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.

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Finance and Performance Committee

Open Minutes

Date: Wednesday 26 June 2024

Time: 9.30 am

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

Present

Chairperson

Deputy Chairperson

Members

Councillor Sam MacDonald

Councillor Melanie Coker

Councillor Kelly Barber

Councillor Tyrone Fields

Councillor James Gough – via audio / visual link

Councillor Tyla Harrison-Hunt

Councillor Victoria Henstock

Councillor Yani Johanson

Councillor Aaron Keown

Councillor Jake McLellan

Councillor Andrei Moore – via audio / visual link

Councillor Mark Peters

Councillor Tim Scandrett

Councillor Sara Templeton

Principal Advisor

Bede Carran

General Manager Finance, Risk & Performance / CFO

Tel: 941 8999

David Corlett

Democratic Services 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: All Councillors

The agenda was dealt with in the following order.

1. Apologies Ngā Whakapāha

Part C

Committee Resolved FPCO/2024/00036

That the apologies for absence from Deputy Mayor Cotter, Mayor Mauger and Councillor Donovan, and apology for lateness from Councillor Moore and Councillor Harrison-Hunt, and a partial absence from Councillor Gough be accepted.

Councillor MacDonald/Councillor Scandrett Carried

2. Declarations of Interest Ngā Whakapuaki Aronga

Part B

Councillors Gough, MacDonald and McLellan declared an interest in Item 10 - Council-controlled organisations - Sundry Reports (Civic Building).

Councillor Peters declared an interest in Item 10 - Council-controlled organisations - Sundry Reports (Riccarton Bush Trust).

Councillor Fields declared an interest in Item 10 - Council-controlled organisations - Sundry Reports (Rod Donald Trust).

Councillors MacDonald and Templeton declared interest in Item 12 - Christchurch City Holdings Ltd - Quarter 3 Performance Report and Public Excluded Item 16 – Christchurch City Holdings Ltd – Strategic Issues Report as at June 2024.

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

Part C

Committee Resolved FPCO/2024/00037

That the minutes of the Finance and Performance Committee meeting held on Wednesday, 29 May 2024 be confirmed.

Councillor MacDonald/Councillor Coker Carried

18. Resolution to Include Supplementary Report

Committee Resolved FPCO/2024/00038

That the reports be received and considered at the Finance and Performance Committee meeting on Wednesday, 26 June 2024.

Open Items

19. Council submission on Resource Management (Freshwater and Other Matters) Amendment Bill

Councillor MacDonald/Councillor Coker Carried

4. Public Forum Te Huinga Whānui

Part B

There were no public forum presentations.

5. Deputations by Appointment Ngā Huinga Whakaritenga

Part B

There were no deputations by appointment.

6. Presentation of Petitions Ngā Pākikitanga

Part B

There was no presentation of petitions.

Councillor Harrison-Hunt joined the meeting via audio/visual link at 9.33am during consideration of item 7.

7. Key Organisational Performance Results - May 2024

Committee Resolved FPCO/2024/00039

Officer recommendation accepted without change

Part C

That the Finance and Performance Committee:

1. Receives the information in the Key Organisational Performance Results - May 2024 Report.

Councillor Keown/Councillor Johanson Carried

Councillor Harrison-Hunt joined the meeting in Chambers at 9.39am during consideration of item 8.

Councillor Templeton joined the meeting at 9.40am during consideration of item 8.

8. Financial Performance Report - May 2024

Committee Resolved FPCO/2024/00040

Officer recommendation accepted without change

Part C

That the Finance and Performance Committee:

1. Receives the information in the Financial Performance Report - May 2024 Report.

Councillor Harrison-Hunt/Councillor McLellan Carried

9. Capital Programme Performance Report May 2024

Committee Resolved FPCO/2024/00041

Officer recommendation accepted without change

Part C

That the Finance and Performance Committee:

1. Receives the information in the Capital Programme Performance Report May 2024 Report.

Councillor MacDonald/Councillor Scandrett Carried

19. Council submission on Resource Management (Freshwater and Other Matters) Amendment Bill

Committee Resolved FPCO/2024/00042

Officer recommendations accepted without change

Part C

That the Finance and Performance Committee:

1. Approves lodging the Council submission on the Resource Management (Freshwater and Other Matters) Amendment Bill (Attachment A) to the Primary Production Committee.

2. Notes that the decision in this report is assessed as low significance based on the Christchurch City Council’s Significance and Engagement Policy.

Councillor Templeton/Councillor Scandrett Carried

Councillor Gough joined the meeting via audio/visual link at 9.52am during consideration of item 10.

10. Council-controlled organisations - Sundry Reports

Committee Resolved FPCO/2024/00043

Officer recommendations accepted without change

Part C

That the Finance and Performance Committee:

1. Receives the Quarter 3 2023/24 Performance Report for Te Kaha Project Development Ltd;

2. Receives the final Statements of Intent 2024/25 for Council-controlled organisations:

· Civic Building Ltd;

· Te Kaha Project Development Ltd;

· Riccarton Bush Trust;

· Rod Donald Banks Peninsula Trust; and

3. Receives the Annual Report 2023 for Civic Financial Services Ltd.

Councillor Keown/Councillor Coker Carried

Councillor Harrison-Hunt left the meeting at 10.24am and returned at 10.25am during consideration of item 11.

11. Venues Ōtautahi - Quarter 3 2024/25 Performance Report

Committee Resolved FPCO/2024/00044

Officer recommendations accepted without change

Part C

That the Finance and Performance Committee:

1. Receives Venues Ōtautahi’s Quarter 3 2023/24 Performance Report.

Councillor Templeton/Councillor Peters Carried

Attachments

a Venues Ōtautahi - Presentation to Council

13. Notice of Motion - Infrastructure Delivery Working Group

Committee Resolved FPCO/2024/00045

Councillor Keown’s recommendations accepted without change

Part C

That the Finance and Performance Committee:

1. Requests staff to provide advice in August 2024 on the establishment of an infrastructure delivery working group to review contracting and procurement processes to identify if there are opportunities to improve effectiveness and efficiencies. The advice should consider:

a. A potential Terms of Reference for a working group;

b. The capacity and cost of undertaking the work;

c. The Council’s procurement rules;

d. New Zealand Government rules of procurement;

e. The Auditor-General’s guidelines;

f. The Local Government Act 2002; and

g. Any other legal requirements for considerations.

Councillor Keown/Councillor Barber Carried

The meeting adjourned at 11.06am and reconvened at 11.19am, Councillors Henstock and Barber were not present at this time.

Councillor Coker assumed the Chair.

Councillor Barber returned to the meeting at 11.21am during consideration of item 12.

Councillor Henstock returned to the meeting at 11.23am during consideration of item 12.

Councillor Moore joined the meeting via audio/visual at 11.26am during consideration of item 12.

Councillor McDonald left the meeting at 11.29am and returned at 11.37am during consideration of item 12.

Councillor McDonald left the meeting at 11.45am and returned at 11.52am during consideration of item 12.

Councillor Keown left the meeting at 11.49am and returned at 11.52am during consideration of item 12.

Councillor Keown left the meeting at 11.53am and returned at 11.55am during consideration of item 12.

Councillor McDonald left the meeting at 11.56am and returned at 12.03pm during consideration of item 12.

12. Christchurch City Holdings Ltd - Quarter 3 Performance Report

Committee Resolved FPCO/2024/00046

Officer recommendation accepted without change

Part C

That the Finance and Performance Committee:

1. Receives Christchurch City Holdings Ltd’s Quarter 3 2023/24 Performance Report.

Councillor Coker/Councillor Barber Carried

Attachments

a Christchurch City Holdings Ltd - Presentation to Council

14. Resolution to Exclude the Public Te whakataunga kaupare hunga tūmatanui

Committee Resolved FPCO/2024/00047

Part C

That Bryan Pearson and Matthew Slater of Christchurch City Holdings Ltd, remain after the public have been excluded for Item 16 – Christchurch City Holdings LTD – Strategic Issues Report as at June 2024 of the public excluded agenda as they have knowledge that is relevant to that item and will assist the Council.

AND

That at 12.03pm the resolution to exclude the public set out on pages 241 to 242 of the agenda be adopted.

Councillor Coker/Councillor Scandrett Carried

The public were re-admitted to the meeting at 12.21pm.

Karakia Whakamutunga: Given by all Councillors

Meeting concluded at 12.22pm.

CONFIRMED THIS 24^th DAY OF JULY 2024

Councillor Sam MacDonald

Chairperson

8. Final Statements of Intent 2024/25 for ChristchurchNZ Holdings Ltd, Venues Ōtautahi, Local Government Funding Agency and Transwaste Canterbury Ltd
Reference Te Tohutoro:	24/849299
Responsible Officer(s) Te Pou Matua:	Linda Gibb, Performance Advisor, Finance
Accountable ELT Member Pouwhakarae:	Bede Carran, General Manager Finance, Risk & Performance / Chief Financial Officer

1. Purpose and Origin of the Report Te Pūtake Pūrongo

1.1 The purpose of this report is to present the final Statements of Intent (SOIs) for the following Council-controlled organisations (CCOs) – ChristchurchNZ Holdings Ltd (CNZHL), Venues Ōtautahi (VŌ), Transwaste Canterbury Ltd and Local Government Funding Agency (LGFA).

1.2 The final SOIs were received before 30 June 2024 as required by clause 3 of schedule 8, part 1 of the Local Government Act 2002 (LGA).

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Receives the final Statements of Intent 2024/25 for:

a. ChristchurchNZ Holdings Ltd;

b. Venues Ōtautahi;

c. Transwaste Canterbury Ltd; and

d. Local Government Funding Agency.

3. Background/Context Te Horopaki

3.1 Clauses 2 and 3 of Part 1, Schedule 8 of the LGA provides a CCO board to consider its sharheolders’ comments on the draft SOI on or before 1 May and that the board delivers the completed SOI before the commencement of the financial year to which it relates.

3.2 The Council reviewed the draft SOIs for CNZHL, VŌ and LGFA at its meeting on 17 April 2024. The Canterbury Regional Landfill Joint Committee reviewed the draft SOI for Transwaste Canterbury Ltd at its meeting on 8 April 2024 pursant to its governance delegations.

3.3 The financial forecasts for CNZHL and VŌ are consistent with the Long Term Plan 2024-34 (LTP). Transwaste and LGFA are not affected by the LTP.

ChristchurchNZ Holdings Ltd (Attachment A)

3.4 The Council’s comments on CNZHL’s draft SOI (FPCO/2024/00035 refers) have been addressed in the final SOI. The comments were:

· for Goal 1 (Accelerate and amplify productivity, growth and regenerative transition of businesses) - include reference being made to the evidence-based approach already taken by CNZHL in respect of its Support objective under Goal 1; and

· for Goal 3 (Elevate Ōtautahi Christchurch’s profile and reputation in national and global markets) - when promoting Ōtautahi Christchurch to its tourism partners, CNZHL could note the leadership role it is taking in promoting regenerative and sustainable tourism.

3.5 The following table shows the Council funding that is consistent with the LTP, the impact that third party funding has on CNZHL’s total budget and the change in total funding between the draft and final SOIs:

CNZ funding / expense	2024/25 $m	2025/26 $m	2026/27 $m
Council funding per final SOI and LTP	15.9	16.3	16.7
Total funding / expense – draft SOI	17.5	18.2	18.8
Total funding / expense – final SOI	18.2	18.1	18.7
Change	+0.7	-0.1	-0.1

3.6 Third party funding forecasts have increased slightly following CNZHL’s completion of its business planning since the draft SOI was submitted.

3.7 The above forecasts do not include the new events’ eco-system funding that was allocated to the Council’s Recreation, Sports and Events budget for distribution. Council staff (in consultation with partner agencies) are preparing a report to Council with advice on how the additional events’ funding should be split. However, CNZHL has included forecast economic performance from events in its targets as the funding source is not relevant for the targets requiring measurement.

3.8 Forecast total assets have increased by $1.3 million in 2024/25 from $3.6 million to $4.9 million (which flows through each of the outyears) due to capitalising (instead of expensing) corporate IT development costs.

3.9 Non-financial performance targets:

· Levels of Service (LOS) which measure performance of specific CNZHL interventions such as external investment into the city (secured by CNZHL), success rate for business events, initiatives developed in partnership with mana whenua.

In its Letter of Expectations for 2024/25 to CNZHL, the Council requested that it reduces the number of performance targets/levels of service to fewer meaningful ones that are outcomes-focussed. CNZHL’s final SOI acknowledges this expectation and that continued refinement of the range of measures will be undertaken to enable it to more closely monitor the direct impact and contribution to the visitor economy, industry clusters and urban development in particular.

· Performance targets are focussed on the delivery of interventions to meet the organisation’s strategic objectives, all of which underpin economic growth for Christchurch. The targets (including ambitious stretch targets) have been developed following CNZHL’s completion of its its business planning.

Venues Ōtautahi (Attachment B)

3.10 When it reviewed the draft SOI, the Council requested that the VŌ board considers the following matters for inclusion in the final SOI (FPCO/2024/00037 refers). How these matters have been addressed in the final SOI is noted.

· Include updated performance targets following a full review in consultation with Council staff – this has been a collaborative review of the SOI targets between VO and Council staff and is discussed later in this section.

· Provide clarity on what it means to pursue the possibility of the global application of the company’s local procurement model. VŌ has clarified that it will consider opportunities to provide consultancy services to other stadium developers/operators particularly for developing food and beverage strategies focussed on local fare. VŌ’s expertise in this area has recently been sought by an offshore stadium provider.

· Provide a workshop to the Council during calendar year 2024 to update the development and implementation of a commercial strategy for Te Kaha (now known as One New Zealand Stadium), to include detail on its strategy and plans to increase its revenue and reduce reliance on Council funding generally. VŌ welcomes the request for the workshop which will be scheduled for later in 2024/25.

· Review the waste infrastructure to ascertain whether it is fit for purpose and also encourages maximum recycling of waste from events that are run by VŌ. Page 18 of the final SOI provides a carbon reduction roadmap which includes commitment to implement a waste improvement strategy to increase diversion of waste from landfill.

3.11 The following table sets out the Council’s operating and capital funding grants to VŌ as represented in both the LTP and final SOI:

Council funding – final LTP and SOI	2024/25 $m	2025/26 $m	2026/27 $m
Operating grant – events	3.2	3.2	3.2
Capital grant	4.6	4.0	4.5
Te Kaha operating grant	0	2.4	1.6

3.12 The following table shows the difference in forecast operating performance (at EBITDA) between the final and draft SOIs:

VŌ EBITDA (including Te Kaha)	2024/25 $m	2025/26 $m	2026/27 $m
Final SOI	(2.8)	(1.3)	0.8
Draft SOI	(3.0)	(2.0)	0.6
Change	+0.2	+0.7	+0.2

3.13 Forecast operating performance has improved in each of the SOI years following completion of business planning which included a full review and update of the events schedule.

3.14 In 2023/24 VŌ has faced significant pressure on its insurance, rates, utilities and wage costs. Its financial forecasts for 2024/25 incorporate increases from 2023/24 of 12.5% for insurance, 12% for utilities and 15% for rates (note the SOI was finalised before the LTP was approved). These cost pressures will be closely monitored and reported over the year.

Non-financial performance targets

3.15 Council and VŌ staff have reviewed the performance targets for which there has been one target added and several amendments to those that were in the draft SOI. Further consideration of the targets will be given over the course of 2024/25 to refine them if needed.

3.16 A new target for VŌ’s activity in the Te Kaha project has been provided – to maximise the commercial opportunity for the city with targets for developing corporate hospitality marketing collateral and pricing structure (2024/25), corporate hospitality and commercial sponsorship offering being placed in the market (2025/26) and all offerings sold (2027/28).

3.17 A target for 75% of all contractors and suppliers (outside of food which remains at 80%) to be from Canterbury has been reduced to 70% reflecting the increased volume of suppliers and contractors required for the stadium and the uncertainty of a higher volume being achievable until such time as the actual make up of this volume is known (following opening in 2026).

Transwaste Canterbury Ltd (Attachment C)

3.18 The Canterbury Regional Landfill Joint Committee (JC) has been delegated decision-making rights for governance matters for Transwaste. It considered Transwaste’s draft SOI at its meeting on 8 April 2024 and made the following comments for the board to consider (CRLC/2024/00001 refers), further discussed at the end of this section:

· targeting annual reductions in carbon emissions, by removing the word “maintain” from its performance objectives which reflects Transwaste’s commitment to reduce emissions – this is addressed in the final SOI;

· setting annual targets for carbon emissions reductions – not addressed; and

· identifying specific key performance indicators and having emissions reductions plans to meet them – not addressed.

3.19 The tables below show changes in Transwaste’s forecasts between the draft and final SOIs:

EBIT	2024/25 $m	2025/26 $m	2026/27 $m
Final SOI	21.3	21.9	22.6
Draft SOI	21.1	21.3	22.2
Change	+0.2	+0.6	+0.4

Dividend	2024/25 $m	2025/26 $m	2026/27 $m
Final SOI	14.9	14.5	14.8
Draft SOI	13.8	13.8	13.8
Change	+1.1	+0.7	+1.0

3.20 The changes in the forecasts have been made following Transwaste’s completion of business planning. Underpinning the changes is an expectation of slightly more waste tonnage to the Kate Valley landfill, by 13,000 tonnes each year than in the draft SOI and a minor reduction in Electronic Trading Scheme costs which are passed through to customers.

3.21 The increases in forecast dividends reflect expected waste receipts received in the year prior to when the dividend is paid. The higher dividend in 2024/25 is due to increased tonnage of waste (and therefore profitability) in 2023/24. At the half year to 31 December 2023 waste was ahead of target by 10,000 tonnes. The board advised an expectation of exceeding target EBIT by $1 million for the year and this has flowed through to the increased dividend for 2024/25.

3.22 Non-financial performance targets have been amended as follows:

· As noted above, greenhouse gas emission reductions previously to “maintain and/or reduce” are now solely to reduce.

· New emissions reductions measures and targets have been included as follows:

o to increase average Eurostar certification for the fleet to reflect reduced carbon intensity from transport operations as new trucks and lighter bins are brought in;

o reduce GHG emissions from leachate haulage with the target of 50% reduction in leachate hauled offsite over the SOI period; and

o reduce embedded GHG emissions from grid supply with a target of a 50% reduction in grid electricity consumption over the SOI period.

3.23 Transwaste has advised that it is not able at this stage to set annual reduction targets for its operational equipment as it is still working through development of reduction plans. It points out that the emissions from waste are of greater magnitude for its focus to be on.

3.24 Council staff will continue to engage with the JC to encourage it to seek Transwaste’s commitment to setting emissions reductions targets and to report progress on meeting them.

3.25 The Council may wish to request that as part of its annual briefing to the Council, the Chair of Transwaste updates the Council on the emission reduction challenges the company continues to face and what it is doing to overcome those challenges.

Local Government Funding Agency (Attachment D)

3.26 The following table shows the change in forecast NPAT between the draft and final SOIs, and the forecast increases in total assets (mostly lending to local authorities):

NPAT	2024/25 $m	2025/26 $m	2026/27 $m
Final SOI	14.5	21.5	21.2
Draft SOI	15.1	13.1	10.1
Change	-0.6	+8.4	+11.1

Total assets	2024/25 $m	2025/26 $m	2026/27 $m
Final SOI	26,555	29,385	32,909
Draft SOI	24,465	27,244	28,823
Change	+2,090	+2,141	+4,086

3.27 There are two material changes from the draft SOI - an increase in the base lending margin that LGFA charges councils, from 0.20% to 0.25% and an increase in the proportion of borrowing that councils need to re-invest back in the form of Borrower Notes, from 2.5% to 5.0%. These changes apply from 1 July 2024.

3.28 Their purpose is to increase LGFA’s equity capital, in order to maintain its capital adequacy and support a credit rating equal to the Crown’s. LGFA advises that the changes have become necessary because its profitability has not grown in line with the volume of its lending in recent years, primarily because councils borrowed for relatively short periods (at lower margins) in response to the previous government’s 3 Waters proposals.

3.29 Council staff are comfortable that these changes are prudent and appropriate, and that LGFA’s business management remains in line with industry good practice. LGFA profitability and capital adequacy will grow as a result of these changes, and also as councils’ extend their borrowing duration as existing tranches of debt come up for refinancing.

Non-financial performance targets

3.30 There has been several minor wording changes to refine the targets from the draft to the final SOI, but these have not changed the substance of the targets.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	ChristchurchNZ Holdings Ltd - Final SOI 2024/25	24/1156306	25
b ⇩	Venues Ōtautahi - Final SOI 2024/25	24/1156468	55
c ⇩	Transwaste Canterbury Ltd - Final SOI 2024/25	24/1157092	90
d ⇩	Local Government Funding Agency - Final SOI 2024/25	24/1156854	112

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

Document Name – Location / File Link

Not applicable

Signatories Ngā Kaiwaitohu

Author

Linda Gibb - Performance Monitoring Advisor CCO

Approved By

Russell Holden - Head of Finance

Bede Carran - General Manager Finance, Risk & Performance / Chief Financial Officer

9. Christchurch City Holdings Ltd - Final Statement of Intent 2024/25
Reference Te Tohutoro:	24/1088648
Responsible Officer(s) Te Pou Matua:	Linda Gibb, Performance Advisor, Finance.
Accountable ELT Member Pouwhakarae:	Bede Carran, General Manager Finance, Risk & Performance / Chief Financial Officer

1. Purpose and Origin of the Report Te Pūtake Pūrongo

1.1 The purpose of this report is to advise the Finance and Performance Committee of the Christchurch City Holdings Ltd (CCHL) group’s final Statements of Intent (SOIs) for 2024/25.

1.2 This report has been written following receipt of the CCHL group’s final SOIs on 27 June 2024.

2. Officer Recommendations Ngā Tūtohu

That the Finance and Performance Committee:

1. Receives Christchurch City Holdings Ltd’s final Statement of Intent 2024/25; and

2. Notes the Christchurch City Holdings Ltd subsidiary companies’ final Statements of Intent 2024/25 are available at Annual Reports & Statements of Intent | CCHL.

3. Background/Context Te Horopaki

3.1 The following are the relevant clauses from Part 1, Schedule 8 of the Local Government Act 2002 (LGA) that relate to Council-controlled organisations (CCOs) finalising their SOIs:

· Clause 2 – the board must consider any comments on the draft SOI that are made by the shareholders, and by local authorities with indirect control, on or before 1 May in the year preceding the year to which the draft SOI relates; and

· Clause 3 – the board must deliver a completed SOI to shareholders before the commencement of the financial year to which it relates.

3.2 At its meeting on 17 April 2024, the Finance and Performance Committee reviewed the group’s draft SOIs. The Council made the comments[1] (points 1 and 2 in italics below) which were advised to the CCHL board in a letter dated 24 April 2024:

1. That Council and CCHL staff work together to develop a sustainable dividend policy framework that is agreed to by both parties, and which delivers a revised dividend profile which will provide dividend forecasts of $55 million for the 2024/25 year, $65 million for the 2025/26 year and $65 million for the 2026/27 year including identifying opportunities to declare special dividends.

3.3 CCHL’s final SOI provides:

a) one of the company’s focuses will be to work with the Council to develop a sustainable dividend policy that underpins CCHL’s commitment to deliver fair returns to its shareholder; and

b) amended dividend forecasts as shown in the table below, the funding for which is provided by CCHL adjusting its debt repayment profile over the 10 year LTP period.

3.4 The following table reflects the change in dividend distribution forecasts, which meets the Council’s request for higher dividends in the first three years of the LTP:

Dividend forecasts	2024/25 $m	2025/26 $m	2026/27 $m
Final SOI	55	65	65
Draft SOI	38	46	54
Change	+17	+19	+11

3.5 As noted in paragraph 3.2 above the Council made the following comment.

2. Regarding the Lyttelton Port Company’s (LPC’s) draft SOI, the Council acknowledges and appreciates the reference that it is looking at incentive schemes to get more sustainable vessels from customers. The Council requests that the LPC Board considers providing in its SOI:

· greater reference to how the company is monitoring, mitigating and reducing the impact of cruise ships and their emissions when they visit the Port; and

· what additional fees and charges it could introduce to help mitigate and offset the environmental impact of cruise ships visiting the port.

3.6 LPC’s final SOI includes a new commitment “developing and monitoring Scope 3 emissions, including from all vessels visiting the Port. Over the period of the SOI we will continue to develop plans to help support our customers to reduce their emissions while in Port”.

3.7 The second bullet point above, regarding fees and charges to mitigate and offset environmental impacts, is a commercially sensitive matter and so the SOI is not the appropriate document for disclosure. Council and CCHL staff recommend that for LPC’s next strategic briefing with the Council (later this year) it is invited to engage on this issue.

4. Considerations Ngā Whai Whakaaro

4.1 CCHL’s final SOI is attached (refer Attachment A). The subsidiaries’ final SOIs are available on CCHL’s website at Annual Reports & Statements of Intent | CCHL. As CCHL is the companies’ sole or major shareholder, it received their final SOIs.

4.2 The table below shows the changes in the CCHL group’s financial forecasts between the draft and final SOIs. The changes reflect the finalising of the business planning process to underpin the forecasts.

CCHL group	2024/25 $m			2025/26 $m			2026/27 $m
CCHL group	Draft SOI	FinalSOI	Change	Draft SOI	FinalSOI	Change	Draft SOI	Final SOI	Change
Total group NPAT	101	97	-4	127	123	-4	155	147	-8
Dividends to CCHL	92	96	+4	105	106	+1	116	118	+2
Capital expenditure	260	267	+7	316	329	+13	355	365	+10
Total group debt	2,416	2,424	+8	2,513	2,555	+42	2,644	2,706	+62
Dividends to CCC	38	55	+17	46	65	+19	54	65	+11

4.3 The key change in the forecasts is the increased debt at the end of the SOI period of $62 million to support the increased dividends to the Council of $47 million and increased capital expenditure of $30 million. Part of the increase in capital expenditure is bringing forward that which was deferred in 2024.

4.4 The increased debt is forecast to incur additional interest costs of circa $5 million over the next three years.

Non-financial performance targets

4.5 The targets in CCHL’s SOI represents its measures for the group, including the subsidiaries. Those in the draft SOI have been brought forward into the final SOI. The following new targets have been added reflecting areas of Council interest:

· Develop, in consultation with the Council, the principles of a responsible investment framework;

· work with the Council to implement a sustainable dividend policy; and

· undertake annual benchmarking of each asset to assess performance relative to peers in the industry.

Attachments Ngā Tāpirihanga

No.	Title	Reference	Page
a ⇩	Christchurch City Holdings Ltd - Final Statement of Intent 2024/25	24/1194715	131

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

Document Name – Location / File Link

Not applicable

Signatories Ngā Kaiwaitohu

Author

Linda Gibb - Performance Monitoring Advisor CCO

Approved By

Russell Holden - Head of Finance

Bede Carran - General Manager Finance, Risk & Performance / Chief Financial Officer

[1] Resolutions FPCO/2024/00032 and FPCO/2024/00033 from the 17 April 2024 Finance and Performance meeting refer

7. Te Kaha Project - Elected Members Update
Reference Te Tohutoro:	24/1138448
Responsible Officer(s) Te Pou Matua:	David Kennedy, Chief Executive Te Kaha Project Delivery Limited
Accountable ELT Member Pouwhakarae:	Andrew Rutledge, Acting General Manager Citizens and Community

ITEM NO.	GENERAL SUBJECT OF EACH MATTER TO BE CONSIDERED	SECTION	SUBCLAUSE AND REASON UNDER THE ACT	PLAIN ENGLISH REASON	WHEN REPORTS CAN BE REVIEWED FOR POTENTIAL RELEASE
11.	Public Excluded Finance and Performance Committee Minutes - 26 June 2024			Refer to the previous public excluded reason in the agendas for these meetings.
12.	Re-appointment of directors to Christchurch City Holdings Ltd, its subsidiary companies and Venues Ōtautahi	s7(2)(a)	Protection of Privacy of Natural Persons	To protect the reputations of the directors.	As soon as decisions are made and the directors are notified.

Author	David Kennedy – Chief Executive, Te Kaha Project Delivery Limited
Approved By	Barry Bragg – Chair, Te Kaha Project Delivery Limited