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Attachment 1 |
Strategic Risk Profile 2016 |
Risk is the effect of uncertainty on objectives. Strategic risks are those that affect the achievement of Council’s strategies, strategic objectives, key goals and strategic execution. They are key matters that impinge on the whole business, rather than an isolated unit or activity.
Strategic risk links how the whole organisation is positioned in relation to its environment and is not affected solely by what Council decides. It involves a clear understanding of strategy, the uncertainties in adopting it and the uncertainties in executing it. These may be triggered from inside or outside our organisation.
NB: Risk is commonly articulated using “If / Then” statements: IF [Event], THEN [Consequences]. Risk is “an uncertainty that matters”. Therefore the Event is the uncertainty, and the Consequences are why it matters. Risk can be a threat OR opportunity. This risk register attempts to articulate risks in a positive way.
Council’s purpose:
(a) To enable democratic local decision-making and action by, and on behalf of, communities; and
(b) To meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.
Vision:
An Integrated Vision for Hutt City is to make our city a great place to live, work and play. A city where our people are proud to live, where working and investing here is a smart choice, and where there’s always something for our families to explore.
A Better City Every Day.
The following key strategies are in place to help achieve this vision:
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§ Leisure and Wellbeing Strategy 2012-2032 |
§ Infrastructure Strategy 2015-2045 |
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§ Urban Growth Strategy 2012-2032 |
§ Environmental Sustainability Strategy 2015-2045 |
Strategy implementation is prioritised by:
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§ Provide the Best Local Government Services |
§ Develop World-Class Community Facilities |
§ Stimulate Economic and Social Development |
1.Strategic risk profile 2016
The execution of all strategies impacts Council’s standing in the community, carries stakeholder, reputational and legal risk that will generally have a financial impact.
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1.1 Urban Growth Strategy |
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1.1.1 CONTEXT: Statistics New Zealand medium level population projections indicate a declining population. Hutt City has lower than regional average population growth and an aging population. Incentives to stimulate building and business development continue with a focus on STEMM: science, technology, engineering and manufacturing industries. Council investment in development strives for balance so not to place an unreasonable burden of rates increases or debt on residents. Ambitious targets are set around new housing developments city-wide. Targets include: growing households by 6,000 (average 300 p.a.) and population growth to 110,000 by 2032. The expected benefits from the new Events centre alone are $51M to $93M brought into the economy over a 20 year period and 74 direct and 104 total new jobs created in the fifth year. |
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1.1.2 Strategic risk description This strategy contributes
to the city’s economy and growth and focuses on growth targets, new
homes and businesses and how this supports development.
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1.1.3 Key Strategies / Plans |
1.1.4 Risk Treatment, actionS |
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District Plan Urban Growth Strategy 2012-2032 Economic Development Plan 2015-2020 CBD Making Places 2030 CBD Development Charges Rates and Remission Policy and Citywide Development Remissions Policy Rates Remission for Economic Development Development Contributions Policy 2015-2018 Wainuiomata Development Plan and Petone 2040 Events Strategy 2013-2023 Housing Policy Gracefield Innovation Precinct Vision (awaiting Callaghan Innovation) STEMM projects and programmes to promote related employment options and grow the economic wealth of these sectors and the ‘Technology Valley’ brand Manage within Resource Management Act the sustainable management of physical and natural resources and environmental management. Balancing environmental impacts with economic activities. |
Provide development incentives – development contributions and rates remission schemes to attract investment to the city. Gain political and community buy-in for District Plan Changes to achieve growth targets. Housing growth challenge – change required in supply and type, particularly with the impact of an increasing ageing population and smaller households. Urban Growth Strategy Projects: § Kelson ¡ Stokes Valley § Wainuiomata ¡ District Plan Changes CBD development projects: § Hotel construction underway ¡ 177 High Street § Attracting commercial activity to CBD ¡ River Link and Promenade § Events Centre ¡ District Plan Petone West rezoning plan change 29 created a mixed use area, promoting more diversity in activities in the area. Ongoing monitoring of progress, outcomes and implementation of Urban Growth Strategy |
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1.2 Leisure and WellBeing Strategy |
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1.2.1 context:
Hutt City has some of the highest levels of social deprivation in New
Zealand, in particular Naenae, Taita, Pomare and Delaney, Epuni East and
Waiwhetu North. |
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1.2.2 Strategic risk description This strategy contributes to the city’s culture, physical and educational wellbeing and aims to positively impact residents’ quality of life, prospects, safety and connectivity. If this strategy is unsuccessfully executed, the above outcomes may not be achieved and will impact the delivery of the Vision for Hutt City. Council has a suite of capital projects that focus on revitalisation and rejuvenation to update Council facilities as a mechanism to stimulate positive change in the community. This capital commitment continues and a number of capital projects will be delivered in 2017. The key uncertainties associated with the successful redevelopment into World-Class Community Facilities relies on:
Further to this, organisation preparedness and organisational alignment is necessary to successfully achieve project outcomes. |
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1.2.3 Key Strategies / Plans |
1.2.4 Risk Treatment / actionS |
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Leisure and Wellbeing Strategy 2012-2032 Renewal and revitalisation of facilities Rejuvenation Hutt City CBD Making Places 2030 Long Term Integrated Community Facilities Plan 2015-2045 Walk and Cycle The Hutt strategy 2014-2019 Go Outside and Play – a comprehensive plan for play in Hutt City Smoke Free Outdoor Places Policy Strengthen current social projects focussing on high deprivation communities with a focus on core strengths that make a difference (literacy, arts, recreation). Including: § YOUth Inspire Majors task-force for Jobs § North East Kids Initiative and North East Pathways § TAKA: Te Awa Kairangi Access Trust and corporate relationships § Healthy Families § Computer Clubhouses § Action Replay Project Proposed Accessibility and Inclusiveness Plan 2017 to 2027 |
Updated facilities provide a mechanism to simulate positive change in the community. Large scale projects include: § Civic Precinct (Town Hall, Events Centre and Riddiford Gardens) § Fraser Park Sportsville (stage 2 works in progress, stage 3 ongoing) § Huia Pool Redevelopment for Learn to Swim and hydrotherapy pools § Purpose built Stokes Valley Community Hub § Walter Mildenhall Regional Bowls Centre Completed projects include Avalon Park, Walter Nash Centre Taita, refurbished Admin Building and Petone Settlers Museum upgrade. Cycling project spend of $13.5M over 2015/18 from Council/NZTA/Urban Cycle Fund Strategic Leadership Team has overarching programme view of prioritisation, staging, funding and resource allocation across strategic projects in capital programme. Effectively resourcing projects, particularly the availability of people and mix of skills, to successfully implement this strategy. Monitoring processes are being agreed to measure progress against strategic objectives to ensure outcomes for lifestyle, culture and heritage, physical and educational wellbeing to ensure outcomes are achieved in a cost effective manner. Community outcomes will be apparent in future years. Sound analysis for decisions making and meaningful stakeholder communications. |
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1.3 Infrastructure Strategy |
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1.3.1 context: Council aims to deliver reliable, quality infrastructure services for water treatment and supply, wastewater disposal, stormwater drainage, flood protection, roading and footpaths that meet the current and future needs of the city in the most cost effective way. The provision of assets and infrastructure assets are essential for the continued delivery of critical services and public and social good. |
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1.3.2 Strategic risk description The Infrastructure Strategy, supported by Asset Management Plans, provides for good-quality essential infrastructure networks to meet the current and future needs of communities in a cost-effective way for households and businesses. If this strategy is unsuccessfully executed, infrastructure network outcomes may not be achieved. Key risk with Infrastructural Asset Management Plans revolves around essential infrastructure networks being reliable, resilient, fit for purpose, affordable and sustainable for the long term. Water supply vulnerability if pipelines and reservoirs are damaged due to a major earthquake, climate change, accidents or other threats affecting Hutt Valleys reticulated water supplies |
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1.3.3 Key Strategies / Plans |
1.3.4 Risk Treatment, actionS |
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Infrastructure Asset Management and Maintenance Plans Infrastructure Strategy 2015-2045 Local Government Act 2002, Resource Management Act 1991 and Land Transport Management Act 2003 Hutt Valley Floodplain Management Plan Public Health Risk Management Plan for water supply Asset Renewal Strategy and Asset Development Strategy |
Infrastructure based projects in the Long Term Plan completed or on target for delivery as a method for implementing asset management plans Renewal, maintenance and upgraded assets to meet future service levels RiverLink project with Greater Wellington to deliver flood protection outcomes. Regional Council ratified Stopbank decision to upgrade the river defences from Kennedy Good Bridge to Ewen Bridge that will protect our city from up to a one in 440 year flood event. Seismic strengthening is underway for two (of three) remaining bridges on seismic review programme. Works on the remaining third (and final) bridge will commence in 2020/21. Planning process – District Plan and Annual Plan Contract management, safety audits and testing programmes Emergency Response Plan / Evacuation Plans Contingency plans for infrastructure risks Wellington Water “Shaping Our Future” business model review is underway to ensure it is set up in the best way to deliver value to Council WWL resilience work on regional water supply. Refer ‘Natural Hazards’ below. Opus study of road network resilience |
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Wellington Regional Natural Hazard Management Strategy Stocktake July 2015, Natural Hazards Programme, Natural Hazard Management Planning coordinated through Wellington Regional Emergency Management Office. Water Wellington ‘Water Supply Resilience Road Map’ March 2016 outlines three year plan to achieved agreed resilient level of service, per resilience strategic case Aug-2015 |
Execution of Regional Asset Management Plan and investment in water infrastructure. Alignment with New Zealand Infrastructure Management Goals (Treasury National Infrastructure Unit). Planning for critical water supply pipelines and water reservoir seismic upgrades. Priority supply plans for priority users during an event. |
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1.4 Environmental Sustainability Strategy |
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1.4.1 context: There are four major fault lines within the Wellington region, making the Hutt Valley vulnerable to earthquakes. Hutt City sits on a natural flood plain and is high flood risk due to its topography. Weather volatility, flood frequency and intensity in Hutt Valley is projected to increase. Sea level rise may impact low-lying Petone, Eastbourne and Seaview and disrupt transport systems. |
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1.4.2 Strategic risk description The Environmental
Sustainability Strategy contributes to the city’s environmental protection,
sustainability, natural disasters, safety and climate change. Preparedness is vital to manage the city’s exposure and susceptibility to natural hazard events and emerging environmental trends in order to be resilient and able to plan for, respond to and thrive after an emergency event. |
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1.4.3 Strategic risk description |
1.4.4 Key Strategies / Plans |
1.4.5 Risk Treatment, actionS |
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Council strives to show leadership in environmental protection and community resilience; and ongoing adaption and enhancement, so to protect and enhance the environment, air and water quality. Council actions must align with this aim and ensure business practices and resourcing is provided accordingly (reputational risk). |
Ongoing monitoring of outcomes and implementation of ESS Environmental Sustainability Strategy 2015-2045 Regional Waste Management and Minimisation Plan Regional Waste Education Strategy ESS Implementation Plan Hutt River flood management planning Walkway and cycleway projects |
Environmental Impact and Aspect Register for ISO14001:2015 certification Waste Minimisation programme and actions Recycling and refuse collection Silverstream Class A Landfill meets standards outlined in the Centre for Advanced Engineering’s Landfill Guidelines Public open spaces network, reserves, parks, Urban Forest Plan, |
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1.5.1 Natural Hazards RIsk |
1.5.2 Key Strategies / Plans |
1.5.3 Risk Treatment, actionS |
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Lack of emergency preparedness may result in the inability to respond to and/or recover from natural hazard/s. Refer ‘Infrastructure Strategy’ above for Water supply details relating to infrastructure maintenance and renewal requirements to keep pace with natural hazard and climate change risk |
Co-ordinated Emergency Response Plan incorporates emergency preparedness 4R’s reduction, readiness, response and recovery Governance and strategic planning Asset management plans Service Continuity Framework Clear responsibilities for emergency management capability/arrangements between HCC and WREMO |
Evacuation procedures, co-ordinated Emergency Operating Centre operable, Standard Operating Procedures and use of Coordinated Incident Management System (CIMS). Cooperation with Wellington Regional Emergency Management Office, CDEM Group and getready.org.nz for preparedness and early warning system. Civil Defence Emergency Management Act 2002 s58 allows for reduced services during and after an event. Emergency management mapping and use of GIS technology Input to Regional resilience initiatives. Council’s Resilience Framework has been prioritised into four key areas: disaster preparedness, addressing inequalities, climate change and sea level risk and economic vulnerabilities. |
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1.6 Financial strategy |
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1.6.1 context: Council has limited sources of revenue (rates, fees and charges, subsidies) and borrowing to adequately fund agreed levels of service and facilities. Failure of income streams and/or unplanned expenditure could impact the level of funding and/or levels of service if: § A major adverse event, such as an earthquake or flood requiring substantial additional expenditure by Council; and/or § Economic conditions changed such that there is a significant increase in Council costs or significant reduction in Council revenue (outstanding rates and other debt), such as severe financial market or economic downturn |
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1.6.2 Strategic risk description This strategy is based on plans and assumptions regarding financial position, funding options, borrowings, asset management plans, resourcing etc., is set in public consultation and agreement and aims to ensure rates are affordable, competitive and promote the sustainable funding of Councils services being delivered efficiently. The key risk is that Council is unable to adequately fund services to fully meet its objectives, projects and programmes to rejuvenate and create an exciting Hutt City now and into the future. |
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1.6.3 Key Strategies / Plans |
1.6.4 Risk Treatment, actionS |
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Long Term Plan 2015-2025 and Annual Plan 2016-2017 Treasury Risk Management Policy – including adherence to limits, liability management and investment policy, debt management and expert independent advice Revenue and Financing Policy Robust budget setting and financial forecasting processes |
Financial Strategy is agreed as part of the public consultation process Long Term Plan / Annual Plan activities to be funded within the limits approved in the Financial Strategy Regular monitoring and year end forecasting to SLT and Councillors including recommended actions where a year end variance is forecast. Six weekly monitoring of strategic (significant) projects review status, risks and financial forecasts. Standard and Poor’s AA long term with “stable” outlook and A-1+ short term credit rating re confirmed in September 2016 Strong history of rates revenue collection percentages and creditor/debtor controls Adequate insurance cover is in place based on accurate reinstatement / replacement costs. Valuation review underway of above ground assets and modelling of maximum possible loss. Risk profiling to identify under and over insurance. |
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1.7 Organisational performance |
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1.7.1 context: Council operates in a complex and varied environment: regulatory, infrastructure, environmental, community, recreation and leisure, economy and city development, customer services etc. These operations are carried out within financial, technical, technology and workforce constraints. Council’s workforce is a diverse group of people who perform a wide variety of roles that contribute to making Hutt City a great place to live, work and play. Council must attract, retain and develop skilled and engaged staff and leaders in order to deliver its Vision, long term strategies and plans. |
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1.7.2 Strategic risk description The achievement of Council’s strategies and strategic execution are key matters that impinge on the whole organisation, rather than an isolated unit. People, processes and technology must be managed, maintained and developed in relation to workforce capability, capacity, engagement and retention, and workplace practices in order to achieve Council’s Vision and strategic priorities, be a well-governed city and avoid central government intervention. The achievement of Council’s vision, strategic priorities and to keep pace with the development of change requires an ongoing focus on organisation factors such as: § Health and safety risks being addressed; § Successful initiatives that drive high performing staff and grow confident and inspirational leaders; § Effective performance monitoring of progress against strategic outcome and strategic outputs; and § Alignment of systems, resources and decision making processes are adequate to the needs of the organisation to deliver the LTP. A new triennium commenced after October 2016 Local body elections, which may create some uncertainty in relation to governance model and strategic direction. There is potential for central government to impose changes to the legislative framework for local authorities. Any changes will have unknown impacts on service delivery and Council’s structure. Councils in the region need to show increased cross council efficiencies to propel our region forward both economically and socially, which may circumvent central government impositions. |
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1.7.3 Key Strategies / Plans |
1.7.4 Risk Treatment update / actionS |
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Significance and Engagement Policy 2015-2018 Human Resources Plan Health and Safety Plan 2016-2017. Health and Safety Strategy, Policy Statement, Governance Charter revisited and updated Ongoing Operational Risk profiling Strategic initiatives, plans and projects for all strategic priority strands – Best Local Government Services Initiatives and projects, Development of World-Class Community Facilities and Stimulate Economic and Social Development |
There is additional perceived risk awareness of exposures in health and safety matters. Focus on implementing health and safety plan ‘Safer Workplaces’ that promotes a culture of health and safety ownership across the organisation to promptly identify, resolve and reduce risk. An additional Health and Safety Consultant is undertaking detailed risk assessments to engage staff at all levels, across all divisions and raise awareness. Workplace Security Risk Assessment 2.0 underway. On the Road to High Performance programme continues to drive staff performance, grow confident and aspirational leaders and improve performance and remuneration processes. Planning and actions from Best Places to Work Survey and Focus 2016 feedback sessions Business planning process aligns with strategic objectives and outcomes. Monitoring and reporting, particularly against initiatives and progress towards Best Local Government Services and Customer Champion Group initiatives. Active involvement in submissions process and campaigning to influence proposals to Local Government Act changes to reorganise councils. Continue to seek and exploit shared-service opportunities. |