Agenda of Economic Growth Committee - Wednesday, 24 April 2024

Palmerston North City Council

Minutes of the Economic Growth Committee Meeting Part I Public, held in the Council Chamber, First Floor, Civic Administration Building, 32 The Square, Palmerston North on 28 February 2024, commencing at 9.00am.

Members

Present:

Councillor Leonie Hapeta (in the Chair), The Mayor (Grant Smith) and Councillors William Wood, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Roly Fitzgerald, Lorna Johnson, Debi Marshall-Lobb, Billy Meehan and Orphée Mickalad.

Non Members:

Councillors Lew Findlay, Patrick Handcock, and Kaydee Zabelin.

Apologies:

Councillor Lorna Johnson (late arrival)

Councillor Lorna Johnson entered the meeting at 9.18am during consideration of clause 16. She was not present for clauses 13 to 15 inclusive.

13-24

Apologies

Moved Leonie Hapeta, seconded William Wood.

The COMMITTEE RESOLVED

1. That the Committee receive the apologies.

Clause 13-24 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Leonie Hapeta, William Wood, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Roly Fitzgerald, Debi Marshall-Lobb, Billy Meehan, Orphée Mickalad, Lew Findlay, Patrick Handcock and Kaydee Zabelin.

14-24

Confirmation of Minutes

Moved Leonie Hapeta, seconded William Wood.

The COMMITTEE RESOLVED

1. That the minutes of the Economic Growth Committee meeting of 25 October 2023 Part I Public be confirmed as a true and correct record.

Clause 14-24 above was carried 12 votes to 0, with 2 abstentions, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Leonie Hapeta, William Wood, Mark Arnott, Brent Barrett, Rachel Bowen, Roly Fitzgerald, Debi Marshall-Lobb, Billy Meehan, Orphée Mickalad, Patrick Handcock and Kaydee Zabelin.

Abstained:

Councillors Vaughan Dennison and Lew Findlay.

15-24

Confirmation of Minutes

Moved William Wood, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the minutes of the extraordinary Economic Growth Committee meeting of 15 February 2024 Part I Public be confirmed as a true and correct record.

Clause 15-24 above was carried 11 votes to 0, with 3 abstentions, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Leonie Hapeta, William Wood, Mark Arnott, Brent Barrett, Vaughan Dennison, Roly Fitzgerald, Debi Marshall-Lobb, Billy Meehan, Orphée Mickalad and Patrick Handcock.

Abstained:

Councillors Rachel Bowen, Lew Findlay and Kaydee Zabelin.

16-24	Pioneer Highway Signalised Dual Crossing Report, presented by Bryce Hosking, Acting Group Manager - Transport and Development Councillor Lorna Johnson entered 9.18am
	Moved Brent Barrett, seconded Lorna Johnson. The COMMITTEE RECOMMENDS 1. That Council agree Option 1 and construct the signalised dual crossing in the location described in Attachment 2, noting this will remove the right-hand turn exit from the shopping centre.
	Clause 16-24 above was carried 10 votes to 4, with 1 abstention, the voting being as follows: For: The Mayor (Grant Smith) and Councillors William Wood, Brent Barrett, Rachel Bowen, Lorna Johnson, Debi Marshall-Lobb, Orphée Mickalad, Lew Findlay, Patrick Handcock and Kaydee Zabelin. Against: Councillors Leonie Hapeta, Mark Arnott, Roly Fitzgerald and Billy Meehan. Abstained: Councillor Vaughan Dennison.
	Moved William Wood, seconded Mark Arnott.
	Note: Motion 1: That Council agree Option 2 and construct the signalised dual crossing as described in Attachment 3, noting this will continue to allow a right-hand turn exit from the shopping centre. The motion was lost 7 votes to 8, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Leonie Hapeta, William Wood, Mark Arnott, Vaughan Dennison, Roly Fitzgerald and Billy Meehan. Against: Councillors Brent Barrett, Rachel Bowen, Lorna Johnson, Debi Marshall-Lobb, Orphée Mickalad, Lew Findlay, Patrick Handcock and Kaydee Zabelin.

17-24

Annual economic snapshot - Palmerston North

Memorandum, presented by Stacey Andrews, City Economist.

Moved Leonie Hapeta, seconded William Wood.

The COMMITTEE RESOLVED

1. That the Committee receive the report titled ‘Annual economic snapshot – Palmerston North 2024 (attachment 1)’ presented to the Economic Growth Committee on 28 February 2024.

Clause 17-24 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Leonie Hapeta, William Wood, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Roly Fitzgerald, Lorna Johnson, Debi Marshall-Lobb, Billy Meehan, Orphée Mickalad, Lew Findlay, Patrick Handcock and Kaydee Zabelin.

The meeting adjourned at 10.37am

The meeting resumed at 10.50am

18-24

Central City Transformation - Streets for People 6 Monthly Update

Memorandum, presented by Bryce Hosking, Acting Group Manager - Transport and Development.

Moved Leonie Hapeta, seconded William Wood.

The COMMITTEE RESOLVED

1. That the Committee receive the memorandum titled ‘Central City Transformation – Streets for People 6 Monthly Update’ presented to the Economic Growth committee on 28 February 2024.

Clause 18-24 above was carried 15 votes to 0, the voting being as follows:

For:

19-24	Proposed Bus Shelter: 85 Amberley Avenue/ Clarke Avenue - Update Memorandum, presented by Bryce Hosking, Acting Group Manager - Transport and Development. Officers decided to relocate the bus stop and its proposal of a bus shelter to mitigate safety risks.
	Moved Leonie Hapeta, seconded William Wood. The COMMITTEE RESOLVED 1. That the Committee lift the report ‘Proposed Bus Shelter: 85 Amberley Avenue, Highbury’ from the table.
	Clause 19.1-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Leonie Hapeta, William Wood, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Roly Fitzgerald, Lorna Johnson, Debi Marshall-Lobb, Billy Meehan, Orphée Mickalad, Lew Findlay, Patrick Handcock and Kaydee Zabelin.
	Moved Leonie Hapeta, seconded William Wood. The COMMITTEE RESOLVED 2. That the Committee note the Chief Executive will relocate the bus stop at 85 Amberley Ave.
	The COMMITTEE RECOMMENDS 3. That Council decide not to proceed with the proposal for a bus shelter at 85 Amberley Avenue.
	Clause 19.2-24 and 19.3-24 above were taken together and carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Leonie Hapeta, William Wood, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Roly Fitzgerald, Lorna Johnson, Debi Marshall-Lobb, Billy Meehan, Orphée Mickalad, Lew Findlay, Patrick Handcock and Kaydee Zabelin.

20-24

Work Schedule - February 2024

Moved Leonie Hapeta, seconded William Wood.

The COMMITTEE RESOLVED

1. That the Economic Growth Committee receive its Work Schedule dated February 2024.

Clause 20-24 above was carried 15 votes to 0, the voting being as follows:

For:

	Karakia Whakamutunga
	Councillor Debi Marshall-Lobb closed the meeting with Karakia.

The meeting finished at 11.15am

Confirmed 24 April 2024.

Chair

Memorandum

TO: Economic Growth Committee

MEETING DATE: 24 April 2024

TITLE: Palmerston North Airport Limited - Draft Statement of Intent for 2024/25 to 2026/27

Presented By: Steve Paterson, Strategy Manager - Finance

APPROVED BY: Cameron McKay, Chief Financial Officer

RECOMMENDATIONS TO Economic Growth Committee:

1. That the Committee receive the Palmerston North Airport Limited (PNAL) draft Statement of Intent for 2024/25 to 2026/27 (Attachment 1 and 2), presented to the Economic Growth Committee on 24 April 2024.

2. That Palmerston North Airport Limited be advised:

a. Council supports the proposed direction and implementation strategy;

b. Council recognises the projected requirement for loans totalling $44.9m by 30 June 2025 and that Palmerston North Airport Limited will be seeking to utilise the loan facility provided by the Council to fund a significant portion of this.

1. ISSUE

1.1 To present and provide comment on the draft Statement of Intent for Palmerston North Airport Limited (PNAL) for 2024/25 and the following two years.

2. BACKGROUND

2.1 PNAL is deemed a Council-Controlled Trading Organisation (CCTO) under the Local Government Act 2002. A CCTO must deliver a draft Statement of Intent (SOI) to shareholders by 1 March each year and adopt it by 30 June. The Council must, as soon as possible after a draft SOI is delivered to it, agree to a CCTO’s SOI or, if it does not agree, take all practicable steps under clause 6 of Schedule 8 of the Local Government Act 2002 to require the SOI to be modified. The Board of the CCTO must consider any shareholder feedback by 1 May 2024.

2.2 The Council’s reason for its shareholding in PNAL is to ensure that the capacity and image of the City’s key transportation gateway is consistent with the Council’s economic development objectives.

2.3 As a CCTO PNAL is required under the Local Government Act 2002 to have the following principal objective:

· Achieve the objectives of its shareholders, both commercial and non-commercial, as specified in the Statement of Intent; and

· Be a good employer; and

· Exhibit a sense of social and environmental responsibility by having regard to the interests of the community in which it operates and by endeavouring to accommodate or encourage these when able to do so; and

· Conduct its affairs in accordance with sound business practice.

2.4 Council’s shareholding represents 100% of the issued and paid-up capital.

2.5 On 6 December 2023 Council adopted a Statement of Expectations for PNAL and this was provided to PNAL in advance of its development of the draft SOI.

3. Draft SOI - Overview

3.1 Attached is a letter from PNAL to shareholders explaining the enclosed draft SOI and outlining the key assumptions (Attachment 1).

3.2 The draft SOI retains the vision from the current year, ‘New Zealand’s leading regional airport’, and the purpose statement, ‘Launching our communities into a promising future’, as well as the five strategic objectives.

3.3 The SOI addresses all of the matters outlined in Council’s Statement of Expectations.

3.4 It has been assumed there will be a gradual increase in passenger numbers to 599,000 by 2026/27 but the ongoing uncertainty is noted.

3.5 Operating revenues and costs both show significant increases – the reasons are explained in the covering letter.

3.6 The three-year budgets assume capital development (totalling $65.9m; including terminal ($38.1m), Ruapehu Aeropark and Airport Drive ($16.4m), airside infrastructure ($6.3m) and landside infrastructure ($3.7m)) will be able to be accomplished by PNAL with additional borrowing ($50.2m) but without the need for additional share capital.

3.7 The terminal development project will bring with it significant disruptions to the customer experience, day to day operations and the financial outcomes – some extraordinary expenditure is forecast to lead to an operating loss in 2024/25. PNAL indicate that managing disruption and customer communication are key priorities for them.

3.8 Shareholders’ funds as a percentage of total assets are forecast to reduce to 59% in the first year and 53-54% through the rest of the three-year term of the SOI. This is still well above the expectation that it will remain over 40%.

4. Draft SOI – Performance Targets

4.1 The following financial performance targets are included in the Draft SOI:

	Draft SOI 2024/25 Budget	Forecast 2023/24	SOI 2023/24 Budget
NPBIT: Total assets	5%	4%	4%
NPAIT: Shareholders’ funds	(2%)	2%	2%
Shareholders’ funds: Total assets (>40%)	59%	77%	67%
Interest cover (>2.5)	4.4	13.1	5.3
Tangible Net Worth (>$80m)	$84.1m	$85.8m	$87.7m
Total debt	$44.9m	$14.1m	$29.3m
Debt to Equity ratio	53.4%	16.5%	33%
Net Debt*/EBIDA (< 4.5)	6.4	1.9	5.0
Funds from Operations (FFO**)/Net Debt (long term target > 11%)	13.5%	43.6%	13.5%

*Net Debt = total borrowings less cash on hand

**FFO = EBIDA less interest less tax

4.2 There are non-financial measures of performance for each of the strategic areas – compliance, customer, community, culture and commercial.

4.3 Examples include:

· Various compliance requirements including CAA part 139 recertification

· Maintaining a customer satisfaction Net Promoter score of 45 or above

· Serving 562,300 passengers during the 2024/25 year increasing to 581,500 for the following year and 598,700 in the June 2027 year

· Zero lost time injuries to those who work within the airport community

· Maintaining Airport Carbon Accreditation level 4 and implementing several specific initiatives

· Completion of physical works:

o terminal development (stage 1 western end construction complete by June 2025 and stage 2 eastern end complete by June 2026)

o Covered walkways to longstay carpark complete by June 2025 and oversize carpark by June 2027

o Zone D warehouses complete (June 2025 assuming partner secured)

5. Draft SOI – Dividend policy

5.1 Council’s Statement of Expectations (SOE) outlines the expectation that:

“PNAL is required to have a commitment to retaining and growing long-term shareholder value. Council recognizes that shareholder value accretion occurs through PNAL’s ongoing and significant investment in critical infrastructure including the terminal redevelopment to improve the customer experience and to facilitate sustainable growth in passenger and airfreight volumes, and investment in the development of Ruapehu Business Park which will provide income diversification and value accretion benefits. Council further recognizes that given the magnitude of the planned capital programme associated with the terminal replacement and commercial development opportunities PNAL’s ability to preserve cash is likely to be constrained in the short-term.

Council however has an expectation that a dividend payment will be progressively re-instated, in line with PNAL’s dividend policy, from the 2023/24 year (payable in 2024/25) and that the implications of this will be addressed annually through the SOI. As a guide Council expects the dividend payment for the 2024/25 year (payable in 2025/26) will be no less than 20% of net profit after tax and for the following two years no less than 40% of net profit after tax.”

5.2 The draft SOI contains a section relating to its dividend policy. It acknowledges the Council’s dividend expectations and provides for them at the levels indicated in the SOE. PNAL provides information about projected cashflows and it’s ability to fund the payment of dividends. It notes that although dividend payments are being planned for, in two of the three years of the SOI it will need to borrow to make the payments. It also notes:

“Directors will have the opportunity to assess a range of criteria before arriving at an appropriate dividend, including actual and projected performance. In establishing a dividend recommendation, the Directors will consider the following:

1. The scale of the company’s capital expenditure plans including shareholder expectations,

2. The company’s financial performance including cashflows from operations,

3. The company’s ability to raise debt finance and the term thereof,

4. Compliance with performance metric targets,

5. The risks associated with airline schedule uncertainty in the short to medium term.”

5.3 In summary then the forecast position is as outlined in the following table:

Forecast/Budget	Forecast 2023/24	SOI 2024/25	SOI 2025/26	SOI 2026/27
Net profit/(loss) after tax	$1.634m	($1.677m)	$2.173m	$3.063m
Dividend declaration	$163k (10% of NPAT)	$0 (20% of NPAT)	$869k (40% of NPAT)	$1.225m (40% of NPAT)
Dividend payment		$163k	$0	$869k

5.4 Council’s draft Long-term Plan 2024-34 currently assumes there will be a dividend received of $150k each year and indicates there is a high level of uncertainty regarding this assumption. Council recognises the dividend in the year of payment.

5.5 PNAL’s forecasts reinforce the uncertainty of the assumption.

5.6 The matters highlighted by PNAL raise the issue of whether or not it is appropriate for the Council to expect dividends at a time when cash outgoings for essential development effectively mean PNAL is being required to borrow to fund the dividend payment.

5.7 The financial outcomes for 2024/25 will be very dependent on the actual progress with the terminal development and the extent to which the forecast extra-ordinary expenditure has been incurred. Once this is known the directors will be in a position to determine whether or not a dividend of up to 20% of NPAT should be declared – in the event there is a profit.

5.8 Directors of companies have an obligation to undertake appropriate solvency tests each year before declaring a dividend. A dividend in any year is therefore subject to successfully completing this test.

6. Draft SOI – Debt funding

6.1 The Council and PNAL have entered a loan facility agreement that involves the Council borrowing from the Local Government Funding Agency and on-lending to PNAL in an effort to reduce the interest expense for PNAL. The intention of the agreement is that the Statement of Intent is a mechanism for determining the maximum facility agreement in any given year.

6.2 To date $8m has been raised and on-lent under the terms of the facility. The draft SOI forecasts term liabilities increasing to $64.4m over the coming three years (up to $45m in year one) and that revenue will be adequate to service this level of debt assuming interest payable by them at rates of up to 6.5%. Whilst some of the term liabilities will reflect utilisation of PNAL’s facility with its Bank it is anticipated that a significant portion of the increased debt will be obtained through the facility provided by the Council.

6.3 The basis of the loan arrangement is that the PNAL borrowing will not impact on the Council’s ability to borrow for other Council funded capital expenditure. This relies on LGFA being prepared to treat the loan advance from the Council to PNAL as an asset that it will net off against the related borrowing. It is important PNAL‘s assessment of its ability to service the debt is robust and it is acknowledged there are many assumptions involved and there are potential risks.

6.4 PNAL believe the terminal development plan is fundamental to protecting the future of the City’s airport business. The planned development addresses seismic resilience issues and enables the ability to introduce passenger and hold-bag screening if/when it becomes mandatory.

7. PNAL structure &/or investment partnerships

7.1 The draft SOI makes reference to the on-going project to explore options for accelerating investment in the Ruapehu Aeropark.

7.2 A wide range of options are being investigated and this work is scheduled to conclude during the 2024/25 year. Any option that involves the creation of a subsidiary, changes to the structure of the company, or any other change that could impact on the debt facility being provided by the Council or the overall income tax position of the Council group will need Council involvement and agreement.

8. NEXT STEPS

8.1 Council can either endorse the SOI as presented or make suggestions for change to a greater or lesser extent.

9. 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 1: An Innovative and Growing City
The recommendations contribute to the achievement of action/actions in Transport The action is: Work with the airport company to ensure the airport’s strategic intent aligns with the City’s aspirations
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The draft Statement of Intent includes a direction and specific actions that are designed to continue to improve the airport for customers and stimulate growth.

Attachments

1.	Letter from Palmerston North Airport Limited - February 2024 ⇩
2.	Draft Statement of Intent FY 2025-27 ⇩

Memorandum

TO: Economic Growth Committee

MEETING DATE: 24 April 2024

TITLE: Central Economic Development Agency (CEDA): 6-Month Report 1 July 2023 to 31 December 2023 and Draft Statement of Intent 2024/25

Presented By: David Murphy, Chief Planning Officer

APPROVED BY: David Murphy, Chief Planning Officer

RECOMMENDATIONS TO Economic Growth Committee:

1. That the Committee receive Central Economic Development Agency (CEDA) 6-Month Report 1 July 2023 to 31 December 2023 (Attachment 1) presented to the Economic Growth Committee on 24 April 2024.

2. That the Committee receive Central Economic Development Agency (CEDA) draft Statement of Intent 2024-25 (Attachment 3) presented to the Economic Growth Committee on 24 April 2024.

3. That the Committee approve the comments outlined in the Central Economic Development Agency (CEDA) draft Statement of Intent 2024–25 (Table 1) presented to the Economic Growth Committee on 24 April 2024.

1. ISSUE

1.1 The Central Economic Development Agency (CEDA) has delivered its
6-month report 1 July 2023 to 31 December 2023 (6-month report) and draft Statement of Intent 2024/25 (SOI 2024/25). This report includes analysis of both documents.

1.2 The 6-month report is included as Attachment 1.

1.3 The approved Statement of Expectations 2024/25 to 2026/27 (SOE 2024/25 to 2026/27) and draft SOI 2024/25 are included as Attachment 2 and 3.

1.4 Under the Local Government Act 2002 (LGA), when preparing the final SOI, a Council Controlled Organisation (CCO) must consider any comments made on the draft by the Council prior to delivering a final SOI by 30 June 2024.

1.5 The Economic Growth Committee has the delegation to receive the 6-month report and agree the Statement of Intent for CEDA on Council’s behalf.

1.6 The purpose of this report is to receive the 6-month report and provide an opportunity for Council to give feedback to CEDA on their draft SOI 2024/25.

1.7 As a joint shareholder of CEDA with the Manawatū District Council (MDC), any feedback to CEDA on the draft SOI 2024/25 should carefully consider any implications for MDC and the views of MDC on the draft SOI 2024/25. The content of this memorandum and comments on the draft SOI 2024/25 have been shared with MDC.

2. BACKGROUND

2.1 CEDA is a Council Controlled Organisation (CCO) under the LGA and is jointly owned by PNCC and MDC. A CCO must deliver a draft SOI to PNCC and MDC and a final SOI by 30 June 2024.

2.2 The CEDA Board must consider any feedback from the shareholders before delivering a final SOI for approval in June 2024.

2.3 The Council is required by the LGA to regularly undertake performance monitoring of its CCOs. Council is required to evaluate:

· The contribution of each CCO to the Council’s objectives for the CCO;

· The desired results set out in the SOI; and

· The overall aims and outcomes of the Council based on the 6-month reports.

3. 6-MONTH REPORT 1 JULY TO 31 DECEMBER 2023

3.1 The 6-month report allows the Committee to track CEDA’s progress against their SOI 2023/24.

3.2 A copy of the 6-month report is included as Attachment 1.

3.3 From a contract-manager perspective, we have seen a continued focus from CEDA in the last 12-months to actively connect with partners and foster inward investment opportunities that are aligned to the region’s strategic objectives. This has been particularly evident with regards to the work completed on Te Utanganui, Central New Zealand Distribution Hub, where projects of this nature require a commitment to long-term relationships.

3.4 The 6-month report is based around the following three strategic pillars:

· Business - Attract, retain, and develop business and investment in the region.

· People - Attract, retain, and develop talent in the region.

· Place - Profile the region to attract people, business, and investment.

3.5 Key focus areas within CEDA’s 6-month report include:

Business:

· Te Utanganui – Central New Zealand Distribution Hub.

· Manawatū Regional Food Strategy.

· Supporting investment opportunities

· Destination Management Plan

· Sustainable is Attainable Project

· Accommodation Sector Capability and Enhancement

· Agritourism Accelerator Programme cohort one

· Business engagements

· Business Attraction, Retention and Expansion Strategy

· Partnerships with The Factory and Sprout Agritech

People:

· Business profiles

· A Summer of Tech partnerships

· Massey Business School

· Health Sector Accelerate Academy Programme

· Careers Expo New Zealand

Place:

· Manawatū Regional Identity: Five content pieces have been created and published

· 19 Media Features secured profiling the city and region

· 124,319 total sessions on ManawatuNZ.co.nz

· 30,872 Social Media Followers, 22,530 ManawatūNZ Facebook

· Dig In to Manawatū Campaign

Iwi partner projects:

· Rangitāne o Manawatū Māori Tourism Strategy

· He Ara Kotahi, Hei Ara Kōrero

3.6 CEDA’s financial performance is detailed on pages 18 to 22 of the 6-month report and includes a $158,114 surplus for the 6-months to 31 December 2023 (unaudited). CEDA has been working hard to operate within its current Council funding. For example, CEDA recently relocated to a new lower cost premise. The signalled reduction in CEDA directors by the two shareholders will also provide a further small saving for CEDA.

4. STATEMENT OF EXPECTATIONS 2024/25 to 2026/27 (2024/34 Long Term Plan)

4.1 A copy of the SOE 2024/25 to 2026/27 as approved by PNCC and MDC is included as Attachment 2.

4.2 The SOE 2024/25 to 2026/27 was largely a rollover from previous years and maintained a focus on developing a talent pipeline (people); inward investment (business); and domestic visitation (place).

4.3 This SOE covers the period 1 July 2024 to 30 June 2027, which is years 1-3 of the Shareholders’ 2024/34 Long Term Plan. Amendments to the Statement of Expectations may be sought during this period.

4.4 A key addition to the SOE 2024/25 to 2026/27 was the inclusion of ‘Inward investment in the Feilding town centre and Palmerston North city centre’ as a top priority for both councils. We are already seeing CEDA begin to operate in this space following investment leads for new hotels in both Feilding and Palmerston North.

5. DRAFT STATEMENT OF INTENT 2024/25

5.1 A copy of the draft SOI 2024/25 is included as Attachment 3.

5.2 CEDA has presented a draft SOI that aligns with the SOE, as outlined in table 1 below.

Table 1: Comparison of CEDA SOE with the SOI

Statement of Expectation	CEDA Draft SOI 2023/24	Comments
Taking a leadership position and building strategic relationships in the Manawatū region and beyond, is fundamental for CEDA to achieve its purpose. The shareholders have identified the following key partners for CEDA: Palmerston North City Council, Manawatū District Council, Horizons Regional Council, Iwi, Manawatū Chamber of Commerce, NZ Defence Force, Federated Farmers, Accelerate 25, KiwiRail, FoodHQ, Massey University, The Factory, Palmy BID, Feilding & District Promotions, and key Government agencies.	CEDA has addressed strategic partners at page 18 of the SOE and in the performance measures on page 26.	While it is not an explicit replication of the SOE list, a number of the projects and activities listed in the SOE will involve working with the partners listed in the SOE.
Stimulate inward investment (both national and international), retention and expansion of business in the Manawatū region. Developing a talent pipeline. Support domestic visitation and tourism	CEDA has addressed these outcomes via the three pillars, statement of intent outcomes, projects, activities and strategies summarised on page 8 and the performance measures for each are captured on pages 25 and 26.	No comment. Priorities addressed.
Top priorities are: Te Utanganui, Central New Zealand Distribution Hub. Strategic oversight and coordination of the Manawatū Food Strategy. Promotion and development of key tourism and visitor destinations. Inward investment in the Feilding town centre and Palmerston North city centre.	CEDA has addressed its work to support Te Utanganui, Central NZ Distribution Hub at page 10. Manawatū Regional Food Strategy is addressed at page 10. Visitor activity is addressed via pillar three (place) and the supporting statement of intent outcomes, projects and activities summarised on page 8. The focus on Feilding town centre and Palmerston North city centre is addressed at page 10 under inward investment opportunities.	Priorities addressed. While there are no specific performance measures for each of these priorities individually, progress will be reflected in the achievement of the overall performance measures captured in pages 25 and 26.
CEDA’s success will be measured by the shareholders using the following indicators of the health of the regional economy: Job growth. Increase in median household income. Number of investment leads and deals secured. Strength of the relationship with strategic partners.	Addressed in the performance measures (pages 25 and 26). The specific monitoring indicators included in previous SOI such as change in median salaries and wages are not included in this SOI.	Seek clarification from CEDA regarding the exclusion of specific monitoring indicators included in previous SOIs.
Financials		The titles for the budget years on page 31 should be updated.

5.3 A budget for 2024/5 (year 1) and a forecast for 2025/26 (year 2) and 2026/27 is included in the financial performance on pages 30 and 301 of the Draft SOI. The Council funding assumption is based on the figures contained within the PNCC and MDC Draft 2024/34 Long Term Plans. While CEDA are forecasting a small deficit for years 1-3, this is not considered significant given the cash and cash equivalents detailed on page 32 is $912,235 in year 1.

6. NEXT STEPS

6.1 Provide comments on the draft SOI in writing to CEDA, noting that any comments on the draft SOI agreed by Council will need to be cognisant of what they mean for MDC as a joint shareholder.

6.2 CEDA will deliver its final SOI to both councils (shareholders) in June 2024.

7. Compliance and administration

Does the Committee have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		No
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 1: An Innovative and Growing City
The recommendations contribute to the achievement of action/actions in Economic Development The action is: • Agree a Statement of Intent with CEDA • Carry out regular performance monitoring and reporting for CEDA
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The Innovative and Growing Strategy includes the following: Increasing economic wellbeing will depend on Council working well with businesses, support agencies, central government and other local authorities. The Central Economic Development Agency (CEDA) will support business development and retention and will promote a diverse economy. CEDA will focus on helping young people develop the skills they need for the changing jobs market.

Attachments

1.	CEDA 6-month Report 1 July 2023 to 31 December 2023 ⇩
2.	CEDA Statement of Expectations 2024/25 to 2026/27 ⇩
3.	CEDA Draft Statement of Intent 2024/25 ⇩

Memorandum

TO: Economic Growth Committee

MEETING DATE: 24 April 2024

TITLE: Amendment to the Appointment of Directors and Trustees Policy 2022 - Remuneration for Directors/Trustees of Council Controlled Organisations.

Presented By: Sarah Claridge, Democracy and Governance Advisor

APPROVED BY: Donna Baker, Acting Chief Executive Unit Manager

RECOMMENDATION TO Council:

1. That Council adopt the draft Remuneration section (Attachment 1) to replace Part 1 section 12 Remuneration section of the Appointment of Directors Policy 2022.

1. ISSUE

1.1 At its 25 October 2023 meeting, the Economic Growth Committee resolved, “that the Chief Executive establish a policy of regular CPI increase to Palmerston North Airport Limited (PNAL) director fees.”

1.2 Officers have redrafted Section 12 Remuneration of the Council’s Appointment of Directors and Trustees Policy (the ‘Policy’) in response to this resolution.

1.3 Officers recommend that Board Member remuneration be adjusted by the Labour Cost Index rather than the Consumer Price Index (CPI). Statistics New Zealand gauges the inflationary effect on wages using the Labour Cost index, as opposed to the Consumer Price Index (CPI) which measures the change in price of goods.

1.4 There was another relevant resolution of Council in December 2023 to review the remuneration for the three Cultural Council-Controlled Organisations (CCOs) boards.

1.5 The proposed revisions also incorporate additional guidance for reviewing remuneration levels.

2. BACKGROUND

2.1 Council has several CCOs that vary in size, duties and expectations. Naturally these require different skill sets, knowledge and work commitments of Board directors. Council’s Policy is silent on when and how Board remuneration will be reviewed. This has led to a practice of ad hoc reviews of Board remuneration which depend on if or when a Board requests it. The Palmerston North Airport Limited Board have been reviewed fairly regularly while Te Manawa Board’s remuneration was last reviewed in 2000.

2.2 Council is empowered by section 57 of the Local Government Act 2002 to appoint directors to CCO’s boards and set directors’ fees.

2.3 Council’s Policy provides an objective and transparent process for the appointment and remuneration of its CCO boards. The Policy was reviewed and adopted in 2022, it covers the following CCOs^{^[1]}:

• Te Manawa Museums Trust

• The Regent Theatre Trust

• The Globe Theatre Trust

• Palmerston North Performing Arts Trust

• Palmerston North Airport Limited (PNAL)

The current Policy simply sets out the amounts paid to each of the cultural CCOs and notes that an annual resolution of Council will set the total remuneration for PNAL, in line with its Constitution (s.14.8).

2.4 In contrast, the Central Economic Development Agency Ltd. has its own Appointment of Directors Policy agreed by both shareholding councils. Section 41.1 of that policy describes Fee Setting.

“Board members’ remuneration will be reviewed once per triennium following council elections. A full review will be conducted and will include benchmarking against comparative entities. The review will consider market movement and the final decision on board members’ remuneration will be made by a resolution of the Councils. Fees will be set taking into consideration the following:

a) the size and scale of CEDA (e.g. turnover, value of assets, number of employees)

b) complexity and scope of operations (e.g. complexity of issues, level of guidance for decision-making, relationship management responsibilities)

c) accountability (e.g. scale of market risk, public interest and profile, potential risk to director reputation, and other key risks)

d) skills - the type of expertise and specialisation needed.

Special considerations may also be included in setting fees, such as a temporary increase in workload for the board, or difficulties in recruiting particular skills.”

3. Review of Remuneration Section

3.1 Officers have redrafted the remuneration section of the Policy to guide the setting of remuneration for Council’s CCOs (except CEDA). The reviewed section establishes a standard approach to the setting and reviewing of CCO Board remuneration.

3.2 The amended section includes the following points:

· Council sets remuneration levels for Board members (current practice)

· Council supports the payments by CCOs of directors’ liability insurance and the indemnification of directors. (Council practice/ written in trust deeds/ constitution)

· Lists factors to consider when determining Board remuneration (in line with CEDA’s Appointment Policy)

· Labour Cost Index adjusted (response to resolution from Economic Growth Committee, extended to all for fairness)

· Remuneration to be reviewed once per triennium (good practice).

3.3 Regular review will make sure remuneration stays relative to similar-sized CCOs and accurately reflects the expertise required to fulfil the role.

3.4 No amendment of the PNAL constitution would be required as a result of the amendments proposed to Council’s overarching Policy.

4. Financial Impact

4.1 There will be a minor financial impact of setting remuneration rates which are adjusted annually based on the Labour Cost Index.

4.2 In practical terms the annual percentage change for the December quarter will be applied so that any remuneration changes can be factored in when setting the Annual budget (for Council) and the Statement of Intent (for PNAL).

4.3 Remuneration for the Boards will be set using the Statistics New Zealand category: Public Sector - Manager Occupation Group. This is currently at 5% (Dec 2023), but economic forecasts expect inflation to reduce to 2% this year.

4.4 Annually adjusting fees using the Labour Cost Index should smooth out potential large increases when the fees are reviewed (triennially).

4.5 Table 1 shows the effect of regularly adjusting the board remuneration across the 4 CCOs. Noting that PNAL pay their board from the income generated by the business.

4.6 With the expectation that inflation will be dropping to 2% by December 2024, Table 1 estimates a 2% increase in total remuneration. As the Boards of the cultural CCOs are currently paid a meeting fee – officers have assumed full board attendance of 12 meetings per year.

Table 1 Estimated total Board Remuneration with an inflation adjustment of 2%

CCO Board	Total Members	2023/24 ($)	2024/25 ($)	2025/26 ($)	2026/27 ($)
Regent Theatre	9	9,180 ($85)	9,364	9,551	9,742 ($90)
Globe Theatre	6	6,120 ($85)	6,242	6,367	6,495 ($90)
Te Manawa	9	30,820*($165)	31,436	32,065	32,706 ($182)
PN Airport	5	146,000	148,920	151,898	154,936

*Includes meeting fee and total annual expenses of $13,000

4.7 Te Manawa Board members also receive expenses of $1000 and $5000 for Board member and Chair respectively. When added to their meeting fees – Board members currently receive an equivalent of $248 per meeting and the Chair $581.

4.8 Table 1 provides an indication of how fees would increase over time. The full financial impact will not be known until the review of the Cultural CCOs’ Boards remuneration is presented in June, which may result in a change to the base remuneration for some or all of the cultural CCOs. Regardless, establishing a policy to adjust all Board Member remuneration by the December Quarter of the Labour Cost Index sets the expectation that a fair and standardised approach will be used for all of Council’s CCOs.

5. NEXT STEPS

5.1 If Council approves the amended section, officers will update the Policy and re-publish it on the Council website.

5.2 Should the policy revisions be adopted, Officers will present a review of the remuneration for the Cultural CCOs, against this policy to the Culture and Sport Committee in June 2024.

6. Compliance and administration

Does the Committee have delegated authority to decide?		No
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 5: A Driven & Enabling Council
The recommendations contribute to the achievement of action/actions in Governance and Active Citizenship The action is: Ongoing review of governance systems and structures to support Council’s effectiveness and reputation
Contribution to strategic direction and to social, economic, environmental and cultural well-being	According to the Local Government Act 2002, s58 (1), “The role of a director of a council-controlled organisation is to assist the organisation to meet its objectives and any other requirements in its statement of intent.” CCOs further Council’s strategic objectives on its behalf. Appropriate remuneration can contribute to the effectiveness of boards and thus to the meeting of those objectives.

Attachments

Appointment Policy_ New Section 12 Remuneration ⇩

Memorandum

TO: Economic Growth Committee

MEETING DATE: 24 April 2024

TITLE: Road Maintenance Contract 6 Monthly Update

Presented By: Bryce Hosking, Acting Group Manager - Transport and Development

APPROVED BY: Chris Dyhrberg, Chief Infrastructure Officer

RECOMMENDATION TO Economic Growth Committee:

1. That the Committee receive the memorandum titled ‘Road Maintenance Contract 6 Monthly Update’ presented to the Economic Growth Committee on 24 April 2024.

1. ISSUE

1.1 In March 2022, the report titled ‘Road maintenance Contract Update’ was presented to the Infrastructure Committee. In this meeting the Committee resolved:

“to receive further 6-monthly reports on the work programme and performance of the road maintenance contract.”

1.2 This report provides the latest 6-monthly update on the work programme and performance of the road maintenance contract, using information up to the end of March 2024.

2. BACKGROUND

Road Maintenance Contract

2.1 Council entered Contract 3938 (Road Maintenance, Renewal, and Capital Improvement Services) with Fulton Hogan in March 2021. The contract commenced on 1 July 2021 with an initial term of three (3) years, with two (2) right of renewals for three (3) years each.

2.2 Ahead of the renewal date in 2024, an external review of whether the contract outcomes were being met was undertaken in early 2023 with the findings presented in a confidential report to Council on 3 May 2023. This review identified and recommended several improvement actions be implemented to ensure the desired outcomes would be met moving forward. Progress updates of these improvement actions are out of scope for this report, which instead focuses on the deliverables of the contract.

Contract Works

2.3 Works delivered by the road maintenance contract can be split into operations/ maintenance and capital spend areas, with each funding area having key deliverable areas.

Operations and Maintenance:

· Footpaths

· Pavement

· Drainage

· Traffic Services i.e. signals, street lighting, sweeping etc.

Capital:

· Pavement reseals

· Pavement rehabs/ replacements

· Drainage

· Footpaths

· Structural – i.e. bridges etc.

2.4 It should be noted that Fulton Hogan will also deliver distinct Council projects in addition to the above. Whilst the road maintenance contract provides for the ability for additional works to be completed at the same rates, these projects are not within the scope of this report as they are separate engagements.

3. ROAD MAINTENANCE CONTRACT 6 MONTHLY UPDATE as at march 2024

3.1 Below is an update on the contract deliverable areas as listed in 2.3 above.

Operations and Maintenance

3.2 Footpaths

· The city-wide footpath maintenance work programme for 2023/24 is complete and the available budget has been fully expended.

3.3 Pavement

· The programme of work for pre reseal repairs (i.e. potholes, pavement defect repairs etc.) and other reactive maintenance work to the city’s road pavement is complete for 2023/24. The budget for this area has been exceeded so Officers are working to offset this by prioritising works in other maintenance areas.

3.4 Drainage

· The kerb sweeping and sump cleaning is on-going. Noting that the current budget allocation in 2023/24 is not sufficient to meet the desired level of service. As a result, the service is being completed on a reactive basis.

· The budget allocation for this area has been increased in the draft 2024-34 Long Term Plan (LTP) to ensure the desired level of service can be met in the future.

3.5 Traffic Services

· The programme for road marking work throughout the city for 2023/24 is complete and the available budget has been fully expended. There was a focus on Stop/ Give-ways and pedestrian marking only. Noting that carpark marking is not included within the scope and funded from other budgets.

· The streetlight maintenance and replacement programmes are proceeding as planned with product arriving in March and April for the replacement of the 400 streetlights that were out in the city. Providing no delays in product arriving, officers anticipate programme of work being completed by 30 June 2024.

Capital

3.6 Pavement Reseals

· Officers scheduled more than 30 urban and rural streets to be resealed over the summer months. The planned locations were included in the November 2023 update report.

· The 2023/24 programme is predominantly complete with all chip sealing complete, with just some asphaltic concrete paving work outstanding. Programmed works will be completed by 31 May 2024.

3.7 Pavement Rehab

· Officers have identified that Railway Road, between Tremaine and the rail overbridge, requires a complete pavement rehab. The total cost of this work is over $4M, and as such it is being delivered in stages. Construction of the first stage commenced in April 2024, with the balance of the work planned for 2024/25 and 2025/26, as necessary to meet annual funding affordance in addressing other network pavement failures.

3.8 Drainage

· The only project being delivered in 2023/24 in this area was a kerb and channel replacement in Jasper Place. This project was completed in March 2024. Minor kerb and channel upgrades associated with ‘pre-reseal pavement repairs’ have been undertaken to expend the programme budget.

3.9 Structural

· Concrete lining of the Highbury Avenue bridge culvert invert has been designed with construction being delivered in the April-June 2024 quarter. This is to future proof this multiplate bridge culvert in consideration of the Amberley bridge culvert failure being of a same structures type.

3.10 Footpaths

· This programme of renewal work for footpaths throughout the city is underway and will be completed by 30 June 2024. Street trees and roots are a major consideration in this work with the focus being on renewing the areas of most need that are not impacted by trees.

· Addressing the footpaths affected by trees requires more planning and consideration of the trees themselves, which is why they are not being considered this financial year unless urgent.

4. NEXT STEPS

4.1 Continue to work with Fulton Hogan to ensure delivery of the programme of works covered by the Road Maintenance contract.

4.2 Continue to prioritise works with most impact as required to ensure the programme is delivered within timeframes and budget provisions.

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 1: An Innovative and Growing City
The recommendations contribute to the achievement of action/actions in Transport The action is: Develop, maintain, operate, and renew the active and public transport network to deliver on Council goals, the purpose of this plan, and the Government Policy Statement on Transport.
Contribution to strategic direction and to social, economic, environmental, and cultural well-being	The road maintenance contract is a key delivery vehicle towards having safer, well maintained, and well utilised transport network.

Attachments

Nil

Memorandum

TO: Economic Growth Committee

MEETING DATE: 24 April 2024

TITLE: Palmerston North Quarterly Economic Update

Presented By: Stacey Andrews, City Economist

APPROVED BY: David Murphy, Chief Planning Officer

RECOMMENDATION TO ECONOMIC GROWTH COMMITTEE:

1. That the Committee receive the following reports:

a. Palmy Economic Growth Indicators - April 2024 (Attachment 1),

b. Cities Snapshot – December 2023 (Attachment 2),

c. Palmerston North electronic card spending report – December quarter 2023 (Attachment 3),

presented to the Economic Growth Committee on 24 April 2024.

1. purpose

1.1 This memorandum presents a summary of the key themes in the Palmerston North Quarterly Economic Update to April 2024, the newly developed Cities quarterly economic snapshot (December quarter 2023), and the Palmerston North City Centre Quarterly electronic card spending (retail and selected tourism sectors) for the December quarter 2023.

1.2 The quarterly economic update is prepared in-house, utilising data from a range of sources to provide the most up-to-date information available on the city economy. This includes national and global data where appropriate, to inform of broader conditions that are impacting on local economic conditions.

1.3 The quarterly economic update is organised under the categories of (Gross Domestic Product (GDP), business and jobs, earnings and income, spending, and housing. National data that influences the city economy, such as the Consumer Price Index (CPI) and the Official Cash Rate (OCR), are also included in the quarterly economic update.

1.4 The Cities quarterly economic snapshot ranks the performance of Palmerston North against a group of other tier 2 cities (as defined in the National Policy Statement on Urban Development). The cities included are Rotorua, New Plymouth, Dunedin, Hastings, Napier, and Whangārei. The snapshot compares change in annual average GDP, employment (by place of residence), retail spending, new commercial vehicles and car registrations, the rate of young people aged between 15-24 years that are not in employment, education and training (NEET rate), school attendance, the annual average unemployment rate, non-residential consent values, new dwelling consents, and home ownership and rental affordability.

1.5 The Cities snapshot is an evolving report and we plan further content and design improvements throughout 2024. We intend to provide the report quarterly, to identify the strengths of the city relative to comparable locations, as well as areas where improvements can be made.

1.6 The Palmerston North City Centre Quarterly electronic card spending report is prepared in-house and provided as a resource to the city retail sector. This report includes information on retail spending across the city and by precinct, as well as data on retail flows, customer loyalty, and the origin of customers who are spending in Palmerston North.

1.7 The memorandum concludes with a summary of the economic outlook for the city and the wider regional economy. The summary includes factors that are front of mind as we progress through the challenges of 2024.

2. Quarterly economic Update

GDP

2.1 GDP data from Statistics NZ indicates that the New Zealand economy contracted over the September and December 2023 quarters, alongside annual GDP growth of 0.6% over the December 2023 year. Statistics NZ GDP data is not available at territorial authority level, therefore Infometrics data is used as a basis for understanding the impact of current economic conditions on the city economy. The update is attached as Attachment 1.

2.2 Infometrics reports that the Palmerston North GDP fell by 0.5% over the year to December 2023. This compares with a 0.7% increase nationally. The Infometrics GDP series averages GDP growth over the most recent four quarters and therefore is not comparable to the Statistics NZ national GDP data series.

2.3 Annual inflation (as measured by the Consumer Price Index) eased to 4.7% in the December quarter as the economy contracted in response to higher interest rates and a pullback in spending across the economy.

2.4 With GDP growth in the negatives, these are challenging times for our businesses and households. On the upside, the economic slowdown signals that the efforts of the Reserve Bank to reduce spending and rein in inflation are working, increasing the odds of an earlier than expected cut to the Official Cash Rate (OCR).

2.5 A lower OCR will provide relief to households and businesses by lowering interest payments on borrowing and releasing money for spending on other goods and services that contribute to economic wellbeing. The OCR currently sits at 5.5%, with a reduction in the OCR widely anticipated later this year.

Business and jobs

2.6 There were 8,138 businesses in Palmerston North in December 2023; a slight increase of 6 businesses from the previous year. This flat growth follows a period of high growth over the December 2022 year, where the number of businesses in the city increased by 228 (+2.9%).

2.7 The value of non-residential construction investment increased by 42.7% over the year to January 2024 compared with 4.0% growth nationally. This strong growth in the city was driven by a mix of public and private investment. Health sector investment increased fivefold to near $50 million in the year to January 2024, while construction of education buildings remained elevated at $44.4 million. Industrial and commercial investment were also elevated at $56.9 million and $29.9 million respectively.

2.8 Jobs data for the city was mixed over the year, with filled jobs by workplace address decreasing and filled jobs by place of residence increasing. Jobs by workplace address fell -2.7% to a total of 46,446 in the December quarter, while the number of Palmerston North residents in jobs increased by 2.0% to 35,940. This compares with 2.8% and 2.9% growth respectively, nationally.

2.9 Domestic economic conditions suggest further easing of labour market conditions in 2024, driven by an increase in the number of available workers and easing demand for goods and services across the economy.

2.10 The annual average unemployment rate increased to 4.4% in the city in the December quarter 2023, up from 3.2% in the December quarter 2022. This compares with 3.7% nationally. This remains low by historical standards but is certainly on the way up as businesses and government shed workers in response to challenging economic conditions. A lack of supply of workers was the biggest challenge for businesses in 2022 and the first half of 2023, with concerns now shifting to weaker demand.

2.11 The number of MSD jobseeker beneficiaries in Palmerston North increased by 309 over the year to December, to a total of 3,087. This is an 11.1% increase on the previous year compared with an 11.6% increase, nationally. Of this increase, 234 people were receiving the benefit due to health conditions and disability. Jobseeker benefits increased across all age-groups both in the city and nationally.

Earnings and income

2.12 Statistics NZ publishes business collection data that estimates quarterly earnings at the territorial authority level. This series is not as robust as the Linked-Employer-Employee data but does provide a more-timely indication of earnings from salary and wages by territorial authority area. According to this series, earnings in the December 2023 quarter increased by 10.0% in the city compared with the December quarter 2022. This compares with a 9.5% increase nationally over the same timeframe. Growth in earnings, both in the city and nationally, is reflective of the elevated wage inflation that prevailed over the period due to a shortage of workers and strong demand across the local and national economy.

2.13 Elevated earnings growth is further reflected in the Statistics NZ median salary and wages data, with median earnings in the city increasing by 6.4% over the year to December 2022. This compares with a 7.3% increase nationally. Strong wage growth, due to sector wage agreements and the continuation of tight labour market conditions in 2023, are expected to have pushed median salaries and wages up at a higher rate in 2023.

2.14 Wage price pressure is expected to ease in 2024 alongside CPI inflation, relieving some pressure on businesses and organisations across the country.

Spending

2.15 Retail spending increased by 2.7% in the city over the year to February 2024, to a total of $1,503m. This compares with a 4.1% increase in retail spending nationally. Retail spending is in dollar value and does not account for the impact of inflation on the purchasing power of consumers. Early indicators of inflation in 2024 suggest that the growth in retail spending continues to fall below the rate of inflation, implying negative real growth in spending over the year. CPI and Household Living Price Index (HLPI) data for the March quarter 2024 will provide further information on household inflation impacting on households.

2.16 The pressure on household budgets is reflected in the decrease in spending on discretionary items. Home and recreational retail spending in the city fell by -7.0% over the year to February 2024, with other consumer spending falling by -21.8% over the same period.

2.17 New car registrations in the city fell by -2.0% over the year to December 2023 compared with a -0.6% fall nationally. In contrast, commercial vehicle registrations increased by 1.7% in Palmerston North relative to a -20.5% fall nationally.

2.18 Tourism expenditure data is temporarily unavailable due to the closure of the business providing the data. As a temporary alternative, the annual change in guest nights is used as an indication of tourism activity in the city and across the country. Over the year to February 2024, guest nights increased by 0.2% to 439,500. This compares with a 17.3% increase, nationally. The national increase was driven by the resurgence of international visitors to our tourism hotspots, heavily impacted from border closures and a downturn in spending from 2020-2022.

Housing

2.19 The average house price in the city continues to ease upward with prices increasing 1.6% over the February 2024 quarter, to a value of $650,302. This is equal to the 1.6% quarterly increase, nationally. The average house price, both in the city and nationally, remains slightly down on a year ago.

2.20 The affordability of saving for a deposit alongside easing interest rate expectations continues to boost mortgage lending to first home buyers with lending making up 22.6% of total mortgage lending in February 2024. This compares with a nine-year average of 16.8%.

2.21 Conversely, mortgage lending to investors continues to be weak, making up just 17.3% of total mortgage lending in February 2024. This compares with a longer term average of 22.1%. Investor lending is expected to strengthen as interest deductibility is restored by the new government and financial conditions become more favourable.

2.22 Home ownership remains more affordable in Palmerston North than many other parts of the county, with the average house price equal to 5.2 times the average income in December 2023. This compares with 7.0 times the average income, nationally.

2.23 Renting a home in Palmerston North is more affordable than much of New Zealand, with annual average rent making up 19.5% of annual household income compared with 21.5% nationally. A comparison of housing and rental housing affordability compared with similar cities across New Zealand, is included in the following section of this report.

2.24 After a strong 2022, the number of new dwelling consents issued across New Zealand fell by -26.3% over the year to January 2024. This decline was driven by elevated development costs, weaker demand and pricing, and tougher lending conditions. Over the same period, new dwelling consents in the city increased by 16.4% to a total of 468 dwellings.

2.25 Kāinga Ora (KO) was a significant developer in the city over 2023 and into 2024 with an estimated 116 new dwellings consented from March 2023 to March 2024. Kāinga Ora has signalled its intention to continue to invest in housing in Palmerston North, with a total of 496 new dwellings planned to be built in the city to 2026.

3. Cities quarterly economic snapshot

3.1 The performance of the city over the year to December 2023, was mixed when compared to comparator cities. Palmerston North city ranked number one on the annual increase in commercial vehicle registrations, school attendance, and home ownership and rental affordability.

3.2 New commercial vehicle registrations reflect the willingness of businesses to invest in big ticket items, with the relative strength of new commercial registrations in the city implying some investment continues. It is worth noting that the growth rate in the city is just 1.7%, with all other comparator cities posting negative growth over the year.

3.3 Palmerston North boasts the fourth highest school attendance rate in the country as well as the highest school attendance rate when compared with comparator cities, at 56.3%. School attendance is positively correlated with improved educational attainment and outcomes for young people (He Whakaaro, Education Counts, MoE, 2020).

3.4 Palmerston North city has the most affordable housing when compared with other tier 2 cities. Both home ownership and rental affordability is higher in Palmerston North than all comparator cities.

3.5 GDP growth in the city ranks fourth out of seven locations at -0.5%. Rotorua ranks highest at 0.4% over the year, with a rebound in tourism lifting economic activity relative to 2022. Whangārei, Napier, and Hastings experienced a sharper fall in GDP than Palmerston North. The annual fall in GDP in Dunedin and New Plymouth was less than in the city, but still negative over the year.

3.6 Growth in consumer spending and new car registrations was weak over the year, reflecting the challenges faced by households due to the high cost of living and pressure on household budgets. While growth in new car registrations was negative in Palmerston North over the year (-2.0%), the city ranked second compared with other cities measured.

3.7 Labour market indicators were also weaker than comparator cities with employment by place of residence posting the lowest growth rate of 1.6% over the year. The unemployment rate was higher in Palmerston North than all other locations except Rotorua. Unemployment remains low in the city and across New Zealand when compared with historical averages.

3.8 A greater proportion of our young people are engaged in education, employment, or training than many of our comparator cities. The NEET rate ranked third when compared with other locations at 11.8%. Rotorua, Whangārei, New Plymouth, and Hastings all have higher NEET rates than Palmerston North.

3.9 Residential and non-residential construction has held up relatively well in the city compared with many other locations. This has been supported by a mix of public and commercial and industrial development. Palmerston North posted the third highest growth when compared with comparator cities for both non-residential construction and new dwelling consents. Non-residential consent values increased by 45.5% over the year to December 2023 alongside a 7.1% increase in new dwelling consents. New Plymouth and Rotorua both experienced higher growth in non-residential consent values over the year, while the growth rate of new dwelling consents in Napier and Rotorua were higher than the city. National growth rates for both non-residential and new dwelling consents were negative over the year. The Cities snapshot is attached as Attachment 2.

4. Palmerston North electronic card spending report – December 2023

4.1 Reflecting the current economic climate, total electronic card spending fell 0.8% in the December quarter 2023 to a total value of $407.0. This compares with a 0.8% increase nationally. National growth was predominantly driven by a partial recover of spending in parts of New Zealand with greater dependency on tourism spending.

4.2 Over the year to December 2023, electronic card spending in the city reached $1,496 million, up 3.0% from the previous year. This compares with a 4.3% increase nationally over the same period. Of this total, 56.0% was spent in the city centre.

4.3 Spending in the city centre increased by 4.2% over the year. The retail sectors most affected by the pullback in consumer spending were ‘home and recreational retail’, falling -9.2%, and ‘other consumers spending’ down by -18.1% over the year. This is consistent with electronic card spending data for many parts of the country, where spending on non-essential goods and services has come under pressure from rising household costs.

4.4 Spending on ‘groceries and liquor’ and ‘cafes, restaurants, and bars’ increased the most over the year to December 2023, reflecting an increase in spending on essential items. The increase in spending in cafes, restaurants and bars in the city is partly due to the restrictions on the sector over the comparator year (year to December 2022), when COVID restrictions continued to impact on activity.

4.5 Spending in the city centre (Palmerston North Inner CBD and Broadway Avenue) retail precinct was the only precinct in the city to experience spending growth above the rate of the inflation over the year to December 2023, increasing 7.4%. Reflective of the growing economic challenges, spending in the December quarter 2023 fell 0.2% from the same quarter 2022.

4.6 The annual inflation rate to December 2023 was 4.7%, indicating a real decline in spending across retail precincts in the city except for the Inner CBD and Broadway Avenue. This real decline in spending is observed alongside elevated net international migration into New Zealand since March 2023.

4.7 Palmerston North consumers remain relatively loyal to local merchants. The loyalty rate, explained as the percentage of spending by Palmerston North residents at local retailers, was 81.6 % over the year to December 2023. This is up from 81.4% the previous year.

4.8 There was a $300.0m net gain from spending flowing into the city, compared with spending flowing out of the city over the year to December 2023. This is a 3.0% net gain, compared with the previous year.

4.9 The Quarterly Economic Card Spending Report for December 2024 is attached as Attachment 3.

5. Economic outlook

5.1 The current challenges are reflected in the economic data for the city and the country. Interest rate pressures are flowing through to households and suppressing spending across the economy. This is impacting on the demand for goods and services across our economy and placing businesses under significant pressure. These conditions are expected to impact on economic activity flowing through to jobs and earnings over 2024.

5.2 On the upside, the actions of the RBNZ to suppress spending across the economy and drive down inflation is working, increasing the likelihood that interest rates will fall sooner than previously expected. This will relieve pressure on households, enabling increased spending across the economy, supporting businesses and levels of employment alongside the economic wellbeing of our communities.

5.3 Planned investment remains positive in the city with elevated central government investment in infrastructure and housing, and commercial and industrial construction investment. Affordability of our housing and school attendance also standout, as we look toward the future resilience of our city.

5.4 The Palmerston North economy also benefits from a large proportion of big business in the city, alongside the scale of our defence, education and health care sectors. These large employers are less vulnerable to economic cycles and the contraction of fiscal spending. These attributes of the Palmerston North economy will support economic activity relative to parts of New Zealand with greater dependency on consumer demand and back office roles in central government.

5.5 There is some risk to central government employees in the city who fill back office functions. Frontline services such as health workers and defence roles are less vulnerable. We will be watching conditions closely.

5.6 Challenges to our business community and households are expected to continue throughout 2024 with relief in the form of lower interest rates widely anticipated later in the year. Analysis of the performance of the city economy, including any changes to the economic outlook, will be provided throughout the quarterly economic reporting series to Committee.

6. Compliance and administration

Does the Committee have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 1: An Innovative and Growing City
The recommendations contribute to the achievement of action/actions in Economic Development
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Reporting on economic trends in the city and the longer-term outlook for growth, is important for encouraging local business to invest growing their business and attracting new businesses to the city.

Attachments

1.	Palmy Economic Growth Indicators - April 2024 ⇩
2.	Cities Snapshot - December Quarter 2023 ⇩
3.	Quarterly Electronic Card Retail Spending Report - December 2023 ⇩

Memorandum

TO: Economic Growth Committee

MEETING DATE: 24 April 2024

TITLE: Palmerston North Economic Structure Summary Report 2023

Presented By: Stacey Andrews, City Economist

APPROVED BY: David Murphy, Chief Planning Officer

RECOMMENDATION TO ECONOMIC GROWTH COMMITTEE:

1. That the Committee receive the report titled ‘Palmerston North Economic Structure Summary Report 2023 (Attachment 1)’ presented to the Economic Growth Committee on 24 April 2024.

1 Introduction

1.1 This memorandum presents a summary of the key themes from the Palmerston North Economic Structure Summary Report 2023 (Attachment 1).

1.2 The Structure Report summarises the changes to the Palmerston North economy that have occurred over the year to March 2023, as well as over a 10-year and 20-year timeframe.

1.3 The report includes changes to Gross Domestic Product (GDP), employment and occupational structure, business size and structure, business survival rates and the relationship between GDP and carbon emissions in the city. GDP and earnings per worker by industry is also included. The report also summarises changes in GDP, employment and employment by occupation over a 10-year and 20-year timeframe.

1.4 Infometrics and Statistics New Zealand data has been used to understand business, employment and occupation data for the city over the March 2023 year. Estimating the carbon intensity of the city economy combines Infometrics GDP data with the carbon emissions inventory for Palmerston North over the period 2018-2022 (calendar years).

1.5 Attachment 1 of the attached report includes a summary of industry GDP, employment, GDP per worker, and average earnings per worker over the year to March 2023. Latest earnings data by industry to September 2022 is also included in Attachment 1.

2 THE ECONOMIC STRUCTURE OF THE PALMERSTON NORTH ECONOMY

2.1 The Palmerston North economy performed well over the five-years to December 2023, growing by 13.4% compared with 11.2% growth in the New Zealand economy.

2.2 The relatively strong performance of the Palmerston North economy has been supported by the diverse mix of public and private sector activity and employment across the economy, as well as a higher proportion of big business in the city relative to the national profile.

2.3 Elevated public and private investment has also supported economic activity in the city, alongside fewer impacts from COVID-19 restrictions relative to many other parts of New Zealand.

2.4 Palmerston North GDP was estimated at $6.4 billion for the year ended March 2023. This is an additional $132.2m (+2.1%) from the year ended March 2022.

2.5 The employing sectors of the Palmerston North economy directly generated $5.4 billion in GDP (84.1% of total GDP) to the Palmerston North economy. A further 8.3% of GDP was generated from owner-occupied property operation and 7.6% from taxes and duties. The analysis of GDP in this report is based on the GDP generated from employing sectors of the economy.

2.6 GDP growth across employing sectors of the Palmerston North economy increased by $88.0 million over the March 2023 year, up 1.7% compared with the previous year.

2.7 The carbon intensity of the Palmerston North economy, explained as the level of carbon emissions generated per $1 million in GDP, has been declining since 2018. In the 2018 calendar year, 129.1 tCO₂-e were emitted per $1 million of GDP in the city compared with 109.3 tCO₂-e in 2022. The source of energy generation explains much of the decrease. The factors driving the results and further research underway, is discussed in more detail within the attached report.

2.8 The following section summarises the key insights from the ‘Palmerston North Economic Structure Summary Report 2023’ (Attachment 1).

a. The city economy is buffered by a large and diverse government, health and education sector, contributing 31.2% of GDP and 36.0% of total employment. This compares with 17.1% of GDP and 23.1% of employment, nationally.

b. ‘Public administration and safety’ was the largest sector in Palmerston North by contribution to GDP and the third largest employer, contributing $704.4m (13.1%) to GDP and 6,105 (10.8%) jobs to the city economy. ‘Defence’ is the largest sub-sector, adding $293.8m in GDP over the March 2023 year and employing 2,369 personnel.

c. ‘Rental, hiring and real estate services’ was the highest growth sector in the city over the year, increasing by $23.4m to a total value of $463.2m. The sector also posted the third highest growth in employment. Real estate services drove much of this growth, with GDP increasing by $16.8 million to a value of $273.6m and employment increasing by 56 to 686. GDP growth in the sector was driven by strong demand for housing and elevated house price growth in the earlier part of the March 2023 year.

d. ‘Health care and social assistance’ continues to be the largest employer, contributing 8,008 jobs to the city economy. Employment growth in the sector was also strong over the year with a substantial increase in the number of people employed in midwifery and nursing occupations. This growth was supported by an increase in skilled workers from the opening of the borders and the easing of COVID-19 restrictions in 2022.

e. ‘Manufacturing’ had the highest increase in jobs over the year, rising by 132 in response to easing COVID-19 restrictions and the continuation of strong demand. Since 2023, the manufacturing sector has come under significant pressure with the downturn in global economic activity, weighing on employment levels and profitability. Data released in January 2025 will provide further insight into how these pressures have impacted on the city economy over the March 2024 year.

f. Palmerston North has a highly skilled workforce. Professionals continue to be the largest occupation group in the city, making up 27.4% of total employees. Managers are the second largest group, with 15.8% of the workforce working in management occupations.

g. The largest growth occupations over the year to March 2023 were professionals (+168), machinery operators and drivers (+104) and managers (+78).

h. Professional roles were by far the largest growth occupation in the city over all periods, adding 2,843 roles over 10-years, and 5,544 over the 20-years to March 2023.

i. Of the total employees in the city, 33.4% are employed in knowledge-intensive industries, compared with 32.7% of the New Zealand workforce. The Palmerston North workforce also has a slightly higher proportion of highly skilled and skilled workers than New Zealand at 52.8% versus 51.6% nationally.

j. There were 8,412 businesses in the city in March 2023, up by three firms compared with the previous year. Of total workers, 36.2% were employed in businesses with 100+ employees. In contrast, small to medium enterprises (<20 employees) make up 94.0% of businesses and create 38.6% of jobs.

k. Reflecting the scale of big business in the city, the average business size (average number of employees per business) in the city is 6.7 compared with 4.3 employees per business nationally.

l. GDP contracted in the ‘retail trade’ sector, ‘education and training’, ‘information media and telecommunications’, ‘construction and wholesale trade’ in the city over the year to March 2023.

m. There are a variety of reasons for the fall in GDP of the above sectors over the year. ‘Retail and wholesale trade’ have been negatively impacted by reduced spending from households and businesses due to elevated living costs while ‘education and training’ has fallen due to strong labour markets and reduced demand for tertiary education. The ‘information, media and telecommunications’ sector has been declining over time as other forms of media take over from traditional media and advertising revenue falls due to economic conditions. ‘Construction’ sector activity has eased after elevated growth in 2022.

n. The business survival rate expresses the percentage of new businesses in February 2020 that continued to operate in February 2023. The business survival rate for the city over this three-year period was 55.5%. This compares with 61.6% nationally. Business survival rates for the city have fluctuated between 61.1% and 55.5% over the period 2017-2023.

o. The industry sectors that fell below the 55.5% survival rate were ‘agriculture, forestry and fishing’, ‘transport, postal and warehousing’, ‘rental, hiring and real estate services’, ‘professional, scientific and technical services’, ‘administrative and support services’, ‘arts and recreation’, and ‘other services’. Decisions around the structure and size of businesses influence these numbers, as does the wider economic environment. Business survival rates over the next few years will provide further insight into any disruption caused by COVID-19.

2.6 The Palmerston North economy has proven resilient through the challenges of the last few years. Challenges have been mounting however, as wider economic, financial and fiscal factors impact on local economic activity.

2.7 On the upside, the economic slowdown signals that the efforts of the Reserve Bank to reduce spending and rein in inflation are working, increasing the odds of an earlier than expected cut to the Official Cash Rate (OCR). Lower interest rates will provide much needed relief to stretched household and business budgets, enabling greater demand for goods and services across the economy.

3 Compliance and administration

Does the Committee have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		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 achievement of action/actions in Economic Development The action is: Council decision-makers are provided with quality and timely advice.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	A sound understanding of the make-up and contributions of the Palmerston North economy will assist elected members to make well-informed decisions.

Attachments

Palmerston North Economic Structure Summary Report 2023 ⇩

Memorandum

TO: Economic Growth Committee

MEETING DATE: 24 April 2024

TITLE: International Relations and Education Activities 6 Monthly Report

Presented By: Gabrielle Loga - International Relations Manager

APPROVED BY: David Murphy, Chief Planning Officer

RECOMMENDATION TO Economic Growth Committee:

1. That the Committee note the progress on the International Relations and Education activities over the past 6 months, contributing to the Economic Development Plan and Innovative and Growing City Strategy.

1. ISSUE

1.1 The purpose of this memorandum is to update the Economic Growth Committee on the development of Palmerston North’s key international relations and education activities over the past 6 months and their contribution to the relevant goal, strategy and plan.

2. BACKGROUND

2.1 On the establishment of the International Relations Office in 2016, Council agreed that a 6-monthly report be presented to the Economic Development Committee (currently known as the Economic Growth Committee). The reports are an appropriate mechanism for keeping Council informed of general progress and developments.

3. INTERNATIONAL CITY PARTNERSHIP UPDATES

Mihara, Japan (2019 – 2024)

3.1 Palmerston North signed a city partnership agreement with Mihara, Hiroshima in March 2019. The partnership includes cooperation in education, emergency management, sport, economy and culture.

3.2 This year will mark its fifth anniversary where both cities are committed to deepening the partnership and enhancing further development and cooperation. Two international visits were undertaken over the last 6 months:

Councillor Dennison Visits Mihara, October 2023

3.3 Councillor Dennison met with the Hiroshima Prefecture Board of Education and visited Hiroshima Global Academy campus to inspect the quality of living and study arrangements where there could be opportunities for Palmerston North high school students to attend.

3.4 Councillor Dennison also met with Deputy Mayor of Mihara, and other city facilities including Mihara Fire Station and Mihara Shinmei no Sato centre. The trip itinerary is included as attachment 1.

Figure 1- Councillor Dennison visited Hiroshima Global Academy, provider of scholarship programme to Palmerston North students

Mayoral Delegation to Mihara, January – February 2024

3.5 Palmerston North’s Mayoral delegation went to Mihara to celebrate its fifth anniversary as a sister city.

3.6 A series of events was organised to celebrate this event including a Mayoral meeting with exchanging of city gifts, a tree planting ceremony at the New Zealand Friendship Forest, and a signing of the Memorandum of Understanding (attachment 2) between Hiroshima Global Academy, Palmerston North City and Mihara City providing a scholarship opportunity for Palmerston North high school students to study an International Baccalaureate (IB) Diploma Programme at no tuition cost.

3.7 All events were broadcast and reported on Mihara’s local news outlets for their significance. Both Mihara FM Radio Station and Mihara TV also interviewed Mayor Grant Smith, giving him the opportunity to promote Palmerston North to the wider audience in Mihara.


Figure 2- Presenting 5th anniversary city gifts	Figure 3- Mayor Smith interviewed by Mihara TV, promoting Palmerston North to Mihara’s audience

3.8 The delegation went to Sagiura Elementary School for a cultural experience. It was another opportunity to promote Palmerston North as a study destination for international students.

A group of people posing for a photo

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Figure 4- Students and Teachers at Sagiura Elementary School showing off their new Palmy sunglasses

3.9 In addition to the diplomatic engagements, the delegation also visited seven different water and waste facilities, learning about Mihara’s best practices in disaster prevention and emergency management, as well as some of the city’s key manufacturers and businesses to explore possible collaboration opportunities.

3.10 Details of this visit is reported in a separate report to the same Committee meeting titled “Overseas Mission to China and Japan 2024”.

Kunshan, China (1994 – 2024)

3.11 Palmerston North and Kunshan began talks to establish economic and trade relations in 1991 and signed a Friendship City Agreement in June 1994. The agreement stated the desire to develop various bilateral exchanges and cooperation in economic trade, scientific research, culture, education and tourism. On 8 August 1996, a further agreement was signed to enhance the mutual exchanges and cooperation in city management, city engineering and environmental protection.

3.12 This year will mark the partnerships 30 year anniversary. Both cities are keen to upgrade this partnership to the status as ‘Sister Cities’. While it does not translate to much difference in New Zealand, the new status will allow more access and resource allocation for relationship management in the Chinese system.

Areas identified as mutual interests for exchanges and cooperation include water management, AgriTech research, innovation and product development, trade and business, education and culture.

Mayoral delegation to Kushan, January 2024

3.13 In commemoration of the 30 years of friendship between Palmerston North and Kunshan, a Mayoral delegation travelled to Kunshan.

3.14 A high-level meeting between the Palmerston North’s delegation and Kunshan’s city leaders was held to celebrate and acknowledge the significance of the milestone.

A group of people sitting in a circle

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Figure 5- Formal meeting with Kunshan city leaders

3.15 A Memorandum of Understanding Enhancing Friendship City Relationship (Attachment 3) was signed to commit to the upgrading the relationship status to “sister cities” between Palmerston North and Kunshan. The two cities agreed to continue promoting exchanges and cooperation in the fields of economy and trade, science and technology, education, commerce, innovation, city engineering, tourism and sustainable development.

AgriTech and Food Connection with Kushan

3.16 During their stay in Kunshan, the Mayoral delegation visited Lujia A+ Greenhouse factory and the East China Agricultural Science and Technology Centre.

3.17 Following the visit, Officers engaged with the regional stakeholders in the agri-food tech sector to gauge interest in collaboration with Kunshan. As a result, FoodHQ is in conversation with the East China Agricultural Science and Technology Centre, discussing a collaborative Memorandum of Understanding.

3.18 As part of the New Zealand China Council’s delegation to China in April 2024, Dr Victoria Hatton will be visiting the East China Agricultural Science and Technology Centre to conduct in-depth discussion on exchanges and cooperation.

Figure 6- Meeting with East China Agricultural Science and Technology Centre in Kunshan

3.19 Further details of this visit are outlined in a separate report to the same Committee meeting titled “Overseas Mission to China and Japan 2024”.

Kushan-Themed Celebrated in Palmerston North

3.20 To commemorate the anniversary in Palmerston North, Council officers organised a Kunshan-themed celebration booth at the Lunar New Year event in January 2024 at Te Marae o Hine - The Square.

3.21 Deputy Mayor Debi Marshall-Lobb welcomed a diplomatic delegation from the Chinese Embassy in Wellington as well as diplomats from several other countries to Palmerston North on the day including His Excellency Mr Nguyen Van Trung, Ambassador of the Socialist Republic of Vietnam to New Zealand and His Excellency Korean Ambassador Mr Changsik Kim.

3.22 Ms Chen Liyan, Mayor of Kunshan, delivered a celebratory speech via a video message. The distinguished guests spoke to the community about the significance of Lunar New Year in their respective culture and showed strong support for the effort of preserving and promoting cultural diversity in the city.

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Figure 7- From left to right: Ms Ping Peng from Massey University, Councillor Mark Arnott, Deputy Mayor Debi Marshall-Lobb, Deputy Head of Mission Minister Counsellor Wang Genhua and Counsellor Officer Fu Zhiqiang from the Embassy of China, Global Ambassador Arisa Miyazaki at the Lunar New Year event

Kunshan delegation to Palmerston North, 2024

3.23 In keeping with the celebration theme between Palmerston North and Kunshan this year, Kunshan Municipal People’s Government is planning to send a delegation to Palmerston North later in the year with a focus on AgriTech, business and investment.

3.24 Kunshan is interested in attending E Tipu: The Boma Agri Summit in June 2024. However, should the planning of the delegation require more time, they will consider visiting Palmerston North at a later date, possibly around the time of the International Hydrocolloids Conference in November 2024.

Guiyang, China

3.25 Guiyang have expressed its desire to enhance educational collaboration with Palmerston North at elementary school level.

3.26 A Mayor-led delegation visited China in January 2024 and was hosted in Guiyang from 21 – 23 Jan 2024.

3.27 The delegation participated in high level meetings with Guiyang’s city leaders, cultural experience hosted by the Central Primary School of Dula Buyi Village, dialogue on infrastructure, logistics and investment opportunities with Guiyang’s economic development zones and the Guizhou Communications Construction Group.

3.28 Another highlight in Guiyang was the opportunity to visit their water and waste treatment facilities. These engagements have facilitated connection between the infrastructure management teams in both cities and laid down the foundation for future exchanges of ideas and best practices.

3.29 Details of the visit is reported in a separate report to the same Committee meeting titled “Overseas Mission to China and Japan 2024”.

Wageningen, The Netherlands

3.30 Following the June 2023 visit to Wageningen and the discussion with Mayor Vermeulen in The Hague, a further online meeting was organised on 7 December 2023.

3.31 The meeting was attended by:

· Mayor Grant Smith – Palmerston North City Council

· Mayor Floor Vermeulen – Wageningen

· Dr Chris Anderson – Massey University

· Mr Marco Otte – Wageningen University and Research

· Mrs Gabrielle Loga – Palmerston North City Council

· Mr Kunal Chonkar – Palmerston North City Council

· Ms Tjitske Zwerver – Gemeente Wageningen

3.32 Cities want to be exciting and innovative places to live in order to attract residents and investment. Universities want to attract students and the perceived study experience is a big driver for student choice of university. As part of the local community, the more vibrant the community is, the more attractive the city is to students.

3.33 The focus was on topics where city-university collaboration is important to elevate the domestic and international study experience, such as campus development, student housing, food security, mobility, climate and renewable energy policy, sustainable development goals, etc.

3.34 Both Massey University and Wageningen University and Research agreed to look at which universities and cities could potentially be invited to join this city-university network.

3.35 Issues to be addressed in the next meeting include:

· The recognition of the benefit of the city/university partnership

· Student mobility agreements in place which would enable all partners in the network to send and receive exchange students within the network cities and universities.

· An active commitment of each city to support student mobility (financial or in kind).

· A commitment to the sustainable development goals where the outcomes of the network can be reported through meeting the targets.

3.36 The timing of the next meeting will be discussed in April – May 2024.

Missoula, United States of America

Missoula Day 25 November 2023

3.37 Palmerston North City Council and PalmyBID cooperated to once again celebrate the longstanding sister city relationship between Palmerston North and Missoula on the annual Missoula Day on 25 November 2023.

3.38 The event was community and family focused. It delivered a range of entertainment and free activities mainly for children as well as a popular hot dog eating competition.

3.39 In collaboration with Destination Missoula, Arts Missoula and Palmerston North City Council, PalmyBID ran a Win A Trip for Two promo. Anybody who spent $20 in participating retail stores in the city centre went in the draw to win flights, accommodation and the experience of a lifetime in Missoula in August 2024. The winners of the promo were Ella McKinnon and Nic Davey.

3.40 On the day of the event, Deputy Chief of Mission Mr David Gehrenbeck from the Embassy of the United States delivered a remark on the importance of sister cities and congratulated Palmerston North and Missoula on the 41^st sister city anniversary. Mr and Mrs Gehrenbeck joined the community in square dancing and visited the Missoula booth, organised by Palmerston North City Council International Relations team and the city’s global ambassadors.

3.41 The Missoula booth provided small souvenirs from Missoula and Montana to people who could answer questions about the Palmerston North-Missoula sister city relationship or the well-known commonalities between the two cities. It attracted many participants and successfully increased awareness and knowledge of Missoula and the sister city partnership with Palmerston North.


Figure 8- US Deputy Chief of Mission joined locals to learn how to square dance on Missoula Day 2023	Figure 9- PNCC Missoula booth

Indigenous Connection

3.42 As a result of the meeting with US Deputy Chief of Mission David Gehrenbeck on Missoula Day, the International Relations team was provided with information about the US Grants Program Fund and applied for it in December 2023.

3.43 The application proposed to bring an indigenous delegation from Missoula to Palmerston North in June 2024 to co-present with Rangitāne at E Tipu: The Boma Agri Summit on the indigenous practices on food harvesting, consuming and sustainable traditions. It was proposed joint project between Rangitāne, Central Economic Development Agency and Palmerston North City Council.

3.44 The application has been rolled over to the first financial quarter of 2024 for consideration due to the volume of the funding applications received in December 2023. This has unfortunately prevented the delegation to join the 2024 Boma Agri Summit as proposed. However, it is an opportunity to pursue for future projects and supporting bilateral engagements.

Visit from Missoulians

3.45 A direct outcome of the proactive sister city relationship between Palmerston North and Missoula is the increase in mutual tourism activities between the two peoples.

3.46 Another outcome of the city partnership is the two-way tourism activities. Palmerston North welcomed two Missoulians to town for a week in February 2024.

3.47 The regular people-to-people interactions continue to deepen the city-to-city partnership and priming it for further cooperation in other areas including trade and business, education, sports, and sustainable city development.

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Figure 10- Missoulians visit Palmerston North

4. KEY INTERNATIONAL RELATIONS EVENTS

Festival of Cultures, February 2024

4.1 The Palmerston North’s annual Festival of Cultures offered a two-day programme for the Diplomatic Corps to explore the city’s key sectors and celebrate cultural diversity with the communities.

4.2 This year the programme included a city tour showcasing the local AgriTech sector and diplomatic engagements.

4.3 An impressive line-up of 41 members of the diplomatic corps representing 22 different nations and the European Union were welcomed to Palmerston North during the two days.

4.4 The diplomatic delegation received a warm welcome from Palmerston North City Council and Rangitāne at Te Marae o Hine – The Square before spending the day visiting FoodHQ Innovation Hub, meeting with Sprout AgriTech, MAF Digital Labs, Biolumic, Croptide, Agri HQ, Lindsay Irrigation and FMG, as well as visiting Levno and SeedSpider.

Figure 11 - Diplomatic delegation visit to FoodHQ

4.5 After his first visit to the city, the new European Union ambassador His Excellency Mr Lawrence Meredith expressed how impressed and inspired he was by the dynamic economics of Palmerston North and the potential from this region. His comment reflected the same sentiment of other members of the diplomatic delegation.

4.6 The local companies were appreciative of the opportunity to showcase a suite of AgriTech products with international standing that are ready for export as well as the useful connections made. Mr Steve Pavarno, Executive Officer of ManawaTech was pleased to see that during the presentations and visits, many delegates took photos of the slides, asked good questions and interacted with the presenters afterwards.

4.7 The weeks following the tour saw multiple follow-up conversations between the Central Economic Development Agency and a number of diplomats including ambassadors from the European Delegation, The Netherlands, United Kingdom, Germany and South Korea. There has been sharing of the Manawatū Regional Food Strategy, Te Utanganui, and Manawatū Destination Management Plan as well as discussion on returning visits to further explore opportunities for trade and collaboration.

Figure 12 - Diplomatic delegation visit to MAF Digital Labs

4.8 The delegation attended the Mayor’s Morning Reception in the Convention and Function Centre on the Saturday morning. The warm welcome extended to the delegates by the Mayor, Councillors, Palmerston North City Council’s executive leaders, Rangitāne and other community leaders showed a united front of Palmerston North, setting the scene for a celebration of cultural diversity at the World Food, Craft and Music Fair in Te Marae o Hine – The Square.

4.9 During the opening ceremony, Mayor Grant Smith announced the commemoration of the 5^th sister city anniversary between Palmerston North and Mihara. Mr Shiro Inoue, Assistant Director of CLAIR Sydney, represented Mihara and read a letter of congratulations from the Mayor of Mihara Mr Yoshihiro Okada.

4.10 With the support of the Japanese Association of Palmerston North, Mr Inoue and the International Relations team organised a Mihara stall throughout the day, showcasing Mihara and the sister city partnership. The stall also gave out paper fold games, tourism brochures, and free Takomeshi (Octopus rice), a special delicacy of Mihara.

4.11 After the dignitaries’ formalities and the performances began, the diplomatic delegation dispersed into the crowd, joining their respective cultural stalls to promote their own culture for the rest of the day.

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Figure 13- Diplomatic delegation at the Opening Ceremony of the 2024 Festival of Cultures


Figure 14 - Diplomats join communities to represent their cultures at FOC	Figure 15- Mihara booth at FOC attended by Mr Shiro Inoue from Mihara, Global Ambassador Arisa and representatives from the Japanese Association of Palmerston North

5. OTHER DEVELOPMENT OPPORTUNITIES

Hosting CLAIR Sydney Officer’s Study Tour – Mihara Representative

5.1 CLAIR stands for Council of Local Authorities for International Relations of Japan. It is a government-affiliated general incorporated foundation that works to support the internationalisation efforts of local government in Japan through providing training opportunities, fostering people-to-people exchange with the JET Programme and other initiatives, supporting multiculturalism, and by carrying out research behalf of local governments etc.

5.2 CLAIRs staff is mostly made up of Japanese employees seconded from local governments throughout Japan, and non-Japanese Programme Coordinators. Most Japanese local government staff work for 1 year at CLAIR Tokyo and then spend 2 years at one of their overseas offices.

5.3 Mr Shiro Inoue is a staff member of Mihara City Council and undertook a one-week study tour in Palmerston North during February 2024. He has been seconded to CLAIR Sydney office since 2022. To complete his secondment by the end of March 2024, Mr Inoue was required to do a one-week study tour in an Australian or New Zealand’s local governments to improve their understanding of the host council, foster connections and look to collaborate in various areas. Upon his return to Mihara City Council, Mr Inoue will look after the international relations portfolio of the city.

5.4 During his time in Palmerston North, Mr Inoue was hosted by the International Relations division in the Strategic Planning Unit. He learned about the Council’s structure, functions and operation. He also spent time with the Community Development team to explore their work with Welcoming Communities, met with Manawatū Multicultural Council to understand the support in place for international migrants in the city, and visited the local schools to promote the recently signed Memorandum of Understanding between Palmerston North, Hiroshima Global Academy and Mihara on education cooperation. In addition, Mr Inoue engaged with IPU NZ and the Japanese Association of Palmerston North to further his understanding of Mihara’s sister city.

5.5 Most importantly, Mr Inoue had several discussions and workshops with the International Relations on:

· The scope of international relations at local government level

· Areas of collaboration for Mihara and Palmerston North going forwards

· How the two cities could utilise international connections for mutual benefits for local communities.

5.6 CLAIR Sydney’s Executive Director wrote a letter to thank Palmerston North City Council for hosting Mr Inoue from 18 – 25 February 2024, reiterating that his learning would contribute to the continued development of the relationships between Palmerston North and local governments of Japan, especially Mihara City.

Engagements with the High Commission of India

5.7 On 26 January 2024, Councillor Mark Arnott and International Relations and Education Advisor Kunal Chonkar represented Palmerston North to attend the 75^th Republic Day of India in Wellington.

5.8 At the event, Councillor Arnott met with Indian High Commissioner Ms Bhushan Neeta who is keen to engage with the Indian community in Palmerston North and explore opportunities of collaboration and exchanges with the city in various areas.

5.9 Councillor Arnott also had an engaging and insightful discussion with Mr Michael Ahie, Pro Chancellor of Massey University, Director of Zespri, Chair of Spring Sheep Milk Co., Chair of New Zealand Plant Market Access Council (PMAC) and member of the Statistics New Zealand Risk and Assurance Committee, among others. It was a valuable networking opportunity for Palmerston North at the significant celebration of the 75^th Republic Day of India.

Figure 16- International Relations & Education Advisor Mr Kunal Chonkar and Councillor Mark Arnott met with Indian High Commissioner at the 75th Republic Day of India

Vietnamese Prime Minister Visits New Zealand

5.10 Vietnam is one of New Zealand’s key relationships in South East Asia, one of the fastest growing economies in the world, and New Zealand 14^th largest trading partner.

5.11 Vietnam’s Prime Minister Mr Pham Minh Chinh started his official visit to New Zealand at the invitation of Prime Minister Christopher Luxon on 9 March 2024.

5.12 During the two-day visit, the two Prime Ministers discussed opportunities to significantly boost annual two-way trade to a new goal of US$3 billion in 2026 by enhancing our tourism and education flows, as well as removing non-tariff barriers, accelerating trade promotion activities, fully committing to existing free trade agreements and studying measures to promote greater investment in both directions.

· Vietnamese Minister of Education and Training Nguyen Kim Son and New Zealander Minister of Education Penny Simmonds signed an agreement on education cooperation for the 2023-2026 period.

· Vietnamese Minister of Industry and Trade and New Zealander Minister of Trade Todd McClay signed an agreement on economic and trade cooperation.

· Vietnamese Deputy Minister of Finance Bui Van Khang and Chief Executive of the Treasury of New Zealand Caralee McLiesh signed a Memorandum of Understanding on cooperation.

5.13 New Zealand’s Prime Minister also announced a new NZ$6.24m investment in Vietnam's horticulture sector, the 'Viet Nam Climate-Smart Fruit Value Chain (VietFruit)' project, delivered through a partnership with the New Zealand Institute for Plant and Food Research to support climate and economic resilience in Viet Nam's passionfruit industry, building on the highly successful New Zealand-funded dragon fruit project that preceded it.

5.14 Palmerston North Mayor Grant Smith led a business delegation consisting of Fonterra Research and Development Centre and Biolumic who attended an invitation-only roundtable meeting with the Prime Minister and his entourage on 11 March 2024 to discuss business opportunities with Vietnam and showcase the local business interests and projects.

5.15 As a result, Palmerston North has received an invitation from the Foreign Affairs Office of Ho Chi Minh City to attend the International Ginseng, Aromatic and Medicinal Herbs Festival from 24 – 26 May 2024.

5.16 The invitation is an interesting opportunity for local business such as the Herb Farm to network and expand to the Vietnamese market. It extends to cover the travel and accommodation costs of one delegation leader. It is currently circulated for consideration with Central Economic Development Agency (CEDA).

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Figure 17- Vietnam Minister of Education & Training Mr Nguyen Kim Son and NZ Minister of Tertiary Education and Skills Ms Penny Simmonds sign an agreement on education cooperation for 2023 - 2026 period

2024 Taipei Smart City Summit and Expo

5.17 Council approved the Mayor to lead a small officer delegation to attend the 2024 Taipei Smart City Summit and Expo from 18 – 23 March 2024 in Taipei.

5.18 This year, the Taipei Smart City Summit and Expo attracted participants and delegations from 120 cities in over 60 countries.

5.19 On 19 March 2024, the Mayor signed a Memorandum of Understanding (Attachment 4) in support of the promotion of mutual trade and cooperation in the ICT Tech sector, and to attract investments, where appropriate.

5.20 The Mayor also presented at the Eco Net Zero Forum on the progress of Palmerston North in becoming an Eco city. He was joined by 10 other Mayors from 7 different countries on the panel which broke into two sessions.

5.21 It was encouraging to realise the advantage of New Zealand’s renewable energy which puts Palmerston North in the leading quarter of the participating cities at the Net Zero Forum. The forum enabled the exchanging best practices with global partners, which is helpful for deeper understanding and innovative ideas to improve the city’s own carbon emission journey.


Figure 18- MOU signing ceremony with Taipei Computer Association	Figure 19- Mayor G Smith at 2024 Taipei Smart City Summit and Expo

Future Agri-Food Tech Opportunities for 2024

E Tipu: The Boma Agri Summit, June 2024

5.22 Central Economic Development Agency (CEDA), alongside Palmerston North City Council and Manawatū District Council are hosting the 2024 E Tipu: The Boma Agri Summit on 18-19 June 2024. This summit is a critical platform for informed, thoughtful, and future-focused dialogue around the issues that really matter for the primary industries.

5.23 This followed the release of the Manawatū Regional Food Strategy in December 2023 with three overarching priorities:

· Strengthening regional innovation capability, integrating research and development

· Facilitate collaboration across the New Zealand food innovation ecosystem

· Utilise Manawatū’ s expertise in food production for education and training.

Hydrocolloids Conference, November 2024

5.24 Later in the year, the Riddet Institute will be hosting the 17^th International Hydrocolloids Conference from 12-15 November 2024. The theme of the conference is “Future Hydrocolloids for Sustainable Food and Living Solutions”.

5.25 This conference will showcase the latest science and innovations, featuring insightful discussions and presentations from international experts on various food topics.

Figure 20- The 17^th International Hydrocolloids Conference at Riddet Institute

6. International Education activities

Pōwhiri – Welcoming New International Students, November 2023

6.1 On 9 November 2023, Palmerston North City Council’s International Relations and the Communities Development team in partnership with Rangitāne formally welcomed new international students from nine nations, including Cambodia, China, Japan, South Korea, Thailand, India, Indonesia, the Philippines, and Oman, at Te Rangimarie Marae in Rangiotū.

6.2 Rangitāne led the event with a pōwhiri at the Te Rangimarie marae, followed by welcome messages from city leaders, participation of the students in a series of immersive workshops, and shared kai.

6.3 This event was funded by the Ministry of Education to support international students’ wellbeing as part of the COVID-19 Recovery Response Fund.

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Figure 21- New international students participating in welcoming activities on Te Rangimarie Marae

Agent Webinar Destination Aotearoa New Zealand Regional Series – Focus on Manawatū, Nov 2023

6.4 On 10 November 2023, Council’s International Relations Manager presented a comprehensive overview of the city's educational offerings to 127 agents worldwide during an Education New Zealand (ENZ) agent webinar Destination Aotearoa New Zealand Regional Series.

6.5 The presentation highlighted the diverse range of educational offers and post-graduation opportunities available to international students, emphasizing the city's commitment to fostering global connections, excellent study experience and talent attraction and retention.

6.6 Following the webinar, a concerted effort was made to enhance engagement and facilitate informed decision-making among the attendees. Therefore, prospects and comprehensive brochures detailing the educational offerings of various providers within the city were meticulously curated and dispatched.

6.7 The recording of the webinar is made available in Education New Zealand’s Agent Lab where recruiting agents can access tools and resources. It can be viewed on ENZ Youtube channel.

6.8 This proactive initiative not only reinforces the city’s dedication to nurturing global educational collaborations but also ensures that prospective students and partners are equipped with the necessary information to explore the diverse opportunities available in Palmerston North.

Ho Chi Minh City Education Delegation Visit, December 2023

6.9 On 18 December 2023, the city hosted a four-member delegation from Ho Chi Minh City, including two officials from the Ministry of Education and Training. The visitors received a warm welcome by Mayor Grant Smith and representatives from Palmerston North Boys High School, Palmerston North Girls High School, Awatapu College, and IPU NZ.

6.10 Palmerston North and Ho Chi Minh City signed a Memorandum of Arrangement in 2022, recognising the importance of education cooperation to the overall strategic bilateral partnership between New Zealand and Vietnam. The two cities agreed to develop academic and education cooperation and promote mutual understanding during the period of 2022 – 2024.

6.11 The Mayor discussed opportunities in international academic projects, exchange programs, and collaborations across the schools and tertiary institutes in Palmerston North with partners in Ho Chi Minh. There continued to be great efforts required to bring about larger awareness in Ho Chi Minh City for Palmerston North education providers through the city’s master agent in Vietnam.

Figure 22- Hosting an Education delegation from Ho Chi Minh City with local education providers

Promoting Palmerston North as Preferred Study Destination for Vietnamese Students

6.12 AU Hannah Co., Ltd. Is Palmerston North’s master agent in Vietnam. In December 2023, with the support from Council, the company secured funding from Education New Zealand for a marketing campaign focused on promoting Palmerston North, Manawatū, and the local education providers in Vietnam.

6.13 The funded campaign includes a series of offline and online events:

· Studying High School in New Zealand – Offline event on 6 January 2024

· The Differences and Advantages of Single-Sex Education – Online event on 24 February 2024

· Discover Life and Study Experience in Palmerston North – Online event on 16 March 2024

· Popular courses at Massey University – Online event on 13 April 2024

6.14 January 2024, AU Hannah also visited the ICG chain schools in Tay Ninh city and participated in the Culture and Language Day by Nguyen Cong Tru High School in Ho Chi Minh city. The second event was a direct outcome of the visit of the education delegation visit from Ho Chi Minh City to Palmerston North in December 2023.

6.15 With the accelerated efforts in promoting Palmerston North and Manawatū as the preferred study destination for Vietnamese students, the local education providers might expect to see an increase in awareness and interest to study in their institutions from the July 2024 intake and onwards.

Scholarship opportunity for Palmerston North Students to study in Japan

6.16 As mentioned previously, while commemorating the fifth anniversary of the sister city relationship with Mihara (Japan), Palmerston North signed a tripartite Memorandum of Understanding with the Hiroshima Global Academy (HiGA) and Mihara City of Hiroshima Prefecture on 31 January 2024 (Attachment 2).

6.17 The Memorandum of Understanding was an acknowledgment of the success of the Sister City relation and to confirm the desire to further develop relations between the two cities through the establishment of an international Student program.

6.18 The Hiroshima Global Academy is a prefectural public school funded by the Hiroshima Prefectural Board of Education, with the purpose of providing high-level learning opportunities for students, regardless of their economic circumstances. Hiroshima Global Academy is also a public IB World School with international validation, which provides students a high-quality foundation for their university studies and professional life.

6.19 Under the signed agreement, Hiroshima Global Academy will provide an opportunity for Palmerston North high school students to study the International Student Programme at their school for three years of free tuition, funded by Hiroshima Prefecture Board of Education.

6.20 Palmerston North City Council will promote the opportunity with local schools and encourage local students to take part in the programme. Whereas, Mihara will promote and encourage their community to participating in providing extra pastoral support for Palmerston North students in the form of family care and experience during the three years study.

6.21 The promotion will start in May 2024 with information sessions planned for June and July in preparation for student application submission in August 2024. Successful candidates will commence their study at Hiroshima Global Academy in April 2025.

Education New Zealand Funded Regional Partnership Project: Virtual Education Tour

6.22 On behalf of the International Education Leadership Group (IELG), Palmerston North City Council received a funding of $30,000 to deliver two projects:

· A Virtual Tour of the Education Experience in the City – aims to attract new international students to the city/region, enabling prospective students and their families to have a real sense of the life they’d have in Palmerston North, assisting with their decision making without having to travel all the way to the city (Attachment 6).

· A Regional Marketing Mission to reconnect with Japan and Vietnam in 2023 and assist the recovery of the international education sector post-COVID. This was completed in March – April 2023.

6.23 On 22 February 2024, Palmerston North became the first city in New Zealand to host a live-streaming session promoting its educational institutions. This was the final delivery required to conclude the Education New Zealand funded regional partnership project which was approved in 2023.

6.24 Six education providers – Universal College Of Learning (UCOL) Te Pūkenga, Institute of Pacific United (IPU) New Zealand, Awatapu College, Palmerston North Boys High School, and Palmerston North Girls High School collaborated to promote the city as a preferred study destination to the target regions of China, India, Japan, South Korea, Sri Lanka, Thailand, and Vietnam.

6.25 This initiative has presented a unique opportunity for our education providers to virtually promote themselves and showcase the vibrant offerings of Palmerston North to a diverse range of offshore markets, in efforts to attract more students and in return get business.

Waseda Group Study Programme, March 2024

6.26 In 2023, Palmerston North/ Manawatū and the Hawkes Bay were selected as the only two regions to host a Group Study Programme for students from Waseda University’s network of affiliated schools. Commencing on 19 March 2023, our local secondary schools started hosting students for 2 weeks in which they continue to study English, attend regular classes with domestic students, participate in extracurricular activities and live with a homestay family or in the schools’ boarding accommodation.

6.27 From 17-30 March 2024, our local secondary schools hosted the first cohort of the year. 15 students were welcomed to Awatapu College, Nga Tawa Diocesan School, Palmerston North Boys’ High School, and Palmerston North Girls’ High School for the two weeks. The students enjoyed an authentic New Zealand study experience and visited various fun places around the city including the city library, parks and recreation centres, etc.

6.28 A second cohort of 15 students will be arriving on 4 August 2024 for 2 weeks. The participating schools will be Awatapu College, Palmerston North Boys’ High School, and Palmerston North Girls’ High School, but there is scope to expand to include other secondary schools as the student number increases.

6.29 The tertiary providers are also actively involved in this program. The international staff at these institutes introduce the tertiary education system in New Zealand and the study options available in our region to the visiting students as potential returnees for undergraduate programmes.

Education New Zealand Japan Girls’ School Teacher Famil, March 2024

6.30 On 28 and 29 March 2024, the city hosted a Japan Girls’ School Teacher familiarisation trip organised by Education New Zealand in collaboration with Air New Zealand Japan.

6.31 12 delegates visited Palmerston North Girls’ High School and Massey University including 8 delegates from 8 different girls’ schools across two different regions in Japan, accompanied by:

· Mr Hajime Irie – Marketing Executive, Air New Zealand (Japan)

· Ms Misa Kitaoka – Senior Market Development Manager, Education New Zealand (Japan)

· Ms Tomomi Kontani – Business Development Manager, Education New Zealand (Japan)

· Mr Richard Kyle, Business Development Manager, Education New Zealand (Wellington)

6.32 The delegation was particularly interested in exploring inquiry-based learning, digital education, gender equality, diversity and inclusion and environmental protection in the local education offers.

6.33 The Mayor and members of the International Education Leadership Group as well as International Education Manawatū (IEM) hosted the delegation for dinner on 28 March 2024. This gathering provided a conducive environment for meaningful discussions on the prospects of educational collaboration and cultural exchange initiatives.

Deputy Mayor’s Visit to China, April 2024

6.34 Council approved for the Deputy Mayor Debi Marshall-Lobb to travel to China at the invitation of World Class Education as part of their privately arranged education delegation from 11 – 25 April 2024 along with four representatives from select schools of Palmerston North, and other academic representatives from Auckland and Christchurch.

6.35 The Deputy Mayor in her capacity as city ambassador will represent the local schools as a collective, visiting Hefei city in Anhui Province, China.

6.36 Hefei and Palmerston North City signed a cooperation agreement in 2021 (Attachment 5).

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Figure 23- Deputy Mayor Debi Marshall-Lobb welcomed the Hefei Education delegation to Palmerston North City Council in 2023

7. next steps

7.1 Continue discussions with Kunshan Foreign Affairs Office to plan for a delegation visit to Palmerston North in 2024 including relevant city stakeholders.

7.2 Following the signing of the Memorandum of Understanding Enhancing Friendship City Relationship between Palmerston North and Kunshan, a report will be submitted to seek Council’s approval for the signing of the Sister City Agreement between the two cities.

7.3 Plan the next meeting with Wageningen, The Netherlands on establishing a global network of university cities and universities

7.4 Co-hosting the E Tipu: The Boma Agri Summit, June 2024

7.5 Submit the 2024-2025 International Relations Plan to Economic Growth Committee in June 2024.

8. 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 1: An Innovative and Growing City
The recommendations contribute to the achievement of action/actions in Economic Development The action is: Various actions with the international relations chapter of the economic development plan.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The 6-monthly report on International Relations and Education Activities outlines the progress of actions in the International Relations Chapter, which contributes to the Economic Development Plan and Innovative and Growing City Strategy.

Attachments

1.	Itinerary - Councillor Dennison, Hiroshima, Mihara and Okayama, October 2023 ⇩
2.	MOU - Tripartite: PN, Mihra, HiGA 2024 ⇩
3.	MOU - Upgrading Relationship Status between Palmerston North and Kunshan - 30 years of friendship 2024 ⇩
4.	MOU - Taipei Computer Association ⇩
5.	MOU - Education Cooperation between Palmerston North and Hefei ⇩
6.	Poster - Virtual Education Tour ⇩

Memorandum

TO: Economic Growth Committee

MEETING DATE: 24 April 2024

TITLE: Overseas Mission to China and Japan 2024

Presented By: Mike Monaghan - Group Manager, Three Waters and Gabrielle Loga - International Relations Manager

APPROVED BY: David Murphy, Chief Planning Officer

Chris Dyhrberg, Chief Infrastructure Officer

RECOMMENDATION TO Economic Growth Committee:

1. That the Committee receive the report titled ‘Overseas Mission to China and Japan 2024’ presented to the Economic Growth Committee on 24 April 2024.

1. ISSUE

1.1 The is a joint report by the International Relations and Education division of the Strategic Planning Unit, the Water Treatment team from Infrastructure Unit, and Stantec, a leading engineering, architecture and environmental consulting company, on the overseas mission to China and Japan in January-February 2024. It presents the findings and highlights of the Mayoral delegation visit.

1.2 On 6 December 2023, Council approved the Mayor to lead a small delegation to connect with Kunshan, China and Mihara, Japan from 20 January to 6 February 2024.

1.3 The purpose of the overseas mission was to:

· Commemorate 30 years of friendship with Kunshan, China and 5 years of sister city relationship with Mihara, Japan.

· Foster international relations and explore potential partnerships in key sectors that are mutually beneficial.

· Visit relevant facilities in our partner cities to seek understanding, exchange best practices and cultivate opportunities for future collaboration in urban development, innovation and environmental management including water, waste, transportation, and disaster prevention and response.

1.4 The delegation consisted of:

· Mayor Grant Smith, Palmerston North City Council

· Mayoress Michelle Smith, Palmerston North City Council

· Chief Infrastructure Officer Mr Chris Dyhrberg, Palmerston North City Council

· Group Manager – Three Waters Mr Mike Monaghan, Palmerston North City Council

· International Relations Manager Mrs Gabrielle Loga, Palmerston North City Council

· Group Leader – Waters Ms Beth Parkin, Stantec

2. BACKGROUND

INTERNATIONAL RELATIONS, TRADE OPPORTUNITIES AND EDUCATION

Guiyang, china

2.1 Out of courtesy and respect for our oldest Chinese sister city Guiyang, the delegation paid a brief visit to them upon arrival in China 21 Jan – 24 Jan 2024.

2.2 The delegation was warmly welcomed by Deputy Mayor Lin Ping, Guiyang Municipal Foreign Affairs Office and Guiyang People’s Association for Friendship with Foreign Countries.

2.3 A formal meeting with Deputy Mayor Lin Ping and directors of various bureaus including Agriculture and Rural Affairs, Education, Ecology and Environment, Natural Resources and Planning, as well as Guiyang Foreign Affairs Office was conducted on 22 Jan 2024. Both cities discussed enhancing existing education collaboration and exploring further opportunities in economic, trade, infrastructure, investment and sustainability.

Figure 1- Formal meeting with Deputy Mayor Lin Ping of Guiyang

2.4 The delegation was given a thorough tour of the Guizhou Shuanglong Airport Economic Zone Exhibition Centre. This is a solution-focused, national level airport economic demonstration zone with a multimodal transportation system. Their brand new “One bureau Four Centres” including International Bonded Logistics Centre, International Freight Centre, International Mail Exchanges and Customs Supervision Centre serve as a platform for the export-oriented economy and the development of international trade. The zone is also creating a comprehensive hot spring economic complex and wellness tourism hub, integrating the health and ecological tourism industry.

2.5 Further discussion on multimodal transportation, freight, logistics and distribution hub was facilitated during the delegation visit to Guiyang Free Trade Zone in Baiyun district.

2.6 The purpose of these two visits was to showcase the development of Guiyang’s economic development zones and to learn best practices for the city’s own airport development and distribution hub. Guiyang is interested in further talks on e-commerce, frozen logistics and second-hand vehicle trade with Palmerston North.

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Figure 2- Learning about Multimodal transportation system at Shuanglong Airport Economic Zone

2.7 In addition to visits to Guiyang’s economic development zones, their urban renewal project sites, their water and waste treatment plants, the delegation was also welcomed to the Central Primary School of Dula Buyi Village in Baiyun district.

2.8 The Central Primary School of Dula Buyi Village is an elementary school for minority ethnic children. They are working towards becoming a pilot elementary school for international exchanges in Guiyang.

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Figure 3- Delegation welcomed at Central Primary School of Dula Buyi Village

2.9 Afterwards, the delegation was given small gifts to bring back to Palmerston North to give to a local elementary school who is interested in educational cooperation with the Central Primary School of Dula Buyi Village.

2.10 The delegation also met with Guizhou Communications Construction Group to hear about innovative bridge building techniques, environmental protection efforts and development of transport in the mountainous province.

2.11 It was also an opportunity to present Palmerston North to the Guizhou Communications Construction Group as they consider expanding their investment portfolio to international markets.

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Figure 4 - Visit to Guizhou Communications Construction Group

shanghai, china

2.12 The New Zealand Consulate-General Office in Shanghai coordinated a NZ Inc meeting especially for the delegation on 25 January in New Zealand Central, a home base for New Zealand businesses in Shanghai.

2.13 During the meeting, delegates were briefed by the Consul-General on the recent development in the New Zealand-China diplomatic relations, Chinese market updates as well as on the bilateral trade between the two countries.

2.14 Education New Zealand and Tourism New Zealand also spoke about industry-specific updates, emphasizing the significance of China continuing to be the biggest source market for international students and visitors to New Zealand.

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Figure 5 - Received industry and market updates from Education Manager – ENZ Shanghai office

kunshan, china

2.15 The visit to Kunshan City Science and Technology Museum provided valuable insights into Kunshan’s clear and effective long-term vision, its economic development and urban planning strategies. Kunshan's success story as a major economic powerhouse highlighted the importance of innovation, industrial clusters, and foreign investment attraction. The delegation explored avenues for knowledge sharing and partnership in promoting economic growth and entrepreneurship.

Figure 6 - Learning about Kunshan's strategic vision and economic development history

2.16 Keeping with the theme of innovation, Advantech Collaborative Innovation Research and Development Centre welcomed the delegation and showcased its smart city initiatives, leveraging technology to enhance public services, transportation, and urban management. The delegation explored opportunities for knowledge exchange and adopting smart solutions in Palmerston North.

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Figure 7- Exploring smart solutions product ranges at Advantech Collaborative Innovation Research and Development Centre, Kunshan

2.17 As requested by our Kunshan partners prior to the visit, in order to explore new avenues for exchanges and cooperation, the delegation spent time touring the smart agri-park in Lujia A + Greenhouse factory and the Kunshan Coffee Industry Creative Centre in the Comprehensive Protection Business Zone. It was identified that Kunshan had a need for dairy and health products that Palmerston North businesses might be able to meet. The opportunity to send an AgriTech/Food delegation from Kunshan to Palmerston North is being discussed to facilitate relevant business connections and potential economic benefits for the city.

2.18 At the East China Agricultural Science and Technology Centre, the delegation presented on the AgriTech ecosystem in Palmerston North and the opportunity for future collaboration. As a result, Palmerston North City Council is facilitating the conversation on a Memorandum of Understanding for Collaboration between the East China Agricultural Science and Technology Centre and FoodHQ, supported by the New Zealand Consulate-General Office in Shanghai as well as relevant government and diplomatic agencies in Wellington.

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Figure 8 - Lujia A+ Greenhouse Factory, Kunshan

2.19 On the education front, the delegation visited Kunshan Huaqiao Senior High School in support of their partnership with Palmerston North Girls’ High School and Palmerston North Boys’ High School since May 2023.

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Figure 9 - Visit to Kunshan Huaqiao Senior High School

2.20 During the stay in Kunshan, the delegation was warmly welcomed by Deputy Mayor Chen Zhao and the Kunshan Foreign Affairs Office.

2.21 A formal meeting between the delegation and Kunshan’s city leaders was conducted on 25 January 2024 to commemorate 30 years of the city-to-city friendship. Mayor Grant Smith of Palmerston North and Deputy Mayor Chen Zhao signed a Memorandum of Understanding committing to the long-standing relationship of the two cities and to upgrading of the partnership to “sister cities” status. It was witnessed by the New Zealand Consul General and the Secretary of the Communist Party of China Kunshan Municipal Committee.

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Figure 10 - Formal celebration of the 30th friendship anniversary between Palmerston North and Kunshan

2.22 A press release on the celebration of the 30^th friendship anniversary between Palmerston North and Kunshan can be found here.

Figure 11 - Formal meeting between Palmerston North and Kunshan's city leaders

mihara, japan

2.23 Mihara took the delegation visit this time as an opportunity to showcase its economic strengths from small and medium companies such as the Hattendo Village, Nomura Dairy Products Co. Limited, to globally recognised brands including Coca Cola Botlers Japan Hiroshima Factory and Mitsubishi Heavy Industries Light Rail Manufacturing Plant.

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Figure 12 - At My Flora Plant, Nomura Dairy Products Co., Ltd.

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Figure 13 - Introduced product ranges at Hattendo Village

2.24 A direct outcome of these visits was the connection made between Nomura Dairy Products company and the New Zealand Institute for Plant and Food Research for potential collaboration in the research and development of probiotic products.

2.25 Another encounter with a Mihara tour operator resulted in talks on inbound tour into Palmerston North later in the year.

2.26 Moreover, the delegation was given a tour of Mihara City Hall to learn about the structure of Mihara City Council, their services and public facing engagement. It was an opportunity to exchange ideas and best practices in city management and council activities including disaster prevention and emergency management.

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Figure 14 - In Mihara City's Council Chamber with Council Chairman

2.27 The city’s leaders also shared concern over its challenge to maintain existing and attract new business investment into Mihara given the aging local labour force. This is an area where Palmerston North could share experience on how to make the city a more attractive place to live and do business for young families, professionals and entrepreneurs. Welcoming Communities could share their work in welcoming newcomers into the city, making Palmerston North a healthier, happier and more productive community.

2.28 During the formal celebration of the sister cities’ 5^th anniversary on 31 January 2024, Mayor Okada of Mihara, Mayor Grant Smith of Palmerston North and Principal Fukushima of Hiroshima Global Academy signed a Memorandum of Understanding, establishing an educational cooperation where Hiroshima Global Academy, an International Baccalaureate (IB) World School, will cover 100% tuition fees for Palmerston North high school students to study at their school to develop global skills and educational abilities. Palmerston North City will work with local education providers to promote the programme and assist the students with their application submission; while Mihara City will work with local community to provide extra pastoral care and regular interactions with the selected students during their time in Japan.

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Figure 15 - Signing of Tripartite Educational Cooperation Memoradum of Understanding

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Figure 16 - Celebration of 5th sister city anniversary between Palmerston North and Mihara

2.29 Upon invitation from Sagi Island’s leaders and Sagiura Elementary School, the Mayoral delegation visited Sagi Island on 2 February 2024 for a tree planting ceremony to mark the 5^th anniversary of the sister city affiliation. A commemorative plaque was installed for the occasion.

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Figure 17 - Tree Planting Ceremony on Sagi Island

2.30 The delegates then spent time with students and teachers of Sagiura Elementary School who were connected with Terrace End School previously.

Figure 18 - Welcomed by students at Sagiura Elementary School

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Figure 19 - Making mochi with students at Sagiura Elementary School

2.31 In addition, a side visit to IPU Japan campus in Okayama on 30 January 2024 saw the Mayor participate in a mini graduation ceremony of three local Kiwi students who were finishing their 6-month placement in IPU Japan.

2.32 IPU’s leaders extended a warm welcome to the delegation and invited input from Palmerston North City Council to the soon-to-be-established Advisory Board for IPU New Zealand.

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Figure 20 - Visit to IPU campus in Okayama

tokyo, japan

2.33 On the last day in Japan, the Mayoral delegation went to visit the headquarter of Japan’s Council of Local Authorities for International Relations in Tokyo (CLAIR).

2.34 CLAIR is responsible for sister city relationships in Japan, the local government exchanges and cooperation conferences and seminars, as well as the Japan Exchange and Teaching (JET) Programme and Coordinator for International Relations Programme.

2.35 The discussion with CLAIR included an update on the sister city relationship between Palmerston North and Mihara as well as an invitation for CLAIR’s local government and cooperation conferences and seminars to be held in Palmerston North. Palmerston North International Relations team will liaise with CLAIR Sydney office to further this conversation in the future.

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Figure 21 - Meeting with leadership at CLAIR HQ, Tokyo

3. INFRASTRUCTURE – WATER MANAGEMENT

Guiyang, china

3.1 The delegation had the opportunity to visit a state-of-the-art waste disposal facility on the outskirts of Guiyang. The centre was called the Grand Blue Solid Waste Incineration Plant. A multi stream fluidised bed incineration facility received 750 tonnes of general waste per day from the wider Guiyang district. The waste being fed into incinerators operating at 1000deg C, resulting in only fly ash as a by-product. With hi-tech flu gas scrubbing systems and stringent environmental monitoring control, this plant is essential to the region for dealing with the problem of solid waste.

Figure 22 - Trucks lining up to deliver their payload

3.2 The Qingshan Water Recycling Plant is a wastewater treatment facility located in the residential heart of Qingshan. The plant is designed for minimum aesthetic interruption, being mainly underground, and not obvious to the passer by. Like Palmerston North, the Qingshan plant has an inland river discharge. We were not able to visit the whole facility, but we did see the final stages of treatment, including final clarification and Ultraviolet light disinfection. The quality of the final treated water was of an impressive standard, reducing nutrient levels to similar levels as targeted by the Nature Calls Project. The discharge to the river was via an open flume where the high quality of discharge water was observable to all. The city does take the opportunity to reuse the resource water wherever possible, one obvious example was feeding a series of water features and small lakes/ponds for recreation in a local park.

Figure 23- The discharge from the Quingshan plant entering the river

3.3 The delegation got to spend an hour visiting the Urban Renewal Project in Yuxin Lane and Caozhuangyuan Street. This project was a one-million-renminbi local government funded initiative to improve the streetscape in an urban area of the city. Local active play areas and small parklets complemented a street scape upgrade and building frontage renewal. Alleyways linking the two areas were also improved for safety and designed to become part of the experience. The city has completed 42 similar projects in the last year alone. The project had some similarities with the work recently undertaken at the Highbury Centre.

kunshan, china

3.4 One of the most innovative and impressive aspects of the entire visit was seeing how China is embracing the sponge city philosophy. A visit to the Forest Park, Temple Jinghe Corridor revealed a 166-hectare river park project that began development in 2001. The park has been specifically designed to cater for heavy and frequent rain events. Initiatives included the detailed and specific planting programme, which includes species that will thrive in both wet and dry conditions, to footpaths that are pervious, therefore reducing the non-pervious surfaces that hinder most urban developments. Complementing this were a series of lakes, wetlands and attenuation ponds with flow control gates. The system having automation control to manage pond levels and control the flow of water during large events, maximising storage and reducing the chances of downstream flooding. The essence of the corridor was to allow “room” for the water and not to contain it within confined channels.

Figure 24- Map of the Forest Park corridor depicting the attenuation ponds and wetlands

3.5 After visiting the forest park, the delegation got to see first-hand how Kunshan City Greenery Engineering Co. Ltd are applying the sponge city mindset into the everyday infrastructure projects. Rain gardens are common and extensive, planted attenuation areas and footpaths that allow rainwater to soak through them are just some of the now common methods adopted. Interestingly, Greenery Engineering Co. Ltd are working closely with a number of Australian organisations for future sponge city initiatives, including Water Sensitive Cities Australia, Cooperative Research Centre for Water Sensitive Cities and Vic Water.

Figure 25- example of sponge city engineering with rain gardens and sensitive planting

mihara, japan

3.6 Despite being a city with many new and exciting developments, Mihara still has many residential areas that are not connected to the wastewater reticulated network. These properties instead rely on septic tanks. A visit to the Mihara Sludge Treatment centre revealed that a full-scale sludge dewatering facility had been created exclusively to deal with domestic septage and industrial trade waste. Up to 175m3 per day of raw liquid sludge product is delivered by tanker to the plant. The operators of the facility revealed that, similarly to New Zealand, the challenge was to minimise chemical use while maximising the dry solid content to reduce haulage costs. The final product being trucked to the nearby solid waste and biosolid incineration plant.

Figure 26- Septic waste truck delivering its contents to the plant

3.7 A smaller delegation had the opportunity to visit the Minami 5-chome construction site. This challenge was centred around constructing a brand-new stormwater pump station with the capacity to pump 3,900 litres/second of water from the surrounding locality, whilst maintaining the operation of the existing 75-Year-old plant. The construction manager had the added challenge of building this station in the middle of a residential district, with a high-speed railway on one boundary of the site and the Nuta river on the other. The project has been under construction for over 5 years, and like most major projects during recent times, it has suffered delays and cost challenges caused by the Covid 19 outbreak. This visit was proceeded by a tour of the impressive Miyaoki Storm water Pump Station. With 10 diesel engine driven pumps to provide resilience during power outages.

Figure 27- Diesel powered stormwater pumps

3.8 The day was concluded with a visit to the Mihara Fire & Emergency Services Station. Continuing Palmerston Norths long standing relationship, it was a pleasure to see the new facilities being fully utilised by the emergency services. A demonstration of capability was then provided for the delegation, with the operation of mobile lifesaving equipment – jaws of life, cutting machinery and the impressive new chemical response fire truck showing its capability.

Figure 28- The Mihara Chemical emergency vehicle demonstrating its power

3.9 Since the devastating floods in 2018, Mihara have been working hard to identify and fix areas of concern along the Nuta river which runs through the heart of the city. A tour was provided by our host to a number of Disaster Prevention construction sites along the river. Typically, these sites were focused on raising and shoring the stop banks or removing obstructions from within the river corridor itself. Many irrigation dams had been built over the years, all having a compounding effect on the natural flow and capacity of the river. Removing and reengineering these dams will go some way to preventing a reoccurrence of the disaster that befell on Mihara.

3.10 A visit to the Nuta River Purification plant was a chance to see how Mihara have turned around a highly polluted waterway within a time span of just 25 years. This plant is a biological nutrient removal wastewater treatment plant that began operation in 1996. Treating connected residential and trade waste from Mihara and Higashihiroshima, the original plant served a population equivalent of approximately 50,000, and had an average dry weather flow of 34000m3/d. Recently, a third stream has been constructed to cater for the growth of the city and further improve the quality of the discharge water which, after chlorination, discharges directly into the Mihara harbour. The site has a large footprint, and treated wastewater is also utilised onsite for irrigation, cooling water and other non-potable purposes.

Figure 29- Visiting the newly constructed stream at the Nuta WWTP

3.11 The last day in Mihara City saw the delegation visit the Nishino Water Purification Plant. This was an opportunity for the delegation to see how potable drinking water is treated in Japan. Supplying a population similar to Palmerston North, the treatment centre had some similarities, but a few obvious differences to the process used in Palmerston North. The main difference being the treatment for protozoa. Utilization of direct filtration using slow sand filtration would not be an acceptable solution for NZ without a further barrier such as Ultraviolet Light disinfection. Overall though, it was a great plant with lots of investment in renewals, an in-house laboratory for regulatory sampling and a well-supported team of operators and maintenance staff.

Figure 30 - Labour intensive slow sand filters at Nishino WTP

3.12 The delegation managed to pay a visit to the impressive Mihara Waste Processing Plant. This is a centre that has two factories on one site. One factory being a Flammable Waste Facility, comprising of fluidised bed incinerators, built at the end of the 1990’s. The other a very modern Non-Flammable Material Recovery Facility (MRF). The incineration plant, similarly, to the plant in Guiyang, used combustion methods to destroy both solid waste from the city and surrounding districts, and biosolids from the two treatment plants mentioned above. Interestingly, the fly ash by-product has been utilised in land reclamation projects throughout the region. There was also mention of the ash being used in cement products, but no details were available.

The MRF was similar to PNCC’s in that it was a manual sort line without the use of optical automated sorting machines. However, that is where the similarity ended. We questioned our tour host about contamination levels of the kerbside product, this seemed to be an unfamiliar concept to him. As we witnessed when watching the sorting process, the Japanese people appeared to be very compliant with the rules of recycling. The material was simply sorted into soft plastics, PET’s, and MDPE’s. There appeared to be very minimal waste, the incoming product was generally clean and contained little to no contamination. What contamination did exist was simply sent next door to the flammable waste plant.

Figure 31- The impressively clean raw product ready for sorting.

tokyo, japan

3.13 In the spirit of getting as much from the trip as possible, on the morning of the departure for NZ, the Waters team members took the train from Tokyo to the Shibaura Water Reclamation Centre. The size and scale of this plant was impressive. Serving a population base of 1,200,000 people, the pant consisted of primary settling processes, secondary biological nutrient removal final sedimentation, with a tertiary pilot plant trialling microfiltration. The plant was vast, and time was short, so we did not see all processes. However, we did discover that this facility had a standalone fluidised bed incineration plant to deal with the biosolids. The fly ash being turned into paving bricks, of which we saw an example in the streets around the plant. The highly treated wastewater was re-used wherever possible, including process water at the plant, irrigation of local sports fields and feeding a wetland and stream in the onsite park.

Figure 32- The enormous Shibaura Water Reclamation Plant

Figure 33- The rope circle depicts the size of the incoming sewer pipe; the bricks are made from the ash by-product from the Biosolids incineration.

4. NEXT STEPS

INTERNATIONAL RELATIONS, TRADE OPPORTUNITIES AND EDUCATION

4.1 Key next steps and actions are detailed below:

Guiyang, China:

· Working with Guiyang Foreign Affairs on a 2024-2025 action plan, following up leads from the delegation visits with the economic development zones, Guizhou Communications Construction Group and infrastructure partnerships, i.e. exchange ideas and best practices, educational and cultural cooperation.

· PNAL - Guizhou Airport collaboration around Master planning. (Action: PNAL)

· Special Economic Zone learnings (Action: CEDA)

· Urban Design treatments and examples (Action: PNCC Infrastructure)

· Primary School exchanges online (Action: PNCC International Unit & Schools)

· Guizhou Construction & Bridge Company introductions. (Action: PNCC - Central Govt).

Shanghai, China.

· Working with Education NZ to incentivise international students back to the PN market (Action: PNCC International Unit & Education providers)

Kunshan, China.

· Working with Kunshan Foreign Affairs on a delegation visit to Palmerston North in 2024 with a focus on economic cooperation and AgriTech

· Facilitating collaborative conversations between the East China Agricultural Science and Technology Centre and FoodHQ as well as between Nomura Dairy Products and New Zealand Plant and Food Research

· Tech and Business sector collaboration (Action: CEDA/PNCC International Unit)

· Dairy industry opportunities (Action: CEDA/PNCC).

· Science & Research collaboration and MoU with Chinese counterparts (Action: Food HQ)

· Education, International students and Sister School collaboration, both in person & online (Action: PNCC International Unit & Schools).

· Future full Sister City status with Kunshan (Action: both cities)

Mihara, Japan.

· Working with Hiroshima Global Academy and Mihara City and liaising with local schools in Palmerston North to promote the tripartite Memorandum of Understanding and the study overseas opportunity for Palmerston North high school students.

· Working with Mihara City on a 2024-2025 action plan, following up leads from delegation visits and Mr Shiro Inoue’s one-week study tour with Palmerston North City Council.

· Dairy company market research (Action: NZ Plant & Food Research)

· Inbound Tourism opportunities (Action PNCC Mayors Office)

· Education opportunities with International students (Action: PNCC International Unit)

· Welcoming Communities collaboration (Action PNCC International Unit & Comm Dev Unit)

· Emergency Management collaboration (Action: PNCC Infrastructure Unit)

· Sister Primary Schools online (Action: PNCC International Unit & Schools)

· Business collaboration with International Education Institutions (Action: PNCC International Unit & Education providers).

Tokyo, Japan.

· Advocate to host Clair-Japan LG Assn international conference in PN (Action: PNCC International Unit).

INFRASTRUCTURE – WATER MANAGEMENT

4.2 Connecting with the Stantec office in China to gather more information on the reuse opportunities that the Qingshan Water Recycling Plant have realised.

4.3 Facilitate conversations with the Kunshan City Greenery Engineering Co. Ltd to learn more about the implementation of sponge city initiatives.

4.4 Investigate in more detail the environmental standards for air discharge from the incineration plants in China and Japan.

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 1: An Innovative and Growing City
The recommendations contribute to the achievement of action/actions in Economic Development The action is: Foster deeper relations with Palmerston North’s global city partners to promote the city’s interests and facilitate meaningful cooperation in economic, trade, education, city planning, and resource management.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The delegation visit helped to promote the city’s positive international reputation, demonstrated Palmerston North’s commitment to international collaboration and friendship, exchanged best practices and explored opportunities with partner cities to enhance economic, educational, cultural and community cooperation.

Attachments

Final Itinerary for Mayoral Delegation Visit to China and Japan 2024 ⇩

Committee Work Schedule

TO: Economic Growth Committee

MEETING DATE: 24 April 2024

TITLE: Work Schedule - April 2024

RECOMMENDATION TO Economic Growth Committee:

1. That the Economic Growth Committee receive its Work Schedule dated April 2024.

Committee Work Schedule - april 2024

	Estimated Report Date	Subject	Officer Responsible	Current Position	Date of Instruction & Clause no.
	~~24 Apr 2024~~	~~Amendment to the Appointment of Directors & Trustees Policy 2022~~	~~Acting Chief Executive Unit Manager~~
	~~24 Apr 2024~~	~~Vogel Street Safety Improvements - Community feedback and analysis of options~~	~~Chief Infrastructure Officer~~		12 April 2023 Clause 14-23
	~~24 Apr 2024~~	~~PN Airport– 6 Month Report and draft SOI~~	~~Chief Financial Officer~~		~~Terms of Reference~~
	~~24 Apr 2024~~	~~Quarter 2 Economic Report October-December 2023~~	~~Chief Planning Officer~~		~~Terms of Reference~~
	~~24 Apr 2024~~	~~CEDA – 6 Month Report and draft SOI~~	~~Chief Planning Officer~~		~~Terms of Reference~~
	~~24 Apr 2024~~	~~International Relations and Education Activities – 6 monthly update to include Annual plan for international relations activity to Council~~	~~Chief Planning Officer~~		~~Terms of Reference~~ Council Clause 203 -23
	~~24 Apr 2024~~	~~Road Maintenance Contract (6-monthly report on work programme and performance)~~	~~Chief Infrastructure Officer~~		16 Mar 2022 Clause 4-22
	~~24 Apr 2024~~	~~City Economic Structure Report (annually)~~	~~Chief Planning Officer~~		30 Aug 2023 Clause 35-23
	~~24 Apr 2024~~	~~Puriri Terrace - solutions for improving safety~~	~~Chief Infrastructure Officer~~		30 Aug 2023 Clause 30-23
1	~~24 Apr 2024~~ 19 Jun 2024	Parking Framework – Draft for consultation	Chief Planning Officer	Delayed to avoid consultation immediately following LTP
2	19 Jun 2024	Presentation: Palmy Bid
3	19 Jun 2024	Update on infill lighting required to achieve compliance in P and V categories (update for Programme 1367)	Chief Infrastructure Officer		16 Mar 2022 Clause 3-22
4	19 Jun 2024	Tamakuku Terrace Update (6 monthly)	Chief Infrastructure Officer		Terms of Reference
5	19 Jun 2024	PNAL - Final Statement of Intent for 2024-27	Chief Financial Officer		Terms of Reference
6	19 Jun 2024	Quarter 3 Economic Report Jan-March 2024	Chief Planning Officer		Terms of Reference
7	19 Jun 2024	CEDA - Final Statement of Intent for 2024-27	Chief Planning Officer		Terms of Reference
8	19 Jun 2024	Manawatū Regional Economic Structure Report (2 yearly)	Chief Planning Officer		30 Aug 2023 Clause 35-23
9	19 Jun 2024	Annual Plan - International Relations Activity	Chief Planning Officer		Council 6 Dec 2023 Clause 203-23
10	18 Sep 2024	Presentation: Chamber of Commerce
11	18 Sep 2024	Streets for People Update (6 monthly)	Chief Infrastructure Officer		Terms of Reference
12	18 Sep 2024	International Relations 6 Monthly report	Chief Planning Officer		Terms of Reference
13	18 Sep 2024	Quarter 4 Economic Report April-June 2024	Chief Planning Officer		Terms of Reference
14	18 Sep 2024	PNAL – Annual Report for 2023/24	Chief Financial Officer		Terms of Reference
15	18 Sep 2024	CEDA – Annual Report for 2023/24	Chief Planning Officer		Terms of Reference
16	20 Nov 2024	Presentation: The Factory
17	20 Nov 2024	PNCC Events - Annual Summary of Economic Impact and Benefits 2022/23	CE Unit Manager		25 Oct 2023 Clause 60-23
18	20 Nov 2024	Quarter 1 Economic Report Jul-Sep 2024	Chief Planning Officer		Terms of Reference
19	20 Nov 2024	PNAL – Statement of Expectation for 2024/26 – 2027/28	Chief Financial Officer		Terms of Reference

[1] Because it is a joint CCO, CEDA has a separate Appointments Policy.

Leonie Hapeta (Chair)
William Wood (Deputy Chair)
Grant Smith (The Mayor)
Mark Arnott	Lorna Johnson
Brent Barrett	Debi Marshall-Lobb
Rachel Bowen	Billy Meehan
Vaughan Dennison	Orphée Mickalad
Roly Fitzgerald

Project Item	Budget	Re-Forecast Budget	Comment
Project Management	$500,000	$579,500	Internal capitalised labour cost for project delivery.
Detailed Design	$500,000	$658,000	Includes concept design, location assessment and Safe System Audit by consultants.
Construction - Civil	$750,000	$1,495,500	Initial budget estimated prior to design completion allowed unconservative assumptions regarding scale and cost of civil works.
Shelter Procurement	$3,500,000	$2,517,500	Contract with shelter supplier was overestimated at commencement of the project.
Construction Management	$100,000	$99,500	Contractor programming, construction monitoring, surveillance, and quality assurance.
Total	$5,350,000	$5,350,000