Finance and Performance Committee

Agenda

 

 

Notice of Meeting:

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

 

Date:                                     Wednesday 6 December 2017

Time:                                    9am

Venue:                                 Council Chambers, 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

Mr Mike Rondell (Non-Voting Member)

 

 

1 December 2017

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

Aidan Kimberley

Committee and Hearings Advisor

941 6566

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

06 December 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 a non-voting independent member appointed by the 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

Process for appointing Independent Members to the Finance and Performance Committee

 

The following principles will guide the appointment process for Independent Members of the Finance and Performance Committee:

 

1.              Council Officers, in consultation with Elected Members, will compile a longlist of candidates and provide this list to the General Manager Finance and Commercial for consideration.

 

2.              If appropriate, the Chair of the Finance and Performance Committee and the General Manager Finance and Commercial may endorse the nominations.

 

3.              Candidates will be contacted at the appropriate time to confirm their willingness to serve as an independent committee member and, if confirmation is received, appropriate background checks as determined by the General Manager Finance and Commercial will be conducted. Candidates will also be informed of Council policies.

 

4.              The Chair and Deputy Chair of the Finance and Performance Committee, and the General Manager Finance and Commercial, will review the candidates to develop a shortlist by assessing the following:

 

a.              Professional credentials and relevant experience.

b.             Their understanding of relevant legislation.

c.              Experience overseeing or assessing the performance of organisations.

d.             Potential conflicts of interest.

e.             Affiliations or connections with the Council and its related entities.

f.               Reference and background check reports.

 

5.              The shortlist of candidates will be presented to an Appointments Panel. The Panel will select from that shortlist the independent member to be appointed to the Committee. The resolution to appoint the independent member should specify the dates on which the appointment commences and concludes. 

 

6.              The Chair of the Panel will inform the Council in writing of the Panel’s decision.

 


Finance and Performance Committee

06 December 2017

 

Part A        Matters Requiring a Council Decision

Part B         Reports for Information

Part C         Decisions Under Delegation

 

 

TABLE OF CONTENTS

 

C       1.       Apologies.......................................................................................................................... 5

B       2.       Declarations of Interest................................................................................................... 5

C       3.       Confirmation of Previous Minutes................................................................................. 5

B       4.       Public Forum.................................................................................................................... 5

B       5.       Deputations by Appointment........................................................................................ 5

B       6.       Presentation of Petitions................................................................................................ 5

STAFF REPORTS

C       7.       Regenerate Christchurch - Annual Report for year ending 30 June 2017 and Quarterly Performance Report for quarter ending 30 September 2017................................... 11

C       8.       Annual Reports for year ended 30 June 2017 for Council-controlled Organisations 73

C       9.       Performance Reporting for October 2017................................................................... 91

C       10.     LTP 2018-28 Audit Engagement Letter...................................................................... 101

C       11.     The use of Targteted Rates to support non-Council community assets (such as the Akaroa Health Hub)..................................................................................................... 127

C       12.     Development Christchurch Ltd - Progress Update Report for October/November 2017....................................................................................................................................... 131

C       13.     Resolution to Exclude the Public............................................................................... 135  

 

 


Finance and Performance Committee

06 December 2017

 

 

1.   Apologies

An apology was received from Mike Rondell.

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 November 2017 be confirmed (refer page 6).

4.   Public Forum

A period of up to 30 minutes may be available for people to speak for up to five minutes on any issue that is not the subject of a separate hearings process.

5.   Deputations by Appointment

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

6.   Petitions

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


Finance and Performance Committee

06 December 2017

 

 

 

Finance and Performance Committee

Open Minutes

 

 

Date:                                     Wednesday 1 November 2017

Time:                                    9:03am

Venue:                                 Council Chambers, Civic Offices,
53 Hereford Street, Christchurch

 

 

Present

Chairperson

Deputy Chairperson

Members

Councillor Raf Manji

Deputy Mayor Andrew Turner

Councillor Vicki Buck

Councillor Jimmy Chen

Councillor Mike Davidson

Councillor Anne Galloway

Councillor Jamie Gough

Councillor Yani Johanson

Councillor Deon Swiggs

Mr Mike Rondell (Non-Voting Member)

 

 

31 October 2017

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

Aidan Kimberley

Committee and Hearings Advisor

941 6566

aidan.kimberley@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/2017/00063

That the apology from Mayor Dalziel and apology for lateness from Councillor Johanson and Buck be accepted.

Deputy Mayor/Councillor Chen                                                                                                                            Carried

 

2.   Declarations of Interest

Part B

There were no declarations of interest recorded.

3.   Confirmation of Previous Minutes

Part C

Committee Resolved FPCM/2017/00064

Committee Decision

That the minutes of the Finance and Performance Committee meeting held on Wednesday, 4 October 2017 be confirmed.

Deputy Mayor/Councillor Chen                                                                                                                            Carried

 

4.   Public Forum

Part B

There were no public forum presentations.

5.   Deputations by Appointment

Part B

There were no deputations by appointment.

6.   Presentation of Petitions

Part B

There was no presentation of petitions.

 

8.   Final Statement of Intent - World Buskers Festival Trust

 

Joanna Norris of ChristchurchNZ joined the table for this item.

Committee Decided FPCM/2017/00065

Part A

That the Finance and Performance Committee recommends that the Council:

1.         Notes that the final Statement of Intent for the World Buskers Festival Trust for 2017/18 received by Council staff on 2 October 2017 addresses the comments made by the Council on the draft document at its meeting on 28 September (Council resolution CNCL/2017/00272 refers);

2.         Notes that the final Statement of Intent for the World Buskers Festival Trust for 2017/18 meets the minimum statutory requirements for information to be provided as set out in clauses 9 and 10 of Schedule 8 of the Local Government Act 2002; and

3.         Notes that the Statement of Intent will be made public by the World Buskers Festival Trust on its website as soon as possible.

Councillor Gough/Councillor Davidson                                                                                                               Carried

 

9.   Corporate Finance Report for the period ending 30 September 2017

 

Committee Decided FPCM/2017/00066

Part A

That the Finance and Performance Committee recommends that the Council:

1.         Receives the information in the report

Deputy Mayor/Councillor Davidson                                                                                                                    Carried

 

Councillor Buck joined the meeting at 09:09 am.

10. Performance report for the three months to 30 September 2017

 

Committee Decided FPCM/2017/00067

Part A

That the Finance and Performance Committee recommends that the Council:

1.         Receives the information in the report.

Deputy Mayor/Councillor Chen                                                                                                                            Carried

 


 

11. Quarterly Performance Reporting for September 2017

 

Committee Decided FPCM/2017/00068

Part A

That the Finance and Performance Committee recommends that the Council:

1.         Receive the information in the attached appendices.

Councillor Swiggs/Councillor Chen                                                                                                                       Carried

 

7.   Annual Report for the year ended 30 June 2017 - Christchurch City Holdings Ltd and subsidiaries

 

Leah Scales of Christchurch City Holdings Limited joined the table for this item.

Committee Decided FPCM/2017/00069

Part A

That the Finance and Performance Committee recommends that the Council:

1.         Notes the Christchurch City Holdings Ltd’s 2016/17 annual results incorporating the results of its subsidiary companies.

Councillor Davidson/Councillor Swiggs                                                                                                               Carried

 

  12 Resolution to Exclude the Public

 

Committee Resolved FPCM/2017/00070

Part C

That Joel Lieschke, Steve Clark and Richard Wall of Development Christchurch Limited remain after the public have been excluded for Item 14 of the public excluded agenda as they have knowledge that is relevant to that item and will assist the Council.

That Leah Scales of Christchurch City Holdings Limited remain after the public have been excluded for Item 14 of the public excluded agenda as she has knowledge that is relevant to that item and will assist the Council.

AND

That at 9:54 the resolution to exclude the public set out on pages 184 to 186 of the agenda be adopted.

Councillor Gough/Councillor Davidson                                                                                                                 Carried

 


 

The public were re-admitted to the meeting at 10:22am.

 

   

Meeting concluded at 10:22am.

 

CONFIRMED THIS 6TH DAY OF DECEMBER 2017

 

Councillor Raf Manji

Chairperson

 


Finance and Performance Committee

06 December 2017

 

 

7.        Regenerate Christchurch - Annual Report for year ending 30 June 2017 and Quarterly Performance Report for quarter ending 30 September 2017

Reference:

17/1230634

Contact:

Linda Gibb

Linda.gibb@ccc.govt.nz

941 6762

 

 

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 that the Council notes Regenerate Christchurch’s Annual Report for 2016/17 and Quarterly Report of performance for the first quarter of 2017/18 (1 July – 30 September 2017).

Origin of Report

1.2       This report is staff generated following receipt of Regenerate Christchurch’s annual report for 2016/17 and its quarterly performance report for Quarter 1 2017. 

2.   Significance

2.1       The noting decision(s) in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.  The level of significance was determined by the impact of the decisions on the Council and the community.

3.   Staff Recommendations

That the Finance and Performance Committee recommends that the Council:

1.         Notes Regenerate Christchurch’s Quarter 1 2017 (1 July – 30 September) performance; and

2.         Notes Regenerate Christchurch’s Annual Report for the year ended 30 June 2017.

 

4.   Key Points

Quarter 1 2017/18 Performance Report

4.1       Staff from the Council and the Department of the Prime Minister and Cabinet jointly report to shareholders on Regenerate Christchurch’s performance on a quarterly basis.  The report is based on targets set in Regenerate Christchurch’s Statement of Performance Expectations for 2016/17. 

4.2       The performance report for Quarter 1, 2017/18 is at Attachment A.  Against its target milestones, Regenerate Christchurch has mostly delivered on time and within budget. Financial performance for the quarter is presented in the table on the following page.

2017/18

profitability

$000

SOI target profitability

$000

Comments

Profit (non-taxable)

2,673

Profit (non-taxable)

2,248

Expenditure has been applied to Residential Red Zone $1.5 million and Regeneration Planning $0.8 million.  Each output class is around $0.2 million below budget which reflects some small delay in progress, and the replacement of higher consultancy costs with permanent staff.

The overall surplus reflects the receipt of the Council’s funding payment at the beginning of the year, instead of progressively over the course of the year. 

 

4.3       The Letter of Expectations from shareholders to Regenerate Christchurch dated 14 April 2016 proposed that Regenerate Christchurch prioritise work on the evaluation of progress and provision of advice on what is required to increase momentum and support regeneration of the central city.  We understand this report will be submitted to shareholders in February 2017.  This report is likely to provide critical information that will inform decision making in relation to the regeneration of the central city.  Council staff consider it is important that this report is delivered in accordance with the Regenerate Christchurch-projected February timeline.

Annual Report for year ended 30 June 2017

4.4       Regenerate Christchurch’s Annual Report for the year ended 30 June 2017 is at Attachment B.  The key financial and performance information is noted below.

Table 1:  Regenerate Christchurch’s financial performance in 2016/17

2016/17

profitability

$000

2015/16

profitability

$000

SOI target profitability

$000

Comments

Profit (non-taxable)

 

 

1,302

Profit (non-taxable)

(3 months of operations)

1,318

Profit (non-taxable)

 

 

1,413

The reduced expenditure arose as a result of a delay in Regenerate Christchurch acquiring senior staff following its establishment.  This in turn delayed development of its 5 year work plan.  The surpluses in the current year, and in the three months of operation in the 2015/16 year have led to the transfer of $2.6 million to the 2017/18 financial year to meet the costs of accelerated activity.

Direct operating expenditure was applied to the Residential Red Zone of $1.9 million and Regeneration Planning of $1.2 million.  Indirect operating and overhead costs were $3.7 million.

 

4.5       We note that the Annual Report presents signposts of future work to be delivered in the near term.  This is a useful addition to the report which is likely to be well received by the community.

 

 

Attachments

No.

Title

Page

a

Regenerate Christchurch - joint report from the Department of the Prime Minister and Cabinet and Council staff on Regenerate Christchurch's progress and performance.

14

b

Regenerate Christchurch Annual Report 2016/17

21

 

 

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

Linda Gibb - Performance Monitoring Advisor

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

06 December 2017

 

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06 December 2017

 

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Finance and Performance Committee

06 December 2017

 

 

8.        Annual Reports for year ended 30 June 2017 for Council-controlled Organisations

Reference:

17/1285343

Contact:

Linda Gibb

Linda.gibb@ccc.govt.nz

941.6762

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee to note the 2016/17 performance of the following Council-controlled Organisations - Vbase Ltd, Civic Building Ltd, Riccarton Bush Trust, Tuam Ltd, Christchurch Agency for Energy Trust, Rod Donald Banks Peninsula Trust, World Buskers Festival Trust, Transwaste Canterbury Ltd and Central Plains Water Trust.

Origin of Report

1.2       This report is staff generated as a result of receiving the final audited financial statements and annual reports for the Council’s CCOs. 

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 because the information in the report is in the public domain.

 

3.   Staff Recommendations

That the Finance and Performance Committee recommends that the Council:

1.         Notes the 2016/17 performance of its Council-controlled organisations - Vbase Ltd, Civic Building Ltd, Riccarton Bush Trust, Tuam Ltd, Christchurch Agency for Energy Trust, Rod Donald Banks Peninsula Trust, World Buskers Festival Trust, Transwaste Canterbury Ltd and Central Plains Water Trust.

 

4.   Key Points

4.1       Performance reports for each of the CCOs that were included in the Council’s Annual Report for 2016/17 are appended to this report (refer Attachment A).  The reports provide profitability information against Statement of Intent targets and the 2015/16 year’s performance.  They also provide an assessment of the CCO’s performance against non-quantifiable performance targets.

4.2       A summary of the reports is provided in the table over the page.

Table 1:  CCO financial performance in 2016/17

Entity

2016/17 profitability $000

2015/16

profitability

$000

SOI target profitability

$000

Comments

Civic Building Ltd

Profit (Loss) after tax

(946)

Profit (Loss) after tax

(886)

Profit (Loss) after tax

(860)

In 2016 there was a one-off insurance payment of $57,000 received. Lower property expenses have resulted in lower recoveries of those expenses, with a net $32,000 impact.

Tuam Ltd

Profit after tax 69

Profit after tax 27,028

Profit after tax 6

The company received $27m of material damage insurance recoveries in 2015/16, which was distributed to the Council during the year.  Tuam Ltd is no longer trading.

Vbase Ltd

Profit (Loss) before tax

(40,669)

Profit (Loss) before tax

(58,572)

Profit (Loss) after tax

(48,461)

Actual Profit (Loss) after tax

(40,199)

(Vbase does not set a profit before tax target).

Variance of $18m between the actual results in 2016/17 and the prior year reflects a one-off impairment charge in 2015/16.

The variance between target and actual for 2016/17 largely reflects a $10m lower demolition charge for the AMI Stadium at Lancaster Park, due to a delay in demolishing the stands.

Transwaste Canterbury Ltd

Profit after tax 29,971

Profit after tax 16,698

EBIT 19,301

Actual

EBIT 19,924

(Transwaste does not set a before or after tax target).

Better result against last year ($10m dividend from subsidiary Burwood Resource Recovery Park) and against target (increased sales of high density demolition-related waste at the Kate Valley landfill). 

Christchurch Agency for Energy Trust

(non-taxable)

Profit (Loss) (0.278)

Profit (Loss) 0.040

Profit (Loss)

(0.701)

The Trust’s losses reflect the payment of grants, against funding that it holds in reserves.  The grants made in 2016/17 are lower than expected and will be paid out in later periods.

Riccarton Bush Trust

(non-taxable)

Profit (Loss) (0.215)

Profit (Loss) 0.092

0

Additional income from higher than expected sales from food and beverage ($10,000) were offset by lower donations, and a variety of additional costs, including historic house maintenance, higher salaries, a one-off fee for recruiting a new manager, work on restoring the Ranger’s House among others.


 

Entity

2016/17

profitability

$000

2015/16

profitability

$000

SOI target profitability

$000

Comments

Rod Donald Banks Peninsula Trust

(non-taxable)

Profit Loss (0.132)

Profit (Loss)

(0.106)

55.6

Revenue has decreased as a result of interest accruing on a lower trust fund balance each year as the balance reduces, offset by higher hut revenue, and reduced costs mostly from fewer minor projects being undertaken and fewer grants paid to its partners.

Against target, the main differences were higher revenue on investments which had been conservatively forecast, as well as a $50,000 receipt from sale of land to the Josef Langer Trust.  A further commitment of grants to a partner was decided and advanced during the year.

World Buskers Festival Trust

(non-taxable)

Profit (Loss)

5

Profit (Loss)

(0.115)

2.5

The Trust had reduced income of $128,933 against budget, and $249,545 over the prior year as a result of the loss of strategic partnerships, grants and donations and door donations and food and beverage sales.  Across almost all categories of expenditure, reductions have been made, the most notable being production and technician costs of $175,000.

Central Plains Water Trust

(non-taxable)

Profit (Loss)

0

Rev/Exp 0.050

Profit (Loss)

0

Rev/Exp 0.056

The Trust does not provide targets.

-

 

 

 

Attachments

No.

Title

Page

a

Council-controlled organisations - performance summary reports

77

 

 

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

Linda Gibb - Performance Monitoring Advisor

Mushe Shoko - Manager External Reporting & Governance

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

06 December 2017

 

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Finance and Performance Committee

06 December 2017

 

 

9.        Performance Reporting for October 2017

Reference:

17/1382388

Contact:

Peter Ryan

Peter.Ryan@ccc.govt.nz

03 941 8137

 

 

1.   Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee to note an update on LTP level of service performance.

 

2.   Staff Recommendations

That the Finance and Performance Committee:

1.         Receive the information in the attached appendices.

 

3.   Key Points

3.1       Staff forecasts as at 31 October 2017 indicate a high level of achievement (91%) which is in line with historical trends.

3.2       Individual level of service exceptions are set out in the attached appendix.

3.3       Levels of Service relating to Rural Fire Management is now managed by Fire Emergency New Zealand (FENZ) and no longer sit with the Council.

 

 

Attachments

No.

Title

Page

a

LTP Level of Service Exceptions

92

b

LTP Level of Service Forecast Delivery Graph

99

c

Appendix to "LTP Level of Service Exceptions" - Changes to Levels of Service from Annual Plan 2017-18

100

 

 

Signatories

Author

Sung Jun Park - Performance Analyst

Approved By

Peter Ryan - Head of Performance Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

06 December 2017

 

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Finance and Performance Committee

06 December 2017

 

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Finance and Performance Committee

06 December 2017

 

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Finance and Performance Committee

06 December 2017

 

 

10.    LTP 2018-28 Audit Engagement Letter

Reference:

17/1426652

Contact:

Peter Ryan

Peter.Ryan@ccc.govt.nz

03-941-8137

 

 

1.   Purpose of Report

1.1       The purpose of this report is to inform the Finance and Performance Committee about the content of the Long Term Plan (LTP) 2018-28 Audit Engagement Letter, and to recommend the Mayor authorise the Audit Engagement Letter on behalf of Christchurch City Council.

 

2.   Staff Recommendations

That the Finance and Performance Committee recommends that the Council:

1.         Receive the information in the LTP 2018-28 Audit Engagement Letter.

2.         Authorises the Mayor to sign the Audit Engagement Letter on behalf of the Christchurch City Council.

 

3.   Key Points

3.1       There is an obligation under the Local Government Act 2002 for the draft and final Long Term Plans to be audited and an audit opinion issued with each document. The agency conducting these reviews is Audit New Zealand.

3.2       Audit NZ has supplied Christchurch City Council with an Audit Engagement Letter, outlining the financial terms involved in the audit of the LTP 2018-28 (Attachment A). These are in line with past terms, and costs are covered by planned budget. Page 8 of the Audit Engagement Letter also seeks clarification on when the various documents that will make up the draft LTP 2018-28 (Consultation Document, Infrastructure Strategy, Financial Strategy and underpinning information) will be available for their review. 

3.3       This is an important issue for both parties. It is essential that Christchurch City Council prepares a draft that accurately reflects its priorities, and the outputs and budgets that will make them possible. Equally, the period from January-March is peak workload for Audit NZ, who have other local government clients to manage at the same time. It is essential that the dates agreed in the Audit Engagement Letter are met so that both parties have clarity and can avoid scheduling conflicts.

3.4       The dates set out in the letter have been discussed in meetings between the Chief Executive, GM Finance & Commercial, Head of Performance Management, Head of Financial Management and Audit NZ representatives. They represent the best balance between the needs of the various stakeholders and align with key milestones in the LTP Project Plan.  It is recommended that the Mayor authorise the Letter of Engagement on behalf of Christchurch City Council, and that CCC senior management be issued with clear communications about which components are to be supplied and the deadlines involved for each.

3.5       It is further recommended that the Performance Management Unit (in its project management
co-ordination role) be the central point of contact for Audit NZ in terms of document supply, in order to avoid any issues around version control, assisting with further enquiries etc. This is in keeping with previous practice.

 

 

 

Attachments

No.

Title

Page

a

LTP 2018-28 Audit Engagement Letter, sent 22 November 2017

103

 

 

Signatories

Author

Monika De Neef - Senior Business Analyst

Approved By

Peter Ryan - Head of Performance Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

06 December 2017

 

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Finance and Performance Committee

06 December 2017

 

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Finance and Performance Committee

06 December 2017

 

 

11.    The use of Targteted Rates to support non-Council community assets (such as the Akaroa Health Hub)

Reference:

17/1416422

Contact:

 Enter contact

Enter email address

Enter phone.

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is to advise the Finance and Performance Committee about the potential use of targeted rates to contribute to funding for localised services which are outside the council’s responsibility, such as the Akaroa Health Hub.

Origin of Report

1.2       This report responds to Council Resolution CAPL/2017/00022, passed at the 20 June 2017 Annual Plan adoption meeting.

2.   Significance

2.1       This report provides advice, not a recommended decision.  However, the issues discussed are assessed to be of medium significance in relation to the Christchurch City Council’s Significance and Engagement Policy.  There is likely to be a high level of local community interest if the council gives consideration to:

·     Providing financial support to a community facility that is not owned or controlled by the Council; and

·     Funding this financial support through a new targeted rate, particularly if this is only levied on properties located within the facility’s identified catchment area.

 

1.   Staff Recommendations

That the Finance and Performance Committee note that:

1.         The use of targeted rates to contribute to funding for localised services which are outside the council’s responsibility, such as the Akaroa Health Hub, requires two related but separate decisions:

a.         To provide a grant from the council to the relevant local provider; and

b.         To fund this grant through a targeted rate (either on the community as a whole or on just that part of the community identified as receiving primary benefit from the service).

2.         Both of these decisions are legally permitted, provided the proper legal process is followed.  The required consideration and decision-making could be achieved through the normal Long Term Plan process, although specific consultation of affected Akaroa area ratepayers would be advisable.

 

3.   Key Points

3.1       The use of targeted rates to support local facilities and /or services requires two related but separate decisions:

·     To provide a grant from the council to the relevant local provider; and

·     To fund this grant through a targeted rate.

3.2       Both of these decisions are legally permitted:

·     The Local Government Act 2002 includes the “making of grants” as part of its definition of permitted local government activities.

·     The Local Government (Rating) Act 2002 gives local authorities the power to fund its activities through rates, including targeted rates.

3.3       In making such decisions, the council must follow the process set out in sections 76-81 of the Local Government Act – broadly:

3.3.1   The objective needs to be defined – for example the objective may be to provide support to the development of the Akaroa Health Hub, in order to promote the same Community Outcomes as other grants activity.

3.3.2   All reasonably practicable options for the achievement of this objective need to be identified.  The council has a variety of existing policies for grants and community loans, funded from general rates – consideration needs to be given to providing the desired support from each of these sources (including an increase in their general rates funded budget, if required) alongside any new targeted rate proposal.

3.3.3   The advantages and disadvantages of each identified option need to be explored prior to identifying a preferred option.  In most instances, the option of not providing support should also be considered.

3.3.4   Community views need to be considered, including through consultation.  Where the preferred option affects an identifiable community within the district, specific consultation of that community may be advisable.  In the Akaroa Health Hub example, an option that levies a targeted rate on just those properties located within the identified catchment area should include specific consultation with affected ratepayers rather than just general consultation through the Long-Term Planning process.

3.4       Christchurch City Council has used local targeted rates in the past, although to fund council-owned infrastructure rather than third party facilities – targeted rates were charged on Governor’s Bay properties until June 2016, to fund the development of local water and sewer infrastructure.

3.5       A grant and targeted rate approach is currently being considered to support the restoration of the Christchurch Anglican Cathedral (although in this case the targeted rate would be charged universally on all properties not just a local catchment area).

3.6       Other local authorities have used a grant and targeted rate approach to fund third party health facilities:

·     Kaikoura District Council used a universal targeted rate (i.e. charged to all properties) to support the development of Kaikoura Hospital;

·     Clutha District Council used a local targeted rate (i.e. charged only on properties within the catchment area) to support the development of the west Otago Health Facility

3.7       If Councillors wish to provide support for the development of an Akaroa Health Hub, an options paper would be required to consider other options (including grants, community loans, and not providing support) as well as a grant and targeted rate option.  This options report should be drafted primarily by the Community Support team (with support as required from Finance and Legal).

 

4.   Context/Background

Background

4.1       The earthquake damaged Akaroa Hospital is being replaced by an Akaroa Health Hub, to be operated by a Community Trust.  The DHB is satisfied that the Hub will be financially viable, but require the Trust to contribute $2.5 million towards construction costs.  Having raised some of this funding from other sources, the Trust has asked for Council support towards remaining requirements through a Grant.

4.2       The Community Trust made a submission to the 2017/18 Annual Plan, asking for a temporary targeted rate to be levied on the new Hub’s catchment area in order to fund a council grant to support the Hub’s construction.  The response given through the Annual Plan submission process was that such a grant and targeted rate would be legally achievable, but that the council would need to consider whether the proposal was consistent with its overall strategies.

4.3       At its 20 June 2017 Annual Plan adoption meeting, Councillors requested a staff report “about whether targeted rates can be used to contribute to funding for localised services which are outside the Council’s responsibility, such as the Akaroa Health Hub.” (Resolution CAPL/2017/00022)

Illustration – how a local targeted rate might work

4.4       If Councillors decided (after due consideration of options and the results of public consultation) that a grant and targeted rate approach is desirable, it could be implemented from the start of the following rating year (1 July).

4.5       Given the GP service patterns indicated by the DHB, an appropriate catchment area over which the targeted rate could be levied could be defined as all rateable properties in the eight District Valuation Rolls located within the area highlighted in the map below:

Map:  Reasonable Hub Catchment Area

·   Valuation Rolls are are geographic areas with similar property market characteristics, used for Rating Valuation purposes.  They are likely to be well correlated to geographic catchments, and they provide a more straightforward and transparent rating boundary than any other mechanism.  Every property has its own Roll Number shown on the Council’s public website.

·   The area to the south of the dotted line has relatively few properties – they will probably be served by the Hub, but a material proportion may register with GPs in Christchurch.  The appropriateness of including this area in any targeted rate could be discovered through the consultation process.

4.6       There are 2,975 properties in this catchment area, of which 236 are legally non-rateable (eg. churches, parks, etc.).  Given this limited number of taxpaying properties, a balance would be required between the size of the Grant to be provided, the number of years for which the targeted rate would be charged, and the dollar amount payable per year.  Illustrative options are tabulated below (for context, average rates in this area are currently around $2,100, including GST but excluding Ecan’s Reginal council rates):

Table:  Illustrative Targeted Rate charges for various Grant amounts and numbers of years

4.7       Alternatively, funding a grant from general rates would have a relatively small impact on council’s overall rates increase because of the larger number of ratepayers affected – a $1 million grant would increase rates by around 0.01%.  The appropriateness of this approach would need to consider how this proposal ranks (in terms of priority) against the range of other spending proposals which, although small individually, can have a significant cumulative impact on annual rates increases.

 

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

Steve Ballard - Manager Funds and Financial Policy

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

06 December 2017

 

 

12.    Development Christchurch Ltd - Progress Update Report for October/November 2017

Reference:

17/1403048

Contact:

Linda Gibb

Linda.gibb@ccc.govt.nz

941 6762

 

 

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 the Council that it notes Development Christchurch Ltd’s (DCL) progress update report for October and November 2017.

Origin of Report

1.2       This report is staff generated as a result of receiving DCL’s progress update report.

2.   Significance

2.1       The noting decisions in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.  The level of significance was determined by assessing the likely impact on the community of the noting decisions.

 

3.   Staff Recommendations

That the Finance and Performance Committee:

1.         Notes Development Christchurch Ltd’s progress update report for October/November 2017.

 

 

4.   Key Points

4.1       An opening event is planned for the New Brighton Playground on 20 December.  DCL notes that the project development costs at completion for both the Hot Salt Water Pools and the Playground remain within budget.

4.2       The ‘quick wins’ budget that was capped at $100,000 for the New Brighton regeneration project has now been exhausted.  DCL’s report provides a list of all the initiatives undertaken with a view to creating momentum for regeneration.

 

 

Attachments

No.

Title

Page

a

Development Christchurch Ltd - Progress Update Report for October/November 2017

133

 

 

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

Linda Gibb - Performance Monitoring Advisor

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

06 December 2017

 

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Finance and Performance Committee

06 December 2017

 

 

13.  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

06 December 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

14

Public Excluded Finance and Performance Committee Minutes - 1 November 2017

 

 

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

 

15

Development Christchurch Ltd - Progress Update October/November 2017

s7(2)(b)(ii), s7(2)(f)(ii), s7(2)(h), s7(2)(i)

Prejudice Commercial Position, Protection from Improper Pressure or Harassment, Commercial Activities, Conduct Negotiations

To enable negotiations to be carried out for the terms and conditions for draw down from a loan facility provided by the Council or its CCOs

When the Chief Executive determines there are no longer any reasons to withold the information under the Act.

16

Quarterly performance report for Christchurch City Holdings Limited and its subsidiaries for the quarter ended 30 September 2017

s7(2)(h)

Commercial Activities

Discusses the commercial activities of the entity.

When the information is publicly available.

17

ChristchurchNZ Holdings Ltd - Annual Report and Shareholder Resolutions for AGM

s7(2)(a), s7(2)(f)(ii)

Protection of Privacy of Natural Persons, Protection from Improper Pressure or Harassment

To allow the Council the unimpeded space to consider options for board appointments and remuneration, and to protect the identity of the candidates from potential reputational damage if decisions are not made in their favour.

after Council's decisions are made

18

ChristchurchNZ Holdings Ltd - Letter of Expectations 2018/19

s7(2)(f)(ii)

Protection from Improper Pressure or Harassment

To allow the Council and ChristchurchNZ Holdings Ltd the space to negotiate the expectations without pressure from third party interests.

After the Statement of Intents are accepted by Council by 30 June 2018

19

Capital Projects Watchlist and Major Cycleways

s7(2)(b)(ii)

Prejudice Commercial Position

Commerically sensitive financial and milestone information

 Per Project upon Completion