Audit and Risk Committee. Strategic Planner

Transcription

1 Report To: From: Audit and Risk Committee Strategic Planner Date: 2 December 2014 File reference: Document: n Appendix A: n Meeting date: 10 December 2014 Subject: 2015 Long Term Plan Self Assessment Recommendation: THAT the report be received. Purpose To present the Committee, for its information, a self-assessment for the 2015 Long Term Plan undertaken recently. Background Audit New Zealand are the appointed auditors for the 2015 Long Term Plan. As part of their audit process they ask Council to complete a self assessment. The self assessment covers a range of issues and topics regarding Overall project planning and project readiness Readiness for new legislative requirements Involvement of elected members to date Progress of asset management planning Considerations made during the development of the financial and infrastructure strategies Budget processes Issues and options Staff have provided responses to the self assessment questions and returned the self assessment to Audit New Zealand. As the Councillors will be aware, Long Term Plan project reports are reported to the Council on a monthly basis. This month is a very busy month for the Long Term Plan with the culmination of the financial position and a number of strategies, policies and asset management plans. Overall, the Long Term Plan project is on track and appropriate attention is being given to the new legislative requirements. Page 1 of 2

2 Audit New Zealand are undertaking their Audit in several stages. The Infrastructure Strategy is being reviewed on the 8 th of December. From December the Auditors will be commence their assessment of the underlying and supporting information and draft policies and strategies. From 2-20 February the Auditors will undertake the majority of their Long Term Plan audit. Conclusion This item is included for the Committee s information and is an opportunity for the Committee to ask any questions regarding the development of the Long Term Plan and/or the audit process. KATINA CONOMOS STRATEGIC PLANNER Page 2 of 2

3 Self Assessment Questions The self-assessment is designed to be a starting point to assist audit planning and should not be an onerous task for council. The completion of the selfassessment should be co-ordinated by one person and the Chief Executive and the Chair of a relevant council committee (such as the LTP co-ordinating committee, the audit committee or the finance and planning committee) should review it before it is sent back to the auditor. Section 1: Council specific risks and issues How does council ensure that it has identified the important issues facing council and that sufficient disclosure will be made in the Consultation Document/LTP to provide meaningful information to the community in order to effectively consult on these issues? (Section 93B). Purpose: To assess the extent to which council has identified its important issues and that they will be communicated in the Consultation Document and/or LTP to enable effective consultation. 1.1 Please list the key issues and matters facing council and its community: Council staff and Elected Members have taken considerable time in assessing what the major matters are for Council and the Community. Docs # and # Financial Strategy, with a focus on affordability, and demonstrate this identification process however, in summary after considering numerous potential matters, Council has chosen to focus on its Financial Strategy, with a focus on The extent of Council s investment in Economic Development affordability, and the extent of Council s investment in Economic Development. What process has council undertaken to identify, prioritise and consult on these issues and/or matters to date? Council has taken into account community views through targeted questions through the triennial survey # held in 2013 and then subsequently built on this. During the LTP process and thereafter targeted Economic Development has been a big focus for Council and this continues to be built on. At this point these issues are not prioritised as Council feels with having such a small number of issues and them being so different, it is feasible for them to stand on their own

4 Section 1: Council specific risks and issues How does council ensure that it has identified the important issues facing council and that sufficient disclosure will be made in the Consultation Document/LTP to provide meaningful information to the community in order to effectively consult on these issues? (Section 93B). Purpose: To assess the extent to which council has identified its important issues and that they will be communicated in the Consultation Document and/or LTP to enable effective consultation. rather than being ranked. 1.2 How is council planning to disclose these These will clearly be the prime focus of the Consultation Document. However, other than issues/matters in the Consultation Document/LTP in saying they are to be in a summarised form, it is too early for staff to say at this point as order for the community to provide feedback on the both items are still in a formative phase. choices it faces in respect of these issues/matters? Section 2: Governance Are the governance structures of council effective, open and transparent? (s39(b)) Purpose: to assess the extent of understanding of roles by elected members and staff in the development of the LTP. Questions 2.1 Is council using the same processes for the Yes Council is following the same approach as prior plans. In terms of the LTP, all material development of its Consultation Document/LTP as it has is being prepared through a series of workshops with Elected Members and then for prior plans? represented for consideration and adoption as supporting information for the LTP. If not, what is council doing that is different? In terms of the Consultation Document, some information has already been discussed with Elected Members particularly focusing on the change in legislative requirements. The most applicable information for the Consultation Document will be workshopped and identified with Council prior to their considering for adoption. 2

5 Section 2: Governance Are the governance structures of council effective, open and transparent? (s39(b)) Purpose: to assess the extent of understanding of roles by elected members and staff in the development of the LTP. Questions 2.2 What systems do council have to ensure that it will The Council has a detailed project plan (including dates and deadlines) that monitors the produce a Consultation Document/LTP on time and with progress of the LTP project as a whole (# ). From this, short term tasks are all relevant information (including any new information communicated to Strategic Planning team members on a weekly basis to ensure immediate requirements as a result of changes to legislation, etc)? staff are focused on the upcoming goals. Also, a progress report is drafted based on the project plan and communicates the progress of key aspects of the project to a Long Term Plan Management Group who meet on a monthly basis. This Group includes the Chief Executive, Management Team, and key LTP staff. An Asset Management Group meeting is held once a month to communicate key messages and deadlines relating to Asset Management Planning and relevant LTP project information to staff involved in that work. A monthly report is also presented to Council to ensure they are informed of LTP progress and issues. Strategic Planning also meet with the Chief Executive fortnightly to discuss any current issues. An LTP intranet page was also developed to ensure that all relevant material is readily available and accessible for those involved in the LTP project. This page is updated on a regular basis as soon as new information is available. In terms of meeting the new information requirements for the Consultation Document and the LTP, a legislative checklist has been developed as per question 6.1, an LTP index (# ) and CD content document - albeit still a work in progress (# ) have been developed which consider the legislative requirements for the content of the CD and final LTP and detail how those requirements are expected to be met. 2.3 Has council familiarised themselves with the most Yes. Key staff read the LTP guidance as it became available. Some Finance and Strategic recent SOLGM LTP guides? When did council last Planning also staff attended the Road to 2015 seminars held by SOLGM during August complete the SOLGM health check (see the SOLGM

6 Section 2: Governance Are the governance structures of council effective, open and transparent? (s39(b)) Purpose: to assess the extent of understanding of roles by elected members and staff in the development of the LTP. Questions guide Living through (Another) LTP)? As a result of Council last completed a health check (# ) in June Since this time, the considering the SOLGM guides and completing the legislative checklists referred to in question 6.1 have been more of a focus, however as at checklist what areas has council identified that require early November Council is aware another health check should be done and as of the date of action? What action is planned to address these areas? this Self assessment has begun a second review. Council will ensure this is completed prior to the initial audit on the 15 th December. The health check and legislative checklists have been of use. In particular it increased the priority of consulting with Maori; the need to readdress how we present the legislatively required negative effects; the importance of the Consultation Document; and it highlighted the importance of needing to start key documents/process early, even prior to the relevant legislation being enacted, due to how much was required. 2.4 How do council processes (whether changed or not) Early in the LTP process, A Way Forward approach was endorsed by Council. (# ) ensure elected members and staff understand their This stated roles across the organisation including Elected Members and staff and more respective roles in preparing and consulting on the key specifically included summarised job descriptions for each of the roles including the HLTP aspects of LTP? Working Group; for each of the HLTP Project Team and for each of the Management Team. When considering this report in December 2013, it was determined a political working group being that of the Mayor, Deputy Mayor, Operations Committee Chair and the Ward Chairs, would be available to discuss the LTP as required at their allocated monthly meetings. This was suitable for the earlier part of the LTP process, however for the collective Council to be most effective in their guidance and decision making, regular workshops were necessary. These were held each month since mid

7 3.1 How advanced is council in developing its 30 year The Council commenced preparation of its Infrastructure Strategy in late October. An infrastructure strategy? What are the main challenges external consultant has been engaged to assist with this work and is due to deliver the evident within the 30 year strategy timeframe? What is Strategy in December. the council s proposed approach to challenges in years At the time of preparing this self-assessment the work is too formative to outline the main 11 to 30? challenges and proposed approach to these challenges. Further information will be provided to Audit NZ in due course. Cognisant of the alignment required with the Financial Strategy, in preparation of the Financial Strategy the high level infrastructure picture was considered before progressing the work on the Financial Strategy. This is available in the Financial Strategy discussion paper (# ). 3.2 Has council been successful in completing the Water and wastewater A number of programmed works (# ) were deferred forecast work (maintenance and capital) in its activity and while various investigations were carried out including the application for subsidy funding asset management plans to date? for water supply projects. The subsidy funding saw Council awarded roughly $5M in If not, what was the deviation of planned versus actual subsidy against a number of projects. This required shuffling of the timing of both the work undertaken and what were the causes? water and wastewater capital programmes in line with available resourcing. Land Drainage Maintenance work is pro-active and completed annually. Capital 5

8 works are largely stopbank upgrades and have generally been completed as scheduled or deferred due to access issues, or unsuitable ground conditions. Stormwater maintenance is generally re-active. Capital works have been completed within an annual budget. Works are non-specific and mostly agreed with the communities, or are reactive upgrades and renewals. 3.3 What actions to improve or change processes have been identified since the preparation of prior plans? Have changes been implemented? Is council using any data modelling tools to consider future options? If yes, what are the main challenges, issues and risks these tools are identifying? Roading - The Expenditure Forecast is complete for both the maintenance and capital work for 10 years to 2015/25. The expenditure forecast has been broken down into relevant sub-activities and separated for subsidised and non-subsidised funding classes. Community Services have completed forecast work and this is reported on monthly to each respective Ward. There is very little carried forward. There are no resourcing issues, so the only reason for any form of delay is a political change, or impacts from other organisations eg Transit. Water and Wastewater - Council have previously tried different ways of funding for renewals, none of which were found to be appropriate for long term provision primarily due to Industry base life estimates being considerably shorter than performance of Council s assets shows. Accordingly, effort has been put into the development of a statistical based model to determine the renewal profile of Council s water and wastewater reticulation networks (the largest value component of both of these asset 6

9 groups). This model allows ongoing refinement as additional data becomes available over time. The key issue/challenge shown by this model is a continual increase in the length of reticulation that will need renewal each year, over the next 30 years. This increase was not unexpected, as several previous forecasts have shown this trend. Improved forecasting of the reticulation s assets actual life, vs the default (conservative) base lives that were previously used by Council has reduced previous forecasts of rate at which expenditure on renewals work will need to increase over the coming 30 years in order to maintain the Council s level of service targets. Land Drainage No changes implemented Stormwater No changes implemented, no data modelling undertaken Roading: The actions to improve or change processes identified since the preparation of prior plans are identified in the Business Case for the Land Transportation Asset Management Plan (partially completed) and include the Improvement plan (completed), the implementation of the One Network Road Classification (ONRC) (initial stage implemented with further stages to follow to be fully bedded in by 2017/18), the preparation of the 30 year transportation infrastructure strategy and Waikato Regional Council requirements (implemented the programme business case outline and 7

10 assessment profile for asset management planning). The data modelling tools to consider future options for the Roading asset, are RAMM Treatment Selection Analysis and Reporting, dtims Pavement Deterioration Modelling, and a number of spreadsheet based condition and trend determinations. The challenges are the issues and risks these tools are identifying. The measurements and modelling identify that the roading network is in a very good health and currently at or above the peer group averages. The tools identify that going forward the condition of the network even while deteriorating slightly at the nominated investment levels is still forecast to remain in a good to fair condition at the end of the 10 years. 3.4 How confident is council that the AMP data is reliable? Does council have an AMP improvement programme? If so, what progress has council made in respect of the improvement programme? What areas of asset management planning does council consider to be weak or limited? Community services have introduced a new web based asset data system that provides unit rate component valuations and lifecycle analysis and is exceptionally robust. Water and wastewater Council is confident that the AMP data held is sufficiently complete to allow reasonable financial forecasts to be determined. Council has recently carried out assessments of both the accuracy and completeness of its asset data. 1) A data capture exercise on water, wastewater, and stormwater reticulation assets was across large areas of the district 12 months ago. This work has shown that the data already held was largely (estimated to be greater than 95%) accurate. The data captured from this exercise is still being processed back in the office, therefore final accuracy values are not yet known. 8

11 2) An asset data stocktake was carried out in June as a part of the asset valuation exercise. All reticulation and plant asset data for water, wastewater, stormwater, and land drainage assets were reviewed through this process. The stocktake found few errors. Those errors that were identified have already been corrected within Council s asset databases. The asset data register is therefore considered to be as accurate, as at June Asset Management Improvement programmes are in place for each asset. Progress on the water and wastewater improvement programmes was delayed for a time following the departure of a key staff member. A long term replacement has now been secured and a revised and refocused improvement programme developed. A summary of the progress against the Improvement programme is included with the latest AMP update for both of these assets. The major focus of the revised improvement programme is improvements to the efficiency of Council s data management. Land Drainage Data confidence is high. The main improvement plan items have been progressed including the analysis of trends for pumping utilisation forecast; ensuring the identified asset maintenance data is captured; progressing of service level agreements with in house businesses; optimising and documenting maintenance processes; the development of a strategy and long term programme to improve asset condition and performance data and derive remaining life; the development of specification for 9

12 implementation of electronic data capture in the field. Stormwater Data confidence is reasonable. The Stormwater AMP improvement items include to finalise and document As Built processes and workflow; developing a strategy and long term performance to improve asset condition and performance data and derive the remaining life. In terms of AMP weaknesses, the knowledge of asset condition of buried assets is reasonably low and Council is only funding a low level of investigation in this area. The decision to take reactive approach to storm water due to its intermittent demand pressures. However Council are aware of the hot spots and these are dealt with accordingly in times of demand in adverse weather conditions. Roading - Council has improvement programmes for all its roading assets. Confidence level in the data is high and the confidence ratings for various asset data types are recorded in the asset management systems section in line with the International Infrastructure Management Manual. The AMP improvement programme includes a specific section of the Asset Management Plan. The improvement programme itemizes the activities and progressively implements the programme in priority order as the budget permits. A significant proportion of the Improvement Plan Items has been implemented along with new items being identified. 10

13 The areas of asset management planning considered by Council to be weak or limited relate to the uncertainties of the One Network Road Classification (ONRC) system and its effect on the Levels of Service. It is uncertain when this information will be released. Further development of Levels of Service statements is challenging in the absence of this information. 3.5 The NAMS International Infrastructure Management Manual contains several rating scales to assess the level of confidence and accuracy/reliability of asset data (section 2 page 59, section 3 page 87, 89) and therefore the forecasts based on that data. These scales are set out below. Data Confidence Grade Description Accuracy 1 Accurate 100% 2 Minor inaccuracies +/- 5% Community services took a risk based approach to the recondition grading of all of their assets. As a result minor assets, (park benches, rubbish bins, some lighting) were not condition graded in this current year but have been identified as a year 1 improvement plan item. Please complete the table included below as a separate document and attach to this self-assessment, for each asset class covered in your 30 year infrastructure strategy, and provide an explanation of how the rating has been assessed in each case across the 30 years (where the confidence varies significantly across the 30 years please split the rating into blocks, eg years 1-10, and 21-30). Where your council has completed this rating assessment at a more detailed level please indicate the average rating for the class and the range of ratings within the asset class and also the proportion of assets within the class that fall within the main categories of the range. Ie if your range is Grades 1 to 4 please state what percentage of the total class are at grade 1, 2, 3 and 4. 11

14 3 50% estimated 4 Significant data estimated 5 All data estimated Forecast confidence rating Confidence Grade General meaning A Highly reliable B Reliable C Uncertain D Very uncertain +/- 20% +/- 30% +/- 40% Data based on sound records, procedure, investigations and analysis, documented properly and recognized as the best method of assessment. Data based on sound records, procedures, investigations and analysis, documented properly but has minor shortcomings, for example the data are old, some documentation is missing, and reliance is placed on unconfirmed reports or some extrapolation. Data based on sound records, procedures, investigations and analysis which is incomplete or unsupported, or extrapolated from a limited sample for which grade A or B data is available. Data based on unconfirmed verbal reports and/or cursory inspection and Asset class Data confidence rating Forecast confidence rating Water Supply 2 all data. C all years. Method of completing the rating assessment Data Confidence: Field survey carried out in 2012 of approx 20% of the district s reticulation showed estimated > 95% agreement with existing data. Accuracy value is estimated, as post-processing not yet 100% complete on captured field-data. Forecast Confidence: Internal assessment of the forecasting methodology and source data against the defined criteria (left). Conclusion: The forecasts are based upon a limited sample of Grade B data. Wastewater 2 C Data: Field survey carried out in Jan / Feb 2014 of approx 85% of the district s reticulation showed estimated > 95% agreement with existing data. Accuracy value is estimated, as the field data is still being processed by Council staff. Forecast Confidence: Internal assessment of the forecasting methodology and source data against the defined 12

15 analysis. criteria (left). Conclusion: The forecasts are based upon a limited sample of Grade B data. Stormwater 3 all data C Data: Field survey carried out in Jan / Feb 2014 of approx 35% of the district s reticulation showed estimated > 85% agreement with existing data. Accuracy value is estimated, as due to large amount of data captured, the field data is still being processed by Council staff. Forecast Confidence: Internal assessment of the forecasting methodology and source data against the defined criteria (left). Conclusion: The forecasts are based upon a limited sample of Grade B data Roading - Pavement Surface 2 B Data confidence Roading Pavement Surface data information is maintained in the RAMM register. Sound asset management systems exist whereby the pavement surfacing information in RAMM has been able to be improved to within +/- 5% accuracy. The systems ensure that when new resurfacing is undertaken the new construction 13

16 Has the council used these scales to assess reliability and confidence of asset data and forecasts based on that data? What disclosure is council intending to provide in its LTP and 30 year infrastructure strategy about the reliability of asset data and the implications for the accuracy of financial forecasts? Roading - Pavement Structure data is captured and loaded into RAMM by qualified RAMM practitioners. The pavement surfacing data quality has improved vastly in the last 20 years. The pavement surfacing information in RAMM includes location, quantities, surfacing details, additives, application rates etc. Forecast confidence The pavement surfacing forecast is reliable based on accurate existing surfacing data and sound surfacing records in the RAMM register. The forecasts are based on widely publicised expected lifecycles for resealing modified with recent local experience in successfully extending those lifecycles on low volume roads in the district. 4 C Data confidence Roading Pavement Surface data information is maintained in the RAMM register. A significant proportion of the pavement structure data is estimated in particular for pavements older than 20 years. The pavement structure information that is accurate has pavement layer information, thicknesses, source of 14

17 material, location, if stabilised etc. Asset Management systems now exist which ensure that for any new pavement layers the inventories are updated following the completion of pavement rehabilitation works. The cost to improve the data confidence by retrospective field measurements has been prohibitive to date. The current data capture systems will ensure that the inventory is progressively updated and improved This process can be accelerated by the contractor gathering this data when routine maintenance/renewal activities where the pavement can be exposed, measured and recorded Forecast confidence The pavement structure forecast is based on sound records but to a large extent extrapolated from a limited sample of Highly Reliable to Reliable data. Pavement modelling techniques have been utilised which also rely on data quality. The forecasts are based on local achievements, economic analysis, and field inspections. Roading 3 B Data confidence Road pavement 15

18 Pavement Formation Roading Drainage / Channel formation is basically the footprint that the pavement has been constructed on. Generally the formation is not depreciated unless there are unstable subgrades which has linear subsidence expected. Therefore the formation can be easily quantified by adding nominal distances to the seal width. A level of data confidence in the pavement formation is expected Forecast confidence As the formation is not generally depreciated the renewal cost is minimal if any. Therefore a forecast confidence rating is assessed to be reliable. 3 C Data confidence Roading drainage channel data information is maintained in the RAMM register. A significant proportion of the drainage channel information in RAMM has been updated after field measurements. The age information is in part estimated. Overall the accuracy is estimated to be +/- 20%. Asset Management systems now exist which ensure that for any new drainage channels the inventories are updated 16

19 Roading Structures following the completion. This information includes construction materials, dimensions, location and construction dates etc. The current data capture systems will ensure that the inventory is progressively updated and improved. Forecast confidence The drainage forecast is based on field condition assessments of drainage assets. The information in RAMM.includes field condition rating, estimated lives. We conclude a forecast confidence rating of B. 3 C Data confidence Roading structure data information is maintained in the RAMM register with some additional information maintained in the bridge and structure inspections framework. A significant proportion of the bridge construction date information in RAMM has been estimated. Overall the accuracy is estimated to be +/- 20%. Asset Management systems now exist which ensure that for any new bridges the inventories are updated following the completion of works including construction materials, dimensions, location and 17

20 Roading Traffic Facilities construction dates. The current data capture systems will ensure that the inventory is progressively updated and improved. Forecast confidence The bridge forecast is based on field condition assessments of bridge assets and the information in RAMM. A mix of sound data (e.g. field condition rating) and estimated lives. We conclude forecast confidence rating of B. 3 C Data confidence Roading traffic services data information is maintained in the RAMM register. A significant proportion of the detailed traffic facilities data is not available. Overall the accuracy is estimated to be +/- 20%. Asset Management systems now exist which ensure that for any new traffic service facilities the contractor updates the inventories following the completion of works including construction materials, dimensions, location and construction dates etc. The current data capture systems will ensure that the inventory is progressively updated and improved. 18

21 Roading Streetlights Community Services assets Forecast confidence The traffic services forecast is based on lifecycle renewals and checked against recent achievements A forecast confidence rating of C for this category. 2 B Data confidence Streetlight data information is maintained in the RAMM register. Due to streetlights being relatively visible and valuable assets the register has been maintained to a high accuracy. Overall the accuracy is estimated to be +/- 5%. Asset Management systems now exist which ensure that for any new streetlights the contractor updates the inventories following the completion of works including construction materials, dimensions, location and construction dates etc. The current data capture systems ensures that the inventory is maintained at a highlevel of accuracy. Forecast confidence The streetlight forecast is based on recent achievements A forecast confidence rating of B is awarded. 2 B Data confidence A specialist contractor was engaged to conduct 19

22 response included however Community Services included as part of Infrastructure Strategy. a full Asset condition grading in July Forecast confidence Forecast confidence is B for all Community Services Assets. Verifiable records, field inspections and comprehensive lifecycle analysis and renewal data (SPM) other than minor shortcomings that are documented. (Improvement programme) are available. Meta data overall would be B. Yes, Council has used these scales to assess reliability and confidence of asset data and forecasts based on that data. Council can provide the above disclosure on the reliability of the asset data. Council can provide statement on the implications for the accuracy of the financial forecasts The financial forecasts are based on known information and does not include allowance for unforeseen circumstances or a similarly worded statement acceptable to the Council. 3.6 What does Council do to ensure that asset data is complete and up to date at the time the LTP is being prepared? Water and Wastewater an asset register stocktake was carried out in June 2014 to ensure that the Asset Register database was complete and up to date. The stocktake involved review by key staff (office and field) of GIS plans of Council s networks and 20

23 requested to update incorrect details. Plant data was itemized in lists and reviewed by key staff (office and plant operators). Land Drainage Asset schedules are updated as assets are created or decommissioned. Stormwater Reconciliation of GIS and valuation data is being confirmed. 3.7 In respect of each asset class covered by the infrastructure strategy what is Council s assessment of network performance? What are the network performance issues, if any? How is council planning to address network performance/how has it assessed the impacts? NB: Consideration of network performance may not result in additional work being identified. It may Roading The data accuracy is progressively improved throughout the year by the addition, deletion and modifications of assets. The databases are validated and cleansed periodically to ensure the integrity of information is maintained. Community services an audit of the asset register is programmed for 2015/16 with amendment, as required, to the component library and the review of unit rates. Water and Wastewater: Water and Wastewater Network performance is assessed against LOS targets, by flow monitoring, and by fault reporting. Apart from discrete areas identified in the wastewater AMP, these networks are performing well. Funding has been provided in the 2015/25 LTP to address the wastewater network performance issues. 21

24 indicate that the network is performing at a higher level than consideration of individual components may signal. Roading Network Performance assessment Pavement Surface - network performance is very good measured by Surface Condition Index Pavement Structure network performance is very good measured Pavement Integrity Index and Smooth Travel Exposure Drainage / Channel network performance is good Measured by Drainage Inspections and periodic rating surveys. Structures network performance is acceptable Measured by structural inspections Traffic Facilities network performance is very good Determined by Contractor and consultant network Inspections Streetlights network performance is good - Inspections Roading - network performance issues, Road Crashes (Road Safety) are a focus of the GPS, There are no accident black spots within Hauraki District with serious and fatal crashes having little or no contributing road factors. 22

25 Roading address network performance The Road Safety Action Plan Forum gathers stakeholders to pool resources and share ideas within the East Waikato Sub regional cluster The partnerships primary focus is to reduce fatal and serious crashes basically using Engineer Education and Enforcement. 3.8 Has council recently updated the valuation of its A revaluation was commissioned in Optimised replacement costs identified by the infrastructure assets? What is council planning to do to revaluation are used in the forecast renewal rate in Council s LTP. ensure any significant movements since the last valuation are reflected in the opening asset values to be included in the LTP? 3.9 What has council done to reconfirm or change the The focus for the LTP has not been extensive regarding service levels. Council has service levels since the prior LTP? carried out significant levels of service reviews for the past two LTPs. The focus for If Council is planning changes to service levels what has been on reviewing performance measures that support the levels of consultation has been completed? service. The inclusion of mandatory measures on top of these documents is additional What analysis has been completed to consider the and to be considered by Council late November impacts of current LOS on future generations? For Roading specifically, further development of the LOS is expected to be after the One Network Road Classification Level of Service statements are released by the Agency working party. It is then that the implications on future generations can be considered How does council identify activity and resource Resolutions are sent electronically to relevant asset managers if decisions are made at a implications from strategies, policies and plans and Council level for and closing once addressed. 23

26 integrate these implications into the LTP? In terms of linking through policies, plans and strategies, relevant activity managers are advised if a recently adopted policy has come into effect and it is the responsibility of the asset manager to ensure these are integrated. For some activity plans, there is an Organisational Consistency section and any applicable aspects to other policies and strategies, is recorded for action Does the council have capacity (both financial and At the time of preparing this self assessment the Council is compiling its Long Term Plan non-financial) to deliver on its plans? financial estimates. Financially, there have been a number of reviews of these estimates to ensure that the proposed budgets are within the Council s/communities ability to pay. Non financially, a major part of the focus of the performance measures review was on ensuring non financial aspects of Councils operations were realistic. The Management Team consider that the current resources budgeted are adequate to be able to carry out the forecast capital programme What systems does council have to ensure that Budget managers are required to identify whether the principal driver of capital asset and activity information will flow through into the expenditure is for meeting additional demand, improving levels of service or the LTP? Specifically the disclosure requirements outlined in replacement of existing assets. This information is captured in Council s LTP tool Schedule 10 of the Act, as follows: (Authority) from the source documents used in the preparation of the asset management For each group of activities for each financial year plans. For new projects detailed project sheets are required to be completed and help covered by plan the council needs to disclose the amount inform this decision in a more substantial manner. of capital expenditure that the authority has budgeted 24

27 to (a) meet additional demand for an activity; and (b) improve the level of service; and (c) replace existing assets How does council provide information to its The community is informed about the impacts of proposed/determined levels of service communities about the impacts of proposed/determined through targeted consultation processes. For key changes to LoS will be levels of service? Does council provide information about specifically consulted on through the Consultation Document. For other LoS these, will the cost implications of different levels of service when be made available through an overview section of each Group of Activities and more consulting with the community? specifically through the AMP s. Are legislative requirements and environmental Other than through the Key Community Issues section, Council does not provide standards, to the extent they are relevant in setting information about the cost implications of different levels of service as part of this LTP. minimum service levels, set out clearly for the This was addressed during the review of LoS in 2009 and community? The most key legislative requirements and standards are integrated into either the Is the availability of resources, including financial customer or technical levels of service. Customer levels of service are more clearly constraints, clearly set out for community consideration accessible than the technical levels of service. For the Land Transportation activity, the Levels of Service are yet to be fully developed as part of the implementation of the One Network Road Classification (ONRC) process. It is expected that these will be fully implemented during the 3 year term Once the ONRC is implemented then the cost implications of different levels of service can be meaningfully discussed with the community. At this stage only one set of Levels 25

28 of Service is promulgated in the asset management plan. Councils Financial Strategy contains the rate and debt caps. These are the principal financial constraints and this will be clearly set in the Consultation Document for community consideration. Section 4: Financial strategy and financial management systems How does council ensure that it gives effect to the requirements for financial management, particularly sections 100, 101 and 101A? Purpose: To assess the extent to which council systems support prudent stewardship and effective use of resources in a manner that promotes the current and future interests of the community. 4.1 What is council s financial strategy? Has this The Council has reviewed its Financial Strategy from the Long Term Plan, strategy changed from the previous LTP? If so, how however, the process of developing the Strategy is iterative and this will not be finalised has the revised strategy been developed? until January The Financial Strategy will be similar to the Financial Strategy with the following improvements: The presentation of the information will be more succinct and clearer with regards to the financial story and direction of the Council. 26

29 Section 4: Financial strategy and financial management systems How does council ensure that it gives effect to the requirements for financial management, particularly sections 100, 101 and 101A? At present, there is one proposed change to the current rates cap, which is to increase the current rates cap from LGCI + 1.5% to LGCI + 2%. With regards to process, a discussion paper was prepared to consider the contextual matters within which the Council is operating (to give effect to s.101(3)(a)), and for the Council to consider its initial directions and quantified limits on rates, rates increases and debt. (# ). Staff have since been working with the Audit and Risk Committee to progress the Financial Strategy and will continue to do so between now and the adoption of the endorsement of the Strategy on the 26 th November In developing council s financial strategy has Prudence and affordability are matters which the Council has in its focus, given the high council considered issues of prudence? Has council social deprivation of many of its community. specifically addressed the requirements of s101(3) of With regards to the Financial Strategy, prudence and affordability are represented in the Act? Is council satisfied that its approach is Council s directions of prudently reducing debt levels and minimising and smoothing rates prudent? If any specific prudence concerns have been increases. identified please summaries these issues. s.101(3) analysis is being prepared currently and is due to be presented to the Council throughout November January, with a particular focus on affordability and prudence. There is a reference in the Financial Strategy discussion paper regarding further analysis re. affordability being brought back to Council (page 7, of # ) 4.3 How has council taken future generations into Intergenerational equity is one of the drivers for Council s direction regarding smoothing account in developing its financial strategy? rates increases to ensure that the costs are apportioned to the beneficiaries in a fair manner. This is the same with the Council s approach to debt. 4.4 How has the financial strategy been communicated Elected members have been engaged in the development of the Council s Financial to staff and elected members? Strategy, firstly through a discussion paper (# ). Members of Council s Audit and Risk Committee were also involved in an informal workshop. With regards to staff, the Council s Management Team, Finance and Planning staff were 27

30 Section 4: Financial strategy and financial management systems How does council ensure that it gives effect to the requirements for financial management, particularly sections 100, 101 and 101A? engaged in the preparation of this discussion paper. Following the Council s endorsement of the initial direction in October 2014, the papers considered by Council have been made available on the LTP intranet page for staff, and verbal updates have been made at the third tier management meeting and the Asset Management Plan meeting and this has been communicated via to staff (# ). 4.5 How does council intend to present its financial The Financial Strategy has been identified as a key community issue for the Long Term strategy to its community to ensure that the effects on Plan and will feature strongly in the Consultation Document. services, rates, debt and investments as a result of The Council will endeavour to tell the financial story in the Consultation Document and council s proposals for funding and expenditure are support this with the use of visual aids such as graphs/charts, and additional supporting clear (s101a)? information available on the Council s website. 4.6 What actions to improve the budgeting and In the Long Term Plan it was identified that there was a lack of formal training for modelling systems or financial management systems budget managers in the use of the LTP Tool (Authority) and a lack of formal budgeting have been identified since the prior LTP audit? Have guidelines. Several formal training sessions have been held and budgeting guidelines any identified changes been implemented? have been developed and distributed (# ). This training documentation, guidelines and templates are also available on Council s LTP intranet page. 4.7 Does council s budgeting and modelling systems or The Council s budgets are put through a comprehensive internal review process by staff financial management systems have controls in place before being signed off for presentation for Council review. This involves a number of to ensure that it addresses matters of prudence and the meetings with Council s Management Team and a number of Council Workshops. current and future interests of the community? What The overall impact of this information is modelled over the life of the plan and compared to controls are in place to ensure that limits and criteria prior forecasts (including the Long Term Plan) and policy limits. set in policies are not breached? 28

31 Section 5: Performance management and reporting information How does council ensure that it is giving effect to the requirements in the Act to identify the community outcomes that it aims to achieve, to assess its performance and be able to provide meaningful information to the community? (Schedule 10(2) and (4)). Purpose: To establish that council generates forecast service performance information in the LTP which is relevant, reliable, complete, meaningful and comparable, and will allow council to effectively identify community outcomes and monitor and report on the performance and impact of its activities. 5.1 Is council planning on revising the performance framework it has used in prior plans? If so, please describe council s approach to setting community outcomes, performance goals, levels of service, performance measures and performance targets, and to monitoring and reporting achievements against these. We expect the structure of performance information in the LTP to clearly show: a clear link between community outcomes and the group of activities to which they primarily contribute; the services that will be carried out and why; the service levels required to meet the needs of its communities or other duties and intentions of council; and the planned level of service intended to be achieved. Yes the performance framework has been revised. Suggested changes to the Community Outcomes were considered by Council in March 2014, and consulted on in May Following consultation, the Council adopted their amended Community Outcomes in May (# ). The approach to setting performance goals, levels of service and targets has involved an overview presentation to all Asset and Activity Managers so that their goals and deadlines for the performance framework review were clear. Asset and Activity Managers attended workshops with Strategic Planning in some cases, or within their own departments, to review their current levels of service measures, suggest new measures based on asset or activity plans and experience. Proposed levels of services and measures were peer reviewed by Strategic Planning, and then workshopped with Council prior to adoption in October At those workshops Council also set the planned level of service via the setting of performance targets. In addition to the above, background working documents have also been completed for each activity, and outline the rationale, assumptions etc for each measure. 29

32 Section 5: Performance management and reporting information How does council ensure that it is giving effect to the requirements in the Act to identify the community outcomes that it aims to achieve, to assess its performance and be able to provide meaningful information to the community? (Schedule 10(2) and (4)). Purpose: To establish that council generates forecast service performance information in the LTP which is relevant, reliable, complete, meaningful and comparable, and will allow council to effectively identify community outcomes and monitor and report on the performance and impact of its activities. 5.2 How will council ensure that its presentation of the outcomes, levels of service, the performance measures and targets in the LTP allow the community to readily understand them and will encourage community interest? 5.3 Is council updating or developing new systems to monitor and report (in the annual report) against its performance measures and targets including those in the Non-Financial Performance Measures Rules 2013? Councils should have processes in place as it develops the LTP that will enable future reporting of results. The link between Community Outcomes and the Group of Activities is considered once the levels of service and performance measures are developed the performance framework tables include the Community Outcomes icons to which the performance measures, then levels of service, then the Group contribute to. As mentioned above, the Community Outcomes, levels of service, performance measures and targets are presented to the community in one table per activity. The table is concise, and uses the Community Outcomes icons to engage the reader with a visual element. There has been an emphasis this LTP on Asset and Activity Managers completing a background document per activity that covers the performance measures assumptions and monitoring systems information. This has been done to ensure that Asset and Activity Managers give consideration to how measures will be monitored. In terms of the mandatory non-financial performance measures, workshops have been undertaken between relevant Asset Managers and members of the Management and Strategic Planning teams, to brainstorm our underlying assumptions for the mandatory 30