Agenda of Assurance, Risk and Finance Committee Meeting

	Authorising Body	Mayor/Council
	Status	Standing Committee
COUNCIL COMMITTEE	Title	Assurance, Risk and Finance Committee Terms of Reference
	Approval Date	19 December 2019
	Responsible Officer	Chief Executive

Purpose

The purpose of the Assurance, Risk and Finance Committee (the Committee) is to assist and advise the Governing Body in discharging its responsibility and ownership of finance, risk and internal control.

The Committee will review the effectiveness of the following aspects:

· The robustness of financial management practices;

· The integrity and appropriateness of internal and external reports and accountability arrangements;

· The robustness of the risk management framework;

· The robustness of internal controls and the internal audit framework;

· Compliance with applicable laws, regulations, standards and best practice guidelines;

· The establishment and maintenance of controls to safeguard the Council’s financial and non-financial assets;

· Data governance framework

To perform his or her role effectively, each Committee member must develop and maintain

his or her skills and knowledge, including an understanding of the Committee’s responsibilities, and of the Council’s business, operations and risks.

Membership

The Council will determine the membership of the Assurance, Risk and Finance Committee including at least one independent appointment with suitable financial and risk management knowledge and experience.

The Assurance, Risk and Finance Committee will comprise of at least five elected members (one of which will be the chairperson), and one independent appointed member.

Mayor Carter

John Vujcich – Chairperson

Bruce Robertson – Deputy Chairperson and Independent Member of the Committee

Moko Tepania

Mate Radich

Rachel Smith

Kelly Stratford

Ann Court

Mike Edmonds

Adele Gardner

Non-appointed councillors may attend meetings with speaking rights, but not voting rights.

Quorum

The quorum at a meeting of the Assurance, Risk and Finance Committee is 4 members.

Frequency of Meetings

The Assurance, Risk and Finance Committee shall meet every 6 weeks, but may be cancelled if there is no business.

Power to Delegate

The Assurance, Risk and Finance Committee may not delegate any of its responsibilities, duties or powers.

Committees Responsibilities

The Committees responsibilities are described below:

Financial systems and performance of the Council

· Review the Council’s financial and non-financial performance against the Long Term Plan and Annual Plan

· Review Council quarterly financial statements and draft Annual Report

Far North Holdings Limited (FNHL)

· Recommend to Council the approval of statement of intent and Annual Report (s67 LGA)

· Receive 6 monthly report on operations (s66 LGA)

· Receive quarterly financial statements

· Recommend appointment of directors of FNHL

Risk Management

· Review appropriateness of Council’s risk management framework and associated procedures for effective risk identification, evaluation and treatment

· Receive and review risk management dashboard reports

· Provide input, annually, into the setting of the risk management programme of work

· Receive updates on current litigation and legal liabilities

Internal Audit and Controls

· Review whether management has in place a current and comprehensive internal audit framework

· Receive and review the internal audit dashboard reports

· Provide input, annually, into the setting of the internal audit programme of work

· Review whether there are appropriate processes and systems in place to identify and investigate fraudulent behaviour

The Committee will manage Council’s relationship with external auditor.

The Committee will approve applications to declare land abandoned and any other such matters under the Rating Act.

Rules and Procedures

Council’s Standing Orders and Code of Conduct apply to all the committee’s meetings.

Annual reporting

The Chair of the Committee will submit a written report to the Chief Executive on an annual basis. The review will summarise the activities of the Committee and how it has contributed to the Council’s governance and strategic objectives. The Chief Executive will place the report on the next available agenda of the governing body.

ASSURANCE, RISK AND FINANCE COMMITTEE - MEMBERS REGISTER OF INTERESTS

Name	Responsibility (i.e. Chairperson etc)	Declaration of Interests	Nature of Potential Interest	Member's Proposed Management Plan
Hon John Carter QSO	Board Member of the Local Government Protection Programme	Board Member of the Local Government Protection Program
Hon John Carter QSO	Carter Family Trust
John Vujcich (Chair)	Board Member	Pioneer Village	Matters relating to funding and assets	Declare interest and abstain
	Director	Waitukupata Forest Ltd	Potential for council activity to directly affect its assets	Declare interest and abstain
	Director	Rural Service Solutions Ltd	Matters where council regulatory function impact of company services	Declare interest and abstain
	Director	Kaikohe (Rau Marama) Community Trust	Potential funder	Declare interest and abstain
	Partner	MJ & EMJ Vujcich	Matters where council regulatory function impacts on partnership owned assets	Declare interest and abstain
	Member	Kaikohe Rotary Club	Potential funder, or impact on Rotary projects	Declare interest and abstain
	Member	New Zealand Institute of Directors	Potential provider of training to Council	Declare a Conflict of Interest
	Member	Institute of IT Professionals	Unlikely, but possible provider of services to Council	Declare a Conflict of Interest
Bruce Robertson (Deputy)	Chair/Deputy Chair of a number of Audit and Risk Committees: Far North Auckland Bay of Plenty Regional Tauranga Thames Coromandel Hamilton Waipa Otorohanga Waitomo Environment Southland Invercargill Southland.		There is a low level of there being a potential interest conflict. An outside potential is water reform and ‘discussion’ of one north regional water company in loving North AKD with Watercare.	I remain aware of my roiled and will Raise any matter with the Mayor/CEO And chair of ARF should any matter potentially conflict.
	Currently None are North AKD. Previously I have Undertaken work on Okara Park with Whangarei DC.	Advisory Work.	Okara Park is a regional Stadium. Matter solely related Governance and role of DC. Low risk of conflict.
Deputy Mayor Ann Court	Waipapa Business Association	Member		Case by case
	Warren Pattinson Limited	Shareholder	Building company. FNDC is a regulator and enforcer	Case by case
	Kerikeri Irrigation	Supplies my water		No
	Top Energy	Supplies my power		No other interest greater than the publics
	District Licensing	N/A	N/A	N/A
	Top Energy Consumer Trust	Trustee	Crossover in regulatory functions, consenting economic development and contracts such as street lighting.	Declare interest and abstain from voting.
	Ann Court Trust	Private	Private	N/A
	Waipapa Rotary	Honorary member	Potential community funding submitter	Declare interest and abstain from voting.
	Properties on Onekura Road, Waipapa	Owner Shareholder	Any proposed FNDC Capital works or policy change which may have a direct impact (positive/adverse)	Declare interest and abstain from voting.
	Property on Daroux Dr, Waipapa	Financial interest	Any proposed FNDC Capital works or policy change which may have a direct impact (positive/adverse)	Declare interest and abstain from voting.
	Flowers and gifts	Ratepayer 'Thankyou'	Bias/ Pre-determination?	Declare to Governance
	Coffee and food	Ratepayers sometimes 'shout' food and beverage	Bias or pre-determination	Case by case
	Staff	N/A	Suggestion of not being impartial or pre-determined!	Be professional, due diligence, weigh the evidence. Be thorough, thoughtful, considered impartial and balanced. Be fair.
	Warren Pattinson	My husband is a builder and may do work for Council staff		Case by case
Ann Court - Partner	Warren Pattinson Limited	Director	Building Company. FNDC is a regulator	Remain at arm’s length
	Air NZ	Shareholder	None	None
	Warren Pattinson Limited	Builder	FNDC is the consent authority, regulator and enforcer.	Apply arm’s length rules
	Property on Onekura Road, Waipapa	Owner	Any proposed FNDC capital work in the vicinity or rural plan change. Maybe a link to policy development.	Would not submit. Rest on a case by case basis.
Mate Radich	No form received
Kelly Stratford	KS Bookkeeping and Administration	Business Owner, provides book keeping, administration and development of environmental management plans	None perceived	Step aside from decisions that arise, that may have conflicts
	Waikare Marae Trustees	Trustee	Maybe perceived conflicts	Case by case basis
	Bay of Islands College	Parent Elected Trustee	None perceived	If there was a conflict, I will step aside from decision making
	Karetu School	Parent Elected Trustee	None perceived	If there was a conflict, I will step aside from decision making
	Māori title land – Moerewa and Waikare	Beneficiary and husband is a shareholder	None perceived	If there was a conflict, I will step aside from decision making
	Sister is employed by Far North District Council			Will not discuss work/governance mattes that are confidential
	Gifts - food and beverages	Residents and ratepayers may ‘shout’ food and beverage	Perceived bias or predetermination	Case by case basis
	Taumarere Counselling Services	Advisory Board Member	May be perceived conflicts	Should conflict arise, step aside from voting
	Sport Northland	Board Member	May be perceived conflicts	Should conflict arise, step aside from voting
Kelly Stratford - Partner	Chef and Barista	Opua Store	None perceived
Kelly Stratford - Partner	Māori title land – Moerewa	Shareholder	None perceived	If there was a conflict of interest, I would step aside from decision making
Rachel Smith	Friends of Rolands Wood Charitable Trust	Trustee
	Mid North Family Support	Trustee
	Property Owner	Kerikeri
	Friends who work at Far North District Council
	Kerikeri Cruising Club	Subscription Member
Rachel Smith (Partner)	Property Owner	Kerikeri
	Friends who work at Far North District Council
	Kerikeri Cruising Club	Subscription Member and Treasurer
Moko Tepania	Teacher	Te Kura Kaupapa Māori o Kaikohe.	Potential Council funding that will benefit my place of employment.	Declare a perceived conflict
	Chairperson	Te Reo o Te Tai Tokerau Trust.	Potential Council funding for events that this trust runs.	Declare a perceived conflict
	Tribal Member	Te Rūnanga o Te Rarawa	As a descendent of Te Rarawa I could have a perceived conflict of interest in Te Rarawa Council relations.	Declare a perceived conflict
	Tribal Member	Te Rūnanga o Whaingaroa	As a descendent of Te Rūnanga o Whaingaroa I could have a perceived conflict of interest in Te Rūnanga o Whaingaroa Council relations.	Declare a perceived conflict
	Tribal Member	Kahukuraariki Trust Board	As a descendent of Kahukuraariki Trust Board I could have a perceived conflict of interest in Kahukuraariki Trust Board Council relations.	Declare a perceived conflict
	Tribal Member	Te Rūnanga ā-Iwi o Ngāpuhi	As a descendent of Te Rūnanga ā-Iwi o Ngāpuhi I could have a perceived conflict of interest in Te Rūnanga ā-Iwi o Ngāpuhi Council relations.	Declare a perceived conflict
Mike Edmonds	Chair	Kaikohe Mechanical and Historic Trust	Council Funding	Decide at the time
Mike Edmonds	Committee member	Kaikohe Rugby Football and Sports Club	Council Funding	Withdraw and abstain

Assurance, Risk and Finance Committee Meeting Agenda

24 March 2021

MINUTES OF Far North District Council
Assurance, Risk and Finance Committee Meeting
HELD AT THE Council Chamber, Memorial Avenue, Kaikohe
ON Wednesday, 10 February 2021 AT 1.00 pm

PRESENT: Cr John Vujcich, Member Bruce Robertson, Cr Rachel Smith, Cr Kelly Stratford, Kaikohe-Hokianga Community Board Chairperson Mike Edmonds

IN ATTENDANCE: Janice Smith (General Manager Corporate Services - Acting), William J Taylor, MBE (General Manager Strategic Planning and Policy - Acting), Andy Finch (General Manager Infrastructure and Asset Management), Dean Myburgh (General Manager District Services)

1 Karakia TimatAnga – Opening Prayer

Chair John Vujcich started the meeting with a karakia.

2 Apologies and Declarations of Interest

Resolution 2021/1

Moved: Cr John Vujcich

Seconded: Member Bruce Robertson

That the apologies from His Worship the Mayor John Carter, Deputy Mayor Ann Court, Councillor Moko Tepania be accepted.

Carried

3 Deputation

No deputations for this meeting.

4 Confirmation of Previous Minutes

4.1 Confirmation of Previous Minutes

Agenda item 4.1 document number A3051523, pages 12 - 18 refers.

Resolution 2021/2

Moved: Cr John Vujcich

Seconded: Member Bruce Robertson

Recommendation

That the Assurance, Risk and Finance Committee confirms the minutes of the Assurance, Risk and Finance Committee meeting held 2 December 2020 as a true and correct record.

Carried

5 Reports

5.1 Update of Policy - Appointment of Directors to Council Organisations

Agenda item 5.1 document number A3058464, pages 19 - 23 refers.

Recommendation

Moved: Cr John Vujcich

Seconded: Cr Kelly Stratford

That the Assurance, Risk and Finance Committee recommend to Council that the updated Policy 2117 – Appointment and Remuneration of Directors for Council Organisations be approved.

AMENDMENT

Moved: Cr John Vujcich

Seconded: Member Bruce Robertson

That the Assurance, Risk and Finance Committee recommend to Council:

a) the updated Policy 2117 – Appointment and Remuneration of Directors for Council Organisations be approved, subject to;

b) the Chair of Assurance, Risk and Finance Committee and Chair of Strategy and Policy Committee have delegated authority to approve the amendments on an updated policy.

The amendment became the substantive motion.

MOTION 2021/3

Moved: Cr John Vujcich

Seconded: Member Bruce Robertson

That the Assurance, Risk and Finance Committee recommend to Council:

a) the updated Policy 2117 – Appointment and Remuneration of Directors for Council Organisations be approved, subject to;

b) the Chair of Assurance, Risk and Finance Committee and Chair of Strategy and Policy Committee have delegated authority to approve the amendments on an updated policy.

Carried

5.2 Recommendation to remove ARF002 Building Consents – BCA status risk from the organisational risk dashboard

Agenda item 5.2 document number A3047645, pages 24 - 27 refers.

Resolution 2021/4

Moved: Cr Kelly Stratford

Seconded: Cr Rachel Smith

That the Assurance, Risk and Finance Committee approves the removal of ARF002 Building Consents – BCA status risk from the organisational risk dashboard.

Carried

6 Information Reports

6.1 February 2021 Risk Management Report

Agenda item 6.1 document number A3053831, pages 28 - 41 refers.

Resolution 2021/5

Moved: Cr Kelly Stratford

Seconded: Member Bruce Robertson

That the Assurance, Risk and Finance Committee receive the report February 2021 Risk Management Report.

Carried

6.2 2021-02-10 Revenue Recovery report

Agenda item 6.2 document number A3067425, pages 42 - 47 refers.

Resolution 2021/6

Moved: Cr Kelly Stratford

Seconded: Member Bruce Robertson

That the Assurance, Risk and Finance Committee receive the report 2021-02-10 Revenue Recovery report 2021-02-10.

Carried

At 2:03 pm, Cr Kelly Stratford left the meeting.

At 2:05 pm, Cr Kelly Stratford returned to the meeting.

6.3 Elected Member Sensitive Expenditure

Agenda item 6.3 document number A3014973, pages 48 - 49 refers.

Resolution 2021/7

Moved: Kaikohe-Hokianga Community Board Chairperson Mike Edmonds

Seconded: Member Bruce Robertson

That the Assurance, Risk and Finance Committee receive the report Elected Member Sensitive Expenditure.

Carried

6.4 Level of Service KPI Quarter 2 Performance Report

Agenda item 6.4 document number A3066072, pages 50 - 72 refers.

Resolution 2021/8

Moved: Member Bruce Robertson

Seconded: Cr Kelly Stratford

That the Assurance, Risk and Finance Committee receive the report Level of Service KPI Quarter 2 Performance Report.

Carried

6.5 Digital Information Services - 2021 Work Programme

Agenda item 6.5 document number A3059539, pages 73 - 76 refers.

Recommendation

Moved: Cr Kelly Stratford

Seconded: Cr Rachel Smith

That the Assurance, Risk and Finance Committee receive the report Digital Information Services - 2021 Work Programme.

Carried

At 2:48 pm, Kaikohe-Hokianga Community Board Chairperson Mike Edmonds left the meeting.

At 2:50 pm, Kaikohe-Hokianga Community Board Chairperson Mike Edmonds returned to the meeting.

6.6 Sustainable Procurement Update

Agenda item 6.6 document number A3062233, pages 77 - 78 refers.

Resolution 2021/9

Moved: Cr John Vujcich

Seconded: Member Bruce Robertson

That the Assurance, Risk and Finance Committee receive the report Sustainable Procurement Update.

Carried

6.7 Tender Panel Quarterly Information Report September - December 2020

Agenda item 6.7 document number A3063064, pages 79 - 85 refers.

Resolution 2021/10

Moved: Member Bruce Robertson

Seconded: Cr John Vujcich

That the Assurance, Risk and Finance Committee receive the report Tender Panel Quarterly Information Report.

Carried

7.0 RESOLUTION TO EXCLUDE THE PUBLIC

Resolution 2020/11

Moved: Cr John Vujcich

Seconded: Member Bruce Robertson

That the public be excluded from the following parts of the proceedings of this meeting.

The general subject matter of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48 of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Ground(s) under section 48 for the passing of this resolution

1.1 - Confirmation of Previous Minutes

s7(2)(h) - the withholding of the information is necessary to enable Council to carry out, without prejudice or disadvantage, commercial activities

s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7

1.2 - Re-appointment of Directors for Far North Holdings Limited

s7(2)(a) the withholding of the information is necessary to protect the privacy of natural persons, including that of deceased natural persons

s7(2)(f)(i) free and frank expression of opinions by or between or to members or officers or employees of any local authority.

Abstained: Cr Rachel Smith

Carried

7.1 CONFIRMATION OF INFORMATION AND DECISIONS IN OPEN MEETING

Resolution 2021/12

Moved: Cr John Vujcich

Seconded: Cr Kelly Stratford

That Assurance, Risk and Finance Committee confirm that the information and decisions contained in the part of the meeting held with the public excluded is not to be restated in public meeting.

Abstained: Cr Rachel Smith

Carried

7.2 RESOLUTION TO READMIT THE PUBLIC

Recommendation 2021/13

Moved: Cr John Vujcich

Seconded: Cr Kelly Stratford

That Assurance, Risk and Finance Committee readmit the public.

Abstained: Cr Rachel Smith

Carried

At 3:45 pm, Cr Rachel Smith returned to the meeting.

8 Karakia Whakamutunga – Closing Prayer

Cr. Kelly Stratford closed the meeting with a karakia.

9 Meeting Close

The meeting closed at 3:46 pm.

The minutes of this meeting were confirmed at the Assurance, Risk and Finance Committee Meeting held on 24 March 2021.

...................................................

CHAIRPERSON

Assurance, Risk and Finance Committee Meeting Agenda

24 March 2021

5 Reports

5.1 Recommendation to Remove ARF011 Organisational Cohesion Risk from the Organisational Risk Dashboard

File Number: A3110274

Author: Tanya Reid, Business Improvement Specialist

Authoriser: Jaime Dyhrberg, General Manager - Corporate Services (Acting)

Te Take Pūrongo / Purpose of the Report

To seek to approve the removal of ARF011 Organisational Cohesion risk from the organisational risk dashboard.

Te WhakarĀpopoto matua / Executive Summary

· ARF011 Organisational Cohesion risk is an organisational risk in the Operational/Financial category (whole of business view of the Council) performance including service/services delivery, risk, finance, environmental.

· Of the 12 risks adopted in May 2019 the ARF011 Organisational Cohesion was the second lowest priority risk with a medium impact score of 39.

· A comprehensive treatment plan has been implemented. Improvements from the treatments are now being experienced and the risk trend continues to decline in line with the desired residual risk score of 14.

· With a total residual impact score of 15, this risk is now assessed as low impact and unlikely to occur.

A recommendation to demote ARF011 Organisational Cohesion Risk from the organisational risk dashboard is supported by the total risk score and probability, and the controls in place.

ngĀ tŪtohunga / Recommendation

That the Assurance, Risk and Finance Committee approves the removal of ARF011 Organisational Cohesion risk from the organisational risk dashboard.

1) te TĀhuhu kŌrero / Background

In November 2018, elected members workshopped and agreed their top organisational risk dashboard. The top organisational risk dashboard was adopted 30^th May 2019. Of the 12 risks originally on their risk dashboard the ARF011 Organisational Cohesion Risk was the second lowest priority risk with a medium impact score of 39.

Table 1: November 2018 ARF011 Organisational Cohesion Risk description and scoring

Description of risk and impact

Organisational Cohesion is the ability of the parts of the organisation to work together in a collaborative and productive manner to deliver on its strategies, plans and objectives.

Local Government organisations work on complex, costly, and often politically and socially sensitively multi-faceted issues requiring multiple parts of the organisation to work together effectively.

Breakdowns in cohesion can lead to costly delays and additional impacts such as communication overheads, lower morale, trust and churn.

In 2018, FNDC Council members and management acknowledged challenges in the working relationship between governance and management layers.

At that point while progress had been made to improve the challenges the following issues were being experienced:

• Delays in decisions due to papers being left to lie on the table

• Conduct and criticisms during Council meetings

• Sub-optimal cohesion between Council members

• Governance over-reach

• Information security

• Governance and other support resources not being utilized in their full capacity

• Requirement for controlled or restricted access to staff members

• Attendance levels at training and other events

• Not always following agreed or required processes

2) Te matapaki me NgĀ KŌwhiringa / Discussion and Options

Both elected members, including those newly elected to Council in October 2019, and staff acknowledged these challenges and have worked together to improve the relationship resulting in a more efficient and effective Council.

Improvements from the treatments are now being experienced and the risk trend continues to decline in line with the desired residual risk score of 14. Treatments in place include:

• Comprehensive induction and professional development programmes are in place to support elected members.

• A professional development plan has been developed for the Mayor and each elected member. These are informed by the results of an external competency assessment.

• A reporting framework is in place, to increase the quality of information to elected members and ensure relevant information to support decision-making processes is provided, and to verify organisational performance.

• Staff regularly schedule workshops to explain proposals and answer questions from elected members prior to formal meetings and decisions. Positive feedback has been received on this, especially by less experienced elected members.

• Regular communication between the organisation and elected members such as daily CEO briefing between the Mayor and Deputy Mayor; weekly Weekender newsletter published Friday to provide elected members information and up-dates on current projects which enables them to be abreast of Council current affairs; scripts from CEO staff videos are shared with elected members so they are aware of what is happening operationally; Councillors are actively involved in working groups e.g. Kerikeri Domain.

• Establishment of a virtual elected member lounge to facilitate elected member interaction. This has been used to provide draft feedback on the Long Term Plan

• Development of a dedicated physical space for elected member use in Kaikohe HQ and John Butler Centre.

• Staff conducted a survey, in 2020, to seek feedback from elected members as to their satisfaction on the quality of advice from staff. A total of two responses were received, indicating that this is no longer a “burning platform”.

• Progress is being made on establishing pre-agenda meetings between the Committee Chair and the executive sponsor of the Committee.

• Council pre-agenda meetings happen with SLT and Democracy Services who run through the agenda and the proposed resolutions. Progress is also being made on the Chief Executive briefing the Mayor on upcoming papers and proposed resolutions.

Our recent November 2020 CouncilMARK assessment (currently draft) observed that:

“Overall leadership of the Council is provided by a highly experienced Mayor who has over thirty years of public service. There is a good mix of youth and passion, as well as experience and wisdom amongst the elected members, and they seem to work well together and be united as a group.

The Mayor and Chief Executive have a strong relationship. They meet every week to discuss topical operational and strategic matters, and emerging issues. The Chief Executive’s and Council’s performance is also regularly discussed. They debate issues, sometimes vigorously, and, from time to time, they agree to disagree. However, the Mayor and Chief Executive stand united in public.

The Chief Executive is respected by the Mayor, elected members, and staff as a strong and capable leader who has embraced an inclusive style of leadership since arriving at Far North District Council. A comprehensive performance agreement and a structured professional development plan are in place for the Chief Executive. Key performance indicators are aligned with agreed Council priorities.”

CouncilMARK called out the following strengths in the Governance, leadership and strategy quadrant:

· Council leaders show strong intent to lift Council performance, to meet service level expectations and well-being outcomes.

· The Mayor and Chief Executive are experienced and respected leaders.

· A high level of commitment and engagement is apparent amongst the elected members, especially the first term members.

Te Take Tūtohunga / Reason for the recommendation

A recommendation to demote ARF011 Organisational Cohesion Risk from the organisational risk dashboard is supported by the total risk score and probability, and controls in place.

In January 2021, ARF011 Organisational Cohesion Risk was rescored using the FNDC risk matrix. The rescoring is captured in Table 2.

Assessment of risk, impact and likelihood

Table 2: Jan 2021 ARF011 Organisational Cohesion Risk impact score using FNDC matrix:

Financial

Customer

Reputational

Compliance/Legal

Health and Safety

High - Intolerable

Medium

Low- none

Unlikely

Probable

Will Happen

Unlikely

Probable

Will Happen

Unlikely

Probable

Will Happen

Unlikely

Probable

Will Happen

Unlikely

Probable

Will Happen

ARF011 Organisational Cohesion Risk is an organisational risk in the Operational/Financial category (whole of business view of FNDC performance including service/services delivery, risk, finance, environmental). Organisational risks may impact on council achieving its vision, mission and community outcomes. With a total residual impact score of 15 this risk is now assessed as low impact and unlikely to occur, see table 3.

Table 3: ARF011 Organisational Cohesion Risk map as assessed January 2021

	Total Risk
High - Intolerable
Medium
Low- none	x
	Unlikely	Probable	Will Happen

This reduction in risk score has been achieved through proactive changes and controls. Current ARF011 Organisational Cohesion Risk controls in place are:

1. CEO Group Risk Register: continue risk management via the CEO Office Risk Register, see table 4: Definition of risk from CEO Office Risk Register.

2. Elected member induction and professional development programme.

3. Individual elected member professional development plans.

4. Reporting framework.

5. Elected member workshops for staff to explain proposals and answer questions.

6. Regular communication between the organisation and elected members.

7. Virtual elected member lounge.

8. Dedicated space for elected member use in Kaikohe HQ and JBC.

9. Pre-agenda meetings between the Committee Chair and the Committee executive sponsor.

10. SLT Council pre-agenda meetings.

Table 4: Definition of risk from CEO Office Risk Register:

Group / SLT	Risk level	Inherent Risk	Risk description	Because of	There is a chance that…	leading to…


CEO Office	Organisational	15	Operational/Financial	Complex, costly and often politically and socially sensitive multi-faceted issues.	If we do not have organisational cohesion (ability to work together in a collaborative and productive way) because of suboptimal relationships between staff and Elected members.	Council may be unable to deliver to Elective Member strategic priorities, plans and objectives.

3) NgĀ PĀnga PŪtea me ngĀ wĀhanga tahua / Financial Implications and Budgetary Provision

There is no financial implication or request for budgetary provision.

ngĀ Āpitihanga / Attachments

Nil

Te Hōtaka Take Ōkawa / Compliance schedule:

Full consideration has been given to the provisions of the Local Government Act 2002 S77 in relation to decision making, in particular:

1. A Local authority must, in the course of the decision-making process,

a) Seek to identify all reasonably practicable options for the achievement of the objective of a decision; and

b) Assess the options in terms of their advantages and disadvantages; and

c) If any of the options identified under paragraph (a) involves a significant decision in relation to land or a body of water, take into account the relationship of Māori and their culture and traditions with their ancestral land, water sites, waahi tapu, valued flora and fauna and other taonga.

2. This section is subject to Section 79 - Compliance with procedures in relation to decisions.

He Take Ōkawa / Compliance requirement	Te Aromatawai Kaimahi / Staff assessment
State the level of significance (high or low) of the issue or proposal as determined by the Council’s Significance and Engagement Policy	The recommendation in this report does not meet the thresholds as per the Council’s significance and engagement policy.
State the relevant Council policies (external or internal), legislation, and/or community outcomes (as stated in the LTP) that relate to this decision.	Risk Management Policy.
State whether this issue or proposal has a District wide relevance and, if not, the ways in which the appropriate Community Board’s views have been sought.	None.
State the possible implications for Māori and how Māori have been provided with an opportunity to contribute to decision making if this decision is significant and relates to land and/or any body of water.	The recommendation in this report does not have any direct implications for Māori.
Identify persons likely to be affected by or have an interest in the matter, and how you have given consideration to their views or preferences (for example – youth, the aged and those with disabilities).	There are no affected or interested parties to this recommendation.
State the financial implications and where budgetary provisions have been made to support this decision.	There is no financial implication or request for budgetary provision.
Chief Financial Officer review.	The Chief Financial Officer has reviewed this report.

Highlights:

New Works

· The East Coast WWTP Resource Consent is under budget - the consent has been appealed to the environment court and Council is working towards mediation which has been significantly delayed due to COVID-19 and conflicting schedules between stakeholders.

· The Paihia Treatment Plant Improvements project is under budget, it is currently in design phase for a recirculation system which will enhance and prolong the lifespan of the new plant, commitments have been raised.

· District wide sludge management is under budget. Sludge work has been delayed due to lack of resourcing and COVID-19. Work is ongoing and commitments have been raised.

· The Houhora Wastewater Treatment Plant, the Council approved project is under budget to replace sand and treatment tank. The sand has now been replaced but there has been a delay with the tank.

· Planned Provincial Growth Funds (PGF) road sealing projects commenced at Ruapekapeka. Ngapipito and Peria Road.

· Panguru Rd raising project stage 1 has now been completed and a proposed stage 2 is yet to be done, offset by the Infill Lighting project which is behind programme due to lengthy negotiations and approval of the tender phase, however the contract is now essentially approved and ready to start construction.

· Pungaere Road project has experienced some delays in the investigation and design as a result of negotiations with a resident over drainage issues, a managed cattle underpass is to be installed before road construction commences.

· Kaitaia New Source (Sweetwater) is behind budget for a number of reasons but funds are fully committed. Due to the delay in the contract being awarded this will result in an underspend this financial year however, the DIA grant funds of $1.7M have been received.

· Unbudgeted purchase of the Kaitaia Warehouse property in support of the Te Hiku revitalisation project.

· Kerikeri Wastewater Treatment Plant has gone over budget, a final subsidy will be applied for to partially offset this.

· Ongoing unbudgeted Tourism Infrastructure Funds (TIF) received from Ministry of Business, Innovation & Employment (MBIE) for the construction of public toilets at Opononi, Mitimiti, Waitangi boat ramp and Haruru Falls bush walk.

o Mitimiti has been completed.

o Other projects were delayed. Construction commenced in November 2020 at the Opononi I-Site public toilets.

o Consent for the Waitangi boat ramp public toilets has been approved and the tender process has commenced.

o Tender has been awarded for the Haruru Falls public toilets after changing the scope and design to include more natural light as the cost of getting the power to the site was too excessive.

· The Centennial/Jaycee Park project works for construction of the basketball court and footpath completed in February 2021. Planting works are expected to commence in April after finalising the award of the contract.

· Te Hiku Sports Netball Court project will go back out for tender due to lack of interest, however, if awarded the construction is likely to commence in the next financial year.

Renewals

· Kerikeri Wastewater Treatment Plant is under budget. The commissioning phase of the plant will run until the end of November at which time connections will commence and be completed by May 2021 with close out expected in June 2021.

· Emergency Works awarded tenders have come under budget due to competitive pricing.

· Sealed road resurfacing and rehabilitation are behind schedule as contractor resources were reprioritised to undertake repairs for the July 2020 storm event. The North sealing is 56% complete and South sealing is at 76% complete and still behind their planned programme due to short supply of sealing aggregate. Both contractors will be increasing resources in the coming months to complete the programme by mid-Autumn.

· Rehabilitation works on 5 out of the 7 sites are complete for both the North and South contracts and have been progressing steadily, however due to the inability to complete prior year works this has delayed the programme but NTA and the contractors are confident to delivery by mid-Autumn.

· Ferry renewal scope and works are reduced due to long lead time to get the jet pump into the country.

· Safety improvement, bridge and resilience projects across district has not commenced as planned, however. procurement and awarded contracts are being finalised.

· Unsealed Road Metalling is ahead of schedule due to the suitable weather conditions.

Unbudgeted Expenditure

These are additional works not included in the original budget for the current year.

Unbudgeted work greater than $100,000 must be approved by Council, anything less than that can be approved by a General Manager with appropriate financial delegation.

Unbudgeted Expenditure
*Expenditure over $100K approved by Council (in grey)

Unbudgeted Operational		Amount
Facilities operations - not buildings	Professional Fees	150,000
Maritime Facilities	External Services	30,000
Public Toilets	Repairs & Maintenance Buildings	6,400
		186,400


Unbudgeted Capital Works		Amount
Te Hiku o te Ika - PGF	CAPEX New Works Contract Services	7,000,000
Kerikeri Domain - PGF	CAPEX New Works Contract Services	3,000,000
Waipapa Sports Hub - PGF	CAPEX New Works Contract Services	2,000,000
Hokianga Harbour Coastal Repairs	CAPEX New Works Contract Services	1,815,000
Kaitaia New Source (Sweetwater) - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	1,754,000
Monument Hill Drought Impact - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	1,184,000
Dog Pound Southern	CAPEX New Works Contract Services	1,000,000
Lake Omapere (PGF)	External Services	500,000
Kerikeri WTP New Clarifiers - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	500,000
Water main renewals - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	330,000
Windsor Landing Carpark and Access Road	CAPEX New Works Contract Services	291,195
Network model updates - Stormwater - 3 Waters Reform	3 Waters Reform - Professional Fees	250,000
Network model updates - Wastewater - 3 Waters Reform	3 Waters Reform - Professional Fees	250,000
Network model updates - Water - 3 Waters Reform	3 Waters Reform - Professional Fees	250,000
Enhanced water leak repairs - 3 Waters Reform	3 Waters Reform - Professional Fees	200,000
Ex res chlorine measurements - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	200,000
Awanui River Intake Permanent Weir - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	150,000
Kotui Library Licence/Subscription System	Software Licence Fees	137,863
WWTP Wetland remedial works - 3 Waters Reform	3 Waters Reform - Professional Fees	130,000
Water Safety Plan updates - 3 Waters Reform	3 Waters Reform - Professional Fees	130,000
Houhora WWTP	CAPEX New Works Contract Services	112,000
Rangitane Maritime Boat Ramp	CAPEX Renewal Works Contract Services	111,925
Structural works Kawakawa WTP	CAPEX New Works Contract Services	109,051
Paihia WTP Self-Cleaning Screen - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	100,000
District Wide Leak Detection Equipment - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	100,000
Okaihau Bore Refurbishment - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	100,000
Hundertwasser toilet upgrade	CAPEX Renewal Works Contract Services	82,000
Kawakawa Water Take Consent - 3 Waters Reform	3 Waters Reform - CAPEX New Works Contract Services	70,000
Water Safety Lead - 3 Waters Reform	3 Waters Reform - OPEX Salaries	50,000
East Coast PS Bush Point Rd	CAPEX New Works Contract Services	49,942
Kawakawa WTP Roof Replacement	CAPEX New Works Contract Services	47,366
Kaikohe Streetscape Project	CAPEX New Works Contract Services	40,000
East Coast PS Leslie Rd	CAPEX New Works Contract Services	38,000
Kerikeri Wastewater Infrastructre	CAPEX New Works Contract Services	31,836
Regional Allocation - Wastewater - 3 Waters Reform	3 Waters Reform - Professional Fees	24,000
Regional Allocation - Stormwater - 3 Waters Reform	3 Waters Reform - Professional Fees	23,000
Regional Allocation - Water - 3 Waters Reform	3 Waters Reform - Professional Fees	23,000
60 Peninsula Parade Hihi Sewer Connection	CAPEX New Works Contract Services	22,387
Network Model review lead - Stormwater- 3 Waters Reform	3 Waters Reform - Professional Fees	17,000
Network Model review lead - Wastewater - 3 Waters Reform	3 Waters Reform - Professional Fees	16,500
Network Model review lead - Water - 3 Waters Reform	3 Waters Reform - Professional Fees	16,500
Opononi/Omapere WTP pH Treatment	CAPEX New Works Contract Services	15,000
Kerikeri Wastewater Infrastructre	Equipment Purchases (uncapitalisable)	13,827
Mitimiti Toilet (TIF)	CAPEX New Works Contract Services	13,000
Proof of concept - new ways of working	External Services	12,788
Te Hononga CCTV - Hundertwasser	CAPEX New Works Contract Services	12,000
Rawene Housing for the Elderly	CAPEX Renewal Works Contract Services	11,836
Operational Data Management Software - 3 Waters Reform	3 Waters Reform - Professional Fees	10,000
Operational Data Management Software - 3 Waters Reform	3 Waters Reform - Professional Fees	10,000
Operational Data Management Software - 3 Waters Reform	3 Waters Reform - Professional Fees	10,000
Rawene Hall	CAPEX Renewal Works Contract Services	4,110
Operational Data Management Software - 3 Waters Reform	Grants Operational	-10,000
Operational Data Management Software - 3 Waters Reform	Grants Operational	-10,000
Operational Data Management Software - 3 Waters Reform	Grants Operational	-10,000
Network Model review lead - Wastewater - 3 Waters Reform	Grants Operational	-16,500
Network Model review lead - Water - 3 Waters Reform	Grants Operational	-16,500
Network Model review lead - Stormwater- 3 Waters Reform	Grants Operational	-17,000
Regional Allocation - Stormwater - 3 Waters Reform	Grants Operational	-23,000
Regional Allocation - Water - 3 Waters Reform	Grants Operational	-23,000
Regional Allocation - Wastewater - 3 Waters Reform	Grants Operational	-24,000
Water Safety Lead - 3 Waters Reform	Grants Operational	-50,000
Kawakawa Water Take Consent - 3 Waters Reform	Grants Capital	-70,000
Paihia WTP Self-Cleaning Screen - 3 Waters Reform	Grants Capital	-100,000
District Wide Leak Detection Equipment - 3 Waters Reform	Grants Capital	-100,000
Okaihau Bore Refurbishment - 3 Waters Reform	Grants Capital	-100,000
WWTP Wetland remedial works - 3 Waters Reform	Grants Operational	-130,000
Water Safety Plan updates - 3 Waters Reform	Grants Operational	-130,000
Awanui River Intake Permanent Weir - 3 Waters Reform	Grants Capital	-150,000
Enhanced water leak repairs - 3 Waters Reform	Grants Operational	-200,000
Ex res chlorine measurements - 3 Waters Reform	Grants Capital	-200,000
Network model updates - Stormwater - 3 Waters Reform	Grants Operational	-250,000
Network model updates - Wastewater - 3 Waters Reform	Grants Operational	-250,000
Network model updates - Water - 3 Waters Reform	Grants Operational	-250,000
Water main renewals - 3 Waters Reform	Grants Capital	-330,000
Lake Omapere (PGF)	Grants Operational	-500,000
Kerikeri WTP New Clarifiers - 3 Waters Reform	Grants Capital	-500,000
Dog Pound Southern	Grants Capital	-1,000,000
Monument Hill Drought Impact - 3 Waters Reform	Grants Capital	-1,184,000
Kaitaia New Source (Sweetwater) - 3 Waters Reform	Grants Capital	-1,754,000
Hokianga Harbour Coastal Repairs	Subsidy New Works	-1,815,000
Waipapa Sports Hub - PGF	Grants Capital	-2,000,000
Kerikeri Domain - PGF	Grants Capital	-3,000,000
Te Hiku o te Ika - PGF	Grants Capital	-7,000,000
		1,156,126

Unbudgeted Roading		Amount
Ngapipito Road - PGF	CAPEX New Works Contract Services	6,850,000
Peria Road - PGF	CAPEX New Works Contract Services	6,446,000
Ruapekapeka Road - PGF	CAPEX New Works Contract Services	6,133,000
District Wide Storm Response & Mitigation - MBIE	CAPEX Renewal Works Contract Services	699,529
Kawakawa Safety and Streetscape Improvement Project	External Services	474,375
Peria Road - PGF	CAPEX New Works Professional Fees	400,000
District Wide Storm Response & Mitigation - MBIE	External Services	250,000
Peria Road - PGF	External Services	204,000
Ruapekapeka Road - PGF	CAPEX New Works Professional Fees	200,000
Ngapipito Road - PGF	CAPEX New Works Professional Fees	140,000
Moerewa Safe Streets - Innovating Streets	External Services	126,500
Ruapekapeka Road - PGF	External Services	117,000
Tai Tokerau Kaikohe Safe Streets - Innovating Streets	External Services	111,550
Ngapipito Road - PGF	External Services	60,000
Ruapekapeka Road - PGF	Professional Fees PSU New Works	50,000
Ngapipito Road - PGF	Professional Fees PSU New Works	50,000
Peria Road - PGF	Professional Fees PSU New Works	50,000
Moerewa Drainage Works - MBIE	CAPEX Renewal Works Contract Services	29,187
Moerewa Drainage Works - MBIE	External Services	20,914
Moerewa Drainage Works - MBIE	Grants Operational	-20,914
Moerewa Drainage Works - MBIE	Grants Capital	-29,187
Ngapipito Road - PGF	Grants Operational	-60,000
Ruapekapeka Road - PGF	Grants Operational	-117,000
Peria Road - PGF	Grants Operational	-204,000
District Wide Storm Response & Mitigation - MBIE	Grants Operational	-250,000
District Wide Storm Response & Mitigation - MBIE	Grants Capital	-699,529
Ruapekapeka Road - PGF	Grants Capital	-6,383,000
Peria Road - PGF	Grants Capital	-6,896,000
Ngapipito Road - PGF	Grants Capital	-7,040,000
		712,425

		2,054,951

Budget Movements

These are budgets timed in future years, brought forward into the current year (positive values) OR budgets timed in the current year to be moved out to future years (negative values).

The figures that follow exclude the $5M Roading budget adjustment moved out to future years to reflect the lower of FNDC or NZTA budget.

Budget Movements

General Ledger	Comment	Amount
Infrastructure & Asset Management Operations	TIF funding applications wrongly classified as Capex in EB	1,100,000
Pou Herenga Tai Cycle Trail NZ Heritage	Cycletrail MBIE grant July 2020 storm event	241,000
Community Board Operations	Opex budget savings 2020-2021 Corporate Services	-349
Internal Control & Risk Management	Opex budget savings 2020-2021 Corporate Services	-2,000
Community Board Operations	Opex budget savings 2020-2021 Corporate Services	-5,000
Community Board Operations	Opex budget savings 2020-2021 Corporate Services	-5,000
Council Advisory Services	Opex budget savings 2020-2021 Corporate Services	-5,220
Internal Control & Risk Management	Opex budget savings 2020-2021 Corporate Services	-12,000
Pou Herenga Tai Cycle Trail NZ Heritage	Cycletrail MBIE grant July 2020 storm event	-241,000
		1,070,431

Project Ledger	Comment	Amount
Kaikohe Footpath Signal Station Rd, Omapere - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	300,700
Footpaths Northern Ward	Reforecast NZTA Subsidy to gross up for CB New Footpath projects	205,573
Hokianga Harbour Coastal Repairs	Hokianga Harbour Coastal Repairs Correction of budget & forecast	200,000
Tree Management Eastern Ward	Te Tai Tokerau Worker Redeployment Packa age for Vegetation Clearance & Clean Ups	150,000
Length of Blacks Road - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	110,000
Footpaths Eastern Ward	Reforecast NZTA Subsidy to gross up for CB New Footpath projects	105,073
Footpaths Western Ward	Reforecast NZTA Subsidy to gross up for CB New Footpath projects	105,073
RFID Installation	RFID Budget Brought Forward	90,000
Donald Ln to WINZ on N Park Drive - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	80,000
IT Online Services Stage 3	Pathway Online Services funds from future year 2021-22 required	70,330
Foreshore Road, Taipa Footpath - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	70,000
Ward Wide Town Beautification / Improvements Western	Ward Wide Town Western Beautification / Improvements	52,275
Point Road, Taipa - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	40,000
Disability Access Halls Western	Budget Movement Disability Access Hall Western - LOS	28,320
Tree Management Northern Ward	Te Tai Tokerau Worker Redeployment Packa age for Vegetation Clearance & Clean Ups	25,000
Tree Management WesternWard	Te Tai Tokerau Worker Redeployment Packa age for Vegetation Clearance & Clean Ups	25,000
Mamaru Road Footpath - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	20,000
Rawene Housing for the Elderly	Rawene HFTE Unit3 building structural & plumbing fixtures renewal	15,753
Rawene Hall	Budget Movement Rawene Hall Deck Rpairs - Renewal	8,250
Panguru Transfer Station	Panguru Transfer Station Sealing - Renewals budget	4,698
Russell Chapel Street Carpark	Russell Chapel Street Carpark Remove budget now project	-2,245
Parks & Reserves Western	P&R Western Assets moving out ot future years	-3,251
Water Saving Devices for Russell public toilet facilities	Budget not required this FY Move to 2024-25	-5,000
Mamaru Road Footpath - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	-20,000
Tree Management Northern Ward	Te Tai Tokerau Worker Redeployment Packa age for Vegetation Clearance & Clean Ups	-25,000
Tree Management Western Ward	Te Tai Tokerau Worker Redeployment Packa age for Vegetation Clearance & Clean Ups	-25,000
Parks & Reserves Western	P&R Western Assets moving out to future years	-32,511
Point Road, Taipa - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	-40,000
Water Saving Devices for Russell public toilet facilities	Budget not required this FY Move to 2024-25	-50,000
Foreshore Road, Taipa Footpath - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	-70,000
Donald Ln to WINZ on N Park Drive - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	-80,000
Length of Blacks Road - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	-110,000
Russell Chapel Street Carpark	Russell Chapel Street Carpark Remove budget now project	-122,451
Tree Management Eastern Ward	Te Tai Tokerau Worker Redeployment Packa age for Vegetation Clearance & Clean Ups	-150,000
Footpaths Eastern Ward	Reforecast NZTA Subsidy to gross up for CB New Footpath projects	-175,473
Footpaths Western Ward	Reforecast NZTA Subsidy to gross up for CB New Footpath projects	-175,473
Maritime - Improvement to Structures	Hokianga Harbour Coastal Repairs Correction of budget & forecast	-200,000
Kaikohe Footpath Signal Stn Rd, Omapere - MBIE	New footpath redeployment package MBIE shovel ready funds 2020-21	-300,700
Footpaths Northern Ward	Reforecast NZTA Subsidy to gross up for CB New Footpath projects	-343,308
TIF Funding Application	TIF funding applications wrongly classified as Capex in EB	-1,100,000
		-1,324,364

		-253,933

Treasury Report

Treasury Compliance

Assurance, Risk and Finance Committee Meeting Agenda

24 March 2021

6.2 Risk Progress Report for Programme of Externally Funded Projects

File Number: A3110299

Author: Tanya Reid, Business Improvement Specialist

Authoriser: Jaime Dyhrberg, General Manager - Corporate Services (Acting)

TE TAKE PŪRONGO / Purpose of the Report

To provide a risk progress report on the risks associated with the programme of the externally funded “shovel ready” projects that form part of the Governments economic response to the COVID-19 pandemic. No decision is required.

TE WHAKARĀPOPOTO MATUA / Executive SummarY

As a part of the current government’s economic response to the COVID-19 pandemic Council, and the Far North District, have secured external project funds. The goal of this funding is to provide economic stimulus and employment opportunity within the Far North District.

This risk progress report provides an up-date to inform the Assurance, Risk and Finance Committee, in their governance role, how we are managing the uncertainty.

NGĀ TŪTOHUNGA / Recommendation

That the Assurance, Risk and Finance Committee receive the report Risk Progress Report for Programme of Externally Funded Projects.

TE tĀHUHU KŌRERO / Background

The current COVID-19 pandemic has negatively impacted our nation and district. As part of their response to the negative economic impact of the COVID-19 pandemic, central government have provided a number of infrastructure funds to help stimulate the economy. Council bid, and has won, funding for a programme of “shovel ready” projects (These projects are also known as “ESEO” (economic stimulus, employment opportunity) projects and for clarity will be referred to, within this report, as externally funded). These eleven projects are:

1. Te Hiku Revitalisation

2. Waipapa Sports Hub

3. Kerikeri Domain

4. Kawakawa Innovating Streets

5. Kaikohe Innovating Streets

6. Moerewa Innovating Streets

7. Monument Hill Deep Bore

8. Kerikeri Reticulation

9. Otiria Rugby Club

10. Priority roading (three roads) to provide supplementary tarmacked routes for logging and agricultural trucks

11. Ruapekapeka Road upgrade

The characteristics of these externally funded projects are:

· that they are either wholly, or partially, externally funded

· may involve multiple funding streams

· with different funding requirements and conditions

· have multiple stakeholders, who may also be the project lead

· have short milestone timelines associated with the delivery of the projects the funding is intended for.

Four externally funded project risks were identified and presented to the Assurance, Risk and Finance Committee in October 2020. These risks are (see table 1 for a full description):

1. Complexity external funding

2. Funding gap

3. Impact on rates

4. Disruptions

These four risks are classified as organisational risks in the Operational/Financial category (whole of business view of FNDC performance including service/services delivery, risk, finance, environmental). Organisational risks may impact on council achieving its vision, mission and community outcomes. Each of the risks has been assessed as medium impact and likely to occur. The risks are recorded in the IAMs Risk Register where Treatment owners and progress is also recorded.

TE MATAPAKI ME NGĀ KŌWHIRINGA / Discussion and Next Steps

A range of mitigations, treatments, have been developed and implemented. A summary of these is provided below in table 1.

To support and monitor this programme of work we have implemented a structured reporting programme. The reporting programme is structured in three parts:

1. A Programme Steering Group with terms of reference is in place. The Programme Steering Group meets four weekly to receive a brief report on each of the externally funded projects and to decide key legal and funding arrangements such as ownership of assets created.

2. Regular monthly reporting to SLT Performance Meeting.

3. Regular monthly reporting into IAMs Business Report

The Government goal of providing this funding is to provide economic stimulus and employment opportunity within the Far North District. These goals can be categorised as:

1. Jobs and careers

2. Arresting and reversing environmental degradation

3. Partnering with Tangata Whenua

4. Growing the local market

5. Ratepayer affordability

The following provides a brief up-date, and understanding, on the progress to-date towards achieving the Governments overarching goals.

1. Jobs and careers

To address the challenges of intergenerational poverty and disparity through high unemployment of Māori and youth within Northland. To provide training and career pathways that move people from low-paid to highly paid skilled workers. To break the cycle of the working poor, eventually raising the minimum wage to the Living Wage.

· Positive weighting for Maori Business in tender evaluations have been incorporated into procurement documents.

· Te Puni Kōkiri (TPK) attended contractor workshops in Kaitaia and Kerikeri to meet and co-ordinate support for Maori business. Capturing Maori employment data is a target for ongoing improvement.

· Amotai – Supplier diversity specialist will provide registration and additional support services for Maori and Pasifika businesses. Amotai will also provide lists of Maori businesses across a range of categories to enable target invitations to tenders. (Kerikeri Domain and Waipapa Sports Hub design is an example)

· Northtec attended contractor workshops to offer training options and to support businesses looking for additional staff. Northtec have since worked with a number of FNDC local contractors around training and upskilling.

· Health and Safety training, Working at Heights, chainsaw and abrasive wheels courses have been undertaking. The working at heights courses were found necessary so that sculpturers can work safely during the carving of sculptures over two meters. The training courses are funded from PGF and will help to develop skills amongst local operatives.

· Joint Venture options are under consideration in a number of areas to enable more mature contractors to engage local contractors on components of specialised projects and to qualify local business for ongoing maintenance (e.g. shade sails, picnic table concrete bases, pump track, specialist design).

Te Hiku Revitalisation \|Waipapa Sports Hub \| Kerikeri Domain \|Kawakawa Innovating Streets \|Kaikohe Innovating Streets \| Moerewa Innovating Streets \|Monument Hill Deep Bore \| Kerikeri Reticulation \|Otiria Rugby Club
People Employed on Projects	83
Maori and Pasifika	39
Job Creation/Protection	12

Ruapekapeka Road, Peria Road and Ngapipito Road figures are not yet included. Contracts awarded to date for the major contractors have 30% local employment criteria.

2. Arresting and reversing environmental degradation

Climate change and water security and resilience are number one risks to our community from an infrastructure, wellbeing and economic perspective. We must protect and secure our water sources and protect our natural environment for generations to come. Our natural environment including our water and soil is our future economic potential.

· Green design experience is a specific skillset targeted in designer selection.

· Water harvesting for the local community is incorporated into plans at Otiria Rugby club.

· Water bore for self-sufficient supply is a project objective at Waipapa Sports Hub and is currently under action.

· Significant native plantings are incorporated into design requirements.

3. Partnering with Tangata Whenua

With 50.5% of our District’s population of Māori descent, and 11 iwi and 200+ hapu, we must work harder to create meaningful relationships and genuine participation in delivering services and resolving challenges in the Far North.

· Te Hiku project working group includes local Kaumatua who liaise with local Iwi for creation of cultural art installations. A significant amount of time has been spent on consultation with the appropriate Iwi groups for input into the streetscaping and cultural art works. Final costings and contract agreements are in negotiation phase now which will allow the artist to make a start in the very near future.

· Ruapekapeka Road has an agreement in place with Te Ruapekapeka Trust (includes representation from local Hapu/Iwi and DOC). This includes provisions for cultural monitors and local labour resources associated with local Marae.

· Direct support for the NAX Opua Cycle trail has involved significant consultation and liaison with Ngati Hine and a project management team with Hapu links has been engaged.

4. Growing the local market

Create opportunity for Far North businesses to participate in the delivery of services to FNDC. We recognise the importance of a healthy, resilient local supply chain in providing diversity of competent suppliers, growing economic potential for Far North business to participate in national and export contract, and building deeper economic resilience within our community.

· Health and Safety prequalification and operating systems have been identified as a major barrier to growth for a significant number of local businesses. SiteWise accreditation is the required Health and Safety standard for FNDC, WDC and KDC. 40 businesses attended SiteWise workshops in Kerikeri and Kaitaia. 25 Local contractors are registered for additional assistance and are working with our Health and Safety team to gain SiteWise accreditation.

· Working at Heights training completed for local artists in Kaitaia to enable them to safely undertake scaffolding based work. Courses in Kerikeri and Kaitaia for other suppliers are in the planning stage.

· As newly qualified suppliers come onboard their details are shared with Facilities Maintenance Team to enter the available contractor pool.

· Move to electronic procurement platform to enable local businesses to easily compete for the large volume of minor works. This will also enable upskilling of business ability to submit good proposals.

· There will be a requirement to develop local businesses understanding of FNDC’s sustainable outcomes approach to procurement, including support with administrative processes to streamline their RFP response overheads.

· The award of the NAX Opua Project Management contract has directly contributed to a major project management company setting up an office in Northland.

5. Ratepayer affordability

As 27% of our ratepayers have household incomes of less than $30k pa, and only 21% with household incomes over $70k, our responsibility is to prioritise spend and investment where it is most needed. That we make assessments on a whole of life perspective while at the same time balancing the broader social, economic, environmental and cultural needs of our ratepayers.

· We are actively negotiating the requirement for out of region suppliers to qualify local business for the local installation works and ongoing maintenance. This will reduce ongoing operational costs.

· Taking a long-term view for cost reduction, such as working with a local supplier to stock supplies of certified playground bark. This not only works for the building phase of these projects but will reduce transport costs for the maintenance of existing playgrounds.

	Score	Because of ….	There is a chance that….	Leading to….	Treatments:
1 Complexity external funding	29	The high level of complexity of the ESEO externally funded FNDC led projects: · short timelines to complete CAPEX projects · multiple funding pots · multiple external parties/stakeholders involved · different funding requirements · different external parties can be leading the projects e.g. FNHL	Projects may not proceed, may be delayed or not completed.	Loss of funding; Reputational risk; Uncompleted projects; Legal / compliance disputes; Extended timelines; and/or Requirement for additional FNDC funding.	In place: Central register capturing key governance and management information. In place: Establish Programme Steering Group. In place: Utilise project management methodology with risk analysis. Completed: Appoint professionally qualified project managers; In place: Using standard Council procurement strategy. Completed: Hold contractor engagement/information workshop re externally funded projects; In place: Set up a separate team to deliver the externally funded projects. In place: consultation plan and process for all projects. In place: Council approved amendments to FNDC process.
2 Funding gap	29	Projects are not fully funded, or funding agreements are not honoured or able to be honoured by the legal entities who sign the funding agreements with Government.	Council may need to find additional funding to complete projects or projects may be abandoned.	Council’s reputational damage; Increased borrowing to fund; Funding re-allocated from planned work; so annual plan objectives are not met; Increase risk to Council of asset failures; and/or Council has white elephants on the books.	Completed: Review project funding commitments mid-September before. Completed: As the funding applicant understand Council’s obligations to funding providers; In place: Elected Member engagement strategy; monthly reporting into MBIE and discussions both local and in Wellington. In place: Funding agreements are in place for all projects we are in control of.
3 Impact on rates	25	Impact to long term rate payer funding requirements due to operational budget requirements / depreciation and upgrading of new assets.	There may be a need to increase rates to fund OPEX, depreciation and CAPEX requirements.	Additional costs to rate payers (as increased rates) impacting affordability across the district and negatively impacting current growth forecasts.	Completed: Model financial implications to understand future operational requirements/costs, which includes costs to fund any community entity via a grant to manage an asset, including depreciation and renewal costs and their impact on rates; To be completed: Model the economic benefits to the ratepayers, their ability to earn greater income in the future from these projects (affordability metric); Ongoing: While there has not been an internal appointment of dedicated financial accountant a structure to report into Finance has been set up with a regular weekly meeting and report into finance team.
4 Disruptions	21	Disruption(s), out of our control (e.g. Drought / COVID-19), to agreed project timeline · disrupted supply chains; · shortages of required goods and services; and/or · need to halt the project as we are unable to work.	We may not be able to deliver to, or renegotiate, the agreed milestones.	Failure to deliver the project as project milestones that are linked to the funding payments are not achieved; or Additional cost to rate payers to complete the project.	Ongoing: Monitor external environment and modify project plans as required.; Ongoing: Follow H&S protocols.

Assurance, Risk and Finance Committee Meeting Agenda

24 March 2021

Table 1: Top Organisational Risk Dashboard					Key to trend of risk rating:			Decline
								No change/stable
								Increase
Risk ID:	Risk title	Inherent risk score	Trend of risk rating	Residual risk score	Accountable Risk Governance	Responsible Risk Governance	Risk Progress Report schedule		Risk Progress Report ARF agenda:
ARF001	Climate Change	63		30	CEO	GMSPP	6 Monthly		Mar 21
ARF003	Health & Safety Vulnerabilities	46		34	CEO	Manager P&C	3 Monthly		Feb 21
ARF004	Asset Management Risks	45		18	CEO	GMIAM	6 Monthly		Mar 21
ARF005	Affordability Risk	45		26	CEO	GMSPP	6 Monthly		Dec 20
ARF006	Project Priorities Deliveries Delays	45		14	CEO	GMIAM	3 Monthly		Feb 21
ARF007	Compliance NRC Abatements	45		18	CEO	GMIAM	6 Monthly		Dec 20
ARF009	Customer Service Delivery	39		22	CEO	Manager P&C	3 Monthly		Mar 21
ARF010	Data Governance Risks	39		14	CEO	CEO	6 Monthly		Dec 20
ARF011	Organisational Cohesion Risks	29		14	CEO	CEO	6 Monthly		Sept 20
ARF012	Contract Management Risks	39		14	CEO	GMIAM	3 Monthly		Feb 21
ARF013	Drinking Water Resilience	35		ARF to agree level residual risk	CEO	GMIAM	3 Monthly		Mar 21

Table 2: 2021 Risk Programme

2021 ARF meeting date:	10/02	24/03	05/05	16/06	21/07	08/09	20/10	01/12
Risk deep dives		ARF011	ARF003	ARF013	ARF006	ARF004	ARF012	ARF005

ARF001 Climate Change		ü				ü
ARF003 Health & Safety Vulnerabilities	ü		ü		ü	ü		ü
ARF004 Asset Management Risks		ü				ü
ARF005 Affordability				ü				ü
ARF006 Project - Priorities Deliveries Delays	ü		ü		ü		ü
ARF007 Compliance NRC Abatements				ü				ü
ARF009 Customer Service Delivery		ü		ü		ü		ü
ARF010 Data Governance Risks				ü				ü
ARF012 Contract Management Risks	ü		ü		ü		ü
ARF013 Drinking Water Resilience		ü		ü		ü		ü

Assurance, Risk and Finance Committee Meeting Agenda

24 March 2021

TE MATAPAKI ME NGĀ KŌWHIRINGA / Discussion and Next Steps

Organisational Risk Management

In December 2020, the Assurance, Risk and Finance Committee attended a workshop to agree the residual risk score for ARF013, Drinking Water Resilience. Resilience is not only the ability to recover quickly from difficulties, it is also the ability to survive a crisis and thrive in a world of uncertainty. It is also more challenging to understand than risk. Due to the shortened workshop time, available in December, elected members were unable to assess their desired adaptive capacity to respond to events, articulated as residual risk score for staff to work towards. As a next step a staff workshop (16/01/2021) was held to understand our potential adaptive capacity based on current, and first three years Long Term Plan, drinking water resilience work. This, and further work, has identified three aspects to understanding our adaptive capacity – source, treatment and network, of which there are a number of contributing factors towards achieving resilience. Water Safety Plans are being updated for each of our eight water schemes. This significant piece of work will be completed within the next 12 months and will inform our understanding on the resilience issues faced by each scheme. When completed this assessment will then be used to inform the Assurance, Risk and Finance Committee discussion to develop a residual risk profile.

The proposed 2021 risk work programme was agreed at the Feb 2021 Assurance, Risk and Finance Committee workshop. This is now included as table 2 (above).

A separate report on the March 2021 Assurance, Risk and Finance Committee agenda is a recommendation to remove ARF011 Organisational Cohesion Risk from the organisational risk dashboard, with ongoing risk oversight provided through inclusion on the CE Office Group Risk Register. The November 2020 CouncilMark Assessment provides external evidence in support of the recommendation to demote this risk from the organisational risk dashboard.

A separate risk progress report provides an update on how we are managing the risk associated with the external project funds Council has secured as part of the government’s economic response to the COVID-19 pandemic. The goal of this funding is to provide economic stimulus and employment opportunity within the Far North District.

Emergent risk:

No new emergent risks have been identified for inclusion in this report.

Table 3: Table of identified emergent risk

Emergent risks	Presented to Assurance, Risk and Finance Committee	Progress
1. The risk of externally funded shovel ready, economic stimulus employment opportunity projects due to the impact of the COVID-19 pandemic.	October 2020	Subject of a report to the Assurance, Risk and Finance Committee meeting of March 2021.
2. The financial and legal risks due to the effects of climate change. Timing of a report on this risk, to the Assurance, Risk and Finance Committee meeting, is to be determined.	October 2020	An emergent risk report is proposed for the May 2021 agenda.
3. District Services have proposed to escalate one of their top group risks for consideration of inclusion on the top organisational dashboard.	October 2020	It is proposed that this be included in the Assurance, Risk and Finance Committee risk workshop agenda.
4. The risk of not fit for purpose business continuity arrangements.	October 2020	This was subject to a report at the December 20 Assurance, Risk and Finance Committee meeting.
5. Extending the Government Procurement Rules to government entities in the New Zealand public sector.	December 2020	An up-date was expected in the March 2021 risk management report. This is now expected in the May report. A full report to Assurance, Risk and Finance Committee is planned for May 2021.
6. Development of new legislation and the creation of Taumata Arowai, the new Water Services Regulator, to oversee and enforce a new drinking water regulatory framework, with an additional oversight role for wastewater and stormwater networks.	December 2020	Government report is due 08/06/21
7. Potential impact of the Worksafe decision, in December 2020, to charge 13 parties over the Whakaari/White Island tragedy; and the government review of Worksafe’s performance.	February 2021	Impact to be considered when further information is to hand.

Organisational risk progress reports:

Four scheduled risk progress reports, including high level treatment plan progress, are provided with highlights and analysis of risk progress below. More detail is available in the attached risk progress reports.

No additional reporting requirement for organisational risk has been identified.

Risk progress report – highlights and analysis:

1. ARF001 Climate Change Risk Progress Report: The risk rating trend has been assessed as increasing the “locking in” of the effects of climate change such as the melting of our polar ice.

2. ARF004 Asset Management Risks Risk Progress Report: The risk rating trend has been assessed as stable (no change). The plan is to continue to make progress against treatment solutions.

3. ARF009 Customer Service Delivery Risk Progress Report: The inherent risk rating trend has been assessed as stable (no change). It is noted that there may be a negative impact on this risk due to the changes proposed within the Long-term, FN2100, Rates Review and District Plans.

4. ARF013 Drinking Water Resilience Risk Progress Report: The risk rating trend has been assessed as stable (no change). The plan is to continue to progress treatments to build resilience.

Group Risk

Work is progressing with two groups to further enable good risk management and risk governance practice.

1. District Services - in addition to risk being a standard agenda item at their monthly management meeting - have successfully piloted a focussed quarterly District Services risk governance meeting with the GM District Services, and the tier three managers, to review their risk landscape. This promotes networking and discussion on new and emerging risks, progress on risk treatments; and supports the flow of information within the group.

2. Work has commenced with Infrastructure Asset Management (IAM), based on the District Services pilot, to design a risk management and governance programme to meet their requirements. Transformation and Assurance have partnered with key IAMs staff to present risk management programme firstly to the IAMs leadership forum and then to the full IAM staff meeting in March.

Business Continuity Arrangements

To continue to build organisational resilience, and adaptive capacity, we are working to refresh Council’s business continuity (and incident management) arrangements. There is a clear link between risk and requirements for increased resilience. This work will help us to focus on the key areas through a better understanding of what is most important to continue in times of disruption, identification of the resources required to keep these important functions and services functioning, and to develop strategies to achieve this where resilience needs enhancement. The process to refresh business continuity plans was piloted in the District Services Group and is now being rolled out to the Corporate Services Group. These arrangements are not just about having a plan they will sit within a business continuity framework which will include processes to enable us to take practical steps to become more resilient, to minimize the impact of any disruptive event and to learn from these experiences.

NGĀ PĀNGA PŪTEA ME NGĀ WĀHANGA TAHUA / Financial Implications and Budgetary Provision

No additional budgetary provision is requested.

ngĀ Āpitihanga / Attachments

1. 2021 03 ARF001 Climate Change Risk Progress Report - A3094078 ⇩

2. 2021 03 ARF004 Asset Management Risk Progress Report - A3094079 ⇩

3. 2021 03 ARF010 Customer Service Delivery Risk Progress Report - A3094080 ⇩

4. 2021 03 ARF013 Drinking Water Resilience Risk Progress Report - A3104512 ⇩