Report Date
: 26 July 2017
To
: Mayor and Councillors
Tararua District Council
From
: Malcolm Thomas
Strategy and Policy Adviser
Subject
:
Outcomes of the Local Government Act 2002 Section 17A Service
Review Process
Item No :
11.6
1.
Reason for the Report
1.1
For Council to formally adopt the outcomes of the Section 17A service review
process reflecting the discussions from a series of workshops over the last two
years. This report is part of the Service Review process under Section 17A of the
Local Government Act 2002 (LGA 2002), and allows Council to progress towards
meeting its legal obligations.
2.
Background
2.1
Service reviews are required by legislation (LGA 2002 s17A as amended in
2014). A review of services is a mandatory requirement when there is:
• Significant change to levels of service, or
• Council signing a significant contract for service (new or renewal, Council
determines significance). Council has set the trigger point for a significant
contract at $200,000 a year operating cost.
2.2
Regardless of the above the LGA (
Clause 2, schedule 1AA) requires that all services
are reviewed by 8 August 2017. After this first review there is a six-year cycle of
mandatory reviews, or whenever a review is required by the two triggers above.
2.3
The legislation requires that a service delivery review should periodically assess
“
the cost-effectiveness of current arrangements for meeting the needs of
communities within its district or region for good quality local infrastructure, local
public services, and performance of regulatory functions”.
2.4
A full s17A
review determines the cost-effectiveness of different funding,
governance and service delivery options for meeting the needs of communities.
For each service being reviewed each combination of the above needs to be
considered. Considering a Council Controlled Organisation (CCO), shared service
and contracting out are options that are mandatory.
2.5
Not all services will require a ‘full’ review looking at costing and analysing the
current service delivery against mandatory and any other options. At Council’s
discretion service reviews are not required where:
• Council is legally obliged to deliver the service,
• Council has a binding contract that has more than 2 years to run,
• Council has recently carried out a review that considers the mandatory
options,
• Council considers that the costs of a review outweigh the benefits, such
as:
o Small service area operating costs,
o Contract value below a determined threshold,
o No workable alternatives
2.6
For those services not exempt for any of the above reasons Council is required to
carry out a detailed review. The review must consider the mandatory options (but
other options should be considered if sensible):
a) in-house governance, funding and delivery
b) in-house governance and funding, but
i. delivery by a CCO, whether wholly owned by the local authority, or a
CCO where the local authority is a part owner
ii. another local authority
iii. another person or agency (for example central government, a private
sector organisation or a community group)
c) responsibility for governance and funding is delegated to a joint committee or
other shared governance arrangement, with delivery options as set out in b).
2.7
The Society of Local Government Managers (SOLGM) good practice template
has been used as the basis for each review process and content.
2.8
The LGA does not define the services or what is significant. The Significance
and Engagement Policy gives Council guidance on this. There are a few
services such as Civil Defence that are ‘significant’ but have a relatively low
cost.
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Report on Outcomes of the Local Government Act 2002 Section 17A Service Review Process
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3.
Options and Discussion
3.1
Council considered a number of s17A compliant reviews during the period
2014/15 and 2015/16. These were triggered by the expiry of major contracts, the
decision to exit housing and solid waste kerbside refuse, and as part of other
service reviews that occurred.
• Housing – s17A options were considered as part of the assessment of options
that resulted in the decision to sel these assets. Subsequent reports have
resulted in Council deciding to re-consider this decision as part of the 2018
Long Term Plan (LTP) process.
• Solid waste contracts – A series of external contracts for the operation of
transfer stations were considered significant. Council resolved that the
services delivered through the contracts should continue.
3.2
Council considered the process for s17A reviews in a workshop in August 2015.
Council approved a report in April 2016 in which:
• Councillors agreed that the threshold for significant contracts should be
$200,000,
• Services were grouped together to match the Long Term Plan structure in
order to minimise staff work.
3.3
A series of Council workshop sessions have taken place to consider s17A review
material prepared by Council staff. Councillors gave directions as to which
services should:
• proceed to full s17A service reviews,
• maintain the current delivery model, or
• are exempt from the review process at this time.
3.4
The material presented at workshops set out the current state of each service and
the options available to the governance, funding and service delivery of each. In
addition to the reviews previously undertaken during 2014-16, full reviews were
indicated as necessary for:
• Regulatory Services (workshop in May 2016)
• IT support
3.5
Council reconsidered the need for a full review of Regulatory Services at a
workshop on 27 June 2017. A range of factors, including the direction of
neighbouring councils during the s17A service reviews, government legislative
changes and other shared service initiatives (GoShift), has resulted in considerable
uncertainty and few options. Council supported the view that a full review is no
longer an efficient option.
Report on Outcomes of the Local Government Act 2002 Section 17A Service Review Process
Page 3
2 August 2017
3.6
The table below summarises the outcomes of the workshops held for all service
reviews. Council has confirmed the current models of service delivery in all
service areas, or has agreed to defer a full service review under the two
exemptions al owed by the LGA 2002.
3.7
There has been a full review of the IT support services as this is a significant
contract that expires 30 June 2018. Council wil consider this again as part of the
IT support contract process in 2017/18.
3.8
The 3 waters services will need a full review; however this would most effectively
be done as part of the Alliance contract renewal process in 2018/19. This reflects
the integrated professional management of Stormwater, Roading, Footpaths.
Wastewater and Water (reticulation and treatment).
3.9
The table below summarises the outcome of all the service review workshops.
The suggested good practice for the s17A process is for Council to formally resolve
the outcomes of these workshops. While this concludes the initial s17A process,
service reviews will continue as triggered by the LGA 2002 s17A provisions, or as
part of a regular six-year review process.
3.10
Council s17A service reviews are required by legislation (LGA 2002 s17A as
amended in 2014). Al reviews in this first round must be completed by 8
August 2017. Council has the ability to decide that a service is exempt from a
full review due to two factors:
1. because of Legislation or Committed contracts - s17A(3)a, or
2. the cost of undertaking a review outweighs the benefits - s17A(3)b
Service Area
Recommendation for Legislation
review
Parks and Reserves (includes Domain Boards Not Required
s17A(3)b
and Camping Grounds), Community Buildings,
Public Conveniences, Pools and Cemeteries
Pensioner Housing
Economic Development
3 Waters - Water and Wastewater Treatment
Not Required
s17A(3)b
3 Waters - Water and Wastewater Reticulation, Not Required
s17A(3)a
Stormwater
Roading and Footpaths
Not Required
s17A(3)a
Community Support
Not Required
s17A(3)b
Representation
Not Required
s17A(3)a
IT
Full review carried out
Emergency Management
Not Required
s17A(3)b
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4.
Statutory Requirements
4.1
Section 17A of the LGA 2002 requires that councils periodically undertake a formal
review of how they deliver their services. This was enacted as part of the August
2014 amendments to the LGA 2002.
4.2
Council is required in the LGA 2002 s17A (1) to review the cost-effectiveness of
current arrangements for meeting the needs of communities within its district or
region for good-quality local infrastructure, local public services, and performance
of regulatory functions.
4.3
The LGA 2002 s17A (4) states that each service review must consider options for
the governance, funding, and delivery of infrastructure, services, and regulatory
functions, including, but not limited to, the fol owing options:
(a) responsibility for governance, funding, and delivery is exercised by the local
authority:
(b) responsibility for governance and funding is exercised by the local authority,
and responsibility for delivery is exercised by —
i. a council-controlled organisation of the local authority; or
ii.
a council-control ed organisation in which the local authority is one of
several shareholders; or
iii.
another local authority; or
iv.
another person or agency:
(c) responsibility for governance and funding is delegated to a joint committee or
other shared governance arrangement, and responsibility for delivery is
exercised by an entity or a person listed in paragraph (b)(i) to (iv).
4.4
Under Schedule 1AA of the LGA 2002, Council must complete a review of all
services by 8 August 2017. After this date, further reviews must be carried out for
individual services within six years. A review is also triggered where a major
change is planned to levels of service in an activity, or where a significant contract
is due for re-tendering. Changing the way an activity is governed, funded or
delivered also requires a review of options as set out in s17A.
4.5
There is no audit process for this process.
4.6
There is currently no case-law on this process. Good practice guidelines by
SOLGM state that Council should formally resolve the outcome of each service
review. These decisions give direction for Council management as to the model
for how Council services are delivered until the next s17A service review.
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Report on Outcomes of the Local Government Act 2002 Section 17A Service Review Process
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5.
Consultation and Significance Assessment
5.1
The decisions being made by Council as part of this process are governance
decisions based on an internal process set by legislation. The process is about
how Council governs, funds and delivers each service, not about the levels of
service.
5.2
If Council decided to implement a significant change to the governance or funding
of an activity of Council then consultation would likely be required. Decisions that
change the type of service delivery model would be unlikely to require
consultation, but Council could choose to do so.
5.3
Residents can make submissions on any of these matters as part of the Long Term
Plan process.
6.
Conclusion
6.1
This report summarises the outcome of Council workshops in meeting its
legislative requirements under s17A of the LGA 2002. The reviews and
background material discussed by Council at workshops in 2016/17 support the
current arrangements for governance, funding and service delivery across Council
activities.
6.2
Council previously resolved in 2015/16 to exit the housing activity. This decision is
now on hold.
6.3
Council has indicated that a major review of 3 Waters and Roading services will be
undertaken as part of the renewal process for the Alliance contract. The five year
contract has a renewal point in September 2019.
Report on Outcomes of the Local Government Act 2002 Section 17A Service Review Process
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7.
Recommendation
7.1
That the report from the Strategy and Policy Adviser dated 26 July 2017
concerning the Outcomes of the Local Government Act 2002 Section 17A Service
Review Process (as circulated) be received, and
7.2
That the Council confirm the directions indicated during workshop sessions for
the following services as part of meeting the requirements under Section 17A of
the Local Government Act 2002.
a. Services considered exempt by Council under Section 17A(3)a (existing
committed contract or required by legislation):
•
Solid Waste
•
Water and Wastewater Reticulation, Stormwater
•
Roading and Footpaths
b. Services considered exempt by Council under Section 17A(3)b (the cost of
undertaking a review outweighs the benefits):
•
Economic Development
•
Commercial Property
•
Libraries/Service Centres
•
Regulatory (Animal Control, Health and Safety, District Planning)
•
Emergency Management
•
Parks and Reserves (includes Domain Boards and Camping
Grounds), Community Buildings, Public Conveniences, Pools and
Cemeteries
•
Community Support
•
Representation
•
Water and Wastewater Treatment
c. Confirmation of results of full reviews:
i. IT service contract - seek new contract (from July 2018) with MBS to
provide IT support services
ii. Pensioner Housing - exit activity (now on hold)
Attachments
Nil.
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Report on Outcomes of the Local Government Act 2002 Section 17A Service Review Process
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Document Outline
