Agenda of Finance and Performance Committee

PALMERSTON NORTH CITY COUNCIL

Finance and Performance Committee MEETING

15 April 2019

Order of Business

NOTE: The Finance and Performance Committee meeting coincides with the ordinary meeting of the Arts, Culture and Heritage Committee. The Committees will conduct business in the following order:

- Arts, Culture and Heritage Committee

- 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. Confirmation of Minutes Page 7

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

6. Huia Street Reserve Page 13

Memorandum, dated 29 March 2019 presented by the City Planning Manager, David Murphy and the Property Manager, Bryce Hosking.

7. Fees and Charges Review Page 39

Report, dated 29 March 2019 presented by the Strategy Manager Finance, Steve Paterson.

8. Quarterly Performance and Finance Report - Quarter Ending 31 March 2019 Page 101

Memorandum, dated 9 April 2019 presented by the Finance Manager, Stuart McKinnon and the Head of Community Planning, Andrew Boyle.

9. Treasury Report - 9 months ended 31 March 2019 Page 181

Memorandum, dated 3 April 2019 presented by the Strategy Manager Finance, Steve Paterson.

10. External Fundraising Update Page 191

Memorandum, dated 29 March 2019 presented by the Commercial Advisory Manager, Fiona Dredge.

11. Committee Work Schedule Page 195

12. 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
13.	CET Arena Artificial Pitch Project Update	Commercial Activities	s7(2)(h)

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.

Property Manager (Bryce Hosking) because of his knowledge and ability to assist the meeting in speaking to his 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 March 2019, commencing at 9.00am

Members

Present:

Councillor Susan Baty (in the Chair), The Mayor (Grant Smith) 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, Duncan McCann and Tangi Utikere.

Apologies:

Councillors Rachel Bowen (early departure on Council Business) and Leonie Hapeta (early departure).

Councillor Rachel Bowen was not present when the meeting resumed at 10.57am. She entered the meeting at 11.28am during consideration of clause 14. She was not present for clauses 11 to 13 inclusive.

Councillor Leonie Hapeta left the meeting at 12.16pm during consideration of clause 15. She was not present for clauses 15 to 20 inclusive.

10-19

Apologies

Moved Susan Baty, seconded Jim Jefferies.

The COMMITTEE RESOLVED

1. That the Committee receive the apologies.

Clause 10-19 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and 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, Bruno Petrenas and Tangi Utikere.

The meeting adjourned at 9.01am

The meeting resumed at 10.57am

When the meeting resumed Councillor Rachel Bowen was not present.

11-19

Public Comment

Public Comment was received from Mr Peter Wheeler regarding the venues policy.

Moved Susan Baty, seconded Grant Smith.

The COMMITTEE RESOLVED

1. That the public comment be received for information.

Clause 11-19 above was carried 14 votes to 0, the voting being as follows:

For:

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

12-19

Deputation - Maruna Engu

Mr Maruna Engu made a deputation regarding the recent grant paid to Toyota and outlined the following points:

- There was disappointment and shock in the community over the grant

- Mr Engu had approached Council to help with his business idea but had not received any assistance

- There needed to be a focus on transparency

- The grant amount should be included in the economic budget over the next three years.

Moved Leonie Hapeta, seconded Bruno Petrenas.

The COMMITTEE RESOLVED

1. That the Finance and Performance Committee receive the deputation for information.

Clause 12-19 above was carried 14 votes to 0, the voting being as follows:

For:

13-19

Confirmation of Minutes

Moved Susan Baty, seconded Jim Jefferies.

The COMMITTEE RESOLVED

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

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

For:

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

Abstained:

The Mayor (Grant Smith).

14-19

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

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

Councillor Rachel Bowen entered the meeting at 11.28am

Moved Susan Baty, seconded Lew Findlay QSM.

The COMMITTEE RECOMMENDS

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

Clause 14-19 above was carried 15 votes to 0, the voting being as follows:

For:

15-19

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

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

Councillor Leonie Hapeta left the meeting at 12.16pm

Moved Karen Naylor, seconded Grant Smith.

The COMMITTEE RECOMMENDS

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

Clause 15-19 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and 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, Bruno Petrenas and Tangi Utikere.

16-19

Additional Capital Renewal Funding for CAB Works

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

Moved Vaughan Dennison, seconded Brent Barrett.

The COMMITTEE RECOMMENDS

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.

Clause 16-19 above was carried 13 votes to 1, the voting being as follows:

For:

Against:

Councillor Karen Naylor.

17-19

Whakarongo Residential Development

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

Moved Susan Baty, seconded Grant Smith.

The COMMITTEE RECOMMENDS

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.

Clause 17-19 above was carried 14 votes to 0, the voting being as follows:

For:

18-19

Papaioea Place Redevelopment Quarterly Update

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

Moved Susan Baty, seconded Karen Naylor.

The COMMITTEE RESOLVED

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

Clause 18-19 above was carried 14 votes to 0, the voting being as follows:

For:

19-19

Aquatic Facilities - Free admission of under five year olds

Memorandum, dated 7 March 2019 presented by the Property Manager, Bryce Hosking and the Chief Infrastructure Officer, Tom Williams.

Moved Lorna Johnson, seconded Brent Barrett.

The COMMITTEE RESOLVED

1. That the Committee 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 Committee 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 June 2019.

Clause 19-19 above was carried 14 votes to 0, the voting being as follows:

For:

20-19

Committee Work Schedule

Moved Susan Baty, seconded Brent Barrett.

The COMMITTEE RESOLVED

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

Clause 20-19 above was carried 14 votes to 0, the voting being as follows:

For:

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

The meeting finished at 1.12pm

Confirmed 15 April 2019

Chairperson

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 15 April 2019

TITLE: Huia Street Reserve

DATE: 29 March 2019

Presented By: David Murphy, City Planning Manager, Strategy and Planning

Bryce Hosking, Property Manager, Infrastructure

APPROVED BY: Sheryl Bryant, General Manager - Strategy & Planning

Tom Williams, Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That the Chief Executive be authorised to prepare a consultation document and undertake a consultation process under the Local Government Act 2002 prior to the Council making a decision about engaging with Parliament to initiate an amendment to the Palmerston North Reserves Act 1922 and / or the Palmerston North Reserve Empowering Act 1966 to enable the disposal or development of Huia Street Reserve (Lots 3 4 Pt Lots 1 2 DP 545) for an alternative use.

2. That it be noted that should an amendment to the Palmerston North Reserves Act 1922 and / or the Palmerston North Reserve Empowering Act 1966 be enacted or made by Parliament that the disposal or development of Huia Street Reserve (Lots 3 4 Pt Lots 1 2 DP 545) may be subject to further consultation by the Council under the Local Government Act 2002 and / or Reserves Act 1977 and Resource Management Act 1991.

3. That the Council receive the residential development scenarios prepared for the Huia Street Reserve report dated 29 March 2019 that demonstrate one option (residential development) for how the Huia Street Reserve could be used in the future, noting that any final decision on the future use of the reserve is subject to an amendment to the Palmerston North Reserves Act 1922 and / or the Palmerston North Reserve Empowering Act 1966 and the results of public consultation under the Local Government Act 2002 and / or Reserves Act 1977 and Resource Management Act 1991.

1. ISSUE

An amendment to the Palmerston North Reserves Act 1922 and / or the Palmerston North Reserve Empowering Act 1966 is required to enable the disposal or development of Huia Street Reserve.

The Council is required to prepare a consultation document and undertake a consultation process under the Local Government Act 2002 prior to making a decision about engaging with parliament.

2. BACKGROUND

City Development Strategy

The City Development Strategy, consulted on as part of the preparation of the 2018 Long Term Plan, records that:

Council will pursue the opportunity to use more public land for housing, particularly the vacant Housing NZ block. Council also has a significant property portfolio that can be used to contribute to city growth and development, while also providing revenue. This could include repurposing underutilised land or identifying land where uses can be relocated to enable sustainable housing development and intensification.

Huia Street Reserve

The portion of the reserve formerly occupied by the Manawatū Bowling Club has been vacant since 2005 and has been subject to many reports, processes and Council workshops. The most recent Council workshop confirmed that this part of Huia Street Reserve has potential for land development and is not required by the Council to meet any community or recreation needs given a review of recommendations contained in the Council’s Recreation Needs Assessment (2016) and the Manawatū-Whanganui Regional Sports Facility Plan (2018).

Consistent with the City Development Strategy, the land offers the Council an opportunity to dispose or develop the site to assist with housing supply, drive new housing typologies and realise a revenue stream for major recreation projects in the 2018 Long Term Plan. To ready the land for disposal or development, there are a number of processes that need to be actioned due to its land status.

Huia Street Reserve is held ‘in trust’ under the Palmerston North Reserves Act 1922 (PNRA 1922). The reserve was originally given to the City in 1876 by the Wellington provincial government as a public park and recreation ground and botanical garden for the inhabitants of Palmerston North and its vicinity so formed part of the wider land holding that includes the Victoria Esplanade, Manawaroa, Ongley and Fitzherbert Parks. There is no power of sale contained in the Palmerston North Reserves Act 1922.

Legislative Processes

At present there is some uncertainty regarding the exact nature of the amendments required to the Palmerston North Reserves Act 1922 and / or the Palmerston North Reserve Empowering Act 1966 to enable the disposal or development of Huia Street Reserve for an alternative use.

The Council is required to prepare a consultation document and undertake a consultation process under the Local Government Act 2002 prior to making a decision about engaging with parliament.

The recommendations cover the entire Huia Street Reserve, including the portion occupied by the Manawatu Lawn Tennis Club. Separating the entire reserve from the requirements of the Palmerston North Reserves Act 1922 and / or the Palmerston North Reserve Empowering Act 1966 does not commit the Council to disposing or developing the portion occupied by the Manawatu Lawn Tennis Club. The Manawatu Lawn Tennis Club have a lease with Council over part of the reserve that commenced in 2017 for a five-year term, with one right of renewal.

As noted in the recommendations, the disposal or development of Huia Street Reserve may be the subject to further consultation by the Council under the Local Government Act 2002 and / or Reserves Act 1977 and Resource Management Act 1991.

As noted above, the City Development Strategy was consulted on as part of the 2018 Long Term Plan.

Residential Development Scenarios

A series of residential development scenarios are attached as Appendix A.

The scenarios demonstrate one option (residential development) for how the site could be used in the future. Any final decision on the future use of the reserve is subject to an amendment to the Palmerston North Reserves Act 1922 and / or the Palmerston North Reserve Empowering Act 1966 and the results of public consultation under the Local Government Act 2002 and / or Reserves Act 1977 and Resource Management Act 1991.

The residential development scenarios have been developed to take account of the following directions from the City Development Strategy:

Other housing choices now allowed under the District Plan include multi-unit developments and minor dwellings. Multiunit developments are encouraged close to the city and suburban centres, where there is ready pedestrian access to services and facilities. Minor dwellings are aimed at meeting the demand for small, good quality and affordable rental accommodation. The planning framework enables apartments in or near the city centre, including as part of a mixed-use development. Council will actively identify opportunities and reduce barriers to city centre living and brownfield development, including transitioning Roxburgh Crescent from industrial to residential. Council will provide support for multi-unit developments, minor dwellings and city centre living, to reduce risks and uncertainty over design and consents. Co‑creation is critical to encouraging these housing types, which are unfamiliar to the Palmerston North development community.

Alternative options for the use of Huia Street Reserve can form part of more direct consultation under the Local Government Act 2002 and / or Reserves Act 1977 and Resource Management Act 1991.

3. NEXT STEPS

Determine the exact nature of the changes required to the Palmerston North Reserves Act 1922 and / or the Palmerston North Reserve Empowering Act 1966 and engage with Government to initiate the necessary amendments.

4. Compliance and administration

Does the Committee have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual		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: Collaborate with the development community to deliver new housing developments and new forms of housing.
Contribution to strategic direction	The recommendations give effect to the following within the City Development Strategy: Council will pursue the opportunity to use more public land for housing, particularly the vacant Housing NZ block. Council also has a significant property portfolio that can be used to contribute to city growth and development, while also providing revenue. This could include repurposing underutilised land or identifying land where uses can be relocated to enable sustainable housing development and intensification.

Attachments

Appendix A: Huia Street Reserve Residential Development Scenarios ⇩

PALMERSTON NORTH CITY COUNCIL

Report

TO: Finance and Performance Committee

MEETING DATE: 15 April 2019

TITLE: Fees and Charges Review

DATE: 29 March 2019

PRESENTED BY: Steve Paterson, Strategy Manager Finance, Finance

APPROVED BY: Grant Elliott, Chief Financial Officer

RECOMMENDATION(S) TO Council

1. That report be received and the current status of fees and charges be noted.

Trade waste

2. That the proposal to adopt updated fees and charges for Trade Waste services effective from 1 July 2019 as attached in Appendix 2, be approved for public consultation and the Chief Executive be authorised to undertake the necessary consultative process under sections 82 and 150 of the Local Government Act 2002.

Planning & Miscellaneous

3. That the Statement of Proposal (and the associated summary) to adopt updated fees and charges for Planning Services and Miscellaneous Services effective from 1 July 2019 as attached in Appendix 3, be approved for public consultation and the Chief Executive be authorised to undertake the necessary consultative process under sections 83 and 150 of the Local Government Act 2002.

Building

4. That the fees and charges for Building Services, as proposed in Appendix 4 be adopted and following public notification take effect from 1 July 2019.

Environmental Health

5. That the fees and charges for Environmental Health Services (in terms of regulation 7 of the Health (Registration of Premises) Regulations 1966) as proposed in Appendix 5, be adopted and following public notification, take effect from 1 July 2019.

Animal Control

6. That the fees and charges for the Impounding of Animals (in terms of section 14 of the Impounding Act 1955) and for Dog Registration and Dog Impounding (in terms of sections 37 and 68 of the Dog Control Act 1996) as proposed in Appendix 6 be adopted, and once following public notification, take effect from 1 July 2019.

Burial & Cremation

7. That the fees and charges for Burial and Cremation, as proposed in Appendix 7 be adopted and following public notification take effect from 1 July 2019.

Service Connections

8. That the fees and charges for Service Connections, as proposed in Appendix 8 be adopted and take effect from 1 July 2019.

Recycling Charges

9. That the fees and charges for Recycling as proposed in Appendix 9 be adopted and take effect from 1 May 2019.

Summary of options analysis for

Problem or Opportunity	Fees and charges need to be reviewed annually to ensure they adequately meet Revenue & Financing policy, budgetary and other objectives
OPTION 1:	Approve fee increases as proposed
Community Views	Each of different types of fees requires a different process for community engagement. Where this is legislatively controlled it is identified in the report
Benefits	More likely to comply with funding proportions contained in Revenue & Financing Policy
Risks	Public criticism of increases
	Increased charges for some activities may discourage compliance or reduce volumes
Financial	Budgeted revenue targets more likely to be achieved
OPTION 2:	Approve fee amendments for some of those proposed at greater or lesser levels
Community Views	As above
Benefits	Lower fees than recommended likely to mean policy targets will not be achieved
	Higher fees than recommended in some instances will increase likelihood of policy user fee target being achieved
Risks	Higher fees than recommended may increase the risk of public criticism
Financial	If lower increases are approved for some fees likely that budgeted revenue will not be achievable
OPTION 3:	Do not approve any fee increases
Community Views	As above
Benefits	Lower fees than recommended likely to mean policy targets will not be achieved
Risks	When increases eventually are made (to reduce the pressure on rates increases) the extent of the increase required will be publicly and politically unacceptable
Financial	If no increases are approved likely that budgeted revenue will not be achievable
Contribution of Recommended Option to Council’s Strategic Direction	Council’s Financial Strategy and Revenue & Financing Policy strive to ensure those who benefit from the provision of services are the ones who pay, where this is practicable. The proposed changes to fees and charges attempt to ensure there is a reasonable chance of this happening.

Rationale for the recommendations

1. Overview of the problem or opportunity

1.1 The purpose of this report is to provide an overview of the current status of fees and charges made by the Council and to recommend the adoption of updated fees for some of them.

1.2 It is important that fees and charges be regularly reviewed. There are a variety of reasons for this including:

· Compliance with legislative requirements – many fees and charges made by the Council are governed by specific legislation

· Consistency with Council’s Revenue and Financing policy – for each activity the Council has adopted targets for the funding mix i.e. the proportion of costs to be funded from fees and charges

· Transparency – in some instances it is important to be able to demonstrate that the charge being made represents a fair and reasonable recovery of the costs of providing a particular service

· Market comparability – for some services the Council operates in a contestable market and it is important that fees and charges are responsive to market changes.

1.3 However as a review process is sometimes very time-consuming the depth of the review for each type of fee or charge may vary depending on the circumstances.

1.4 Attached as Appendix 1 is a schedule listing, in broad terms, the various types of fees and charges made by the Council. The schedule is ordered by activity (consistent with the 10 Year Plan 2018-28) and within that by function (consistent with the Revenue & Financing Policy). Comments are made within the schedule outlining the reasons for there being no change recommended to a particular fee or charge. In cases where changes are recommended more detail is provided in the appendices.

2. Background and previous council decisions

2.1 Council has previously indicated that as a matter of policy it wishes all fee and charge revisions to be encapsulated in a single report to this Committee early each year.

2.2 Council’s current Revenue & Financing Policy (10 Year Plan 2018-28 pages 211-231) describes how the Council goes about deciding who should pay for the provision of each activity and in what proportions. The policy should be the foundation for decisions about the levels of fees and charges.

2.3 The following table shows the indicative levels of direct user contribution (including through the use of targeted rates) sought to fund the operating costs for each activity as described in the Revenue & Financing Policy:

Revenue & Financing Policy – Indicative levels of direct user contribution (incl. targeted rates) sought toward activity cost

Low

0-19%

Med-Low

20-39%

Med

40-59%

Med-High

60-79%

High

80-100%

Economic development & international relations

Planning services- public

Urban design

Heritage management

Roads, street facilities, street lighting & traffic services

Active & public transport

Creative & exciting city

Arts, culture & heritage

Reserves & sportsfields

Swimming pools

Libraries & community centres

Civil defence & safer community initiatives

Biodiversity & sustainable practices

Stormwater

Leadership

Central Energy Trust Arena

Public Health

Conference & Function Centre

Building services

Cemeteries

Planning services – private

Parking

Social housing

Animal Control

************

Rubbish & Recycling^#

Wastewater^#

Water^#

************

# significant portion of funding through targeted rates

2.4 For some activities (such as swimming pools) only a portion of the operating costs is borne by the Council and none of the revenue is received directly by the Council. The Council does have the right under the agreement with CLM to set the maximum fees charged for the services. The Revenue & Financing Policy addresses only that portion of the net operating costs funded by the Council and therefore makes no reference to user charges for swimming pools.

2.5 In some of the activities shown above it is not practical to charge users through a separate charge specifically related to use. An example of this is water where large consumers are metered but the majority of users are charged through the rating system by way of a fixed targeted rate as the best proxy for direct user charge.

2.6 In some activities a combination of charging mechanisms is used. Rubbish & recycling is an example. Users are responsible for their own rubbish disposal. The Council does provide a collection and disposal service which is funded from the sale of rubbish bags. Recycling activity is funded from the sale of recyclables and the balance through the rating system by way of fixed targeted rates.

2.7 Council reviewed some fees and charges in March and April 2018 and confirmed in June 2018 those that were the subject of public consultation. In addition, in November 2018 approval was given to increase admission and concession fees for swimming pools effective from 1 July 2019.

3. Description of options

3.1 With a few exceptions (e.g. cemetery/crematorium, conference & function centre), draft revenue budgets for 2019/20 have been set at levels which aim to meet the Revenue & Financing Policy proportion targets. Achieving these revenue levels is dependent not only on the level of fee or charge set but also the actual volumes of activity by comparison with budget assumptions.

3.2 The timing of this review is scheduled to fit into the annual planning timetable in a way which ensures appropriate revenue assumptions are made in the proposed 10 Year or Annual Plans and changes to fees and charges can be implemented as soon as practicable.

3.3 Much of this report is focused on providing an overview of Council’s fees and charges. However the report does include specific proposals for change for a number of fees and charges as explained in more detail in the following appendices:

Appendix
2	Trade Waste	Proposal for public consultation
3	Planning & Miscellaneous	Proposal for public consultation
4	Building	Proposed increases
5	Environmental Health	Proposed increases
6	Animal Control	Proposed increases
7	Burial & Cremation	Proposed increases
8	Service Connections	Proposed increases
9	Recycling	Proposal for charges for extended services

4. Analysis of options

4.1 Analysis of the options for each of the fee types for individual activities is contained in the appendices

5. Conclusion

5.1 A broad review of fees and charges has been undertaken. Revenue from these is an important part of the funding mix. There are two elements to achieving revenue budgets. The first is the actual level of the fee or charge. The second is the volume of sales or use. A change to the level of fee or charge can influence demand. Achieving revenue targets is sometimes more about volumes than the level of the charge. There is a fine balance between the two. This report recommends increases in charges for tradewaste, planning & miscellaneous, building, environmental health, animal control, burial & cremation, service connections, and some new charges for recycling.

5.2 Fees and charges for sportsfields will be the subject of a separate report as soon as practicable following consideration of the report to the Sport & Recreation Committee on the philosophy of charging for them.

6. Next actions

6.1 There is a series of procedural steps to be followed to enable some of the revised fees and charges to be implemented. In some cases (as specifically identified in the recommendations) this involves a period of public consultation and a report back to the Council for final confirmation (taking into account any public submissions).

7. Outline of community engagement process

7.1 The Revenue & Financing Policy incorporates the Council’s current views on what portion of each activity should be directly funded from users. This policy forms part of the 10 Year Plan which was the subject of public consultation in 2018.

7.2 There are varying types of public consultation required to enable changes to be made to fees and charges. For some the special consultative process or a process consistent with the principles of section 82 of the Local Government Act is to be used. More detail about each is provided in the detailed appendices.

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?	NA
Can this decision only be made through a 10 Year Plan?	No
Does this decision require consultation through the Special Consultative procedure?	Yes
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

Appendices 1-9 ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 15 April 2019

TITLE: Quarterly Performance and Finance Report - Quarter Ending 31 March 2019

DATE: 9 April 2019

Presented By: Stuart McKinnon, Finance Manager, Finance

Andrew Boyle, Head of Community Planning, Strategy and Planning

APPROVED BY: Grant Elliott, Chief Financial Officer

Sheryl Bryant, General Manager - Strategy & Planning

RECOMMENDATION(S) TO Finance and Performance Committee

1. That the Committee receives the March 2019 Quarterly Performance and Financial Report.

1. ISSUE

1.1 To provide a quarterly update on the performance and financial achievements of the Council for the period ending 31 March 2019. This is the third quarterly report for the year.

2. BACKGROUND

2.1 Details of operating and financial performance are included in the following sections. Reports are against the new goals as detailed in the 10 Year Plan 2018-28.

3. Compliance and administration

Does the Committee have delegated authority to decide?		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?		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 in a plan under the Driven and Enabling Council Strategy The action is: to enable Council to exercise governance by reviewing financial performance and operating performance and provide accountability for these to the public.
Contribution to strategic direction	As above.

Attachments

1.	March 2019 Quarterly Performance and Finance Report (Summary) ⇩
2.	March 2019 Quarterly Performance and Finance Report (Supplementary Materials) ⇩
3.	March 2019 Quarterly Performance and Finance Report (Performance Measures) ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 15 April 2019

TITLE: Treasury Report - 9 months ended 31 March 2019

DATE: 3 April 2019

Presented By: Steve Paterson, Strategy Manager Finance, Finance

APPROVED BY: Grant Elliott, Chief Financial Officer

RECOMMENDATION(S) TO Finance and Performance Committee

1. That the performance of the treasury activity for the 9 months ended 31 March 2019 be noted.

1. ISSUE

To provide an update on the Council’s treasury activity for the 9 months ended 31 March 2019.

2. BACKGROUND

The Council’s 10 Year Plan Budget for 2018/19 forecast additional debt of $38.71m would need to be raised during the year to fund the $47.89m of new capital expenditure programmes (including assumed carry forwards from 2017/18). In June 2018 the Council resolved to specifically authorise the raising of up to $39m of additional debt.

Council’s Financial Strategy (updated version adopted 25 June 2018) contains the following ratios which the Council has determined to be prudent maxima:

• Net debt as a percentage of total assets not exceeding 20%

• Net debt as a percentage of total revenue not exceeding 200%

• Net interest as a percentage of total revenue not exceeding 15%

• Net interest as a percentage of annual rates income not exceeding 20%

The Treasury Policy (embracing the Liability Management and Investment Policy), adopted in December 2017 and updated on 25 June 2018, also contains a number of other criteria regarding debt management.

3. performance

Following the latest annual review published on 9 April 2018 Council’s S&P Global Rating’s credit rating remained unchanged at AA / A-1+. Following a review of the New Zealand rating outlook from stable to positive the Council’s long-term rating was similarly increased from stable to positive in a release published on 31 January 2019.

Schedule 1 attached shows the details of Council’s debt as at 31 March 2019. Debt levels were within the policy parameters outlined in section 2 of this report.

The summarised gross term debt movements are shown in the following table:

10 Year Plan Budget for year (2018/19)

$000

Actual – 3 months (2018/19)

$000

Actual – 6 months (2018/19)

$000

Actual – 9 months (2018/19)

$000

Debt Balance at 1 July 2018

New Debt #*

Debt repayments #

106,153

38,710

99,875

15,000

(2,875)

99,875

30,000

(2,875)

99,875

30,000

(17,875)

Closing Balance

Comprising:

Bank advance (on call)

LGFA short term advance

LGFA & Council stock

144,863

112,000

10,000

102,000

127,000

10,000

117,000

112,000

10,000

102,000

# A portion of the Council’s debt is drawn on a daily basis – daily drawdowns & repayments are not included in these figures but the net draw or repayment for the year to date is shown as part of new debt or debt repayment as appropriate.

* $15m new debt was raised in July originally to pre-fund debt maturing in March 2019, however later used to fund capital expenditure undertaken in the latter part of last year and paid for early this year. A further $15m of new debt was raised in December 2018 to pre-fund maturing debt in March 2019. This sum was placed on short term deposit until March 2019 at an interest rate that more than covered the cost of borrowing.

Net debt at 31 March 2019 was $111m (i.e. gross $112m less short-term deposits of $1m compared with $98.875m at 1 July 2018 (i.e. gross $99.875m less short-term deposits of $1.0m).

Movements in recent years are shown in the following graph:

Actual finance costs incurred during the 9 months (including interest, line fees & the effects of swaps) amounted to $4.53m compared with the budget for the year of $7.284m.

The Council has entered financial instruments related to its debt portfolio utilising swap trading lines established with Westpac and ANZ. The details of these are shown in Schedule 2 attached.

The value of these instruments is measured in terms of its “mark-to-market” i.e. the difference between the value at which the interest rate was fixed and the current market value of the transaction. Each of these transactions was valued at the date they were fixed and again at the reporting date. Financial reporting standards require the movement in values to be recorded through the Council’s Statement of Comprehensive Income (Profit & Loss Account). They have been revalued as at 31 March 2019 and show a decrease in book value of $1.77m for the quarter and $2.47m for the year to date.

The Council’s Treasury Policy contains guidelines regarding the measurement of treasury risk as follows:

· Interest rate risk is managed by the Council maintaining the ratio of debt that is subject to floating versus fixed interest rates within pre-set limits.

· Funding and liquidity risk is managed by the Council maintaining a pre-set portion of its debt in a range of maturity periods eg < 1 year, 1 – 3 years, 5 years +.

The position compared to the policy is illustrated in the graphs in Schedule 3. The overall ratio of fixed v floating interest rate debt is based on the assessed level of total debt in 12 months’ time.

The interest rate risk position graph shows that as at 31 March one of the target policy sub-limits is not being met. However this will self-correct during April. Such an outcome is contemplated and permitted by the policy.

As at 31 March 2019 all remaining policy targets had been met.

Council’s credit lines with the banks include a $18m four-year credit facility with Westpac Bank (maturing 31 July 2020) and a revolving $25m three-year facility with ANZ Bank (maturing 31 March 2021).

4. conclusion & NEXT STeps

Finance costs for the 9 month period (including interest, line fees & the effect of swaps) was $4.53m compared with budget for the year of $7.284m.

In conjunction with Council’s treasury advisors hedging instruments are regularly reviewed in an effort to ensure the instruments are being utilised to best advantage as market conditions change. The level of hedging cover is also reviewed as the forecasts of future debt levels are revised.

Council’s borrowing strategy is continually reviewed, in conjunction with Council’s treasury advisors, to ensure best advantage is taken of Council’s quality credit rating.

A further performance report will be provided after the end of the June 2019 quarter.

5. Compliance and administration

Does the Committee have delegated authority to decide?		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 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 in Not Applicable This report outlines the outcomes of a fundamental administrative activity of the Council.
Contribution to strategic direction	Managing the Council’s treasury activity is a fundamental component of day to day administration of the Council.

Attachments

Schedules 1 - 3 ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 15 April 2019

TITLE: External Fundraising Update

DATE: 29 March 2019

Presented By: Fiona Dredge, Commercial Advisory Manager, Finance

APPROVED BY: Grant Elliott, Chief Financial Officer

RECOMMENDATION(S) TO Council

1. That this external funding update is received for information.

1. ISSUE

During consideration of the Quarterly Performance and Finance Report at the Finance and Performance Committee meeting held on 18 February 2019 an update was requested on the current status of external fundraising.

2. BACKGROUND

External fundraising expectations are taken from Council’s 10 Year Plan as amended by the Annual Budget where applicable and from Council resolutions.

Where a project in the 10 Year Plan is contingent on external funding being raised, this effectively means that the decision about whether the project goes ahead sits with the funder/s. While every effort is made to obtain external funding and to align it with the timeframes in the 10 Year Plan, the final decision about when and if funding is successful is at the funder’s discretion.

Funding applications for specific projects or activities need to be matched with the appropriate funder in terms of the funder’s objectives and areas of interest. Funding rounds vary and may be, for example, monthly or annually depending on the funder. In some cases, Council is excluded from applying for specific funds or grants because it is a local authority.

Generally, only one application from Council will be considered by a funder at any one time and funders may limit the number of successful grant applications that Council can make over a specific period, for instance one successful grant application every 12 months. Therefore, it is vitally important that funding applications are coordinated and are not set up to compete against each other.

The Chief Executive, in conjunction with a group of senior managers from across the organisation, oversees the coordination and prioritisation of fundraising efforts and monitors progress on a monthly basis. Authorisation is required from the internal fundraising group prior to any funding applications being submitted.

In the last four years, nearly $10 million dollars of external funding has been raised. Over half of that funding has been from the Central Energy Trust and relates to various projects including Wildbase Recovery, the Arena partnership and the He Ara Kotahi bridge lighting. From a project perspective, approximately 50% of the total external funding raised over that period has been for Wildbase.

Below is a table showing the current status of external fundraising:

Project	Total Fundraising Component (from 10 YP)	Confirmed Funding Raised	Remainder Left to Fundraise
He Ara Kotahi Bridge Lighting	$700,000	$350,000	$350,000
Arena Artificial Pitch	$700,000	$350,000	$350,000
Arena Speedway Pits move	$1 Million	Nil	$1 Million
Arena South Grand Stand	$6 Million	Nil	$6 Million
Bunnythorpe Community Centre	$700,000	Nil	$700,000
Memorial Park Splash Pad	$250,000	Nil	$250,000
Memorial Park Skate Park Lights	$40,000	Nil	$40,000

He Ara Kotahi Bridge Lighting

Half of the total funding component has been raised to date. Plans are underway to make a sponsorship pitch to an external party for the remainder. Initial discussions were held with that third party in March.

Arena Artificial Pitch

Two successful funding applications have been made to date for $350,000 in total. After initial indications of higher funding being granted, one of those successful applications was for half of the amount applied for. Two other applications have been declined. There are two additional applications currently being submitted to external funders for a total $140,000.

Arena Speedway Pits move

This project is currently being reviewed as part of the Arena Masterplan. A significant portion of this could be funded from the Central Energy Trust partnership agreement if the energy-related component of the project meets the criteria.

Arena South Grand Stand

This project is not expected to meet philanthropic funding requirements and external fundraising will be difficult, especially at the level assumed in the 10 Year Plan.

Bunnythorpe Community Centre

This project is being led by the Bunnythorpe Community Centre Trust with fundraising advice and support from Council. This approach is deemed appropriate and fundraising should not be brought in-house as it will otherwise compete for funding against other PNCC projects.

Memorial Park Splash Pad

Funding applications for this project are being held back until external funding for the Arena artificial pitch has been successfully raised and accountability is complete.

Memorial Park Skate Park Lights

Council has other priority funding requirements for the most likely funder of this project. To have the best chance of success it is recommended that the external supporters of this project lead any applications for external funding, with advice and support from Council if required.

3. NEXT STEPS

Continue external fundraising efforts with immediate priority given to the Arena artificial pitch and He Ara Kotahi Bridge Lighting.

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?		N/A
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?		N/A
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 in a plan under the Driven and Enabling Council Strategy
Contribution to strategic direction	This update is provided to ensure that Council has access to good information that enables it to excel in good governance.

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