Agenda of Council - Wednesday, 5 February 2025

Palmerston North City Council

Minutes of the Council Meeting Part I Public, held in the Council Chamber, First Floor, Civic Administration Building, 32 The Square, Palmerston North on 11 December 2024, commencing at 9.02am

Members

Present:

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

Apologies:

Councillor Rachel Bowen (late arrival), Councillor Debi Marshall-Lobb (early departure- Council business)

Councillor Rachel Bowen entered the meeting at 10.10am during consideration of clause 212-24. She was not present for clauses 207-24 to 211-24.

Councillor Debi Marshall Lobb was not present when the meeting resumed at 10.40am after consideration of clause 212-24. She entered the meeting again at 1.35pm after consideration of clause 219-24. She was not present for clauses 213-24 to 219-24.

Councillor Kaydee Zabelin was not present when the meeting resumed at 1.35pm after consideration of clause 219-24. She returned to the meeting at 2.18pm during consideration of clause 222-24 but left at 3.01pm. She was not present for voting gon clauses 220-24 to 226-24.

Councillor Orphée Mickalad was not present when the meeting resumed at 1.35pm after consideration of clause 219-24. He returned to the meeting at 3.09pm during consideration of clause 222-24. He was not present for clauses 220-24 and 221-24.

	Karakia Timatanga
	Councillor Debi Marshall-Lobb opened the meeting with karakia.

207-24

Apologies

Moved Grant Smith, seconded Vaughan Dennison.

RESOLVED

1. That Council receive the apologies.

Clause 207-24 above was carried 15 votes to 0, the voting being as follows:

For:

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

Declarations of Interest

Councillor Vaughan Dennison declared a conflict of interest in Item 20 Recommendations from the Community Committee – 4 December 2024 (clause 218-24), he took no further part in discussion or debate and sat in the gallery.

Mayor Grant Smith declared a conflict of interest in Item 12 Approval of International Travel for the Mayor in March 2025 (clause 220-24), he took no further part in discussion or debate and sat in the gallery.

208-24

Presentation - Aspiring Leaders Forum

Presentation, by Alex Murray and Liorah Jainarain

Alex and Liorah spoke about their experience at the Aspiring Leaders Forum in August 2024. They discussed what they had learnt about the attributes of being a good leader. They thanked Mayor Grant Smith for nominating them to attend.

The presentation is attached to the minutes.

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That the Council receive the presentation for information.

Clause 208-24 above was carried 15 votes to 0, the voting being as follows:

For:

209-24

Standing Orders - Option C

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

That Council adopt Option C (SO 2.12.3) for Item 11 Annual Budget 2025/26 on this agenda.

Clause 209-24 above was carried 14 votes to 1, the voting being as follows:

For:

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

Against:

Councillor Lorna Johnson.

210-24

Confirmation of Minutes

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

That the minutes of the ordinary Council meeting of 6 November 2024 Part I Public and Part II Confidential be confirmed as a true and correct record.

Clause 210-24 above was carried 15 votes to 0, the voting being as follows:

For:

Reports

211-24

FoodHQ Annual Update

Presentation by Dr Victoria Hatton Chief Executive, Food HQ and Chris Dyhrberg, General Manager - Infrastructure.

The presentation is included in the agenda.

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council note the update on FoodHQ activities.

2. That Council appoint David Murphy, General Manager – Strategic Planning as Council’s nominated alternate director for FoodHQ Innovations Ltd, to be reviewed in March 2026, or earlier if necessary.

Clause 211-24 above was carried 15 votes to 0, the voting being as follows:

For:

212-24

2024 Rating Valuations

Memorandum, presented by Steve Paterson, Manager – Financial Strategy and Jason Hockly, Property Consultant for QV.

The presentation is attached to the minutes.

Councillor Rachel Bowen entered the meeting at 10:10am.

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council note that the 2024 City rating revaluation has been completed and new values, with an effective date of 1 September 2024, have been authorised for implementation by the Valuer-General through the issue of an unqualified audit opinion on 29 November 2024.

Clause 212-24 above was carried 16 votes to 0, the voting being as follows:

For:

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

The meeting adjourned at 10.22am.

The meeting resumed at 10.40am.

Councillor Debi Marshall-Lobb was not present when the meeting resumed at 10:40am.

213-24	2024 Rating Valuations - Impact on Rating Incidence Memorandum, presented by Steve Paterson, Manager – Financial Strategy The presentation is attached to the minutes.
	Moved Grant Smith, seconded Leonie Hapeta. RESOLVED 1. That Council note: a. the new rateable values will be used as the basis for calculating rates effective from 1 July 2025. b. the valuation changes do not increase the total rates revenue for the Council. However, without further changes to the rating system the valuation significantly alters the incidence of rates both within and between the differential groups of property, and in particular transfer a greater share of the rates to the commercial/industrial sector. 2. That Council instruct the Chief Executive to bring options to the 12 February 2025 Council meeting in response to the change in rating incidence caused by the valuation changes. These options will include mechanisms such as altering the level of uniform annual general charge; or the differential surcharges applying to the general rate based on the land value or the targeted rate based on capital value; or a combination of all three.
	Clause 213-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.
	Moved Brent Barrett, seconded Vaughan Dennison. On an amendment: That Council instruct the Chief Executive to bring options to the 12 February 2025 Council meeting in response to the change in rating incidence caused by the valuation changes ~~and the planned stage 2 implementation of the greater share based on capital value~~. These options will include mechanisms such as altering the level of uniform annual general charge; or the differential surcharges applying to the general rate based on the land value or the targeted rate based on capital value; or a combination of all three. The amendment was carried 11 votes to 4, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Brent Barrett, Rachel Bowen, Vaughan Dennison, Roly Fitzgerald, Patrick Handcock, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor and Kaydee Zabelin. Against: Councillors Mark Arnott, Lew Findlay, Leonie Hapeta and William Wood.

Recommendations from Committee Meetings

214-24

Strategy & Finance Committee Part I Public - 13 November 2024

Councillor Dennison presented the recommendations below:

Moved Vaughan Dennison, seconded Karen Naylor.

1. That Council adopt the recommendations from the Strategy & Finance Committee of 13 November 2024

Quarterly Performance and Financial Report - period ending 30 September 2024 (clause 47-24)

Memorandum, presented by Scott Mancer, Manager - Finance and John Aitken, Manager - Project Management Office.

The COMMITTEE RECOMMENDS

2. That Council approve the adjustments to activities due to an internal realignment per Attachment 4 - Realignment Budget Variations.

Local Water Done Well Funding Reallocation (clause 50-24)

Report, presented by Scott Mancer, Manager - Finance and Julie Keane, Transition Manager.

The COMMITTEE RECOMMENDS

1. That Council approve the reallocation of $928,503 Department of Internal Affairs funding for Better Off Funding from Programme 1054 – Ashhurst Water Quality Improvements to Local Water Done Well Transition Support in the Wastewater operating budget, subject to Department of Internal Affairs approval.

2. That Council note that the capital expenditure budget for programme 1054 was reduced at the Council meeting on 6 November 2024.

3. That Council increase the Wastewater operating budget for both revenue and expenditure by $306,672 in the 2024/25 Financial Year for Transition Support.

4. That Council refer to the Annual Budget process a revenue and expenditure budget of $621,831 for Transition Support for the 2025/26 Financial Year.

5. That Council agree that $928,503 will be spent across the 2024/25 and 2025/26 Financial Years and that any unspent funding in 2024/25 will be adjusted via carry forwards at 30 June 2025.

Deliberations - Draft Dangerous, Affected, and Insanitary Buildings Policy 2024 (clause 53-24)

Report, presented by Lili Kato, Policy Analyst.

The COMMITTEE RECOMMENDS

2. That Council adopt the Dangerous, Affected, and Insanitary Buildings Policy 2024 (Attachment 1).

3. That Council rescind the Dangerous and Insanitary Buildings Policy 2006.

Clause 214-24 above was carried 15 votes to 0, the voting being as follows:

For:

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

215-24	Economic Growth Committee Part I Public - 20 November 2024 Councillor Hapeta presented the recommendations below:
	Moved Leonie Hapeta, seconded William Wood. RESOLVED 1. That Council adopt the recommendations from the Economic Growth Committee of 20 November 2024: Palmerston North Airport Limited - Annual report for 12 months ended 30 June 2024 & Instructions relating to Annual Meeting (clause 63-24) Memorandum, presented by Steve Paterson, Manager - Financial Strategy. The COMMITTEE RECOMMENDS 2. That the Council shareholder representative be instructed to support the proposed resolutions (section 2.9) to be considered at the Annual meeting of Palmerston North Airport Limited to be conducted by way of resolution in writing.
		Clause 215-24 above was carried 14 votes to 0, with 1 abstention, the voting being as follows: For: Councillors Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Abstained: The Mayor (Grant Smith).

216-24		Culture & Sport Committee Part I Public - 27 November 2024 Councillor Bowen presented the recommendations below:
		Moved Rachel Bowen, seconded Billy Meehan. RESOLVED 1. That Council adopt the recommendations from the Culture & Sport Committee of 27 November 2024: Funding Request from Stuff Events for Central District Field Days (clause 47-24) Memorandum, presented by Luke McIndoe, Head of Events. The COMMITTEE RECOMMENDS 1. That Council decline request and maintain existing contestable funding from Major Event Fund.
		Clause 216-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.
		Moved Rachel Bowen, seconded Billy Meehan. Funding Request from Stuff Events for Central District Field Days (clause 47-24) Memorandum, presented by Luke McIndoe, Head of Events. RESOLVED 2. That Council refer a new programme of up to $30k per year to support Central District Field Days Innovation Zone proposal to the Annual Budget 2025/26 process.
		Clause 216-24 above was carried 11 votes to 4, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan and Orphée Mickalad. Against: Councillors Mark Arnott, Karen Naylor, William Wood and Kaydee Zabelin.
		Moved Rachel Bowen, seconded Billy Meehan. RESOLVED Heritage Reference Group - Terms of Reference (clause 50-24) Memorandum, presented by Keegan Aplin-Thane, Senior Planner and Greg Vossler, Heritage Planning Consultant. The COMMITTEE RECOMMENDS 1. That Council approve the Terms of Reference and purpose for the Palmerston North Heritage Reference Group in Attachment 1. 2. That Council appoint an Elected Member representative to the Heritage Reference Group to act as the Councillor liaison as detailed in the Terms of Reference. 3. That Council note members of the Palmerston North Heritage Reference Group will be appointed through an expressions of interest process, as detailed in Section 6.2 of the Terms of Reference (Attachment 1).
		Clause 216-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin.

217-24	Sustainability Committee Part I Public - 4 December 2024 Councillor Zabelin presented the recommendations below:
	Moved Kaydee Zabelin, seconded Patrick Handcock. RESOLVED 1. That Council adopt the recommendations from the Sustainability Committee of 4 December 2024: Community Gardens - simplified process (clause 47-24) Memorandum presented by Aaron Phillips, Activities Manager Parks and Amy Viles, Manager Community Development. The COMMITTEE RECOMMENDS 1. That Council approve the Palmy Community Garden Guide 2024 (Attachment 1). 2. That Council delegate authority to the Chief Executive to issue permits to community gardens.
		Clause 217-24 above was carried 14 votes to 0, with 1 abstention, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Abstained: Councillor Brent Barrett.

218-24		Community Committee Part I Public - 4 December 2024 Councillor Johnson presented the recommendations below:
		Moved Lorna Johnson, seconded Patrick Handcock. RESOLVED 1. That Council adopt the recommendations from the Community Committee of 4 December 2024:
		Social housing and property review work programme (clause 39-24) Memorandum, presented by Julie Macdonald, Manager Strategy and Policy. The COMMITTEE RECOMMENDS 1. That Council endorse the proposed broad terms of reference for an investigation of social housing delivery models (Workstream A), as described in memorandum titled ‘Social housing and property review work programme’ presented to the Community Committee on 4 December 2024 and its Attachment 1 2. That Council endorse the proposed terms of reference for a property review to identify revenue generation opportunities (Workstream B), as described in this memorandum titled ‘Social housing and property review work programme’ presented to the Community Committee on 4 December 2024 and its Attachment 2, and any other bespoke leverage opportunity that Chief Executive identified.
		Clause 218-24 above was carried 13 votes to 0, with 1 abstention, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Rachel Bowen, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor, William Wood and Kaydee Zabelin. Abstained: Councillor Brent Barrett. Note Councillor Vaughan Dennison declared a conflict of interest, withdrew from the discussion and sat in the gallery.
		Moved Lorna Johnson, seconded Patrick Handcock. RESOLVED Social housing and property review work programme (clause 39-24) Memorandum, presented by Julie Macdonald, Manager Strategy and Policy. The COMMITTEE RECOMMENDS 3. That Council confirm its intention to await the outcome of an investigation of social housing delivery models (Workstream A) prior to considering the reports dated 1 May 2024 ‘Summerhays Street Redevelopment – Partnership Models’ and ‘Summerhays Street Redevelopment –Expressions of Interest Feedback’
		Clause 218-24 above was carried 9 votes to 5, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Brent Barrett, Rachel Bowen, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson and Orphée Mickalad. Against: Councillors Leonie Hapeta, Billy Meehan, Karen Naylor, William Wood and Kaydee Zabelin. Note Councillor Vaughan Dennison declared a conflict of interest, withdrew from the discussion and sat in the gallery.

219-24

Palmerston North Quarterly Economic Update - December 2024

Memorandum, presented by Stacey Andrews, City Economist.

Moved Grant Smith, seconded Leonie Hapeta.

RESOLVED

1. That Council receive the Palmerston North Quarterly Economic Update – December 2024, including:

a. Palmerston North Economic Growth Indicators - December 2024 (Attachment 1), and

b. Palmerston North Quarterly Economic Card Spending Report – September 2024 (Attachment 2),

presented to the Council meeting on 11 December 2024.

Clause 219-24 above was carried 15 votes to 0, the voting being as follows:

For:

The meeting adjourned at 12.35pm.

The meeting resumed at 1.35pm.

Councillors Kaydee Zabelin and Orphée Mickalad were not present when the meeting resumed at 1:35pm.

Councillor Debi Marshall-Lobb returned to the meeting at 1.35pm.

The Mayor Grant Smith vacated the chair and sat in the gallery for Item 12 (clause 220-24)

The Deputy Mayor, Debi Marshall-Lobb took the Chair.

220-24

Approval of International Travel for the Mayor in March 2025

Memorandum, presented by Gabrielle Loga, Manager International Relations.

Moved Debi Marshall-Lobb, seconded Rachel Bowen.

RESOLVED

1. That Council grant approval for the Mayor to lead an information and communication technology (ICT) business and startup delegation to attend the 2025 Taipei Smart City Summit and Expo from 18 March until 22 March 2025.

Clause 220-24 above was carried 12 votes to 1, the voting being as follows:

For:

Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan and William Wood.

Against:

Councillor Karen Naylor.

Note:

Mayor Grant Smith declared a conflict of interest, withdrew from the discussion and sat in the gallery.

The Mayor Grant Smith took the chair.

221-24

Submission on the Principles of the Treaty of Waitangi Bill

Memorandum, presented by Todd Taiepa, Poutoko Aropei - Manager Māori Advisory.

Moved Debi Marshall-Lobb, seconded Grant Smith.

RESOLVED

1. That Council submit in opposition to the Treaty of Waitangi Principles Bill and that Council request to speak to its submission.

2. That Council agree the submission will be authorised by the Mayor and Deputy Mayor and reported back to Council in February.

Clause 221-24 above was carried 10 votes to 3, with 1 abstention, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson and Karen Naylor.

Against:

Councillors Mark Arnott, Leonie Hapeta and William Wood.

Abstained:

Councillor Billy Meehan.

222-24	Annual Budget 2025/26 Memorandum, presented by Cameron McKay, Chief Financial Officer and Scott Mancer - Manager Finance. The presentation is attached to the minutes. Councillor Kaydee Zabelin returned to the meeting at 2:18pm. Councillor Kaydee Zabelin left the meeting at 3:01pm. Councillor Orphée Mickalad returned to the meeting at 3:09pm.
A (1a)	Moved Karen Naylor, seconded Billy Meehan. RESOLVED That Council confirm the proposed budget for remuneration as being $63m, being the $62.5m as outlined in the Long-Term Plan 2024/34 plus $0.5m for positions which are offset with additional revenue.
	Clause 222.1-24 above was carried 9 votes to 6, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Vaughan Dennison, Roly Fitzgerald, Leonie Hapeta, Billy Meehan, Orphée Mickalad, Karen Naylor and William Wood. Against: Councillors Debi Marshall-Lobb, Brent Barrett, Rachel Bowen, Lew Findlay, Patrick Handcock and Lorna Johnson.
1(a)	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That Council instruct the Chief Executive to prepare a draft of the Consultation Document and supporting information for the Annual Budget 2025/26 for consideration by the Council at its meeting on 12 February 2025 and that it contains: a. Key assumptions outlined in Section 4 including the agreed motion above.
	Clause 222.2-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor and William Wood.
A 1(b)	Note: Moved Karen Naylor, seconded Brent Barrett. On a motion: That Council defer the following programmes by one year to be considered as part of the 2026/27 budget: · Programme 1194 - CET Arena Masterplan - $8,168K. The motion was lost 2 votes to 13, the voting being as follows: For: Councillors Brent Barrett and Karen Naylor. Against: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad and William Wood.
B 1(b)	Note: Moved Karen Naylor, seconded Vaughan Dennison. On a motion: That Council defer the following programmes by one year to be considered as part of the 2026/27 budget: · Programme 159 - Kelvin Grove Road $3,000K. The motion was lost 3 votes to 12, the voting being as follows: For: Councillors Vaughan Dennison, Karen Naylor and William Wood. Against: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan and Orphée Mickalad.
1(b)	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED 1. That Council instruct the Chief Executive to prepare a draft of the Consultation Document and supporting information for the Annual Budget 2025/26 for consideration by the Council at its meeting on 12 February 2025 and that it contains: b. Programmes as agreed at the Council meeting on 6 November 2024 and attached for information in Attachment 4.
	Clause 222.3-24 above was carried 13 votes to 2, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan and William Wood. Against: Councillors Orphée Mickalad and Karen Naylor.
c. i.	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED That Council agree a budget for Local Water Done Well Transition support in 2025/26 comprising expenditure of $1.5M funded by way of a grant subsidy of $621,831 and the balance of $878,169 by way of loan.
	Clause 222.4-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor and William Wood.
c. ii.	Moved Grant Smith, seconded Brent Barrett. RESOLVED That Council increase the resource recovery operating budget by $65k to fund the delivery of Programme 2338 – Recycling Contamination Monitoring Development
	Clause 222.5-24 above was carried 12 votes to 3, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan and Orphée Mickalad. Against: Councillors Mark Arnott, Karen Naylor and William Wood.
c. iii.	Moved Grant Smith, seconded Rachel Bowen. RESOLVED That Council add the following to the draft Annual Budget 2025/26: Street Lighting That a budget of $120,000 to support a Street Lighting survey be included in the Annual Budget 2025/26.
	Clause 222.6-24 above was carried 11 votes to 4, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson and Orphée Mickalad. Against: Councillors Mark Arnott, Billy Meehan, Karen Naylor and William Wood.
	Moved Grant Smith, seconded Rachel Bowen. RESOLVED That Council add the following to the draft Annual Budget 2025/26: Street Lighting That the Council refer a programme to begin upgrading the street lighting on the already identified streets (listed in the Roading Report to the Economic Growth Committee in June 2024) to the next practicable meeting.
	Clause 222.7-24 above was carried 13 votes to 2, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Rachel Bowen, Vaughan Dennison, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor and William Wood. Against: Councillors Brent Barrett and Lew Findlay.
	Moved Grant Smith, seconded Rachel Bowen. RESOLVED That Council add the following to the draft Annual Budget 2025/26: Palmerston North Age Friendly Action Plan That Council approve Option 1 and agree an additional budget of $50K for the development and implementation of the Palmerston North Age Friendly Implementation Plan in the 2025/26 Annual Budget.
	Clause 222.8-24 above was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad and William Wood. Against: Councillor Karen Naylor.
	Moved Grant Smith, seconded Rachel Bowen. RESOLVED That Council add the following to the draft Annual Budget 2025/26: Centrepoint Theatre That Council support the Centrepoint Theatre rebuild of up to $200k over two years by: a. In-kind support – officer time to support with fundraising, promotion, communications etc; and b. Resource consent and building consent costs – the application process for this is already underway; and c. Grant funding – the quantum to be determined at the 12 February 2025 Council meeting
	Clause 222.9-24 above was carried 14 votes to 1, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad and William Wood. Against: Councillor Karen Naylor.
A c(iv)	Note: Moved Karen Naylor, seconded Brent Barrett. On a motion: That Council reduce the proposed 2025/26 operating budget for International relations to $300K. The motion was lost 1 vote to 14, the voting being as follows: For: Councillor Karen Naylor. Against: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad and William Wood.
B c(iv)	Note: Moved Karen Naylor, seconded William Wood. On a motion: That Council reduce the proposed 2025/26 operating budget for city marketing is reduced by $200K. The motion was lost 2 votes to 13, the voting being as follows: For: Councillors Karen Naylor and William Wood. Against: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan and Orphée Mickalad.
C c(iv)	Moved William Wood, seconded Grant Smith. RESOLVED That the Chief Executive look at reducing the professional services budgets in 2025/26 by $1M and creating a new $1M Internal Capacity Building Budget to be used for professional development, internal capacity support and staff remuneration; and report back to 12 February 2025.
	Clause 222.10-24 above was carried 12 votes to 3, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Billy Meehan, Orphée Mickalad, Karen Naylor and William Wood. Against: Councillors Debi Marshall-Lobb, Lew Findlay and Lorna Johnson.
1C	Moved Grant Smith, seconded Debi Marshall-Lobb. RESOLVED That Council instruct the Chief Executive to prepare a draft of the Consultation Document and supporting information for the Annual Budget 2025/26 for consideration by the Council at its meeting on 12 February 2025 and that it contains: c. Operating budgets as outlined in Attachments 1-3, , including the agreed motions above.
	Clause 222.11-24 above was carried 15 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Debi Marshall-Lobb, Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Orphée Mickalad, Karen Naylor and William Wood.

223-24

Council Work Schedule

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

1. That Council receive its Work Schedule dated 11 December 2024.

Clause 223-24 above was carried 15 votes to 0, the voting being as follows:

For:

Exclusion of Public

224-24

Recommendation to Exclude Public

Moved Grant Smith, seconded Debi Marshall-Lobb.

RESOLVED

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

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

General subject of each matter to be considered		Reason for passing this resolution in relation to each matter	Ground(s) under Section 48(1) for passing this resolution
23.	Confirmation of the minutes of the ordinary Council meeting of 6 November 2024 Part II Confidential	For the reasons set out in the Council of 6 November 2024, held in public present.
24	Contract time extension- Nature Calls technical experts	NEGOTIATIONS: This information needs to be kept confidential to ensure that Council can negotiate effectively, especially in business dealings	s7(2)(i)
25.	Appointment of Directors to Central Economic Development Agency 2024	PRIVACY This information needs to be kept private to protect personal information that is confidential or sensitive. This includes people who are no longer alive	s7(2)(a)
26.	Development Agreements with Summerset Villages (Kelvin Grove) Ltd and The Colonial Motor Company Ltd	THIRD PARTY COMMERCIAL Disclosing the information could harm a company's commercial position	s7(2)(b)(ii)

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Section 6 or Section 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public as stated in the above table.

Also that Nicholas Jessen, be permitted to remain in the public excluded part of the meeting, because of his knowledge and ability to assist the meeting in speaking to Item 26, Development Agreements with Summerset Villages (Kelvin Grove) Ltd and The Colonial Motor Company Ltd.

Nicholas Jessen will be present at the meeting for Item 26 only.

Clause 224-24 above was carried 15 votes to 0, the voting being as follows:

For:

The public part of the meeting finished at 4.40pm

Confirmed 5 February 2024

Mayor

Memorandum

TO: Council

MEETING DATE: 5 February 2025

TITLE: Local Water Done Well- Approval for Consultation

Presented By: Julie Keane- Transition Manager Three Waters, Mike Monaghan- Group Manager Three Waters, Olivia Wix- Communications Manager

APPROVED BY: Chris Dyhrberg, General Manager Infrastructure

Danelle Whakatihi, General Manager Customer & Community

RECOMMENDATION TO Council

1. That Council adopt for consultation the Local Water Done Well Consultation Document (Attachment 1 – attached separately).

1. ISSUE

1.1 Under the Local Government (Water Services Preliminary Arrangements) Act, Council is required to consult on options for the future delivery of Water Services.

1.2 At its meeting on 5 December 2024 Council agreed three options to consult the community on, including identifying a preferred option.

1.3 Council will consult on options for future water service delivery between Thursday 20 February and Sunday 23 March 2025.

1.4 In the attachment to this report, is the draft consultation document to be approved to proceed with consultation.

2. BACKGROUND

2.1 On 5 December, Council considered options to take to public consultation for the future of Palmerston North’s Water Services Delivery.

2.2 Council agreed to include three options for consultation, one of which (Status Quo) is legally required to be consulted on, despite for our Council, not meeting legislative requirements (Option 3).

2.3 The two other remaining options would see us collaborate with other councils to form a joint Council Controlled Organisation. Option 1 is a collaboration with Kāpiti Coast, Horowhenua, Manawatū and Palmerston North councils. Option 2 is with one or more councils within the Horizons boundary area.

2.4 Council voted to endorse Option 1 as its preferred option for consultation.

2.5 The Draft consultation document was circulated to elected members for initial feedback on 24 January.

2.6 Since December, we have re-modelled the options to ensure elected members and our community have the most up-to-date potential costings.

2.7 Previously modelling between Option 1 and Option 2 were completed by different organisations. It is important that what we present to the public can confidently be compared. One of the main differences between the numbers you see today and those presented in December is that all options and analysis now include inflation.

2.8 It should be noted that modelling of Option 2 assumes all seven councils are included, whereas we know some councils have already signalled they are not considering this option. Removing some councils from the modelling will likely result in an increase in costs.

2.9 Some other councils have also looked again at their proposed spending over the next few decades to ensure it represents the true projected water investment needed over the coming decades. This is reflected in what is presented today.

3. OULTINE OF COMMUNITY ENGAGEMENT PROCESS

3.1 A significant community engagement process will occur.

3.2 A pre-education campaign about the Local Water Done Well programme is already underway. This includes tours of the wastewater plant, website material, social media, radio and newspaper promotion and a display in our Customer Service Centre. A flyer is also included in the February rates instalment.

3.3 During consultation the full consultation document and supporting information will be on our website, available at all libraries and our Customer Service Centre. All properties will receive an information booklet encouraging them to read our consultation material in more depth, and to give feedback. There are tight deadlines to meet in relation to the printing and distribution of this document. Comments made today will be incorporated into both the Consultation Document and this booklet.

3.4 During this time period, there will be a wide range of radio, digital, newspaper and social media promotion. We will host tours at our wastewater plant, visit schools and have a presence at a number of events including Esplanade Day, Rural Games, Central District Field days and Festival of Cultures. We will also host sector sessions with Environment, Community, and a joint session with business and our commercial water and trade waste customers. We will also host drop-in sessions at our libraries throughout the consultation period.

3.5 People will be able to fill out submission forms on our website and at our libraries and customer service centres. People will also be able to make submissions in formats they choose- eg: art, poems, drawings, video etc.

3.6 Councils within the options are continuing to communicate with each other and will share information and provide assistance if queries occur about other communities to ensure correct information is provided. We will also make council staff available for engagement sessions in other communities where they are included in some of our options.

3.7 We are the first council in the Horizons and Kāpiti area to begin consultation. The other councils will start mid-way through our consultation period. We have timed our consultation to ensure there is limited crossover with the Annual Budget consultation and to take advantage of the range of events to engage with our community.

4. UPDATE ON FINAL WATER SERVICES BILL

4.1 The Local Government (Water Services) Bill establishes the enduring settings for the new water services system.

4.2 The objectives of the Bill are to ensure water services are safe, reliable, environmentally resilient, customer responsive and delivered at the least cost to consumers and businesses.

4.3 The Bill was introduced to Parliament in December 2024. It reflects key policy decisions announced by the Government in August 2024.

4.4 The Bill sets out key details relating to the water services delivery system, the economic regulation and consumer protection regime for water services, and changes to the water quality regulatory framework.

4.5 It provides for:

Arrangements for the new water services delivery system, including:

· Structural arrangements such as establishment, ownership, and governance of water organisations

· Operational matters such as arrangements for charging bylaws and management of stormwater networks

· Planning, reporting and financial management

A new economic regulation and consumer protection regime based on the existing economic regulation regime in Part 4 of the Commerce Act which currently applies to electricity lines services, gas pipeline services, and airport services.

Changes to the water quality regulatory framework and the water services regulator including:

· Changes to the Water Services Act 2021 to reduce the regulatory burden of the drinking water quality regime and improve proportionality in the application of regulatory powers

· A change to Te Mana o te Wai

· A new single standard for wastewater and stormwater environment performance.

4.6 The Bill contains standalone provisions and amendments to a number of other Acts including but not limited to the Civil Defence Emergency Management Act, Commerce Act, Income Tax Act, Local Government Act and the Water Services Act.

4.7 There are no changes to the information that was shared by the DIA in August but the Bill sets out detailed information about the new waters delivery system.

4.8 Officers are currently preparing a submission on the Bill, that will be bought to Council on 12 February. Responses to the Bill are required by 23 February and it is expected that the Bill will be enacted mid-2025.

5. NEXT STEPS

5.1 Following Council’s approval of the Consultation Document, consultation will commence from 20 February to 23 March.

5.2 Hearings will be heard by the Sustainability committee on 16 April.

5.3 Report back to Council 7 May on analysis of submissions including recommendations.

5.4 4 June presentation of Water Services Delivery Plan or alternative 25 June depending on other council decisions

6. Compliance and administration

Does the Council have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these objectives?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to:Whāinga 4: He tāone toitū, he tāone manawaroa Goal 4: A sustainable and resilient city
The recommendations contribute to this plan: 14. Mahere mana urungi, kirirarautanga hihiri 14. Governance and Active Citizenship Plan The objective is: To receive community feedback to enable us to advocate to Government and other decision-makers on issues and opportunities regarding water services.
Contribution to strategic direction and to social, economic, environmental and cultural well-being	The purpose of the Local Government (Water Services Preliminary Arrangements) Bill (WSPA) is to establish preliminary arrangements for the future delivery of water services.

Attachments

Local Water Done Well - Consulation Document (attached separately)

Local Water Done Well - Consultation Form (attached separately)

Memorandum

TO: Council

MEETING DATE: 5 February 2025

TITLE: Exemption of Council Controlled Organisations

Presented By: Sarah Claridge, Governance Advisor

APPROVED BY: Cameron McKay, General Manager Corporate Services

RECOMMENDATIONS TO Council

1. That Council approve the request to treat the Globe Theatre Trust as an exempted organisation for the purpose of compliance and external financial audit; for three years from 5 February 2025 to 5 February 2028, pursuant to Section 7 of the Local Government Act 2002.

2. That Council approve the request to treat the Regent Theatre Trust as an exempted organisation for the purpose of compliance and external financial audit; for three years from 5 February 2025 to 5 February 2028, pursuant to Section 7 of the Local Government Act 2002.

3. That Council decline the request from Te Manawa Museums Trust to become an exempted organisation.

4. That Council request the Globe Theatre Trust and Regent Theatre Trust present their Annual Report to the relevant committee.

1. ISSUE

1.1 Council has three cultural CCOs: Te Manawa Museums Trust, Regent Theatre Trust and Globe Theatre Trust. Each CCO is run by a Trust Board who is responsible for independently managing the respective facility to meet the Council’s objectives. The Local Government Act (LGA), requires CCO trusts to regularly report performance and provide audited financial statements to their shareholder (Council).

1.2 Council has received letters from the chairs of the three Cultural CCOs (Attachments 1-3) requesting that their Trust be exempted from the reporting and auditing requirements of the LGA. The main driver for these requests is the increasing cost of Audit New Zealand. The LGA requires CCO accounts to be audited by Audit New Zealand.

1.3 A Council resolution can exempt a small organisation that is not a council-controlled trading organisation from the requirements on a council-controlled organisation (see 2.3 below).

1.4 This report seeks Council’s consideration of the requests from the CCO Board chairs.

2. BACKGROUND

Legal Requirements of being a CCO

2.1 The legal requirements of a CCO are outlined in Part 5 of the LGA. Reflecting that CCOs primarily rely on public funds, reporting requirements are extensive and financial statements must be audited annually by Audit New Zealand.

2.2 CCOs must provide three reports annually to Council, these are:

· Statement of Intent (future 3-year performance indicators/ targets, objectives and 3-year budgets)

· Six-month report (half year performance of the CCO in achieving its set targets and finances)

· Annual Report (audited report on the previous year’s budget and performance)

Exemption Criteria

2.3 Local authorities may exempt a CCO for not more than 3 years (LGA, s7(6)). This effectively means the CCO would not be required to meet the monitoring and reporting requirements (set out in section 2.2 above) for the exemption period.

2.4 While an exemption can be up to 3 years, councils can review and revoke an exemption at any time. Therefore, should an exempted CCO’s conduct be unsatisfactory, Council could remove the exemption and bring the CCO back into the reporting regime immediately.

2.5 When considering whether to exempt an organisation, Council must take into account two matters (LGA 2002, s7(5)), namely:

(a) the nature and scope of the activities provided by the organisation; and

(b) the costs and benefits, if an exemption is granted, to the local authority, the council-controlled organisation, and the community.

2.6 Irrespective of whether an exemption is granted or not, the following actions would continue:

· Council would provide an annual grant to each CCO

· Council would appoint trustees to the Trust Boards.

· Regular annual gatherings between elected members and the cultural CCOs would continue.

· Council officers would continue to maintain a relationship with the CCOs through regular catchups. This provides an opportunity for any issues to be raised with officers and brought to elected members attention (if required).

· Council can request a CCO to present to Council or Committee.

Trust Deeds

2.7 There is nothing in either the Regent or Globe’s Trust Deeds preventing the CCOs becoming exempt, but Te Manawa’s Trust Deed does contain an audit requirement.

Section 11.2 of the Te Manawa Trust deed reads:

The Board shall, as soon as practicable after the end of every financial year of the Board, cause the accounts of the Board for that financial year to be audited by the auditor for the time being who audits the accounts of the Council unless the Council shall approve of some other auditor.”

2.8 If Council were to exempt Te Manawa, an additional resolution approving an alternative auditor would be required to satisfy the requirement of section 11.2 above.

Financial Breakdown of Cultural CCOs

2.9 The Globe and Regent Trust Boards are relatively small CCOs and are similar sized financially, whereas Te Manawa is much larger. See Table 1 below.

Table 1: Financial Breakdown of Cultural CCOs

2023-2024 Financial Year	Globe Theatre Trust	Regent Theatre Trust	Te Manawa Museums Trust
Council Grant	$174,981	$258,016	$3,756,570^{^[1]}
Total Assets	$594,588	$1,315,073	$23,942,208
Total Expenses (excluding depreciation)	$338,417	$896,548	$3,982,144
Annual Audit Cost	$10,000	$34,186	$69,569

Charities Act 2005

2.10 All three CCOs are registered charities under the Charities Act 2005 (the Act).

The Act requires all charities with Total Expenses over $1.1M to be audited. The Globe and Regent Theatres both have operating expenditure of less than $1.1M so fall under the threshold that requires auditing. Te Manawa’s total expenses, of nearly $4M triggers the audit requirement. This means that even if exempted as a CCO, Te Manawa must still have their Annual Report audited. Te Manawa believe that becoming an exempt CCO would allow them to find a more affordable auditor than Audit New Zealand.

3. Request for exemption from the Globe AND Regent Theatre trustS

Section 3 considers the Regent and Globe Theatre exemption requests together, as both are of similar size and nature.

Nature and scope of activities

3.1 Council established the Globe Theatre Trust Board as a CCO in 2002 to independently manage and promote the Globe as a community theatre and venue for hire. The Globe has two small sized theatres (>200 seats) and caters for community groups and emerging local and national acts looking to establish themselves. Similarly, the Regent Theatre has been a CCO since 2001. It is responsible for managing and promoting the Regent Theatre, which contains a 1400 seat auditorium catering for performers that attract a larger audience.

3.2 In recent years, both Trusts have been very successful at attracting a diverse range of local, national and international acts and have met the majority of their performance indicators. (see Globe Annual Report 2023-24 and Regent Annual Report 2023-24)

Table 2: Costs and Benefits of granting an exemption to the Globe and Regent Trusts.

OPTION 1:

Exempt the Globe Theatre Trust, and/or the Regent Theatre Trust

Community Views

Community Views not sought

Benefits

For Council

Council Staff time saved on monitoring and reporting on the Globe and Regent’s performance.

For the CCOs

More Trust Board/ Management time available to run the theatre for the benefit of the community, instead of time taken to report results to Council and answering audit queries. The CCOs would still be required to answer any non-financial performance measures (as part of the quarterly performance reporting schedule presented to Council/committee).

Risks (Costs)

Council

Less Governance direction – Council would no longer set expectations for the Trust Boards to report on through the Statement of Expectation or agreement of the Statement of Intent. Instead the Trusts would be expected to meet the purpose of their Trust deeds.

Less Governance oversight – Council would no longer receive a statement of intent, or six-month report from the Trusts. Reporting to Council would reduce from three times a year to one (the Annual Report). Council could request presentations to committee more regularly.

Alignment of accounts – Unaudited financial statement would be included in Council’s audited accounts.

The risk matrix below shows the risks of exempting the Theatres as CCOs. Residual risk increases across all risk categories (compared to the status quo – see Option 2 below) but remains within the Council’s risk tolerance and is therefore acceptable. The change in risk is largely derived from the removal of independent audit as a control, but the change in risk is small due to relatively low financial commitments and nature of operations involved.

Risk Category	Residual Risk Rating	Within Risk tolerance
Financial	Medium	Yes
Service Delivery	Medium	Yes
Reputational	Medium	Yes

For the CCOs

Foregone opportunity to gain insight and assurance of effectiveness or otherwise of internal controls gained from an independent auditor’s perspective.

Financial

For Council

Audit expenses: could be redistributed towards the operations of the CCO or could be reallocated to other council services (by a reduction in a CCO’s grant).

For the CCOs

Audit expenses: The Trusts would no longer have their accounts audited by Audit NZ (nor would be required to have their accounts audited at all), which could enable more of their operating grant to be spent on managing the theatres (if Council does not reduce current grant levels).

OPTION 2:

Status Quo – retain CCO requirements for the Globe Theatre Trust, and/or the Regent Theatre Trust

Community Views

Community Views not sought

Benefits

For Council

Continues to have regular reporting and independently audited finances of the cultural CCOs, providing transparency that ratepayer money is being spent responsibly and ensuring Council oversight and accountability of operations.

For the CCOs

Regular opportunities to present their work to Council and community through regular reports to committee.

Risks (Costs)

For both Council and CCOs

The risk matrix below shows the risk levels of not awarding an exemption. There is a low residual risk across all categories.

Risk Category	Residual Risk Rating	Within Risk tolerance
Financial	Low	Yes
Service Delivery	Low	Yes
Reputational	Low	Yes

For the CCOs

Staff spend more time meeting compliance requirements rather than operating their facilities and achieving Council objectives.

Financial

Audit New Zealand costs may continue to become more expensive, requiring a larger portion of Council’s grant to be spent on compliance rather than operating the theatres.

Analysis of Benefits and Risks – Globe and Regent Theatres

3.3 Savings on Audit fees for both CCOs and the funds could be channelled back into operating the theatres, or Council could redistribute the proposed savings to other council services. Estimated audit fees are $10,000 for the Globe and $34,000 for the Regent.

3.4 If exempted, officers consider the risk of financial mismanagement low, as both CCOs are managing small budgets. It should however be noted that the small size of the operations by nature increases the risk of financial mismanagement where independent audit is absent. However, both CCOs have shown themselves to be fiscally responsible. Over the last few years, the cultural CCOs have often presented unaudited Annual Reports to Council due to delays in the auditing process. No issues have yet been found by Audit NZ that has required accounts to be re-submitted to Council.

3.5 Officers consider that for small CCOs, the cost of complying with the requirements of the LGA outweighs the benefits identified above. Officers do however recommend the Trusts continue to provide an unaudited Annual Report to the Council each year and could be asked to present regularly albeit informally should that be the wish of elected members. Coming in front of Council in this way would go some way to provide Council assurance that a Trust is performing in line with their trust deeds and would allow for some oversight of their accounts and public accountability of grant funding.

3.6 Presenting an Annual Report also aligns the reporting requirements of an (exempted) CCO with Council’s Sector Leads, some of whom receive similar sized grants.^{^[2]}

4. Request for exemption from te manawa muesums trust

Nature and Scope of Activities

4.1 Te Manawa Museums Trust (Te Manawa) has been a CCO since 1999. It is responsible for managing the Te Manawa museum, a regional museum with a strong art, science and heritage focus.

4.2 Te Manawa has met several of its performance indicators over the last few years, and continues to provide a variety of science, art and heritage exhibitions, and educational programmes to the community. For example, in 2023-24, Te Manawa increased its external revenue funding and visitor numbers ( refer Annual Report 2023-24).

4.3 Te Manawa does rely significantly on Council’s grant and has sought and secured an increase in the grant over the next two years (see below).

Increase in Te Manawa Grant over next 2 years

Current Year

2024/25

2025/26

2026/27

$3,833,599

$4,024,056

$4,217,826

4.4 Officers analysis of the costs and benefits of an exemption to Te Manawa is set out in Table 3 below.

Table 3: Costs and Benefits of granting an exemption to Te Manawa Museums Trusts

OPTION 1:

Exempt Te Manawa Museums Trust Board

Community Views

Community Views not sought

General public expectation that regular monitoring should occur of organisations that receive public funds. Te Manawa maintains $24M in council assets and receives nearly $4M annually in council funds. As such, public trust in Council may decline if governance oversight is reduced.

Benefits

For Council

Council Staff time saved on preparing Statement of Expectations and agreeing Statement of Intents along with the subsequent monitoring and reporting on Te Manawa’s performance against these measures six monthly.

Audited Accounts are presented to Council annually, ensuring fiscal responsibility over ratepayer funded activity.

For Te Manawa

Some Trust Board/ Management time saved not having to report a Statement of Intent or six-month report to Council. Audit queries and the answering of any non-financial performance measures (as part of the quarterly performance reporting schedule presented to Council/committee would remain as an Annual Audit will still be required as per its Trust Deed and the Charities Act requirements.

Risks (Costs)

Council

Less Governance direction– Council would no longer set expectations for the Trust Boards to report on through the Statement of Expectation or agreement of the Statement of Intent. Instead the Trust would be expected to meet the purpose of its Trust deed.

Less Governance oversight – Council would no longer receive a statement of intent, or six-month report from Te Manawa. Officers recommend that the audited Annual Report continue to be presented. Council could request presentations to committee more regularly.

Alignment of audits may be compromised if Te Manawa’s annual audit was conducted by a different auditor to Council’s own auditor. This could lead to delays in preparation of Council’s Group Financial Statements and the subsequent audit by Audit NZ. Additional coordination between audit providers by officers would be necessary to understand the progress of Te Manawa’s audit and any impact that it might have on Audit NZ’s work programme for Council.

The risk matrix below shows the risks of exempting Te Manawa as a CCO. Reputational risk is assessed as being above the Council’s risk tolerance due to the expectation of public unease over a $4M Council grant being given with significantly reduced governance oversight.

Risk Category	Residual Risk Rating	Within Risk tolerance
Financial	Low	Yes
Service Delivery	Medium	Yes
Reputational	High	No

For Te Manawa

Connectedness with Governance Te Manawa would need to make sure it connected regularly with elected members through fora other than committee meetings.

Financial

No significant financial savings, as Te Manawa’s accounts will still be required to be audited (as set out in their Trust deed and by the Charities Act 2005).

There may be potential for some savings by shifting audit provider for Te Manawa.

OPTION 2:

Status Quo – Retain status quo CCO requirements for Te Manawa Museums Trust

(same benefits and costs outlined in Table 2, Option 2)

Analysis of Benefits and Risks – Te Manawa Museums Trust

4.5 There is no material financial savings achieved by exempting Te Manawa from the reporting requirements of the LGA, as Te Manawa’s financial size still requires it to provide audited accounts to Charities Services (as does its trust deed).

4.6 If exempted, there is a high reputation risk to Council due to the loss of governance oversight. Council’s ability to set expectations and oversee the proposed actions of Te Manawa through the Statement of Intent process provides transparency and ensures that ratepayers’ money is spent progressing Council’s strategic direction.

4.7 Te Manawa’s letter does offer to continue to regularly report to Council, which would mitigate the reputational risk of ‘loss of oversight’ that an exemption could cause. If such mitigation measures were agreed, officers’ question what an exemption would achieve as most identified benefits would be removed in doing so. (See Option 1, Table 3 above.)

4.8 If Council were to make Te Manawa an exempt CCO, officers recommend that the Trust continues to present their audited Annual Report to Council. This would provide a level of transparency and an audit gives assurance that Council’s grant is being spent appropriately.

4.9 Officers do not recommend Te Manawa becomes an exempted CCO. The benefit to Te Manawa of potentially having a cheaper auditor and reducing its reporting requirements do not outweigh the loss of council oversight and public transparency for a strategic asset of its size.

5. NEXT STEPS

5.1 Decisions of Council will be communicated to Trustees and other relevant bodies.

5.2 If exempted, CCOs will present to the Culture and Sport Committee their six month report July – December 2024 in March 2025 and will continue to present an Annual Report each year.

5.3 If not exempted, CCOs will present their six-month report 2024-25 and their draft Statement of Intent to the Culture and Sport Committee on 26 March 2025.

6. Compliance and administration

Does the Council have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these objectives?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to: (Not Applicable)
The recommendations contribute to the achievement of objective/objectives in: 14. Mahere mana urungi, kirirarautanga hihiri 14. Governance and Active Citizenship Plan The objective is: · Review governance systems and structures · Oversee Council operations and communicate outcomes and decisions to our communities
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Exempting the trust boards from the CCO reporting requirements of the LGA may release the Trusts to focus on their core matters ie. contributing to the cultural and social fabric of Palmerston North.

Attachments

1.	Exemption Request Letter - Globe Theatre Trust Board ⇩
2.	Exemption Request Letter - Regent Theatre Trust Board ⇩
3.	Exemption Request Letter - Te Manawa Museums Trust Board ⇩

Committee Work Schedule

TO: Council

MEETING DATE: 5 February 2025

TITLE: Council Work Schedule

RECOMMENDATION TO Council

1. That Council receive its Work Schedule dated 5 February 2025

COUNCIL WORK SCHEDULE 5 February 2024

#	Estimated Report Date	Subject	Officer Responsible	Current Position	Date of Instruction & Clause
	~~mid 2025~~	~~Delivery Model options for Property - CCO/ Trust to include Summerhays Street.~~	~~GM Corporate Services~~	moved to Community Committee work schedule	~~1 May 2024~~ ~~Clause 66.1~~
1	early 2025	Report back on Investment Options for PN Airport	GM Corporate Services		6 December 2023 Clause 197-23
2	~~5 Feb 2025~~	~~Agree LWDW Consultation Document~~	~~Chief Executive~~	Hearings - Sustainability Committee 16 April	~~5 Dec 2024 Clause 202-24~~
3	~~5 Feb 2025~~	~~Civic and Cultural Precinct Master Plan Steering Group – 6-monthly update~~	~~GM Strategic Planning~~		~~Terms of Reference~~
4	~~5 Feb 2025~~	~~Review of CEDA and PNCC Appointment of Directors Policies~~	~~GM Corporate Services~~	~~Establish working party / agree Terms of Reference~~	~~2 Oct 2024~~ ~~Clause 172~~
5	12 Feb 2025	Report back – Submission Treaty Bill	GM Strategic Planning		11 Dec 2024 Clause 221 -24
6	12 Feb 2025	Review of Rating Incidences	GM Corporate Services		11 Dec 2024 Clause 213 - 24
7	12 Feb 2025	Review of Fees and Charges 25/26	GM Corporate Services		Terms of Reference
8	12 Feb 2025	Draft Annual Budget 2025/26	Chief Executive		Terms of Reference
9	5 March 2025	Draft Annual Budget 2025/26 for consultation	Chief Executive		Terms of Reference
10	5 March 2025	Remits from PNCC for consideration	GM Corporate Services		Terms of Reference
11	5 March 2025	Alternative Options for BPO - Nature Calls	GM Infrastructure	Waiting on release of Taumata Arowai standards	Council 29 May 2024 Clause 95.11 -25 (rec 2)
12	2 April 2025	Extension of Contract – Nature Calls	GM Infrastructure		11 Dec 2024 clause 224- 24
13	30 April / 1 May 2025	Hearings for the Annual Budget 2025/26	Chief Executive		Terms of Reference
14	7 May 2025	Deliberations and Decision for Local Water Done Well	GM Infrastructure	following Hearings at Sustainability Committee – 16 April
15	14 May 2025	Deliberations for the Annual Budget 25/26	Chief Executive		Terms of Reference
16	4 June 2025	Remits received from other Territorial Authorities	GM Corporate Services		Terms of Reference
17	4 June 2025	2024 Residents Survey – Action Plan	GM Strategic Planning		Terms of Reference
18	4 June 2025	Adopt Annual Budget 2025-26	Chief Executive		Terms of Reference
19	4 June 2025	Agree LWDW - Water Services Delivery Plan	Chief Executive
20	4 June 2025	Set the Rates for 2025-26	GM Corporate Services		Terms of Reference
21	4 June 2025	Approve Borrowing for 2025-26	GM Corporate Services		Terms of Reference
22	25 June 2025	Agree revised BPO – Nature Calls	GM Infrastructure
23	8 October 2025	Parking Contract Review Update – Frog Parking	GM Infrastructure		4 September 2024 Clause 156-24
24	8 Oct 2025	Adopt Annual Report 2024-25	Chief Executive		Terms of Reference
25	8 Oct 2025	Appointment of Trustees on Council Controlled Organisations	General Manager Corporate Services		Terms of Reference
26	TBC	Summerhays Reports – Partnership Models Expressions of Interest	GM Infrastructure	Lying on the Table	1 May 2024 Clause 66-24 and 74 -24
27	TBC	Effectiveness of Civics Education Initiatives – Annual progress report	GM Customer & Community		29 May 2024 Clause 95.29 -24

[1] Includes an additional $250,000 to deliver specific projects

[2] The largest sector lead is Environmental Network Manawatū who receives $172,590 a year, a comparable grant size to the Globe Theatre.

[3] The Electoral College consists of six members, three from each council. It is responsible for recommending appointments of CEDA directors to the councils.

Grant Smith (Mayor)
Debi Marshall-Lobb (Deputy Mayor)
Mark Arnott	Leonie Hapeta
Brent Barrett	Lorna Johnson
Rachel Bowen	Billy Meehan
Vaughan Dennison	Orphée Mickalad
Lew Findlay (QSM)	Karen Naylor
Roly Fitzgerald	William Wood
Patrick Handcock (ONZM)	Kaydee Zabelin

205-24	Local Water Done Well - Assessment of Options and Consultation Process Report, presented by Mike Monaghan Manager 3 Waters, Julie Keane, Transition Manager and Cameron McKay, Chief Financial Officer. An additional motion was agreed that Council indicate to the public its preferred option in the Local Water Done Well consultation material. The meeting adjourned at 11.11am The meeting resumed at 11.31am
	Moved Grant Smith, seconded Patrick Handcock. RESOLVED 1. That Council note the Local Government (Water Services Preliminary Arrangements) Act 2024 requires councils to produce a Water Services Delivery Plan and accompanying implementation plan by 3 September 2025. 2. That Council note it is required by the Local Government (Water Services Preliminary Arrangements) Act 2024 to consider and consult with the community on at least two options for the future delivery model for water services, being the Internal business unit – Modified Status Quo, and a Water Services Council-Controlled Organisation or joint services arrangement. 3. That Council consult on: a) Option 1 – Internal Business Unit – Modified Status Quo, as required by legislation AND c) Option 3 - a Multi-Council-owned Water Organisation – sub-regional that includes Palmerston North City Council, Manawatū District Council, Horowhenua District Council and Kāpiti Coast District Council. AND d) Option 4 - a Multi-Council-owned Water Organisation of the Manawatū-Whanganui region or any other combination of councils. 4. That Council instruct the Chief Executive to include the options agreed above in a draft Statement of Proposal and consultation document to be brought back to Council on 5 February 2025. 5. That Council note the Chief Executive will prepare a submission to the Local Government Water Services Bill to be submitted under the Mayor’s delegation and brought back to Council for information in the new year.
	Clause 205-24 above was carried 14 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, William Wood and Kaydee Zabelin.
	Moved William Wood, seconded Lorna Johnson. RESOLVED 6. That Council agree the option: a Multi-Council-owned Water Organisation – sub-regional that includes Palmerston North City Council, Manawatū District Council, Horowhenua District Council and Kāpiti Coast District Council as the preferred option for consultation.
	Clause 205-24 above was carried 14 votes to 0, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Mark Arnott, Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Leonie Hapeta, Lorna Johnson, Billy Meehan, Karen Naylor, William Wood and Kaydee Zabelin.
	Note: Moved Brent Barrett, seconded William Wood. On an amendment that: Option 2 - a Single Council-owned Water Organisation – PNCC be included in the consultation options, the amendment was lost 6 votes to 8, the voting being as follows: For: Councillors Mark Arnott, Brent Barrett, Roly Fitzgerald, Billy Meehan, Karen Naylor and William Wood. Against: The Mayor (Grant Smith) and Councillors Rachel Bowen, Vaughan Dennison, Lew Findlay, Patrick Handcock, Leonie Hapeta, Lorna Johnson and Kaydee Zabelin.

206-24	Rangitāne o Manawatū Committee Part I Public - 30 October 2024 Councillor Naylor presented the recommendations below:
	Moved Karen Naylor, seconded Vaughan Dennison. RESOLVED 1. That Council adopt the recommendations from the Rangitāne o Manawatū Committee of 30 October 2024:
	Te Motu o Poutoa Development Programme – Update (clause 18-24) Memorandum, presented by Kathy Dever-Tod, Manager Parks and Reserves. The COMMITTEE RECOMMENDS 1. That Council agree the terms of reference of the Te Motu o Poutoa Steering Group (Attachment 1). 2. That Council investigate the use of a council-controlled organisation (CCO) or other subsidiary entity model as the start-up structure for the Te Motu o Poutoa Marae and Cultural Centre. 3. That Council endorse the Te Motu o Poutoa Programme Steering Group position that they do not wish to seek funding from Gaming Trusts for this project.
	Clause 206-24 above was carried 11 votes to 0, with 3 abstentions, the voting being as follows: For: The Mayor (Grant Smith) and Councillors Brent Barrett, Rachel Bowen, Vaughan Dennison, Lew Findlay, Roly Fitzgerald, Patrick Handcock, Lorna Johnson, Billy Meehan, Karen Naylor and Kaydee Zabelin. Abstained: Councillors Mark Arnott, Leonie Hapeta and William Wood.

	Karakia Timatanga
	Councillor Roly Fitzgerald opened the meeting with karakia.

	Tributes to Lorna Black and Sir Robert Gillies
	Mayor Grant Smith gave a tribute to Lorna Black, wife of former Mayor Desmond Black, and Sir Robert Gillies, former member of the 28^th Māori Battalion.

	Karakia Whakamutunga
	Councillor Roly Fitzgerald closed the meeting with karakia.