Finance and Performance Committee

Agenda

 

 

Notice of Meeting:

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

 

Date:                                     Wednesday 5 April 2017

Time:                                    9am

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

 

 

Membership

Chairperson

Deputy Chairperson

Members

Councillor Raf Manji

Deputy Mayor Andrew Turner

Councillor Vicki Buck

Councillor Jimmy Chen

Mayor Lianne Dalziel

Councillor Mike Davidson

Councillor Anne Galloway

Councillor Jamie Gough

Councillor Yani Johanson

Councillor Deon Swiggs

 

 

31 March 2017

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

Aidan Kimberley

Committee and Hearings Advisor

941 8185

aidan.kimberley@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:
https://www.ccc.govt.nz/the-council/meetings-agendas-and-minutes/

 


Finance and Performance Committee

05 April 2017

 

Terms of Reference Finance and Performance Committee

 

 

Chair

Councillor Manji

Membership

Deputy Mayor Turner (Deputy Chair), Mayor Dalziel, Councillor Buck, Councillor Chen, Councillor Davidson, Councillor Galloway, Councillor Gough, Councillor Johanson, Councillor Swiggs and an independent member to be appointed by Council

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

Monthly

Reports To

Council

 

 

Responsibilities

The focus of the Finance & Performance Committee is the financial and non-financial performance of the Council and its subsidiaries.

 

The Finance & Performance Committee:

·         Seeks to enhance the Council’s accountability with the community in relation to the Council’s financial and non-financial performance

·         Promotes active citizenship, community participation and community partnerships, including participatory budgeting

·         Works in partnerships with key agencies, groups and organisations

 

The Finance & Performance Committee considers and reports to Council on issues and activites relating to:

·         The preparation and adoption of the draft and final Annual Plan and Long Term Plan (based on the strategic direction of the Strategic Capability Committee)

·         Performance  against the  Long Term Plan (LTP) and  Annual Plan (AP), including financial performance and non-financial performance including:

medium to long term asset management

treasury investment and borrowings

organisational performance and capability.

·         Insurance matters including to:

consider legal advice from the Council’s legal and other advisers,

approve further actions relating to the issues,

make recommendations to Council concerning formal actions.

·         Performance of a number of subsidiaries including Council Controlled Organisations (CCO). 

·         Recommendations   from   Council’s   Subcommittees,   Community Boards, the public, stakeholders and providers in relation to finance and performance.

·         Overseeing the development to the Annual Report for consideration by the Council

·         Development of the financial policy of the Council

·         Development of a Genuine Progress Indicator

 

 


Finance and Performance Committee

05 April 2017

 

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

STAFF REPORTS

C       6.       Levels of Service - Verbal Update

A       7.       Building and Infrastructure Improvement Allowance................................................. 9

A       8.       Council Controlled Organisations - Financial Statements for the six months to 31 December 2016.............................................................................................................. 15

A       9.       Canterbury Economic Development Company Limited Winding Up..................... 157

A       10.     Development Christchurch Limited Update Report April 2017............................... 163

C       11.     Resolution to Exclude the Public............................................................................... 165  

 

 


Finance and Performance Committee

05 April 2017

 

 

1.   Apologies

An apology was received from Mayor Dalziel.

2.   Declarations of Interest

Members are reminded of the need to be vigilant and 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 Finance and Performance Committee meeting held on Wednesday, 1 March 2017  be confirmed (refer page 5).

4.   Deputations by Appointment

There were no deputations by appointment at the time the agenda was prepared. 

5.   Presentation of Petitions

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

6.   Levels of Service - Verbal Update

Council staff will provide a verbal update on Levels of Service, in response to the Committee’s resolution at its meeting on 1 March 2017.


Finance and Performance Committee

05 April 2017

 

 

 

Finance and Performance Committee

Open Minutes

 

 

Date:                                     Wednesday 1 March 2017

Time:                                    9am

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

 

 

Present

Deputy Chairperson

Members

Deputy Mayor Andrew Turner

Mayor Lianne Dalziel

Councillor Vicki Buck

Councillor Jimmy Chen

Councillor Mike Davidson

Councillor Anne Galloway

Councillor Jamie Gough

Councillor Yani Johanson

Councillor Deon Swiggs

 

 

1 March 2017

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

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 FPCM/2017/00001

It was resolved on the motion of Deputy Mayor Turner, seconded by Councillor Gough that the apology for absence from Councillor Manji and the apology for early departure from Councillor Chen be accepted.

Deputy Mayor  Turner/Councillor Gough                                                                                                          Carried

 

 

2.   Declarations of Interest

Part B

There were no declarations of interest recorded.

 

3.   Confirmation of Previous Minutes

Part C

There were no previous minutes to confirm.

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:  Councillor Buck arrived at 9.05am.

 

6.   Corporate Finance Report for the period ending 31 December 2016

 

Committee Comment

The Committee asked that staff prepare a report providing information on the number of library books able to be borrowed and the library debt write-off.

 

Staff Recommendations

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

 

Committee Decided FPCM/2017/00002

Part A

The Finance and Performance Committee recommends to the Council that it receives the report.

 

Deputy Mayor  Turner/Councillor Chen                                                                                                             Carried

 

7.   Performance report for the six months to 31 December 2016

 

Committee Comment

The Committee considered the report and asked that a workshop be held around the reporting of the Levels of Service performance.

 

Staff Recommendations

That the Finance and Performance Committee recommend that the Council:

1.         Receive the information in the report.

 

Committee Resolved FPCM/2017/00003

Part C

The Committee resolved to:

1.       Receive the information in the report.

 

2.         Request an urgent report to the Finance and Performance Committee’s 5 April 2017 meeting on the maintenance  on the roads, footpaths, parks and greenspace and what can be done to address the failing Levels of Service.

 

3.         Request a report regarding the Earthquake Improvement Allowance including recommendations on how the balance can be utilised.

Deputy Mayor  Turner/Councillor Chen                                                                                                             Carried

 

Committee Decided FPCM/2017/00004

Part A

The Finance and Performance Committee recommends that the Council:

1.         Receive the information in the report.

 

Deputy Mayor  Turner/Councillor Chen                                                                                                             Carried

 

 

 

8     Resolution to Exclude the Public

 

Committee Resolved FPCM/2017/00005

Part C

The Committee resolved:

1.   That Paul Munro of Christchurch City Holdings Limited remain after the public have been excluded for Item 9 of the public excluded agenda as he has knowledge that is relevant to that item and will assist the Committee.

2.    That at 10.01am  the resolution to exclude the public set out on pages 45 to 46 of the agenda be         adopted.

Deputy Mayor  Turner/Councillor Davidson                                                                                                       Carried

 

The public were re-admitted to the meeting at 10.49am.

 

   

Meeting concluded at 10.49am.

 

CONFIRMED THIS 5TH DAY OF APRIL 2017

 

Deputy Mayor Andrew Turner

Chairperson

   


Finance and Performance Committee

05 April 2017

 

 

7.        Building and Infrastructure Improvement Allowance

Reference:

17/227474

Contact:

Bruce Moher

Bruce.moher@ccc.govt.nz

941-8497

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee to recommend to Council how the balance of the Building and Infrastructure Allowance should be utilised and a process for doing so.

Origin of Report

1.2       This report is generated at the request of the Finance and Performance Committee to be presented at the April meeting.

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 applying the Council’s Significance and Engagement Policy, taking into consideration the possible costs/ risks to the Council, ratepayers and wider community of carrying out the decision, whether the impact of the decision can be easily reversed and the number of people affected and /or with an interest in the matter.

2.1.2   Given the low significance of the decision, community engagement in relation to this decision is not considered appropriate.

 

 

3.   Staff Recommendations 

That the Finance and Performance Committee recommends that the Council resolves to:

1.         Allocate the $1.1m balance of the Betterment Fund towards the Port Hills recovery programme  including water protection, parks restoration and public safety elements.

2.         Close the fund once the above allocation has occurred.

 

4.   Key Points

4.1       This report does support the Council's Long Term Plan (2015 - 2025).

4.2       The following feasible options have been considered:

·     Option 1 – Allocate the balance of the Building and Infrastructure Improvement Allowance towards the capital work identified in the Port Hills Recovery Programme (preferred option)

·     Option 2 – Allocate the balance of the Building and Infrastructure Improvement Allowance to capital improvement projects

·     Option 3-Cancel the Building and Infrastructure Improvement Allowance

4.3       Option Summary - Advantages and Disadvantages (Preferred Option – Option 1)

4.3.1   The advantages of Option 1 are that some of the urgent work required to protect the Port Hills can be funded from within an existing but currently unallocated budget without putting pressure on other parts of the capital programme.

4.3.2   The main disadvantages of Option 1 is that the opportunity to apply the funds to betterment opportunities, the original reason for which the fund was established, is lost.

4.4       Option Summary Advantages and Disadvantages (Alternative Option 2)

4.4.1   The advantages of option 2 are that additional (minor) improvement projects can be undertaken within the existing planned budget. Because the amount available is small by Council capital standards it is an opportunity to involve the Community Boards in identifying enhancements to existing capital projects.

4.4.2   There are no major disadvantages, other than the administrative task of co-ordinating the process.

4.5       Option Summary Advantages and Disadvantages (Alternative Option 3)

4.5.1   The advantages of this option is that borrowing will decrease which will have a marginal effect on rates in the Annual Plan 2017/18.

4.5.2   The disadvantage of this option is that the chance is lost to allocate planned funds to betterment opportunities.

 

 

5.   Context/Background

5.1       In late 2011 Council established a building improvement allowance of $150 million. This allowance was to be funded by borrowing. Its primary purpose was initially to provide for building or infrastructure improvements that would not be covered by insurance proceeds. This was later extended to also cover timing issues where the repair of a building was desired to get under way before insurance was settled. All allocations from the allowance were required to be approved by Council.

5.2       Over the years the borrowing provision has been referred to as the betterment fund, improvement allowance, and building and infrastructure improvement allowance.

5.3       The quantum was agreed to assist the early rebuild of the City without unduly exposing Council to financial commitments it couldn’t support at a time when funding and insurance matters were uncertain early in the post-earthquake period.

5.4       During adoption of the 2012/13 Annual Plan Council allocated $79.3 million to major projects, primarily for the Town Hall repair, and increased the allowance by $25 million.

5.5       The Council subsequently increased the allowance again as part of the 2013/16 Three Year Plan by $50 million to bring the total allowance to $225 million.

5.6       The allowance has been allocated per attachment A. Some recoveries were achieved.

5.7       The last allocation was in December 2015 for QEII land remediation.

5.8       The allowance largely became redundant following the global insurance settlement. Council now has a much clearer view of its financial position and reflected this with its financial strategy as detailed in the 2015/25 Amended Long Term Plan.

5.9       The fund has a balance of $1,118,796 but this is not supported by a cash balance. If the decision is made to allocate the balance, the funds will be borrowed in accordance with the original resolution.

5.10    In March 2016 the City experienced a major fire event on the Port Hills. The consequence of the fire means that there is significant damage to the Port Hills and the five catchment areas. The recovery will require significant resource from CCC in areas such as sediment control to avoid damage to waterways and to avoid potential flooding.  Repair of horizontal infrastructure including roads and water systems to properties, Regional Park fencing and water systems. Significant replanting will be required. There are safety issues such as the removal of trees and safety areas on our walking tracks and public parks, rock fall management and geotech management.

 

 

Attachments

No.

Title

Page

a

Building and Infrastructure Improvement Allowance

12

 

 

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 - Manager Planning & Reporting Team

Diane Brandish - Head of Financial Management

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

05 April 2017

 

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Finance and Performance Committee

05 April 2017

 

 

8.        Council Controlled Organisations - Financial Statements for the six months to 31 December 2016

Reference:

17/277456

Contact:

Patricia Christie

Patricia.chrisitie@ccc.govt.nz

941 8113

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       This report presents the financial statements for the six months to 31 December 2016 for Christchurch City Holdings Limited (CCHL), Vbase Limited (Vbase), Civic Building Limited (CBL), Tuam Limited (Tuam), Riccarton Bush Trust (RBT), Christchurch Agency for Energy Trust (CAfE), The World Buskers' Festival Trust (WBFT), Rod Donald Banks Peninsula Trust (RDBPT), and New Zealand Local Government Funding Agency Limited (NZLGFA) which are Council Controlled Organisations (CCOs).

Origin of Report

1.2       The origin of this report is the Local Government Act 2002, which requires that the financial statements of CCOs be provided to the shareholder/stakeholder within two months of the end of the first half of the financial year (28 February).

2.   Significance

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

2.1.1   The level of significance was determined by applying the Council’s Significance and Engagement Policy, taking into consideration (amongst other things) the possible costs/risks to the Council, ratepayer and wider community of this decision.

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

 

3.   Staff Recommendations

That the Finance and Performance Committee recommends that the Council:

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

a.         Christchurch City Holdings Limited;

b.         Vbase Limited;

c.         Civic Building Limited;

d.         Tuam Limited;

e.         Riccarton Bush Trust;

f.          Christchurch Agency for Energy Trust;

g.         World Buskers Festival Trust;

h.         Rod Donald Banks Peninsula Trust; and

i.          New Zealand Local Government Funding Agency Limited.

 

 

4.   Key Points

4.1       The following financial statements for the six months to 31 December 2016 are attached for information:

·     CCHL (Attachment A);

·     Vbase (Attachment B);

·     CBL (Attachment C);

·     Tuam (Attachment D);

·     RBT (Attachment E);

·     CAfE (Attachment F);

·     WBFT (Attachment G);

·     RDBPT (Attachment H); and

·     LGFA (Attachment I).

4.2       The CCOs are required under section 66 of the Local Government Act 2002 to submit half year reports within two months of the end of the first half of the financial year.

4.3       A half year report must contain the information required by each organisation's Statement of Intent (SOI). For the above organisations this includes financial statements prepared in accordance with New Zealand accounting standards and generally accepted accounting policies.

 

 

5.   Comment

Christchurch City Holdings Limited

5.1       CCHL is 100 percent owned by Council and operates as the investment arm of the Council holding the full or majority shareholding in eight operating companies.

5.2       The CCHL group recorded a profit of $48.7 million for the six months ended 31 December 2016, compared to $45.7 million for the same period last year. Both revenue and expenses were down from last year resulting in a similar profit before income tax for the two periods.

5.3       Within the CCHL group compared to the equivalent period last year, Orion’s profit was down $5.4 million mainly due to the change in accounting treatment for capital contributions, CIAL’s profit was up $2.1 million reflecting strong growth in passenger number and additional aircraft capacity, and LPC’s profit was up $1.7 million as a result of higher container volumes in part due to the Kaikoura Earthquakes. City Care, Red Bus and Eco Central all had slight improvements to their operating results for the six months period.

5.4       In November 2016 Red Bus acquired the tourism company, Aaron Travel. Red Bus’s trading result has improved from this acquisition.

5.5       CCHL parent, recorded a net profit of $40.2 million for the six months to 31 December 2016 compared to a full year target of $58.2 million. CCHL is on track of meeting all its financial and non-financial performance targets for the 2016/17 financial year.

Vbase Limited

5.6       Vbase is 100 percent owned by the Council and owns and manages Horncastle Arena, Lancaster Park (formerly AMI Stadium), and the Christchurch Town Hall. Vbase also manages the conference facilities at the Wigram Airforce Museum, AMI Stadium (Addington) for the Stadium Trust, the ilex café and function room along with the Duck Duck kiosk in the Botanic Gardens and the Pavilion at Hagley Oval.

5.7       Vbase recorded an operating profit (before interest expense, depreciation and tax) of $0.84 million compared with an operating deficit of $0.92 million for the six months to December 2015. Its earnings before interest, tax, depreciation and amortisation (EBITDA) was a loss of $0.68 million, which excluded interest revenue of $1.5 million. This was $0.26 million better than planned.

5.8       The increased profit was the result of good quarter one results due to strong Horncastle Arena concert revenue. The strong performance did not continue into the second quarter with EBITDA for the three months to 31 December 2016 being a loss of $0.59 million, $0.20 million worse than planned. Bookings for large events for the second half of the year are soft and the forecast to June is an EBITDA loss of $2.5 million. This is $0.2 million better than the 2016 and $0.4 million worse than planned.

5.9       Vbase is on track to achieve or has achieved all but one of its performance targets for the year. The one target that it is unlikely to achieve is to survey a minimum of 500 retail hospitality guests (ilex café, Lot 55 or Tuck Shop at Air Force Museum). For the first six months of the year only 81 surveys had been completed with an average satisfaction of 100%.

Civic Building Limited

5.10    CBL is 100 percent owned by the Council and is a joint partner with Ngai Tahu Property in the Christchurch Civic Building Joint Venture which owns and manages the civic building (Hereford Street).

5.11    CBL made a loss of $0.67 million before tax compared to a before tax loss of $0.63 million for the six months to 31 December 2015. The increase in loss was largely due to a reduction in property expenses recovered in the period.

5.12    The statement of financial position shows that CBL is in a net liability position. This is a result of the accounting treatment of the lease of the civic building and does not indicate that it is unable to meet its obligations as they fall due.

5.13    CBL's net deficit before tax was more than its SOI targets by $0.04 million for the six months to 31 December 2016. This was due to lower than expected property expense recoveries. CBL's capital structure and operational targets are in line with the SOI targets.

Tuam Limited

5.14    Tuam is 100 percent owned by the Council and the primary objective of the Company was to own and manage the Council's former civic building. The land and buildings were sold to the CCDU in 2013. The final sales proceeds and insurance claims were fully settled in the 2015/16 financial year.

5.15    Tuam made a profit before tax of $0.07 million. A profit of $26.66 million was reported for the six months to 31 December 2015 as a result of the settlement of Tuam’s insurance claims.  Ignoring the insurance settlement, total revenue was $7,000 lower than last year.

5.16    Tuam's non-financial performance measures for the six months to 31 December 2016, have been met and are expected to be met for the full year. On receipt of the insurance settlement, Tuam distributed $46 million funds to its shareholder in line with its target to distribute capital to Council.  The future of Tuam is currently being considered and a report will be provided to Council before 30 June 2017.

Riccarton Bush Trust

5.17    RBT was formed by an Act of Parliament in 1914. The Trust administers Riccarton House and its 5.41 hectares of grounds together with a 6.373 hectare native bush remnant gifted by the Deans family to the people of Canterbury.

5.18    For the six months ended 31 December 2016 the Trust had a deficit of $0.09 million compared to a profit of $0.17 million for the six months to 31 December 2015. The large profit in 2015 was mainly due to the recognition of $0.27 million of insurance recoveries. Allowing for this one-off revenue item, RBT's operating profit remained largely unchanged from the same period last year.

5.19    RBT’s operating deficit before depreciation for the six months period was $12,983 worse than the SOI target. Operating revenue was lower than expected mainly due to low door sales and education and independent tours during the period and the cessation of rental income from the Ranger’s House following the demolition of the house. Operating expenses were higher than expected mainly due to recruitment fees for the new manager.

5.20    RBT are on track to meet most of the project performance targets outlined in its 2016/17 SOI.

Christchurch Agency for Energy Trust

5.21    CAfE was formed by the Council to:

·   raise awareness in Christchurch and promote energy efficiency initiatives and the use of renewable energy by providing information and advice to a wide range of parties.

·   encourage the use of renewable energy.

·   introduce initiatives to address the negative health and social impacts of fuel poverty and energy affordability issues in Christchurch.

5.22    CAfE had total comprehensive income for the six months of $15,105, a decrease of $8,089 on the same period last year. This decrease was mainly due to interest fluctuations.

5.23    The net surplus was $645,855 better than the SOI target for the period. This was mainly due to no Christchurch Energy Grant Scheme payments being made during the period. The first payments are expected to be made in the second half of the financial year.

5.24    The net assets of CAfE have increased from $2.169 million at 30 June 2016 to $2.201 million at 31 December 2016. The movement in net assets was purely a result of the net surplus for the six month period.

5.25    The target of the funds being fully allocated by 30 June 2017 remains on track to be achieved.

World Buskers’ Festival Trust (WBFT)

5.26    WBFT was established by the Council to:

·    devise, manage and hold an annual buskers festival in Christchurch with a view to providing a national and international profile and identity for New Zealand street theatre;

·    provide opportunities for local buskers to reach a wider audience; and

·    provide a street theatre festival that is accessible to the public including the provision of free events and commitment to maintain low ticket prices for performances where charges are made.

5.27    WBFT had a deficit of $23,606 for the six months ended 31 December 2016 compared with a surplus of $225,773 for the six months to 31 December 2015 and a planned surplus of $1,250. As the Festival was held from 19 - 29 January 2017, the deficit/surplus does not represent the result of the festival. The nature of the festival is such that it is not possible to reliably estimate at 31 December the additional revenue and expenses which the festival will generate.

5.28    The deficit at 31 December 2016 is driven by a combination of the tight sponsorship environment and the timing of recognition of revenue and expenses relating to the festival. This deficit has pushed WBFT to a net liability position reducing net assets from $0.006 million at 30 June 2016 to negative $0.017 million at 31 December 2016.

5.29    A number of the operational performance targets for the year were unable to be assessed at 31 December. Of the targets that could be assessed most of these were met.

Rod Donald Banks Peninsula Trust

5.30    RDBPT was formed by the Council with the objective of promoting sustainable management and conservation of Banks Peninsula’s natural environment and associated recreation.

5.31    For the six months to 31 December 2016, RDBPT made a net deficit of $45,045 compared to a deficit of $44,401 for the six months to 31 December 2015. Despite minimum movement in net deficit both revenue and expenses have increased compared to the same period last year.   

5.32    RDBPT's operating surplus for the six months was $78,445 better than its SOI targets. Revenue plus sale of property is $45,960 higher than target due to additional income from contracting track work and sale of property.  There are also cost savings from trust management cost, commitments to partners and minor projects cost partially offset by a slightly higher operating costs due to increased activities in the first half of the year.

5.33    RDBPT is on track to achieve most of its non-financial performance targets.

New Zealand Local Government Funding Agency Limited

5.34    LGFA was incorporated in December 2011 under the Local Government Borrowing Act 2011 to provide debt funding to New Zealand local authorities.  Its primary objective is to optimise debt funding terms and conditions for participating local authorities. LGFA is 89.9% owned by New Zealand local authorities and 11.1% by the New Zealand Government. The Council owns 8.3% of LGFA and is the joint second largest shareholder together with a further eight councils.

5.35    LGFA made a profit of $5.312 million for the six months to 31 December 2016 compared to a profit of $4.769 million for the six months to 31 December 2015. This was primarily due to an increase in interest and derivatives income, partially offset by an increase in operating expenses as a result of the listing of LGFA bonds on the NZX and increased compliance costs as a result of an increase in offshore investor holdings of LGFA bonds.

5.36    Net assets increased from $44.224 million as at 30 June 2016, to $48.144 million as at 31 December 2016. This is primarily due to an increase in loans to local authorities from $6.451 billion to $7.065 billion, this debt is held over 49 participating councils.

5.37    LGFA's financial SOI targets had forecasted net interest revenue for period ending 30 June 2016 of $16.58 million. As at 31 December, total net interest revenue is $8.51 million, which is $0.314 million above management forecast. 

5.38    As at 31 December 2016, LGFA was saving AA- rated councils between 15 bps (basis points or 0.15%) for a 2019 (two and half year) maturity and 25 bps for a 2021 (five year) maturity.

 

 

Attachments

No.

Title

Page

a

CCHL half year report to December 2016

21

b

Vbase half year report to December 2016

37

c

CBL half  year report to December 2016

49

d

Tuam half year report to December 2016

58

e

RBT half year report to December 2016

66

f

CAfE half year report to December 2016

79

g

WBFT half year report to December 2016

91

h

RDBPT half year report to December 2016

102

i

LGFA half year report to December 2016

116

 

 

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

Patricia Christie - Manager External Reporting and Governance

Daisy Yu - Financial Accountant

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

05 April 2017

 

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Finance and Performance Committee

05 April 2017

 

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Finance and Performance Committee

05 April 2017

 

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Finance and Performance Committee

05 April 2017

 

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05 April 2017

 

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Finance and Performance Committee

05 April 2017

 

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Finance and Performance Committee

05 April 2017

 

 

9.        Canterbury Economic Development Company Limited Winding Up

Reference:

17/304637

Contact:

Patricia Christie

Patricia.christie@ccc.govt.nz

941 8113

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee to consider the future of Canterbury Economic Development Company Limited (CED Co) and the recommendation from the Board that the company be wound up.

Origin of Report

1.2       This report is staff generated in response to request from the CED Co board.

2.   Significance

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

2.1.1   The level of significance was determined by applying the Council’s Significance and Engagement policy, taking into consideration (amongst other things) the possible costs/risks to the Council, ratepayers and the wider community.

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

 

3.   Staff Recommendations

That the Finance and Performance Committee recommend that the Council:

1.         Approve the winding up of the Canterbury Economic Development Company Limited.

2.         Approve the shareholders’ resolution to be signed by the General Manager Finance and Commercial on behalf of the Council.

 

 

 

4.   Key Points

4.1       The CED Co Board resolved at its meeting on 6 October 2016 “That the directors recommend to the Canterbury Mayoral Forum that the company be wound up.”  This has subsequently been discussed at the Canterbury Mayoral Forum on 24 February 2017.

4.2       The Canterbury Mayoral Forum noted that:

·   there is no current need for CED Co – the NZTE Research Strategy Fund closed on 30 June 2010,

·   if a CCO is required for future collaboration and/or funding applications, it would likely be more appropriate to set up a new company (if a company is required), rather than try to adapt CED Co’s current Constitution.  For example, if a shared services CCO was established, the Constitution would need to reflect the requirements for delivery of shared services,

·   the direct and indirect costs of operating CED Co are greater than the balance of funds currently held, and may be difficult to justify in the absence of the identification of a future possible use for the company,

·   the disestablishment of CED Co will have no impact on collaborative or other work being undertaken in the Canterbury region, and would not provide a barrier to any future work.

Options

4.3       The options now available are either to:

·   agree with the recommendation from the CED Co Board to wind up the company and sign the attached Shareholders’ Resolution (Attachment A); or

·   continue the company.

4.4       A unanimous resolution of all shareholders is needed to wind up the company. At present all shareholding councils are being asked to consider the request from the CED Co Board.

The implications of continuing CED Co

4.5       Even though CED Co is no longer trading and has been inactive for five years, the Board of Directors still need to comply with the requirements of CED Co’s Constitution and any other statutory duties (such as tax obligations).

4.6       In particular, CED Co’s Constitution requires the Board to undertake many duties including:

·   deliver a draft Statement of Intent to shareholders on or before 1 March each year,

·   keep specified company records at CED Co's registered office in Timaru,

·   keep accounting records, in particular financial statements, and engage the Auditor-General to audit financial statements,

·   provide an annual report to shareholders.

·   provide an annual return.

4.7       These requirements impose an administrative burden on the directors to ensure CED Co is meeting its obligations (which are primarily statutory obligations).  There are both direct and indirect costs of ensuring CED Co satisfies its obligations.  The direct costs are in the order of $2,500 (plus GST) per annum.  This is principally the cost of the audit, but there may be other sundry filing costs.  The indirect costs are where there is no cash disbursement required.  These are not insignificant and are difficult to measure accurately.  Indirect costs include the administrative support (currently provided by Timaru District Council) to ensure CED Co meets its obligations and the time required by the directors to meet at least annually.

4.8       Continuing CED Co also exposes directors and shareholding councils to a latent risk.  As an inactive company there is little or no reason for the directors to meet and this heightens the risk of inadvertent breaches under various pieces of legislation or the Constitution.  While this risk may be manageable for small, closely held companies, it is much less so for a company that has public accountability.

Background

4.9       CED Co was formed on 9 October 2008 by ten Canterbury councils but has been inactive for the last 5 years.

4.10    CED Co was established as a result of a national regional development funding programme that was instigated by the government at that time.  Funding from the NZTE Regional Strategy Fund was only accessible as a single application made by the entire region, hence the need to establish CED Co.  The purpose of the Fund was to support transformational economic development projects that would benefit regions.

4.11    CED Co is a council controlled organisation (CCO).  The nine appointed directors of CED Co are Janie Annear, Bill Bayfield, Bede Carran, Kelvin Coe, David East, Nicholas Harris, Tom Hooper, Angus McKay, and Jim Palmer.

4.12    There are ten shareholders who hold an equal number of shares (ten per shareholder).  Shareholders are Christchurch City Council, Timaru District Council, Ashburton District Council, Hurunui District Council, Selwyn District Council, Canterbury Regional Council, Waimate District Council, Kaikoura District Council, Mackenzie District Council, and Waimakariri District Council.

4.13    CED Co’s funding bid in 2008 was successful, and central government funding was paid into the company (alongside local government funding), and then dispersed to a variety of projects run by different parts of the region.  Once the initial programme was completed, CED Co was left in place in case there were any further opportunities for region-wide funding activities.  There have been no further opportunities to utilise CED Co in the last five years and CED Co has been inactive since the initial projects were completed.

 

Attachments

No.

Title

Page

a

CED Co Shareholders' Resolution removal from register

160

 

 

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

Patricia Christie - Manager External Reporting and Governance

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

05 April 2017

 


 


 


Finance and Performance Committee

05 April 2017

 

 

10.    Development Christchurch Limited Update Report April 2017

Reference:

17/301332

Contact:

Rob Hall

Rob.hall@dcl.org.nz

Enter phone.

 

 

1.   Purpose of Report

1.1       This report is the April 2017 update to the Finance and Performance Committee and Council on the activities of Development Christchurch Limited (DCL).

 

2.   Staff Recommendations

That the Finance and Performance Committee recommend that the Council:

1.         Receive the information in the April 2017 update report from Development Christchurch Limited.

 

 

3.   Key Points

3.1       The report provides an update on the following projects:

·   New Brighton

·   Peterborough Quarter

·   Christchurch Adventure Park

 

 

Attachments

No.

Title

Page

a

DCL April 2017 Finance and Performance Report

164

 

 

Signatories

Author

Patricia Christie - Manager External Reporting and Governance

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

05 April 2017

 

 

 


Finance and Performance Committee

05 April 2017

 

 

11.  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:


Finance and Performance Committee

05 April 2017

 

 

 

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

12

Public Excluded Finance and Performance Committee Minutes - 1 March 2017

 

 

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

 

13

Development Christchurch Limited - April Update Report

s7(2)(i)

Conduct Negotiations

Development Christchurch Limited are conducting commercial negotiations that need to remain confidential until the negotiations are concluded.

Conclusion of negotiations

14

Council Controlled Organisation - 31 December 2016 Performance Report

s7(2)(h)

Commercial Activities

Discusses the commercial activities of the entity

When the information is publicly available

15

Christchurch City Holdings Limited and subsidiary companies - Draft Statement of Intent 2018-2020

s7(2)(h)

Commercial Activities

As the draft is provided for comment it is appropriate that these comments can be made on a confidential basis

The final Statements of Intent will be presented to Council in an open agenda

16

Draft 2018-2020 Statements of Intent for Vbase Limited, Transition Holdings Limited, Civic Building Limited, Riccarton Bush Trust, Christchurch Agency for Energy Trust and Rod Donald Banks Peninsula Trust

s7(2)(h)

Commercial Activities

As the draft is provided for comment it is approaciate that these comments can be made on a confidential basis.

The final Statements Of Intent will be presented to Council in an open agenda

17

Capital Programme Watchlist

s7(2)(h)

Commercial Activities

Sensitive data and ongoing negotiations on a number of projects within this financial year envelope

1 August 2017

18

Insurance matters

s7(2)(c)(i), s7(2)(g), s7(2)(h), s7(2)(i)

Protection of Source of Information, Maintain Legal Professional Privilege, Commercial Activities, Conduct Negotiations

The report contains legal advice.

Future public release is unlikely due to obligations of confidentiality.