Agenda of Finance & Audit Committee - Wednesday, 22 September 2021

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 23 June 2021, commencing at 9.01am

Members

Present:

Councillor Susan Baty (in the Chair), The Mayor (Grant Smith) and Councillors 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, Billy Meehan and Orphée Mickalad.

Apologies:

Councillor Orphée Mickalad (early departure on Council business).

Councillor Vaughan Dennison entered the meeting at 9.03am after consideration of clause 47. He was not present for clause 47.

Councillor Orphée Mickalad left the meeting at 11.18am during consideration of clause 53. He was not present for clauses 53 to 55 inclusive.

47-21

Apologies

Moved Susan Baty, seconded Karen Naylor.

The COMMITTEE RESOLVED

1. That the Committee receive the apologies.

Clause 47-21 above was carried 16 votes to 0, the voting being as follows:

For:

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

Councillor Vaughan Dennison entered the meeting at 9.03am.

48-21

Petition: PNCC – Keep the parking times as they are

Mr Gerry Keating presented a petition signed by 2,547 residents of Palmerston North, and a further 168 people residing in the surrounding area (Foxton, Levin, Bulls, Feilding).

Mr Keating spoke to the petition focusing on his concerns regarding parking meter times being extended into late-week evenings and weekends, and the effect this could have on people attending events and shows at local theatres and venues.

Moved Susan Baty, seconded Rachel Bowen.

The COMMITTEE RESOLVED

1. That the Finance & Audit Committee receive the petition from Gerry Keating for information.

Clause 48-21 above was carried 17 votes to 0, the voting being as follows:

For:

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

49-21

Confirmation of Minutes

Moved Susan Baty, seconded Vaughan Dennison.

The COMMITTEE RESOLVED

1. That the minutes of the Finance & Audit Committee meeting of 26 May 2021 Part I Public be confirmed as a true and correct record.

Clause 49-21 above was carried 17 votes to 0, the voting being as follows:

For:

50-21

Palmerston North Airport Limited - Final Statement of Intent for 2021/22

Memorandum, presented by Steve Paterson, Strategy Manager – Finance, David Lanham, Palmerston North Airport Limited (PNAL) Chief Executive and Murray Georgel, PNAL Board Chair.

Moved Grant Smith, seconded Patrick Handcock ONZM.

The COMMITTEE RECOMMENDS

1. That the Statement of Intent for Palmerston North Airport Limited for 2021/22, presented to the Finance & Audit Committee on 23 June 2021, be agreed.

Clause 50-21 above was carried 17 votes to 0, the voting being as follows:

For:

51-21

Health, Safety and Wellbeing Report January to March 2021

Memorandum, presented by Alan Downes, Health, Safety and Wellbeing Manager and Patrick Watson, Chief People & Performance Officer.

Moved Brent Barrett, seconded Aleisha Rutherford.

The COMMITTEE RESOLVED

1. That the memorandum titled ‘Health, Safety and Wellbeing Report January to March 2021’, presented to the Finance & Audit Committee on 23 June 2021, be received for information.

Clause 51-21 above was carried 17 votes to 0, the voting being as follows:

For:

The meeting adjourned at 10.47am.

The meeting resumed at 11.05am.

The Mayor (Grant Smith) and Councillors Vaughan Dennison and Billy Meehan were not present when the meeting resumed.

52-21

Assurance Report on Review of Council Policy Framework

Memorandum, presented by Masooma Akhter, Business Assurance Manager and Julie Macdonald, Strategy & Policy Manager.

Councillor Billy Meehan entered the meeting at 11.07am.

The Mayor (Grant Smith) entered the meeting at 11.12am.

Councillor Vaughan Dennison entered the meeting at 11.13am.

Moved Karen Naylor, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the memorandum titled ‘Assurance Report on Review of Council Policy Framework’ and its attachment, presented to the Finance & Audit Committee on 23 June 2021, be received for information.

Clause 52-21 above was carried 16 votes to 0, with 1 abstention, 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, Karen Naylor, Billy Meehan, Orphée Mickalad, Bruno Petrenas, Aleisha Rutherford and Mr Stephen Armstrong.

Abstained:

The Mayor (Grant Smith).

53-21

Business Assurance Accountability Report

Memorandum, presented by Masooma Akhter, Business Assurance Manager.

Councillor Orphée Mickalad left the meeting at 11.18am.

Moved Susan Baty, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the memorandum titled ‘Business Assurance Accountability Report’ presented to the Finance & Audit Committee on 23 June 2021, be received for information.

Clause 53-21 above was carried 16 votes to 0, the voting being as follows:

For:

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

54-21

Committee Work Schedule

Moved Susan Baty, seconded Aleisha Rutherford.

The COMMITTEE RESOLVED

1. That the Finance & Audit Committee receive its Work Schedule dated June 2021.

Clause 54-21 above was carried 16 votes to 0, the voting being as follows:

For:

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

Exclusion of Public

55-21

Recommendation to Exclude Public

Moved Susan Baty, seconded Karen Naylor.

The COMMITTEE RESOLVED

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

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under Section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

General subject of each matter to be considered		Reason for passing this resolution in relation to each matter	Ground(s) under Section 48(1) for passing this resolution
13.	Minutes of the Finance & Audit Committee meeting - Part II Confidential - 26 May 2021	For the reasons set out in the Finance & Audit Committee minutes of 26 May 2021, held in public present.
14.	Business Assurance Accountability Report - Confidential Items	Third Party Commercial, Health Safety and Gain Advantage	s7(2)(b)(ii), s7(2)(d) and s7(2)(j)
15.	Award of Contract 4058 - Supply of Pipes and Fittings - 2021-22	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 55-21 above was carried 16 votes to 0, the voting being as follows:

For:

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

The public part of the meeting finished at 11.25am

Confirmed 22 September 2021

Chairperson

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 22 September 2021

TITLE: Results of Public Engagement - Extension of Paid Parking Hours

Presented By: Michael Duindam, Acting City Planning Manager and Vinuka Nanayakkara, Senior Transport Planner

APPROVED BY: David Murphy, Chief Planning Officer

RECOMMENDATION(S) TO Council

1. That the following extended paid parking hours take effect:

a. Thursday 8.30am-9.00pm

b. Friday 8.30am-9.00pm

c. Saturday 9.00am-9.00pm

d. Sunday 9.00am-3.00pm

2. That the Chief Executive be authorised to determine a practicable date for the extended paid parking hours to take effect.

That the following existing paid parking hours are retained:

a. Thursday 8.30am-5.30pm

b. Friday 8.30pm-5.30pm

c. Saturday 11.00am-3.00pm

d. Sunday no paid parking hours

1. Background

Council approved changes to on-street and off-street parking charges on 7 April 2021 – an increase and standardisation across the city for on-street parking at $1.70 per hour and $1.00 per hour (maximum of $5.00 per day) at off-street locations. This increase in parking charges was the first change in Palmerston North since 2015. Council also agreed to extend chargeable hours to 9.00pm on Thursday, Friday and Saturday, and introduce paid chargeable hours on Sunday till 3.00pm to manage the balance between the supply and demand of carparks across the city.

Response from the public was swift and profound, resulting in a petition – signed by around 5,700 people – to “Keep the Parking Times As They Are”. The petition was presented to the Finance & Audit Committee on Wednesday 23 June 2021. Subsequently on 7 July 2021, Council decided to pause the implementation of extended paid parking hours to enable a 2-week period of public engagement on the matter, which commenced on 28 July 2021.

The opportunity for the public to provide feedback was marketed through a variety of means, including social media posts (provided in Appendix D), media releases, flyer drops at Council venues and on car windscreens, as well as direct communication with key stakeholders such as the Chamber of Commerce, Palmy BID and Horizons Regional Council. The public were able to provide feedback through an online form, direct email to council or through hard-copy forms provided at key council sites such as libraries, front-of-house and the iSite.

2. Engagement Results

Around 2,600 public submissions were received on the online form available on the Council website, along with 106 hard copy submissions and 25 email submissions. A series of multi-choice and long answer questions were asked; responses for the former have been provided below. Constraints with timing and resourcing brought on by the August 2021 COVID lockdown has meant that the answers below account for the online submissions only. A more detailed summary of the online responses is provided in Appendix A. The email and written submissions are attached in Appendix B and Appendix C respectively. Social Media Post feedback is contained in Appendix D.

1. Do you support the proposal to extend the parking hours to better manage demand?

Answer	Number of responses	Percentage of responses
Yes	81	3.1%
No	2539	96.9%

2. The proposal that Council is considering will extend the hours for paid parking until 9.00pm on Thursday night. Do you think this is:

Answer	Number of responses	Percentage of responses
Too long	2384	93.0%
Too short	19	0.7%
About right	160	6.2%

3. The proposal that Council is considering will extend the hours for paid parking until 9.00pm on Friday nights. Do you think this is:

Answer	Number of responses	Percentage of responses
Too long	2393	93.9%
Too short	22	0.9%
About right	134	5.3%

4. The proposal that Council is considering will extend the hours for paid parking to be between 9.00am and 9.00pm on Saturdays. Do you think this is:

Answer	Number of responses	Percentage of responses
Too long	2427	95.8%
Too short	18	0.7%
About right	89	3.5%

5. Council is also considering introducing paid parking on Sundays from 9.00am to 3.00pm. Do you think this is:

Answer	Number of responses	Percentage of responses
Too long	2349	93.8%
Too short	33	1.3%
About right	123	4.9%

6. Do you regularly park in on-street carparks in the city centre on Thursday, Friday or Saturday evenings, or on Sundays?

Answer	Number of responses	Percentage of responses
Yes	1958	75.8%
No	626	24.2%

a. If yes, how easy is it for you to find a carpark?

Answer	Number of responses	Percentage of responses
Very easy	285	14.6%
Easy	1153	58.9%
Difficult	439	22.4%
Very difficult	81	4.1%

b. If no, why?

Answer	Number of responses	Percentage of responses
No reason to go to the city centre at that time	335	50.9%
Difficult to find a carpark near my destination	82	12.5%
Other	241	36.6%

7. Do you think the cost to Council of maintaining on-street carparks should be covered by rates or by the user of the carpark?

Answer	Number of responses	Percentage of responses
Rates	1340	56.3%
Users	1041	43.7%

Several questions provided respondents with the opportunity to provide written answers to support their multi-choice responses. Due to the high volume of answers received, a summary has been provided under five key themes below – four of which are in opposition to the proposal and one in support. A further summary of the online responses is provided in Appendix A, email and written submissions are attached in Appendices B and C respectively, and Social Media Posts are contained in Appendix D.

Theme 1 (Opposing): Affecting local business

· Businesses will lose customers and income to online shopping or shopping elsewhere (i.e. Feilding) where free parking is available.

· The inner city is dying, and this proposal will make it worse.

· Increased turnover will have a negative effect because people will have to rush and not enjoy shopping, movies, dining, etc.

Theme 2 (Opposing): Difficult for elderly, young women and people with disabilities

· Change in hours will mean young women who work on Broadway will need to park further away creating danger walking to car at night after work.

· Increased safety issues from walking further to get a carpark.

· Elderly use free parking and can’t afford to pay for parking.

· Churches and Community Centres in central city will be affected because their people can’t afford to pay for parking.

· Walking, cycling and, in particular, public transport are not viable alternative options. Public transport needs to run later and more often.

Theme 3 (Opposing): Weekend parking – particularly Sunday – should always be free

· Free parking encourages families to go shopping together.

· People wait until the weekend to go shopping and are encouraged to do so because of the free parking.

· Not enough free parking for staff on weekends.

Theme 4 (Opposing): Proposal is unaffordable

· Every year rates increase, so why do parking fees also need to increase?

· This proposal is a cash grab by the Council when they should be managing the budget better and spending within their means.

· The proposal will particularly impact students, the elderly, city centre workers and low-income earners.

Theme 5 (Supporting): Proposal is needed for the city

· Making it harder for people to drive and park in cities is the best way forward to encouraging other transport options and stop CBD clogging.

· Maintenance of car parks is 24 hours, so payment should be too.

· It is hard to get a car park at night because of people at shows, movies or dining at restaurants because they use the spaces for a long time.

· There are plenty of carparks in places other than Broadway, such as King St and UCOL. What is needed is an attitude change that you don’t need to park close to where you are going but you can walk a few hundred metres.

· Address climate change and have less dependence on cars.

In addition to the public response, submissions were received from Horizons Regional Council who supported the proposal, and Manawatu Chamber of Commerce, Palmy BID and Grey Power Manawatu who opposed the proposal. These are included in Appendix B.

3. Financial Implications

Council’s budget for 2021/22 (and beyond) includes an assumption that revenue received from parking will increase by $500,000 per annum as a consequence of a standardisation of metered parking charges, an increase to the hourly rate charged and an extension to the hours of paid parking. It was assumed these changes would all take effect from 1 July 2021.

Based on an extrapolation of 2019 figures it was estimated the net revenue likely to be received from extended chargeable hours would amount to $125,000 per annum comprised of $20,000 on Thursday evening, $20,000 on Friday evening, $50,000 on Saturday and $35,000 on Sunday.

It is too soon to be able to project what revenue might actually be received during 2021/22 as the new charges were not able to be implemented until the end of July (following Council approval on 7 July) and there will be a revenue loss of possibly $80,000 per week during the COVID-19 lockdown period. Parking revenue offsets rates as a source of revenue for the Council.

4. Compliance and administration

Does the Committee have delegated authority to decide?		No
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 5: A Driven & Enabling Council
The recommendations contribute to the achievement of action/actions in Not applicable
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The recommended decisions in this report are independent of a future city-wide strategic review of carparking, which will investigate the contribution of carparking to the city’s strategic direction and to social, economic, environmental and cultural wellbeing.

Attachments

1.	Appendix A - Summary of Online Submissions ⇩
2.	Appendix B - Email Submissions ⇩
3.	Appendix C - Written Submissions ⇩
4.	Appendix D - Social Media Post Performance ⇩

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 22 September 2021

TITLE: Health, Safety and Wellbeing Report - April to June 2021

Presented By: Alan Downes, Safety & Health Manager and 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 - April to June 2021’, presented to the Finance & Audit Committee on 22 September 2021, be received for information.

1. EXECUTIVE SUMMARY

Health, Safety and Wellbeing continues to be a significant focus area for leadership at all levels of PNCC. While data continues to provide encouragement (most notably in the area of reporting), Management recognises the importance of sustaining effort and investment to ensure a resilient system which keeps our people safe. We continue to experience incidents relating to excavation and are persisting in engaging our workforce and partners to reduce the risk in this area.

Notable highlights over the reporting period include:

• Executive Team site visits at the Awapuni Resource Recovery Park, the Central Library and the Wastewater Treatment Plant. These visits provide insight for the Executive Team and an opportunity to assess the effectiveness of the system and appraise the opportunities for improvement.

• The SafePlus audit occurred council-wide in June. It involved group sessions, multiple individual interviews and a review of processes. The resulting audit report has provided visibility on our current safety culture level and a baseline to track progress going forward.

• Refreshing PNCC’s employee participation and Health and Safety champion forums.

Looking forward it is envisaged that the SafePlus report, combined with the outstanding audit actions from 2018, will form the basis of a Health & Safety Change Programme for the next triennium.

2. REPORT

This report covers the period 1 April to 30 June 2021. The information included in this report is discussed at the appropriate Health & Safety Committees.

A. Hazards, Incidents and Near Misses Reported

Quarter	2019			2020			Dec 20			Mar 21			Jun 21
	Sep	Dec	Mar		Jun	Sep		PNCC	Con		PNCC	Con		PNCC	Con
Hazards	1	2	4		2	13		16			21			19
Incidents	24	32	33		24	58		44	3		38	4		44	4
Near Misses	22	21	25		17	20		30	7		13	1		12	3
Lost Time (days)	108	155	99		97	56		75			85			83
Lost Time Injuries	10	15	12		3	9		5			4			6

Key: PNCC = Staff; CON = Contractor

Comments:

· The increase in reporting of hazards and incidents continued in the 2020-21 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 PNCC.

· The significant reduction Year on Year in time lost is encouraging with a 35% reduction in days lost in the current financial year when compared to the same period last year.

· The significant 40% 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
3	Tree felling / sectional takedowns
4	Working alone
5	Working at height (fall to lower level)		2
6	Excavation work		2
7	Confined space work
8	Working with mobile plant	4	7
9	Work environment (psychological, physical and emotional)
10	Members of the public	8	4
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 24 months is shown below:

	Sep 19	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20	Mar 21	Jun 21
Incidents	10	7	11	3	7	10	4	10
A manual handling frequency ratio was requested at meeting on 24 February 2021
Manual handling incident frequency ratio (MHIFR)							0.000001	0.00003
MHIFR (magnification): 10 x 200,000 = 2,000,000 / 300560							2.66	6.4
12 Month Moving Average (12MMA-FR)		5.5	6.0	5.2	4.7	5.2	4.0	5.2
600 staff x 40 hrs x13 weeks = 312000 hrs worked. 10 incident / 312000 the actual frequency ratio = 0.00003 or alternatively 312000 hrs / 10 = 1 incident per 31200 hrs. (40 hrs x 46 weeks = 1840). 31200 hrs / 1840 = 17 years Normal practice is to significantly magnify the number of incidents so we can make sense of the results. 10 x 200,000 =2,000,000 incidents / 312000 hours worked = 6.4 FR

Comments:

· If we compare Sept - Jun 2019-20 with Sept - Jun 2020-21 we can see the number of manual handling incidents year on year is unchanged. However, when we factor in the April – June 2020 period where COVID had a significant effect, it indicates 16% reduction occurred in the 2020-21 year.

· The new 12 month moving average frequency ratio (12MMA-FR) flattens out the spikes and dips in the quarterly results and reveals we are averaging 5.11 or one manual handling incident for every 19 years of actual hours worked.

· PNCC currently has a number of proactive measures in place including:

o Education – the manual handling procedure including stretching, warm-up/cool down and the importance of early reporting of discomfort, pain and injury is covered at induction.

o Training – Move at work / manual handling training occurs annually with refresher training occurring every three years in addition to the Safe System of Work (SSW) procedures which are completed regularly in-house.

o Monitoring – manual handling incidents are reviewed, and additional training / supervision initiated as needed.

o The safe systems of work (SSW) manual handling procedure is also used as refresher by business unit supervisors.

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 two incidents as ‘notifiable’ and engaged with WorkSafe. WorkSafe did not initiate any further action.

E. 2018 Audit Action Plan

The 2018 Audit identified 47 actions of which 35 have been fully completed. PNCC undertook an external audit of Health & Safety effectiveness in April 2018 which resulted in the development of a work plan to address the agreed actions. Of the original workplace actions developed there is a balance of 12 items to complete (refer to status of actions included with the graphs).

Key focus areas progressed in this reporting period include:

• An additional 20 SOP were revised to align with the 2018 audit recommendations.

• The new event management format is risk based, comprehensive, auditable and an appropriate training tool. A review during the reporting period affirmed its inclusion in the health and safety management system as recommended in the 2018 audit.

• The status of actions is now at 72% complete, which is a 2% improvement since the last report.

Comments:

· In February 2021 the work was completed around securing and assessing data on the current SOPs and comparing them against the 2018 audit requirements. This has brought clarity around the work required to close the gaps identified and informed the approach to complete SOPs in stages.

· As previously reported, the % of audit actions still to be completed (28%) is not indicative of the time and effort required to fully close them out. It is estimated that fully completing the outstanding actions will take between 12–15 months at current capacity.

· Although management will continue to focus on progressing these outstanding actions, it is anticipated that any outstanding 2018 items will be combined with the 2021 Health & Safety Change Action Programme.

· To provide visibility on the alignment of SOPs and competency assessments to the 2018 audit a separate graph has been included below.

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	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20	Mar 21	Jun 21
Number of events	37	34	32	51	31	29	29
Staff attending	51	97	53	227	156	130	215

Comment:

· There has been a significant increase in training activity in the current financial year against the same period last year (59%). This is a consequence of ‘catching up’ on training lost during the COVID-19 restrictions.

G. Wellbeing

i. The Activate Wellness Gyms (CAB and Depot) were used 1,359 times during the June quarter or an average of 105 times per week by 143 individual members during the period. Gym use in the June 2020 quarter was down considerably due to the COVID-19 lockdown and its resurgence. The Depot contributes to 16% of the overall figures below.

Gym Usage	Jun 20	Sep 20	Dec 20	Mar 21	Jun 21
Gym usage quarterly total	411	1659	1585	1460	1359
Average weekly use	51	128	122	112	105

Wellbeing Table	Apr-June	YTD
Gym usage	1395	7642
Biennial health / eye check	67	195
Annual flu vaccinations	207	207
Vitae – Pastoral contacts	466	5585
Vitae – Other contacts	40	629
Sick Leave days	1116	4832	3716/600 = 8.0
People Feedback	Raw Score
Safe from physical harm	4.23
Safe from bullying, racism, harassment	3.82

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

iii. Biennial health and eye check information is sent directly to staff members on their even birthdays, e.g. age 38.

Comments:

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

· Management are reviewing the provision of mental health / resilience training to identify opportunities to capture more of our workforce and equip our people with skills and tools in a timely manner.

H. Annual leave

Jun 19	Sep 19	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20	Mar	June
1884	1749	3006	1775	660	2308	4995	2562	1775

Total days of annual leave taken over the quarter

Comment:

· The average annual leave balance per staff member is 21.53 days (entitled plus accrued leave). Leave is actively managed however there are a number of single points of success / failure which management are seeking to explore solutions.

I. Turnover

Turnover for the quarter of permanent staff was 29 or 4.96%. Total annual turnover rate was 18.1%. Employee initiated turnover are resignations and retirements. 12% has been traditionally regarded as a healthy indicator for our Council. Across all industries and sectors in NZ the shortage of talent is a significant issue with a number of local authorities also recording increases.

Date	Jun 19	Sep 19	Dec 19	Mar 20	Jun 20	Sep 20	Dec 20	Mar 21	Jun 21
Employee Initiated	11	19	19	26	9	19	34	28	25
Other	5	8	2	2	2	4	7	1	4

Comments:

· December and March continued to show an increase in turnover which, though expected continues to be of concern. The labour market in Palmerston North and Manawatu is particularly buoyant within an already challenging NZ market. There is a particular risk of losing talent in this market, and PNCC has very limited means to compete.

· PNCC is currently developing a Future Remuneration Framework to ensure our ability to attract and retain talent and maintain our relevance in this highly competitive market. In addition, we have commenced a capability development pilot to improve career progression in response to feedback.

· Over the reporting period (1 April – 30 June) we appointed 38 candidates to new roles at PNCC.

Alan Downes Wayne Wilson

SAFETY & HEALTH 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.

3. Compliance and administration

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

Attachments

1.	Health & Safety specific training undertaken in the last 12 months
2.	Health and Safety Dashboard for April-June 2021 ⇩

Attachment One

Event	June 20	Sept 20	Dec 20	Mar 21	Jun 21
Assessor Hort. ITO Online Training 4098
Behaviour Safety Observed training					1
Breathing Apparatus			1	10
Chemical training Cleaners				6
Confined Space Entry		21	1		2
Customer Conflict Awareness			14
Dangerous Good DG				2	1
Mental Wellbeing at Work (completed in May 2020-21)					28
Driver Assessment Training
Driver’s License – Class 1R (Restricted)	1
Driver’s License – Class 2L (Learners)				1
Driver’s License – Class 4L (Learners)				2
Driver’s License – Class 1 (Car License)	3	1	5	3	2
Driver’s License – Class 2 (Medium Rigid Vehicle)	3	1	2	1
Driver’s License – Class 4 (Heavy Rigid)	1	1	3
Driver’s License – Class 5 (Heavy Combination)	1	2
Driver’s License – Class 6 (Motorcycle)	1
Efficient Compaction Operators Course					42
Electrofusion certificate		11	9
Elevated Working Platform (Scissor Lift and Boom)			6
Endorsement (F) Forklift	2	3	5	3
Endorsement (R) Roller	2	5	1	2
Endorsement (T) Tracks	1	5	1	2
Endorsement (W) Wheeled Special Type	2	5	2	2
Fire Warden Training			1
First Aid Certificate	1	26	16	2	4
Forklift OSH Certificate	4	10	15		5
Forklift (F) Endorsement				2	2
Front End Loader				2
Grow-safe		27			10
Harassment Prevention and Awareness			36
Harassment Prevention and Awareness – Managers workshop			10
Certified Handlers (hazardous Substances)			4
Height Safety Introduction					2
Height Safety Advanced					3
H&S Representative		14	1
IVO Power Brush XL – Cleaners			5
Kerbside collection traffic leader KCTL / WCTL		10
Managing Mental Health				25
Move at Work / Manual Handling (occurred July 2020-21)
NC Utilities Maintenance L4 (water)			1
PeopleSafe Training	19	55			31
Permit To Work					44
Public toilets & facilities cleaning /training SOP	5
Resilience training (Completed in May 2020-21)					38
Safe Work Zones
Site Safe Foundation Passport				23
Site Specific Safety Plan				31
SOP Compost Op G/Waste Shredder				3
SSTC situational safety & tactical communications		9
STMS Level 1 – Site Traffic Management	5	10	3	5	1
TC1 – Basic Traffic Controller Level 1	1	9	4	4
T1 Tennant Battery Floor Scrubber - Cleaners			5
TC Refresher				1	1
Truck Loader Crane/Hi Ab
Twintec TTB 1840 Battery Compact - Cleaners			5
Total Number of Events	32	51	31	29	29
Total Number of Staff Attending	53	227	156	130	215

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 22 September 2021

TITLE: Treasury Report - 12 months ending 30 June 2021

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATION(S) TO Council

1. That the performance of Council’s treasury activity for the 12 months ending 30 June 2021 be noted.

1. ISSUE

To provide an update on the Council’s treasury activity for the 12 months ending 30 June 2021.

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. As there was a high likelihood the full capital expenditure programme for the year would not be achieved there was no change to the additional debt that was authorised for either of these changes.

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. On 7 July 2021 Council adopted its updated Financial Strategy for 2021-31. No changes were made to these prudent debt ratios.

3. PERFORMANCE

Following the annual review published on 3 May 2021 Council’s S&P Global Rating’s credit rating remained unchanged at AA / A-1+.

Schedule 1 attached shows the details of Council’s debt as at 30 June 2021. 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

Actual – 9 months (2020/21)

$000

Actual – 12 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

142,000

35,000

142,000

44,125

(20,000)

Closing Balance

Comprising:

Bank advance (on call)

LGFA short term advance

LGFA & Council stock

178,240

172,000

177,000

166,125

9,125

157,000

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

Gross debt at 30 June 2021 was $166.125m compared with $142m at 1 July 2020.

Movements in recent years are shown in the following graph:

Actual finance costs incurred during the 12 months (including interest, line fees and the effects of payments relating to swaps) amounted to $4.975m compared with the budget for the year of $5.557m. $168k of this expense related to $20m of new loans raised in August 2020 to prefund debt maturing on 15 May 2021. This cost was more than offset by unbudgeted interest income of $242k received from short term investment of this $20m. The effective average interest rate for the year was 2.9% compared with the budgetary assumption of 3.4% and this translated to a saving of approximately $825k.

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 30 June 2021 and show a reduction in the book value liability of $779k for the quarter and $7.575m for the year.

Swaps with a notional value of $18m matured during the year and new forward start swaps with a notional value of $40m (maturing in 2027 and 2028) were entered in June 2021. These new swaps were entered to ensure the Council remained within its interest rate risk policy framework.

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 attached.

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

· Council’s liquid position complies with policy, and debt that matured in May 2021 was repaid using sums raised in advance and temporarily invested.

· Since 30 June $20m of term debt has been raised. $10m of this is to pre-fund debt maturing in April 2022 and has been invested in the meantime at a rate that more than covers the cost of the interest expense. The remainder is funding activity in the 2021/22 year.

The interest rate risk position describes 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 2020 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 three waters.

· At the present time the strategy being adopted is to use the forecast debt figures from the recently adopted 2021-31 10 Year Plan but reducing them by 30% each year. Past experience is the Council has struggled to deliver its full programme of budgeted work so it is prudent to assume this reduced requirement. Failing to do this would likely lead to the Council’s portfolio becoming over hedged.

· At the present time projected debt levels that exclude debt assigned for three waters programmes are also being considered to make sure the Council is not over hedged if water related debt is effectively transferred (or paid off) on 30 June 2024.

· At the present time interest rates are being fixed at or near policy minimums based on the debt forecasts mentioned above and that is the position as at 30 June. This approach is kept under constant review in the light of changing market conditions.

As at 30 June 2021 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 2024).

4. CONCLUSION & NEXT STEPS

Finance costs for the year (including interest, line fees and the effect of swaps) was $4.975m compared with budget for the year of $5.557m. The variances from budget were due to a variety of factors including prefunding of maturing debt, actual interest rates lower than the budget assumption, capital expenditure and consequentially debt being lower than budget.

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. In recent weeks there has been upward market movement in NZ short term interest rates (90 Bank bill rates) and these will be reflected in the 90 interest rate resets for Council’s floating rate borrowing. However margins for present borrowing are fixed. Council’s hedging strategy is based on the use of forward start swaps. These are influenced by international market movements for long term bonds and there has been little movement in these – if anything they have reduced in recent months.

A further performance report will be provided after the September 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 & Enabling Council This report outlines the outcomes of a fundamental administrative activity of the Council.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Managing the Council’s treasury activity is a fundamental component of day to day administration of the Council.

Attachments

Schedules 1 to 3 ⇩

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