News
Legislation to implement change for Auckland
The government's proposed reorganisation of Auckland local government will be effected by three pieces of legislation.
The first - the Local Government (Tamaki Makaurau Reorganisation) Act passed by Parliament on 17 May 2009 - establishes the new Auckland Council and disestablishes the existing Auckland local authorities on 1 November 2010. It also sets up the Auckland Transition Agency (the ATA) and prescribes transition arrangements.
The second bill, the Local Government (Auckland Council) Bill, will not be subject to urgency as the first was and, as a result, will receive public submissions before a specially-formed select committee. The bill's purpose is to set out in more detail the governance structure for the new Auckland Council.
The third bill to come later in the year is expected to cover other establishment issues such as the council-controlled organisations and transitioning of existing bylaws, policies and plans.
The Local Government (Tamaki Makaurau Reorganisation) Act 2009
The Local Government (Tamaki Makaurau Reorganisation) Act 2009 addresses the transition process from the existing seven Auckland local authorities to the establishment of one unitary authority – the Auckland Council.
The scope of the reorganisation is very large, involving 6300 staff, over $27 billion in assets and annual revenue in excess of $2 billion. The transition period begins the day after the date on which the bill receives the Royal Assent (expected to be Tuesday, 26 May 2009) and ends on 31 October 2010.
This act establishes reporting and "confirmation" requirements regarding decision-making by existing Auckland local authorities and other "local government organisations". Councils and council organisations retain their existing responsibilities but the scope and nature of their decision-making is subject to oversight by the Transition Agency.
The act also removes the power of an existing local authority to hold, or make decisions about, the October 2010 triennial general elections and provides for the dissolution of the existing Auckland local authorities on 1 November 2010.
The Transition Agency can monitor local government organisations and has statutory powers to veto (by not "confirming") certain specified decisions that may significantly adversely impact on the reorganisation itself or the new Auckland Council.
The Transition Agency
The Transition Agency will consist of a chair and up to four other members. The government is expected to announce the members shortly. This agency will report to the Minister of Local Government. The act also requires the Transition Agency appoint a chief executive for the agency and sets out the chief executive's responsibilities in the reorganisation.
The Transition Agency must obtain the approval of the Minister of Local Government and the Minister of Finance for its budgeted expenditure. However, any expenditure will become a debt due by the Transition Agency (and ultimately the new Auckland Council) to the Crown.
Specifically, the Transition Agency must develop:
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an "organisational structure" for the Auckland Council so that it can operate efficiently and effectively on and from 1 November 2010; and
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a "change management plan" for managing the transition of assets and staff from existing local government organisations to the new Auckland Council structure.
The Transition Agency must ensure that its activities are conducted "efficiently and effectively", that "it operates in a financially responsible manner" and that key local government projects in Auckland are not interrupted.
The act also requires the Transition Agency to appoint an interim chief executive for the Auckland Council. The term of that interim appointment may not extend beyond 30 June 2012.
The Transition Agency and local authorities' role and power during transition
The Transition Agency has the ability during the transition period to "review" (for the purpose of determining whether a matter subject to "confirmation") any decision made by a local government organisation or any item on the agenda for any meeting of the organisation.
The act also establishes a process by which the agency must confirm a decision submitted by an existing local government organisation for confirmation.
Specific obligations are imposed on local government organisations and, interestingly, their chief executives, over:
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cooperating with the Transition Agency during the transition period, including the requirement to comply with any reasonable request from the agency and secondment arrangements;
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obtaining written confirmation of the Transition Agency for decisions made during the transition period that may:
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significantly prejudice the reorganisation;
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significantly constrain the powers or capacity of the Auckland Council following the reorganisation; or
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have a significant negative impact on the assets or liabilities that are transferred to the Auckland Council.
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The act also sets out specific restrictions on existing local government organisations that require the Transition Agency approval (i.e. "confirmation") including:
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borrowing money for a period beyond 30 June 2011;
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entering into contracts for consideration greater than $20,000 that extend beyond 30 June 2011; and
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appointing directors and chief executives.
The Local Government (Auckland Council) Bill
This bill specifies the governance structure for the new Auckland Council including:
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a high level framework for the structure of the Auckland Council;
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eight members elected at large and 12 members from wards;
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local boards (between 20 to 30) and a description of their high-level functions;
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direction and provision of powers for the Local Government Commission (LGC) to determine the boundaries of the wards of the Auckland Council and the local boards, and the number of local boards and their membership; and
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providing powers and functions for the LGC to develop a reorganisation scheme for the partition of the Franklin District and the Franklin District Council between the Auckland Council and the Waikato District Council.
Next steps The timetable for reorganisation is:
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appointment of members of Transition Agency as early as possible after enactment of the first bill;
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enactment of second bill by 24 September 2009;
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introduction of third bill in October 2009;
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appointment of an electoral officer by November 2009;
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enactment of third bill by May 2010;
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local authority elections in October 2010;
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transition to the new core arrangements significantly completed by October 2010;
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establishment of structures for Auckland Council by 1 November 2010; and
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development of a unified rating system from 2012.
Auckland local government during the transition period will require careful management by both Transition Agency and existing local government organisations.
The organisational structure and change management plan prepared by the Transition Agency will no doubt generate a high level of interest. However, it seems just as likely that the protocols and practices developed by the Transition Agency will create important interface and governance issues for both the existing local government organisations and the Transition Agency to deal with.
For information and advice please contact:
Tom Bennett
Partner
David McGregor
Senior Partner
Garry Downs
Partner
