Agenda of Finance & Audit Committee - Wednesday, 21 October 2020

PALMERSTON NORTH CITY COUNCIL

Palmerston North City Council

Minutes of the Finance & Audit Committee Meeting Part I Public, held in the Elwood Room, Conference & Function Centre, 354 Main Street, Palmerston North on 16 September 2020, commencing at 9.00am

Members

Present:

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

Non Members:

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

37-20

Confirmation of Minutes

Moved Susan Baty, seconded Patrick Handcock ONZM.

The COMMITTEE RESOLVED

1. That the minutes of the Finance & Audit Committee meeting of 19 August 2020 Part I Public be confirmed as a true and correct record.

Clause 37-20 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, Billy Meehan, Karen Naylor, Bruno Petrenas, Aleisha Rutherford, Tangi Utikere and Mr Stephen Armstrong.

38-20

Assurance Report on Review of Business Continuity Planning

Memorandum, presented by Masooma Akhter, Business Assurance Manager and Jason McDowell, Head of Risk & Resilience.

After discussion Elected Members requested a follow-up report assessing progress on the recommendations, action plan and Business Continuity Planning Review.

Moved Lorna Johnson, seconded Susan Baty.

The COMMITTEE RESOLVED

1. That the memorandum entitled ‘Assurance Report on Review of Business Continuity Planning’ and its appendices, presented to the Finance & Audit Committee on 16 September 2020, be received for information.

2. That the Chief Executive report back on the recommendations, action plan and progress on the Business Continuity Planning Review to the December 2020 meeting of Finance & Audit Committee.

Clause 38-20 above was carried 17 votes to 0, the voting being as follows:

For:

39-20

Review of Elected Members' Expenses and Allowances Policy

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

After discussion Elected Members were of the opinion that the policy was not yet a finished product and that a workshop would be a more efficient way to raise and discuss issues.

The meeting adjourned at 10.07am

The meeting resumed at 10.33am

Moved Brent Barrett, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the Elected Members’ Expenses and Allowance Policy be referred to a workshop.

Clause 39-20 above was carried 11 votes to 6, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Brent Barrett, Rachel Bowen, Zulfiqar Butt, Renee Dingwall, Lew Findlay QSM, Lorna Johnson, Billy Meehan, Bruno Petrenas, Tangi Utikere and Mr Stephen Armstrong.

Against:

Councillors Susan Baty, Vaughan Dennison, Patrick Handcock ONZM, Leonie Hapeta, Karen Naylor and Aleisha Rutherford.

40-20	Committee Work Schedule Officers had requested clarity from the Committee regarding what should be included in the report regarding expenses of the Mayor and Deputy Mayor. This was addressed in the additional recommendation.
	Moved Susan Baty, seconded Leonie Hapeta. The COMMITTEE RESOLVED 1. That the Finance & Audit Committee receive its Work Schedule dated September 2020.
	Clause 40.1 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, Billy Meehan, Karen Naylor, Bruno Petrenas, Aleisha Rutherford, Tangi Utikere and Mr Stephen Armstrong.
	Moved Susan Baty, seconded Leonie Hapeta. 2. That the annual Expenses of the Mayor & Deputy Mayor report address discretionary expenditure and that the expenses of the Mayor and Deputy Mayor be reported separately.
	Clause 40.2 above was carried 12 votes to 3, with 2 abstentions, the voting being as follows: For: Councillors Brent Barrett, Rachel Bowen, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Karen Naylor, Bruno Petrenas, Aleisha Rutherford and Mr Stephen Armstrong. Against: Councillors Susan Baty, Lew Findlay QSM and Billy Meehan. Abstained: The Mayor (Grant Smith) and Councillor Tangi Utikere.
	Note: Moved Brent Barrett, seconded Karen Naylor. On a motion that the word ‘sensitive’ be replaced with ‘discretionary’ in Clause 40.2, the motion was carried 13 votes to 2, with 2 abstentions, the voting being as follows:
	For: Councillors Susan Baty, Brent Barrett, Rachel Bowen, Zulfiqar Butt, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, Bruno Petrenas, Aleisha Rutherford and Mr Stephen Armstrong. Against: Councillors Vaughan Dennison and Lew Findlay QSM. Abstained: The Mayor (Grant Smith) and Councillor Tangi Utikere.

The meeting finished at 10.58am

Confirmed 21 October 2020

Chairperson

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 21 October 2020

TITLE: Palmerston North Airport Limited - Annual Report for 12 months ended 30 June 2020 & instructions relating to Annual Meeting

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATIONS TO Council

1. That the memorandum entitled ‘Palmerston North Airport Limited - Annual Report for 12 months ended 30 June 2020 & Instructions relating to Annual Meeting’ presented to the Finance & Audit Committee on 21 October 2020, be received.

2. That the Annual Report and Financial Statements of Palmerston North Airport Limited for the year ended 30 June 2020 be received.

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

1. ISSUE

Palmerston North Airport Ltd (PNAL) as a Council controlled trading organisation has prepared its Annual Report for the year ended 30 June 2020. This report provides a brief commentary on PNAL’s results for the year and recommends the Council’s shareholder representative be instructed to support the resolutions proposed for the Annual Meeting.

2. BACKGROUND

2.1 PNAL’s Annual Report for the year ended 30 June 2020 is attached. The report gives a comprehensive assessment of company performance with key matters highlighted in the joint report of the Chairman and Chief Executive. Performance is judged against the Statement of Intent adopted by the Board in May 2019 and endorsed by the Council in June 2019.

2.2 PNAL was on track for a very successful year until Covid-19 began to impact on the country and passenger movements in particular. Due to its strong financial position, and its prompt and effective decision-making PNAL has been able to address the challenges without recourse to the Council as shareholder.

2.3 Operating results are summarised in the following table:

Actual 2017/18	Actual 2018/19		Actual 2019/20	Budget 2019/20 SOI
8,482,757	10,202,063	Revenue	9,137,276	11,221,428
4,408,861	5,176,634	Operating Expenditure (incl. PFAS related extra-ordinary items)	5,057,989	5,671,492
4,073,896	5,025,429	Operating Surplus (before interest, depreciation & tax)	4,079,287	5,549,935
1,582,752 279,238 922	1,821,379 522,347 88,776	Depreciation Finance Costs Impairment & loss on sale of assets	1,854,304 531,078 (993)	2,141,657 669,130
	1,051,349	Revaluation (loss)/gain – Investment properties	(397,523)
2,210,984	3,644,276	Operating Surplus (before tax)	1,297,376	2,739,148
601,965	879,745	Taxation	(329,232)	766,962
1,609,019	2,764,531	Net Surplus after tax for year	1,626,608	1,972,187

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

Actual 2018/19		Actual 2019/20	SOI Target
3.6%	Surplus, before interest/tax/revaluations to Total Assets Surplus, before interest/tax/depreciation/revaluations to Total Assets	2.6% ⁽¹⁾ 4.7%	6.0
4.1%	Surplus, after interest/tax/revaluations to Shareholders’ funds	2.4% ⁽¹⁾	3.1%
6.1	Surplus, before interest & tax to Interest ≥ 2.25 : 1	3.4 ⁽¹⁾	5.1
$67.5m	Tangible net worth (total tangible assets less total liabilities) ≥ $50m	$67.1m	$63.1m
75%	Ratio of consolidated shareholders’ funds to total assets ≥ 40%	78%	69%
Achieved	Civil Aviation Rule part 139 certification	Achieved ⁽²⁾	Achieve
40	Maintain a Net Promotor score of 50 or above, measured on an annual basis	30 ⁽³⁾	50
687,142	No. of passengers served through airport terminal	498,422	680,000
12.5 hrs	Achieve zero lost time injuries to those who work within our airport community	Zero	Zero
Completed	Complete roadmap to carbon neutrality	Implemented	Implement
Achieved	Achievement of emission reduction targets	Achieved ⁽⁴⁾	Achieve

⁽¹⁾Lost aeronautical & ancillary revenue associated with reduced passenger volumes March-June due to Covid-19 has impacted on net surplus performance

⁽²⁾The 5 yearly CAA audit of PNAL’s compliance with Part 139 was completed in July 2019.

⁽³⁾Net promoter score results were impacted primarily by dissatisfaction with in-terminal WIFI connectivity. A hardware upgrade has subsequently taken place. Net promoter score is based on survey responses received July 2019 to February 2020.

⁽⁴⁾Total energy consumption for the full year declined 13% on the previous year, however on a per passenger basis for the period (July 2019 to February 2020) energy consumption remained flat. The overall reduction was offset by a corresponding decline in passenger numbers including the loss of Jetstar from December 2019. PNAL is still in the process of gathering and recording 2019/20 data to be used in establishing a baseline. Water consumption based on July 2019 to February 2020 data.

2.5 The Company applied $1.2m during the period to the purchase of fixed assets ($7.5m in the previous year). This compares with the budgetary provision for capital expenditure of $11.6m (none of the actual expenditure was funded from asset sales compared with the budget provision of $1.6m for all of the planned work).

2.6 The Annual Report advises that Directors have proposed that based on the year’s results no dividend be payable (compared with $685,238 for the previous year). Although the Statement of Intent for 2019/20 presumed a dividend equivalent to 40% of the net surplus after tax (excluding capital contributions) would be payable, PNAL earlier this year signalled its dividend intentions (in the light of Covid impacts) and the Council subsequently revised its 2020/21 budget assumption to zero.

2.7 The Company’s debt/equity ratio as at 30 June 2020 was 22:78 (25:75 at 30 June 2019).

2.8 The Company’s Constitution provides that the shareholders must approve the total remuneration payable to Directors. In October 2018 the Council approved an increase to $108,000 effective from 1 July 2018. The PNAL Board has determined to allocate this sum as $33,600 (chairperson) and $18,000 (remaining four directors) plus $2,400 for the chair of the Audit and Risk Committee. It is proposed the total remuneration remain at $108,000 for 2020/21.

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

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

2.10.1 Receipt of the Annual Report and financial statements for the year ended 30 June 2020

2.10.2 Advice the Directors’ propose that no dividend be payable for the year ended 30 June 2020

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

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

3. NEXT STEPS

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

In August Council agreed to PNAL’s Statement of Intent for 2020/21. At the time it was indicated PNAL would report again in October with an updated version incorporating projections for the following two years. At this stage there is insufficient certainty about the future to make it worthwhile presenting an updated version. However, it is intended PNAL representatives will give a brief update on the current position at the meeting.

4. Compliance and administration

Does the Committee have delegated authority to decide?		No
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 1: An innovative and growing city
The recommendations contribute to the outcomes of the Economic Development Strategy
The recommendations contribute to the achievement of action/actions in the Economic Development Plan The action is: operating a key gateway for people and freight to and from the city and the wider region; grow passenger numbers and freight using the airport.
Contribution to strategic direction	PNAL is playing an active part in growing the City.

Attachments

1.	Letter from PNAL including Notice of Annual Meeting ⇩
2.	PN Airport Ltd 2020 Annual Report ⇩

PALMERSTON NORTH CITY COUNCIL

Report

TO: Finance & Audit Committee

MEETING DATE: 21 October 2020

TITLE: Massey University Hockey Turf - Agreement for Shared Use

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

APPROVED BY: Sheryl Bryant, Acting Chief Infrastructure Officer

RECOMMENDATIONS TO Council

1. That the report entitled ‘Massey University Hockey Turf – Agreement for Shared Use’, presented to the Finance & Audit Committee on 21 October 2020, be received.

2. That the Council approves the Agreement for Shared Use for the Massey University Hockey Turf.

3. That the Council decides whether to appoint a Councillor to the Massey University Hockey Turf Steering Group, and if so, make an appropriate resolution.

Summary of options analysis for

Problem or Opportunity	Council entered into a Memorandum of Understanding in 2017 with Massey University for the development of a new artificial hockey turf following a partner and location selection process. The turf was opened in 2020. This report requests Council approves an Agreement for Shared Use, to replace the 2017 Memorandum of Understanding, detailing the understandings and policies between Hockey Manawatu, Massey University and the Council for the ongoing operation of the new artificial hockey turf.
OPTION 1:	Approve the Agreement for Shared Use for the Massey University Hockey Turf
Community Views	Hockey Manawatu has contributed to the development of the Shared User agreement.
Benefits	The Agreement for Shared Use ensures community use of the hockey turf in exchange for Council’s contribution towards the cost of construction, operations and renewal.
Risks	The Agreement for Shared Use reduces Council’s risk of a turf operating outside the parameters under which it was established. Risks are managed through a Steering Group and dispute resolution process.
Financial	Council is committing $3,000 per year (adjusted by 5% annually) towards maintenance, and $260,000 in 2029 for renewals. These amounts are consistent with the commitments by Council recorded in the 2017 MOU.
OPTION 2:	Request changes to the Agreement for Shared Use for the Massey University Hockey Turf
Community Views	Hockey Manawatu has contributed to the development of the Shared User agreement.
Benefits	Council may identify amendments which add value to the Agreement for Shared Use.
Risks	Any variation to the understanding set out in the 2017 MOU will require negotiation with both Massey University and Hockey Manawatu. Both have already signed the Agreement for Shared Use.
Financial	There are no financial implications to requesting changes.

Rationale for the recommendations

1. Overview of the problem or opportunity

1.1 Council entered into a partnership with Hockey Manawatu and Massey University to develop a new artificial hockey turf at Massey University in 2017.

1.2 The Memorandum of Understanding (2017 MOU) term has ended and is being rolled over pending approval of a replacement agreement. The 2017 MOU was focused on the funding and construction process.

1.3 The 2017 MOU also set out principles for operation of the turf, once constructed, with a licence and stakeholder agreement to be formed.

1.4 An Agreement for Shared Use has been developed to detail operational processes and responsibilities of the three parties. This report considers the expectations set out in the 2017 MOU and requests approval of the Agreement for Shared Use.

2. Background and previous council decisions

2.1 In 2015 Council received a number of submissions to its Ten Year Plan advocating for an additional hockey turf in Palmerston North.

2.2 After considering the New Zealand Hockey National Facilities Strategy and a demand assessment Council allocated $500,000 towards a hockey turf in the 2015/25 Ten Year Plan and completed a process to consider potential partners and locations.

2.3 In 2016 the decision was made to proceed with a turf at Massey University.

2.4 In 2017 a Memorandum of Understanding (2017 MOU) was signed to fundraise and build the turf – refer Attachment One.

2.5 In 2019 fundraising was completed and construction started.

2.6 The turf was opened in July 2020 after some construction delays due to the Covid pandemic.

2.7 This report presents an Agreement for Shared Use (Attachment Two) to replace the 2017 MOU, setting out the operational and governance arrangements for the new hockey turf.

3. Description of options

3.1 Option One: Approve the Agreement for Shared Use for the Massey University Hockey Turf

The Agreement for Shared Use sets out the governance, fees, maintenance, renewal and record keeping expected of the parties for the operation of the new artificial hockey turf at Massey University.

3.2 Option Two: Request Changes to the Agreement for Shared Use for the Massey University Hockey Turf

Council could request amendments to the Agreement for Shared Use, before signing.

4. Analysis of options

4.1 Option One: Approve the Agreement for Shared Use for the Massey University Hockey Turf

4.2 The 2017 MOU set out expectations around community access, through Hockey Manawatu. The Agreement for Shared Use is consistent with the 2017 expectations.

4.3 Hockey Manawatu has negotiated the detail of the Agreement for Shared Use and is satisfied with, and has signed, the Agreement for Shared Use.

4.4 The User Agreement has been reviewed by Council’s Legal Counsel. It has been confirmed as being in order for signing by Council.

4.5 The points of note are:

- Hockey Manawatu will operate the booking system and collect fees for the turf and pay those fees to Massey University.

- Hockey Manawatu will schedule games equitably between the three turfs.

- A Steering Group will be established with one Council officer and one Councillor (if Council chooses to appoint a representative), two Hockey Manawatu Representatives and two Massey University representatives. Schedule B of the Agreement sets out the Terms of Reference for the Steering Group.

- The Steering Group will seek external funding for 10% of the renewal costs.

- Hockey Manawatu will meet 10% of the turf renewal costs (after grant funding).

- Massey University will own, maintain the facility, take out and cover insurance costs, and meet 100% of any toilet, fencing and carparking costs and 30% of the turf renewal costs.

- Council will contribute $3,000 per year, adjusted by 5% per year, towards maintenance and 70% of the turf renewal costs.

- Dispute resolution is included and initially elevates issues to the Chief Executive of Council, Hockey Manawatu Chair and University Vice-Chancellor.

- Schedule A sets out details of operations including the turf fees.

4.6 Option Two: Request Changes to the Agreement for Shared Use for the Massey University Hockey Turf

4.7 Council officers have reviewed the agreement and believe it fairly represents the intentions of the 2017 MOU.

4.8 Regardless, Councillors may have identified amendments they wish to request be made to the Agreement for Shared Use.

5. CounCIllor RepresEntation on Steering Group

5.1 Under clause 4.2.2 of the User Agreement Council has the option of appointing a Councillor to the Steering Committee.

5.2 Council may wish to initiate a process to appoint a Councillor.

6. Financial

6.1 Council’s $3,000 per year contribution to maintenance is consistent with its contribution made to the maintenance at the twin turfs at Fitzherbert Park, eg. for condition and maintenance reports, reactive maintenance and vandalism. An allowance of $3,000 per annum has been made within the draft Ten Year Plan to maintain service level budgets.

6.2 The 5% annual adjustment was not contemplated in the 2017 MOU. Council officers consider it is reasonable considering experiences with maintenance costs at other facilities and the scale of costs. Compounding 5% per year will see the annual contribution rise to $4,887 per year in 10 years’ time.

6.3 Council’s renewals commitment is provided for in Programme 1356. The allowance is currently estimated at $260,000 in 2029.

6.4 The twin turfs at Fitzherbert Park are forecast for renewal in 2028 and 2030 under Programme 1829.

7. Conclusion

7.1 The Agreement for Shared Use has been thoroughly considered by Hockey Manawatu.

7.2 The Agreement is consistent with the expectations Council set when it allocated its contribution of $500,000 towards construction of a new artificial hockey turf.

7.3 The Agreement for Shared Use has been reviewed and confirmed as in order for signing by Council.

7.4 It is recommended that Council approves signing of the Agreement for Shared Use and determines whether it wishes to appoint a Councillor to the Steering Group.

8. Next actions

8.1 Complete signing of the Agreement for Shared Use.

8.2 Contribute to the facility governance through the Steering Group.

9. Outline of community engagement process

9.1 Community engagement on the hockey turf establishment occurred through the 2015/25 and 2018/28 Ten Year Plan processes.

9.2 Hockey Manawatu has assisted with and signed off the Agreement for Shared Use.

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? Funding is also in the in the 2018 Ten Year Plan for the renewals contribution under Programme 1356.		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: Facilitate sports code-led developments where there is a demonstrated community benefit.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The hockey turf provides opportunities for active recreation and provides the opportunity for significant tournaments, having three water based turfs within a few minutes’ drive of each other.

Attachments

1.	Appendix One: Artifical Hockey Turf Memorandum of Understanding 2017 ⇩
2.	Appendix Two: Hockey Turf at Massey Unversity - Shared Use Agreement 2020 ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 21 October 2020

TITLE: Audit arrangements for small Council Controlled Organisations

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATIONS TO Council

1. That the memorandum entitled ‘Audit arrangements for small Council Controlled Organisations’ presented to the Finance & Audit Committee on 21 October 2020, be received.

2. That the Council liaise with the Boards of the Caccia Birch Trust and Palmerston North Performing Arts Trust to amend the respective trust deeds to modify the requirements for audited financial statements.

3. That with respect to the Caccia Birch Trust the change be either:

a. Option one – require a review rather than an audit; or

b. Option two – remove the requirement for an audit or a review

4. That with respect to the Palmerston North Performing Arts Trust the requirement for an audit of the annual financial statements be removed as outlined in Option two.

1. ISSUE

In September 2018 following consideration of the 2018-28 Statements of Intent for Council Controlled Organisations (CCOs) the Council resolved “The Chief Executive be instructed to provide an issues and options report on the audit issues facing Palmerston North City Council Controlled Organisations.”

2. BACKGROUND

2.1 Overview

Council controlled organisations include the following:

· Palmerston North Airport Ltd

· Te Manawa Museums Trust

· Central Economic Development Agency Ltd (CEDA)

· Regent Theatre Trust

· Globe Theatre Trust

· Caccia Birch Trust

· Palmerston North Performing Arts Trust

· Manawatu-Wanganui Regional Disaster Relief Fund Trust

Council can exempt small CCOs from the planning and reporting requirements of the Local Government Act (LGA) and has currently exempted the Palmerston North Performing Arts Trust and Manawatu-Wanganui Regional Disaster Relief Fund Trust.

As public entities performing functions on behalf of the Council it is important that these entities have appropriate checks and balances in place. Usually this would involve some form of independent audit or review. Such audits or reviews are part of the way directors, trustees, the Council, and sometimes external funders gain an assurance that what they have in place is appropriate and that the financial statements fairly reflect their financial operations and position. This is important in larger entities but also in smaller ones when adequate separation of duties is difficult.

2.2 Council considerations so far

In August 2017 the Council was presented with a report that addressed the possibility of both the Caccia Birch Trust and the Globe Theatre Trust being exempted as CCOs pursuant to section 7(3) of the LGA. Council resolved to do this and in the case of the Globe Theatre Trust this was subject to receipt of a formal request to do so from the Trust Board. The Trust Board subsequently advised it did not wish to be exempted.

Although it was resolved to exempt the Caccia Birch Trust the intention was always that the Trust Board would continue to be required, as a condition of receiving Council funding, to prepare a Statement of Intent and an Annual Report. It was thought it would be possible to reduce audit costs by changing from an annual audit to what is termed an annual review – a review is a lower level of assurance engagement and is now a common approach for smaller organisations. A review is a less intensive process involving a lower level of testing which results in the reviewer being able to declare that nothing has come to their attention that would indicate the accounts are not true and fair.

Although the Charities Act provides that charities with operating expenditure less than $500,000 pa are not required to have an audit or a review, previous Council discussions have indicated it is appropriate for organisations associated with the Council to be subject to some form of independent review of the financial statements each year.

In December 2017 a further report was provided to the Council addressing the issue and recommending that the trust deeds for both the Caccia Birch Trust and the Palmerston North Performing Arts Trust be amended to replace the requirement for an audit of the financial statements to a requirement they be subject to a review. The Boards of both trusts had resolved they wished these changes to be made in the hope the review process would be less costly.

The changes to the deeds approved by the Council in December 2017 are shown as follows (deletions by strikethrough, additions marked in yellow):

Caccia Birch Trust

“Rule 7.3 Annual General Meeting

(a) The ~~audited~~ reviewed accounts of the Trust.

Rule 13.2 ~~Audit~~ Review

The Board shall, as soon as practicable after the end of every financial year of the ~~Board~~ Trust, cause the accounts of the ~~Board~~ Trust for that financial year to be ~~audited~~ reviewed by the auditor for the time being who audits the accounts of the Council, unless the Council shall approve of some other ~~auditor~~ reviewer. The ~~audited~~ reviewed accounts shall be available for the Annual General Meeting and shall be presented to Council by 30^th September each year.

Rule 18 Trust to be a Council-controlled organisation

Unless exempted by the Council pursuant to the Local Government Act 2002 the Trust shall be a Council-controlled organisation for the purposes of the Local Government Act 2002 and the Board shall ensure that the Trust carries out all obligations imposed on the Trust by the Local Government Act 2002.”

Palmerston North Performing Arts Trust

“Clause 8.2 ~~Audit~~ Review

The Board shall as soon as practicable after the end of every financial year of the Trust, cause the accounts of the Trust for that financial year to be ~~audited~~ reviewed by the auditor for the time being of the accounts of the Palmerston North City Council, unless the Council shall approve some other reviewer. ~~and the audited~~ The reviewed accounts shall be made available to the Palmerston North City Council and then, by extension, to the public.”

The changes to the trust deeds have not been formally actioned as subsequent discussions with representatives from Audit NZ and Office of the Auditor General have made it unclear as to whether the proposed changes would actually result in the reductions in costs that had been assumed.

This report now focuses on the position for the Caccia Birch Trust and the Palmerston North Performing Arts Trust.

2.3 Options for Caccia Birch Trust

In late 2018 Council’s then audit director from Audit NZ advised that the Auditor-General is required to be the auditor of the Trust if the trust deed requires either an audit or a review. They also advised that as Caccia Birch is a subsidiary of the Council if Audit NZ is not the Trust’s auditor they still have obligations in relation to the Trust as the Council group auditor. This would be achieved either through the audit team servicing the Council doing the work or requesting it be done by the Trust’s auditor.

The two options therefore now seem to be:

2.3.1 Option One

Continue to revise the trust deed as agreed in 2017 to require a review and recognise the Auditor-General will continue to appoint the trust’s reviewer – although this could be Audit NZ, it could be someone else. The consequential reduction in audit fees may be minimal. In addition to the changes highlighted above it would be necessary to revise Rule 7.3 (f) of the deed as follows:

“(f) the appointment of ~~auditors~~ reviewers in accordance with Rule 13.2”; or

2.3.2 Option Two

Revise the trust deed to remove the need to appoint an auditor and to present audited accounts to the annual general meeting. This would involve making the following changes to the deed:

“Rule 7.3 Annual General Meeting

(a) the ~~audited~~ annual accounts of the Trust

(f) ~~the appointment of auditors in accordance with Rule 13.2~~”

Rule 13.1 True and fair accounts

The Board shall keep true and fair accounts of all monies received and expended for each financial year and prepare a set of financial accounts as at ~~with~~ the balance date of 30^th June in each year. They shall be available for the Annual General Meeting and be presented to the Council by 30^th September each year.

~~Rule 13.2 Audit~~

The Board shall, as soon as practicable after the end of every financial year of the Board, cause the accounts of the Board for that financial year to be audited by the auditor for the time being who audits the accounts of the Council, unless the Council shall approve of some other auditor. The audited accounts shall be available for the Annual General Meeting and shall be presented to Council by 30^th September each year.

Rule 18 Trust to be a Council-controlled organisation

Under this option it would still be possible for the Board to appoint a reviewer should they desire to do so. As mentioned earlier, because Caccia Birch is part of the Council group, the Council’s auditor will still have obligations in relation to the Trust and would be looking to gain assurances that will involve them in some additional work.

2.4 Options for Palmerston North Performing Arts Trust

At the present time the Trust is administered by Council staff and these staff keep the financial records and prepare annual financial statements. The Trust has no staff and its financial activities are relatively simple.

In this context it does seem unnecessary to engage any external audit or review capability.

The two options therefore now seem to be:

2.4.1 Option One

2.4.2 Option Two

Revise the trust deed to remove the need to appoint an auditor. This would involve making the following changes to the deed:

“Clause 8.1 True and fair accounts

The Board shall keep true and fair accounts of all money received and expended and of the funds of the Trust, and will prepare a set of financial accounts as at the balance date that shall be made available to the Palmerston North City Council and then, by extension, to the public.”

~~Clause 8.2 Audit~~

The Board shall as soon as practicable after the end of every financial year of the Trust, cause the accounts of the Trust for that financial year to be audited by the auditor for the time being of the accounts of the Palmerston North City Council and the audited accounts shall be made available to the Palmerston North City Council and then, by extension, to the public.”

3. NEXT STEPS

Proposed changes to the Trust Deeds for the Caccia Birch Trust and the Palmerston North Performing Arts Trust will be discussed with the respective Boards and assuming they agree with what is proposed, the changes will be initiated. Otherwise there will be a further report back to the Council. The intention would be that the changes would be effective for the 2020/21 year.

4. Compliance and administration

Does the Committee have delegated authority to decide?		No
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions? But the costs should not be significant		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 Culture and Heritage Plan The action is: Support CCOs to achieve objectives
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Council has strategic partnerships with council-controlled organisations – these recommendations are designed to try to reduce the cost of operations for the two entities.

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 21 October 2020

TITLE: Treasury Report - 3 months ending 30 September 2020

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATIONS TO FINANCE & AUDIT COMMITTEE

1. That the memorandum entitled ‘Treasury Report – 3 months ending 30 September 2020’ presented to the Finance & Audit Committee on 21 October 2020, be received.

2. That the performance of Council’s treasury activity for the 3 months ended 30 September 2020 be noted.

1. ISSUE

To provide an update on the Council’s treasury activity for the 3 months ending 30 September 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. There was no change to the additional debt that was authorised. 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 30 September 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

Debt Balance at 1 July 2020

New Debt #

Debt repayments #

142,597

35,643

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 30 September 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 3 months (including interest, line fees & the effects of payments relating to swaps) amounted to $1.253m compared with the budget for the year of $5.557m. The effective average interest rate for the quarter was 3.13% compared with the budgetary assumption of 3.4% and this translated to a saving of approximately $50k.

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 September 2020 and show a decrease in book value of $264k for the quarter.

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 30 September.

As at 30 September 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 $1.253m 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 December 2020 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

Memorandum

TO: Finance & Audit Committee

MEETING DATE: 21 October 2020

TITLE: Mayor and Deputy Mayor Expenditure 2019/2020

Presented By: Hannah White, Democracy & Governance Manager

APPROVED BY: Stuart McKinnon, Chief Financial Officer

RECOMMENDATION TO Finance & Audit Committee

1. That the memorandum entitled ‘Mayor and Deputy Mayor Expenditure 2019/2020’, presented to the Finance & Audit Committee on 21 October 2020, be received.

1. ISSUE

This report is a response to the resolution of 13 November 2019 which amended the Elected Member Expenses Policy to require that:

“The expenses of the Mayor and Deputy Mayor be reported annually to the Finance & Audit Committee.”

Further direction was sought from the Finance and Audit Committee in September 2020 to ensure that the level of reporting met the expectations of the resolution.

2. BACKGROUND

Delegation 193A, also introduced on 13 November 2019, gives the Chairperson of the Finance & Audit Committee and the independent non-elected member appointed to that Committee each the power to approve expenses (all invoices and credit card transactions) incurred by the Mayor, retrospectively.

Furthermore, the expenditure reported here is subject to audit undertaken by Audit NZ through the audit of the annual report. Their scope includes reviewing the effectiveness and efficiency, waste, and testing for a lack of probity or financial prudence. Findings are then reported to the Finance & Audit Committee.

This report, therefore, adds a level of good practice by providing a summary of the expenses of the Mayor and Deputy Mayor to the Finance & Audit Committee in a regular and timely manner.

3. Sensitive expenditure

Below is a summary of sensitive expenditure across the Mayoral Office, Mayor’s Discretionary and Mayor’s Relief Fund. The summary presents only a part of these budget lines. Total expenditure for the 2019/20 Financial Year was $133,902.10, from a budget of $209,780.

Type	19/20 Actual	19/20 Budget	18/19 Actual
Hospitality	$28,821	$31,872	$36,727
Training	$2,554	$8,076	$9,752
Travel/ Accommodation	$26,966	$21,852	$32,545
Other grants/Donations	$12,548	$10,632	$25,757
Relief Fund	$2,988	$1,092	$5,010
Donations to Relief Fund			($7,000)
Miscellaneous:
Gifts	$5,015	**	**
Hospitality	$6,274	**	**
Travel/ Accommodation	$1,380	**	**

** Note that 1) 2019/20 miscellaneous spending was also reviewed for sensitive expenditure. A limited number of transactions were identified and are recorded here. A similar review has not been completed for the prior year; 2) the reported expenses are only a portion of the miscellaneous budget.

4. Credit card use

Below is a summary of all credit card transactions by the Mayor and Deputy Mayor for the 2019/20 financial year. There is overlap with the expenses above.

Credit Card
Mayor	$4,180.36
Advertising	$212.82
Hospitality	$2,203.62
Gifts/Donations	$652.00
Miscellaneous (other)	$263.66
Travel/ Accommodation	$848.26
Deputy Mayor	$638.89
Hospitality	$72.96
Training	$91.30
Travel/ Accommodation	$474.63

5. REIMBURSEMENTS

The Mayor received a total of $117.66 for reimbursements in the 2019/20 financial year.

6. NEXT STEPS

Coding work will be undertaken to ensure clarity of reporting, including setting up new codes where appropriate for regular expenses.

7. Compliance and administration

Does the Committee have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual 193A		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
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Open and transparent governance contributes to trust and reputation of the Council.

Attachments

NIL

PALMERSTON NORTH CITY COUNCIL

Report

TO: Finance & Audit Committee

MEETING DATE: 21 October 2020

TITLE: Otira Park - Proposal to grant a lease on reserve land to Palmerston North Pony Club Branch

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

APPROVED BY: Sheryl Bryant, Acting Chief Infrastructure Officer

RECOMMENDATIONS TO Council

1. That the report entitled ‘Otira Park - Proposal to grant a lease on reserve land to Palmerston North Pony Club Branch’ presented to the Finance & Audit Committee on 21 October 2020, be received.

2. That the Council approves notifying the public of the proposal to grant a lease at Otira Park, 22 Totara Road to Palmerston North Pony Club Branch Incorporated, in accordance with Section 54 of the Reserves Act 1977.

3. That the Council notes the land area affected by the lease for Palmerston North Pony Club Branch Incorporated is described as part of Section 1732 TN of Palmerston North, part of Section 1737 TN of Palmerston North, part of Section 1 SO 27741 and Part Lot 1 DP 3063. The lease area is shown in the draft proposal lease contained in Attachment 1 of the report titled ‘Otira Park – Proposal to grant a lease on reserve land to Palmerston North Pony Club Branch’ presented to the Finance & Audit Committee on 21 October 2020.

Summary of options analysis

Problem or Opportunity	Palmerston North Pony Club Branch has been operating their club activities at Otira Park, 22 Totara Road, on a month to month tenancy since 1990. Palmerston North Pony Club Branch approached Council and requested a lease for the current occupied land as existing use. This report requests approval to notify the public of Council’s intention to grant a new lease in accordance with Section 54 of the Reserves Act 1977.
OPTION 1:	Notify the public of Council’s intention to approve the proposal to grant a lease to the existing tenant at Otira Park, 22 Totara Road, in accordance with Section 54 of the Reserves Act 1977.
Community Views	Community views will be sought during the public notification period.
Benefits	The community views will be understood to inform the decision, and any objections considered as required under the Reserves Act 1977.
Risks	No risks are identified.
Financial	Cost of public notification will be minor.
OPTION 2:	Decline the proposal to grant a lease to the existing tenant at Otira Park, 22 Totara Road.
Community Views	Community views will not be sought.
Benefits	Not applicable.
Risks	Not applicable.
Financial	No further costs would be incurred.

Rationale for the recommendations

1. Overview of the problem or opportunity

1.1 The Palmerston North Branch of the New Zealand Pony Club (“the Pony Club”) has been operating on the land at 22 Totara Road, Palmerston North since the 1970s.

1.2 The last tenancy agreement with the Palmerston North Branch of the New Zealand Pony Club was signed in 1990 on a month-by-month basis.

1.3 Council Officers had been communicating with the Pony Club to enter a lease based on Council’s Recreation and Community Asset Rental Policy. However, the lease was never executed.

1.4 The Pony Club has recently obtained their legal status and requested a lease for the land at 22 Totara Road, Palmerston North.

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

2. Background and previous council decisions

2.1 The Pony Club submitted a 3-year term lease proposal to Council in 1997. However, the proposal was rejected due to a possible wetland project on the land occupied by the Pony Club. The wetland project did not proceed.

2.2 In 2006, Council officers prepared a draft lease; however, it was never executed as the Pony Club was not a legal entity at that time.

2.3 In 2009, the Pony Club was notified that Council would continue with the month-by-month tenancy following consultation with Iwi.

2.4 In 2013 and 2017, Council Officers communicated with the Pony Club to set up the new lease; however, the Pony Club had not become an incorporated society.

2.5 The Pony Club recently obtained its Certificate of Incorporation, and as such, has again requested a lease for the land at 22 Totara Road, Palmerston North.

3. Strategic fit

3.1 Policy for the Use of Public Space:

3.1.1 The Policy for the Use of Public Space (page 6) contains several criteria for assessment of applications to use public space:

“In considering an application to use public space, and particularly where there are competing applications for the use of public space or high demand for a public space, the Council will consider whether the event or activity”:

Criteria	Assessment
Supports the achievement of the Council’s goals	The Pony Club activities are consistent with council’s active community plan under the Creative and Exciting City goal. The Pony Club provides community recreation and community development opportunities.
Is accessible to the wider community	The Pony Club seeks and supports community membership, with the membership age range between ages 5 to 25.
Adds to the variety of events or activities available in Palmerston North	The Pony Club provides activities for rallies based around games, jumping, dressage and theory.
Enhances any precinct identities (eg. Broadway as a hospitality precinct)	The Pony Club provides recreation activities on the site, which being horse-related, compliments the nearby activities within the Awapuni Racing Centre.
Provides an experience (rather than a simple commercial exchange)	The community has the opportunity to observe the horse-riding activities being undertaken on the site both from the roadside and from the walkway path at Otira Park.
Does not significantly limit the availability of space for general community use	The pony club has been operating on the proposed location since 1970s. There are no serious objections or complaints received from the public.

Table One: Assessment against Policy for the Use of Public Space

4. Land Status

4.1 The land that would be subject to the proposed lease is contained in Section 1732 TN of Palmerston North, Section 1737 TN of Palmerston North, Section 1 SO 27741 and Part Lot 1 DP 3063.

Title	Reserve Status	Comment
WN10B/1328 – Section 1732 Town of Palmerston North	Recreation Reserve	Held by Council in trust for the Crown, as a reserve for recreation purpose, subject to Reserves and Domains Act 1953. Land vested in Council by this Act is, by virtue of section 16 Reserves Act 1977, deemed to be held as reserve for the purpose for which it was originally held, pending classification. No evidence that Section 1732 Town of Palmerston North has been classified under the Reserve Act 1977.
WN9B/931 (part) – Section 1737 Town of Palmerston North	Held for Public Work (Drainage)	Not a reserve – Held by Council for a Public Work (Drainage)
No title – Section 1 SO 27741	Closed Street	This land was previously legal road. Proclamation 894500, registered in 1971, proclaimed this parcel of street to be closed. Title has not been issued for this parcel. The gazette notice does not state who the closed street is vested in, however, as the street would not have been part of the State Highway network, and lies within the Palmerston North City boundaries, it is assumed ownership sits with the Palmerston North City Council.

5. The proposal

5.1 The proposed lease area is about 43,951 square metres situated at Otira Park, 22 Totara Road, as shown in Figure One.

5.2 The annual rent is $1,000 plus GST and outgoings, in line with Council’s Recreation and Community Asset Rental Policy.

5.3 Council typically leases its land/building for periods of 5 years, and in some cases 10 years, where there is sufficient reason to do so. Prior to this report being written, Council Officers consulted with Iwi on the request from the Pony Club and it was confirmed that a 3-year lease with a termination clause would be acceptable.

5.4 If a new lease were entered into, the use of the site will remain the same as the existing use of the site.

Figure One: Proposed lease area

6. Leasing powers under Reserves Act

6.1 Section 54 (1) (b) of the Reserves Act 1977 allows for an administering body to:

“lease to any voluntary organisation part of the reserve for the erection of stands, pavilions, gymnasiums, and, subject to sections 44 and 45, other buildings and structures associated with and necessary for the use of the reserve for outdoor sports, games, or other recreational activities, … which lease shall be subject to the further provisions set out in Schedule 1 relating to leases of recreation reserves issued pursuant to this paragraph:

provided that a lease granted by the administering body may, with the prior consent of the Minister given on the ground that he or she considers it to be in the public interest, permit the erection of buildings and structures for sports, games, or public recreation not directly associated with outdoor recreation.”

6.2 “Necessary” has not been interpreted as requiring that all or even most visitors or users of the reserve need/want to use the service or activity provided under the lease. Reserves often have activities on them that only some of the visitors to the reserve use.

6.3 The proposal would see the continued use of the reserve by the Pony Club. The location does not reduce the current user’s experience or impact the capacity for other future activities currently foreseen.

7. IMpact on the LOCality and Park operations

Aesthetics

7.1 The primary use of the lease area is as a rally ground for the Pony Club, and the encouragement of riding and horse care in the city area. Grazing of the lease area is carried out to keep the grounds in good condition for running the event.

Security

7.2 The Pony Club is responsible for their building security.

Cleaning and offensive litter

7.3 The Pony Club is responsible for managing litter within their leased area.

Vegetation

7.4 No trees or shrubs would be required to be removed.

Car parking

7.5 There are no sealed car parks nearby the lease area to the Pony Club.

7.6 However, grass off-street carpark is available along Totara Roadside of the lease area.

Affected parties

7.7 Parties identified include:

· Neighbouring residents;

· Awapuni community;

· Park users; and

· Rangitāne o Manawatū – have indicated comfort with the proposal.

8. Reserve Act 1977 considerations

8.1 Section 17(1) of the Reserves Act 1977 defines the purpose of recreation reserves as:

“recreation reserves, for the purpose of providing areas for the recreation and sporting activities and the physical welfare and enjoyment of the public, and for the protection of the natural environment and beauty of the countryside, with emphasis on the retention of open spaces and on outdoor recreational activities, including recreational tracks in the countryside.”

8.1.1 Officer comment: The Pony Club provides a variety of rallies based around games, jumping, dressage and theory for members from age 5 to 25 and welcomes all new members with the opportunity to come to test rallies before joining.

8.2 Section 17(2) requires:

(a) The public shall have freedom of entry and access to the reserve, with the exception of the ability to lease areas under Section 54 which covers the leasing powers.

8.2.1 Officer comment: The lease area is approximately 43,951 square metres. There is a walkway path neighbouring the lease area for public access to and through Otira Park.

(b) Where scenic, historic, archaeological, biological, geological, or other scientific features or indigenous flora or fauna or wildlife are present on the reserve, those features or that flora or fauna or wildlife shall be managed and protected to the extent compatible with the principal or primary purpose of the reserve.

8.2.2 Officer comment: No trees or vegetation are required to be removed by the proposal.

(c) Those qualities of the reserve which contribute to the pleasantness, harmony, and cohesion of the natural environment and to the better use and enjoyment of the reserve shall be conserved.

8.2.3 Officer comment: Part of the lease land consists of road stopping land and public drainage. During the wintertime, the lease land floods. The Pony Club has minimal impact on the pleasantness of the reserve considering the above facts.

(d) to the extent compatible with the principal or primary purpose of the reserve, its value as a soil, water, and forest conservation area shall be maintained.

8.2.4 Officer comment: The Biodiversity Plan 2018/21 includes an aspiration that the Mauri at urban streams is enhanced, and native aquatic life is thriving.

Otira Reserve includes a stormwater channel that acts as a minor tributary to the Mangaone Stream. In the longer-term, consideration may be given to the appropriateness of grazing animals in this area. Rangitāne have also expressed a desire to see other uses in the future.

9. Giving effect to the Principles of the treaty of Waitangi

9.1 The Reserves Act 1977 is subject to Section 4 of the Conservation Act and requires that administering bodies under the Reserves Act 1977 give effect to the principles of the Treaty of Waitangi.

9.2 Rangitāne o Manawatū representatives have considered the proposal. Rangitāne are comfortable with the proposal on the provision that a relatively short lease is granted to allow for the possible future use.

10. Description of options

Option One: Notify the public of Council’s intention to approve the proposal to grant a lease to the existing tenant at Otira Park, 22 Totara Road, in accordance with Section 54 of the Reserves Act 1977.

10.1 Under Option One Council would publicly notify the community on the proposed lease area and seek views and objections to the proposal. The draft lease is contained in attachment Appendix One.

Option Two: Decline the proposal to grant a lease to the existing tenant at Otira Park, 22 Totara Road.

10.2 Council could choose to decline the proposal, and not proceed with consultation.

11. Analysis of options

Option One: Notify the public of Council’s intention to approve the proposal of a lease to the existing tenant at Otira Park, 22 Totara Road, in accordance with Section 54 of the Reserves Act 1977.

11.1 Council must give people the opportunity to object and be heard before deciding to grant a lease as per Sections 119 & 120 of the Reserves Act 1977.

Option Two: Decline the proposal of a lease to the existing tenant at Otira Park, 22 Totara Road.

11.2 Council may decide the proposal is not to its satisfaction and decline the proposal. This option does not enable the community to express their views on the proposed lease.

12. Conclusion

12.1 The proposal is consistent with the purposes of recreation reserves as the Pony Club is a recreation group and would host and support recreation activities.

12.2 Public notification on the proposal will provide the opportunities for submissions and objections to be made before a decision is made, fulfilling the requirements of the Reserves Act.

12.3 It is recommended Council proceed to public notification.

13. Next actions

13.1 Public notification of the proposal to grant the lease, seeking submissions and objections.

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

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

14. Outline of community engagement process

14.1 The proposal is relatively modest and unlikely to engender strong public interest. As such the proposed consultation is:

· Meet the public notification requirements on the Reserves Act – minimum of one-month period advertised in the Manawatu Standard.

Compliance and administration

Does the Committee have delegated authority to decide?		No
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 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: To carry out recreation and reserves planning functions under the Reserves Act 1977 and Local Government Act 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

Attachments

Draft Lease ⇩

PALMERSTON NORTH CITY COUNCIL

Report

TO: Finance & Audit Committee

MEETING DATE: 21 October 2020

TITLE: Ashhurst Domain - Proposal to lease area for Scout hall

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

APPROVED BY: Sheryl Bryant, Acting Chief Infrastructure Officer

RECOMMENDATIONS TO Council

1. That the report entitled ‘Ashhurst Domain – Proposal to lease area for Scout hall’ presented to the Finance & Audit Committee on 21 October 2020, be received.

2. That Council approves Option One in the report titled ‘Ashhurst Domain - Proposal to lease area for Scout hall’ presented to the Finance & Audit Committee on 21 October 2020 and proceeds to public notification on the proposal to grant a lease for a Scout hall at the Ashhurst Domain, meeting the requirements of Section 54 of the Reserves Act 1977.

3. That Council notes the recreation reserve on which the lease is proposed is part of Lot 1 DP 52268; the lease area and the draft lease are contained in Attachment One of the report titled ‘Ashhurst Domain – Proposal to lease area for a Scout hall’ presented to the Finance & Audit Committee on 21 October 2020.

Summary of options analysis for

Problem or Opportunity	Council has received a proposal to lease a portion of the Ashhurst Domain to enable the construction and operation of a Scout hall to serve the Ashhurst Scouts. Policy 9.15.3 of the Ashhurst Domain Development and Management Plan 1997 requires Council to “Ensure that all the present and future leases and commercial activities are managed in terms of the provisions of the Reserves Act 1977, and current Council leasing and licencing regulations, and in conjunction with other polices contained in this Management Plan.” A decision is required from Council to either consult with the community on the proposal, before making a final decision, or decline the proposal. This report requests approval to consult the community to obtain their views in accordance with Section 54 of the Reserves Act 1977.
OPTION 1:	Option One: Publicly notify the proposal to grant a lease for a Scout hall at the Ashhurst Domain, meeting the requirements of Section 54 of the Reserves Act 1977.
Community Views	Community views will be sought during the consultation period.
Benefits	The community views will be understood, and any objections considered as required by the Reserves Act 1977.
Risks	No risks are identified.
Financial	Cost of public notification will be modest. There will be some advertising costs, some signage costs and there may the need for a hearing, which would require Councillor and staff time.
OPTION 2:	Option Two: Decline the proposal for the land lease for a Scout hall at the Ashhurst Domain
Community Views	Community views would not be sought.
Benefits	No further work required.
Risks	The community may have some expectation that their views will be sought, so declining the proposal presents the risk of community dissatisfaction from those that support the proposal.
Financial	No further costs would be incurred.

Rationale for the recommendations

1. Overview of the problem or opportunity

1.1 Council has received a proposal to develop a Scout hall on Council land.

1.2 Officers reviewed possible locations for the Scout hall with Scout officials.

1.3 The Scouts would like to lease the portion of the Ashhurst Domain currently used as a grass overflow car park for the sports fields.

1.4 Recreational leases are contemplated in the Ashhurst Domain Development and Management Plan 1997 (the Management Plan). Section 9.14 and 9.15 of the Management Plan cover Buildings and Facilities, and Leases generally.

1.5 This report assesses the proposal against the objectives and policies of Council’s Policy on the Use of Public Space and Management Plan and seeks a Council resolution on whether to proceed to consultation on the proposed lease or decline the request.

2. Background and previous council decisions

2.1 Council received a deputation from the Ashhurst Scouts, outlining their desire for a new hall on parks and reserve land in Ashhurst, at the Sport and Recreation Committee meeting on 16 September 2019. The Committee resolved to receive the deputation for information.

2.2 Officers met with the Ashhurst Scouts, initially considering the possibility of the Works Pit, then expanded to look at other possible locations.

3. Strategic Fit

3.1 Policy for the Use of Public Space:

3.1.1 The Policy for the Use of Public Space (page 6) contains several criteria for assessment of applications to use public space.

Criteria	Assessment
Supports the achievement of the Council’s goals	Scout activities are consistent with Council’s Creative and Active Community goal. Scouts provide community recreation and community development opportunities.
Is accessible to the wider community	Scouts groups activity seek and support community membership and are active in the Ashhurst area.
Adds to the variety of events or activities available in Palmerston North	Scouting provides activities for youth. They take part in wider community events as well as running and supporting events and activities of their own.
Enhances any precinct identities (eg. Broadway as a hospitality precinct)	A Scout hall supports and enhances the range of recreation activities at the Ashhurst Domain.
Provides an experience (rather than a simple commercial exchange)	Scouts is an ongoing programme of recreation and community development related activities. They are not a commercial activity.
Does not significantly limit the availability of space for general community use	The Ashhurst Domain is a large reserve, totalling 54.6 hectares. The Scout hall proposal would take up 300 to 500 square metres in building area, with up to another 500 square metres in gravel car park. This represents less than 0.25% of the total reserve area. 5.7 hectares of land currently grazed is also available for other play, recreation and sport facilities should the need arise.

Table One: Assessment against Policy for the Use of Public Space

4. Land Status

4.1 The land that would be subject to the proposed new lease is contained in Lot 1 DP 55676.

Title

Reserve Status

Comment

WN14A/25 – Lot 1 DP 52268

Recreation Reserve

Transferred from the Ashhurst Pohangina Racing Club to the Oroua County Council in 1979 and declared to be a recreation reserve in 1985 (Gazette 792817.1).

Application 9431700.1 vested the land in the Palmerston North City Council.

5. The proposal

5.1 The proposal is for a land lease. The Ashhurst Scouts would fundraise for, construct and own a new Scout hall on the land lease.

5.2 The proposal is described by the Ashhurst Scouts (the Scouts) as “… a purpose built facility that meets the needs of the Ashhurst Scouting Group to educate, develop, and inspire our youth in the scouting way.”

5.3 The building footprint proposed is in the order of 300 square metres, roughly described as being 15 x 20 metres. An associated service access and minor car parking next to the building would be required. A total lease area of up to 1,000 square metres is proposed.

5.4 The building would contain a combination of open plan activity space, meeting rooms, storage and a kitchen.

5.5 The proposal includes consideration of sustainable practices in the building design such as renewable energy and rainwater collection.

5.6 The Scouts support designing the building to fit the character of the reserve but need the lease in place in order to initiate fundraising that would allow design work to be undertaken.

5.7 The lease area of up to 1,000 square metres is situated in the grass overflow car park for the sports fields in the north-western corner of the Domain as shown in Figure One.

Figure One: Scout lease proposal location and extent

6. Ashhurst domain Development and Management plan

6.1 Section 54 of the Reserves Act requires that Council assesses any proposal for conformity with the Management Plan.

6.2 The proposal must be assessed against the objectives and policies of the Management Plan 1997.

6.3 The Management Plan is being reviewed in 2020/21. The timing for this review complements the review of the Te Apiti (Manawatu Gorge) Masterplan and Te Ahu a Turanga: Manawatū Gorge Replacement Route Project.

6.4 Table Two assesses the proposal against the relevant objectives and policies of the existing Management Plan.

relevant policies

oFFICER aSSESSMENT

9.2 ADMINSTRATION AND MANAGEMENT

Policy 9.1.1

To manage the Domain under the Reserves Act 1977 while recognising and giving effect to the status and the position of tangata whenua

This report and the associated processes are giving effect to the policy.

Rangitāne o Manawatū have advised they are comfortable with the proposal.

9.2 LANDSCAPE

Policy 9.2.2

To manage the landscape of the Domain in accordance with the policies shown on … - Landscape Identity Areas.

Modification Policy:

Management and public use activities may dominate the original landscape character.

The proposed site is on the Upper River Terrace which falls under the “Modification Policy” area of the Domain. Management and use can modify the original landscape character in this area.

The existing site is an overflow grass car park. Council’s Urban Designer reviewed the general proposal and was satisfied that a Scout hall fits within the landscape identity area.

9.3 VEGETATION

Policy 9.3.1

To manage and maintain the vegetation within the Domain to enhance the natural character of the environment, facilitate opportunities for ecological habitats and wildlife, and for visual amenity.

The proposal would benefit from selective pruning and shrub removal in order to provide some visibility of the building from Cambridge Avenue and the sports field car park.

The extent of this vegetation management would be assessed at the time the design for the building and its orientation on the site is finalised. Any vegetation removal would require Manager, Parks and Reserves approval as a condition of the lease.

9.6 RECREATION

Policy 9.6.1

To maintain and encourage informal and casual unstructured recreational use of Ashhurst Domain compatible with its cultural heritage and landscape values.

Additional recreational use of the Domain will occur.

Rangitāne have indicated their comfort with the proposal. The Council’s Urban Designer and Policy Planner who are leading the Reserve Development and Management Plan are satisfied that the proposed location can be managed to fit the landscape values.

Policy 9.6.3

To ensure that recreational activities do not adversely impact on the experience of the casual user and that they are compatible with the natural rural landscape of the Domain.

The space proposed for lease for the Scout hall is currently used for grazing and occasional overflow car parking for large events on the sports fields. The existing overflow car park capacity could be retained by shifting a fence. This would require approximately 80m of new fencing, removal of 40m of fencing, and a new gate.

9.13 INTERPRETATION AND EDUCATION

Policy 9.13.1

To promote the Domain as a valuable cultural and natural resource.

Nothing in the proposal adds value to the promotion of the cultural and natural resources of the Domain.

Rangitāne o Manawatū advise they are comfortable with the proposal.

9.14 BUILDINGS AND FACILITIES

Policy 9.14.1

To ensure that only those buildings and facilities essential for the convenience, comfort and safety of the users are sited within the Domain.

Implementation:

Assess all future proposals … against the following criteria:

-the need for the structure to be within the Domain;

-the need for the structure to be sited in the location identified;

-the maintenance of the park’s character;

-the particular design and its relationship to the park character;

-the contribution of the structure to the quality and experience of the park;

-the public benefit to be obtained from the structure;

-the impact on the immediate locality;

-the ability to meet the objectives and policies of this Management Plan:

8.1.1 To maintain, facilitate and further promote the informal and organised outdoor recreational use of the Domain by the general public.

8.1.2 To balance the interest of present and future recreational users with that of local residents, lessees and others with vested or sectional interests in the Domain.

8.1.3 To encourage use of the Domain as an educational resource.

8.1.4 To ensure that the use of the Domain is consistent with the variety of relevant regulations to enable safe and appropriate recreational opportunities.

8.1.5 To protect and enhance the natural environment and character of the Domain.

8.1.6 To encourage the integrated management and development of the Domain.

5. Ensure that the following is achieved in relation to all future buildings and/or structures:

-a design which is appropriate to the site and consistent with both the character of the Domain and all other existing structures and buildings;

-locations appropriate to the function of the structure.

The Scouts are users of the Domain.

The proposal will make the Domain the core venue for their activities.

Council Senior Parks Planner, in conjunction with Ashhurst Scout’s representatives, considered 17 possible locations throughout Ashhurst.

The strengths, weaknesses, threats and opportunities of 10 sites were considered in a desktop exercise.

Ashhurst Scouts shortlisted the Ashhurst Domain with 4 possible locations:

- Sportsfields South – adjacent to the Pony Club within the sport field curtilage area

- Sportsfields Central – next to the changing rooms

- Sportsfields – overflow car park

- Terrace – former café site

The Ashhurst Scouts considered the possible locations and identified their preferred location as the sports fields overflow car park.

This preference is because:

- The location allows the Scouts access independent of the opening and closing hours of the Domain.

- The existing sports fields car parking in the road reserve can be used as the Scouts operate largely in weekday evenings, meaning only service access and limited parking is required within the lease area.

- The location is close to the village, enabling easy walking access.

The Scout building is proposed to be designed to fit the character of the park. This would be managed through a condition in the lease requiring the design to be submitted to the Manager, Parks and Reserves and Urban Designer for approval under the Reserve Management Plan prior to application for building consent.

Provision of a Scout hall in the Domain provides recreation opportunities to the Ashhurst community through scouting activities and opportunities.

The Ashhurst Scouts envision using the facility to run small scale provision of food and beverage as fundraisers and business skills development for the Scouts, for example, coffee and food provision for sports tournaments utilising their kitchen. Such provision will add to the recreation benefits of the Domain. Council and community aspirations of a viable café in the Domain have been discussed with the Scouts and they are aware that if a café were developed there may be some restrictions on their food and beverage activities. A condition in the lease is proposed to manage food and beverage sale and activities.

The impact on the immediate locality is minor:

- a minor impact on overflow car park provision. This can be easily offset with some minor farm fencing adjustments.

- Some minor tree pruning and shrub removal.

The Scout hall would provide further recreation activity in the Domain, both directly through the Scouts themselves and indirectly through facility provision, for example other groups using the hall (eg. sports tournaments).

Consultation on this proposal will gather the views of locals and others with interests in the Domain.

The Scout Method – Te Tikanaga Scout includes Adventure -Te Mātātoa and Learning by Doing – Te Ako mā te Mahi.

The Scouts will be required to operate in accordance with relevant regulations as conditions of the lease.

Scouts programme planning encourages support of the UN Sustainable Development Goals.

The revision of the Ashhurst Domain Development and Management Plan 1997 is underway. During scoping of the draft lease document, the Strategy and Planning Staff leading that work have been consulted. They advise nothing in their research to date indicates the proposed lease location would have negative effects on the plan revision underway or the proposals relating to the review of the Te Apiti (Manawatu Gorge) Masterplan and Te Ahu a Turanga: Manawatū Gorge Replacement Route Project.

The proposed Scout building would be designed to fit the character of the park. This can be managed through a condition of the draft lease requiring the design to be submitted to the Manager, Parks and Reserves and Council’s Urban Designer for approval prior to application for building consent.

Table Two: Assessment against Management Plan

7. leasing powers under the Reserves act 1977

7.1 Section 54 (1) (b) of the Reserves Act 1977 allows for an administering body to:

lease to any voluntary organisation part of the reserve for the erection of stands, pavilions, gymnasiums, and, subject to sections 44 and 45, other buildings and structures associated with and necessary for the use of the reserve for outdoor sports, games, or other recreational activities, … which lease shall be subject to the further provisions set out in Schedule 1 relating to leases of recreation reserves issued pursuant to this paragraph:

7.2 “Necessary” has not interpreted as requiring that all or even most visitors or users of the reserve need/want to use the service or activity provided under the lease. Reserves often have activities on them that only some of the visitors to the reserve use.

7.3 The proposal would increase the use of the reserve by the Scouts. The location does not reduce the experience of current users or impact on the capacity of the reserve for other activities.

8. Term of the proposed lease

8.1 Council typically awards leases of a 5 year term with a right of renewal of 5 years. Exceptions have been made where the works proposed by the lessee are substantial and a shorter lease would jeopardise the ability to raise the funds for the activities.

8.2 The proposed lease for the Ashhurst Scouts is 10 years plus a 10 year right of renewal in recognition of the level of investment in a new Scout hall and the need for certainty of tenure to support fundraising.

9. impact on locality and park operations

9.1 Aesthetics:

9.1.1 The proposed Scout hall would have very minor aesthetic impacts on the locality. The building would be situated behind existing shelter belt trees and positioned in an area marginally visible from the sports fields.

Figure Two: Indicative Scout hall scale and size as viewed from Cambridge Avenue

9.1.2 Some selective tree and shrub pruning may be undertaken to improve the visibility of the building from the road and sports fields, supporting security and wayfinding. This is proposed to be managed at the time of construction and requires the approval of the Manager, Parks and Reserves.

9.2 Security:

9.2.1 The Scouts will be responsible for their building security.

9.2.2 Council security contractors lock the Domain and other parks and facilities in Ashhurst. This service could be available to the Scouts if they wanted to procure it.

9.3 Cleaning and offensive litter

9.3.1 The Scouts would be responsible for managing litter within their leased area.

9.4 Vegetation:

9.4.1 The area proposed is a grass overflow car park. No trees or shrubs would be required to be removed. As per section 9.1.2 some vegetation management for security and visibility may be useful.

9.5 Car parking:

9.5.1 As shown in Figure Three, there are 74 sealed car parks, plus bus parking, currently provided and 2000 square metres of grass overflow car park which could cater to 40 – 60 cars depending on the efficiency of parking.

Figure Three: Existing car parking

9.5.2 The Scouts’ activities are typically run on a week night when the demand for sports fields car parking is low.

9.5.3 The Scouts anticipate using the existing sports fields sealed car parks along Cambridge Avenue with service vehicle and staff parking associated with the building.

9.5.4 To retain the existing overflow car park capacity the fence on the eastern end could be shifted in the order of 25 metres to the east with a minor impact on the grazing lease as shown in Figure Four.

Figure Four: Fence relocation to retain overflow car park capacity

9.6 Affected parties:

Affected parties would be interviewed or invited to submit during the consultation period. Parties identified include:

· Sports fields user grounds – Central Football use the fields near the proposed Scout hall year-round. Their Chief Operations Manager suggests it would be a positive addition for football.

· Grazing lease – the leaseholder indicated no particular issue with the proposal. He noted the vandalism in the Domain and that they operate a certified organic operation. He requested no use of sprays by the Scouts anywhere near the grazing lease boundary.

· Ashhurst community – would be consulted on the proposed lease.

· Park users – would be consulted on the proposed lease.

· Rangitāne o Manawatū – have indicated their comfort with the current proposal.

10. reserves act 1977 considerations

10.1 Section 17(1) of the Reserves Act 1977 defines the purpose of recreation reserves as:

“for the purpose of providing areas for the recreation and sporting activities and the physical welfare and enjoyment of the public, and for the protection of the natural environment and beauty of the countryside, with emphasis on the retention of open spaces and on outdoor recreational activities, including recreational tracks in the countryside.”

10.2 Officer comment: The proposed Scout hall would provide a venue for recreation activities both in terms of the Scouts’ activities directly and potentially other community recreation groups or Domain users, eg. football use during tournaments.

10.3 Section 17(2) (a): The public shall have freedom of entry and access to the reserve, with the exception of the ability to lease areas under Section 54 which covers the leasing powers.

10.4 Officer comment: The lease area is approximately 1,000 square metres on a reserve of over 50 hectares. The lease area is currently used for overflow car parking for large events on the sports fields. This use can be retained with a small modification to the grazing lease area. No currently publicly accessed reserve area will be affected.

10.5 Section 17(2) (b): Where scenic, historic, archaeological, biological, geological, or other scientific features or indigenous flora or fauna or wildlife are present on the reserve, those features or that flora or fauna or wildlife shall be managed and protected to the extent compatible with the principal or primary purpose of the reserve:

10.6 Officer comment: No trees or vegetation is required to be removed by the proposal.

10.7 Section 17(2) (c): Those qualities of the reserve which contribute to the pleasantness, harmony, and cohesion of the natural environment and to the better use and enjoyment of the reserve shall be conserved:

10.8 Officer comment: The Scout hall will have minimal impact on the pleasantness of the reserve. The building design will be required to fit the landscape and character of the reserve via design approval clauses in the draft lease.

10.9 Section 17(2) (d): to the extent compatible with the principal or primary purpose of the reserve, its value as a soil, water, and forest conservation area shall be maintained.

10.10 Officer comment: the proposal is compatible with soil, water or forest conservation.

11. Giving effect to the Principles of the treaty of Waitangi

11.1 The Reserves Act 1977 is subject to Section 4 of the Conservation Act and requires that administering bodies under the Reserves Act 1977 give effect to the principles of the Treaty of Waitangi.

11.2 Rangitāne o Manawatū representatives have considered the proposal. Rangitāne are comfortable with the proposal.

12. planning assessment

12.1 The Scouts will need to obtain resource and building consents.

12.2 The part of Ashhurst Domain subject to this proposal is zoned recreation in the District Plan. The proposed Scout hall meets the definition of a community and leisure facility (meaning land and/or buildings used for public or private recreation, entertainment, meetings or social events).

12.3 A preliminary scoping of the District Plan requirements indicates that generally the Scout hall should not present any significant resource consenting issues.

12.4 Overnight stay in the Scout hall is identified as an important part of scouting activities by the Ashhurst Scouts. Section 15.4.3.1 (e) of the District Plan limits the hours of operation for the recreation zone to between 7am and 10.30pm Sunday to Thursday and 7am to 12midnight on Fridays and Saturdays. The Scouts would be required to apply for a resource consent for overnight stay activities.

13. Description of options

13.1 Option One: Publicly notify the proposal to grant a lease for a Scout hall at the Ashhurst Domain, meeting the requirements of Section 54 of the Reserves Act 1977

Under this option Council would seek community input to inform its decision on the proposed lease. As required by the Reserves Act 1977, Council must give people the opportunity to make submission and objections and be heard before deciding to grant the lease.

The draft lease is contained in Attachment One.

13.2 Option Two: Decline the proposal for the land lease for a Scout hall at the Ashhurst Domain

If Council considers the effects of the proposal on the reserve to be too significant it can decline the proposal without having first heard community views on the lease.

14. Analysis of options

14.1 Option One: Publicly notify the proposal to grant a lease for a Scout hall at the Ashhurst Domain, meeting the requirements of Section 54 of the Reserves Act 1977

Council can proceed to publicly notifying the proposal to grant the Scouts lease meeting the requirements of Section 119 of the Reserves Act 1977.

If Council chooses to publicly notify the proposed lease it must give consideration to the submissions and objections received, including the opportunity to be heard, as required under Section 120 of the Reserves Act.

14.2 Option Two: Decline the proposal for the land lease for a Scout hall at the Ashhurst Domain

Council could choose to decline the proposal, without consulting the community to ascertain their views on the proposal.

15. Conclusion

15.1 The proposal is consistent with the purposes of recreation reserves as the Scouts are a recreation group and would host and support recreation activities.

15.2 Consultation on the proposed lease will provide the Council with community feedback, which could be considered before a decision is made. The consultation process would also fulfil the requirements of the Reserves Act.

15.3 It is recommended Council proceed to community consultation.

16. Next actions

16.1 Publicly notify the proposal to grant the land lease, seeking feedback.

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

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

17. Outline of community engagement process

17.1 The proposed consultation is:

· Public notification period requirements of the Reserves Act – advertise in the local newspaper from 1 November until 1 December 2019.

· Letter drop to residential properties in the section of Cambridge Avenue between Napier Road and York Street

· Signage at the sports fields.

· Article in the Ashhurst Village Voice.

· Display and social media through the Ashhurst Library.

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: 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 report assesses the proposal against the Ashhurst Domain Reserve Management Plan and Reserves Act.

Attachments

Ashhurst Scouts draft lease ⇩

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	Tangi Utikere
Patrick Handcock ONZM

1.	September 2020 Performance and Financial Report - CE overview and financial summary ⇩
2.	September 2020 Performance and Financial Report - Performance measures ⇩
3.	September 2020 Performance and Financial Report - Supplementary materials ⇩