Finance and Performance Committee

22 March 2023

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

Chair	Councillor MacDonald
Deputy Chair	Councillor Coker
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

22 March 2023

Unconfirmed

Finance and Performance Committee

Open Minutes

Date: Wednesday 22 February 2023

Time: 9.31 am

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

Present

Chairperson

Deputy Chairperson

Members

Councillor Sam MacDonald

Councillor Melanie Coker

Mayor Phil Mauger

Councillor Kelly Barber

Councillor Pauline Cotter

Councillor Celeste Donovan

Councillor Tyrone Fields

Councillor James Gough

Councillor Tyla Harrison-Hunt - via audio/visual link

Councillor Victoria Henstock

Councillor Yani Johanson - via audio/visual link

Councillor Aaron Keown

Councillor Jake McLellan

Councillor Andrei Moore

Councillor Mark Peters

Councillor Tim Scandrett

Councillor Sara Templeton

Principal Advisor

Leah Scales

General Manager - Resources / CFO

Tel: 941 8999

Principal Advisor

Dawn Baxendale

Chief Executive

Tel: 941 8999

David Corlett

Committee and Hearings Advisor

941 5421

david.corlett@ccc.govt.nz

www.ccc.govt.nz

Part A Matters Requiring a Council Decision

Part B Reports for Information

Part C Decisions Under Delegation

Karakia Tīmatanga: Given by all Councillors

Whakataka Te hau ki Te uru

Whakataka Te hau ki Te tonga

Kia makinakina ki uta

Kia mataratara ki Tai

E hi ake ana te atakura

He tio, he huka, he hau hu

Tihei Mauri Or

The agenda was dealt with in the following order.

1. Apologies Ngā Whakapāha

Part C

Committee Resolved FPCO/2023/00001

That the apologies received from the Mayor for lateness , and Councillors MacDonald and Donovan for partial absence be accepted.

Councillor Coker/Councillor Fields Carried

The Mayor joined the meeting during the public excluded session.

2. Declarations of Interest Ngā Whakapuaki Aronga

It was noted that Councillor Gough is a Director on the Board of Transwaste. (item.13)

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

Part C

Committee Resolved FPCO/2023/00002

That the minutes of the Finance and Performance Committee meeting held on Wednesday, 30 November 2022 be confirmed.

Councillor MacDonald/Councillor Barber Carried

4. Public Forum Te Huinga Whānui

4.1 Geoffrey King

Geoffrey King spoke regarding the Organics Processing Plant, street works, recycling and other matters.

Councillor Henstock left the meeting at 10.21am and returned at 10.24am during discussion on item 5.

Councillor Gough left the meeting at 9.56am and returned at 9.59am during discussion on item 5.

Councillor Moore left the meeting at 10.26am and returned at 10.29am during discussion on item 5.

5. Deputations by Appointment Ngā Huinga Whakaritenga

5.1 Fiona Bennetts

Fiona Bennetts spoke (via audio/visual link) to her presentation (attached) regarding item 14. Climate Emergency Response Fund (Transport Choices) - Decision over how to Progress

Attachments

a Cycle lanes presentation

5.2 Allan Taunt

Allan Taunt spoke to his presentation (attached) regarding item 14. Climate Emergency Response Fund (Transport Choices) - Decision over how to Progress

Attachments

a Cycle lane presentation

5.3 Don Babe

Don Babe spoke on behalf of Spokes Canterbury (Inc.) regarding item 14. Climate Emergency Response Fund (Transport Choices) - Decision over how to Progress

5.4 Celia Hogan

Celia Hogan spoke to her presentation (attached) regarding item 14. Climate Emergency Response Fund (Transport Choices) - Decision over how to Progress.

Attachments

a Cycle Lanes: Wheels to Wings

5.5 David Duffy and Murray James

David Duffy and Murray James spoke on behalf of Richmond Residents & Business Association regarding item 14. Climate Emergency Response Fund (Transport Choices) - Decision over how to Progress

5.6 Francis Johnson and Faye Brorens

Francis Johnson and Faye Brorens spoke on behalf of Extinction Rebellion regarding item 14. Climate Emergency Response Fund (Transport Choices) - Decision over how to Progress

6. Presentation of Petitions Ngā Pākikitanga

Part B

There was no presentation of petitions.

7. Key Organisational Performance Results - January 2023

Committee Resolved FPCO/2023/00003 Officer recommendations accepted without change

Part C

That the Finance and Performance Committee:

1. Receive the information in the Key Performance Results January 2023 report.

2. Note the changes to level of service targets to be amended within the current financial year.

Councillor MacDonald/Councillor Peters Carried

8. Financial Performance Report - January 2023

Committee Resolved FPCO/2023/00004 Officer recommendations accepted without change

Part C

That the Finance and Performance Committee:

1. Receive the information in the Financial Performance Reports for January 2023, and December 2022 (Attachment B).

2. That staff report on steps undertaken to recover the forecast deficit at the next meeting.

Councillor Templeton/Councillor Scandrett Carried

Councillor Donovan left the meeting at 10.52 and returned at 11.40am during discussion on item 13.

9. Capital Programme Performance Report for January 2023

Committee Resolved FPCO/2023/00005 Officer recommendations accepted without change

Part C

That the Finance and Performance Committee:

1. Receive the information in the Capital Programme Performance Report for January 2023.

Councillor Coker/Councillor Peters Carried

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

Committee Resolved FPCO/2023/00006 Officer recommendations accepted without change

Part C

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 Council has received the report, but the names of the individuals and organisations will remain confidential.

Councillor MacDonald/Councillor Coker Carried

The meeting adjourned at 11.00am and reconvened at 11.23am

Councillor Coker assumed the Chair for items 12 and 13.

Councillors MacDonald, Gough, Donovan, and Mayor Mauger were not present after the adjournment.

12. ChristchurchNZ Holdings Ltd - Half year report for the six months ending 31 December 2022
	Committee Comment 1. Therese Arseneau (Chair) and Alison Adams (Chief Executive) spoke to their presentation (attached).
	Committee Resolved FPCO/2023/00007 Officer recommendations accepted without change Part C That the Finance and Performance Committee: 1. Receives ChristchurchNZ Holdings Ltd’s half year performance report for the period 1 July–31 December 2022. Councillor Templeton/Councillor Cotter Carried
	Attachments a ChristchurchNZ Half Year Report

Councillor Keown left the meeting at 11.53am and returned at 11.56am during discussion on item 13.

13. Transwaste Canterbury Ltd - Annual Report 2021/22

Committee Resolved FPCO/2023/00008 Officer recommendations accepted without change

Part C

That the Finance and Performance Committee:

1. Notes the performance of Transwaste Canterbury Ltd for the year ended 30 June 2022.

Councillor Johanson/Councillor Peters Carried

The meeting adjourned at 12.02pm and reconvened at 2.03pm.

Councillor MacDonald returned to the Chair.

Mayor Mauger and Councillor Harrison-Hunt were not present after the adjournment.

11. Community Application to the Capital Endowment Fund

Committee Resolved FPCO/2023/00009 Officer recommendations accepted without change

Part C

That the Finance and Performance Committee:

1. Approves a grant of up to $50,000 from the 2022/2023 Capital Endowment Fund, to the Central City Business Association, for the provision of roving security guards in Central City Retail precinct, from February 1 to June 30 2023. Conditional upon:

a. All monies advanced to the Central City Business Association being repaid in full if the current Council application for “Better Off Funding” for this purpose is successful.

2. Notes that if the Council’s application for “Better Off Funding” is unsuccessful the Council has the opportunity to consider funding the Central City Business Association through the 2023/24 Annual Plan process.

3. Delegates to the Head of Community Support and Partnerships the authority to make the necessary arrangements to fulfil resolution 1.

Councillor McLellan/Councillor Templeton Carried

Councillor Keown left the meeting at 2.40pm and returned at 2.43pm during discussion on item 14.

14. Climate Emergency Response Fund (Transport Choices) - Decision over how to Progress
	Secretarial note: Staff advised that a revised Attachment A and Attachment B (attached) along with revised recommendations had been provided because staff have received more information from Waka Kotahi in relation to when they want the design work completed. The Committee firstly voted on recommendations 1,5,6 and after these carried voted on recommendations 2,3,4 and 7 which were also carried.
	Committee Resolved FPCO/2023/00010 1. Acknowledge the positive response from Waka Kotahi to the Council application for CERF funded projects and notes the resourcing implications of adding additional projects to the Transport Capital Programme, especially given the tight delivery timelines of June 2024. 4. Notes that staff will start work on the CERF projects in advance of the final adoption of the 2023/24 Annual Plan. 5. Approves the CERF programme and the projects as defined in Attachment A revised, be determined as metropolitan significance. Councillor Templeton/Councillor Cotter Carried
	Committee Resolved FPCO/2023/00011 That the Finance and Performance Committee: 2. Agree to accept eleven CERF projects (as defined in updated Attachment A revised) to the transport capital programme as part of the draft 2023/24 Annual Plan, with a total additional budget of $25,685,419. 3. Notes that three CERF projects will not be accepted - #72757 Southeast Orbital Cycle Connection; #72761 Healthy Streets Linwood; #66291 PT-Bus Priority, Gloucester Street. 4. Delegates authority to sign the funding agreement between Council and Waka Kotahi for CERF projects, in accordance with the final resolutions, to the Chief Executive Officer. 7. Approves that the 24 projects, with a total budget of $4,422,532 (as defined in Attachment B revised), be deferred by one year to mitigate the delivery impact of the increased CERF budget. This will be reflected and consulted on through the draft 2023/24 Annual Plan. Councillor Templeton/Councillor Cotter Carried
	Attachments a Revised Attachment A b Revised Attachment B

Councillor Donovan requested that it be recorded that she does not support deferral of :

26601 – Major Cycleway – Otakaro-Avon Route (section 1) – Fitzgerald to Swans Road; and

45165 – New Brighton Public Realm Improvements.

Councillor Henstock requested that it be recorded that she supports the deferral of:

26611 and 2612 – Major Cycleway -Wheels to Wings Project.

Councillor Gough requested that it be recorded that he supports the deferral of :

26611 and 2612 – Major Cycleway -Wheels to Wings Project; and does not support deferral of

66406 - Glandovey-Idris Active Transport Improvements

Councillor Johanson abstained on the vote on 2,3,4 and 7 and requested that it be recorded that he did not support the deferral or rephrasing of any of the projects, and supports all the CERF projects being done.

Councillor Coker left the meeting at 3.47pm.

15. Resolution to Exclude the Public

Committee Resolved FPCO/2023/00012

Part C

That at 3.48pm the resolution to exclude the public set out on pages 211 to 212 of the agenda be adopted.

Councillor MacDonald/Councillor Cotter Carried

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

The public were re-admitted to the meeting at 4.02pm.

Karakia Whakamutunga: Given by all councillors.

Kia whakairia te tapu

Kia wātea ai te ara

Kia turuki whakataha ai

Haumi e. Hui e. Tāiki e

Meeting concluded at 4.03pm

CONFIRMED THIS 22nd DAY OF March 2023.

Councillor Sam MacDonald

Chairperson

Finance and Performance Committee

22 March 2023

7. Key Organisational Performance Results - February 2023
Reference / Te Tohutoro:	23/143658
Report of / Te Pou Matua:	Peter Ryan, Head of Corporate Planning & Performance Peter.Ryan@ccc.govt.nz
General Manager / Pouwhakarae:	Lynn McClelland, Assistant Chief Executive Strategic Policy and Performance (lynn.mcclelland@ccc.govt.nz)

1. Nature of Information Update and Report Origin

1.1 The purpose of this report is to provide Council with an overview of service, project and budget performance, as adopted through the 2021-31 Long Term Plan (and Annual Plan 2022/23), against organisational performance targets.

The key organisational performance targets include:
1.1.1 Service delivery
1.1.2 Capital projects (both planning and delivery)
1.1.3 Finance

1.2 Management-initiated performance goals.

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Receive the information in the Key Performance Results February 2023 report.

3. Brief Summary

3.1 Organisational performance forecasts are as at the end of February 2023, for the second year of the LTP 2021-31 (financial year to June 2023).

3.2 Level of service delivery is forecast at 86.0%, against a target of 85%.

3.3 Key project delivery is forecast at 86.2%, while Non-Key project delivery is forecast at 74.9% (both against a target of 85%). For more information refer to the Capital Programme Performance Report.

3.4 84.2% of FY2024 funding programme budgets have been allocated (projects initiated by 1^st March 2023) against a target of 90%. The capital Programme Management Office (PMO) forecast is for this target to be met (noting that while this is an end-February forecast, at the time of writing there were some outstanding adjustments and finalisations to be made that PMO believe will move 84.2% to achieving target.)

3.5 69.9% of FY2025/FY2026 funding programme budgets have been drawn down (by 1^st May 2023) against a target of 90%. The capital PMO forecast is also for this target to be met.

3.6 The organisation is forecasting a year-end operational surplus of $0.2m.

3.7 Forecast for capital expenditure is presently at -16.9%, outside ELT’s target range. In line with the ELT target, this forecast includes core and externally funded work, but excludes Te Kaha and Parakiore.

4. Service delivery

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

4.1 Community levels of service (LOS) is forecast 86.0% delivery against the performance target of 85%, declining marginally from January 2023 forecast (86.4%) reporting to Committee.

4.2 Comments and remedial actions from managers for LOS exceptions are available in Attachment A.

4.3 Amongst the LOS exceptions are a number relating to residents satisfaction. Results from the Residents Survey 2021/22 were presented to Council at the meeting of 9 June 2022. Included with the results were responses from Heads of Service, providing an interpretation of the results and details of actions to be taken to improve or maintain resident service satisfaction. As part of the 9 June meeting Council asked for a 6-month update, which was compiled and presented to Council at the meeting of 30 November 2022.

4.4 Transport activity has a number of exceptions related to road and footpath condition, resurfacing, including resident satisfaction, transport mode-share and safety.

4.5 Water Supply activity is impacted by leakage rates and water quality issues.

4.6 Impacts are also noticeable in some regulatory services, from increases in consent volumes leading to delays in consent processing. Extensive effort around recruitment, contracting and process improvement initiatives have been underway for some time to provide the additional capacity needed.

4.7 Performance management and reporting activity exceptions relate to date and processing timeline adjustments potentially impacting quality and timeliness of reporting to management and to Committee.

4.8 The scatter diagram below is an overview of the performance of the top-ten activities.

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

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

5. Capital projects - delivery and planning

ELT Goal: Deliver 85% Key capital projects to ‘delivery complete’ milestones

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

5.1 Key project delivery is forecast at 86.2% delivery against the target of 85%. 25 of the 29 identified key projects are forecast to meet milestone baseline target date at year-end.

5.2 Non-Key project milestone delivery is forecast at 74.9% delivery against the target of 85%.

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

5.4 For further information and underlying detail, refer to the detailed Capital Programme Performance Report for February 2023.

5.5 Below is a forward view of capital delivery performance (financial), an overview of capital delivery in recent years against plan, plus capital delivery planned for the first three years of the LTP 2021-31 (2021/22 to 2023/24).

5.6

Figures are updated for 2022/23, to align with the Capital Programme Performance report.

5.7 There has been stability of financial delivery year-on-year for projects CCC is responsible for delivering (green line – total spend/total forecast), ranging consistently in a band between $371m to $409m spend per annum over the previous four years (2018/19 to 2021/22).

5.8 The ELT performance target for capital financial delivery is based on all delivery CCC is accountable for, regardless of funding source.

5.9 For this year (year 2 of the LTP 2021) the total programme budget set for CCC to deliver is $469m (blue line). The February 2023 Financial Report forecast for capital financial expenditure is $390m, which equates to 83% delivery. As noted above, this forecast includes both core and externally funded works, but excludes Te Kaha and the remainder of Parakiore funding, in line with the ELT performance goal.

5.10 In adopting the Draft Annual Plan 2023/24, $137m of capital has been rephased which has changes the future year CCC delivery programme for 2023/24 from $753m (as at Annual Plan 2022/23) to $616m (black line).

5.11 In reflection of this the Council delivery budget the 2023/24 value has moved from $599m (as at Annual Plan 2022/23) to $465m (blue-line, includes core and externally funded work, excluding Te Kaha and remainder of Parakiore build funding.)

5.12 For more detail refer to the Financial Performance and Capital Programme Performance reports.

ELT Goal: Ensure capital planning for FY24 funding programme budgets allocated,
90% by 1 March 2023.

ELT Goal: Ensure capital planning for FY25 & FY26 funding programme budgets drawn down, 90% by 1 May 2023.

5.13 Capital planning targets are intended to monitor the draw-down and allocation of future capital funding programme budgets, in this case years 3, and 4 & 5 of 2021-31 LTP. This helps the business plan and prepare for future capital project delivery, in order to effectively implement the LTP.

5.14 84.2% of FY2024 funding programme budgets have been allocated (projects initiated) by 1st March 2023 against a target of 90%. The PMO is forecasting this target will be met (noting that while this is an end-February forecast, at the time of writing there were some adjustments and finalisations to be made that PMO believes will move the 84.2% to achieving target.) Reporting next month (March) will carry the full year-end value.

5.15 69.9% of FY2025/FY2026 funding programme budgets drawn down by 1st May 2023 against a target of 90%. The PMO is also forecasting this target will be met.

6. Finance

6.1 The organisation is forecasting an operational surplus of $0.2m (after carry forwards of $4.1m). For more information refer to the Financial Performance Report.

6.2 Capital expenditure variance at year-end forecast is at -16.9%. More detail is available in the Capital Programme Performance Report.

Attachments / Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	LOS Exception Commentary February 2023	23/329087	24

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

Document Name – Location / File Link

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

Johan Jacobs - Senior Business Analyst

Boyd Kedzlie - Senior Business Analyst

Amber Tait - Performance Analyst

Approved By

Peter Ryan - Head of Performance Management

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

Finance and Performance Committee

22 March 2023

8. Financial Performance Report - February 2023
Reference / Te Tohutoro:	23/240484
Report of / Te Pou Matua:	Russell Holden – Head of Finance (Russell.Holden@ccc.govt.nz)
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)

1. Nature of Information Update and Report Origin

1.1 The purpose of this report is for the Finance and Performance Committee to be updated on financial performance to February 2023, including the current year forecast, and receive current treasury information.

1.2 This is a regular report that goes to the Committee on a monthly basis.

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Receive the information in the Financial Performance Report for February 2023.

3. Brief Summary

3.1 The financial result for February shows a year to date operational surplus of $7.3 million. The current surplus year end forecast of $0.2 million (after signalled budget carry forwards) is an improvement of $1.4 million from the $1.2 million deficit forecast last month.

3.2 The total capital programme continues to forecast an under spend, currently $51.9m.

3.3 All treasury risk positions are within policy limits.

4. Operating Surplus

4.1 Last meeting, staff were requested to report back on steps undertaken to recover the forecast deficit presented. The following comments on the process undertaken on a monthly basis:

4.1.1 The forecast is a projection at a point in time, a position which will continually change as new information and events come to light. The operational budget is a sizable $675 million, a move of $1.2 million amounts to only 0.2%. The risk remains that any adverse events could negatively impact the overall position of Council.

4.1.2 To identify such events and provide timeliness of reporting for mitigation action, regular forecasting and reporting at all levels in the organisation occurs to ensure issues are identified, monitored and addressed by management on an ongoing basis. Material risks are reported to and monitored by the executive team, with a view to managing the financial outcome of the organisation to within that approved by Council.

4.1.3 The forecast changes this month relate to a mix of ongoing and some new items. The movement is the result of an ongoing detailed review and examination on possible savings across all Council activities. Staff have increased their focus on reviewing positive variances to YTD budgets in order to correctly capture year-end forecast variances. Some of these savings have become more certain as year-end approaches.

4.1.4 The key issue driving the forecast deficit last month, which remains an issue, is the capitalisation of staff time. Several factors are driving this issue, including sickness, staff turnover, and recruitment difficulty. This is currently impacting a couple of units and is being actively managed to ensure process accuracy and minimise financial impact.

4.1.5 Linked to this is the reviewing of previous months to ensure accuracy in the allocation of staff time to capital projects. This work has resulted in some costing corrections.

4.2 Following the above reviews, we are currently forecasting a surplus of $0.2 million (after carry forwards of $4.1 million). The $1.4m forecast improvement from the $1.2 million deficit forecast in January is mainly resulting from vacancies that are unlikely to be filled by year end ($1.2m), provisions in place that are no longer ($0.65m), and lower net interest costs ($0.2m). These are partially offset by lower Resource Consenting revenues ($0.75m) where discounts have been provided for not meeting statutory timeframes, noting that processing timeframes continue to improve which will result in less revenue needed to be discounted in the last quarter of the year.

5. Operational Expenditure and Revenue

5.1 This covers day to day spend on staffing, operations and maintenance, and revenues to fund it.

5.2 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 to show the operational year to date and forecast cash surplus or deficit.

	Year to Date Results			Forecast Year End Results			After Carry Forwards
$m	Actual	Budget	Var	Forecast	Budget	Var	Carry Fwd	Var
Revenues	(625.1)	(616.5)	8.6	(891.3)	(880.2)	11.1	0.9	10.2
Expenditure	463.0	461.7	(1.3)	680.5	675.3	(5.2)	3.4	(8.6)
Funds not available for Opex	156.3	156.3	-	206.5	204.9	(1.6)	(0.2)	(1.4)
Surplus	(5.8)	1.5	7.3	(4.3)	-	4.3	4.1	0.2

5.3 Brief summaries of revenues and expenditure are highlighted below.

5.4 Revenues are $8.6 million higher than budget year to date, forecast to be $10.2 million higher at year end.

5.4.1 Key drivers of actual and forecast variances to budget include: YTD Forecast
(after c/f)

· Higher Interest revenues (partially offset by higher debt servicing costs) $3.7m $8.0m

· Higher Transwaste dividends (early receipt to bring back from FY24) $1.9m $1.1m

· Rates Revenues (2021/22 rating growth higher than planned) $1.8m $2.0m

· Waka Kotahi subsidies (offset by higher Transport emergency maintenance costs) $1.2m $0.7m

· EcoCentral Volume rebate received $0.8m $0.8m

· Higher Building Consent volumes (offset by higher resourcing costs) $0.4m $0.8m

· Higher He Puna Taimoana revenues $0.5m $0.5m

· Lower Housing revenues (offset by lower maintenance costs) ($0.2m) ($0.7m)

· Resource Consents (significant discounts – due to statutory timeframe not met) ($0.8m) ($1.0m)

· Lower Burwood Landfill revenues ($1.3m) ($1.8m)

5.5 Expenditure is $1.3 million higher than budget year to date; and forecast to be $8.6 million higher at year end after $3.4 million of signalled budget carry forwards.

5.5.1 Key drivers of actual and forecast variances to budget include: YTD Forecast

(after c/f)

· Higher debt servicing costs (offset by higher interest revenues) ($2.8m) ($6.6m)

· Lower Capitalisation of staff time (net of lower personnel costs) ($2.0m) ($2.0m)

· Building Consenting additional resourcing (partly offset by higher revenues) ($1.4m) ($0.8m)

· Waste Collection Contracts ($1.3m) ($1.7m)

· Transport maintenance (as a result of emergency works from July rain events) ($1.2m) ($1.7m)

· Lower Housing expenditure (partially offset by lower revenues) $0.8m $1.0m

· Internal Burwood Landfill revenues (from Council capital projects) $1.0m $1.0m

· Lower Recycling Processing fees $1.1m $1.9m

· Crown funded Water Transition expenditure timing $1.6m -

· Grants and levies (incl. EV & Vacant land remissions) $2.4m $0.6m

5.6 Funds not available for opex - items included in this category contributing to the variance are Housing and Dogs (both non-rates funded), Capital Endowment funded projects, and Capital grants.

6. Capital Expenditure and Revenue

	Year to Date Results			Forecast Year End Results			After Carry Forwards
$m	Actual	Budget	Var	Forecast	Budget	Var	Carry Fwd	Var
Core Programme	205.6	202.4	(3.2)	385.8	413.7	27.9	27.9	-
External Funded Programme	28.6	28.7	0.1	48.1	55.7	7.6	7.6	-
Less unidentified Carry Forwards	-	-	-	(43.9)	-	43.9	43.9	-
Core/External Funded Programme	234.2	231.1	(3.1)	390.0	469.4	79.4	79.4	-
Te Kaha/Parakiore	79.1	55.1	(24.0)	131.3	103.8	(27.5)	(27.5)	-
Total Capital Programme	313.3	286.2	(27.1)	521.3	573.2	51.9	51.9	-
Revenues and Funding	(279.4)	(263.4)	16.0	(445.2)	(410.6)	34.6	19.2	15.4
Borrowing required	33.9	22.8	(11.1)	76.1	162.6	86.5	71.1	15.4

Capital Expenditure

6.1 This covers the capital programme spend and funding relating to it.

6.2 Gross capital expenditure of $313.3 million has been incurred year to date. A further $208 million is forecast to be spent by year end.

6.3 The $521.3 million forecast spend is based on a Core/External Funded spend of $390 million, plus forecast spend of $131.3 million on the Te Kaha and Parakiore projects.

6.4 Project managers have identified $35.5 million to be carried forward on specific projects in the Core/External Funded Programme. The forecast includes an additional $43.9 million of expected carry forwards yet to be specifically identified (based on actuals to date and historical trend analysis).

6.5 There is currently a forecast spend of $108.1 million for Te Kaha this financial year (January forecast was $140.8 million), compared to a budget of $78.5 million. The earlier forecast cost will be covered by bringing forward Crown revenues budgeted in 2023/24.

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

Capital Revenues and Funding

6.7 Capital revenues and funding are a net $16 million higher year to date and forecast to be $34.6 million higher than budget before carry forwards comprising:

6.7.1 Revenues are $27.7 million higher than budget and forecast to be $47.4 million higher - mainly due to higher development contributions ($20.2 million YTD / $24.4 million forecast), and earlier receipts of Te Kaha Crown revenues ($12.9 million YTD - $29.6 million forecast) due to an earlier project spend. Partially offset by slower timing of Shovel Ready revenues ($7.6 million YTD / $7.2 million forecast).

6.7.2 Lower Reserve drawdowns of $11.7 million year to date, forecast to be $12.8 million lower - mainly due to some of the above development contributions being set aside to fund future works ($13.6 million YTD and forecast); partially offset by higher Housing Fund drawdowns of $1.9 million year to date ($0.6 million forecast) due to earlier capital spend.

7. Treasury

Borrowing, Advances to Related Parties, and Bank Deposits

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

7.2 Current debt levels are temporarily elevated due to the pre-funding of some large up-coming maturities (to reduce liquidity risk). Net Debt by Jun-23 is expected to be only modestly higher than at Jun-22, with higher Gross Debt off-set by higher Advances to related parties (mostly CCHL).

Policy Compliance

7.3 All Treasury risks are within Policy limits, with minimal risk of breaches over the coming year:

Risk Area	Compliance	*Plain-language meaning*
Liquidity Risk	Yes	(cash availability)
Funding Risk	Yes	(spread of debt maturities)
Interest Rate Risk	Yes	(managing interest costs)
Counterparty Credit Risk	Yes	(not all eggs in one basket)

Funding & Interest Rates

7.4 Council’s projected funding needs, per financial year, are shown in the chart below, split between the maturities of existing gross borrowing (green) and expected new borrowing requirements (grey).

7.5 Council’s interest rate risk is managed to reduce the volatility of interest costs from year to year. Most existing Council debt has been fixed for at least the next three years, which will limit the impact of current higher interest rates on Council’s future borrowing costs.

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

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

Bruce Moher - Manager Corporate Reporting

Ryan McLachlan - Reporting Accountant

Steve Ballard - Group Treasurer

Annie Yang - Reporting Accountant

Approved By

Russell Holden - Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

Finance and Performance Committee

22 March 2023

9. Capital Programme Performance Report February 2023
Reference / Te Tohutoro:	22/1682878
Report of / Te Pou Matua:	Andrew Robinson, Head of Programme Management Office (andrew.robinson@ccc.govt.nz)
General Manager / Pouwhakarae:	Lynn McClelland, Assistant Chief Executive Strategic Policy and Performance (lynn.mcclelland@ccc.govt.nz)

1. Nature of Information Update and Report Origin

1.1 The purpose of this report is to present to the Council meeting the monthly Capital Programme Performance Report February 2023.

1.2 This report provides Elected Members with oversight on the performance of the Capital Programme.

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Receive the information in the Capital Programme Performance Report to the end of February 2023.

3. Brief Summary

3.1 The consolidated FY23 forecast for the CCC Capital component of the programme (excl. Te Kaha and Parakiore) as reported by Project Managers is $428.7m. This is a decrease on last month’s reporting ($438.6m).

3.2 The PMO forecast for the CCC Capital component remains at $390m this month (83% of budget). This is based on programme analysis, including year to date actuals, historical trends and the current outlook.

3.3 The major facilities, Te Kaha and Parakiore, are progressing and are reported in more detail elsewhere. Significant expenditure is still forecast for Te Kaha in the next four months as site activity ramps up. However, a reduction in early purchasing of roof steelwork has resulted in an FY23 forecast decrease of $33m. A bring back is still anticipated in FY23, and the project remains on track to budget for all years.

3.4 Both Matatiki (Hornby Service Centre) and The Court Theatre (Performing Arts) are well positioned to advance significantly in FY23 with construction underway on both projects, however some significant carry forward for the Court Theatre is expected to get alignment between Budgets and construction schedules.

3.5 The Three Waters forecast is slightly up this month, from $160.8m to $163.8m (89% of budget at end of February). Both Water Supply and Stormwater projects are forecasting good progress, however some Wastewater projects are still reporting delays in contract award, but are at or near award.

3.6 Transport PMs are reporting delivery at 88% of budget ($122.4m, a reduction of $10m compared to the January forecast). YTD spend is lagging at $64.6m. Delivery on the ground is increasing now that the summer construction season has started, and projects involving KiwiRail infrastructure have reached milestones allowing physical works to proceed.

3.7 Parks, Digital and the Ōtākaro Avon River Corridor (OARC) programme are all reporting good progress against FY23 Budgets and some bring backs are likely to support strong delivery targets.

3.8 Staff have been busy on the preparation of the Draft Annual Plan for FY24 with associated briefings to Council to achieve a deliverable programme and the Draft was adopted on 28 February. An Interactive Budget Tool has been developed to communicate the Plan to the community and will be made available as part of the Consultation Document.

3.9 Resource constraints remain with continued low unemployment and tight competition in the employment market and infrastructure owners often competing for the same resources. This poses a risk for deliverability.

3.10 Continued geopolitical instability remains a key risk and is having a continuing impact on cost estimates through inflationary pressures across all areas of capital delivery.

3.11 There is an emerging risk relating to upcoming repair programmes the North Island, in response to damage created by Cyclone Gabrielle in February 2023. With detailed assessments of repairs and reinstatement costs yet to be completed, the impacts on market capacity in Christchurch and market prices are not yet known. However, these may increase the severity of existing financial and resourcing risks.

3.12 While it is difficult to make accurate predictions as to the time period within which these broader issues outside of Council control will resolve, internal planning and risk mitigation is based on the assumption that a return to normal is not expected in the short term. Recent economic forecasts and historical indicators, continue to support cost pressures.

3.13 The attached Capital Delivery Report – February 2023 details the above and provides further commentary across the Capital Programme.

Attachments / Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Attachment to report 22/1700726 (Title: Capital Delivery Report February 2023 - FINAL)	23/340530	44
b ⇩	Attachment to report 22/1700726 (Title: Capex Watchlist Report - February 2023 - FINAL)	23/340333	82

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

Document Name – Location / File Link

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 Robinson - Head of Programme Management Office

Greer Hill - PMO Administrator

Approved By

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

Finance and Performance Committee

22 March 2023

10. Development Contributions Rebate Schemes
Reference / Te Tohutoro:	22/1608324
Report of / Te Pou Matua:	Gavin Thomas, Principal Advisor Policy (gavin.thomas@ccc.govt.nz)
General Manager / Pouwhakarae:	Lynn McClelland, Assistant Chief Executive Strategic Policy and Performance (lynn.mcclelland@ccc.govt.nz)

1. Nature of Decision or Issue and Report Origin

1.1 This report seeks a decision from the Finance and Performance Committee on whether to extend the development contributions rebate scheme for social housing and, if so, whether the scheme criteria should be amended. The report also asks the Committee to decide whether staff should undertake further work on possible new rebate schemes.

1.2 This report is staff initiated in response to the development contributions rebate scheme for social housing expiring in December 2022 and also responds to Council requests for staff to look at possible new rebate schemes.

1.3 The decision in this report is of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy. The level of significance was determined by the decision being to extend a provision enabled by a previous decision and the finance impact for the Council being minor.

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Agrees that the development contributions rebate scheme for social housing is continued in accordance with the revised scheme criteria (Attachment A).

2. Notes that the revised criteria provides for:

a. Scheme funding to remain at $2.5 million;

b. The scheme to continue until 30 June 2027, depending on funding being available;

c. A developer being required to register a covenant on the title of all properties receiving a rebate that requires the development contributions to be paid if the property is to be used for any purpose other than social or affordable housing;

d. A declaration is required from applicants stating they can’t access funding from any other external source to cover the cost of the development contributions.

3. Agrees that no new development contribution rebate schemes are investigated further at this time.

3. Reason for Report Recommendations Ngā Take mō te Whakatau

Development contributions rebate scheme for social and affordable housing

3.1 Having the social housing rebate scheme continue enables the Council to achieve the following:

3.1.1 Support the actions of the Council’s Housing Policy 2019

o Develop consenting, rating and development contributions assistance policies to support social and affordable housing

3.1.2 Support the Council’s Community Housing Strategy 2021

o Incentivise the community housing and private sectors

o Sustainably fund and/or support new Council and/or CHP [community housing provider] units

3.2 The rebate scheme has received strong endorsement from community housing providers. Many report that the scheme is a positive and proactive initiative by the Council to support the community housing provider sector.

3.3 Some social and affordable housing developments do not require support from the rebate scheme as the development is fully funded from other sources like the Ministry of Housing and Urban Development, and some developers have chosen not to take up the rebate for other reasons. In order to ensure that only developments that need the rebate can apply staff have proposed introducing a declaration requirement to the scheme criteria.

3.4 Staff recommend the scheme continues with an amended criteria and with a fixed term life and finite funding. This provides the Council with clarity regarding the support being given to developers of new social housing and gives the opportunity for periodic review of the scheme and, if necessary, the opportunity to further refine scheme criteria.

Other possible new development contributions rebate schemes

3.5 In October 2021, Council resolved^{^[1]} for staff to consider possible new development contributions rebate scheme options. Staff have since looked into options for alternative rebate schemes with respect to the following:

3.5.1 energy efficient housing – to promote achievement of third party building performance standards

3.5.2 alternative housing – to support development of ‘alternative housing’ in the central and immediate inner city

3.5.3 community facilities - to support community organisations providing community facilities

3.6 Staff have assessed the possible new schemes and believe they are unlikely to influence developer decision-making, particularly once the Council no longer takes development contributions for three waters activities, as the value of the rebate will be considerably reduced.

3.7 In the case of a possible rebate scheme for community facilities developed by community organisations there are challenges clearly identifying which developments should or shouldn’t receive a rebate. Assisting developments of this nature may be better achieved through other mechanisms.

4. Alternative Options Considered Ētahi atu Kōwhiringa

Development contributions rebate scheme for social and affordable housing

4.1 Continue to operate the scheme using the current scheme criteria.

4.1.1 Advantages

· No changes are required.

· The Council continues to progress objectives of the Council’s Housing Policy 2019 and Community Housing Strategy 2021 through supporting the development of social and affordable housing.

4.1.2 Disadvantages

· Developments that don’t need the rebate support could still claim a rebate.

· Council unnecessarily foregoes some development contribution revenue.

4.2 Discontinue the development contributions rebates for social housing development.

4.2.1 Advantages

· No development contributions revenue would be foregone.

· No administration requirements for Council.

4.2.2 Disadvantages

· Development contribution charges could be a barrier to development of new social housing.

· The Council would not be using this policy lever to progress objectives of the Council’s Housing Policy 2019 or Community Housing Strategy 2021.

· The Council would not be using this policy lever to progress community outcomes related to appropriate and affordable housing.

Other possible new development contributions rebate schemes

4.3 Recommend the introduction of one or more new rebate schemes

4.3.1 Advantages

· Some developments may benefit from the rebate funding resulting in some developments occurring that otherwise wouldn’t, some developments occurring quicker than they otherwise would and some developments being of a larger scale than they otherwise would be.

4.3.2 Disadvantages

· Three waters reform means the scheme(s) would lose meaningful financial benefit for developers from 1 July 2024.

· Establishment costs for such a short scheme duration would be unreasonably high.

5. Detail Te Whakamahuki

Social Housing Rebate Scheme

Background

5.1 The Council established its development contribution rebate scheme for social housing in 2017 to give effect to an action from the Council’s Housing Policy 2016 to: “Develop consenting, rating and development contributions assistance policies to support social and affordable housing.”

5.2 The scheme criteria identifies the expected strategic outcomes of this rebate scheme as being

· Increase in social and/or affordable rental housing options.

· Increased supply of a broad range of residential development - encouraging the development of smaller housing options in response to the forecast increase in smaller households, rising levels of rental tenure, and an ageing population.

5.3 The rebate scheme is open to accredited community housing providers and charitable trusts with the provision of social housing being one of their objects. This means the Ōtautahi Community Housing Trust can (and has been able to) access rebate funding.

5.4 Note that Kāinga Ora and the Council are not eligible to gain accreditation as a community housing provider and therefore cannot access the rebate funds.

5.5 Rebates are allocated at the time a qualifying development submits a complete application for resource consent or building consent. The development contributions assessors then prepare an assessment of development contributions required and advise the developer the charges will be rebated when they meet the criteria for confirmation of a rebate, which is;

· the development has passed its first building inspection; and

· the developer has registered a restricting covenant in the Council’s favour on the title(s) which requires development contributions to be paid in the event the property is used for any purpose other than provision of social housing.

5.6 The scheme has a financial limit of $2.5 million. This was considered an appropriate level of funding that balanced a degree of certainty regarding access to the rebate for social and affordable housing developers with the ability for the Council to periodically review its commitment to the funding. The scheme criteria provided that it expired on 31 December 2022, again providing the Council with the opportunity to review its commitment to the scheme.

Current balance of the scheme

5.7 Details of the scheme’s current balance are:

Social housing rebate scheme fund 2022
Fund limit	$2,500,000
Confirmed Rebates	$1,016,221
Number of developments with confirmed rebates	17
Average value of rebate per development	$59,777
Number of units with confirmed rebates	116
Average value of rebate per residential unit	$8,760
Rebates allocated but pending confirmation	$534,251
Number of developments with rebates pending confirmation	6
Number of units with rebates pending confirmation	95
Remaining (unallocated) balance	$949,528

5.8 If all developments allocated a rebate but which haven’t been confirmed were to receive a rebate this would leave $950,000 in the scheme. Given the uptake of rebates since the scheme was created in 2017 staff believe this is likely to be sufficient funding to last through to the proposed closing date of the scheme of 30 June 2027.

5.9 If the funding is exhausted prior to closing of the scheme the Council can decide to extend the funding at any time. The Council can also decide to extend the scheme beyond its closing date if it chooses.

What has changed?

5.10 Since the social housing rebate scheme was created in 2017 the Government has introduced new funding streams for providers of public housing and social housing, particularly for registered community housing providers. There are a number of funding streams available meaning many developments can be fully funded by the Government negating the need for a development contributions rebate.

5.11 The Council then needs to decide whether to simply close the rebate scheme on the basis that for some developments at least the rebate isn’t required, or continue to offer the rebate for developments that don’t qualify to be fully government funded. To continue to make the rebate available the Council could require that developers self-manage a screening process by being required to sign a declaration that the development contribution isn’t funded or able to be funded from another source.

5.12 The other key consideration stems from three waters reform. A significant proportion of current development contributions are required for three waters infrastructure. When ownership of three waters assets and responsibility for service delivery shifts to a water services entity the value of a development contributions rebate based on current charges will be approximately $4,000 to $7,000 per housing unit. The Council needs to consider whether this level of assistance is meaningful and will result in facilitating provision of social housing.

5.13 The staff recommend the Council continues the social housing rebate scheme but with amended scheme criteria requiring developers sign a declaration. It is recommended that no additional funding be made available at this time as it is expected that the current funding is sufficient to extend the scheme to 30 June 2027, the end of the period covered by the Council’s next Long Term Plan. The Council can review the efficacy of the scheme at that time and decide whether to continue the scheme and if so under what criteria.

Possible new rebate schemes

5.14 At the time the Council decided to close the central city residential rebate scheme staff were asked to look at possible rebate schemes. At that time staff and elected members identified the following types of development might be suitable for rebate scheme support:

5.14.1 Energy efficient housing. This would see houses that meet a third party accreditation standard for low energy demand, such as Homestar 6 and above receiving a development contributions rebate.

The Government is in the process of raising energy efficiency standards for all new homes to close to Homestar 6 standard and incrementally increasing minimum stands so that by 2030 the minimum standard is similar to the current Passive Home standard. This would require the scheme to be continually adjusted and eventually becoming redundant.

When taking the significant reduction in development contribution charges resulting from three waters reform into account staff don’t believe the scheme offers enough of an incentive to influence developer decision-making to warrant introducing the scheme.

5.14.2 Alternative housing in the central city. This would support development of “alternative housing” options in an alternative housing support area, comprising the Central City and immediate inner city. This would be to support the Council’s Central City Residential Programme (Project 8011). The types of housing this would target includes:

· Papakāinga housing for Maori communal or general living.

· Cooperative housing comprised of shared ownership (e.g. via a trust, including for rental) and co-living.

· Shared equity housing developed by accredited progressive home ownership providers (PHOs) and/or community housing providers (CHPs).

· Housing by other trusts or not-for-profit organisations comprised of mixed tenures (i.e. both owned and rented units) or alternative tenures (e.g. leasehold, shared equity, rent to own/buy).

It is very difficult to gauge the level of demand for these types of housing, while the Council already supports some housing of these types through its development contributions rebate schemes for social housing and papakāinga housing.

5.14.3 Community facilities developed by community organisations. Community organisations sometimes develop new community facilities to service local communities. These might include sports facilities, community centres, drop-in centres etc.

While development contributions charges for these types of developments are often quite modest the organisations tend to be extremely cost-constrained so will look for ways for the Council to assist. Often the Council will have provided grant funding prior to being asked to waive development contributions.

Staff have looked at how such a scheme might be structured and believe operating a rebate scheme for these types of developments is likely to be problematic in terms of defining which organisations and developments should qualify and which shouldn’t in a way that can be consistently applied the Council’s development contributions team.

Organisations are currently advised to apply for a remission of development contributions under section 4.2.1 of the Council’s Development Contributions Policy 2021 which provides for the Council to provide a remission in “unique and compelling circumstances”. In practice this has proved problematic for the Council to approve as it has looked to avoid setting a precedent with respect to providing a remission.

Staff could investigate development of a decision-making framework for granting a remission under the current policy provisions that allows for those provisions to be utilised effectively.

Other

5.15 Community views. When staff consulted with community housing providers on the Council’s Community Housing Strategy, several noted the importance of the rebate in assisting with the viability of their new housing builds, and as part of a sound policy approach to assist community housing provision.

5.16 The decision affects all wards/Community Board areas.

6. Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic AlignmentTe Rautaki Tīaroaro

6.1 This report supports the Council’s Housing Policy 2019 and the Council’s Community Housing Strategy 2021 by encouraging new social housing development by the non-government community housing sector.

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

6.2.1 Activity: Strategic Planning, Future Development and Regeneration

· Level of Service: 17.0.1.2 Advice to Council on high priority policy and planning issues that affect the City. Advice is aligned with and delivers on the governance expectations as evidenced through the Council Strategic Framework. - Annual strategy and policy forward work programme is aligned to Council Strategic Framework, and is submitted to Executive Leadership Team, and Council as required.

Policy Consistency Te Whai Kaupapa here

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

6.3.1 Housing Policy 2019

6.3.2 Community Housing Strategy 2021

Impact on Mana Whenua Ngā Whai Take Mana Whenua

6.4 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.

6.5 The decision involves a matter of interest to Mana Whenua and could impact on our agreed partnership priorities with Ngā Papatipu Rūnanga.

6.6 Ngāi Tahu has, through the Greater Christchurch Partnership, committed to developing a Kāinga Nohoanga Strategy which will provide direction for the provision of affordable housing for Māori in Greater Christchurch. It is likely that at least some housing developed in response to the Strategy will qualify for a development contribution rebate under the social housing rebate scheme. The Council does also have a rebate scheme for development in the Papakāinga/ Kāinga Nohoanga zones of the District Plan.

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

6.7 New housing normally has lower energy requirements than older housing and normally has less embedded carbon per housing unit.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

6.8 Social housing is often designed and built to include specific accessibility features. Specific design features are at the discretion of the developer.

7. Resource Implications Ngā Hīraunga Rauemi

Capex/Opex Ngā Utu Whakahaere

7.1 Cost to Implement – Development contribution rebates are revenue the Council agrees to forego. This revenue would normally be used to fund growth infrastructure. Minor adjustments can be made to the Council’s development contributions budgeted revenue to reflect the impact of rebates.

7.2 Maintenance/Ongoing costs – The cost of administering the scheme is less than minor and is funded from the normal operating budget of the development contributions assessment team.

7.3 Funding Source – Ultimately the rebates are funding from rates.

8. Legal Implications Ngā Hīraunga ā-Ture

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

8.1 The Council is able to make this decision using the powers of general competence provided to councils through section 12 of the Local Government Act (2002).

8.2 The Finance and Performance Committee of the Whole has the delegated authority to make decisions associated with development contributions other than adopting the Council’s Development Contributions Policy.

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

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

9. Risk Management Implications Ngā Hīraunga Tūraru

9.1 In designing the rebate scheme and its criteria the following risks and mitigations have been considered:

9.1.1 Risk - a developer may claim the rebate and then either use the development for purposes other than for social housing or sell the property and the new owner uses it for a purpose other than to provide social housing.

Mitigation - a developer must register a covenant against the title in the Council’s favour that requires the payment of all rebated development contributions if the property is to be used for purposes other than to provide social housing.

9.1.2 Risk - a large development may claim a significant share of the rebate funding for the scheme, potentially leaving other developments unable to receive a rebate.

Mitigation - the Finance and Performance Committee must approve individual rebates in excess of $500,000. This provides elected members with effective real-time oversight of the available rebate funding.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Development Contributions Rebate Scheme Criteria Social Housing 2023 - Draft	23/274311	100

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

Document Name – Location / File Link

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

Gavin Thomas - Principal Advisor Economic Policy

Ellen Cavanagh - Senior Policy Analyst

Approved By

David Griffiths - Head of Strategic Policy & Resilience

Lynn McClelland - Assistant Chief Executive Strategic Policy and Performance

Leah Scales - General Manager Resources/Chief Financial Officer

Finance and Performance Committee

22 March 2023

11. Christchurch Foundation - Annual Report 2021/22 and Half Year Report for the six months ending 31 December 2022.
Reference / Te Tohutoro:	23/48834
Report of / Te Pou Matua:	Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz).
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)

1. Nature of Information Update and Report Origin

1.1 This report provides the Christchurch Foundation's Annual Report for the year ended 30 June 2022, and its half year report for the period 1 July 2022 to 31 December 2022.

1.2 It has been written following publication of the Foundation's Annual Report on its website in late 2022 and receipt of its interim report on 7 February 2023.

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Notes the Christchurch Foundation’s Annual Report for 2021/22 and half year report for the period 1 July to 31 December 2022; and

2. Notes that Council support funding to the Foundation ends at 1 July 2023.

3. Brief Summary

3.1 The Foundation is not a Council-controlled organisation as defined in section 6 of the Local Government Act 2002. However, the Council has the following interests in it:

· provides funding to assist it to meet administration costs incurred over its establishment period, six years ending on 1 July 2023 – by this date the Council will have funded around $3 million of establishment administration and operating costs;

· receives grants for community facilities and other assets; and

· on behalf of the local community, benefits from its charitable activities.

3.2 The Annual and Half Year reports are at Attachments A and B respectively.

3.3 The Chair of the Foundation’s board, Mr Humphry Rolleston is to stand down in April 2023.

Financial outturn

3.4 When the Foundation set its budget in May 2021, it was in the context of ongoing uncertainty about COVID-19 restrictions. The first six months of the 2021/22 financial year saw restrictions continue, with progressive liberalisation (including international border re-opening) until March 2022. The budget for the first half of 2022/23 was cautiously optimistic about the extent of activity the Foundation could undertake, noting that global economic expectations were unfavourable.

3.5 Between 1 July 2021 and 31 December 22 (18 months as per the attached financial reports), key financial outcomes were the receipt of $438,000 from the Foundation’s UK sister entity for the reinstatement of the Christ Church Cathedral and the commencement of new funding streams of fees-for-service from third parties of $200,000 over the 18 months, and forecast to be $225,000 in 2022/23.

3.6 At 30 June 2022, two of the Foundation’s partners – Southbase and Spark completed their agreements for sponsorship funding for Turanga of jointly $200,000 per annum (Southbase $50,000 per annum; in total $250,000 and Spark $150,000 per annum; in total $750,000). TSB’s commitment was for 10 years at $150,000 per annum, which has five years to run.

3.7 The Foundation expects to break-even for the 2022/23 financial year.

Annual Report – 2021/22

Operating revenue and expenditure

	Actual $000	Budget $000	Variance $000	2020/21 $000	Variance $000
Operating revenue	637	690	-53	588	+49
Operating expenditure	(754)	(684)	-70	(731)	-23
Operating surplus/(deficit)	(117)	6	-123	(143)	+26

3.8 The costs and revenues are those that reflect the Foundation’s costs of doing business. It is these costs that the Council has, to date made funding grants available to partly meet. Operating revenue includes the Council’s grant of $350,000.

Half year report – 1 July – 31 December 2022

	Actual $000	Budget $000	Variance $000	2021/22 $000	Variance $000
Operating revenue	215	260	-45	280	-65
Operating expenditure	(344)	(383)	+39	(264)	-80
Operating surplus/(deficit)	(129)	(123)	-6	16	-145

3.9 Between years, the Council’s grant has reduced by $75,000 and fees-for-service have reduced by $25,000.

3.10 Note that the last page of the Foundation’s Half Year report (at Attachment B) records the recipients of distributions since the Foundation’s inception.

Impact Report

3.11 The Foundation commissioned the development of a framework for the purposes of measuring and reporting on the broader impact that its activities have on greater Christchurch. Its first report has been published to its website at CF_Impact Report_2022 v2.6.pdf (christchurchfoundation.org.nz). It records the Foundation’s many and varied activities undertaken for the expected benefit of Christchurch’s residents. However, it does not evaluate the magnitude of change these activities have had which, at this stage of the Foundation’s life cycle is too early. Evaluation is expected following the next Vital Signs research project in 2024.

3.12 The Impact Report identifies the activities that the Foundation undertakes, some of which are of a facilitation, engagement and advisory nature, and others are more substantial in philanthropic leadership and brokering giving. Following its Vital Signs research project in 2024, the Foundation is intending to include an assessment of the change it has created through its programmes in its next Impact Report.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Christchurch Foundation - Annual Report 2021/22	23/332350	106
b ⇩	Christchurch Foundation - Half year report for six months ended 31 December 2022	23/332337	125

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

Document Name – Location / File Link

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

Author	Linda Gibb - Performance Monitoring Advisor CCO
Approved By	Leah Scales - General Manager Resources/Chief Financial Officer

Finance and Performance Committee

22 March 2023

12. Council-controlled organisations - Half year performance reports for the six months ending 31 December 2022
Reference / Te Tohutoro:	23/18332
Report of / Te Pou Matua:	Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz).
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)

1. Nature of Information Update and Report Origin

1.1 To review the half year performance reports for the period 1 July-31 December 2022 for the following Council-controlled organisations (CCOs) - Civic Building Ltd, Local Government Funding Agency, Riccarton Bush Trust and Te Kaha Project Delivery Ltd.

1.2 This report has been written following receiving the CCOs' half year performance reports for 2022/23.

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Receives the half year reports for the period 1 July-31 December 2022 for the following Council-controlled organisations:

· Civic Building Ltd

· Local Government Funding Agency

· Riccarton Bush Trust

· Te Kaha Project Delivery Ltd.

3. Brief Summary

3.1 The half year reports were received on time – on or before the due date of 28 February pursuant to section 66(2)) of the Local Government Act 2002 (LGA).

3.2 Content requirements are provided for in section 68 of the LGA - the information necessary to enable an informed assessment of the operations of the CCO and its subsidiaries by including a comparison of performance against the SOI and an explanation of any material variances between that performance and the SOI. It must also state the dividend, if any, authorised to be paid by the CCO.

Civic Building Ltd (Attachment A)

Half year report

3.3 The company’s income is generated mostly from the Council’s finance lease payments for occupancy of Civic Building, less the costs of servicing the loan advanced by the Council for purchasing the building.

Actual

$000

SOI target

$000

Variance

$000

Last year

$000

Variance

$000

Revenue

Expenses

Net profit before tax

2,204

2,109

2,162

1,944

218

+42

-165

-123

2,218

2,256

(38)

-14

+147

+133

Total assets

51,861

57,191

-5,330

56,493

-4,632

3.4 During the six month period, CBL repaid debt and equity principal of $4.5 million. The transaction was not forecast in the SOI as the board had not, at that stage decided to make the repayment. The flow on effect is a reduction in interest payable on the borrowings and to reduce the occupancy lease payments. The repayment of loan principal has reduced the value of total assets as shown in the table above.

3.5 Against both SOI targets and last year’s outturn revenues variances are immaterial at +1.9% and -0.6% respectively. Variances under 5% are below the commentary threshold.

3.6 Against the SOI target, expenditure is higher by $165,000 reflecting an extra month’s insurance payment of around $23,000 which missed the prior period to which it belonged, an increase in rates of around $57,000 (6%) and increased interest costs of $87,000 on the loan from the sharp rise in market rates compared with those forecast. This notwithstanding the lower loan principal on which interest was calculated.

3.7 Against the same period last year, expenses are lower by $147,000 which reflects seven months’ of insurance payments (versus five months in the prior year) of around $46,000 and lower interest costs of $186,000 due to repayment of loan principal and equity.

3.8 Non-financial performance targets continue to be progressed in the ordinary course of business.

Local Government Funding Agency (Attachment B)

3.9 The LGFA is owned by the New Zealand Government (11.1%) and 30 councils (88.9%). Christchurch City Council, and eight other councils all have equal shareholdings of 8.3% each and the remaining 14.2% is held by 22 other local authorities.

3.10 Its financial performance for the half-year compared with the half year to 31 December 2021 is shown in the table below. The LGFA did not provide interim targets in its SOI or its half year report. For guidance, the full year targets are shown in the last column.

Target	Actual $m	Last year $m	Variance $m	Full year target $m
Net operating income	5.6	9.7	-4.1	12.2
Issuance, on-lending and operating expenses	4.5	3.8	+0.7	9.4
Net profit	1.1	5.9	-4.8	2.8

3.11 Actual revenue and expenses are just under 50% of full year targets, and the LGFA’s assessment is that it is likely to meet its full year targets.

3.12 Against the prior year’s half year performance, net profit is significantly lower (circa 81%) which was anticipated in full year SOI targets. This is due to a combination of sharp rises in interest rates in the market and an increase in the size of the liquid asset portfolio to meet demand for short term financing (the more liquid the assets, the lower the interest rates).

Target	Actual $b	Last year $b	Variance $b
New lending (long term)	1.8	1.6	+0.2
New lending (short term)	0.5	0.4	+0.1
Total lending to participating councils	15,751	13,513	+2,238

3.13 Total lending to participating councils is ahead of last year’s by $2.2 billion of which $1.82 billion was new long term lending and just under $0.5 billion was short-dated.

3.14 Non-financial performance targets have all been met except one – “meet reduction targets outlined in the carbon reduction management plan”. LGFA advises that it is currently working on translating the target into annual carbon reduction plan targets.

Riccarton Bush Trust (Attachment C)

3.15 The Trust is a charitable trust, incorporated under an Act of Parliament in 1914. The Riccarton Bush Amendment Act 2012 provides that the Trust must provide a financial plan to the Council annually for review and approval. The Trust administers 7.8 hectares of native bush and Riccarton (historic) House.

Actual

$000

SOI target

$000

Variance

$000

Last year

$000

Variance

$000

Revenue

Expenses¹

Surplus/(deficit)

465

(631)

(166)

284

(284)

+181

-347

-166

327

(422)

(95)

+138

-209

-71

Trust Fund Balance

16,100

13,702

+2,398

¹target does not include non-cash expenses such as depreciation.

3.16 Against the SOI target, the deficit is higher by $166,000 made up of:

· Higher revenue by $181,000 largely due to the Council grant of $161,000 for painting Riccarton House, visitor income and café commission from more visitors than expected post COVID-19 of $8,800 plus one-off rental received from a film company of around $4,700 and the impact of higher interest rates of $3,700; and

· Higher operating costs by $347,000 of which $167,000 was the costs incurred for painting Riccarton House, $152,000 for depreciation which is not included in the SOI target as it is non-cash, building maintenance to Riccarton House of $7,100 as a result of repairs discovered during the painting programme, around $13,000 in salary and wage pressures and $6,000 for grounds and trees’ maintenance. The latter is a timing issue that will come into line in the second half of the year.

3.17 Against the 2021/22 half year, the deficit is higher by $71,000 made up of:

· Higher revenue by $138,000 largely due to the Council grant of $161,000 for painting Riccarton House, donations and visitor revenue of $20,000, film company revenue of $4,700 and donations of $6,000 for the bush enhancement project, offset by the impact of a one-off capital grant in the prior period of $10,000 and a lower Council operating grant of $47,000; and

· Higher operating costs by $209,000 from Riccarton House painting costs of $167,000, repairs and maintenance to the House of $19,000 revealed as being required during painting, depreciation charge of $10,000 due to uplift in valuation of the House and increased bush and grounds’ maintenance costs of $13,000, in part relating to the cost of the four yearly tree survey and in part a timing issue which will even out by year end.

3.18 Non-financial performance targets have all been met except one relating to bush enhancements – “replace board walk and improve interpretation and infrastructure”. This project has been delayed as a result of a longer than anticipated planning process and ambitious targets but is due to start on the ground shortly.

Te Kaha Project Delivery Ltd (Attachment E)

3.19 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.

Actual

$000

SOI target

$000

Last year

$000

Revenue / Expenses

Operating surplus/(deficit)

151

165

121

Not reported

3.20 The actual revenue and expense is lower than the SOI target by $14,000 which is a timing issue between an equal spread of forecast remittances and the actual timing of invoicing from the directors.

3.21 Non-financial performance targets – have all been met or are in progress in the ordinary course of business.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Civic Building Ltd - Half year report for the period 1 July-31 December 2022	23/330105	150
b ⇩	Local Government Funding Agency - Half year report for the period 1 July-31 December 2022	23/330199	162
c ⇩	Riccarton Bush Trust - Half year report for the period 1 July-31 December 2022	23/330115	182
d ⇩	Te Kaha Project Delivery Ltd - Half year report for the period 1 July-31 December 2022	23/330219	194

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

Document Name – Location / File Link

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

Author	Linda Gibb - Performance Monitoring Advisor CCO
Approved By	Leah Scales - General Manager Resources/Chief Financial Officer

Finance and Performance Committee

22 March 2023

13. Venues Ōtautahi - Half year performance report and interim financial statements for the six months ending 31 December 2022
Reference / Te Tohutoro:	23/18229
Report of / Te Pou Matua:	Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz)
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)

1. Nature of Information Update and Report Origin

1.1 This report provides Venues Ōtautahi Ltd's (VŌ's) half year performance update and interim financial statements for the six months ending 31 December 2022.

1.2 This report has been written following receiving VŌ's half year (interim) performance report on 28 February 2023.

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Receives Venues Ōtautahi ‘s Quarter 2, 2022/23 performance report for the period 1 July to 31 December 2022.

3. Brief Summary

3.1 VŌ’s performance report is at Attachment A and its unaudited financial statements are at Attachment B.

3.2 VŌ has complied with section 66 of the Local Government Act 2002 which requires a Council-controlled organisation (CCO) to report on the organisation’s operations to its shareholders within two months after the end of the first half of each financial year (by 28 February).

Financial Performance

3.3 The following table presents VŌ’s operating performance for the six months to 31 December 2022, as discussed in its performance report. It shows a major improvement in operating profitability following the difficult COVID-19 affected years from March 2020 to March 2022.

	Actual $000	Budget $000	Variance $000	Prior year $000	Variance $000
Operational outturn	(1,001)	(1,907)	+1,142	(1,166)	+165
Council subsidy	2,025	2,025	0	1,967	+58
EBITDA	1,024	118	+906	801	+223

	Actual	Budget	Variance	Prior year	Variance
Number of events	253	197	+56	109	+144
Number of visitors	327,988	200,000	+127,988	150,531	+177,457

3.4 Little needs said about VŌ’s improved performance, at the EBITDA level, other than to note that its variance against last year includes around $1.8 million of the Government’s COVID-19 wage subsidy, leave support and resurgence support.

3.5 The performance report focuses on operating performance; it excludes uncontrollable and fixed overheads. However, the half year financial accounts record the full surplus/(deficit) before income tax, which is reconciled as follows:

	2022 $000	2021 $000
EBITDA (performance report)	1,024	801
Transfer out (below EBITDA) COVID-19 Government support	(13)	(1,839)
Plus interest revenue	178	12
Surplus before other non-exchange revenue and other expenses (financial statements)	1,189	(1,026)
Transfer in of COVID-19 Government support	13	1,839
Capital grant from CCC	3,654	0
Depreciation/amortisation	(4,353)	(4,089)
Interest expense (on legacy debt)	(585)	(570)
Surplus/(deficit) before tax	(81)	(3,846)

3.6 EBITDA from the performance report largely characterises VŌ’s discretionary operating performance – where it can make a difference by choosing various actions. The better it does at this level in financial terms, the more it can contribute to meeting the overhead costs that are shown below EBITDA. The costs below EBITDA cannot, on a business as usual basis be influenced by VŌ.

3.7 The difference between EBITDA in the performance report and Surplus before other non-exchange revenue and other expenses in the financial statements reflects a different way of allocating costs and revenues to report discretionary performance as opposed to financial reporting accounting rule requirements.

3.8 The most relevant performance measures for the Council are the first set of EBITDA numbers (which include the government COVID-19 support since it was for the purposes of revenue that would have been received had COVID-19 restrictions not displaced it).

3.9 The Council’s operating grant does not cover all the ownership costs relating to the Christchurch Arena and Town Hall. VŌ itself meets around one third of these costs from its operational profits.

Non-financial performance targets

3.10 All targets have either been met year to date, or are on track to be met by full year. One of the targets met at the half year point is 40 events receiving the community rate. It is difficult for VŌ to cap the community rate, but nevertheless there is a cost that comes with providing discounts which ultimately impacts its profitability ($110,000 reflecting the incremental costs of utilities, cleaning and repair and maintenance due to wear and tear).

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Venues Ōtautahi - Half year report 1 July-31 December 2022	23/346708	210
b ⇩	Venues Ōtautahi - Half year financial statements for the period 1 July-31 December 2022	23/346707	221

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

Document Name – Location / File Link

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

Author	Linda Gibb - Performance Monitoring Advisor CCO
Approved By	Leah Scales - General Manager Resources/Chief Financial Officer

Finance and Performance Committee

22 March 2023

14. Christchurch City Holdings Ltd - Half year report and financial statements for the Group for the period 1 July-31 December 2022
Reference / Te Tohutoro:	23/199911
Report of / Te Pou Matua:	Linda Gibb, Performance Advisor, External Reporting and Governance, Resources (linda.gibb@ccc.govt.nz)
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)

1. Nature of Information Update and Report Origin

1.1 The purpose of this report is to provide Christchurch City Holdings Ltd's (CCHL's) Quarter 2, 2022/23 'traffic lights' performance report for its group and Interim Report (and financial statements) released to the market on 28 February 2023. It also provides Christchurch International Airport Ltd's (CIAL's) Interim Report and financial statements which were released to the market on the same day.

1.2 This report has been generated following receiving the reports on 24 February 2023 within the timeframe required by section 66 of the Local Government Act 2002 (LGA).

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Receives Christchurch City Holdings Ltd’s ‘traffic lights’ performance report for Quarter 2 2022/23 (1 October-31 December 2022) and Interim Report for the half year (1 July-31 December 2022); and

2. Notes Christchurch International Airport Ltd’s Interim Report for the half year (1 July-31 December 2022).

3. Brief Summary

Interim Report

3.1 CCHL’s Interim Report for the six months ending 31 December 2022 was issued to the NZX on 28 February and is at Attachment A. It presents the group’s half year financial outturn in comparison with the same period in the prior year (2021). Refer to page 44 of the Interim Report for a break-down of financial performance by subsidiary.

3.2 The group’s performance for the half year has been a marked improvement over the prior year. The prior half year had been subject to a two week nationwide lockdown and extended level 3 and 4 restrictions in Auckland and surrounding areas from August to December. However, the group’s profitability reflects, among other things a quicker return to pre-COVID-19 levels of business driven mostly by CIAL, Enable and City Care.

3.3 The following graph shows the profitability trend since pre-COVID-19 (note that financial profitability is only one component of CCHL’s returns). Note that Orion’s returns are for nine months, all others are six months.

3.4 The turndown in Orion’s profitability is the impact that the default-price-quality regulation has had on its ability to profit.

3.5 The following table shows each subsidiary’s profitability against its six month target, the same period in the prior year and the full SOI forecast for the year ending 30 June 2023:

3.6 The Interim Report notes that the group has, over the half year faced the challenges of rising interest rates, inflationary pressures, and resourcing constraints. Nevertheless, in aggregate it has achieved profitability that is 16.4% ahead of the half year budgets, almost 70% of the full year SOI targets and almost 50% ahead of the prior half year.

3.7 Against SOI targets– profitability exceeds what were reasonably conservative forecasts due to uncertainty of future impacts of COVID-19 on the group’s activities.

3.8 CIAL, Enable and City Care have achieved the greatest increases in profit against SOI targets – CIAL from swifter recovery of passenger numbers to near pre-pandemic levels in the case of domestic travel, Enable from increased customer connections and the ongoing benefits of strong cost control generated to help manage potential COVID-19 impacts back in 2020/21 and City Care from overhead efficiencies and the acquisition of the Spencer Henshaw group finalised in September last year.

3.9 In the same period in the prior year (July-December 2021) performance has improved for the same reasons as against budget, but also including the impact of the COVID-19 restrictions that occurred in the prior period. These were two weeks of nationwide level 4 lockdown and ongoing level 3 and 4 restrictions affecting Auckland and surrounds through to December. This had the greatest detrimental impact on CIAL and City Care (which generates around one third of its revenue in Auckland) as can be seen by the green bars in the above chart. Enable has continued to grow its connections annually to almost 147,000 (at 30 June 2022 143,300).

Dividends

3.10 CCHL advises that there is no change in its forecast dividend payment to the Council for 2022/23 of $32.4 million. All CCHL subsidiaries (other than City Care) are projecting payment of dividends to shareholders (including minority shareholders) to be in line with SOI targets totalling $85 million. As part of its agreement with CCHL for the Spencer Henshaw acquisition, City Care is not required to make a distribution this year (its target for which had been $4.1 million). This does not affect the quantum of dividend that CCHL will pay to the Council.

Balance Sheet

3.11 Total assets are valued at $5.4 billion, an increase of $180 million over 30 June 2022 year-end. This was largely due to ongoing infrastructure and property investment across the group.

CCHL group - quarter 2 ‘traffic lights’ performance report

3.12 CCHL’s Quarter 2 ‘traffic lights’ performance report against Statement of Intent (SOI) targets for the quarter 1 October to 31 December 2022 is at Attachment B.

3.13 The Quarter 2 performance report indicates several areas across the group where performance against full year SOI targets has become uncertain. Explanations are provided in the report. Of most note are:

· Lyttelton Port’s target of conducting a bio-diesel trial in its plant is no longer achievable and it is instead looking to electrification for long-term emissions reduction. This will not impact LPC’s timeline by which it expects to become net neutral in emissions.

· Enable has a target of no more than three total recordable injuries and no serious harm injuries. This financial year so far there have been two, but these have been minor.

Christchurch International Airport Ltd

3.14 CIAL also released its Interim Report to the NZX on 28 February. It is at Attachment C. As noted above, CIAL’s financial performance largely rests with the quicker than expected return to almost pre-COVID-19 levels of air travel, particularly in the domestic market. The financial return is characterised by a 50% increase in operating revenue and an accompanying 10% increase in operating costs. Of the $7.7 million increase in expenses, $3 million is financing and interest costs, with the remainder direct operating costs.

3.15 The following chart shows how little expenditure changes as passenger numbers change, (within at least current broad demand and supply levels):

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Christchurch City Holdings Ltd Interim Report and financial Statements for the half year 1 July-31 December 2022	23/315484	236
b ⇩	Christchurch City Holdings Ltd Quarter 2, 2022/23 Traffic Lights Report	23/315438	296
c ⇩	Christchurch International Airport Ltd Interim Report for the half year 1 July-31 December 2022	23/315457	309

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

Document Name – Location / File Link

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

Author

Linda Gibb - Performance Monitoring Advisor CCO

Approved By

Russell Holden - Head of Finance

Leah Scales - General Manager Resources/Chief Financial Officer

Finance and Performance Committee

22 March 2023

15. Appointment of elected members to the boards of ChristchurchNZ Holdings Ltd, Venues Ōtautahi and Civic Building Ltd
Reference / Te Tohutoro:	23/51843
Report of / Te Pou Matua:	Linda Gibb, Performance Advisor, Resources Group (linda.gibb@ccc.govt.nz).
General Manager / Pouwhakarae:	Leah Scales, General Manager Resources/Chief Financial Officer (Leah.Scales@ccc.govt.nz)

1. Nature of Decision or Issue and Report Origin

1.1 This report proposes the appointment of elected members to the boards of ChristchurchNZ Holdings Ltd (CNZHL), Venues Ōtautahi (VŌ) and Civic Building Ltd (CBL) for the current 2023-2025 triennium.

1.2 This report has been written following advice from the Apppointments' Committee about the process it has followed to reach recommendations for appointments of elected members to each of the CCOs.

1.3 The Appointments’ Committee’s report to the Council’s with its recommended appointees has not yet been completed as interviews for the board roles were only completed yesterday, 15 March. The positions were heavily subscribed for and as a result the work required of the Appointments' Committee was more time consuming than expected.

1.4 The Appointments’ Committee’s report will be finalised and circulated separately prior to the Finance and Performance meeting. It will be added to this report as Attachment A.

1.5 Staff consider it is undesirable to defer making the appointments as the three boards need the full complement of directors to give the boards the full capacity and capability to exercise their CCO governance responsibilities.

1.6 The Council established the Appointments’ Committee at its meeting on 25 January 2023 (CNCL/2023/00003 refers) comprising the following members - Chair of ChristchurchNZ Holdings Ltd, Chair of Venues Ōtautahi and the Mayor.

1.7 The Committee was charged with undertaking the work required, as prescribed by the Council’s Policy for the Appointment and Remuneration of Directors of Council Organisations to recommend elected member appointments to the boards of CNZHL, VŌ and CBL.

1.8 Council staff consider the process advised by the Appointments’ Committee as having been undertaken is consistent with the Council’s Policy for the Appointment and Remuneration of Directors of Council Organisations.

1.9 The Appointments' Committee recommends the following elected members be appointed for the current triennium, effective immediately and ending at the 2025 local body election:

· Councillors [insert two names] to CNZHL;

· Councillors [insert two names] to VŌ; and

· Councillors [insert three names] to CBL.

1.10 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 decisions might impact the community.

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Approves the following elected member appointments to Council-controlled organisations’ boards for a term of approximately three years each, effective immediately and expiring at the 2025 local body election:

Councillor [insert name] and Councillor [insert name] to ChristchurchNZ Holdings Ltd;

Councillor [insert name] and Councillor [insert name] to Venues Ōtautahi Ltd; and

Councillor [insert name], Councillor [insert name] and Councillor [insert name] to Civic Building Ltd.

3. Reason for Report Recommendations Ngā Take mō te Whakatau

3.1 The appointments’ process undertaken meets the requirements of the Appointments' Policy and the Council’s requirements per its 25 January 2023 resolution (CNCL/2023/00003 refers) for work to be undertaken to recommend elected member appointments to the boards of CNZHL, VŌ and CBL.

4. Alternative Options Considered Ētahi atu Kōwhiringa

4.1 The only alternative option is to not appoint elected members to the CCO boards which would be out of step with the Council’s 25 January decisions.

5. Policy Framework Implications Ngā Hīraunga ā- Kaupapa here

Strategic AlignmentTe Rautaki Tīaroaro

5.1 This report is consistent with the Council’s governance policy which reflects its views of good governance in the local government context. It is not specifically related to the Council's Long Term Plan (2021 - 2031).

Policy Consistency Te Whai Kaupapa here

5.2 The decision sought is consistent with the Council’s Plans and Policies. In particular, the requirements for director appointments contained in the Council’s Appointments’ Policy.

Impact on Mana Whenua Ngā Whai Take Mana Whenua

5.3 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.

5.4 The decision does not involve a matter of interest to Mana Whenua and will not impact on our agreed partnership priorities with Ngā Papatipu Rūnanga.

5.5 Governance arrangements that are optimal benefit the entire community.

Climate Change Impact Considerations Ngā Whai Whakaaro mā te Āhuarangi

5.6 Not relevant to this decision.

Accessibility Considerations Ngā Whai Whakaaro mā te Hunga Hauā

5.7 Not relevant to this decision.

Capex/Opex Ngā Utu Whakahaere

5.8 Cost to Implement – there is no impact on the Council’s costs as a result of the recommendations in this report.

6. Legal Implications Ngā Hīraunga ā-Ture

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

6.1 Local Government Act 2002.

Other Legal Implications Ētahi atu Hīraunga-ā-Ture

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

7. Risk Management Implications Ngā Hīraunga Tūraru

7.1 Not relevant.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a	Appointments' Committee - Recommendations for elected members appointments to CCO boards (Under Separate Cover)

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

Document Name – Location / File Link

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

Author	Linda Gibb - Performance Monitoring Advisor CCO
Approved By	Leah Scales - General Manager Resources/Chief Financial Officer

ITEM NO.	GENERAL SUBJECT OF EACH MATTER TO BE CONSIDERED	SECTION	SUBCLAUSE AND REASON UNDER THE ACT	PLAIN ENGLISH REASON	WHEN REPORTS CAN BE RELEASED
17.	Public Excluded Finance and Performance Committee Minutes - 22 February 2023			Refer to the previous public excluded reason in the agendas for these meetings.
18.	Christchurch City Holdings Ltd - Deputy Chair Appointment	s7(2)(a)	Protection of Privacy of Natural Persons	To protect the reputation of the candidate in the event the appointment is not approved.	As soon as the Council makes its decision and the candidate is notified.
19.	Christchurch City Holdings Ltd - Quarter 2 2022/23 Strategic Update	s7(2)(b)(ii)	Prejudice Commercial Position	The report contains commercial information which, if released publicly could be detrimental to CCHL's financial performance for the year.	After release of CCHL's Annual Report by the end of September 2023.
20.	Insurance Subcommittee Part A Report	s7(2)(g)	Maintain Legal Professional Privilege	To keep legal advice confidential.	The report will remain withheld from public release until the ground for withholding under the Local Government Official Information and Meetings Act no longer applies.