Agenda of Finance and Performance Committee

PALMERSTON NORTH CITY COUNCIL

Finance and Performance Committee MEETING

18 March 2019

Order of Business

NOTE: The Finance and Performance Committee meeting coincides with the ordinary meeting of the Council. The meetings will conduct business in the following order:

- Council

- Finance and Performance Committee

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. Declarations of Interest (if any)

Members are reminded of their duty to give a general notice of any interest of items to be considered on this agenda and the need to declare these interests.

4. 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.)

5. Deputation - Maruna Engu Page 7

6. Confirmation of Minutes Page 9

“That the minutes of the Finance and Performance Committee meeting of 18 February 2019 Part I Public be confirmed as a true and correct record.”

7. Palmerston North Airport Ltd - Interim Report for 6 months to 31 December 2018 Page 15

Memorandum, dated 28 February 2019 presented by the Strategy Manager Finance, Steve Paterson.

8. Palmerston North Airport Ltd - Draft Statement of Intent for 2019/20 Page 33

Memorandum, dated 28 February 2019 presented by the Strategy Manager Finance, Steve Paterson.

9. Additional Capital Renewal Funding for CAB Works Page 63

Memorandum, dated 16 January 2019 presented by the Property Manager, Bryce Hosking.

10. Whakarongo Residential Development Page 67

Memorandum, dated 26 February 2019 presented by the Property Manager, Bryce Hosking.

11. Papaioea Place Redevelopment Quarterly Update Page 71

Memorandum, dated 28 February 2019 presented by the Property Manager, Bryce Hosking.

12. Aquatic Facilities - Free admission of under five year olds Page 75

Memorandum, dated 7 March 2019 presented by the Parks and Reserves Manager, Kathy Dever-Tod.

13. Committee Work Schedule Page 79

14. 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
15.	Minutes of the Finance and Performance Committee meeting - Part II Confidential - 18 February 2019	For the reasons setout in the Finance and Performance Committee minutes of 18 February 2019, held in public present.

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), Chief Infrastructure Officer (Tom Williams), General Manager – Strategy and Planning (Sheryl Bryant), General Manager - Community (Debbie Duncan), Chief Customer and Operating Officer (Chris Dyhrberg), General Manager - Marketing and Communications (Sacha Haskell), Sandra King (Executive Officer) 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 Executive Leadership 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.

Committee Administrators (Penny Odell, Rachel Corser and Courtney Kibby), because of their knowledge and ability to provide the meeting with procedural advice and record the proceedings of the meeting.

[Add Council Officers], 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

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 18 February 2019, commencing at 9.04am

Members

Present:

Councillor Susan Baty (in the Chair), and Councillors Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Karen Naylor and Bruno Petrenas.

Non Members:

Councillors Brent Barrett, Rachel Bowen and Duncan McCann.

Apologies:

The Mayor (Grant Smith) (lateness on Council Business) and Councillors Leonie Hapeta (early departure), Aleisha Rutherford and Tangi Utikere (lateness).

Councillor Leonie Hapeta left the meeting at 9.10am during consideration of clause 3. She was not present for clauses 3 to 8 inclusive.

Councillor Tangi Utikere entered the meeting at 9.40am during consideration of clause 5. He was not present for clauses 1 to 4 inclusive.

1-19

Apologies

Moved Vaughan Dennison, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the Committee receive the apologies.

Clause 1-19 above was carried 13 votes to 0, the voting being as follows:

For:

Councillors Brent Barrett, Susan Baty, 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.

2-19

Confirmation of Minutes

Moved Vaughan Dennison, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the minutes of the Finance and Performance Committee meeting of 17 December 2018 Part I Public be confirmed as a true and correct record.

Clause 2-19 above was carried 13 votes to 0, the voting being as follows:

For:

3-19

Acquisition of Fitzherbert East Road site for Landfill Purposes

Memorandum, dated 8 January 2019 presented by the Property Manager, Bryce Hosking.

Councillor Leonie Hapeta left the meeting at 9.10am

Moved Susan Baty, seconded Vaughan Dennison.

The COMMITTEE RECOMMENDS

1. That Council agrees to enter into the Reverse Sensitivity Encumbrance arrangement as part of the acquisition of the Fitzherbert East Road site for Landfill Purposes.

Clause 3-19 above was carried 12 votes to 0, the voting being as follows:

For:

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

4-19

E-Waste Recycling at Ferguson Street - First Six Months of Reduced Fees

Memorandum, dated 30 January 2019 presented by the Waste Management Manager, Stewart Hay.

Moved Brent Barrett, seconded Bruno Petrenas.

The COMMITTEE RESOLVED

1. That the information provided in the Memorandum dated 30 January 2019 and titled ‘E-Waste Recycling at Ferguson Street – First Six Months of Reduced Fees’ be received by the Finance and Performance Committee.

Clause 4-19 above was carried 12 votes to 0, the voting being as follows:

For:

5-19

Quarterly Performance and Finance Report - Quarter Ending 31 December 2018

Memorandum, dated 1 February 2019 presented by the Finance Manager, Stuart McKinnon.

Councillor Tangi Utikere entered the meeting at 9.40am

Moved Karen Naylor, seconded Brent Barrett.

The COMMITTEE RESOLVED

1. That the Committee receives the December 2018 Quarterly Performance and Financial Report.

Clause 5-19 above was carried 13 votes to 0, the voting being as follows:

For:

6-19

Treasury Report for 6 months ended 31 December 2018

Memorandum, dated 25 January 2019 presented by the Strategy Manager Finance, Steve Paterson.

Moved Susan Baty, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the performance of the treasury activity for the 6 months ending 31 December 2018 be noted.

Clause 6-19 above was carried 13 votes to 0, the voting being as follows:

For:

7-19

Committee Work Schedule

Moved Susan Baty, seconded Karen Naylor.

The COMMITTEE RESOLVED

1. That the Finance and Performance Committee receive its Work Schedule dated February 2019.

Clause 7-19 above was carried 13 votes to 0, the voting being as follows:

For:

Exclusion of Public

8-19

Recommendation to Exclude Public

Moved Susan Baty, seconded Vaughan Dennison.

The COMMITTEE RESOLVED

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

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
12.	Award of Contract 3696 for Engagement of Legal Advisor for the Wastewater BPO Project	Third Party Commercial	s7(2)(b)(ii)

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), Chief Infrastructure Officer (Tom Williams), General Manager – Strategy and Planning (Sheryl Bryant), General Manager - Community (Debbie Duncan), Chief Customer and Operating Officer (Chris Dyhrberg), Human Resources Manager (Wayne Wilson), General Manager - Marketing and Communications (Sacha Haskell) 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.

Transport and Infrastructure Manager (Robert van Bentum) and Commercial Advisory Manager (Fiona Dredge), 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 8-19 above was carried 12 votes to 0, with 1 abstention, the voting being as follows:

For:

Councillors Susan Baty, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas and Tangi Utikere.

Abstained:

Councillor Brent Barrett.

The public part of the meeting finished at 9.58am

Confirmed 18 March 2019

Chairperson

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 18 March 2019

TITLE: Palmerston North Airport Ltd - Interim Report for 6 months to 31 December 2018

DATE: 28 February 2019

PRESENTED BY: Steve Paterson, Strategy Manager Finance, Finance

APPROVED BY: Grant Elliott, Chief Financial Officer

RECOMMENDATION(S) TO Council

1. That the Interim Report and Financial Statements of Palmerston North Airport Ltd for the period ended 31 December 2018 be received.

1. ISSUE

Palmerston North Airport Ltd (PNAL), as a Council-Controlled Organisation, is required to provide a 6 monthly report to the Council. The report for the period ending 31 December 2018 is attached.

2. BACKGROUND

PNAL’s draft Statement of Intent (SOI) for 2018/19 was considered by the Council in March 2018 and the final SOI was considered by the Council in June 2018.

Performance for the year to date is covered in the report by the Chair and Chief Executive. They outline the key components of what has been another busy period for the airport with increased passenger numbers and better overall financial performance. This outcome is very pleasing.

The Council has been paid a dividend of $643,650 based on the previous year’s results – this compares with the Council’s budget for 2018/19 of $500,000.

PNAL has prepared its draft SOI for the 2019/20 year and this is being considered under a separate report.

3. NEXT STEPS

PNAL will prepare and forward an annual report after 30 June 2019.

4. COMPLIANCE AND ADMINISTRATION

Does the Committee have delegated authority to decide?		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
The recommendations contribute to Goal 1: An Innovative and Growing City
The recommendations contribute to the outcomes of the City Development Strategy
The recommendations contribute to the achievement of action/actions in the Strategic Transport Plan The action is: Work with the airport company to ensure the airport’s strategic intent aligns with the City’s aspirations
Contribution to strategic direction	This report outlines progress to date.

Attachments

Interim Report to 31 December 2018 ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 18 March 2019

TITLE: Palmerston North Airport Ltd - Draft Statement of Intent for 2019/20

DATE: 28 February 2019

PRESENTED BY: Steve Paterson, Strategy Manager Finance, Finance

APPROVED BY: Grant Elliott, Chief Financial Officer

RECOMMENDATION(S) TO Council

1. That the Palmerston North Airport Ltd draft Statement of Intent for 2019/20 be received and its assumptions endorsed.

1. ISSUE

To present and provide comment on the draft Statement of Intent for Palmerston North Airport Ltd (PNAL) for 2019/20.

2. BACKGROUND

PNAL is deemed a Council-Controlled Trading organisation (CCTO) under the Local Government Act 2002. A CCTO must deliver a draft Statement of Intent (SOI) to shareholders by 1 March each year and adopt it by 30 June. The Council must, as soon as possible after a draft SOI is delivered to it agree to a CCTO’s SOI or, if it does not agree, take all practicable steps under clause 5 of Schedule 8 of the Local Government Act 2002 to require the SOI to be modified.

Attached is a letter from PNAL to shareholders explaining the enclosed draft SOI and outlining the key assumptions.

The draft SOI retains the vision from the current year “New Zealand’s leading regional airport”. The mission (aims and values) and strategic objectives sections are unchanged from the updated version in 2018/19.

It has been assumed the airport will operate as a Tier 2 domestic regional one over the next three years. Further growth in the domestic activity, and as a consequence increased revenue and related operating expenses is forecast.

The capital expenditure programme has two components. Airside and landside infrastructure assets (pavement, Airport Drive, terminal and carpark) are scheduled for on-going upgrades. In addition, commercial development (development of the business park including two rental car facilities, and other light industrial, freight and logistics and accommodation facilities) is scheduled over the next three years.

The draft SOI contains an assumption that capital expenditure of $19.02m will be phased across the three years, funded in part ($4.29m) from the sale of non-strategic land and a net increase of $2.16m in term borrowing.

Shareholders’ funds are forecast to be approximately 70% of total assets through the three-year term of the SOI.

Financial performance targets/forecasts are included vis:

	Draft SOI 2019/20 Budget	SOI 2018/19 Budget
NPBIT : Total assets	4.2%	3.9%
NPAIT : Shareholders’ funds	3.5%	3.1%
Shareholders’ funds: Total assets (>40%)	70%	72%
Interest cover (>2.5)	5.5	4.9
Tangible Net Worth (>$50m)	$63.4m	$60.0m
Dividends - % of NPAT	40%	40%

Non-financial targets relate to:

· Maintaining a customer satisfaction Net Promoter score of 50 or above (measured annually – target 60 for 2019/20)

· Serving 692,000 passengers during the 2019/20 year increasing to 715,000 for the following year and 774,000 in the June 2022 year (684,000 forecast for 2018/19)

· Maintaining Civil Aviation Rule Part 139 certification and having no adverse findings from the annual audit

· Zero lost time injuries to those who work within the airport community

· Complete roadmap to carbon neutrality

· Achievement of emission reduction targets.

Council’s 10 Year Plan 2018-28 assumes PNAL will pay the Council shareholder dividends of $500,000 during 2018/19 increasing by $50,000 p.a. for the following three years. The SOI assumes a payment of $744,000 in 2019/20 and payments of $899,000 and $1,155,000 in the following two years. These significant increases in dividends will obviously be reliant on achieving the assumed growth and PNAL meeting the appropriate solvency tests.

The Council’s reason for its shareholding in PNAL is to ensure that the capacity and image of the City’s key transportation gateway is consistent with the Council’s economic development objectives. PNAL encapsulates this with specific acknowledgement in clause 12.

As a CCTO PNAL is required under the Local Government Act 2002 to have the following principal objective:

· Achieve the objectives of its shareholders, both commercial and non-commercial, as specified in the Statement of Intent; and

· Be a good employer; and

· Exhibit a sense of social and environmental responsibility by having regard to the interests of the community in which it operates and by endeavouring to accommodate or encourage these when able to do so; and

· Conduct its affairs in accordance with sound business practice.

The Council’s shareholding represents 100% of the issued and paid-up capital.

PNAL’s letter outlines the assumptions which have been made in preparing the draft SOI. These appear reasonable.

3. NEXT STEPS

The Council can either endorse the SOI as presented or make suggestions for change to a greater or lesser extent. No material recommendations are being made for change other than one in relation to the performance measure for the level of net worth of PNAL.

PNAL is obliged to consider shareholder comments then decide whether or not to make any changes to the draft when adopting the final SOI before 30 June 2019.

4. COMPLIANCE AND ADMINISTRATION

Does the Committee have delegated authority to decide?		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
The recommendations contribute to Goal 1: An Innovative and Growing City
The recommendations contribute to the outcomes of the City Development Strategy
The recommendations contribute to the achievement of action/actions in the Strategic Transport Plan The action is: Work with the airport company to ensure the airport’s strategic intent aligns with the City’s aspirations
Contribution to strategic direction	The draft Statement of Intent includes a direction and specific actions that are designed to continue to improve the airport for customers and stimulate growth

Attachments

1.	Covering Letter from PNAL ⇩
2.	Draft SOI for 2019/20 ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 18 March 2019

TITLE: Additional Capital Renewal Funding for CAB Works

DATE: 16 January 2019

Presented By: Bryce Hosking, Property Manager, Infrastructure

APPROVED BY: Tom Williams, Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That Council approve an additional $145,000 of capital renewal funding for the 2018/19 year to complete stage 2 of the CAB fire upgrade work.

2. That Council approve an additional $35,000 of capital renewal funding for the 2018/19 year for the designing/ consenting work for stage 3 of the CAB fire upgrade work.

3. That Council approve an additional $30,000 of capital renewal funding for the 2018/19 year for the construction of a kitchenette on the 5^th floor of the CAB.

4. That Council approve an additional $50,000 of capital renewal funding for the 2018/19 year for the replacement of the carpet in the ground floor office of the CAB.

1. ISSUE

1.1 There are several important works that need to be completed in the CAB in the current 2018/19 year. These works are, with indicative costings:

· Stage 2 of the fire safety upgrade work – $952,388 (shortfall $145,000);

· Designing and consenting for stage 3 of the fire safety upgrade work – $35,000;

· The installation of a kitchenette on the 5^th floor office wing – $30,000; and

· The replacement of the carpet in the ground floor offices – $50,000.

Additional funding required for these works total $260,000 + GST.

1.2 Funding for renewal works in the CAB is held within the capital renewal Programme 281 – Operational Property – Civic Administration Building – Refurbishments. This programme has $807,244 available in the current 2018/19 year and is fully committed for the Stage 2 fire safety upgrade work.

1.3 With the 2018/19 budget being fully committed already, this has not allowed for any other important works to be completed within the existing budgets.

1.4 The budgets in the future years within Programme 281 are also fully committed. Council Officers do not feel it is prudent or feasible to bring monies forward from future years to get the other works underway or to cover the shortfall in the stage 2 works. Doing so would simply push the problem into the budgets in future years of this programme.

1.5 Council Officers have investigated opportunities for savings from other programmes but unfortunately, have been unable to find any.

2. further detail of works to be completed

Stage 2 – Fire Safety Upgrade Work

2.1 Funding for the fire safety upgrade work began in the 2015/16 year. This was for the planning, staging, consenting and pricing of the project.

2.2 Stage 1 of the physical works began in the 2017/18 year and were completed in the same year as scheduled.

2.3 Stage 2 of the fire safety upgrade work began in the current 2018/19 year and is on track to be completed in March 2019 as planned.

2.4 Stage 2 has cost significantly more than budgeted for primarily due to increased labour costs, and the fire doors required increasing significantly in cost.

2.5 $145,000 of additional funding in the current 2018/19 year is required to meet the contract cost obligations of this work.

Stage 3 – Fire Safety Upgrade Work

2.6 Stage 3 of the fire safety upgrade work is essential and must also be completed. There is funding provision in next year’s 2019/20 financial year budgets for the stage 3 physical works to be completed.

2.7 To ensure the project works can be completed in the 2019/20 year, it is essential the detailed design and consenting phase of the project be completed this year, so contractors can be secured and physical works can begin as early as possible in the new financial year.

2.8 $35,000 of additional funding is requested so this work can be undertaken in the current 2018/19 year.

2.9 The stage 3 fire safety upgrade work must be completed prior to beginning earthquake strengthening work in the CAB core. For clarity, planning, detailed design and consenting work for CAB strengthening is being completed in the 2019/20 year, with the physical strengthening works planned to begin in the following 2020/21 year.

5^th Floor Kitchenette

2.10 The 5^th floor upgrade was completed in the 2017/18 year. This allowed for the office to be taken back to a basic office shell so it could be occupied in the future. Works included new carpet, new seismically safe ceiling tiles, lighting, and wall painting.

2.11 At the time the upgrades were completed, there was no immediate plan for the 5th floor to be occupied. To keep the layout options open for the wing, no kitchenette was installed.

2.12 Early in the current 2018/19 year the Communications and Marketing unit was created, and due to space restrictions were placed in the 5^th floor office wing. Adding to this, an additional 10-15 people are moving in February 2019 from the 3^rd floor of the library building to the 5^th floor to improve the evacuation speed in the library. This will result in the floor now being fully occupied.

2.13 Currently all staff in this wing are required to go to other floors or over to the cafeteria if it is open, for their access to water and tea and coffee facilities. Given the wing is now full, and the location of the cafeteria within the CAB is uncertain, this is not an appropriate solution moving forward.

2.14 For clarity, even if the 5^th floor space was leased to an external tenant, installing a kitchenette would need to be installed by Council anyway.

2.15 The kitchenette will be purchased and installed by Council’s building trades team to ensure this is completed in a timely manner.

2.16 $30,000 of additional funding is requested so this work can be undertaken in the current 2018/19 year.

Replacement of Ground Floor Carpet

2.17 Most of the carpet throughout the CAB has been replaced as required over the past 10 years. This is generally scheduled into the then current 10-year plan.

2.18 The carpet in the areas occupied as offices by council staff is in a state of disrepair and needs to be replaced. As the carpet is beginning to tread and lift in places it is now becoming a health and safety issue by creating trip hazards.

2.19 As the carpet will be commercial grade carpet tiles as opposed to long-run carpet, this allows for future options of the space to be considered rather than just the current layout.

2.20 $50,000 of additional funding is requested so the carpet can be purchased and laid in the current 2018/19 year.

3. NEXT STEPS

3.1 Stage 2 of the fire safety upgrades will be completed as scheduled in March 2019.

3.2 Appropriate Council Officers and a qualified fire engineer will be engaged in March 2019 to complete the detailed design, planning, consenting of stage 3 of the fire safety upgrade work ahead of the 2019/20 year.

3.3 The kitchenette materials will be ordered in March 2019, with the kitchenette being installed in April 2019.

3.4 Carpet tiles for the ground floor will be ordered in March 2019 and laid as soon as practically and logistically possible.

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?		No
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 5: A Driven and Enabling Council
The recommendations contribute to the outcomes of the Driven and Enabling Council Strategy
The recommendations contribute to the achievement of action/actions is Not Applicable
Contribution to strategic direction	Works in this report are internal works improving the safety for occupation of the CAB. This is good governance.

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 18 March 2019

TITLE: Whakarongo Residential Development

DATE: 26 February 2019

Presented By: Bryce Hosking, Property Manager, Infrastructure

APPROVED BY: Tom Williams, Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That Council approves the sale of the Council-owned land within the Whakarongo residential growth area as residential sections and delegates to the Chief Executive the authority to negotiate the terms and conditions of sale.

1. issue

1.1 The Local Government Act 2002 does not allow Council to delegate the power to dispose of assets, other than in accordance with their Long-Term Plan.

1.2 However, our Council goes further, and has retained the authority to dispose of, or sell, any real property. For clarity, this means Council has not delegated the authority to dispose of, or sell, any land or buildings even if it is signalled in the 10-Year Plan.

1.3 This means that despite the current Long-Term Plan anticipating that Council will develop the land it owns within the Whakarongo Residential Area, and includes the appropriate budgets to do so, any decision to sell the land at Whakarongo must be made by Council, and thus report from Council Officers would be required each time.

1.4 As the land is being developed into a large number of residential sections and the intention is to sell these individually within the property marketplace, Council Officers do not believe it is not practical to bring a separate report up to Council for each section being sold.

1.5 To ensure a smooth process and ease of purchase experience for the individual purchasers, Council Officers are seeking for the Chief Executive to be given the delegated authority to negotiate the terms and conditions of sale, and by extension sell the sections, within this residential development.

2. background

2.1 Palmerston North City Council owns an area of 9.63ha within the upper terrace of the Whakarongo residential growth area off James Line.

2.2 The land was acquired by Council for cemetery purposes but was no longer required. As obliged under the public works process the land was offered back to the previous owners to purchase, but no offer was received.

2.3 Given no offer was received, the parcel of land was subsequently rezoned for residential use.

2.4 The Long-Term Plan anticipates that Council will develop this land and funding has been allocated to begin in the 2018/19 financial year through Programme 1485.

District Plan

2.5 The District Plan includes a specific Structure Plan and suite of planning provisions for the Whakarongo Residential Area that will direct the subdivision design and development.

2.6 Palmerston North City Council views this as an opportunity to initiate development at Whakarongo and deliver a subdivision consistent with the requirements of the recently reviewed District Plan.

Overview of the Development

2.7 Once developed the site will create around 115 residential sections. Sections will be of a variety of sizes so to appeal to a wide variety of purchasers by giving options regarding design, build type and purchase price.

2.8 In a broad sense, the project can be split into 3 phases:

1. Design, Planning and Consenting;

2. Project Management and Delivery of Physical Works; and

3. Marketing and Selling of Sections.

2.9 It is anticipated that the resource consent application for the development will be submitted in Mid-late March 2019. For clarity, an independent commissioner will make the decision on the resource consent application for this development.

3. NEXT STEPS

3.1 Submit the resource consent application for approval by the independent commissioner and Council’s regulatory team.

3.2 Begin procurement of contractors and start physical works on the site once resource consent is granted. Works can begin as soon as practically possible.

3.3 Sell the sections in the property marketplace.

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
The recommendations contribute to Goal 1: An Innovative and Growing City
The recommendations contribute to the outcomes of the City Development Strategy
The recommendations contribute to the achievement of action/actions in the Housing and Future Development Plan The action is: Housing development is initiated at Whakarongo.
Contribution to strategic direction	Progressing a Council-led housing development at Whakarongo (2018/19 onwards).

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 18 March 2019

TITLE: Papaioea Place Redevelopment Quarterly Update

DATE: 28 February 2019

Presented By: Bryce Hosking, Property Manager, Infrastructure

APPROVED BY: Tom Williams, Chief Infrastructure Officer

RECOMMENDATION(S) TO Finance and Performance Committee

1. That the memorandum dated 28 February 2019 and titled `Papaioea Place Redevelopment Quarterly Update’ be received for information.

1. ISSUE

1.1 Stage 1 of the Papaioea Place housing project is funded through Programmes 357 and 1277 – C/fwd of the 2018 10-Year Plan.

1.2 The Finance and Performance Committee Chairperson has requested a quarterly update to be brought back to the Finance and Performance meeting for the duration of the construction period.

1.3 The Construction Programme was received from Latitude Homes in June and presented to Finance and Performance at the 18 June 2018 meeting for information.

2. BACKGROUND

2.1 The Papaioea Place project form of contract is a design and build contract between Palmerston North City Council (Principal) and Latitude Homes (Contractor) of New Plymouth.

2.2 The overall project management is being provided by WT Partnership Advisory. The day-to-day project management is being carried out by Council Officers.

2.3 Site meetings and Project Control Group meetings are held on the last Thursday of each month. The most recent meetings being 27 February 2019.

3. SUMMARY – PROJECT CONTROL GROUP MEETING 9: 27 FEBRUARY 2019

Health and Safety

3.1 There have been no health and safety incidents reported since the last update to Council dated 17 December 2018.

Programme

3.2 Blocks 1 and 2 of Stage 1 were completed by 28 February 2019 as planned. A blessing of the units occurred on 1 March 2019, followed by a civic ceremony on 4 March 2019. The tenants then moved in to the units from 5 March 2019.

3.3 With the change in legislation occurring regarding fixed heating being installed in all rental properties; electric wall-mounted heaters will be retrospectively installed in all units of Blocks 1 and 2. At the time of writing this report, the heating solution was still being priced, however, this can be accommodated within the project budget contingency.

3.4 For clarity, the same heating solution provided in Clause 3.3 will be installed in all future units of the development for consistency.

3.5 Works have now commenced for Part 2 of Stage 1: Blocks 3 and 4. Blocks 3 and 4 are due for completion in December 2019.

3.6 Immediate works commencing on the site include temporary fencing around Blocks 3 and 4, asbestos removal in the old units, before the removal and demolition of the 4 old blocks.

Regulatory

3.7 Landscape design has been approved by Council. Landscape planting will commence in April 2019, while all grass areas have already been laid and are being maintained.

3.8 All Council final inspections have occurred for Blocks 1 and 2, and all units have passed.

3.9 Code of Compliance Certificates have been issued for Blocks 1 and 2.

Design

3.10 There are currently no design items outstanding.

Financial

3.11 Variations to date:

Description	Amount ($)
Excavation of soft spots/ Asbestos removal	$37,854
Provision for Sky TV connections	$4,760
Additional light switches	$5,040
Renewal extension of contractor’s professional indemnity insurance (1yr given need to extend contract period)	$9,311
Bond in lieu of retentions	$3,500
Curtains	$67,500
Chorus Connections	$60,000
Landscaping	$18,000
Total	$205,965

3.12 These variations have been accommodated within the project contingency. For clarity, the heating solution discussed in Clause 3.3 is not yet accounted for in either the above or below tables.

3.13 An overview of the Project Budget Status is in the table below:

Description	Project Budget	Budget Variance	Final Forecast
Construction	$6,646,031	$205,965	$6,851,996
Professional Fees	$265,400	$0	$265,400
Authorities Fees	$55,000	$0	$55,000
Construction Contingency	$332,561	$205,965	$126,596
Project Contingency	$333,000	$0	$333,000
Total	$7,631,992	$0	$7,631,992

4. NEXT STEPS

4.1 Continue the construction programme to complete Stage 1 as per the budget and timeline.

5. Compliance and administration

Does the Committee have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual <Enter clause>		Yes
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
The recommendations contribute to Goal 3: A Connected and Safe Community
The recommendations contribute to the outcomes of the Connected Community Strategy
The recommendations contribute to the achievement of action/actions in the Social Housing Plan The action is: Upgrade the Papaioea housing complex (by end of 2018/2019).
Contribution to strategic direction	Programme 357 is stage 1 of the Papaioea Place Redevelopment project – to demolish 32 existing units and create 50 new units in their place which will be suitable for tenants to age in place.

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 18 March 2019

TITLE: Aquatic Facilities - Free admission of under five year olds

DATE: 7 March 2019

Presented By: Kathy Dever-Tod, Parks and Reserves Manager, Infrastructure

APPROVED BY: Tom Williams, Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That the Council notes that the cost to implement free swimming for under five-year olds, is estimated to be $28,971 per annum, based on an assumption of current numbers

2. That the Council notes that more analysis is needed to obtain a better picture of future use, including a survey of potential users and contractual obligations, and a full paper with recommendations will come to the Finance and Performance Committee in August 2019.

1. ISSUE

1.1 Council instructed the Chief Executive to report back on the cost of providing free swimming for children under 5 years old at the Lido and Freyberg Aquatic Facilities.

1.2 Council has monthly admission records dating back to 2003 however these records do not provide information on pre-school admissions.

1.3 It is not possible to report back to Councillors on the actual cost of a policy of free swimming for pre-school children with the current information available.

2. BACKGROUND

2.1 CLM manage the Lido and Freyberg Pools under a long-term Aquatic Facilities Management Contract with Council. Council sets the maximum admission and concession charges and CLM collects the revenue.

2.2 As part of their monthly reporting, CLM provides a report on admission numbers, as recorded through their electronic point of sales system. This enables Council to understand the number of people entering the pools as part of a family or school group, on a concession card, or as individuals. Pre-schoolers are currently recorded as part of the child admission category.

2.3 Since the beginning of January 2019, CLM have been recording the number of children five years and under entering the pools. These numbers are presented below:

	Pool	January	February
5 years and under	Lido	446	454
	Freyberg	155	207
		601	661

6 – 15 years	Lido	8,813	3,780
	Freyberg	1,307	646
		10,120	4,426

Total Number of Child visits		10,721	5,087

2.4 The survey figures show that the total number of children entering the pools in February was 53% less than in January. This reduction corresponds with the end of the school holidays. This trend is consistent with the same period in previous years.

2.5 By contrast, the number of children five years and under entering the pools was 2% higher at the Lido and 34% higher at the Freyberg in February, compared to January. The figures suggest that visitations by this young age group are inversely related to school holidays – when the school holidays end, visits increase. Possible factors may include more mid-week trips by carers and children whilst older children are at school, young children accompanying carers whilst older siblings attend swimming classes etc.

2.6 During the survey period the total number of visits by children five years and under was 1,262. If this figure is extrapolated, the estimated annual pool entry is 7,572.

2.7 The increase in the number of visits, when the school holidays end, suggests most of the survey group were less than five years in age, and therefore the survey data represents pre-schoolers. It should be noted, however that this is an assumption, not a conclusion.

2.8 The current entry fee for children is $4.00. This is due to increase to $4.40 on 1^st July 2019. Using the new price, and the assumption that the survey data can be used to estimate the number of pre-schoolers likely to enter the pools each year, the cost to Council of providing free entry to pre-schoolers is estimated to be $33,317 including GST, and $28,971 excluding GST.

2.9 The above estimate is based purely on the loss of entry fees for children under five years old. There are several other factors Council needs to consider including:

o The impact of a free entry policy on the number of times pre-schoolers and their families visit the pool – is cost a barrier to demand, or are there other barriers?

o The seasonal pattern of pre-school entry into the pool is largely unknown - estimates may under or over represent actual entry figures

o The impact of an increase in demand on current operating costs – for the operator and subsequently Council

o The impact of a free entry policy for pre-schoolers on other pool entry categories, for example will it reduce the number of family concessions sold?

o Which party will carry the contractual risk associated with free entry when the impacts of the policy may not be known for some time.

2.10 To establish the a more reliable estimate of the cost of a policy of free swimming for pre-schoolers, more information is required. This includes admission data over a longer period, and user intercept survey information collected at the facilities to assess price sensitivity, frequency and timing of pre-school visits. This would enable officers to better understand the likely impact of a free pre-school swimming policy on demand, and enable the preparation of policy options for Council’s consideration, including free entry and reduced-price entry, with or without limitations on visitation times.

3. NEXT STEPS

3.1 Officers will continue to analyse admission data at the pools, and request that CLM collect data for children under five going forward, rather than children five years and under. This will enable Council to track usage of the pools by pre-schoolers.

3.2 Officers will come back to the Committee with a policy recommendation for pre-school admission to swimming pools in August 2019

2. 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
The recommendations contribute to Goal 2: A Creative and Exciting City
The recommendations contribute to the outcomes of the Creative and Liveable Strategy
The recommendations contribute to the achievement of action/actions in the Active Community Plan The action is: Through contract and facility management, and discussions with facility managers, optimise the use of Council aquatic facilities and the Central Energy Trust Arena.
Contribution to strategic direction	Removing financial barriers to accessing Aquatic facilities enables citizens to remain connected and active Ensuring that facilities are profitable, enables them to continue to be run at a high standard and offer a range of services, without impacting on other services of Council.

Attachments

Nil

Susan Baty (Chairperson)
Jim Jefferies (Deputy Chairperson)
Grant Smith (The Mayor)
Adrian Broad	Leonie Hapeta
Gabrielle Bundy-Cooke	Lorna Johnson
Vaughan Dennison	Karen Naylor
Lew Findlay QSM	Bruno Petrenas