Two in One
- Created: Wednesday, 04 December 2013 04:06
PROPOSALS FOR LOCAL BOARDS FOR UNITARY AUTHORITIES
The recent introduction of the Local Government Act 2002 Amendment Bill (No.3) (Bill), initiated the next phase of local government reform. As we explained in our summary of the Bill, some of the proposed amendments to the Local Government Act 2002 (LGA) signal a major shift in the how local government operates and is structured.
One of the key changes introduced by the Bill is the roll out of the Local Boards governance model as an option the Local Government Commission can consider for any local government reorganisation proposal constituting a unitary authority. The local board model will not be available in an area where there are already two levels of decision-making in the form of a regional and a territorial authority. As of 26 November 2013 the Local Government Commission has proposed that the Local Board governance model be used in Northland and the Hawkes Bay.
The "two tier" local governance structure was first designed specifically for the 2010 reorganisation of local government in Auckland into a signal unitary authority. The Bill retains some of the elements of the Auckland model and adjusts others, attempting to address and iron out the issues that have arisen in Auckland.
The "two tier" structure would be made up of two complementary and non-hierarchical decision-making parts: the governing body and local boards. Within their areas of control, each has final decision-making powers and is democratically responsible for how it exercises those powers. The governing body (the mayor and elected councilors) focuses on the "big picture" and on region-wide strategic decisions. Local boards provide local community representation within the larger council, and make decisions on local issues, activities and facilities. The model is designed to strengthen regional leadership while still providing effective and resonant local and community democracy.
Decision making
Local boards are intended to ensure that governance at a community level reflects local wants and needs. The Bill allocates local boards the same decision-making responsibilities as in the Auckland Council model. Specifically, a local board has decision-making responsibility for non-regulatory activities allocated to it by the governing body. The Bill includes a presumption that non-regulatory decisions will be allocated to local boards unless:
- The impact of the decision will extend beyond the local board area; or
- Effective decision making requires alignment with other decisions that are the responsibility of the governing body; or
- The benefits of a consistent or coordinated approach through the district in regard to that activity outweigh the benefits of reflecting particular, local needs.
Local boards are also responsible for making and adopting a local board plan and a local board agreement. The local board plan must identify and reflect the priorities and preferences of the communities within its area. The local board plan provides the foundation for the local board agreement for the next 3 years and provides a basis for the accountability of the local board to its area. Each local board agreement is drafted annually and sets out how the council will reflect the priorities and preferences in the local board plan.
As with the Auckland model, a local board must collaborate and cooperate with other local boards if it is satisfied that the interests and preferences of its area will be best served by doing so. Under the Bill this is extended to require collaboration and cooperation with "any other body or entity".
The Bill does not include a framework for the how the governing body and local boards finalise the contents of local board agreements. Crucially, it has no legislative mechanism to resolve disagreements. In the worst case scenario this could result in a never-ending deadlock between the governing body and the local board.
Local boards funding policies
A unitary authority that has adopted the local board model must include a local boards funding policy as part of its long-term plan. The local boards funding policy must set:
- The formula by which total funds for local activities and administrative support are allocated to each local board; and
- New to the Bill, the basis on which the total funds to be allocated to meet the cost of all local activities is to be determined.
The formula must allocate funds in such a way as to allow the local board to enhance the well-being of its different communities equally with regard to specific factors. Also new to the Bill is the consideration of "other districts", as well as the individual local board area, when considering the factors of:
- Dependence on government services; and
- Any other factors identified as significantly affecting the nature and level of service required by an individual local board area.
This change incorporates a balancing of the comparative needs of local board areas within a unitary authority. Although this has the positive effect of helping to ensure that money is spent where it is most required, it is possible that it could lead to a financially driven "battle of the boards".
Status of local boards
In light of issues with the Auckland model, the Bill attempts to clarify the status of local boards. A local board cannot hold or dispose of property, enter into contracts or suspend or remove employees. Although a local board is a discrete decision-making part of a unitary authority in its own right (as opposed to a committee) it is not a legal entity separate from the unitary authority. As such, and made clear in the Bill, it cannot commence, or be a party to, or be heard in legal proceedings. Despite this restriction, the Bill provides for the governing body to delegate its regulatory functions to a local board if it is of the opinion that the benefits of reflecting local preference outweigh the importance of a single district approach. It is possible that a local board could take up the role of the governing body in legal proceedings with a distinct local flavour, such as simple resource consent applications.
Membership
As with the Auckland model, local board members are elected to office by the residents of the relevant local board area. The chairperson is then subsequently elected from those members by the local board itself, unless an Order in Council provides that the Chairperson is to be directly elected. The appointment of additional members by the governing body may be authorised by an Order in Council. Every local board will be required to consist of between 5 and 12 members, including the chairperson. A minimum of 5 members must be elected. The total number of appointed members must not exceed half the total number.
Amendments to the Local Government (Auckland Council) Act 2009
The Bill amends the Local Government (Auckland Council) Act 2009 to complement the Local Government Act 2002 as it would be if amended, and to address issues that have arisen with the Auckland model to date. The key amendments include:
- The addition of specific governing body responsible for transport networks and infrastructure.
- Removal of the requirement for the Long Term Plan (LTP) and the annual plan to record the allocation of non-regulatory functions and the allocation of local funds. Instead the local board agreement and funding policy, which themselves record these points, would be part of the LTP.
- The Auckland Council will have to prepare an annual consultation document for each local board area, with consultation undertaken by both the governing body and the local board.
- The ability for the governing body to delegate its regulatory functions to local boards would apply to the Auckland Council.
The Auckland Council has provided the rare opportunity to apply the 20/20 vision of hindsight in assessing and designing the "two tier" structure and local boards as a local governance structure available across New Zealand.
On its first introduction the Bill retains some of the elements of the Auckland model, and adjusts others, in an attempt to bring greater clarity to the roles of and relationship between the governing body and local boards. However, there are still areas of uncertainty, particular regarding the working relationship between the governing body and local boards. These will need to be addressed to ensure the local board model is able to provide a robust and efficient local governance structure for New Zealand.
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The contents of this publication are general in nature and are not intended to serve as a substitute for legal advice on a specific matter. In the absence of such advice no responsibility is accepted by Brookfields for reliance on any of the information provided in this publication
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