AGENDA

Finance & Audit Committee

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Susan Baty (Chairperson)

Karen Naylor (Deputy Chairperson)

Grant Smith (The Mayor)

Leonie Hapeta

Vaughan Dennison

Lorna Johnson

Renee Dingwall

Bruno Petrenas

Lew Findlay QSM

Tangi Utikere

Patrick Handcock ONZM

 

 

 

 

 

 

 

 


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

 

 

 

Finance & Audit Committee MEETING

 

4 December 2019

 

 

 

Order of Business

 

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 Participation at Meetings                                                                         Page 7

Memorandum, presented by Natalya Kushnirenko, Democracy & Governance Administrator.

5.         4 Month Performance and Financial Report - Period Ending 31 October 2019 Page 11

Memorandum, presented by Stuart McKinnon, Finance Manager.

6.         Treasury Report - 3 months ending 30 September 2019                                 Page 75

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

7.         Review of Structure of Dog Control Fees                                                          Page 85

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

8.         Contract Approval - CET Arena - Arena 2 Ceiling, Lighting and Fire System Upgrade Page 93

Memorandum, presented by Bryce Hosking, Manager - Property.

9.         New Deed of Lease for 21 Havelock Avenue                                                  Page 101

Memorandum, presented by Bryce Hosking, Manager - Property.

10.       Request for City Wide Capital New Programme to Fund New Parking Infrastructure                                                                                                                          Page 105

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

11.       Te Motu o Poutoa Land Purchase Opportunity                                              Page 111

Report, presented by Kathy Dever-Tod, Parks and Reserves Manager.

12.       Committee Work Schedule                                                                              Page 123    

 13.      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

 

 

 

 

 

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.

[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

 

Memorandum

TO:                                Finance & Audit Committee

MEETING DATE:           4 December 2019

TITLE:                            Public Participation at Meetings

Presented By:            Natalya Kushnirenko, Democracy & Governance Administrator

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

 

 

RECOMMENDATION(S) TO Finance & Audit Committee

1.   That the Finance & Audit Committee set aside a public comment section of not more than 30 minutes at the commencement of each ordinary meeting of the Committee to provide members of the community the opportunity to comment.

 

 

1.         ISSUE

Each newly established Committee needs to consider whether or not it wishes to have public participation at its meetings.  The procedures to receive public comment are set out in this report.

2.         BACKGROUND

It has been a decision by Committees and Subcommittees in the past to set aside a period of time to receive public comment at the beginning of the meetings for members of the public to comment on issues on the agenda, and if time permits, on other issues.  This procedure has been proven to be effective in providing an opportunity for greater communication with the community.

Providing a public comment section at the beginning of the meeting enables any member of the public to come along to the meeting to make comment on any matters on the agenda or other matters if time permits.

This procedure also enables an opportunity for quick response from any Council officer who might be present and also facilitates the request for reports for subsequent meetings.  In some cases, concerns raised by members of the public may well be resolved by Council officers present at the meeting.

The Council has previously adopted its own Standing Orders and in those Standing Orders provision has been made to allow for public comment at Committee and Subcommittee meetings should a Committee wish to adopt this practice.  Please refer to the ‘Public Participation’ section as outlined in clause 3.23 of the Palmerston North City Council’s Standing Orders and as appended to this report.

If a member or members of the public wish to comment on issues that do not appear on the agenda, they must do so with the Chairperson’s approval in the public comment section of the meeting.

3.         NEXT STEPS

If the Committee decide to allow public comment, this will be provided for in all Committee ordinary meetings for the following term.

4.         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 3: A Connected and Safe Community

The recommendations contribute to the outcomes of the Connected Community Strategy

The recommendations contribute to the achievement of action/actions in the Active Citizenship Plan

Contribution to strategic direction and to social, economic, environmental and cultural well-being

Increasing opportunities for the community to contribute to Council decision making and for the Council to engage with the community.

 

 

Attachments

1.

Standing Orders - Public Participation

 

    


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PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Finance & Audit Committee

MEETING DATE:           4 December 2019

TITLE:                            4 Month Performance and Financial Report - Period Ending 31 October 2019

DATE:                            11 September 2019

AUTHOR/S:                   Stuart McKinnon, Finance Manager

APPROVED BY:             Grant Elliott, Chief Financial Officer

Sheryl Bryant, General Manager - Strategy & Planning

 

 

RECOMMENDATION(S) TO COMMITTEE

1.       That the Committee receives the October 2019 Performance and Financial Report and note:

a.    The October 2019 financial performance.

b.    The September 2019 quarterly operating performance.

c.     The October 2019 capital expenditure programme progress.

 

 

1.         ISSUE

To provide an update on the performance and financial achievements of the Council for the period ending 31 October 2019. This is the first update provided for the year.

 

2.         BACKGROUND

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

 

 

 

 

3.         Compliance and administration

Does the Committee have delegated authority to decide?

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

Yes

Are the decisions significant?

No

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

No

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

No

Does this decision require consultation through the Special Consultative procedure?

No

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

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.

October 2019 Performance and Financial Report - CE Overview and financial summary

 

2.

Performance and Financial Report - Performance measures September 2019 (first quarter)

 

3.

October 2019 Performance and Financial Report - Supplementary Materials

 

    


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PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Finance & Audit Committee

MEETING DATE:           4 December 2019

TITLE:                            Treasury Report - 3 months ending 30 September 2019

Presented By:            Steve Paterson, Strategy Manager - Finance

APPROVED BY:             Grant Elliott, Chief Financial Officer

 

 

RECOMMENDATION(S) TO COMMITTEE

1.   That the performance of the treasury activity for the three months ended 30 September 2019 be noted.

 

 

 

1.         ISSUE

To provide an update on the Council’s treasury activity for the 3 months ended 30 September 2019.

2.         BACKGROUND

The Council’s Annual Budget for 2019/20 forecast additional debt of $44.792m would need to be raised during the year to fund the $53.516m of new capital expenditure programmes (including assumed carry forwards from 2018/19).  In June 2019 the Council resolved to specifically authorise the raising of up to $45m of additional debt.  In August 2019 the Council approved increasing the new capital expenditure programme for the year to $57.022m due to a revised assessment of the level of carry forwards from 2018/19.  At this stage however there has been no change to the additional debt that has been authorised.  If additional debt is required a request will made later in the year.

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 30 September 2019 Council’s S&P Global Rating’s credit rating remained unchanged at AA / A-1+ with a positive outlook. 

Schedule 1 attached shows the details of Council’s debt as at 30 September 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:

 

Annual Budget for year (2019/20)

$000

Actual – 3 months (2019/20)

$000

Debt Balance at 1 July 2019

New Debt #

Debt repayments #

122,041

44,792

121,200

2,950

Closing Balance

Comprising:

Bank advance (on call)

LGFA short term advance

LGFA & Council stock

166,833

124,150

 

5,150

10,000

109,000

 

#   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.

Gross debt at 30 September 2019 was $124.15m compared with $121.2m at 1 July 2019.

 

 

 

 

 

 

 

 

 

Movements in recent years are shown in the following graph:

Actual finance costs incurred during the 3 months (including interest, line fees & the effects of payments relating to swaps) amounted to $1.42m compared with the budget for the year of $7.616m. 

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 30 September 2019 and show a decrease in book value of $2.08m for the quarter.

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.

For the purpose of this calculation the forecast debt has been assumed as $142m although the Annual Budget forecast is that the total debt by 30 June 2020 will be $167m.  We have used this lower forecast to protect against the risk of becoming over hedged i.e. too much fixed debt in the event the actual borrowing required is lower than budgeted.  56% of the forecast total debt is fixed (using the forecast total of $142m) and this reduces to 47% (if the total is $167m).  Current market sentiment is that interest rates will be lower for longer.

As at 30 September 2019 all 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 & in the process of being extended to 31 July 2022) and a revolving $25m three-year facility with ANZ Bank (maturing 31 March 2022).

 

4.         conclusion & next steps

Finance costs for the 3-month period (including interest, line fees & the effect of swaps) was $1.42m compared with budget for the year of $7.616m.

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 December 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

1.

Schedules 1 to 3

 

    


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PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Finance & Audit Committee

MEETING DATE:           4 December 2019

TITLE:                            Review of Structure of Dog Control Fees

Presented By:            Steve Paterson, Strategy Manager - Finance

APPROVED BY:             Grant Elliott, Chief Financial Officer

 

 

RECOMMENDATION(S) TO Council

1.   That the report be received and that it be noted that officers will be placing more emphasis than before on monitoring compliance with the criteria for classification as a preferred owner.

2.   That no specific change be made to the charging structure for animal control fees but the rationale for the components of the fees be consciously considered each year as part of the process of recommending an updated schedule of fees and charges.

 

 

1.         ISSUE

This memorandum responds to the following resolution adopted by the Council on 29 April 2019:

“That a review of the charging structure for animal control fees be undertaken to explore a mechanism to shift the fee burden to non-compliant dog owners and reported to the Finance & Performance Committee.”

2.         BACKGROUND

2.1       Legislative & Policy Framework

The main focus of the legislation is to enable the Council to maintain and improve public safety through managing risk and mitigating unreasonable risk.  The Council’s approach is contained in its Dog Control Policy and enforcement is actioned as provided for in the Dog Control Bylaw.

In relation to the setting of fees the Dog Control Act 1996 provides:

•     s.37 allows Council to set fees for the registration and control of dogs. The Act provides for:

•     Lower fees for neutered dogs, working dogs, younger dogs and people demonstrating responsible dog ownership (s.37(2))

•     Penalty fees not exceeding 50% of the fee if paid after 1 August (s.37(3))

•     In fixing the fees Council shall have regard to the relative costs of the registration and control of dogs in the various categories and such matters the Council considers relevant (s.37(4))

•     s.68(1) allows Council to set reasonable fees for poundage, seizure of dogs, sustenance of impounded dogs & destruction of impounded dogs

•     May set different fees for registered & unregistered dogs and a graduated scale for repeated impounding of the same dog (s.68(3))

Council’s Revenue & Financing Policy (contained in the 10 Year Plan) indicates “a significant portion (80-100%) of the costs of dog control should be borne by dog owners as the majority of the activity relates to their actions or inactions. As no particular group or individual benefits more than other the residual cost should be allocated to the whole city as part of the general rate.”

 

As provided for in the Dog Control Act the Council does set lower fees for people demonstrating responsible dog ownership (preferred owners), for desexed dogs and for rural dogs.  Registration fees are increased by 50% for those who fail to register by 1 August each year.

 

2.2       Categories & Numbers of Registered Dogs

The following table provides a projection of the number of dogs that may be registered in the current year – a total of 8,756 dogs generating a total revenue of $876k (GST inclusive).

2.3       Costs & Funding of Dog Control Activity

The following table shows the historical and budgeted breakdown of the costs of the dog control activity and how this is funded.  For the current year 85% of the total cost of $809k is expected from registration and pound fees with the balance from general rates.  The rates contribution is increasing as the costs, especially of the pound operation are rising.  It is projected that approximately $41k of the budgeted $193k of pound costs will be recovered from pound fees.

2.4       Comparisons with other Councils – Registration fees

Council’s registration fees for 2019/20 compared with a sample of other Councils are shown in the following table.

Council’s fees are above average for urban fees and below average for rural fees.

2.5       Comparisons with other Councils – Impounding charges

Council’s impounding charges for 2019/20 compared with a sample of other Councils are shown in the following table.

Council’s charges are at the high end for impounding and microchipping.

 

2.6       Comparisons with other Councils – Funding policy

The City’s dog population and funding policy compared with a sample of other Councils is shown in the following table.

 

2.7       Impounding Outcomes

The following table shows what happens to dogs that are impounded.  The Council’s approach is to attempt to return a dog to its owner (the first time it is picked up) rather than take it to the pound.

 

2.8       What is meant by non-compliant dog owners?

The following graphic shows what we have interpreted to be the non-compliant actions of dog owners.

 

The Council charges higher registration fees for those who fail to pay on time and impounds roaming dogs – some of the cost of enforcement and impounding are recovered through pound charges.

Dog owners who meet certain criteria become ‘preferred owners’ and pay lower registration fees.

2.9       Are non-compliant owners paying a reasonable share & what are the options?

Non-compliant owners do not pay the full cost of pound and enforcement activities.  The balance is currently borne by other dog owners and general ratepayers. 

If it was considered appropriate to change the balance possible options include:

·    Reducing the registration fees and increasing impounding fees and infringements issued

·    Giving a greater reduction to preferred owners (currently 35% off the standard registration fee and 25% off the desexed dog registration fee)

·    Increasing the registration fee for rural dogs and decrease for urban dogs

·    Fund a greater share from general rates.

If the balance was to be changed the following are considerations:

Option

Considerations

Reducing the registration fees and increasing impounding fees and infringements issued

Each $1 decrease in registration fees would require an increase of approximately $24 in impounding charges to generate the same total revenue.

Likely to be more impounded dogs not collected.

Sustenance fee must be “costs reasonably incurred”.

Infringement fees are set by regulation so gathering more revenue would require more infringements to be issued – may be seen as a revenue gathering exercise.

Difficult to differentiate bad owners from the ‘unlucky’.

 

Giving a greater reduction to preferred owners

Preferred owners are currently 50.6% of the total – would need to increase general owner fee by $1 for every $1 reduction in preferred owner fees to generate the same revenue.

Need to reconsider the criteria used to determine who is a preferred owner and how well this meaning monitored.

 

Increasing the registration fee for rural dogs and decrease for urban dogs

Rural dogs are 17.4% of the total – would need to increase rural fees by $5 for every $1 reduction in urban fees to generate the same total revenue.

Rural dogs require less compliance & enforcement activity than urban dogs.

Fund a greater share from general rates

There is some scope within the present policy for a greater share to be borne from rates (budget for 2019/20 assumes 15% from rates – policy max is 20%).

Need to be conscious of possible increase in costs of impounding in future (if further investment in pound).

If a greater share was to be sought from rates would need to justify on the basis of increased investment in community education with broader community safety benefit.

 

2.10     Conclusion

Non-compliant dog owners do not pay the full share of the costs that are incurred by the Council in enforcement and impounding.

Council’s Revenue and Financing Policy does recognise there is some general community benefit from the Council’s animal welfare and education activity and as a consequence does provide for up to 20% of the cost to be funded from the general rate.

Obtaining more revenue from impounding charges will be difficult given the potential outcomes from any significant increase in the charges.

Council officers intend to place more emphasis on monitoring compliance with the criteria for classification as a preferred owner and as a consequence it is likely fewer owners will qualify for this classification in future.  If this is the case then a higher portion of total registrations will be at the standard registration fee, rather than the discounted preferred owner fee.

There is little justification for any significant increase in rural dog registration fees.

 

3.         NEXT STEPS

Council officers are reviewing the approach to the treatment of dog owners as preferred owners.

Recommendations for updated fees and charges will be developed for the 2020/21 year and presented as part of the corporate fees and charges report early next calendar year.

 

 

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 3: A Connected and Safe Community

 

The recommendations contribute to the outcomes of the Connected Community Strategy

 

The recommendations contribute to the achievement of action/actions in the Safe Community Plan

The action is: Achieve compliance with relevant legislation, bylaws, and policies through provision of information, education and enforcement (animal control, building compliance, bylaws, health compliance, liquor licensing, noise control, planning compliance).

 

Contribution to strategic direction

The approach being recommended is considered the most appropriate in terms of balance between achieving compliance and maintaining a safe community.

 

 

 

Attachments

Nil   


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Finance & Audit Committee

MEETING DATE:           4 December 2019

TITLE:                            Contract Approval - CET Arena - Arena 2 Ceiling, Lighting and Fire System Upgrade

Presented By:            Bryce Hosking, Manager - Property

APPROVED BY:             Tom Williams, Chief Infrastructure Officer

 

 

RECOMMENDATION(S) TO Council

1.   That the Council approves the contract between Palmerston North City Council and Project Work 2008 Limited for the Arena 2 Ceiling, Lighting and Fire System Upgrade for the sum of $2,423,000 + GST.

2.   That the Council notes that:

a)   Preparation and related minor works for this project, including the procurement of materials and sub-contractors, have already been completed; and

b)   The major works are set to begin on 8 December 2019 prior to Recommendation 1 of this report being approved by Council.

 

 

 

1.         ISSUE

Project Overview

1.1       There are several renewal works being undertaken in Arenas 2, 3 and 4 in the 2019/20 year. The most significant of these is a collection of projects within Arena 2 to replace the ceiling tiles, upgrade the lighting, and upgrade the fire system.

·    Upgrades to court lighting (pre-purchased and stored);

·    Replacement of ceiling – Seismically braced;

·    Sprinkler system upgrade – Additional heads on a parallel system to offset the lack of pressure; and

·    Smoke alarm system – Design and Build to LE3 standard.

Expanded project details and financials are provided in Section 2 of this report.

1.2       The head contractor (Project Works 2008 Limited) was engaged in January 2019 to undertake these works. It was decided at the time that the three projects would be delivered in unison by the one head contractor for the following reasons:

·    Cost savings – one set of scaffolding hire, one head contractor;

·    Inter-related projects – installing the lighting and fire system while the ceiling was being replaced rather than removing ceiling later;

·    Delivery timing – a key consideration was to lessen the disruption to key events in Arena 2 so they can still proceed; and

·    Delivery coordination – there are several specialist subcontractors.

1.3       Preparation and related minor works for this project have already been completed, including:

·    Research and development and formation of Detailed Design;

·    Purchase of materials;

·    Procurement of subcontractors; and

·    Building Consents.

1.4       The major construction works will be delivered over a 12-month period running from December 2019 to December 2020. To lessen disruption to the Arena activities and key events over the next 12-months the project will be delivered in construction windows. The first of these windows begins on 8 December 2019.

1.5       A full project timetable in provided in Section 2 of this report.

1.6       The project is being delivered via Programme 1051 – Central Energy Trust Arena Manawatu – Combined Asset Refurbishment.

1.7       Council Officers confirm it will be delivered within the existing budgets in this Programme over the 2019/20 and 2020/21 financial years.

Adherence to Council’s Policies and Procedures

1.8       There are several of Council’s policies and procedures which have not been followed regarding this project. They are summarised as:

·    Combined contract, not three projects – as the three projects are being delivered by one head contractor, they should have been considered one combined contract, not independently;

·    Combined contract sum exceeds delegation of Chief Executive – the combined sum of the contract exceeds the delegated authority levels of the Chief Executive and as such, should have been approved by Council prior to contractor proceeding;

·    No tender process – Council’s procurement procedures were not followed as no tender process was undertaken for this work and instead a direct engagement took place.

Please refer to Section 3 of this report for Preventative Measures.

Sub-Contractor Procurement

1.9       Despite the head contractor being a direct engagement rather than the works being tendered in the open market; the head contractor has undertaken a thorough procurement process for the subcontractors completing the various specialist works of the project.

1.10     The procurement process conducted by the head contractor has given Council Officers confidence and assurance of:

·    All contractors have the capability and capacity to not only undertake the works, but meet Council’s outcomes and timeframe requirements;

·    All contractors have experience working in live environments and the ability to meet the health and safety requirements required for the site to be safely made available for events to be conducted within Arena 2 outside of the construction windows; and

·    Council is getting value for money from the subcontractors as they were engaged in an open market process.

1.11     In addition to this, the head contractor who was engaged has significant project delivery and management experience delivering multiple other Council projects in the past.

Actions Required

1.12     Given the upgrades are significant compliance matters and essential for the continued use of Arena 2 as a multi-use venue, and given the project is being completed in construction windows around events, it is essential that major works commence on 8 December 2019 as planned.

1.13     For clarity, if the project does not proceed or is delayed, Council runs the risk of having a non-compliant building which may not be suitable for all activities required within it.

1.14     Despite not being best practise, Council Officers ask Council to note that the works will be proceeding prior to the combined contract being approved by Council and signed.

1.15     Council is also required to provide retrospective approval and delegated authority to the Chief Executive to enter into a formal contract for the works.

2.         BACKGROUND

Project Details

2.1       Below is a summary of the details of the projects being delivered:

Project

Description

Court Lighting Upgrade

·    Lighting systems have reached end of life and to ensure quality of output and maintenance.

·    Lighting has been pre-purchased and stored.

Ceiling Tiles Replacement

·    The ceiling has reach end of life and requires replacement with a new ceiling grid and tile. 

·    The ceiling void depth has been increased for primarily services routes and to mitigate thermal impact from the adjacent roof. 

·    The ceiling system is to replace the current seismically heavy tiles and replace lightweight tiles which are seismically braced.

Sprinkler System Upgrade

·    The sprinkler system is to be upgraded to Insurance requirements on a parallel system to offset the lack of infrastructure water pressure.

Smoke Alarm System Upgrade

·    The fire alarm system is to be upgraded to LE3 requirements.

 

Financial Summary

2.2       The project is being delivered via Programme 1051 – Central Energy Trust Arena Manawatu – Combined Asset Refurbishment.

2.3       Council Officers confirm it will be delivered within the existing budgets in this Programme over the 2019/20 and 2020/21 financial years.

2.4       Below is a financial summary for the contract:

Component

Cost

Ceiling Construction Supply and Install

$727,899

Fire Sprinkler System Supply and Install

$737,898

Electrical and Lighting Install

$240,896

Smoke Alarm System Supply and Install

$47,850

CCTV Wiring

$6,857

Scaffolding

$340,000

Air Conditioning

$18,136

Structural Rigging

$34,000

Consultant Professional Fees

$63,157

Contingency

$146,463

Project Management

$60,000

Total

$2,423,000

Paid as at 31 October 2019

$191,896

 

2.5       Note 1: Figures are rounded for easy reading.

2.6       Note 2: The contractor will use lighting products that were pre-purchased directly by the Council during 2018/19 – this cost is not included in the contract sum.

Delivery Timetable – Construction Windows

2.7       Below is a summary of the Delivery Timetable for the physical construction phase:

Phase

Construction Window

Bays 1 and 2

Start 8th Dec 2019 – 21 Mar 2020

Bay 3

Starts 29th Mar 2020

Bay 4

Starts 28th July 2020

Bay 5

Start 5 Oct 2020

Phase 6

Starts 5 Dec 2020

 

2.8       Please note: 1 week is required at the beginning and end of each construction window for the erection and then pack down of the scaffolding system. This week also includes floor protection measures to be put in place to protect the new floor.

3.         PREVENTATIVE MEASURES

3.1       The following actions have been taken to ensure better processes and practises are followed:

·    Creation of the Project Management Office (PMO)

o A function of the PMO is to provide project management excellence through setting best practise standards and providing leadership and guidance to all Council Officers delivering projects.

o A clear and concise project delivery framework has been put in place to not only ensure best practise delivery standards are used.

·    Project Review Board

o A dedicated review board has been set up to provide programme and project governance, risk analysis, health and safety governance, and provide oversight of financial management.

o The Manager – Property will have a closer handle on all projects being delivered from the Property Division and ensure the appropriate policies and procedures are being followed.

·    Restructure and Improved Culture

o The restructure has resulted in new project managers entering the organisation bringing strong project delivery backgrounds and skillsets.

o The creation of a high performing culture in the Infrastructure unit of accountability, being outcome focused and customer centric, and striving for operational excellence.

·    Procurement Improvements

o The creation of a Procurement Manager within the organisation has allowed for a focused lens to be put on all of Council procurement policies, operations and processes, including tender requirements.

4.         NEXT STEPS

4.1       Major construction works to commence on 8 December 2019 as planned.

4.2       Contract to be entered between Palmerston North City Council and Project Works 2008 Limited.

5.         Compliance and administration

Does the Committee have delegated authority to decide?

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

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?

Yes

There are several inconsistencies with Council’s policies highlighted in this report. They are summarised as:

·    The head contractor was engaged to deliver the Ceiling Replacement, Lighting Upgrade and Fire System Upgrade projects as a combined contract prior to Council approving the contract;

·    The combined sum of the contract exceeds the delegated authority levels of the CE and as such, should have been approved by Council prior to contractor commencing works;

·    Council’s procurement procedures were not followed as no tender process for the head contractor was undertaken for this work and instead a direct engagement took place.

The above has occurred as a result of:

·    Previous Council Officers who were managing this contract on behalf of Council did not understand the requirements for a contract to go to tender;

·    Council’s procurement process and policy was not clearly communicated to Officers;

·    The decision was made early on that these projects could be treated individually not as a combined contract, and as such could be agreed upon by the CE. This was an incorrect decision;

·    This matter occurred in the middle of a significant restructure of the Infrastructure Unit and then Property Divisions. This resulted in a high turnover of project managers and other staff in the Property Division; and

·    The Manager – Property incorrectly assumed the above had been done correctly and did not investigate further. The matter was only made obvious at this late stage while finalising arrangements to start works.

The recommendations contribute to Goal 2: A Creative and Exciting City

The recommendations contribute to the outcomes of the Creative and Liveable Strategy

The recommendations contribute to the achievement of action/actions in the Active Community Plan

The action is: The Central Energy Trust Arena is the city’s main multi-purpose hub for sport and recreation and serves as the region’s premier sporting and events hub.

Contribution to strategic direction and to social, economic, environmental and cultural well-being

Palmerston North has fit-for-purpose facilities that meet demonstrated community’s sport and recreation needs and retains its ability to host major sporting events.

 

 

Attachments

Nil   


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Finance & Audit Committee

MEETING DATE:           4 December 2019

TITLE:                            New Deed of Lease for 21 Havelock Avenue

Presented By:            Bryce Hosking, Manager - Property

APPROVED BY:             Tom Williams, Chief Infrastructure Officer

 

 

RECOMMENDATION(S) TO Council

1.   That the Council as the administering body under the Reserves Act 1977, on behalf of the Minister of Conservation, approves the lease of land and building at 21 Havelock Avenue, Palmerston North, to Papaioea Pasifika Centre Trust.

2.   That the Council agree to execute a new five-year and nine-months lease between Palmerston North City Council and Papaioea Pasifika Centre Trust for 21 Havelock Avenue, Palmerston North.

 

 

1.         ISSUE

1.1       The current lease of 21 Havelock Avenue to Papaioea Pasifika Centre Trust expired on 30 September 2019.

1.2       As the land is a reserve under the Reserves Act 1977, a new lease requires approval from the Local Authority on behalf of the Minister of Conservation to lease the land.

1.3       Papaioea Pasifika Centre Trust has requested a new lease for the land and building located at 21 Havelock Avenue.

1.4       The lease terms will be as follows:

·    Commencement Date: backdated to start on 1 October 2019

·    Initial Term: Five (5) Years, Nine (9) Months

·    Renewal Term: One term of Three (3) Years

·    Annual Rental: $1,419.08 + GST and outgoings

·    If a new lease is entered, the use of the site will remain the same as the existing use.

1.5       For clarity, the rationale for a 5-year & 9-month term was to strategically align the expiry of the lease with Council’s other community centres.

2.         BACKGROUND

2.1       Papaioea Pasifika Centre Trust has had a land lease on 21 Havelock Avenue since September 2009.

2.2       The public notification process required under the Reserve Act 1997 has been undertaken with notification being advertised of Council’s intention to enter a new lease. Council officers confirm that no submissions were received from this process.

2.3       The draft new lease was provided to Papaioea Pasifika Centre Trust for review and they are satisfied with the terms.

3.         NEXT STEPS

3.1       A new lease will be executed between Palmerston North City Council and Papaioea Pasifika Centre Trust.

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 3: A Connected and Safe Community

The recommendations contribute to the outcomes of the Connected Community Strategy

The recommendations contribute to the achievement of action/actions in the Community Services and Facilities Plan

The action is:  Support the provision of existing community centres.

Contribution to strategic direction and to social, economic, environmental and cultural well-being

Incorporate demographic projections and information about community needs into all development and review of community facilities.

Attachments

Nil   



 

 

 


PALMERSTON NORTH CITY COUNCIL

 

Memorandum

TO:                                Finance & Audit Committee

MEETING DATE:           4 December 2019

TITLE:                            Request for City Wide Capital New Programme to Fund New Parking Infrastructure

Presented By:            Robert van Bentum, Manager Transport and Infrastructure

APPROVED BY:             Tom Williams, Chief Infrastructure Officer

 

 

RECOMMENDATION(S) TO Council

1.   That the Council approve a Capital New Programme entitled City Wide - On-Street Parking Infrastructure for the 2019-20 financial year with a budget of $75,000.

 

 

 

1.         ISSUE

1.1       Palmerston North city is experiencing a period of rapid growth. Not only is there a significant increase in the number of residential properties but job growth is also contributing to increasing commuter traffic into the city from other regional centres. A significant proportion of the residential growth in the city comprises infill development resulting in an increase in the density of the residential areas.

1.2       One of the impacts of the significant growth and increasing density of residential development within the city is a measurable increase in traffic volumes as well as increasing pressure on parking in some parts of the city. As a result, there are an increasing number of conflicts and pressures occurring in respect of parking across the city.

1.3       Residential development which results in new accessways as well as investment by Council in urban upgrades which prioritise pedestrians over cars and re-prioritisation some road corridors for other travel modes is resulting in the loss of on-street car parking availability in some areas.

1.4       Due both to the growth pressures and the desire by Council to make better provision for all transport modes, Officers have identified the need to change the management of parking in areas of significant pressure and conflict. The pressure for improved parking management is reflected in the large number of requests from residents and business owners for parking intervention.

1.5       Officers are receiving increasing numbers of requests from Council and the wider community for parking interventions and mitigation measures ranging from new line marking, signage as well as implementation of time limits as well as the installation of additional parking sensors and additional mobility parking. While accepting the need for some of this new infrastructure, Officers are unable to respond to the level of requests given there is currently no capital new programme budget allocated to fund the new capital infrastructure.

1.6       This report seeks approval from Council for a new City-Wide Capital New Programme for the current 2019-20 financial year, with a view to including the programme in future annual and LTP programmes of work. A budget of $75,000 has been requested based on an assessment of the cost to implement parking requests currently sitting with Council Officers and considered to be justified.

2.         BACKGROUND

2.1       Pressure on parking availability is an inevitable consequence of Palmerston North becoming a major urban centre however expectations in respect of the easy availability of parking are slow to change. Some pressure on parking availability is also essential to provide the impetus for a move to active transport modes such as public transport, walking and cycling.

2.2       However, with most Palmerston North residents commuting to work by car, parking close to major employer locations in the city is under some pressure e.g. hospital. Victoria precinct. While there is still ample available parking (average occupancy around 50%) in the paid parking areas within the central CBD, pressure is increasing in the zone immediately outside the ring road, as commuters and shoppers seek out free all-day parking.

2.3       Areas where there is significant pressure for on-street parking and for which Officers have received requests for parking interventions include:

·        Dogwood Way (No Stopping Signs)

·        Milverton Park – Additional new mobility parking space

·        Grey Street (Introduce/extend existing P90)

·        Main Street (selected P15)

·        Victoria Avenue (Change P120 to P60 near new commercial building)

·        Church Street (Change P120 to P60 near Salvation Army)

·        Heretuanga Street (Implement P120 for Hospice)

·        He Ara Kotahi – Ruha Street and Park Road (Install Street Yellow Lines)

·        Hokowhitu Shops (Change P120 to P30)

·        Disabled Parking Improvements in CBD (signage upgrades)

·        Russell Street (Implement P120)

 

2.4       There is also parking signage in the CBD which is non-compliant and requires amendment to ensure effective user compliance and parking enforcement. These include

·        Substandard Mobility Parking signage requiring improvements in CBD

·        Parking conflicts adjacent to the Square East Electric Charging Station CBD

 

2.5       Officers have also been approached by schools across the city seeking contributions towards interventions to improve parking pickup and drop off in association with traffic safety improvements. These schools include:

·        Westend Primary School

·        College Street Normal School

·        Palmerston North Intermediate School

·        Longburn School

·        Roslyn School

·        Carncot

·        Winchester School

·        Russell Street School

 

3.         Parking service requests

3.1       In the past 12 months, Officers have received 185 KBase service requests for changes to parking infrastructure. These range from requests to introduce time limited parking in high use areas close to schools and major employment areas to requests to paint yellow line to resolve neighbour disputes around parking of cars in residential areas.

3.2       Officers are guided by Council’s Parking Management Plan and are developing internal policy guidance for assessing and prioritising whether requests can be effectively addressed by parking infrastructure changes. Guiding principles include:

·        Priority to be given to parking management changes which can mitigate safety risks for vulnerable road users e.g. vehicle access and parking around schools

·        Parking mitigation to restrict parking will be supported to improve safety e.g. parking around high use intersections

·        Parking mitigation will be supported where there is evidence of inadequate facilities for vulnerable users e.g. additional mobility parking provision

·        Parking management interventions will be supported, outside the CBD to balance the parking needs between all day commuter use and short-term visitor requirements e.g. medical or health related services patients, residential visitors on the periphery of the CBD

·        Officers will generally decline requests for parking mitigation generally in the form of line marking to resolve parking conflicts between neighbours in low volume residential streets on the basis that painting yellow lines does not change behaviour or ensure compliance.

 

4.         Budget provision

4.1       Officers have reviewed the number outstanding requests for parking mitigation and have summarised the type of works and indicative cost of the interventions in Table 2 below.

Table 2   - Estimated Cost of Outstanding Parking Mitigation

Parking Mitigation

Estimated Quantity

Unit Cost

Estimated Cost

Line marking

37

500

$18,500

Parking Signs

160

100

$16,000

Mobility Parking

6

3000

$18,000

TOTAL

 

 

$52,500

 

5.         NEXT STEPS

5.1       Should the new programme budget be approved, Officers will look to implement the outstanding parking and road safety issues that are assessed as being warranted. The budget will be used largely to install parking signs, road markings and infrastructure associated with mobility parking (such as kerb ramps) around the city.

5.2       Where changes to time restricted parking is proposed, consultation will be undertaken with affected stakeholders prior to any decision about implementation of any changes. Officers will establish that this is significant support from directly affected stakeholders before implementing any changes.

5.3       If a dedicated capital budget is not approved, Officers will be unable to respond to most of the parking management and mitigation requests. A small number of requests might be supported through existing programmes where a safety impact is identified, although this will require some reprioritising of other programmes of work. Otherwise significant investment in parking management changes will need to wait for approval of a budget at a future date.

6.         Compliance and administration

Does the Committee have delegated authority to decide?

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

No

Are the decisions significant?

No

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

No

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

No

Does this decision require consultation through the Special Consultative procedure?

No

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

No

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

No

The recommendations contribute to Goal 1: An Innovative and Growing City

 

The recommendations contribute to the outcomes of the City Development Strategy

 

The recommendations contribute to the achievement of action/actions in the Strategic Transport Plan

The action is: An adequate supply of parking to meet the needs of a business’s/industry and economic growth, and for encouraging a strong culture of walking, cycling and public transport use.

 

Contribution to strategic direction

More effective parking management will help to mitigate the negative effects of growth and increased intensification of residential development as well as encouraging a shift to other modes of transport.

 

 

 

Attachments

Nil   


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

Report

TO:                                Finance & Audit Committee

MEETING DATE:           4 December 2019

TITLE:                            Te Motu o Poutoa Land Purchase Opportunity

PRESENTED BY:            Kathy Dever-Tod, Parks and Reserves Manager

APPROVED BY:             Tom Williams, Chief Infrastructure Officer

 

 

RECOMMENDATION(S) TO Council

1.   That the Council purchases the land at the entranceway to Te Motu o Poutoa for

$300,000 from Higgins Family Holdings.

2.   That the Council funds the $300,000 land purchase by: 1. transferring $170,000 of the unspent budget from Programme 708 (Urban Growth - Aokautere - Reserves Land Purchase) to this purchase; and 2. utilising $130,000 of unallocated budget from Programme 94 (Walkways and Shared Path – Purchase of Land to Extend Walkways) for this purchase to make up the total.

3.   That the top up of Programme 708 (Urban Growth - Aokautere - Reserves Land Purchase) of $170,000 to cover the amount used at Te Motu o Poutoa to purchase the entranceway land be referred to the next 10 Year Plan 2021 process.

 

 


 

Summary of options analysis for

Problem or Opportunity

The opportunity to purchase the piece of land at the entranceway to Te Motu o Poutoa is currently on offer to Council.

OPTION 1:

Purchase the entranceway land to Te Motu o Poutoa using $170,000 unspent budget from Programme 708 Urban Growth Aokautere Reserves Land Purchase budget; and the remaining $130,000 from Programme 94 Walkways and Shared Path – Purchase of Land to Extend Walkways.

Community Views

Community views have not been tested on the proposal. All indications so far however in regards community feedback have been positive with regards the work in the Manawatū River environment.  

Rangitāne o Manawatū are supportive of the purchase.

Benefits

This option allows Council to spend its Aokautere land purchase budget and Walkways Land Extension budgets on a sound Aokautere land purchase opportunity that may not be available again, and to defer the urban growth purchase to a later date.

This option will allow Council greater flexibility when the development plan for Te Motu o Poutoa is worked through with Iwi.

This option secures the connection between existing Aokautere walkways and the Manawatū River Park and Te Motu o Poutoa. 

Risks

Council is seen to be spending urban growth money for local reserves on an unplanned land purchase.

The inclusion of additional $170,000 in the Urban growth programme for Aokautere is not adopted by Council at the next 10 Year Plan and the reserve land purchase programme to accommodate growth is put at risk.

Financial

$170,000 spent from Programme 708, and the amount referred to the next 10 Year Plan for consideration to fund Aokautere Urban growth reserves land purchase.

OPTION 2:

Purchase the entranceway land to Te Motu o Poutoa using Programme 94 – Walkways and Shared Path Extension – Purchase of Land to Extend Network, and overspend this budget by $170,000, acknowledging that this budget is overspent in some years and underspent in others.

Community Views

Community views have not been tested on the proposal. All indications so far however in regards community feedback have been positive with regards the work in the Manawatū River environment.  

Rangitāne o Manawatū are supportive of the purchase.

Benefits

This option allows Council to spend its walkway development budget on a sound Aokautere land purchase and walkway connection opportunity that may not be available again. This option will not require Officers to put a budget up to the next 10 Year Plan for urban growth land purchase in Aokautere.

This option will allow Council greater flexibility when the development plan for Te Motu o Poutoa is worked through with Iwi.

This option secures the connection between existing Aokautere walkways and the Manawatū River Park and Te Motu o Poutoa. 

Risks

Council is seen to be spending rates on unplanned walkway connections.

Financial

This option requires an overspend of $170,000 on Programme 94.

OPTION 3:

Do not purchase the entranceway land to Te Motu o Poutoa.

Community Views

Community views have not been tested on the proposal. All indications so far however in regards community feedback have been positive with regards the work in the Manawatū River environment.  

Benefits

There is no budgetary overspend nor is there any budgetary spend deferred to the next 10 Year Plan.

Risks

This land may not become available again.

This piece of entranceway land will play a key role in connecting the Manawatū River pathway and He Ara Kotahi to the developed Te Motu o Poutoa. The loss of this opportunity will make that connection more difficult.

If Higgins Family Holdings successfully achieve a residential development on this land, it will considerably hinder our connections between the existing Aokautere walkways, He Ara Kotahi and Te Motu o Poutoa. 

Financial

There are no financial implications with this option.

The recommendations contribute to Goal 1: An innovative and growing city

The recommended option contributes to the outcomes of the Creative and Liveable Strategy

The recommended option contributes to the achievement of action/actions in the Active Community Plan

The action: Expresses iwi and Māori cultural heritage values in city parks by making stories and traditions more visible through place names, Toi Māori – artistic expression, bilingual signage, and ancestral stories and interpretation.

Work with mana whenua to identify, protect, preserve, and manage wāhi tapu and other places of significance within the public open space network.

Extend the walking and cycling network, including completing and upgrading parts of the existing network.

 

Contribution to strategic contribution

The purchase of this land will help us give full expression to the City’s key site of cultural significance. It will also help us complete a comprehensive and lasting connector to our walkway network.

 

 

Rationale for the recommendations

1.         Overview of the problem or opportunity

1.1       In August 2019 Higgins Family Holdings approached Council with a proposal for Council to purchase the piece of land directly adjacent to the entranceway to Te Motu o Poutoa on the eastern side of Cliff Road.

1.2       Officers immediately identified the opportunity to develop a prominent and appropriate entranceway at the City’s most significant cultural site of significance, establish key connections between Te Motu o Poutoa and He Ara Kotahi, and the connect the Aokautere walkways to He Ara Kotahi. 

1.3       Council engaged a valuer to provide a valuation of the land parcel. The land value came back at just over $300,000. Officers believe that the land can be purchased with no impact on rates by utilising a combination of the unspent Programme 708 Urban Growth Land Purchase budget – which is currently tagged to a future Aokautere reserve, and Programme 94 – land purchase to extend the walkway network – which is under-allocated in 2019/20 by $130,000.

2.         Background and previous council decisions

2.1       Te Motu o Poutoa (the Place of Poutoa) is arguably considered the most important site of cultural significance by Rangitāne o Manawatū. The site consists of a 4.35 Ha parcel of land on one of the most prominent high points in Palmerston North.

2.2       The site was the key defensible pa site in times of danger by Rangitāne o Manawatū – Palmerston North’s Iwi. The site is/was also home to urupa (graves) and food pits, some of which remain visible today (refer aerial on following page under 2.3).

2.3       Rangitāne o Manawatū have clearly expressed their desire to work with Council to restore this key site of cultural significance. As a result just under $1,000,000 has been adopted in the 10 Year Plan to develop the site. It is also believed that the prominence and importance of the site will result in this project being highly attractive to central government and other external agency funding opportunities. 

2.4       In 2017 Officers and Rangitāne began design work on the Manawatū River Framework and a development plan for Te Motu o Poutoa. The development plan for Te Motu o Poutoa was in order to give effect to the development budget under Programme 1951 – Te Motu o Poutoa/ANZAC Park Reserve Development.

2.5       During development planning and workshops with Councillors it became apparent that it would be most appropriate that Rangitāne o Manawatū and Palmerston North City Council co-manage this site. In the spirit of partnership that had been organically growing over the years between the Council and Rangitāne o Manawatū a Kawenata (partnership agreement) was developed to manage and develop the site together.

2.6       The agreed expression of this co-management arrangement was to develop a full Council Committee under the LGA 2001 set up to co-manage the site. The Committee is to be made up of 50% Rangitāne and 50% Councillors. The development plan was placed on hold until the new co-management committee is established. 

2.7       In August 2019 Higgins Family Holdings approached Council with a proposal for Council to purchase the 1.3 Ha piece of land directly adjacent to the entranceway to Te Motu o Poutoa on the eastern side of the road. The aerial below describes the land parcel.

2.8       Officers immediately saw the opportunity to utilise this piece of land in the upcoming development plan for Te Motu o Poutoa. In particular, the piece of land would ensure a prominent and appropriate entranceway could be built at the City’s most significant cultural site of significance. Also, key connections between Te Motu o Poutoa and He Ara Kotahi could be achieved; and the Aokautere walkways could be easily joined into the He Ara Kotahi walkway development. 

2.9       In addition, and in anticipation of the development plan at Te Motu o Poutoa, Officers engaged an engineering firm to complete a desk-top analysis to ascertain the stability of the cliff-top area at the top of Te Motu o Poutoa. The company determined that it is likely that at least a 35m set back from the edge of the cliff is required for any development of the site. The set back means that development of the site will be somewhat constrained. Officers therefore also saw additional opportunity to utilise space in a more dynamic manner in the development plan, if the entranceway land was purchased. The aerial below describes the likely extent of the limitations on site development. A detailed engineering report with core drilling will be required to confirm this desk top analysis.

2.10     Officers approached Rangitāne o Manawatū with the proposal to ascertain their appetite for this opportunity and to determine if there might be any cultural issues with the proposal. Rangitāne expressed their desire for Council to purchase the land prior to beginning work on the development plan for Te Motu o Poutoa. Rangitāne support potentially developing a new and ambitious entranceway at one of the City’s key entranceways to the City’s most prominent cultural site of significance.

2.11     Officers then approached a valuer to provide advice on valuation. Valuation of the site came back at just over $300,000. Council Officers have signalled to Higgins Family Holdings a desire to purchase the land parcel, subject to Council approval. This report outlines the options for consideration by Council.

3.         Description of options

3.1       Option 1: Purchase the entranceway land to Te Motu o Poutoa using $170,000 unspent budget from Programme 708 Urban Growth Aokatuere Reserves Land Purchase budget, and the remaining $130,000 from Programme 94 Walkways and Shared Path – Purchase of Land to Extend Walkways.

3.2       Option 2: Purchase the entranceway land to Te Motu o Poutoa using Programme 94 – Walkways and Shared Path Extension – Purchase of Land to Extend Network, and overspend this budget by $170,000.

3.3       Option 3: Do not purchase the entranceway land to Te Motu o Poutoa.

4.         Analysis of options

4.1       Option 1: Purchase the entranceway land to Te Motu o Poutoa using $170,000 unspent budget from Programme 708 Urban Growth Aokatuere Reserves Land Purchase budget, and the remaining $130,000 from Programme 94 Walkways and Shared Path – Purchase of Land to Extend Walkways.

Programme 708 – Urban Growth – Aokautere – Reserves Land Purchase

4.2       This option would allow Council to purchase the proposed land parcel from both an existing land purchase budget for the same area that will be unspent this year (Programme 708), and the remainder of the budget to extend walkways land (Programme 94). Programme 708 will be unspent due to urban growth not occurring at the rate at which Officers had initially planned for, and Programme 94 due to carry-forward is not fully committed. This means the proposed land purchase could occur without an immediate impact on rates.

4.3       Development Contributions is the Council policy that describes which portions of development are considered growth related, and which are level of service changes for existing rate payers. This policy applies to all infrastructure, including reserves. Some reserves are 100% growth funded. Local purpose reserves are 100% growth related. This is because these reserves would not otherwise be developed if growth did not occur, and these reserves, for-the-most-part, service the local community only. City Reserves, on the other hand, will continue to be developed – partially because the City is growing, and partially because our rate payers expect us to provide high quality parks and reserves. This requires us to determine which portion is growth related and which is providing more for existing rate payers. 

4.4       The budget for Programme 708 for urban growth is to purchase a neighbourhood reserve in Aokautere. This programme is 100% growth related and therefore results in the reserve land being purchased 100% by development contributions. The full development contributions obviously are not realised by Council until all properties in the surrounding area are sold and all contributions for the local reserve are collected.

4.5       The proposed purchase of the land parcel at Te Motu o Poutoa is not 100% growth related. This is because Te Motu o Poutoa, as part of the City Reserve (Manawatū River Park), is partially funded by growth and partially funded by existing rate payers – as it benefits both.

4.6       The relationship between existing levels of service and growth for Palmerston North is 16% at current growth rates. This means that City Reserves – reserves that service the entire city, are funded by development contributions at 16% (current cumulative growth rate over the life of the Development Contributions Policy), with the remaining 84% being funded by existing rate paying properties.

4.7       Therefore, the true cost to Council of the land purchase is $48,000 from development contributions – as the growth-related portion; and $252,000 from loans as an increased level of service to the existing community of rate payers.

Programme 94 – Walkways and Shared Path – Purchase of Land to Extend Walkways

4.8       The walkways land purchase programme was developed several years ago, to extend over a 50-year timeframe, and assumed a linear budget line.  In reality, some years have higher development levels than others, with walkway purchase opportunities, and others have less development and the budget has been unspent.  Review of the programme found on average the overall spend has been consistent with the overall budget across 10 years but can fluctuate from year to year.

4.9       Currently Programme 94 Walkways Land Extension budget holds $515,000 for the 2019/20 financial year. There are a number of committed land purchases set against it for this financial year. They are:

·    a walkway connection/easement along Manawatū River (Van Echten property).

·    A walkway in Aokautere (Polson Hill to Moonshine Valley).

·    Walkway connection from Brian Green development (Aokautere)

·    Easement along Green’s Road (Te Araroa Trail). 

·    In addition to this the $95,000 to purchase the Manawatū Golf Club land budgetted for in the Manawatū River Framework did not include the pine forest purcahse. Programme 94 therefore also included an additional $75,000 to make that purchase.

4.10     The approximate total amount of planned land purchases under Programme 94 for the 2019/20 financial year is $385,000. The total walkways budget for Programme 94 is $515,000. There is currently likely to be a $130,000 underspend on the budget, and this could be allocated to this purchase. This would leave a shortfall of $170,000 for the proposed purchase of the Te Motu o Poutoa land parcel.

Benefits of Option 1

4.11     This option also opens up a number of opportunities:

·    Better overall connectivity between walkways, the river and this key site

·    Larger scale entranceway and better use of space given set back requirements on site. (Note: this could allow Council and Rangitāne to place the bulk of site parking at the entranceway thereby leaving room for any structures on site that will need to adhere to the 35m setback).

·    Ensures walkway connection over the existing site owned by Higgins is maintained.

·    Halts any future development that might not be complimentary to the development of a site of cultural significance.

4.12     The blue arrow above describes the existing walkway to Te Motu o Poutoa and the Manawatū River across Higgins Family Holdings land. The yellow arrow describes the entranceway to the reserve. The blue x describes the proposed site for purchase, and the red arrow describes the directional link to the Manawatū River and He Ara Kotahi.

4.13     The risk in this approach is that Council will need to include the equivalent land purchase amount ($170,000) as additional expenditure in the 2021 10 Year Plan to ensure that the anticipated land purchases are not compromised.

4.14     Option 2: Purchase the entranceway land to Te Motu o Poutoa using Programme 94 – Walkways and Shared Path Extension – Purchase of Land to Extend Network; and overspend this budget by $170, 000.

4.15     The analysis for Option 1: (under heading) Programme 94 – Walkways and Shared Path – Purchase of Land to Extend Walkways holds for this option. However, an overspend of approximately $170,000 on Programme 94 is anticipated under this option.

4.16     Given this budget experiences over spends and underspends from year to year it is anticipated that the over spend will be made up in times where little development is occurring, and there is therefore less land purchase opportunity for extending walkways.

4.17     Option 3: Do not purchase the entranceway land to Te Motu o Poutoa.

4.18     This option will result in the above opportunities being either lost or limited in their application. A lesser entranceway will be developed; and it is unsure what type of development would be proposed by Higgins Family Holdings.

4.19     The walkway connection currently on Higgins land would also be placed at risk.

5.         Conclusion

5.1       Purchase the Higgins Family Holdings property at the base and entranceway to Te Motu o Poutoa in preparation of the development plan for this key site of cultural significance at no immediate cost to rate payers.

5.2       Include an additional $170,000 in Programme 708 in 2021/22 as part of the 10 Year Plan process to offset expenditure of local purpose reserve funding on this land purchase.

6.         Next actions

6.1       Develop a sale and purchase agreement with Higgins Family Holdings for purchase of the land parcel.

7.         Outline of community engagement process

7.1       Extensive engagement with Rangitāne o Manawatū has occurred. The community has not been engaged in this potential land purchase.

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?

No

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

No

The recommendations contribute to Goal 2: A Creative and Exciting City

 

The recommendations contribute to the outcomes of the Creative and Liveable Strategy

 

The recommendations contribute to the achievement of action/actions in the Active Community Plan

The action is: Plan for and provide sport and recreation facilities in urban growth areas.

The recommendations contribute to the achievement of action/actions in the Manawatu River Plan

The action is: Implement a series of ‘acquisition’ projects including purchase of land.

 

Contribution to strategic direction and to social, economic, environmental and cultural well-being

Iwi Partnerships

 

 

 

Attachments

Nil   


 

 

 


PALMERSTON NORTH CITY COUNCIL

 

Committee Work Schedule

TO:                                Finance & Audit Committee

MEETING DATE:           4 December 2019

TITLE:                            Committee Work Schedule

 

 

RECOMMENDATION(S) TO Finance & Audit Committee

1.   That the Finance & Audit Committee receive its Work Schedule dated December 2019.

 

 

Attachments

1.

Committee Work Schedule

 

    


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