Finance and Performance Committee

Agenda

 

 

Notice of Meeting:

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

 

Date:                                    Thursday 28 April 2022

Time:                                   9.30am

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

 

 

Membership

Chairperson

Deputy Chairperson

Members

Deputy Mayor Andrew Turner

Councillor Sam MacDonald

Mayor Lianne Dalziel

Councillor Jimmy Chen

Councillor Catherine Chu

Councillor Melanie Coker

Councillor Pauline Cotter

Councillor Mike Davidson

Councillor Celeste Donovan

Councillor Anne Galloway

Councillor James Gough

Councillor Yani Johanson

Councillor Aaron Keown

Councillor Phil Mauger

Councillor Jake McLellan

Councillor Tim Scandrett

Councillor Sara Templeton

 

 

22 April 2022

 

 

Principal Advisor

Leah Scales

General Manager - Resources / CFO

Tel: 941 8999

Principal Advisor

Dawn Baxendale

Chief Executive

Tel: 941 6996

 

 

David Corlett

Committee and Hearings Advisor

941 5421

david.corlett@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

28 April 2022

 

Finance and Performance Committee of the whole - Terms of Reference Ngā Ārahina Mahinga

 

Chair

Deputy Mayor Turner

Deputy Chair

Councillor MacDonald

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

 

Delegations

The Council delegates to the Finance and Performance Committee authority to oversee and make decisions on:

 

Capital Programme and operational expenditure

·         Monitoring the delivery of the Council’s Capital Programme and associated operational expenditure, including inquiring into any material discrepancies from planned expenditure.

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

·         Approving Capital Programme business and investment cases, and any associated operational expenditure, as agreed in the Council’s Long-Term Plan.

·         Approving any capital or other carry forward requests and the use of operating surpluses as the case may be.

·         Approving the procurement plans (where applicable), preferred supplier, and contracts for all capital expenditure where the value of the contract exceeds $15 Million (noting that the Committee may sub delegate authority for approval of the preferred supplier and /or contract to the Chief Executive provided the procurement plan strategy is followed).

·         Approving the procurement plans (where applicable), preferred supplier, and contracts, for all operational expenditure where the value of the contract exceeds $10 Million (noting that the Committee may sub delegate authority for approval of the preferred supplier and/or contract to the Chief Executive provided the procurement plan strategy is followed).

 

Non-financial performance

·         Reviewing the delivery of services under s17A.

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

·         Exercising 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.

 

Council Controlled Organisations

·         Monitoring the financial and non-financial performance of the Council and Council Controlled Organisations.

·         Making governance decisions related to Council Controlled Organisations under sections 65 to 72 of the Local Government Act 2002.

·         Exercising 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 –

o   (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; and

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

 

Development Contributions

·         Exercising 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.

 

Property

·         Purchasing or disposing 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.

 

Loans and debt write-offs

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

·         Approving amendments to loans, in accordance with the Council’s Long-Term Plan.

 

Insurance

·         All 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 (Sub-delegated to the Insurance Subcommittee as per the Subcommittees Terms of Reference)

 

Annual Plan and Long Term Plan

·         Provides oversight and monitors development of the Long Term Plan (LTP) and Annual Plan.

·         Approves the appointment of the Chairperson and Deputy Chairperson of the External Advisory Group for the LTP 2021-31.

 

Submissions

·         The Council delegates to the Committee authority:

·         To consider and approve draft submissions on behalf of the Council on topics within its terms of reference. Where the timing of a consultation does not allow for consideration of a draft submission by the Council or relevant Committee, that the draft submission can be considered and approved on behalf of the Council.

 

Limitations

·         The general delegations to this Committee exclude any specific decision-making powers that are delegated to a Community Board, another Committee of Council or Joint Committee. Delegations to staff are set out in the delegations register.

·         The Council retains the authority to adopt policies, strategies and bylaws.

 

The following matters are prohibited from being subdelegated in accordance with LGA 2002 Schedule 7 Clause 32(1) :

·         the power to make a rate; or

·         the power to make a bylaw; or

·         the power to borrow money, or purchase or dispose of assets, other than in accordance with the long-term plan; or

·         the power to adopt a long-term plan, annual plan, or annual report; or

·         the power to appoint a chief executive; or

·         the power to adopt policies required to be adopted and consulted on under this Act in association with the long-term plan or developed for the purpose of the local governance statement; or

·         the power to adopt a remuneration and employment policy.

 

Chairperson may refer urgent matters to the Council

As may be necessary from time to time, the Committee Chairperson is authorised to refer urgent matters to the Council for decision, where this Committee would ordinarily have considered the matter. In order to exercise this authority:

·         The Committee Advisor must inform the Chairperson in writing the reasons why the referral is necessary

·         The Chairperson must then respond to the Committee Advisor in writing with their decision.

·         If the Chairperson agrees to refer the report to the Council, the Council may then assume decision making authority for that specific report.

 

Urgent matters referred from the Council

As may be necessary from time to time, the Mayor is authorised to refer urgent matters to this Committee for decision, where the Council would ordinarily have considered the matter, except for those matters listed in the limitations above.

 

In order to exercise this authority:

·         The Council Secretary must inform the Mayor and Chief Executive in writing the reasons why the referral is necessary

·         The Mayor and Chief Executive must then respond to the Council Secretary in writing with their decision.

 

If the Mayor and Chief Executive agrees to refer the report to the Committee, the Committee may then assume decision-making authority for that specific report.

 


Finance and Performance Committee

28 April 2022

 

Part A           Matters Requiring a Council Decision

Part B           Reports for Information

Part C           Decisions Under Delegation

 

 

TABLE OF CONTENTS

 

Karakia Tīmatanga................................................................................................... 8 

C          1.        Apologies Ngā Whakapāha.......................................................................... 8

B         2.        Declarations of Interest Ngā Whakapuaki Aronga........................................... 8

C          3.        Confirmation of Previous Minutes Te Whakaāe o te hui o mua.......................... 8

B         4.        Public Forum Te Huinga Whānui.................................................................. 8

B         5.        Deputations by Appointment Ngā Huinga Whakaritenga................................. 8

B         6.        Presentation of Petitions Ngā Pākikitanga.................................................... 8

Staff Reports

B         7.        Christchurch Wastewater Treatment Plant Recovery Update......................... 19

B         8.        Key Performance Results March 2022......................................................... 33

B         9.        Financial Performance Report - March 2022................................................. 53

B         10.      Capital Programme Performance Report - March 2022.................................. 69

B         11.      Vertical Capital Delivery : Bi-Monthly Update............................................. 115

C          12.      Delegations and Visibility of Budget Changes in the Capital Programme........ 125

B         13.      Council-controlled organisations - Draft Statements of Intent for 2022/23..... 129

C          14.      Christchurch City Holdings Ltd - Draft Statements of Intent 2022/23............. 177

B         15.      Venues Ōtautahi draft Statement of Intent 2022/23.................................... 369

C          16.      ChristchurchNZ Holdings Ltd - Draft Statement of Intent for 2022/23............ 403

B         17.      Local Government Funding Agency - Draft Statement of Intent 2022/23 and Shareholder Presentation....................................................................... 417

C          18.      Annual Plan 2022/23 - proposed timeline and process for adopting the final Annual Plan..................................................................................................... 473

B         19.      Overdue General and Rates Debtors at 31 March 2022 (Greater than $20,000 and 90 days).................................................................................................... 477

B         20.      Te Kaha Project Delivery Ltd - Draft Statement of Intent for 2022/23 and Quarter 2 Performance Report for period ending 31 December 2021............................ 481

B         21.      Te Kaha Project - Elected Member Update.................................................. 515

C          22.      Organics Processing Options

This report is to be circulated separately.

  

C          23.      Resolution to Exclude the Public.............................................................. 517

Karakia Whakamutunga

 


Finance and Performance Committee

28 April 2022

 

 

Karakia Tīmatanga

1.   Apologies Ngā Whakapāha  

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

2.   Declarations of Interest Ngā Whakapuaki Aronga

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 Te Whakaāe o te hui o mua

That the minutes of the Finance and Performance Committee meeting held on Thursday, 24 March 2022  be confirmed (refer page 9).

4.   Public Forum Te Huinga Whānui

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

 

There were no public forum requests received at the time the agenda was prepared

5.   Deputations by Appointment Ngā Huinga Whakaritenga

Deputations may be heard on a matter or matters covered by a report on this agenda and approved by the Chairperson.

 

 

6.   Presentation of Petitions Ngā Pākikitanga

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


Finance and Performance Committee

28 April 2022

Unconfirmed

 

 

Finance and Performance Committee

Open Minutes

 

 

Date:                                    Thursday 24 March 2022

Time:                                   9.30am

Venue:                                 Via Audio/Visual Link

 

 

Present

Chairperson

Deputy Chairperson

Members

Deputy Mayor Andrew Turner

Councillor Sam MacDonald

Mayor Lianne Dalziel

Councillor Jimmy Chen

Councillor Catherine Chu

Councillor Melanie Coker

Councillor Pauline Cotter

Councillor Mike Davidson

Councillor Celeste Donovan

Councillor Anne Galloway

Councillor James Gough

Councillor Yani Johanson

Councillor Aaron Keown

Councillor Phil Mauger

Councillor Jake McLellan

Councillor Tim Scandrett

Councillor Sara Templeton

 

 

 

 

 

 

Principal Advisor

Leah Scales

Acting General Manager - Resources / CFO

Tel: 941 8999

Principal Advisor

Dawn Baxendale

Chief Executive

Tel: 941 6996

 

David Corlett

Committee and Hearings Advisor

941 5421

david.corlett@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

 

 

 

Karakia Tīmatanga: Deputy Mayor Turner  

 

The agenda was dealt with in the following order.

1.   Apologies Ngā Whakapāha

Part C

Committee Resolved FPCO/2022/00015

That the apologies received from Councillor Gough and Councillor Templeton for partial absence, apology from Councillor Chu for early departure and apology from Mayor Dalziel for lateness be accepted.

Deputy Mayor/Councillor Cotter                                                                                                                         Carried

 

2.   Declarations of Interest Ngā Whakapuaki Aronga

Part B

Item 12: The Mayor, Deputy Mayor Turner and Councillors Gough and Templeton are directors on the Board of Christchurch City Holdings Limited. Councillors Gough, MacDonald and Mauger are directors on the Board of Civic Building Limited.

Item 13: The Deputy Mayor and Councillor Davidson are on the Board of ChristchurchNZ Holdings Limited.

Item 14: Councillor Scandrett declared an interest in Item 14 relating to Venues Ōtautahi.

Item 15: Councillor Mauger is a Director on the Board of Transwaste Canterbury Limited.

Item 16: Councillor Chen is a Trust Board Member of the Riccarton Bush Trust

 

3.   Confirmation of Previous Minutes Te Whakaāe o te hui o mua

Part C

Committee Resolved FPCO/2022/00016

That the minutes of the Finance and Performance Committee meeting held on Thursday, 24 February 2022 be confirmed.

Deputy Mayor/Councillor Chen                                                                                                                           Carried

 

4.   Public Forum Te Huinga Whānui

Part B

There were no public forum presentations.

5.   Deputations by Appointment Ngā Huinga Whakaritenga

Part B

There were no deputations by appointment.

6.   Presentation of Petitions Ngā Pākikitanga

Part B

6.1

Dr Tracey McLellan – Member of Parliament for Banks Peninsula presented a petition of 338 signatures (attached) from the Bromley community calling on the Christchurch City Council to move the Living Earth compost plant.

 

Petition request:

 

The Bromley community calls on the Christchurch City Council to move the Living Earth compost plant.

 

Reason:

 

The plant has been emitting offensive odours for a long time, significantly and negatively impacting the lives of nearby residents. The local community has expressed concern that proposals to redevelop the facility would not succeed in eliminating the odours. Relocating the plant to a non-residential area is the only solution that would ensure the odour problem is resolved for long suffering Bromley residents.

Committee Resolved FPCO/2022/00017

Part B

That the Finance and Performance Committee:

1.         Thanks Dr McLellan for the petition presentation and refers the petition to staff; and

2.         Requests that staff respond to the matters raised in the petition, in the report that is scheduled to come to the Committee in April 2022.

Councillor Cotter/Councillor Johanson                                                                                                           Carried

Attachments

a       Bromley petition  

 

7.   Key Performance Results February 2022

 

Committee Resolved FPCO/2022/00018 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Receives the information provided in the Key Performance Results for February 2022.

Deputy Mayor/Councillor Chen                                                                                                                           Carried

 

 

8.   Corporate Finance Report - February 2022

 

Committee Resolved FPCO/2022/00019 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Receives the information in the Corporate Finance Report for February 2022.

Deputy Mayor/Councillor Cotter                                                                                                                         Carried

 

Councillor Templeton left the meeting at 10.15 am.

9.   Capital Project Performance Report - February 2022

 

Committee Comment

1.         The Committee noted the reasons why some projects are experiencing delays. Staff to provide a memo with an estimate of the time it will take to complete sections of the Major Cycleway- Southern Express Route.

2.         Staff to provide a short memo on the process that is employed to inform local communities of project delays in their area.

3.         Staff to provide a memo on the status of Takapūneke Reserve.

 

Officer Recommendations / Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receive the information in the Capital Project Performance Report, Three Waters Delivery Enhancements, Watchlist Report, External Funded Report, Major Cycleways Report and the Project Delivery Complete FY22, to 28 February 2022.

 

Committee Resolved FPCO/2022/00020

Part C

That the Finance and Performance Committee:

1.         Receive the information in the Capital Project Performance Report, Three Waters Delivery Enhancements, Watchlist Report, External Funded Report, Major Cycleways Report and the Project Delivery Complete FY22, to 28 February 2022.

2.         Requests a memorandum from staff with advice on ways to improve the Council’s relationship with Kiwirail, particularly with respect to the following issues:

a.     Coordination between the Council and Kiwirail for delivering capital projects near rail corridors.

b.     Enhancing the governance oversight of the relationship.

c.      Improving governance to governance relationships between the Council and Kiwirail.

Councillor Johanson/Councillor Davidson                                                                                                     Carried

 

 

10. Close Out Report - Victoria Street (An Accessible City)

 

Committee Resolved FPCO/2022/00021 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Receive the information in the Victoria Street Project Close Out Report

Councillor Chen/Councillor Cotter                                                                                                                     Carried

 

 

11. Electricity Procurement

 

Committee Resolved FPCO/2022/00022 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Approve the procurement plan for electricity supply to engage with MBIE’s All of Government procurement process to evaluate proposals from electricity retailers for 18 and 36 month terms.

Councillor MacDonald/Councillor Scandrett                                                                                                 Carried

 

The meeting adjourned at 10.52 am and resumed at 11.10am.

Deputy Mayor Turner declared an interest in items 12 and 13 and vacated the Chair at 11.10am. Councillor MacDonald assumed the Chair.

12. Council-controlled organisations - Half year reports for the six months ending 31 December 2021

 

Committee Resolved FPCO/2022/00023 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Receives the half year reports for the six months ending 31 December 2021 for Civic Building Ltd, Local Government Funding Agency and Rod Donald Banks Peninsula Trust; and

2.         Receives the Interim Reports for Christchurch City Holdings Ltd and Christchurch International Airport Ltd for the six months ending 31 December 2021.

Councillor MacDonald/Councillor Mauger                                                                                                      Carried

 

 

13. ChristchurchNZ Holdings Ltd - Interim Report for the six months to 31 December 2021

 

Chief Executive Ali Adams spoke to their presentation (attached)

 

Committee Resolved FPCO/2022/00024 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Receives ChristchurchNZ Holdings Ltd’s Quarter 2 Performance Report and half year performance for the period 1 July 2021 to 31 December 2021.

Councillor MacDonald/Councillor Gough                                                                                                        Carried

 

Attachments

a       Christchurch NZ Presentation  

 

Deputy Mayor Turner resumed the chair at 12.02pm.

Councillor Templeton returned to the meeting at 12.03pm

 

14. Venues Ōtautahi - Interim Report for the six months to 31 December 2021

 

Committee Resolved FPCO/2022/00025 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Notes Venues Ōtautahi ‘s Quarter 2, 2021/22 performance report and financial statements for the period 1 July 2021 to 31 December 2021.

Deputy Mayor/Councillor MacDonald                                                                                                               Carried

 

 

15. Transwaste Canterbury Ltd - Annual Report 2020/21

 

Committee Comment

1.         Gill Cox, Chair, spoke to his presentation (Attached).

 

Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Notes Transwaste Canterbury Ltd’s Annual Report for the year ended 30 June 2021.

 

Committee Resolved FPCO/2022/00026 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Notes Transwaste Canterbury Ltd’s Annual Report for the year ended 30 June 2021.

Deputy Mayor/Councillor Scandrett                                                                                                                  Carried

 

Attachments

a       Transwaste Presentation  

 

Councillor left the meeting at 1.05pm and did not return.

 

 

16. Riccarton Bush Trust - Performance Report for the six months to 31 December 2021 and draft Statement of Intent for 2022/23

 

Trust members Bob Shearing, Bob Lineham and Shona Willis spoke to their presentation (attached).

 

Committee Resolved FPCO/2022/00027 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Receives Riccarton Bush Trust’s half year report for the period 1 July to 31 December 2021;

2.         Approves an increase in the capital grant for Riccarton Bush Trust of $53,000 in 2022/23, $71,000 in 2023/24 and a reduction of $8,000 in 2024/25 for the bush enhancement project;

3.         Notes Riccarton Bush Trust’s draft Statement of Intent for 2022/23 and comments to the trustees that the Council would like them to consider including in the final Statement of Intent for 2022/23 the following:

·    identification of the contribution the Riccarton Bush Trust makes to the Council’s community outcomes through the delivery of its activities and services;

·    a commitment to meeting the goal of becoming net carbon neutral by 2030, and to work with Council staff to identify what is required to enable this outcome; and

·    a commitment to provide information in its statutory reporting about numbers of participants across the variety of Riccarton Bush and House offerings and providing comparisons over time as that information is compiled.

Deputy Mayor/Councillor MacDonald                                                                                                               Carried

 

Attachments

a       Riccarton Bush Trust presentation  

 

The Meeting adjourned at 1.30pm and resumed at 2.30pm.


17.      Te Kaha Project - Elected Member Update

 

Committee Resolved FPCO/2022/00028 Officer Recommendation accepted without change

Part C

That the Finance and Performance Committee:

1.         Receive the information in the Te Kaha Project Elected Members Update Report.

Deputy Mayor/Councillor MacDonald                                                                                                               Carried

 

 

 

 

 

22. Request for drawdown of funds for Major Cycleway Heathcote Expressway Section 2 (Tannery to Martindales)

 

Committee Comment

1.         Staff were asked to update the Community Board on the timeframe for the Major Cycleway- Southern Express Route.

 

Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Notes the tendered costs of constructing Major Cycleway – Heathcote Expressway Route Section 2 Tannery to Martindales are higher than previously budgeted

2.         Approve the drawdown of programme funds to #23100 Major Cycleway – Heathcote Expressway (Section 2) Tannery to Martindales, from the following:

a.         $2,999,862 from #1987 Programme – Major Cycleway – Heathcote Expressway,

b.         $600,000 from #1983 Programme – Major Cycleway – Rapanui-Shag Rock, and

c.         $2,000,000 from #1980 Programme – Major Cycleway – South Express

 

Committee Resolved FPCO/2022/00029

Part C

That the Finance and Performance Committee:

1.         Notes the tendered costs of constructing Major Cycleway – Heathcote Expressway Route Section 2 Tannery to Martindales are higher than previously budgeted.

2.         Approve the drawdown of programme funds to #23100 Major Cycleway – Heathcote Expressway (Section 2) Tannery to Martindales, from the following:

a.         $2,999,862 from #1987 Programme – Major Cycleway – Heathcote Expressway,

The division was declared carried by 12 votes to 3 votes the voting being as follows:

For:                          Deputy Mayor Turner, Mayor Dalziel, Councillor Chen, Councillor Coker, Councillor Cotter, Councillor Davidson, Councillor Donovan, Councillor Galloway, Councillor Johanson, Councillor McLellan, Councillor Scandrett and Councillor Templeton

Against:                 Councillor MacDonald, Councillor Keown and Councillor Mauger

Councillor Davidson/Councillor Cotter                                                                                                            Carried

 

Committee Resolved FPCO/2022/00030

That the Finance and Performance Committee:

2.         Approve the drawdown of programme funds to #23100 Major Cycleway – Heathcote Expressway (Section 2) Tannery to Martindales, from the following:

b.         $600,000 from #1983 Programme – Major Cycleway – Rapanui-Shag Rock, and

c.         $2,000,000 from #1980 Programme – Major Cycleway – South Express.

The division was declared carried by 12 votes to 3 votes the voting being as follows:

For:                          Deputy Mayor Turner, Mayor Dalziel, Councillor Chen, Councillor Coker, Councillor Cotter, Councillor Davidson, Councillor Donovan, Councillor Galloway, Councillor Johanson, Councillor McLellan, Councillor Scandrett and Councillor Templeton

Against:                 Councillor MacDonald, Councillor Keown and Councillor Mauger

Councillor Davidson/Councillor Cotter                                                                                                            Carried

 

Committee Resolved FPCO/2022/00031

That the Finance and Performance Committee:

3.         Requests the Mayor and the Chief Executive to approach other entities, including but not limited to Waka Kotahi, to fund the additional costs.

Councillor Davidson/Councillor Cotter                                                                                                            Carried

Councillor Keown requested that his vote against the resolution be recorded.

 

 

 

18. Resolution to Exclude the Public

 

Committee Resolved FPCO/2022/00032

Part C

That Barry Bragg, Chair of Te Kaha Project Delivery remain after the public have been excluded for Item 20 of the public excluded agenda as he has knowledge that is relevant to that item and will assist the Council.

AND

That at 4.04pm the resolution to exclude the public set out on pages 402-403 of the agenda be adopted.

Councillor Johanson requested his vote against the resolution to exclude the public be recorded.

Deputy Mayor/Councillor Chen                                                                                                                             Carried

 

The public were re-admitted to the meeting at 4.27pm.

 

 

 

Karakia Whakamutunga: Deputy Mayor Turner

 

Meeting concluded at 4.28pm.

 

CONFIRMED THIS 28TH DAY OF APRIL 2022.

 

Deputy Mayor Andrew Turner

Chairperson


Finance and Performance Committee

28 April 2022

 

 

7.     Christchurch Wastewater Treatment Plant Recovery Update

Reference / Te Tohutoro:

22/493192

Report of / Te Pou Matua:

Michael Croucher, Senior Programme Manager

General Manager / Pouwhakarae:

Jane Davis, GM Infrastructure, Planning & Regulatory Services

 

 

1.   Brief Summary

1.1       This report provides an update on recent and planned actions undertaken for recovery of the Christchurch Wastewater Treatment Plant (CWTP) following the fire on 1 November 2021. This report is a further update, following the presentation at the TWIE meeting on 8 December 2021, to Councillors on the procurement methodology and the urgency with which we are seeking to reduce the issues coming from the fire. 

1.2       The mitigation measures to reduce the effects of the putrid smells emanating from both the ponds and the burnt material in the trickling filters are discussed as well as future plans for removing the material from the trickling filters.

1.3       The complexities of keeping the waste water treatment plant operating while constructing alternative treatment processes and working through options for remediation with insurers, Environment Canterbury (ECAN) and contractors have presented enormous challenges that have included international sourcing of resources to speed up the remediation work.

1.4       The reduction of the ongoing smells emanating from the oxidation ponds and the more offensive odours coming out of the trickling filters has been the focus of all efforts since the fire in early November 2021. 

1.5       In order to get the odour-generating material out of the trickling filters as quickly as possible we are directly appointing a contractor to do this work.  The insurer has agreed that the filter media needs to be removed regardless of whether the end result is a repair or a rebuild, and is well aware of the impact of the material on the city. This work is being funded from an interim $10 million payment received from insurers in late November 2021, and we are also discussing with our claim advisors a further interim payment.

1.6       It is acknowledged that the nature of the trickling filter situation will mean that the odours will take some months to dissipate due to the quantum of material to be removed and the tightness of the site to undertake this work.

1.7       Staff will provide a presentation to the Committee in support of this report.  This will include the various interim options considered to minimise the odours from the trickling filters.

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receives the information in this update

2.         Notes that regular communications will be implemented to ensure residents in the local area and across the city are aware of all efforts being undertaken to expedite the removal process and reduce the effects of the odours.

3.         Notes that an update on the details of the insurance claim will be reported to the Insurance sub-committee

3.   Key points

 

Mitigation works undertaken to date

3.1       On the afternoon of 1 November 2021 the covers on the trickling filters at the Bromley wastewater treatment plant caught fire as workers from an external contractor were undertaking planned maintenance on the roofs of the 2 trickling filters.

3.2       Fire and Emergency NZ responded immediately and the fire was eventually declared extinguished on 25 November.  The length of time between the fire starting and it being declared out was due to the combustible material at the base of the huge structures being impossible to reach with fire equipment.

3.3       Remediation experts were called in immediately to work with staff to undertake several immediate remediation and mitigation projects which included diverting the waste flow to the oxidation ponds to ensure continuation of the critical waste water plant infrastructure, aerating the oxidation ponds to add oxygen so that the smells from the higher effluent concentration could be reduced, and working with insurers and contractors on site to develop plans for the removal of the burnt material inside the trickling filter tanks.

3.4       An independent “cause and origin” fire investigator was appointed on 1 November.  Due to the complex nature of the investigation, this process is only now drawing to a conclusion.  Other parties involved have also engaged their own fire investigators. 

3.5       Worksafe New Zealand was formally notified of the event on 2 November and Council initiated our own health and safety investigation into the fire at the same time.  Council completed a complex investigation report and provided this to Worksafe New Zealand in February.  They formally notified Council on 4 March 2022 that it was not going to investigate Christchurch City Council in relation to the cause of the fire.

3.6       We also immediately started adding hydrogen peroxide to the wastewater flowing into the oxidation ponds to improve the level of dissolved oxygen and minimise the potential for the emission of foul odours.

 

Odour emissions

3.7       There are two primary sources of the odour coming from the treatment plant – the oxidation ponds and the tricking filter media. The odours are a product of the breakdown of organic matter within the ponds and tricking filters.

3.8       The first source of odours emanating from the ponds arose as a consequence of losing part of the plant’s treatment system.  The loss of the trickling filters significantly reduced the treatment effectiveness of the plant and degraded the quality of the wastewater discharged to the oxidation ponds, which happens at the end of the treatment system. This in turn created conditions within the ponds that generated very unpleasant odours.

3.9       The second – less frequent but more acute – source of odour comes from the remaining burnt media inside the trickling filters.  When it rains the filter media gets wet and the organic matter trapped within the media putrefies, releasing a pungent odour until it dries.

3.10    A number of options to prevent water entering the filters have been investigated and assessed against effectiveness, risk, time and cost.  Those assessed as being most effective had implementation times similar to the time estimated to start the process to remove the material and it was determined that little, if any, practical benefit would be gained by implementing these options. 

3.11    Environmental conditions such as wind, humidity and temperature all influence how odours from the plant are dispersed.  While a strong breeze helps dilute and disperse odour in the direction of the prevailing wind, conditions with light or no wind, such as the still nights experienced lately, allows the odour to linger and to be smelt over a wider area.

3.12    Our primary focus is two pronged; improve the water quality in the ponds and remove the filter media within the trickling filters as soon as possible to reduce both sources of odour emissions. We acknowledge and understand that living with this odour is difficult for residents, particularly those living in the immediate neighbourhood.

3.13    We have also recognized that residents have expressed concerns regarding health and safety in relation to the odours. While ECAN are responsible as regulator for monitoring air quality, we have commissioned an independent specialist study into the composition and nature of the odours.

 

Improving the quality of the wastewater being discharged to the ponds

3.14    We are continuing to add hydrogen peroxide to the wastewater flowing into the oxidation ponds to improve the level of dissolved oxygen and minimise the potential for anaerobic conditions to develop, with subsequent emission of foul odours. This treatment began immediately after the fire to maximise the oxygen saturation in the water and minimise the potential for odour to be emitted.

3.15    We are taking a two-stage approach to improving the wastewater treatment process to further improve the health of the oxidation ponds. The first stage is to improve the quality of the wastewater before it is discharged into the oxidation ponds.

3.16    A number of options for reconfiguring the plant were developed and assessed by Council staff and external specialists during November and early December. The option of converting clarifier tanks to aeration basins was considered to provide the best result and this was approved in mid-December.

3.17    The equipment required to install four aeration units on each tank was ordered just before Christmas 2021. Because of the specialised nature of the equipment it had to be sourced from around the world, and arrived on site in late February 2022. Following assembly the aerators were lifted into the basins in mid-March and then were turned on in early April.

3.18    Given the nature of the equipment required, the Christmas / New Year season, and global supply chain issues it is a significant achievement to have these aeration basins operational already. The amount of effort made by everyone involved including Council staff, external specialists, equipment suppliers and installation contractors to achieve this should not be underestimated.

3.19    Consistent with our previous public messaging it will take between four and six weeks for the aeration basins to adjust and stabilise to the new treatment process. It is expected that odours coming from the ponds will continue to reduce over this period.

Converted clarifier tanks with active aeration units

 

3.20    These aeration basins will not fully compensate for the treatment work that was previously undertaken by the tricking filters. However they will greatly improve the quality of the wastewater being discharged into the oxidation ponds and the overall biological health of the ponds.

3.21    Stage two will involve monitoring the water quality of the ponds to ascertain the effectiveness of the aeration basins. The monitoring will commence in late May when the ponds have stabilised to the new treatment process. The results of the monitoring will determine whether additional aerator units will need to be installed on the oxidation ponds to further improve water quality.

3.22    Once the treatment process and ponds have adjusted, we will reassess the need to continue adding hydrogen peroxide to the ponds.

 

Trickling filter damage assessments

3.23    Initial visual damage assessments were carried out immediately after the fire by structural engineers to ensure the safety of the concrete tanks.  No issues were identified that would cause a hazard to the ongoing operation of the treatment plant.

3.24    In mid-November engineers were appointed by both Council and our insurer to carry out detailed investigations and damage assessments. These assessments included identification of damage caused from the fire, options for repair or replacement, and the estimated costs.

3.25    Following discussions between engineers acting for Council and those acting for our insurer a scope of work was agreed. This outlined the specific tasks to be carried out in order to determine the damage and reinstatement options. These tasks have included visual inspections, 3D drone surveys, review of existing documentation, and removal of concrete samples to check for heat damage.

Trickling Filter 2 showing scaffold towers constructed for access to carry out assessments and concrete samples taken (outlined in red)

 

3.26    Four locations on each trickling filter tank had concrete samples removed over the height of the tank as shown in the picture above. Two core samples were taken side by side - one for Council's engineers and one for our insurer's engineers. These samples are being tested to determine the extent of any damage to the concrete as a result of the fire.

3.27    While the samples were taken in mid-March due to the quantity involved testing is taking some time. We expect to receive initial results of the testing during May, which will then allow us to determine what is required to rectify the damage and estimate the cost of this work.

3.28    The facility was fully insured at the time of the fire, and continues to be fully insured.  Council’s discussions with its insurer (which began on 1 November) are on-going, but remain confidential due to commercial sensitivity (which also extends to third parties). 

3.29    Detailed information will be reported to the Council’s Insurance Subcommittee in accordance with the Subcommittee's Terms of Reference. An update to the Subcommittee is expected to occur around the end of May following the receipt of final damage assessment reports and further discussions with our insurer.

 

Trickling filter odour and media removal

3.30    Following damage investigations and discussions with our insurer, we are now in a position to begin removing the filter media from the tanks. The insurer has agreed that the filter media needs to be removed regardless of whether the end result is a repair or a rebuild, and is well aware of the impact of the material on the city. This work is being funded from an interim $10 million payment received from insurers in late November 2021, and we are also discussing with our claim advisors a further interim payment.

3.31    Planning is well under way for this significant piece of work, and we have accelerated the appointment of a contractor. The potential contractor has visited the site to discuss options with staff and is currently confirming their methodology. At this stage, it is anticipated that the removal process will take between four and seven months to remove material from both tanks.

3.32    The actual start date of media removal will be known once the contractor has confirmed their methodology. There are approximately 26,000m3 of filter material that needs to be extracted and disposed of and this is equivalent in volume to more than 10 Olympic-sized swimming pools. While it is estimated that the removal of media may take up to seven months due to the volume involved, the contractor is well aware of the urgency of the work and has committed to carry out the work as quickly as possible.

3.33    Its important to note that odour emission from the trickling filters could grow stronger during the removal period as fresh media is exposed to the open air. 

 

        

Trial removal of filter media material using 85 ton excavator

 

 

Disposal of material

 

3.34    A trial removal of filter media was undertaken in early December. This allowed both Council and our insurer to see how the fire may have affected the media, and to understand how best to handle it during the removal.

3.35    When the removal of the burnt material is underway it will be loaded into sealed bins and transported to the hazardous waste landfill site at Kate Valley operated by Transwaste Canterbury Limited.

3.36    We are discussing with Transwaste ways in which truck movements can be coordinated to maximise the number of loads disposed each week. The speeding up of the disposal process will help us remove the offensive odorous material and alleviate the odour issues.

3.37    We anticipate that we will be able to update further at the meeting on 28 April.

 

Communications

3.38    We have been regularly communicating through a number of channels.  Now we are moving into the next significant phase of the recovery programme we are increasing our communications including

·   A comprehensive Q&A piece was published on Newsline last week to accompany the report of 22 April and as a follow up to previous Q & A pieces published on 2 and 23 December 2021.

·   A flyer to the most affected households in eastern Christchurch to be delivered once the approved contractor to remove trickling filter media is announced. This content is currently being developed and designed. The flyer will also be published on the website.

·   A video walkthrough of the treatment plant to show the current situation and the work done to address odours to date.

·   A potential media tour to show how the plant is now working with the aeration basins in operation.

·   The contractor announcement will be published on Newsline, social media and via e-newsletter.

·   Development of an infographic dashboard to update and distribute weekly via e-newsletter as the trickling filter removal project progresses.

·   Promote initiatives and programmes to help most-affected residents (once confirmed).

3.39    Communications will be continually updated to reflect the dynamic situation and key messages required. These will be updated when there are further developments on the web pages.

3.40    A full presentation in support of this report will be provided to the Finance and Performance Committee on the 28th April.

3.41    There will be further regular updates provided to elected members.

 

Next steps

3.42    As published on 6 April, the turning on of the aerators will improve the quality of wastewater discharged to the ponds. With an increase in the amount of oxygen in the ponds the odour level will reduce and effluent discharges will continue to be monitored with ECAN.

3.43    Finalising a contract for removing burnt matter from the trickling filter tanks and transporting the material to landfill is a matter of days away.

3.44    A leaflet drop to the most affected residents will go out once we announce the contractor, so we can ensure they know what is happening and how to report concerns, as well as how to receive regular updates.

3.45    Regular communications will be published on our website and through Council’s social media pages, along with the residents’ associations pages.

3.46    We have gone out to the market to find consultants to advise on options to replace the trickling filter process focusing on the most up to date technology from around the world with the best environmental options.

3.47    We are commissioning an independent expert study into the composition and nature of the odours and will report back on these results.

 

 

 

Attachments / Ngā Tāpirihanga

There are no attachments for this report.

 

In addition to the attached documents, the following background information is available:

Document Name

Location / File Link

Nil

 

 

 

 

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

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 / Ngā Kaiwaitohu

Authors

Michael Croucher - Senior Programme Manager

Adrian Seagar - Insurance & Asset Manager

Elizabeth Neazor - Manager Legal Service Delivery, Commercial & Property

Simon Makker - Senior Communications Advisor

Adam Twose - Manager Operations

Kurt Scoringe - Senior Health & Safety Advisor

Carolyn Gallagher - Programme Director Strategic Support

Approved By

Jane Davis - General Manager Infrastructure, Planning & Regulatory Services

  


Finance and Performance Committee

28 April 2022

 


Finance and Performance Committee

28 April 2022

 





Finance and Performance Committee

28 April 2022

 

 

8.     Key Performance Results March 2022

Reference Te Tohutoro:

22/364843

Report of Te Pou Matua:

Peter Ryan, Head of Performance Management, peter.ryan@ccc.govt.nz

General Manager Pouwhakarae:

Lynn McClelland, Assistant Chief Executive
lynn.mcclelland@ccc.govt.nz

 

 

1.   Brief Summary

1.1       The purpose of this report is to track delivery of organisational performance priorities set out in the 2021-31 Long Term Plan, to target and within budget. The key organisational performance measures include:

1.1.1   Service delivery

1.1.2   Capital projects (planning and delivery)

1.1.3   Finance

1.2       Organisational performance forecasts as at March 2022 are variable, showing month-on-month improvement for Non-Watchlist project delivery and both capital funding planning targets (FY2023 target has been met), while remaining stable and on-track for operational budget. Forecasts against performance targets for level of service and project delivery, and capital expenditure show decline.

1.3       Overall two performance targets are either met or on track to be met for year-end. The other targets require small improvement to meet target.

1.4       This remains a positive series of forecasts, given the restrictions of response levels and COVID-19 impacting level of service delivery. There are also supply chain delays and construction price escalations impacting Council’s capital programme delivery. These effects are also being felt nationwide.

1.5       The (relatively) minor forecast variations from previous years for these results shows that Council’s mitigation strategies to deal with Covid-impacts have been successful to date.

 

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receives the information provided in the Key Performance Results for March 2022.

 

3.   Service delivery

ELT Goal: Deliver 85% Community Levels of Service to target

 

3.1       Community levels of service (LOS) year-end forecast as at March is 82.6% against the performance target of 85%. This is a decline of 1.0% from February 2022.

3.2       This March forecast is 0.4% above the result from this time last year and higher than last year's final result (81.6%).

3.3       The restrictions of COVID-19 response levels (New Zealand remains at ‘Red’) continue to impact the number of people using the Council’s facilities, services and programmes, such as Art Gallery, Akaroa Museum, Libraries, Recreation and Community Centres.

3.4       Impacts are also noticeable in some regulatory services, such as increases in consent volumes leading to delays in consent processing. Extensive effort around recruitment and contracting has been underway for some time to provide the additional capacity needed. Improvements are beginning to be seen.

3.5       A number of LOS exceptions are cautiously forecast as they await results from this year’s resident satisfaction surveys.

3.6       For further details regarding LOS exceptions, refer to managers’ comments in Attachment A.

3.7       The scatter diagram below is an overview of the performance of the top-ten activities as at March 2022.

3.7.1   The vertical y-axis shows service delivery (LOS) performance. 

3.7.2   The horizontal x-axis shows budget over/underspend.

3.8       Since the beginning of this financial year, the majority of activities continue to cluster around the ‘sweet spot’ – delivering their LOS to target and on budget.

3.9       Similar to February reporting, the activities requiring focus are Transport, Water Supply, Recreation, Sports, Community Arts and Events, and Solid Waste and Resource Recovery.

4.   Capital projects, planning and delivery

ELT Goal: Deliver 90% Watchlist capital projects to ‘delivery complete’ milestones

ELT Goal: Deliver 85% non-Watchlist capital projects to ‘delivery complete’ milestones

4.1       Watchlist project performance is forecast at 88.2% (target 90%), this is a decline of 2.7% from the February report but well ahead of the previous year’s forecast at the same period. Three projects are newly forecast to not meet milestone baseline target date.

4.2       Forecast Non-Watchlist project delivery has improved to 78.8% (target 85%). Overall the programme is delivering more strongly to plan than the previous year.

4.3       Supply chain delays and construction price escalation remain a concern nationwide and are risks to the delivery of the Council’s capital programme.

4.4       For further information and underlying detail, refer to the detailed Capital Project Performance Report March 2022.

 

Forward view of capital delivery performance for the LTP

4.5       This is an overview of capital delivery in the last three years against plan, plus capital delivery planned for the first three years of the LTP 2021-31.

4.6       Figures are updated for 2022/23 and 2023/24, per the adopted Draft Annual Plan (24 February 2022).

4.7       There has been stability of delivery year-on-year for projects CCC is responsible for delivering (green line – total spend), ranging consistently between $390m to $409m spend per annum over the previous 3 years.

4.8       For this year (year 1 of the LTP 2021) the total programme amount set for CCC to deliver (core plus externally funded) was $487m. This excludes spend for projects CCC is not responsible for – Parakiore and Te Kaha/CMUA.

4.9       The March 2022 forecast for capital delivery in the Finance Report is $350m (for core plus externally funded, but excluding Parakiore and Te Kaha/CMUA) which equates to 71.9% delivery.

4.10    Under the Draft Annual Plan 2022/23, future year’s CCC delivery programmes for 2022/23 and 2023/24 are set at $498m and $565m (blue line - excluding Te Kaha).

4.11    There remain clear risks around deliverability for these future years, given the consistency of spend these last 4 years (approx. $400m pa), plus the challenges of supply of materials and cost escalation that will impact both 2021/22 and 2022/23, and potentially the years beyond.

4.12    For more detail refer to the Financial Performance Report March 2022.

 

ELT Goal: Ensure capital planning for FY23 funding programme budgets allocated,
90% by 1 March 2022.

ELT Goal: Ensure capital planning for F24 & FY25 funding programme budgets drawn down, 90% by 1 May 2022.

4.13    Capital planning targets are intended to monitor the draw-down of capital funding programme budgets in years 2, and 3 and 4 of 2021-31 LTP. This helps the business plan and prepare for future capital project delivery, in order to effectively implement the LTP.

4.14    95.3% of FY 2022/23 funding programme budgets have been allocated to date, meeting the target for 90% projects initiated to be allocated by 1st March 2022.

4.15    64.8% of FY2024/FY2025 funding programme budgets has been drawn down in CPMS (Capital Programme Management System). The target is for 90% funding programme budgets drawn down by 1st May 2022There remains time for the business to achieve target.

5.   Finance

ELT Goal: Demonstrate value for money and actively manage our operational budgets.

ELT Goal: Deliver overall capital programme to approved budget, =/ -10%.

5.1       There is currently a $22.4 million surplus forecast for the year.

5.2       The forecast (after signalled carry forwards) has increased significantly ($11.0m) from last month. More detail is available in the Financial Performance Report.

5.3       Capital programme is forecast variance at -19.9% (based on project manager forecasts), outside the organisations performance target of between 0% to -10%. More detail is available in the Capital Programme Performance Report.

 

 

Attachments Ngā Tāpirihanga

No.

Title

Page

a

LOS Exceptions Commentary March 2022

40

 

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

Nil

Nil

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

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 Ngā Kaiwaitohu

Authors

Boyd Kedzlie - Senior Business Analyst

Johan Jacobs - Senior Business Analyst

Approved By

Peter Ryan - Head of Performance Management

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

  


Finance and Performance Committee

28 April 2022

 













Finance and Performance Committee

28 April 2022

 

 

9.     Financial Performance Report - March 2022

Reference Te Tohutoro:

22/346192

Report of Te Pou Matua:

Bruce Moher, Acting Head of Finance, bruce.moher@ccc.govt.nz

General Manager Pouwhakarae:

Leah Scales, General Manager Resources/CFO, leah.scales@ccc.govt.nz

 

 

1.   Brief Summary

1.1       The purpose of this report is for the Finance and Performance Committee to be updated on financial performance to 31 March 2022, including the current full year forecast, and to receive information relating to the Council’s treasury and debtors risks, and insurance notifications.

1.2       Financial results to date and forecast remain positive.

1.3       All treasury risk positions are within policy limits but with a likely breach in one for a six month period.

1.4       There was a decrease in rates and an increase in general debt during the month.

1.5       There were no material insurance issues for the month.

 

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receives the information in the Financial Performance Report for March 2022.

2.         Notes the likely breach of the Funding risk policy limit from April to September 2022 and the staff advice supporting it.

3.   Key Financial Statistics

A 1% increase in interest rates would cause a 3% rates increase, which is why we hold a lot of our debt at fixed rates  

What causes a 1% rates increase?
 
$5.9m of opex or $95m of capex

         

    

Historic and projected gross debt level

 

4.   Financial Overview

4.1       Financial information reported covers two key areas.

4.1.1   Operational (expenditure and revenue) covers the day to day spend on staffing, operations and maintenance, and revenues.

4.1.2   Capital covers the capital programme spend and funding relating to it.

4.2       The forecast operating surplus has increased significantly from last month to $22.4 million. The $11 million improvement is largely due to;

4.2.1   Subvention receipts – total receipts of $11.4 million, after allocating $1.5 million to Venues Ōtautahi, are $9.2 million above budget. This reflects the better than expected trading result of the CCHL subsidiaries. The trading results since the LTP was prepared absorbed the losses carried forward by CCHL subsidiaries quicker than anticipated. Trading profits from our CCTO’s have been offset against CCC tax Group losses, which has resulted in additional cash receipts being generated.  

4.2.2   Remuneration budget provision savings ($2.1 million) – arising due to timing of settlements not agreed at time of annual plan, and impacted by vacancies

4.2.3   Lower net interest costs ($0.8 million) – driven by higher interest revenues due to higher amounts of cash on hand (due to a slower capital spend), and slightly lower borrowing costs.

Partially offset by,

4.2.4   Further costs for the Le Bons Bay Landfill Remediation project ($1 million). Further submerged pit areas have been discovered that are required to be remediated.  

4.2.5   Note, we have not yet forecast any costs related to the City Recovery package approved of up to $1.55m.

4.3       Covid-19 Restrictions Impact - the following are the material expected forecast impacts, these have remained relevantly stable from the $6.5 million reported in the February report. The Impact is now forecast at $6.4 million.

Activity

Reduced Revenue

($m)

Expenditure Impacts

($m)

Recreation & Sport

Entry/Usage fees

Casual rentals/hire revenues

2.1

0.3

 

Additional security

Event cancellations

Casual Labour decrease (lockdown period)

0.3

(0.2)

(0.1)

Libraries

Lower fees & charges/facility hire/rent relief

0.5

Additional security

0.5

Parks

Lower shop sales & rental relief

0.4

Lower stock purchases

(0.1)

Art Gallery

Lower shop sales/donations/facility hire

0.2

 

 

Citizen & Customer Service

NZ post revenues decrease

0.1

 

 

Community Development

Community Facilities hire revenues

0.1

 

 

Transport

Decrease in fines

Parking

Rental relief

0.9

0.9

0.2

 

 

Corporate/Internal services

Petrol Tax

0.1

Temporary staff costs/Masks/

Rapid tests

0.2

Total Revenue Impact

5.8

Total Expenditure Impact

0.6

4.3.1   Favourable forecasts across other areas of the organisation cover the above impact.

5.   Operational Position

5.1       Operational revenue exceeds expenditure as it includes rates revenue for capital renewals and debt repayment. This revenue is referred to below as ‘Funds not available for Opex’ and removed from the Operational result below.


Year to Date Results

Forecast Year End Results

After Carry Forwards

$m

Actual

Budget

Var

 

Forecast

Budget

Var

 

Carry Fwd

Var

 

Revenues

(606.9)

(580.5)

26.4

 

(820.6)

(792.8)

27.8

 

-

27.8

 

Expenditure

452.1

459.6

7.5

 

616.2

621.3

5.1

 

9.7

(4.6)

 

Funds not available for Opex

125.6

126.0

0.4

 

175.7

171.5

(4.2)

 

(3.4)

(0.8)

 

Surplus

(29.2)

5.1

34.3

(28.7)

-

28.7

6.3

22.4

5.1       Operational results by activity are detailed in Attachment A.

5.2       Brief summaries of the surplus, revenues, and expenditure are highlighted below.

Surplus

The operational surplus is currently $34.3 million better than budget, but forecast to drop to $28.7 million by year-end ($22.4 million after signalled carry forwards) due to some expenditure currently below budget being timing related. Major carry forwards signalled in the forecast include the claims preparation and management of legal proceedings ($3.4 million – borrowed for rather than rates funded), holiday pay remediation payments ($3.4 million), operational costs associated with the earthquake repair programme ($1.1 million), and Rockfall grants to cover future claims ($0.9 million).

Key forecast drivers after carry forwards:  

Higher subvention receipts ($9.2 million), Recycling processing fee savings and prior year rebate ($6.4 million), favourable net interest/dividend revenues ($4.7 million), higher Regulatory and Compliance volumes ($4.5 million – net of resourcing costs), higher rates revenue ($2.8 million), Burwood Landfill continued operations ($1.7 million), personnel savings ($2.7 million), and insurance savings ($1.1 million).

Partially offset by COVID-19 restrictions impacts ($6.4 million), additional remediation costs for Le Bons Bay Landfill ($1.7 million), and higher refuse disposal fees ($1.6 million).

Revenues

Revenues are $26.4 million higher than budget year to date - forecast to be $27.8 million higher at year end. Below are the key drivers of these variances:

 

                                                                                                                                                                               YTD                  Forecast

Higher subvention receipts than planned ($1.5m to be allocated to Venues Ōtautahi in April)    $10.7m                   $9.2m

Regulatory & Compliance revenues (driven by higher building/resource consent volumes)              $9.2m                 $10.5m

Increased Burwood Landfill revenues (due to continuing operations)                                               $2.7m                   $3.2m

Interest Revenues (higher interest rates and cash on hand)                                                                        $2.5m                   $3.7m

Rates Revenues (2020/21 rating growth higher than planned)                                                                    $2.4m                   $2.8m

Higher Transwaste dividends received                                                                                                 $2.1m                   $2.1m

EcoCentral Recycling Processing fee rebate received (relating to prior years)                             $1.4m                   $1.4m                         

COVID-19 revenue impacts                                                                                                                      ($4.3m)                  ($5.8m)

Expenditure

Expenditure is $7.5 million lower that budget year to date and forecast to be $5.1 million lower at year end before carry forwards ($4.6 million higher after budget carry forwards).

 

Key variance drivers:                                                                                                                                   YTD                  Forecast
(after c/f)

Recycling processing fee savings (net of increased disposal of contaminated loads)                          $3.5m                    $3.4m

Timing of grant payments                                                                                                                          $2.4m                         -

Three Water activities behind budget spend (timing of Water Reform programme spend)           $2.4m                         -

Lower Personnel costs (excl. Regulatory & Compliance shown below)                                                                $1.8m                    $1.9m

Parks expenditure (Red zone delay in transfers/managing costs to cover COVID related revenue loss)  $1.6m                    $0.6m

Recreation & Sport expenditure timing (forecast offset by grant/subsidies revenues received)      $0.9m                  ($0.2m)

Lower insurance premiums                                                                                                                       $0.9m                    $1.1m

Earthquake repair programme opex related costs to be carried forward                            $0.7m                        -

Le Bons Bay Remediation (increased costs due to additional material found)                                      ($0.4m)                ($1.7m)

Higher debt servicing costs (due to higher interest rates – offset by revenues)                                     ($0.4m)                ($1.1m)

Burwood Landfill operation costs (continued operation – offset by revenues)                                  ($1.1m)                ($1.5m)

Transport expenditure (YTD due to earlier maintenance – forecast  post rain event repairs)                ($1.3m)                ($0.5m)

Higher Regulatory & Compliance resourcing costs (offset by revenue volumes)                         ($4.6m)                ($6.0m)

Procurement savings (unlikely to be found due to inflation impacts & living wage decision)                           -                        ($0.7m)                                               

Funds not available for Opex

Forecast reduction from surplus of $0.8 million after carry forwards is due to a better Housing ($0.3 million) and Dogs ($0.1 million) forecast result (both non-rates funded) and $0.4 million relating to the Bexley Landfill Remediation project (rate funded capital project).

6.   Capital Position


Year to Date Results

Forecast Year End Results

After Carry Forwards

$m

Actual

Budget

Var

 

Forecast

Budget

Var

 

Carry Fwd

Var

 

Core Programme

197.5

256.9

59.4

 

337.5

414.0

76.5

 

76.5

-

 

External Funded Programme

34.7

51.0

16.3

 

56.2

73.3

17.1

 

17.1

-

 

Less unidentified Carry Forwards

-

-

-

 

(43.7)

-

43.7

 

43.7

-

 

Core/External Funded Programme

232.2

307.9

75.7

350.0

487.3

137.3

137.3

-

Te Kaha/Parakiore

45.9

68.0

22.1

 

71.9

119.4

47.5

 

47.5

-

 

Total Capital Programme

278.1

375.9

97.8

 

421.9

606.7

184.8

 

184.8

-

 

Revenues and Funding

(224.4)

(219.5)

4.9

 

(309.6)

(301.7)

7.9

 

(5.1)

13.0

 

Borrowing required

53.7

156.4

102.7

112.3

305.0

192.7

179.7

13.0

Capital Expenditure

6.1       Gross capital expenditure of $278.1 million has been incurred year to date. A further $143.8 million is forecast to be spent by year end.

6.2       The $421.9 million forecast spend is based on a Core/External Funded spend of $350 million, plus forecast spend of $71.9 million on Te Kaha and Parakiore projects.

6.3       Project managers have identified $141.1 million relating to specific projects forecast to be carried forward. The forecast includes an additional $43.7 million of expected carry forwards yet to be specifically identified (forecast based on actuals to date and historical trend analysis).

6.4       The Draft 2022/23 Annual Plan includes an assumed total $50 million carry forward. This will be revisited for the Final, including what years these higher forecast carry forwards are predicted to fall into and any re-reprioritisation of the programme required to ensure deliverability.

6.5       Breakdown of Capital expenditure by Group of Activities is outlined in Attachment A.

6.6       For further information on capital, please refer to the Capital Programme Performance Report.

Capital Revenues and Funding

6.7       Year to date revenues are higher than budget driven by a higher drawdown of development contributions ($6.4 million) due to higher revenues received; partially offset by timing of Crown contributions ($1.9 million) due to timing of capital spend.

6.8       Forecast after carry forwards are $13 million higher largely driven by additional drawdowns forecast for development contributions ($6.2 million) due to higher contributions received, budgets not required for development contribution rebates ($4.5 million) due to closed schemes with balances remaining, and higher water connection fees ($2 million). Forecast carry forwards of $5.1 million include Crown contributions ($6.4 million) due to timing of the Kaha project spend, Earthquake Appeal Trust revenues ($1.5 million) relating to the Avon River Corridor spend; partially offset by $2.5 million of development contributions rebate budgets to be carried forward to cover future allocations from open schemes.

6.9       The lower current year borrowing requirement forecast of $192.7 million comprises $179.7 million for capital programme carryforwards (timing), and permanent lower borrowing of $13 million due to the higher capital revenues outlined in 6.2 above.

7.   Special Funds

7.1       The current and forecast movements and balance of the Housing Account and Capital Endowment Fund are shown in Attachment A.

7.2       The forecast balance of 2021/22 funds available for allocation from the Capital Endowment Fund at 31 March 2022 was $18,031.

8.   Treasury

Borrowing, Advances to Related Parties, and Bank Deposits

8.1       Council’s borrowing and treasury-related Advances are shown below:

8.2       Gross Debt has not changed since the last Report, although there has been a small increase in Advances ($450k of LGFA Borrower Notes).

8.3       Rates-funded borrowing is expected to remain unchanged this financial year – net outflows from operations and capital investment will be funded by existing cash holdings.

Policy Compliance

8.4       All Treasury risks are within Policy limits:

Risk Area

Compliance

Liquidity Risk

Yes

Funding Risk

At risk

Interest Rate Risk

Yes

Counterparty Credit Risk

Yes

 

8.5       “At Risk” Funding Policy:  Council’s debt maturity profile currently complies with the Policy requirement that at least 10% matures beyond 7 years.  However, a breach will occur from April 2022, once $116m of April 2029 maturities move to within 7 years.  A Policy breach could be avoided by borrowing $60m long-term during April, but this is not preferred as it would increase cash holdings unnecessarily over financial year end, particularly in light of the current forecast lower capital spend and increasing operating surplus.  It is therefore intended to tolerate a breach over coming months until the issuance of long-term debt becomes more appropriate (no later than October 2022, based on current cash-flow projections).  Note that Council’s interest rate risk is managed independent of its funding risk, so is unaffected by this choice.

Funding & Interest Rates

8.6       Council’s projected funding needs per financial year are shown in the chart below, split between the maturity of existing gross borrowing (green) and expected new borrowing requirements (grey).  There is a significant concentration risk in the 2024 year, which is subject to on-going management.

8.7       Council’s interest rate risk is managed, to reduce the volatility of interest costs from year to year.  Most existing debt has been fixed for at least the next three years, which will limit the impact of recent market interest rate increases on Council’s future borrowing costs.  The table below may be adjusted for the final Annual Plan, but significant changes are not expected.

9.   Rates and General Debt

9.1       Rates debt decreased $1.3 million this month and General debt increased $25.8 million as shown in the table below. General debt includes a Crown invoice for $28.8m relating to Te Kaha (CMUA), which was paid on 1 April.

$m

February

Current

Change

Comment

Rates Debt

22.3

21.0

(1.3)

Per below

Overdue rates for current year

19.2

19.0

(0.2)

 

Arrears from previous years

3.1

2.0

(1.1)

Mortgagees paying formal demands

General Debt

8.9

34.7

25.8

$28.8m Crown contribution for Te Kaha paid in April 2022

(less than 30 days)

7.8

33.9

26.1

As above

(between 30 – 90 days)

0.6

0.4

(0.2)

-

(greater than 90 days)

0.5

0.4

(0.1)

-

 

9.2       General debts of $0.11 million have been written-off year to date, and $13k in the 3 months to March 2022 of which $11.1k related to libraries debt.

9.3       A summary report of debtors written-off in 2021/2022 by month is provided as Attachment B.

9.4       The graph below shows 90+ days rates debt as a percentage of the annual rates strike that year, with a three month moving average to smooth the quarterly cycle, and indicates that rate arrears are well in hand.

 

10. Insurance Claims

The table below outlines the number of events that have been notified by Council against its insurance policies as well as claims against Council from third parties during March 2022.

 

Policy

Claims / Notifications

Estimated Cost

Above excess

Below excess

Claims by Council

Motor Vehicle

0

3

$TBC

 

Material damage

0

0

$0

Claims against Council

PI / PL

0

0

$0

 

10.1    CWTP fire claim - damage assessments of the trickling filters and reconfiguration of the treatment plant process continued during this period. Once this work is completed the quantum of the claim will become clearer. Updates on this claim will be reported to the Insurance Subcommittee, in accordance with the updated Terms of Reference for this Subcommittee.

 

 

Attachments Ngā Tāpirihanga

No.

Title

Page

a

Operational & Capital breakdown by Activties / Special Funds

62

b

Debtors Written Off Summary 31 March 2022

68

 

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

Nil

Nil

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

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 Ngā Kaiwaitohu

Authors

Ryan McLachlan - Reporting Accountant

Andrew Jefferies - Manager Rates Revenue

Steve Ballard - Group Treasurer

Brett Hales - Manager Transactions

Adrian Seagar - Insurance & Asset Manager

Martin Zelas - Team Leader Rates

Approved By

Bruce Moher - Acting Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

  


Finance and Performance Committee

28 April 2022

 







Finance and Performance Committee

28 April 2022

 


Finance and Performance Committee

28 April 2022

 

 

10.   Capital Programme Performance Report - March 2022

Reference / Te Tohutoro:

22/416997

Report of / Te Pou Matua:

Richard Wesley, Acting Head of Programme Management Office

General Manager / Pouwhakarae:

Lynn McClelland, Assistant Chief Executive Strategic Policy and Performance

 

 

1.   Brief Summary

1.1       The purpose of this report is for the Finance and Performance Committee to be informed of Capital Performance for period ending 31 March 2022 and the outlook for coming months.

1.2       As noted at the last meeting, the report format has been updated this month. The aim of this updated reporting format is to ensure that the capital report is more readable and communicates clearly the progress, risks and issues facing the capital programme.

1.3       As has been flagged for the last six-eight months, the capital programme has come under significant pressure this year due to a combination of Covid-related and supply chain issues.   While the programme was largely on track at the six month mark, the last three months have seen these risks crystallised.  The projected capital delivery is now trending towards an outcome of around $350m (72%) for the Council-delivered capital programme of works.   Every effort will be made to reduce further slippage, however, many factors are outside Council control.

1.4       An assessment is underway to ascertain the impact on carry-forwards and the capital programme currently envisaged for FY2023.  We intend to share this with Councillors before final decisions are made on the Annual Plan for 2023.

 

 

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receive the information in the Capital Programme Performance Report – March 2022

 

 

 

 

Attachments / Ngā Tāpirihanga

No.

Title

Page

a

2022-04-08 Capital Delivery Report - March 2022

71

b

2022-03 Capex Watchlist Report - March 2022

99

c

2022-03 Major Cycleways Report - March 2022

104

d

2022-03 External Funded Report - March 2022

108

 

 

In addition to the attached documents, the following background information is available:

Document Name

Location / File Link

Nil

 

 

 

 

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

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 / Ngā Kaiwaitohu

Author

Richard Wesley - Head of Programme Management Office

Approved By

Mary Richardson - General Manager Citizens & Community

Jane Davis - General Manager Infrastructure, Planning & Regulatory Services

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

  


Finance and Performance Committee

28 April 2022

 





























Finance and Performance Committee

28 April 2022

 






Finance and Performance Committee

28 April 2022

 





Finance and Performance Committee

28 April 2022

 







Finance and Performance Committee

28 April 2022

 

 

11.   Vertical Capital Delivery : Bi-Monthly Update

Reference / Te Tohutoro:

22/295346

Report of / Te Pou Matua:

Darren Moses, Manager, Project Management Team, VCD

General Manager / Pouwhakarae:

Mary Richardson, GM Citizens & Community

 

 

1.   Brief Summary

1.1       The purpose of this report is to inform the Finance and Performance Committee of the status of some of the higher profile projects within the portfolio of the Vertical Capital Project Management team.  These are included in Attachment A.

1.2       The Vertical Capital Delivery Project Management Team holds a current portfolio of 27 projects with a financial year budget of $37.9M.  This excludes the budgets for Te Kaha and Parkaiore Recreation and Sports centre.

1.3       Note that the Canterbury Multi-Use Arena /Te Kaha project is reported separately.

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receive the information in the Vertical Capital Delivery :  Bi-Monthly Update Report

 

 

 

 

Attachments / Ngā Tāpirihanga

No.

Title

Page

a

Vertical Capital Delivery Elected Member Update 2022-03-26

117

 

 

In addition to the attached documents, the following background information is available:

Document Name

Location / File Link

Nil

 

 

 

 

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

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 / Ngā Kaiwaitohu

Authors

Rita Estrella - Senior Project Coordinator

Corrine Early - Senior Project Coordinator

Approved By

Darren Moses - Manager - Project Management Team

Brent Smith - Acting Head of Vertical Capital Delivery

Mary Richardson - General Manager Citizens & Community

  


Finance and Performance Committee

28 April 2022

 








Finance and Performance Committee

28 April 2022

 

 

12.   Delegations and Visibility of Budget Changes in the Capital Programme

Reference Te Tohutoro:

22/261234

Report of Te Pou Matua:

Richard Wesley, Head of Programme Management Office

General Manager Pouwhakarae:

Lynn McClelland, Assistant Chief Executive, Strategic Policy & Performance

 

 

1.   Purpose of the Report Te Pūtake Pūrongo

1.1       The purpose of this paper is to propose changes of delegations and enhanced visibility by Councillors in relation to capex changes. The overall objectives of this exercise are to re-set clear delegations of authority, improve transparency and maintain operational efficiency.

1.2       There are two main categories of capital expenditure covered: programmes, largely focused on renewals, and vertical capital projects.  These will require different delegations.   The proposed improved briefing process is designed to enhance transparency. 

 

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Approve major project budget changes, over $5m, in the programmes of Three Waters, Transport, Parks, Digital, Recreation, Sports and Events, and Vertical Capital, following ELT endorsement.

2.         Approve budget changes over $500,000, between standalone capital projects in the Community and Major Facility delivery programme agreed in the LTP.

3.         Receive a regular quarterly briefing on project budget changes between $250,000 and $5m, approved by ELT.

4.         Recommend these delegations be reviewed and adjusted in 12 months’ time, if required.

 

3.   Reason for Report Recommendations Ngā Take mō te Whakatau

Capex Programmes of Work

3.1       Programme budgets are approved in the Long Term Plan (LTP), often by asset type in accordance with Asset Management Plans, and are predominantly renewals e.g. Water Supply Mains Renewals, Transport and Parks. Programme funding is then drawn down to projects based on priority – condition, growth, delivery optimisation.

3.2       There is an Executive Leadership Team (ELT) performance target to draw down projects three years in advance each year, ensuring that projects can progress through planning and design, therefore enabling a rolling programme of work in construction and maximising delivery of projects.

3.3       Draw down of all projects from renewal programmes is aligned to the LTP approved Asset Management Plans.  Programme management enables flexibility, ability to respond to changing priorities, community feedback, and opportunities for delivery optimisation. Projects are drawn down from programme with budgets and milestones baselined to the original LTP.

3.4       There is a reasonable likelihood of changes during the investigation, design and procurement phases, resulting in the need for budget change requests. We have identified the need to improve early project estimation based on previous experience, lessons, known risks, which is part of our continuous improvement.  However, with the combined effects of increased clarity of scope, technical information, actual inflation, the risk of budget impacts, and therefore the requirement for budget change requests, cannot be totally eliminated.

3.5       When change requests are required to adjust project budgets, all budget changes within a programme ensure there is a net zero budget impact to the approved Long Term Plan activity budget funding envelope.  However, the actual work delivered may change, savings in one project can be transferred to ensure another is delivered, and lower priority projects may be deferred to a following financial year planning period.  As noted above, any deferrals are based on priority – condition, growth, delivery optimisation. An examples would be within the water main replacement programme where there is a clear priority of renewals needed. If a project is under budget, the next projects can be accelerated, while if a project budget is exceeded, the next projects are delayed.

3.6       In order to maintain operational efficiency the threshold for Councillor approval of change requests for renewals programmes of work is recommended to be $5m. This will provide the opportunity for Councillors to make decisions on significant change requests currently made by management and based on recent years’ experience, may result in approximately 6-8 change requests per year.

Standalone Vertical Capital Projects

3.7       There is a second category of capital expenditure in the form of substantial individual projects in the community and major facilities programme, such as the Organics Processing Plant, Naval Point Development, and Hornby Pool which have specific budgets allocated and approved within the LTP.   Changes to these projects require a different delegation level and process to reflect the different nature of these projects and Councillor feedback.

3.8       We therefore propose that any transfers between individual vertical capital projects (not related to renewals) over $500,000 be submitted to Councillors for guidance and approval.

Reporting Process

3.9       We also propose to enhance the visibility of changes between $250,000 and $5m to the approved capital Long Term Plan (LTP) initially through quarterly briefings to Councillors.  As Councillors become more familiar with the information there is the opportunity to convert this into regular quarterly reporting. 

3.10    All budget changes reported in this way will have been through a process where they are reviewed and approved by the Change Request Board, Finance Manager, Project Sponsor,  Head of Department and ELT.

 

4.   Alternative Options Considered Ētahi atu Kōwhiringa

4.1       The proposal put forward in this paper is an improvement on the current delegations and programme visibility. The option of remaining with the status quo will prevail in the event of this proposal not progressing.

5.   Detail Te Whakamahuki

5.1       The information will be included as part of the publically accessible reports for the Finance and Performance Committee, and therefore available to all Community Boards.

6.   Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic Alignment Te Rautaki Tīaroaro

6.1       This report supports the Council's Long Term Plan (2021 - 2031):

6.1.1   Activity: Programme Management Office

·     Level of Service: 13.13.18 Support Management and Governance board roles through visibility of project and portfolio performance - 100% delivery within target delivery date

Policy Consistency Te Whai Kaupapa here

6.2       The decision is consistent with Council’s Plans and Policies.

Impact on Mana Whenua Ngā Whai Take Mana Whenua

6.3       The decision does not involve a significant decision in relation to ancestral land or a body of water or other elements of intrinsic value. However the increase in transparency of process is helpful in ensuring visibility of budget changes.

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.4       No impact

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.5       No impact

7.   Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1       There are no cost implications of this decision, as it will form part of existing Programme Management Office reporting functions.

Other He mea anō

7.2       N/A

8.   Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1       There are no issues in this regard

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2       There is no legal context, issue or implication relevant to this decision.

9.   Risk Management Implications Ngā Hīraunga Tūraru

9.1       There are no risk management issues to consider

 

 

Attachments Ngā Tāpirihanga

There are no attachments for this report.

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

Nil

 

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

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 Ngā Kaiwaitohu

Author

Richard Wesley - Head of Programme Management Office

Approved By

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

  


Finance and Performance Committee

28 April 2022

 

 

13.   Council-controlled organisations - Draft Statements of Intent for 2022/23

Reference Te Tohutoro:

22/211369

Report of Te Pou Matua:

Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz).

General Manager Pouwhakarae:

Leah Scales, General Manager/CFO, Resources Group (leah.scales@ccc.govt.nz).

 

 

1.   Purpose of the Report Te Pūtake Pūrongo

1.1       The purpose of this report is to present the draft Statements of Intent (SOIs) for the following Council-controlled organisations (CCOs) for 2022/23:

·    Civic Building Ltd (Attachment A);

·    Rod Donald Banks Peninsula Trust (Attachment B); and

·    Central Plains Water Trust (Attachment C).

1.2       This report has been written following receipt of the draft SOIs by the statutory due date of 1 March 2022 pursuant to clause 1, part 1 of schedule 8 of the Local Government Act 2002 (LGA).  The draft SOIs meet the content requirements of schedule 8 of the LGA.

Local Government Act 2002 requirements

1.3       Clauses 2 and 3 of part 1, schedule 8 of the LGA sets out the requirements for a Council-controlled organisation’s (CCO’s) adoption of a SOI.  In particular, it provides the shareholder may provide comments on the draft SOIs [of its directly and indirectly owned CCOs] to the CCO board by 1 May and the CCO board must consider the comments and finalise the SOI by 30 June.  The final SOI must be published on an internet site within one month of being finalised pursuant to section 64(9) of the LGA.

1.4       Key SOI content includes, for the financial year to which it relates and each of the following two financial years:

·    the objectives of the group;

·    the board’s approach to governance;

·    nature and scope of activities to be undertaken;

·    non-financial performance targets and other measures by which performance is judged in relation to the objectives; and

·    the major accounting policies of the company or group.

1.5       For Civic Building Ltd (CBL), as a Council-controlled trading organisation it must also include in its SOI, ratio of consolidated shareholders’ funds to total assets, estimated amount or proportion of accumulated profits and capital reserves intended to be distributed (CBL does not make dividend distributions at this stage) and the board’s estimate of commercial value of the shareholders’ investment in the company.

1.6       For the two trusts, as non-trading CCOs they must include forecast financial statements for the three year SOI period.

 

1.7       The draft SOIs all meet these requirements.

1.8       The decisions in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.  The level of significance was determined by estimating the extent to which the recommendations may impact the community.

 

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receives Civic Building Ltd’s draft Statement of Intent for 2022/23;

2.         Receives Rod Donald Banks Peninsula Trust’s draft Statement of Intent for 2022/23; and

3.         Receives Central Plains Water Trust’s draft Statement of Intent for 2022/23.

 

3.   Reason for Report Recommendations Ngā Take mō te Whakatau

3.1       The draft SOIs are all legally compliant.

 

4.   Alternative Options Considered Ētahi atu Kōwhiringa

4.1       There are no other options since the SOIs are at the discretion of the CCO boards, and they are required to have SOIs finalised and published by 30 June. 

5.   Detail Te Whakamahuki

Civic Building Ltd (Attachment A)

5.1       CBL is a Council-controlled trading organisation (CCTO).  It is a 50/50 partner in a joint venture (JV) with Ngāi Tahu Property Ltd which owns and manages the civic building.  The Council’s other interests relating to CBL are as a tenant of the building, and as the lender of the capital used by CBL to purchase the building. 

5.2       CBL’s draft SOI for 2021/22 compared with last year’s final SOI are set out in the table below:

 

2022/23

$000

2023/24

$000

2024/25

$000

Net profit before tax - current draft SOI

437

702

960

Net profit before tax - last year’s final SOI

443

708

-

Total assets – current draft SOI

57,191

57,881

58,742

Total assets - last year’s final SOI

59,548

60,168

-

5.3       The current draft SOI is consistent with the forecasts made in last year’s final SOI.

5.4       The improvement in net profit before tax across the SOI years reflects the lower cost of financing on a reducing loan balance.  The loan was provided by the Council for acquisition of the Civic Building. 

5.5       The projected reduction in total assets in the draft SOI over the projections in last year’s SOI reflects the declining value of the finance lease with the Council, as tenant of Civic Building as time passes.


Rod Donald Banks Peninsula Trust (Attachment B)

5.6       The Trust supports sustainable management, conservation and recreation on Banks Peninsula. 

5.7       The following table sets out the changes in the Trust’s SOI financial projections:

Operating surplus / (deficit)

2022/23

$000

2023/24

$000

2024/25

$000

Current draft SOI

(128)

1,350

-7

Last year’s final SOI

(147)

1,296

-

 

Cash balance

 

 

 

Current draft SOI

761

1,736

1,424

Last year’s final SOI

739

1,844

-

5.8       The financial forecasts reflect the residual Trust Fund balance prior to the commencement of the Council’s LTP funding to the Trust of $1.35 million capital in 2023/24 and $100,000 per annum operating funding in 2023/24 and 2024/25. 

5.9       The forecasts are preliminary, and are likely to change following the Trust’s strategy planning session to be held before the SOI is finalised by 30 June.

5.10    Performance targets remain as in the prior year.  They are focussed on the Trust’s four pillars of access, biodiversity, knowledge and partnerships.

Central Plains Water Trust (Attachment C)

5.11    The Trust is settled in equal parts by the Council and Selwyn District Council for the purpose of owning and holding the long term resource consents for the taking of water for the purpose of irrigation in the central plains.  The Trust issues water use rights to Central Plains Water Ltd (the water company), underpinned by the resource consents.  A key duty of the Trust is to ensure the water company complies with the water use rights, to ensure that the Trust, as owner of the resource consents is compliant with their terms and conditions.

5.12    The Trust’s objectives are to:

·  encourage, support and facilitate sustainable development of the water resources in the Canterbury region, agricultural and horticultural diversity in the central Canterbury plains area, and an appropriate balance of the benefits of agricultural development with the enhancement of ecological, social and recreational values in the central plains area; and

·  provide and facilitate education to the inhabitants of the Canterbury region in relation to water issues and sustainable agricultural development.

5.13    The Central Plains Water Joint Committee (Joint Committee) includes two representatives from each settlor Council.  The Deputy Mayor and Councillor Cotter are the Council’s members.  The Joint Committee is charged with making recommendations to the two settlor councils regarding the Trust; it does not have delegated decision-making powers.  Decisions must be agreed by both settlor councils to take effect.

Joint Committee’s review of SOI

5.14    The Joint Committee met on 25 February 2022 to review the Trust’s draft SOI for 2022/23, among other things.  The draft SOI has not changed markedly over the previous year’s, which is as expected.  The scope of the Trust’s activity is relatively narrow - monitoring the water company’s compliance with the water use rights issued by the Trust (underpinned by the Trust’s resource consents), education activities, commissioning an annual sustainability report and administering the Environmental Management Fund on terms and conditions set out in the resource consents.

5.15    The draft SOI contains new performance targets relating to the Trust’s core activity noted above.  This was in response to a request from the Joint Committee that the targets be reviewed and updated.  It is the last in a number of governance and accountability improvements that have been addressed with the Trust over the past three years. 

5.16    The draft SOI does not provide climate change commitments.  As the Trust is not operational itself, the relevance of reducing emissions is likely to relate largely to such things as incidental activities such as transport to and from meetings and educational activities (a bus excursion as part of an educational initiative is proposed later this year).  Staff propose that the Council requests the Joint Committee members to raise this matter with Selwyn District Council’s Joint Committee members and if in agreement, that the request for a climate change commitment be provided as a formal comment on the draft SOI to the Trust.

5.17    There are several other matters that the Joint Committee discussed at its meeting (at which  the Trust’s Chair, Mr Pat McEvedy was present for some period) including:

Timing of replacing or re-appointing trustees

5.17.1 The trustees, their terms of appointment and appointers are set out in the table below.

Trustee

Appointed by

First appointed

Term expires

Pat McEvedy, Chair

Joint Councils

1 January 2020

1 January 2023

Elle Archer

Joint Councils

1 January 2020

1 January 2023

Rob Lawrence

Joint Councils

1 January 2020

1 January 2023

Olive Webb

The Trust

Prior to 2015

1 January 2023

Les Wanhalla

Joint Councils on the recommendation of Te Taumutu Rūnanga

1 January 2020

1 January 2023

Viv Smart

Joint Councils on the recommendation of Te Ngāi Tūāhuriri Rūnanga

Prior to 2009

1 January 2023

5.17.2 Council staff will work with Selwyn District Council staff later in 2022 towards recommending reappointments and/or new appointments.  This will include engaging with the Chair of the Trust to confirm the mix of skills and capabilities required for the Board as a whole, and to confirm the optimal size of the Board. 

Annual Sustainability Report

5.17.3 The Joint Committee has requested the Trust itself articulates its own assessment of environmental, economic and social outcomes as a result of the water company’s irrigation activities, and that it presents these views formally to the Joint Committee.  The reasoning for this is that the Trust is accountable for ensuring there is an appropriate balance of the benefits of agricultural development with the enhancement of ecological, social and recreational values in the central plains area.  The Annual Sustainability Report is an input into that accountability, not a substitute for it. 

5.17.4 The 2021/22 Annual Sustainability Report was published to the Trust’s website recently and is at CPWL Baseline Water Quality Assessment.  Staff from the governance and science policy groups in the Council will report on the content of that report, along with other information and advice about the Council’s ongoing interest in the water irrigation activities in the Central Plains by June 2022.  Input from ECAN on the science aspects of these matters is also being sought.

6.   Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic Alignment Te Rautaki Tīaroaro

6.1       SOIs are strongly aligned to the Council’s strategic objectives and to the Council's Long Term Plan (2021 - 2031) LTP 2021-31. 

Policy Consistency Te Whai Kaupapa here

6.2       The decisions in this report are consistent with the Council’s Plans and Policies – in particular promoting good governance.  This report has linkages to the Council's Long Term Plan (2021 - 2031).

Impact on Mana Whenua Ngā Whai Take Mana Whenua

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

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.4       The decisions in this report do not themselves create any climate change impacts.  However, a request for the Trust to include climate change commitments in its SOI is in line with the Council’s climate change policies.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.5       Not relevant.

7.   Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1       There are no costs arising as a result of this report.

8.   Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1       Section 64 of the LGA requires every CCO to prepare and adopt a SOI.  The process and SOI content requirements and obligations of CCOs and local authority shareholders is set out in schedule 8 of the LGA.

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2       There are no other legal issues or implications relevant to the decision in this report.

9.   Risk Management Implications Ngā Hīraunga Tūraru

9.1       Not relevant.

 

 

Attachments Ngā Tāpirihanga

No.

Title

Page

a

Civic Building Ltd - Draft Statement of Intent 2022/23

135

b

Rod Donald Banks Peninsula Trust - Draft Statement of Intent 2022/23

147

c

Central Plains Water Trust - Draft Statement of Intent 2022/23

165

 

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

Nil

 

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

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 Ngā Kaiwaitohu

Author

Linda Gibb - Performance Monitoring Advisor CCO

Approved By

Len Van Hout - Manager External Reporting & Governance

Bruce Moher - Acting Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

  


Finance and Performance Committee

28 April 2022

 













Finance and Performance Committee

28 April 2022

 



















Finance and Performance Committee

28 April 2022

 













Finance and Performance Committee

28 April 2022

 

 

14.   Christchurch City Holdings Ltd - Draft Statements of Intent 2022/23

Reference Te Tohutoro:

21/1775899

Report of Te Pou Matua:

Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz).

General Manager Pouwhakarae:

Leah Scales, General Manager/CFO, Resources Group (leah.scales@ccc.govt.nz).

 

 

1.   Purpose of the Report Te Pūtake Pūrongo

1.1       The purpose of this report is to advise the Committee of the Christchurch City Holdings Ltd’s (CCHL’s) group’s draft Statements of Intent (SOIs) for 2022/23.  The following are attached:

·      CCHL’s report on the group’s draft SOIs - Attachment A;

·      CCHL’s draft SOI - Attachment B;

·      CCHL’s subsidiaries’ draft SOIs - Attachment C; and

·      the Council’s Letter of Expectation to the CCHL board (for reference) - Attachment D

1.2       This report has been written as a result of receiving the draft SOIs on 1 March 2022, in accordance with the requirements of clause 1, part 1 of schedule 8 of the Local Government Act 2002 (LGA).

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

 

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Notes the draft Statements of Intent for 2022/23 for Christchurch City Holdings Ltd and its subsidiaries;

2.         Notes that Christchurch City Holdings Ltd’s business planning process for 2022/23 and subsequent years will end in May 2022 and its forecast dividend to the Council for the Statement of Intent’s three year period will be advised in time for inclusion in the Annual Plan for 2022/23; and

3.         Agrees to provide the following feedback on Christchurch City Holdings Ltd’s draft Statement of Intent for 2022/23:

a)    Acknowledges the work that Christchurch City Holdings have done to reflect requests by Council in their Letter of Expectations for 2022/23.

b)    That requests Christchurch City Holdings Ltd to continue to work with Council staff on the review of its dividend policy for inclusion in its final Statement of Intent for 2022/23, as requested in the Letter of Expectations for 2022/23; and

c)    Acknowledges the recommendations of the CCHL Strategic review coming to the new Council in November.

 

3.   Reason for Report Recommendations Ngā Take mō te Whakatau

3.1       Christchurch City Holdings Ltd’s draft SOI is legally compliant and reflects the Council’s expectations as issued in its LOE for 2022/23 to the extent appropriate.

 

4.   Alternative Options Considered Ētahi atu Kōwhiringa

4.1       The only other option is to not provide feedback on CCHL’s draft SOI.

5.   Detail Te Whakamahuki

Local Government Act 2002 requirements

5.1       Clauses 2 and 3 of part 1, schedule 8 of the LGA sets out the requirements for a Council-controlled organisation’s (CCO’s) adoption of a SOI.  In particular, it provides the shareholder may provide comments on the draft SOIs [of its directly and indirectly owned CCOs] to the CCO board by 1 May and the CCO board must consider the comments and finalise the SOI by 30 June.  The final SOI must be published on an internet site within one month of being finalised pursuant to section 64(9) of the LGA.

5.2       Key content requirements of trading CCOs (i.e. CCTOs) are set out in parts 2 and 3 of schedule 8 of the LGA.  They include stating:

·    the objectives of the group;

·    the board’s approach to governance;

·    nature and scope of activities to be undertaken;

·    non-financial performance targets and other measures by which performance is judged in relation to the objectives;

·    an estimate of the amount or proportion of accumulated profits and capital reserves that is intended to be distributed to shareholders; and

·    the board’s estimate of commercial value of the investment in the CCO or its group.

5.3       CCHL’s draft SOI meets these requirements.  As CCHL is the shareholder of the subsidiaries it is a matter for it to determine whether their draft SOIs are legally compliant and appropriately reflect the expectations set out in CCHL’s LOE to them.  CCHL’s report on the group’s draft SOIs includes the comments that it intends to provide to its subsidiaries following review of their draft SOIs.

5.4       The CCHL subsidiaries have not yet completed business planning, so all financial forecasts are indicative, based in large part on recently updated forecasts.  The business planning will conclude in time for the financial forecasts to be included in the final SOIs. The most material change in forecasts, if any is likely to be from CIAL as a result of recent significant easing of COVID-19 restrictions.  Any changes to financial forecasts that have an impact on CCHL’s dividend to the Council will be advised to staff by mid-April for updating in the Council’s Annual Plan for 2022/23.


 

5.5       This report takes into account matters discussed at the SOI workshop on 22 March 2022.

Strategic review

5.6       In its LOE to CCHL, the Council sought a strategic review of CCHL’s role, and to reflect that after 30 years whether its original core purpose remains relevant and/or whether it could be enhanced to provide more support to Christchurch. 

5.7       At the time of writing of this report, work is being done between CCHL and Council staff to agree a Terms of Reference for the review.  There is a workshop scheduled with councillors in May to notify the proposed Terms of Reference and to report the outcome of CCHL’s independent board effectiveness review (which was an objective in current SOI).  We are recommending the review is commenced following the workshop with the outcome of the review and any recommendations coming to the new Council in November.

Letter of Expectations 2022/23

5.8       The LOE is at Attachment D.  Not all of its expectations are relevant to a SOI, although the majority are.  Staff consider the following expectations have not been sufficiently well reflected in the CCHL parent’s draft SOI:

Dividends

5.8.1   Over the SOI period, the subsidiaries have reduced  their projected dividends to CCHL compared with last year’s SOI projections as shown in the following table:

Forecast Dividends

Year 1

2022/23

$m

Year 2

2023/24

$m

Year 3

2024/25

$m

Draft SOI

LY SOI

Change

Draft SOI

LY SOI

Change

Draft SOI

Group to CCHL

78.6

94.4

-15.7

108.5

114.4

-5.9

121.6

CCHL to Council

32.4

32.4

-

50.7

50.7

-

57.2

5.8.2   In Year 1, the reduction of $15.7 million is attributable to CIAL ($10 million) and Enable ($5 million).  In Year 2 the reduction of $5.9 million is attributable to CIAL ($4.4 million) and Enable ($2 million).  For CIAL, the impacts are a reflection of COVID-19 (with border restrictions still in place at the time the draft SOI was prepared and little guidance about timing of their removal known).  For Enable, it is a reflection of a slower growth in fibre connections. 

5.8.3   CCHL’s dividend policy as recorded in its draft SOI is to pay dividends after taking into account profitability, debt levels, future investment requirements and the requirement to meet the solvency test under the provisions of the Companies Act 1993.  The CCHL group’s gearing is around 50% which will impact how much cash the group has available for dividend distributions. 


 

5.8.4   The optimal balance of returns, over the short, medium and long term needs to be the subject of a more deliberate and transparent conversation between the Council and CCHL.  The Council’s LOE to CCHL requests that its dividend policy be reviewed in consultation with the Council.  CCHL has advised that the board will consider and advise its dividend policy in its final SOI.  

Strategic alignment between CCHL and members of the Council family

5.8.5   The draft SOI provides for CCHL engaging with its subsidiaries and the Council shareholder to ensure strategic alignment with the Council’s strategic priorities.  It does not go so far as to identify ChristchurchNZ (CNZ) as a particular party outside the CCHL group itself. 

5.8.6   Staff acknowledge that CCHL is active in maintaining a relationship with CNZ, as demonstrated by the work being progressed on managing the former Development Christchurch Ltd assets and releasing the necessary capital to facilitate the capitalisation of CNZ for its urban development function.  As well, CCHL’s roll-out of its Te Whāriki platform aimed at leveraging the capabilities that exist within the CCHL group has been piloted with the Council also.  Staff consider there need be no further elaboration of strategic alignment in the final SOI. 

Growing balance sheet value

5.8.7   The Council’s LOE to CCHL included that it provides its business plan to Council staff to enable an improved understanding of CCHL’s monitoring programme of group performance.  This is not something that needs to be specified in the SOI, but is a key supporting document to it.  CCHL have advised that final business plans are due to it from the subsidiaries by the end of May, and CCHL’s own business plan will be shared with Council staff in June. 

Living Wage

5.8.8   The draft SOIs mostly reflect the CCHL subsidiaries’ commitment to paying a living wage to their staff.  CCHL has included a performance target in its draft SOI to provide regular updates on progress with implementing the living wage to the group’s employees and its suppliers. 

CCHL feedback to its subsidiaries

5.8.9   There have been a handful of omissions of commitments across the group’s draft SOIs, although none are omissions in practice, just in the SOI documentation.  CCHL has advised it will be providing formal comments to the following of its subsidiaries:

Living Wage – Orion and EcoCentral;

Restraint in executive remuneration – LPC and EcoCentral;

Diversity and inclusion – EcoCentral;

Organisational collaboration – Orion and EcoCentral.

COVID-19 impacts

5.9       The forecast financial targets for CIAL reflect a combination of recovery with expectations of uncertainty about, among other things the timing of New Zealand’s international borders being opened to other than New Zealand citizens, recovery of tourism, domestic demand for air travel, shortages in labour and supply chain delays.  Importantly, CCHL notes that globally pre-COVID-19 levels of activity are not expected in the near future.

5.10    Last year, CIAL’s SOI was finalised before Omicron was known globally and before the lengthy lockdown period in Auckland, Northland and Waikato from August-December 2021.  The impact from these occurrences for CIAL is the deferral of its recovery from 2022/23 to the following two SOI years, as shown in the following table:

CIAL

Year 1

2022/23

$m

Year 2

2023/24

$m

Year 3

2024/25

$m

Draft SOI

LY SOI

Change

Draft SOI

LY SOI

Change

Draft SOI

NPAT

15.2

33.0

-17.8

34.4

45.9

-11.5

43.7

Forecast dividends

13.7

23.8

-10.1

31.0

35.4

4.4

39.3

5.11    CIAL’s forecasts are likely to change due to further easing in COVID-19 restrictions since the draft SOI was prepared.  However, the uncertainty of further COVID-19 outbreaks and public appetite for travel in view of the wide spread of Omicron will prevail for some time yet. 

Financial projections

5.12    As noted earlier in this report, CCHL’s subsidiary companies are yet to complete business planning, and therefore the financial forecasts in the draft SOI (2022/23) are not final.

5.13    The forecast financial data for the subsidiaries reflects the latest re-forecast of targets by the group.  CCHL advises the finalised forecasts from completed business planning will be included in the final SOIs, and if time permits will be socialised with Council staff before then as requested in the Council’s LOE for 2022/23 to CCHL.

5.14    The following table shows the changes in profitability of the CCHL subsidiaries and the changes in dividends projected for distribution to CCHL compared with last year’s SOI.  It also shows there has been no change in the CCHL dividend to be distributed to the Council:

 CCHL subsidiaries

Year 1

2022/23

$m

Year 2

2023/24

$m

Year 3

2024/25

$m

Draft SOI

LY SOI

Change

Draft SOI

LY SOI

Change

Draft SOI

Combined NPAT projections

88.1

109.4

-21.3

115.6

130.8

-15.2

131.6

Combined dividend projections from subsidiaries to CCHL

78.6

94.4

-15.7

108.5

114.3

-5.9

121.6

Dividend to CCC

32.4

32.4

-

50.7

50.7

-

57.2

5.15    NPAT forecasts have reduced in each of the 2022/23 and 2023/24 financial years against last year’s SOI as follows:

·    2022/23 by $21.3 million (CIAL $17.8 million, Enable $1.8 million, City Care $1.3 million).  Enable’s reduction is due to slower growth in fibre connections, however it is now turning its attention to developing new commercialisation opportunities leading to an upturn in its dividend projections in 2024/25 ($4 million higher than in 2023/24).  City Care is continuing to see pressure in its profit margins due to competition in the market.

·    2023/24 by $15.2 million (CIAL $11.5 million, Orion $3 million).  Orion is required to return surplus revenue earned from 2021 under its default price path electricity distribution regulatory framework.

5.16    While dividend forecasts from CCHL to the Council remain unchanged over last year’s SOI, dividend forecasts from the subsidiaries to CCHL have reduced in each of the 2022/23 and 2023/24 as follows:

·    2022/23 by $15.7 million (CIAL $10 million, Enable $5 million);

·    2023/24 by $5.9 million (CIAL $4.4 million, Enable $2 million). 

5.17    The Year 3 (2024/25) forecasts provide for dividends to CCHL from its subsidiaries of $121.6 million, of which $57.2 million is proposed to be distributed on to the Council (47%).  The increase in value of dividends to CCHL compared with 2023/24 of $13.6 million is attributable to CIAL ($8.8 million), Enable ($4 million) and City Care ($1 million).

5.18    As noted earlier in this report, the dividend distributions have not yet been confirmed, but will be done in time for the Annual Plan. 

Other financial performance targets

5.19    CCHL has added new financial performance targets as requested in the Council’s LOE.  Forecast return on equity is 3.3% in 2022/23 and 4.5% in the following two years.

Non-financial performance targets

5.20    Non-financial performance targets are largely as they were in last year’s SOI, with several amendments and updates, including:

·    Kaitiakitanga  - relevant targets from the strategic review are to be added (if any);

·    Mana – new objective “CCHL applies the principles of Te Tiriti o Waitangi across everyday practices of the Group, whether this be internal operations or external engagement with mana whenua”.  Targets are to be developed for the final SOI;

·    Sustainability – a new target has been developed for CCHL to review its asset register each year with a view to maximising the amount of debt it may be able to borrow under CCHL’s sustainable finance framework; and

·    People – a new target for CCHL to provide input into the Council’s review of the Policy for the Appointment and Remuneration of Directors of CCOs scheduled for review prior to the 2022 local body elections; and to include the outcomes of the CCHL independent board effectiveness review in the strategic review findings.

Annual end-to-end governance and accountability process

5.21    Following the publication of final SOIs by 30 June, the annual end-to-end process for the 2022/23 financial year is proposed as follows:

Deliverable

Due to Council staff

Workshop

F&P meeting

Annual report for year ending 30 June 2022

By 30 September

N/A

 November

Strategic update, Draft Letter of Expectations / Statement of Expectations

N/A

November

December

CCHL Strategic Review

 

November

 

Quarter 1 (July-Sept) performance report

By 30 November

N/A

December

Half year (interim) report and Quarter 2 performance report

By 28 February

N/A

March / April

Draft Statements of Intent 

By 1 March

March

April

Quarter 3 (Jan-Mar) performance report and expected annual outturn

By 31 May

N/A

June / July

Final Statements of Intent

By 30 June

N/A

July / August

Next steps

5.22    The Council’s feedback on the group’s draft SOIs is required to be provided to CCHL by 1 May 2022, pursuant to clause 2, part 1 of schedule 8 of the LGA.  CCHL will communicate any feedback to the subsidiaries that it considers appropriate. 

5.23    Final SOIs will be provided to the Council by 30 June 2022 and will be published within one month of the SOI being adopted by the group’s boards.  Staff will report on changes in the final SOIs against the drafts.

6.   Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic Alignment Te Rautaki Tīaroaro

6.1       This report supports the Council's Long Term Plan (2021 - 2031).

Policy Consistency Te Whai Kaupapa here

6.2       The decisions in this report are consistent with Council’s Plans and Policies – in particular promoting good governance.

Impact on Mana Whenua Ngā Whai Take Mana Whenua

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

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.4       The CCHL group’s draft SOIs provide for carbon reduction and offsetting plans to meet the Council’s 2030 target to be net neutral for greenhouse gas emissions.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.5       Not relevant.

7.   Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1       There are no costs arising from the draft SOI.

8.   Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1       LGA – in particular, section 64 (Statements of Intent for CCOs), Part 1, Schedule 8 (Adoption of SOI) and Parts 2 and 3 of Schedule 8 (Content of SOIs for all CCOs and Additional Content of SOIs for CCOs that are trading CCOs).

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2       There is no legal context, issue or implication relevant to this decision.

9.   Risk Management Implications Ngā Hīraunga Tūraru

9.1       Not relevant.

 

 

Attachments Ngā Tāpirihanga

No.

Title

Page

a

Christchurch City Holdings Ltd - Report to Council on the Group's draft Statements of Intent for 2022/23

185

b

Christchurch City Holdings Ltd - Draft Statement of Intent 2022/23

198

c

Christchurch City Holdings Ltd - Subsidiaries' draft Statements of Intent for 2022/23

225

d

Letter of Expectations to Christchurch City Holdings Ltd for 2022/23

361

 

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

 

 

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

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 Ngā Kaiwaitohu

Author

Linda Gibb - Performance Monitoring Advisor CCO

Approved By

Len Van Hout - Manager External Reporting & Governance

Bruce Moher - Acting Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

  


Finance and Performance Committee

28 April 2022

 














Finance and Performance Committee

28 April 2022

 




























Finance and Performance Committee

28 April 2022

 









































































































































Finance and Performance Committee

28 April 2022

 








Finance and Performance Committee

28 April 2022

 

 

15.   Venues Ōtautahi draft Statement of Intent 2022/23

Reference Te Tohutoro:

22/205755

Report of Te Pou Matua:

Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz).

General Manager Pouwhakarae:

Leah Scales, General Manager/CFO, Resources Group (leah.scales@ccc.govt.nz).

 

 

1.   Purpose of the Report Te Pūtake Pūrongo

1.1       The purpose of this report is to present Venues Ōtautahi (VŌ’s) draft Statement of Intent (SOI) for 2022/23 which is at Attachment A.  A letter from the Chief Executive of VŌ is at Attachment B.  The Council’s Letter of Expectations to VŌ for 2022/23 is at Attachment C for reference.

1.2       This report takes into account the matters discussed at the workshop on 29 March 2022. 

1.3       VŌ has complied with the following legislative requirements as set out in the Local Government Act 2002:

·  clause 1, part 1 of schedule 8 which requires the board of a CCO to deliver a draft SOI to its shareholders on or before 1 March.  VŌ’s draft SOI was received on 24 February; and

·  parts 2 and 4 of part 5, schedule 8 which define the content required for SOIs for non-trading CCOs.

1.4       The decisions in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.  The level of significance was determined by the extent to which the community is likely to be impacted by the decisions.

 

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receives Venues Ōtautahi’s draft Statement of Intent for 2022/23.

 

3.   Reason for Report Recommendations Ngā Take mō te Whakatau

3.1       VŌ’s draft SOI is legally compliant and reflects the Council’s expectations as issued in its LOE for 2022/23 to the extent appropriate.

 

4.   Alternative Options Considered Ētahi atu Kōwhiringa

4.1       The only other option is to not provide feedback on VŌ’s draft SOI.

 

5.   Detail Te Whakamahuki

Local Government Act 2002 requirements

5.1       Clauses 2 and 3 of part 1, schedule 8 of the LGA sets out the requirements for a Council-controlled organisation’s (CCO’s) adoption of a SOI.  In particular, it provides the shareholder may provide comments on the draft SOI to the CCO board by 1 May and the CCO board must consider the comments and finalise the SOI by 30 June.  The final SOI must be published on an internet site within one month of being finalised pursuant to section 64(9) of the LGA.

5.2       Key content requirements of trading CCOs (i.e. CCTOs) are set out in parts 2 and 3 of schedule 8 of the LGA.  They include stating:

·    the objectives of the group;

·    the board’s approach to governance;

·    nature and scope of activities to be undertaken;

·    non-financial performance targets and other measures by which performance is judged in relation to the objectives;

·    an estimate of the amount or proportion of accumulated profits and capital reserves that is intended to be distributed to shareholders; and

·    the board’s estimate of commercial value of the investment in the CCO or its group.

5.3       VŌ’s draft SOI meets these requirements.

Letter of Expectations 2022/23

5.4       The following LOE expectations are included in the draft SOI:

Value for Money, minimising the Council’s operating subsidy, sharing the business plan

5.5       Clarity on the prioritisation of Council’s operating subsidy of $4.05 million per annum until 2024/25 to ensure the venues are safe, compliant and operationally functional will be provided from VŌ and Council staff commitment to a joint working group.

5.6       Of note, the Council’s operating grant of $4.05 million per annum to 2024/25 reduces, with the decommissioning of Orangetheory Stadium, to $3.05 million per annum from 2025/26. The draft SOI does not include extended operations of Orangetheory Stadium.

5.7       The operating subsidy and bid incentive fund for Te Kaha will be required from 2024/25 and will be worked through in the Council’s next long term plan and annual planning processes for that financial year.

Climate Change

5.8       The Council’s Resource Efficiency team has advised that the climate change undertakings in VŌ’s draft SOI could be amended to include the following, and VŌ has acknowledged it will do so, in addition to reflecting the holistic and aspirational approach to sustainability as referenced in the draft SOI:

·    using the Council’s Target Sustainability services which provide business resource efficiency and greenhouse gas emission measurement and reduction advice; and

·    provide undertakings to:

develop GHG emission, energy, solid waste and water management plans through to 2030 (performance target for plans to be developed in 2022/23);

develop a plan to achieve net zero GHG emissions by 2030 (performance target for plan to be developed in 2022/23);

have its GHG emission inventory verified against ISO 14064 annually; and

develop procurement requirements for VŌ’s suppliers to have GHG emission, energy, solid waste and water management plans (performance target to develop requirements in 2022/23).

Working with the Council family

5.9       VŌ’s commitment to work with the Council, Te Kaha Project Delivery Ltd, ChristchurchNZ (CNZ) and the wider Council family is included throughout the draft SOI, most notably with respect to CNZ in the collaborative leadership of communications, stakeholder engagement and brand development for Te Kaha and in reference to the importance of the strategic partnership between the two entities to attract major ticketed and business events to the region.

5.10    VŌ has signalled its commitment to continuing to work closely with Council staff in providing ongoing clarity around the value for money, prioritisation and reporting of Council funding support for VŌ venues, design engagement, communications, stakeholder engagement and brand development, and capital acquisition for Te Kaha.

5.11    With respect to the wider Council family, VŌ has committed outside of the SOI to providing support as required with respect to developing and implementing a local procurement strategy and also in seeking support from Christchurch International Airport for VŌ’s sustainability journey.

5.12    VŌ’s commitment to work with the Council, Te Kaha and CNZ is included throughout the draft SOI, most notably with respect to the design and development of Te Kaha, with CNZ to maximise the social and economic net benefits of major events and with Council staff to provide ongoing clarity around the value for money, prioritisation and reporting of Council funding support.

Te Kaha

5.13    The LOE contains a number of expectations for VŌ with respect to Te Kaha, all of which have been reflected in the draft SOI to the extent appropriate. 

Other LOE expectations

5.14    There are a number of the Council’s expectations that have not been included expressly in the draft SOI.  For the majority, VŌ acknowledges its intent to act on them, but considers them not relevant as standalone items for the SOI.  Council staff agree the expectations are not directly related to VŌ’s expression of strategy and how it will deliver against the Council’s strategic directions and community outcomes.  The following expectations fall into this category, together with VŌ’s reasoning:

·    exercising restraint in total senior executive remuneration and in board fees and paying the living wage - VŌ is committed to all of these requirements, however it does not consider operational matters such as remuneration policies to be relevant to a SOI.  Council staff agree but note that due to the importance the Council places on these policies most other CCOs have conceded to record them in their SOIs;

·    aligning VŌ’s procurement policy with the Council’s – VŌ notes that its procurement strategy and approach have key elements that align with the Council’s procurement approach as it was this, and the Office of the Auditor General’s advice that underpinned the development of its procurement strategy;

·    presenting a workshop to other members of the Council’s family of CCOs on its journey with its ‘celebrate and source local procurement’ strategy – VŌ has advised its intent to do this; and

·    considering what might be needed to activate the Town Hall outside of event days, including considering re-locating VŌ’s corporate hub to the Town Hall – VŌ advises it will consider this.

5.15    Note that Council staff report at the end of the financial year on CCOs’ delivery against all expectations in their respective LOEs. 

Community groups

5.16    The LOE requested that VŌ reports on the nature of community groups or individuals for which access to VŌ venues is provided at the cultural rate.  VŌ is committed to providing Council with the levels of reporting required to demonstrate VŌ’s commitment to continuing to focus on increased community access to and connection with the venues.  VŌ notes that in doing so, the privacy of groups and individuals accessing community rates must be maintained, as well as the balance between commercial and social returns.    

5.17    At the workshop, clarity was sought as to the level of community access and support detailed in the draft SOI operational performance targets.  VŌ will amend the community discount performance target in the final SOI to clarify the number of events provided at community discounted rates reflect the above commitment to community access.  VŌ will also include an additional performance target to demonstrate the additional community support provided for through the Ōtautahi Collective.

COVID-19 impacts

5.18    The forecast financial targets are weighted towards a reasonably rapid upswing in ticketed events following the easing of Covid-19 restrictions on gathering limits and to a lesser extent restriction at New Zealand’s international borders.  Revenue forecasts for each of the draft SOI’s three years are at around 80% of pre-COVID-19 expectations, and guest numbers to all VŌ venues is projected at around 70% of pre-COVID-19 levels.

Financial forecasts

5.19    The operating expenditure forecasts for the three year SOI period are shown in the following table, compared with forecasts in last year’s SOI (in grey): 

 

 

2022/23

$m

LY’s forecast

2023/24

$m

LY’s forecast

2024/25

$m

Operating income

13.6

13.6

14.1

14.3

14.5

Council grant per LTP

4.05

4.05

4.05

4.05

4.05

Operating costs and overheads

17.8

17.7

18.2

18.1

18.5

EBITDA (SOI target)

(0.2)

(0.05)

(0.05)

0.3

0.05

 

 

 

 

5.20    The forecasts have considerable uncertainty attached to them.  The key driver of uncertainty are if public gatherings remain volatile.

5.21    VŌ considers recovery in event activity and revenues will take some time with pre-COVID-19 levels of event activity and revenue not expected to return in the period covered by this SOI.


 

5.22    The following graph shows the operating revenue and cost trends for VŌ over the COVID-19 period, including its forecast over the draft SOI years:

5.23    The above graph compares VŌ’s performance (excluding the Council’s operating grant) over years in which there was no COVID-19 (2019), and the three years 2020-2022 during which VŌ has reduced operating and overhead costs through a diverse range of initiatives, including but not limited to improved internal systems, a revised operational delivery framework and through a shift to sourcing local food and beverage produce.

5.24    The financial forecasts are in line with last year’s SOI.  Revenue in the three COVID-19 years includes Government wage subsidy amounts.  The Council’s operating grant of $4.05 million per annum is excluded.  Overhead costs are largely fixed, and include the costs of running VŌ’s office, permanent staff, non-capital repairs and maintenance, and fixed costs such as insurance and rates.

5.25    The Council’s operating grants are incorporated into EBITDA.  The graph shows the funding grant enables VŌ to cover the fixed overhead costs associated with the venues to ensure they are compliant, safe and operationally functional, and these costs are incurred whether there are events or not.


 

 

Capital projections

5.26    Capital expenditure projections in the draft SOI are as follows:

 

2022/23

$m

2023/24

$m

2024/25

$m

Draft SOI

3.6

2.4

2.8

Last Year’s SOI

3.6

2.4

-

LTP 2021-31

3.6

2.4

2.8

Non-financial performance targets

5.27    The performance targets are ambitious, but in VŌ’s estimation achievable if COVID-19 recovery continues to advance.  Of note, VŌ is targeting guests to venues of 400,000 in 2022/23 growing to $500,000 in 2024/25.  This compares with actual attendance of 714,000 in 2019 and 373,000 in 2020 which included 3-4 months of COVID-19 impacts. 

Next steps

5.28    The Council’s feedback on VŌ’s draft SOI is required to be provided to VŌ by 1 May 2022, pursuant to clause 2, part 1 of schedule 8 of the LGA.   

5.29    Final SOIs will be provided to the Council by 30 June 2022 and will be published within one month of the SOI being adopted.

6.   Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic Alignment Te Rautaki Tīaroaro

6.1       This report supports the Council's Long Term Plan (2021 - 2031).

Policy Consistency Te Whai Kaupapa here

6.2       The decisions in this report are consistent with Council’s Plans and Policies – in particular promoting good governance.

Impact on Mana Whenua Ngā Whai Take Mana Whenua

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

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.4       VŌ’s draft SOI provides for its establishment of benchmark sustainability measures to underpin further work towards achieving net carbon neutrality by 2030.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.5       Not relevant.

7.   Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1       There are no costs arising from the draft SOI.

8.   Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1       LGA – in particular, section 64 (Statements of Intent for CCOs), Part 1, Schedule 8 (Adoption of SOI) and Parts 2 and 3 of Schedule 8 (Content of SOIs for all CCOs and Additional Content of SOIs for CCOs that are trading CCOs).

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2       There is no legal context, issue or implication relevant to this decision.

9.   Risk Management Implications Ngā Hīraunga Tūraru

9.1       Not relevant.

 

Attachments Ngā Tāpirihanga

No.

Title

Page

a

Venues Ōtautahi - draft Statement of Intent 2022/23

376

b

Venues Ōtautahi - Letter from the Chief Executive on the draft Statement of Intent 2022/23

401

 

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

 

 

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

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 Ngā Kaiwaitohu

Author

Linda Gibb - Performance Monitoring Advisor CCO

Approved By

Len Van Hout - Manager External Reporting & Governance

Bruce Moher - Acting Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

  


Finance and Performance Committee

28 April 2022

 


























Finance and Performance Committee

28 April 2022

 



Finance and Performance Committee

28 April 2022

 

 

16.   ChristchurchNZ Holdings Ltd - Draft Statement of Intent for 2022/23

Reference Te Tohutoro:

22/199234

Report of Te Pou Matua:

Linda Gibb, Performance Monitoring Advisor CCO (linda.gibb@ccc.govt.nz).

General Manager Pouwhakarae:

Leah Scales, General Manager/CFO, Resources Group (leah.scales@ccc.govt.nz).

 

 

1.   Purpose of the Report Te Pūtake Pūrongo

1.1       The purpose of this report is to present the draft Statements of Intent (SOI) for ChristchurchNZ Holdings Limited (CNZ) for 2022/23 and to seek final approval of the capital strategy, decision-making and prioritisation framework, and value sharing proposal in relation to the ChristchurchNZ’s Expanded Economic Development Agency work.

1.2       This report has been written following receipt of the draft SOI by the statutory due date of 1 March 2022 pursuant to clause 1, part 1 of schedule 8 of the Local Government Act 2002 (LGA).  The draft SOIs meet the content requirements of schedule 8 of the LGA and following a workshop with Elected Members on the 5th April.

1.3       CNZ is a Council-controlled organisation (CCO) its delivers key strategic objective to support the Council’s Long Term Plan.  

 

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receives the draft Statement of Intent for ChristchurchNZ Holdings Limited for 2022/23.

2.         Approves the following:

a.         Capitalisation of CNZ via amalgamation of DCL as at 1 July 2022.

b.         The CNZ Urban Development Prioritisation Framework

c.         The CNZ/CCC Value Sharing Agreement

 

3.   Reason for Report Recommendations Ngā Take mō te Whakatau

3.1       The draft SOIs are all legally compliant.

 

4.   Alternative Options Considered Ētahi atu Kōwhiringa

4.1       The only other option is to not formally receive the draft SOI.  This would be unusual but would not prevent the CCOs from finalising the documents by 30 June 2022.

 

 

5.   Detail Te Whakamahuki

Local Government Act 2002 requirements

5.1       Clauses 2 and 3 of part 1, schedule 8 of the LGA sets out the requirements for a Council-controlled organisation’s (CCO’s) adoption of a SOI.  In particular, it provides the shareholder may provide comments on the draft SOI [of its directly and indirectly owned CCOs] to the CCO board by 1 May and the CCO board must consider the comments and finalise the SOI by 30 June.  The final SOI must be published on an internet site within one month of being finalised pursuant to section 64(9) of the LGA.

5.2       Key SOI content includes, for the financial year to which it relates and each of the following two financial years:

·    the objectives of the group;

·    the board’s approach to governance;

·    nature and scope of activities to be undertaken;

·    non-financial performance targets and other measures by which performance is judged in relation to the objectives; and

·    the major accounting policies of the company or group.

5.3       The draft SOI (Attachment A) contains all of these requirements however CNZ has noted that several internal processes taking place between now and June that will inform the content in the final SOI as noted in the covering letter from the Chair of CNZ(Attachment B):

·    Review of performance management measures - It is likely we will make minor changes to performance management measures as a result of business planning for FY22/23 and lessons learnt through the monitoring undertaken in the current year.

·    Business planning – FY22/23 planning is just beginning. The priority given to each of our strategic outcomes may be adjusted based on the current economic settings and

expectations of risks and operating conditions relating to the Covid disruptions. This will shape programme delivery and investment, which will inform the setting of KPI targets.

·    Establishment of an urban development pillar and programmes – Pending Council decisions will confirm the full nature and scope of the urban development programmes and how ChristchurchNZ will be capitalised. Changes will be needed to the SOI in response.

·    Organisational Culture Strategy – We are initiating a process to better articulate and embed a consistent culture across the organisation that may lead to some minor changes.

Due to the above, staff recommend that the CNZ’s draft Statement of Intent (SOI) is received, however pending it completing its business planning  that a final draft is received for review by Staff before finalisation of the final SOI.  Details of any changes to the final SOI will be reported to Council following receipt of the final SOI.

5.4       In addition, this report seeks final approvals in relation to the capital strategy, decision-making and prioritisation framework and value sharing agreement in relation to the EEDA role that the Council approved CNZ to undertake in December 2021.

5.4.1   At its December 2021 meeting the Finance and Performance Committee resolved to:

·    Approves ChristchurchNZ Holdings Ltd’s role as an Expanded Economic Development Agency  as provided for in the Long Term Plan 2021-31 and in the Council’s Letter of Expectation for 2021/22, and for which funding of $1.8 million per annum was allocated in the Long Term Plan 2021-31;

·    Agrees in principle to capitalising ChristchurchNZ Holdings Ltd up to a maximum value equal to that held on Development Christchurch Ltd’s balance sheet (excluding Christchurch Adventure Park) of circa. $20 million which is consistent with the Council’s previous investment in urban development activity;

·    Directs Council staff to work with ChristchurchNZ Holdings Ltd and Christchurch City Holdings Ltd to report back to the Council in the new year to seek final approvals, as follows:

a capital strategy and funding options to support delivery of ChristchurchNZ Holdings Ltd’s urban development mandate; and

an urban development pipeline of projects and implementation plan, including a decision-making and prioritisation framework, accountability settings and reporting obligations; and

a value sharing proposal with the Council that balances a fair return with the requirements for ChristchurchNZ Holdings Ltd to retain sufficient capitalisation to continue to perform; and

·    Notes that the requirements for action by ChristchurchNZ Holdings Ltd as a result of the decisions made in this report will be reflected as appropriate in the Council’s Letter of Expectations for 2022/23 for ChristchurchNZ Holdings Ltd.

5.5       At a workshop on 5 April 2022, Council and CNZ staff presented core EEDA strategies for capitalisation (and its funding source), prioritisation of urban development projects, a decision-making framework and value-sharing methodology and process.  Documentation in support of the decisions in this report are attached as follows:

Attachment C – prioritisation and decision-making frameworks underpinning how urban development projects will be added to the pipeline and consultation, engagement, informing and decision-making responsibilities; and

Attachment D – Value-sharing methodology, taking into account the short, medium and long terms.

5.6       This report seeks final approval as requested at the December 2021 meeting to:

5.6.1   the capitalisation of CNZ by way of an amalgamation of the former Development Christchurch Ltd (DCL) into CNZ which will include a mixture of cash and assets to the value of approx. $18 million; Prior to amalgamation the investment in the Christchurch Adventure Park will be transferred to Christchurch City Holdings Ltd (CCHL) together with capital of $4.401 million, and

5.6.2   The Urban Development Prioritisation Framework (Attachment C)

5.6.3   The Value Sharing Agreement (Attachment D)

5.7       A final tranche of work for the EEDA will be the development of a pipeline of urban development projects, performance targets and a reporting framework.  These will be completed as part of CNZ’s business planning for reflecting as appropriate in the final SOI, due to be completed by 30 June 2022, and published within one month following completion. 

5.8       The decisions in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.  The level of significance was determined by the extent to which the community is likely to be impacted by the decisions.

 

Capitalisation

5.9       At its meeting on 15 December 2021, the Finance and Performance Committee resolved the following with respect to the proposed EEDA:

·    agreed in principle to capitalising CNZ up to a maximum value equal to that held on DCL’s balance sheet (excluding Christchurch Adventure Park) of circa. $20 million which is consistent with the Council’s previous investment in urban development activity; and

5.10    The following information supports the decisions sought in this report, based on collaboration between CNZ, CCHL and Council staff, based on a ‘what is best for Christchurch’ approach.  It is proposed that the urban development function is capitalised at around $17.993 million, to be funded from DCL’s balance sheet.  The value reflects:

·    the current market value of the assets that were invested in the former DCL over its life for urban development (excluding the Christchurch Adventure Park), which is a mixture of cash and assets; and

·    exclusion of the Council’s investment in the Christchurch Adventure Park which is proposed to be retained by CCHL as part of its role of monitoring of the Council’s commercial entities, together with capital from DCL’s balance sheet of $4.401 million.

·    To give effect to this transaction, the former DCL entity (after the transfer of the Christchurch Adventure Park ownership interest and capital) will be amalgamated into CNZ.  CNZ will receive a mixture of cash and assets which it will recycle to generate urban development outcomes over the long term.

Prioritisation and decision-making frameworks

5.11    All urban development opportunities will be evaluated against a prioritisation framework that assesses the extent of strategic alignment with CNZ’s SOI, delivery of economic, social, cultural and environmental benefits to Christchurch city, and scale, impact and deliverability. 

5.12    The following diagram reflects the broad weightings that will be applied to urban development opportunities.

 

Value-sharing

5.13    At the request of the Council, a value-sharing framework has been developed as follows:

Step and Approximate Timeframe

 

Description

Step 1 – years 1-3 (Current LTP)

Recycle capital to deliver urban development activity including committed projects that achieves economic, social, cultural and

environmental outcomes including temporary and permanent jobs, mixed use developments and a mix of housing types.

Step 2 – years 4-10

Continue to recycle capital as outlined in step 1 and, reduce operational funding requirements from rates for urban development (ie. $1.8m) through revenue-generating assets or fee for services activities that may be acquired as part of urban development activity. This will form part of the next LTP.

Step 3 – years 11+

Continue as outlined in Steps 1 and 2 and generate a capital return that begins to repay the capital investment by Council in the urban development function. NB: Should a significant capital return materialise earlier, then this will be considered earlier via LOE and SOI processes.

 

 

5.14    The engagement needed between the Council and CNZ on value sharing is proposed to be undertaken in the period during which the Council develops its Letter of Expectations.  How this works in practice may need to evolve over time, but in principle there will be transparency as to urban development gains on investment of both operating and capital flows over the long term, with decisions sought underpinned by ‘best for Christchurch’ analysis. 

Next steps and draft Statement of Intent

5.15    A pipeline of urban development projects will be developed by CNZ and Council staff.  The pipeline will be underpinned by the prioritisation framework.  Points of engagement for decision-making purposes will be as depicted in the decision-making framework.

5.16    Performance targets, accountability settings and reporting obligations will be developed as the pipeline is developed, and will be included in CNZ’s SOI for 2022/23. 

5.17    Staff recommend that the CNZ’s draft Statement of Intent (SOI) is received, however pending it completing its business planning that a final draft is received for review by Staff before finalisation of the final SOI.  Details of any changes to the final SOI will be reported to Council following receipt of the final SOI. In the unlikely event the SOI needs to be further revised following Council consideration, the CNZ board will be able to issue a modified SOI.

6.   Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic Alignment Te Rautaki Tīaroaro

6.1       This report supports the Council's Long Term Plan (2021 - 2031).

Policy Consistency Te Whai Kaupapa here

6.2       The decision is consistent with Council’s Plans and Policies.

Impact on Mana Whenua Ngā Whai Take Mana Whenua

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

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.4       Not relevant.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.5       Not relevant.

7.   Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1       Cost to Implement – The cost of CNZ delivering activities under the SOI are included in the Council’s Long Term Plan.

8.   Legal Implications Ngā Hīraunga ā-Ture

Statutory power to undertake proposals in the report Te Manatū Whakahaere Kaupapa

8.1       n/a

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

8.2       There is no legal context, issue or implication relevant to this decision.

9.   Risk Management Implications Ngā Hīraunga Tūraru

9.1       n/a

 

 

Attachments Ngā Tāpirihanga

No.

Title

Page

a  

Draft Statement of Intent 2023-25 (Under Separate Cover)

 

b

Cover Letter to Dawn Baxendale

410

c

Urban Development Prioritisation Framework

412

d

Urban Development Value-Sharing Methodology and Process

413

 

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

 

 

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

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 Ngā Kaiwaitohu

Authors

Len Van Hout - Technical Financial Advisor

Linda Gibb - Performance Monitoring Advisor CCO

Approved By

Leah Scales - General Manager Resources/Chief Financial Officer

  


Finance and Performance Committee

28 April 2022

 



Finance and Performance Committee

28 April 2022

 


Finance and Performance Committee

28 April 2022

 




Finance and Performance Committee

28 April 2022

 

 

17.   Local Government Funding Agency - Draft Statement of Intent 2022/23 and Shareholder Presentation

Reference Te Tohutoro:

22/285770

Report of Te Pou Matua:

Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz).

General Manager Pouwhakarae:

Leah Scales, General Manager/CFO, Resources Group (leah.scales@ccc.govt.nz).

 

 

1.   Brief Summary

1.1       The purpose of this report is to advise the Local Government Funding Agency’s (LGFA’s) draft Statement of Intent (SOI) for 2022/23 and to provide the shareholder presentation to be given to the Finance and Performance Committee by the LGFA’s Chief Executive, Mr Mark Butcher.

1.2       The report has been written as a result of Councillors requesting a presentation at the Finance and Performance Committee meeting in October 2021 and on receiving the draft SOI on 28 February.  COVID-19 restrictions until recently have prevented Mr Butcher’s earlier attendance.

1.3       The LGFA’s draft SOI is at Attachment A to this report, and its board’s letter to shareholders accompanying the draft SOI is at Attachment B. 

1.4       The LGFA’s shareholder presentation is at Attachment C.

1.5       The decisions in this report are of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.  The level of significance was determined by considering the extent to which the recommendations may impact the community.

Legal compliance

1.6       The LGFA’s draft SOI was received by the statutory due date of 1 March, in accordance with clause 1 of part 1, schedule 8 of the LGA. 

1.7       The draft SOI meets the SOI content requirements of the LGA, as set out in parts 2 and 4 of schedule 8.  Key content requirements are for SOIs to include the objectives of the group, a statement of the board’s approach to governance, the nature and scope of activities to be undertaken, the non-financial performance targets and other measures by which performance is judged in relation to the objectives and forecast financial statements for the SOI’s three year time horizon.

Christchurch City Council’s interest in LGFA

1.8       The Council has an 8.3% ownership stake in the LGFA.  It is also a borrower and a guarantor of losses incurred by LGFA in the event of defaults by other council-borrowers.  The strategic approach agreed by all shareholder-Councils is for the focus to be on lowering lending margins for council borrowers rather than dividends for equity holders.

1.9       The LGFA is governed by a Shareholders’ Council comprising representatives of its largest local authority shareholders (which includes the Christchurch City Council) plus the Crown.  The Shareholders’ Council acts on behalf of shareholders with respect to issuing an annual Letter of Expectations (LOE) and making recommendations to shareholders on governance matters including the draft SOI.  The Shareholders’ Council did not issue a LOE for the 2022/23 financial year, and has not provided advice on the draft SOI.


 

1.10    The LGFA’s financial forecasts compared with those projected in last year’s SOI are shown in the tables below:

Net profit before tax

2022/23

$m

2023/24

$m

2024/25

$m

Current draft SOI

9.9

11.7

10.0

Last year’s final SOI

10.6

11.9

-

 

Dividends

 

 

 

Current draft SOI

1.4

1.5

1.6

Last year’s final SOI

1.0

1.1

-

 

Lending to councils

 

 

 

Current draft SOI

14,558

15,567

16,270

Last year’s final SOI

14,515

15,623

-

 

1.11    The small reduction in net profit after tax reflects additional costs associated with the work LGFA is doing on sustainability, (including having appointed a new Sustainability manager) and costs associated with advisory work LGFA is undertaking on the three waters’ reforms.

1.12    LGFA’s forecasts are highly sensitive to assumptions about the timing of refinancing and interest rates.  LGFA notes that by 2024/25 there could be $5.3 million of bonds and $5.7 million of council loans maturing. 

1.13    The dividend has not been forecast in the draft SOI.  LGFA has advised that its computation of dividend is a function of the amount of borrowing it does, the term of the borrowing, the timing of that borrowing across the financial year and the LGFA’s estimated borrowing cost. A 2% margin is added to arrive at the dividend rate.  The increase over last year’s SOI projections reflects increasing interest rates.

 

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Notes the Local Government Funding Agency’s draft Statement of Intent for 2022/23; and

2.         Notes the investor presentation to be conducted by Mr Mark Butcher, Chief Executive of the Local Government Funding Agency at the Finance and Performance Committee’s meeting.

 

 

 

 

Attachments Ngā Tāpirihanga

No.

Title

Page

a

Local Government Funding Agency - Draft Statement of Intent 2022/23

420

b

Local Government Funding Agency - Letter from Chief Executive with draft SOI 2022/23

432

c

LGFA Presentation 28 April 2022

435

 

 

Additional background information may be noted in the below table:

Document Name

Location / File Link

Nil

Nil

 

 

 

Confirmation of Statutory Compliance Te Whakatūturutanga ā-Ture

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 Ngā Kaiwaitohu

Author

Linda Gibb - Performance Monitoring Advisor CCO

Approved By

Len Van Hout - Manager External Reporting & Governance

Bruce Moher - Acting Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

  


Finance and Performance Committee

28 April 2022

 













Finance and Performance Committee

28 April 2022

 




Finance and Performance Committee

28 April 2022

 






































Finance and Performance Committee

28 April 2022

 

 

18.   Annual Plan 2022/23 - proposed timeline and process for adopting the final Annual Plan

Reference / Te Tohutoro:

22/442547

Report of / Te Pou Matua:

Peter Ryan, Head of Performance Management, peter.ryan@ccc.govt.nz

General Manager / Pouwhakarae:

Lynn McClelland, Assistant Chief Executive
lynn.mcclelland@ccc.govt.nz

 

 

1.   Brief Summary

1.1       The purpose of this report is to request the Finance and Performance Committee review and confirm the proposed timeline for the remainder of the Annual Plan 2022/23 process, specifically the dates and intentions for Elected Member briefings of 17-25 May 2022, and advise any changes regarding adoption of the final Annual Plan by Council.

1.2       The Executive Leadership Team (ELT) have met to discuss options and timings for the remainder of the process and recommend the following process and timeline to the Committee;

1.2.1   18 April – Consultation and engagement with community period closes, including for the additional specific consultations.

1.2.2   6 May – Final coded report of raw submissions and response data available to Elected Members, including staff advice.

1.2.3   4 to 14 May – Public Submissions and Hearings process with Elected Members (placeholder dates are set).

1.3       Finance and Performance Committee is requested to confirm the following recommended content and designated status (Elected Member Information Only, or public briefing) for briefings of 17-25 May 2022;

1.3.1   17 to 25 May – Elected Member briefings proposal

·     17 May – Elected Members Information Only briefing.

·     To receive a briefing to set the scene on what has changed since the draft Annual Plan was adopted.  Receive changes to the draft, such as inflation assumptions, financial results to date, actual Covid costs/supply chain, and error corrections.

·     To receive the Thematic Analysis of submissions and hearings, and the latest Residents’ Survey results.

·     To initiate the request for Annual Plan amendments from Elected Members.

·     20 May, 24 May, 25 May – Public briefings to inform and finalise Elected Member guidance for preparing the final Annual Plan.

1.3.2   29 May – closing date for Elected Member amendments.

1.3.3   (3 June – Management complete all Annual Plan documents, including for the additional consultations. All Audit and Risk Management Committee (ARMC) process and significant assumptions sign-offs also completed.)

1.3.4   (8 June – ELT sign-off of Annual Plan documents, including for additional consultations. Proposed Mayor’s Foreword also ready, for inclusion with ARMC agenda.)

1.3.5   9 June – ARMC agenda released.

1.3.6   15 June – ARMC meeting.

1.3.7   16 June - Council agenda released.

1.3.8   21 June – Council meeting date for adoption of the final Annual Plan 2022/23.

1.3.9   By 21 July – Resolutions confirmed, all documentation updated, responses sent to all submitters, communications released to support release of the final Annual Plan, and the Annual Plan is published and distributed, on-line and in hard-copy.

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receive the information in the Annual Plan 2022/23 – proposed timeline and process for adopting the final Annual Plan Report

2.         Confirm the content and designated status (Elected Member Information Only, or public briefing) for briefings of 17-25 May 2022

3.         Advise any other changes to the proposed timeline to conclude the Annual Plan 2022/23.

3.   Background InformationTe Horopaki

3.1       The Draft Annual Plan 2022/23 was adopted by Council on 24 February 2022.

3.2       Consultation and engagement period opened with the community, including additional specific consultations, on 11 March 2022.

3.3       The meeting date for adoption of the final Annual Plan 2022/23 is set as 21 June 2022.

3.4       The proposed process set out above is the result of extensive stakeholder engagement between the Annual Plan project team, the Executive Leadership team and a wide variety of support staff.

3.5       It seeks to strike a balance between meaningful engagement with our community and the preparation of high-quality information, with legislative deadlines and logistical constraints.

 

 

Attachments / Ngā Tāpirihanga

There are no attachments to this report.

 

In addition to the attached documents, the following background information is available:

Document Name

Location / File Link

Nil

 

 

 

 

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

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 / Ngā Kaiwaitohu

Author

Boyd Kedzlie - Senior Business Analyst

Approved By

Peter Ryan - Head of Performance Management

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

  


Finance and Performance Committee

28 April 2022

 

 

19.   Overdue General and Rates Debtors at 31 March 2022 (Greater than $20,000 and 90 days)

Reference / Te Tohutoro:

22/429118

Report of / Te Pou Matua:

Andrew Jefferies, Rates Revenue Manager, andrew.jefferies@ccc.govt.nz

General Manager / Pouwhakarae:

Leah Scales, General Manager Resources/CFO,
leah.scales@ccc.govt.nz

 

 

1.   Brief Summary

1.1       The purpose of this report is to update the Finance and Performance Committee on overdue general and rates debtors with balances in excess of $20,000, as at 31 March 2022.

2.   Officer Recommendations / Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receives the Overdue General and Rates Debtors (Greater than $20,000 and 90 days) report.

2.         Notes the action being taken to recover the overdue amounts.

3.         Resolves that a redacted copy of the report can be released after the Committee has received the report but the names of the individuals and organisations will remain confidential.

3.   Overdue general (non-rates) debtors

3.1       There were two traffic related damage debtors and one commercial lease debtor with balances greater than $20,000 and older than 90 days as at 31 March 2022, totalling $68,819 (See Attachment A).

4.   Overdue rates debtors

4.1       As at 31 March 2022, there are 26 individual properties with arrears greater than $20,000 (and where at least some of those arrears are older than 90 days). Total arrears on those properties is $0.84 million. Attachment B provides information on each of those properties including comments on the management of each debt. This is contained in the first table in that attachment.

4.2       In terms of the number of properties that have entered or exited this list since the last report as at 31 January 2022 (considered at the 24 March 2022 Committee meeting):

4.2.1   Eight new debtors have been added to the first table in Attachment B.  This is indicated by a yellow highlight in the first column labelled “Date came on report”.

4.2.2   There are six debtors from the previous quarterly report that no longer appear in the first table of Attachment B. The arrears owed by these debtors reduced by $0.31 million. The second table of Attachment B provides information on each of those properties.

5.   Referred to Debt Collection Agency or Council Legal Team

5.1       Debt collection agency: The following table shows the number and value of files (accounts) that have been submitted to our contracted debt collection agency in the 2 months to 31 March 2022. It also shows the amount closed (sent back to Council), the amount collected, and the total debt still outstanding for files held by our debt collection agency. This includes all debt (not just debts over $20,000).

 

Amount submitted

Amount closed

Amount collected

Total debt still out­standing for collection and number of files

General debtors

$31,909

81 files

$7,640

$9,263

23 files are under arrangement plans totalling $76,946

$118,893

55 files

Rates debtors (inclusive of water rates)

$287,313

88 files

$47,024

$236,526

59 files are under arrangement plans totalling $124,447

$186,573

81 files

 

5.2       Council’s legal team: The following table shows the number and value of files currently being managed by Council’s legal team. This includes all debt (not just debts over $20,000).

 

Total number of files submitted and active

Total amount submitted and active

General debtors

1

$900

Rates debtors (inclusive of water rates)

23

$505,936

 

 

Attachments / Ngā Tāpirihanga

No.

Title

Page

a  

General Debtors at 31 March 2022 (Under Separate Cover) - Confidential

 

b  

Rates Debtors Report 31 March 2022 (Under Separate Cover) - Confidential

 

 

 

In addition to the attached documents, the following background information is available:

Document Name

Location / File Link

Not applicable

Not applicable

 

 

 

Confirmation of Statutory Compliance / Te Whakatūturutanga ā-Ture

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 / Ngā Kaiwaitohu

Authors

Andrew Jefferies - Manager Rates Revenue

Brett Hales - Manager Transactions

Martin Zelas - Team Leader Rates

Approved By

Bruce Moher - Acting Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

  


Finance and Performance Committee

28 April 2022

 

 

20.   Te Kaha Project Delivery Ltd - Draft Statement of Intent for 2022/23 and Quarter 2 Performance Report for period ending 31 December 2021

Reference / Te Tohutoro:

22/396630

Report of / Te Pou Matua:

Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz).

General Manager / Pouwhakarae:

Leah Scales, General Manager, Resources Group (leah.scales@ccc.govt.nz).

 

 

1.   Brief Summary

1.1       The purpose of this report is to advise the Council of Te Kaha Project Delivery Ltd’s following documentation:

·    Draft Statement of Intent (SOI) for 2022/23 at Attachment A; and

·    Quarter 2 Performance Report to 31 December 2021 at Attachment B

1.2       This report has been written following receipt of the documents from Te Kaha Project Delivery Ltd in accordance with the statutory due dates, respectively 1 March and 28 February, 2022.

1.3       Te Kaha Project Delivery Ltd is the governance body tasked with commissioning the design and construction of Te Kaha.  The responsibility and accountabilities for the final design and construction of Te Kaha are held with the Council’s Capital Delivery – Major Facilities Team which reports to the Council monthly.

2.   Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1.         Receives Te Kaha Project Delivery Ltd’s draft Statement of Intent for 2022/23; and

2.         Receives Te Kaha Project Delivery Ltd’s Quarter 2 Performance Report for the period ending 31 December 2021.

Draft Statement of Intent

2.1       Clauses 2 and 3 of part 1, schedule 8 of the Local Government Act 2002 (LGA) set out the requirements for a Council-controlled organisation’s (CCO’s) adoption of a SOI.  In particular, the shareholder may provide comments on the draft SOI to the Council-controlled organisation (CCO) board by 1 May, and the CCO board must consider the comments and finalise the SOI by 30 June. 

2.2       The final SOI must be published on an internet site within one month of being finalised pursuant to section 64(9) of the LGA.

2.3       Te Kaha Project Delivery Ltd’s draft SOI complies with the SOI content requirements set out in parts 2 and 4 of schedule 8 of the LGA which include:

·    the objectives of the group;

·    the board’s approach to governance;

·    the nature and scope of activities to be undertaken;

·    the non-financial performance targets and other measures by which performance is judged in relation to the objectives and forecast financial statements for the SOI’s three year time horizon;

·    the major accounting policies of the organisation; and

·    forecast financial statements for the three years of the SOI.

2.4       The draft SOI is consistent with last year’s SOI which the Council reviewed at its meeting on 9 December 2021.  Part of that consideration was that the Council’s Letter of Expectations (LOE) to the company was adequately reflected in the draft SOI.  It provides Te Kaha Project Delivery Ltd’s strategic objectives, activities and performance targets underpinning its role in commissioning the design and construction of Te Kaha. 

2.5       The essence of the change in the draft SOI is reflecting the shift from pre-contract services to design and construction.  Other key changes in the draft SOI from last year’s are:

·    replacement of the former name CMUA with the newly gifted name Te Kaha for the Arena, as well as in the name of the delivery company;

·    removal of the performance objectives for the 2021/22 year as they are not relevant to the 2022/23 document; and