Agenda of Finance and Performance Committee

PALMERSTON NORTH CITY COUNCIL

Finance and Performance Committee MEETING

16 September 2019

Order of Business

NOTE: The Finance and Performance Committee meeting coincides with the extraordinary meeting of the Sport and Recreation Committee. The Committees will conduct business in the following order:

- Finance and Performance Committee

- Sport and Recreation 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 19 August 2019 Part I Public be confirmed as a true and correct record.”

6. Palmerston North Airport Limited - Annual Report for 12 months ended 30 June 2019 & Instructions relating to Annual Meeting Page 15

Memorandum, presented by Steve Paterson, Strategy Manager, Finance.

7. Papaioea Place - Stage 2 Page 75

Report, presented by Bryce Hosking, Manager - Property.

8. Wastewater BPO Progress Update Page 93

Report, presented by Robert van Bentum, Manager - Transport & Infrastructure.

9. The Future Use of Huia Street Reserve - Statement of Proposal Page 97

Memorandum, presented by David Murphy, City Planning Manager.

10. Recommendation for Adoption 2018/19 Annual Report Page 133

Memorandum, presented by Stuart McKinnon, Finance Manager.

11. Committee Work Schedule Page 401

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.	PlastOil Business Case - Support for Endorsement	Third Party Commercial and Commercial Activities	s7(2)(b)(ii) and 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.

Democracy Administrators (Carly Chang, Courtney Kibby, Natalya Kushnirenko, and Penny Odell), because of their knowledge and ability to provide the meeting with procedural advice and record the proceedings of the meeting.

Asset & Planning Manager (Jono Ferguson-Pye), Business Development Executive (Mike Manson), Rubbish & Recycling Engineer (Natasha Hickmott), Project Support Officer (Melissa Doyle), Waste Operations Supervisor (Ariadne Santos), 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 19 August 2019, commencing at 9.00am

Members

Present:

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

Non Members:

Councillors Brent Barrett, Rachel Bowen, Duncan McCann, Aleisha Rutherford and Tangi Utikere.

Apologies:

The Mayor (Grant Smith) and Councillors Rachel Bowen (early departure on Council Business) Adrian Broad, Leonie Hapeta (for lateness) and Lorna Johnson (for early departure on Council Business).

Councillor Aleisha Rutherford was not present when the meeting resumed at 9.24am. She entered the meeting again at 9.29am during consideration of clause 47. She left the meeting again at 11.27am during consideration of clause 53 and entered again at 11.45am during consideration of clause 54. She was not present for clause 53.

Councillor Leonie Hapeta was present when the meeting resumed at 9.24am. She was not present for clause 46.

Councillor Rachel Bowen left the meeting at 12.50pm during consideration of clause 57. She was not present for clauses 57 and 58.

Councillor Lorna Johnson left the meeting at 12.50pm during consideration of clause 57. She was not present for clauses 57 and 58.

46-19

Apologies

Moved Susan Baty, seconded Vaughan Dennison.

The COMMITTEE RESOLVED

1. That the Committee receive the apologies.

Clause 46-19 above was carried 13 votes to 0, the voting being as follows:

For:

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

The meeting adjourned at 9.01am

The meeting resumed at 9.24am

When the meeting resumed Councillor Leonie Hapeta was present and Councillor Aleisha Rutherford was not.

47-19	Public Comment Councillor Aleisha Rutherford entered the meeting at 9.29am
	Mr David Lea made public comment regarding the replacement of the sound system at the Regent Theatre.
	Moved Bruno Petrenas, seconded Lorna Johnson. The COMMITTEE RESOLVED 1. That the Public Comment be received.
	Clause 47-19 above was carried 14 votes to 0, the voting being as follows: For: Councillors Brent Barrett, Susan Baty, Rachel Bowen, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas, Aleisha Rutherford and Tangi Utikere.

48-19

Deputation - Cycling Plan Delays/Changes

Mr Steve Stannard made a deputation to the Committee raising concern of the continued delay and changes to the plan to make cycling a safe mode of transport. Mr Stannard mentioned that motorists were not happy about the parks being removed to put in cycle lanes. He advised that it is not who gets to use what bit of our city’s infrastructure but it is about building a forward looking community. A safe and connected community where everyone including cyclists, pedestrians, children, adults and motorists can go safely.

When Mr Stannard was asked about the Awapuni area he advised that it can be quite dangerous for cyclists around the shopping centre and suggested that the speed limit be reduced down College Street outside of the shops. Mr Stannard also suggested that next time the Council goes out for public consultation they should make some temporary changes and see how they go for a month or so, taking measures and collecting data.

Moved Duncan McCann, seconded Jim Jefferies.

The COMMITTEE RESOLVED

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

Clause 48-19 above was carried 14 votes to 0, the voting being as follows:

For:

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

49-19

Confirmation of Minutes

Moved Vaughan Dennison, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the minutes of the Finance and Performance Committee meeting of 17 June 2019 Part I Public and Part II Confidential be confirmed as true and correct records.

Clause 49-19 above was carried 13 votes to 0, with 1 abstention, the voting being as follows:

For:

Abstained:

Councillor Aleisha Rutherford.

50-19	Sound System Replacement - The Regent Theatre Memorandum, presented by Bryce Hosking, Manager - Property. In discussion it was agreed by the majority that the Council should not provide a loan to the Regent Theatre but provide them a one-off capital grant to help replace the sound system, as the Regent Theatre had already fundraised for two thirds of the sound system and the loan would put financial pressure on the Trust.
	Moved Jim Jefferies, seconded Rachel Bowen. The COMMITTEE RECOMMENDS 1. That Council provide a one-off capital grant to The Regent Theatre Trust to the value of $134,300 + GST to replace and upgrade the sound system in the Regent Theatre Building.
	Clause 50-19 above was carried 11 votes to 0, with 3 abstentions, the voting being as follows: For: Councillors Brent Barrett, Susan Baty, Rachel Bowen, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Jim Jefferies, Lorna Johnson, Duncan McCann, Aleisha Rutherford and Tangi Utikere. Against: Councillors Leonie Hapeta, Karen Naylor and Bruno Petrenas.
	Note: On a motion “That Council provide a repayable loan to The Regent Theatre Trust to the value of $134,300 + GST to replace and upgrade the sound system in the Regent Theatre Building, and that Chief Executive will be given delegated authority to negotiate the specific terms and conditions of this loan if this is the preferred option”, the motion was lost 3 votes to 11, the voting being as follows: For: Councillors Leonie Hapeta, Karen Naylor and Bruno Petrenas. Against: Councillors Susan Baty, Jim Jefferies, Brent Barrett, Rachel Bowen, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Lorna Johnson, Duncan McCann, Aleisha Rutherford and Tangi Utikere.

51-19

Whakarongo Residential Subdivision Update

Memorandum, presented by Bryce Hosking, Manager - Property

Moved Susan Baty, seconded Aleisha Rutherford.

The COMMITTEE RESOLVED

1. That the Finance and Performance Committee receives the report titled ‘Whakarongo Residential Subdivision Update’.

Clause 51-19 above was carried 14 votes to 0, the voting being as follows:

For:

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

The meeting adjourned at 10.33am

The meeting resumed at 10.52am

52-19	Quarterly Performance and Financial Report - Quarter Ending 30 June 2019 Memorandum, presented by Stuart McKinnon, Finance Manager.
	Moved Susan Baty, seconded Lorna Johnson. The COMMITTEE RECOMMENDS 1. That the Committee receive the June 2019 Quarterly Performance and Financial Report and note: a. The June 2019 financial performance and operating performance. b. The June 2019 capital expenditure programme progress together with those programmes identified as unable to be completed this financial year.
	Clause 52.1 above was carried 14 votes to 0, the voting being as follows: For: Councillors Brent Barrett, Susan Baty, Rachel Bowen, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas, Aleisha Rutherford and Tangi Utikere.
	Moved Susan Baty, seconded Lorna Johnson. 2. That the Committee note that the capital expenditure carry forward values in the 2019/20 Annual Budget will be increased by a net $4,065,000 to the amount of remaining programme budgets.
	Clause 52.2 above was carried 13 votes to 1, the voting being as follows: For: Councillors Brent Barrett, Susan Baty, Rachel Bowen, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Bruno Petrenas, Aleisha Rutherford and Tangi Utikere. Against: Councillor Karen Naylor.

53-19

Treasury Report - 12 months ending 30 June 2019

Memorandum, dated 19 July 2019 from Steve Paterson, Strategy Manager – Finance.

Councillor Aleisha Rutherford left the meeting at 11.27am

Moved Susan Baty, seconded Tangi Utikere.

The COMMITTEE RESOLVED

1. That the performance of the treasury activity for the 12 months ended 30 June 2019 be noted.

Clause 53-19 above was carried 13 votes to 0, the voting being as follows:

For:

54-19	Local Impact Procurement Policy Memorandum, presented by Julie Pedley, Procurement Manager. Councillor Aleisha Rutherford entered the meeting again at 11.45am In discussion it was suggested that a draft procurement policy be developed, targeting the social and environmental impact.
	Moved Rachel Bowen, seconded Susan Baty. The COMMITTEE RECOMMENDS 1. That Council approves and implements a Local Impact Procurement Policy. 2. That the Local Contribution Assessment factors include consideration of specific local knowledge or expertise.
	Clause 54-19 above was carried 14 votes to 0, the voting being as follows: For: Councillors Brent Barrett, Susan Baty, Rachel Bowen, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas, Aleisha Rutherford and Tangi Utikere.
	Moved Brent Barrett, seconded Duncan McCann. 3. That the Chief Executive develops, for consideration by Council, a draft procurement policy targeting social & environmental impact.
	Clause 54-19 above was carried 12 votes to 1, with 1 abstention, the voting being as follows: For: Councillors Brent Barrett, Rachel Bowen, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas, Aleisha Rutherford and Tangi Utikere. Against: Councillor Susan Baty. Abstained: Councillor Jim Jefferies.

55-19

E-Waste recycling reduced fees update

Memorandum, presented by Stewart Hay, Waste Management Manager.

Moved Lorna Johnson, seconded Aleisha Rutherford.

The COMMITTEE RESOLVED

1. That the information provided in the Memorandum titled ‘E-Waste reduced fees update’ be received by the Finance and Performance Committee.

2. That the Committee concludes their discussions on a zero fee e-waste trial for a 6 month period.

Clause 55-19 above was carried 14 votes to 0, the voting being as follows:

For:

56-19

Update on Infill Lighting Required to Achieve Compliance in P and V Categories

Memorandum, presented by Robert van Bentum, Manager - Transport and Infrastructure.

Moved Aleisha Rutherford, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the Committee receive the report entitled “Update on Infill Lighting Required to Achieve Compliance in P and V Categories”.

Clause 56-19 above was carried 14 votes to 0, the voting being as follows:

For:

57-19	Review of Rating System - Terms of Reference Memorandum, presented by Steve Paterson, Strategy Manager - Finance. Councillors Rachel Bowen and Lorna Johnson left the meeting at 12.50pm
	Moved Brent Barrett, seconded Duncan McCann. The COMMITTEE RECOMMENDS 1. That the Terms of Reference for the Review of Rating System be revised to include identification of ways that a future rating system could positively contribute to strategic outcomes, including optimisation of land use within and among district planning zones.
	Clause 57-19 above was carried 11 votes to 1, the voting being as follows: For: Councillors Susan Baty, Jim Jefferies, Brent Barrett, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Duncan McCann, Karen Naylor, Bruno Petrenas, Aleisha Rutherford and Tangi Utikere. Against: Councillor Leonie Hapeta.
	Moved Jim Jefferies, seconded Susan Baty. 2. That the Terms of Reference for the Rating Review as outlined in Appendix Three of the report titled “Review of Rating Systems – Terms of Reference”, be endorsed.
	Clause 57-19 above was carried 12 votes to 0, the voting being as follows: For: Councillors Brent Barrett, Susan Baty, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Duncan McCann, Karen Naylor, Bruno Petrenas, Aleisha Rutherford and Tangi Utikere.

58-19

Committee Work Schedule

Moved Susan Baty, seconded Aleisha Rutherford.

The COMMITTEE RESOLVED

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

Clause 58-19 above was carried 12 votes to 0, the voting being as follows:

For:

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

The meeting finished at 1.07pm

Confirmed 16 September 2019

Chairperson

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 16 September 2019

TITLE: Palmerston North Airport Limited - Annual Report for 12 months ended 30 June 2019 & Instructions relating to Annual Meeting

Presented By: Steve Paterson, Strategy Manager, Finance

APPROVED BY: Grant Elliott, Chief Financial Officer

RECOMMENDATION(S) TO Council

1. That the Annual Report and Financial Statements of Palmerston North Airport Limited for the year ended 30 June 2019 be received.

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

1. ISSUE

Palmerston North Airport Ltd (PNAL) as a Council controlled trading organisation has prepared its Annual Report for the year ended 30 June 2019. This report provides a brief commentary on PNAL’s results for the year and recommends the Council’s shareholder representative be instructed to support the resolutions proposed for the Annual Meeting.

2. BACKGROUND

2.1 PNAL’s Annual Report for the year ended 30 June 2019 is attached. The report gives a comprehensive assessment of company performance with key matters highlighted in the joint report of the Chairman and Chief Executive. Performance is judged against the Statement of Intent adopted by the Board in May 2018 and endorsed by the Council in June 2018.

2.2 PNAL has had another very successful year with significant passenger and revenue growth and a consequential increase in the surplus after tax (noting that $1m of this related to a revaluation gain for investment properties). Improvements to facilities for travellers and users provide an impressive gateway to the City.

2.3 Operating results are summarised in the following table:

Actual 2016/17	Actual 2017/18		Actual 2018/19	Budget 2018/19 SOI
7,313,379	8,482,757	Revenue	10,202,063	9,952,224
3,778,876	4,408,861	Operating Expenditure	5,176,634	4,783,270
3,534,503	4,073,896	Operating Surplus (before interest, depreciation & tax)	5,025,429	5,168,954
1,217,466 269,622 198,454	1,582,752 279,238 922	Depreciation Finance Costs Impairment & loss on sale of assets	1,821,379 522,347 88,776	1,832,625 682,794 0
		Revaluation gain – Investment properties	1,051,349	0
1,848,961	2,210,984	Operating Surplus (before tax)	3,644,276	2,653,535
549,839	601,965	Taxation	879,745	742,990
1,299,122	1,609,019	Net Surplus after tax for year	2,764,531	1,910,545

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

Actual 2017/18		Actual 2018/19	SOI Target
3.2%	Surplus, before interest/tax/revaluations to Total Assets	3.6% ⁽¹⁾	3.9%
2.7%	Surplus, after interest/tax/revaluations to Shareholders’ funds	4.1% ⁽¹⁾	3.1%
14.6	Surplus, before interest & tax to Interest ≥ 2.5 : 1	6.1	4.9
$60.7m	Tangible net worth (total tangible assets less total liabilities) ≥ $50m	$67.5m	$61.9m
78%	Ratio of consolidated shareholders’ funds to total assets ≥ 40%	75%	72%
Achieved	Civil Aviation Rule part 139 certification	Achieved ⁽²⁾	Achieve
90%	High level of Customer satisfaction (≥ 90%) Maintain a Net Promotor score of 50 or above, measured on an annual basis	40 ⁽³⁾	60
657,515	No. of passengers served through airport terminal	687,142	656,310
n/a	Achieve zero lost time injuries to those who work within our airport community	12.5 hrs	Zero
n/a	Complete roadmap to carbon neutrality	Completed	Complete
n/a	Achievement of emission reduction targets	Achieved ⁽⁴⁾	Achieve

⁽¹⁾ SOI did not include a revaluation. Excluding the revaluation the results would have been 3.8% & 3.0% respectively

⁽²⁾The 5 yearly CAA audit was conducted in 2014, and the next audit will be completed in September 2019.

⁽³⁾Results reported are for the period February to June 2019. Due to changes in the NPS questionnaire the benchmark for 2019/20 has been set at 50.

⁽⁴⁾Emission reduction targets were set & achieved for energy consumption. Waste to landfill and water consumption reduction targets will be based on data gathered for 2018/19

2.5 The Company applied $7.5m during the period to the purchase of fixed assets ($5.3m in the previous year). This compares with the budgetary provision for capital expenditure of $12.6m (None of the actual expenditure was funded from asset sales compared with the budget provision of $2.7m for all of the planned work).

2.6 The Annual Report advises that Directors have proposed a total dividend of $685,238 based on the year’s results (compared with $643,650 for the previous year). The total dividend is equivalent to 40% of the net surplus after tax (excluding capital contributions) which equates the target dividend return outlined in the Statement of Intent. As the sole shareholder the Council receives the full dividend. The Council’s budget assumption is $550,000.

2.7 The Company’s debt/equity ratio as at 30 June 2019 was 25:75 (22:78 at 30 June 2018).

2.8 The Company’s Constitution provides that the shareholders must approve the total remuneration payable to Directors. Last year the PNAL Board sought an increase from $90,000 to $124,000. In October 2018 the Council approved an increase to $108,000 effective from 1 July 2018. The PNAL Board has determined to allocate this sum as $33,600 (chairperson) and $18,000 (remaining four directors) plus $2,400 for the chair of the audit and risk committee. It is proposed the total remuneration remain at $108,000 for 2019/20.

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

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

2.10.1 Receipt of the Annual Report and financial statements for the year ended 30 June 2019

2.10.2 Advice of the Directors’ actions in relation to payment of a dividend for the year ended 30 June 2019

2.10.3 Approving the total remuneration of directors being $108,000 p.a.

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

3. NEXT STEPS

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

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 Economic Development Strategy
The recommendations contribute to the achievement of action/actions in the Economic Development Plan The action is: operating a key gateway for people and freight to and from the city and the wider region; grow passenger numbers and freight using the airport.
Contribution to strategic direction	PNAL is playing an active part in growing the City.

Attachments

1.	Notice of Annual Meeting 2019 ⇩
2.	PNAL Annual Report ⇩

PALMERSTON NORTH CITY COUNCIL

Report

TO: Finance and Performance Committee

MEETING DATE: 16 September 2019

TITLE: Papaioea Place - Stage 2

PRESENTED BY: Bryce Hosking - Manager - Property

APPROVED BY: Tom Williams, Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That Council extend the scope of Programme 1219 – Papaioea Place – Stage 2 to include the development of a communal tenant lounge and gardens within the complex.

2. That Council increase the budget of Programme 1219 by $1,893,577 taking the total Programme Budget from $4,859,959 incl. GST to $6,753,536 incl. GST.

Summary of options analysis for

Problem or Opportunity	· There is a green space within the Papaioea Place complex which can be utilised as part of Stage 2 of the development. Council has options for how to develop the space. · The existing budget of Programme 1219 is insufficient to deliver the development.
OPTION 1:	Maintain the current scope of Stage 2 and retain an undeveloped green space within the centre of the complex
Community Views	This may be viewed as an opportunity missed by the community.
Benefits	· Although still a considerable increase, it requires the smallest capital increase to the Programme Budget of the 5 options. · Consistent with the Social Housing, Housing and Future Development, Safe Community, and the Urban Design Plans.
Risks	· An opportunity is missed to further add to the site. · This is one of the least preferred options from an urban design viewpoint.
Financial	$5,986,532 incl. GST – an increase of $1,126,573 incl. GST to budget
OPTION 2:	Extend the scope of Stage 2 to include a communal tenant lounge and gardens within the complex
Community Views	The development of functional, well designed and developed housing developments which connect tenants and create a sense of community is viewed positively by the community.
Benefits	· Consistent with the Social Housing, Housing and Future Development, Safe Community, and the Urban Design Plans. · This is the preferred option from an urban design viewpoint.
Risks	· Significant increase to programme budget and timeline.
Financial	$6,753,536 incl. GST – an increase of $1,893,577 incl. GST to budget
OPTION 3:	Extend the scope of Stage 2 to include an additional 12 units within the complex
Community Views	The development of additional social housing is viewed positively.
Benefits	· Consistent with the Social Housing, Housing and Future Development, Safe Community, and the Urban Design Plans. · More social housing units are provided.
Risks	· Significant increase to programme budget and timeline.
Financial	$8,190,415 incl. GST – an increase of $3,330,456 incl. GST to budget
OPTION 4:	Extend the scope of Stage 2 to include a communal tenant lounge and an additional 6 units within the complex
Community Views	The community views the development of additional social housing positively, as well as the development of functional, well designed and developed housing developments which connect tenants and create a sense of community.
Benefits	· Consistent with the Social Housing, Housing and Future Development, Safe Community, and the Urban Design Plans. · This is the 2^nd most favoured option from an urban design viewpoint. · More social housing units are provided.
Risks	· Significant increase to programme budget and timeline.
Financial	$7,805,809 incl. GST – an increase of $2,945,850 incl. GST to budget
OPTION 5:	Reduce the scope of Stage 2 to only build 18 units and retain an undeveloped green space within the centre of the complex
Community Views	This may be viewed as an opportunity missed by the community.
Benefits	· Consistent with the Social Housing, Housing and Future Development, Safe Community, and the Urban Design Plans. · A way rescope to be within the existing Programme Budget.
Risks	· An opportunity is missed to further add to the site. · This is one of the least preferred options from an urban design viewpoint. · Less housing units are provided.
Financial	$4,754,958 incl. GST – within existing budget.
The recommendations contribute to Goal 3: A connected and safe community
The recommended option contributes to the outcomes of the Connected Community Strategy
The recommended option contributes to the achievement of action/actions in the Social Housing Plan The action is: Upgrade the Papaioea housing complex.
Contribution to strategic contribution		Programme 1219 – Social Housing – Papaioea Place Stage 2 is a redevelopment project that currently includes the construction of the final 28 units within the housing complex.

Rationale for the recommendations

1. Overview of the problem or opportunity

1.1 Council is proceeding with Stage 2 of the Papaioea Place Redevelopment which will see the remaining old units removed, and an additional 28 new units developed in their place, taking the entire complex to 78 units in total.

1.2 Construction and demolition for Stage 2 is a multi-year project which is set to start in March 2020 and set to conclude in August/ September 2021.

1.3 The current scope of the completed project sees a large unutilised and undeveloped green space/ grassed area being retained in the centre of the complex.

1.4 This green space/ grassed area provides an opportunity for further development of the site with either a tenant lounge and garden area, an additional 12 units, or a combination of both.

1.5 The development of this space can be incorporated into an expanded Stage 2 of the project or a future Stage 3. For clarity, any development of this space would be unbudgeted expenditure and would require additional funding.

1.6 In addition to this, as detailed designs have been priced up, it has been found that the existing budget of $4,859,959 incl. GST for Stage 2 is insufficient under the current scope, even if Council opts not to develop the grassed area.

1.7 The shortfall in budget is primarily due to:

· Budgets set for Stage 2 in the LTP were based on ‘educated estimates’ as no detailed design was completed;

· Construction costs have steadily increased since budgets were set due to a booming construction industry;

· There was no scope in original concept designs for improvements to the stormwater and electrical transformer are required as the site has become more denser; and

· Several functional improvements that were excluded from designs for Stage 1, which have subsequently had to be added back in as variations using the project contingency. Designs for Stage 2 need to include these.

1.8 Council is now required to consider its preferred option for Stage 2 of the development and increase the available budget to allow the project to proceed accordingly.

1.9 Please note: unlike most Council projects, this programme budget is required to reflect figures including GST rather than excluding as it is a residential development.

2. Background and previous council decisions

2.1 The Papaioea Place project is a design and build contract between Palmerston North City Council (Principal) and Latitude Homes (Contractor) of New Plymouth, with project management being provided by WT Partnership.

2.2 The overall development is being delivered in the following format:

· Stage 1

o Part 1 – demolition of old units, 30 new replacement units

o Part 2 – demolition of old units, 20 new replacement units

· Stage 2

o Part 1 – demolition of old units, 18 new replacement units

o Part 2 – demolition of old units, 10 new replacement units

2.3 As mentioned in Clause 1.5 of this report, options within this report could be added to an expanded Stage 2 – Part 2, or as a Stage 3.

Bringing Forward Stage 2

2.4 The decision was made by Council to bring forward Programme 1219 – Papaioea Place Stage 2 into the current financial year from the 2020/21 year. This was done as part of the confirmation of the 2019/20 Annual Plan.

2.5 The decision to bring forward the Programme allowed the on-site contractors to move fluently into Stage 2 of the development and provided the following benefits:

· Securing the availability of contractors – they can move straight into Stage 2 upon the completion of Stage 1;

· Efficiency gains – Design, consents, resources, contractors and project managers can all start preparing for Stage 2 prior to the completion of Stage 2 so Resource Consent can be achieved prior to the conclusion of Stage 1, and physical works can begin straight away; and

· Cost savings – Contractors can bundle up works to get the best rates. It has allowed prices to be locked in at today’s rates rather than in 8 months’ time. This has included labour rates, materials, and construction costs.

Existing Budget Provision for Stage 2

2.6 The existing budget of $4,859,959 incl. GST for Stage 2 was set as part of the LTP in 2016. This budget was created as a placeholder figure based on Council’s early cost per unit estimate figures for the then yet-to-start Stage 1.

2.7 The project costs for Stage 1 were refined and re-costed as part of the detailed design coordinated by WT Partnership when they took over the project management in early 2017. These revised budgets were presented in the report titled ‘Papaioea Place Housing Redevelopment Construction Programme’ to the Finance and Performance Committee on 11 June 2017.

2.8 Unfortunately, the allocated budget for Stage 2, while initially costed out, was never revised to the reflect the increased costings in the 2017 report. In addition, as they were only based on a cost per unit basis, they did not consider the items listed in Clause 1.7 of this report.

2.9 Furthermore, until the exact scope of Stage 2 is defined, and the detailed designs finalised, it has been very difficult to lock in an appropriate and accurate budget for Stage 2 before now.

2.10 For clarity, as Council Officers did not have completed detailed designs and costings for the 2019/20 Annual Plan, thus these increased costings and potential scope change was unable to be presented as part of the Annual Plan.

3. Description of options

3.1 Attached is a financial summary of the 4 development options which includes:

· A breakdown of how the Programme budgets have been calculated;

· Some general notes and clarifications; and

· Programme exclusions such as the upgrade of the Papaioea Place road itself which could be considered as a separate project in the future.

3.2 The 5^th option of reducing the scope is not included in the attachment but is based on reducing the number of units to 18. This reduces the figure in the top row of this attachment, however, all other costs remain the same as they will need to be upgraded even in this option.

Option 1 – Retain the undeveloped green space within the complex

3.3 Option 1 provides 28 new units in the development taking the total number of units on the site to 78. It provides an unutilised and undeveloped green space in the centre of the complex.

3.4 This green space would remain undeveloped as part of stage 2 and could be developed in the future, however, carries the risk of a poor future design outcome and would cause significant future disruption to settled tenants and neighbours.

3.5 The undeveloped space does provide a blank canvas for a future community garden which could be implemented by the residents themselves.

3.6 Urban Planning and Resource Consent considerations:

· As the site has increased density, the open space provides some spatial relief from the overall housing development and provides visual links to rear site.

· The provision of a large open grassed space at the centre of the layout is a poor design outcome and unnecessary given adjacent Papaioea Park.

· Essentially creates a ‘hole’ at the centre of the development.

3.7 Programme Cost: $5,986,532 incl. GST – an increase of $1,126,573 incl. GST to existing programme budget.

Option 2 – Construct a communal tenant lounge and gardens within the complex

3.8 Option 2 provides 28 new units in the development taking the total number of units on the site to 78. It also provides a communal lounge facility along with a large communal garden area in the centre of the development.

3.9 Option 1 creates a community-based space in the development which acts to support and enhance the surrounding housing development and is in alignment with the original ethos of the design brief for the entire complex.

3.10 Urban Planning and Resource Consent considerations:

· Provision of an active area supported by a community lounge and an occupied garden area which is a positive attribute to the whole development.

· Allows some visual links to rear of site.

· This is considered a good and productive occupation of the central space.

· The lounge building provides an opportunity to have a quality ‘iconic’ building which is highly activated on all sides with limited blank walls.

· The existing mature tree can be retained.

3.11 Programme Cost: $6,753,536 incl. GST – an increase of $1,893,577 incl. GST to existing programme budget.

Option 3 – Construct an additional 12 units within the complex

3.12 Option 3 provides 40 new units in the development taking the total number of units on the site to 90. In addition to the 28 new units within the existing scope of stage 2 it provides for 2 further rows of 6 units each within the centre of the development.

3.13 Whilst Option 3 provides increased housing numbers, the increased density of housing and lack of community-based spaces means there are risks associated with the design not being in accordance with Council’s Urban Planning Guidelines.

3.14 This option carries the risk of additional RC costs and it is expected it will add to the preconstruction timeframe due to affected party and community engagement.

3.15 Adding an additional 12 units will also increase the traffic density on-site and require additional car parking. Proximity of units to the existing and proposed other units in stage 2 will also likely cause additional shading on all units, impeding sun access and providing less liveable spaces.

3.16 Urban Planning and Resource Consent considerations:

· There is a loss of a sense of centrality or focus to the development layout.

· No communal meeting or gathering areas with the development.

· It does make efficient use of available land and provides continuity of housing edge onto Papaioea Place.

· Having these units helps define link north to rear housing areas.

· Additional housing is consistent with the housing block modules already established.

· The existing mature tree with need to be removed.

· The further loss of the northern green space area for more car parking will not be viewed positively.

3.17 Programme Cost: $8,190,415 incl. GST – an increase of $3,330,456 incl. GST to existing programme budget.

Option 4 – Construct a communal tenant lounge and an additional 6 units within the complex

3.18 Option 4 provides 34 new units in the development taking the total number of units on the site to 84. In addition to the 28 new units within the existing scope of stage 2, it provides for 2 further rows of 3 units each as well as the communal lounge facility mentioned in Option 2.

3.19 Option 4 creates a community-based space in the development which acts to support and enhance the surrounding housing development and is mostly in alignment with the original ethos of the design brief for the entire complex.

3.20 Urban Planning and Resource Consent considerations:

· Provision of an active area supported by a community lounge and an occupied garden area which is a positive attribute to the whole development.

· The exclusion of community garden does reduce the defined open space and decreases ability for strong visual connection through site to the northern blocks of Portion 3 and 4.

· With no room for a community garden, this reduces the what could be the focal point of the development and increase the level of amenity of the community development.

· The opposing orientation of the small housing blocks provides a better frontage to Papaioea Place and creates smaller defined landscaped areas.

· The orientation of extra 6 units assists in framing the entry to the Papaioea Place cul-de-sac.

· This option differs significantly in terms of scale and building relationship with the remainder of the site development.

3.21 Programme Cost: $7,805,809 incl. GST – an increase of $2,945,850 incl. GST to existing programme budget.

Option 5 – Reduce the number of units to 18 as well as retaining the undeveloped green space within the complex

3.22 Option 5 only provides 18 new units in the development taking the total number of units on the site to 68. It provides an unutilised and undeveloped green space in the centre of the complex.

3.23 Essentially only the blocks in 5A and 5B in the above graphic would be delivered portion 6 remaining undeveloped along with the green space. This could be developed in the future, however, carries the risk of a poor future design outcome and would cause significant future disruption to settled tenants and neighbours.

3.24 The undeveloped spaces do provide a blank canvas for a future community gardens which could be implemented by the residents themselves, or even additional car parking.

3.25 It would be recommended that the existing buildings in ‘portion 6’ would still be demolished as they are substandard, have significant asbestos and would further detract form the balance of the site this could be accommodated within existing budgets.

3.26 Urban Planning and Resource Consent considerations:

· As the site has increased density, the open space provides some spatial relief from the overall housing development and provides visual links to rear site.

· The provision of a large open grassed space at the centre of the layout is a poor design outcome and unnecessary given adjacent Papaioea Park.

· Essentially creates ‘holes’ at the centre and front of the of the development.

· This option differs significantly in terms of the building relationship with the remainder of the site development and is not particularly in alignment with the original ethos of the design brief for the entire complex and leaves the complex feeling unfinished.

· Provides a poor edge of the development fronting onto Heretaunga Street as there is no end unit to portion 6 providing an edge.

3.27 Programme Cost: $4,754,958 incl. GST – within existing budget.

Alignment to Council’s Strategies and Plans

3.28 As all four options are not only increasing the number of social housing units but are also providing a good housing outcome for the development, they are all considered consistent with the following Plans:

· Social Housing Plan;

· Housing and Future Development Plan;

· Safe Community Plan; and

· Urban Design Plan.

3.29 The above being said, Options 1 and 5 – are considered the least aligned as the undeveloped space is not really contributing to improving the overall standard of the complex as much as the other options.

3.30 Social Housing Plan

· Ensure we have a healthy community where everyone has access to healthy, safe and affordable housing and neighbourhoods.

· The Council provides warm, safe, and affordable housing for people on low incomes who are Super annuitants, have long term disabilities, or experience barriers to renting in the private market.

· Housing is provided in a financially sustainable way and meets the needs of tenants.

· Housing is provided through the most effective delivery mechanism and the amount of housing provided is increased over time.

· The Council also advocates for and supports measures to improve the overall standard of rental housing in Palmerston North.

3.31 Housing and Future Development Plan

· Developers deliver new forms of housing in brownfield developments.

· Improving the quality of rental stock and supply.

3.32 Safe Community Plan

· CPTED principles are applied to the design of all public spaces.

3.33 Urban Design Plan

· Increased knowledge of the principles and value of good urban design.

· The principles of good urban design are elevated to be an intrinsic and effective part of everyday city making & co-creation.

· Council Officers across the organisation operate in a multi-disciplinary capacity on a range of key projects.

· Palmerston North city-making environment encourages innovative design and development

3.34 Like with Stage 1 of the development, Council can take a lead in best practise housing complex design outcomes – the development can promote and support safer spaces including streets and parks, internal accessways and shared spaces.

4. Assessment of options

4.1 In assessing the options available, Council Officers took three key areas under consideration:

· Financial – level of increase required to existing budget

· Urban Design and Resource Consent considerations – best practice design and ease of meeting consent guidelines

· Council’s Strategies and Plan – does it align to a strategy or plan

4.2 For a visual guide, the four options have been ranked in the below table based on Council Officer’s assessments i.e. 1 being 1^st, 2 being 2^nd etc.:

Option	Financial	Urban Design and Resource Consent	Alignment to Strategies and Plans	Overall Ranking Score
2 – Lounge and Gardens	3	1	1	1
4 – Lounge and Extra 6 Units	4	2	1	2
3 – 12 Extra Units	5	3	1	3
1 – Undeveloped Green Space	2	4	2	4
5 – Reducing number of units	1	5	3	5

5. Conclusion

5.1 Based on the assessment of the 5 options Council Officers recommend Option 2 - Extend the scope of Stage 2 to include a communal tenant lounge and gardens within the complex.

· Programme Cost: $6,753,536 incl. GST – an increase of $1,893,577 incl. GST to existing programme budget.

· Construction of a lounge and gardens in the centre of the complex provides the preferred option from an urban design point of view. It provides a good utilisation of the space, interacting well with the balance of the development.

· There is a strong alignment to the Social Housing, Housing and Future Development, Safe Community, and the Urban Design Plans.

6. Next actions

6.1 Begin engagement with affected neighbours as part of the Consent process.

6.2 Continue to refine detailed designs and plans for the preferred option.

6.3 Submit designs and plans for the Life Mark Assessment Review.

6.4 Submit and obtain Building Consent in February 2020.

6.5 Construction phase of Stage 2 to begin in March 2020.

7. Outline of community engagement process

7.1 Like what was required prior to starting Stage 1 of the Papaioea Place development, significant engagement is required with the affected neighbours to the site as part of the Resource Consent process.

Compliance and administration

Does the Committee have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual <Enter clause>	No
Are the decisions significant?	No
If they are significant do they affect land or a body of water?	No
Can this decision only be made through a 10 Year Plan?	No
Does this decision require consultation through the Special Consultative procedure?	No
Is there funding in the current Annual Plan for these actions?	Yes
Are the recommendations inconsistent with any of Council’s policies or plans?	No

Attachments

Financial Summary Report ⇩

PALMERSTON NORTH CITY COUNCIL

Report

TO: Finance and Performance Committee

MEETING DATE: 16 September 2019

TITLE: Wastewater BPO Progress Update

PRESENTED BY: Robert van Bentum, Manager - Transport & Infrastructure

APPROVED BY: Tom Williams, Chief Infrastructure Officer

RECOMMENDATION(S) TO Finance and Performance Committee

1. That the Committee receive the update for the Wastewater BPO Project as detailed in the report titled ‘BPO Quarterly Report’.

2. That the Committee agree to the next quarterly updates for 2019-20 FY being provided in February, May and August 2020 to align with the next three quarters of the financial year.

1. Report purpose

1.1 To purpose of the report is to provide an update to the Finance and Performance Committee of Council on the achievements of the Wastewater BPO Project for the period ending 31 August 2019. This is the first update for the financial year and is intended to be provided on a quarterly basis and supplements the monthly Project Steering Group (PSG) Meetings and project workshops undertaken with full Council at key milestone stages of the Project.

2. Background and previous council decisions

2.1 Introduction

2.1.1 The Council is required to lodge an application for new resource consents for the Best Practicable Option (BPO) for the Totara Road Wastewater Treatment Plant, by 30 June 2022.

2.1.2 The BPO Project was initiated in 2017 and has progressed to date, in line with the Project Programme adopted by the Council (refer Attachment 1). To date, all the key tasks within the control of the Project Manager and the project Technical Team, have been achieved within this programme.

2.1.3 The 2018/28 Long Term Plan confirmed an annual budget of $1,120,800 for the 2019/20 Financial Year.

2.2 Identification of BPO Shortlist Options

2.3 The following options comprise the recommended shortlist:

2.3.1 R2(b) All wastewater discharged to the Manawatu River, with increased TP & TN Removal

2.3.2 Dual R + L Manawatu River discharge at Opiki Bridge, with some land application

2.3.3 L + R (a) & (b) Approximately 97% of the treated wastewater applied to land

2.3.4 L + R (d) & (e) Treated wastewater applied to land below intermediate/high flows in the Manawatu River

2.3.5 GW – 2 Base flow to land application, with remainder to high rate infiltration

2.3.6 O + L Most of the treated wastewater discharged to the ocean and some to land.

2.4 The options within the draft short list have been selected as they are representative of the range of receiving environments and option categories included in the longlist.

2.5 Each of the options have been evaluated on ‘high level information’. Those involved in the selection process as well as the project team recognise that further investigation is necessary to understand the definitive scope and extent of environmental, social, cultural and economic impacts each of these options may have. This further investigation process will provide the additional more robust information, that will allow the key project stakeholders and Council to understand the viability of the recommended shortlist options.

3. Current actions

3.1 The next stage of the BPO Project involves robust investigation, analysis of information and community and stakeholder engagement to develop each of the options further, to inform a focussed and intensive consultation with the community and stakeholders in early 2020.

3.2 The Project Team are working collaboratively with PNCC officers to identify the scope of work and associated costs to deliver the current financial year within the LTP Budget. The outcome of this review is yet to be confirmed by the Project Team and will be reported to the committee in due course.

3.3 To develop detailed options that will support a robust consultation process and stand up to the future Resource Management Act processes, the following tasks will be completed within the 2019/20 Financial Year:

3.3.1 Confirmation of population forecasts;

3.3.2 Future Trade waste industry flows and loads;

3.3.3 Desktop analysis to identify potential land, coastal and river discharge locations. This includes technical investigations from a range of expertise to identify sites that are suitable for the proposed future flows and loads;

3.3.4 Determine the treatment needs for each of the options;

3.3.5 Wetland and/or land passage options for the river-based discharge options;

3.3.6 Funding opportunities and cost options for all options; and

3.3.7 Other technical packages to support the development of options.

3.4 In addition to the above tasks, project management, project governance, stakeholder consultation, statutory planning reviews, legal reviews and technical peer reviews will continue to be delivered in this Financial Year.

3.5 Engagement with neighbouring councils has been ongoing with respect to project updates and the potential for a sub-regional scheme.

3.6 The recent release of Horizons Regional Council One Plan – Plan Change 2, has identified potential concerns for PNCC in relation to the BPO. The BPO Project Team and Councils Policy Team, are working with neighbouring Councils’ to collaborate on the plan change process and potential submission.

3.7 The project risk register is being reviewed for the current Financial Year and responded to by the Project Steering Group.

3.8 A stakeholder engagement plan is being prepared and a communications marketing strategy has been developed that will be aligned with Councils strategy for engagement.

3.9 Consultation with neighbouring Iwi is currently underway and will be increased as the project progresses with greater detail surrounding all the options.

4. Next Steps

4.1 Further refinement and commencement of the project tasks is underway. This process must ensure that the detail developed for the options being evaluated is enough to support the Resource Management Act ‘Alternatives Assessment process’. This is also necessary to confirm the budget for the financial year is adequate.

4.2 Technical Project Team and PSG workshops in late September and October.

4.3 Aligned communications and marketing plan and stakeholder engagement strategy for the 2019/20 Financial year tasks will be completed.

4.4 Engagement with Horizons Regional Council and neighbouring Councils with respect to Plan Change 2 and the development of options will continue.

4.5 Ongoing engagement with Rangitane and other Iwi.

4.6 By July 2020 (new Financial Year), the Council will progress into a Multi-Criteria Analysis process. This will assist Council in identifying the BPO (preferred) option by December 2020.

5. Outline of community engagement process

5.1 There is currently no large-scale community engagement process underway. It is recommended to consult with the community on the shortlist options in early 2020. This is once there is adequate information about the shortlist options.

5.2 Material has been developed to educate the community about wastewater by the Marketing and Communications Team.

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 give effect to the Wastewater BPO Project, which is required to obtain a new resource consent for the BPO by 2022

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 16 September 2019

TITLE: The Future Use of Huia Street Reserve - Statement of Proposal

Presented By: David Murphy, City Planning Manager

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

RECOMMENDATION(S) TO Council

1. That the Future Use of Huia Street Reserve Statement of Proposal – October 2019, including the Potential Housing Development Scenarios, be approved for public consultation.

2. That the consultation on the Future Use of Huia Street Reserve Statement of Proposal – October 2019 be for a period of at least one month, beginning from a date to be determined by the Chief Executive.

3. That the Chairperson and Deputy Chairperson of the Finance and Performance Committee be authorised to make minor amendments to the Future Use of Huia Street Reserve Statement of Proposal – October 2019.

1. ISSUE

Consultation is required should the Council wish to enable the disposal or development of Huia Street Reserve for housing.

2. BACKGROUND

The Finance and Performance Committee passed the following resolutions (24-19) in April 2019:

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.

The Statement of Proposal details the proposal, the reasons for the proposal, an analysis of reasonably practicable options and the details of the consultation process, including the opportunity for submitters to present their views to the Council.

The proposal covers 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 currently 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.

Separate statutory processes and further consultation will be required to make the necessary amendments to the legislation and the District Plan should the Council decide to adopt its preferred option.

Subject to the nature of any amendments made to the Palmerston North Reserves Act 1922 and / or the Palmerston North Reserve Empowering Act 1966, any revenue generated from the disposal or development of Huia Street Reserve for housing would be used to help fund the various recreational projects identified in the Council’s Long Term Plan.

Potential housing development scenarios are shown in Appendix A of the Statement of Proposal. Council is not seeking specific feedback on the housing development scenarios shown in Appendix A. These have been included to demonstrate the range of housing development scenarios that could be delivered on the site. Access, parking and potential effects on the Manawatu Lawn Tennis Club will need to be worked through as part of the detailed design of any housing development. The housing development scenarios shown are not final.

A copy of the Statement of Proposal is included as Attachment A.

Appendix A of the Statement of Proposal Potential Housing Development Scenarios is included as Attachment B of this memorandum.

3. NEXT STEPS

Initiate consultation.

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?		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
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: Identify Council and Government land to be used for affordable housing.
Contribution to strategic direction	The City Development Strategy records that 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

1.	Attachment A Future Use of Huia Street Reserve Statement of Proposal October 2019 ⇩
2.	Attachment B Future Use of Huia Street Reserve Statement of Proposal Housing Development Scenarios ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 16 September 2019

TITLE: Recommendation for Adoption 2018/19 Annual Report

PRESENTED BY: Stuart McKinnon, Finance Manager

APPROVED BY: Grant Elliott, Chief Financial Officer

RECOMMENDATIONS TO Council

1. That the 2018/19 Annual Report and 2018/19 Summary Annual Report be adopted.

2. That Council note that an Auditor’s “opinion” from Audit New Zealand would be expected to be received immediately following recommended adoption by Council on 23 September 2019 and Council signing of the reports.

3. That delegated authority is given to the Chairperson and Deputy Chairperson of the Finance and Performance Committee to make minor amendments to the 2018/19 Annual Report and 2018/19 Summary Annual Report.

1. ISSUE

The Council has a legal obligation to adopt its audited Annual Report within four months after the end of the financial year to which it related. Adoption at the 23 September 2019 Council meeting is within this period. Adoption of the Annual Report will allow the Council to report to the community on the Council’s performance in the 2018/19 year.

The Annual Report is a key part of the 10 Year Plan and Annual Budget process. Those plans show the community what the Council intends to do, including what it intended to do in the 2018/19 year. The Annual Report shows the community how well the Council did that work.

Adoption of the recommended actions will allow the Council to deliver the 2018/19 Annual Report and Summary Annual Report.

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

2. BACKGROUND

The presentation of the Annual Report is the culmination of the quarterly reports presented to the Council, which have monitored progress against the 2018/19 Annual Budget.

Audit New Zealand have completed their audit of the Annual Report. They have advised that they are happy with the documents, and gave verbal clearance on Friday 6 September.

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

The levels of service and performance measures by activities in the 2018/19 Annual Budget reflect a clear link to what the Council was aiming to achieve. The Council received comprehensive quarterly reports on its performance during the 2018/19 year.

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

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

After considering the issues, background, all relevant options, the community views, Council’s policies and plans, along with the financial and legal implications, it is recommended that the Committee receive the 2018/19 Annual Report and the Summary Annual Report. Further it is proposed that the Committee recommends the Annual Report and the Summary Annual Report for Council’s adoption in its meeting scheduled for 23 September 2019.

3. NEXT STEPS

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

4. Compliance and administration

Does the Committee have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual		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 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 to the public.
Contribution to strategic direction	As above.

Attachments

1.	Annual Report 2019 ⇩
2.	Summary Annual Report 2019 ⇩

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