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Subject: Prepared by: Meeting Date:

LGNZ Conference 2013 Claudelands Event Centre Hamilton

Councillor Andy Cranston Thursday 5 September 2013

Report to COUNCIL for noting

SUMMARY
Though it is the first conference I have attended I felt it was an excellent event. Most of the presentations were very relevant and the presenters of a high standard. There was an indication from many long term attendees that this was their best conference. I had trepidations about the conference when I opened my conference pack to find an umbrella and a beanie. However BREAKFAST with ROB HAMILL We started in with breakfast session which was apparently successfully added to the programme last year. This year we heard the incredible story of Rob Hamilll but more to the point the astonishing story of brother number one, his older brother. Rob was a highly successful competitive rower, world champion silver medallist, Atlantic rower and general high achiever. When his brother was 27 years old and on the big OE by way of yacht he was awoken one morning with gun shots over the mast and a couple of hours later locked up and housed courtesy of the Pol Pot regime of the Cambodian Kymer Rouge. It took two years torture to extract his false confession as to being a member of some supposed intricate American spy network. The confession document was an incredible document which Rob, knowing death to be his imminent outcome used to send coded messages back to his loved ones who he knew would be frantic having had such a long period of absolutely no communication or hint of his whereabouts or fate. References to his spy trainer were of a Colonel S. Tarr which was a coded reference to send messages back to his mum Esther. His training grounds were Meremere with descriptions matching back to the South Auckland coal plant. Brother number 2 committed suicide and after those two horrific events a main point of Robs story was that of the support and encouragement of his mum. Imagine ringing your mum as the sole surviving child, the other two having been lost in the most tragic of circumstances and telling her you are going to row the Atlantic! To her amazing credit mum said, Son if its your dream you go for it! JONAR NADER How not to lose friends and infuriate ratepayers

Technology will not make us efficient if we are inefficient. It will not make us faster if we are now slow. It will not enable us to deliver better customer service if we currently deliver none. Advertising and PR will not change peoples perception of service, as the proof is always in the pudding. We must fix that intangible called Culture. Shining as an organisation means winning hearts and minds one at a time. The measure of service is productivity. The task is to optimise productivity. Staff performance is teamwork driven and the task is to build teams that work.

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An issue often seen is that created by that of staff distance from the ultimate decision-maker. Culture results from a tradition that is self-replicating or self-preserving. Over a period of time a culture is about action which becomes acceptable then becomes a habit which is permissible and becomes invisible. The bad news is flawed culture becomes extremely difficult to change in a large organisation. A culture can be created but you cannot change a culture until you understand the root of the culture. And you cannot improve unless you have a cardiac arrest button. This is an ability at any level for any participant to cease an activity and implement change for the better. You cannot grow if your staff cannot step out of their silo. The question needs to be asked Can your staff add WOW (Wealth or Worth) and that WOW must be from the clients perspective and one must keep shifting the WOW as we grow. Dont go in search of excellence: work with OPEX one percent excellence. Achieving one percent excellence every day will be possible, achieving absolute excellence next month will not. I thought Jonars presentation had some very sound ideas for large organisations such as Council and this is just a brief summary of what I felt was an inspiring catalyst to an organisations further growth and development. GREG HALLAM More for your money Specialised services in Queensland

Greg went to great effort to show how closely compared the Queensland region was to that of NZ. The statistics are closely aligned in populations, urban /rural structure, and area. This was to indicate that the efficiencies we may be seeing with Boplass were possible and in fact even more lucrative on an even grander scale. Greg stated the LGAQ (Local Government Association of Queensland) through its subsidiary companies is saving in excess of one hundred million dollars per year over around 1.5 billion dollar turnover through low cost high volume aggregation schemes. Services offered range from Insurance, Workers Compensation, Procurement of goods and Services, ICT, and Cloud Computing, Advisory, gateway review, and even actual procurement of major capital infrastructure; customer services, out of hours call centres, rate arrears collection and statutory fine enforcement and collection. Simply put LGAQ is a very large economies of scope and scale operator. They use their advantage for every single Queensland Council, largest through to the smallest most remote, - though I realise much of this would not be viable for GDC it did have me thinking that BOPLASS may be not meeting its potential and maybe a follow up could catalyse more efficiencies and savings. PROF NATALIE JACKSON Population change and council changes

The data presented here is hugely important to Councils strategic thinking and forward planning. The focus was that of recognising the end of the natural population growth we may well take for granted. Over the next two decades the only growth in 56 of NZ Territorial Authorities will be at age 65+. This is different to youth driven growth as it is finite. Aging is a powerful force we cant really fight. There are 7 billion on the planet and counting but predictions are for a top out at 9 billion. Some 40 odd countries are already at decline e.g. Japan, Germany. (i.e. they are not replacing population at the neutral 2.1 births per couple.) Natural increase will shift to natural decline. We cannot escape these realities and we should stop dreaming of a 15 million NZ population and incorporate the inevitable consequences into our planning. It is problematic that virtually all the growth is focussed on Auckland. While we have responsibilities to growth and development and any possibilities should be followed up on, the established pattern of non-growth is impossible to ignore and it would seem more sensible to strategize for the most likely scenario rather than be overly optimistic and counting on a future of growth which is actually unrealistic. Maintaining and supporting what we have already may be more sensible than continually putting resources into what will be incredibly difficult to achieve and sustain.
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The regions have declined since 1996 (Gisborne was one of the better off ones at -1.3%- some were closer to -20%). The growth is limited to Auckland with a couple of other regions hanging on. Decline matters! Throughout the world this is demonstrated through a very real phenomena of abandoned housing which of course has overall value impacts. This can be witnessed on many of the abandoned houses websites and is not limited to low value housing. The ending of the growth is signalled through sound demographic study and those studies are warning us loudly and clearly that We cant actually promise growth. What we can do is actively manage the process. We cant really stop the healthier aging reality and we cant really get the birth rate up. Prof Jackson suggests the ABC (A) (B) Accept it is happening. The end of growth is coming. Buffer by responding to the demographics. We cant change it but we can focus our strategy on increasing the fight against loss, especially job losses. We need to love our place or lose it. Collaborate or Conserve. We need to proactively manage our aging population and the end of population growth. We must support and invest more in what we have as opposed to what we want as our wants may not be viable. IS BIGGER BETTER?

(C)

BREAKOUT SESSION

This was chaired by Guyon Espiner and the question was posed - can we do more with less? The session was a good follow on from the realities presented in the demographics session. Panellists were Michael Burnett Auckland Chamber of Commerce; Bruce Robertson, Assistant Auditor General; Ganesh Nana, Senior Economist BERL; and Lawrence Yule. Mr Burnett pointed out that businesses do not maintain themselves within authority boundaries and more efficiencies would be gained with Councils working together. There may be opportunities to provide highly desired infrastructure and improved Levels of Service at the least possible cost. From Mr Robertson of the Audit office we heard there was steady soft growth in Central Government and Local Government. The concern is Councils have gone through a period of seemingly needing more when the actual focus is to strategize doing more with less. (As did the Queenstown Lakes with a 0% rates increase.) The reasons for Council organisations to get bigger must be for very sound positive rationale. But Councils do need to have an ability to attract the most capable people. This drew the attention to the question of amalgamation and there was wide agreement that simply becoming bigger was certainly not sound rationale. Smaller LGAs spend less on improving services and meeting additional demand etc. but they have less debt. Ganesh put it to us that we havent even defined what better is he teased perhaps it has something to do with wellbeings! Economic betterment is perhaps an accepted measurable guideline but there must be common acceptance of what better is. People definitely value local community, local economy and local democracy; and only by getting those right may we see ingress into a community. We currently do a hopeless job selling ourselves. Ratepayers dont know what they are buying. The best form of economic development is leadership. It is not up to ratepayers to fund financial risk but get those business movers and shakers into a room and leave them to it. Lawrence Yule was justifying his position on amalgamation in his region which he stated as being quite obvious to him because of the current inter Council competition between Napier and Hastings which is seeing both centres losing. He acknowledged the uniqueness of the two centres being just 15kms apart being problematic. He is fearful of the damage the Auckland magnet is doing to the regions but realises everyone is still struggling to answer the question of - what is the most appropriate model for Local Government. How do we best protect the non-Auckland regions in these difficult demographic times?
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He finished with a suggestion that a Royal Commission to study the most appropriate structure for Local Government over the whole country may be necessary as there are many flaws in the current system. He doesnt believe conflicted Local Government will be able to implement the best outcome for NZ and suggests the Royal Commission as an independent option. After the session I cornered first Michael and then Ganesh and put to them the question of ratepayer assisted EDAs. From both I received similar advice. Initially we must have a clear answer to the question - what do we want from an EDA? They were both adamant that it should not be a tourism agency, as so many default to, and they should stay away from being an eventing body. They hinted more disappointment in them than glowing recommendation. So often the outcomes will be strongly driven by the abilities of the individual(s) involved and advised the importance and difficulty of securing a person able to achieve the desired outcomes. JOHN KEY Mr Key reiterated the governments four priorities. 1. Manage debt responsibly. Books back to surplus. 2. Building a competitive and productive environment. 3. Deliver better public services. Bureaucracy is focused on the targets. 4. Rebuilding Christchurch. Government has had to write a $15 billion cheque so far. The Prime Minister has asked of his staff what business as usual means to the future and stated his government to be in the second phase of reform with a focus on efficiency. He is anticipating structural changes may mean better governance. The Local Government reforms are progressing rapidly. There is a focus on things happening in a much more timely manner e.g. the unacceptable scenario of the Wellington highway taking 18 years to consent. He spoke on the issue of Housing affordability which was politically topical at that moment so I wont regurgitate though I was pleased to hear him state they are very wary of implementing a supposed fix nationally ( e.g. interest rates) for an essentially Auckland problem. GEOFF LAWRIE CISCO parallel

As the world becomes increasingly urbanised, community leaders everywhere are struggling to build the kind of efficient, safe, prosperous and stimulating environments that citizens expect. Tomorrow starts here. Geoff presented some outstanding realities and facts on the speed and impact of technological growth. Moores Law Computing power has been doubling every 18 months for decades. The computing power utilised to get to One giant step is contained today in a childs gaming device. It was just in July 1994 that Time magazine highlighted a then unknown phenomenon - Social media. It spoke of an unparalleled opportunity to connect and inspire. As of today 35 million cell phones are sold per week! We can now work untethered and physically disconnected to a workplace. 1990 saw 3 million internet users; 1997 76 million users. It was still mostly a business tool but then the consumers took control (i.e. people to people users) and in 2004 users shot to 745 million users. Now the world has 2.4 billion users! What has that done to cost? In 1980 I gigabyte cost $1 million to produce; now that technology capacity is available for 10 cents. In 2020 20 billion devices will be connected to the internet. Cars now commonly have 5 or 6 computing devices. We are now seeing new cities built with connectivity being the primary concern and these developments are setting the standard for all new cities (e.g. Songdo Korea). Right from the start this is sustainable design based on 100+ year planning.

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Geoff was strongly critical of the seeming inability of local government to get up to speed with technological advancements and gave some parking and lighting and GPS based examples. He was especially interested in the slow uptake by Councils of social media opportunities and how they could be utilised as a very powerful consultation vehicle. JUDE MUNROE CEO BRISBANE THINKING BIG

Jude explained her long history in large scale local government. She said that her most satisfying had been under the Lord Mayor system of Brisbane which seems to be a system where very large decisions can be tasked to very few people and the upside of this would seem to be much more rapid progress. It seemed we were able to achieve a huge amount of progress in a short period of time. In her opinion Lord Mayors had pushed the liveability and prosperity of Brisbane. Even with a divided Council the Clem Tunnel at $2.6 billion was the swiftest tender evaluation in Australian history. But even in a standard system she states Mayors are in the best position to advocate for their areas and influence national policy. Local government must understand the policy position of its national government and may need to organise itself regionally and nationally to be a more effective player. DR. OLIVER HARTWICH THE NZ INITIATIVE - Executive Director

A GLOBAL PERSPECTIVE ON LOCALISM In the beginning all politics was local. The City is the birthplace of modern society and cities were the highest form of government. Now local government seems to have been relegated to a lower status. Central government seems to be calling the shots and defining the role of local government. Dr Hartwich believes this should not be the case. The danger of over-reaching political influence is all too real. He introduced me to the Principle of Subsidiarity. This states that nothing should be done by a larger more complex organisation which can be done by a smaller and simpler organisation. Decisions are taken as close as possible to the citizen. On that principle Local Government is far better placed to involve the citizens, maintain democracy, engage, bring systems within peoples reach etc. LG is the best provider of local services. If Central government were supplying public services they would become a monopoly. Local government can also become monopolies but people can move between those monopolies (i.e. move to better levels of service). 2/3rds of the OECD have significant elements of personalised taxation allocated to Local Government. Not NZ. The NZ government has control of 89% of public spending. (NB. Those countries are far more active in the likes of health, education, policing etc.). Dr Hartwich gave an overview of several countries and their structures to indicate the stronger more empowered status of local government and a trend to some countries moving to strengthen the sector by empowerment. In Switzerland only 20% of the tax take goes to central government. In summary he stated NZ has the most extreme case of Central government influence and NZ should debate what might central government do and what local government should do. Chance of that happening ???! ROBERT LINTERMAN EECA

Mr Linterman spoke of the Healthy Homes subsidy coming to an end and implementing a Voluntary Targeted Rates Scheme to maintain the momentum of the initiative. This is something we looked at in Community Development last year. With the ECT assistance we have had with this insulation programme we were leaders and most regions are still very underdone. He actually quoted Gisborne as having identified less health issues and directly attributed that to our healthy homes programme.

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HON CHRIS TREMAIN

Min Internal Affairs/Min local Government

Chris was quick to congratulate the sector as a whole for the lowest rate rise across the sector he is aware of. He believes this is because the Council actually share in some of the PMs priorities. He stated we must understand each others core business. We are moving to a drive to provide the same or better services for the same or similar dollar commitments. There are transformations in social services and the local government reforms are aiming at better services. While benchmarking is often objected to and defended it will still be used extensively as there needs to be measures in place. He likes the idea of a Local Government centre of excellence with an aim to lift the performance. Other parts of the reforms he alluded to were: fiscal prudence, strong local economies, reduction of red tape (improved public services, reducing compliant costs etc.), community engagement (the new bill will look at how engagement can be more time efficient). The hope is that Councils will decide on the most appropriate consultation guidelines. The bill will incorporate the use of new technologies. They are looking at the complexity of the Long Term Plan and are keen to move to a simpler consultative document through the draft process. He stated that the Auckland amalgamation is showing very significant savings but further amalgamations will be the community decision. Development contributions are to be more transparent and related to the actual development. They are certainly not looking to abolish them but working through options. The bill is also looking at decisions around Council reserves being made locally rather than in Wellington. He introduced the recently announced Significant Projects Fund which is relaunched with $30 million and he did say not to forget to apply to the WW1 monument restoration fund. (I was surprised at this because I had heard it was already oversubscribed- though I may be misinformed). He said they were looking at a plan to test online voting. YING FOON MAYORESS The Fulton Hogan dinner was a great night with MC Te Radar an entertaining comedian. The band led by a dynamic Shane Cortese had the awesome Claudelands Entertainment Centre rocking til the wee smalls. I enjoyed sharing a social occasion with Meng and Ying. Ying was involved in some field trips and one of them was to the awesome Hamilton gardens. I have only briefly visited them but do remember them as something really special. Within these gardens are sectors and one sector is Te Parapara Maori Garden. This obviously impressed Ying and led to her posing an appropriate question and observation Where are our Maori gardens?

RECOMMENDATIONS
That the Council 1. receives the report

Andy Cranston Councillor

Keywords: LGNZ Conference, Councillor report,

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