AGENDA

Finance and Performance Committee

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Susan Baty (Chairperson)

Jim Jefferies (Deputy Chairperson)

Grant Smith (The Mayor)

Brent Barrett

Lorna Johnson

Rachel Bowen

Duncan McCann

Adrian Broad

Karen Naylor

Gabrielle Bundy-Cooke

Bruno Petrenas

Vaughan Dennison

Aleisha Rutherford

Lew Findlay QSM

Tangi Utikere

Leonie Hapeta

 

 

 

 

 

 

 

 


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

 

 

 

Finance and Performance Committee MEETING

 

18 September 2017

 

 

Order of Business

 

NOTE: The Finance and Performance meeting coincides with the extraordinary Council meeting.  The format for the meeting will be as follows:

-              Council will open and adjourn immediately to Finance and Performance Committee

-              The Finance and Performance Committee will open, conduct its business and then close.

1.         Apologies

2.         Notification of Additional Items

Pursuant to Sections 46A(7) and 46A(7A) of the Local Government Official Information and Meetings Act 1987, to receive the Chairperson’s explanation that specified item(s), which do not appear on the Agenda of this meeting and/or the meeting to be held with the public excluded, will be discussed.

Any additions in accordance with Section 46A(7) must be approved by resolution with an explanation as to why they cannot be delayed until a future meeting.

Any additions in accordance with Section 46A(7A) may be received or referred to a subsequent meeting for further discussion.  No resolution, decision or recommendation can be made in respect of a minor item.

3.         Public Comment

To receive comments from members of the public on matters specified on this Agenda or, if time permits, on other Committee matters.

(NOTE:     If the Committee wishes to consider or discuss any issue raised that is not specified on the Agenda, other than to receive the comment made or refer it to the Chief Executive, then a resolution will need to be made in accordance with clause 2 above.)

4.         Confirmation of Minutes                                                                                    Page 7

“That the minutes of the Finance and Performance Committee meeting of 21 August 2017 Part I Public be confirmed as a true and correct record.”  

5.         Palmerston North Airport Ltd - Comment on Annual Report for 12 months ended 30 June 2017 & Instructions Relating to Annual Meeting                                           Page 13

Memorandum, dated 31 August 2017 from the Strategy Manager Finance, Steve Paterson.

6.         Recommendation for Adoption 2016/17 Annual Report                              Page 55

Memorandum, dated 5 September 2017 from the Financial Accountant, Keith Allan.

7.         Capital New Programme Adjustments for 2017-18                                       Page 59

Memorandum, dated 14 August 2017 from the Water & Waste Services Manager, Robert van Bentum.

8.         Victoria Esplanade Erosion                                                                              Page 65

Report, dated 17 August 2017 from the Parks & Property Manager, John Brenkley.

9.         Committee Work Schedule                                                                              Page 73

    

 10.      Exclusion of Public

 

 

To be moved:

“That the public be excluded from the following parts of the proceedings of this meeting listed in the table below.

 

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under Section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

 

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Ground(s) under Section 48(1) for passing this resolution

11.

Minutes of the Finance and Performance Committee meeting - Part II Confidential - 21 August 2017

For the reasons setout in the Finance and Performance Committee minutes of 21 August 2017, held in public present.

12.

Increase in Leased Reserve Land for Hokowhitu School Pool

Commercial Activities

s7(2)(h)

13.

Sale of land - request to amend settlement date

Negotiations

s7(2)(i)

 

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Section 6 or Section 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public as stated in the above table.

Also that the persons listed below be permitted to remain after the public has been excluded for the reasons stated.

Chief Executive (Heather Shotter), Chief Financial Officer (Grant Elliott), General Manager, City Enterprises (Ray McIndoe), General Manager, City Future (Sheryl Bryant), General Manager, City Networks (Ray Swadel), General Manager, Customer Services (Peter Eathorne), General Manager, Libraries and Community Services (Debbie Duncan), Human Resources Manager (Wayne Wilson) and Communications and Marketing Manager (or their representative (name)) because of their knowledge and ability to provide the meeting with advice on matters both from an organisation-wide context (being members of the Council’s Management Team) and also from their specific role within the Council.

Legal Counsel (John Annabell), because of his knowledge and ability to provide the meeting with legal and procedural advice.

Governance and Support Team Leader (Kyle Whitfield) and Committee Administrators (Penny Odell, Carly Chang and Rachel Corser), because of their knowledge and ability to provide the meeting with procedural advice and record the proceedings of the meeting.

Strategy Manager – Finance (Steve Paterson) and Property Officer (Bryce Hosking), because of their knowledge and ability to assist the meeting in speaking to their report and answering questions, noting that such officer will be present at the meeting only for the item that relate to their respective report.

[Add Third Parties], because of their knowledge and ability to assist the meeting in speaking to their report/s [or other matters as specified] and answering questions, noting that such person/s will be present at the meeting only for the items that relate to their respective report/s [or matters as specified].

 

 

   


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

 

Palmerston North City Council

 

Minutes of the Finance and Performance Committee Meeting Part I Public, held in the Council Chamber, First Floor, Civic Administration Building, 32 The Square, Palmerston North on 21 August 2017, commencing at 9.01am

Members

Present:

Susan Baty (in the Chair), The Mayor (Grant Smith) and Councillors, Brent Barrett, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor and Bruno Petrenas.

Apologies:

Councillor Leonie Hapeta (Early Departure), Councillor Aleisha Rutherford and Councillor Tangi Utikere.

 

Councillor Leonie Hapeta left the meeting at 10.14am at the conclusion of clause 58.  She was not present for clause 59 to 63 inclusive. 

 

54-17

Apologies

 

Moved Rachel Bowen, seconded Gabrielle Bundy-Cooke.

The COMMITTEE RESOLVED

1.   That the Committee receive the apologies.

 

Clause 54-17 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Susan Baty, Brent Barrett, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies,  Lorna Johnson, Duncan McCann, Karen Naylor and Bruno Petrenas.

  

55-17

Confirmation of Minutes

 

Moved Vaughan Dennison, seconded Jim Jefferies.

The COMMITTEE RESOLVED

1.    That the minutes of the Finance and Performance Committee meeting of 19 June 2017 Part I Public be confirmed as a true and correct record.

 

55-17 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Susan Baty, Brent Barrett, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor and Bruno Petrenas.

 

56-17

Treasury Report for 12 months ended 30 June 2017

Memorandum, dated 26 July 2017 from the Strategy Manager Finance, Steve Paterson.

 

Moved Karen Naylor, seconded Brent Barrett.

The COMMITTEE RESOLVED

1.   That the performance of the treasury activity for the 12 months ending 30 June 2017 be noted.

2.   That it be noted that as at 30 June 2017 the treasury policy targets were complied with, except for the five year plus fixed rate maturity profile band target of 15% to 60% and that as the level of non-compliance was minimal no specific action is intended at this stage.

 

Clause 56-17 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Susan Baty, Brent Barrett, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor and Bruno Petrenas.

 

57-17

Quarterly Performance and Finance Report - Quarter ending 30 June 2017

Memorandum, dated 27 July 2017 from the Financial Accountant, Keith Allan and the Head of Community Planning, Andrew Boyle.

 

Moved Vaughan Dennison, seconded Jim Jefferies.

The COMMITTEE RESOLVED

1.    That the Committee receive the June 2017 Quarterly Performance and Financial Report and note:

a.    The June 2017 financial performance and operating performance.

b.    The June 2017 capital expenditure programme progress together with those programmes identified as unable to be completed this financial year.

2.    That the Committee note that the capital expenditure carry forward values in the 2017/18 Annual Budget will be increased by a net $2,453,000 to the amount of remaining programme budgets.

 

Clause 57-17 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Susan Baty, Brent Barrett, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor and Bruno Petrenas.

 

58-17

Section 17A Review Venues & Events Palmerston North

Memorandum, dated 25 July 2017 from the Manager - Venues PN, John Lynch.

 

Moved Vaughan Dennison, seconded Rachel Bowen.

The COMMITTEE RECOMMENDS

1.         That given the information within the report entitled: Section 17A             Review Venues and Events Palmerston North dated 25 July 2017 on the             considerable advancement and achievements in relation to previously             highlighted areas for improvement and recommendations from the             independent reviews undertaken by Horwarth HTL and Freeman             Associates it is recommended:

1.        That the Palmerston North Conference & Function Centre continues to be run in house under joint management alongside Central Energy Trust Arena.

2.        Confirm the June 2015 resolution 87.1 that the Palmerston North Conference & Function Centre continue to be delivered internally.

3.        That the Central Energy Trust Arena continues to be run in house under joint management alongside Palmerston North Conference & Function Centre.

4.        That the ongoing management and delivery of both venues be continually reviewed in the best interests of Palmerston North.

5.        That Council agrees that the independent reviews of the Palmerston North Conference & Function Centre and the Central Energy Trust Arena met the intent of the Local Government Act s17A for the first round of s17A reviews

 

Clause 58-17 above was carried 13 votes to 0, with 1 abstention, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Susan Baty, Brent Barrett, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor and Bruno Petrenas.

Abstained:

Councillor Leonie Hapeta.

 

59-17

Ashhurst Domain - River Protection Works

Memorandum, dated 14 August 2017 from the Acting General Manager, Rob Green.

During discussion the Committee decided that they wished to have formal notification from both NZTA and the Horizons Regional Council around confirming their commitment to contribute to the Ashhurst Domain River bank.

The COMMITTEE RECOMMENDS

 

Moved Susan Baty, seconded Leonie Hapeta.

1.   That the information about the proposed works to provide protection to the Ashhurst Domain from further damage by the Manawatu River be received.

 

Moved Grant Smith, seconded Susan Baty.

2. That Council formally contact NZTA to seek confirmation of their contribution of $500,000 or third contribution.

 

Moved Grant Smith, seconded Jim Jefferies.

3.  That Horizons Regional Council again be contacted for their $500,000 or third contribution and on completion of Rockwall bank, that this assets be part of the lower Manawatu Scheme.

 

Moved Vaughan Dennison, seconded Susan Baty.

4. That further reports be presented to the Committee confirming outcomes of recommendation 2 and 3.

 

Clause 59-17 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Susan Baty, Brent Barrett, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor and Bruno Petrenas.

 

60-17

Committee Work Schedule

 

Moved Susan Baty, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1.   That the Finance and Performance Committee receive its Work Schedule dated August 2017.

 

Clause 61-17 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Susan Baty, Brent Barrett, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor and Bruno Petrenas.

      

 

 

Exclusion of Public

54-17

Recommendation to Exclude Public

 

Moved Susan Baty, seconded Jim Jefferies.

Councillor Karen Naylor left the meeting at 10.14am

Councillor Leonie Hapeta left the meeting at 10.14am

 

The COMMITTEE RESOLVED

“That the public be excluded from the following parts of the proceedings of this meeting listed in the table below.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under Section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

 

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Ground(s) under Section 48(1) for passing this resolution

11.

Minutes of the Finance and Performance Committee meeting - Part II Confidential - 19 June 2017

For the reasons setout in the Finance and Performance Committee minutes of 19 June 2017, held in public present.

12.

Programme 674 Church/Ruahine Roundabout Safety Improvements Revised Budget

Commercial Activities

s7(2)(h)

13.

Purchase of Wetlands Cafe Buildings, Ashhurst Domain

Commercial Activities

s7(2)(h)

14.

Section 17A Review Venues & Events Palmerston North (Part II Background Reports

Privacy and Negotiations

s7(2)(a) and s7(2)(i)

 

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Section 6 or Section 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public as stated in the above table.

Also that the persons listed below be permitted to remain after the public has been excluded for the reasons stated.

Acting Chief Executive (David Wright), Chief Financial Officer (Grant Elliott), Acting General Manager, City Enterprises (John Lynch), General Manager, City Future (Sheryl Bryant), Acting General Manager, City Networks (Rob Green), General Manager, Customer Services (Peter Eathorne), General Manager, Libraries and Community Services (Debbie Duncan), Human Resources Manager (Wayne Wilson) and Acting Strategic Communications Manager (Jane McSweeney) because of their knowledge and ability to provide the meeting with advice on matters both from an organisation-wide context (being members of the Council’s Management Team) and also from their specific role within the Council.

Legal Counsel (John Annabell), because of his knowledge and ability to provide the meeting with legal and procedural advice.

Governance and Support Team Leader (Kyle Whitfield) and Committee Administrators (Penny Odell, Carly Chang and Rachel Corser), because of their knowledge and ability to provide the meeting with procedural advice and record the proceedings of the meeting.

Roading Planning Team Leader (David Lane), Property Officer (Bryce Hosking) Manager – Venues PN (John Lynch), Parks and Property Manager (John Brenkley) because of their knowledge and ability to assist the meeting in speaking to their report and answering questions, noting that such officer will be present at the meeting only for the item that relate to their respective report.

 

 

Clause 61-17 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Susan Baty, Brent Barrett, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Jim Jefferies, Lorna Johnson, Duncan McCann and Bruno Petrenas.

Councillor Karen Naylor returned to the meeting at 10.15am

 

The public part of the meeting finished at 10.15am

 

Confirmed 18 September 2017

 

 

 

Chairperson

 

  


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Finance and Performance Committee

MEETING DATE:           18 September 2017

TITLE:                            Palmerston North Airport Ltd - Comment on Annual Report for 12 months ended 30 June 2017 & Instructions Relating to Annual Meeting

DATE:                            31 August 2017

AUTHOR/S:                   Steve Paterson, Strategy Manager Finance, City Corporate

 

 

RECOMMENDATION(S) TO Council

1.   That the Annual Report and Financial Statements of Palmerston North Airport Limited for the year ended 30 June 2017 be received.

2.   That the Council shareholder representative be instructed to support the proposed resolutions to be considered at the Annual Meeting of Palmerston North Airport Limited to be conducted by way of resolution in writing.

 

 

 

1.         ISSUE

            Palmerston North Airport Ltd (PNAL) as a Council controlled trading organisation has prepared its Annual Report for the year ended 30 June 2017.  This report provides a brief commentary on PNAL’s results for the year and recommends the Council’s shareholder representative be instructed to support the resolutions proposed for the Annual Meeting.

2.         BACKGROUND

2.1       PNAL’s Annual Report for the year ended 30 June 2017 is attached.  The report gives a comprehensive assessment of company performance with key matters highlighted in the joint report of the Chairman and Chief Executive.  Performance is judged against the Statement of Intent adopted by the Board in May 2016 and endorsed by the Council in June 2016.

 

2.2       PNAL has had a very successful year with significant passenger and revenue growth and a consequential increase in the surplus after tax. Improvements to facilities for travellers and users provide an impressive gateway to the City.

2.3       Operating results are summarised in the following table:

 

Actual

2014/15

Actual

2015/16

 

Actual

2016/17

Budget

2016/17 SOI

4,942,760

5,522,881

Revenue

7,313,379

7,075,074

2,878,554

3,132,368

Operating Expenditure

3,778,876

3,633,355

2,064,206

2,390,513

Operating Surplus (before interest, depreciation & tax)

3,534,503

3,441,719

769,048

383,955

1,129,848

303,689

115,911

Depreciation

Finance Costs

Impairment & loss on sale of assets

1,217,466

269,622

198,454

1,336,920

326,860

50,000

911,203

841,065

Operating Surplus (before tax)

1,848,961

1,727,938

248,855

35,632

Taxation

549,839

483,823

662,348

805,433

Net Surplus after tax for year

1,299,122

1,244,116

 

2.4       The Company’s results, compared with the targets set in the Statement of Intent are shown in the following table:

 

Actual

2015/16

 

Actual

2016/17

SOI

Target

2.0%

Surplus, before interest/tax/revaluations to Total Assets

3.15%#

3.2%

1.62%

Surplus, after interest/tax/revaluations to Shareholders’ funds

2.18%#

2.5%

7.87

Surplus, before interest & tax to Interest

13.1

≥ 2.5 : 1

$49.8m

Tangible net worth (total tangible assets less total liabilities)

$59.6m

≥ $36.5m

96%*

Maintain a high level of Customer satisfaction

96%

≥ 90%

515,727

No. of passengers served through airport terminal

629,411

> 631,000

* 96% of customers were either ’quite satisfied’, ‘very satisfied’ or of ‘average satisfaction’ – Customer Satisfaction Survey –May 2016

# The 2016/17 SOI did not take into account an asset revaluation as at 30 June 2017.  The increase in the total assets and shareholders’ funds figures as a result of the revaluation mean the actual percentages are lower than they would have been (3.7% and 2.6% respectively) if they had been calculated on the same basis as the SOI.

 

2.5       The Company applied $1.3m during the period to the purchase of fixed assets ($2.6m in the previous year).  This compares with the budgetary provision for capital expenditure of $3.4m ($0.65m of the actual expenditure was funded from asset sales compared with the budget provision of $2.25m for all of the planned work).

 

2.6       The Annual Report advises that Directors have proposed a total dividend of $512,000 based on the year’s results (compared with $322,173 for the previous year).  The total dividend is equivalent to 40% of the net surplus after tax (excluding capital contributions) which equates the target dividend return outlined in the Statement of Intent.  As the sole shareholder the Council receives the full dividend.  The Council’s budget assumption is $300,000.

 

2.7       The Company’s debt/equity ratio as at 30 June 2017 was 19:81 (21:79 at 30 June 2016).

 

2.8       The Company’s Constitution provides that the shareholders must approve the total remuneration payable to Directors.  In February 2016 Council approved a progressive increase over two years to $90,000.  Consistent with this Directors are recommending the total sum of $90,000 pa.

 

2.9       The Council is obliged to receive the report but has a choice as to whether or not to support the resolutions proposed for the Annual Meeting.  As the Council is the sole shareholder it is planned (as in recent years) to hold the Annual Meeting by way of entry in the minute book rather than to hold a physical meeting.  Company representatives will be available at the Finance and Performance Committee meeting to respond to any questions about Company performance over the past twelve months.

 

2.10     The Annual Meeting (by way of entry in the minute book) will have resolutions (as attached) covering the following:

 

2.10.1              Receipt of the Annual Report and financial statements for the year ended 30 June 2017

2.10.2              Advice of the Directors’ actions in relation to payment of a dividend of $512,000 (equivalent to 5.64 cents per dollar of paid up capital)

2.10.3              Noting that the total remuneration of directors will be $90,000

2.10.4              Recording the reappointment of the Auditor General as auditor and to authorise the Directors to fix the remuneration of the Auditor.

3.         NEXT STEPS

PNAL’s Annual Report will be published on the Company’s website and be made available at Council offices and libraries.  The resolutions for the Annual meeting will be authorised in writing by the Council’s shareholder representative.

 

 

Attachments

1.

Palmerston North Airport Ltd Annual Report 2017

 

2.

PNAL Notice of AGM 2017

 

 

 

Steve Paterson

Strategy Manager Finance

 

 

 

 

 

 

 


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PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Finance and Performance Committee

MEETING DATE:           18 September 2017

TITLE:                            Recommendation for Adoption 2016/17 Annual Report

DATE:                            5 September 2017

AUTHOR/S:                   Keith Allan, Financial Accountant, City Corporate

 

 

RECOMMENDATION(S) TO Council

1That the Committee recommend to Council that the 2016/17 Annual Report and 2016/17 Summary Annual Report be adopted.

2.  That the Committee note that an Auditor’s “opinion” from Audit New Zealand          would be expected to be received immediately following recommended adoption by Council on 25 September 2017 and Council signing of the reports.

3.  That delegated authority is given to the Chairperson and Deputy Chairperson of the Finance and Performance Committee to make minor amendments to the 2016/17 Annual Report and 2016/17 Summary Annual Report.

 

 

 

1.         ISSUE

The Council has a legal obligation to adopt its audited Annual Report within four months after the end of the financial year to which it related. Adoption at the 25 September 2017 Council meeting is within this period. Adoption of the Annual Report will allow the Council to report to the community on the Council’s performance in the 2016/17 year.

The Annual Report is a key part of the 10 Year Plan and Annual Plan process.  Those plans show the community what the Council intends to do, including what it intended to do in the 2016/17 year.  The Annual Report shows the community how well the Council did that work.

 

Adoption of the recommended actions will allow the Council to deliver the 2016/17 Annual Report and Summary Annual Report.

The recommended actions fit within the whole 10 Year Plan process and reports on all levels of service.  All costs involved with preparation of the Annual Report are provided for within the current budget.

2.         BACKGROUND

The quarterly report for June 2017 indicated a Parent draft, unaudited net surplus after tax of $11,472,000 for the 2016/17 year. This has now been finalised with the final net surplus after tax unchanged. Annual valuations resulted in Other Comprehensive Revenue and Expense of $99,707,000. This gives a Parent Total Comprehensive Revenue and Expense surplus of $111,179,000 and for the consolidated Group $121,443,000 surplus.

Audit New Zealand have completed their audit of the Annual Report. Audit clearance is expected before the Committee meeting.

A copy of the draft Annual Report and the draft Summary Annual Report have been circulated with this report.

The presentation of the Annual Report is the culmination of the quarterly reports presented to the Council, which have monitored progress against the 2016/17 Annual Plan.

The levels of service and performance measures by activities in the 2016/17 Annual Plan reflect a clear link to what the Council was aiming to achieve. The Council received comprehensive quarterly reports on its performance during the 2016/17 year.

The Council’s strategic direction is incorporated into the 10 Year Plan and Annual Plans and shows the community how Council intended to achieve its vision and goals. The Annual Report includes reporting on progress to achieve those vision and goals.

The adoption of the Council’s Annual Report marks a milestone of the Council’s accountability and dedication to the public.  The wide-ranging and complex nature of Council activities together with the requirements for disclosure under the Local Government Act, and Public Benefit Entity Accounting Standards, means the Council’s full Annual Report is relatively lengthy and yet necessary. This complexity makes the Summary Annual Report an ideal document for those readers who wish to have an easy read and yet still understand the Council’s activities.

 

After considering the issues, background, all relevant options, the community views, Council’s policies and plans, along with the financial and legal implications, it is recommended that the Committee receive the 2016/17 Annual Report and the Summary Annual Report. Further it is proposed that the Committee recommends the Annual Report and the Summary Annual Report for Council’s adoption in its meeting scheduled for 25 September 2017.

 

 

 

3.         NEXT STEPS

Once the Annual Report has been adopted by Council and Auditor’s opinion received, copies of both the full and summary annual report will be immediately printed and become available for distribution.  Copies will be sent to the organisations prescribed by the legislation and to regular readers according to Council’s existing mailing list.  The Annual Report and its summary will also be made available on the Council’s website, at the City Library and the Customer Service Centre.

 

4.         Compliance and administration

Does the Committee have delegated authority to decide?

If Yes quote relevant clause(s) from Delegations Manual <Enter clause>

No

Are the decisions significant?

No

If they are significant do they affect land or a body of water?

No

Can this decision only be made through a 10 Year Plan?

No

Does this decision require consultation through the Special Consultative procedure?

No

Is there funding in the current Annual Plan for these actions?

Yes

Are the recommendations inconsistent with any of Council’s policies or plans?

No

 

 

Attachments

1.

2017 Draft Annual Report and Draft Summary Annual Report (attached separately)

 

 

 

Keith Allan

Financial Accountant

 

 

  



 

 

 


PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Finance and Performance Committee

MEETING DATE:           18 September 2017

TITLE:                            Capital New Programme Adjustments for 2017-18

DATE:                            14 August 2017

AUTHOR/S:                   Robert van Bentum, Water & Waste Services Manager, City Networks

 

 

RECOMMENDATION(S) TO Council

1.   That a new 2017/18 Rubbish and Recycling Capital New Programme called “Awapuni Lease Property Improvements” with a budget of $40,000 be created by utilising savings of $40,000 from Water Capital New Programme 610 – “Turitea Valley Road / Pacific Drive New Water Supply Link.”

2.   That a new 2017/18 Water Capital New Programme called “Turitea WTP Access Road Retaining Wall” with a budget of $180,000 be created by utilising savings of $180,000 from Water Capital New Programme 610 – “Turitea Valley Road / Pacific Drive New Water Supply Link”.

3.   That the budget for the 2017/18 Wastewater Capital New Programme “1048 Totara Road WWTP  – Construction of New Food Waste Facilities” be revised from $101,000 to $150,000 by utilising savings of $49,000 from Water Capital New Programme 610 – “Turitea Valley Road / Pacific Drive New Water Supply Link.”

4.   That the budget for the 2017/18 Wastewater Capital New Programme “570 Totara Road WWTP – Replacement of Inlet Screens (Growth)” be revised from $385,000 to $475,000 by utilising savings of $90,000 from Water Capital New Programme 610 – “Turitea Valley Road / Pacific Drive New Water Supply Link”.

 

 

1.         ISSUE

1.1       For a variety of reasons a number of new capital programmes are required or existing programmes are predicted to exceed their allocated budgets. Officers are therefore seeking approval to reallocate funding within a number of 2017-18 capital programmes. Reasons for the higher predicted expenditure and unforeseen programme expenditure include:

·    higher than expected tender prices due to the tight contracting environment

·    unforeseen capital new works following lease changes

·    unforeseen technical issues or site conditions resulting in additional project costs

 

1.2       While additional budget is being requested for a number of programmes, in all cases surpluses have been identified within water and waste activities which can be used to offset the additional costs. Further detail on the programmes, reasons for any project cost increases and proposed savings offsets are set out below.

2.         Capital New Programmes

2.1       Budget adjustments are requested in respect of four programmes namely:

·    A new Rubbish and Recycling Programme – Awapuni Lease Property Improvements

·    A new Water Programme  – Turitea WTP Access Road Retaining Wall

·    Programme 1048 – Totara Road WWTP – Construction of Food Waste Reception Facilities

·    Programme 570 - Totara Road WWTP – Replacement of Inlet Screens (Growth)

 

2.2       In respect of the budget adjustments savings are available from the Programme 610 – Turitea Valley Road / Pacific Drive – Water Supply Link and New Reservoir to offset the additional capital costs.

 

3.         New Programme – Awapuni Lease Property Improvements

3.1       As part of the Awapuni Resource Recovery Facility site, Council lease a number of sites and buildings to third party tenants, both to generate income and also to encourage provision of a range of services which are complementary with the recycling and reuse activities at the site. Activities include grease trap waste receipt and processing, paper and card baling and storage, and metals recycling and processing.

 

3.2       For many years Council has leased sites to metal recycling companies who have provided both public drop off and receipt of bulk metals. The leasees have received and paid for aluminium and steel from council’s kerbside and drop off facilities. Unfortunately Council’s most recent tenant has closed its business and this has prompted a review of the site in order to secure a new tenant.

 

3.3       It is clear there is a need to address a number of infrastructural asset deficiencies on the site and as such capital investment is required. These works include installation of kerb and channel to collect stormwater run-off and a stormwater treatment device to treat stormwater from the site prior to discharge. Several other minor capital improvements are also required to the OJI paper recovery site.

 

3.4       The capital investment of $40,000 will enable the sites to be upgraded to secure Council’s on-going rental income and provide valuable commercial recycling services to the community.

 

4.         A New Water PROGRAMME - Turitea WTP Access Road Retaining Wall

4.1       Council owns and maintains Water Works Road at the upper end of Turitea Road which provides access to the Turitea WTP and the lower and upper dams. This road which is narrow and winding as it follows the Turitea Stream, is subject to erosion from both over and under slips.

 

4.2       Council has had Capital New programme funding in recent years under Programmes 652 Turitea Dams – Access Road Improvements and Programme 893 – Turitea WTP – New Retaining Walls on Access Road. After significant investment in construction of retaining walls during recent years and no obvious areas where further investment was required, no capital new budget has been allocated for the 2017-18 year.

 

4.3       However as a result of the extended wet autumn and winter period a new under slip area has developed. While vehicle access is still possible past this under slip area, the road width has been reduced such that access for trucks is now an issue. Following last year’s wet summer, the logging of the forest within the catchment was deferred to 2017-18. Addressing the slip area and constructing the retaining wall is now a priority if the proposed harvest of trees is not to be compromised.

 

4.4       Officers are therefore seeking approval for $180,000 to fund construction of the additional retaining wall under a new Capital New Programme – Turitea WTP Access Road Retaining Wall. The wall has been designed and tendered and the contract for construction is ready to be awarded once funds are approved. Works will need to be completed by December 2017 if tree harvesting is to proceed as planned.

 

 

5.         Programme 1048 – Totara Road WWTP – Construction of Food Waste Reception Facilities

5.1       Programme 1048 to construct new food waste reception facilities is currently in the final design stage and engineer’s estimates have been prepared for supply and installation of the equipment. The programme will enable the Wastewater Treatment Plant to accept high energy food and process waste from targeted businesses in the city which will be fed into the anaerobic digesters. The additional food will significantly enhance the gas production from the digesters.

 

5.2       The additional gas when combined with that produced from the digestion of WWTP primary sludge and gas extracted from the landfill will enable Council to operate the biogas generator at a higher output rate and more continuously, thereby further lowering the proportion of imported electricity purchased at the site.

 

5.3       Following the completion of the second digester lid refurbishment, Council will again have two functioning digesters. Current levels of primary wastewater sludge can be handled in one digester, which leaves the second digester available to process other waste such as the proposed food waste stream. The gas produced by the food waste will help to offset the slow decline in gas yield expected from the closed landfill over the next 5 to 10 years.

 

5.4       The engineer’s estimate and initial pricing estimates from equipment suppliers indicates that the costs for equipment and installation are likely to exceed the available budget. Officers are therefore seeking an increase in the capital budget from $101,000 to $150,000 by allocating $49,000 of the surplus from Programme 610 - Turitea Valley / Pacific Drive Water Supply Link and Reservoir.

 

6.         Programme 570 - Totara Road WWTP – Replacement of Inlet Screens (Growth)

6.1       Council has a significant programme ($2.1 million) funded from both Capital New and Capital Renewal over two years to replace and upgrade the screens at the inlet to the wastewater treatment plant. The budget which was spread across two programmes provides for installing three new high capacity band screens which remove a much greater percentage of the solids, upgraded screenings handling facilities, improvements to the screen room, installation of odour control equipment and investment in a recycled water facility to provide wash water for the screens.

 

6.2       The screens were tendered and ordered in 2016-17 with delivery scheduled for November 2017. The screen installation contract has been tendered and a preferred tenderer identified. Physical works are scheduled to begin in October / November. The additional work around strengthening the screen room and the detailed design of the recycled wash water system are well advanced.

 

6.3       Confirmed contract prices and engineer’s estimates indicate that there is a risk that the project will exceed the available budget, particularly in respect of the capital new components around the new recycled wash water system and the modifications to the screen room and gantry system. The new recycled water system will result in some 100m3/day reduction in potable water consumption or an annual cost of $40,000. Allowing for capital repayment and operational costs, it is expected that a net annual saving of some $30,000 will be achieved, in addition to the reduction in water use.

 

6.4       Officers are therefore seeking approval for an additional sum of $90,000 (5% of the programme budget) to provide for some contingency for unforeseen costs. This funding is available from savings in Programme 610 - Turitea Valley / Pacific Drive Water Supply Link and Reservoir.

 

7.         Budget summary for reallocation of capital new programmes

7.1       The new programme budgets and proposed reallocations as well as the corresponding savings available from Programme 610 are summarised in Table 1 below.

 

Table 1            Proposed Capital New Programme Budget Adjustments

Prog ID

Description

2017/18 Budget

Proposed 2017/18 Budget

Change

 

Capital New

 

 

 

New

Awapuni – Lease Property Improvements

$0

$40,000

$40,000

New

Turitea WTP – Access Road Retaining Wall

$0

$180,000

$180,000

1048

Totara Road WWTP – Construction of Food Waste Facilities

$101,000

$150,000

$49,000

570

Totara Road WWTP - Replacement of Inlet Screens – Growth

$385,000

$475,000

$90,000

610

Turitea Valley / Pacific Drive Water Supply Link and Reservoir (in final commissioning)

$558,000

$199,000

-$359,000

 

Totals

$1,044,000

$1,044,000

$0

 

8.         Compliance and administration

Does the Committee have delegated authority to decide?

If Yes quote relevant clause(s) from Delegations Manual <Enter clause>

No

Are the decisions significant?

No

If they are significant do they affect land or a body of water?

No

Can this decision only be made through a 10 Year Plan?

No

Does this decision require consultation through the Special Consultative procedure?

No

Is there funding in the current Annual Plan for these actions?

Yes

Are the recommendations inconsistent with any of Council’s policies or plans?

No

 

 

Attachments

Nil

 

Robert van Bentum

Water & Waste Services Manager

 

 

 

 

 

 

 


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

Report

TO:                                Finance and Performance Committee

MEETING DATE:           18 September 2017

TITLE:                            Victoria Esplanade Erosion

DATE:                            17 August 2017

AUTHOR/S:                   John Brenkley, Parks & Property Manager, City Networks

 

 

RECOMMENDATION(S) TO Council

1.   That Council contribute $125,000 to Horizons RC to rock line the riverbank below the Victoria Esplanade to prevent further erosion occurring in this location as an operational cost within the City Reserves General Activity.

 

 

Summary of options analysis for

 

Problem or Opportunity

Recent flooding events have caused erosion to a section of the Manawatu River directly below the Victoria Esplanade.

OPTION 1:

Contribute $125,000 to Horizons RC to rock line the riverbank to prevent further erosion occurring.

Community Views

Recent media articles suggest strong support for Council to be proactive to prevent erosion from causing major damage to City Reserves adjacent to the Manawatu River such as the Ashhurst Domain and the Victoria Esplanade.

Benefits

Early intervention prevents the erosion from getting worse and causing more damage to the Victoria Esplanade.  Rock lining is the most effective bank protection method.  Less berm space is required for rock lining compared to battering back the slope and planting with trees and therefore the existing pathway can be retained.  The amount of open space next to the river is kept.

Risks

That rock lining material is not available when it is required.  That a flood occurs between now and when the construction work is planned.

Financial

Contribution of $125,000 to Horizons RC. 

OPTION 2:

Batter back the riverbank and replant with willows as a bank protection measure.

Community Views

Recent media articles suggest strong support for Council to be proactive to prevent erosion from causing major damage to City Reserves adjacent to the Manawatu River such as the Ashhurst Domain and the Victoria Esplanade.

Benefits

The planting option is a softer option than rock lining and is less expensive to implement.

Risks

The planting option takes longer to establish and offers less protection in a severe flood than rock lining.

Financial

No cost to PNCC for the batter and planting work.  Cost to replace the pathway  and to reinstate the grass and planting $15,000

Contribution of Recommended Option to Council’s Strategic Direction

Safe, easy lifestyle and many recreational opportunities. 

Financially responsible, prudent decision making.


 

Rationale for the recommendations

1.         Overview of the problem or opportunity

1.1       Recent flooding in the Manawatu river and continued wet weather has resulted in extensive bank slumping and erosion along the river.  One site of particular concern is at the Victoria Esplanade, 50 metres downstream of the recently completed rock lining project.

1.2       The erosion issue was highlighted in an article in the Manawatu Standard on the 12th of August 2017.

2.         Background and previous council decisions

2.1       There was a programme in the 2015/16 Financial Year to work with Horizons and Powerco to rock line a segment of the Manawatu River below the Victoria Esplanade to protect a significant electrical cable from being exposed by river action.  Council contributed $195,000, Horizons $195,000 and Powerco $120,000.  Horizons designed and managed the works. 

2.2       The erosion at the Victoria Esplanade is within the area covered by the Lower Manawatu River Control Scheme managed and rated for by Horizons Regional Council.

2.3       Horizons manage a variety of erosion protection works which include rock lining and tree planting methods. The decision as to which asset protection method is used depends on how critical the protection works are.  For example, Dittmer Drive and Teacher's College have a narrow berm on the outside of a bend in the river.  Trees would not be robust enough to provide reliable protection to the stop bank and therefore rock lining is used on these bends.  In contrast, the reach of the right bank between the point opposite Te Motu o Poutoa (ANZAC) cliffs and the former Teacher's College campus is a straight section of the river with a wider berm and therefore it is feasible to use trees as a bank protection system.

2.4       The recently constructed rock lining in the Esplanade is on a straight section of river and did not protect a stop bank; therefore Horizons would typically batter back the bank and plant trees.  However, Powerco has a high voltage cable near the river and PNCC has a section of asphalt shared pathway in the same location, both of which would have required moving if Horizons battered back the bank and planted trees.  Horizons put forward a proposal to enter into a cost share arrangement on a rock lining solution for this repair rather than trees.  Powerco and PNCC assessed the cost benefit of the proposal and agreed that a rock lining was the best option for this location.  It is also worth noting that the Victoria Esplanade rock lining is half the height of the Dittmer Drive and Teacher's College rock linings due to the fact that it is on a straight and not on a bend.

2.5       The current Victoria Esplanade erosion is on a straight section of river, so there is a choice.  Horizons could simply batter back the bank and plant with a mixture of willows and natives.  It would be a more natural repair than a rock lining, very much cheaper to the Lower Manawatu River Control Scheme and at no cost to PNCC. However, given the height of the bank it would require a significant amount of berm to batter it back which would require the shared path to be moved. This would be a cost of $15,000 to PNCC. 

 

3.         Description of options

3.1       Option 1 - Contribute $125,000 to Horizons RC to rock line the riverbank to prevent further erosion occurring and $5,000 to repair damage to the existing pathway.

3.2       Option 2 – Batter back the riverbank and replant with willows as a bank protection measure.  Relocate the pathway away from the river bank works at a cost of $15,000.

4.         Analysis of options

4.1       Option 1 - Contribute $125,000 to Horizons RC to rock line the riverbank to prevent further erosion occurring.

4.2       Horizons has written to PNCC (letter attached) suggesting that its typical approach to issues such as this is the planting of willow trees as an erosion prevention measure.

4.3       In this case however Horizons propose to rock line the river bank rather than batter and plant because the height of the bank is such that it would require a significant amount of berm to batter it back which would require the shared path to be moved. The path removal and realignment closer to the Victoria Esplanade would be a cost to PNCC of $15,000. 

4.4       Horizons engineers estimate the cost of the rock extension works to be $250,000 and seeks a 50% contribution from PNCC.  Horizons will carry out the design and implementation of the work at no cost to PNCC apart from repairing the existing path that has been damaged by the erosion.

4.5       The completed rock protection structure would be added to the Lower Manawatu River Control Scheme asset inventory and would be inspected and maintained by Horizons.

 

 

4.6       Option 2 – Batter back the riverbank and replant with willows as a bank protection measure.

4.7       The current Victoria Esplanade erosion is on a straight section of river, so there is a choice.  Horizons could simply batter back the bank and plant with a mixture of willows and natives.  It would be a more natural repair than a rock lining, very much cheaper to the Lower Manawatu River Control Scheme and at no cost to PNCC. However, given the height of the bank it would require a significant amount of berm to batter it back which would require the shared path to be moved. This would be a cost to PNCC of $15,000. 

4.8       The planting option will take a longer time to establish and offers less protection than the rock lining option. Planting would need to be done in the cooler months of the year which will delay the project until mid 2018 when the flood risk is higher.

5.         Conclusion

5.1       Recent flooding has resulted in bank slumping and erosion below the Victoria Esplanade 50 metres downstream from the recently constructed rock lining works.

5.2       The recommended treatment is to rock line the river bank from the existing rock lining to the area of current erosion.  The cost has been estimated at $250,000. Horizons propose that the costs be shared equally between Horizons and Palmerston North City Council.  Horizons will be responsible for the design, procurement and construction supervision at no cost to PNCC.  The work would be carried out early in 2018.

5.3       To ensure the situation does not become worse it is suggested that Horizons be encouraged to undertake the works as soon as practicable.

6.         Next actions

6.1       The next step would be to liaise with Horizons to plan the work.

7.         Outline of community engagement process

7.1       There has been no specific community consultation for the current erosion issue; however previous experience of erosion at the Ashhurst Domain has indicated that the community are very concerned that issues such as this are not dealt with at an early stage.

7.2       An article about the erosion of the river bank and damage to the shared path appeared in the Manawatu Standard on the 12th of August 2017 which highlighted the issue to the community.

 

8.         Compliance and administration

8.1       Adoption of Option 1 would see Council’s contribution of $125,000 as an operational cost within the City Reserves General Activity.

 

8.2       This Activity Budget attends to maintenance issues as and when they arrive. It did not foresee this requirement and therefore the budget will need to be monitored more actively going forward.

 

8.3       Attending to the pathway repairs will be a charge on the Roading General Activity Budget.

 

Does the Committee have delegated authority to decide?

If Yes quote relevant clause(s) from Delegations Manual <Enter clause>

No

Are the decisions significant?

No

If they are significant do they affect land or a body of water?

 

Can this decision only be made through a 10 Year Plan?

No

Does this decision require consultation through the Special Consultative procedure?

No

Is there funding in the current Annual Plan for these actions?

Yes

Are the recommendations inconsistent with any of Council’s policies or plans?

No

 

 

Attachments

1.

Appendix 1 Esplanade Erosion

 

 

 

John Brenkley

Parks & Property Manager

 

 

 

 

 

 

 

 


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PALMERSTON NORTH CITY COUNCIL

 

Committee Work Schedule

TO:                                Finance and Performance Committee

MEETING DATE:           18 September 2017

TITLE:                            Committee Work Schedule September 2017

 

 

RECOMMENDATION(S) TO Finance and Performance Committee

1.   That the Finance and Performance Committee receive its Work Schedule dated September 2017.

 

 

Attachments

1.

Committee Work Schedule

 

    


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