16 284 Title: Section: Prepared by: Draft Grant Allocation Policy and Processes Strategic Planning Julie Conder (Contracts & Funding Advisor) Meeting Date: 30 June 2016 Legal Financial Significance = low to medium Report to COUNCIL for decision SUMMARY The purpose of this report is to propose a process to better manage requests for Council contributions from the community. During the consultation on the 2016/17 Annual Plan a request for funding was received from Motu Trails Charitable Trust. However there is no funding available for requests of this type as the funding has been allocated through the Long Term Plan. Council is also no longer required to consult on an Annual Plan so planning and funding for large cost programmes happens only every three years through the Long Term Plan process. The 2016/17 Annual Plan Adopting report (16-227) has recommended that $200k be set aside to create a contestable fund for community groups to apply to. This report will propose a process to ensure the funds are allocated transparently. Council receives numerous requests each year for funding and other support. Many of these requests are made through formal funding avenues such as grant schemes. However some requests are made directly to the Mayor, the Chief Executive, at Council meetings or to individual Council staff. There is no clear policy or process for Council to respond to the requests that fall outside formal funding avenues. The Local Government Act 2002 requires Council to demonstrate that its activities are focused on core functions of local government. Best practice from the Auditor General also advises on the need to have systems in place to ensure transparency and accountability in Council activities. Officers suggest that Council can achieve clarity, transparency and accountability by: adopting a Grant Allocation Policy to guide decisions on financial grants and nonfinancial grants (such as waiving fees and providing technical staff support) developing processes to outline how the community can access support and how Council can ensure it is making effective decisions that achieve appropriate benefits. The full Policy and Processes will be presented at the next Council meeting for decision. The decisions or matters in this report are considered to be of low to medium significance in accordance with the Council s Significance and Engagement Policy. Page 1 of 7
RECOMMENDATIONS That the Council: 1. Notes the contents of this report. 2. Approves Motu Trail Charitable Trust application for $10k from the $200k discretionary fund created by the recommendation in the 16-227 2016-17 Annual Plan Adopting report and that Council staff work with the Trust to develop an appropriate funding agreement. Authorised by: David Wilson Strategic Planning Manager Judy Campbell Chief Executive Keywords: grants, sponsorship, funding, community projects, in-kind contributions, Page 2 of 7
BACKGROUND 1. Council no longer runs Annual Plan processes automatically, so planning and funding for large-cost programmes happens only every three years. Due to this we expect to see an increase in the number of requests made by groups for assistance in between Long Term Plan rounds. Currently there is no formal process for groups to request funding for community programmes from Council. 2. Council already receives numerous requests each year for support for community programmes. The most visible means of Council support is through financial grants. In 2015/16, Council allocated at least $1m for community programmes. This makes Council one of the major funders of community programmes in Tairāwhiti. These grants were made through a variety of funding avenues. Funding avenues Details Application rounds Total funds (2015/16) Ratepayer-funded grant schemes Mahi iti (up to $2,500 each) 4 x per year $15,000 Mahi nui (up to $10,000 for 3 years) Every 3 years $36,400 Natural Heritage Fund On request $30,000 Iconic Events Fund (via Tourism Eastland) On request $35,000 Third-party grant schemes Creative Communities (Creative NZ) 3 x per year $34,000 Rural Travel Fund (Sport NZ) 2 x per year $19,000 Waste Minimisation Fund (MfE) 1 x per year $10,000 Community Road Safety Fund (NZTA) 1 x per year $50,000 Long Term Plan Varies Every 3 years Varies ISSUES General lack of clarity 3. There is a lack of clarity for Council and the community around who can be assisted and what the principles are that guide Council decisions to assist groups. The Mayor and the Chief Executive are frequently approached for requests for sponsorship for community events, this can be for cash contributions, however it can also include staff time and resources to support events. There is currently a lack of process around how these requests are managed. This often leads to confusion, frustration, raised expectations and inconsistency in decisions. Lack of decision process and criteria for Long Term Plan funding 4. Council receives and provides support for numerous community programmes each Long Term Plan cycle. Often the assistance required is for large sums of grant funding however it can also be for specific projects like road resealing, culvert replacement or drain maintenance. 5. While the Long Term Plan process provides a funding avenue, there is no clear process or instruction for submitting requests (such as the type of information required) or for making decisions on such requests. Council is often left without clear and robust advice from staff around the merits of requests. Page 3 of 7
Lack of transparency around discretionary funding 6. Council receives and provides support for many grant requests outside of the Long Term Plan each year. Where relevant, requests are directed to Council s formal funding avenues. Some requests do not fit with the criteria of these schemes (eg the type and amount of funding) so these requests may fall through the cracks. 7. Assistance is provided at the discretion of individual budget holders from existing budgets. The actual total expended is difficult to quantify. 8. Council is no longer required to consult on minor variations to the Annual Plan so planning and funding for large-cost programmes happens only every three years. It also means that requests for projects where Council may provide staff or resources will move more towards the three year LTP cycle. For this reason, we expect to see an increase in the number of requests made by groups for discretionary assistance. Lack of transparency and financial accountability for in-kind contributions 9. In-kind assistance is often not calculated as part of a package of Council assistance. 10. Council is often asked to reduce or waive costs or fees (consents, permits, venue hire) to community organisations. Decisions are made at the discretion of the appropriate department. The total value of the contributions is difficult to quantify. While in-kind contributions may appear cost-free to recipients, there is a real cost to Council and the ratepayer in reducing or waiving compliance costs or providing technical support. 11. For example Council allocated $50,000 to the Tokomaru Bay Wharf Restoration Project, should the restoration proceed, to be used for engineering services. However the project would require five resource consents which the Trust is now asking to have waived. This is an additional $25,000 cost or 50% increase in the value of the original Council contribution. Why is a policy and process important? 12. The Office of the Auditor General s guidelines for managing funding to non-government organisations outlines the basic principles that govern the use of all public resources: Accountability: Measurable achievement of the goals that the funding arrangements were designed to meet. Openness: Value for money: Lawfulness: Fairness: Integrity: Acting in a way that is, and is seen to be, transparent. Using resources effectively, economically and without waste in achieving end-user benefits. Acting within the law, and meeting legal obligations. Acting fairly and reasonably and being open and impartial. Managing public resources with the utmost integrity including conducting its business to a standard the public expects in the use of its taxes and rates. 13. Officers are developing policy and processes for the Long Term Plan, discretionary funding and in-kind contributions which will: Improve transparency, openness, fairness and integrity of processes consistent with best practice. Reduce reputational risk. Provide the mechanism to link decisions on grant allocation to Council s strategic framework. Page 4 of 7
Reduce administration and processing time. Create clarity for users and improve certainty. Align decisions clearly with the purpose of local government. Improve accountability through enabling better tracking and reporting of grant allocation to demonstrate how public funds are spent. Ensure consistency of decisions on grant allocation. Enable informed and responsive decisions (with faster turn-around of decisions) on grant allocation. GRANT ALLOCATION FRAMEWORK CONTENT 14. Officers suggest the grant allocation framework described in the diagram and text below. Council Assistance Allocation Policy Long Term Plan Allocation Process Discretionary Allocation Process (Sponsorship, In-kind Contribution Allocation Process Ratepayer grant allocation processes Third-party grant allocation processes donations (fee waiver, technical staff support, enabling (Mahi Nui, Mahi iti, Waste Minimisation Fund, Natural (Creative Communities, Rural Travel) works) Heritage) Policy content 15. Policy content would need to answer the following questions: How do we align our decisions on which projects to assist with our community outcomes and strategic priorities? How do we ensure transparency and consistency in our decisions for our ratepayers? How do we decide which tools are most appropriate to support community projects? Who should make the decisions about Council assistance for community projects? Process content 16. The processes to manage grant allocation via the Long Term Plan, discretionary funds and inkind contributions would need to cover: How do we deal with requests for discretionary funds? How do we identify the full contribution that Council makes to community projects (not just monetary)? How do we allow for the cost of unplanned grants (including costs for in-kind contributions) in activity budgets? How do we make decisions on funding that are fully accountable, and provide good value for money? Page 5 of 7
Work programme 17. Officers have started work on the policy and processes. Attached is a draft Grant Allocation Policy (Appendix 1) for Council discussion and feedback. Also attached is a draft Long Term Plan Grant Allocation Process (Appendix 2) for feedback. 18. Future work includes the development of processes to assess and make decisions on discretionary grant funding and in-kind contributions. 19. The whole package of work will be presented to Council at its August meeting. We are seeking initial feedback on the approach. NEXT STEPS Date Action/Milestone 18 August Council to consider adopting Grant Allocation Policy 18 August Council to consider adopting Long Term Plan Grant Allocation Process 18 August Council to consider adopting Discretionary Grant Allocation Process 18 August Council to consider adopting In-kind Contributions Allocation Process Motu Trails request for funding 20. In a submission to the Annual Plan Motu Trails Trust request funding of $10k be extended to 2016/17. There are currently no funds set aside as part of the Cycleways Programme. As part of the 2015-2025 Long Term Plan process Motu Trails was provided $10k for 2015/16. Staff consider that this was spent appropriately, contributing to positive outcomes for the district, and that providing a further $10k for the 2016/17 would have similarly favourable outcomes. Staff recommended that the application by the Motu Trail charitable Trust be approved and Council staff work with the Trust to develop a funding agreement. ASSESSMENT OF SIGNIFICANCE Criteria This Report The Process Overall The effects on all or a large part of the Gisborne district Low Low The effects on individuals or specific communities Medium Medium The level or history of public interest in the matter or issue Medium Medium Consistency with Council s current strategy and policy High High Impacts on Council s delivery of its Financial Strategy and Long Term Plan. Low Low 21. The decisions or matters in this report are considered to be of low to medium significance in accordance with Council s Significance and Engagement Policy because: it is consistent with Council s strategy and policy to be transparent and accountable and would fill a current gap in Council s strategic framework it is likely to have a reasonable level of public interest based on the number of requests Council receives each year for Council in-kind support it would not result in a significant change in expenditure (rather improvements in process) so is unlikely to have a significant impact on Council s Financial Strategy and Long Term Plan. Page 6 of 7
COMMUNITY ENGAGEMENT 22. No consultation has been taken on the draft Policy or Process. 23. The changes proposed are to tighten and clarify procedure rather than making significant changes. CONSIDERATIONS Financial/budget considerations 24. There are no financial implications of the decision. The proposal is aimed at process improvement rather than additional funding. Council has historically provided significant amounts of funding (eg $1m in 2015/16) for community grants and the framework aims to continue to allocate that funding with some rigour and transparency around it. Legal 25. The Local Government Act 2002 states the purpose of local government is: to promote local democratic decision-making 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 costeffective for households and businesses. 26. The proposal is consistent with ensuring decisions are more closely linked with the purpose of local government (through Council s strategic framework) and more transparent and accountable contributing to democratic processes. POLICY and PLANNING IMPLICATIONS 27. Council has some policy about how it contributes to community projects. Most of these policies relate to how it allocates grant funding such as through the Mahi Iti, Mahi Nui, and Natural Heritage funds. There is no over-arching policy or process about how Council chooses to support community projects in other ways such as in-kind services and support. APPENDICES Appendix 1: Draft Grant Allocation Policy Appendix 2: Draft Long Term Plan Grant Allocation Process Page 7 of 7