agenda - Rotorua Lakes Council [PDF]

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Operations & Monitoring Committee 1 February 2018

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File No: 01-15-226

NOTICE OF AN ORDINARY MEETING OF THE

OPERATIONS & MONITORING COMMITTEE to be held on Thursday, 1 February 2018 at 9:30am in the Council Chamber, Rotorua Lakes Council

Chairperson:

Cr Sturt

Members:

Cr Tapsell (Deputy) Cr Donaldson Cr Kent Cr Raukawa-Tait Mr Stanton

Quorum:

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Mayor Chadwick Cr Gould Cr Kumar Mr Biasiny-Tule Mr Martin

Cr Bentley Cr Hunt Cr Maxwell Mr Waru

AGENDA 1.

APOLOGIES

2.

DECLARATIONS OF INTEREST Members need to stand aside from decision-making when a conflict arises between their role as a Member of the Council and any private or other external interest they might have. This note is provided as a reminder to Members to review the matters on the agenda and assess and identify where they may have a pecuniary or other conflict of interest, or where there may be a perception of a conflict of interest. If a member feels they do have a conflict of interest, they should publicly declare that at the start of the meeting or of the relevant item of business and refrain from participating in the discussion or voting on that item. If a member thinks they may have a conflict of interest, they can seek advice from the Chief Executive or the Governance & Partnerships Manager (preferably before the meeting). It is noted that while members can seek advice the final decision as to whether a conflict exists rests with the member.

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URGENT ITEMS NOT ON THE AGENDA Section 46A of the Local Government Official Information and Meetings Act 1987 states: (7) An item that is not on the agenda for a meeting may be dealt with at the meeting if – (a) the local authority by resolution so decides, and (b) the presiding member explains at the meeting at a time when it is open to the public, (i) the reason why the item is not on the agenda; and (ii) the reason why the discussion of the item cannot be delayed until a subsequent meeting. (7A) Where an item is not on the agenda for a meeting, (a) that item may be discussed at the meeting if – (i) that item is a minor matter relating to the general business of the local authority; and (ii) the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but (b) No resolution, decision, or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.

4.

PRESENTATIONS a) Crankworx – Ariki Tibble “Crankworx Event Director Page

5.

CONFIRMATION OF MINUTES

5.1

Minutes of the Operations & Monitoring Committee meeting held 30 November 2017 ............... 7

6.

STAFF REPORTS RECOMMENDATION 1: Aquatic Centre Proposal ......................................................................... 13 RECOMMENDATION 2: Financial Performance for the 6 months ended 31 December 2017 .................................................................................. 46 RECOMMENDATION 3: Operational report for December 2017 to January 2018 ....................... 49

7.

RESOLUTION TO EXCLUDE THE PUBLIC The general subject 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(1) of the Local Government Official Information and Meetings Act 1987, for the passing of this resolution are as follows:

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General subject of each Reason for passing this resolution in matter to be considered relation to each matter RECOMMENDATION 4: Contract 17/044:Tender Approval for Springfield Link: Springfield Road and Waters Stree Pavement Rehabilitation

Enable any local authority holding the information to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

RECOMMENDATION 5: Contract 17/006: Tender Approval for Ranolf Street Cycle Link

Enable any local authority holding the information to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

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Ground(s) under Section 48(1) for passing of this resolution Section 48(1)(a) Section 7(2)(i)

Section 48(1)(a) Section 7(2)(i)

This resolution is made in reliance on Section 48(1) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Sections 6 or 7 of the Act or Sections 6, 7 or 9 of the Official Information Act 1982, as the case may require, which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as shown above (in brackets) with respect to each item.

8.

CONFIDENTIAL ITEMS

8.1

Staff reports (cont.) RECOMMENDATION 4: Contract 17/044: Tender Approval for Springfield Link: Springfield Road and Waters Street Pavement Rehabilitation.................................................................................. 65 RECOMMENDATION 5: Contract 17/006: Tender Approval for Ranolf Street Cycle Link .............. 69

Rotorua Lakes Council is the operating name of Rotorua District Council

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OPERATIONS AND MONITORING COMMITTEE DELEGATIONS Type of Committee

Committee

Subordinate to

Council

Subordinate Committees Legislative Basis

Schedule 7 clause 30 (1) (a), Local Government Act 2002.

Purpose

The purpose of the Operations and Monitoring Committee is to assist the Council to ensure consolidated and complete reporting and monitoring of all financial and non-financial information and performance measures against the Annual Plan, Long-term Plan and strategic goals/priorities.

Reference Membership

01-15-226 Councillor Sturt (Chair) Councillor Tapsell (Deputy Chair) The Mayor and all councillors 2 Te Tatau o Te Arawa members 1 Lakes Community Board member 1 Rural Community Board member

Quorum

Full voting rights for all members 8

Meeting frequency

Monthly

Delegations

The Committee’s role is recommendatory only.1 It is authorised to take the actions precedent to the exercise by the Council of its statutory responsibilities, duties and powers, by:  Monitoring and reporting on the performance of the Council in terms of the organisational targets set in the Long Term Plan and Annual Plan – both financial and non-financial;  Monitoring and reporting on operational performance and benchmarking;  Undertaking quarterly reviews and reporting on Council’s financial performance;  Monitoring, reviewing and reporting on the performance of council controlled organisations;  Monitoring, reviewing and reporting on Council’s tender and procurement processes;  Monitoring, reviewing and reporting on the performance and management of Council contracts;  Monitoring, reviewing and reporting on the performance and management of major capital projects (including considering and making recommendations on issues that may arise);

1 Council is authorised to delegate anything precedent to the exercise of Council’s powers, duties and functions - Schedule 7, clause 32 of the Local Government Act 2002

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

    

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Providing oversight and making recommendations in respect of proposals to exercise the powers and remedies of the General Conditions of Contract (by Council as “Principal”) – including taking possession of, determining, or carrying out urgent repairs to works covered by the contract; Considering and making recommendations on outstanding accounts and the remission of fees and charges, for amounts exceeding $6,000; Considering and making recommendations as to the settlement of uninsured claims for compensation or damages where the amount exceeds the amounts delegated to council officers; Considering and making recommendations on requests for Council to guarantee third party loans; Considering and making recommendations on proposals and requests for the grant of easements or rights of way over Council property; Considering and making recommendations in respect of proposals to which will or are likely to significantly vary the levels and/or terms of insurance for Council assets; Such other functions as the Council may direct from time to time.2

Relevant Statutes

All the duties and responsibilities listed above must be carried out in accordance with the relevant legislation.

Limits to Delegations

The Committee does not have the delegated authority to make decisions for and on behalf of the Council. All matters requiring a decision of Council must be referred, by way of recommendation, to the Council for final consideration and determination. In the event that the Council resolves not to approve or adopt a Committee recommendation, the item shall be returned to the Committee via the Chief Executive for review and subsequent referral to the Council for further consideration and determination.

2 A committee is subject in all things to the control of the local authority, and must carry out all general and special directions of the Council given in

relation to the committee - see Schedule 7, clause 30(3) of the Local Government Act 2002.

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MINUTES OF PREVIOUS MEETING

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ROTORUA LAKES COUNCIL

Minutes Operations & Monitoring Committee meeting held Thursday, 30 November 2017 at 9:30am in the Council Chamber, Rotorua Lakes Council MEMBERS PRESENT:

Cr Sturt(Chairperson) Mayor Chadwick, Cr Bentley, Cr Donaldson, Cr Gould, Cr Hunt, Cr Kumar, Cr Raukawa-Tait, Cr Maxwell, Cr Bentley, Cr Kent, Cr Tapsell, Mr Waru & Mr Biasiny-Tule (Te Tatau o Te Arawa) Mr Stanton (Lakes Community Board), Mr Martin (Rural Community Board)

APOLOGIES: STAFF PRESENT:

G Williams, Chief Executive; T Collé, Chief Financial Officer; J-P Gaston, Group Manager Strategy; M Morrison, Kaitiaki Maori; H Weston, Acting Group Manager Operations; S Michael, General Manager Infrastructure; C Tiriana, Manager CE Office; O Hopkins, Corporate planning & Governance Manager; I Tiriana, Public Relations Manager; R Pitkethley, Recreation and Environment Manager; R Dunn, Governance Lead; H King, Governance Support Advisor.

The Chairperson welcomed members, members of the public and staff to the meeting.

1.

APOLOGIES Resolved: That the apologies from Cr Kent & Cr Maxwell (early departure) & Mr Martin & Cr Hunt & Mr Waru (after lunch) be accepted. Cr Gould/Cr Maxwell OM17/11/85

2.

DECLARATIONS OF INTEREST None

3.

URGENT ITEMS NOT ON THE AGENDA There was one urgent item to be discussed in the public excluded session.

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4.

CONFIRMATION OF MINUTES

4.1

MINUTES OF THE OPERATIONS & MONITORING COMMITTEE MEETING 2 NOVEMBER 2017 Resolved: That the minutes of the Operations & Monitoring Committee meeting held 2 November 2017 be confirmed as a true and correct record including the confidential minutes as these items are now publicly available. Cr Maxwell/Cr Gould OM17/11/086

5.

STAFF REPORTS

5.1

RECOMMENDATION 1: FINANCIAL PERFORMANCE FOR THE 4 MONTHS ENDED 31 OCTOBER 2017 01-65-052 Resolved: That the report “Financial performance for the four months ended 31 October 2017” be received Cr Maxwell/Mr Martin OM17/11/087 CARRIED

5.2

RECOMMENDATION 2: OPERATIONAL AND FINANCIAL UPDATES FOR COUNCIL FROM INFRACORE LIMITED, TERAX LIMITED PARTNERSHIP, ROTORUA ECONOMIC DEVELOPMENT LIMITED AND ROTORUA AIRPORT LIMTED 01-65-052

Resolved: That the report ‘Operational and Financial Updates for Council from InfraCore Limited, Terax Limited Partnership, Rotorua Economic Development Limited and Rotorua Airport Limited’ be received Cr Hunt/Cr Donaldson OM17/11/088 CARRIED Tim Hammond & John McCrae (Chair) spoke to a Powerpoint presentation titled ‘Infracore Limited, 1st Quarter Report 2017-2018. (Attachment 1) Michelle Templer, Rotorua Economic Development Ltd spoke to her report. Mark Gibb, Rotorua Airport Ltd spoke to his report. Russell Burton, Terax Limited Partnership spoke to his report.

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RECOMMENDATION 3: OPERATIONAL REPORT FOR NOVEMBER 2017 TO JANUARY 2018 01-65-052 Thomas Collé overviewed the Executive dashboard (Attachment 2) Resolved: That the report “Operational Report for November 2017 to January 2018 ” be received. Cr Kent/Mr Waru OM17/11/78 CARRIED ATTENDANCE: ATTENDANCE: ATTENDANCE: ATTENDANCE: ATTENDANCE:

6.

Mr Martin left the meeting at 12.13pm Cr Hunt left the meeting at 12.39pm Cr Kent left the meeting at 12.45pm Cr Maxwell left the meeting at 12.52pm Mr Waru left the meeting at 1.07pm

RESOLUTION TO EXCLUDE THE PUBLIC Resolved:

That the committee move into public excluded session. Mayor Chadwick/Cr Raukawa-Tait CARRIED The general subject 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(1) of the Local Government Official Information and Meetings Act 1987, for the passing of this resolution are as follows: General subject of each Reason for passing this resolution in Ground(s) under Section matter to be considered relation to each matter 48(1) for passing of this resolution URGENT ITEM Protect information where the making Section 48(1)(a) Hemo Sculpture update available of the information would be Section 7(2)(b)(ii) likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information. Section 48(1)(a) Enable any local authority holding the Section 7(2)(i) information to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations). This resolution is made in reliance on Section 48(1) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Sections 6 or 7 of the Act or Sections 6, 7 or 9 of the Official Information Act 1982, as the case may require, which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as shown above (in brackets) with respect to each item.”

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OPEN SESSION

____________________________ Meeting closed at 1.35pm ____________________________

To be confirmed at the Operations & Monitoring Committee meeting on 1 February 201

………….…………………………… Chairperson

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Confidential minutes now released 01-15-010\25-01

Confidential minutes of the Operations & Monitoring Committee meeting held 30 November 2017 PUBLIC EXCLUDED SESSION 7.

CONFIDENTIAL ITEM

7.1

URGENT ITEM Hemo Sculpture update provided.

Resolved: That the committee move out of public excluded session. Cr Bentley/Cr Donaldson CARRIED

Note 1: Rotorua Lakes Council is the operating name of Rotorua District Council Note 2: Attachments to these minutes are available on request or on Council’s website www.rotorualc.nz

STAFF REPORTS

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File No: 10-10-116-01 RDC-794556 ROTORUA LAKES COUNCIL Mayor Chairperson and Members OPERATIONS AND MONITORING COMMITTEE

ALTERNATIVE MANAGEMENT MODEL FOR ROTORUA AQUATIC CENTRE – A STAFF PROPOSAL Report prepared by: Kerry Starling, Procurement Lead; Henry Weston, Acting Group Manager Operations Report reviewed by: Monty Morrison, Kaitiaki Māori; Gina Rangi, Kaiwhakahaere Māori Report approved by: Jean-Paul Gaston, Acting Chief Executive

1.

PURPOSE The purpose of this report is to provide the Committee with an alternative staff proposal for the future management of the Rotorua Aquatic Centre and seek its recommendation on the way forward.

2.

3.

RECOMMENDATION 1: 1.

That the report ‘Alternative Management Model for Rotorua Aquatic Centre – A Staff Proposal’ be received.

2.

That the Committee: a) Agree to submit the staff proposal to the next Council meeting for consideration; or b) Not agree to submit the staff proposal to the next Council meeting for consideration

BACKGROUND In November 2017, the Council agreed to enter into a new management arrangement for the Aquatic Centre and directed the Chief Executive to negotiate the terms of a management contract with Community Leisure Management (CLM). A copy of the Council paper and resolution is attached. A copy of the CLM management proposal has previously been provided to Councillors through Stellar. Subsequent to that decision there have been negotiations with CLM and discussions with staff and the Amalgamated Workers Union (AWUNZ). Proposals of employment from CLM had been made to 36 out of 38 staff on the same pay rate and broadly similar terms and conditions. No final contract has yet been signed.

4.

DISCUSSION AND OPTIONS AWUNZ challenged the decision-making process leading up to the Council decision. It argued a breach of the Employment Relations Act and/or the Collective Agreement. Essentially it argued that the process of engagement with the Union had been inadequate. After mediation and a hearing before the Employment Relations Authority, a consent agreement between the Union and the Council was reached to resolve the dispute.

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The consent agreement established an additional process designed to ensure that the Union and staff had an opportunity to put together an alternative in-house management proposal that Councillors could consider. The commitment made was that any staff proposal would be fairly considered and assessed against the same criteria that were applied to the external proposals. The Union/Staff proposal was developed with the support of an ‘Advisory Group’ consisting of Dr Reynold McPherson, Louis Sylvester (initially), Bruce Cheeseman and Noel Gulliver.

5.

STAFF PROPOSAL AND ASSESSMENT The staff proposal, titled the Te Puna Proposal, was submitted in Te Reo Maori and it may be summarised as follows (with an English translation below): Whakarongo ki te tangi a te ma tui, tui, tui, tui, tuia Tuia ku runga, Tuia ki raro, Tuia ki roto, Tuia ki waho Tuia ki te here tangata, tuia ki te muka tangata Ka rongo te po, ka rongo te ao Tuia ki te whaiao, tuia ki te ao marama Ka po, ka ao, ka awatea The Te Puna proposal describes a philosophy underpinned by a fully collaborative team working within Te Puna, wholly open to community involvement and input. It seeks to be a bicultural philosophy based on the values of reciprocity, honesty, integrity, understanding, working together, love and respect for all people. It proposes a new name to reflect this: “Te Whare Kauhoe o Rotorua ki Te Puna o Kuirau”. Our assessment of the proposal relative to the CLM proposal and using the attributes from the Request for Proposals document (as had been agreed) has been carried out by a new tender panel to ensure objectivity (Acting CEO Craig Tiriana, CFO Thomas Colle facilitated by Procurement Lead, Kerry Starling). The results of that assessment are summarised as follows: Attribute

CLM

Staff (Te Puna) Proposal

Experience and Team Capability

Proven, with scale and resilience

No ‘how detail’ nor evidence of recent success at the level described in their report

Methodology and Management Systems

Proven, with scale and best practice learning from multiple operations experts in their field

Section 17A report highlights that this is currently, and would be, lacking in a staff/RLC operation

Community Benefit

Strong response to RLC expectations with documented and proven examples

Aligned to RLC 2030 vision and aspirations with strong bicultural philosophy, though little detail

Local Economic Benefit

Proven, with reinvestment into facility. Local employees but risk carried by CLM

Local employees but risk carried by RLC

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Attribute

CLM

Staff (Te Puna) Proposal

Sustainability

Proven with clear sustainability goals and policy

Relies on current and successful RLC policies, little additional detail provided

Price

Significant savings over current operational costs to be delivered by proven operator – risk carried by CLM

Some projected savings identified but no proven experience of delivering or meeting financial objectives. Financial risk remains with RLC

Summary Comment

A very strong proposal represented by proven experience and examples in all attributes

A proposal that is aspirational in terms of intent and philosophy though limited in detail

CLM are experts in Aquatic Centre management and will carry the full risk of meeting financial objectives

The proposal seeks the opportunity to work with RLC management to deliver improved performance, but Section 17A report identified that the in house operation was not performing and it is difficult to see how the Te Puna proposal would compete with the proven expertise of CLM

CLM provided a proposal that gave the Evaluation Panel confidence that all aspects of service delivery will be enhanced

All risk would remain with RLC

Broadly, the proposal does not offer a discrete proposition for the management of the Aquatic Centre but rather offers an opportunity to council to go back to the drawing board to co-design how this philosophy could be translated into an effective governance and operations model. There is the potential to achieve a number of the aspirations identified, particularly around adopting a bi-cultural and community focused Centre, under either an external contract or internal contract.

6.

ASSESSMENT OF SIGNIFICANCE The Council remains committed to providing important community outcomes through the Aquatic Centre. This decision has always been about how, not whether, those community outcomes will be delivered. Because the decision to contract out will increase levels of service and reduce costs, it is not considered that this decision is significant Regardless of the option chosen, the large majority of current staff will continue to be employed at the Rotorua Aquatic Centre. There has been some concern expressed in the community about ‘privatisation’, job losses and price increases all likely to come about as a result of this decision. Under either option, the Council will continue to own the asset and prescribe the outcomes that need to be achieved for our community. Because the Council continues to prescribe the outcomes for the Aquatic Centre to achieve, many of the positive aspirations identified by staff in their proposal can be achieved under either model. In fact, CLM have identified proven experience in working effectively with communities in Whangarei and South Auckland in particular.

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COMMUNITY INPUT/ENGAGEMENT AND PUBLICITY As with the earlier paper, there is no proposal to lower the levels of service currently provided by the Aquatic Centre to the Rotorua community. The objective is to lift levels of service and provide a better facility for the public in the most-cost effective way. As there is no change to the outcomes that the Aquatic Centre is committed to achieving, but only to the way in which those outcomes are delivered, it is not considered that community consultation is necessary. All care would be taken to ensure that any public impact from any change in management will be nil or minimal.

8.

CONSIDERATIONS

8.1

Financial/budget considerations The earlier paper established that a contract with CLM would result in savings of some $702,700 in year one, to $786,668 in year three against the same Council budgeted amount. Negotiations with CLM to ensure transferring staff were paid at the same rate will reduce those savings by approximately $50,000 per year. Savings against actual costs would be higher given the Council subsidy required over the last two financial years has in fact been higher than budgeted. In the 2016/2017 year the actual cost to Council was $1,206,171 so savings on current levels would be in the order of $750,000 in year 1 and rising to over $835,000 in year 3. CLM accept any financial risk of not achieving their revenue targets.

8.2

Without providing very much supporting detail, the Te Puna proposal identifies $520,000 pa in Year 1 savings (although the identified savings appear to rely on an additional subsidy from the Council of $450,000) but all risk of not achieving this target would rest with RLC. . Policy and planning implications This decision is designed to deliver existing and ultimately enhanced community outcomes for the Aquatic Centre.

8.3

Risks The key risk is in meeting or not meeting financial performance objectives and this rests totally with CLM in terms of the outsourced option and sits entirely with RLC with the in-house Te Puna proposal.

8.4

Authority Council has the authority to make the recommended decision.

9.

ATTACHMENTS

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Attachment 1 – Copy of Employment Relations Authority Consent Determination (Pages 18 – 20) Attachment 2 – Alternative staff in-house proposal document presented to RLC on 17 January 2018 (Hard copies will be distributed and attached as a separate document) Attachment 3 – Alternative staff in-house proposal document presented to RLC on 26 January 2018 (Hard copies will distributed and attached as a separate document) Attachment 4 – Independent translation of the Alternative staff proposal dated 17 January 2018 (Pages 21 – 26) Attachment 5 – AWUNZ feedback on this paper (Pages 27 – 36) Attachment 6 – Proposing a new Management Model for the Rotorua Aquatic Centre – Report to O&M, 2 November 2017 (Pages 37 – 45)

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Introduction

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Notes now released to public

Weave from within Weave from without Weave a tie that binds people In darkness and light This incantation encompasses the spirit of this request, in that, it acknowledges all of us who are active throughout the land at this time – here in this community of Rotorua-nui-ā-Kahumatamomoe and his descendants including all hapu and iwi of Te Arawa Waka, people from other Maori iwi, all residents of Rotorua. This incantation also acknowledges the breaking of dawn to a new day, a great day for those who have been interwoven together as one. Therefore, this is a true and accurate proposal submitted to you on behalf of the staff of The Aquatic Centre of Rotorua. For the purpose of this proposal the Aquatic Centre of Rotorua has been renamed Kuirau Community Pool. The new name signals a pathway to tread in the spirit of that links the tangata whenua to their land and their waiāriki. A new beginning is rising before us. The staff are excited at the prospect of sharing their proposal – named the Kuirau Community Pool with the Council - a new pathway for all to follow in the spirit of nurturing and caring for the community, of the tangata whenua, keepers of the fires of ownership and stewardship of this region. The renaming of the Aquatic Centre of Rotorua to the Kuirau Community Pool comes with change to enable the community to participate in that renewal. Aspects of this proposal Heading: Te Puna Hapori o Kuirau (Kuirau Community Pool) To: Rotorua Lakes District Council From: Staff, Aquatic Centre Rotorua Date: 17 January 2018 Ngā Whakahua: Talitha Te Tau & Nan Wehipeihana Main Points 1.1 There are 3 main points to this submission. First, a new model for the management and operation of the Rotorua Aquatic Centre, a notion that goes beyond the two options which have been widely discussed for the future running of inside and outside house facilities. The staff of the Aquatics Centre are excited to share their proposal. 1.2

The second part is in accordance with the RFP released by the Council calling for proposals to be assessed for its merits or otherwise, its relevance and does the proposal submitted meet the requirements. Having looked carefully at those 3 requirements, we conclude that this proposal will bring many benefits to the community. The crux of the staff’s proposal for the Aquatic Centre is in accordance with the tikanga and kaupapa decided by the Council for everyone to follow and the staff are very committed to taking this proposal to the highest level.

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1.3

In conclusion the information attached has been gathered from previous years of operation and collated to clarify and promote the benefits of this kaupapa and the capacity of staff to advance it to fruition.

1.4

Here are the relevant recommendations of this proposal The Council agrees that this proposal has merit and meets the RFP; The Council will grant the Staff representatives a further 4 weeks to complete its proposal. (Due to time constraints, a time of only 1 week was manageable for the development and preparation of this proposal).

1.5

In conclusion, the staff of the Aquatic Centre, Rotorua, would like to acknowledge the Judge of the Employment Relations Authority for clearing a pathway for the staff representatives to make this submission to meet all the requirements of the Individual Employment contracts agreed to by the Rotorua Lakes District Council.

2. Values of the workplace 2.1 The management of Aquatic Centre remains under the auspices of council but there would be greater community engagement in its operations which would ensure the Aquatic Centre truly reflects a bicultural model. The following points will provide a more detailed explanation: 2.2 Employee relationships must be built on honesty, integrity and understanding. A wananga forum would create an inclusive environment to enable employees and the community to discuss the issues, challenges and the pathway forward which would settle any anxieties and lead to a more collaborative and positive impact. All views and opinions would be valued and taken into account which creates a positive workplace and which means less stress on families. However, we must not forget that aroha underpins all values of the Aquatic Centre; manaakitanga is a part of the aroha family and is of a reciprocal nature. 2.3 When outsiders come into Aquatic Centre, they along with their families will feel the spirit and living culture and will also be expected to adhere to the values of honesty, integrity, understanding, working together, love and respect for all people. 2.4 These values are not only Maori values, but are indeed basic human values. However, the difference perhaps is that these values are instilled into the workplace. If staff and management embrace the values referenced above, it will be evident in ones conduct and work. 2.5 Staff will establish a collaborative group plan where all can contribute in whatever capacity and field they wish be it as a life guard, manager, accounts, so on and so forth however the key focus is collaboration. 2.6 Maori language will be normalised within the Aquatic Centre to support biculturalism and to show that Te Reo and its values are alive and well. Therefore the Aquatic Centre will be an example of bilingualism which is only right.

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2.7 The image below shows the proposed management model that this group has formed and further supports the narrative/discussion: 3. Positive outcomes 3.1 The following are the potential positive outcomes of the group  A strong family culture would be very evident in all aspects of the group. This aligns with council’s long term 2030 vision and strengthens the cultural values of Te Arawatanga and Manaakitanga.  The Aquatic Centre would be an exemplar of biculturalism. This aligns with council’s vision to become a bicultural organisation and for Rotorua to become a bicultural place.  People from all branches of the community would be empowered, encouraged and be given an opportunity to play an inclusive part in the Centre.  Staff and management would work more collaboratively to ensure more value and contribution in decision making. The days of one person making all the calls are gone and outdated and should make way for a more collaborative model where all can have input to the direction of the organisation.  A support group, “friends of Te Puna” would be established to gather ideas from the Rotorua community and to provide staff and management of the Aquatic Centre with feedback on their aspirations and expectations for the Aquatic Centre. 3.2 Bringing together the positive outcomes referred to above would address the issues that are before us now and strengthen a collective move forward together. 4 A summary of the three proposed options 4.1 Based on its own analysis, council made the decision to outsource the management of the Aquatic Centre not only to save money but also to improve the current Aquatic Centre experience. Eventually council started the tender process to attract an appropriate service provider. As a result, CLM was selected as the preferred service provider. However, the Employment Relations Authority found fault in the process and ruled that the working group (Employee group/staff?) be allowed to present a proposal of their own and so here is that proposal which is special, creative and informed by an experienced employee group who know how the Aquatic Centre runs and operates. And so, here is a breakdown of the three pathways before us: 1. Management remains under the council 2. Management is outsourced 3. Change to the positive outcomes model proposed

1. Management remains under Council control

Experience &

Governing Authority:

2. Management is outsourced

Governing Authority:

3. Change to the positive outcomes model proposed Governing Authority:

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Team Capability (15%

A democratic system model

Management/CEO: Career Orientated Key focus: Delivery of an outstanding service and product, narrow focus with minimal engagement

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An independent company controlled system with related parties

A democratic community based system model

Management/CEO: Commercially driven, economic benefits to key partners and stakeholders only

Management/CEO: From the within the community

Key focus: Delivery of an outstanding service and product, generation of revenue Methodology and Management Systems (25%)

Community Benefit (15%)

Local

Key aspects: Retention of expertise and knowledge in-house

Key aspects: CLM store data in the cloud which could be problematic.

Focus upon advancing the Aquatic Centre and its services. Community input and engagement is minimal at best. Council interaction is minimal due to the difficulty in navigating its management structure.

Being a nationwide organisation, the community and indeed tangata whenua would lose the ability to contribute and engage in a meaningful, spiritual and valued way. For example: The Swim Magic set goal of 150m will be reduced to 25m. This means all students will be put into Swim Rotorua and Professional competition. This does not support the concept of the health and wellbeing of all people. CLM competes with a variety of businesses

Economic In recent months, due to lack of organisation, businesses within

Key focus: Delivery of an outstanding service and product, greater engagement from and with all branches of the community.

Key aspects: It is preferable to retain the expertise and knowledge within the Aquatic Centre One of the main features of this model is the engagement between the Community and Management. This ensures Community aspirations are reflected in Management and Operations. This will lead to a significantly improved delivery of service and product. Any concerns Council may have will dissipate in knowing things are running successively and efficiently.

The Aquatic

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Impact (5%)

the community failed to work collaboratively, resulting in lack of momentum. Financial matters and business initiatives have not been addressed, which is crucial to progressing forth.

within the community. These businesses range from food service to running fitness centres. With the support and backing of the council, CLM would thrive which would be to the detriment of other businesses. CLM will have access to the resources provided by the Aquatic Centre and the Fitness Centre, which is utilised by the many who aspire to lead a healthier life.

Centre and other business ventures that support the Aquatic Centre will endeavour to work collaboratively. This will ease the heavy workload on the organisation, allowing to focus on more in-depth, important issues. This is a community focus.

Sustainability (5%)

The highest accolade Qualmarks has to offer for Enviromental Sustainability, namely, the Enviro-Gold Award was rewarded.

CLM adopts a clean green attitude towards energy, water, waste and also the environment to ensure sustainablity and prosperity.

The Aquatic Centre continues to operate and deliver its outstanding service which in recent months has resulted in being awarded the Enviro-Gold Award, which, in turn, enables progression to greater heights, with locals and the community working in unison. These values resonate through Earth Mother to the

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environment, and come from all walks of life.

5.

Financial Kōrero Council Management remains

Management is Privatised

A new more beneficial arrangement

6.

What are the benefits?

6.1

The ongoing benefits are relevant to our community through the Rotorua Swim School. It features our Lakes at the top of each step achieved by our learners. This is not possible through CLM, an outside company.

6.2

The ultimate goal of the Swim School is to ensure our students can swim 200m. The CLM distance is only 25m.

6.3

The distance at Tikitere is 200m.

6.4

The Swim School has already been awarded the Gold Quality Swim School by Swimming NZ.

6.5

More important is that the Rotorua Lakes School promotes Water Safety within all our schools.

6.6

The Community is totally supportive of the strategies and work of the Swim School.

6.7

Although the Unison Lakes Safety programme was developed by the Rotorua Lakes Swim School it will continue to be operated under CLM.

6.8

The following already receive funding Road Patrol Disabilities, entry and support Camp Quality New Zealand Representative

6.9

The Swim School will continue to provide water safety training for its staff.

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Te Puna Hapori o Kuirau

Memo To:

RLC Management Committee - The Aquatic Centre

From:

[Your Name]

cc:

[Recipient(s)]

Date:

January 26, 2018

Re:

Feedback to Draft Report for O&M Committee

Purpose The purpose of this memo is to provide written feedback to the draft report prepared by RLC management for presentation to the Councils Operation and Monitoring Committee for 01 February 2018.

Background In November 2017, through an RFP process, RLC Senior Management decided to outsource the management and HR of the Rotorua Aquatic Centre to Community Leisure Management (CLM). In the same month the Staff began industrial action with the general issues being: change management; and strategic direction. Reflecting issues with the change management was a decision by the Employment Relations Authority that established an additional process that enabled the Staff to develop an alternative management proposal. However, the timeframe awarded for the alternative proposal was challenging, 20 December 2017 to 20 January 2018, with the development of the proposal dependent upon voluntary staff and community commitment. So all the aspects of a strong proposal including concept design; business planning; and report writing to produce a proposal that could compete had to happen within this challenging context. Despite the challenge a proposal was developed and submitted. And it has substance and edge, it actually competes. However, this proposal requires more time support to develop the detail and this is reflected in the two recommendations presented in the proposal:

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1. That Council agree that there is substance and potential in this proposal worthy of serious consideration 2. That Council enable the Staff to develop further the proposal over an additional four week period to a more detailed nature (the proposal in its current form was effectively developed over a one week period) A critique of the draft report prepared by RLC Management for the O&M Committee is appended. Reflective of the voluntary community input into this process there are two critiques provided, one providing a wider lens view, the other dealing with the detail.

Next Steps What is required at this point is for good leadership to supplement the RFP process and for a general ‘teaming up’ to occur. It requires the human element of aroha ki te tangata. Council Management needs to decide if they are going to support recommendation 2 detailed above and enable it to happen. If they do then there is an immediate opportunity to re-establish good faith into what has become an adversarial low trust situation. If there is support for recommendation 2 at the senior management level this needs to be communicated to the Staff Working Group before the O&M Committee meeting on 01 February.

2

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Appendix 1: A Wider Lens Critique The Aquatic Centre is a special and valued asset owed and run by the RLC. An important part of its value and its potential value, is that it is run by the community that uses it and not by a profit-making entity. This pool should be viable whether it is managed by the Council or not. It has free hot water and is well loved. The fact it has been making losses is not due to staff but poor management. The staff do not agree the answer is to contract it out. Rotorua is a community with a significant Maori population that is keen to be further involved in running the pool and in it meeting the needs of the community. The community as a whole is strongly supportive of keeping the pool run by the Council and getting involved in improving the way it is run and serves the community. The staff proposal focuses on further involving the staff and the community, including Maori, in bringing new connectivity to the way the pool is run. The staff had very little time to develop an alternative because the Council made the decision to contract to CLM without consulting with staff. They were told this would happen but then it was too late because the Council had made the decision. This is what the litigation was about. The reason for the lack of consultation was that Council management were under the misapprehension that the Council did not have to consult as they wrongly believed the Council was not the employer and was not bound by that obligation. As a consequence of undertakings, the staff were given a short timeframe to put together an alternative. They appreciate what they have presented is a work in progress. They hope you will allow further development of a plan because you can see the merit of keeping the pool in the community and run by it. The RLC is asked to do this because it shares with staff a strong commitment to this engagement of the community and involvement of Maori. Contracting out to a profit-making provider is moving away from these values. Section 4 of The Local Government Act 2002 says the purpose of local government is: “Purpose The purpose of this Act is to provide for democratic and effective local government that recognises the diversity of New Zealand communities; and, to that end, this Act— provides for local authorities to play a broad role in meeting the current and future needs of their communities for good-quality local infrastructure, local public services, and performance of regulatory functions.”

3

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It also commits to; “Treaty of Waitangi In order to recognise and respect the Crown’s responsibility to take appropriate account of the principles of the Treaty of Waitangi and to maintain and improve opportunities for Māori to contribute to local government decision-making processes, Parts 2 and 6 provide principles and requirements for local authorities that are intended to facilitate participation by Māori in local authority decision-making processes.” Maori and Community involvement in running the pool is consistent with the purpose and the commitment to the principles of the Treaty yet it was not something even considered when the management considered contracting out. The focus was on savings. Keeping the pool with the management of the Council connects and strengthens this community. it facilitates participation by Māori in local authority decision-making processes. By providing a pool that is not for profit and letting those who live here get involved in running it, the Council is carrying out its purpose; meeting the current and future needs of their communities for good-quality local infrastructure, local public services. We know the pool can make a lot of the efficiencies offered by a contractor under good management, without losing the quality and connectivity that can be achieved by being a locally run, community run pool because it has done so before but the proposal is more innovative. We can do much better. Savings such as bulk funding can be made by working with other councils, they are not lost if the pool is not contracted out. There is nothing to stop the Council making as much money out of running a café as CLM can. More importantly however, a community pool is the kind of activity that makes a real difference to the quality of life of the people of Rotorua. Our community can teach its mokopuna to swim. By staying in Council hands, an organisation committed to the Principles of the Treaty and reflecting the community, it can better reach out to those who live here and it can involve them in deciding how to use the pool to best involve and reach the people who need it. The proposal builds on the retention of the pool by the current community and further strengthening the community engagement in it, particularly Maori. The staff accept the pool is not currently well run. They were the ones who raised the alarm because the pool used to be much better managed and was meeting the needs of this community much more efficiently. They do not consider the answer is to bring in a profit-making contractor, nor to slash term and conditions of the staff. The CLM proposal is suggesting savings of $200K in the first year based on paying the employees less.

4

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The management of the Council who support contracting out may say that they will offer transfer on the same pay-rate but they are not offering anything close to the same take home wage and they are eroding the security of employment of the workers but only guaranteeing them minimum hours. Penal rates will go too. The reduction in real wages and secure work will impact on families in this community. Less money and less hours of work will cause these families stress and poverty. These ways of saving are unnecessary and unsustainable. The pools can be made much more efficient without eroding the incomes of the staff. In the proposal, you will see the staff are concerned that the projected savings are also unrealistic and unsustainable. For example, the contractor has not accounted for the likely obligation for Council’s to pay the living wage. At the Council, staff have been given regular hours. They have paid maternity leave rights. They will lose them. Is this the way the Council want to make savings? This also indicates that the contractor is out of step with the values of this Council. Contracting out the pool to a profit-driven company, with no connection to Rotorua and no commitment to fostering that community is not the answer.

5

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Appendix 2: A Detailed Critique There are a number of supporting source documents that generally support assertions made in the critique.

No: 1.

2.

Ref: Pg1, Item “Purpose”

1.

Pg1, Item 2. “Recommendation”

RLC Report “The purpose of this report is to provide the Committee with an alternative staff proposal….and seeks its recommendation on the way forward” “a) Agree to submit the staff proposal to the next Council meeting for consideration; or B) Not agree to submit the staff proposal to the next Council Meeting…”

Response The opening statement is misleading as senior management have gone well beyond just “providing” the proposal to Councilors for a decision, as the content of their report so undermines and undervalues the Staff Proposal that the Assessment Panel of Craig Tiriana, etc. failed to even give the proposal any scores according to the RFP weighting criterial. We submit that Recommendation 2, a) and b) whilst appearing neutral, actually constrains Councilors’ decision making options to either a YES or NO decision at the O&M meeting. We believe this is unhelpful to Councilor’s given the high public scrutiny surrounding the future of the Aquatic Centre. We submit that recommendation 2 be amended as follows: 2, a) Councilor’s agree the Staff Proposal has potential and merit worth further consideration and; b) Allow a period of 4 weeks for a comprehensive Staff Proposal to be submitted at the next full Council Meeting c) That Full Council makes a FINAL DECISION to either approve or reject a comprehensive Staff Proposal at that time.

3.

Pg1, Item 3.

“Proposals of employment from CLM had been made to 36 of 38 staff on the SAME

We submit that there is no additional cost or inconvenience to Councilor’s apart from an extended timeframe for a final decision. We have been advised that there is no signed contract with CLM at this stage. The extension would demonstrate Councils’ good will and desire to make fully informed decisions especially given the high public scrutiny on the future of the Aquatic Centre. We utterly reject this statement as it blatantly misleads Councilor’s by creating the false impression that staff are being looked after by 6

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PAY RATE AND BROADLY SIMILAR TERMS AND CONDITIONS” “No final contract has been signed”

4.

Pg1. Item 3.

5.

Pg1. Item 4.

“Essentially it (the ERA applicant) argued that the process of engagement with the Union had been inadequate.”

6.

Pg2, Item 4.

“…any staff proposal would be fairly considered and assessed against the same criteria that were applied to the external proposals.”

7.

Pg2, Item 5. “para 3”

“The Te Puna proposal describes a ….”

Operations & Monitoring Committee 1 February 2018

stating their pay and conditions are “BROADLY SIMILAR”. THIS IS ABSOLUTELY NOT THE CASE We seek to challenge the legality and efficacy of RLC senior managers appointment of Mr Pierre Holland, (CLM Senior Manager) on or about the st 1 December 2017 to the role of Acting Aquatic Centre Manager, given there has been no signed contract between RLC and CLM? This statement grossly understates the magnitude and seriousness of the resulting ERA application made by AWUNZ against the RLC in which there were at-least two clear breaches communicated by the Adjudicator on the day of the hearing. We contend that the assessment panel of senior tier RLC managers: 1) SERIOUS FAILURE to fairly assess the Proposal written in Te Reo, because of an incorrect translation of that document; 2) FAILED to consider the Proposal fairly by enforcing RFP tender criteria designed for an outsourcing management response; 3) DISRESPECTED the point of difference of the Proposal, with a one paragraph description of the bicultural management approach, without specific analysis related to the merits and opportunities of this approach; 4) INCORRECT ASSUMPTION that RLC top tier management assessing the Proposal would be perceived as impartial, highlights a “disconnect” given the high public interest and scrutiny by the community on the future of the Aquatic Centre. We assert that an external assessment panel be commissioned to fairly evaluate the Staff Proposal. We are EXTREMELY DISAPPOINTED with the candid lack of analysis provided by Council firstly because the Proposal has been translated incorrectly, and secondly that there is no expert analysis provided to evaluate the efficacy and merits of a bicultural management component that underpins the entire Proposal. We perceive this as being DEEPLY DISRESPECTFUL and pays lip service through poor translation and incorrect interpretation of the Staff Proposal, indicative of a Senior Management group that appears to lack both 7

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8.

Pg2, Item 5 “Table”

See table on bottom page 5 of Council’s report.

9.

Pg2, Item 5

Refer table bottom page 5

10.

Pg3, Item 5. “refer table, Local Economic Benefit, column 2.

“Proven, with reinvestment into facility. Local employees but risk carried by CLM”

11.

Pg3, Item 5. “

As per Item 11 above.

12.

Pg3, Item “Summary Comment”

5.

Colum 3: “but Section 17A report identified that the in house operation was not performing.”

Operations & Monitoring Committee 1 February 2018

the capability and competence to manage the entirety of this process. The Staff of the Rotorua Aquatic Centre have been treated with disdain and disrespect with the Panels decision to so devalue the proposal that they refused to assign scores against the weighting criteria. We further assert that neither the CLM proposal nor the Staff Proposal ever provided “how detail” but what both proposals have in common are “assertions of actions to be employed in the pursuit of operational matters based on past experience”. For the Council to ignore the current staff capabilities and experience in operational matters is abhorrent as it effectively means that RLC Senior Managers responsible for the Aquatic Centre, assume responsibility for its influential role in the perceived demise of the Centre which has led to the outsourcing option as a way of masking senior managements incompetence. The Panel’s comments highlight the lack of detail. We contend that the Panels assessment has been erroneous due to a poor translation of the proposal from te reo into English. This places its’ entire report at RISK due to this basic error. Analysis of the Financial Accounts provided by CLM reveals the entity has a $20million turnover, is highly geared with debt, and has just over two weeks of “working capital” available. Its 2017 nett profit was $140K and the previous year CLM made a loss of $200k. CLM presents as a SIGNIFICANT FINANCIAL RISK that has been ignored or missed by both the original and new panel members. This raises again an issue of incompetence of senior management at RLC to identify and report with accuracy to decision makers on potential risk factors in the CLM proposal. The RFP clearly states that “Audited Accounts” must be provided by the respondents to the RFP. CLM has not met this requirement, instead providing a compilation report, unaudited. Another senior management error that presents a real financial risk to RLC. We consider that the 17A report is erroneous because it fails to assess the impact of Senior Managements’ decision making over the past 3 years that have contributed significantly to the perceived demise of the Centre. Please see attached a survey of 201 customers of the Aquatic Centre and their compelling feedback which confirms that a “lack of maintenance, and 8

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13.

Pg3, Item “Assessment Significance”

6. of

14.

Pg3, Item 6 “para 3”

Entire Section.

“many of the positive aspirations identified by staff in their proposal can be achieved under either model. In fact CLM, have identified proven experience in working effectively with community in Whangarei and South Auckland in particular.”

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capital expenditure” which are decisions made by senior management with the blame erroneously attributed to Operational Management & Staff. The Panel states that community outcomes are important, but that the decision to outsource is “not significant”. In response we have provided a community based petition which has in excess of 6,000 signatories that disagree with RLC Managements opinion that this decision is “not significant”. This assessment by the panel and resulting comment is particularly telling as they attempt to assert that our bilingual community approach can be achieved by CLM. This is insulting given the in-house capabilities of current Aquatic Centre staff who are fluent in Te Reo and as a result are competent in tikanga Maori. In contrast to CLMs appreciation of a bicultural approach they quote: “We appointed Scott Linklater, former NZ Maori, Chiefs and Waikato rugby player, in 2014 as our Te Ha Maori o CLM to facilitate and lead this process” Instead of elaborating on the content and important aspects of its bicultural program, CLM concludes that it would highlight a brown face with a rugby pedigree as being significant in its proposal?

15.

Pg4, Item 7 “para 2”

16.

Pg4, Item 8.1 “para 1”

17.

Pg4, Item 8.1 “para 1”

Entire paragraph concludes that community consultation is not considered necessary.

“CLM accept any financial risk of not achieving their revenue targets.” Entire paragraph.

The Panel that assessed this aspect of the CLM proposal clearly lacks a competent understanding and capability to assess anything to do with a kaupapa tikanga rua methodology. We once again conclude that Senior Management incompetence has led to an illinformed view that the community should be “excluded” from consultation on the future of the Aquatic Centre. We have in excess of 6,000 signatories to a community petition that directly opposes the view of RLC senior management, as evidence of their management incompetence. Refer No.11 of this feedback table. CLM presents as a FINANCIAL RISK to RLC The financial narrative provided by the Panel misleads readers in terms of both the true financial input of RLC with regard to the CLM option. We assert that the purported savings are masked by additional costs of Corporate 9

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Overhead, Capital Expenditure, Depreciation and Finance Costs that when added onto the operating costs of the Aquatic Centre, appear to produce substantial savings not to the Rate Payer, but to the Rotorua Lakes Council overarching financials. This is misleading and requires a fresh and transparent financial analysis methodology that demystifies these complexities and creates and open and honest financial reporting framework that would allow Councilors to fully assess all proposals on an equal playing field.

10

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PUBLIC EXCLUDED

RESOLUTIONS TO EXCLUDE THE PUBLIC General subject of each matter to be considered

Reason for passing this resolution in Ground(s) under Section relation to each matter 48(1) for passing of this resolution Protect information where the making Section 48(1)(a) available of the information would be Section 7(2)(b)(ii) likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information. Enable any local authority holding the Section 48(1)(a) information to carry on, without Section 7(2)(i) prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

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File No: 60-01-010\24 RDC-774755 ROTORUA LAKES COUNCIL Chairperson and Members OPERATIONS AND MONITORING COMMITTEE

PROPOSING A NEW MANAGEMENT MODEL FOR THE ROTORUA AQUATIC CENTRE Report prepared by: Rob Pitkethley Report reviewed by: Henry Weston, Group Manager Operations (Acting) Report approved by: Geoff Williams, Chief Executive

1.

PURPOSE The purpose of this report is to seek a Committee recommendation to Council that a new management contract for the Rotorua Aquatic Centre is entered into.

2.

EXECUTIVE SUMMARY The Rotorua Aquatic Centre is a popular destination and an important community asset for Rotorua residents. Its role is to deliver highly-valued community outcomes by:   

Ensuring high quality, affordable, community fun, health, wellbeing and recreation experiences; Delivering an excellent learn to swim programme aimed at keeping our children (and adults) safe in our aquatic environments; and Working with clubs to support athlete pathways from grassroots to national and international levels, host sporting events, and build Rotorua’s reputation as an outstanding sporting environment.

The effectiveness of the Council’s current management of the Aquatic Centre in delivering expected outcomes has been carefully reviewed as part of this process, and external providers have been tested to understand how they might deliver those same outcomes. The review process concluded that the Aquatic Centre does not currently meet best practice and that if it continues to be managed in-house significant changes – with time, energy and significant investment - need to be implemented to bring the Centre to best-practice standard. Some issues with the Aquatic Centre relate to the fact it is an aging facility that requires capital investment; others relate to efficiency, community engagement, staffing, planning, programming, risk management and monitoring. On the other hand, the top external provider, Community Leisure Management (CLM), has 22 years’ experience, manages 27 facilities across the country, has excellent management systems and has a strong record in working with communities – notably in South Auckland where it works to support and build capability of communities in need. It has committed to delivering on (and expanding) the agreed outcomes for the community at a hugely reduced cost. CLM has provided assurances that a regular community needs analysis will be conducted and reported to Council, that it will conduct an analysis of local perceptions, convene annual user group meetings, and provide ongoing evidence that its services meet the needs of the local community. It will provide an annual report to Council of performance against objectives.

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The current cost for the Council of managing the Aquatic Centre is approximately $2,200,000 (included in this is approx. $500k for each of depreciation and corporate overheads). CLM have committed to delivering the service for $454,968 per annum, reducing to $370,980 per annum by year 3 – an annual saving in the order of $750k in year 1 and $835k by year 3. There will be no price increases for the public in year 1, and no more than CPI increases after that. CLM has indicated it will be willing to discuss transfer of existing staff, and have said that in their experience the majority of front-line staff at least is likely to transfer across.

3.

RECOMMENDATION 1. That the report ‘Proposing a New Management Model for the Rotorua Aquatic Centre’ be received. 2. That the Committee notes the conclusions in this paper that the recommended tender will run the Rotorua Aquatic Centre at a higher level of service for a considerably reduced cost. 3. That the Committee recommends to Council that Community Leisure Management Limited (CLM) take over the management of the Rotorua Aquatic Centre. 4. That the Committee recommends to Council that the Chief Executive is delegated the authority to negotiate the final terms of a management contract with CLM within the parameters set out in this paper. 5. That this report, and the minutes relating to this item, be made publicly available should the Council accept the recommendations.

4.

BACKGROUND The Rotorua Aquatic Centre was first opened in 1975 and additional facilities were added in 1988 and 2004. It is highly valued by the Community and is the only aquatic centre in the district offering the current range of activities. It attracts approximately 350,000 visits per year. The Aquatic Centre is a popular recreation destination for local families, it is the home for most aquatic sports in Rotorua and hosts aquatic sporting competitions for swimming, waterpolo, and underwater hockey, and delivers learn to swim programmes to the public and schools through the Rotorua Lakes Swim School. For the past two years it has worked in partnership with Swim Rotorua to deliver a swimming and water safety programme to schools, particularly lower decile schools. There has been no significant capital investment into the Aquatic Centre since 2004 and its appearance is now tired and outdated and has fallen behind similar centres in neighbouring areas. Vision 2030 identifies seven key goals, and the Aquatic Centre either does, or has the potential to, contribute as an outstanding place to play, to our vibrant city heart, to business innovation and prosperity, and a resilient community. Our wider aquatic environments are highlighted as strengths in our district. The Council’s Sport and Recreation Strategy highlights key opportunities around developing aquatic sport and recreation and growing Rotorua’s reputation as the first choice for great events. Broad objectives in that Strategy include increasing participation (including from low participation groups), improving collaboration with communities and sport stakeholders, and increasing the utilisation of our facilities. It also identifies the need to refurbish the Aquatic Centre and increase the capacity and level of service in line with community expectations, and work in partnership with schools, Swim

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Rotorua and Te Arawa Lakes Trust to ensure every young person in Rotorua has the opportunity to learn to swim. Coming out of this is the overarching imperative that the Aquatic Centre is, and remains, accessible to our community and delivering the key community outcomes of:   

High quality and affordable community fun, health and wellbeing, and recreation experiences; Excellent learn to swim and water safety programmes, in particular engaging with our schools and young people; and Sport development and hosting sporting events, in particular working collaboratively with swimming, waterpolo and underwater hockey clubs.

The recent Capability 2030 process, the departure of both the Aquatic Centre Manager and Learn to Swim Manager, and the requirement under section 17A of the Local Government Act to review periodically the cost-effectiveness of current arrangements for meeting community needs, all led to a decision to review the management of the Aquatic Centre and ensure the Council is delivering services in the most effective way for our community.

5.

DISCUSSION AND OPTIONS The review process has been careful and undertaken in several stages and sequential steps, consisting of:    

Engaging a consultant experienced in aquatic and leisure centre management to undertake a review of the Council’s management of the Aquatic Centre; and then after reading those initial conclusions: Calling for expressions of interest (EOI) from the external market to test whether there might be interest in a management contract option and the skills and experience that they could bring to it; and then after being satisfied more detailed information should be sought: Running a formal request for proposal process (RFP) with the two management companies who demonstrated the best skills and experience through the EOI process; and Having a presentation from, and face to face discussions with, the preferred applicant.

Following this, a careful analysis and comparison of the options has been carried out – all the time assessing against the imperative of delivering on the outcomes that the Council has identified are most important to our community. Review of current management A comprehensive review of the current management of the Aquatic Centre has been carried out. The review consisted of staff interviews, stakeholder surveys, desktop research, interviews with industry professionals, and benchmark analysis. The Aquatic Centre was assessed against best practice as outlined in the 2015 Facility Management Manual (Sport NZ). Overall the conclusions are the Aquatic Centre does not meet accepted best practice in a number of areas, and that if it continues to be managed in-house then significant changes – with time, energy and significant investment - need to be implemented to bring the Centre up to best practice standard. More specifically, concerns were raised about effective community engagement to understand community needs, lack of leadership in key roles, planning and risk management gaps, and monitoring and measuring deficiencies. Benchmarking showed that questions were also raised about the efficiency of the operation and the level of staffing costs. It is important to repeat that while the facility itself is somewhat tired and is due for a significant renewal and this has not helped,

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satisfaction responses from regular users and hirers of the Aquatic Centre track consistently below established industry benchmarks. Following this review work, the recommendation from the Consultant was that the external management company model should be considered for the following reasons:      

Expected cost savings of 20-25% Minimal impact on existing operations and programmes Immediate improvements to quality management Better access to specialist staff, aquatic expertise and services Potential for Council to further reduce ratepayer subsidies Possible future investment partner in the development of the Centre.

As a result of this initial work, a decision was made to explore what external management options might exist, what they could offer, and whether providers had any interest in looking at management of the Aquatic Centre. Expressions of interest process Expressions of interest were called for from aquatic centre management companies asking for details of relevant experience, management systems and staffing, their points of difference and their organisational profiles. Prices were not asked for at this stage. Three expressions were lodged – from the YMCA, Belgravia Leisure, and from CLM. All three expressions were of a very high quality, though those put forward by both Belgravia Leisure and CLM stood apart. The expressions detailed considerable experience in working across New Zealand and Australia, a strong commitment to working in partnership with Councils, and a significant focus on working with communities to improve their experiences. A decision was made at this point to undertake an RFP and call for detailed proposals (including price) from Belgravia Leisure and CLM. ‘Request for Proposals’ Both Belgravia Leisure and CLM submitted strong and detailed proposals. After working through the assessment criteria (including price), CLM emerged as clearly the preferred candidate for further assessment. The five criteria – all focused around their ability to meet our community outcomes for the Aquatic Centre – were:      

Experience and team capability (15%) Methodology and management systems (25%) Community benefit (15%) Local economic benefit (5%) Sustainability (5%) Price (35%)

Highlights under each heading are provided below: 

Experience and team capability – CLM is a New Zealand owned company with 22 years’ experience and manages 27 aquatic and recreation centres, including award winning facilities in Nelson and Papakura. References from Councils who partner CLM have been excellent.

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

Methodology and management systems – CLM provided details of the range of systems and processes it uses to provide a ‘total operational management’ solution. This included details of staffing structures, rosters, approach to employing staff, marketing, maintenance and cleaning, health and safety policies and procedures, pool testing, IT and financial management as well as details about the range of programmes they run with and for the community. The level of detail provided, and the sophistication of the many systems, is impressive. CLM is the only pool operator in the country to achieve the highest level of accreditation with ACC in Workplace Safety Management. Online monitoring provides real time information on all aspects of operation and asset performance, health and safety and water quality.



Community benefit – CLM indicates it will look to expand the Aquatic Centre’s role as the centre for aquatic sports, learn to swim, and family and youth recreation. It is committed to proactively engage with user groups to explore ways to expand their activities, enhance customer service and develop a programming strategy that will help optimise community use – and especially those groups who are disadvantaged. CLM also commits to undertaking a regular community needs analysis to help programming, bring together an annual meeting of user groups and provide an annual report of performance. In other pools, CLM initiatives have included swimming lessons in te reo Maori, Tongan and Samoan. CLM has provided assurances that a regular community needs analysis will be conducted and reported to Council, that it will conduct an analysis of local perceptions, convene annual user group meetings, and provide ongoing evidence that its services meet the needs of the local community. It will provide an annual report to Council of performance against objectives. CLM is happy to discuss the transfer of existing staff where there are like for like positions and where they meet the employment conditions relevant to the role. Their experience has been that the majority of frontline staff – lifeguards and swim instructors – transfer across in these situations, while manager and supervisor positions are more closely tested.



Local economic impact – CLM state that their general experience of growing the business and providing more activities for the public will lead to increased employment. They have said that they will provide work experience and volunteer opportunities for Rotorua youth and others and would support the Gateway Programme in partnership with schools. CLM believe it is inevitable they will support local groups in cash and in kind as they have done elsewhere. They have also expressed a willingness to be a partner in investing in the facility and have provided an example from Palmerston North where they have worked in partnership with a hydro slide business. This has resulted in hydroslides and outdoor play areas being established at no cost to the Council.



Sustainability – CLM’s focus will be on energy and water conservation, waste minimisation, pollution prevention, environmentally friendly chemicals, and environmental advocacy.



Price – CLM are seeking a Council subsidy of $454,968 in year one, $393,351 in year two, and $370,980 in year three. By comparison, the total cost for the Council budgeted for the 2017-18 year is $1,157,668, taking away the fixed costs of depreciation, interest and corporate overheads (which will remain with the Council). If CLM is successful in providing this service then the annual cost saving for the Council against budget is just over $700,000 in year one rising to nearly $800,000 by year three. In the 2016-17 year the actual cost (as opposed to budgeted cost) to Council was $1,206,171 so savings on current levels would be in the order of $750,000 in year one rising to over $835,000 by year three. There are no admission price increases proposed for the public in Year one – and no more than CPI increases in further years unless there is specific Council approval. One line item in the proposed income budget is grant funding of $55,000. This is money that has been secured over the past two years from both RECT and BayTrust by the Rotorua Lakes Swim

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School and Swim Rotorua to deliver the ‘Making the Difference’ outreach programme to schools. The intention is that the cost savings could be used in part to at least meet this grant funding amount if not extend the school programme further. Presentation from CLM and discussion Staff met with CLM management and representatives in Rotorua. It provided a chance to meet the individuals behind the company, and to gain more detail about the way they operate and their proposal for Rotorua. Key points that came out of the discussion were that CLM were very familiar with the Aquatic Centre having undertaken earlier work on development options, that they worked in a number of similar communities to Rotorua especially in Whangarei and South Auckland and placed a big focus on community engagement, and that their mode of operation was one of continuous improvement and not radical change. Particularly impressive were their ‘active youth’ programmes, their bi-cultural approach, and their commitment to working with schools. They also highlighted the full on-line transparency of all their systems, and the work they have done in the ‘coinvestment’ space. The other thing that became apparent was the value they could drive throughout their organisation by sharing ideas and innovations, and their focus on staff development. Analysis The strength of the proposal from CLM is based on many years of experience working in the pool management business and refining and developing its systems. There is little doubt that these systems and management processes are stronger than those currently adopted by the Aquatic Centre. Equally, the CLM experience in working with the communities it operates in and the commitments it has provided to continuing that work in Rotorua is far above that of our own Aquatic Centre. When price is factored in, the Council will achieve some very significant cost savings – some of which could be reinvested to deliver even better outcomes for our community particularly in the area of water safety and school programmes. We see no risk to the delivery of the core community outcomes that the Aquatic Centre has been focused on, and have confidence that the improvements will be marked. CLM is committed to working as a partner with the Council. Their experience working with other Councils in 27 facilities shows improved levels of service and efficiencies in operating public aquatic and leisure facilities have been delivered. Our suggestion would be that if the Council agrees with the recommendations put forward, then an initial contract based on:  a term of five years and a five year option for renewal subject to meeting agreed conditions;  annual subsidies from the Council as outlined in their proposal (unless the Council decides to purchase additional services); and  no price increases for the public in year one and no more than CPI increases in any other year. In addition, the Council would continue to specify the strategic outcomes and priorities for the Aquatic Centre. This will help safeguard the interests of the Rotorua community.

6.

ASSESSMENT OF SIGNIFICANCE The Council remains committed to providing important community outcomes through the Aquatic Centre. This decision is about how, not whether, those community outcomes will be delivered. Because of this, it is not considered that this decision is significant. There is no suggestion that the current levels of service will be lowered; and in fact, the expectation is that the levels of service will be increased over time at a considerably reduced cost.

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There has been some concern expressed in the community about ‘privatisation’, job losses and price increases all likely to come about as a result of this decision. There may be some job losses of existing staff but in all likelihood the majority will have the option of transferring across to CLM. No price increases are proposed, the proposal from CLM makes it clear that they will have a strong focus on meeting community needs and expectations, and the overall cost savings to the Council will be very significant.

7.

COMMUNITY INPUT/ENGAGEMENT AND PUBLICITY There is no proposal to lower the levels of service currently provided by the Aquatic Centre to the Rotorua community. The expectation is that the levels of service will be lifted. As there is no change to the outcomes that the Aquatic Centre is committed to achieving, but only to the way in which those outcomes are delivered, it is not considered that community consultation is necessary. In the event the decision is made to change to a management contract, the public will be kept advised as the transition progresses through. All care would be taken to ensure that any public impact from any change in management will be nil or minimal. Staff have been kept advised throughout the process.

8.

CONSIDERATIONS

8.1

Financial/budget considerations Should the Council approve the recommendations then the subsidy that the Council provides to operate the Aquatic Centre will reduce from the 2017-2018 budgeted amount of $1,157,668 to $454,968 in year one, $393,351 in year two, and $370,980 in year three. This would represent a saving of some $702,700 in year one, to $786,668 in year three against the same Council budgeted amount. The main differences between the current budget and the budget proposed by CLM are in the revenue lines where they are anticipating an additional $300,000 (24%) with admissions, retail and swim school numbers all projected to increase; in wages down by $200K (16%) driven by smarter rostering not by lower pay rates (in fact CLM have said that their philosophy is to pay good rates for good people); and in operating expenses reducing by $120K (37%) and this is likely to be in enhanced contracting and purchasing. Many of these reductions will come about through extracting benefits of scale and experience in working widely and deeply in the sector. And it is worth noting that CLM accept any financial risk of not achieving their revenue targets. The actual amount of the Council subsidy required over the last two financial years has in fact been higher than budgeted. In the 2016/2017 year the actual cost to Council was $1,206,171 so savings on current levels would be in the order of $750,000 in year 1 and rising to over $835,000 in year 3.. CLM has included ongoing grant funding in its budget that has been specifically attributed to the ‘Making the Difference’ schools partnership programme. If future grant funding (RECT and BayTrust) is not forthcoming, consideration could be given to providing this additional subsidy to CLM to continue – or extend – a school outreach programme focused on lower decile schools. This could be considered in any contract negotiations.

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Policy and planning implications This decision is designed to deliver existing and ultimately enhanced community outcomes for the Aquatic Centre. Exploring new partnership options for managing the Aquatic Centre has also been clearly signalled through the Council’s annual work plan.

8.3

Risks There are limited risks to the decision being taken, although there has already been some public comment that this is a ‘privatisation’ and that costs will increase. The contractual arrangements will ensure that this does not happen. This is a model that is increasingly being used in aquatic and leisure centre management across the country. The other risk would be that CLM does not perform to expectations leading to public criticism and diminished service levels. This is unlikely to happen given the CLM track record at other facilities. In a worst case scenario the situation would need to be managed and potentially brought back in-house.

8.4

Authority Council has the authority to make the recommended decision. What is proposed is a contract to deliver agreed Council services.

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File No: 01-65-052 RDC-794799 ROTORUA LAKES COUNCIL Mayor Chairperson and Members OPERATIONS & MONITORING COMMITTEE FINANCIAL PERFORMANCE FOR THE SIX MONTHS ENDED 31ST DECEMBER 2017 Report prepared by: Cullum Vibert, Financial Controller Report reviewed by: Thomas Collé, Chief Financial Officer Report approved by: Jean-Paul Gaston, Acting Chief Executive

1.

PURPOSE The purpose of this report is to provide information on Council’s financial performance for the six months ended 31st December 2017.

2.

RECOMMENDATION 2: That the report “Financial performance for the six months ended 31st December 2017” be received.

3.

DISCUSSION Operating Statement For the month ending 31 December 2017 Year to Date

Full Year

Actual

Budget

Variance

Annual Plan

$ (000)

$ (000)

$ (000)

$ (000)

44,199

43,720

479

87,476

Fees and charges

9,303

8,732

570

17,356

Subsidies and grants

2,551

2,191

360

4,350

54

67

56,107

54,710

1,397

Revenue Rates

Investment income Total Revenue

(13)

134 109,315

Less Expenditure Operating expenses

27,577

24,579

(2,998)

48,630

Staff expenses

13,455

13,200

(255)

26,492

1,801

1,680

(122)

3,253

Adminstration expenses Finance expense

3,614

3,967

353

7,936

12,419

12,421

3

24,842

Total expenditure

58,865

55,847

(3,019)

Operating surplus (deficit)

(2,758)

(1,137)

(1,622)

Depreciation expense

111,155 (1,840)

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Year to date Operating result: Income continues to track ahead of budget to be $1.4m ahead of budget for the year to date. Fees and charges continue to track ahead of budget. Rates are up $490,000, consenting fees are up by $190,000, building inspection fees are up by $130,000, infringement notices and prosecution fees are up by $80,000 and other trading income is also slightly up on budget. Expenditure continues to be unfavourable against budget with the variance increasing during the month mainly due to waste management, Mudtopia and electricity costs. Electricity costs for the six months are $350,000 higher than normal due to the price increase experienced during July to September. This has now returned to normal levels but this cost increase will need to be offset during the remainder of the year. Staff expenses are $255,000 higher than budget. Solid Waste expenditure is $670,000 higher than budget due to planned savings yet to be delivered and higher than budgeted disposal costs at the landfill due to more volume than was planned. Discussions are currently underway to identify areas where cost savings can be made to offset these overruns. A number of mitigation actions are underway to bring Council back on budget by year end. These include, but are not limited to:    

Targeting $250,000 cost savings from Library, EEC and SHMPAC operations. Potential savings at the Aquatic Centre of up to $60,000 per month. Forecasting continued revenue growth for Consenting up to $50,000 per month. Looking to hold staff vacancies where possible.

Cash flow from Operations: Year to Date

Operating surplus (deficit)

Full Year

Actual

Budget

Variance

Annual Plan

$ (000)

$ (000)

$ (000)

$ (000)

(2,758)

(1,137)

12,419

12,421

- Change in working capital & provisions

(15,959)

(16,000)

Cash flow generated from operations

(6,299)

(4,716)

(1,622)

(1,840)

Add back (deduct): - Depreciation

(3) 41 (1,583)

Cash flow generated for the period to December is $1.6 lower than budget which is attributable to the unfavourable operating deficit.

24,842 23,003

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Application of funds (capital expenditure and borrowing): Year to Date

Full Year

Actual

Budget

Variance

Annual Plan

$ (000)

$ (000)

$ (000)

$ (000)

Capital expenditure and subsidies - Sale of property

515

500

5,024

7,119

(2,095)

15,641

(26,645)

(20,921)

(5,724)

(47,059)

(21,106)

(13,302)

(7,804)

(30,366)

- Loans drawn down

115,720

16,500

99,220

7,363

- loans repaid

(87,310)

-

(87,310)

-

28,410

16,500

11,910

7,363

Increase (decrease) in cash balances

1,005

(1,518)

2,523

Opening Cash balance

1,789

1,789

-

Movement

1,005

(1,518)

2,523

Closing cash balance

2,794

- Capital subsidies received - Capital expenditure Net Cost to Fund

15

1,051

Borrowing:

Net Loans drawn (repaid)

271

2,523

(1) 1,789 (1) 1,789

Capital expenditure continues to track ahead of year to date budget. A number of large projects have or are close to completion. The year to date variance is in the main due to timing of expenditure against how the budgets have been spread during the year. There are however, a couple of projects with budget pressures:   

I-site – majority of work was budgeted last year but due to delays ($1m) the work fell into this financial year. Increase in costs due to additional asbestos removal required $400,000. Civic Centre Refurbishment – the stripping of ceilings and walls exposed the state of underlying services. These were not expected to have the level of degradation and needed replacement which was unplanned. CBD refresh and central precinct upgrades – weather related delays pushed timing of completion and costs into this financial year.

At this stage Council is forecast to end the year $3.7m over in capital expenditure. Management is currently reviewing the remaining capital program to determine whether forecast expenditure is likely to occur and to identify savings to bring the capital spend back on budget by year end. This review will identify projects that could either be delivered at a lower cost by reducing scope or stopped altogether. If all actions are implemented and the capex budget is limited to Annual Plan levels, the borrowing change at year end will be approximately $7.4m.

4.

ASSESSMENT OF SIGNIFICANCE The decisions or matters of this report are not considered significant in accordance with the Council’s Significance and Engagement Policy.

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File No: 01-65-052 RDC-793964

ROTORUA LAKES COUNCIL

Mayor Chairperson and Members OPERATIONS AND MONITORING COMMITTEE

OPERATIONAL REPORT FOR DECEMBER 2017 TO JANUARY 2018 Report prepared by: Jean-Paul Gaston, Acting Chief Executive

1.

PURPOSE The agreed purpose of the report is to provide:    

2.

Briefings on matters under consideration prior to any decision being needed by Council; An opportunity to discuss the purpose and nature of developments at an early stage; Progress updates on key initiatives; and Briefings on issues and matters arising from decisions made.

RECOMMENDATION 3: That the report “Operational Report for December 2017 to January 2018” be received.

3.

BACKGROUND The report has four sections with reports and updates from: 1. Kaiwhakahaere Māori 2. Strategy group 3. Business Support group 4. Infrastructure group 5. Operations group

It is envisaged some matters will need to be considered in public excluded. The intention however is to maintain as much as possible in open meeting. The operations update report will not replace any existing reports to Council, such as the monthly report on organisational performance presented by the Chief Financial Officer.

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4.

DISCUSSION

4.1

KAIWHAKAHAERE MĀORI   

 

4.2

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A successful Noho Marae was held during November at Waiteti Marae. The next will be held Tuesday 13 and Wednesday 14 February 2018. Gina Rangi, our Kaiwhakahaere Māori has been with us full time since 8 January 2018. Her Worship Mayor Steve Chadwick has been supported at a number of powhiri and mihi, including a United Nations Global Cities Compact Workshop and FOMA National Conference with a highlight being welcoming Prime Minister Jacinda Adern on her inaugural visit to Rotorua, and the Boryeong mayoral party ahead of Mudtopia. Sadly, during this time Te Arawa lost two prominent leaders - Rangipuawhe Maika of TuhourangiNgati Whaiao and our own Pihopa Kingi of Ngati Whakaue. We thank and acknowledge them for their 50 plus years of service and guidance to the work of Council. During the Christmas break a number of Te Arawa passed away, affecting all hapu around the lakes. Of note, former airport director Bill Kingi died the day after Boxing Day and the following day Ngati Rangiwewehi lost a matriarch in Ella Bidois. The iwi appreciated Mayor Chadwick’s presence and Council’s acknowledgement.

STRATEGY GROUP

4.2.1 Strategy Traffic Bylaw 2015 Amendment The Traffic Bylaw amendment is currently out for public consultation which has been extended to 15 February. The two amendments relate to shared paths and shared zones. Big Moves/Projects Redwoods and Whakarewarewa Forest Concept development for improvements at the Redwoods and Whakarewarewa Forest is progressing discussions with partners. A master plan outlining infrastructure and commercial opportunities has been completed with input from mana whenua. A workshop regarding the proposed master plan was held with Councillors and community representatives in November. Development Company A workshop was held with Councillors and community representatives on 6 December to consider options for an Urban Development Company for Rotorua. The initial focus will be the implementation of the master plan for the Rotorua lakefront. The proposal to create and Urban Development Company will be included as part of the 2018-28 Long-term Plan (LTP). Pensioner Housing Preparation is underway for detailed information required to develop options analysis and recommendations and for public consultation through the LTP. Current tenants are being kept up to date, the latest communication a letter sent mid-December. Te Aka Mauri – Library and Children’s Health Hub The official opening of Te Aka Mauri (the name gifted to the building by the project’s cultural reference group), will be on 2 February with a community open day planned for 3 February.

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Timeline of events for 2 February official opening: 6am Dawn karakia 9am Official opening – pōwhiri, ribbon cutting, speeches 10.30am Morning tea From 10.30am VIP tours (15 minute duration) The community open day on Saturday 3 February will feature a range of activities, tours of Te Aka Mauri, information stands and food stalls. City Ride buses (with the exception of the Murupara route) will be free during the open day, which will run from 10am until 4pm. To enable the move back to Te Aka Mauri from the temporary library, the library closed for six days from Saturday 27 January. However, the Pukuatua Street return slots will operate until 3 February and the mobile library, online services and call centre are operating as usual with due dates extended to 3 February for items due during the closure period. Funded jointly with the Lakes District Health Board, the refurbishment has been completed within the funding envelope approved by Council. Project estimates, including provisions for final variation costings, have the project cost at $12.3million. Any variations from this final position estimate are likely to be minor. Total Costs Project Share

Budget

Actual

Rotorua Lakes Council Lakes District Health Board

$8.8million maximum $4m

$8.3m $3.8m

Total project

$12.8m

$12.3m

4.2.2 Strategy Portfolios People Portfolio Youth Spaces Plus Ministry of Youth Development representatives held their first contract performance meeting on 1 December with the three communities delivering Youth Spaces Plus alongside Freeparking programmes. Te Papa Takaro in Te Koutu, Ko te Tuara Totara o Fordlands, and Western Heights Community Association are all progressing the services well and have met the first round of reporting requirements. Safe Rotorua The Safe Rotorua community group forum was deferred from November and is now planned for 13 February. Safe Communities NZ representatives requested a meeting to discuss Safe Rotorua’s membership due to concerns about ability to meet reporting and model requirements. As a result, it was recommended Safe Rotorua withdraw from membership of the parent body. This decision was supported by the participating partners. Neighbourhood Matching Fund 17 grants totalling $64,386.45 have been allocated to the end of December for the following community projects. All but one were applications to the small grants pool.

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Bay Of Plenty Phillipino Friendship Society Inc. Matariki Rotorua Inc. Rotorua Trails Trust Meet & Reveg Ngongotaha Lions Club Kaingaroa Forest Village Inc. Marist St Michael’s Rugby and Sport Club Kai Rotorua Apumoana Marae Committee Toku Tuu Youth Development Programme Mamaku Residents Association Haumarino Community Youth Trust Ngati Rangiwewehi Senior Kapahaka Committee Mamaku Messenger Hillcrest Community Kaingaroa Forest Village Inc. Rotorua Japanese Playgroup

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Filipino Cultural Performance Evening

$3,498.00

Matariki Rotorua Lantern Festival Trail equipment and maintenance Weeding and Planting Neil Hunt Park Quarry Tree Planting at the Rail Trust Park Rangatahi Leadership Wananga Club/Community Clean-up

$500.00 $2,271.39 $1,578.54 $400.00 $1,600.00 $297.65

Preparation of land and planting Maori potato Purchase of water tank and greenhouse Prizes for 3x3 basketball tournaments

$4,762.19 $4,660.99 $2,880.00

Community Spring Clean-up on Dansey Road Clean up Waiteti River bank Clean up Awahou River

$3,720.00 $20,000.00 $858.87

Compilation, printing and distribution of local newsletter Establish a community garden at Manuka Crescent Reserve Build a pergola/shelter and picnic tables/clean-up Promotion of Japanese traditions, culture and language

$4,845.60 $3,631.89 $5,000.00 $3,881.33

Smokefree Outdoor Spaces Implementation of Phase Two of the policy started 1 January. In October 2017, letters were sent to all Eat Streat and CBD businesses with outdoor pavement eating areas advising them of the policy, seeking their support and offering assistance with signage. Letters were also sent to businesses with outdoor eating areas which are on private property, e.g. shopping centres, malls. One tourism business responded and was connected with Toi te Ora Public Health for assistance with implementing smokefree areas. Staff have subsequently met with Eat Streat businesses and taken their advice, trialling pavement signage at the street entry points. Further table-top and pillar signage is on order. A number of businesses have been very supportive and a number were already smokefree. We are aware some are finding the change more challenging and will continue to provide support. We will continue to listen to business feedback and consider how best to minimise any negative effects of displacement of smokers to other locations. Dementia-friendly Rotorua Alzheimers NZ presented dementia-friendly awards to Rotorua businesses Bupa The Gardens Retirement Village, Bupa Redwood Care Home and Bupa Redwood Retirement Village. A dementiafriendly hymn-along was held on Sunday 10 December at the Rotorua Salvation Army Church. The Dementia-friendly Rotorua community steering group ended December with lots of enthusiasm and new ideas for 2018. The infographic below summarises the achievements in 2017.

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BUSINESS SUPPORT GROUP

4.3.1 Information Solutions OneCouncil Project Phase One  The Project remains on schedule for March 2018 Go-Live. The first round of User Acceptance Testing is being completed with the second round of testing to start soon. Also to be tested are interfaces with systems provided or supported by suppliers, such as BNZ (FlexiPurchase) and Affinity (Payroll). 

More than 350 suppliers (17%) have provided updated details which are being prepared for migration to the new system. Finance system changes are also being communicated to suppliers.

Phase Two  Phase Two (Enterprise Content Management, Property and Rating) is progressing to schedule, and will ramp up quickly once after going live with Phase One.  Phase Two has a wider scope, requiring engagement of all staff around document management and rationalising business information. 4.3.2 Customer Solutions The after-hours service managed all calls to Council during the Customer Centre shutdown over Christmas/New Year. During this time they managed 1559 calls which resulted in 600 jobs being actioned during this time: 22/12/17 27/12/17 28/12/17 29/12/17 3/1/18 4/1/18 5/1/18

(12pm-5pm) (8am-5pm) (8am-5pm) (8am-5pm) (8am-5pm) (8am-5pm) (8am-5pm)

153 199 179 234 213 201 380 (storm day)

Call numbers on a normal day average 450-500. During this same period Council received 800 emails that were actioned during the first week of January.

4.4

INFRASTRUCTURE GROUP

4.4.1 Transport New projects and projects in construction prior to Christmas and re-starting:  Gordon Road - Western Heights CyWay project  Springfield/Otonga Intersection - Minor Safety Improvement Project  Springfield Phase 2 and Ranolf CyWay projects. Both have been through the tender process and both resulted in tender estimates over the $1 million threshold. Reports will go to Council for approval to award contracts.

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 Hemo intersection opening was planned for mid-December. We are working with NZTA to time an official ministerial opening with the Ranolf Project sod turning.  Road Safety Programmes - BlueLight has requested the contract be cancelled in light of Safer Journeys Coordinator’s resignation. This was agreed to and approved pre-Christmas. CyWay update Safe and Sustainable Journeys update - A shared bike business is in application process to obtain a licence to operate a dockless shared bike scheme in Rotorua. They will launch as soon as possible if their application is successful. Te Manawa Communications and education on how to use the new shared zone is progressing. A safety review has been conducted by an independent audit team who recommended minor adjustments which were considered by a steering group and will be actioned accordingly. Recommendations included rotating some bench seats, realignment of one paver strip to direct pedestrian traffic and adding arrow road markings at Hinemoa end to clearly direct traffic left as they exit the shared zone. Projects underway, completed or to progress over the next period:  Karamu Street upgrade in Mamaku (footpaths and safety);  Reporoa Road foundation rehabilitation including roundabout resurfacing;  Koutu Road foundation rehabilitation project including installation of traffic calming humps;  Flood damage remedial works arising from March-June 2017 storms at various sites including Paradise Valley Road;  Springfield Road and Waters Street rehabilitation projects, including stage 2 of the Springfield CyWay;  Dinsdale to Biak Street service lane link tender has closed and construction will start on settlement of land agreements;  Works to replace kerb and channel footpaths and failed pavement in and around the Polynesian Spa. Waste Management  2017 was the first year there was no kerbside waste collection on Christmas Day. As Christmas Day was on a Monday, the collection day for all properties that week was moved to the following day (e.g. collection where it is normally Friday moved to Saturday during that week). Council advertised this on social media, in newspapers, on the RLC website and on the radio, however a large number of residents put bins out on their normal day. The booklet that went out with the bins in 2016 indicated that the service was also not operating on New Year’s Day, something which subsequently changed. Again, this was advertised but many put bins out a day late.  An issue with the online address search function to identify any change in collection increased the number of phone calls received by Watchdog (Council’s after-hours call service) and Smart Environmental (Council’s waste collection contractor).  Minimal complaints around overflowing bins or messy reserves were received over the Christmas/New Year period. The hard work undertaken by council staff and Smart Environmental over the last few months appeared to have paid off.  The amount of kerbside recycling collected during December was on par with the previous year. However, there was an increase of 120 tonnes in kerbside rubbish collected and an increase of 35 tonnes of rubbish removed from transfer stations compared with December 2016.

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Storm events Storm event 5/6 January  Public messaging was shared to prepare the community, urging extra care on the roads and providing contact details and links to ongoing updates for power outages and roads.  Winds posed the biggest problem, keeping crews busy dealing with fallen trees, prompting some temporary road closures. Gusts of 100km per hour were recorded at the Rotorua Airport and 150km per hour at Mamaku.  The sole occupant of a vehicle died when a council-managed heritage tree on the corner of Amohia and Arawa streets fell. A building was also damaged by the treefall. Police are investigating on behalf of the Coroner and Council is continuing to cooperate with the inquiry.  Fulton Hogan road crews dealt with 37 reported fallen trees and/or branches on Friday (6th).  An excavator was needed to clear a large fallen tree in Whittaker Road, Koutu.  After hours services responded to more than 160 calls relating to trees and road closures, power outages and minor flooding.  There was a power outage at the Civic Centre mid-morning Friday 6 January. The council emergency generator supported facilities and equipment with back up fuel made available.  The storm caused high inflows overnight on 4 January which were managed by duty staff. The following day power was lost to the Okareka pump station for a period and to the wider Mourea/Okere/Otaramarae areas. This involved up to 10 pump stations and lasted until 9am on 6 January. Wastewater Treatment Plant staff worked overnight, rotating mobile generators between the pump stations to maintain sewage flow. This was successful with only one minor overflow which was cleaned up and disinfected immediately.  High winds caused extended power cuts to pumping and treatment plants at Reporoa, Mamaku and Rotoiti. In-situ generators operated well at the two Reporoa sites and council and Infracore staff worked together to deploy mobile generators to Mamaku and Rotoiti, where the new connection point was utilised until mains power was restored.  Post-storm more than 50 trees on council reserves and street berms were attended to by Infracore and contracted arborists, with the work programme being prioritised according to public safety risks. There were a similar number of trees cleared from roads after the storm. The Tokorangi and Whakarewarewa Forests also suffered extensive damage with the Rotorua Trails Trust removing many dozens of trees from trails and roads within the forest. 4.4.2 Water Solutions 3 Waters Services Business Operations – 17 December 2017 to 18 January 2018 Stormwater  A short duration rainstorm on 18 December caused surface flooding in the eastern suburbs. Te Ngae Road and Vaughan Road were worst affected and water entered several houses in the Warwick Drive area and a kindergarten in Alastair Avenue.  A thunderstorm on 12 January also caused surface/road flooding – in the Glenholme and central city areas. Wastewater  During the 12 January thunderstorm, a power surge caused by lightning damaged control cabling in the Wastewater Treatment Plant control room, causing a temporary loss of communication with all pump stations and within the plant. A temporary repair was in place within several hours. The storm also caused a large immediate surge in flows with plant inflow rising from 600 cubic metres/hour to 2500 cubic metres/per hour very quickly. This again highlights the need to direct resourcing into reducing inflow/infiltration.

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Water Supplies  Dry weather late November and December caused a noticeable increase in water demand but did not exceed manageable levels. Regular rainfall in early January has reduced consumption.  On 21 November, a burst occurred on the 250mm diameter main which takes water from the Waipa Spring in Whakarewarewa Forest to the eastern reservoirs on Tarawera Road. This was repaired before the reservoirs emptied. However, the burst caused a large washout of the road supporting the pipeline which required a significant urgent repair.  Replacement of the electrical switchboard at the Rotoiti pump station was completed in November. This included a new emergency generator connection point to where our largest generator can safely be transported.  One of the two main pumps at Rotoiti, which was due for replacement in 2018, failed in December. A replacement was sourced from Australia and was fitted.  During the severe thunderstorm on 12 January, lightning destroyed electronic control equipment at the Matipo reservoir. Repairs were made using equipment swapped from a non-essential network metering point.  The Stage 2 report of the Havelock North Drinking Water Enquiry was released in December. The enquiry calls for reforms in a number of areas including: - Government departmental structure and regulatory framework; - mandatory treatment of water supplies; - structure and framework of water supply entities. Significant 3-Waters Capital Works Programme East Rotoiti/Rotomā Sewerage Scheme  The contract for construction of the Wastewater Treatment Plant has been let with work scheduled to begin soon.  Tenders for construction of the Rotomā sewerage reticulation closed 23 January 2018. Rotorua Wastewater Treatment Plant (WWTP) Upgrade and Procurement Plan  Three successful participants in the Expression of Interest process were shortlisted.  Request for tenders will be issued to the shortlisted participants in February 2018.  The draft Resource Consent Application for the Rotorua Wastewater Treatment Plant has been submitted to Bay of Plenty Regional Council for pre-lodgement review. Formal lodgement of the resource consent application will occur during the last week of February 2018. It is proposed the application be directly referred to the Environment Court. 4.5

OPERATIONS GROUP

4.5.1 Planning and Development Solutions This report covers the period November and December 2017 Building Consents  Total value of building consents issued for the financial year to 30 December 2017 was $70,189,496, up 11% on the same time last year ($62,906,323).  85 building consents for new dwellings were issued for the financial year to 30 December, up 60% on the same time last year (53).  34 new dwellings were consented during November and December 2017. LIMS  LIMs issued for the financial year to 30 December totalled 91, up on 68 at the same time last financial year;  Residential LIMS totalled 379, down from 586 in the same period the previous year.

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Subdivision Consents  As at 31 December 2017, there were 51 subdivision consents issued, compared with 52 at the same time the previous financial year.  The number of potential additional lots issued during the period from 1 November to 31 December 2017, as a result of the approved subdivisions, was 15 lots (11 residential and 4 lifestyle).  The total number of potential additional lots issued as at 31 December 2017 was 110 (66 residential and 44 lifestyle lots).

District Plan Policy  The hearing for Plan Change 4: Noise will reconvene on 8 February 2018. The Commissioners have requested expert evidence from Malcolm Hunt Associates on the effect of altering the evening noise levels.  The submissions period on Plan Change 5: Signs and Miscellaneous Changes; and Plan Change 6: Holiday Rentals closed 12 January. Five submissions were received on PC5 and eight on PC6. Once submissions have been summarised there will be a limited opportunity for further submissions to be made, followed by a hearing soon after.

4.5.2 Arts & Culture Business Development Key Projects  SHMPAC: Nine expressions of interest were reviewed and narrowed down to two for further clarification before the shortlist is finalised. Draft concept designs are due by the end of March. Efforts to secure external funding for the centre upgrade continue. Sir Owen Glenn announced he will contribute $3m and Rotorua Trust (RECT) has agreed in principle to contribute $1.5m.  Combined event marketing: The first combined Rotorua events calendar was inserted into the Weekender in mid-December. The next version is being developed for distribution early March. Markets, Festivals & Events  Farmers Market: Growers are starting to factor the market into their planting programmes, and report sales in Rotorua have been greater than at other regional markets. The educational barrow has been well supported by Toi Oho Mai and last month hosted local MKR (My Kitchen Rules) contestants. The children’s barrow has been constantly booked by a variety of causes from individuals to groups such as Scouts and preschools. The goal of 20 barrows and six mobiles was reached in December. New stallholder enquiries continue so the word is spreading.  Night Market: The market now incorporates Te Manawa and trade for December 2017 was outstanding. A new family zone is up and running with a range of giant wooden games (Jenga, Connect 4, etc) and visitor numbers have exceeded expectations.  GLO Festival: An estimated 15,000 people attended the new format 1-day festival at the Village Green which included a movie, local entertainers, fireworks at 9.15pm and midnight and headline act Elemeno P. The event was very successful with the vast majority of attendees happy and well behaved. A mainly family audience attended the early part of the evening and an older crowd for the later part of the evening. A handful of incidents were handled by security, the police and/or the medical staff in attendance. A full debrief report will be available next month.  Mary Poppins (11-24 March): A range of promotional collateral is already in market and tickets went on sale on 8 January 2018.

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Public Art Mural Symposium All eight completed murals (5m x 2.4m) are being installed throughout the CBD. The aim of the symposium was to create murals that could be installed around the CBD (buildings/alleyways between buildings) to add vibrancy and points of interest. The murals are being installed with the permission of building owners and tenants. Several are in Eruera Street with others in Amohia and Pukuatua streets.

Refresh CBD powerbox transformer murals Now completed - total of 27 units throughout CBD, themed ‘The Rotorua Experience’. See Paul Walsh’s winning design below.

Hemo Sculpture Staff continue to work with local company Kilwell to construct the sculpture via 3D printing and carbon fibre. Awaiting specialist engineers to assess and sign off the structure using this material. Printing is expected to start in February with final installation geared for August 2018. Maintenance  Sculpture at Lake Tarawera viewing platform (just past Buried Village) is being assessed by carver Rob Rika for cleaning and any maintenance required.  Carvings at Tarukenga entranceway removed due to rot/safety issues and stored at Infracore. Rob Rika to asses and advise on repair / replacement scenario. Community Murals Artists engaged to work with youth towards painting a mural outside Ngati Whakaue premises at 2 Ranolf Street – key entranceway to the city. Band Rotunda Concerts In association with RECT, these performances are organised for Sundays through February and March, 1-3pm.

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4.5.3 Museum – Te Whare Taonga o Te Arawa Seismic Strengthening Basic concept designs for the preferred option (bracing in walls, new sub-floor, roof replacement and other strengthening) have been provided to Heritage NZ for feedback – following that work will be done to get good indicative costings. We are expecting these in April/May 2018. Collections  Collections staff met with Te Arawa Lakes Trust staff on Monday 27 November to discuss future management of their archives collection. National Library and Archives NZ staff also contributed to the discussion.  Māori Women’s Health League’s exhibition, Autauhinerā: Sisterhood, which opened in the Civic Centre galleria 1 December was supported by Collections and Exhibitions staff. Events and Engagement  31 people attended a talk by Natascha Hartzuiker and Sue Skellern at the Arts Village, How to Hang Your Art Like a Professional. The talk was aimed at artists and covered tips for preparing artworks, hanging systems and packaging art works.  45 people attended Uke Box on 19 November and 55 on 17 December.  Museum staff hosted a Christmas Family Day 9 December at Children’s Art House and the museum’s Community Christmas Tree was at the Library, with the community making donations for Women’s Refuge. Exhibitions  Te Papa Conservator, Nirmala Balram, visited on Monday 13 November to carry out condition reports for taonga on loan from Te Papa (Ngā Pūmanawa exhibition).  Staff are working alongside Digital Basecamp on the Hinemoa Tower projection and continuing touring plans for AEIOU. Education Education numbers for school term four were 1116 (377 national, 739 from local schools) with the total for year to date 3166. 4.5.4

Library Programmes The summer holiday programme, STEAM into Summer, proved very popular. Future STEAM (Science, Technology, Arts and Maths) programmes are planned. With the delay in moving it was decided to offer a taste of the programmes to come and there was a lot of interest and participation and requests for similar programmes for adults. Customers were particularly drawn to the operational 3D printers.

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Sir Howard Morrison Performing Arts Centre  

4.5.6

The Ticketmaster Box Office has relocated to the Energy Events Centre and this is working well alongside events the venue is hosting. Staff from the Sir Howard Morrison Performing Arts Centre have relocated to the Energy Events Centre and continue to deliver events transferred to other venues. They are also supporting the increase in activity at the Energy Events Centre. Events and Venues

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Over this reporting period the venue has hosted three business events with over 890 conference delegates. In early December the Asia Pacific Robotics Competitions was held over four days with teams from throughout New Zealand and 150 students from China. In addition the Christmas with a Punch event with over 400 in attendance, the Rotorua Charities FUN’raiser was also held, alongside regular meetings and Sportsdrome bookings. Auckland Anniversary Weekend Rotorua hosted the National Maori Basketball Tournament (over 3000 players and spectators) with the annual Home & Garden Show scheduled for early February and the Te Arawa Regional Kapa Haka competitions in early March. The Te Runanga Tearooms and band rotunda hosted four weddings during this reporting period and five private/corporate functions prior to Christmas.

Recreation & Environment

4.6.1 Aquatic Centre The Rotorua Lakes Swim School had a busy Term 4 with 1057 students enrolled and another 56 children participating in transition classes with Swim Rotorua. Estimated Term 1 enrolments are 1120. The Making the Difference programme in partnership with Swim Rotorua was delivered to eight schools and 635 children. The Unison Lakes Water Safety Programme to increase children’s confidence in the local lakes was delivered to 377 children. Events over this period have included the Ladies Night (218 participants) and the Weetbix Try-athlon (1119 participants, a 23% increase on last year), the NZ Police Road Patrol, NZ U/18 and National Underwater Hockey Tournaments, and BOP Junior Swim Championships. The Centre’s ‘Summer Splash’ holiday activities offered a wide range of aquatic fun and play experiences. 23,296 visits were recorded during the three weeks leading up to Christmas. International Stadium Over December work focused on maintenance of the fields after the wet winter and the games/tournaments hosted in September/October. Warriors and Chiefs games in February and April 2018 have been confirmed and the Bayleys National 7’s tournament was hosted 13-14 January 2018 with the Festival of Rugby League coming up on 1617 February. These events are being marketed via social media, local and national media and billboards/placards across the city. We have engaged both the rugby league and rugby union communities and have worked closely with the Warriors and BOP Rugby. We have also been working closely with BOP Rugby to finalise the establishment of the High Performance Training Centre. We hope to have this finalised in January 2018. The HPTC will provide great sporting outcomes for the community from grassroots to representative level.

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Major Sport and Recreation Events Events during the period from 8 November to 12 January included:  Tarawera Trail Marathon and 50km/Tikitapu Trail Run (11 November 2017) - 1485 runners from around NZ and internationally and approximately 1500 spectators.  NZO Singlespeed Mountain Bike World Championships (18 November 2017) - 637 riders from NZ and internationally and approximately 1000 spectators.  NZ Masters Rugby League Festival held at Puketawhero Park (21-23 November 2017) - 400 players from NZ and internationally and approximately 1200 spectators.  Podium Rotorua Half Marathon (26 November 2017) is an annual event and attracted approximately 1700 runners and 1500 spectators.  NZ Maori Touch Nationals held at Puarenga Park (3-4 December) is an annual event and attracted approximately 1000 players and 1,500 spectators.  The Giant 2W Gravity Enduro Mountain Bike Series, Race 2 of the 4 race schedule (9 December 2017) - limited to 500 riders. 4.6.2 Open Spaces The Kuirau Park footpools were completed before Christmas and opened to the public. Preparation for the Netball Court resurfacing has been completed and work progressed to laying and sealing the rubber mats. The Waipa Bypass Road has been tied in to the old Waipa State Mill Road so heavy and mill traffic is no longer passing the mountain biking area. Roading contractors are starting on the car parking improvements along Waipa State Mill Road and once completed this will add about 100 more carparks to this area. The installation of a vaulted toilet within the Whakarewarewa Forest at the MTB shuttle pick up waiting area is scheduled for February with manufacture and building consents being processed now. Sand-slitting at Westbrook and Ray Boord Park is programmed for late February and March and work has begun on the hockey turf with the new surface to be laid in February. Work on the Lake Okareka Walkway is underway to repair damage caused by high lake levels. Recreation and Environment Engagement Bollards and pathways are the main focus this summer at Hamurana Reserve as part of development of the area. HARRA and Ngati Rangiwewehi were involved in determining the path alignment along the reserve. Planning for Parks Week and Children’s Weekend, both in March, is underway. The Recreation and Environment team have been working on a signboard project to facilitate better management of event signage across the city. Signboards will be provided for event organisers, particularly non-profit groups, to promote events without having to obtain resource consent. These signboards will be fixed in place with bookings taken. Proposed locations are: corner Fairy Springs and Kawaha Point Roads, Ranolf end of Lake Road, Pukuatua Street (Kuirau Park), Fenton Street near the race course, Te Ngae Road near the Amohau Street extension junction, Tarawera Road adjacent to the Redwoods and Old Taupo Road near Moncur Drive. Both the Council transport team and NZTA (on state highways) have been consulted and approved these sites as suitable to meet safety and regulatory standards. See map

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