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Brief Counsel

Auckland enters 16-month transition to Super City

27 May 2009

The Queen City is now in something of an inter-regnum.  The Government-appointed Auckland Transition Agency (ATA) will have veto power over all decisions of substance for the next 16 months.  The ATA's brief is to have the architecture for the new governance structure settled by 10 October next year – in time for the next local body elections.

The timetable is tight and already there are signs that the process will not be smooth.  Opposition to the Government's blueprint for the Super City appears to be growing, fed by the platform for dissent created by the Mt Albert by-election and by the campaign for dedicated Māori seats.

This Brief Counsel is designed to provide practical advice on how the machinery which will drive Auckland over the next 16 months will work, or not, and to identify possible issues for business in relation both to the transitional arrangements and to the design of the Super City. 

Key personnel

Mark Ford, Chair of the ATA, has a reputation for strong leadership and for bringing complex projects in on time. 

John Carter, the Associate Minister of Local Government and the Chair of the select committee which will hear the Local Government (Auckland Council) Bill, is an experienced politician, well liked on both sides of the House.  He has the skills and the personality to steer the Bill through the select committee.  His appointment, however, is controversial because it blurs the constitutional distinction between the roles of Parliament and the executive and sends the signal that the Government is approaching the committee hearings with a closed mind.  Carter has a history of strong opposition to race-based representation in his Northland electorate.  That said, we note that John Key kept open the prospect of a compromise on the Māori seat issue at his post-cabinet press conference on Monday.

The Ministers:  Rodney Hide is the portfolio Minister but sits outside the Cabinet and has not always been in the room when important decisions are taken.  John Key will be influential in that big decisions always need the Prime Minister's support to pass.  Expect him, however, to leave the day-to-day political running to others as much as possible.  Stephen Joyce will be a useful contact as Key looks to him for strategic political advice.

Legal framework in the transition

The Local Government (Tamaki Makaurau Reorganisation) Act, passed under urgency on 16 May, creates the regime which will apply until 31 October, 2010.  At that time, the seven territorial authorities, the Auckland Regional Council and the ATA will cease to exist.  The newly elected Auckland Council will come into existence on the following day: 1 November 2010.

The ATA is tasked with completing the organisational restructuring so that the new Auckland Council can hit the ground running. 

Functions of the ATA 

  • to develop a change management plan that includes protocols and processes to manage the transition of assets and staff to the new Auckland Council

  • to integrate the systems, plans and policies of the existing organisations into a new unitary framework

  • to approve a process for and to oversee the integration of Auckland's water supply and waste water services by Watercare Services Ltd

  • to create the organisational structure and operational arrangements of the Auckland Council.  Nothing is sacred: the Auckland Regional Transport Authority (ARTA) might be subsumed into the Auckland Council, for example

  • to advise the Minister of Local Government on the restructure, including on the second bill as it traverses through the select committee and on a third bill, to be introduced later this year, which will set the detailed legislative framework for the new governance structure

  • to provide information on the re-organisation to the public, the Minister, the local authorities and their staff, and

  • to monitor the existing local authorities and council organisations, their meetings and decisions during the transition period.

The ATA will be able to second staff from the existing workforce and will appoint an interim CEO with tenure to 30 June 2012.  This person will undertake the role as if the Auckland Council were already in existence: employing staff (cherry-picking?) for the Auckland Council and entering contracts on behalf of the Auckland Council.

The appointment will be for a term of at least two years to ensure some continuity between the ATA and the new Council.  The idea is that the interim CEO will do the "negative" work – the redundancies etc – so that the incoming CEO doesn't get tainted with any of this baggage and is able to point the organisation toward a positive future.

Current thinking is that the interim CEO will NOT morph into the permanent CEO.  An international search will be done for that job. 

A Transition Management Group will be established comprising the chief executives of the existing councils, Watercare Services Ltd and Auckland Regional Transport Authority.  This will support the ATA by managing day-to-day business, communicating with staff and managing change processes.   

The ATA will itself be exposed to intense scrutiny.  It will be accountable to Parliament for its performance and will be subject to the Ombudsmen Act, the Official Information Act, the Public Audit Act and the Public Finance Act.

The ATA and the local authorities

The ATA will oversee decisions in relation to existing local authority plans and policies, including the long-term council community plan and financial plans required under the Local Government Act 2002, and will have the power to veto any attempt by the authorities to change these plans.

The local authorities are required to co-operate both with the ATA and with each other to facilitate the amalgamation.  This includes complying with reasonable requests from the ATA to second staff and for information relevant to the restructure.

The decision-making powers of local authorities and their organisations have been severely limited.  They must obtain the ATA's consent before implementing any decision involving expenditure of more than $20,000 and/or which may:

  • prejudice the reorganisation or constrain the powers of the Auckland Council or its subsidiaries

  • have a significant negative impact on the assets or liabilities that will be transferred to the Auckland Council

  • create or acquire shares in a council-controlled organisation

  • adopt or amend a long-term council community plan, a policy under the Local Government Act 2002 or a change to an organisation's statement of intent

  • affect the employment of a chief executive or the appointment or remuneration of a director of a council-controlled organisation, or

  • result in substantial (more than $20,000) and long-term contracts or loans.

It is significant that the oversight role relates to matters originating from the councils.  The capacity of the ATA to initiate matters itself for action within the transition period is limited to those matters that fit the longer-term objectives.

It is also significant that Ports of Auckland has been excluded from these limitations but not Auckland Regional Holdings, Watercare Services Ltd or ARTA.

Comments

The Long-term (10 year) Council Community Plan, the regional infrastructure investment plan and the spatial plan will determine:

  • where critical infrastructure services (water, sewerage, roads) will be located, and

  • the future location and mix of residential, business and industrial activities within specific geographic areas.

The task of developing these plans will be left to the incoming Council.  This, combined with the strictures on council decision-making, could lead to a repetition of the three to four year hiatus which followed the 1989 local government amalgamations.  Jeremy Sole, Chief Executive of the New Zealand Contractors' Federation, commented on this risk in an article in the New Zealand Herald on 18 May 2009, saying infrastructure projects "simply stopped" after 1989 until a works programme was established under the new order.  He suggested a "forward workload planning group" within the ATA.  The ATA's monitoring and informational functions are extensive and will absorb huge amounts of resources.   The threshold for referring decisions "upstairs" to the ATA is very low and will create a lot of work for the ATA.  If the ATA does not have the resources to cope or develop practical guidelines for implementation of its veto power, gridlock may result. 

The Local Government (Auckland Council) Bill

Unlike the first bill, this one will be subject to submissions.  The Bill reflects the Government's response to the recommendations of the Royal Commission on Auckland Governance.  It provides for a 20-member Auckland Council (the Council), 12 elected through wards and eight at large. The Mayor will be responsible for proposing the annual budget to the Council and for developing proposals for the Long-term Community Council Plan.  The Mayor will appoint the Deputy Mayor and the committee chairpersons and will establish and maintain an appropriately staffed Office of the Mayor.  These duties cannot be delegated.

At the second tier, the Bill provides for between 20 and 30 local boards (the final number to be set by the Local Government Commission).  These will be unincorporated and will be unable to acquire, hold or dispose of property or to appoint, suspend or remove employees.  The Auckland Council will provide the administrative facilities, employ the staff, set the budgets and pay the expenses.

The boards will represent and advocate for their residents, make recommendations to the Council regarding matters affecting their area, enable democratic decision-making by and for their communities, facilitate local input into the deliberations of the Council and identify local preferences in relation to matters of predominantly local significance.

They will be required to reach agreement with the Council in respect of service levels, local facilities and funding arrangements; monitor and review the services provided by the Council; consider and report on any matter of interest or concern; and communicate with community organisations and special interest groups.

The Council is explicitly prevented in the Bill from delegating to any of the boards the power to:

  • make a rate (but it can on request from the local board levy locally targeted rates to fund specific investments in local amenities)

  • make a bylaw

  • borrow money, or purchase or dispose of assets other than in accordance with the long-term council community plan

  • adopt a long-term council community plan, annual plan or annual report

  • appoint a chief executive, and

  • adopt policies required to be adopted and consulted on under the Local Government Act in association with the long-term council community plan or developed for the purpose of the local governance statement.

The Local Government Commission is tasked with determining by April next year the names and boundaries for the 12 wards and 20 to 30 local boards, the transfer of assets and responsibilities that will flow from any boundary adjustments and the number of elected members for each board.  There are more wards than boards but generally ward boundaries will not straddle board boundaries.

This Bill is scheduled for report back in September.

Comments

Submissions are likely to focus on the main areas of contention.  These are:

  • whether there should be places at the council table reserved for Māori

  • the mix of ward-based and at-large Councillors

  • whether rural Rodney and Franklin should be lumped in with metropolitan Auckland, and

  • the appropriate role, functions and powers of the second tier of representation.

In addition to these issues, consideration should be given to how we might avoid a repeat of the stasis which occurred after the 1989 local government restructuring.  The purpose of the move to a unitary authority is to make Auckland work better and this will be frustrated if capital and infrastructure developments are put on hold or delayed while the new structure settles in.

The third bill

To be introduced later this year, once the final detail of the second bill is known, the third bill will legislate for the official structure of the Auckland Council.  The ATA will advise the Minister on the proposed organisational design and systems, and on the legislation itself.

Contacts

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