Finance and Performance Committee of the Whole

Agenda

 

 

Notice of Meeting:

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

 

Date:                                    Thursday 4 April 2019

Time:                                   9.30am

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

 

 

Membership

Chairperson

Deputy Chairperson

Members

Councillor Raf Manji

Deputy Mayor Andrew Turner

Mayor Lianne Dalziel

Councillor Vicki Buck

Councillor Jimmy Chen

Councillor Phil Clearwater

Councillor Pauline Cotter

Councillor Mike Davidson

Councillor David East

Councillor Anne Galloway

Councillor Jamie Gough

Councillor Yani Johanson

Councillor Aaron Keown

Councillor Glenn Livingstone

Councillor Tim Scandrett

Councillor Deon Swiggs

Councillor Sara Templeton

 

 

29 March 2019

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance

 

Samantha Kelly

Committee and Hearings Advisor

941 6227

samantha.kelly@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 of the Whole

04 April 2019

 

 

Finance and Performance Committee of the whole - Terms of Reference

 

Chair

Councillor Manji

Deputy Chair

Deputy Major Turner

Membership

The Mayor and all Councillors

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

 

Area of focus

The focus of the Finance and Performance Committee is the financial and non-financial performance of the Council, including the delivery of the Council’s Capital Programme, CCHL and its subsidiaries, and any other Council Controlled Organisations.

 

In making recommendations or exercising its delegations, the Committee must manage the matters referred to in section 101 of the Local Government Act 2002 which includes that the Council must manage its revenues, expenses, assets, liabilities, investments, and general financial dealings prudently and in a manner that promotes the current and future interests of the community.

 

The Finance and Performance Committee considers and, if the matter is not within the Committee’s delegated authority, reports to Council on matters relating to:

·           The delivery of the Council’s Capital Programme

·           The Council’s operational and capital expenditure, including any material discrepancies from planned expenditure

·           Leading and overseeing the Council’s strategic relationship with the Crown, including specific strategic projects of shared interest and interface with the Crown, including the Cost Share Agreement and matters under the Greater Christchurch Regeneration Act 2016

·           The financial and non-financial performance of the Council and Council Controlled Organisations, and governance decisions related to Council Controlled Organisations

·           The Council’s financial and funding policies under section 102 of the Local Government Act 2002

·           Debt write-offs and status of Council debtors

·           Acquisition or disposal of property where required for the delivery of the Capital Programme

·           Council insurance policies and related matters and litigation

·           The development of the Annual Report for consideration by Council

·           Advising and supporting the Mayor to lead the development of the Long Term Plan and Annual Plan, including setting the overall parameters, strategic direction and priorities, and the development of a consultation document.

·           Reviewing the delivery of services under s17A

·           Submissions to external bodies relating to the area of focus of the Finance and Performance Committee

 

 

 

Delegations

 

The Council delegates to the Finance and Performance Committee authority to:

·           Monitor the delivery of the Council’s Capital Programme, including inquiring into any material discrepancies from planned expenditure

·           Monitor the financial and non-financial performance of the Council and Council Controlled Organisations, including carrying out all of the Council’s obligations under sections 65 to 72 of the Local Government Act 2002

·           Exercise the Council’s powers directly as the shareholder, or through CCHL, or in respect of an entity (within the meaning of section 6(1) of the Local Government Act 2002) in relation to –

-          (without limitation) the modification of constitutions and/or trust deeds, and other governance arrangements, granting shareholder approval of major transactions, appointing directors or trustees, and approving policies related to Council Controlled Organisations

-          in relation to the approval of Statements of Intent and their modification (if any)

·           Purchase or dispose of property where required for the delivery of the Capital Programme, in accordance with the Council’s Long Term Plan, and where those acquisitions or disposals have not been delegated to another decision-making body of the Council or staff.

·           Adopt funding and financial policies other than those that must be adopted as part of the Council’s Long-Term or Annual Plans

·           As may be necessary from time to time, approve amendments to the Capital Programme outside the Long Term Plan or Annual Plan processes

·           Approve preferred suppliers for capital projects where the value of the contract exceeds $15 Million

·           Approve preferred suppliers and contracts from both capital and operational budgets relating to the Council’s Information Technology systems where the value of the contract exceeds $15 Million of capital expenditure or $10 Million of operational expenditure.

·           Amend levels of service targets, unless the decision is precluded under section 97 of the Local Government Act 2002

·           Approve debt write-offs where those debt write-offs are not delegated to staff

·           Insurance matters, including considering legal advice from the Council’s legal and other advisers, approving further actions relating to the issues, and authorising the taking of formal actions.

·           Authorise submissions to external bodies relating to the area of focus of the Finance and Performance Committee

 

The Committee delegates to the following subcommittees or working groups the responsibility to consider and report back to the Committee:

·           Insurance Subcommittee

 

 


Finance and Performance Committee of the Whole

04 April 2019

 

Part A           Matters Requiring a Council Decision

Part B           Reports for Information

Part C           Decisions Under Delegation

 

 

TABLE OF CONTENTS

 

C          1.        Apologies................................................................................................. 7

B         2.        Declarations of Interest.............................................................................. 7

C          3.        Confirmation of Previous Minutes................................................................. 7

B         4.        Public Forum............................................................................................ 7

B         5.        Deputations by Appointment....................................................................... 7

B         6.        Presentation of Petitions............................................................................ 7

chair introduction

Staff Reports

current performance

B         7.        Capital Programme Performance Report..................................................... 17

B         8.        Performance Exceptions Reports for February 2019....................................... 33

A          9.        Process for an independent review of 3 Waters delivery (as per a s17A review).... 51

CAPITAL PROGRAMME: MAJOR PROJECTS

B         10.      Christchurch Town Hall Project Monthly Update........................................... 65

B         11.      Capital Delivery Major Facilities Elected Member Updates............................... 67

CLOSE OUT REPORTS

B         12.      Tūranga, Central Library Financial Close-out Report...................................... 79

CCO/CCTO REPORTS

C          13.      Council-controlled organisations:  Draft Statements of Intent 2019/20.............. 83

C          14.      Local Government Funding Agency - Half year report to 31 December 2018 and Draft Statement of Intent 2019/20..................................................................... 151

B         15.      Development Christchurch Ltd - Performance report for period December 2018 - February 2019........................................................................................ 209

C          16.      Resolution to Exclude the Public.............................................................. 213  

 

 


Finance and Performance Committee of the Whole

04 April 2019

 

 

1.   Apologies

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

2.   Declarations of Interest

Members are reminded of the need to be vigilant 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 of the Whole meeting held on Thursday, 7 March 2019  be confirmed (refer page 8).

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.

It is intended that the public forum session will be held at 9.30am.

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 of the Whole

04 April 2019

 

 

 

Finance and Performance Committee of the Whole

Open Minutes

 

 

Date:                                    Thursday 7 March 2019

Time:                                   9.33am

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

 

 

Present

Chairperson

Deputy Chairperson

Members

Councillor Raf Manji

Deputy Mayor Andrew Turner

Mayor Lianne Dalziel

Councillor Vicki Buck

Councillor Jimmy Chen

Councillor Phil Clearwater

Councillor Pauline Cotter

Councillor Mike Davidson

Councillor David East

Councillor Anne Galloway

Councillor Jamie Gough

Councillor Yani Johanson

Councillor Aaron Keown

Councillor Glenn Livingstone

Councillor Tim Scandrett

Councillor Deon Swiggs

Councillor Sara Templeton

 

 

7 March 2019

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance

 

Samantha Kelly

Committee and Hearings Advisor

941 6227

samantha.kelly@ccc.govt.nz

www.ccc.govt.nz

To view copies of Agendas and Minutes, visit:
www.ccc.govt.nz/the-council/meetings-agendas-and-minutes/

 


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 FPCO/2019/00006

That the apology from the Mayor for partial absence be accepted.

Councillor Manji/Deputy Mayor                                                                                                                         Carried

 

2.   Declarations of Interest

Part B

There were no declarations of interest recorded.

 

3.   Confirmation of Previous Minutes

Part C

Committee Resolved FPCO/2019/00007

That the minutes of the Finance and Performance Committee of the Whole meeting held on Thursday, 7 February 2019 be confirmed.

Councillor Manji/Deputy Mayor                                                                                                                         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.

 

 

Chair Introduction

 

The Mayor joined the meeting at 9.37am during consideration  of item 7.

 

Councillor Cotter left the meeting at 9.46am and returned at 9.49am during consideration of item 7.

 

Councillor Gough left the meeting at 10.03am and returned at 10.07am during consideration of item 7.

 

 

7.   Capital Programme Performance Report

 

Committee Resolved FPCO/2019/00008

Original Staff Recommendation Accepted without Change

Part B

That the Finance and Performance Committee of the Whole:

1.         Receive the information in the Capital Programme Performance report.

Councillor Manji/Councillor Chen                                                                                                                    Carried

 

 

 

Councillor Livingstone left the meeting at 10.28am and returned at 10.30am during consideration of item 8.

 

Councillor East left the meeting at 10.44am and returned at 10.46am during consideration of item 8.

 

Councillor Gough left the meeting at 10.46am and returned at 10.50am during consideration of item 8.

 

Councillor Galloway left the meeting at 11.02am and returned at 11.06am during consideration of item 8.

 

Councillor Templeton left the meeting 11.11am and returned at 11.16am during consideration of item 8.

 


 

8.   Performance Exceptions Reporting for January 2019

 

Committee Comment

The staff recommendation was accepted without change. The Committee also requested a further report from staff for the next meeting regarding the process for an independent review of 3 waters delivery.

 

 

Committee Resolved FPCO/2019/00009

Part C

That the Finance and Performance Committee of the Whole:

1.         Receive the information in the monthly Corporate Performance Exceptions Report, Level of Service Exceptions and Commentary, and Performance by Activity reports for January 2019.

2.         Request that staff report separately next month on the process for an independent review of 3 waters delivery (as per a s17A review) in light of the potential consequences of the government’s Three Waters Review.

Mayor/Deputy Mayor                                                                                                                                              Carried

 

 

 

The Mayor left the meeting at 11.18am.

 

The meeting adjourned at 11.18am and reconvened at 11.32am. Councillors Buck, Cotter, East and Galloway were not present at this time.

 

Councillor Cotter returned to the meeting at 11.33am during consideration of item 12.

 

Councillor Galloway returned to the meeting at 11.36am during consideration of item 12.

 

Councillor Buck returned to the meeting at 11.38am during consideration of item 12.

 

Councillor East returned to the meeting at 11.47am during consideration of item 12.


 

12. Regenerate Christchurch Ltd - Half year performance report for period 1 July - 31 December 2018

 

Committee Comment

Ivan Lafeta, Chrief Executive and Jen Crawford, Board Member of Regenerate Christchurch Limited joined the meeting for consideration on this item.

 

 

Committee Resolved FPCO/2019/00010

Original Staff Recommendation Accepted without Change

Part C

That the Finance and Performance Committee of the Whole:

1.         Note the attached performance reports from Regenerate Christchurch and Council and the Department of the Prime Minister and Cabinet staff; and

2.         Request Council staff to urgently review the Regenerate Christchurch Forward Work Programme and associated financial implications and report back to Council. 

Councillor Manji/Deputy Mayor                                                                                                                         Carried

 

 

 

Councillor Buck left the meeting at 11.54am during consideration of item 9 and was not present when the motion was put.

 

Councillor Gough left the meeting at 12.01pm and returned at 12.05pm during consideration of item 9.

 

Deputy Mayor Turner left the meeting at 12.11pm during consideration of item 9 and was not present when the motion was put.

 


 

9.   Community Facilities Earthquake Rebuild Programme Bi-Monthly Update February 2019

 

Committee Resolved FPCO/2019/00011

Original Staff Recommendation Accepted without Change

Part B

That the Finance and Performance Committee of the Whole:

1.         Receives the information in the Community Facilities Rebuild Bi-Monthly Update report.

Councillor Chen/Councillor Gough                                                                                                                  Carried

 

 

 

Councillor Buck returned to the meeting at 12.19pm during consideration of item 10.

 

Deputy Mayor Turner returned at 12.14pm during consideration of item 10.

 

 

10. Christchurch Town Hall Project Monthly Update

 

Committee Resolved FPCO/2019/00012

Original Staff Recommendation Accepted without Change

Part B

That the Finance and Performance Committee of the Whole:

1.         Receives the Christchurch Town Hall Project Monthly Update report.

Councillor Manji/Councillor Chen                                                                                                                    Carried

 

 

 

11. New Brighton Pier Project Closeout Summary

 

Committee Resolved FPCO/2019/00013

Original Staff Recommendation Accepted without Change

Part B

That the Finance and Performance Committee of the Whole:

1.         Receive the information in the Project Closeout Summary for New Brighton Pier.

Councillor Manji/Councillor East                                                                                                                      Carried

 

 

 

 

Councillor Templeton left at 12.40pm during consideration of item 13  and was not present when the motion was put.

 

 

13. Christchurch City Holdings Ltd - Interim Report 2019

 

Committee Comment

Leah Scales, Chief Financial Officer of Christchurch Holdings Limited joined the table for consideration on this item.

 

 

Committee Resolved FPCO/2019/00014

Original Staff Recommendation Accepted without Change

Part B

That the Finance and Performance Committee of the Whole:

1.         Notes the content of this report and the attached Christchurch City Holdings Ltd Interim Report for 2019.

Councillor Manji/Councillor Davidson                                                                                                            Carried

Deputy Mayor Turner and Councillors Buck and Gough declared an interest and took no part in discussion on this item.

 

 

Councillor Templeton returned to the meeting at 12.40pm during consideration of item 14. 

 

14. Council-controlled organisations - Half year reports for the period 1 July - 31 December 2018

 

Committee Resolved FPCO/2019/00015

Original Staff Recommendation Accepted without Change

Part B

That the Finance and Performance Committee of the Whole:

1.         Note the contents of this report, and its attachments.

Councillor Clearwater/Councillor Scandrett                                                                                               Carried

 

Councillors appointed to the Boards of these organisations took no part in discussion on the reports from those organisations.

 

 


 

 

 

15  Resolution to Exclude the Public

 

Committee Resolved FPCO/2019/00016

Part C

That Leah Scales, of Christchurch Holdings Limited, remain after the public have been excluded for Item 17 of the public excluded agenda as she has knowledge that is relevant to that item and will assist the Council.

AND

That Anna Elphick, Acting Chief Executive and Jane Carr of ChristchurchNZ Holdings Limited, remain after the public have been excluded for Item 18 of the public excluded agenda as they have knowledge that is relevant to that item and will assist the Council.

AND

That Chris Mintern and Chris Wallace of Vbase Limited, remain after the public have been excluded for Item 19 of the public excluded agenda as they have knowledge that is relevant to that item and will assist the Council.

AND

That at 12.53pm the resolution to exclude the public set out on pages 269 to 271 of the agenda be adopted.

Councillor Manji/Deputy Mayor                                                                                                                           Carried

 

The public were re-admitted to the meeting at 3.33pm.

 

   

Meeting concluded at 3.33pm.

 

CONFIRMED THIS 4TH DAY OF APRIL 2019.

 

Councillor Raf Manji

Chairperson

 


Finance and Performance Committee of the Whole

04 April 2019

 

 

7.     Capital Programme Performance Report

Reference:

19/323957

Presenter(s):

Ged Clink – Head of Programme Management Office
David Adamson –General Manager City Services
Heads of – Various from Capital Delivery Teams

 

 

1.   Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee of the Whole to be informed of the Capital Programme Delivery Performance for period ending 28 February 2019.

2.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receive the information in the Capital Programme Performance report.

2.         Note that the report has now been aligned to end of month financial and delivery information, bringing it into alignment with Performance Management and Corporate Finance reporting periods. 

 

 

 

Attachments

No.

Title

Page

a

Capital Programme Performance Report

18

 

 

Confirmation of Statutory Compliance

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

(a) This report contains:

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

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

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

 

Signatories

Author

Ged Clink - Head of Programme Management Office

Approved By

Carol Bellette - General Manager Finance and Commercial (CFO)

David Adamson - General Manager City Services

  


Finance and Performance Committee of the Whole

04 April 2019

 

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Finance and Performance Committee of the Whole

04 April 2019

 

 

8.     Performance Exceptions Reports for February 2019

Reference:

19/284040

Presenter(s):

Peter Ryan - Head of Performance Management

 

 

1.   Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee of the Whole to note performance exception reporting for February 2019.

2.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receives the information in the monthly Corporate Performance Exceptions Report, Level of Service Exceptions, Commentary and Performance by Activity reports for February 2019.

3.   Key Points

3.1       Corporate performance reports focus on exceptions as follows:

3.1.1   Performance Exceptions Report February 2019 in Attachment A.

3.1.2   Attachment B comprises February 2019 updates for:

·   Graph of forecast levels of service (LOS) performance by Activity.

·   Graph of forecast LOS delivery summary.

·   Exceptions commentaries.

3.1.3   Performance by Activity Feb 2019 in Attachment C.

·   Graph of relationship between forecast LOS delivery and forecast operational expenditure by Activities.

·   Table of Activities forecast LOS delivery performance and forecast operational expenditure.

4.   Context/Background

Issue or Opportunity

4.1       The reports assist with both transparency and accountability. Their focus is on managing risks to delivery and any remedial actions required.  

Strategic Alignment

4.2       This reporting framework is based on the levels of service, budgets and projects approved in the 2018 Long Term Plan. 

 

 

Attachments

No.

Title

Page

a

Performance Exceptions Summary Feb 2019

35

b

LOS Graphs and Exceptions Commentaries Feb 2019

37

c

Performance by Activity Feb 2019

49

 

 

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

Lerks Stedman - Senior Business Analyst

Boyd Kedzlie - Senior Business Analyst

Approved By

Peter Ryan - Head of Performance Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee of the Whole

04 April 2019

 

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04 April 2019

 

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04 April 2019

 

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Finance and Performance Committee of the Whole

04 April 2019

 

 

9.     Process for an independent review of 3 Waters delivery (as per a s17A review)

Reference:

19/325036

Presenter(s):

David Adamson -  General Manager City Services
Teresa Wooding -  Project Manager, Strategy and Transformation

 

 

1.   Purpose of Report

1.1       The report sets out the options and provides a recommendation regarding who will prepare, review and provide governance of a Local Government Act 2002 (LGA) section 17A review for the 3 Waters. 

1.2       It responds to a request from the Finance and Performance Committee of the Whole’s meeting on 19 March 2019 to ‘report separately on the process for an independent review of 3 Waters delivery (as per a s17A review) in light of the potential consequences of the government’s Three Waters Review’.

2.   Executive Summary

2.1       A section 17A review was completed for the 3 Waters in 2017 as part of the delivery of the Long Term Plan 2018 - 2028. 

2.2       Prepared internally with external support, it recommended retaining the status quo of internal governance, asset ownership and service delivery. 

2.3       The potable and waste water maintenance contracts are due to expire in June 2020.  This potentially triggers the LGA section 17A requirement for a further review. 

2.4       The LGA section 17A(3) sets out the grounds for exemptions.  This includes (b) ‘if the local authority is satisfied that the potential benefits of undertaking a review … do not justify the costs of undertaking the review’.   The Council could potentially seek to use these grounds for exemption but at this stage there is no evidence to confirm that the Council would meet them.

2.5       The timeframe for the contracts renewal process does not allow for the completion of a section 17A review.  The contracts renewal programme team are aware and looking into the potential impacts.

2.6       Assuming a section 17A review is to proceed, the lead author and approach for peer-review and review process governance needs to be agreed.  Appendix A provides a summary of options. Staff recommend option 1 which is for an independent preparation lead and process governance with internal staff support peer review.  The options analysis specifically excluded funding constraints to avoid automatically recommending an internal approach.  However, Council will need to consider the costs of the different options, and it should be noted that no provision for external funding for a 3 Waters section 17A review is provided in the annual plan.

2.7       Central Government is currently undertaking a 3 Waters review that may impact the way these services are delivered in the future.  With recommendations from Central Government due by the end of 2019, the section 17A review could further explore the options that are expected to be considered by central government so that Council can be prepared to respond to any significant and/or structural changes that may be recommended.

2.8       The main time constraint for the development of a Section 17A review will be in regards to the development of an agreed regional perspective.

3.   Staff Recommendations

That the Finance and Performance Committee of the Whole recommend to Council:

1.         That a section 17A review for the 3 Waters should commence in 2019.

2.         To approve option 1 as the preferred way of delivering the review, which is an independent preparation lead and process governance with internal staff support and peer-review.

3.         To identify how the 3 Waters section 17A review should be funded.

4.         Note that the scope of the section 17A review has to include cost-effectiveness for the Canterbury region as per the legislation and this will enable the Council to be prepared to respond to potential outcomes of the central government 3 Waters work programme.

4.   Key Points

4.1       A section 17A review focuses on the cost-effectiveness of current service delivery arrangements for the Christchurch district. 

4.2       The LGA section 17A requirement provides flexibility on the level of independence in how a review is prepared, reviewed and governed.

4.3       An independent review can provide greater transparency and the ability for a review to include an objective regional focus.  A challenge with including a regional focus is that it would increase timeframes as well as agreement from the other councils to participate.  At this stage there is no indication that other councils would agree to be involved.

4.4       The Canterbury Mayoral Forum included a 3 Waters review in its regional work programme for the current triennium.  The scope of this work was amended in 2018 and no longer includes a formal regional strategic assessment for the delivery of 3 Waters services. As such it does not guarantee to provide a sufficient basis for any preparation required by the Council regarding the Central Government 3 Waters review.

4.5       The potable and waste water maintenance contracts renewal programme does not currently allow for the completion of a section 17A review prior to executing  significant decisions that would impact the ability for any recommendations of a section 17A to be viable.  The programme team is aware that a section 17A may be performed and is already looking into the timeframe impacts.

5.   Context/Background

Issue or Opportunity

5.1       With the Council’s potable and waste water maintenance contracts expiring in June 2020, a section 17A review can deliver a sound foundation to ensure that the way that services are delivered will provide the best value for money prior to the preparation of a contract renewal or open market tender.  With a focus on service delivery, funding and governance it is a vital pre-requisite to ensure that the Council is not tied into one or more contracts that may not provide the best overall delivery mechanism going forwards. 

5.2       As the timeframes do not currently align, a short term direct negotiation for the potable and waste water maintenance contracts may be required to enable the outputs of the section 17A review to effectively feed into the contract renewal process.

Strategic Alignment

5.3       This report aligns to the ‘Safe and sustainable water supply and improved waterways’ strategic priority.  A section 17A review will analyse how the services are delivered, not the activities and programmes that are required to deliver on this strategy priority.  However, how the services are delivered and what work is underway are not mutually exclusive and achieving the best overall outcome for water services is paramount.

A section 17A review and how it is triggered

5.4       Section 17A of the Local Government Act 2002 states that all Councils ‘must review the cost effectiveness of current arrangements for meeting the needs of communities within its district or region for good-quality local infrastructure, local public services and performance of regulatory functions’.  A section 17A must cover governance, funding and service delivery arrangements and a summary of the act is provided in Attachment C for reference.

5.5       Christchurch City Council completed a section 17A review for the 3 Waters in May 2017.  It recommended retaining the status quo of internal governance, asset ownership and service delivery.

5.6       Section 17A includes three triggers for doing a review.  As the maintenance contracts for the service delivery of potable and waste water services is due for renewal in June 2020, it fits into trigger (b) which states that ‘within 2 years before the expiry of any contract or other binding agreement relating to the delivery of that infrastructure, service, or regulatory function’. 

5.7       A section 17A review can also be triggered ‘at such other times as the local authority considers desirable, but not later than 6 years following the last review’.

5.8       Section 17A(3) contains the conditions for exemptions.  This report has not considered grounds for exemption as the request was in regards to the process for an independent review.  It should be noted that without further investigation, whether or not an exemption could be sought is not known.

Approach taken for the 2017 section 17A review

5.9       The programme to deliver the 2018-2028 Long Term Plan included the completion of a section 17A review, or exemption as applicable for each service area.   The 3 Waters services review was completed internally to the Christchurch City Council but outside of the 3 Waters business unit.  The review of options was completed by a panel of Christchurch City Council senior staff members and three City Councillors.  The financial analysis of options was prepared by PwC who also provided peer review advice during the development of the review.

Advice provided in the 2017 section 17A review

5.10    The overall recommendation was to retain the status quo due to insufficient justification to further investigate a change.   A financial review of amalgamation options was not included as at the time a separate piece of work had been approved through the Canterbury Mayoral Forum to review regional opportunities for the delivery of 3 Waters services.   PwC reported that an economic case for any alternative option could not be made when considering Christchurch City Council in isolation.

5.11    A number of recommendations were included in the final section 17A review. These supported improved value for money in the status quo as well as better preparedness for future section 17A reviews.  A summary of the actions with an update on the progress is provided in Attachment B for reference.

 Central Government’s Three Waters review programme

5.12    A review of service delivery options is a key component of the Central Government’s three waters programme.  A report is currently due back to Cabinet in late 2019 and is expected to focus on the following three high-level options:

5.12.1 Regulatory reforms with voluntary, sector-led reforms to service delivery arrangements;

5.12.2 A three waters fund to support voluntary service delivery improvements; and

5.12.3 An aggregated system of dedicated, publically-owned, drinking water and wastewater providers.

5.13    LGNZ position statement[1] on the three waters, released in late 2018 outlined the following four principles:

5.13.1 Fix the drinking water first – regulatory reform and hard line, outcome based, standards.

5.13.2 Let existing regulations run their course – noting the 2017 amendments to the National Policy Statement for Freshwater Management which lift the requirements for stormwater and wastewater discharges.

5.13.3 Take mandatory aggregation off the table – 3 Waters assets are owned by communities and communities are best placed to make the decisions; oppose a one-size-fits-all policy approach and notes other options such as shared services, franchising, and contracted service provision.

5.13.4 Incentives matter – quality standards plus enforcement will lift performance, encourage innovation and minimise the cost burden; small rural councils may require subsidies.

The Mayoral Forum work programme

5.14    In the 2017 section 17A review a regional focus was removed from scope because the Mayoral Forum work programme included a strategic assessment on the delivery of the 3 Waters. In early 2018 the Canterbury Chief Executives Forum endorsed a proposal from the Operations Forum to re-focus the strategic assessment and request the new operations forum to:

5.14.1 Stocktake the current state of 3 Waters management across the region.

5.14.2 Build consensus on a strategic intent for 3 Waters management in Canterbury in relation to national direction and developments.

5.14.3 Identify key risks, challenges and barriers, and recommend priority actions.

This programme of work is under action by the Engineering Managers Forum.  The latest status update, as provided to the Canterbury Operations Forum in February 2019 is included in Attachment B for reference.

What a section 17A review could contribute

5.15    With the potable and waste water maintenance contracts up for renewal in July 2020, a section 17A review can provide a robust foundation to ensure the best approach for governance, asset ownership and service delivery is achieved before being locked into a significant contract.  The outcomes of the review could have fundamental implications on the setup, scope and requirements for on-going maintenance contracts and as such this needs to be completed as a pre-requisite to the core contract renewal process.

5.16    A section 17A review also enables regional amalgamation or shared services options to be explored as a basis for responding to the outcomes of Central Government’s 3 Waters review.  For this to be effectively and objectively achieved, the section 17A review will need to consider cost effectiveness from the perspective of the Christchurch District and also the Canterbury Region and will require support and engagement from the other Councils within the Canterbury region.

 

Attachments

No.

Title

Page

a

Section 17A review - options on how it could be delivered

56

b

Update on the recommendations of the 2017 section 17A review

57

c

Section 17A legislation

62

 

 

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

Teresa Wooding - Project Manager

Approved By

David Adamson - General Manager City Services

  


Finance and Performance Committee of the Whole

04 April 2019

 

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04 April 2019

 

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Finance and Performance Committee of the Whole

04 April 2019

 

 

10.   Christchurch Town Hall Project Monthly Update

Reference:

19/257795

Presenter(s):

John Rossetter – Project Director
Alistair Pearson – Manager Capital Delivery Major Facilities

 

 

1.   Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee of the Whole to be updated as to the current status of the Town Hall Rebuild Project.

1.2       This report was requested by the Council under resolution CNCL/2018/00312.

That the Council requests that the project provides a monthly status report to Finance and Performance Committee.

 

2.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receives the Christchurch Town Hall Project Monthly Update.

3.   Context/Background

3.1       Under Council resolution dated 19 December 2018 the budget for the Town Hall Rebuild Project was increased by up to $15M to a total budget allowance of up to $167.2M. The staged completion of the project as described below was also noted by the Council:

·   Auditorium, Foyer, Function and Limes rooms - 20 February 2019.

·   James Hay Theatre - 5 April 2019.

·   Christchurch Symphony Orchestra rehearsal building (CSO) – Certificate of Public Use (CPU) 7 May 2019 and project completion 15 August 2019.

3.2       Under this resolution the Council also agreed that the additional funding would be allocated from within the existing capital programme and would not affect rates. The Council requested that a report be presented to the Finance and Performance Committee detailing the savings identified across the multi-year capital programme that will enable the additional funding to be allocated to the project. The Council noted that no approval was given to delay or re-scope projects beyond the existing delegations.

4.   Project Status

Programme

4.1       The auditorium, foyer, function and Limes rooms were handed over to Vbase as planned ahead of the public reopening of the facility 23 February 2019.

4.2       Current accepted construction programme sectional completion dates remain within those presented to the Council 19 December 2018.



Progress

Construction

4.3       Certificate of Public use covering the areas forming section one of the works was issued 21 February 2019.

4.4       Defect rectification and commissioning activities continue across all sections of the works including section one.

4.5       Construction works continue across the remaining sections of the works.

Establishment

4.6       The installation of theatrical enhancements to the James Hay Theatre including the flying system and the constellation system has commenced.

5.   Financial

5.1       The total estimated final project cost remains within the total budget allowance of $167.2M.

5.2       Staff have provided an initial briefing to Councillors regarding the borrowing cost savings already identified to offset the additional Town Hall budget, with a further update planned for Q1 FY20 as further savings are realised as part of financial year end processes. It is intended for a report to be presented to the Finance and Performance Committee after this time.

 

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

Authors

Harriet Scott - Project Coordinator

John Rossetter - Project Director

Michael Down - Finance Business Partner

Approved By

Alistair Pearson - Manager Capital Delivery Major Facilities

Mary Richardson - General Manager Citizen and Community

  


Finance and Performance Committee of the Whole

04 April 2019

 

 

11.   Capital Delivery Major Facilities Elected Member Updates

Reference:

19/280754

Presenter(s):

Alistair Pearson - Manager Capital Delivery Major Facilities

 

 

1.   Purpose of Report

1.1       To inform the Finance and Performance Committee of the Whole of current updates involving Capital Delivery Major Facilities projects.

2.   Executive Summary

2.1       The Capital Delivery Major Facilities Team (CDMF) is responsible for the delivery of Christchurch City Council’s Major Facilities “high risk” and “high value” vertical projects. Established under the 2016 Fit for Future Organisational restructure, it currently holds a portfolio of ten (10) major projects with an estimated total budget of $824.5 million and a Heritage Maintenance Programme with a total budget of about $0.8 million.

2.2       Since its establishment, CDMF has completely delivered Lichfield Street Carpark (November 2017), Taiora QEII Recreation and Sport Centre (May 2018), Tūranga Central Library (October 2018) and this year Christchurch Town Hall (February-March 2019) and the Christchurch Symphony Orchestra Rehearsal Building (August 2019).

2.3       CDMF is headed by its Manager, Alistair Pearson with a full time staff of 11.

 

3.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receives the information within the Elected Member Updates of Capital Delivery Major Facilities projects:

a.         Christchurch Town Hall

b.         CSO Rehearsal Space (included in Town Hall update)

c.         Metro Sports Facility (Joint Venture with Ōtākaro Ltd)

d.         Lancaster Park Demolition

e.         Linwood Pool

f.          Hornby Library, Service Centre and South West Leisure Pool

g.         Cathedral Square Public Realm Improvements

h.         Old Municipal Chambers Roof Repairs

i.          Performing Arts Precinct

j.          Canterbury Multi-Use Arena

4.   Key Points

4.1       All projects are delivered by Major Facilities using our Key Operational Standards.

 

5.   Context/Background

Issue or Opportunity

5.1       Opportunity to view the Major Facilities Portfolio and confirm its alignment with Council Strategic Framework outcomes.

Strategic Alignment

5.2       Portfolio delivery aligns with the Council Strategic Framework objectives and in accordance with the Long Term Plan forecast.

 

 

Attachments

No.

Title

Page

a

Major Facilities Elected Member Updates March 2019

69

 

 

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

Rita Estrella - Senior Project Coordinator

Harriet Scott - Project Coordinator

Approved By

Alistair Pearson - Manager Capital Delivery Major Facilities

Mary Richardson - General Manager Citizen and Community

  


Finance and Performance Committee of the Whole

04 April 2019

 

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Finance and Performance Committee of the Whole

04 April 2019

 

 

12.    Tūranga, Central Library Financial Close-out Report

Reference:

19/154951

Presenter(s):

John Rossetter - Project Director

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       To inform the Finance and Performance Committee of the Whole as to the financial status of the New Central Library Project.

1.2       To satisfy the Committee’s request for information relating to the project budget and the expenditure of the project budget.

Origin of Report

1.3       This report was requested by the Chair of the Committee.

 

2.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receive the specific information contained in the Tūranga, Central Library Financial Close-out Report.

3.   Key Points

3.1       The Council initiated the project in 2012 in response to the Christchurch Central Recovery Plan (CCRP). The project developed through a period marked by significant change following the earthquake of February 2011.

3.2       As a result the project budget changed a number of times in response to this uncertain environment.

3.3       The project budget is $92.7M. The final account with the main contractor has now been agreed. The final forecast cost is currently $91.8M. A sum of in the order of $0.9M is expected to be returned from the project budget following the formal closure of the project accounts.

 

4.   Context/Background

4.1       The existing central library building on Gloucester Street was damaged in the 2010 and 2011 earthquakes and aftershocks.

4.2       The Council initially planned to repair the building at an estimated cost of $8.8M supported by an estimated insurance pay-out of $8.2M.

4.3       However, this plan was superseded by the release of the CCRP in July 2012. The CCRP identified a new central library as an Anchor Project in its Blueprint for the reconstruction of central Christchurch. The location designated for the proposed New Central Library was a 2,725 square metre site on the northern edge of the Square facing Colombo Street to the west and Gloucester Street to the north.

4.4       The Council engaged a consultant design team led by Architectus-schmidt hammer lassen to produce a preliminary design and employer’s requirements; Architectural: Architectus-schmidt hammer lassen, Structural: Opus, Building Services: Beca, Fire: Aurecon, Quantity Surveyor: AECOM (formerly Davis Langdon)

4.5       The Council sought design and construct submissions from the open market on the basis of this preliminary design solution. Tenderers were specifically asked to provide innovative construction solutions.

4.6       Southbase Construction provided the successful submission and was subsequently engaged under an NEC3 Engineering and Construction Contract.

4.7       Construction works commenced September 2016 and were completed 19 September 2018. The facility opened to the public 12 October 2018.

5.   Funding

5.1       The Cost Sharing Agreement signed in 2013 set out high level parameters for the project; a  Total Project cost of $89.363M, split $19.363M Crown, $60M Council and $10M Non-Commercial (Philanthropic), that Project Delivery Responsibility, Ownership (upon completion) and Operating Cost Liability would all lie with the Council and an Estimated Project Completion Date of Q3 2015.

5.2       The Council initiated the New Central Library Project in 2012 and budgeted the required $~56M in its 2013-2016 three year plan ($60M when inflation adjusted).

5.3       The project team undertook an extensive public consultation exercise and proceeded to benchmark public expectations against similar facilities around the world. Benchmarking confirmed that for the project to be capable of achieving its objectives a budget of in the order of $90M would indeed be required.

5.4       The Crown spent $12.7M to acquire and clear the land for the New Central Library. This land was transferred by the Crown to the Council in May 2016. In turn the Council reimbursed the Crown a sum of $5.5M, which is understood to be equal to the sum that the Crown paid to the Council to acquire the site of the existing central library. The contribution made to the project by the Crown was therefore $7.2M.

5.5       The Council increased its budget to $75M under its 2015-2025 Long Term Plan to account for the now projected funding shortfall. The project team proceeded to develop a design for the facility and presented its design to the Council on 26 March 2015. The Council confirmed the allocation of funding and instructed the project team to seek submissions from the market for the completion of the design and construction of the facility.

5.6       In 2016 the Crown ceased efforts to secure the required philanthropic funding. In order to expedite the delivery of the project the Council committed to underwrite the philanthropic investment of $10M described by the Cost Share Agreement seeking instead to develop commercial partnerships with interested parties through a community foundation.

5.7       The Council found that the land was contaminated and in need of remediation. Under resolution 22 April 2016 the Council increased the project budget by $7.7M to $92.7M, recognising the previously unbudgeted cost of $5.5M associated with the acquisition of the land and allowing $2.2M with respect to the cost of the decontamination of the land.

5.8       The project budget remains $92.7M.

6.   Financial Performance

6.1       At the point of main contractor engagement the final forecast cost was $92.7M of which approximately $6M was contingency. At this time operational establishment related costs had been estimated at a high level.

6.2       The scope of the establishment related elements of the project was developed in detail through 2017 and an Establishment Project Management Plan and a revised budget structure was accepted by the Project Steering Group in January 2018. The final forecast cost at this time was $91.9M. The remaining unallocated budget of $0.8M was held as contingency.

6.3       The contingency was managed in accordance with the processes and delegations of authority described in the approved project management plans.

6.4       The final account with the main contractor has now been agreed. However a handful of other items have yet to be concluded. The project accounts will be formally closed following the defect liability period which will conclude in September 2019.

6.5       The final forecast cost is currently $91.8M. A sum of in the order of $0.9M is expected to be returned from the project budget following the formal closure of the project accounts.

 

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

Authors

Harriet Scott - Project Coordinator

John Rossetter - Project Director

Approved By

Alistair Pearson - Manager Capital Delivery Major Facilities

Carolyn Robertson - Head of Libraries and Information

Mary Richardson - General Manager Citizen and Community

  


Finance and Performance Committee of the Whole

04 April 2019

 

 

13.   Council-controlled organisations:  Draft Statements of Intent 2019/20

Reference:

19/223234

Presenter(s):

Linda Gibb - Performance Advisor

 

 

1.   Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee of the Whole to note the draft Statements of Intent (SOI) for 2019/20, 2020/21 and 2021/22 for the following Council-controlled organisations (CCOs) – Central Plains Water Trust, Christchurch Agency for Energy Trust, Civic Building Ltd, Riccarton Bush Trust, and Rod Donald Banks Peninsula Trust. 

2.   Executive Summary

2.1       The draft SOIs that are the subject of this report were all received on or before 1 March 2019, in accordance with clause 2 of schedule 8 of the Local Government Act 2002 (LGA). 

2.2       All of the draft SOIs meet the minimum content requirements of clauses 9 and 10 of schedule 8 of the LGA.

 

3.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Notes that the draft Statements of Intent for 2019/20, 2020/21 and 2021/22 for Central Plains Water Trust, Christchurch Agency for Energy Trust, Civic Building Ltd, Riccarton Bush Trust and Rod Donald Banks Peninsula Trust were all received by 1 March 2019 in accordance with clause 2 of schedule 8 of the Local Government Act 2002, and all comply with the minimum content requirements of clauses 9 and 10 of schedule 8 of the Local Government Act 2002.

2.         Requests that Riccarton Bush Trust includes performance targets for the annual number of visitors to Riccarton House and Bush, and for third party revenue in its final Statement of Intent.

3.         Agrees that the draft Statements of Intent for Central Plains Water Trust, Christchurch Agency for Energy Trust, Civic Building Ltd, and Rod Donald Banks Peninsula Trust are acceptable to the Council in their current forms and can accordingly be finalised.

4.   Key Points

4.1       The draft SOIs from the following organisations are attached:

·    Central Plains Water Trust (Attachment A)

·    Christchurch Agency for Energy Trust (Attachment B)

·    Civic Building Ltd (Attachment C)

·    Riccarton Bush Trust (Attachment D)

·    Rod Donald Banks Peninsula Trust (Attachment E)

4.2       In accordance with clause 2 of schedule 8 of the LGA, the draft SOIs were submitted to the Council within the statutory timeframe provided (by 1 March 2019).  The draft SOIs all meet the minimum content requirements of clauses 9 and 10 of schedule 8 of the LGA. 

Central Plains Water Trust

4.3       Central Plains Water Trust (CPWT) is a charitable trust for which the joint settlors are the Christchurch City Council and the Selwyn District Council.  The Trust Deed provides that the purpose of the CPWT is to “promote the development of agriculture in the Central Canterbury Plains area of New Zealand for the benefit of all of the inhabitants of the Canterbury region”. 

4.4       Construction of Stages 1 and 2 of the Central Plains Water Scheme are complete.  Activities that CPWT undertakes include monitoring compliance with resource consent conditions and CPWT’s terms and conditions under the licensing agreement, and the users of the Scheme in respect of Water Use Agreements. 

4.5       The reasonable costs of administering the CPWT are paid annually by Central Plains Water Ltd.  The costs are estimated at $80,000 in 2019/20.   

4.6       In 2016 the Council considered whether it should withdraw from the Trust, leaving it to Selwyn District Council to continue as sole settlor.  The Council resolved to continue in its role as settlor (CNCL/2016/00074 refers). 

4.7       CPWT’s draft SOI is largely identical to its 2018/19 SOI.  The key performance targets have not changed between this draft SOI and last year’s SOI.

Christchurch Agency for Energy Trust

4.8       Christchurch Agency for Energy Trust (CAfE) administers the Christchurch Energy Grants Scheme which is close to being fully allocated and paid.  The Trust expects to be wound up as soon as it pays out its remaining funds of $225,000.  It is forecasting to pay out $220,000 during the 2019/20 year, with any residual balance likely to be donated to the Mayor’s Welfare Fund.

4.9       The draft SOI contains only one performance target – allocation of the remaining balance of incentive grants for initiatives within the central city through the Christchurch Energy Grants Scheme or other initiatives in line with the Trust Deed.

4.10    As soon as possible following completion of all of its obligations, Council staff will report on the requirements for winding up CAfE.

Civic Building Ltd

4.11    A comparison of the financial targets between the current draft SOI and last year’s SOI is as follows:

(Loss)/profit before income tax target

SOI target

2018/19

$000

SOI target

2019/20

$000

SOI target

2020/21

$000

SOI target

2021/22

$000

Current draft SOI

-

65

41

(4)

Last year’s final SOI

(345)

(15)

(191)

-

4.12    The repayment of debt of $2.5 million in December 2018, with a further $2.5 million repayment to be made in June 2019, will reduce interest costs going forward. 


 

Riccarton Bush Trust

4.13    The Trust forecasts to break-even from its operations.  The table below shows the comparison of the financial targets for revenue/expense between the current draft SOI and last year’s SOI:

Revenue/Expense target

SOI target

2018/19

$000

SOI target

2019/20

$000

SOI target

2020/21

$000

SOI target

2021/22

$000

Current draft SOI

-

560

771

582

Last year’s final SOI

556

567

578

-

4.14    The increase in expenditure in 2020/21 against last year’s SOI and compared with 2019/20 and 2021/22 is the repainting of Riccarton House.  Previously the Trust had it painted in stages each year.  However, it was able to negotiate a lower price for the full job to be done in one year so that going forward the cost of circa $200,000 will be incurred once every eight years.

4.15    The forecast capital structure shows increased equity from $11 million to $15 million as a result of a revaluation gain on property, plant and equipment at the end of the 2017/18 financial year. 

4.16    The Trust’s levy to the Council is $360,600 and its capital funding requirements are signalled at $93,100 (for works including ground floor carpet replacement, external toilet upgrade, bush enhancements and interpretation) in 2019/20 and these amounts have been provided for in the 2018-28 LTP. 

4.17    Performance targets relate to key projects the Trust is undertaking, environmental and social outcomes, and a financial target for expenditure to match revenue.  The Riccarton House and Bush’s benefit to the community rests with the number of visitors to it.  The quality of the historic offering is enhanced by the Trust’s ability to earn third party revenue, which it recorded a sizeable increase in for the half year to December 2018. 

4.18    Staff propose that Council requests the Trust to include performance targets for visitor numbers and for third party funding in its final SOI.

Rod Donald Banks Peninsula Trust

4.19    At its inception in 2010 the Trust was vested with capital of $3.5 million from the sale of farms endowed to earlier Banks Peninsula councils.  Expenditure projections indicate that the Trust will no longer be able to contribute capital to major projects after 2020.

4.20    The Trustees consider there is still work to be done to deliver outcomes relating to its four key pillars - access, biodiversity, knowledge and partnership.  It has produced a strategic plan for the period 2020-2030 and is scheduled to present the plan to Council on 11 April.  We understand the Trustees will be seeking an indication of support (or otherwise) from Councillors to it doing further work to identify specific projects that could potentially be funded.

4.21    A comparison of the financial targets between the current draft SOI and last year’s SOI is as follows:

Operating surplus/(deficit) target

SOI target

2018/19

$

SOI target

2019/20

$

SOI target

2020/21

$

SOI target

2021/22

$

Current draft SOI

-

(60,964)

(101,355)

(126,161)

Last year’s final SOI

143,584

(112,088)

(128,010)

-

 

Forecast Trust funds

2,131,765

1,348,801

706,196

90,035

4.22    There is a change in performance targets between years as follows:

·    Removed:  due to the project being completed, the target of securing a conservation covenant on the regenerating forest on the Woodills South track property prior to its sale, and divesting property that contains Woodills South track after a public walking easement has been secured; and

·    Inserted:  new undertaking for the Trust to build expertise in carbon sequestration and how it can facilitate native forest regeneration.

5.   Context/Background

5.1       Clause 2 of schedule 8 of the LGA provides that a CCO must deliver to its shareholders a draft SOI on or before 1 March each year.  Clause 3 provides that the CCO board (a) must consider any comments on the draft SOI that are made to it within two months of 1 March by the shareholders or by any of them, and (b) deliver the completed SOI to the shareholders on or before 30 June each year.  Clause 7 requires the board to make the final SOI publicly available one month after it has been finalised.

5.2       Clauses 9 and 10 of schedule 8 of the LGA lists the required content of SOIs in respect of the next financial year and each of the immediately following two financial years.  This includes, but is not limited to a CCO’s (or its group’s) objectives, nature and scope of activities, performance targets and other measures by which the performance of the group may be judged in relation to its objectives, estimate of distributions to shareholders, the board’s estimate of the commercial value of the shareholders’ investment in the CCO or group.

 

 

Attachments

No.

Title

Page

a

CPWT Draft SOI

88

b

Christchurch Agency for Energy - Draft SOI 2019/20

101

c

Civic Building Ltd - Draft SOI 2019/20

109

d

Riccarton Bush Trust - Draft SOI 2019/20

122

e

Rod Donald Banks Peninsula Trust - Draft SOI 2019/20

128

 

 

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

Len Van Hout - Manager External Reporting & Governance

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee of the Whole

04 April 2019

 

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04 April 2019

 

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Finance and Performance Committee of the Whole

04 April 2019

 

 

14.   Local Government Funding Agency - Half year report to 31 December 2018 and Draft Statement of Intent 2019/20

Reference:

19/229570

Presenter(s):

Linda Gibb - Performance Advisor

 

 

1.   Purpose of Report

1.1       This report accompanies the Local Government Funding Agency’s (LGFA’s) half year report for the period 1 July – 31 December 2018 and its draft Statement of Intent (SOI) 2019/20.

2.   Executive Summary

2.1       LGFA’s half year report to 31 December 2018 is at Attachment A and its draft SOI is at Attachment B

2.2       The LGFA is reporting net operating profit of $6.08 million at December 2018, largely from the early refinancing of loans due to expire on 15 March 2019 by councils and new council borrowing. 

2.3       The draft SOI is projecting net operating profit of $10.9 million for 2019/20, $11.2 million for 2020/21 and $10.9 million for 2021/22.

 

3.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Notes the content of this report.

2.         Agrees to advise the Local Government Funding Authority to finalise its Statement of Intent for the three years 2019/20, 2020/21 and 2021/22.

 

4.   Key Points

Interim Report to December 2018

4.1       Performance for the half is largely due to the early refinancing of debt expiring on 15 March 2019, and new lending.  New borrowing has tended towards the longer term of 6.5 years (average term of borrowing in the 12 months to 30 June 2018 was 4.5 years).

4.2       Of its loaned funds during the half year, $1.05 billion was long-dated and $800 million was customised lending on a flexible basis.  At December 2018, LGFA had long term loans of $8.8 billion and short-term lending (less than 12 months) of $524 million.

4.3       Financial outcomes reported for the half year ending 31 December 2018 include:

·    Net operating profit $6.08 million (same period last year: $6.04 million; SOI target $5.77 million).  The increase in profit of $0.31 million against target is a result of :

increased interest revenue of $0.17 million attributable to the early refinancing of loans maturing in March 2019 by councils and a higher level of new council borrowing; and

lower Approved Issuer Levy (AIL) of $0.15 million due to lower utilisation of the standby facility; 

·    Total assets of $9.9 billion (December 2017: $8.8 billion) have increased by $1.1 billion largely from increased loans on issue to local government of $1.35 billion;

·    Dividends paid during the period were $1.28 million of which the Christchurch City Council’s share was $106,240.

4.4       The Chair of the LGFA board notes that the “The financial strength of LGFA was reaffirmed by credit rating agencies Standard & Poors (in July 2018) and Fitch (in November 2018) who both maintained our credit rating at ‘AA+’ which, very importantly, is the same as the New Zealand Government” (page 5 of the LGFA Half Year Report, 31 December 2018).

4.5       LGFA is on target to meet three of its four SOI performance targets as noted on page 19 of its half year report.  The target not met is for savings on borrowing costs for council borrowers relative to other sources of financing and compared to previous years.  However, this largely reflects the reduced supply of council-issued debt in the market (and the natural reduction in LGFA/council interest rate differences as remaining council debt gets closer to its maturity), rather than LGFA performance.  This measure is likely to become less meaningful if most councils continue to meet their debt requirements from LGFA.

Draft Statement of Intent for 2019/20

4.6       The LGFA’s draft SOI was received before 1 March in accordance with clause 2 of schedule 8 of the Local Government Act 2002.  Clause 3(a) requires the board to consider any comments on the draft SOI that are made to it within two months of 1 March by the shareholders, or by any of them.  Clause 7 requires the board to make the final SOI publicly available one month after its finalisation.

4.7       The LGFA meets the minimum content requirements for a SOI as recorded in clause 9(1) of schedule 8 of the LGA.  Therefore, we propose that the Council advises LGFA that it should proceed to finalise the document.  The LGFA will be required to consider all comments made by other shareholders, if any, before finalising its SOI.

4.8       A comparison of the financial targets between the current draft SOI and last year’s SOI is as follows:

(Loss)/profit before income tax target

SOI target

2018/19

$000

SOI target

2019/20

$000

SOI target

2020/21

$000

SOI target

2021/22

$000

Current draft SOI

-

10.9

11.2

10.9

Last year’s final SOI

10.9

9.6

13.7

-

4.9       LGNZ has revised upwards its expectations of short and long term loans by around $1.1 billion in 2020 and $1.6 billion in 2021, reflecting among other things higher long-term borrowing requirements from councils as outlined in the Long Term Plans 2018-28, increased utilisation of short-term borrowing from LGFA by councils, and a surge in new council members who typically refinance their debt with LGFA upon joining.

4.10    Staff agree with LGFA’s change in its performance target that was designed to demonstrate the degree of savings that councils have made as a result of acquiring debt from the LGFA rather than private debt providers. This is the target that was not met in the LGFA’s interim report as discussed in the section above.  LGFA has had difficulty with measuring this performance measure because of the lack of single name bond issuance by councils who are not members of the LGFA.  Instead LGFA will use a survey-based approach to identify the benefits its lending provides to councils over private debt providers.

5.   Background

5.1       The LGFA is owned by the New Zealand Government (11.1%) and 30 councils (88.9%).  Christchurch City Council, and eight other councils own 74.7% (all with equal shareholdings of 8.3% each) and the remaining 21 local authorities own between them 14.2%. 

5.2       Loans issued to local government total $9.33 billion (2017: $7.98 billion).  The two major debt holders are Auckland Council ($2.10 billion) and Christchurch City Council ($1.96 billion), together holding 43.5% of loans issued.  Christchurch City Council’s loans increased by $298.6 million during the half year to 31 December 2018.

 

Attachments

No.

Title

Page

a

Local Government Funding Agency - Half year report to 31 December 2018

154

b

Local Government Funding Agency - Draft Statement of Intent for 2019/20

194

c

Local Government Funding Agency - Letter accompanying draft SOI 2019/20

207

 

 

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

Len Van Hout - Manager External Reporting & Governance

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee of the Whole

04 April 2019

 

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04 April 2019

 

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Finance and Performance Committee of the Whole

04 April 2019

 

 

15.    Development Christchurch Ltd - Performance report for period December 2018 - February 2019

Reference:

19/7386

Presenter(s):

Rob Hall - Chief Executive, Development Christchurch Ltd

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee of the Whole to note Development Christchurch Ltd’s (DCL’s) performance report for the period December 2018 to February 2019. 

Origin of Report

1.2       This report is staff generated as a result of receiving DCL’s performance report on 20 March 2019. 

2.   Significance

2.1       The 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 the extent to which the decisions in this report are likely to impact the community.

3.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Note the content of Development Christchurch Ltd’s performance report for December 2018 to February 2019.

 

4.   Key Points

4.1       DCL’s performance report from December 2018 – February 2019 is at Attachment A.

 

 

 

Attachments

No.

Title

Page

a

DCL - Performance Report for period December 2018 - February 2019

211

 

 

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

Len Van Hout - Manager External Reporting & Governance

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee of the Whole

04 April 2019

 

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Finance and Performance Committee of the Whole

04 April 2019

 

 

16.   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 of the Whole

04 April 2019

 

 

 

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

17

Public Excluded Finance and Performance Committee of the Whole Minutes - 7 March 2019

 

 

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

 

18

Development Christchurch Ltd - Performance report December 2018 - February 2019

s7(2)(h)

Commercial Activities

Information about commercial activities being undertaken or engaged in by DCL is contained in this report.

At such time that there are no longer grounds to withhold the information under the Local Government Official Information and Meetings Act 1987 and with the approval of the Chief Executives of the Council and DCL.

19

Vbase Ltd - Draft Statement of Intent 2020-2022

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

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

The report contains information that could cause detriment to Vbase while it is currently engaging with staff and progressing a restructuring of the business.

After final SOIs have been made public, both for Vbase and for the new CCOs and with the approval of the Chief Executives of the Council and Vbase.

20

ChristchurchNZ Holdings Ltd - Draft Statements of Intent 2020-2022 for ChristchurchNZ Ltd and CRIS Ltd

s7(2)(f)(ii)

Protection from Improper Pressure or Harassment

The draft SOIs may contain information that is not yet agreed with shareholders, and as a consequence may change in the final SOI.

After release of the final SOI by 31 July 2019, and with the approval of the Chief Executives of the Council and ChristchurchNZ Holdings Ltd

21

Capital Programme Watchlist and Major Cycleways Watchlist

s7(2)(b)(ii)

Prejudice Commercial Position

Release of the information may prejudice ongoing commercial negotiations.

Information on individual projects may be released from public excluded when the project is complete and the Chief Executive has determined there is no longer any reason to withhold the information under the Act.

22

Facilities Maintenance Contract Options

s7(2)(g), s7(2)(i)

Maintain Legal Professional Privilege, Conduct Negotiations

The witholding of the information is necessary to conduct contract negociations and maintain legal professional privilege.

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

23

Global Settlement Progress Report

s7(2)(i)

Conduct Negotiations

To enable confidential negotiations.

28 June 2019

or when Council considers the final Global Settlement report.

 

 



[1] http://www.lgnz.co.nz/assets/Uploads/aacd0f4253/LG-position-statement-on-three-waters.pdf