Agenda of Audit and Risk Committee Meeting

Audit and Risk Committee Meeting Minutes

17 February 2022

DRAFT

MINUTES OF THE Carterton District Council
Audit and Risk Committee Meeting
HELD VIA ZOOM ON Thursday, 17 February 2022 AT 9:30 am

PRESENT: Philip Jones (Chair), Cr Robyn Cherry-Campbell (Deputy Chair), Mayor Greg Lang, Deputy Mayor Rebecca Vergunst, Cr Dale Williams, Charmaine Kawana

Elected members

Cr Steve Cretney

Other

Jacques du Toit (Audit NZ), John Whittal (Audit NZ)

Council staff

Geoff Hamilton (Chief Executive), Dave Gittings (Infrastructure, Planning and Regulatory Manager), Geri Brooking (People and Wellbeing Manager), Kelly Vatselias (Corporate Services Manager), Jody Dalziel (Health, Safety and Wellbeing Advisor), Melanie Barthe (Climate Change Advisor), Elisa Brown (Communications and Engagement Advisor), Robyn Blue (Democratic Services Officer)

1 Karakia Timatanga

The meeting was opened with a karakia led by Charmaine Kawana.

2 Apologies

There were no apologies received.

3 Conflicts of Interests Declaration

There were no conflicts on interest declared.

4 Public Forum

There was no public forum.

5 Confirmation of the Minutes

5.1 Minutes of the Audit and Risk Committee Meeting held on 17 November 2021

MOVED

1. That the minutes of the Audit and Risk Committee Meeting held on 17 November 2021 are true and correct.

Cr D Williams / Cr R Cherry-Campbell

CARRIED

6 Reports

6.1 Audit New Zealand Report on the 2020/21 Annual Report

1. Purpose

To present the report prepared by Audit New Zealand on the 2020/21 Annual Report for the Committee’s consideration.

NOTED

John Whittal presented the Audit NZ report on the 2021 Audit.

MOVED

That the Committee:

1. Receives the report.

2. Notes the management comments.

Cr R Cherry-Campbell / Mayor G Lang

CARRIED

6.2 Progress update on Audit NZ Recommendations

1. Purpose

The purpose of this paper is to update the Committee on the progress achieved to date responding to the recommendations presented by Audit NZ, arising from their previous audits.

MOVED

That the Committee:

1. Receives the report.

2. Notes the progress being made to meet the recommendations made by Audit New Zealand.

Chair P Jones / Cr R Cherry-Campbell

CARRIED

6.3 Proposed Audit and Risk Committee schedule for 2022 year

1. Purpose

For the committee to review and amend/make comment to the proposed work programme contained below.

NOTED

· The Governance Review will be added to the Audit and Risk Committee Schedule (May), then a full Council meeting.

· The Corporate Services Manager is reviewing the non-financial reporting measures which will come to an Audit and Risk Committee meeting, then a full Council meeting.

· It was recommended that the full Risk Register is reviewed annually, but the top 5-10 risks are reported on in more detail at each Audit and Risk Committee meeting and also changes to any other risks.

MOVED

That the Committee:

1. Receives the report.

Deputy Mayor R Vergunst / Cr R Cherry-Campbell

CARRIED

6.4 Treasury Update Report

1. Purpose

The purpose of the report is to provide the Committee with an update on council’s current Treasury position.

NOTED

As agreed by Council, Price Waterhouse Cooper have been engaged for Treasury management services. They will be invited to attend the May Audit & Risk Committee meeting with a workshop held prior.

MOVED

That the Committee:

1. Receives the report.

2. Notes the current Treasury position and compliance with policy.

Cr D Williams / Deputy Mayor R Vergunst

CARRIED

6.5 Risk Register Update

1. Purpose

To advise the Audit and Risk Committee on changes to the Carterton District Council Risk Register

NOTED

The risks associated with climate change need more discussion at a workshop before the various risks and their rating are included in the Risk Register. The focus with climate change is on what Council can do.

MOVED

That the Committee:

1. Receives the report.

2. Note climate change will be on the agenda of the next Audit and Risk Committee meeting.

Chair P Jones / Deputy Mayor R Vergunst

CARRIED

6.6 Government Reform Update

1. Purpose

For the Committee to receive an update on Central Government’s reform changes impacting upon Local Government.

MOVED

That the Committee:

1. Receives the report.

Cr R Cherry-Campbell / Deputy Mayor R Vergunst

CARRIED

6.7 Project Reviews Update - Expression of Interest

1. Purpose

To update the Committee on progress of the Expression of Interest (EOI) for the project reviews of the Clocktower Project and Wastewater Reservoirs Project.

MOVED

That the Committee:

1. Receives the report.

2. Notes the next update will be brought back to the Audit and Risk Committee on 19 May 2022.

Chair P Jones / Mayor G Lang

CARRIED

6.8 Health, Safety & Wellbeing Update

1. Purpose

This report updates the Audit and Risk Committee on recent health, safety and wellbeing (HS&W) activities.

NOTED

the current focus with the Health, Safety and Wellbeing team is on managing risk with the Omicron outbreak. Sixteen staff are identified as critical workers who have access to Rapid Antigen Testing from the DHB until CDC stock arrives.

MOVED

That the Committee:

1. Receives the report.

Cr R Cherry-Campbell / Cr D Williams

CARRIED

7 Karakia WhakamUtunga

The meeting was closed with a karakia led by Charmaine Kawana.

The meeting closed at 11.05 am

Minutes confirmed: ……………………………………

Date: ...................................................

Audit and Risk Committee Meeting Agenda

19 May 2022

6 Reports

6.1 Independent Review of the Clocktower and Wastewater Treatment Ponds Projects

1. Purpose

To update the Committee on the outcome of the independent review of the project management process used for the delivery of the Clocktower and Wastewater Treatment Reservoir Pond projects.

2. Significance

The matters for decision in this report are not considered to be of significance under the Significance and Engagement Policy.

3. Background

Carterton District Council engaged with external consultant Calibre Consulting Ltd to undertake an independent review [see Attachment 1] of the project management process used for the delivery of the Clocktower and Wastewater Treatment Reservoir Pond project (up to stage two).

The purpose of the reports is to document the lessons learnt and propose recommendations for future project delivery, with a focus on delivery of non-standard / new build projects.

4. DiscussioN

The objective of this independent review is to provide elected members and ratepayers with confidence that:

· Future projects have a value and outcome focus and are delivered to established standards.

· Council is continuing to improve their delivery processes.

Provide officers with:

· Learnings for future non-standard/new build projects.

· A clear, scalable framework for project delivery in Council.

· Good core project management principles that can be applied across the organisation.

Council sought expressions of interest from parties with the requisite skills and experience, with an interest in local suppliers. Five responses were received expressing interest in undertaking the review.

Calibre Consulting from Masterton and Wellington were selected to undertake the work. Calibre undertook a review of the Waihinga Community Centre project for South Wairarapa District Council and understand the complex and political issues Council capital projects sometimes face. They have a strong project management background as well as significant experience with local authority civil construction projects.

Calibre focused on two projects being the Clocktower and Wastewater Treatment ponds. The two projects incurred additional costs as well as time delays through a range of different factors. Calibre Consulting was given access to all necessary staff, including staff who have since resigned, and relevant project and tender documentation.

The Clocktower project was able to be reviewed in its entirety as this work is now complete. The Wastewater Treatment Ponds project review covered the period from tendering until April 2022.

The review team concluded that despite the repeated increases in costs for the Clocktower project, the final cost of the strengthening works was likely to have been only marginally above a realistic budget, if it had been scoped correctly at the outset.

On the Wastewater Treatment Ponds project the review team concluded that the decision to award the construction contract to the lowest cost tenderer, CHB Earthmovers Ltd, and proceed knowing that there were concerns with the relocation of the mudfish, led to much of the delay and cost overruns experienced to date.

Lessons Learned

Overall, the review team identified nine key learnings for Council being.

1. Develop a simple business case procedure for all projects which outlines scope, programme, budget, management resources, communications and assess risk. This could be initiated at the early budget stages and developed in more detail as necessary through the project life cycle.

2. Encourage staff to prepare project cost estimates based on sound risk and scope assessments and not to understate the project as a way of demonstrating value.

3. Develop a procurement plan early in the project to assist and guide project implementation. The procurement planning should also address and incorporate Council’s broader objectives to ensure the project delivers value to the community.

4. Ensure that there is clear separation between operational management and governance for all projects with clearly defined roles and accountabilities.

5. Identify and appoint a project manager with appropriate authority and time availability to manage each project.

6. Ensure that all projects include regular and robust reporting procedures that address issues including risk, budget, programme, quality, health, and safety. The reporting should address forward facing issues as well as documenting progress and should be structured to identify key risks or decisions required from the recipient.

7. Ensure Council has a robust central filing system, that staff are trained in how to use it, and are encouraged to do so.

8. Train key staff and managers in basic project management and procurement procedures and ensure they are aware of Council’s policies and delegations of authority requirements.

9. Implement appropriate processes to ensure that appropriate actions to mitigate identified risks are negotiated and documented prior to award of contracts.

Since the May 2021 report to Audit & Risk officers have increased the focus on capital project delivery. Our focus has identified in some cases the scope of project work could have been defined clearer. We recognise pressure on staff to start work can compound issues and lead to a lack of clarity around scope, timing, and budget.

Officers have recently put in place additional support and processes for capital programmes including:

· Regular capital project reviews with the Executive Leadership Team covering risk, scope, budget, and timing.

· Upgrading of financial systems to enhance project financial reporting and provide regular reporting to project managers.

· Review of the forward works programmes across our infrastructure areas.

· Project initiation review following tender evaluations, but before construction start, to inform our decisions on budget, contract type and detailed specifications.

· Additional project management resources engaged sharing workload and allowing more focus on delivery of critical projects.

In summary, officers support the review findings and will seek to implement the key lessons learned into our BAU practices as follows:

· Project team – Clarifying guidelines on the role functions and responsibilities within a project team to consider “who is doing what”.

· Resources – Ensuring at the start of a project we have appropriate level of skilled resources within the project team to deliver the project objectives. This may require external professional advisors where the internal teams are fully utilised, or the work is outside their area of expertise.

· Procurement process – Developing an internal guideline for our refreshed Procurement Policy, to help assist decision making and manage the higher levels of risk associated with accepting lowest cost responses.

· Business case – Developing and implementing a generic business case tool that considers and manages known risks to delivery.

· Documentation management – investigating a cloud based central filing system for Council project documentation and data.

5. CONSIDERATIONS

5.1 Climate change

There are no specific impacts for climate change as a result of this review.

5.2 Tāngata whenua

There are no specific impacts for tāngata whenua with this work.

5.3 Financial impact

The cost of this review was not included in the Long-Term Plan funding, and therefore will be unbudgeted expenditure. While the invoice for the work has not yet been received, it is anticipated the review will cost less than $20,000 (excl GST).

5.4 Community Engagement requirements

As a result of this review there is no Community Engagement requirements.

5.5 Risks

Project risks will be identified, managed, and reported through individual projects.

6. Recommendation

That the Committee:

1. Receives the report.

File Number: 138853

Author: Geoff Hamilton, Chief Executive

Attachments: 1. Background Information of Calibre Consulting and Review of the Clocktower and Wastewater Treatment Ponds Projects ⇩

Audit and Risk Committee Meeting Agenda

19 May 2022

6.2 Climate Change Risk and Resilience Strategy

1. Purpose

For the committee to receive an update on the progress made on the Climate Change Risk and Resilience Strategy.

2. Significance

The matters for decision in this report are not considered to be of significance under the Significance and Engagement Policy.

3. Background

During the LTP2021-31 process, the climate change related risks were briefly assessed by the climate change advisor. This assessment revealed that CDC needed a deeper understanding of its climate change related risks to be able to better adapt to climate change and increase the organisation’s resiliency.

Therefore, it was agreed that a Risk and Resilience Strategy should be developed. This strategy will allow CDC to understand the Council’s climate change related risks and increase the Council’s resiliency. Note that the strategy focuses only the risks the organisation is facing. It does not focus on the risks the district is facing.

This work is in line with:

- Government work (National Climate Change Risk Assessment released in 2020 and National Adaptation Plan due in August 2022)

- The region’s work (Wellington Regional Climate Change Impact Assessment due in December 2022 and Wellington Regional Adaptation Plan due in 2024)

4. Methodology

The Strategy was developed following the “He kupu ārahi mō te aromatawai tūraru huringa āhuarangi ā-rohe – A guide to local climate change risk assessments” released by the Ministry for Environment (MfE) in 2021.

Climate change scenarios and timeframe

Following MfE guidance the following scenarios are used in the Strategy:

- RCP4.5: emissions peak in 2040 and start to decline to reach net zero in 2080.

- RCP8.5: no measures are taken to reduce the greenhouse gas emissions.

Following the MfE guidance, the following timeframes are used in the Strategy:

- Present day

- Mid-term: 2040-2050

- Long-term: 2090-2100

Climate change projections and hazards

Climate change projections:

The source of the climate change projection is: “Climate change projections for the Wairarapa”, report prepared by that National Institute of Water and Atmospheric Research (NIWA) for GWRC, 2021.

An information session was held on 18 November 2022 to present this report to Elected Members and Managers from both CDC and SWDC. A replay of this session is available here.

For further information, you can have a look at the full report and a short video (made by NIWA):

- Report here,

- Video here.

Hazards:

- Extreme weather events (wind and rain)

- Sea level rise, coastal flooding and erosion

- Inland flooding

- Erosion and land slide

- Droughts

- Wildfire

- Heatwave

Elements at risk and screening against hazards

Physical impacts:

Part of this screening was done by overlaying the following layers on a GIS system (this is a good way to identify physical impacts):

- Climate change projections and hazards

- CDC properties (building, parks and reserves, etc), roads, elements linked to 3-waters, etc

The following screenshot shows an example of risks identified: The WWTP is partly located in a flood zone (in blue). Also, the dark red lines show the roads located in the flood zone.

Other impacts:

Other impacts, such as financial impacts, were also identified.

Workshop:

A workshop was undertaken on 4 May with Elected Members and Managers to confirm the screening and make sure all the risks were appropriately identified.

Risk rating

To rate a risk, exposure to the hazard and vulnerability must be combined. Vulnerability is a combination between sensitivity and adaptive capacity.

Exposure:

Definition: Element that could be adversely affected by a climate hazard

Exposure rating	Definition
Extreme	Significant and widespread exposure of elements to the hazard (>75%)
High	High exposure of elements to the hazard (50-75%)
Moderate	Moderate exposure of elements to the hazard (25-50%)
Low	Isolated elements are exposed to the hazard (5-25%)

Vulnerability:

Definition of vulnerability: Propensity or predisposition to be adversely affected by a climate hazard. To rate vulnerability, sensitivity of the element and adaptive capacity must be combined.

Definition of sensitivity: How the element will fare when exposed to a hazard

Definition of adaptive capacity: Element’s ability to adjust to potential damage

		Sensitivity
		Low	Moderate	High	Extreme
Adaptive capacity	Very low	Moderate	High	Extreme	Extreme
	Low	Low	Moderate	High	Extreme
	Medium	Low	Moderate	Moderate	High
	High	Low	Low	Low	Moderate

Vulnerability rating	Definition
Extreme	Extremely likely to be adversely affected, because the element or asset is highly sensitive to a given hazard and has a low capacity to adapt
High	Highly likely to be adversely affected, because the element or asset is highly sensitive to a given hazard and has a low capacity to adapt
Moderate	Moderately likely to be adversely affected, because the element or asset is moderately sensitive to a given hazard and has a low or moderate capacity to adapt
Low	Low likelihood of being adversely affected, because the element or asset has a low sensitivity to a given hazard and has a high capacity to adapt

Risk rating matrix:

		Exposure
		Low	Moderate	High	Extreme
Vulnerability	Extreme	Moderate	High	Extreme	Extreme
	High	Low	Moderate	High	Extreme
	Moderate	Low	Moderate	Moderate	High
	Low	Low	Low	Moderate	High

The workshop on 4 May with Elected Members and Managers aimed to rate all the risks identified. Interesting discussions occurred, and using the elected members and managers skills and knowledge the risk ratings were able to be defined more precisely.

Mitigation measures

A second workshop will be scheduled in June with Elected Members and Managers in order to:

- validate the mitigation measures presented by the climate change advisor

- Discuss about other measures attendees may know of

- Discuss about other measures that could be undertaken to increase resiliency

At the end of the next workshop, we aim to have all the information needed to finalise the Risk and Resilience Strategy.

5. NEXT STEPS

June 2022: Mitigation Measures Workshop with elected members and managers.

August 2022: Final Strategy presented to the Audit and Risk Committee.

6. CONSIDERATIONS

6.1 Climate change

Climate Change mitigation: There is no direct impact on the greenhouse gas emissions from the organisation.

Climate change adaptation: This strategy will allow CDC to have a deep understanding of the climate change risks the organisation is, and will be facing. This strategy will also identify mitigation actions and measures to increase the Council’s resiliency.

6.2 Tāngata whenua

The Risk and Resilience Strategy identifies a risk on mana whenua relationships and engagement. By acknowledging this risk and providing measures to mitigate this risk, the strategy will have a positive impact on tāngata whenua.

6.3 Financial impact

The Risk and Resilience Strategy identifies several risks on the Council’s budget. By acknowledging those risks and providing measures to mitigate them, the strategy will have a positive impact on the Council’s finances.

6.4 Community Engagement requirements

No communication or engagement plan is required.

6.5 Risks

The Risk and Resilience strategy allows CDC to have a deep understanding of its climate related risks and how to mitigate those risks. Therefore, the risks CDC are currently facing should be reduced in the future due to this strategy.

7. Recommendation

That the Committee:

1. Receives the report.

File Number: 141445

Author: Melanie Barthe, Climate Change Advisor

Attachments: Nil

Audit and Risk Committee Meeting Agenda

19 May 2022

6.3 Progress update on Audit NZ recommendations

1. Purpose

The purpose of this paper is to update the Committee on the progress achieved to date responding to the recommendations presented by Audit NZ, arising from their previous audits.

2. Significance

The matters for decision in this report are not considered to be of significance under the Significance and Engagement Policy.

3. Background

At the completion of each audit, Audit NZ sets out their findings from the audit in a report to the governing body. This report draws attention to areas where Audit have made recommendations for improvement. These recommendations are then added to this report. This report proves a mechanism for the Audit and Risk Committee to monitor the Councils progress in relation to the implementation of these recommendations on a regular basis.

Management can comment on the Audit recommendations, noting planned actions, or if management considers time/resource/financial costs outweighs the benefits gained by implementing the recommendation. The Committee can provide guidance on prioritisation of recommendations, and whether to accept the risk associated with any of the recommendations (i.e. where time/resource/financial costs outweighs the benefits gained by implementing the recommendation).

4. Discussion

There are currently 13 recommendations listed in Appendix 1, including those raised in the 2021 Report to Governors which was received at the February Audit and Risk Committee meeting.

Of these recommendations, management have noted six as cleared, though these have been left in the appendix until Audit NZ reviews them as part of the 2022 audit. A further six recommendations are in progress. Only one recommendation has not been started - this is because it relates to the 2023 roading valuation.

These findings and recommendations are set out in Attachment 1, which also includes an explanation of the rating criteria. The management comments and details of progress to date are identified with each.

Staff continue to work towards clearing the outstanding items.

5. CONSIDERATIONS

5.1 Climate change

There are no climate change considerations.

5.2 Tāngata whenua

There are no tāngata whenua considerations.

5.3 Financial impact

Our responses to most of the outstanding recommendations can be covered within existing budgets.

As a small council, it can be challenging to implement some recommendations within current resources. We are considering roles and priorities within the team, and also weigh up the benefits of implementing recommendations against costs (whether financial, or staff time).

5.4 Community Engagement requirements

There are no community engagement requirements.

5.5 Risks

There are risks associated with outstanding Audit recommendations. There are currently no ‘Urgent’ recommendations outstanding, which would identify a more significant level of risk. When considering Audit recommendations, we look at the level of importance assigned, and as discussed above, the benefits of implementing versus the costs involved.

6. Recommendation

That the Committee:

1. Receives the report.

2. Notes the progress being made to meet the recommendations made by Audit New Zealand.

File Number: 138849

Author: Kelly Vatselias, Corporate Services Manager

Attachments: 1. Audit NZ recommendations and progress ⇩

Audit and Risk Committee Meeting Agenda

19 May 2022

6.4 Treasury Policy Review

1. Purpose

For the committee to review the updated Treasury Policy and recommend adoption by the Policy and Strategy Committee.

2. Significance

The matters for decision in this report are not considered to be of significance under the Significance and Engagement Policy.

3. Background

The Treasury Policy objective is to ensure that investments and liabilities are managed in a prudent, effective, and efficient manner, as well as ensuring that all external borrowing, investments and incidental financial arrangements meet the requirements of the Local Government Act 2002.

The Treasury Policy sets the treasury operational risk framework, in which staff manage funding, interest rate, liquidity and credit risks to achieve the lowest possible net interest cost to Council. This covers all borrowing, and investments. The policy was previously reviewed as part of the Long-Term Plan 2021-2031 which was adopted in June last year.

While the policy is not due for review until the next Long-Term Plan in 2024, Council has decided to complete an earlier review to further align with current market operational practice, recognise the new interest rate environment, and incorporate advice from Treasury advisors Price Waterhouse Cooper (PWC).

4. Discussion

The Council’s recently engaged treasury advisors, PWC, have reviewed and updated the Council’s policy. The draft policy is based on good practice in the sector, and reflects discussions held with officers and elected members on the operation of Council’s treasury function.

Key changes to the Treasury Policy relate to:

· Borrowing Limits, updated to show Council limits and LGFA limits

· Debt Funding Risk, including specific limits

· Liquidity risk, including requirement to hold $2m cash

· Interest rate Risk, including specific parameters/limits

· A section on LGFA, including that Council is a guarantor

· Investment mix updated to include externally managed funds and loans and advances to community organisations.

· Section included on Counterparty Credit Risk including limits.

· Sections added to address Cash Management, Reporting and Policy Review.

· Including Delegation of Authority and Approved Financial Instruments as appendices.

The full draft policy is included as attachment 1, with the current Treasury Management Policy included as attachment 2.

5. Options

The Committee is recommended to review the revisions to the treasury management policy as summarised above and included in the updated policy (attachment 1) and recommend adoption to the Policy and Strategy Committee.

The Committee may recommend adoption of the policy subject to certain changes.

The Committee may decide to not recommend adoption of the updated policy and continue with the existing policy.

6. NEXT STEPS

If the Committee recommends the updated Treasury Policy for adoption by the Policy and Strategy Committee who then adopt the policy, staff will then be able to implement the recommended changes.

There will be a transition period after the Council adopts the new policy, as some new limits have been included in the policy, and Council may not be in compliance with all of the new limits. Officers will work with PWC to ensure that Council moves to a position of full compliance in a prudent way. Compliance with policy will be reported at each Audit and Risk Committee meeting.

7. CONSIDERATIONS

7.1 Climate change

No specific considerations.

7.2 Tāngata whenua

No specific considerations.

7.3 Financial impact

The Treasury Management Policy sets the risk framework to manage net debt to achieve the lowest possible net interest costs.

7.4 Community Engagement requirements

No specific community engagement required.

7.5 Risks

The Local Government Act 2002 requires Council to have Liability Management and Investment policies. The Treasury Management Policy covers both liability management and investments, which include all external borrowing, financial investment and incidental financial arrangements.

8. Recommendation

That the Committee:

1. Receives the report.

2. Recommends the Policy and Strategy Committee adopts the updated Treasury Management Policy in attachment 1.

File Number: 141409

Author: Kelly Vatselias, Corporate Services Manager

Attachments: 1. Draft CDC Treasury Management Policy ⇩

2. Current Treasury Management Policy ⇩

Audit and Risk Committee Meeting Agenda

19 May 2022

6.5 Treasury Update Report

1. Purpose

The purpose of the report is to provide the Committee with an update on Council’s current Treasury position.

2. Significance

The matters for decision in this report are not considered to be of significance under the Significance and Engagement Policy.

3. Background

This report is an update as at 30 April 2022 on the current position of the loan/debt status, and compliance against the parameters outlined in the Council’s Liability Management Policy. An update on the position of investments is also included.

4. Discussion

Historically CDC has had a relatively low level of debt. Debt has been funded through BNZ, with some internal loans when prudent. Reporting against debt has generally been through financial updates to Council, and in the annual report.

As CDC’s debt increases, the level of risk also increases, and as such we plan to report on CDC’s treasury position and management at each Audit and Risk Committee meeting. This covers the current debt position, forecast debt position, compliance with policy and covenants, and risks.

At the October 2021 Council meeting, the Council made the decision to become a guarantor of the Local Government Funding Agency (LGFA). This will allow us to have a further discounted interest rate on new or refinanced borrowing and will also allow us to go over LGFA’s $20m limit on non-guarantor borrowers, if/when required. On 27 April 2022, legal documentation was finalised and Council is now a guarantor of LGFA.

This report incorporates analysis undertaken by PwC, who have been engaged since February to advise on Council’s treasury management. They have also reviewed the current treasury management policy and have provided a revised draft for consideration. This draft is presented separately in another report to the Committee.

5. CURRENT DEBT POSITION

Since the Treasury Update Report was presented at the February Audit and Risk Committee meeting, the council have not borrowed any additional funds other than to refinance short-term borrowings with a floating rate note with LGFA for $2 million.

The total capital programme for the 2021/22 year is approximately $14m. The amount borrowed through LGFA pre-funds our loan-funded capital programme for the rest of the financial year (excluding a short-term bond which ended April 2022 and was refinanced). By pre-funding our borrowing for the rest of the year, we have taken advantage of LGFA’s still low interest rates.

We continue to have internal borrowings of approximately $6m, which as previously discussed, can be a prudent way to manage debt. However, it is not always visible in financial reporting, as only external debt is shown in the Statement of Financial Position. For the 2021 annual report, we included in our borrowings note disclosure, a table to show our internal debt.

Position as at 30 April 2022:

LGFA	$14,700,000
Internal borrowings	$6,100,000
TOTAL	$22,800,000

The average interest rate on our borrowings with LGFA has risen to $2.01% from 1.72% after refinancing of short-term funding.

As noted in the previous report, interest rates have responded to economic conditions arising from the pandemic and global supply issues. Council is in a good position with a still low average interest rate, and the capex programme for the remainder of the year pre-funded. The internal borrowings have also meant a decrease in external interest expense, as our external borrowing is not as high as budgeted, due to the use of internal borrowing.

The current interest rate has been achieved through borrowing from a number of different bonds, ranging from 6 months to eight years. In selecting the bonds, we considered interest rates, the timing of bonds, and the three waters reform (loans for three waters activities are in bonds with dates before July 2024). The following graph identifies the anticipated level of borrowing under the 10 Year Plan (black line) and the desirable proportion of that borrowing at fixed rates (red line). The grey line shows a minimum level of borrowing at fixed rates. In effect the graph reflects a desirable balance between fixed and floating rates.

6. LIABILITY MANAGEMENT COMPLIANCE

Council adopted Liability Management and Investment Policies as part of the 2021-31 Long-Term Plan. The new Policies were effective as of the date of adoption.

The Liability Management Policy stipulates a number of parameters relating to the prudent management of debt. For the purposes of this report, the key policies are each addressed separately, as relevant.

6.1 Interest rate exposure

Interest rate exposure refers to the impact that movements in interest rates have on the Council’s financial performance. Council’s objective in managing interest risk is to minimise debt servicing cost and to maintain stability of debt servicing costs.

Factors that influence interest rates for long and short-term securities are beyond the control of the Council. It is prudent to be aware of where interest rate cycles are when making a decision as to the type of borrowing to be undertaken and what arrangements might need to be entered into to manage the interest on borrowing.

We have considered our interest rate exposure when drawing down borrowings and have structured our borrowings across bonds that end at different dates.

Interest rates are continuing to increase, and we will continue to monitor interest rates and consider ways to manage our interest expense. This includes the pre-funding of year 1 capital programme.

6.2 Liquidity

Liquidity refers to the availability of financial resources to meet all obligations as they arise, without incurring penalty costs. The policy states that Council requires a minimum level of surplus liquidity to meet unexpected cash expenditure or revenue shortfall. The policy does not specify the level of liquidity required.

On 31 March 2022 our liquidity ratio was 3.5, where our current liabilities are $4.9 million and liquid assets are $17.4 million.

6.3 Credit exposure

Credit risk is the risk that a party to a transaction will default on its contractual obligation. Policy states the Council will only enter into borrowing agreements with creditworthy counterparties (rated A- or better).

LGFA is currently rated AAA by S&P Global Ratings.

6.4 Borrowing limits

The policy specifies the following borrowing limits:

Policy	Current position (as at 31 March 2022)
Total debt as a percentage of total assets will not exceed 15 percent.	5.7%
In any financial year, gross interest paid on term debt will not exceed 12 percent of gross operating revenue.	1.5%
In any financial year, gross interest expense will not exceed 50 percent net cash inflow from operating activities.	3.7%

7. forecast position

We are currently in year 1 of the Long-Term Plan. Capital expenditure is forecast for the year, of which a large portion is loan funded, resulting in forecast debt of $18m at 30 June 2022. This is well within our limits, as shown in the LTP prudence benchmark graphs. We have pre-funded all loan-funded capital works forecast in year 1 to take advantage of low interest rates.

Currently we are still holding internal debt and will continue to assess whether it is more prudent to continue to hold this internally, or transfer to external debt through the LGFA.

8. Investments

Current investments held are as follows:

Currently the higher than normal cash levels reflect the receipt of maturing short-term investments relating to special reserve investments and pre-funding for this year’s capital programme. We intend to place short-term deposits across at least two different banks and are currently in discussions on rates.

Special reserve investments are funds set aside for specific purposes, such as infrastructure contributions.

The average interest rate on term investments is currently approximately 1%.

9. NEXT STEPS

Staff will continue to monitor and report on treasury position and compliance to the Audit and Risk Committee.

10. CONSIDERATIONS

10.1 Climate change

There are no specific climate change considerations.

10.2 Tāngata whenua

There are no specific tāngata whenua considerations.

10.3 Financial impact

There are no financial impacts resulting from the decisions in this report.

10.4 Community Engagement requirements

There are no community engagement requirements.

10.5 Risks

Key risks relate to treasury management areas outlined above. As demonstrated, we are in compliance with policy, and have significant headroom in terms of our borrowing capacity.

As borrowings increase, risk becomes higher. For example, changes in interest rates can have a significant impact. In order to reduce risk, we can, and will, consider the following:

· Interest rate exposure

· Policy limits

· Implications of the potential 3 waters reform

We have already engaged PwC as an external advisor as previously agreed, which will help us to further manage risks.

11. Recommendation

That the Committee:

1. Receives the report.

2. Notes the current Treasury position and compliance with policy.

File Number: 138850

Author: Kelly Vatselias, Corporate Services Manager

Attachments: Nil

Audit and Risk Committee Meeting Agenda

19 May 2022

6.6 Insurance update

1. Purpose

To provide an annual update to the Committee regarding the Council’s insurance policies and an update on the insurance environment.

2. Significance

The matters for decision in this report are not considered to be of significance under the Significance and Engagement Policy.

3. Background

Currently Council purchases insurance to cover the risks associated with:

· Material damage to buildings and above ground plant, including construction of new or renovation, excluding larger projects.

· Material damage to our 3 Waters underground infrastructure.

· Loss of forest income based on its current value as a crop.

· Loss of material, cash or capability through crime or nefarious act (e.g., fraud).

· Usage of our motor vehicle and mobile plant fleet.

· Legal and associated costs related to liability claims arising from statutory, public and professional instances of Council behaviour or action.

· Well-being of staff and elected members through trauma and accident insurance.

· Community usage of our facilities.

The exception to this range of cover is roading; no structural assets such as bridges nor the roading network are covered for material damage. Given the shared cost of maintaining and extending/improving the network with Waka Kotahi, the risk of damage through adverse events is carried in part by the funding mechanisms available to Waka Kotahi and to a lesser extent by Council through the annual programme and a special reserve fund for that purpose.

The cost of insurance cover has risen over time, and significantly last year, with premiums as follows:

2019/20

2020/21

2021/22

2022/23 draft budget

$221,000

$228,000

(3.2% increase)

$278,000

(21.9% increase)

$318,000 TBC

(14.4% increase)

Additionally, this year Council has purchased a specific construction policy to cover the remedial works at the WWTP, costing $26,000.

4. Discussion

The increase of our insurance cover by nearly 50% in three years is driven by two factors:

· The rise of construction costs necessary to remedy material damage.

· Insurer reluctance to provide cover given a claim history or the lack of profit within the general local government sector. In this respect, it is the perception of the international re-insurers that determines the willingness to accept the insurance risk.

General market perception about local government is not favourable, particularly in respect of the liability products, largely driven by claim history and perceived risk impacts to insurers. This relates to the risks associated with building and similar consents provided to the construction industry.

Council’s capability to sustain this upward trend motivates its need to consider the nature and extent of cover we purchase, its variation or an alternative way to manage the risk.

The driver to take out insurance is the realisation that if the risked event occurs, it will generally do so when Council is least able to manage the remedial cost (e.g. fire or extreme adverse weather), or that it enables an opportunity cost (continue normal activities otherwise not undertaken due to the impact of the event – e.g. motor vehicles).

5. Options

The other option to purchasing insurance is to self-insure. That is, build financial capacity to cover the risks Council would otherwise purchase to cover. This can be done in a variety of ways:

· Increase the excess levels to reduce premium – this can have a positive effect where insurers perceive favourable profit. This is done by adjusting operational budgets.

· Assume the risk and manage the impacts through appropriate capital provision. We currently do this for mechanical damage – essentially our reticulation pumping – where our neighbours insure. Or we adjust operational budgets to cover instances (e.g. our motor vehicle and mobile plant fleet), but doing so where respective outgoings are positive over a period (three to five years).

· Assume the risk and deal with impacts after the event.

· Do nothing – continue to purchase insurance as risk is unsustainable.

6. NEXT STEPS

Council is currently considering the insurance programme for 2022/23, working with Marsh (our broker for general insurance) and Civic Financial Services (LAPP) relating to our 3 Waters underground facilities.

Our approach currently is to continue the status quo but test any movement in excess in order to achieve a decreased premium, at an acceptable risk level.

7. CONSIDERATIONS

7.1 Climate change

Insurers are also focusing on climate change and its impact on risk profiles. We are seeing insurers looking very closely at regions and areas susceptible to flood or sea inundation. However, there are no climate change considerations relating to the decisions in the report.

7.2 Tāngata whenua

There are no specific tāngata whenua considerations relating to the decisions in this report.

7.3 Financial impact

Financial impacts on council are discussed in this report, noting that insurance premiums are increasing annually. Insurance costs are included within our annual plan and 10-year Plan budgets. There are no financial impacts relating to the decisions in this report.

7.4 Community Engagement requirements

There are no community engagement requirements.

7.5 Risks

There are no additional risks not already covered in the report.

8. Recommendation

That the Committee:

1. Receives the report.

File Number: 141347

Author: Kelly Vatselias, Corporate Services Manager

Attachments: Nil

Audit and Risk Committee Meeting Agenda

19 May 2022

6.7 Government Reform Update

1. Purpose

For the Committee to receive an update on Central Government’s reform changes impacting upon Local Government.

2. Significance

The matters for decision in this report are not considered to be of significance under the Significance and Engagement Policy.

3. Background

There are a number of significant pieces of work being completed by Central Government which impacts Local Government.

This report is a standard report to the Audit and Risk Committee which outlines any key changes in government reform since the previous update report to the Committee.

4. Changes to Drinking water standards

4.1 Overview

Taumata Arowai took over from the Ministry of Health as the drinking water regulator on 15 November 2021.

4.2 Changes since the last update report

At the end of March consultation closed on proposed new Drinking Water Standards, Quality Assurance Rules, Aesthetic Values, Acceptable Solutions for Roof Water Supplies, Spring and Bore Water Supplies and Rural Agricultural Water Supplies, and Network Environmental Performance Measures. Feedback will be used to further refine the proposed standards/documents which set the regulatory approach before these are finalised and implemented later in 2022.

In early April Taumata Arowai launched the Public Register of Drinking Water Supplies. The register allows consumers to be able to find out more about where their drinking water comes from. https://hinekorako.taumataarowai.govt.nz/publicregister/supplies/

5. Three waters review Update

5.1 Overview

The Government’s Three Waters Reform proposals are a comprehensive change to the way fresh water, wastewater and storm waters are managed for our communities.

The reforms shift the current 67 council-owned and operated three waters services into four new publicly owned entities to manage the future delivery of these services from July 2024.

Papers have gone to previous Audit and Risk Committee and Ordinary Council meetings, which outline the reform in more detail.

5.2 Changes since the last update report

The Local Government Minister shared the latest Three Waters Reform update on Friday 29^th April 2022. They advised that Three Waters reforms will go ahead with local councils taking non-financial shareholdings in four new public water entities. The proposed co-governance of regional groups which will appoint the new entities’ governance boards and provide public accountability for the entities is set to remain.

Cabinet agreed to the bulk of 47 Representation, Governance and Accountability working group recommendations (see link to summary table of working group recommendations and government response).

The Water Services Entities Bill is expected to be introduced to the House in mid-2022. People can make submissions on the Bill when it is referred to the Select Committee shortly after. (see link to the DRAFT Water Services Entities Bill).

A more detailed update report is part of the agenda going to the Ordinary Council meeting on 25 May.

6. Resource Management ACT

6.1 Overview

The Government is repealing the Resource Management Act 1991 (RMA) and replacing it with new legislation.

· The Natural and Built Environments Act (NBA) will be the main replacement for the RMA;

· The Strategic Planning Act (SPA) will require councils, iwi/Māori and central government agencies to develop 30-year regional spatial plans; and

· The Climate Change Adaptation Act (CAA) deals with the legal and technical matters associated with climate change adaptation and managed retreat.

Once the select committee has considered submissions, it will report its findings to Parliament. Any changes will be made before the full Bill is formally introduced.

6.2 Changes since the last update report

There have been no changes since the February report.

7. Emergency Management Bill

7.1 Overview

In December 2021, the Minister for Emergency Management announced that a new Emergency Management Bill will be introduced to replace the Civil Defence and Emergency Management Act 2002.

The Civil Defence Emergency Management (CDEM) Amendment Bill arose from a review of the legislative framework for recovery. There are two stages to the review:

· Stage One: focussed on small to moderate-scale emergencies (which are the most frequent experienced in New Zealand; for example, from floods and weather-related event) and enhancing the recovery provisions in the Civil Defence Emergency Management Act 2002; and

· Stage Two: focussed on large-scale emergencies (i.e., like the 22 February 2011 earthquake) and what legislation might be needed for recovery. Stage Two has not yet commenced.

The CDEM Amendment Bill seeks to provide a smooth and coordinated transition of arrangements and powers from the response phase to the recovery phase. The proposed amendments have regard to the constitutional conventions that need to accompany any legislation that provides powers in emergency-like situations.

7.2 Changes since the last update report

The Wellington CEDM Group undertook a joint submission on the Modernising the Emergency Management Framework document that was distributed by NEMA on 14 January 2022. The groups feedback focused on five main areas, these are summarised below:

· That there needs to be more thought given to a number of the proposals to help respondents understand ‘what’ (exactly) is being proposed in each of the options that are being presented.

· The development of proposals should be undertaken in collaboration with CDEM Groups and iwi/Māori to help understand their different perspectives and areas of concern – especially in relation to ‘how’ decisions are going to be implemented. After all, if selected options are poorly informed, poorly crafted or misunderstood by those who then have to implement them, then they are unlikely to be delivered in the way they were intended and are unlikely to achieve their desired outcomes.

· The CDEM groups have repeatedly been told in both written and verbal form that resourcing is ‘not in scope’ for this particular piece of work. As the above listed responses show, given current local government funding pressures, the ability of NEMA and CDEM Groups to deliver on what is proposed is going to take additional resources – resources that are not currently budgeted or able to be funded by CDEM Groups. This being the case, we think any final statement of support for the proposed changes will be dependent on there being full transparency on where the additional funding is going to come from and when it is going to be available.

Concerns about the timeframes that have been identified for this legislative change. Rather than rush things though and end up with something that is not fit-for-purpose, we strongly recommend that the Minister and NEMA slow the process down to ‘do it once, do it right’ and get a systematic review that aligns with the opportunities presented by the 3 Waters review, RMA reforms (which are critical to Reduction) and the pending reforms in Local Government.

8. Local Government Review

8.1 Overview

As a result of the cumulative changes being progressed as part of the Government’s reform agenda, the overall purpose of the Review is to identify how our system of local democracy and governance needs to evolve over the next 30 years, to improve the wellbeing of New Zealand communities and the environment, and actively embody the Treaty partnership.

The Review’s initial focus will be on how local government will be a key contributor to the wellbeing and prosperity of New Zealand and an essential connection to communities in the governance of New Zealand in the future.

This will enable scoping of the broader work to follow. The Review will then focus on answering the priority questions identified during its initial scoping work.

On 30 September 2021 an interim report presented to the Minister signalled the probable direction of the review and key next steps.

8.2 Changes since the last update report

No changes since the February update report. On 30 September 2022 a draft report and recommendations will be issued for public consultation.

9. CONSIDERATIONS

9.1 Climate change

Responses to the emergency management bill proposal included considerations in climate change emergencies such as flooding and severe drought becoming more frequent.

9.2 Tāngata whenua

Responses to the emergency management bill proposal included suggestions that Māori have a greater input in option development.

9.3 Financial impact

Feedback to the emergency management bill specifically incorporated the inadequate provision of funding for some proposed additional shared responsibilities.

9.4 Community Engagement requirements

All the above proposed legislative changes are the responsibility for Central Government to coordinate public responses.

9.5 Risks

Each of the proposed legislative changes have a potential impact on the form and function of local government.

10. Recommendation

That the Committee:

1. Receives the report.

File Number: 141348

Author: Kelly Vatselias, Corporate Services Manager

Attachments: Nil

Audit and Risk Committee Meeting Agenda

19 May 2022

6.8 Risk Register Update

1. Purpose

To advise the Audit and Risk Committee on changes to the Carterton District Council Risk Register.

2. Significance

The matters for decision in this report are not considered to be of significance under the Significance and Engagement Policy.

3. RISK MANAGEMENT FRAMEWORK

Council’s Risk Management Framework outlines Council’s risk appetite and informs the ranking for the Risk Register (Attachment 1). The Register is regularly reviewed and updated as required with the last update in February 2022. The Register contains 32 identified risk items with an associated coloured risk score for each item, as per the approved Risk Management Framework. The unmitigated score of each item is recorded in the first column, with the second column showing the scores once mitigated.

4. Risk register changes

In February 2022, the Committee endorsed the addition of a new risk item in relation to climate change as outlined in Attachment 1.

At the time of endorsement, further assessment was required to confirm the associated risk score and mitigations. Officers suggested that the unmitigated risk score fall in the extreme risk (red category) and the mitigated score be at the significant risk (orange category) level.

The Climate Change Advisor is currently working with elected members and officers to confirm the risk scores as the part of Council’s Risk and Resilience Strategy. An update on this work is provided under a separate report for this meeting, with a further workshop to develop the mitigation measures scheduled over the coming months. The final Strategy and the confirmed Risk Register scores will be presented to the Committee on 18^th August 2022.

Overall, the total number and categorisation of risks are as below (not including climate change).

Risk Score (unmitigated)	Risk Score (mitigated)	Level of Risk
11	Zero	Extreme risk
14	2	Significant risk
5	14	Moderate risk
Zero	15	Low risk

5. CONSIDERATIONS

5.1 Climate change

None for the Risk Register.

5.2 Tāngata whenua

None for the Risk Register.

5.3 Financial impact

There are no budgetary implications for the Risk Register.

5.4 Community Engagement requirements

None for the Risk Register.

5.5 Risks

None outside of the specified risks in the Register.

6. Recommendation

That the Committee:

1. Receives the report.

2. Notes the proposed addition to the Risk Register in relation to climate change will be presented at the next Committee meeting on 18 August 2022.

File Number: 138851

Author: Geri Brooking, People and Wellbeing Manager

Attachments: 1. CDC Risk Register ⇩

6.9 Health, Safety and Wellbeing Update

1. Purpose

This report updates the Audit and Risk Committee on recent health, safety and wellbeing (HS&W) activities.

2. Significance

The matters for decision in this report are not considered to be of significance under the Significance and Engagement Policy.

3. focus of activities

The main focus for the reporting period, February - April, has been managing the safe and uninterrupted delivery of services through the COVID-19 Omicron surge, and increasing the reporting of near miss incidents.

3.1 COVID-19

Service Delivery

Managers and staff have continued to follow safety protocols and risk mitigations which have to date, minimised the impacts of positive cases and prevented a widespread outbreak. The protocols, together with the high vaccination rate of staff and proactive use of Rapid Antigen Testing (RAT), has meant we have not yet experienced transmission amongst teams, despite the high number of community cases.

The move to the Orange Setting under the COVID-19 Protection Framework (CPF), slightly increased the risk to staff, particularly with the removal of Vaccine Pass requirements for the Events Centre and Library, however we have found that the protocols continue to protect staff well, and the majority of positive cases have likely been as a result of transmission from their children.

Staff Vaccination Policy

The Staff Vaccination Policy was implemented on 28^th February 2022. The policy strongly encourages all employees to receive and maintain vaccination as the main form of defence against COVID-19, and outlines roles that require mandatory vaccination:

· Roles subject to a Public Health Order or the CPF;

· Roles that are frontline and require staff to deal with members of the public;

· Roles that require staff to deal with members of the public in uncontrolled environments;

· Roles deemed to require vaccination as a result of a risk assessment process for health and safety purposes.

New employees are also required to be vaccinated.

Following guidance from Worksafe and Taituarā, management will be reviewing the policy to ensure it reflects the current risk environment. There have been some changes to the environment since the implementation of the policy which include:

· the return to the Orange Setting under the CPF,

· the reduction of Wairarapa cases following the Omicron surge,

· the high rates of vaccination (including booster vaccinations),

· the reduced risk of reinfection for those who have recently recovered from COVID-19, and

· the available supply of RAT kits.

Worksafe has stressed that the justification for requiring vaccination is stronger when the risk of contracting and transmitting COVID-19 at work is higher than it is in the community. They recommend a health and safety assessment process that includes the following factors:

· if there is a greater risk of the worker being exposed to new variants at work than they would be in the community,

· whether the worker, as part of their work, interacts with people who are at greater risk of severe illness should they contract COVID-19,

· whether the worker regularly interacts with people who are less likely to be vaccinated,

· if the workspace is confined within 100m2, and involves close and sustained interactions with others.

Managers and staff will undertake a risk assessment of all roles to inform the policy review which is due for completion by the end of June 2022.

COVID-19 Cases and Sick Leave

Since 2020, CDC has operated a flexible sick leave policy designed to ensure staff have sufficient leave to stay at home when they are unwell. The policy has worked successfully, particularly in keeping staff with COVID-19 symptoms at home to prevent any spread through the organisation. There have been no instances of the policy being misused.

During the current surge, as expected, we have recorded a number of positive cases amongst the staff (23 cases = 28% to date) however these have only been sporadic across the teams, and have usually involved 2-3 cases at any time since the start of the outbreak in February.

This has resulted in an increase in sick leave being taken by staff either due to being a positive case, caring for positive household contacts, or staying home with COVID-19 symptoms but testing negative.

As at 8^th May, 95 days were recorded as sick leave being taken by positive cases. This is a reduced figure than we may have seen as many staff were able to work from home if they felt well enough.

3.2 REPORTING OF NEAR MISS INCIDENTS

Over the past 6 weeks, managers and team leaders have again focused on ensuring staff report near miss incidents. The number of reports had reduced markedly over the past 3 months, we believe, largely as a consequence of the disruption of COVID-19.

The proportion of staff working remotely, combined with a higher incidence of sickness and/or isolation, has reduced the likelihood of near misses and accidents however, we believe it has also reduced the front of mind safety awareness for staff. This is concerning as we know that an absence of near miss reporting increases the risk of preventable accidents, which we are already starting to see in the seriousness of the incidents reported.

Managers and team leaders will continue to emphasise reporting requirements to their teams, and Health & Safety (H&S) Committee members are leading a permanent H&S agenda item in team meetings. The HS&W Advisor has also increased staff engagement to highlight front of mind vigilance including a re-invigoration of our “Sh!t That Was Close” campaign activities.

4. GENERAL risk monitoring

4.1 HEALTH AND SAFETY INCIDENTS

For this period, incidents were reported as follows:

• 2 near miss incidents

• 3 incidents resulting in minor injury

The H&S Committee and HS&W Advisor have reviewed all incidents and are satisfied that the responsible managers and team leaders are taking appropriate actions in each case. None of the accidents have highlighted major systemic failings.

4.2 VEHICLE SAFETY

Managers and Team Leaders regularly monitor speed and safe driving behaviour.

Speed Monitoring

While we experienced a spike in speeds in October, these are now returning to usual levels with a significant decrease in the last month. We continue to remain below the national industry average and regular speed reports will continue to be provided to managers to ensure compliance and follow up of any breaches.

*Data is taken from the Argus Tracking System installed in all Carterton District Council vehicles. The line graph shows risk points per vehicle, comparing Carterton District Council to the industry average. Risk points are incurred due to speeding where more speed equals more points, and sustained speed equals more points.

Policy Review

Staff policies relating to vehicle and driving behaviour are being reviewed at present. We currently have three policies that cover these areas – Driver Licensing Policy, Motor Vehicle Useage Policy, and Safe Driving Policy.

We are looking to combine and streamline these policies for ease of understanding and compliance by staff. Engagement with staff will be undertaken during the review.

Road Safety Week

Staff promoted safety awareness during the week (9 – 13 May) through internal and external communications, and by wearing yellow on Friday 13^th May.

5. engaging with our people

5.1 Health & Safety (H&S) Committee

The Committee meet bi-monthly to report on HS&W issues, and to review incidents, near misses and hazards. The Committee remain well engaged and committed to leading HS&W across the Council. There are eight members representing all teams across the council and supported by the HS&W Advisor.

At the recent H&S Committee meeting, representatives discussed the change of COVID-19 Protocols from the Red traffic light setting to Orange and the review of the Vaccination Policy and Role Risk Assessments.

With the expected severe flu season this year, H&S Committee members have also been instrumental in encouraging their colleagues to get vaccinated resulting in a large number of staff registering.

5.2 Wellbeing activities

Wellbeing Strategy and Action Plan

With the CPF setting at Orange, and the majority of staff now working back onsite, we will be progressing the Wellbeing Strategy Action Plan. We have started with the activities that help to reconnect the teams including an all of council staff meeting, and a social event.

My Everyday Wellbeing

The H&S Committee have endorsed the use of the “My Everyday Wellbeing” interactive wellbeing platform which will be available for all staff to access. The website platform has a wide range of information and activities to increase the wellbeing of staff and their families. It includes, (but is not limited to), healthy eating including meal planning and shopping, exercise, illness’s, financial wellbeing and individual or team challenges. This will be available to staff from 25 May.

How to walk your way to wellbeing Roast beef and mustard rolls Easy ways to save money

Pink Shirt Day

National Pink Shirt Day is about working together to stop bullying by celebrating diversity and promoting kindness and inclusiveness. It is about creating a community where all people feel safe, valued and respected, regardless of gender identity, sexual orientation, age, ability, religion or cultural background.

Pink Shirt Day is Friday 20^th May and all staff at CDC are encouraged to participate and support the Kaupapa.

5.3 Training and Development

One staff member has completed First Aid training, with a number of staff due to renew their First Aid Certification in June. Two H&S Representatives completed online Accident and investigation Training. Both staff members had positive feedback post training.

One of our new Committee members completed H&S Representative Stage One training (online), with three other new members booked to complete this training in May.

5.4 Employee Assistance Programme

An Employee Assistance Programme (EAP) is a workplace wellness program designed to boost staff performance by proactively helping them resolve personal and work issues. The programme offers confidential and short-term support that assists with a variety of issues, including financial, legal, physical and mental health. Although EAP’s are often used for mental health counselling, they can also support staff in other ways such as career advice and support following a traumatic event. EAP’s are an essential part of supporting the health and wellbeing of Council staff, increasing productivity and encouraging a positive work environment.

Three staff members have accessed EAP services attending a total of six sessions in this reporting period.

6. WORKING WITH OUR CONTRACTORS

Reviewing and updating our contractor information is a focus area, including ensuring COVID-19 protocols and aligned with Council’s. A biennial audit programme is in place to satisfy ourselves they understand their obligations, they know what they are doing, and have competent employees doing it.

While we believe we have a robust contractor management system in place, this has become outdated and is largely a manual, spreadsheet-based system. The HS&W Advisor, and the Project, Contracts and Procurement Officer, attended a meeting to consider other options including a Contractor Management Programme called SiteWise.

SiteWise is a prequalification system that assesses contractors’ H&S capability, and publishes that assessment in a database available to main contractors and principal organisations.

It also records all H&S information, eg insurances, policies etc, ensuring our contractors have current documentation, and thus processes, in place at all times. For staff, it provides a robust contractor selection process, and simplifies the tendering process for everyone involved.

SiteWise is used by many other councils, and there is no cost involved for CDC.

The Executive Management Team have approved the use of SiteWise which will be implemented in May, beginning with engagement with our contractors.

7. FIVE BIGGEST HEALTH AND SAFETY RISKS

The five biggest Health and Safety risks are listed with details about how they will be reduced, and when reduction measures will take place.

Currently the five biggest risks we are focusing on are:

1. Contractors

2. Working alone and remotely

3. Under reporting

4. Behaviour

5. Staff wellbeing

Top 5 Health and Safety Risks

Risk

Description of Risk

Controls and reduction measures

Actions

Contractors

Council hires contractors because it doesn’t always have the expertise or capacity to undertake the activities.

Contractors pose a risk principally because we have little control over their staff and their work standards while they are on the job. It is not possible for us to supervise them at a micro level. We are reliant on them to employ staff who are trained and competent to undertake the work assigned while at all times observing safe practices and their obligations under the Health and Safety at Work Act.

All contractors used by the council will have satisfied us that they have robust health and safety systems in place and that they understand their health and safety obligations to us and their staff. Discussions will be held with contractors before they commence any tasks and staff are expected to have had and recorded health and safety conversations.

Contractors have been asked to provide details of their health and safety systems. Information provided is being checked and accredited by council. Approved providers will be required to sign a contractor agreement. ONGOING

Briefing and induction processes including hazards and present controls are developed and are provided to appropriate council staff. COMPLETE

Site safety Checklists have been developed and are provided to appropriate council staff. Checklists modified to include what meets expectations and doesn’t meet expectations. COMPLETE

Staff have attended the contractor management training.

COMPLETE

Contractor COVID 19 safety plans and protocols are reviewed to ensure alignment with council protocols and MOH guidelines.

ONGOING

Implement the SiteWise Contractor Prequalification and Management Tool to manage H&S information of contractors.

IN PROGRESS

Risk

Description of Risk

Controls and reduction measures

Actions

Working Alone and Remotely

Being such a small organisation it is often impossible for staff to work in teams or even in pairs. Often staff are required to work alone and remotely where in some cases poor cell phone coverage is an additional factor.

With the introduction of flexible working arrangements due to Covid-19, we have staff working from more than we have had in the past.

All staff who work remotely or alone will be provided with in car radio transmitters and/or cell phones. They will be required to sign out before they leave, including their intended location and expected time of return. This will be monitored, and action taken in line with an emergency response plan if help is summoned or they fail to return by the expected time. They will be required to sign in when they return. They will be provided with a device to summon assistance which does not require cell phone coverage.

Staff working from home are supported by their Managers/Team Leaders and work colleagues through Teams meetings/phone calls and emails. Staff are reminded that the same obligations to Health and Safety apply when working from home.

All staff who work remotely or alone have a car radio transmitter and/or cell phone and/or a Garmin device. COMPLETE

Sign out/in system has been reviewed. COMPLETE

Monitoring of sign out/in system in place. COMPLETE

Remote contact devices have been distributed to teams who have people who work alone or remotely. We will continue to work with the teams on monitoring team members when they are out and about and using the information from the Garmin device.

ONGOING

Garmin refresher training, and Working Alone refresher training will be co-ordinated in house with those staff that work alone.
ONGOING

Staff are reminded of our Working from Home Policy, Workstation set up guide, Incident Report and EAP services.

ON GOING

Risk

Description of Risk

Controls and reduction measures

Actions

Under Reporting

While there is a good level of reporting any physical accidents, the risk of under-reporting of near misses needs to be constantly monitored.

This is due to a combination of staff thinking “nothing happened so why report it” and the perceived amount of time required to make a report.

We regularly remind staff of the importance of notifying any near miss so that we are able to both consider patterns and to take pre-emptive action to put in place safety measures where necessary. Wherever possible are making it easier for staff to report near misses.

We have provided all Operations staff with a pocket-sized notebook to instantly record near misses. COMPLETE

The “Sh!t That Was Close” initiative is a descriptor of a near miss that is relevant to our staff who are the most likely to observe such things. We have a designated email address stwc@cdc.govt.nz and text number set up to make it easy for staff to communicate health and safety matters. ONGOING

Managers and Team Leaders are backing the reporting message at team meetings through a formal agenda item, talking about near misses and reminding staff to report those that they see. ONGOING

Health and Safety Committee members take an active role in encouraging all incident reporting, including near miss reporting within their teams and across Council. ONGOING

Near miss reporting , the STWC email and H and S phone number are being promoted through posters, fortnightly staff newsletter and the TV monitors in the staffrooms. ONGOING

Health and safety obligations are included in employment agreements and job descriptions. ONGOING

The importance of timely reporting is emphasised during health and safety staff induction processes ONGOING

Risk

Description of Risk

Controls and reduction measures

Actions

Behaviour

An unintended consequence of changes in our environment has seen Carterton district council having to manage situations where people’s behaviours pose a risk of somebody threatening or assaulting them, possibly with a weapon. With potential of a fatality.

Introduction of a range of services and experiences such as Wi-Fi, together with external environmental factors such as transition of mental health patients into the community, troublesome youth, drug and alcohol abuse have potential to result in an increase in problematic individuals frequenting CDC premises and dealing with CDC staff in the community.

Cash held on premises also presents potential for robbery.

Negative behaviour from customers objecting to COVID-19 restrictions and mandates.

It is important all our staff know how to keep themselves and others safe when dealing with each other and members of the public. Skilled staff are able to deal with interactions with difficult customers, before they escalate to situational violence. We need to provide all staff with training to give them the skills to deal with situations before they escalate to harm.

We need to ensure there are appropriate security measures in place to protect staff from persons entering premises with the intent of causing harm. This includes equipping people working in our community with cameras and communication devices.

We need to continue migration of customers to payment mechanisms that do not rely on cash.

Concern for underreporting of near misses involving people’s behaviour, is being addressed separately. The risk of threats or violence to staff working alone or in remote areas is also being addressed separately.

Restrict public access to secure staff only areas. Ensure staff escorts visitors to non-public areas in all three council sites. ONGOING

Undertake regular engagement with Police, community patrol groups and community groups supporting youth and mental health to ensure an awareness of what is happening in the community with potential to impact Council staff and others. ONGOING

Staff are provided with training covering Personal safety, Conflict Resolution, Cash Handling and Robbery Preparedness. In the Staff Handbook, we have guidelines and tools to assist staff when dealing with difficult people.

ONGOING

We have seen continued uptake of payment of accounts online or by direct debit with over 60% of ratepayers now paying rates by direct debit, with others paying through online banking and automatic payment.

We have set up an online payment portal and we will continue to encourage people to pay online. COMPLETE

We are fostering a healthy and safe team culture through gender balance, more robust onboarding process and the implementation of the CDC Wellbeing Strategy. We are promoting a culture where staff feel safe raising any concerns, and know their concerns will be addressed appropriately. ONGOING

During the COVID-19 pandemic we have monitored incidents involving negative behaviour associated with objections to COVID-19 restrictions and mandates. Frontline staff have been provided with guidelines and resources to manage challenging behaviour. Managers are on hand to provide support where required.

ONGOING

Risk

Description of Risk

Controls and reduction measures

Actions

Staff Wellbeing

Being a small organisation and having departments under-staffed is placing some teams under pressure and the need to work long hours. Staff under pressure pose a risk to themselves, the organisation, and customers. Staff under pressure can lead to burnout, stress, fatigue, all leading to both mental/physical and social affects, contributing to lower performance levels.

Working long hours under pressure can lead to poorer mental health including stressful feelings, an increase in anxiety, depression and lower quality sleep patterns. This will contribute to a higher number of accidents occurring, bad decisions being made, irritability and concentration/memory issues.

Employees physical health can be compromised with the increased risk of a stroke, heart problems, high cholesterol and high blood pressure.

Managers and staff need to be able to recognise the early symptoms of stress, fatigue and burnout.

We need to ensure we have an environment where staff feel they are trusted and can talk with their manager or a senior staff member about how they are feeling.

Stress awareness, fatigue information and the symptoms of burnout will be communicated to all staff so early symptoms can be recognised across the team.

Staff will be reminded of the free and confidential counselling service offered through EAP.

Clearly defined position descriptions and resourcing are key for reducing this risk. Clearly defined boundaries and jobs that are achievable. Managers and Team Leaders to encourage their teams to take adequate breaks and keep tabs on work hours to ensure they do not exceed 55 hours in a week as per our “Hours of Work and Fatigue Policy” ID 42072.

Development of staff Wellbeing Strategy and action plan. COMPLETE

Implementation of flexible sick leave policy. COMPLETE

Good mental health, stress awareness, fatigue information and good wellbeing is communicated to all staff through posters, T.V. screen notices, and the fortnightly staff newsletter. ONGOING

Managers and team leaders regularly check in with their teams and provide support where needed. ONGOING

EAP information communicated to all staff through posters and the fortnightly staff newsletter. ONGOING

New screens installed in the lunchroom to provide wellbeing and health and safety messages.

IN PROGRESS

Work with other councils to combine services and/or provide relief staff. ONGOING

Filling of vacant roles. ONGOING

Address lack of work-space issues through physical relocation, working from home flexibility where appropriate, re-design of existing spaces. ONGOING.


AGENDA Audit and Risk Committee Meeting
Date:	Thursday, 19 May 2022
Time:	9:30 am
Location:	Carterton Events Centre 50 Holloway Street Carterton
P Jones (Chair) Deputy Chair R Cherry-Campbell Mayor G Lang	Deputy Mayor R Vergunst Cr D Williams Marae Representative C Kawana