Transport Committee, a Watercare Committee, and a Waterfront Committee. There must also be a Local Board Committee. Councillors need to engage politically with Auckland Council Boards. These are the meaty issues, and I want Committee options that will enable us to get to grips with Auckland local government.

CEO: Hmmm. How about a cuppa tea?

End of imaginery conversation. More later. In another Blog. Maybe.

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.