Agenda of Council - 24 00 2020

PALMERSTON NORTH CITY COUNCIL

Council MEETING

24 June 2020

Order of Business

NOTE:

This meeting will also be held via audio visual links. A recording of the meeting will be made available on our website shortly after the meeting has finished.

If you wish to attend this meeting via audio visual link then please contact the Democracy & Governance Advisor, Sarah Claridge, on sarah.claridge@pncc.govt.nz to request a link.

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. Presentation - Queen's Birthday Honours Page 7

Presentation, by The Mayor (Grant Smith).

5. Confirmation of Minutes Page 11

“That the minutes of the ordinary meeting of 27 May 2020 Part I Public be confirmed as a true and correct record.”

6. Adopting the Annual Budget (Plan) 2020/21 - Presentation of the Part I Public Committee of Council Recommendations from its 10 June 2020 Meeting Page 19

“That the Committees recommendations be adopted or otherwise dealt with.”

Reports

7. Revisions to Annual Plan document 2020/21 Page 21

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

8. Setting Rates for 2020/21 Page 43

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

9. Resolutions to Authorise Borrowing Page 55

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

10. Proposed changes to foundation policies for Local Government Funding Agency (LGFA) Page 59

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

11. Alteration to Standing Orders - remote participation Page 71

Memorandum, presented by Hannah White, Democracy and Governance Manager.

12. Review of Standing Orders Page 81

Report, presented by Hannah White, Democracy and Governance Manager.

13. Remits to Local Government New Zealand 2020 Annual General Meeting Page 91

Memorandum, presented by Hannah White, Democracy and Governance Manager.

14. Council Work Schedule Page 119

Recommendations from Committee Meetings

15. Presentation of the Part I Public Economic Development Committee Recommendations from its 3 June 2020 Meeting Page 121

“That the Committees recommendations be adopted or otherwise dealt with.”

16. Presentation of the Part I Public Planning & Strategy Committee Recommendations from its 10 June 2020 Meeting Page 123

“That the Committees recommendations be adopted or otherwise dealt with.”

17. Presentation of the Part I Public Arts, Culture & Heritage Committee Recommendations from its 10 June 2020 Meeting Page 125

“That the Committees recommendations be adopted or otherwise dealt with.”

18. Presentation of the Part I Public Finance & Audit Committee Recommendations from its 17 June 2020 Meeting Page 127

“That the Committees recommendations be adopted or otherwise dealt with.”

19. Presentation of the Part I Public Play, Recreation & Sport Committee Recommendations from its 17 June 2020 Meeting Page 129

“That the Committees recommendations be adopted or otherwise dealt with.”

20. 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
21.	Minutes of the ordinary meeting - Part II Confidential - 27 May 2020	For the reasons setout in the ordinary minutes of 27 May 2020, held in public present.
22.	Appeal to Plan Change C Kākātangiata Stage 1: Kikiwhenua Residential Area	Negotiations	s7(2)(i)
23.	Rotation of Trustees on Council Organisations	Privacy	s7(2)(a)

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.

Palmerston North City Council

Minutes of the Council Meeting Part I Public, held in the Elwood Room, Conference & Function Centre , 354 Main Street, Palmerston North, 32 The Square, Palmerston North on 27 May 2020, commencing at 9.00am.

Members

Present:

Grant Smith (The Mayor) (in the Chair) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

Apologies:

Councillor Lorna Johnson – early leaving.

Councillor Johnson left the meeting at 12.06pm during consideration of clause 49.20.

43-20

Apologies

Moved Grant Smith, seconded Tangi Utikere.

RESOLVED

That apologies be received.

Clause 43-20 above was carried 16 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

44-20

Notification of Additional Item

Moved Grant Smith, seconded Tangi Utikere.

RESOLVED

To receive late Item 17: Amendment to the Council and Committee Meeting Schedule for 2020

Item 17 was late because the co-ordination of meetings was disrupted due to the Covid-19 lockdown. It needs to be considered at this meeting to ensure the public are notified of the meetings within the appropriate notice period.

Clause 44-20 above was carried 16 votes to 0, the voting being as follows:

For:

45-20

Confirmation of Minutes

Moved Grant Smith, seconded Tangi Utikere.

RESOLVED

1. That the minutes of the ordinary meeting of 29 April 2020 Part I Public be confirmed as a true and correct record.

Clause 45-20 above was carried 16 votes to 0, the voting being as follows:

For:

Reports

46-20	Standing Orders Update- Remote participation Memorandum, presented by Hannah White, Democracy and Governance Manager.
	Moved Grant Smith, seconded Tangi Utikere. RESOLVED 1. To note the contents of the report entitled “Standing Orders Update-Remote participation”, of Council meeting 27 May 2020.
	Clause 46.1 above was carried 16 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.
	Moved Lorna Johnson, seconded Leonie Hapeta. 2. That a proposal to allow remote participation in council meetings to be made permanent is brought to the Council meeting in June.
	Clause 46.2 above was carried 16 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

47-20

Covid-19 Palmerston North City Recovery Plan

Memorandum, presented by David Murphy, City Planning Manager and Julie Macdonald, Strategy and Policy Manager.

Moved Grant Smith, seconded Tangi Utikere.

RESOLVED

1. To receive the memorandum entitled “Covid-19 Palmerston North City Recovery Plan” dated 27 May 2020.

2. To endorse the Covid-19 Palmerston North City Recovery Plan to guide Council’s recovery actions and inform future decision-making, particularly the 10 Year Plan 2021/31.

Clause 47-20 above was carried 16 votes to 0, the voting being as follows:

For:

48-20	Voucher - Process Options and Feasibility Memorandum, presented by Sacha Haskell, General Manager - Marketing and Communications. The report looked at possible options for a voucher to assist local retailers and businesses. It was requested at a Councillor workshop on City recovery. The report proposed a voucher which gave a $10 cash back on $30 spend. Councillors raised concerns about possible costs, distribution of the voucher, fraud and legal issues. The voucher was to come from funds from this financial year and would need to be redeemed before 30 June 2020. A motion to allow the voucher to be used to pay rates, was lost as it did not meet the objective of the proposal which was to encourage retail spending. Councillors were supportive of a Manawatu resident card which would allow for discounts for Palmerston North residents. The card could be linked to Council facilities and non-profit organisations. Officers to explore the options and report back to Council in the future. Meeting adjourned 10.43 Meeting resumed 11.09
	Moved Grant Smith, seconded Tangi Utikere. RESOLVED 1. To receive the report entitled “Voucher – Process Options and Feasibility dated 27 May 2020. 2. That a future Choose Manawatu/PalmyProud residents’ card is explored over time, within existing Council budgets and reported back in the near future.
	Clause 48-20 above was carried 15 votes to 0, with 1 abstention, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford. Abstained: Councillor Leonie Hapeta.
	Moved Grant Smith, seconded Rachel Bowen. Note: Motion That the Chief Executive be instructed to introduce a Voucher system as outlined in Option (2-B). To be distributed via PalmyProud magazine in early June, with the following conditions: • $10 including GST voucher for any $30 or more purchase. • Must be redeemed by June 30th 2020. • For Citywide businesses, (excl Supermarkets, alcohol and tobacco). • Business payment via invoice and voucher redemption to Council. • Redeemed for face value against rates This motion was amended.
	Moved Aleisha Rutherford, seconded Vaughan Dennison. Note: Amendment of Motion RESOLVED Remove “Redeemed for face value against rates” from the motion above
	The amendment to remove “Redeemed for face value against rates” was carried 14 votes to 1, with 1 abstention, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford. Against: Councillor Rachel Bowen. Abstained: Councillor Leonie Hapeta.
	Note: On the motion that: That the Chief Executive be instructed to introduce a Voucher system as outlined in Option (2-B). To be distributed via PalmyProud magazine in early June, with the following conditions: • $10 including GST voucher for any $30 or more purchase. • Must be redeemed by June 30th 2020. • For Citywide businesses, (excl Supermarkets, alcohol and tobacco). • Business payment via invoice and voucher redemption to Council. Moved Grant Smith, seconded Rachel Bowen. The motion was lost 5 votes to 10, with 1 abstention, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Tangi Utikere, Rachel Bowen, Vaughan Dennison and Aleisha Rutherford. Against: Councillors Brent Barrett, Susan Baty, Zulfiqar Butt, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Lorna Johnson, Billy Meehan, Karen Naylor and Bruno Petrenas. Abstained: Councillor Leonie Hapeta.

49-20

Electoral System Review

Report, presented by Hannah White, Democracy and Governance Manager.

Councillors discussed whether the STV or FPP voting systems encouraged a higher turnout at local elections. It was acknowledged that STV encouraged greater diversity among councillors.

The public will be notified of their right to request a poll for a change to the electoral system in September 2020.

Moved Karen Naylor, seconded Brent Barrett.

RESOLVED

1. That the report entitled “Electoral System Review” of Council meeting 27 May 2020 be received.

2. That the electoral system for the 2022 elections be the Single Transferable Voting electoral system (Option 1).

Note:

On a motion that: That Council resolve that a community poll be undertaken to determine the electoral system by February 2021 (Option 3.). The motion was lost 3 votes to 12, the voting being as follows:

Moved Bruno Petrenas, seconded Billy Meehan.

For:

Councillors Lew Findlay QSM, Billy Meehan and Bruno Petrenas.

Against:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Karen Naylor and Aleisha Rutherford.

The meeting adjourned at 12.35pm

The meeting resumed at 1.37pm

50-20

Councillor Appointments

Memorandum, presented by Hannah White, Democracy & Governance Manager.

Moved Grant Smith, seconded Leonie Hapeta.

RESOLVED

1. That the report entitled “Council Appointments” be received.

2. That Council appoint Councillor Findlay to represent Council on Age Friendly Palmerston North.

3. That Council appoint Councillor Rutherford as spokesperson for Digital Technology under the Science, Technology and Innovation Portfolio.

Clause 50-20 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

51-20

Extension of Term of Trustees on Palmerston North Performing Arts Trust Board

Memorandum, presented by Hannah White, Democracy & Governance Manager.

The Mayor abstained from voting because he is a member of the Arts Trust Board.

Moved Rachel Bowen, seconded Susan Baty.

RESOLVED

1. That the report entitled “Extension of Terms of Trustee on Palmerston North Performing Arts Trust Board” be received.

2. That the Council extend the terms of Ms Sheridan Hickey and Ms Margaret May, as Trustees of the Palmerston North Performing Arts Trust Board, to 30 September 2020, subject to their agreement.

Clause 51-20 above was carried 14 votes to 0, with 1 abstention, the voting being as follows:

For:

Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

Abstained:

The Mayor (Grant Smith).

52-20

Amendment to the Council and Committee Meeting Schedule for 2020

Memorandum, presented by Hannah White, Democracy and Governance Manager.

Councillors asked officers to check availability of all Elected Members for the Rangitāne o Manawatū meeting as the suggested dates are unsuitable. Requested to have the meeting before August 2020.

Moved Aleisha Rutherford, seconded Karen Naylor.

RESOLVED

1. To amend the Council and Committee meeting schedule to include the following committee meetings:

9am 1 July 2020 - Community Development Committee

1pm 1 July 2020 – Environmental Sustainability Committee

9am 29 July 2020 – Council

Clause 52-20 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

53-20

Council Work Schedule

Moved Grant Smith, seconded Tangi Utikere.

RESOLVED

1. That the Council receive its Work Schedule dated 27 May 2020.

Clause 53-20 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

Exclusion of Public

54-20

Recommendation to Exclude Public

Moved Grant Smith, seconded Tangi Utikere.

RESOLVED

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

General subject of each matter to be considered		Reason for passing this resolution in relation to each matter	Ground(s) under Section 48(1) for passing this resolution
13.	Appointment to the Jaycee Trust Travelling Fellowship Selection Panel	Privacy	s7(2)(a)
14.	Appointment of External Member to the Finance and Audit Committee	Privacy	s7(2)(a)

Clause 54-20 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Tangi Utikere, Brent Barrett, Susan Baty, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Billy Meehan, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

The public part of the meeting finished at 1.52pm

Confirmed 24 June 2020

Mayor

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Council

MEETING DATE: 24 June 2020

TITLE: Revisions to Annual Plan document 2020/21

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATION TO Council

1. That recommendation 3 from the Committee of Council meeting on 10 June 2020 be amended to update the figures shown as $3.95m and $6.84m to be $3.6m and $7.5m respectively.

1. ISSUE

1.1 At its meeting on 10 June the Committee of Council considered the Council’s budget for 2020/21 and its recommendations are attached to the agenda.

1.2 This memo highlights changes made to the Annual Plan document as a consequence of the resolutions of the Committee and clarifies the figures to be included in the resolution regarding the balanced budget.

2. BACKGROUND

2.1 The report from the Chief Financial Officer to the Committee meeting discussed the need for the Council to consider the legislative requirements regarding a balanced budget and proposed a recommendation to accommodate this. The change made at the meeting to restore the minor roading works programme (No 279) to the level contained in the 10 Year Plan meant the figures in the resolution needed to be changed and this calculation was not available at the meeting.

2.2 Updated figures are shown in the resolution above.

2.3 The change made by the Committee meant there were changes required to several pages in the document. In addition, typographical errors have been corrected on pages 57, 83 and 122. The changes are summarised in the following table and copies of the updated and corrected pages are attached for information.

Page	What	Change from	Change to	Reason
12	Common issues in submissions – environmental submission figure	A dozen or so submissions were received on the environment and climate change in general….	17 submissions were received on the environment and climate change in general…	Clarity on exact number
15	Paragraph under heading Reductions and deferral of capital new programmes	$8.6m	$8m	Update following CoC budget changes
19	Financial overview and Statements – financial parameters table third line down, middle column	133.9%	134.1%	Update following CoC budget changes
19	Forecast financial statements, third column, middle paragraph	Reference to $10.9m, $3.9m and 94.7%	Reference to $11.2m, $3.6m and 94.9%	Update following CoC budget changes
20-21	Prospective statements…	Various figures	Various figures	Update following CoC budget changes
22	Annual Budget Disclosure Statement	Planned percentage figures 133.9%, 94.7%, 139.0%	Planned percentage figures 134.1%, 94.9%, 142.1%	Update following CoC budget changes
30, 33, 35, 36	Various figures within Activity Financial Statements for: Whole of Council, Strategic Transport (Roading)	Various	Various	Update following CoC budget changes
57	Safe Communities Capital Renewal title duplication And Use of the word Husbandry in “reason for change”	Capital Renewal, Capital Renewal Husbandry	Capital Renewal, Capital New welfare	Correcting error
83	Rating System, Rates and Funding Impact Statements	Errors in general rates, fourth column	Various figures	Correcting errors
89, 90, 91, 93	Various figures within Funding Impact Statements for: Whole of Council, Creative and Exciting City, Connected and Safe Community, Transport, Driven and Enabling Council	Various	Various	Update following CoC budget changes
122	ELT chart and title	Exactutive Leadership Team 5 June 2020 Strategy and planning unit description	Executive Leadership Team 24 June 2020 Amended with correct information	Correcting errors

3. NEXT STEPS

3.1 Final copies of the budget document will be prepared for distribution in the usual manner.

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?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		Yes
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
Contribution to strategic direction and to social, economic, environmental and cultural well-being	This action is to facilitate the formal adoption of the Council’s annual budget (plan)

Attachments

Updated pages for 2020/21 Annual Budget Document ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Council

MEETING DATE: 24 June 2020

TITLE: Setting Rates for 2020/21

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATIONS TO Council

1. That the resolution to set the rates for the 2020/21 year (attached as Appendix One) be adopted.

2. That it be noted that the setting of rates is a significant decision within the parameters of the Local Government Act 2002 and that it is satisfied there has been compliance with the decision-making and consultation requirements of the Act.

1. ISSUE

1.1 Section 23 of the Local Government (Rating) Act 2002 prescribes that the rates must be set by resolution of the Council and be in accordance with the relevant provisions of the Funding Impact Statement (contained within the 10 Year Plan or Annual Plan) for the year.

1.2 Rates are the Council’s principal source of revenue. It is important that rates be set in the timeframes outlined so that Council will have the ability to fund its approved budget. The rates outlined in the attached resolution are calculated to generate the rates revenue for 2020/21 as outlined in the Council’s Annual Budget/Plan to be formally adopted on 24 June 2020.

1.3 The recommendations assume the Council will have adopted the 2020/21 Annual Budget/ Plan earlier in the meeting.

2. BACKGROUND

2.1 On 10 June the Committee of Council recommended the adoption of the 2020/21 Annual Budget. The Budget determines the net revenue to be sought from ratepayers to fund operations and new programmes for the 2020/21 year.

2.2 The rates to be set are designed to cover a net sum of external income for the City Council of $100.78 million (plus GST) plus a sum to cover rates for Council owned properties as approved by the adoption of the Budget.

2.3 The resolution attached (appendix one) outlines the details of the rates to be set. Rates throughout the report and the resolution are GST inclusive unless stated otherwise.

2.4 The following table demonstrates the changes for the Uniform Annual General Charge (UAGC) and the fixed amounts for services:

2019/20

GST incl.

2020/21

GST incl.

Uniform Annual General Charge

Water Supply

Kerbside Recycling

Rubbish & Public Recycling

Wastewater disposal

Wastewater pan charge

Metered water charge (p cu metre)

$500

$257

$127

$72

$252

$1.2075

$500

$255

$126

$64

$241

$1.265

2.5 The budgeted revenue from the UAGC plus the Rubbish & Recycling fixed charges represents 19.3% of total rates revenue (including metered water charges) compared with a 19.8% in 2019/20 and a band of 25 to 26% over the previous five years and the legislative maxima of 30%. The significant percentage change in 2019/20 is due to the reduction in the UAGC.

2.6 Information about the structure of the rates assessed by broad differential grouping is attached as appendix two.

2.7 Appendix three shows graphically by broad differential grouping the land values and the impact on the distribution of the general rate and total rate for 2020/21 compared with 2019/20.

2.8 Examples of the rates which will be assessed are shown below:

Land Value

Actual Rates

2019/20

Proposed Rates

2020/21

Single unit residential

Average

Median

Quartile 1

Quartile 3

243,000

230,000

185,000

280,000

2,609

2,534

2,275

2,822

2,639

2,561

2,292

2,860

Two unit residential

Average

Median

Quartile 1

Quartile 3

273,000

255,000

220,000

300,000

4,230

4,077

3,781

4,459

4,265

4,107

3,801

4,502

Non-residential

Average

Median

Quartile 1

Quartile 3

708,000

400,000

230,000

790,000

14,652

8,636

5,316

16,253

15,107

8,885

5,451

16,764

Rural & semi-serviced

(5ha or more)

Average

Median

Quartile 1

Quartile 3

829,000

475,000

320,000

840,000

1,794

1,272

1,044

1,810

1,828

1,288

1,052

1,845

Rural & semi-serviced

(between 0.2 & 5ha)

Average

Median

Quartile 1

Quartile 3

316,000

315,000

250,000

365,000

1,620

1,617

1,401

1,783

1,648

1,644

1,422

1,816

Miscellaneous

Average

Median

Quartile 1

Quartile 3

594,000

315,000

145,000

630,000

4,950

2,894

1,641

5,215

5,092

2,965

1,669

5,366

2.9 The following graph shows a further breakdown of the makeup of single unit residential rates for the various land value levels. At the head of each column it shows the total rates for each land value level.

2.10 The City was revalued for rating purposes in September 2018 and these values will be the base for setting and assessing general rates for 2020/21 ie no change from 2019/20.

2.11 The Government’s rates rebates scheme for residential home owners on lower incomes has provided much needed assistance. 1,990 city ratepayers have received a total of $1.2 million from the scheme during 2019/20 to date. Each year the Government updates the qualifying criteria for the scheme by a CPI adjustment.

3. NEXT STEPS

3.1 The recommended actions in this report are of a machinery nature to implement the decisions incorporated in the Annual Budget. Although machinery, they are significant and must be passed in the form outlined.

3.2 Once adopted Council staff will complete the administrative actions necessary to assess rates on individual properties then deliver rates assessments and invoices for the first instalment on 1 August 2020. As usual a ratepayer newsletter will be produced and distributed as part of the rates package. Publicity will be given to the availability of the rates rebate scheme.

4. Compliance and administration

Does the Committee have delegated authority to decide?		Yes
Are the decisions significant?		Yes
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 The action is: Setting the rates for the year is an administrative pre-requisite to being able to fund the delivery of all of the actions in Council plans.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Setting the rates for the year is an administrative pre-requisite to being able to fund the delivery of all of the actions in Council plans that contribute to the strategic direction.

Attachments

Appendix 1 - Resolution to set rates for the 2020/21 year
Appendix 2 - Analysis of structure of rates revenue - 2020/21 budget
Appendix 3 - Comparisons by differential category ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Council

MEETING DATE: 24 June 2020

TITLE: Resolutions to Authorise Borrowing

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATIONS TO Council

1. That Council authorise the Chief Executive to borrow, in accordance with delegated authority, up to $36 million (“the Borrowing”) of additional term debt by way of bank loan or loans or credit facilities or other facilities or the issue of stock for the Borrowing secured by the Debenture Trust Deed.

2. That Council note that the purpose of the Borrowing is the carrying out or continuing of programmes identified in the Annual Budget for the 2020/21 year.

3. That Council note that the security for the Borrowing may be the charge over rates under the Debenture Trust Deed if the Chief Executive considers appropriate.

4. That Council note that the benefits of the Borrowing are that it will enable the Council to carry out the programmes identified in the Annual Budget while spreading the costs for those programmes over time to recognise future benefits. The risk is that interest rates may vary in the future resulting in higher debt servicing costs to the Council.

5. That Council approve that having regard to the Council’s financial strategy, it is prudent and reasonable to enter into the proposed borrowing for the reasons set out in this report.

6. That Council note that the raising of the Borrowing will comply with the Council's Liability Management Policy.

7. That Council note that the decision to borrow up to $36 million is a significant decision within the parameters of the Local Government Act 2002 and is satisfied that there has been compliance with the decision-making and consultation requirements of the Act.

1. ISSUE

1.1 The Council’s Annual budget for 2020/21 incorporates provision for raising $35.64m of additional debt during the 2020/21 year based on an assumption that the total debt outstanding as at 1 July 2020 will be $142.6m, that there will be capital expenditure (new) of $46.8m undertaken during 2020/21 and that the cost of the new ERP system will be funded from rates over seven years. It assumes existing and new debt will be serviced at an average of 3.4% per annum and that new borrowings will be raised progressively during the year.

1.2 The Council's borrowing is governed by the Local Government Act 2002 (the "Act") and the Liability Management Policy the Council has adopted. Previous legislation required the Council to specifically resolve if it wished to borrow. The Act is silent on these matters except that clause 32 of schedule 7 provides that the Council may not delegate the power to borrow money other than in accordance with the 10 Year Plan. It is considered prudent to have the Council specifically authorise the proposed borrowings each year by way of resolution and the Council’s Liability Management Policy provides that such a resolution is required. From time to time during the year it will also be necessary to re-finance present borrowings.

2. BACKGROUND

2.1 In preparing the Council's 10 Year Plan, the Council's long and short term expenditure and funding requirements have been considered and the Council has adopted a Financial Strategy and a Liability Management Policy with regard to borrowing to meet its funding requirements. These considerations are retained in the 2018-28 10 Year Plan.

2.2 The Council has entered into a Debenture Trust Deed which provides a charge on Council’s rates and rates revenue in favour of Covenant Trustee Services Ltd as trustee for the various lenders who may be granted security under it by the Council.

2.3 The Council's Annual Budget 2020/21 provides for the following:

· Forecast term liabilities of $142.6m as at 1 July 2020

· Additional debt of $35.6m being raised during 2020/21

· Forecast total term liabilities of $178.2m as at 30 June 2021

· Total capital expenditure of $70.5m during 2020/21 ($46.8m of which is new capital work) & $2.9m spent during the year on the new ERP system.

2.4 Additional debt is raised only as required and will be dependent on a number of key factors such as progress with the capital expenditure programme and the timing of the receipt of subsidies, grants and development contributions.

2.5 To enable the approved capital programme to be funded it is important that officers have clear delegated authority to raise the approved sums when appropriate.

2.6 The Council’s Liability Management Policy prescribes that the Council considers the following to be prudent borrowing limits:

· 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%.

2.7 As part of the process of deciding whether to approve borrowings which would result in the ratios being exceeded the Council will have particular regard for the principles of financial management contained in the Act.

2.8 The proposed borrowing, if obtained within the range of rates currently available to the Council, will be within the target limits contained within the Financial Strategy. After raising the Borrowing, and assuming an average interest rate of 3.4% for additional borrowing is achieved, the following estimates of borrowing ratios will apply for the 2020/21 year:

Limits

Projection for 2020/21

Net Debt: Total Assets

< 20%

10.0%

Net Debt: Total Revenue

Net Interest: Total Revenue

Net Interest: Annual Rates Income

< 200%

< 15%

< 20%

134.1%

4.2%

5.5%

The ratios are within the limits provided for in the policy.

2.9 Provision is made for a total interest expense of $5.56m during 2020/21 approximately $0.6m of which relates to the additional debt. The full year servicing cost of the additional debt (at 3.4% pa) would be $1.2m.

3. NEXT STEPS

3.1 After considering the issue it is recommended the Council formally approve the borrowings to enable the capital expenditure plans approved for 2020/21 in the Annual Budget to be funded. The recommendation is to approve additional borrowings of up to $36m (i.e. $35.64m rounded upward) to accommodate any possible variations in the expenditure for the 2019/20 year and therefore the levels of capital expenditure carry forward.

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?		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 The action is: The recommendations are a procedural pre-requisite to enable all capital development plans to be undertaken.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The recommendations are a procedural pre-requisite to enable all capital development plans to be undertaken

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Council

MEETING DATE: 24 June 2020

TITLE: Proposed changes to foundation policies for Local Government Funding Agency (LGFA)

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATION TO Council

1. That Council support the Local Government Funding Agency (LGFA) proposal as follows:

· To increase the foundation policy financial covenant net debt/total revenue from the current 250% to 280% for local authorities with a long-term credit rating of ‘A’ equivalent or higher;

· That until 2025/26, local authorities with a long-term credit rating of ‘A’ equivalent or higher must comply with the “Alternate Net Debt/Total Revenue covenant” as below:

Alternative Net Debt / Total Revenue Covenant
Financial Year (Test Date)	Net Debt / Total Revenue
30 June 2020	<250%
30 June 2021	<300%
30 June 2022	<300%
30 June 2023	<295%
30 June 2024	<290%
30 June 2025	<285%

· That the amended foundation policy covenant of 280% will apply in the 2025/26 financial year and annually thereafter.

1. ISSUE

1.1 The Local Government Funding Agency (LGFA) is seeking shareholder approval to proposed changes to its foundation policies to increase the net debt/total revenue foundation policy covenant that applies to local authorities with a long-term credit rating of ‘A’ equivalent or higher. This approval is being sought at a Special General Meeting on 30 June 2020.

1.2 This memo seeks approval for the Council to support the changes.

2. BACKGROUND

Past decisions

2.1 In June 2012 the Council passed a number of resolutions relating to the LGFA and in particular to authorise the Council becoming a shareholder and guarantor. The Chief Executive was delegated authority to execute any documents associated with the Council’s participation in LGFA.

2.2 A number of complex documents were executed as part of the process and the Council has subsequently been a shareholder (0.4% of total shareholding), guarantor (1.7% share of guarantee) and borrower (1.3% of total borrowings as at 1 May 2020) from what has become a very successful entity that now provides over 90% of New Zealand local governments funding needs and a shareholder equity of approximately $74 million at 30 June 2019.

2.3 In 2015 the Chief Executive’s delegation was relied upon to authorise the execution a number of documents that made changes to some of the foundation documents of LGFA so they were compliant with requirements of the then new Financial Markets Conduct Act. The changes at the time made no substantive change to the nature of the Council’s investment in LGFA or its borrowing practices.

2.4 LGFA needs to continuously evolve to meet changes in the operating environment and stakeholder demands.

2.5 In 2018 shareholders authorised LGFA to proceed to investigate a framework that would enable LGFA to lend directly to CCOs as at the present time it can lend only to Councils. In November 2019 the Council resolved to support the changes that had been developed to make this effective. The documentation relating to this has recently been signed and will soon become operative.

2.6 A Shareholders’ Agreement establishes a Shareholders’ Council (SC) to advise shareholders on relevant matters that require shareholder resolutions. The Shareholders’ Agreement also contains foundation policies for LGFA lending.

2.7 When lending to local authorities, the LGFA sets covenants in place in order to minimise risk of default on repayment of debt which local authority borrowers must meet to avoid recovery action being taken. The covenants are shown in the table below:

Covenant	Ratio - Current	Ratio - Proposed
Net Debt / Total Revenue	<250%	<280%
Net Interest / Total Revenue	<20%	<20%
Net Interest / Annual Rates Income	<30%	<30%
Liquidity	>110%	>110%

2.8 Borrowers are able to apply for bespoke financial covenants that exceed the above targets. Loan agreements reached on bespoke terms require the approval of the LGFA board only.

2.9 The LGFA has two classes of local authority borrowers – those with long-term credit ratings of ‘A’ equivalent or higher of which there are 30 borrowing councils; and those without. Of total loans on issue, 90.1% are to councils with credit ratings.

Latest proposal

2.10 LGFA is proposing a change to one of the key policy covenants for those wishing to borrow through the LGFA. The change is designed to provide greater flexibility and borrowing capacity to Council’s with a long-term credit rating of ‘A’ equivalent or higher. Local authorities are facing short-term revenue uncertainties as a result of COVID-19’s impact on the New Zealand economy. They are also facing increased borrowing requirements to finance additional infrastructure to meet population growth, climate change, water quality and more recently central government’s call for local authorities to assist with additional infrastructure investment in the near term as part of the economic relief package post COVID-19.

2.11 At the present time all local authorities (with a long-term credit rating of ‘A’ or better) borrowing through the LGFA must maintain a ratio of net debt/total revenue below 250%. It is proposed this limit be raised to 280% effective from the 2025/26 year but in the intervening years 2021-2025 that there be temporary covenants of between 250% and 300% as shown in the following table:

Year ending:	Net Debt/Total Revenue
30 June 2020	<250%
30 June 2021	<300%
30 June 2022	<300%
30 June 2023	<295%
30 June 2024	<290%
30 June 2025	<285%
30 June 2026	<280%

2.12 Financial covenants for the council borrowers that do not have long-term credit ratings of ‘A’ equivalent or higher are to remain unchanged at 175%.

2.13 The following table notes the benefits and risks that the proposed change to the covenant will make to various parties:

Party	Impact of increase in borrowing capacity
LGFA	Will be able to lend an additional $2.6 billion to the 30 councils with long-term credit rating of ‘A’ equivalent or higher.
Palmerston North City Council	The Council’s Net Debt / Total Revenue at 30 June 2019 was 84%, which means headroom remaining to reach the 250% covenant was $230 million. Lifting the covenant to 280% would enable additional borrowings of circa. $42 million.
Other councils with long-term credit ratings of ‘A’ equivalent or higher	Of the 30 relevant local authority borrowers, the highest ratio at 30 June 2019 was 180%. Therefore, most have significant headroom to manage the potential financial pressures over the next few years. Auckland Council is the largest borrower with a ratio of 173%, and for which the increase in the covenant will create the ability for it to borrow an additional $1.1 billion.
Guarantors of local authority borrowings and LGFA shareholders	The LGFA expects a maximum of five councils are likely to exceed the 250% covenant, based on LTP expectations. These include growth councils – Auckland, Tauranga and Hamilton which together could borrow up to an additional $1.27 billion to reach the 280% ceiling by 2026. With a guarantee of 1.7%, the Council would be exposed to additional risk of $21.6 million. However, the LGFA has liquidity of $1.56 billion that it would access prior to reverting to guarantors. The LGFA has discussed the proposal with credit rating agencies who have advised that it will not change the LGFA’s overall rating of AA+ (and therefore its price of borrowing for on-lending to local authorities will not increase as a result of the increased financial covenant). Overall, the risk of a call to guarantee a council default remains negligible.

2.14 Attached are the following:

· an EXPLANATORY NOTE from the LGFA that provides more detail

· an Analysis of additional risk to guarantors from proposed change to Foundation Policy limits.

Shareholders’ Council recommendation

2.15 The LGFA’s Shareholders’ Council has provided its recommendation, which is to support the LGFA’s proposed shareholder resolutions. An excerpt from that letter follows:

“Before the Shareholders’ Council (SC) position was finalised, LGFA sought feedback from the main credit rating agencies to establish the level of support for the proposal. A report subsequently published by S&P Global Ratings is attached.

At that time, the SC agreed that while it broadly supported the proposed changes, more information was required about any incremental risks arising. However, given the positive response from the rating agencies we gave our qualified support at that time, and agreed that preparations for the proposal to be put to shareholders at a Special General Meeting should be progressed by LGFA.

LGFA has responded to our request for further information (also attached). While this is not an independent assessment, the majority of SC members agree that this addresses our concerns and that the benefits of the proposal outweigh any associated risks.

Eight of the nine council members of the SC have voted to recommend that the proposal is supported, with one abstaining. The Government representative has also supported the SC recommendation, although it is noted that the Government is not a guarantor of LGFA.

We therefore support the proposed changes and recommend that all shareholders do the same.”

Conclusion

2.16 Although this Council’s current ratio is well below these limits in a number of years this higher level covenant may be of benefit. In the short to medium term the Council’s key concern is to ensure there is not significantly greater risk to it as a guarantor of LGFA. LGFA has stress tested this and discussed the proposal with the various credit rating agencies LGFA rely on to be able to attract funding at such attractive levels.

2.17 The Shareholders’ Council recommends supporting the change.

2.18 The conclusion is that the proposal is a sensible one in these extraordinary circumstances and should be supported.

3. NEXT STEPS

3.1 Assuming the necessary proportion of shareholders support the proposed changes by resolution at the SGM then the various documents will be signed by all parties.

4. Compliance and administration

Does the Council 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 the outcomes of the Driven and Enabling Council Strategy
The recommendations contribute to the achievement of action/actions in Not Applicable
Contribution to strategic direction	Not applicable

Attachments

1.	EXPLANATORY NOTE from LGFA ⇩
2.	Analysis of additional risk to guarantors from proposed changes to Foundation Policy limits ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Council

MEETING DATE: 24 June 2020

TITLE: Alteration to Standing Orders - remote participation

Presented By: Hannah White, Democracy and Governance Manager

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

RECOMMENDATIONS THAT Council:

1. Receive the report titled “Alteration to Standing Orders – remote participation” dated 24 June 2020.

2. Amend the Standing Orders to include Part 4 Remote Participation (Appendix 1 of the “Alteration to Standing Orders – remote participation” report dated 24 June 2020).

3. Determine that Council and committee meetings in the 2019-2022 triennium be webcast and recorded

Determine that only Council meetings be webcast and recorded

Allow each committee to decide if its meetings are webcast and recorded

4. Note that the Council Chamber will need the appropriate technology to be in place to allow remote participation.

1. ISSUE

1.1 In May 2020, Council resolved “That a proposal to allow remote participation in council meetings to be made permanent is brought to the Council meeting in June”. This report addresses that request.

1.2 There are two parts to this request:

(1) Agree to additional Standing Orders that allow for remote participation

(2) Determine the expectations of the Council as to whether remote participation will occur for all committees or only Council.

1.3 Any Standing Orders alteration (as outlined in Appendix 1) is subject to availability of technology. Elected Members have set aside $80,000 for enhancing participation in the Chamber. After a digital technology assessment, we will know the cost of options available and report back to Elected Members. Should further funding be required this would be subject to the Long-Term Plan process.

2. BACKGROUND

2.1 During the Epidemic Notice issued as a part of the Covid-19 lockdown procedures, central government amended the Local Government Act 2002. The amendment gives local authority members the right to attend meetings remotely and to allow remote attendance to count towards quorum of local authority meetings (25B(6)).

(1) 25B states that:

“A member of a local authority, or of a committee of a local authority, has, unless lawfully excluded, the right to attend any meeting of the local authority or committee by means of audio link or audio-visual link.

And

To that end, a member may attend a meeting by means of audio link or audio-visual link despite any limitation or condition on the use of an audio link or audio-visual link that is contained in the local authority’s standing orders; and anything else to the contrary in the local authority’s standing orders.”

(2) Further 25B(6) explicitly notes that:

“A member of the local authority or committee who attends a meeting by means of audio link or audio-visual link, in accordance with this clause, is to be counted as present for the purposes of clause 23.”

2.2 Furthermore, the Local Government Official Information and Meetings Act 1987 (LGOIMA) was also amended under the same Epidemic Notice to enable members of the public to observe meetings remotely. Section 47A states

(1) For the purposes of section 47, open to the public means that the local authority,—

(a) if it is reasonably practicable, enables access to the meeting by broadcasting live the audio or video of the meeting (for example, by broadcasting it on an Internet site); and

(b) does 1 or both of the following as soon as practicable after the meeting ends:

(i) makes an audio or a video recording of the meeting available on its Internet site:

(ii) makes a written summary of the business of the meeting available on its Internet site.

(2) The local authority must provide the live broadcast, and make the recording or summary available, free of charge.

2.3 The temporary amendments noted above will be revoked on 25 June 2020 when the Epidemic Preparedness (COVID-19) Notice 2020 expires. If the Council wishes to continue to use remote participation for committee members, officers and public then an alteration to the Standing Orders is required.

2.4 Section 25A of the Local Government Act 2002 already allows for local authorities to permit remote participation. The Act sets out the following requirements for doing so in Section 27:

“Where a local authority wishes to permit the use of audio link or audio-visual link for the purposes of clause 25A(1)(a), the local authority—

(a) must first provide for this matter in its standing orders; and

(b) may include in its standing orders matters concerning the use of audio links or audio-visual links at meetings, including, without limitation, —

(i) specifying the type or types of meeting at which members may participate by way of audio link or audio-visual link; and

(ii) attendance requirements; and

(iii) prescribing any method or technology of audio links and audio-visual links; and

(iv) any other requirements that the local authority considers are appropriate to maintain public confidence in the transparency and integrity of decision-making processes and the conduct of members during these processes; and

(v) specifying that any person wishing to participate in this manner must make prior arrangement with the local authority.

3. Proposed Alteration to Standing Orders

3.1 It should be noted that Council would need to alter its standing orders to enable remote participation to take place. This requires the support of 75% of elected members present.

3.2 Appendix 1 sets out proposed additional clauses to the Palmerston North City Council Standing Orders. The Appendix sets out a framework for the remote participation of committee members, officers and members of the public who wish to speak to a council or committee meeting.

3.3 Appendix 1 has been developed from Local Government New Zealand’s Model Standing Orders 2019, which reflect the legislative guidance.

4. RECORDING OF MEETINGS

4.1 The additional proposed clauses 4.1 and 4.7 allow for recording and webcasting of meetings, however, do not require it. A decision to undertake recording of the committee would need to be agreed by the Council at the beginning of the triennium.

4.2 Remote participation at each meeting would remain at the Chair’s discretion.

4.3 Remote participation may be limited to those actively participating in the meeting (eg. through online meeting software) or extended to those who wish only to observe (eg. through webcast or recording).

4.4 Webcasting may be made available live or recorded for viewing later. Offering both heightens opportunities for wider community engagement in committee processes.

4.5 Recordings would be subject to the Public Records Act 2005, which would require archiving for at least ten years, and subsequently subject to official information requests under LGOIMA.

4.6 It should be noted that webcasting and recording will take additional (or redirected) staff resource.

4.7 Appropriate technology would need to be installed in the Council Chamber to guarantee the quality of remote participation.

4.8 A protocol for recording meetings is attached as Appendix 2.

5. NEXT STEPS

5.1 The Council Chamber refit will be the basis of a future report as new budget has been allocated to enable participation in the Council Chamber. Only once this work is completed, will the Council be able to use remote participation in the Chamber.

5.2 Alterations to the Standing Orders will be published and distributed appropriately.

6. Compliance and administration

Does the Committee have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual s166		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 is Not Applicable The action is:
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Altering the Standing Orders (by addition of new clauses) to allow for remote participation opens wider opportunities for participation in Council’s decision-making processes.

Attachments

1.	Appendix 1 - Part 4 Remote Participation ⇩
2.	Appendix 2 - Recording Protocols ⇩

PALMERSTON NORTH CITY COUNCIL

Report

TO: Council

MEETING DATE: 24 June 2020

TITLE: Review of Standing Orders

PRESENTED BY: Hannah White, Democracy and Governance Manager

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

RECOMMENDATIONS TO Council

1. That the report “Review of Standing Orders”, presented to Council 24 June 2020 be received.

2. That Council appoint a Standing Orders Working Group (Option 2) consisting of the Deputy Mayor (lead), Councillor X, Councillor Y and Councillor Z to conduct a comprehensive review of the Council’s Standing Orders.

3. That Council approve the Terms of Reference of the Standing Orders Working Group (as attached in Appendix 1).

4. That Council notes the Standing Orders Working Group will report their recommendations back to Council in October 2020.

Summary of options analysis for

Problem or Opportunity	Council has not completed a comprehensive review of its standing orders since 2005. Standing Orders should be reviewed regularly to ensure they meet the needs of Councillors.
OPTION 1:	Adopt the current Standing Orders unchanged
Community Views	No opportunity to reflect upon the ways in which Standing Orders may or may not affect public engagement with Council meetings.
Benefits	Councillors are already familiar with the Standing Orders. No officer time is needed for further review.
Risks	Changes to the Local Government Act 2002 to allow for electronic participation at meetings or webcasting are not incorporated into the standing orders. The wording and format of the document may not reflect current language usage, resulting in misunderstanding. New councillors do not get an opportunity to review the current standing orders.
Financial	None
OPTION 2:	Establish a councillor-led working group to review the Standing Orders and to report back to Council.
Benefits	Councillors lead the development of the Standing Orders and consider how standing orders are used by Palmerston North City Council (within the parameters of the law). Opportunity to reflect on the way Councillors wish to operate meetings.
Risks	The review may take longer to complete.
Financial	Officer time to assist with the review.
OPTION 3:	Instruct officers in the Democracy and Governance Team to review the Standing Orders and to report back to Council.
Benefits	Review will be completed within a shorter timeframe. Councillors time is spared.
Risks	Initial Standing Orders report may be less likely to reflect the individual nature of Palmerston North City Council.
Financial	Officer time

Rationale for the recommendations

1. Overview of the problem or opportunity

1.1 The Council’s Standing Orders (SO) were adopted in 2005, amended in 2008 and 2015 and re-adopted in 2017 unchanged. They have not been comprehensively reviewed for 15 years.

1.2 It is good practice for each new Council to adopt its own standing orders, to allow elected members the opportunity to adjust to fit their needs. In the current Council, there are members who are quite familiar with using the current Standing Orders, and also newly elected and appointed members who are not.

1.3 The Covid-19 lockdown has required Council to conduct its business via audio-visual meetings. This has required temporary changes to provisions in the Standing Orders. Given the need to make these temporary changes, it seems appropriate to review the Standing Orders now to take into account the impact of these changes on the document as a whole.

2. Background and previous council decisions

2.1 Standing Orders are a set of procedures that outline how a local authority’s meetings are managed. The Local Government Act 2002 requires all local authorities to adopt a set of standing orders and once adopted, they can only be amended, or a new set adopted with the support of 75% of elected members present. Councils are free to decide what their standing orders contain as long as they comply with, and do not contradict legislation.

2.2 Every triennium, Local Government New Zealand (LGNZ) revises their model Standing Orders for local authorities to adopt if they wish. The model incorporates any legal changes to practices for meeting procedures and simplifies the language used to improve readability and comprehension. Governance managers and representatives from Local Government New Zealand are involved in the re-drafting of the model Standing Orders.

2.3 The most recent model Standing Orders were published by LGNZ in 2019. The model Standing Orders is a guidance document. Councils can choose to adopt it fully, amend it to suit their own needs or develop their own standing orders completely.

2.4 LGNZ’s Model Standing Orders 2019 contain additional ways to participate at meetings. These include:

· Webcasting – streaming Council meetings live so that people can view them

· Audio-visual participation – both for members and for the public

· Options to speak and move motions and amendments

· Whether the Chair has a casting vote

2.5 Palmerston North City Council’s Standing Orders are based on Model Standing Orders 2003. They were adopted in 2005 after a comprehensive review done by officers which included councillor feedback. Several amendments followed in 2008 and 2015.

2.6 In 2017 an officer’s report asked Council whether it wished to adopt in full or part of the new Model Standing Orders 2017. Council decided to re-adopt its current standing orders unchanged.

2.7 Given that a new council was elected in 2019, it is good practice that the opportunity to review the Standing Orders is offered to Council. To allow councillors to change the standing orders to reflect how they wish to operate their meetings.

3. Description of options

OPTION ONE: Adopt the current Standing Orders unchanged

3.1 This is the simplest option available to Councillors and would require no further work.

3.2 The existing Standing Orders are familiar to most members, and they have been amended when needed to meet the requirements of Council.

3.3 As Table 1 shows, of the 78 local authorities in New Zealand, 45 have adopted new Standing Orders following the most recent election in 2019.

Table 1: Number of Councils that adopted their Standing Orders by Year

Year	Before 2016	2016	2017	2018	2019	2020	Don’t Know
Number	5	13	11	1	36	9	1

OPTION TWO: Establish a councillor-led working group to review Council’s standing orders and to report back to Council.

3.4 Standing orders exist to assist members and officers of the local authority. Rather than simply adopting the model standing orders, Council could establish a councillor working group to review the Standing Orders with the potential to personalise the model standing orders to reflect the specific needs of Palmerston North City Council.

3.5 The Working Group could consist of the Deputy Mayor (lead) and three councillors. It would be supported by officers of the Governance Team.

3.6 The review will involve comparison of the Council’s Standing Orders with LGNZ’s Model Standing Orders 2019, by:

1. Undertaking a clause by clause analysis to determine whether to amend, delete, or leave each clause of the Council’s Standing Orders.

2. Reviewing the sections of the Model Standing Orders 2019 which are not currently in Council’s Standing Orders, to determine whether to add them or not.

3. Considering ways in which the Standing Orders might be written to improve its overall readability and comprehension; to remove any repetition or contradiction, ambiguity of terminology; and to re-format the document so that it more user-friendly.

3.7 It is envisaged that the working group will complete this work in three months and will be able to report its recommendations to Council in October 2020.

3.8 A draft Terms of Reference for the Working Group and proposed work schedule to complete the work are attached as Appendix 1.

OPTION THREE: Instruct Governance officers to review Council’s Standing Orders and to report back to Council.

3.9 Council could instruct Governance officers to review the Council’s standing orders against the model and present a draft version for their consideration.

3.10 An officers’ review would be a desktop analysis of the elements listed in 3.6 above. Officers would then present a draft of the standing orders to Councillors for review and feedback. Councillors views could then be discussed and incorporated into the draft document through a workshop.

3.11 An officer-led review could be completed in July with Councillors able to offer feedback in August/September. Council could then formally adopt new Standing Orders at its Council meeting in October 2020.

4. Analysis of options

Adopt the current Standing Orders unchanged (Option 1)

4.1 The benefit of this option is that many councillors are familiar with the current standing orders.

4.2 If the purpose of standing orders is to assist councillors and officers to run effective meetings, then the current standing orders fall short. The current standing orders contain discrepancies and repetition which can make it difficult for officers to provide ready advice when problems arise. The structure of the document is not easy to follow and can cause confusion for members during meetings.

4.3 Council’s goal to be a driven and enabling council implies that Council has effective decision-making structures and is agile and transparent in its approach to community participation. The existing standing orders restrict Council’s ability to meet this goal, as

· the current format is difficult to understand for the layperson who may wish to participate in a meeting.

· there is no clause enabling electronic participation or for meetings to be webcast. Rather participants must be in the meeting room, which is not always convenient for members of the public who are working, since the council meets during the day. It also prevents councillors participating in meetings when they are unable to attend the council office due to other commitments.

4.4 There is no additional financial implication for this option.

Establish a councillor-led working group to review Council’s standing orders and to report back to Council (Option 2 - recommended)

4.5 This is the recommended option. It allows for a full review of the Council’s Standing orders against the model Standing Orders, and encourages Councillors to be involved in the Standing Orders review.

4.6 Using the Model Standing Orders as the comparator means

· Discussions are guided within a recognised framework.

· The Model incorporates the current legislation and has been reviewed for readability, thus providing a tested standard against which to compare.

· Council can incorporate the wording and structure of the model when it suits.

4.7 By being involved in the drafting of the document, councillors will be able to design a set of standing orders that work for them. Councillors will be able to tailor the model to meet the needs of Palmerston North City Council.

4.8 This process will take more Councillor time for those who become members of the working group.

4.9 The option supports Council’s goal of being a driven and enabling Council, as it encourages Councillors to change the Standing Orders to reflect their needs. Councillors could alter the standing orders so that decision making is more efficient, and the meeting procedures are more flexible and transparent.

OPTION THREE: Instruct officers in the Democracy and Governance Team to review the Standing Orders and to report back to Council.

4.10 This option has similar benefits to Option 2. Standing Orders will be reviewed and updated against the LGNZ Model Standing Orders with the aim of being a more Driven and Enabling Council. However, most of the work will be the responsibility of Governance Officers and councillors will only be consulted once a working draft has been created.

4.11 This option saves councillor time as officers would produce a working draft for councillors to comment and amend. However, there is the risk that without councillor input at an early stage, officers might develop a working draft that does not reflect councillors needs and which will need to be changed.

5. Conclusion

5.1 It has been three years since Council’s Standing Orders were last adopted and 15 years since they were fully reviewed.

5.2 Over this time, there have been several legal changes to how councils can manage their meetings which are not included in the Palmerston North City Council’s existing Standing Orders. With the recent Covid-19 lockdown requiring Council to meet electronically, and enabling Councillors the opportunity to experience electronic participation in meetings, it seems an opportune time for Council to review its Standing Orders.

5.3 Even if Councillors are opposed to changing the Standing Orders, a review is still advisable to improve the formatting and ease of use of the existing Standing Orders.

6. Next actions

6.1 If Council decides to appoint a Working Group (Option 2) and its Terms of Reference, officers will arrange meetings of the Working Group over the next few months to review the Standing Orders.

6.2 The Working group will report their recommendations back to Council in October 2020.

6.3 If Council decides on Option 3, Officers will complete a desktop review and bring to Council by October 2020.

Compliance and administration

Does the Council have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual 166.8		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: N/A
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Reviewing the standing orders contributes to the effective running of Council, supporting Council’s goal of being a driven and enabling Council. Councillors could alter the standing orders so that decision making is more efficient, and the meeting procedures are more flexible and transparent.

Attachments

Appendix 1: Working Group - Terms of Reference ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Council

MEETING DATE: 24 June 2020

TITLE: Remits to Local Government New Zealand 2020 Annual General Meeting

Presented By: Hannah White, Democracy and Governance Manager

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

RECOMMENDATIONS TO Council

1. That the Council endorses the following remits to be submitted by Whanganui District Council to the Local Government New Zealand Annual General Meeting on 21 August 2020

1) Four- year election cycle

2) Loans for low-cost housing

3) Measuring and reporting on Local Government’s CO2 emissions

4) Rates rebates for low income property owners

1. ISSUE

1.1 Whanganui District Council and New Plymouth District Council have requested the support of Palmerston North City Council in the submission of remits (attached) to the Local Government New Zealand Annual General Meeting.

1.2 The remits from both Councils were received with a limited turnaround time. Remits were due to Local Government New Zealand by 5pm 16 June 2020.

1.3 The Mayor has advised Whanganui that Palmerston North City is prepared to support the remits, upon the advice of officers. This report seeks retrospective endorsement from the Council.

1.3 The Mayor has advised New Plymouth that Palmerston North City is not prepared to support its remits, upon the advice of officers. The remits are included for information only.

2. NEXT STEPS

2.1 Should the Council decide not to endorse any one of the remits, Whanganui District Council will be informed.

3. Compliance and administration

Does the Council have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual <Enter text>		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 Not Applicable The action is:
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The remits address each of the four wellbeings at a national level.

Attachments

1.	Remit 1: Four Year Election Cycle ⇩
2.	Remit 2: Loans for Low Cost Housing ⇩
3.	Remit 3: Measuring and Reporting on Local Government's CO2 Emissions ⇩
4.	Remit 4: Rates Rebates for Low Income Property Owners ⇩
5.	Remit 5: Balance of Transfers ⇩
6.	Remit 6: GST ⇩

Grant Smith (Mayor)
Tangi Utikere (Deputy Mayor)
Brent Barrett	Patrick Handcock ONZM
Susan Baty	Leonie Hapeta
Rachel Bowen	Lorna Johnson
Zulfiqar Butt	Billy Meehan
Vaughan Dennison	Karen Naylor
Renee Dingwall	Bruno Petrenas
Lew Findlay QSM	Aleisha Rutherford