Agenda of Finance & Audit Committee - Wednesday, 24 February 2021

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 24 February 2021

TITLE: Otira Park - Palmerston North Pony Club Land Lease Proposal - Summary of Submissions

Presented By: Kathy Dever-Tod, Manager - Parks and Reserves; Bryce Hosking, Manager - Property

APPROVED BY: Sheryl Bryant, Acting Chief Infrastructure Officer

RECOMMENDATION(S) TO FINANCE & AUDIT COMMITTEE

1. That the memorandum titled ‘Otira Park - Palmerston North Pony Club Land Lease Proposal - Summary of Submissions’ presented to the Finance and Audit Committee on 24 February 2021, be received.

1. ISSUE

1.1 The Pony Club has requested a new lease for the land at Otira Park.

1.2 The Reserves Act 1977 requires new leases to be subject to public consultation and a subsequent decision by the Council, having first considered any community feedback.

1.3 Furthermore, Section 120(1)(c) of the Reserves Act 1977 states the community must be offered the opportunity to be heard, i.e. present their submission in person to the Council.

1.4 The public consultation process has now been completed, and this report summarises submissions received, for consideration alongside any submissions being presented to the Committee.

2. BACKGROUND

2.1 The Finance and Audit Committee received a report on the proposed lease at their meeting on 21 October 2020.

2.2 Council subsequently approved the proposal to proceed to community consultation.

2.3 Community consultation occurred during the period 4 November to 7 December 2020.

3. CONSULTATION Process

3.1 Various mediums were used to raise awareness of the consultation period including:

a. Public notice – published in the Manawatu Standard on 4 November 2020.

b. Two posts on the Council’s Facebook page, the first on 4 November and the second on 30 November 2020.

c. Direct mail to neighbours – a letter was hand delivered to the properties shown in orange in Figure One and mailed to any landowners not residing at those locations.

Figure One: Letter delivery area

4. Submission summary

Written Submissions

4.1 Two hundred and six (206) written submissions were received. The overall breakdown of those in support and opposed to the proposal is shown in Figure Two below:

Figure Two: Submission summary graph

4.2 In addition to general support for the project, several points and themes were raised through the various comments and submissions.

4.3 The points and themes are summarised below:

Submissions in support - 193
Comments/opinions	Submission numbers
Support for outdoor youth activities/development	7, 11, 16, 18, 22, 29, 35, 38, 40, 43, 45, 47, 48, 51, 56, 57, 66, 72, 74, 83, 85, 91, 94, 98, 101, 106, 108, 125, 127, 129, 130, 131, 145, 147, 148, 154, 184, 200, 203, 205 (forty in total)
Support for Pony Club activities and operations	7, 27, 31, 36, 37, 38, 51, 52, 57, 62, 67, 70, 71, 73, 76, 80, 88, 89, 93, 109, 110, 112, 118, 131, 135, 139, 141, 142, 143, 150, 151, 154, 176, 179, 192, 194, 206 (thirty-seven in total)
Support for current use of the space (Pony Club & green space) at Otira Park	3, 8, 16, 21, 37, 38, 44, 45, 46, 54, 58, 63, 64, 65, 80, 81, 102, 104, 105, 107, 108, 114, 153, 158, 160, 179, 180, 189, 194, 196 (thirty in total)
Longer lease term to be granted	1, 26, 34, 43, 45, 49, 58, 60, 78, 81, 83, 86, 98, 113, 123, 130, 138, 141, 144, 151, 165, 200, 202, 205 (twenty-four in total)
Enjoyment of the walk, sightseeing and engagement of the Pony Club activities	27, 38, 60, 80, 82, 85, 124, 127, 142, 155, 172, 175, 178, 179, 180, 183, 188, 190, 191, 198, 202, 206 (twenty-two in total)
Not in favour of housing or other development of the land	19, 25, 28, 32, 38, 83, 98, 105, 106, 123, 127, 151, 160, 166, 172, 182, 188, 194, 196 (nineteen in total)
In favour of the location of the Pony Club where is close to town or racecourse	7, 16, 27, 29, 35, 36, 39, 51, 56, 88, 98, 112, 124, 163, 173, 180, 183, 190 (eighteen in total)
Asset to the community	16, 19, 43, 50, 55, 77, 89, 94, 133, 147, 157, 181 (twelve in total)
Provide safe places for horse riding	16, 102, 103, 133, 139, 145, 156, 205 (eight in total)
Stay where they are considering the history and background	38, 70, 78, 88, 89, 129, 151, 183 (eight in total)
Council provide land for the existence of the club	51, 67, 74, 89, 105, 131, 137 (seven in total)
Support land used by communities / sports	4, 16, 32, 37, 48, 49, 61 (seven in total)
Opportunities for family activities by participating	15, 45, 66, 72, 189 (five in total)
The land is a flood zone	25, 44, 60, 98, 104 (five in total)
Lower rent or no rent increase	34, 99, 192 (three in total)
Stop removing all the riding areas for horses	38
It should be open for all ages of horse riders	164
Pony club to tidy and maintain their clubrooms better	182
Trees replanted in this area	183
Submissions in opposition - 10
Point raised	Submission numbers
Utilise the land for housing development	13, 69, 92, 117, 126, 149, 185 (seven in total)
The land is not used frequently / used by few individuals	69, 92, 100, 149 (four in total)
Land to be used by greater community	92, 100, 201 (three in total)
Low lease price	92, 149 (two in total)
Owning horses and horse riding is for people with higher level of income	92
Poor behaviour of some of their riders – language used and leaving the horse droppings on the river path and playground	134
Sell the land to reduce the rates	149
Pony club within city boundary has outlived its suitability of this reserve	201
Neutral submissions - 3
Point raised	Submission numbers
Restoring it back to wetland	2
Significant site for the Tangata Whenua Rangitāne O Manawatu	2
Year by year lease	2
Valuable flood relief zone	25
No points raised	197

Social Media Submissions

4.4 The social media post and associated statistics are shown below:

4.5 The themes arising from the social media posts were:

· To keep the land for community activities;

· That it is a great location for the Pony Club;

· People have great childhood memories of the Pony Club and made it possible to have ponies as a kid. However, the facilities could be better utilised;

· Do not understand why we are consulting on this;

· Enjoy the walking there and watching the Pony Club activities;

· Longer lease term for the Pony Club to invest and improve their facilities;

· The Pony Club lease is on a reserve, so glad it is required to consult over the extending of a lease under the reserve;

· Land could be instead developed for community housing;

· Flood land – not suitable for housing development; and

· Get rid of golf course instead of the Pony Club.

5. NEXT STEPS

5.1 Deliberations and recommendations on the proposed lease reported to the March meeting of Finance and Audit Committee.

6. 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 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: Carry out recreation and reserves planning functions under the Reserves Act 1977 and LGA including the preparation of Reserve Management and Development Plans and Master Plans.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Council is meeting its administrating authority responsibilities for consultation under Section 120(1)(c) of the Reserves Act 1977.

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 24 February 2021

TITLE: Ashhurst Domain - Scout Land Lease Proposal - Summary of Submissions

Presented By: Kathy Dever-Tod, Manager - Parks and Reserves; Bryce Hosking, Manager - Property

APPROVED BY: Sheryl Bryant, Acting Chief Infrastructure Officer

RECOMMENDATION(S) TO COMMITTEE

1. That the memorandum titled “Ashhurst Domain - Scout Land Lease Proposal - Summary of Submissions” presented to the Finance and Audit Committee on 24 February 2021, be received.

1. ISSUE

1.1 The Ashhurst Scouts have requested a land lease at the Ashhurst Domain.

1.2 Clause 9.15.3 of the Ashhurst Domain Development and Management Plan 1977 states:

“To ensure that no additional leases for new uses not currently in existence will be considered by the Council if they involve the permanent alienation of land from use by the general public, and that any future leases entered into are directly related to the use of the reserve.”

1.3 Council officers determined that a lease to the Ashhurst Scouts would not meet the above criteria and was therefore subject to the Reserves Act 1977 process.

1.4 The Reserves Act 1977 requires new leases to be subject to public consultation and a subsequent decision by Council, having first considered any community feedback.

1.5 Furthermore, Section 120(1)(c) of the Reserves Act 1977 states the community must be offered the opportunity to be heard, i.e. present their submission in person to Council.

1.6 The public consultation process has now been completed, and this report summarises submissions received, for consideration alongside any submissions being presented to the Committee.

2. BACKGROUND

2.1 The Finance and Audit Committee received a report on the proposed lease at their meeting on 21 October 2020.

2.2 Council subsequently approved the proposal to proceed to community consultation.

2.3 Community consultation occurred during the period 4 November to 7 December 2020.

3. consulTation PROCESS

3.1 Various mediums were used to raise awareness of the consultation period including:

a) Public notice – published in the Manawatu Standard on 4 November 2020.

b) Signs – Two on-site, one facing the carpark and one facing the walkway/ sportsfield space, and a sign at Ashhurst Domain Office noticeboard.

c) Media release on 4 November 2020.

d) Ashhurst Village Voice – article in the November edition.

e) Display in Ashhurst Library.

f) Two posts on the Council’s Facebook page, the first on 4 November and the second on 30 November 2020.

g) Direct mail to neighbours – a letter was hand delivered to the properties shown in purple in Figure One below and mailed to any landowners not residing at those locations.

Figure One: Letter delivery area

4. Submission Summary

Written submissions

4.1 Thirty-four (34) written submissions were received. The overall breakdown of those in support and opposed to the proposal is shown in Figure Two:

Figure Two: Submission summary graph

4.2 In addition to general support for the project, several points and themes were raised through the various comments and submissions.

4.3 The points and themes are summarised below:

Submissions in support - 28
Themes	Submission numbers
Support for more youth activities/development	2, 4, 5, 9, 13, 14, 17, 20, 30, 31
The hall fit well with the Domain and activities in it	5, 16
Support conditional on a limitation of no-scout personal events	16
Use murals on the walls	2
Request a modern design	21
Council financially support the scouts	8
Asset to wider community	9
Uses underutilised land	22
Remove trees to make the proposed hall less likely to be vandalised	28
Submissions in opposition - 4
Themes	Submission numbers
Detract from reserve	15
Trees trim/removal	26
Concerned with the visual impacts	15, 29
Car parking effects.\	26, 29
Old café location as more suitable	26
Noise from the scout activities	15
Enough halls and clubs already – not required	15, 24, 29
Concerned about scout’s financial ability to build and maintain	29
Scout activities will disrupt family and children activities	15
Build multi-use events venue	24
Neutral submissions - 2
Themes	Submission numbers
Old café location as more suitable	23
No points raised

Social Media submissions

4.4 The social media posts and the associated statistics are shown below:

4.5 The themes arising from the social media posts were:

· Tree loss/effects;

· Carparking;

· Security; and

· Comments that there were enough halls already.

5. NEXT STEPS

5.1 Deliberations and recommendations on the proposed lease reported to the March meeting of Finance and Audit Committee.

6. 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 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: Carry out recreation and reserves planning functions under the Reserves Act 1977 and LGA including the preparation of Reserve Management and Development Plans and Master Plans.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Council is meeting its administrating authority responsibilities for consultation under Section 120(1)(c) of the Reserves Act 1977.

Attachments

NIL

PALMERSTON NORTH CITY COUNCIL

Palmerston North City Council

Minutes of the Finance & Audit Committee Meeting Part I Public, held in the Council Chamber, First Floor, Civic Administration Building, 32 The Square, Palmerston North on 16 December 2020, commencing at 9.03am

Members

Present:

Councillor Susan Baty (in the Chair), Councillors Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Karen Naylor, Bruno Petrenas, Aleisha Rutherford and Mr Stephen Armstrong.

Non Members:

Councillors Brent Barrett, Rachel Bowen, Zulfiqar Butt and Billy Meehan.

Apologies:

The Mayor (Grant Smith), and Councillors Lew Findlay QSM, Patrick Handcock ONZM and Aleisha Rutherford (early departure).

Councillor Patrick Handcock left the meeting at 9.21am during consideration of clause 66. He was not present for clauses 66 to 70 inclusive.

64-20

Apologies

Moved Susan Baty, seconded Aleisha Rutherford.

The COMMITTEE RESOLVED

1. That the Committee receive the apologies.

Clause 64-20 above was carried 15 votes to 0, the voting being as follows:

For:

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

65-20

Confirmation of Minutes

Moved Susan Baty, seconded Karen Naylor.

The COMMITTEE RESOLVED

1. That the minutes of the Finance & Audit Committee meeting of 18 November 2020 Part I Public be confirmed as a true and correct record.

Clause 65-20 above was carried 15 votes to 0, the voting being as follows:

For:

66-20

Palmerston North Airport Ltd - Statement of Expectations

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

Following discussion by Elected Members, a change to the wording of Section 3 (iii) of the Statement of Expectations for Palmerston North Airport Ltd 2021-23 was requested, for clarity of communication around Council’s expectations regarding carbon neutrality. A further request was made for the Chair and Deputy Chair of Finance & Audit Committee to be authorised to make minor amendments to the Statement of Expectations.

Councillor Patrick Handcock left the meeting at 9.21am.

Moved Brent Barrett, seconded Renee Dingwall.

The COMMITTEE RECOMMENDS

1. That the memorandum titled ‘Palmerston North Airport Ltd – Statement of Expectations’ presented to the Finance & Audit Committee on 16 December 2020, be received.

2. That the Statement of Expectations for Palmerston North Airport Ltd 2021-23 be adopted, subject to the following amendment:

Replace “PNAL’s efforts to strive towards achieving carbon neutrality are recognised and encouraged” with “Council expects PNAL to make progress toward carbon neutrality” (Section 3 (iii)).

3. That the Chair and Deputy Chair of Finance & Audit Committee be authorised to make minor amendments to the Statement of Expectations for Palmerston North Airport 2021-23

Clause 66-20 above was carried 14 votes to 0, the voting being as follows:

For:

Councillors Susan Baty, Brent Barrett, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas, Aleisha Rutherford, and Mr Stephen Armstrong.

67-20

2021/22 Business Assurance Plan

Memorandum, presented by Masooma Akhter, Business Assurance Manager.

Moved Susan Baty, seconded Karen Naylor.

The COMMITTEE RECOMMENDS

1. That Council approve the Business Assurance Plan for the 18 months beginning January 2021, included as Attachment One of the memorandum titled ‘2021/22 Business Assurance Plan’ presented to the Finance & Audit Committee on 16 December 2020.

2. That each review from the 2021/22 Business Assurance Plan be included on the work schedule for the Finance & Audit Committee.

Clause 67-20 above was carried 14 votes to 0, the voting being as follows:

For:

68-20

Business Assurance Accountability Report 2020

Memorandum, presented by Masooma Akhter, Business Assurance Manager.

Moved Susan Baty, seconded Aleisha Rutherford.

The COMMITTEE RESOLVED

1. That the memorandum titled ‘Business Assurance Accountability Report 2020’ presented to the Finance & Audit Committee on 16 December 2020, be received for information.

2. That a six-monthly accountability report be included on the work schedule for the Finance & Audit Committee for the 2019-2022 term.

Clause 68-20 above was carried 14 votes to 0, the voting being as follows:

For:

69-20

Committee Work Schedule

Moved Susan Baty, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the Finance & Audit Committee receive its Work Schedule dated December 2020.

Clause 69-20 above was carried 14 votes to 0, the voting being as follows:

For:

Exclusion of Public

70-20

Recommendation to Exclude Public

Moved Susan Baty, seconded Lorna Johnson.

The COMMITTEE RESOLVED

“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
11.	Minutes of the Finance & Audit Committee meeting - Part II Confidential - 18 November 2020	For the reasons set out in the Finance & Audit Committee minutes of 18 November 2020, held in public present.
12.	Tender Award - Contract 3791 - Junction and Road Safety Improvement	Third Party Commercial	s7(2)(b)(ii)

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.

Clause 70-20 above was carried 14 votes to 0, the voting being as follows:

For:

The public part of the meeting finished at 9.50am

Confirmed 24 February 2021

Chairperson

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 24 February 2021

TITLE: Treasury Report - 6 months ending 31 December 2020

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATIONS TO FINANCE & AUDIT COMMITTEE

1. That the performance of Council’s treasury activity for the 6 months ended 31 December 2020 be noted.

1. ISSUE

To provide an update on the Council’s treasury activity for the 6 months ending 31 December 2020.

2. BACKGROUND

The Council’s Annual Budget for 2020/21 forecast additional debt of $35.643m would need to be raised during the year to fund the $46.754m of new capital expenditure programmes (including assumed carry forwards from 2019/20). In June 2020 the Council resolved to specifically authorise the raising of up to $36m of additional debt. In August 2020 the Council approved increasing the new capital expenditure programme for the year by a further $3.8m due to a revised assessment of the level of carry forwards from 2019/20. In December 2020 the Council approved further additional capital expenditure of approx. $1.27m. There was no change to the additional debt that was authorised for either of these changes. Progress against the approved capital expenditure programme will be monitored during the year and authorisation for additional debt will be sought if required.

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%

An updated version of the Treasury Policy (embracing the Liability Management and Investment Policy), adopted by the Council in August 2020, also contains a number of other criteria regarding debt management.

3. Performance

Following the latest annual review published on 20 April 2020 Council’s S&P Global Rating’s credit rating remained unchanged at AA / A-1+, although the outlook was revised from positive to stable.

Schedule 1 attached shows the details of Council’s debt as at 31 December 2020. 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 (2020/21)

$000

Actual – 3 months (2020/21)

$000

Actual – 6 months (2020/21)

$000

Debt Balance at 1 July 2020

New Debt #

Debt repayments #

142,597

35,643

142,000

30,000

142,000

30,000

Closing Balance

Comprising:

Bank advance (on call)

LGFA short term advance

LGFA & Council stock

178,240

172,000

# 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 31 December 2020 was $172m compared with $142m at 1 July 2020. $20m of this was raised in advance to refinance debt maturing in May 2021. The sum raised in advance has been invested short term at rates that more than cover the borrowing costs.

Movements in recent years are shown in the following graph:

Actual finance costs incurred during the 6 months (including interest, line fees & the effects of payments relating to swaps) amounted to $2.5m compared with the budget for the year of $5.557m. The effective average interest rate for the quarter was 3% compared with the budgetary assumption of 3.4% and this translated to a saving of approximately $340k.

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

The value of these instruments is measured in terms of its “mark-to-market”, ie. the difference between the value at which the interest rate was fixed and the current market value of the transaction. Each of these transactions was valued at the date they were fixed and again at the reporting date. Financial reporting standards require the movement in values to be recorded through the Council’s Statement of Comprehensive Income (Profit & Loss Account). They have been revalued as at 31 December 2020 and show a reduction in the book value liability of $2.39m for the quarter and $2.12m for the year to date.

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

· Funding and liquidity risk is managed by the Council maintaining a pre-set portion of its debt in a range of maturity periods, eg. < 3 years, 3 - 7 years, 7 years +.

· 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.

The position compared to the policy is illustrated in the graphs in Schedule 3.

The funding & liquidity risk position can be summarised as follows:

· Council’s liquid position complies with policy, and debt maturing in May 2021 is covered through sums raised in advance and temporarily invested.

The interest risk position is more complex to explain but is basically about the portion of the overall forecast debt that is fixed versus floating and can be summarised as follows:

· Changes to the Treasury Policy adopted in August mean the calculations are no longer based on the rolling debt forecast for the next 12 months but rather the rolling debt forecasts for up to 11 years plus.

· There is significant uncertainty about forecast levels of future debt – this very much depends on a number of factors including future Council decisions on the proposed capital expenditure programme and Government decisions on the future structure of the provision of 3 waters.

· For the purposes of this report we have assumed debt will increase from $142m at 1 July 2020 to $388m at 30 June 2028 – the 2018-28 10 Year Plan assumes $367m by this date. These figures significantly understate the likely debt especially if the latest forecasts for the wastewater project are included.

· In the current economic environment we expect to fix interest rates at or near policy minimums based on the debt forecasts mentioned above and that is the position as at 31 December.

As at 31 December 2020 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 2022) and a revolving $25m three-year facility with ANZ Bank (maturing 31 March 2023).

4. conclusion & next steps

Finance costs for the quarter (including interest, line fees & the effect of swaps) was $2.5m compared with budget for the year of $5.557m. This was slightly lower than the year to date budget principally due to lower average interest rates.

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 March 2021 quarter.

5. Compliance and administration

Does the Committee have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 5: A Driven and Enabling Council
The recommendations contribute to the outcomes of the Driven and Enabling Council Strategy
The recommendations contribute to the achievement of action/actions in Not Applicable This report outlines the outcomes of a fundamental administrative activity of the Council.
Contribution to strategic direction	Managing the Council’s treasury activity is a fundamental component of day to day administration of the Council.

Attachments

Schedules 1 to 3 ⇩

PALMERSTON NORTH CITY COUNCIL

Report

TO: Finance & Audit Committee

MEETING DATE: 24 February 2021

TITLE: Animal Shelter Options

PRESENTED BY: Bryce Hosking, Manager – Property; Kerry-Lee Probert, Head of Enviromental Protection Services

APPROVED BY: Sheryl Bryant, Acting Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That Council proceeds with Option 1 of the report titled ‘Animal Shelter Options’ presented to the Finance & Audit Committee on 24 February 2021, and undertakes the construction of the Animal Shelter Base Build only.

2. That Council increases total budget of Programme 1552 in the 2021-31 LTP from $2,750,000 to $4,173,600 to enable the construction of the Animal Shelter Base Build.

This budget will have the following financial year split:

· 2021/22 (Year 1) – $2,750,000, and

· 2022/23 (Year 2) – $1,423,600.

Summary of options analysis for

Problem or Opportunity	In its current state the existing animal shelter does not meet all requirements of the Code of Welfare for the Temporary Housing of Companion Animals. The Finance and Audit committee resolved to build a new Animal Shelter next to existing Palmerston North City Facility on Totara Road. Council Officers were instructed to proceed with two developed design options; a base build and a base build with educational space. Council needs to provide direction on their preferred design option which will then be progressed into a consented detail design.
OPTION 1:	Animal Shelter Base Build
Community Views	· Improved animal welfare is generally well supported by the community. · The location of existing and new facility is considered well located and easy to access. · Increased public focus on animal welfare indicates a facility that allows for some public access will be well received.
Benefits	· The location of the new facility is adjacent to the existing facility which will limit public confusion moving forward. · There will be no disruption to existing operations as current facility can continue operating and offering the current services whilst the facility is being built. · The new facility will support and enable all current levels of service for the Animal Management Team to be delivered in full. · The new facility will fully comply with new Code of Welfare. · The new facility will provide an improved environment for the animals whilst housed within the facility. · The facility and its systems have been designed to provide a safer experience for both Council Officers and public when onsite. · The facility is designed to allow future growth and changes through; o The modular design for easy expansion; o Provision within the design for some changes in the Welfare act; and o Services have been designed in a way to allow for future integration into the Council-wide systems. This will include CCTV, fob access, and alarms.
Risks	· That Council may change its strategic direction and choose to no longer operate the animal shelter facility itself. · The total project costs may increase either once the designs are progressed to the detailed design stage and re-costed, or as a result of the tender process. · Council may be criticised for not delivering more animal educational opportunities to the community. · Minor design changes occur as the project proceeds to detailed design and during construction. · Some building materials may not be available or will require long-lead-in times. · An appropriate building contractor may not be able to be secured in a timely manner. · Further changes to the Animal Welfare Act will require additional future compliance features. · The project may be delayed and must continue operating from the existing facility.
Financial	Estimated Total Project Cost is $4,173,600 + GST
OPTION 2:	Animal Shelter Base Build with an Educational Space
Community Views	· Improved animal welfare is generally well supported. · Good location of facility and easy to access. · Increased public focus on animal welfare indicates a facility that allows for some public access will be well received.
Benefits	· As the base build remains the same and the education space in addition to this, the benefits from option 1 are also present for option 2. · The new facility allows for onsite animal welfare education to be seamlessly integrated into onsite services. · The onsite educational space will help facilitate the increased community interest in animal welfare. · Additional visibility to the public of animal welfare and the Animal Management Teams services through the onsite education space.
Risks	· The risks are the same as identified in Option 1 except for the reputational risk around the provision of educational services which is revised to the below: o The community may not perceive the inclusion of an educational space in the facility to be good value for money.
Financial	Estimated Total Project Cost is $4,464,000 + GST

Rationale for the recommendations

1. Overview of the problem or opportunity

1.1 In its current state the existing animal shelter does not meet all requirements of the Code of Welfare for the Temporary Housing of Companion Animals.

1.2 At the Finance and Audit Committee Meeting on 19 February 2020 Council resolved to proceed with building a new Animal Shelter next to the existing facility on Totara Road, Palmerston North.

1.3 Council Officers were instructed to proceed with two developed design options for the new building:

1. A base build design; and

2. A base build design with an educational space.

1.4 This report presents these two options to enable Council to provide direction on their preferred design option for the new Animal Shelter.

1.5 The preferred option will then be progressed into a consented detailed design, with construction of this facility planned to commence in the 2021/22 financial year.

2. Background and previous council decisions

Code of Welfare Amendment – Temporary Housing for Companion Animals

2.1 On 1 October 2018 a new Code of Welfare amendment, “Temporary Housing for Companion Animals”, came into effect.

2.2 The purpose of this Code is to inform those in charge of animals in temporary accommodation about the standards they must achieve to meet their obligations under the Animal Welfare Act 1999.

2.3 Key changes in the new Animal Welfare Code state that the temporary housing of companion animal facilities must contain an “isolation” area to help prevent the spread of infectious diseases and infections.

2.4 This area needs to be accessed separately from other entry points into the facility which are used by other animals.

2.5 The facility also requires a “health assessment” room so that upon arrival, each animal can be assessed before entering the facility.

2.6 There is a need for the facility to be able to safely handle dangerous dogs. This area is to be located away from the main housing area.

2.7 A review and condition grade of Council’s facility was carried out and in its current state the existing facility no longer meets the needs of its users, and the size of the facility is not large enough to accommodate all that is now required under the new Code of Welfare.

Previous Council Decision

2.8 As per Clause 1.2, at the Finance and Audit Committee Meeting on 19 February 2020 Council resolved to proceed with building a new Animal Shelter next to the existing facility on Totara Road, Palmerston North, rather than attempting to renovate the existing facility in an effort to comply with the Animal Welfare Act.

2.9 Subsequently, Programme 1552 – Council Pound Development was created for the delivery of the Animal Shelter project in the 2020/21 and 2021/22 financial years.

2.10 The project will be split into two distinct phases:

1. Design and Consent Phase (2020/21); and

2. Construction Phase (2021/22).

2.11 Council Officers were instructed to begin the Design Phase and to present two developed design options to Council:

1. A base build design; and

2. A base build design with an educational space.

2.12 Once Council has provided direction on their preferred design option for the new Animal Shelter, the preferred option will be progressed into a consented detailed design. The construction phase of the project is planned to commence in the 2021/22 financial year.

2.13 Please note: Council Officers believe the construction phase will now actually be delivered over two (2) financial years as opposed to solely in 2021/22 as was originally anticipated and referred to in Clauses 2.9 and 2.10 above.

2.14 A split of the total project budget will be recommended as an amendment in the 2021-31 LTP as part of the recommendations and discussed further in the Options Analysis section of this report.

Current levels of service

2.15 The below services are currently being delivered to meet expectations;

· Scheduled patrols throughout the city;

· Investigations and infringement issuance;

· Assistance of emergency services, e.g. Police;

· Animal welfare in the community;

· Processing preferred owner applications;

· Receiving surrendered animals;

· Administration of registrations, preferred ownerships and non-compliance;

· Caring for impounded animals; and

· Temperament assessments for all animals in the shelter.

2.16 The below services are only able to be delivered in a limited capacity due to current facility restraints;

· Animal collection and seizures – Council Officers currently need to potentially hold off on seizing animals to avoid housing them in the current facility due to kennel conditions;

· Trapping of roaming or dangerous animals – Although carried out there is a reasonable safety risk to Officers in housing them in the current facility due to kennel construction and only one exercise area;

· Microchipping on and off site – no room to do this onsite currently;

· Education and public events – Currently these are only done offsite; and

· Adoption / Rehoming – currently only done through Facebook (‘Palmy Pooches’) as onsite visits to meet dogs is too high risk of a safety concern for the public.

Current circumstances

2.17 For context of the capacity required for the new facility, it is important to consider the current statistics.

2.18 Impounded dog statistics for the last 3 financial years;

· 2017/18 – 20 per fortnight;

· 2018/19 – 19 per fortnight; and

· 2019/20 – 15 per fortnight.

Please note: the above figures are calculated based on an average number of dogs per month. This actual figure onsite can fluctuate at any given time. These figures also do not include surrendered animals.

2.19 For clarity, the downwards trend in these numbers is due to health and safety and condition restrictions of the current facility not because of a decrease in dogs needing to be impounded.

2.20 It is expected once the new facility is built these numbers will more accurately reflect the community need.

2.21 In addition to the above, there are several other issues with the current facility that impact on the operations of the Animal Management Team;

· The current facility does not have enough desk capacity in the office to have all five of the Animal Management team working from site; and

· There have been several incidents where the safety of the staff onsite has been compromised due to poor facility layout and retrofitted security measures.

2.22 Current maintenance costs for the 2019/20 financial year were $28,297.41. Any maintenance for the year was closely monitored and only carried out if necessary, given the decision for the building to be replaced. However, this maintenance has not addressed any of the issues highlighted above in Clauses 2.15 - 2.19.

3. Description of options

3.1 There are two design options for Council to consider for the new Animal Shelter building:

1. Build a new Animal Shelter Base Build – build a new purpose-built facility on Council-owned land next to the existing facility; and

2. Build a new Animal Shelter with an educational space – build the Animal Shelter Base Build as per option 1 with an onsite educational space also included within the facility. This addition is marked in red on Attachment 1 – Concept layout.

4. Analysis of options

Option 1: Animal Shelter Base Build

4.1 Option 1 sees the construction of a new purpose-built facility that will meet all requirements under the new Temporary Housing of Companion Animals, Code of Welfare and current levels of service.

4.2 The new facility will allow for full delivery of all current levels of service as referenced in Clauses 2.13 and 2.14.

Features of the New Facility

4.3 The new facility consists of:

· Administration and Reception Building

o Desk capacity for up to ten staff including a reception desk (the current staffing is five);

o Meeting room for internal and external office use – meetings with owners about impounded animals, team meetings, etc.;

o Microchipping room – this is a service currently offered by the animal management team and is done both onsite at the current Pound and in the field;

o Reception waiting area; and

o A public gender neutral and fully accessible toilet.

· Kennel Blocks

o A total of 39 individual kennels;

o Two general population blocks;

o One dangerous dog / high security block;

o A kitchen, laundry and storage room to service the three blocks listed above;

o One isolation and quarantine block for inbound and sick animals; and

o A separate kitchen, small storage room, animal wash station, and an assessment room are in the isolation block to minimise risk for the spread of disease within the facility.

· Drive in area for Council Officers to easily and securely offload animals within the facility with a wash area to clean the vehicles – reducing the risk of disease spread.

· Secure parking within the facility for Animal Management vehicles.

· Socialisation and enrichment area for dogs that are healthy and pass their temperament testing. This area also provides a space for potential owners to come and interact with dogs that are available for adoption.

4.4 In order to ensure the new facility can continue to service the city’s future requirements, a thoughtful design approach has been taken by;

· Kennel blocks have been purposely designed in a modular way. This will allow for expansion should it be required; and

· Services have been designed in a way to allow for future integration into a Council-wide IT system once the future centralisation strategy is realised. This will include CCTV, fob access, and alarms.

Community Views

4.5 Improved animal welfare is generally positively viewed within the community.

4.6 The location of existing and new facility is considered to be well located and easy to access.

4.7 Increased public focus on animal welfare indicates a facility that allows for some public access will be well received.

Benefits

4.8 Given the new facility is to be built in the same area and adjacent to the existing pound, this will minimise any public confusion around location once the new building is operational.

4.9 There is no disruption to existing operations as current facility can continue operating and offering current services whilst the new facility is being built.

4.10 The new facility will enable all current levels of service by the Animal Management Team to be delivered in full.

4.11 The new Animal Shelter will fully comply with the new Code of Welfare.

4.12 The new facility will provide an improved environment for the animals whilst housed within the facility.

4.13 The facility and its systems have been designed to provide a safer experience for both Council Officers and the public when onsite.

4.14 The facility is designed to allow future growth and changes through;

· The modular design allows for simple and cohesive expansion;

· Provisions have been made within the design for some changes in the Welfare Act; and

Risks

4.15 There are several risks that have been identified with Option 1. The key risks, along with their consequences and potential mitigations are detailed below:

4.16 Strategic:

· Risk: That Council may change its strategic direction and choose to no longer operate the animal shelter facility itself.

· Consequence: The animal welfare services will be outsourced to another provider.

· Mitigation: The new facility could easily be leased or sold by an external party.

4.17 Financial

· Risk: The total project costs may increase either once the designs are progressed to the detailed design stage and re-costed or as a result of the tender process.

· Consequence: The project budget will be exceeded, and more budget will be required to complete the project.

· Mitigation: A 10% contingency is being allowed for to allow for minor movements; this will be addressed as part of the tender award report to Council.

4.18 Reputational

· Risk: Council may be criticised for not delivering more animal educational opportunities to the community.

· Consequence: There will be very limited educational opportunities being provided which may lead to poor animal welfare or safety incidents in the future.

· Mitigation: Educational services can be explored at other locations such as schools, community centres, etc.

4.19 Changing Scope

· Risk: Minor design changes occur as the project proceeds to detailed design and during construction.

· Consequence: There is a shift in the construction costs of the project.

· Mitigation: A 10% contingency is being allowed for to allow for minor movements.

4.20 Supplier

· Risk: Some building materials may not be available or will require long-lead-in times.

· Consequence: The scope of the project will change as alternative materials will need to be used and the project may be delayed.

· Mitigation: Council Officers to begin the tender process as early as possible to create the maximum lead-in time for the project and to ensure materials with long-lead-in times can be ordered as soon as possible.

4.21 Contractor Availability

· Risk: An appropriate building contractor may not be able to be secured in a timely manner.

· Consequence: The project will be delayed.

· Mitigation: Council Officers to begin the tender process as early as possible to create the maximum lead-in time for the project.

4.22 Compliance

· Risk: Further changes to the Animal Welfare Act will require additional future compliance features.

· Consequence: The changes may require further future investment.

· Mitigation: The facility has been designed to allow for future changes to be accommodated.

4.23 Timeline

· Risk: The project may be delayed and must continue operating from the existing facility.

· Consequence: The existing non-compliant facility must be used for longer than intended.

· Mitigation: Minor remedial works have been undertaken at the existing facility to ensure approval was able to be obtained from the Ministry of Primary Industries for the temporary use of the existing facility while the new facility is built.

Financial

4.24 As discussed in Clause 2.10, the project will be split into two distinct phases:

1. Design and Consent Phase; and

2. Construction Phase.

4.25 There is a $300,000 + GST budget in the current 2020/21 Financial Year for the Design and Consent Phase.

The total project cost for the Construction Phase of the Animal Shelter Base Build is estimated to be $4,173,600 + GST. This is made up of the below:

Costs	Amount (exc. GST)
Construction	$3,451,000
Contingency (10%)	$345,100
Security and Information Technology (provisional sum)	$165,000
Professional Fees (provisional sum)	$172,500
Regulatory (provisional sum)	$40,000
Total	$4,173,600 + GST

4.26 As highlighted in Clauses 2.13 and 2.14, Council Officers believe the construction phase will now actually be delivered over two (2) financial years as opposed to solely in 2021/22 as was originally anticipated and referred to in Clauses 2.9 and 2.10 above.

4.27 Given the delivery timeframe changes, Council Officers propose the total project budget for the construction phase of $4,173,600 be split over the two (2) financial years as follows:

· 2021/22 (Year 1) – $2,750,000 + GST; and

· 2022/23 (Year 2) – $1,423,600 + GST

4.28 A placeholder budget of $2,750,000 for the construction phase was allowed in 2021/22 (Year 1) of the 2021-31 LTP. This was based on the estimate figures from the report presented at the February 2020 Finance and Audit Committee meeting.

4.29 For clarity, the designs presented to this meeting were at a very early concept stage, and as such the exact scope and requirements were not fully understood. As a result, the $2,750,000 placeholder budget was only able to be based upon a generalised square metre rate basis.

4.30 The $1,423,600 difference between the placeholder budget and the total project cost above has resulted from:

· The requirements have since been refined and the designs further developed which allowed the project costs to be costed with more accuracy;

· The different areas within the development and the materials needed were able to be costed, rather than just using a generalised construction square metre rate; and

· There has been a general increase in construction costs and materials since late 2019 when the last pricing was determined.

4.31 Please note: The Developed Design has been reviewed by a Quantity Surveyor to provide greater assurance for budgeting.

Demolition of Current Facility

4.32 The above figures do not have any provision for the potential demolition of the existing facility as the decision around its future use, if any, are not yet determined. Please see Clauses 5.12 – 5.14 for more information on this.

Option 2: Animal Shelter Base Build with an Educational Space

Features of the New Facility

4.33 As the base build (Option 1) remains the same and the education space in addition to this, the features of the base build highlighted in Clauses 4.3 and 4.4 remain the same.

4.34 The educational space is essentially separate but connected building comprising of an open plan room with a kitchenette and storage.

4.35 The educational space will have direct access to the enrichment/ play area and connect to the main office block and its amenities via a link which would include the public entrance to the facility.

Educational Space Rationale

4.36 Currently the Animal Management Team offers a limited education service to the public which includes:

· Bite prevention seminars to organisations;

· Safety education to schools, play groups and children’s groups;

· Dog training sessions for owners; and

· One on one training sessions for difficult dogs and their owners.

4.37 Some of these services are currently hosted offsite at the organisation or schools’ premises but others, such as dog trainings and children’s groups with no fixed abode, are difficult to host due to location requirements.

4.38 Council Officers believe there is a missed opportunity for increased education within the community primarily due to the increased interest in animal welfare.

4.39 A good example of this is the significant engagement with the CET Wildbase Recovery Centre, and its onsite educational space.

4.40 This shows how beneficial having an educational space within the facility can be for community education.

Community Views

4.41 Please see the Community Views Section in the analysis for Option 1 for detail of the community views. Council Officers deem these to be the same for both Options.

Benefits

4.42 As the base build remains the same and the education space in addition to this, the benefits from option 1 are also present for option 2. Please refer to Clauses 4.8 – 4.14 for details of these.

4.43 In addition to the above, the educational space allows for seamless integration of onsite animal welfare education into the onsite services.

4.44 The onsite educational space will help facilitate the increased community interest in animal welfare.

4.45 Additional visibility to the public of animal welfare and the Animal Management Team’s services through the onsite education space.

Risks

4.46 There are several risks that have been identified with Option 2. These are the same as identified in Option 1 except for the reputational risk (Clause 4.18) which is revised to the below:

4.47 Reputational

· Risk: The community may not perceive the inclusion of an educational space in the facility to be good value for money given the added financial investment between the Options.

· Consequence: The educational space is not used as well as expected.

· Mitigation: Council Officers proactively promote the new educational opportunities which would now be able to be delivered from the facility to promote the benefits of this space.

Financial

4.48 As discussed in Clause 2.10, the project will be split into two distinct phases:

1. Design and Consent Phase; and

2. Construction Phase.

4.49 There is a $300,000 + GST budget in the current 2020/21 Financial Year for the Design and Consent Phase.

4.50 The total project cost for the Construction Phase of the Animal Shelter Base Build with an Educational Space is estimated to be $4,464,000 + GST. This is made up of the below:

Costs	Amount (exc. GST)
Construction	$3,715,000
Contingency (10%)	$371,500
Security and Information Technology (provisional sum)	$165,000
Professional Fees (provisional sum)	$172,500
Regulatory (provisional sum)	$40,000
Total	$4,464,000 + GST

4.51 As outlined in Clauses 4.27 and 4.28, the construction phase will now actually be delivered over two (2) financial years as opposed to solely in 2021/22 as was originally anticipated.

4.52 Council Officers propose the Option 2 total project budget for the construction phase of $4,464,000 be split over the two (2) financial years as follows:

· 2021/22 (Year 1) – $2,750,000 + GST; and

· 2022/23 (Year 2) – $1,714,000 + GST.

4.53 As per Clause 4.29, a placeholder budget of $2,750,000 for the construction phase was allowed in 2021/22 (Year 1) of the 2021-31 LTP. This was based on the estimate figures from the report presented at the February 2020 Finance and Audit Committee meeting.

4.54 Please refer to Clauses 4.30 – 4.32 for the rationale for the increase from this placeholder to the total project cost above.

Demolition of Current Facility

4.55 As in Option 1, the above figures do not have any provision for the potential demolition of the existing facility as the decision around its future use, if any, are not yet determined. Please see Clauses 5.12 – 5.14 for more information on this.

5. additional considerations

Potential Further Value Engineering Opportunities

5.1 Whilst some initial value engineering has already been completed as part of the developed design presented in this report, there are several further opportunities that could be explored to further reduce the construction cost in both Options.

5.2 Whilst these are opportunities which will provide construction cost savings, they will in most cases have a detrimental impact on some of the operations, animal welfare environment elements, and in some cases remove some of the future proofing design elements of the current design.

5.3 The value engineering opportunities and their impacts are detailed below:

5.4 Administration and Reception Building

1. Opportunity: The size of the meeting room/ranger office/staff rooms could be reduced.

o Impact: It would become difficult for any additional staff to work from the facility should the Animal Management Team grow due to capacity and desk space reductions.

2. Opportunity: Convert the meeting room and consult room in the admin block into the same room with multiple uses.

o Impact: This would impact the functionality of the space as the consult room and meeting room serve different purposes and as such have different requirements, i.e. examination tables vs. meeting tables, etc.

5.5 Kennel Block

1. Opportunity: Reduce the overall sizes of the kennels back to the absolute minimum compliance sizes.

o Impact: This may allow for one larger block rather than the two proposed currently, however, will result in a considerable decrease in the animal experience whilst in the facility. This also would be difficult to retrospectively amend in the future should the Animal Welfare code change to require larger kennels.

5.6 Isolation Block

1. Opportunity: Remove internal carpark.

o Impact: This carpark allows direct access for animals to head straight to the quarantine area. Removing this may increase the risk of diseases spread and cross animal contamination. In addition to this, the carpark provides security for the animal management vehicles and team when onsite or operating out of hours.

2. Opportunity: Reduce capacity of the isolation block.

o Impact: This will severely impact the functionality of how the animal shelter will operate as a whole and create capacity issues.

5.7 Future Expansion

1. Opportunity: Reduce boundary fencing so that future expansion area is outside of the fenced area.

o Impact: Should the facility need to expand in the future this may trigger additional consent implications due to the overall area of the facility needing to increase. The costs of this expansion project will also be higher.

5.8 The cost savings of these opportunities have been unable to be costed, as in most cases would have several follow-on design and layout changes which would need to be made in addition to the change itself. If any of these value engineering opportunities were to be actioned, the exact cost savings would need to be assessed once the designs were amended.

5.9 Council Officers do not support that these opportunities are actioned as they assess that the impacts to the facility in the long-term will outweigh the cost saving benefits which will be achieved at the time of construction.

Further changes to the Animal Welfare Act

5.10 There is a reasonable chance that the Animal Welfare Act may undergo further amendments in the future.

5.11 The above changes in the Animal Welfare Act or in Council’s strategic direction, may result in the level of service the Animal Management Team offer needing to be altered accordingly.

5.12 In addition to this, there is an increased focus from the public on animal welfare which may drive future changes to the Act. This could result in additional services required of the Animal Management Team over and above the impounding and temporary housing of dogs.

5.13 The facility has been designed to allow for future changes to be accommodated. Please refer to Clause 4.4 for details on this.

5.14 For clarity, there is no budget provision in the 2021-31 LTP for any future significant or structural changes to the facility resulting from a change to the Animal Welfare Act. As changes may or may not ever occur, these will be addressed if, and when, needed through independent reports.

On-going maintenance and operational costs

5.15 Materials in the design have purposely been chosen to be hard wearing and cost efficient to maintain.

5.16 Maintenance and building renewal budgets have been included in the 2021-31 LTP to ensure the new building is maintained to an appropriate standard.

5.17 These are;

· Maintenance: there is $55,000 per annum starting 2022/23 (Year 2); and

· Building Renewals: there is $10,000 per annum proposed beginning 2024/25 (year 4 of the LTP) financial year, increasing to $15,000 per annum from 2033/34.

Existing Facility

5.18 Council will need to provide direction in relation to the future use of the current pound facility once construction is completed.

5.19 Council Officers advise that the condition of the existing facility is poor and given the specialist design of the building, it may require substantial renovation or changes to be able to support future uses.

5.20 Please note: Once the new facility is operational and the Animal Management function has relocated, the maintenance strategy for the old facility will revert to a run-to-fail approach until a decision on the future of the facility is made.

6. Conclusion

6.1 Both options will provide a facility that will meet all current Animal Management levels of service and requirements of the Code of Welfare – Temporary Housing of Animals Act.

6.2 The increased cost of building an educational space needs to be weighed up against the additional benefits it will provide.

6.3 Council Officers have assessed that there are not many additional benefits and as a result, makes it hard to justify the additional cost at this time.

6.4 Given the above, Council Officers recommend Council proceeds with Option 1 and only do the base build.

6.5 For clarity, if the demand for the educational space increases, it could easily be constructed in the future to meet this need. The facility has been designed in such a way to allow for this.

7. Next actions

7.1 Advance the design of the preferred option to a consented detailed design.

7.2 Begin procurement of construction contractor and commence construction of new facility in 2021/22 financial year.

8. Outline of community engagement process

8.1 No specific consultation has been undertaken with the public to determine their preferred option, however, the Safe Community Plan provides clear direction that Council will:

‘Plan and implement upgrade of the City Pound to comply with requirements of MPI Code of Welfare Temporary Housing of Companion Animals, including necessary security improvements.’

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: Design and implement upgrade of the City Pound to comply with requirements of MPI Code of Welfare Temporary Housing of Companion Animals, including necessary security improvements.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The construction of a new Animal Shelter facility will ensure: · The facility complies with the requirements of the MPI Code of Welfare for Temporary Housing of Companion Animals under the Animal Welfare Act 1999; · There are suitable facilities to adequately provide for the animals during their stay; · Staff have appropriate facilities to undertake the services being provided; and · The opportunities to rehome animals can be maximised through more appropriate facilities.

Attachments

Animal Shelter Developed Concept Plan ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 24 February 2021

TITLE: Health, Safety and Wellbeing Report October - December 2020

Presented By: Alan Downes, Health, Safety and Wellbeing Manager; Wayne Wilson, Human Resources Manager

APPROVED BY: Patrick Watson, Chief People & Performance Officer

RECOMMENDATION(S) TO Finance & Audit Committee

1. That the memorandum titled ‘Health, Safety and Wellbeing Report October – December 2020’, presented to the Finance & Audit Committee on 24 February 2021, be received for information.

1. Report

This report covers the period 1 October to 31 December 2020. The information included in this report is discussed at the appropriate Health & Safety Committees.

A. Hazards, Incidents and Near Misses Reported

Quarter	Jun 19	Sep 19	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20
Quarter	Jun 19	Sep 19	Dec 19	Mar 20	Jun 20	Sep 20	PNCC	CON
Hazards	2	1	2	4	2	13	16
Incidents	27	24	32	33	24	58	44	3
Near Misses	53	22	21	25	17	20	30	7
Lost Time (days)	87.6	107.6	154.8	98.7	96.6	55.7	74.9
Lost Time Injuries	9	10	15	12	3	9	5

Key: PNCC = Staff; CON = Contractor

Comments:

· The increase in reporting of Hazards and incidents continues in the current financial year and this is assessed as a positive consequence of PNCC’s efforts to raise awareness of Health & Safety and expand the use of the PeopleSafe reporting tool beyond Infrastructure to all of PNCC.

· The significant reduction Year on Year in time lost is encouraging with a 51% reduction in days lost in the current financial year when compared to the same period last year.

· The significant 56% reduction in number of lost time injuries in this financial year is encouraging when compared to the previous year.

B. Critical Risk Table

This table has been included to provide clarity on the number of critical risk events and the category each event relates to. For more information on the individual events refer to the dashboard report.

No	Critical Risk	Near Miss	Incident
1	Bodies of Water
2	Use of powered hand tools and stationary plant		1
3	Tree felling / sectional takedowns
4	Working alone
5	Working at height (fall to lower level)	6
6	Excavation work		3
7	Confined space work
8	Working with mobile plant	4	1
9	Work environment: (psychological, physical and emotional)
10	Members of the public	1	1
11	Asset control
12	Hazardous substances

C. Manual Handling

Manual Handling incidents have previously been identified as being a key area which contributes to Lost Time and remains a PNCC area of focus. PNCC monitors the effectiveness of Manual Handling capabilities by identifying incidents which are attributed to it, undertaking investigations and assessing the effectiveness of controls for this area.

The number of identified Manual Handling incidents recorded over the last 18 months is shown below:

June 19	Sep 19	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20
8	10	7	11	3	7	10

Comments:

· If we compare Q1-Q3 2019 with Q1-Q3 2020 we can see there is a 20% reduction in the number of incidents year on year. However, it is considered that reduced activity attributed to Covid may influence this.

· Adjusting the number of incidents to account for Covid suggests that there is no meaningful reduction in incidents, however this is regarded as positive in the context of increased reporting levels.

D. WorkSafe Investigations

Investigations occurred this quarter 0

Previous Investigations (last 12 months)

Number of remedial actions required 0

Number of remedial actions completed 0

WorkSafe investigation information remains on the report for 12 months or until actions are completed.

Comment:

· During the period PNCC classified three incidents as ‘notifiable’ and engaged with WorkSafe. WorkSafe did not initiate any further action.

E. External Audit

PNCC undertook an external audit of Health & Safety effectiveness in April 2018 which resulted in the development of a work plan to address the opportunities identified. Of the 47 actions, 28 (60%) have been completed with 19 still in progress. A status breakdown of those still outstanding is shown below:

PNCC is scheduling another external audit for June 2021 – Franz Assenmacher.

Scope: To gain an understanding of current health & safety practices and review against what good health & safety looks like, above minimum legal compliance. Through the review of three key elements: leadership, risk management and worker engagement, identifying the current maturity state and providing a way to move forward. The audit will cover all PNCC. Refer: WorkSafe NZ website for more information on SafePlus.

Comment:

· Although progress is being made on the workplan significant effort is required to complete the outstanding items, the majority of which pertain to strengthening PNCC’s standard operating procedures.

· The current work has been focused on securing and assessing data on the current SOPs and comparing them against the 2018 audit requirements. This work is expected to be completed in February 2021, at which point there will be clarity around the work required to close the gaps identified and also whether the current goal to complete it all by June 2021 is realistic.

F. Training

Summary information on Health & Safety training undertaken in the last 18 months is shown below. Further detail is provided in Attachment One.

Date	Sep 19	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20
Number of events	21	37	34	32	54	28
Number of staff attending	106	51	97	53	273	110

Comments:

· There has been a significant increase in training activity in the current financial year against the same period last year (59%).

· The increase between September and December 2020 period is explained by the training surge to compensate for lost training time during Covid-19.

G. Wellbeing

The Activate Wellness Gyms (CAB and Depot) were used 1,585 times during the December quarter or an average of 122 times per week by 74 individual staff members during the period. Gym use in the June quarter was down considerably due to the Covid-19 lockdown and its resurgence. The Depot contributes to 18% of the overall figures below.

Gym Usage	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20
Gym usage quarterly total	1060	1165	411	1659	1585
Average weekly use	81	88	51	128	122

Wellbeing Table	Oct-Dec	YTD
Gym Usage	1585	4820
Biennial health / eye check	29	109
Annual flu vaccinations		246
Vitae – Pastoral contacts	1716	4598
Vitae – Other contacts	195	511
Sick Leave days	1153		1153/600 = 1.9
People Feedback*	Raw Score
Safe from physical harm	4.23
Safe from bullying, racism, harassment	3.82

I. Flu vaccination information is widely published across the organisation.

II. Biennial health and eye check information is sent directly to staff members on their even birthdays, eg. 28.

Comment:

· The People feedback datapoints on physical and emotional safety are new for 2020 so trend is unknown. PNCC will be pursuing meaningful improvements in both.

· Wellbeing datapoints are consistent with previously reported insight on the implications of the disconnect between PNCC’s commitments and resource levels in the current year.

· PNCC will be initiating an internal comms programme to remind our people about how we work together to achieve a safe and positive working environment and what channels are open to individuals experiencing challenges.

H. Annual leave

Dec 18	Mar 19	Jun 19	Sep 19	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20
3287	2051	1884	1749	3006	1775	660	2308	4995

Total days of annual leave taken over the quarter

Comment:

· The average annual leave balance per staff member is 19.6 days (entitled plus accrued leave). This rose during the COVID-19 lockdown when staff did not take leave and has not reduced.

I. Turnover

Turnover for the quarter of permanent staff was 41 or 6.9%. Total annual turnover rate was 14.57%. Employee initiated turnover only which is 12.56%. Employee initiated turnover are resignations and retirements and 12% has been traditionally regarded as a healthy indicator for our sector.

Date	Dec 18	Mar 19	Jun 19	Sep 19	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20
Employee Initiated	20	15	11	19	19	26	9	19	34
Other	11	3	5	8	2	2	2	4	7

Comment:

· December saw a significant increase in turnover which, while the average remains in the acceptable bracket, is of concern. The labour market in Palmerston North and Manawatu is increasingly buoyant and PNCC will struggle to remain an attractive proposition with continuing wage suppression and workload challenges.

· There is a particular risk of losing talent in this market, and PNCC has very limited means to mitigate this risk.

Alan Downes Wayne Wilson

HEALTH, SAFETY AND WELLBEING MANAGER HUMAN RESOURCES MANAGER

Attachment One: The details of Health & Safety specific training undertaken in the last 12 months. Not included is the Health & Safety induction that all new staff receive.

Attachment Two: The Health & Safety Dashboard for the quarter that is discussed at Health & Safety committees.

Attachment One:

Event	Dec 19	Mar 20	June 20	Sept 20	Dec 20
Assessor Hort. ITO Online Training 4098		4
Breathing Apparatus	1	5			1
Chemical Handling & Spill Management	3
Confined Space Entry		14		21	1
Customer Conflict Awareness					14
Dangerous Good DG	1	1
Mental Wellbeing at Work	Schedule for 2020-21 financial year
Driver Assessment Training		9
Driver’s License – Class 1R (Restricted)			1
Driver’s License – Class 4L (Learners)	1	2
Driver’s License – Class 1 (Car License)	5	2	3	1	5
Driver’s License – Class 2 (Medium Rigid Vehicle)	3	1	3	1	2
Driver’s License – Class 3 (Medium Combination)		1	1	2
Driver’s License – Class 4 (Heavy Rigid)	2	2	1	1	3
Driver’s License – Class 5 (Heavy Combination)		1	1	2
Driver’s License – Class 6 (Motorcycle)			1
Efficient Compaction Operators course	1
Electrofusion certificate				11	9
Elevated Working Platform (Scissor Lift and Boom)					6
Endorsement (D) Dangerous Goods		1
Endorsement (F) Forklift		1	2	3	5
Endorsement (R) Roller	2	1	2	5	1
Endorsement (T) Tracks	2	1	1	5	1
Endorsement (W) Wheeled Special Type	2	1	2	5	2
Fire Extinguisher training (internal)	1
Fire Warden Training					1
First Aid Certificate	15	1	1	26	16
Forklift OSH Certificate			4	10	15
Grow-safe	1			27
Harassment Prevention and Awareness				36
Harassment Prevention and Awareness – Managers workshop				10
Certified Handlers (hazardous Substances)					4
H&S Representative				14	1
IVO Power Brush XL – Cleaners					5
Kerbside collection traffic leader KCTL / WCTL				10
Internal Orientation – Easy Start Orientation	2
Managing Mental Health	Schedule for 2020-21 financial year
Move at Work (Manual Handling)	Schedule for 2020-21 financial year
NC in Water Reticulation L3	1
NC Utilities Maintenance L4 (water)					1
NZ Certificate in Wastewater Treatment L4	1
NZ Certificate in Water Treatment L4	1
PeopleSafe Training		32	19	55
Public toilets & facilities cleaning /training SOP			5
Resilience	Schedule for 2020-21 financial year
Safe Work Zones		1
SSTC situational safety & tactical communications				9
STMS Level 1 – Site Traffic Management	3		5	10	3
TC1 – Basic Traffic Controller Level 1	1	2	1	9	4
T1 Tennant Battery Floor Scrubber - Cleaners					5
TC Refresher	2
Truck Loader Crane/Hi Ab		14
Twintec TTB 1840 Battery Compact - Cleaners					5
Total Number of Events	37	34	32	54	28
Total Number of Staff Attending	51	97	53	273	110

2. Compliance and administration

Does the Committee have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		No
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 5: A Driven and Enabling Council
The recommendations contribute to the outcomes of the Driven and Enabling Council Strategy
The recommendations contribute to the achievement of action/actions in The action is: Providing a safe and healthy workplace
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Providing a safe and healthy workplace.

Attachments

Health and Safety Quarterly Dashboard Report: October - December 2020 ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 24 February 2021

TITLE: Manawatu Community Athletics Track - Reviewed Memorandum of Understanding

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

APPROVED BY: Sheryl Bryant, Acting Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That the Council endorse the proposed 2020 Manawatu Community Athletics Track Memorandum of Understanding, as attached to the memorandum titled ‘Manawatu Community Athletics Track - Reviewed Memorandum of Understanding’ presented to the Finance and Audit Committee on 24 February 2021, noting that it replaces the 2000 and 2006 Memoranda of Understanding.

2. That the Council approve signing of the 2020 Manawatu Community Athletics Track Memorandum of Understanding subject to funding in the 2021/31 Ten Year Plan.

1. ISSUE

1.1 The Manawatu Community Athletics Track (MCAT) Memorandum of Understanding (2000 MOU) between Massey University, the Palmerston North Athletics and Harrier Club (PNAHC) and Palmerston North City Council (the Council) is now 20 years old.

1.2 Following the major resurfacing of the track in 2018/19, the Manawatu Community Athletics Track Advisory Committee (the Advisory Committee) agreed it was timely to review the MOU.

1.3 The review of the MOU proposes changes to the governance and financial provisions.

1.4 This memorandum highlights the proposed changes to the MOU, including updated costs, and seeks Council approval to sign the new Memorandum of Understanding (2020 MOU) contained in Attachment One.

2. BACKGROUND

2.1 In 2000 the Council entered a 2000 MOU for the provision of an artificial athletics track for Palmerston North and the wider Manawatu region. MCAT is situated at Massey University and managed through an Advisory Committee.

2.2 In 2006 changing/clubroom facilities were added to the facility, and a separate MOU was developed to cover these.

2.3 In 2011 spectator shade structure was constructed and then extended. In 2019 a shade sail and participant shelter/shade portable dugouts were added, and the first major renewal of the track surface renewal was completed.

2.4 The arrangements for the operation and management of the MCAT have been working well. Council has been receiving annual reports through the Friday Compendium.

2.5 The MCAT Advisory Committee structure provides a forum for making sure all parties communicate regularly and the track is managed according to a collective understanding and expertise.

2.6 The track surface renewal, in tandem with Council preparation of 2020 Asset Management Plans and the draft 10 Year Plan, were catalysts for a review of the 2000 MOU.

3. DISCUSSION

3.1 The MOU was reviewed by a sub-committee of the MCAT Advisory Committee. The sub-committee included a representative from each of Massey University, Council and PNAHC. The draft 2020 MOU was circulated to the full Advisory Committee and reviewed separately by each of the parties.

3.2 Attachment Two contains a comparison of the 2000 and 2020 MOU’s, with officer commentary on those changes of substance.

3.3 The key points are:

3.3.1 Vision and objectives are the same with minor rewording and restructuring.

3.3.2 The Advisory Committee remains, with added responsibility for considering health and safety and renewals planning.

Sport Manawatu is removed as a nominated user group representative but may still have representation via the PNAHC’S three nominees. Manawatu District Council (MDC) is removed from the Advisory group. Both Sport Manawatu and MDC are satisfied that they no longer need representation.

3.3.3 Costs of operations, maintenance and forecast renewals have been revised. It is proposed Council and Massey University continue to share equally in the costs of the MCAT as follows:

- Operations and maintenance $33,500 plus GST each per annum (there is also provision that this amount be adjusted annually by inflation). This is an increase of $8,500 per annum plus GST compared to the current annual contribution of up to $25,000 plus GST.

- Renewals - $45,400 per annum plus GST each towards a forecast renewal in 2029 (there is also provision that this amount be adjusted annually by inflation). This is an increase of $20,400 per annum plus GST from the current up to $25,000 plus GST per year.

- The User Group will endeavour to seek grant funding of up to 10% of the total cost of the next major surface renewal. This clause anticipates a major renewal around 2029 and that there may be opportunities to apply for external funding to support that renewal. The fundraising would be led by PNAHC as the major users and community face of the track.

- The hire charges for equipment will be transferred directly to PNAHC who identify and purchase equipment needed for the track. Currently 50% of the hire charges are retained and administered by Massey University for equipment and 50% is administered by PNAHC via a bank account operated by Sport Manawatu. PNAHC will operate an independent bank account for equipment and report to Advisory Committee on income and expenditure on equipment.

3.3.4 Dispute resolution – a clause has added the PNAHC President to the dispute resolution process, to ensure users are adequately represented.

3.3.5 Principles of use – are consistent between the 2000 MOU and the 2020 MOU.

3.4 Council’s Legal Counsel has reviewed the proposed 2020 MOU and considers it to be in order for signing.

3.5 PNAHC and Massey University have both indicated their approval of the proposed 2020 MOU. Massey University has already signed the document.

4. Financial

4.1 Council currently budgets up to $50,000 plus GST per year contribution for maintenance and renewals within its Maintain Levels of Service (MSL) budgets.

4.2 Programme 1415 was adopted in 2018/28 Ten Year Plan. It allowed an additional $10,000 plus GST per year in anticipation of the additional maintenance and renewals upon review of the MOU. This amount was first drawn upon in 2020/21.

4.3 Under the provisions of the 2020 MoU the cost to council of MCAT is $78,900 plus GST per year. This covers both maintenance and renewals contributions, as noted in section 3.2.3.

4.4 An additional $18,900 plus GST per year is required, over and above current MSL budget and Programme 1415 provisions, to give effect to the 2020 MOU. This increase has been included in the draft MSL budgets proposed in the draft 2021/31 Ten Year Plan.

5. CONCLUSION

5.1 After 20 years of successful operation of MCAT, a major resurface of the track, and the review of council Asset Management Plans, it is timely to review the Memorandum of Understanding.

5.2 The changes proposed have been considered by Council officers, Massey University and Palmerston North Athletic and Harrier Club. All parties are satisfied with the provisions of the proposed 2020 MOU.

5.3 An additional $18,900 plus GST per year will be required from the Council to maintain the existing level of service at the Athletics Track. Massey University is matching this increase in funding contribution.

6. NEXT STEPS

6.1 Arrange for signing of the 2020 MOU.

7. 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: Provide and maintain city reserves, neighbourhood reserves, playgrounds, sportsfields, Arena Manawatū, aquatic facilities, walkways, shared paths, sport and recreation facilities.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The Manawatu Community Athletics track provides active recreation opportunities at the track, community development through club and community interactions at the track. Events using the track attract visitors from outside the region supporting economic well-being.

Attachments

1.	Manawatu Community Athletics Track proposed MOU 2020 ⇩
2.	2000 MOU comparison with 2020 MOU ⇩

PALMERSTON NORTH CITY COUNCIL

Report

TO: Finance & Audit Committee

MEETING DATE: 24 February 2021

TITLE: Clearview Reserve - Proposal to Grant an Easement on Reserve Land to Powerco

PRESENTED BY: Bryce Hosking, Manager - Property; Kathy Dever-Tod, Manager - Parks and Reserves

APPROVED BY: Sheryl Bryant, Acting Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That the Council approves notifying the public of the proposal to grant an easement at Clearview Reserve, Palmerston North to convey electricity, to Powerco, in accordance with Section 48 of the Reserves Act 1977.

2. That the Council notes the land area affected by the easement for Powerco is described as part of Lot 1 DP 69185. The affected area of the easement is shown in the draft LT plan contained in Attachment 1 of the report titled ‘Clearview Reserve - Proposal to Grant an Easement on Reserve Land to Powerco’ presented to the Finance & Audit Committee on 24 February 2021.

Summary of options analysis for

Problem or Opportunity	Powerco has existing transformer and associated services within Clearview Reserve for the supply of electricity to Clearview Drive. These utility services were established within the reserve land in 2003 as part of the Clearview Drive Subdivision. The Reserves Act 1977 requires any form of utility for services on reserve land to be covered by an easement, however, there is currently no easement registered for this matter within Clearview Reserve. Powerco has identified this matter during their recent upgrade work and has requested an easement be created to ensure the legal status of these utilities align with the Reserves Act. This report requests approval from Council to begin this process by notifying the public of Council’s intention to grant an easement in accordance with Section 48 of the Reserves Act 1977.
OPTION 1:	Notify the public of Council’s intention to approve the proposal to grant an easement to Powerco at Clearview Reserve, in accordance with Section 48 of the Reserves Act 1977.
Community Views	· Community views will be sought during the public notification period. · Council Officers have never received any feedback in relation to this matter since its establishment in 2003.
Benefits	· Registering an easement within Clearview Reserve is considered good governance and ensures the activity is compliant with the requirements of the Reserves Act 1977.
Risks	· Council may be criticised for not picking up this matter earlier or for the correct procedures not being followed when the transformer and associated services was established.
Financial	· There are no financial implications with this easement as all costs are met by Powerco as the owner of the services as per Council’s Easements Policy.
OPTION 2:	Decline the proposal to grant an easement to Powerco at Clearview Reserve and require the services to be relocated.
Community Views	· Community views will not be sought. · Council Officers have never received any feedback in relation to this matter since its establishment in 2003.
Benefits	· No benefits are identified.
Risks	· Powerco will need to find a new location for the transformer which may cause future disruption to the surrounding residents. · Given the services have been in place since 2003, Council may be viewed as causing unnecessary disruption.
Financial	· No further costs would be incurred.

Rationale for the recommendations

1. Overview of the problem or opportunity

1.1 Powerco has existing transformer and associated services within Clearview Reserve for the supply of electricity to Clearview Drive.

1.2 The location of the transformer within Clearview Reserve is shown below:

1.3 The Reserves Act 1977 requires any form of utility for services on reserve land to be covered by an easement, however, there is currently no easement registered for this utility within Clearview Reserve.

1.4 Powerco identified this matter during their recent upgrade work to connect a new cable from Dogwood Way to the transformer, and have requested an easement be created to ensure the legal status of these utilities align with the Reserves Act.

1.5 This report requests approval from the Council to begin this process by notifying the public of Council’s intention to grant an easement in accordance with Section 48 of the Reserves Act 1977.

2. Background and previous council decisions

2.1 Powerco’s utility services at Clearview Reserve include a transformer and associated services such as underground cables. These utility services were established within the reserve land in 2003 as part of the Clearview Drive Subdivision.

2.2 In general Council encourages, wherever possible, service companies to locate their services in the road corridor. Road corridors are often increased in new subdivisions to include “alcoves” that will house transformers. This allows service companies to operate under a standard roading corridor right-of-way.

2.3 This is not always possible or an appropriate outcome however, hence on occasion these utility services are required to be located within reserve land.

2.4 In these situations, Council encourages companies to situate these utility services underground. In this case the transformer needed to be located above ground for access, so the best outcome was to set this back off the road or footpath and to be located “out of the way”.

Requirement for Easements

2.5 In 1968 the Electricity Act provided the legal basis for utilising land for the purposes of conveying electricity. In 1977 this method of utilising land in reserves for the purposes of conveying electricity was superseded by the Reserves Act 1977.

2.6 In recent years Powerco has been bringing the legal status of all their electricity conveyance utilities in line with the Reserves Act, including the establishment of easements when required.

2.7 The easements proposed cover the transformer site and the recent upgrade works area.

2.8 The area covered by the easement has been surveyed and pegged out and is shown in Appendix 1: Draft LT Plan of this report.

3. Land Status

3.1 The legal description of the land to be subject to the easement and historic summary comments of this land are below:

Title

Reserve Status

Comment

WN37C/797 –

Lot 1 DP 69185

Recreation Reserve

The land was previously owned by Fair Investments Limited in the current CFRs.
In 1996, the land was transferred to Palmerston North City Council for a recreation reserve under Reserves Act 1977, by Transfer B504799.1.

4. Description and analysis of options

OPTION 1: Notify the public of the Council’s intention to approve the proposal to grant an easement to Powerco at Clearview Reserve, in accordance with Section 48 of the Reserves Act 1977.

4.1 Option 1 involves Council beginning the easement process by notifying the public of the Council’s intention to grant an easement in accordance with Section 48 of the Reserves Act 1977.

4.2 The Minister of Conservation advises that any easement over 60 years is considered a “permanent effect” under the Reserves Act 1977.

4.3 As this easement is a permanent easement it therefore exceeds 60 years and can be considered to have a “permanent effect”. As a result, the Reserves Act consultation process is triggered, and the Council must consult with the public on the proposed establishment of the easement under Section 119 of the Reserves Act 1977 and seek views and canvas any objections to the proposal.

4.4 After the public consultation has concluded, submissions will be brought back to the Council for consideration.

4.5 A Council resolution accepting the easement proposal would be required before an easement could be registered to Powerco.

Community Views

4.6 Council Officers have never received any feedback in relation to this matter since its establishment in 2003.

4.7 The utility services are already established and have been for some time and are in an area which is not located strictly in the park proper, or at a key entranceway to the park.

4.8 It is not anticipated this matter will be viewed negatively, however, community views will be sought during the public notification period as part of this process and feedback can be considered accordingly.

Iwi Consultation

4.9 Iwi must also be consulted on any permanent easement proposal under Section 4 of the Conservation Act, prior to adoption of the easement.

4.10 Iwi have been engaged prior to this report and did not oppose the easement.

Benefits

4.11 The registration of an easement is an administrative matter.

4.12 Registering this easement within Clearview Reserve is considered good governance and ensures the activity is compliant with the requirements of the Reserves Act 1977.

Risks

4.13 The only risk that was identified was a reputational one whereby Council may be criticised for not picking up this matter earlier or for the correct procedures not being followed when the transformer and associated services was established.

4.14 This risk is considered to have low consequences and is unlikely to occur.

Financial Implications

4.15 There are no financial implications with this easement as all costs are met by Powerco as the owner of the services as per Councils Easements Policy.

OPTION 2: Decline the proposal to grant an easement to Powerco at Clearview Reserve and require the services to be relocated.

4.16 This option would see Powerco power supply facilities exposed to risk given that it is not legally covered by an easement agreement.

4.17 The result would likely be that Powerco would relocate the transformers outside the reserve.

4.18 The power supply facilities can legally continue being used until the relocation of the transformer.

Community Views

4.19 As per Option 1 Council Officers have never received any feedback in relation to this matter since its establishment in 2003, and it is not anticipated this matter will be viewed negatively.

4.20 However, despite this no community views will be sought under this Option.

Benefits

4.21 No benefits have been identified for this option.

Risks

4.22 Two risks were identified with Option 2:

· Customer: Powerco will need to find a new location of the transformer which may cause future disruption to the surrounding residents; and

· Reputational: Given the services have been in place since 2003, Council may be viewed as causing unnecessary disruption.

Financial Implications

4.23 No costs will be incurred by proceeding with Option 2.

5. Conclusion

5.1 As this is an administrative matter, Option 1 is considered good governance and will ensure the activity is compliant with the requirements of the Reserves Act 1977.

5.2 In addition, Powerco has agreed to meet all costs associated with this easement.

5.3 Given these points, it is recommended Council proceed with Option 1 and undertake public notification.

6. Next actions

6.1 Council Officers will work with Powerco’s legal team to enact the easements.

6.2 Public notification of the proposal to grant the easement, seeking submissions and objections.

6.3 Provide the opportunity for any submitters that wish to be heard to speak to the Council.

6.4 Consider the objections and submissions and provide advice to the Council on whether to accept, modify or decline the easement proposal.

7. Outline of community engagement process

7.1 Public Notice under Section 119 of the Reserves Act 1977 is being proposed.

7.2 As the transformer has been in place since 2003 without public issue, and that the proposal does not alter anything on the ground, officers advice that the minimum legal requirements for consultation should be applied in this case - minimum of one-month period advertised in the Manawatu Standard.

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 3: A Connected and Safe Community
The recommendations contribute to the outcomes of the Economic Development Strategy
The recommendations contribute to the achievement of action/actions in the Economic Development Plan The action is: Carry out recreation and reserves planning functions under the Reserves Act 1977 and LGA including the preparation of Reserve Management and Development Plans and Master Plans.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	This action ensures Council meets its legal obligations under the Reserves Act 1977 with regards to reserves planning and legislative requirements for utilities sited in reserves.

Attachments

Draft LT Plan ⇩

Susan Baty (Chairperson)
Karen Naylor (Deputy Chairperson)
Grant Smith (The Mayor)
Stephen Armstrong	Leonie Hapeta
Vaughan Dennison	Lorna Johnson
Renee Dingwall	Bruno Petrenas
Lew Findlay QSM	Aleisha Rutherford
Patrick Handcock ONZM

Submission No.	Submitter	Page No.
34, 95	James Good & Rachel Robertson (Pony Club)	49, 110

Submission No.	Submitter	Page No.
20	Kellie Brice	247

1.	December 2020 Performance and Financial Report - CE overview and financial summary ⇩
2.	December 2020 Performance and Financial Report - Performance Measures ⇩
3.	December 2020 Performance and Financial Report - Supplementary materials ⇩
4.	December 2020 Performance and Financial Report - Three Waters Reform Grant Funding Values ⇩