Strategy and Finance Committee

Agenda

 

 

Notice of Meeting:

An ordinary meeting of the Strategy and Finance Committee will be held on:

 

Date:                                     Thursday 19 May 2016

Time:                                    1.00pm

Venue:                                 Committee Room 1, Level 2, Civic Offices,
53 Hereford Street, Christchurch

 

 

Membership

Chairperson

Deputy Chairperson

Members

Councillor Raf Manji

Mayor Lianne Dalziel

Deputy Mayor Vicki Buck

Councillor Jimmy Chen

Councillor Phil Clearwater

Councillor Jamie Gough

Councillor Yani Johanson

Councillor Andrew Turner

 

 

12 May 2016

 

 

 

Principal Advisor

Peter  Gudsell

General Manager Finance and Commercial

Tel: 941 8528

 

Margaret Henderson

Committee Advisor

941 8185

margaret.henderson@ccc.govt.nz

www.ccc.govt.nz

Note:  The reports contained within this agenda are for consideration and should not be construed as Council policy unless and until adopted.  If you require further information relating to any reports, please contact the person named on the report.
To view copies of Agendas and Minutes, visit:
www.ccc.govt.nz/Council/meetingminutes/agendas/index

 


Strategy and Finance Committee

19 May 2016

 

Strategy and Finance Committee - Terms of Reference

 

Chair

Councillor Manji

Membership

Mayor Dalziel (Deputy Chair), Deputy Mayor Buck, Cr Chen, Cr Clearwater (as Chair of Infrastructure, Transport and Environment Committee), Cr Gough, Cr Turner (as Chair of Communities, Housing and Economic Development), Cr Johanson

Quorum

Half of the members if the number of members (including vacancies) is even, or a majority of members if the number of members (including vacancies) is odd.

Meeting Cycle

To be separately considered

Reports To

Council

 

Responsibilities

·         Review as appropriate and make recommendations to the Council on Financial

·         Strategy  and  Performance,  Investment  and  Borrowing,  Insurance  matters  and all Council Controlled Organisations

·         Managing  relationships  with  Canterbury  Development  Corporation  (CDC)  and Christchurch and Canterbury Tourism (CCT) and other major organisations

·         Developing policy and strategy in relation to long term plan and other activities as listed above

·         Monitoring earthquake recovery related to the committees specified activities

·         Considering   recommendations   from   Council’s   Subcommittees,   Community

·         Boards,  the  public,  stakeholders  and  providers  in  relation  to  strategy  and finance planning, delivery and operation

·         Making  decisions  with  regard  for  the  requirements  of  Sections  76  –  81  of  the Local Government Act 2002 where it has the authority from Council to do so, or recommendations to Council where a Council decision is required.

 

Long Term Plan Activities

·         Strategic Planning and Monitoring of

­          central city planning and policy

­          land use planning (including financial and planning assumptions)

­          urban development strategy (including the Land Use Recovery Plan)

­          urban design planning and policy

­          urban regeneration planning and policy; and

­          other strategic issues

·         Performance management and reporting

·         Development contributions

·         Transition process with the Canterbury Earthquake Recovery Authority

·         Manage Iwi and Maori relationships

·         Plus

­          Monitoring and reporting on anchor projects

­          Monitoring and review of CERA recovery programmes

­          External liaison with central government agencies, CERA, the Earthquake Commission and the Insurance community

­          Council Controlled organisations

­          Liaison with EQC and Insurance companies

Delegations

Nil.


Strategy and Finance Committee

19 May 2016

 

Part A        Matters Requiring a Council Decision

Part B         Reports for Information

Part C         Decisions Under Delegation

 

 

TABLE OF CONTENTS

 

C       1.       Apologies.......................................................................................................................... 4

B       2.       Declarations of Interest................................................................................................... 4

C       3.       Confirmation of Previous Minutes................................................................................. 4

B       4.       Deputations by Appointment........................................................................................ 4

B       5.       Presentation of Petitions................................................................................................ 4

C       6.       Development Contributions Remission Application.................................................. 11

A       7.       Remotely Piloted Aircraft (Drones) Policy.................................................................. 23

B       8.       Suburban Centres Biannual Report - October 2015 to March 2016......................... 43

A       9.       Central Plains Water Trust - Draft Statement of Intent............................................. 47

A       10.     Corporate Finance Report for the period ending 31 March 2016............................. 85

A       11.     Performance report for the nine months to 31 March 2016..................................... 95

B       12.     Earthquake Claims Update as at 31 March 2016...................................................... 131

B       13.     Report of the Chairperson of the Capital Endowment Fund Working Group....... 137

C       14.     Resolution to Exclude the Public............................................................................... 141  

 

 


Strategy and Finance Committee

19 May 2016

 

 

1.   Apologies

At the close of the agenda no apologies had been received.

2.   Declarations of Interest

Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as an elected representative and any private or other external interest they might have.

3.   Confirmation of Previous Minutes

That the minutes of the Strategy and Finance Committee meeting held on Thursday, 21 April 2016 be confirmed (refer page 5).

4.   Deputations by Appointment

4.1

Peter Mitchell from Cavell Leitch will address the Strategy and Finance Committee on behalf

of Roman Catholic Bishop of Christchurch regarding a remission of development contributions

for the new classroom block at St Francis of Assisi Primary School at 370 Innes Road.

 

5.   Presentation of Petitions

There were no petitions received at the time the agenda was prepared.  


Strategy and Finance Committee

19 May 2016

 

 

 

Strategy and Finance Committee

Open Minutes

 

 

Date:                                     Thursday 21 April 2016

Time:                                    1.00pm

Venue:                                 Committee Room 1, Level 2, Civic Offices,
53 Hereford Street, Christchurch

 

 

Present

Chairperson

Deputy Chairperson

Members

Councillor Raf Manji

Mayor Lianne Dalziel

Deputy Mayor Vicki Buck

Councillor Jimmy Chen

Councillor Phil Clearwater

Councillor Yani Johanson

Councillor Andrew Turner

 

 

21 April 2016

 

 

 

Principal Advisor

Peter  Gudsell

General Manager Finance and Commercial

Tel: 941 8528

 

Margaret Henderson

Committee Advisor

941 8185

margaret.henderson@ccc.govt.nz

www.ccc.govt.nz

To view copies of Agendas and Minutes, visit:
www.ccc.govt.nz/Council/meetingminutes/agendas/index

 

 

 

 

 

 

 

 

Part A        Matters Requiring a Council Decision

Part B         Reports for Information

Part C         Decisions Under Delegation

 

 

 

The agenda was dealt with in the following order.

1.   Apologies

Part C

 

 

Committee Resolved SFCM/2016/00022

It was resolved on the motion of Councillor Clearwater, seconded by Councillor Turner that the apology for absence from Councillor Gough, and an apology for lateness from Deputy Mayor Buck,  be accepted. 

Councillor Clearwater/Councillor Turner                                                                                                           Carried

 

13. Resolution to Include Supplementary Reports

 

Committee Resolved SFCM/2016/00023

That the reports be received and considered at the Strategy and Finance Committee meeting on Thursday, 21 April 2016.

Councillor Turner/Councillor Clearwater                                                                                                           Carried

2.   Declarations of Interest

Part B

 

Deputy Mayor Buck and Councillor Johanson declared an interest in Item 6, 10 and 11.

Councillor Chen declared an interest in items 6 and 9.

Councillor Turner declared an interest in items 6 and 9.

3.   Confirmation of Previous Minutes

Part C

 

Committee Resolved SFCM/2016/00024

Committee Decision

That the minutes of the Strategy and Finance Committee meeting held on Thursday, 17 March 2016 be confirmed.

Councillor Chen/Councillor Clearwater                                                                                                              Carried

 

4.   Deputations by Appointment

Part B

There were no deputations by appointment.

5.   Presentation of Petitions

Part B

There was no presentation of petitions.

 

Note: Deputy Mayor Buck arrived at the meeting at 1:05 pm.

 

6.   Council Controlled Organisations - Financial statements for the six months to 31 December 2015

 

Committee Consideration

The Committee considered a report asking that it review the financial statements for the six months to 31 December 2015 for the Council Controlled Organisations.

 

Staff Recommendations

That the Strategy and Finance Committee:

1.         Recommends to the Council that it receive the half-year reports for the following Council Controlled Organisations:

a.         Christchurch City Holdings Limited;

b.         Civic Building Limited;

c.         Tuam Limited;

d.         Vbase Limited;

e.         Riccarton Bush Trust;

f.          Christchurch Agency for Energy Trust;

g.         World Buskers Festival Trust; and

h.         New Zealand Local Government Funding Agency Limited.             

 

                                                                                                                                                                                                            

Committee Decided SFCM/2016/00025

Part A

That the Council:

1.         Receive the half-year reports for the following Council Controlled Organisations:

a.         Christchurch City Holdings Limited;

 

Councillor Manji/Mayor                                                                                                                                              Carried

 

 

Committee Decided SFCM/2016/00026

That the Council:

1.         Receive the half-year reports for the following Council Controlled Organisation:

a.            Civic Building Limited.

 

Councillor Manji/Councillor Chen                                                                                                                           Carried

Committee Decided SFCM/2016/00027

That the Council:

1.         Receive the half-year reports for the following Council Controlled Organisation:

                         a.         Tuam Limited.

 

Councillor Manji/Councillor Chen                                                                                                                           Carried

Committee Decided SFCM/2016/00028

That the Council:

1.         Receive the half-year reports for the following Council Controlled Organisation:

a.         Vbase Limited.

 

Councillor Manji/Councillor Chen                                                                                                                           Carried

Committee Decided SFCM/2016/00029

That the Council:

1.         Receive the half-year reports for the following Council Controlled Organisation:

a.         Riccarton Bush Trust.

 

Councillor Manji/Councillor Clearwater                                                                                                                Carried

Committee Decided SFCM/2016/00030

That the Council:

1.         Receive the half-year reports for the following Council Controlled Organisation:

a.         Christchurch Agency for Energy Trust.

 

Councillor Manji/Councillor Chen                                                                                                                           Carried

Committee Decided SFCM/2016/00031

That the Council:

1.         Receive the half-year reports for the following Council Controlled Organisation:

a.         World Buskers Festival Trust.

 

Councillor Manji/Councillor Chen                                                                                                                           Carried

Committee Decided SFCM/2016/00032

That the Council:

1.         Receive the half-year reports for the following Council Controlled Organisation:

a.            New Zealand Local Government Funding Agency Limited.

Councillor Manji/Councillor Chen                                                                                                                           Carried

 

 

7     Resolution to Exclude the Public

 

Committee Resolved SFCM/2016/00033

Part C

That at 1.15pm  the resolution to exclude the public set out on pages 143 and 144 of the ordinary agenda and pages 5 and 6 of the Supplementary agenda be adopted and that Bob Lineham and Leah Scales from Christchurch City Holdings Limited remain after the public have been excluded for Items 10, 11 and 12 and that Brett Gamble and Mark Bowman from Enable Services Limited be admitted for item 11, as they have knowledge that will assist the Council.

 

Councillor Manji/Councillor Chen                                                                                                                           Carried

 

The public were re-admitted to the meeting at 5.14pm.

 

   

Meeting concluded at 5.14pm.

 

CONFIRMED THIS 19TH DAY OF May 2016

 

Councillor Raf Manji

Chairperson

   


Strategy and Finance Committee

19 May 2016

 

 

6.        Development Contributions Remission Application

Reference:

16/288528

Contact:

Katrina Guest

katrina.guest@ccc.govt.nz

941-6596

 

 

1.   Purpose and Origin of Report 

Purpose of Report

1.1       The purpose of this report is to provide the Strategy and Finance Committee with information to assist it to make a recommendation to Council whether to approve or decline a request for a remission of Development Contributions (DC's).

Origin of Report

1.2       This report is in response to the Bishop's request for Council to consider granting a remission of a Development Contribution under clause 3.6.2 of the Development Contributions Policy.

2.   Significance

2.1       The decision(s) in this report is of medium/low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.

2.1.1   The level of significance was determined based on the significance criteria used by the Council.

2.1.2   There is no community engagement or consultation required for the preferred option.

 

3.   Staff Recommendations

That the Strategy and Finance Committee recommend to Council that it:

1.      Agree that the Development Contributions are payable for BCN/2014/6462 under clause 3.6.2 of the Development Contributions Policy.

 

4.   Key Points

4.1       This report supports the Council's Long Term Plan (2015 - 2025):

4.1.1   Activity: Strategic Planning and  Policy

·     Level of Service: 17.0.1 Advice is provided to Council on high priority policy and planning issues that affect the City.

4.2       The following feasible options have been considered:

·     Option 1 - Agree that the Development Contributions are payable under clause 3.6.2 of the Development Contributions Policy.

·     Option 2 - Approve a remission of the full Development Contribution.

·     Option 3- Approval a reduction to the Development Contribution.

 

 

 

 

Context/Background

St. Francis of Assisi School

 

4.3       As a result of the February 2011 Earthquake, St Paul's Primary School situated at 17 Gayhurst Road suffered damage and became the only state integrated or state school in Christchurch to be located within the Crown's red zone. The Crown made a red zone purchase offer for the land.

4.4       The Bishop accepted the Crown's offer to acquire the site and close St. Paul's School. The Bishop also made the decision to close Our Lady of Fatima School situated at 370 Innes Road and establish a new primary school to be called St Francis of Assisi Catholic School on the site of Our Lady of Fatima School, situated at 370 Innes Road to accommodate the students of the former two schools

4.5       Due to the two schools combining and the need to accommodate additional children there was a need to build two new classroom blocks.

4.6       In accordance with the 2013 Development Contributions Policy, development contributions of $150,617.11 were invoiced to St. Francis of Assisi School for the additional demand on the network infrastructure.

4.7       The Bishop's solicitor previously presented a legal argument to the council that state-integrated schools should have the same privileges as that of the Crown and not be required to pay Development Contributions.  The Council's Legal Service Unit does not agree that the proprietor of a State Integrated School, retaining ownership of school land, is to be treated as the Crown and able to claim the Crown exemption under the Local Government Act 2002.  These issues are still being explored between the parties, but in the meantime the Bishop has made a request for a remission under the Development Contributions Policy.

Development Contributions Policy

4.8       The Council requires a development contribution, in accordance with Sections 197, 198(2) and 199 of the LGA and in accordance with its Development Contributions Policy.

4.9       The Development Contributions Policy does not contain any specific remissions from the requirement to pay Development Contributions  but in clause 3.6.2 states "This DCP does provide for the Council, at is sole discretion, to consider and grant remissions and/or reductions in unique and compelling circumstances"

4.10    The Development Contributions Policy also states in 3.4.2 that "Where the Crown is the landowner, it is exempt from paying development contributions by statute".  "Not all government bodies can be defined as the "Crown" including entities such as District Health Boards and charter or state-integrated schools".

4.11    In addition to this clause 2.3 of the Development Contributions Policy specifically talks about land classified as red zone and development contributions: "Residential and non-residential lots within an area classified by CERA as red zone that are subsequently demolished will retain the assessed credit with the lot.  No red zone credits can be transferred or sold but will remain with the land until they are used on that site or they expire.  The Council considers that owners of red zone properties will have received reimbursement of any development contributions paid as a component of payment received in the acquisition of a red zone property"

Unique and Compelling

4.12    Attached to this report is the request letter from the Bishop's Solicitors.  The letter states that the Bishop believes "The circumstances were "unique" in that the February 2011 Earthquake was a "remarkable or unusual' event and that, as a consequence of the earthquake, St Paul's school was the only state-integrated school to be identified as being in the red zone"

4.13    It also states "As a result of the School being located in the red zone that he was "compelled" in the sense of being forced or obliged to make a decision to address the future of St. Pauls School.  That decision was to establish St. Francis of Assisi Catholic School"

4.14    The letter also notes that the Bishop is a non-profit making legal person and his decision was providing for education for primary school children.

4.15    If the Council remits the development contributions then the money will be used by the Bishop to provide improved facilities at Catholic state-integrated primary schools in Christchurch City.

4.16    The letter points out there will be no precedent effect if Council makes a decision to grant a remission.

5.             Comment

5.1       It is accepted that St Paul's school was the only school to be classified as red zone, however there were a significant number of other activities and businesses that were displaced by the earthquakes.  There have been no Development Contribution remissions granted to any other person or business developing a site as a result of relocating from the red zone.

5.2       Other land owners that have approached Council for a reduction of their Development Contribution due to the effect of the earthquakes are turned away due to clause 2.3 in the Development Contributions Policy which specifically references red zone properties.

5.3       Although the Bishop has not provided any financial information in this application, it appears he received payment from the Crown for his red zone land the same as other property owners in the red zone.

5.4       While this is the only state integrated school located in the red zone, it is not the only property or business within the red zone and therefore not the only property or business to have been displaced because of this, or because of the effects of the 2011 earthquake. 

5.5       Other not for profit organisation are also required to pay development contributions.  Agencies such as churches, St Johns, and the Fire Brigade are routinely levied development contributions.  They would also use any money not paid in development contributions for other purposes.

5.6       The circumstances outline by the Bishop do not appear to be 'unique', taking a wider view of red zone properties and landowners, and do not suggest any compelling reasons that oblige Council to grant a remission.

6.   Option 1 - Do not approve remission application (preferred)

Option Description

6.1       Do not approve the remission application and require payment in full.

Significance

6.2       The level of significance of this option is low overall, consistent with section 2 of this report.  Engagement requirements for this level of significance are nil.

Impact on Mana Whenua

6.3       This option does not involve a significant decision in relation to ancestral land or a body of water or other elements of intrinsic value, therefore this decision does not specifically impact Ngāi Tahu, their culture and traditions.

Community Views and Preferences

6.4       Only the Roman Catholic Bishop of Christchurch is specifically affected by this option.  His views are expressed in his remission application.  The Bishop's Solicitor has also asked to be heard by Council when it considers the application.

Alignment with Council Plans and Policies

6.5       This option is consistent with Council’s Plans and Policies.

Financial Implications

6.6       Cost of Implementation - Nil.

6.7       Maintenance / Ongoing Costs - Nil.

6.8       Funding source - Nil.

Legal Implications

6.9       Nil.

Risks and Mitigations

6.10    Nil.

Implementation

6.11    Implementation dependencies - Not applicable.

Option Summary - Advantages and Disadvantages

6.12    The advantages of this option include:

·   Consistency with clause 2.3 of the Development Contributions Policy.

·   Consistency with how the policy has been applied to other developers relocating from the red zone.

6.13    The disadvantages of this option include:

·   It could possibly impact on the provision of facilities for Catholic State Integrated Schools in Christchurch but that is not a direct disadvantage for the Council or its other ratepayers.

7.   Option 2 - Approve remission

Option Description

7.1       Approve a full remission of development contributions payable.

Significance

7.2       The level of significance of this option is medium/low consistent with section 2 of this report.  Engagement requirements for this level of significance nil.

Impact on Mana Whenua

7.3       This option does not involve a significant decision in relation to ancestral land or a body of water or other elements of intrinsic value, therefore this decision does not specifically impact Ngāi Tahu, their culture and traditions.

Community Views and Preferences

7.4       Rate Payers are specifically affected by this options as any remission would be spread across the general rates base over the coming years.

Alignment with Council Plans and Policies

7.5       This option is potentially inconsistent with Council’s Plans and Policies

7.5.1   Inconsistency - Potentially inconsistent with clause 2.3 of the Development Contributions Policy.

 

 

 

7.5.2   Reason for inconsistency - Clause 2.3 does not allow development contributions credits for red zone land.  It does not deal specifically with development contribution remissions, although a remission would not need to be sought if a credit could be transferred from the red zone.  So this decision is potentially inconsistent with clause 2.3, but the decision could be made to approve a reduction if the Council agrees with the Bishop that there are unique and compelling circumstances in this case.

7.5.3   Amendment necessary - No.

Financial Implications

7.6       Cost of Implementation - If the Development Contributions charge were remitted it would reduce this year's development contributions revenue and the amount would be effectively spread across the general rates base over coming years.

7.7       Maintenance / Ongoing Costs - Nil.

7.8       Funding source - Rates.

Legal Implications

7.9       Nil.

Risks and Mitigations

7.10    Although there are no other schools that could claim a precedent is set, other red zoned property owners could take the same approach and make a remission application in respect of development contributions being payable at their new site.

Implementation

7.11    Implementation dependencies - Nil.

Option Summary - Advantages and Disadvantages

7.12    The advantages of this option include:

·   It recognises that St Pauls was the only state integrated school in the red zone.

·   It may improve on the provision of facilities for Catholic State Integrated Schools in Christchurch.

7.13    The disadvantages of this option include:

·   It would reduce this year's development contributions revenue and the amount would be effectively spread across the general rates base over the coming years.

·   There is a risk it would set a precedent for other red zoned property owners.

8.   Option 3 - Approve a reduction

Option Description

8.1       Approve a reduction of development contributions payable.

Significance

8.2       The level of significance of this option is low/medium consistent with section 2 of this report.  Engagement requirements for this level of significance are nil.

Impact on Mana Whenua

8.3       This option does not involve a significant decision in relation to ancestral land or a body of water or other elements of intrinsic value, therefore this decision does not specifically impact Ngāi Tahu, their culture and traditions.

Community Views and Preferences

8.4       Rate payers are affected by this option as any reduction would be spread across the general rates base over the coming years, but would be of less effect compared to a full remission.

Alignment with Council Plans and Policies

8.5       This option is potentially inconsistent with Council’s Plans and Policies.

8.5.1   Inconsistency - Potentially inconsistent with clause 2.3 of the Development Contributions Policy.

8.5.2   Reason for inconsistency - Clause 2.3 does not allow development contributions credits for red zone land.  It does not deal specifically with development contribution reductions, although a reduction would not need to be sought if a credit could be transferred from the red zone.  So this decision is potentially inconsistent with clause 2.3, but the decision could be made to approve a reduction if the Council agrees with the Bishop that there are unique and compelling circumstances in this case.

8.5.3   Amendment necessary - No.

Financial Implications

8.6       Cost of Implementation - If the Development Contributions charge were reduced it would reduce this year's development contributions revenue and the amount would be effectively spread across the general rates base over coming years.

8.7       Maintenance / Ongoing Costs - Nil.

8.8       Funding source - Rates.

Legal Implications

8.9       Nil.

Risks and Mitigations

8.10    Although there are no other schools that could claim a precedent is set, other red zoned property owners could take the same approach and make a remission application in respect of development contributions being payable at their new site.

Implementation

8.11    Implementation dependencies - Nil.

Option Summary - Advantages and Disadvantages

8.12    The advantages of this option include:

·   It recognises that St Paul's was the only state integrated school located in the red zone.

·   It may improve the provision of facilities for Catholic State integrated Schools in Christchurch.

8.13    The disadvantages of this option include:

·   Finding an appropriate method to calculate a reduction.  The amount of any reduction could be arbitrary.

·   It would reduce this year's development contributions revenue and the amount would be effectively spread across the general rates base over the coming years.

·   There is a risk that it would set a precedent for other red zoned property owners.

 

 

Attachments

No.

Title

Page

a  

Remission application

18

 

 

Confirmation of Statutory Compliance

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i)  sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

Signatories

Author

Katrina Guest

Team Leader Development Support

Approved By

John Higgins

Peter Sparrow

Head of Resource Consents

General Manager Consenting & Compliance

  


Strategy and Finance Committee

19 May 2016

 

PDF Creator


 

PDF Creator


 

PDF Creator


 

PDF Creator


Strategy and Finance Committee

19 May 2016

 

 

7         Remotely Piloted Aircraft (Drones) Policy

Reference:

16/425050

Contact:

Claire Bryant

Claire.bryant@ccc.govt.nz

8876

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       To consider the Remotely Piloted Aircraft Systems (RPAs) Policy (refers to drones and model aircraft).

Origin of Report

1.2       This report is staff generated in response to changed Civil Aviation Authority (CAA) regulations requiring pilots to request consent to fly RPAs over Council property.

2.   Significance

2.1       The decision in this report is of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.

2.1.1   The level of significance was determined by the low numbers of people currently using and being affected by RPAs.

2.1.2   The targeted community engagement and consultation outlined in this report reflect the assessment. In developing this policy staff have undertaken consultation with the Civil Aviation Authority,  Waimakariri District Council, Selwyn District Council, Land Information New Zealand, Environment Canterbury, the Department of Conservation, Canterbury Earthquake Recovery Authority, seven Christchurch City Council Community Boards, the Canterbury UAV Forum, the Canterbury Air Users Group, Garden City Helicopters Ltd (operators of the Westpac Rescue Helicopter), the CPIT journalist training school, the University of Canterbury Spatial Engineering and Geography Schools,  Canterbury Development Corporation, local hobbyist groups, and local retailers.

 

3.   Staff Recommendation

That the Strategy and Finance Committee recommends that the Council:

1.         Resolves to adopt Option 1 Remotely Piloted Aircraft Policy (Attachment A).

2.         Resolves, under Clause 12(4) of the Parks and Reserves Bylaw, that all Remotely Piloted Aircraft systems, regardless of weight, MAY NOT be flown in the parks and reserves below without explicit consent (which may be granted on a case-by- case basis) from an Authorised Officer of Council:

a.         Garden and Heritage Parks, and Cemeteries.

b.         Within ten metres of an open-air public pool or playground or the boundary of any park.  

c.         Within four kilometres of the Christchurch International Airport and the Christchurch Hospital, Burwood Hospital, Garden City, West Melton heliports.

d.         The Council's legal road corridor on the coast - Scarborough Boat Ramp to Godley Head, and on Banks Peninsula.

e.         Over Council property at Te Waihora (Lake Ellesmere); Birdlings Flat; Brooklands Lagoon; Travis Wetland; Charlesworth Reserve; McCormack's Bay; South Shore Spit; Bromley Oxidation ponds; Bexley Wetland; and Linwood Paddock.

 

4.   Key Points

4.1       This report supports the Council's Long Term Plan (2015 - 2025):

4.1.1   Activity: Strategic Planning and  Policy

·     Level of Service: 17.0.23 Development of new policies, strategies and plans

4.2       A 'do nothing' option was not considered feasible as the Civil Aviation Authority rules require RPA operators to ask for the consent of a land owner to fly over their land.  Without an approved policy in place staff cannot give consent to fly RPA's over Council land. The following feasible options have been considered:

·    Option 1 (preferred).  This option allows for RPAs weighing less than 1.5kg to be flown in parks and reserves without having to ask the Council for consent provided certain use, privacy and noise criteria are met.

The policy also allows the Council to consent flights over the transport corridor, buildings or events provided the pilot is certificated under Civil Aviation Authority Part 102.

The policy allows for case-by-case decisions to be made for larger drones and to fly RPAs in restricted parks, if required.   RPA 'permission required' parks are mapped in Attachments B and C.

Permission Required Areas

Rationale

Garden and Heritage Parks, and Cemeteries.

Within ten metres of an open-air public pool or playground or the boundary of any park.  

High amenity/multi-use areas - to protect privacy, and reduce noise nuisance for existing users and park neighbours

Within four kilometres of the Christchurch International Airport and the Christchurch Hospital, Burwood Hospital, Garden City, West Melton heliports.

To reinforce existing CAA regulations aimed at protecting the safety of airplane passengers and crew. CIAL and the Canterbury Airspace User Group requested additional controls given the weight increase from 1 to 1.5kg.

The Council's legal road corridor on the coast - Scarborough Boat Ramp to Godley Head, and on Banks Peninsula.

Over Council property at Te Waihora (Lake Ellesmere); Birdlings Flat; Brooklands Lagoon; Travis Wetland; Charlesworth Reserve; McCormack's Bay; South Shore Spit; Bromley Oxidation ponds; Bexley Wetland; and Linwood Paddock.

To protect sensitive wildlife in these areas.

 

This option is a conservative approach allowing the Council to test how the RPA community uses drones and adheres to the policy; how the wider community responds to RPA's; and to investigate enforcement issues. The weight criteria is the same as that adopted by Auckland Council for their parks and reserves and the policy approach to roads is the same as that taken by Auckland Transport.

 

 

·     Option 2. (Attachment D) The policy allows for drones weighing less than 1.5kg to be flown in parks and reserves without having to ask the Council for consent provided certain use, privacy and noise criteria are met and allows for case-by-case decisions, if required. 

Under Option 2 consent for flights over roads and buildings will be considered on a case-by-case basis provided certain use, privacy and noise criteria are met.  However, this policy option does not require a pilot to be certificated under CAA Part 102 certification and is, therefore, a less conservative approach than Option 1.  While the criteria for parks is similar to that adopted by Auckland Council the approach for roads is less restricted than the approach adopted by Auckland Transport.

4.3       The policy has been revised since the report presented in March 2016 and further consultation with stakeholders. The threshold for the weight of permitted drones has increased from 1 to 1.5 kilograms. And the prohibited areas have been extended to provide greater protection to aerodromes.

4.4       Option Summary - Advantages and Disadvantages (Preferred Option)

4.4.1   The advantages of this option include:

·     The policy is explicit about where and when RPA operators may and may not fly and when they must ask for consent.

·     Operators with RPAs under 1.5kg need not apply for consent provided they adhere to the conditions of the policy.  The Parks and Reserves Bylaw enables Council rangers to respond to complaints about RPA operators not adhering to the Council policy.

·     The policy encourages and enables recreational hobbyist RPA use while managing for public concerns related to privacy, safety and noise.

·     This option is a conservative approach to test whether there are problems with RPAs in multi-use parks and reserves; to test the approval process for any problems; and because the technology is changing fast.  Staff recommend that the policy be reviewed within twelve months.

·     The Council does have the tools to manage RPAs in parks and reserves (i.e. park rangers and the Parks and Reserves Bylaw) but not over roads and buildings.  This enforcement issue may need to be explored in the future to ensure road safety depending on whether RPA operators respect the policy and the other public using the same facilities.

4.4.2   The disadvantages of this option include:

·     The Council does not have oversight on RPA flights where the RPA weighs less than 1.5 kg in parks and reserves and may lose the opportunity to track where and when RPSs are being flown and therefore the opportunity to manage demand and multi-use.

·            During further consultation with existing aerodrome user groups (Christchurch International Airport, Canterbury Air Users Group) concerns were expressed with the potential risk created by the 1.5kg (replacing the original 1kg) weight limit.  To address these concerns, the policy includes a requirement for all RPA pilots (regardless of weight) to ask for permission before flying in parks and reserves within 4 km of an aerodrome/heliport.  While this criteria duplicates the Civil Aviation Rule 101.205 it does emphasise the importance of public safety first and ensures that inexperienced pilots don't think that Council approval is sufficient in these sensitive areas. 

5.   Context/Background

5.1       The Civil Aviation Rules (CAR) introduced by the Civil Aviation Authority (CAA) in 2015 require RPA operators to obtain a land owner's approval to fly over their property including Council approval to fly over Council owned property.  Council property includes parks and reserves; transport corridors such as roads and cycleways (except state highways); and buildings and facilities (such as community centres and waste transfer stations).

5.2       A policy is required to provide guidance for Council staff when considering applications.  The Council does have an interim approach to guide decisions.  Over late 2015 applications averaged 47 a month although this has decreased in recent months.  Most applications are from hobbyists to fly in parks but a growing number are from commercial operators to fly from or over roads and buildings for filming / mapping / recording. 

5.3       This policy operates under the Civil Aviation Authority Part 101 rules. These rules also establish 'controlled airspace' and four kilometre 'restricted zones' around aerodromes (see Attachment E showing these CAA-defined areas in Christchurch) in order to manage generic safety associated with RPAs.  The proposed Christchurch City Council policy option aims to:

·    Manage for local hazards, privacy and the noise aspects associated with RPAs

·    Enable equitable access to recreational and commercial opportunities within multiple-use environments.

5.4       The Civil Aviation Authority Rules Part 101 Subpart E defines Remotely Piloted Aircraft as "an unmanned aircraft that is piloted from a remote station" which also includes radio controlled model aircraft and control line model aircraft.  The public generally know Remotely Piloted Aircraft (RPA) as either UAV's (unmanned aerial vehicles); model aircraft or 'drones'. 

5.5       The Civil Aviation Rule Part 101 manages the generic safety issues associated with RPAs.  Part 101 only applies to RPAs weighing less than 25 kilograms that can fully comply with Part 101. RPAs weighing between 15-25 kilograms must also be approved by Model Flying New Zealand before asking for the land owner's approval.  When RPA operators can't adhere to the conditions of Part 101 they may apply directly to the Civil Aviation Authority for certification under Part 102, which requires the operator to submit comprehensive safety and other information to the CAA. Operators are also required to have observers and use log-books.

5.6       The proposed policy condition that allows pilots to fly RPAs weighing up to 1.5 kilograms (except in restricted parks) without asking for consent is based on:

·     Retailer comment that 70 per cent of all hobbyist RPAs weigh under 1.5 kilograms indicating that the majority of hobbyist flights can take place without requiring Council consent - consistent with hobbyist practice i.e. deciding that day whether to fly or not.

·     Consistency with Auckland Council criteria.

 

5.7       The Council does not enforce the Civil Aviation Rules nor does the Council accept any liability for any action or inaction of the RPA operator causing loss, damage and/or injury.  The only role for the Council under these Rules is to approve or decline applications to fly RPAs over Council property.  The Civil Aviation Authority is responsible for enforcing their Rules and refers any person concerned for their immediate safety to contact the Police, or the Privacy Commissioner if concerned about privacy. 

5.8       To enforce the policy over this trial period Council staff will use the Parks and Reserves Bylaw with its associated systems and powers to manage RPAs in parks and reserves. The bylaw does not apply to Council property held as roads and buildings, so before consent is considered for RPA flights in these areas, the preferred policy option requires pilots to have CAA Part 102 certification to provide quality assurance.

 

5.9       Staff investigated the option of prohibiting RPAs from flying over rivers within the District.  Legal advice is that Council only 'owns' rivers if there is Council land on both sides of the river.  Prohibiting RPA flights over rivers would require identifying which parts of a river the prohibition relates to and any prohibition would only apply to sections, not the full length of any river.  Mapping staff advise that identifying all the relevant property is likely to require at least a week's work and that the dynamic nature of rivers means they change over time and ongoing mapping would be required.   For this reason the preferred policy identifies only specific sensitive wildlife sites as restricted areas for RPA flights.

5.10    Other territorial authorities with new RPA policies since August 2015 include Auckland Council, Hamilton City Council, Greater Wellington Regional Council, Timaru District Council, Waimakiriri District Council and Selwyn District Council (a guideline rather than a policy).  The majority of these policies focus on parks and reserves only; identify some parks where RPAs may fly without seeking approval; and some areas where flying RPAs is prohibited - usually high use/high amenity areas like the Botanic Gardens or sensitive areas like cemeteries or wildlife areas.  This approach is most clearly reflected in this report in the preferred policy option (Attachment A).

5.11    Land Information New Zealand (LINZ) manage Christchurch's Residential Red Zone flatlands and have a case-by-case online request form.  The New Zealand Transport Agency are working on a national policy and their interim policy requires all applicants to make a written online application.  The Department of Conservation has banned RPAs on the most popular walks, largely for their noise nuisance, and will consider further restrictions if required.  Auckland Transport now have a policy related to RPA flights over their transport corridor and Option 1 has the same criteria for the Christchurch transport corridor.

5.12    RPA use is growing rapidly as are the capabilities and uses to which RPAs are being put.  A conservative approach at this time may allow the public to adjust over time and for any issues to emerge and solutions to be identified.  An early review of a RPA policy is recommended to allow for emerging issues and changing community expectations.  The resulting reviewed policy could then be included in the 2016-17 Public Places Bylaw review for wide community consultation.

6.   Option 1 -  conservative approach to RPAs policy (preferred)

Option Description

6.1       This policy (see Attachment A) outlines where RPA's may be flown without asking for Council permission and under what circumstances the Council will approve an application to fly a RPA over Council property.  Pilots must be certificated under CAA Part 102 before requests to fly over roads and buildings will be considered.

6.2       Advice from the Civil Aviation Authority is that insurance firms may be reluctant to insure Part 101 operators (as they do not have to go through the same comprehensive certification process with the Civil Aviation Authority).  It appears they are more likely to insure operators once they have Part 102 certification.  If RPAs, flying over roads and buildings, do not have public liability insurance there is a risk the operator will not be able to repair any damage caused to public property (such as crashing power lines).  Experience to date with the interim approach is that the vast majority of requests to fly RPAs over roads and buildings are from commercial operators who could reasonably invest in undertaking Civil Aviation Authority Part 102 certification.   Therefore, these are additional requirements for flights over roads and buildings.

6.3       Most of Christchurch City lies under the Civil Aviation Authority definition of 'controlled airspace' (see Attachment E).  This means that, unless the RPA operator has approval from the Air Traffic Controller or owner of the aerodrome, the majority of flights in Christchurch City must be flown as shielded operations.  A shielded operation means the RPA is flown "within 100 metres of, and below the top of, a natural or man-made object", for example, beneath the height of any nearby trees or buildings.  While possible to manage in a parks environment it is problematic when flying over roads and buildings. This increases the necessity for Part 102 certification prior to Council staff making decisions about flights over roads and buildings in the City.

Significance

6.4       The level of significance of this option is low consistent with section 2 of this report.  Engagement requirements for this level of significance are targeted consultation with relevant stakeholders and this has been undertaken.  In the future the RPAs Policy may be linked to the Public Places Bylaw as the intent of the policy is to manage a safety and nuisance matter on and above public places.  The Public Places Bylaw is being reviewed in 2016/17 and including the RPAs policy review in this wider review creates an opportunity for wide consultation after the policy has been tested in operation for some time. 

Impact on Mana Whenua

6.5       This option does not involve a significant decision in relation to land or a body of water or other elements of intrinsic value, therefore this decision does not specifically impact Māori, their culture and traditions.

Community Views and Preferences

6.6       Hobby groups and commercial users were consulted.  In summary, their preference is for an enabling approval regime and for a low cost, timely and easy to understand approvals process.

6.7       Staff also consulted the Community Boards for their views.  Overall, the Board members expressed privacy and safety concerns and supported having a policy.  There was general support for prohibiting RPAs from flying near open-air pools, sensitive wildlife and neighbours boundaries; and some support for including beaches and playgrounds as prohibited areas. 

Alignment with Council Plans and Policies

6.8       Both policy options identify a list of parks and reserves where RPAs may not be flown without consent. These areas were determined in order to provide protection from noise, invasions of privacy or to protect sensitive wildlife.  To ensure alignment, this report recommends that the Council use Clause 12(4) of the Parks and Reserves Bylaw to resolve to prohibit RPAs flights in these areas.  Under Clause 12(4) of the Parks and Reserves Bylaw, the Council may, by resolution, determine any reserve where model aircraft (defined as "any man-made device capable of flight…") may not be flown. 

6.9       There is allowance for applications on a case-by-case basis to fly in these areas in case of special circumstances such as for filming, mapping, recording, and photography purposes e.g. Council may approve filming of a movie or photo's for a wedding party.

Financial Implications

6.10    Cost of Implementation - There will be communications on the Council website including the policy, links to more resources including the Airshare and Civil Aviation sites, and maps showing 'permission required' areas.  Staff are proposing to only install 'No RPAs/drones allowed' signs if there are problems/complaints in any location.  Any minor costs for "No RPA's/drones allowed" signs will be sourced from the ongoing sign updating and maintenance programme.

6.11    Maintenance / Ongoing Costs - Any minor costs for maintaining signs are included in the Parks Unit operational budget.

6.12    Funding source - No additional costs are proposed at this time. The website update costs and stakeholder communications will be funded from Strategy and Transformation, Strategic Policy budget.

 

Legal Implications

6.13    There are no significant legal implications in adopting a policy to manage how permission will be given to RPA operators to fly over Council land. If a policy was not adopted the Council could expect an increasing number of applications but have no guidance for staff on how to respond.  Adopting a policy does not imply the Council has any enforcement role in relationship to RPAs.    The Council enforcement role is limited to its current Parks and Reserves Bylaw and, in making the resolution under Clause 12(4) greater enforcement in these parks may be required until the public become more aware of the restrictions.  If anyone fails to get permission from the Council to fly over Council land the Council can seek to trespass that operator.

Risks and Mitigations

6.14    The public may not understand where RPAs may or may not be flown nor when they should ask for permission. The mitigation is to communicate clearly on the Council website, to update the Airshare website with the Council policy, to provide signage on relevant parks if required, and forward the approved policy to interested stakeholders.

6.15    There may be some risk to public safety from equipment failure or inexpert piloting and the public may feel their privacy is at risk.  The mitigation is that the preferred policy restricts consent to parks and reserves which can be managed and assurance from the Civil Aviation Authority, as the experts in this field, that their regulations manage generic safety risks.

Implementation

6.16    Implementation dependencies - the approved Policy may be implemented once the website is updated and stakeholders have been informed.

6.17    Implementation timeframe - within one month of the Council resolving to adopt a policy.

Option Summary - Advantages and Disadvantages

6.18    The advantages of this option include:

·     The policy is explicit about where and when RPA operators may and may not fly and when they must ask for consent.

·     Operators with RPAs under 1.5kg need not apply for consent provided they adhere to the conditions of the policy.  The Parks and Reserves Bylaw enables Council rangers to respond to complaints about RPA operators not adhering to the Council policy.

·     The policy encourages and enables recreational hobbyist RPA operations while managing for public concerns related to privacy, safety and noise.

·     This option is a conservative approach to allow the public to test whether there are problems with RPAs in multi-use parks and reserves; to test the approval process; and because the technology is changing fast.  Staff recommend that the policy be reviewed within twelve months.

·     The Council does have the tools to manage RPAs in parks and reserves (i.e. park rangers and the Parks and Reserves Bylaw) but not over roads and buildings.  This enforcement issue may need to be explored in the future to ensure road safety depending on whether RPA operators respect the policy and the other public using the same facilities.

5.19    The disadvantages of this option include:

§ The Council does not have oversight on RPA flights where the RPA weighs less than 1.5 kg in parks and reserves and may lose the opportunity to track where and when RPSs are being flown and therefore the opportunity to manage demand and multi-use.

 

 

·    During further consultation with existing aerodrome user groups (Christchurch International Airport, Canterbury Air Users Group) concerns were expressed with the potential risk created by the 1.5kg (replacing the original 1kg) weight limit.  To address these concerns, the policy includes a requirement for all RPA pilots (regardless of weight) to ask for permission before flying in parks and reserves within 4 km of an aerodrome/heliport.  While this criteria duplicates the Civil Aviation Rule 101.205 it does emphasise the importance of public safety first and ensures that inexperienced pilots don't think that Council approval is sufficient in these sensitive areas. 

 

7.   Option 2 - less conservative approach to RPAs policy

Option Description

7.1       Option 2 (Attachment D) outlines where and under what circumstances the Council will approve an application to fly a RPA over Council property.  In summary, the policy identifies when and where an RPA may be flown in a park without asking for consent and where and when consent is required.  Pilots do NOT need to be certificated under CAA Part 102 before requests to fly over roads and buildings will be considered.

7.2       The policy allows for case-by-case decision's to made for restricted areas and identifies criteria under which consent may be given on a case-by-case basis to RPA operators wishing to fly over Council roads, cycleway and buildings.

Significance

7.3       The level of significance of this option is low consistent with section 2 of this report.  Engagement requirements for this level of significance are targeted consultation with relevant stakeholders and this has been undertaken.

Impact on Mana Whenua

7.4       This option does not involve a significant decision in relation to land or a body of water or other elements of intrinsic value, and so this decision does not specifically impact Māori, their culture and traditions.

Community Views and Preferences

7.5       Hobby groups and commercial users were consulted and their preference is for an enabling approval regime and for a low cost, timely and easy to understand approvals process.

7.6       Staff also consulted the Community Boards for their views.  Overall, the Board members expressed privacy and safety concerns and supported having a policy.  There was wide support for the draft policy to prohibit RPAs from flying near open-air pools, sensitive wildlife and neighbours boundaries; and some support for including beaches and playgrounds as prohibited areas.  There was also some support to minimise driver distraction. Some Community Board members expressed a preference to expand the prohibitive criteria for acceptable use of RPAs and to refer all RPA applications for the transport corridor, buildings and facilities and events to CAA for consideration. 

Alignment with Council Plans and Policies

7.7       This option is consistent with Council’s Plans and Policies. Please see 6.8 - 6.9.  

Financial Implications

7.8       Cost of Implementation - Same costs as Option 1.

7.9       Maintenance / Ongoing Costs - Same costs as Option 1.

7.10    Funding source - Same source as Option 1.

Legal Implications

7.11    There are no significant legal implications in adopting a policy to manage how permission will be given to RPA operators to fly over Council land. If a policy was not adopted the Council could expect an increasing number of applications but have no guidance for staff on how to respond.  Adopting a policy does not imply the Council has any enforcement role in relationship to RPAs.    The Council enforcement role is limited to its current Parks and Reserves Bylaw and, in making the resolution under Clause 12(4) greater enforcement in these parks may be required until the public become more aware of the restrictions.  If anyone fails to get permission from the Council to fly over Council land the Council can seek to trespass that operator.

Risks and Mitigations

7.12    The public may not understand where RPAs may or may not be flown nor when they should ask permission.  The mitigation is to communicate clearly on the Council website, to update the Airshare website with the Council policy, and forward the approved policy to interested stakeholders.

7.13    There may be some risks to public safety from equipment failure or inexpert piloting and the public may feel their privacy is at risk. The mitigation is the assurance from the Civil Aviation Authority, as the experts in this field, that their Part 101 rules manages these risks.

Implementation

7.14    Implementation dependencies - the approved Policy may be implemented once the website is updated and stakeholders have been informed.

7.15    Implementation timeframe - within one month of the Council resolving to adopt a policy.

Option Summary - Advantages and Disadvantages

7.16    The advantages of this option include:

·   Meets recreational and commercial RPA operators' preference for an enabling approval regime that is less complex (and therefore has less cost and is timelier for them).

·   Provides guidance for recreational and commercial operators on the requirements to gain consent to fly over Council parks, transport corridors and buildings.

·   Provides clear guidance for staff considering applications.

7.17    The disadvantages of this option include:

·   It does not provide the quality assurance of Civil Aviation Authority Part 102 certification and related safety assurance.

·   There is some risk that without Part 102 certification pilots will not obtain flight insurance and may not be able to cover any damage caused (e.g. RPAs have crashed into power lines and bought down power to a neighbourhood).

·   During further consultation with existing aerodrome user groups (Christchurch International Airport, Canterbury Air Users Group) concerns were expressed with the potential risk created by the 1.5kg (replacing the original 1kg) weight limit.  To address these concerns, this policy option now includes a requirement for all RPA pilots (regardless of weight) to ask for permission before flying in parks and reserves within 4 km of an aerodrome/heliport.  While this criteria duplicates the Civil Aviation Rule 101.205 it does emphasise the importance of public safety first. 

 

Attachments

No.

Title

Page

a  

Attachment A: RPA policy option 1

33

b  

Attachment B: RPA permission required (City)

36

c  

Attachment C: RPA permission required (BP)

37

d  

Attachment D: RPA policy option 2

38

e  

Attachment E: 'controlled airspace' and '4km restricted areas'

41

 

 

Confirmation of Statutory Compliance

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i)    sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii)   adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

Signatories

Author

Claire Bryant

Team Leader Policy

Approved By

Helen Beaumont

Brendan Anstiss

Head of Strategic Policy

General Manager Strategy and Transformation

  


Strategy and Finance Committee

19 May 2016

 

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Strategy and Finance Committee

19 May 2016

 

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Strategy and Finance Committee

19 May 2016

 

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Strategy and Finance Committee

19 May 2016

 

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Strategy and Finance Committee

19 May 2016

 

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Strategy and Finance Committee

19 May 2016

 

 

8.        Suburban Centres Biannual Report - October 2015 to March 2016

Reference:

16/426292

Contact:

Carolyn Bonis

Carolyn.bonis@ccc.govt.nz

8930

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is for the Strategy and Finance Committee to be updated on progress in implementing the nine suburban centre master plans.

Origin of Report

1.2       This report is staff generated in fulfilment of the Strategic Planning and Policy Activity Management Plan, which requires biannual reporting on the Suburban Centres Master Plan programme.

2.   Significance

2.1       The decision in this report is of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.

2.1.1   The level of significance was determined by reflecting on the nature of this report as 'for information', albeit that there will be some interest from the community on overall progress towards master plan implementation and further work.

2.1.2   The community engagement and consultation outlined in this report reflect the assessment.

 

3.   Staff Recommendations

That the Strategy and Finance Committee:

1.         Receive the report.

 

 

4.   Key Points

4.1       When the Committee considered and received the previous biannual report, it accepted the recommendation that future biannual reports will provide an overview, with the details to be instead provided to the relevant community boards.  In accordance with this decision, the 'dashboard' of progress has been circulated to Community Boards, with a request for any feedback.  A summary of any feedback will be circulated to Committee members prior to the Committee meeting.  The full dashboard and summary of feedback will also be available at the meeting.

4.2       The section below identifies key progress over the six month timeframe being reported.  In addition, the capital review and draft Annual Plan process is currently identifying mechanisms for realigning capital budgets already allocated to master plan implementation via the Long Term Plan.  The intent is to reflect timescales for consultation and detailed design, while seeking efficiencies via aligning capital projects for the same location (for example where major cycle routes pass through a suburban master plan centre). 

 

 

4.3       Separate reporting will occur for progress on the two Community-led master planning exercises in Little River and Diamond Harbour; these and other suburban residential master planning processes are occurring outside of the completed suburban master plans programme being reported here.

 

5.   Context/Background

Overview

5.1       The previous biannual report provided the background to establishment of the master plans programme and noted all progress on master plans since their adoption.  The focus of this report is the six month timeframe to March 2016; key progress in each master plan area during this time is noted below.  Master plan actions are achieved by various units of Council, by private owners and by business and community groups.

Lyttelton

5.2       Key progress includes:

·   Norwich Quay amenity improvements: New Zealand Transport Authority (NZTA) is upgrading pedestrian access across Norwich Quay, ahead of a more comprehensive programme of works.  Consultation is underway regarding location of the bus stop, bus shelter and pedestrian crossing.

·   Head to Head walkway: Signage plans have been developed and two structures are being priced for a section of track.  Track work from Maori Gardens to Governors Bay has been completed, as has rockfall assessment for key sections of track.  Design work is underway for a section of steps above Urumau Reserve and for addressing damaged seawall.

·   Lyttelton Recreation Centre: The repaired Centre reopened in February.

·   Accommodating community and cultural activities: Retrofit of a Council-owned building in Canterbury Street for use as a community meeting space has commenced, due for completion in August.

·   Naval Point amenity improvements: a development plan is in design/concept development phase and being informed by key stakeholders. A draft for consultation is expected to be approved by early 2017.

·   Performance/film: The Loons Theatre Trust has partnered with the Ministry of Education to create a dual facility school hall and theatre at Lyttelton Primary School, expected to open in May 2016.

·   Design and character guidance: The Independent Hearings Panel has endorsed design guidelines for the town centre, although this is subject to appeal.  A design guide led by Lyttelton Port Company is in preparation for development of new buildings and public space in Dampier Bay.

·   Heritage retention: Several heritage incentive grants have been allocated to support renovations to commercial and residential heritage buildings.

Sydenham

5.3       Key progress includes:

·   Open spaces: the recently acquired site at 441 Colombo Street has been transformed into a transitional park with seating, planters, astroturf and a loaned Llew Summers artwork.  In relation to both of the actions of Remodelling Buchan Park and Relinquishing and replacing Carlyle Park, a workshop is planned with the Community Board.

·   Gateway treatment: design is complete and installation likely in April.

·   Sydenham school site: Resource consent has been approved for mixed use development.

 

Selwyn Street

5.4       Key progress includes:

·    Streetscape improvements: the project scheme is in development and consultation will occur in due course.

·    Eastern shops: construction on the last section of shops is currently in progress.

·    Selwyn St reserve: issues remain with low and intermittent stream flow, affecting viability of the action to daylight Jacksons Creek.  Funding will therefore likely address landscaping elements of park renewal only at this stage.

Linwood Village

5.5       Key progress includes:

·   Improve bus waiting spaces: Installation of a solar shelter adjacent to the Gloucester Street city-bound bus route.

·   Redevelopment of southwest corner of Worcester / Stanmore Roads: New mixed use development on part of the block has recently commenced.

Sumner

5.6       Key progress includes:

•    Streetscape improvements (Marriner Street-west, Wakefield Avenue): The concept design scheme was recently approved by the Community Board following public consultation.  Detailed design work will occur this year.

·    Redevelopment of community facilities: detailed design is underway, with work due to start on site in August 2016.  The Council recently acquired land in Nayland Street to create off-street parking in association with rebuilding the community facilities.

Edgeware

5.7       Key progress includes:

·    Streetscape and movement improvements: design work has recommenced following decisions on the Papanui Parallel Cycleway and the land drainage projects.  Further briefings and public consultation will occur in due course.

·    Comprehensive redevelopment of northern block: resource consent was granted in February 2016 for an expansion of the supermarket, using this land for building and car parking.

Ferry Road

5.8       Key progress includes:

·    Woolston movement and streetscape improvements: The concept design scheme was approved in December 2015.  Public consultation will proceed in May.  The Urban Renewal budget will be used to achieve the gateway enhancements.

·    Pedestrian bridge to Cumnor Terrace: initiatives with The Tannery are being explored to improve pedestrian connection with Woolston.

·    Community hub: Planning and design has occurred for a transitional project on the site of the former Woolston library building.  Its April delivery will be reported in the next biannual report.

 

Main Road

5.9       Key progress includes:

·    Redcliffs Volunteer Library rebuild: layout and design finalised, tender process initiated.

New Brighton

5.10    Transitional projects: new street furniture is being progressed following community consultation.  A design competition for a series of 'Tiny Huts' is in development.

 

Attachments

There are no attachments to this report.

 

Confirmation of Statutory Compliance

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i)  sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

Signatories

Author

Carolyn Bonis

Team Leader Urban Regeneration

Approved By

Carolyn Ingles

Brendan Anstiss

Head of Urban Regeneration, Urban Design and Heritage

General Manager Strategy and Transformation

  


Strategy and Finance Committee

19 May 2016

 

 

9.        Central Plains Water Trust - Draft Statement of Intent

Reference:

16/536701

Contact:

Ian Thomson

Ian.thomson@ccc.govt.nz

Enter phone.

 

 

1.   Purpose of Report

1.1       To seek comments from the Committee in response to the draft 2016/17 Statement of Intent (SOI) submitted by the Central Plains Water Trust.

 

2.   Staff Recommendations

That the Strategy and Finance Committee:

1.         Receives the draft Statement of Intent for Central Plains Water Trust;

2.         Recommends to the Council that it approves the draft Statement of Intent, including any amendments suggested by the Committee, noting that the observations made will be raised with the Central Plain Water Trust Joint Standing Committee.

 

 

3.   Key Points

3.1       The Council is playing "catch up" with regard to its involvement in the Central Plains Water Trust Joint Standing Committee.  The Committee's role is to monitor and manage the Trust.

3.2       In February this year the Council decided to remain a member of the Committee and as a settlor of the Trust.  It confirmed and appointed Councillors East and Cotter as the Council's representatives on the Committee.

3.3       The Trust is a Council-Controlled Organisation.  A meeting of the Committee is to be held on 27 May 2016, when it will consider the draft SOI attached to this report (Attachment A).  The agenda for the meeting also includes an opportunity for Committee members to discuss the Trust's objectives and operational mechanisms as well as the process for appointing trustees.

3.4       It will not be possible for any comments on the draft SOI to be considered by the Trust board within the period specified by the LGA 2002. However the intention is to have the SOI completed by 30 June 2016, as required by clause 3 schedule 8 of the Act.  This is not a significant level of non-compliance.

3.5       The changes proposed to be made to the current SOI largely reflect changes made to the objectives of the Trust some years ago when, with the agreement of the Council, local Maori took a greater interest in the Central Plains Water Scheme.  Since then the Trustees have been required to have regard to the vision and principles applying to the Scheme as set out in an agreement between the Trust, Central Plains Water Ltd and Maori.

3.6       Other changes acknowledge the fact that stage 1 of the Scheme has now been completed and construction of stages 2 and 3 is underway.

3.7       The draft SOI refers to a number of documents, the first of which is the agreement noted in 3.5 above. 

3.8       The second is a revised Memorandum of Agreement between the Trust and Central Plains Water Ltd.  This was initially focused on the application for resource consents, which were granted some years ago.  It was always envisaged the document would be updated once stage 1 of the scheme was completed. 

3.9       Thirdly, the draft SOI refers to the "Matrix of Good Management", developed in association with Environment Canterbury.  This has resulted in the publication of "Industry-agreed Good Management Practices relating to water quality", a copy of which is also attached (Attachment B).

3.10    Finally, the draft SOI requires the Trust to administer an Environmental Management Fund in the manner set out in the resource consents.  The Trust receives an annual levy from Central Plains Water Ltd for this purpose which is transferred to a committee that is responsible for deciding how the Fund is to be distributed.

3.11    Council staff are advised that to date the Trust has distributed $42,665, with a further levy of $31,297 due for payment this year.

Comments

3.12    It is suggested the Council resists making too many comments on the draft SOI at this stage.  It may be more appropriate to consider this once the Council becomes more familiar with the workings of the Trust through its appointees on the joint Committee. However the following observations have been made on the draft provided for comment.

3.12.1 It is noted that the two paragraphs regarding information flows on page 6 of the draft SOI seem to be contrary to one another. In particular the last sentence of the first paragraph that states 'Within this constraint [commercial sensitivity], information will be communicated to the settlor Councils through both the annual report and half-yearly report. These documents are required by legislation and the words 'within this constraint' dilute the requirement. The second paragraph is sufficient to demonstrate the information flows.

3.12.2 No specific financial performance measures have been included. It is expected that the SOI would include details of the expected financial result. Indicator 5 on page 8 states that an annual budget will be prepared by 30 June. Council would normally expect a draft annual budget would have been prepared to support the draft SOI.

3.12.3 The ratio of consolidated trust funds to total assets on page 9 needs to be updated for the 2016-17 financial year.

3.12.4 The draft SOI provided needs to be for the financial years ending 30 June 2017, 2018 and 2019. As currently drafted this is not apparent

 

 

Attachments

No.

Title

Page

a  

Draft Statement of Intent - track changes

49

b  

Industry-agreed Good Management Practices relating to water quality

60

 

 

Signatories

Authors

Ian  Thomson

Patricia Christie

Senior Legal Advisor - Governance

Manager External Reporting & Governance

Approved By

Diane Brandish

Peter Gudsell

Head of Financial Management

General Manager Finance & Commercial

  


Strategy and Finance Committee

19 May 2016

 

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19 May 2016

 

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Strategy and Finance Committee

19 May 2016

 

 

10.    Corporate Finance Report for the period ending 31 March 2016

Reference:

16/437213

Contact:

Patricia Christie Steve Ballard

Patricia.Christie@ccc.govt.nz Steve.ballard@ccc.govt.nz

941 8113 941 8447

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is for the Strategy and Finance Committee to receive quarterly information relating to the Council's treasury and debtors risks.

Origin of Report

1.2       This report is staff generated.

2.   Significance

2.1       The decision(s) in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.

2.1.1   The level of significance was determined by the impact of the decisions on the community.

 

3.   Staff Recommendations

That the Strategy and Finance Committee recommend to the Council that it receives this report.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.   Key Points

Treasury Risk versus Policy Limits

4.1       Council's Net Debt for treasury risk management purposes is $660 million, $190 million lower than in June 2015.  The most significant event of the past quarter was February's insurance settlement, which increased cash holdings (and also created internal borrowings from Vbase and Tuam Ltd, as Council is managing the investment of their share of the insurance settlement on their behalf).  Prior to the insurance settlement, external borrowing had increased by $127 million over the year, of which $87 million was on-lent to Christchurch City Holdings Limited (CCHL).

Current Debt & Investments versus June 2015

* LGFA Borrower Notes:  When Council borrows from the Local Government Funding Agency (LGFA), a small proportion of that borrowing must be invested back with LGFA for the same term, in order for LGFA to continue to meet its capital adequacy requirements.  These Borrower Notes increase Council's cost of borrowing, despite which the borrowing rates available through LGFA remain lower than Council could achieve by borrowing from other sources.

 

4.2       Policy Snapshot

Risk Area

Policy Compliance

Liquidity

Within

Funding

Within

Interest Rate Re-pricing

Breach *

Counterparty Credit

Within

 

* The breach in Interest Rate Policy is caused by the combination of the insurance receipt and the lower debt path signalled in the draft 2016/17 Plan.  It is expected to be temporary, and was ratified at the 10 March 2016, Council meeting.

 

Debtors

4.3       At 31 March 2016, the debtors' balance stood at $24.9 million, $3.6 million higher than reported in December 2015. The increase is primarily due to general debtors which increased by $3.5 million to $20.5 million at 31 March 2016. This increase is principally due to an increase in the amount owing by Vbase Limited for the Town Hall repair from $3.2 million to $7.4 million. $6.5 million has since been paid.

4.4       Debts of $486,780 have been written-off for the year to 31 March 2016, compared to $188,112 for year to 31 March 2015. The significant increase is due to the write off of $365,641 owed by companies that have been placed into liquidation or receivership. Further detail is provided in paragraph 6.4 below.

 

5.   Treasury Report

5.1       Council manages four types of treasury risk relating to its Net Debt:

Treasury Risk

Description

Short-Term Liquidity Risk

The risk of disrupted payments and/or increased cost of funding arising from having insufficient cash and committed borrowing facilities available to meet day-to-day operating and capital requirements.

Long-Term Funding Risk

The risk of un-budgeted costs arising from difficulty in accessing term borrowing when required.

Interest Rate Re-pricing Risk

The risk of adverse variation to budget, or unacceptable variability in interest costs from one year to the next, arising from movements in market interest rates.

Counterparty Credit Risk

The risk of financial loss arising from a counterparty's inability or unwillingness to make payments to Council as they fall due.

 

Short-term Liquidity Risk

5.2       To ensure that on-going cash payments can be met in an orderly manner.

5.2.1   Policy Limit - LGFA Liquidity Ratio* (must >110%)

  Within Limit

* Ratio is calculated as the sum of all three, divided by external debt
* Investments include Borrower Notes plus $29.5 million of realisable external CEF investments

5.3       Current cash balances (arising from the February 2016 insurance settlement) will be applied to on-going capital spending over the coming 1-2 years, and it is considered more efficient to simply invest them in term deposits rather than use them to temporarily repay fixed-rate debt.  The Policy Ratio will fall from its current high level, but will not threaten the 100 percent limit.

5.4       Planned Capital Release in future years will tend to replenish cash holdings.  Depending on the timing and extent of Capital Release and on-going capex, it may not be necessary to incur new debt (other than to re-finance existing hedged borrowings as they mature) until 2020.


 

Long-term Funding Risk

5.5       To ensure that debt maturities are spread so as to minimise re-financing risk in future years

5.5.1   Policy Limit (existing maturities only)

Within Limit

5.6       In practice, management considers funding risk in terms of both the re-financing of existing maturities and the need to incur new debt to meet negative operating flows, as shown in the chart below.

Notes:

·     Existing maturities (blue bars) now include the maturity of internal borrowing from Vbase and Tuam Ltd ($157 million, mostly maturing in 2016-2018).  The chart excludes $100 million of external debt maturing in 2027.

·     Expected new borrowings (green bars) total $395 million, between 2020 and 2025.

 


Interest Rate Re-pricing Risk

5.7       To ensure that debt maturities are spread so as to minimise re-financing risk in future years.

5.7.1   Policy Limits (chart)  Breach

Notes:

·     Projected Net Debt for treasury risk management purposes has been updated to reflect the debt path in the draft 2016/17 Plan:

§ The Blue line shows Net Debt including all cash balances.

§ The Green line ignores current cash holdings (other than an assumed $30 million held throughout the period for working capital purposes).

§ The Red bars show how much debt is at a contractually fixed rate as at the end of each financial year.

·     Policy Limits (not shown on the chart) are breached each year up to and including 2021, and there is outright over-hedging (i.e. hedging in excess of borrowing) in 2018 and 2019.

§ This breach has been caused by the significant fall in projected debt (the level of hedging has not been changed since December 2014).

§ This Policy breach was ratified at the 10 March 2016 Council meeting, and staff are discussing the most appropriate way to manage the situation with PwC (Council's external Treasury Advisor) - in particular, to eliminate the over-hedging in 2018 and 2019.

 

 

 

 

 

 

 

 

 

Credit Risk

5.8       To minimise risk of loss due to a counterparty's inability or unwillingness to pay liabilities to Council.

Within Limit

Notes:

·     Derivative exposures are calculated as the current market value plus a buffer to reflect potential future value movements.  If the total exposure for any bank is negative (i.e. Council would pay the bank upon termination), then a zero exposure is recorded.

·     Additional credit limits were approved at the 10 March Council meeting, and are highlighted orange in the table.  These higher limits simplify the efficient investment of current cash balances, and will revert to normal limits from 1 July 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.   Debtors Report

Debtors' balance at 31 March 2016

6.1       At 31 March 2016, the debtors' balance stood at $24.9 million, $3.6 million higher than reported in December 2015.

6.1.1   The increase is due to General Debtors which increased by $3.5 million from $17.0 million as at 30 December to $20.5 million at 31 March 2016. This increase is principally due to an increase in the amount owing by Vbase Limited for the Town Hall repair from $3.2 million to $7.4 million, of which $6.5 million has since been paid.  Other categories with large movements include Building Consents debt which increased from $2.3 million to $2.6 million and LIM debt which increased from $0.2 million to $0.3 million.  These increases were partially offset by decreases in Dog Infringement debt from $0.3 million to $0.2 million and Resource Consent debt from $1.2 million to $1.0 million.

6.2       The significant debtors within the General Debtors balance of $20.5 million include The Department of the Prime Minister and Cabinet, and Vbase.  These two debtors account for approximately $17.5 million of the balance and have since been paid.

 

Overdue Debtors

6.3       Overdue debtors, (older than 92 days), have increased by $0.128 million to $0.761 million (3.05 per cent of total debt compared to 2.98 per cent reported in December 2015). This is covered in more detail in the Overdue Debtors report in the PX Agenda.

Debts Written off

6.4       Debts of $486,780 have been written-off for the year to 31 March 2016, compared to $188,112 for year to 31 March 2015.  The detail is below:

6.5       The significant increase in debt written off compared to the same period in 2015 relates to the $366,624 owed by companies that have been placed into liquidation or receivership.  These debts were written off following Council approval with the majority being provided for at 30 June 2015.  A summary report is provided in Attachment A.

6.5.1   The companies who have had debts written off due to liquidation or receivership are:

Highfield Park Limited

$111,340.44

Global Developments (NZ) Limited

$190,706.72

Williams & Co Limited

$7,867.45

Christchurch Yarns NZ Limited

$20,818.04

Containers Direct

$255.00

Sanders Limited

$16.00

Bruce Buchanan Limited

$1,171.81

Serra Natural Foods Limited

$10,528.12

Global Developments 511 Madras Street Limited

$22,938.00

TJ & JBG Limited

$186.88

PBC Developments Limited

$795.50

 

6.6       The main reason for the write-off of residential rents continues to be that debtors cannot be located. 

6.7       The library debt written off comprises a large number of relatively small amounts where debtors cannot be located and/or the individual debt is considered to be uneconomical to collect.  This reflects the cost associated with the Libraries current lending policy which allows customers to borrow up to 30 books at a time.  A review has been requested through Internal Audit to ensure that proper process is being followed.

 

 

Attachments

No.

Title

Page

a  

Debt Written Off - Summary - 31 March 2016

94

 

 

Confirmation of Statutory Compliance

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i)  sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

Signatories

Authors

Steve Ballard

Patricia Christie

Manager Funds & Financial Policy

Manager External Reporting & Governance

Approved By

Diane Brandish

Peter Gudsell

Head of Financial Management

General Manager Finance & Commercial

  


Strategy and Finance Committee

19 May 2016

 


Strategy and Finance Committee

19 May 2016

 

 

11.    Performance report for the nine months to 31 March 2016

Reference:

16/287684

Contact:

Diane Brandish

Diane.Brandish@ccc.govt.nz

941 8454

 

 

1.   Purpose and Origin of Report

Purpose of Report

The purpose of this report is for the Strategy and Finance Committee to be updated on service delivery, financial and capital works programme performance results for the nine months to 31 March 2016.

 

2.   Staff Recommendations

1.         That the Strategy and Finance Committee recommend that Council receive this report.

 

 

3.   Key Points

3.1       Year to date operational spend and revenues continue to perform better than budget.  The forecast post carry forward operational result is $27 million better than budget due to a combination of cost savings and higher revenues.

3.2       Capital expenditure remains well behind budget with only 37 percent of the capital programme delivered in the first nine months.  A further 24 percent is forecast to be delivered in the remaining three months of the year bringing total forecast spend to 61 percent of budget, with $314 million of work carried forward. This is largely already incorporated in the draft 2016/17 Annual Plan.

 

4.   Context/Background

Levels of Service

4.1       The most recent data on Levels of Service (as at 31 March), shows 86.5 percent of Levels of Service on target, above the 85 percent set as the Christchurch City Council objective.

 

4.2       Attachment A lists details of those Levels of Service where Council’s target will not be achieved, or which are compromised and require intervention.

 

Financial Performance Summary

 

Year to Date Results

Forecast Year End Results

After Carry Forwards

$m

Actual

Plan

Var

Forecast

Plan

Var

Carry Fwd

Result

Operational

 

 

 

 

 

Expenditure

384.2

418.0

33.8

560.2

616.5

56.3

29.0

27.3

Revenues and Funding

-380.1

-372.7

7.4

-517.0

-519.5

-2.5

-2.7

0.2

Borrowing required

4.1

45.3

41.2

43.2

97.0

53.8

26.3

27.5

 

 

 

 

 

 

Capital

 

 

 

 

 

Expenditure

447.1

773.7

326.6

745.8

1215.1

469.2

313.7

155.5

Revenues and Funding

-463.4

-553.2

-89.8

-787.0

-843.1

-56.0

-81.5

25.5

Borrowing required

-16.3

220.5

236.8

-41.2

372.0

413.2

232.2

181.0

 

 

 

 

 

Total borrowing required

-12.2

265.8

278.0

2.0

469.0

467.0

258.5

208.5

 

 

 

 

 

 

 

 

 

 

4.3       Key commentary on operational and capital results is given below. This is followed by a section for each area giving further details. A view of the Council’s financial results by activity is provided in Attachment B.

4.4       Operational expenditure is significantly lower than budget year to date and is forecast to remain so.  This is largely due to a forecast under-spend on earthquake related projects including social housing, and lower debt servicing costs, partially offset by $5.2 million of unbudgeted costs for the District Plan Review.  Clause 4.9 to 4.10 provides details. 

4.5       Operational revenues and funding are higher than budget year to date due to higher operating revenues, interest, dividends, and rates.  The forecast deterioration against budget is due to lower funding from the social housing account in line with the reduced expenditure above.  Clause 4.11 to 4.14 provides details.

4.6       Capital expenditure is below budget year to date due to delays in project delivery and is forecast to be $469 million below budget at year end.  Of the work forecast, only 60 percent has been delivered in the first nine months of the year and there is a significant risk of the forecast not being delivered.  This is being monitored to identify any impact on the 2016/17 Amended Long Term Plan (LTP).  Carry forwards of $314 million have been signalled as required to complete work not forecast to be delivered this year. Clause 4.17 to 4.28 provides details. 

4.7       Capital revenues and funding remain lower than budget due to the reduction in Cost Share Agreement funding relating to the Crown's (CERA) contribution and the retiming of CERA's remaining contribution to align with forecast Stronger Christchurch Infrastructure Rebuild Team (SCIRT) delivery. 

4.8       Forecast borrowing required in 2015/16 has reduced significantly again this quarter as a result of lower operational and capital expenditure forecast and the higher insurance settlement.  A total requirement of $2 million is forecast compared with a planned $469 million, with $259 million being deferred to later years to fund forecast carry forwards.

 

 

Operational

 

 

Year to Date Results

Forecast Year End Results

After Carry Forwards

$m

Actual

Plan

Var

Forecast

Plan

Var

C/F

Result

Personnel costs

131.0

132.5

1.5

176.1

176.6

0.5

-

0.5

Less recharged to capital

-22.0

-27.3

-5.3

-35.0

-35.6

-0.6

-

-0.6

Grants and levies

27.9

31.0

3.1

37.8

38.2

0.4

0.3

0.1

Operating costs

120.4

130.1

9.7

197.4

229.7

32.3

26.8

5.5

Maintenance costs

72.0

92.4

20.4

109.5

127.2

17.7

1.9

15.8

Debt servicing

54.9

59.3

4.4

74.4

80.4

6.0

-

6.0

Expenditure

384.2

418.0

33.8

560.2

616.5

56.3

29.0

27.3

 

 

 

 

 

Operating revenue

-122.5

-112.8

9.7

-158.3

-152.2

6.1

-

6.1

Interest and dividends

-60.6

-53.4

7.2

-93.5

-88.7

4.8

-

4.8

Rates income

-295.8

-292.6

3.2

-394.2

-390.0

4.2

-

4.2

Revenue

-478.9

-458.8

20.1

-646.0

-630.9

15.1

-

15.1

 

 

 

 

 

 

Net Cost

-94.7

-40.8

53.9

-85.8

-14.4

71.4

29.0

42.4

Funding Sources

 

 

 

 

Tsfrs from Special Funds

-0.9

-13.6

-12.7

-4.0

-21.6

-17.6

-2.7

-14.9

Less Rates required for capex and debt principal

99.7

99.7

-

133.0

133.0

-

-

-

Funds not available to fund Opex net cost

98.8

86.1

-12.7

129.0

111.4

-17.6

-2.7

-14.9

 

 

 

 

 

 

Borrowing required

4.1

45.3

41.2

43.2

97.0

53.8

26.3

27.5

 

4.9       Operating expenditure for Council activities is $34 million lower than budget, year to date due to a combination of delayed and cancelled earthquake response projects, lower debt servicing costs, and the delayed opening of the Art Gallery and Halswell Library.  The under-spend is forecast to increase to $56 million by year end as the rockfall remediation budget of $22 million is not expected to be required until 2016/17.

4.10    The forecast $27 million result after carry forwards is mainly due to:

4.10.1    Social housing earthquake related works which will not be carried forward due to a reprioritisation of expenditure prior to establishment of the Community Housing Provider ($15 million).

4.10.2    Lower debt servicing costs due to a lower opening debt position and lower spend ($6 million).

4.10.3    Cancellation of the tidal barrier feasibility study.

4.10.4    Savings on salaries and wages as a result of the Fit for Future restructure.

4.10.5    Delayed opening of the Art Gallery and Halswell Library.

4.10.6    The above are partly offset by unbudgeted District Plan Review hearing costs ($5.2 million).

4.11    Operating revenues for Council activities are $10 million higher than budget year to date because of higher building control, car parking, resource consent, NZTA subsidy and trade waste revenues.  The timing of the earthquake insurance claim settlement is also impacting on the year to date result.  These higher revenues are forecast to dip to $6 million by year end.  

4.12    Higher interest revenue is due to higher cash holdings than planned. 

4.13    Rates income is higher than budgeted due to earlier and higher capital growth than planned.

4.14    Special fund drawdowns are lower than budget due to reduced housing expenditure and because funding from the Capital Endowment Fund for the participatory democracy project will not be required until next year.

4.15    The residual net borrowing for operational costs is expected to be $54 million less than budget at year end, of which $26 million will be required in 2016/17 to fund carry forwards.

4.16    The net cost of individual activities is shown in Attachment B.

 

Capital Works Programme

 

 

Year to Date Results

Forecast

After Carry Forwards

$m

Actual

Plan

Var

Forecast

Plan

Var

C/F

Result

Three Waters

23.9

60.3

36.4

67.0

100.8

33.8

29.4

4.4

Roading and Transport

31.2

38.8

7.6

58.9

81.1

22.2

20.5

1.7

Strategic Land

14.4

10.1

-4.3

12.3

28.9

16.6

9.7

6.9

IM&CT

10.1

13.4

3.3

17.7

24.7

7.0

6.7

0.3

Other

24.4

40.0

15.6

47.3

56.2

8.9

6.5

2.4

Expenditure

104.0

162.6

58.6

203.2

291.7

88.5

72.8

15.7

 

 

 

 

Development Contributions

-22.1

-16.2

5.9

-29.9

-21.5

8.4

-

8.4

Less DC Rebates

0.7

9.2

8.5

12.3

12.3

-

-

-

NZTA Capital Subsidy

-12.6

-13.8

-1.1

-19.8

-24.3

-4.5

-4.5

-

Capital Grants/Revenue

-0.7

-0.6

0.0

-0.6

-0.6

-

-

-

Water Connection Fees

-1.6

-1.2

0.4

-1.7

-1.7

-

-

-

Misc Capital Revenues

-0.1

-0.0

0.1

-0.0

-0.0

-

-

-

Asset Sales

-8.6

-8.0

0.6

-9.5

-9.5

-

-

-

Capital Revenues

-45.0

-30.6

14.4

-49.2

-45.3

3.9

-4.4

8.4

 

 

 

 

 

 

 

 

 

Net Cost

59.0

132.0

73.0

154.0

246.4

92.4

68.3

24.1

 

 

 

 

Rates (Renewals / Landfill / Tsfrs)

-81.8

-81.8

-

-109.0

-109.0

-

-

-

Special Funds

1.7

-1.4

-3.1

-7.8

-4.2

3.6

-

3.6

Planned C/F funded next year

-

-0.3

-0.3

-65.0

-65.0

-

-

-

Available Funding Sources

-80.1

-83.5

-3.4

-181.8

-178.2

3.6

-

3.6

 

 

 

 

 

 

Borrowing Required

-21.1

48.5

69.6

-27.8

68.2

96.0

68.3

27.7

 

4.17    Capital works programme expenditure of $104 million for the first nine months of the year represents 64 percent of year to date budget, this has slipped from 70 percent in December.  The year to date variance is mainly due to timing delays around three waters, the Robert McDougall Building, South West leisure centre, purchase of sports grounds, and asset renewals and replacement for the Art Gallery, libraries and recreation and sport.   Forecast expenditure has reduced $34 million since December, however $99 million is still forecast to be spent in the remaining three months. 

4.18    The forecast $16 million permanent underspend after carry forwards is mainly due to the following:

4.18.1    Three waters - land purchases not required due to a pump station being re-sited at the Council's Harewood nursery ($0.9 million); waterways and wetlands land purchases not occurring due to a lack of suitable candidates ($0.6 million).  The remainder is spread over numerous small projects.

4.18.2    Roading and Transport - savings are currently forecast for the Wigram Magdala Link project, with construction expected to be three months ahead of schedule.

4.18.3    Strategic land acquisitions - a number of acquisitions are no longer required following cancellation of the related capital projects.

4.18.4    Other - $0.5 million of the capital governance pool is not forecast to be spent and vehicle fleet renewals are expected to be under-spent by $0.6 million as a result of the recent review.

4.19    Group of Activity level variance commentary is shown in Attachment B.

4.20    Financial results of significant (>$250,000) capital projects are shown in Attachment C.

4.21    Development contributions are higher than planned this year because new development has been faster than anticipated.  Current trends are expected to continue for the remainder of the year.  Central city rebates are behind budget year to date. 

4.22    NZTA capital subsidy is forecast to be $5 million less than budget reflecting delayed expenditure on the major cycle ways. This will be carried forward. 

4.23    Special funds drawdowns are currently behind budget due to the timing of the central city rebates mentioned above, but are forecast to be higher due to higher development contributions available. 

4.24    Borrowing for the Capital Programme is forecast to be $68 million less than budget, or $28 million less after funding carry forwards, due to the savings mentioned in paragraph 4.18 and higher development contributions.

 

Earthquake Rebuild

 

 

Year to Date Results

Forecast Year End Results

After Carry Forwards

$m

Actual

Plan

Var

Forecast

Plan

Var

C/F

Result

Infrastructure - SCIRT

258.3

403.0

144.7

373.0

515.4

142.4

23.1

119.3

Infrastructure - Non SCIRT

23.0

79.6

56.6

53.2

137.2

84.0

77.0

7.0

Transitional / Recovery Projects

11.6

20.6

9.0

27.0

45.0

18.0

20.1

-2.1

Facilities Rebuild

48.2

95.0

46.8

80.6

205.2

124.6

111.3

13.3

Rockfall and Improv Allowance

2.0

12.8

10.8

8.9

20.6

11.7

9.4

2.3

Expenditure

343.1

611.0

267.9

542.7

923.4

380.7

240.9

139.8

 

 

 

 

 

Earthquake Recoveries

-279.7

-378.8

-99.1

-309.5

-365.9

-56.4

-76.5

20.1

Capital Release

-60.0

-60.0

-

-200.0

-200.0

-

-

-

Land Sales

-

-

-

-45.2

-45.2

-

-

-

Capital Revenues

-339.7

-438.8

-99.1

-554.7

-611.1

-56.4

-76.5

20.1

 

 

 

 

 

 

Net Cost

3.4

172.2

168.8

-12.0

312.3

324.3

164.5

159.8

 

 

 

 

 

Housing Account

1.4

-0.3

-1.7

-1.3

-8.4

-7.1

-0.6

-6.5

Available Funding Sources

1.4

-0.3

-1.7

-1.3

-8.4

-7.1

-0.6

-6.5

 

 

 

 

 

 

Borrowing Required

4.8

171.9

167.1

-13.3

303.9

317.2

163.9

153.3

 


 

 

4.25    The majority of SCIRT expenditure year to date has been on wastewater ($120 million) and roading ($75 million) projects.  Cost Share Agreement funding issues earlier in the year impeded project delivery with only 64 percent of budgeted work delivered to date.  SCIRT are forecasting to deliver projects to a value of $373 million (72 percent of budget) by year end which will require an increase in monthly spend from $29 million to $38 million to achieve.

4.26    The majority of non SCIRT infrastructure expenditure has been on land drainage ($15 million). Forecast under-spend is mainly due to a delayed start to the Sumner Road project ($34 million) while funding was confirmed. Design works are expected to be completed this year, with construction commencing next year.  Also contributing is the New Brighton and Owles Terrace stormwater project which has been re-phased in the Amended Long Term Plan and the Peacocks Gallop geotech project which has been delayed awaiting confirmation of funding and completion of demolition work by CERA.

4.27    Year to date transitional/recovery projects expenditure has largely been on various projects in the areas of Road Network and Active Travel, in particular the Coastal Pathway ($3.4 million).  The forecast under-spend mainly relates to Council's contribution to the CERA Avon River project and the Fitzgerald Avenue twin bridges renewal which have both been retimed to next year.

4.28    Facilities year to date expenditure relates to Art Gallery repairs ($24 million) and various other Community and Housing facilities including Aranui Community Centre and Harman Courts.  The forecast under-spend mainly relates to:

4.28.1    Central city car parking facilities ($56 million) which are either awaiting practical completion or were delayed while build and ownership options were considered.

4.28.2    Social Housing ($13 million) due to a reprioritisation of expenditure prior to establishment of the Community Housing Provider.  This has resulted in repairs to closed units being carried out rather than construction of new units as it is less expensive but ensures that levels of service are maintained.

4.28.3    Community facilities ($20 million) due to several projects being delayed (including Shirley, Bishopdale and Sumner community centres).

4.28.4    Budget awaiting allocation to projects ($11 million).

4.29    Earthquake Recoveries are behind budget due to expenditure timing, particularly SCIRT projects.  NZTA subsidies of $90 million will be carried forward as a result of delays to SCIRT and the Sumner/Lyttelton corridor projects. CERA recoveries of $30 million will also be carried forward. These are partly offset by funds received earlier than planned due to the insurance settlement.

4.30    Transfers from the housing account are less than budget due to the reduced expenditure mentioned above.

4.31    Rebuild borrowing required this year is forecast to be $317 million less than budget due to delayed projects along with settlement of the insurance claim at more than budget. $164 million will be required to fund carry forwards.

4.32    Details of life to date earthquake related costs and recoveries are shown in Attachment B.

 

Special Funds

4.33    The current and forecast movements and balance of the Housing Account and Earthquake Mayoral Relief Fund are shown in Attachment D.

 

 

 

 

Attachments

No.

Title

Page

a  

Level of Service Exception Report as at 31 March 2016

102

b  

Financial Performance as at 31 March 2016

117

c  

Significant Capital Works Projects (>250,000k) as at 31 March 2016

125

d  

Housing Development Fund and Christchurch Earthquake Mayoral

130

 

 

Confirmation of Statutory Compliance

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i)  sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

Signatories

Authors

Bruce Moher

Diane Brandish

Catherine Bew

Planning & Reporting Manager

Head of Financial Management

Reporting Accountant

Approved By

Diane Brandish

Peter Gudsell

Head of Financial Management

General Manager Finance & Commercial

  


Strategy and Finance Committee

19 May 2016

 

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19 May 2016

 

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19 May 2016

 

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19 May 2016

 

 

12     Earthquake Claims Update as at 31 March 2016

Reference:

16/422965

Contact:

Adrian Seagar

Adrian.seagar@ccc.govt.nz

941 6345

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is to provide a final update to the Strategy and Finance Committee on insurance matters relating to the 2010/2011 earthquakes. It provides details on the status of these matters as at 31 March 2016.

 

2.   Staff Recommendations

That the Strategy and Finance Committee recommend to the Council:

1.            That the information in this report be received.

2.            That this report be the final quarterly Earthquake Claims Update report to Council.

 

 

3.   Key Points

3.1       There are three attachments to this report which provide brief notes of explanation on the following matters:

3.1.1   Recoveries Summary Status (Attachment A) - information on costs incurred and recoveries accrued and received as at 31 March 2016.

3.1.2   Earthquake Claim Progress Summary (Attachment B) - financial information for each of the main claim heads as 31 March 2016.

3.1.3   Building and Infrastructure Improvement Allowance (Attachment C) - shows the allocations made from this Allowance and the current balance available as at 31 March 2016.

3.2       Many of the Earthquake claims issues are now resolved, particularly with the global insurance settlement. It is therefore intended that this be the final quarterly Earthquake Claims update to Council. The residual Improvement Allowance balance will be reported to Council via the Quarterly Performance Report.

 

Claim Status

3.3       Insurance claims - Council received from LAPP and its reinsurers the outstanding balance of the amount agreed in full and final settlement in December 2015.

3.4       The Crown - Canterbury Earthquake Recovery Authority (CERA) paid Stronger Christchurch Infrastructure Rebuild Team (SCIRT) $22.2 million during the quarter for their share of rebuild work.

 

Building and Infrastructure Improvement Allowance Borrowing

3.5       The current available balance of the Improvement Allowance is $1,118,796.  The latest Council allocation was $1,966,277 for ground treatment work at Queen Elizabeth II Park on 14 December.

3.6       The Council had previously underwritten insurance receivables for the Mount Pleasant Community Centre and Christchurch Music Centre from the allowance ahead of receiving payment from insurers.  As the outstanding insurance balance was received in February these underwrites have been returned to the allowance.

3.7       The Council also underwrote $985,000 for grass sports pitches for last year's FIFA tournament in the expectation that this amount would be fully reimbursed.  $150,000 has been previously returned to the allowance, and in March $294,594 ($200,000 USD) was received from FIFA which was returned to the allowance. No further receipts are expected.

3.8       The Council allocated $48.7 million from the allowance to fund a number of Community Facilities Rebuild projects ahead of insurance settlements.  A Council decision was made during the 2016-2017 Draft Annual Plan process not to return the insurance proceeds for these projects to the allowance, given that the Council had reached a global settlement with its insurers and the required rebuilding work has been scheduled in the capital works programme.

3.9       A full list of allocations made from the allowance is provided in Attachment C to this report.

 

 

 

 

Attachments

No.

Title

Page

a  

Recoveries status summary as at 31 March 2016

133

b  

Insurance programme main claim head summary as at 31 March 2016

134

c  

Building and infrastructure improvement allowance as at 31 March 2016

135

 

 

Confirmation of Statutory Compliance

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i)    sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii)   adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

Signatories

Author

Adrian Seagar

Manager Earthquake Claims

Approved By

Diane Brandish

Peter Gudsell

Head of Financial Management

General Manager Finance & Commercial

  


Strategy and Finance Committee

19 May 2016

 

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Strategy and Finance Committee

19 May 2016

 

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Strategy and Finance Committee

19 May 2016

 

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19 May 2016

 

 

13.    Report of the Chairperson of the Capital Endowment Fund Working Group

Reference:

16/488876

Contact:

Paul Lonsdale

Paul.Lonsdale@ccc.govt.nz

941 8999

 

 

1.   Purpose of Report

1.1       The Capital Endowment Fund Working Group held a meeting on 29 April 2016 and is circulating the report of the meeting to the Strategy and Finance Committee for their information.

 

2.   Chair's Recommendations

That the Strategy and Finance Committee:

1.         Receive the information in the report.

 

 

Attachments

No.

Title

Page

a  

Capital Endowment Fund Working Group - 29 April 2016 - Meeting Notes

138

 

 

Signatories

Author

Paul  Lonsdale

Councillor

Approved By

Paul  Lonsdale

Councillor

  


Strategy and Finance Committee

19 May 2016

 

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Strategy and Finance Committee

19 May 2016

 

 

14.  Resolution to Exclude the Public

Section 48, Local Government Official Information and Meetings Act 1987.

 

I move that the public be excluded from the following parts of the proceedings of this meeting, namely items listed overleaf.

 

Reason for passing this resolution: good reason to withhold exists under section 7.

Specific grounds under section 48(1) for the passing of this resolution: Section 48(1)(a)

 

Note

 

Section 48(4) of the Local Government Official Information and Meetings Act 1987 provides as follows:

 

“(4)     Every resolution to exclude the public shall be put at a time when the meeting is open to the public, and the text of that resolution (or copies thereof):

 

             (a)       Shall be available to any member of the public who is present; and

             (b)       Shall form part of the minutes of the local authority.”

 

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Section 6 or Section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public are as follows:


Strategy and Finance Committee

19 May 2016

 

 

ITEM NO.

GENERAL SUBJECT OF EACH MATTER TO BE CONSIDERED

SECTION

SUBCLAUSE AND REASON UNDER THE ACT

PLAIN ENGLISH REASON

WHEN REPORTS CAN BE RELEASED

15

Public Excluded Strategy and Finance Committee Minutes - 21 April 2016

 

 

Refer to the previous public excluded reason in the agendas for these meetings.

 

16

Overdue Debtors over $20,000 at 31 March 2016

s7(2)(a)

Protection of Privacy of Natural Persons

Overdue debtors should remain confidential to assist in the collection of these debts.

When legal proceedings are commenced.