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Proposal to establish a Council Controlled Organisation

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We are proposing to establish a new Council Controlled Organisation (CCO) to ensure the redevelopment of the civic precinct provides the best community outcomes possible.

The redevelopment of our civic precinct in Tauranga’s city centre is a once-in-a-generation project that will see our city’s heart transformed into a vibrant community space over the coming years, breathing new life into what will become a key cultural, heritage and economic driver for the region.

We’re seeking community feedback on a proposal to establish a new CCO that will govern and lead the delivery of the civic precinct redevelopment, to be called Te Manawataki o Te Papa, the heartbeat of Te Papa.

Having considered potential governance approaches, Council believes a CCO model offers significant advantages to help ensure the best possible project outcomes can be achieved for everyone involved. This formal governance structure would include a Board and at least one employee experienced in delivering similar large-scale projects.

We think this is the right thing to do to set our city centre up for success, but we want to know what you think.

Take the survey

Why is a CCO being proposed?

This proposed governance structure would enable Council to draw upon a wide range of industry and commercial expertise that would enhance the delivery of Te Manawataki o Te Papa, for the benefit of everyone involved.

This project involves a significant investment, so it’s important that we take the right steps to improve cost efficiencies and ensure there is a structure in place that gives everyone confidence that the project will be delivered effectively – be it our funders, partners or the wider community.

Our community has been waiting for such a long time for the city’s heart to be restored and we are committed to ensuring that Te Manawataki o Te Papa is brought to life in a way that benefits everyone.

How did we get to this proposal?

Due to the significance of the project, a review was commissioned earlier this year into potential options for the delivery of the civic precinct redevelopment programme.

The review assessed various options and resulted in a recommendation that a CCO be established to govern and lead the projects.

After considering potential governance approaches, the review report indicated that a governance CCO model offered advantages which would help ensure the best possible project outcomes were achieved.

The full reports undertaken by independent consultant Max Pederson can be found below.

Pedersen report - August 2022 (397kb pdf) Pedersen report - November 2022 (405kb pdf)

What is the civic precinct redevelopment project?

To be called Te Manawataki o Te Papa, the heartbeat of Te Papa, the future civic precinct will feature facilities such as a library and community hub, civic whare (public meeting house), museum, and an exhibition and events centre.

It will be a place for people to come together to connect, discover, learn and share stories about our past, enjoy the present, make decisions for our future, be entertained and have fun.

What is a Council Controlled Organisation (CCO) and how would it work?

A CCO is an entity in which one or more local authorities control 50 percent or more of the voting rights, or appoint 50 percent or more of the members of the governing body. A CCO can be a company, trust, partnership or an incorporated society.

To ensure the redevelopment project will be delivered effectively, it is proposed to establish a new CCO. This proposed CCO would be 100 percent council controlled.

The purpose of the CCO is to:

Govern the delivery of the civic development projects

To achieve that purpose, it is proposed that:

  • Council incorporate the CCO company and adopt a constitution
  • Council identify the skills required for the Board and prepare an information pack for potential directors
  • Council seek and engage directors in accordance with Council's Appointment of Directors to Council Organisations policy
  • Council issue a Statement of Expectations to the CCO
  • Council delegate powers and functions to the CCO and identify reporting requirements of the CCO back to Council
  • Council receive and consider the draft Statement of Intent produced by the CCO

What is a Statement of Intent?

The Statement of Intent (SOI) provides transparency in relation to the CCO’s activities.  The purpose of the SOI is to state publicly the activities and intentions of the CCO for the year, the objectives to which those activities will contribute and provide an opportunity for Council as shareholder to influence the direction of the CCO. The SOI also provides a basis for the accountability of the directors for the performance of the organisation.

The SOI is prepared in accordance with Section 64(1) of the Local Government Act 2002 and in response to a Council’s Statement of Expectations. It is a public and legally required document which is reviewed and agreed annually with the Company’s sole Shareholder, the Council.

What will change under this proposal?

  • The CCO would create a more effective oversight of construction projects
  • There would be a new Board and at least one employee
  • A Statement of Expectations would be issued from Council
  • A clear Statement of Intent would be produced by the project Board

What will not change under this proposal?

  • The existing partnering agreement Council has with Willis Bond
  • Investment levels for Te Manawataki o Te Papa

What are the benefits?

  • The proposal ensures there is a structure in place that gives everyone confidence that the project will be delivered effectively
  • Cost efficiencies for the delivery of the project will be improved
  • Those involved in the project will be able  to draw on a wide range of industry and commercial expertise

What investment is required?

The investment required for the establishment of the proposed CCO is approximately $100k.

Annual fees of the proposed CCO have not been fully determined but are expected to be approximately $600k. These fees will predominately cover the costs of the board and senior executive.

These costs will be covered by a loan funded grant from Council to the CCO. It is recommended that Council will raise a loan to finance to loan fund this grant given the nature of this CCO and its sole focus on the governance of delivery of long-term capital expenditure. There would be additional budget funded through ratepayers over a maximum 10-year time period to pay off each annual loan.

Why are we consulting on this?

Council is consulting anyone who will or may be affected by or have an interest in the establishment of the CCO, as required under section 56 of the Local Government Act 2002. Council encourages interested members of the community to provide their views on the proposed new CCO.

Following community consultation, the Commission will make decisions regarding this proposal at a Council meeting on 12 December 2022.

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Tell us what you think and why

By 5pm, Friday 2 December 2022

Timeline

  • Consultation opens

    21 November 2022
  • Consultation closes

    2 December 2022
  • Decision

    12 December 2022

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Tell us what you think and why

By 5pm, Friday 2 December 2022

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Talk with a staff member

ccoproposal@tauranga.govt.nz
07 577 7000

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