This memorandum is not part of the determination, but is intended to indicate its general effect.
This determination comes into force on 13 October 2013 and expires on the close of 30 June 2014.
In 2012, the Remuneration Authority undertook a work programme to establish new baseline remuneration for elected members in Auckland.
The Authority has twice in the past year sought advice on the job size of the various elected positions in Auckland.
On the first occasion, the Authority had concerns that the final shape of the new governance arrangements had not been bedded in. The Authority did not make any changes to the structure of the Auckland remuneration in 2012, but undertook a re-evaluation towards the end of that year.
On the second occasion, although some doubts were still expressed as to the long-term work levels of some positions, and as to the time commitment that will be a continuing requirement of members, there are some matters that appear clear going forward.
Based on the information reviewed, the Authority is of the opinion that councillor positions are very close to full-time and will be into the future. Additionally, we have accepted that the chairpersons of local boards are also moving close to full-time.
This change of approach, which is based on our investigations on hours of work and job size, revealed that significant increases in remuneration could be justified for councillors and local board chairpersons. If these had been fully implemented, increases for councillors and local board chairpersons would have been considerable.
The Authority remains of the view that local board member positions are not full-time, and that differing time commitments apply to the mainland boards and the 2 gulf boards. Based on our assessment of workload, increases for members of local boards will be modest, but will vary among boards.
In undertaking the job-sizing exercise, it also became clear that the identifiable additional duties of deputy chairpersons of local boards were not at a level that justified additional remuneration for these positions and therefore such positions do not form part of the determination.
Having established what might be deemed the appropriate rate for the positions, the Authority is also required to look closely at other elements of the Authority’s legal mandate, the criteria we must take into account in determining remuneration, and discretions to determine the extent to which it is appropriate to provide for such increases.
New Zealand, like the rest of the world, is going through a period of restricted growth and restricted income movements as economies adjust to the global financial crisis. Households across the country are experiencing little or no increase in income, and balancing the books has come sharply into focus, particularly in our larger cities where accommodation and transport costs place a significant burden on those on restricted incomes.
We are aware that elected members' remuneration represents only a fragment of the average rate bill. Yet to individual ratepayers, already beset by other costs, any increases may seem unfair and arbitrary. Equally, in times when all employers and employees are being asked to exercise restraint, significant one-off increases can undermine the effectiveness of the institutions involved. The Authority does not wish to undermine support for the process of local government in Auckland.
In most countries, the decision making on remuneration is separated from the development of remuneration proposals. The developing authority has the luxury of generosity, and the deciding authority the luxury of public support for frugality. In New Zealand, the Remuneration Authority serves both roles and must therefore balance recognition of the adverse economic environment against fairness to elected members and fairness to ratepayers.
The Authority’s determination therefore moderates the increases in remuneration. We will begin the process of recognising a full-time regime in the years ahead.
While the time commitment is substantial, neither councillors nor local board chairpersons are employees and their availability for council business is effectively at their own discretion. For this reason also, it seems appropriate that careful steps are taken to establish clear expectations of such positions that include the appropriate expectations of workload and availability, and the relationships with other commercial interests of elected members before full implementation is achieved. The Authority will engage with the Auckland Mayor, Council, and local boards over the coming period to progress such steps.
The determination does not allow flexibility for the Mayor or the Council to adjust remuneration independently in any way. If, however, the structure of council activities were to change, the Authority would be happy to give consideration to recognising new roles and duties based on robust position identification.
The Authority will undertake another sizing exercise prior to the 2016 election.
This determination also expands the meaning of hearing times for resource consent hearings to include some preparation time and excludes, on the basis of the full-time nature of the positions, the Mayor, councillors, and local board chairpersons from receiving payment for such hearings.
Finally, the determination makes changes to the levels and conditions of allowances.
The mileage allowance increases the rate of mileage payable to 77 cents per kilometre to reflect changes in the cost of running a motor vehicle. The expectation is that the standard annual usage of 5 000 kilometres for the higher level of reimbursement is reduced to 3 548 kilometres for members elected in October and would be further prorated if members served for a shorter period.
The travel time allowance increases the rate payable for each applicable period from $15 to $35 per hour.
The communications allowance is amended to provide greater clarity on the components for which the allowance can be paid. Such an allowance is payable only where a member uses their personal equipment or service provider instead of the Council providing these items. It is intended to leave to each council the decision as to what appropriate technologies are required to support the work of members.
The communications allowance is prorated from that which would apply for a 12-month period, and also requires payment to be further prorated if members do not serve for the full period of the determination. The determination also provides an ability for the Council to approach the Authority to approve rules under which additional assistance can be provided where unique circumstances apply for geographic reasons.