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 2 May 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 James Gough

Councillor Yani Johanson

Councillor Aaron Keown

Councillor Glenn Livingstone

Councillor Tim Scandrett

Councillor Deon Swiggs

Councillor Sara Templeton

 

 

26 April 2019

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

 

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

02 May 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

 

At the Council meeting on 15 April 2019:

It was resolved that the Council:

 

2.          Agree that the delegations to the Finance and Performance Committee of the Whole be kept under review to reflect that it is now a committee of the whole, and make the following changes:

a.         Delegates to the Finance and Performance Committee of the Whole authority to exercise all of the Council's powers under section 17A of the Local Government Act 2002, relating to service delivery reviews and decisions not to undertake a review.

b.         Delegates to the Finance and Performance Committee of the Whole authority to exercise all of the Council's powers in relation to development contributions, other than those delegated to the Chief Executive and Council officers as set out in the Council's Delegations Register.

i.          Any single development contribution rebate in excess of $1,000,000.

ii.         Any application for a remission of development contribution charges as provided for in the Council's Development Contributions Policy in effect at the time.

iii.       Any increase in development contributions charges as provided for under section 106 (2A - C) of the Local Government Act 2002.

iv.        Any change to the schedule of assets for which development contributions are charged as provided for under section 201A(5) of the Local Government Act 2002.

 

 

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

02 May 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

C          7.        Capital Programme Performance Report..................................................... 21

C          8.        Process for an independent review of 3 Waters delivery (as per a s17A review).... 37

B         9.        Asset Management Improvement Programme Report - Six monthly update...... 57

CAPITAL PROGRAMME: MAJOR PROJECTS

B         10.      Christchurch Town Hall Project Monthly Update........................................... 79

B         11.      Community Facilities Earthquake Rebuild Programme B-Monthly Update April 2019............................................................................................................. 81

LONG TERM PLAN

C          12.      LTP 2021-31 Programme Plan................................................................... 115

FINANCE REPORTS

B         13.      Corporate Finance Report for the quarter ended 31 March 2019...................... 129

B         14.      Financial Performance Report for the nine months to 31 March 2019............... 139

CLOSE OUT REPORTS

B         15.      SCIRT and Horizontal Infrastructure Rebuild Close-out................................. 161

C          16.      MyCouncil Request Management Closeout Summary................................... 477

C          17.      Resolution to Exclude the Public.............................................................. 485  

 

 


Finance and Performance Committee of the Whole

02 May 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, 4 April 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 9am.

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

02 May 2019

 

 

 

Finance and Performance Committee of the Whole

Open Minutes

 

 

Date:                                    Thursday 4 April 2019

Time:                                   9.36am

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 Jamie Gough

Councillor Yani Johanson

Councillor Aaron Keown

Councillor Glenn Livingstone

Councillor Tim Scandrett

Councillor Deon Swiggs

Councillor Sara Templeton

 

 

4 April 2019

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

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/2019/00017

Committee Decision

That the apologies from Councillors East and Galloway for absence and the Mayor for lateness and early departure be accepted.

Councillor Cotter/Councillor Davidson                                                                                                          Carried

 

 

2.   Declarations of Interest

Part B

Councillor Chen declared an interest in sections of Item 13 relating to the Riccarton Bush Trust.

 

Councillors Cotter and Livingstone declared an interest in the sections of Item 13 relating to the Christchurch Agency for Energy Trust.

 

Councillors Davidson and Gough declared an interest in the sections of Item 13 relating to Civic Building Limited.

 

Deputy Mayor Turner declared an interest in the sections of Item 13 relating to the Road Donald Banks Peninsula Trust.

 

Councillor Scandrett declared an interest in Public Excluded Item 19.

 

Deputy Mayor Turner and Councillor Scandrett declared an interest in Public Excluded Item 20.

 

The Mayor, Deputy Mayor Turner and Councillors Buck and Gough declared an interest in Public Excluded Items 25 and 26.


 

3.   Confirmation of Previous Minutes

Part C

Committee Resolved FPCO/2019/00018

Committee Decision

That the minutes of the Finance and Performance Committee of the Whole meeting held on Thursday, 7 March 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.

 

 

24. Resolution to Include Supplementary Reports

 

Committee Resolved FPCO/2019/00019

That the reports be received and considered at the Finance and Performance Committee of the Whole meeting on Thursday, 4 April 2019.

Public Excluded Items

25.      Christchurch City Holdings Ltd – Draft Statements of Intent for the CCHL Group

26.       Christchurch City Holdings Ltd - Establishment of Appointments Committee for new CCHL director

Councillor Manji/Councillor Chen                                                                                                                    Carried

 


 

7.   Capital Programme Performance Report

 

Committee Resolved FPCO/2019/00020

Original Staff Recommendations Accepted Without Change

Part B

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. 

Councillor Manji/Councillor Chen                                                                                                                    Carried

 

 

 

Councillor Cotter left the meeting at 10.15am and returned at 10.18am during consideration of item 8.

 

Councillor Cotter left the meeting at 10.36am during consideration of item 8.

 

 

8.   Performance Exceptions Reports for February 2019

 

Committee Resolved FPCO/2019/00021

Original Staff Recommendation Accepted Without Change

Part B

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.

Councillor Gough/Councillor Templeton                                                                                                       Carried

 

 

 


 

Councillor Cotter returned to the meeting at 10.38am during consideration of item 10.

 

Councillor Gough left the meeting at 10.38am during consideration of item 10.

 

 

10. Christchurch Town Hall Project Monthly Update

 

Committee Resolved FPCO/2019/00022

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.

Councillor Templeton/Councillor Davidson                                                                                                 Carried

 

 

 

Councillor Gough returned to the meeting at 10.51am during consideration of item 12.

 

 

12. Tūranga, Central Library Financial Close-out Report

 

Committee Resolved FPCO/2019/00023

Original Staff Recommendation Accepted Without Change

Part B

That the Finance and Performance Committee of the Whole:

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

Councillor Manji/Councillor Clearwater                                                                                                        Carried

 

 


 

Councillor Templeton left the meeting at 11.03am during consideration of item 11.

 

 

11. Capital Delivery Major Facilities Elected Member Updates

 

Committee Resolved FPCO/2019/00024

Original Staff Recommendation Accepted Without Change

Part B

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

Councillor Manji/Deputy Mayor                                                                                                                         Carried

 

 


 

The meeting adjourned at 11.04am and reconvened at 11.18am. Councillors Davidson, Gough, Johanson and Livingstone were not present at this time.

 

The Mayor and Councillor Gough joined the meeting at 11.19am during consideration of item 14.

 

 

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

 

Committee Resolved FPCO/2019/00025

Original Staff Recommendation Accepted Without Change

Part C

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.

Councillor Manji/Deputy Mayor                                                                                                                         Carried

 

 

 

Councillors Johanson and Livingstone returned to the meeting at 11.23am during consideration of item 9.

 

Councillor Davidson returned to the meeting at 11.25am during consideration of item 9.

 

 

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

 

Committee Comment

1.         The staff recommendations were moved and seconded with a change to resolution 1 and 4. Following further discussion a procedural motion was resolved to let the item lie on the table and request staff provide further advice as noted below.

 

 

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.

 

Committee Recommendation

Part A

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

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

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.         Note the 3 Waters section 17A review is unbudgeted and would therefore require reprioritisation within the 3 Waters budget.

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

Councillor Manji/Councillor Keown                                                                                                     Carried/Lost

 

 

Committee Decided FPCO/2019/00026

That the Finance and Performance Committee of the Whole leave the report to lie on the table until the next Finance and Performance Committee of the Whole meeting (2 May 2019) and request staff to provide additional advice on, the advantages and disadvantages of an exemption,  a Draft Terms of Reference of the review, a recommendation for funding the review and information on the Mayoral Forum.

Mayor/Councillor Cotter                                                                                                                                       Carried

Councillor Clearwater requested his vote against the resolution be recorded.

 

 

 

16  Resolution to Exclude the Public

 

Committee Resolved FPCO/2019/00027

That Rob Hall, Chief Executive of Development Christchurch Limited,  Joanna Norris, Chief Executive of Christchurch NZ Holdings Limited and Paul Munro, Chief Executive of Christchurch City Holdings Limited, remain after the public have been excluded for Item 23 of the public excluded agenda as they have knowledge that is relevant to that item and will assist the Council.

AND

That at 12.30pm  the resolution to exclude the public set out on pages 213 to 216 of the agenda be adopted.

Councillor Manji/Mayor                                                                                                                                         Carried

 

 

Councillor Buck left for the remainder of the meeting at 1.12pm.

 

The meeting adjourned at 1.12pm and reconvened at 2.03pm. The Mayor and Councillors Cotter, Gough and Livingstone were not present at this time.

 

Councillors Gough and Livingstone returned to the meeting at 2.04pm during consideration of item 13.

 

Councillor Livingstone left the meeting at 2.07pm and returned at 2.08pm during consideration of item 13.

 

 

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

 

Committee Resolved FPCO/2019/00028

Original Staff Recommendations Accepted Without Change

Part C

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.

Councillor Keown/Councillor Templeton                                                                                                      Carried

The Deputy Mayor and Councillors Cotter, Chen, Davidson, Gough, and Livingstone declared an interest and took no part in consideration of the reports for the Council Controlled organisations they are appointed to.

 

 

 

 

 

 


 

Councillor Cotter returned to the meeting at 2.17pm during consideration of item 15.

 

 

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

 

Committee Comment

Rob Hall, Chief Executive and Joel Lieschke of Development Christchurch limited joined the table for item 15.

 

 

Committee Resolved FPCO/2019/00029

Original Staff Recommendation Accepted Without Change

Part B

That the Finance and Performance Committee of the Whole:

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

Councillor Chen/Deputy Mayor                                                                                                                          Carried

 

 


 

16  Resolution to Exclude the Public

 

Committee Resolved FPCO/2019/00030

Part C

That Rob Hall, Chief Executive and Joel Lieschke of Development Christchurch 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, 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 Joanna Norris, Chief Executive, Anna Elphick, Laura Dawson and Jane Carr of ChristchurchNZ Holdings Limited, remain after the public have been excluded for Item 20 of the public excluded agenda as they have knowledge that is relevant to that item and will assist the Council.

AND

That Leah Scales of Christchurch City Holdings Limited, remain after the public have been excluded for Items 25 and 26 of the public excluded agenda as she has knowledge that is relevant to those items and will assist the Council.

AND

That at 2.22pm  the resolution to exclude the public set out on pages 213 to 216 of the agenda and pages 5 to 6 of the supplementary agenda number 1 and 2 be adopted.

Councillor Manji/Councillor Templeton                                                                                                         Carried

 

The public were re-admitted to the meeting at 4.54pm.

 

   

Meeting concluded at 4.54pm.

 

CONFIRMED THIS 2ND DAY OF MAY 2019.

 

Councillor Raf Manji

Chairperson

 


Finance and Performance Committee of the Whole

02 May 2019

 

 

7.     Capital Programme Performance Report

Reference:

19/402548

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 31 March 2019.

 

2.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

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

2.         Request further information on specific projects or portfolios.

 

 

 

Attachments

No.

Title

Page

a

Capital Programme Performance Report

22

 

 

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

David Adamson - General Manager City Services

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

 

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

Reference:

19/417099

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 (the Committee) 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’.

Additional Information - Refer to paragraphs 1.3 – 1.5 below:

1.3       The report was originally considered by the Committee on 4 April 2019. At the meeting the Committee resolved to let the report lie on the table and requested staff to provide additional advice on:

1.3.1   The advantages and disadvantages of an exemption;

1.3.2   A draft Terms of Reference of the review;

1.3.3   A recommendation for funding the review; and

1.3.4   Information on the Mayoral Forum.

1.4       The additional advice requested is provided in Attachment D and Attachment E. The staff recommendations have also been updated.

1.5       Subsequent to this report at its meeting on 11 April 2019 the Council resolved to delegate to the Finance and Performance Committee of the Whole the “authority to exercise all of the Council’s powers under section 17A of the Local Government Act 2002, relating to service delivery reviews and decisions not to undertake a 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:

1.         Approves that a section 17A review for the 3 Waters should commence immediately.

2.         Approves 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.         Approves that the components of the sections 17A review that focus on cost effectiveness for the Council should be funded by the professional services budget within the 3 Waters Unit.

4.         Agrees that the scope of the section 17A review should include cost-effectiveness for the Canterbury region. 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

42

b

Update on the recommendations of the 2017 section 17A review

43

c

Section 17A legislation

48

d

Response to questions on a section 17A review April 2019

50

e

Draft Terms of Reference for the section 17A Review of the 3 Waters

54

 

 

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

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

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02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

 

9.     Asset Management Improvement Programme Report - Six monthly update

Reference:

19/381884

Presenter(s):

Piers Lehmann - Head of Asset Management

 

 

1.   Purpose of Report

1.1       The purpose of this report is to inform the Finance and Performance Committee of the Whole about the Asset Management Improvement Programme activity.

1.2       This report is in response to the Council Meeting of 20 December 2017 requesting that staff report on the Asset Management Improvement Programme to the Finance and Performance Committee on a six-monthly basis. The last report was on 3 October 2018.[2]

1.3       This report provides the Finance and Performance Committee with information about the Asset Management Programme focus, content and delivery. The Monthly Portfolio Dashboard Report is presented to the monthly Asset Management Governance Board meeting and then to the ELT Business Change Board meeting.

2.   Executive Summary

2.1       The Asset Management Unit has completed a restructure to enable more effective delivery of the Asset Management Improvement programme.

2.2       The Asset Management Improvement Programme is on track to deliver improvements in Asset Management Maturity as the programme is delivered over the coming years.

 

3.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receives the update on the Asset Management Improvement Programme activities.

2.         Receives the information contained in this report and the March 2019 Portfolio Dashboard Report.

4.   Key Points

4.1       A restructure of the Asset Management Unit was completed in late 2018.  With the new structure now largely in place, the Asset Management Unit is better placed to deliver on the Asset Management Improvement Programme in this financial year and into the future. 

4.2       The delivery of the 2018/19 Asset Management Improvement Programme projects is progressing on time and on budget.  The 2019/20 Programme has been developed and is due to be presented to the Asset Management Governance Board for approval at its next meeting, scheduled on 3 May 2019 and to IT as part of the technology enablement activity.

4.3       The second Asset Management Maturity Assessment was completed in November 2018.  The final report and recommendations from the assessment were presented to the Council’s Audit & Risk Committee on 27 November 2018.[3]  Progress on the implementation of recommendations is regularly reported to the Asset Management Governance Board and to the Audit and Risk Committee through the Open Issues Register.

4.4       Asset management planning is already underway in order to meet the programme milestones for the 2021 Long Term Plan (LTP).  This planning includes:

·     Asset Management Plans;

·     Strategic Asset Management Plan; and

·     Infrastructure Strategy.

4.5       This work is seeking to bridge the gap between long-term strategic planning and shorter term operational planning in a manner which is fully integrated with the LTP programme and consistently applied across all asset owning business units of the Council.  A briefing to the Council on this approach and progress to date has been scheduled for 21 May 2019.

5.   Context/Background

Issue or Opportunity

5.1       Much public service delivery relies on assets and unless the assets are well managed, the services they support will be affected.  Christchurch City Council is a service and asset intensive business and has the responsibility to manage its assets in line with the appropriate asset management practice which invests not only in continued maintenance but also improvement and future resilience.

5.2       Asset management requires a whole-of-organisation multi-functional approach.  The Asset Management Unit provides a centralised asset management function to provide leadership regarding asset management practice and improvement through the activities undertaken as part of the Asset Management Improvement Programme.

5.3       One of the challenges to the Asset Management Improvement Programme that exists is in relation to the business’ capacity to engage with and absorb change as new processes and improvements are developed and come on line. The new structure with its wrap around approach should help to address this issue.

Strategic Alignment

5.4       The Asset Management Policy, endorsed by ELT and adopted in March 2018, provides the organisation’s long-term vision, values and direction for asset management.  The Policy is aligned to Council’s strategic direction and supports the attainment of Community outcomes. 

5.5       The Asset Management Strategy[4], endorsed by ELT and adopted in March 2018, sets out the asset management objectives which state the outcomes required from the asset management system and from the Asset Management Improvement Programme to ensure the Councils’ strategic goals are met.

Asset Management Unit

5.6       The Asset Management Unit was established in April 2016 to provide cross functional responsibility to deliver a sustainable and appropriate asset management delivery framework to support the community outcomes, levels of service and business requirements.

5.7       On 19 October 2018, a change proposal was released, designed to ensure that the Asset Management Unit is resourced and aligned to meet the needs of our customers, increase its focus on efficient programme delivery and be cost effective.  

5.8       Following consultation with staff, a final decision on the proposal was released on 15 November 2018, as a result of which the following new functional structure of the Unit has been implemented:

5.9       The implementation of the new structure has almost been completed.

5.10    With the new structure now largely in place, the Asset Management Unit is better placed to deliver on the Asset Management Improvement Programme this year and into the future.

5.11    Good asset planning relies on good quality data and therefore a significant portion of the Unit’s activities is focused on improving asset data quality and reliability, ensuring a structured approach to assessing the criticality, condition and performance of assets and developing comprehensive lifecycle strategies for the creation, design, maintenance, rehabilitation or replacement and disposal of assets.

Asset Management Improvement Programme

5.12    The Asset Management Improvement Programme projects and continuous improvement initiatives are determined with the objective of driving asset management best practice across all asset owning business units of the Council: Transport, Three Waters and Waste, and Parks and Facilities.  Some will necessarily have reasonably lengthy delivery timeframes.

5.13    The 2018/19 Asset Management Improvement Programme is underway and programme is reported monthly by the Programme Manager to the Asset Management Governance Board and includes the monthly Portfolio Dashboard Report. This monthly reporting is also presented to the ELT Business Change Board to provide executive oversight of the programme. Attachment B is an extract from the March Report and shows projects currently underway.

5.14    The 2018/19 Mid Year Report was presented to the Asset Management Governance Board and Business Change Board (ELT) in March this year. (Attachment C).

5.15    The 2018/19 Asset Management Improvement Programme currently has 13 projects underway.  Of those 4 were initiated in 2017/18, and 9 new projects have been started in this financial year.

5.16    The new projects build on earlier work to develop an organisation wide approach to the lifecycle of assets.  These projects focus on improvements in asset data management through contract management for maintenance and operations functions as well as associated business processes.

5.17    Three projects have been completed year to date, and a further one are on track to be completed in this financial year.  The remaining projects are scheduled to continue into the 2019/20 Programme.

5.18    The 2018/19 Asset Management Improvement Programme completed value year to date is $1,162M, or 66% of the annual budget of $1,773M.  Through close management the Programme is expected to come within budget for the full year.

5.19    The 2019/20 Programme has been developed and will be presented to the AMGB Board for approval at its next meeting, scheduled on 3 May 2019.

Asset Management Maturity Assessment

5.20    The second Asset Management Maturity Assessment was completed in November 2018.  The final report and recommendations from the assessment were presented to the Council’s Audit & Risk Committee on 27 November 2018 and then to Council on 13 December 2018.[5]

5.21    Regular reporting to the Audit & Risk Committee on the implementation of the recommendations from the Asset Management Maturity Assessment occurs via the Open Actions Register.

5.22    The recommendations from the second Asset Management Maturity assessment have informed the priorities of the 2019/20 Asset Management Improvement Programme.

Development of the Asset Management Plans (AMPs), Strategic Asset Management Plans (SAMPs), and Infrastructure Strategy (IS) as part of the Long Term Plan (LTP) 2021 Programme

5.23    The Mayor’s External Advisory Group (EAG) recommended that AMPs are developed earlier and Elected Members are engaged in the development of the Infrastructure Strategy (IS) and the Capital Programme.  The AMP Development Project has been established in response to the EAG’s recommendations.

5.24    The project will develop, document and communicate a systematic CCC AMP development process and it will identify and integrate the interdependencies between AMPs, SAMPs, IS, the Financial Strategy (FS) and the LTP. 

5.25    The project scope includes:

·   development of templates which will be used consistently across all asset owning business units.

·   training and coaching to asset management plan writers.

·   engagement with ELT, Elected Members and the wider stakeholder group through a series of workshops, to socialise infrastructure issues, options, costs and risks and to identify preferred scenarios for inclusion in the capital programme and the draft LTP and IS.

5.26    The envisaged outcome of the project is better alignment of the Asset Management Plans to the Council vision, community outcomes and strategic objectives set out in the Council’s Strategic Framework – August 2017. The project also aims to ensure Council’s leadership team and elected members are assured that appropriate systems and processes are in place and that assets are being managed well.

5.27    A Project Steering Group has been established to support the decision making, resolving high level issues and governing the project to ensure the business outcomes are delivered on time, to budget and to the quality which the business is expecting.

5.28    A series of monthly AMP writers’ and other stakeholders’ workshops, led by an external consultant, have been scheduled throughout 2019, with the initial two workshops held in March and April.

5.29    A briefing to Elected Members on this approach and progress to date has been scheduled for 21 May 2019.

 

 

Attachments

No.

Title

Page

a

Audit and Risk Management Committee Asset Management Maturity Assessment 2018 Report - Executive Summary 12 November 2018 Report

63

b

Monthly Programme Report - March 2019 - Extract

66

c

2019-01-23 Asset Management Mid-Year 2018-2019 Report PowerPoint Presentation

67

 

 

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

Anna Gruczynska - Asset Management Governance & Strategy Advisor

Wendy Walker - Senior Asset Management & Programme Advisor

Piers Lehmann - Head of Asset Management

Approved By

Piers Lehmann - Head of Asset Management

David Adamson - General Manager City Services

  


Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 


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02 May 2019

 


 


 


 


 


 


 


 


 


 


 


 


Finance and Performance Committee of the Whole

02 May 2019

 

 

10.   Christchurch Town Hall Project Monthly Update

Reference:

19/379004

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       The contractor is currently planning to complete the James Hay Theatre 5 April 2019. The fitting out of the Theatre has commenced and will continue following the completion of the construction works. The first event to be held in the Theatre is scheduled to occur in May.

4.3       The planned completion date for the remaining section of the works is 16 August 2019.

 

 

Progress

Construction

4.4       Certificate of Public use covering the areas forming section one of the works was issued 21 February 2019. A revised Certificate of Public Use will be issued following the completion of section two of the works.

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

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

Establishment

4.7       The installation of theatrical enhancements to the James Hay Theatre including the flying system and the constellation system is well underway.

4.8       The team is working closely with representatives from the CSO. Preparations are being made for the transition of the CSO into its new facility.

5.   Financial

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

5.2       As noted in the previous report, 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 for 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

Mary Richardson - General Manager Citizen and Community

  


Finance and Performance Committee of the Whole

02 May 2019

 

 

11.   Community Facilities Earthquake Rebuild Programme B-Monthly Update April 2019

Reference:

19/376403

Presenter(s):

Darren Moses - Manager Capital Delivery Community

 

 

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 current status of the remaining earthquake repair and rebuild projects being delivered by the Capital Delivery Community Unit.

2.   Executive Summary

2.1       The Council prioritised and approved a number of suburban facilities to form part of it’s Facilities rebuild earthquake repair and rebuild programme in 2014.  This report summarises the status of each remaining project in the programme.

2.2      
The programme metrics are summarised below:

 

 

3.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

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

4.   Key Points

4.1       This information-only report provides a bi-monthly update on the remaining projects in the Facilities Rebuild earthquake programme for May 2019.

4.2       A summary of the yet to be completed Community Facilities projects and Heritage Facilities projects can be found in Attachment A.

4.3       The majority of the earthquake repair and rebuild programme that began in 2012 is currently scheduled to be completed by the end of 2019/2020 Financial Year.

4.4       The EQ programme now represents only 15% of the department’s workload. The department is tasked with delivery of 207 BAU capital projects in this financial year to a value of $84M.

4.5       Edmonds Band Rotunda future use was raised at the previous meeting.  The Council resolved to fully reconstruct and restore the building to function as a band rotunda (for the purpose of hosting musical performances and other suitable commercial/community activities). The scope of this project will ideally include improved weather protection by means of retractable glazing or similar, subject to resource consent requirements and remaining within the existing 2018-28 LTP budget for the project.

5.   Context/Background

5.1       The Council is committed to running an earthquake assessment, insurance claim and repair and rebuild programme of its suburban community facilities. There are over 1,000 such assets. This work is undertaken by the Facilities Rebuild team in the Citizens and Community Group.

5.2       Since 2012, this team has delivered numerous repairs and rebuild of key suburban Council facilities all over Christchurch City and across Banks Peninsula, detailed in Attachment A.

 

Attachments

No.

Title

Page

a

Finance & Performance Committee April 2019 Community Facilities Rebuild and Heritage bimonthly Report_ attachment 1

83

 

 

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

Darren Moses - Manager Capital Delivery Community

Approved By

Mary Richardson - General Manager Citizen and Community

  


Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

 

12.   LTP 2021-31 Programme Plan

Reference:

19/400800

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 the Long Term Plan (LTP) 2021-31 Programme Plan which includes asset management planning, the Infrastructure Strategy, Financial Strategy, Consultation Document, service review and all other work streams of the LTP.

2.   Executive Summary

2.1       The purpose of this programme plan is to specify work streams and work stream leaders, as well as to set out the proposed timings of each work stream and how each work stream relates to the phasing of others. Preliminary discussions have taken place with Work Stream leaders. The plan also sets out how and when each part of the organisation and governance is to work together, as well as a clear governance model. 

2.2       The programme plan was considered and approved by ELT on 8 April 2019.

2.3       Elected members need to be aware of the LTP programme plan and its implications for councillors, both in terms of logistics and content. The Finance & Performance Committee has the LTP process within its Terms of Reference.

 

3.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receives the information in the Long Term Plan 2021-31 Programme Plan.

4.   Key Points

4.1       As with the previous LTP the SOLGM Jigsaw ‘Piecing it together’ guide has been used as the basis of the process. The aim was to implement lessons learned from the 2018-28 LTP, while at the same time integrating S17A service delivery reviews plus improvements to the content, timing and transparency of asset management plans and the Infrastructure Strategy.

4.2       It sets out the full range of information that is normally found in an LTP programme plan – purpose, scope, assumptions, risks, mitigations, key decision points, stakeholders, budget, reporting and principles. That information is attached in an LTP programme plan format used by many NZ local authorities.

5.   Context/Background

Issue or Opportunity

5.1       There are key decisions around service delivery reviews which are yet to be finalised by the Finance & Performance Committee. If any reviews are to take place during the LTP process, that would have a profound effect on the logistics and phasing of the LTP programme plan. If and when a programme of reviews is agreed this plan may need to be updated to reflect it.

Strategic Alignment

5.2       This programme plan places strong emphasis on CCC’s Strategic Directions as well as themes of resilience as the foundation of the planning process.

5.3       Please note that these are built in from project commencement rather than trying to impose them late in the process. 

 

Attachments

No.

Title

Page

a

LTP 2021 Project Plan 5.2 9Apr2019

117

 

 

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

Lerks Stedman - 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

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

 

13.   Corporate Finance Report for the quarter ended 31 March 2019

Reference:

19/278307

Presenter(s):

Andrew Jefferies - Manager, Finance Policies
Len van Hout - Manager, External Reporting and Governance

 

 

1.   Purpose of Report

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

 

2.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receives the information in the Corporate Finance Report for the quarter ended 31 March 2019.

2.         Note the status of the Treasury Policy Compliance.

3.         Note the status of the Rates and Non-rates Debtor balances.

 

3.   Key Points

Treasury Risk versus Policy Limits

3.1       As at 31 March 2019, all treasury risk positions were within policy limits (except for the on-going approved breach for interest rate re-pricing, refer below).

Snapshot

Risk Area

Liquidity

Funding

Interest Rate Re-pricing

Counterparty Credit

Policy Compliance

Within

Within

Breach

Within

 

3.2       The Council’s borrowing, lending, and cash balances (including year-to-date changes) were:

Non-rates Debtors

3.3       As at 31 March 2019, non-rates debtors increased by $747K (or 4.91%) over the quarter.  The majority of which was accrued interest on LINZ invoices and development contributions.

3.4       There were $110K of debts written off taking the year to date write off to $220k.

Snapshot

 

Mar 19

$m

Dec 18

$m

Movement

All non-rates debtors

15.9

15.2

Up

Debtors written off

0.1

0.0

Up

 


 

Rates Debtors

3.5       As at 31 March 2019, net rates debtors were $5.5 million.

Snapshot

 

Mar 19

$m

Dec 18

$m

Movement

All rates debtors

7.2

19.9

Down

Credit balances

(1.7)

(20.3)

Down

Net rates debtors

5.5

(0.4)

Up

 

4.   Treasury

Short-term liquidity risk

4.1       Council sources most of its borrowed funds from the Local Government Funding Agency (LGFA). We have an obligation to LGFA to keep our liquidity ratio (described below) above 110%. As at 31 March 2019 our liquidity ratio is well above that minimum level. It is 117%.

Policy Limit (ratio must exceed 110%)Within Limit

Short Term Liquidity

Mar 19

$m

 

 

A – External Debt

1,901.2

B – Liquid Investments

225.9

C – Committed Loan Facilities

100.0

Liquidity [(A+B+C)/A]

117%

 

4.2       Given our undrawn committed loan facility of $100 million, and external debt of around $1.9 billion, we need to hold liquid investments (term deposits and call deposits) of around $90 million to satisfy the minimum requirement. Our term deposits and call deposits currently total around $226 million.

4.3       Ratio has reduced from 139% reported last quarter: Last quarter we reported the ratio was 139%. There are two main reasons why the reported ratio this quarter is substantially lower at 117%:

4.3.1   March 2019 pre-funding has ended: From August to December 2018 we pre-borrowed $200 million to reduce the funding risk associated with having to roll over $256.5 million of borrowing at a single point in time in March 2019. We held that $200 million as term deposits as at 31 December 2018 (last quarterly treasury report). In March we repaid the $256.6 million using the $200 million of cash plus $56.5 million of rolled over borrowing. The reduction in cash of $200 million has substantially reduced the reported liquidity ratio.

4.3.2   External debt used: We are now using external debt (around $1.9 billion) rather than core debt (around $1.25 billion) for calculating this ratio. This is in line with advice from LGFA.  If we had used this measure last quarter we would have reported liquidity as at 31 December 2018 of 127% rather than 139%.

4.4       Managing liquidity over next 12 months: As our cash levels fall over time, we may need to obtain further undrawn committed bank facilities to keep our liquidity ratio up. This potential future need for additional liquid assets is mitigated by two factors.

4.4.1   Potential for CCHL to hold debt directly from LGFA: At present, LGFA does not lend money directly to CCHL. Instead, CCHL accesses funds from LGFA via Council. LGFA’s approach is expected to change within the next six months or so. If CCHL held debt directly from LGFA rather than via Council, Council’s liquidity ratio would improve considerably because Council would hold less debt.

4.4.2   Liquidity measure calculated conservatively: Some of the details of the calculation of the liquidity ratio are conservative. We are having some discussions with LGFA about the details of how to measure this ratio. LGFA has indicated they would be willing to count some additional Council assets as being liquid assets (e.g. Council’s lending to CCOs that matures within the next 12 months), but we have not included those assets in the liquidity ratio.

4.5       Liquidity is also important for obtaining a high credit rating. Standard & Poor’s have recently consulted on a change to their methodology for rating local and regional governments outside of the US. Strong liquidity is increasingly important in their proposal.

4.6       The Council’s Treasury team will continue to monitor and optimise liquidity in line with our treasury policies.

Long term funding risk

4.7       Funding risk is the risk that funds may not be available for Council to borrow at reasonable prices. This includes access to funds for rolling over existing borrowing when it matures. This lack of availability could last days, weeks or months. We manage this risk by ensuring our existing debt does not all mature at a single point in time, but gradually over several years. We have policy limits to guide our debt maturity profile.

Policy Limit (maturity of existing debt only) – Within Limit

Long Term Funding Risk

Actual

Minimum

Maximum

 

 

 

 

0 to 3 years (June 2022)

43%

15%

60%

3 to 5 years (June 2024)

23%

15%

60%

5 years plus

33%

10%

60%

 

100%

 

 

 

4.8       Funding risk also includes the risk we will not be able to access new borrowing (as opposed to borrowing to roll over existing debt). A more comprehensive risk profile is shown below:

Interest Rate Re-pricing

4.9       When we borrow funds at floating interest rates, the interest rate normally changes every three months. If we borrow at fixed rates, then the interest rate will change when we roll that debt over at its maturity. If interest rates have increased at the repricing date, our borrowing will cost more. All our borrowing is exposed to interest rate re-pricing risk, but we manage this by fixing the interest rates for varying lengths of time lasting several years. We can use interest rate swaps (“hedges”) to convert floating rate borrowing into fixed rate borrowing.

4.10    Our hedging profile shows the length of time over which our debt is protected from interest rate re-pricing risk. We want to have sufficient protection from re-pricing risk on one hand, while preserving flexibility (e.g. to repay debt) on the other. We have policy guidelines that provide an envelope within which we aim to keep our hedging profile. This is shown in the following chart.

Orange line = projected borrowing

* Red bars = amount of debt protected against interest rate re-pricing as at 30 June each year.

* Dotted lines = Policy Limits (maximum & minimum amount) for hedging. This guides the extent to which Council can be protected from interest rate re-pricing risk..

4.11    Hedging levels continue to be fractionally above maximum policy limits for 2019, but fall back within those limits from 2020.

4.12    This breach has arisen from delays in Council's debt growth - current hedging of around $1.26 billion was established in 2013 and 2014 to match around 60% of anticipated June 2018 net debt; however, the combination of the large insurance settlement and delayed capital programme has caused actual debt growth to be slower.

4.13    In discussion with the Council's external treasury advisor (PricewaterhouseCoopers), management remains of the view that the cost of adjusting the hedging profile is not justified, and that the best course of action is still to retain the existing hedging profile and allow it to come back within policy limits over time as actual debt levels increase.

4.14    On 28 June 2018 Council Resolution CNCL/2018/00124

2.            Noted that the Council remains within limits on three major prudential ratios and remains outside the limits on one major prudential ratio. 

3.            Noted that the Council will return to within the limit for Interest Rate Re-Pricing over time expected to be within 24 months. 

4.            Ratifies the approach taken to return to within the limit for interest Rate Re pricing.

Credit risk

4.15    Credit risk is the risk that the Council will suffer loss from counterparties' failure to pay funds owed to Council. This risk is managed by keeping our term deposits, call deposits and investments with any one party within specified limits.

Policy Limit (exposure to single creditor) – Within Limit

Counterparty ($m)

Credit

Rating

Exposure

($m)

Limit

($m)

Derivative Banks

 

 

ANZ Bank

“AA” Band

72.0

200

BNZ Bank

“AA” Band

57.4

200

Westpac Bank

“AA” Band

5.0

200

Kiwi Bank

“A” Band

39.0

150

 

 

 

 

Other Banks

 

 

ASB/ CBA Bank

“AA” Band

19.0

150

Customer Liquidation

“AA” Band

38.0

150

 

 

 

 

Government & Semi-Government

 

 

NZ Government

n/a

0.0

unlimited

LGFA

>”A-"

26.5

100

 

·     Derivatives exposures are nil because their net values are negative (i.e. Council would pay the bank if terminated).

·     (No derivative Agreements exist with ASB or Rabobank).

5.   General Debtors

 

Mar 19

$m

Dec 18

$m

Movement

Mar 19

%

Dec 18

%

Movement

All non-rates debtors

15.9

15.2

Up

100

100

 

 

 

 

 

 

 

 

Greater than 90days

4.4

3.9

Up

27

26

Up

Greater than $5k

14.3

13.7

Up

90

90

No change

Greater than $1m

8.8

7.4

Up

56

49

Up

Debtors written off

0.1

0.1

No Change

 

 

 

 

 

 

 

 

 

 

Debtor Category

 

 

 

 

 

 

General

12.1

10.3

Up

76

68

Up

Resource Consent

0.7

1.7

Down

4

11

Down

Building Consent

2.2

2.3

Down

14

15

Down

Health

0.1

0.2

Down

1

1

No Change

Infringements

0.2

0.3

Down

1

2

Down

Others

0.6

0.4

Up

4

3

Up

 

 

Overdue Trade Debtors

5.1       The most significant overdue debtor in this report remains the LINZ account for $3.7 million.

5.2       Overdue trade debtors (greater than 90 days) is 27% of total trade debtors, including the LINZ debt.

Trade Debtors Written Off

5.3       Trade debtors written off were $110,269 for the quarter and $219,518 in the nine months to 31 March 2019 compared to $147,489 in the nine months to 31 March 2018.

5.4       The detail is below:

Debtors Written Off

YTD

Mar 19

$

YTD

Mar 18

$

Movement

 

 

 

 

Residential Rents

1,251

1,989

Down

Regulatory

83,893

6,234

Up

Dogs

0

434

Down

Library

67,825

37,513

Up

Sundry

2,091

2,343

Down

Recreation & Sport

6,942

17,423

Down

Hall Hire

167

0

Up

Customer Liquidation

12,665

27,248

Down

Street Poles

44,385

38,919

Up

Commercial Rents

299

590

Down

Others

0

14,796

Down

Total

219,518

147,489

Up

5.5       The significant write-offs (over $2,000) relate to:

1)    Negotiated settlement of a debtor for Resource Consent work resulted in a reduction of $58,615.  Two other reductions for $15,702 were granted on the basis that the original fees were not reasonable.

2)    Street Pole Damage: There have been two more write-offs for Street Pole damages totalling $6,803. The offenders were not available to pursue.

5.6       The Library debtors written off comprise a large number of relatively small amounts where the debt collection agency has been unable to locate the debtor or the debtor has refused to pay.  Only amounts over $30 are referred to debt collection agencies for collection.

5.7       A summary report of trade debtors written off in 2018/19 by month is provided as Attachment A.

6.   Rates Debtors

 

 

Mar 19

$m

Dec 18

$m

Movement

Net rates debtors

5.5

(0.3)

Up

 

 

 

 

All rates debtors

7.2

19.9

Down

Credit balances

(1.8)

(20.2)

Down

 

6.1       The active reporting and monitoring of rates debtors is impacted by the instalment dates.  Rates are invoiced at the end of the month and receipts are received over the month end leading up to the penalty date.

6.2       The table below highlights all outstanding rates invoices in arrears.

6.3       This ignores credits recorded for other ratepayers who have paid in advance of the next instalment date.

31 March 2019

($m)

General Rates Invoiced YTD
(Mar 2019)

Pre-2018/19 Arrears

Outstanding Current Year

% Outstanding Current Year vs Invoiced YTD

2018/19

547.6

1.7

5.5

1%

 

6.4       In the table below, the arrears reflect the rates outstanding from previous reporting periods.

Quarter Ended

 

Value of Arrears

($m)

Number of Ratepayers in Arrears

March 2019

1.7

887

December 2018

5.0

2,838

 

6.5       Work continues to reduce the pre-2018/19 rates arrears balances.

 

6.6       The table below shows the ageing of the $1.698 million and movement since December 2018 when the balance was $5.013 million for the pre-2018/19 arrears:

Year

2010

$000

2011

$000

2012

$000

2013

$000

2014

$000

2015

$000

2016

$000

2017

$000

2018

$000

Total

$000

Arrears

10

13

22

41

105

95

137

191

1,084

1,698

∆ in Qtr

-

-

-2

-1

28

-

3

-16

-3,145

-3,133

 

 

 

 

 

 

 

 

 

 

 

Year

2010

2011

2012

2013

2014

2015

2016

2017

2018

 

Number

11

15

19

24

25

30

43

85

886

887

∆ in Qtr

-1

-1

-

-

-

-1

0

-54

-1,953

-1,951

 

6.7       Arrears are actively managed to the extent possible. Options include payment plans and direct debit arrangements. Rates postponement is offered where appropriate.

 

 

Attachments

No.

Title

Page

a

Debtors Written Off Summary 31 March 2019

137

 

 

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

Andrew Jefferies - Manager Funds & Financial Policy

Annie Sail - Financial Accountant - Control

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

02 May 2019

 

PDF Creator


Finance and Performance Committee of the Whole

02 May 2019

 

 

14.   Financial Performance Report for the nine months to 31 March 2019

Reference:

19/383481

Presenter(s):

Diane Brandish – Head of Financial Management

 

 

1.   Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee of the Whole to be updated on the financial results for the first nine months of the 2018/2019 financial year to 31 March 2019.

 

2.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receives the information in the Financial Performance Report for the nine months to 31 March 2019.

3.   Key Points

Operating Deficit                     Full year forecast[6]              $0.7mñ

                                                                                  Budget                                                               $0m

 

Key drivers:  Above budget forecast spend within Waters ($2.8 million) due to increased reticulation network maintenance costs and chlorination.

Roads and Footpaths above budget forecast ($1.1 million), driven by increased maintenance spend partly due to reduced glyphosate use resulting in more expensive hand weeding and steam use, and LTP contractor bonds revenue initiative not achievable due to resourcing and associated costs; partially offset by higher NZTA operational subsidies.

There are higher Corporate revenues which are partially offsetting the above.

Note the forecast does not include any 15 March incident response costs. These are currently estimated at $0.6m with a further $0.1m of reduced parking infringement income.

Operating Revenue

Year to date $539.7mñ            Full year forecast1            $745.6mñ

Budget                   $536.5m                               Budget                                               $743.4m

 

Key drivers: Higher rating growth late in the 2017/18 year; higher interest revenues; additional NZTA operational subsidies; partially offset by lower Building Consenting revenues.

(Ref. 4.1 and 4.2 for variances amounts and explanations)


 

Operating Expenditure

Year to date $430mò                Full year forecast1                      $603.6mñ

Budget                   $442.6m                               Budget                                                  $601.8m

 

Key drivers - year to date – slower Lancaster Park demolition costs; slower EQ rebuild programme costs; – both forecast to be carried forward; and lower Building Consenting costs.

Key drivers – full year forecast – interest costs from pre-funding of debt (offset by higher interest revenue); Waters expenditure; Roads and Footpaths maintenance; partially offset by lower Building Consenting costs.

(Ref. 4.3 – 4.6 for variances amounts and explanations)

 

¹ after carry forwards


Capital Expenditure

Year to date $430m       Forecast delivery       $465m Budget $518.8m

Budget                     $442.6m          Forecast carry forwards          $154.6m¹           25% of gross budget

                                                               Forecast over spend                      $2.3m  ñ      

                                                                           

Drivers: Currently forecast to be $2.3m over budget after carry forwards, this will reduce when budget changes are identified to address the additional Town Hall spend (Council have approved up to $15 million additional spend on the project).

(Ref. section 5)

¹$98.5 million of carry forwards were budgeted.

 

 

 

4.   Operational Details

 

Year to Date Results

Forecast Year End Results

After Carry Forwards

$m

Actual

Plan

Var

Forecast

Plan

Var

C/F

Result

Operating revenue

(112.0)

(116.2)

(4.2)

(155.7)

(164.3)

(8.6)

(5.4)

(3.2)

Interest and dividends

(57.8)

(55.3)

2.5

(91.9)

(92.4)

(0.5)

-

(0.5)

Rates income

(369.9)

(365.0)

4.9

(492.6)

(486.7)

5.9

-

5.9

Revenue

(539.7)

(536.5)

3.2

(740.2)

(743.4)

(3.2)

(5.4)

2.2

 

 

 

 

 

Personnel costs

144.7

148.4

3.7

200.1

207.0

6.9

0.3

6.6

Less recharged to capital

(25.6)

(31.2)

(5.6)

(36.9)

(41.0)

(4.1)

-

(4.1)

Grants and levies

36.2

36.5

0.3

45.6

45.8

0.2

0.5

(0.3)

Operating costs

124.7

128.0

3.3

172.0

172.9

0.9

1.9

(1.0)

Maintenance costs

76.3

89.6

13.3

110.4

122.2

11.8

11.8

-

Debt servicing

73.7

71.3

(2.4)

97.9

94.9

(3.0)

-

(3.0)

Expenditure

430.0

442.6

12.6

589.1

601.8

12.7

14.5

(1.8)

 

 

 

 

 

Net Cost

(109.7)

(93.9)

15.8

(151.1)

(141.6)

9.5

9.1

0.4

Other Funding

 

 

 

Transfers from Special Funds

(7.4)

(11.6)

(4.2)

(15.1)

(18.2)

(3.1)

(2.0)

(1.1)

Borrowing for cap grants /EQ resp

(1.5)

(1.3)

0.2

(3.8)

(4.3)

(0.5)

(0.5)

-

Less Rates for capex and debt repayment

123.1

123.1

-

164.1

164.1

-

-

-

Funds not available for Opex

114.2

110.2

(4.0)

145.2

141.6

(3.6)

(2.5)

(1.1)

 

 

 

Operating Deficit / (Surplus)

4.5

16.3

11.8

(5.9)

-

5.9

6.6

(0.7)

Revenue

4.1       Revenue is $3.2 million higher than budget year to date largely due to higher rates revenues ($4.9 million), higher interest revenues ($4.2 million), and higher NZTA operational subsidies ($2.6 million); partially offset by slower Lancaster Park demolition recoveries ($5.5 million), and lower Building Services revenues ($2.4 million), driven lower building consenting volumes.

4.2       The revenue forecast variances include;

4.2.1   Lower Operating revenue ($3.2 million - after adjusting for carry forwards) largely due to,

·     Lower Vbase recoveries ($3 million), offset by lower staffing costs incurred,

·     Drop in Building Services revenues ($2.8 million) – largely offset by lower costs of $1.9 million; partially offset by,

·     Higher NZTA operational subsidies ($1.8 million), due to maintenance being weighted more towards subsidised activities, and new subsidies introduced (including footpaths).

4.2.2   Lower interest and dividends revenues ($0.5 million) driven by,

·     CCHL dividend delayed to 2020 ($3.2 million), due to additional rating growth;

·     Notification that half the special Transwaste dividend has been retimed to 2022 ($1.9 million); partially offset by;

·     Higher interest revenues ($4.5 million), mainly due to investing a prefunded debt rollover that was repaid during March 2019 (partially offset by increased debt servicing costs); and additional on-lending to CCHL.

4.2.3   Higher Rates income ($5.9 million) due to,

·     Higher rating growth late in the 2017/18 year ($5.3 million), and higher penalties than planned ($0.7 million).

Expenditure

4.3       Operational expenditure is $12.6 million below budget year to date, mainly due to:

·   Slower than budgeted Lancaster Park demolition costs ($5.5 million) – offset by matched recoveries, with budgets to be carried forward.

·   Slower EQ rebuild programme costs ($3.2 million), forecast to be under spent $3.3 million by year end with a carry forward of funds required.

·   Lower Building Services costs ($2 million) – offset by decline in revenues,

·   Slower Heathcote River Dredging costs ($1.5 million), a carry forward of $4.2 million is forecast. This year to date underspend is offset by higher reticulation costs mentioned below.

·   Lower Housing maintenance spend ($1.1 million).   

4.4       The $1.8 million forecast expenditure variance after adjusting for carry forwards is mainly due to:

·   Higher debt servicing costs ($3 million), largely due to pre-funding of debt that was repaid during March 2019. These additional funds are placed on deposit until needed and the costs are offset by increased interest revenues. There is also additional on-lending to CCHL (offset by interest revenues).

·   Higher Three Waters costs ($2.8 million), due to increased reticulation network maintenance costs and chlorination,

·   Increased Roads and Footpaths costs ($1.7 million), partly due to reduced glyphosate use resulting in more expensive hand weeding and steam use; partially offset by,

·   Lower Vbase staffing costs ($3 million) – offset by lower recoveries above,

·   Lower Building Services costs ($1.9 million) – offset by lower revenues above.

4.5       Personnel costs variance year to date is driven by past and current vacancies across Council. The forecast includes lower Vbase staffing costs of $3 million for the year.

4.6       Maintenance costs result year to date is mainly due to timing of the Lancaster Park demolition costs ($5.9 million), the EQ rebuild programme ($3 million), and Heathcote River Dredging costs ($2 million). These projects all have a carry forward of funds forecast. Lower Housing maintenance ($1.1 million) is also contributing.

4.7       Funds not available for opex are higher year to date largely due to a slower spend within the EQ Housing Repair Programme ($2.6 million), and lower Housing maintenance spend ($1.1 million). There is a carry forward forecast for the Housing Repair Programme of $2 million, and a favourable operational Housing variance of $0.9 million mainly as a result of the increased rent related subsidies. 

4.8       The net cost of individual activities is shown in Attachment A.

5.   Capital Programme

 

Year to Date Results

Forecast Year End Results

After Carry Forwards

$m

Actual

Plan

Var

Forecast

Plan

Var

C/F

Result

Three Waters

59.9

73.8

13.9

103.2

110.6

7.4

5.4

2.0

Roading and Transport

50.3

64.7

14.4

83.3

105.1

21.8

22.3

(0.5)

Strategic Land

2.5

-

(2.5)

5.7

15.2

9.5

9.4

0.1

IT

17.0

18.0

1.0

22.9

27.0

4.1

3.9

0.2

Equity Investments

42.0

41.5

(0.5)

44.3

45.3

1.0

1.0

-

Other

40.1

61.0

20.9

67.5

92.3

24.8

24.0

0.8

Works Programme

211.8

259.0

47.2

326.9

395.5

68.6

66.0

2.6

 

 

 

 

 

Infrastructure

41.8

47.2

5.4

57.2

69.0

11.8

11.1

0.7

Transitional / Recovery Projects

5.8

5.7

(0.1)

9.5

26.9

17.4

17.0

0.4

Facilities Rebuild

63.6

66.3

2.7

89.2

124.8

35.6

41.6

(6.0)

Rockfall

0.4

1.1

0.7

1.1

1.1

-

-

-

Rebuild Programme

111.6

120.3

8.7

157.0

221.8

64.8

69.7

(4.9)

 

 

 

 

 

Gross Capital Spend

323.4

379.3

55.9

483.9

617.3

133.4

135.7

(2.3)

Unidentified Carry forwards

-

(50.6)

(50.6)

(18.9)

(98.5)

(79.6)

(79.6)

-

Capital Programme Expenditure

323.4

328.7

5.3

465.0

518.8

53.8

56.1

(2.3)

 

 

 

 

Development Contributions

(22.4)

(16.7)

5.7

(28.5)

(22.2)

6.3

-

6.3

Less DC Rebates

2.0

4.4

2.4

3.7

5.8

2.1

2.1

-

NZTA Capital Subsidy

(24.1)

(41.4)

(17.3)

(44.9)

(55.6)

(10.7)

(6.2)

(4.5)

Vbase recovery - Town Hall

(30.7)

(32.4)

(1.7)

(32.4)

(32.4)

-

-

-

CCHL Capital release

(70.0)

(70.0)

-

(140.0)

(140.0)

-

-

-

Misc Capital Revenues

(5.8)

(9.7)

(3.9)

(6.2)

(11.8)

(5.6)

(5.6)

-

Asset Sales

(18.9)

(1.1)

17.8

(20.9)

(1.3)

19.6

-

19.6

Capital Revenues

(169.9)

(166.9)

3.0

(269.2)

(257.5)

11.7

(9.7)

21.4

 

 

 

 

Rates for Renewals

(93.3)

(93.3)

-

(124.4)

(124.4)

-

-

-

Reserve Drawdowns

(72.0)

(98.2)

(26.2)

(112.5)

(131.5)

(19.0)

(0.9)

(18.1)

Other Available Funding

(165.3)

(191.5)

(26.2)

(236.9)

(255.9)

(19.0)

(0.9)

(18.1)

 

 

 

 

 

Borrowing Required

(11.8)

(29.7)

(17.9)

(41.1)

5.4

46.5

45.5

1.0

Capital Expenditure

5.1       Capital expenditure of $323.4 million has been incurred for the first nine months of the year. A further $141.6 million is forecast to be spent by year end.

5.2       The forecast is to be $2.3 million ahead of budget after carry forwards, due to the increased spend for the Town Hall. This will be addressed when budget changes are made to offset the impact of the additional spend (Council approved up to $15 million additional spend on the project).

5.3       Group of Activity level variance commentary for the capital programme is shown in
Attachment A.

5.4       Financial results of significant (>$250,000) capital programme projects are shown in
Attachment B.

 

Capital Revenues

5.5       Development contributions are higher than budget because new development has been higher than anticipated. Payments of development contribution rebates have been slower than planned, pending compliance with the scheme criteria.

5.6       NZTA capital revenues are $17.3 million behind budget year to date, forecast to be $10.7 million behind. After a forecast carry forward of $6.2 million (subsidies on delayed capital spend) there is currently a permanent variance forecast of $4.5 million. NZTA are still to confirm whether some projects are eligible for a higher subsidy rate, if these are agreed the variance is expected to reduce.

5.7       Miscellaneous capital revenues are lower year to date due to timing of Nga Puna Wai capital grants ($3.7 million). These are forecast to be $5.6 million lower for the year and now expected to be received in January 2020 (timed to the official conclusion of the project).

5.8       Asset sales include Housing assets sold to the Ōtautahi Community Housing Trust.

5.9       Reserve net drawdowns are $26.2 million lower than budget year to date, mainly due to the sale of Housing assets above. Higher developer contribution revenue set aside to fund future qualifying growth projects is also contributing to the year to date result.

5.10    The budget indicated a $5.4 million borrowing requirement for the Capital Programme. Due to the lower forecast capital spend there is now no borrowing requirement for this financial year. However after taking into account higher carry forwards of $45.5 million, there is a borrowing requirement of $4.4 million ($1 million less than budget). 

 

Special Funds

5.11    The current and forecast movements and balance of the Housing Account, Capital Endowment Fund and Earthquake Mayoral Relief Fund are shown in Attachment C.

5.12    The balance of 2018/19 funds available for allocation in the Capital Endowment Fund at 31 March 2019 are forecast at $348,069.

 

 

Attachments

No.

Title

Page

a

Financial Performance - March 2019

146

b

Significant Capital Projects - March 2019

154

c

Special Funds - March 2019

160

 

 

Confirmation of Statutory Compliance

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

(a) This report contains:

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

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

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

 

Signatories

Authors

Ryan McLachlan - Reporting Accountant

Carly Flowers - Reporting Accountant

Bruce Moher - Manager Planning & Reporting Team

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 


 


 


 


 


 


Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

 

15.   SCIRT and Horizontal Infrastructure Rebuild Close-out

Reference:

19/263052

Presenter(s):

David Adamson – General Manager City Services
Piers Lehman - Head of Asset Management

 

 

1.   Purpose of Report

1.1       This report is in response to report item 11 which was presented to the Finance and Performance Committee meeting on 5 September 2018 regarding the Financial Performance report for the year ended 30 June 2018.

Committee Decided FPCM/2018/00054
6. Requests staff to provide a full and final report on SCIRT to the Council, including reference to the HIGG independent Chair’s report, independent assessor’s report and OAG report, and noting any other reports that have been published.

2.   Executive Summary

2.1       This report summarises the overall Horizontal Infrastructure (HI) Rebuild Programme with a special focus on the SCIRT programme through which the majority of the HI rebuild was delivered.

2.2       To provide context there is also a discussion of the funding of the programme through Schedule one and Schedule two of the Crown Cost Share Agreement (CSA), with the redacted public version attached. (Attachment G)

2.3       To provide context to the overall horizontal infrastructure rebuild program the following key reports are discussed and either attached or have summaries attached;

2.3.1   the closeout report from the horizontal infrastructure governance group chairperson (Attachment A).

2.3.2   the SCIRT legacy report (Attachment B).

2.3.3   the value of SCIRT report (Attachment D).

2.3.4   the findings from the office of the auditor General’s two audits of SCIRT (Attachments H&I).

2.3.5   the independent assessor’s report (Attachment F).

2.4       The report also covers in detail the financial costs of the horizontal infrastructure programme which due to its complexity needed to be documented with some detail.

2.5       With the horizontal infrastructure programme substantially completed the report concludes that the horizontal infrastructure programme including the SCIRT alliance was a very successful way to rebuild Christchurch’s infrastructure to a level where it could deliver the services required for Christchurch is recovered from the 2010/11 earthquake sequences.

2.6       Key learnings and lessons relate to a clarity of funding between the partners and a clarity of scope.


 

 

3.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receive the SCIRT and Horizontal Infrastructure Rebuild close-out report.

4.   Key Points

4.1       The combined HI Rebuild programme is now largely complete with the opening of Sumner Road on 29 March 2019 as the last major project to be delivered under the Council/Crown jointly managed and funded HI programme.  The combined programmes were governed initially by the Client Governance Group and from October 2013 by the Horizontal Infrastructure Governance Group (HIGG) and its supporting committees.

4.2       The remaining works to be completed are being delivered by Council and were largely not part of the shared funding programme (e.g. the remaining facility repairs at the wastewater treatment plants).

4.3       Both the SCIRT and the non-SCIRT HI programmes included works that were not eligible for cost share funding but these two programmes also delivered Council-funded betterment and/or BAU projects where efficiencies in delivery were identified and funding was available.

5.   Context/Background

HI Rebuild

5.1       The Closeout Report from the HIGG Chair (Attachment A) summarises the timeline and related programme and funding decision making throughout the HI rebuild.  It provides a useful overview to the balance of this report though it is mainly focused on the jointly funded/governed portion of the programme.

5.1.1   The HIGG Chair’s report covers the following:

·     Background to HI governance arrangements.

·     Key areas of focus for the HIGG.

·     Key programme achievements.

·     Learnings.

·     Recommendations.

5.1.2   In summary the Chair’s report concluded that the horizontal infrastructure program was delivered on time, to budget and specification. He also concluded that the combined work of the Crown and Council had seen the horizontal infrastructure programme costs significantly reduce from the initial cost estimates at the time of the cost sharing agreement. This latter point is explored and explained further down within this report.

5.1.3   The key learnings incorporated within this report were jointly prepared by the three funding agents. These can be found within the attached report and have already been noted by Council.

5.2       The table below summarises the SCIRT Programme delivered.

 

The SCIRT Legacy

5.3       The SCIRT Legacy Report (Attachment B) has been prepared by staff following the completion of the SCIRT programme. It provides an overview of the SCIRT programme and the implications for Council as picked up in the Infrastructure Strategy in the 2018/28 LTP.

5.4       The salient points from this report include the following:

5.4.1   The SCIRT rebuild program delivered a major outcome which was the restoration of the functions of the networks particularly wastewater and water.

5.4.2   The program introduced a large number of innovations and ways of working which have been integrated within not only Christchurch City Council’s capital work practices but also have been adapted elsewhere in the country including in emergency situations.

5.4.3   The criteria upon which the cost share agreement was written did not address the full extent of the damaged caused by the Christchurch earthquake sequences. Council therefore has a legacy of work which requires addressing through its long term plans.

5.4.4   Council has adopted a number of strategies to ensure there is a holistic approach to infrastructure priorities and that any funding allocated to addressing this legacy will deliver the best value for money.

5.4.5   Council’s resolution specifically reference the two reports done by the office of the auditor general. The initial one was done in 2013 and the follow-up in 2016. The outcomes of these reports have been presented to Council and are covered at a high level in the SCIRT legacy report. For reference the overview and recommendations from the 2013 report and the summary of the 2016 report are attached to this report.

The Value of SCIRT

5.5       The Value of SCIRT Report (Appendix C &D) was first prepared by SCIRT on completion of their programme in 2017 and has been updated for the results of the final defects liability period to 30 June 2018.  It provides a more in-depth overview of SCIRT’s performance and achievements and how price and scope were managed against funders’ standards and requirements, risk and quality, compliance and lessons learned.

5.6       This report is very extensive. It is based around an Australian guideline on reporting value for money outcomes. The work undertaken by SCIRT was challenging but this report reflects on how the various arrangements met the objectives of the alliance, developed the balance between the price and scope, was accountable to the funding owners, who also sat within the SCIRT Alliance and also identifies a variety of areas where significant lessons were learned. It should be noted that a number of these lessons have already been integrated into current practice both in emergencies and in BAU.

 Auditor General reporting

5.7       The Office of the Auditor General (OAG) published two reports on “The effectiveness and efficiency of arrangements to repair pipes and roads in Christchurch”. The first was released in 2013 and the second, a follow-up report, in May 2016 (Attachment H & I).

5.8       The Auditor General considered various issues, including progress on repairs, governance arrangements, the transfer of assets and the effects of decisions about levels of service and funding. Specific comments were also made in the 2016 report about value, noting that: “Overall, the public entities told us they were getting good value from SCIRT. In our 2013 report, we found that, when relevant variables are considered, SCIRT projects seemed reasonably priced.”

5.9       The Auditor General also acknowledged of the rebuild that “public entities have an audit framework that provides them with adequate assurance”.

5.10    Overall, the Auditor-General’s 2016 report concluded that good progress had been made since the 2013 report in addressing matters raised in the earlier report.

5.11    Summaries of the two OAG audits are attached. (Attachments H & I)

Funding and the Crown Cost Share Agreement (CSA)

5.12    Council’s HI rebuild programme included delivery of above and below ground infrastructure through the SCIRT Alliance contract and through the Council lead Non-SCIRT HI programme.

5.13    The Crown/Council joint governance and management structures applied throughout the HI rebuild primarily focused on the eligible jointly funded programme under the CSA.  In addition to this programme Council also added betterment funding from the Facilities and Infrastructure Improvement Fund and also BAU projects.

5.14    Both the SCIRT and Non-SCIRT programmes included rebuild works that were not eligible under the CSA including insured above-ground assets (treatment plants and pump stations) natural waterways, parks, Council betterment and BAU.

5.15    Earthquake-related repairs to the horizontal infrastructure were jointly funded by the New Zealand Government (CERA and NZTA) and CCC.

5.16    Post-February 2011, funding was initially provided on an indemnity basis. In 2013, the CSA was finalised between the funders for the earthquake recovery programmes, including horizontal infrastructure repairs. Appendix to this report is the Stronger Christchurch Infrastructure Rebuild Plan (Attachment E). This report sets out how the issue of infrastructure rebuild looked in December 2011, 10 months after the devastating February earthquake. It should be noted that at this stage the earthquake sequence was still producing significantly sized after-shocks.

5.17    The CSA stipulated that water, storm water and wastewater work would be funded by CERA and Council, with roading infrastructure repairs funded by NZTA and Council.

5.18    The CSA allowed for a maximum Crown contribution of $1.8 billion and Council $1.14 billion.  This was based on a preliminary estimate of $2.94 billion ($3.34 billion less savings of $398 million to be agreed) for horizontal infrastructure work for both the SCIRT and non-SCIRT programmes.  This estimate also provided the basis of Crown appropriations for the amounts NZTA and CERA would each provide and was also the basis of the budgets and forecasts adopted in Council’s Three Year Plan 2013/16.

5.19    The table below compares the final finding splits with the CSA estimate.

5.20    It was agreed that CERA would fund 60 per cent of eligible 3 Waters works and NZTA would fund 83 per cent of eligible road, bridge and retaining wall work.

5.21    CERA funds would come from Government appropriation, while NZTA funds would come from operating revenue.

5.22    The CSA clearly spelt out eligibility criteria with roading works needing to meet the criteria set out in the NZTA Programme and Funding Manual while all other works needed to meet the definition in the National Civil Defence Emergency Management Plan.

5.23    The CSA made no provision for asset improvement, repairs covered by insurance, or capital projects planned by Council prior to the earthquakes.  Where it made sense to include such work in the SCIRT programme, it would be funded 100 per cent by Council.

5.24    The CSA included for an independent assessment of the extent of the damage and the likely repair cost once better information was available. This assessment would form the basis for any final discussions on horizontal infrastructure cost sharing. The independent assessment is attached to this report.

5.25    The Independent assessors report has been presented to Council (Attachment F). The largest issue by far was the non-inclusion of the Land Drainage Recovery Programme (LDRP).  The Assessor recommended that the Crown and Council hold discussions on the development of a joint working group to investigate how best to progress the LDRP.

5.26    The following table compares the final costs to the programme estimates in the CSA in June 2013 and at the time of the Independent Assessor’s report of April 2015.


5.27    The preceding tables only include the eligible costs funded under the CSA. The total Council HI rebuild is summarised in the following table.  The impact of programme optimisation and funding eligibility processes through the course of the rebuild can be seen in the reduction of the total co-funded programme and the increase in the ineligible portion that Council funded.


5.28    SCIRT also delivered a number of BAU Council projects, incorporated Council-funded betterment on rebuild projects, NZTA funded Highway repairs and provided coordinated works with other utilities such as Orion and Enable (at their cost).  The following table reconciles the total SCIRT programme cost.



5.29    The Crown funding under the CSA was not only to cover the rebuild works programme (including an allocation of the SCIRT programme indirect costs) but also:

5.29.1 Shared client costs (shown as other costs in paragraph 5.26) relate to the Council and Crown’s shared audit and assurance costs incurred under the HIGG governance structures. These costs were largely to cover the SCIRT programme independent cost and claim verification and the Audit Framework Group programme.

5.29.2 Temporary Maintenance (included in Emergency and Response Costs in paragraph 5.26): There was disagreement between the Council and DPMC on the provision of wastewater services to the remaining properties in the residential red zone.

5.30    The CSA provisions for funding the HI rebuild had no termination date however the Crown agencies ceased funding some elements under the CSA as follows.

5.30.1 The Crown ceased funding temporary maintenance work on 31 December 2016, corresponding with the original planned completion of the SCIRT physical works programme and considered temporary maintenance costs were no longer eligible after that date. The SCIRT programme continued until June 2017.

5.30.2 On 23 September NZTA confirmed that the emergency funding assistance rate of 83% would continue to 30 June 2018 on the Sumner-Lyttelton Road project and that all other rebuild work after the 30 June 2017 claim would be at the normal rate of 50% of eligible cost. There was still $9 million of work to complete the Sumner Road programme after 30 June 2018.

5.31    The following table compares the funders’ splits for the eligible programme costs summarised in paragraph 5.26.

The final funder splits were then modified for the following:

5.32    Pain/Gain:  The SCIRT alliance commercial model included a performance-based Pain/Gain adjustment by comparing actual costs against targeted costs on the following basis:

5.32.1 Target Out-turn Cost (TOC) - A TOC was created and set for each project, rather than the whole programme, because:

·     Asset investigation lead to differing project definition in size and complexity.

·     Projects were spread over time, sequenced to rebuild needs and variable investigation and project definition workload.

·     Delivery teams required a budget to measure financial performance on each project.

·     This project-by-project TOC setting was a fundamental SCIRT feature, vital to its workings.

5.32.2 Costs and fees - Under the commercial arrangement, delivery teams or Non-Owner Participants (NOPs) were reimbursed costs plus a fee based on project budget, subject to performance incentive, and including the following components:

·     All participants were reimbursed costs for staff and expenses contributed to the Integrated Service Team, IST, and for agreed overheads.

·     NOPs were paid for the actual construction and site administration costs of their delivery teams, who worked exclusively for SCIRT, set as an annual TOC.

·     NOPs were paid a corporate overhead and profit fee as a percentage mark-up on the total TOC value of the work delivered.

·     The fee was modified by the amount of pain/gain difference between the targeted and actual cost of delivery, with the balance of pain or gain shared 50/50 with the funders or Owner Participants.  This has resulted in the final funders Pain rebate as shown in paragraph 5.34.

·     The share of pain/gain was modified by a performance factor to a limit of not more than ±10% by a score outcome from non-cost KPI measures.

·     The pain/gain was aggregated across all NOPs and allocated to each on the basis of percentage of work delivered, measured by cumulative TOCs for each, (not actual outturn costs).

·     The funders adopted the same appropriation basis as the NOPs to allocate the Pain rebate amongst themselves.

·   The following diagram illustrates the fee structure (identified as payment “Limbs”):

 

5.33    Funding of Renewals (reduction in Crown share)

5.33.1 On 22 April 2014, Cabinet noted that ‘the general Crown policy for Government financial assistance in recovery is not to fund renewals’. (CAB Min (15) 14/9). This in effect meant that the Government share would be calculated on the assets depreciated value and not on its cost to replace.

5.33.2 On 7 December 2016 the Minister of Canterbury Earthquake Recovery, put out a press release indicating the maximum Crown contribution to horizontal infrastructure funding would be $1.689 billion.  He explained this reduction by stating it was the result of good planning and efficient work.

5.33.3 The accompanying Cabinet paper upon which this release was based states that the majority of the savings to the Crown relate to the non-funding of renewals, which they have estimated at $75 million and included formal adoption of the policy not to fund renewals.

5.33.4 Following this announcement staff from SCIRT, CERA and Council established a calculation methodology which was independently tested and applied to programme forecasts to estimate the impact as the programme was completed.

5.33.5 On completion of the SCIRT programme the final Funding of Renewals adjustment is calculated at $67.1 million.

5.34    The resulting splits are:


 

6.   Conclusions and Lessons Learnt

6.1       In summary the Chair’s report concluded that the horizontal infrastructure program was delivered on time, to budget and specification. He also concluded that the combined work of the Crown and Council had seen the horizontal infrastructure programme costs significantly reduce from the initial cost estimates at the time of the cost sharing agreement. This latter point is explored and explained further down within this report.

6.2       The key learnings incorporated within this report were jointly prepared by the three funding agents. These can be found within the attach report and have already been noted by Council.

6.3       Key learnings from the governance arrangements are repeated here:

6.3.1   Clearly defining and documenting the relative roles, responsibilities and accountabilities of each party;

·   A formal governance structure requires partnering and collaboration from all funding partners at all committee levels, and facilitates and records significant decisions.

·   Early engagement and involvement of all parties is imperative;

·   Governance is shared between the funding partners — no one party is 'in charge’ and the position of an independent chair is critical in reinforcing the concept of shared governance;

·   Consistent funding partner representation at the governance level is key to ensuring programme momentum and the delivery of horizontal infrastructure rebuild/repair work;

·   There needs to be a balance between urgent repair work undertaken for health and safety reasons immediately following an event, and the ability of the funding parties to set out a programme and agree the costs — concurrent with the emergency works, detailed programme planning needs to be undertaken. Programme planning should be the subject of regular reviews;

·   The indemnity following the earthquakes remained in place too long, and consequently it was hard to control costs and expectations;

·   Standards and priorities need to be established, formalised and agreed as soon as possible — the purpose of the Crown’s involvement was to restore the horizontal infrastructure network’s performance, serviceability and functionality as soon as possible, not to rebuild and repair all damage.

·   In a programme of this scale, there needs to be flexibility within the governance structure and between the funding partners to respond to changes in programme priorities, funding and standards.

·   There needs to be a more formalised reporting back to all parties from the Governance Group via the Chair, as well as back through individual organisational representatives. It is important that the representatives of the funders understand the position of, and have a clear mandate from, their principals to enable decisions to be made and early alerts from the Chair when appropriate.

·   In early 2016, the HIGG endorsed a change to the governance structure to support transition of the programme from SCIRT to CCC. This was critical to ensure the timely transition of systems and processes to CCC, to ensure the CCC is in a stronger position with respect to network information, asset management and to protect the funders’ investment in the programme to ensure prudent management going forward.

·   The governance structure worked well ensuring all horizontal infrastructure projects were rigorously reviewed with the technical expertise of the IPCT and IPSG, and approved into the programme by the HIGG. Project agreement through this process avoided the need for decisions to be escalated to the Minister and Mayor.

·   A successful transition from SCIRT to CCC should ensure the Crown and Councils investment in the rebuild will be protected and the CCC set up for ongoing success.

·   Communication needs to be carefully managed throughout the process as early public announcements lead to the general publics’ expectations and understanding to far exceed the scope that would be delivered within the programme, creating an ongoing communication challenge particularly in the last section of the programmes delivery.

·   Close engagement and communication with the community and service providers ensured a successful rebuild process for horizontal infrastructure. However, in future events we need to ensure that a regular advertisement is placed in newspapers and prominent notice boards explaining where we are in the process and the rationale behind the order of work.

·   Communication and engagement with SCIRT by the HIGG Governance Committees ensured robust monitoring and reporting on both the financial and non-financial performance of the SCIRT Alliance.

·   For future events of this kind, better planning by funders could result in a better and complete result for the public, e.g. if while the road is being excavated for pipes and consequent road repairs, Local Authority money could be spent on fixing the footpaths etc. so that there is no need for subsequent interruptions. In hindsight, it may have been prudent for CCC to have considered fully funding this type of work taking advantage the economies of scale and integrating this additional work with the SCIRT Programme. The same applies to other utility companies, in Christchurch’s case Orion and Enable and private developers. This would require greater communication on where work is planned and seeking their cooperation. The effort would be worthwhile.

·   Alliance programmes of this magnitude provide opportunities to introduce new governance structures, systems, processes and standards, which are now being applied to the North Canterbury earthquake recovery and rebuild. These include the Recovery Steering Group in Kaikoura and the work scope eligibility processes currently adopted by all three North Canterbury Councils.

 

 

 

 

Attachments

No.

Title

Page

a

Close out Horizontal Infrastructure Governance Group (HIGG)

173

b

SCIRT Legacy Report for Christchurch City Council March 2019

185

c

Value of SCIRT in summary 2018-06-08

220

d

The Value of SCIRT Report to 30 June 2018

222

e

Stronger Christchurch Infrastructure Rebuild Plan December 2011

385

f

Independent Assessor's Report on Horizontal Rebuild Work and Costs

417

g

CSA released under LGOIMA August 2017

443

h

OAG Effectiveness and efficiency of arrangements - Overview and Recommendations

469

i

OAG 2016 SCIRT Summary

475

 

 

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

Peter Langbein - Finance Business Partner

Ross Herrett - Senior Project Manager

Carolyn Gallagher - Programme Director Strategic Support

Approved By

Piers Lehmann - Head of Asset Management

David Adamson - General Manager City Services

  


Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

 

16.   MyCouncil Request Management Closeout Summary

Reference:

19/418735

Presenter(s):

Dana Burnett – MyCouncil Programme Manager

 

 

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 MyCouncil Request Management Closeout Summary.

 

2.   Staff Recommendations

That the Finance and Performance Committee of the Whole:

1.         Receive the information in the Project Closeout Summary for My Council Request Management.

 

 

 

 

 

Attachments

No.

Title

Page

a

MyCouncil Request Management Closeout Summary

478

 

 

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

Dana Burnett - MyCouncil Programme Manager

Approved By

Mary Richardson - General Manager Citizen and Community

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee of the Whole

02 May 2019

 

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Finance and Performance Committee of the Whole

02 May 2019

 

 

17.   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

02 May 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

18

Public Excluded Finance and Performance Committee of the Whole Minutes - 4 April 2019

 

 

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

 

19

Transwaste Canterbury Ltd - Interim Report for half year to 31 December 2018 and draft Statement of Intent 2019/20, 2020/21, 2021/22

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

Prejudice Commercial Position, Commercial Activities

The reports contain commercial information that could prejudice Transwaste in any negotiations it is currently undertaking, or could impact its profitability if competitors obtained the information.

After Transwaste has released its Annual Report and final Statement of Intent publicly, in the second half of the 2019 calendar year.

20

Civic Financial Services - Annual Report 2018 and draft Statement of Intent 2019

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

Protection from Improper Pressure or Harassment, Commercial Activities

The report contains information about a forthcoming asset divestment that could prejudice Civic Financial Services' ability to maximise value.  It also contains information that requires consideration without undue disturbance of interested parties prior to decisions being taken.

After the final Statement of Intent is published, and with the approval of the Chief Executives of the Council and Civic Financial Services.

21

Overdue Trade and Rates Debtors (Greater than $20,000 and 90 days) 31 March 2019

s7(2)(a)

Protection of Privacy of Natural Persons

Publication of the names of the debtors will make collection more difficult

When legal proceedings have commenced

 

 



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

[2] TRIM 18/902452

[3] TRIM 18/839276

[4] The Asset Management Strategy outlines the strategy for delivering improved AM business practise, not to be confused with the Strategic Asset Management Plan (SAMP) which covers the organisation wide approach to and processes for managing assets.

[5] TRIM 18/1199630

[6] After carry forwards