LATE proposed for in-house consultancy
Auckland City's award winning business unit, design consultancy CITY Design, may be established as a LATE (Local Authority Trading Enterprise).
The proposal, which would result in CITY Design becoming CITY Design Limited, was approved by the Council's Investment Committee on Wednesday. Subject to full Council approval in April, the company will be launched on July 1.
Chairman of the Investments Committee, Councillor Vern Walsh, says the decision would enable CITY Design - now the largest local authority engineering and architectural consultancy in New Zealand - to compete for business on an equal footing with other consultancies.
“In a continually changing and more competitive environment this initiative is the best way to ensure we can retain our existing staff and provide them with more opportunities in the future.
"CITY Design is an extremely successful business unit effectively operating as a consultancy to Auckland City and other councils in the upper North Island.
"It makes sense to allow it to diversify its client base and, in the process, allow its staff to fully use their considerable expertise and intellectual property.
I am satisfied that a sound business case for the LATE has been established and that CITY Design Limited would pose no financial risk to ratepayers."
Cr Walsh says the move to a LATE would also
improve the contestability and transparency of the processes
used by Auckland City for buying professional services.
As a LATE, CITY Design would need to compete with other companies for Auckland City work that was previously allocated to it.
CITY Design Limited would be wholly owned by Auckland City. The company would be required to operate without ratepayer subsidies, make sufficient profit to sustain its growth, and to provide a return to the Council.
Subject to the Council's approval next month, consultants will be asked to recruit three external directors for CITY Design Limited. Auckland City's Director of Enterprise Services, Bob Wakelin, has been nominated as the Council representative on the company's board.
Also, negotiations would begin on the sale of CITY Design's business assets to the new company.
CITY Design now provides professional services in the broad market areas of roading and transport, water and environmental management, project management, and land and building. It employs approximately 120 staff.
It has collected awards particularly for its work on the restoration of the Auckland Town Hall, the Rewarewa Bridge in New Lynn, and park and open space landscaping.
Cr Walsh says opportunities for
new business have been identified particularly in transport.
"As a local authority business unit, CITY Design is now
precluded from bidding for work funded by Transfund even
though it has considerable transport design expertise.
"By removing it from its current legislative restraints, it will gain wider access to opportunities in transport and roading in particular."