I hereby give notice that an ordinary meeting of the Finance and Performance Committee will be held on:

 

Date:                      

Time:

Meeting Room:

Venue:

 

Thursday, 24 July 2014

9.30am

Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland

 

Finance and Performance Committee

 

OPEN ADDENDUM AGENDA

 

 

 

MEMBERSHIP

 

Chairperson

Cr Penny Webster

 

Deputy Chairperson

Cr Ross Clow

 

Members

Cr Anae Arthur Anae

Cr Calum Penrose

 

Cr Cameron Brewer

Cr Dick Quax

 

Mayor Len Brown, JP

Cr Sharon Stewart, QSM

 

Cr Dr Cathy Casey

Member David Taipari

 

Cr Bill Cashmore

Member John Tamihere

 

Cr Linda Cooper, JP

Cr Sir John Walker, KNZM, CBE

 

Cr Chris Darby

Cr Wayne Walker

 

Cr Alf Filipaina

Cr John Watson

 

Cr Hon Christine Fletcher, QSO

Cr George Wood, CNZM

 

Cr Penny Hulse

 

 

Cr Denise Krum

 

 

Cr Mike Lee

 

 

(Quorum 11 members)

 

 

 

Crispian Franklin

Democracy Advisor

 

18 July 2014

Contact Telephone: (09) 373 6205

Email: crispian.franklin@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 

 


Finance and Performance Committee

24 July 2014

 

 

ITEM   TABLE OF CONTENTS                                                                                        PAGE

  

11        Funding Assistance Rates - report and resolutions from the Infrastructure Committee                                                                                                                                         5

13        Monthly Budget Update                                                                                              19   

 

    


Finance and Performance Committee

24 July 2014

 

 

Funding Assistance Rates - report and resolutions from the Infrastructure Committee

 

File No.: CP2014/12711

 

  

 

Purpose

1.       To inform the Finance and Performance Committee of the NZ Transport Agency’s decisions regarding the setting of Funding Assistance Rates and to consider potential financial implications for the Long-term Plan 2015-2025.

Executive summary

2.       At its meeting of 4 June 2014, the Infrastructure Committee considered the attached report (Attachment A) on the NZ Transport Agency’s decisions regarding the setting of Funding Assistance Rates, and resolved as follows:

11

Funding Assistance Rates

 

Resolution number INF/2014/20

MOVED by Chairperson ME Lee, seconded by Deputy Chairperson C Darby:  

That the Infrastructure Committee:

a)      receive the report regarding Funding Assistance Rates and note the initial decisions of the NZ Transport Agency regarding proposed Funding Assistance Rates

b)      supports the principle of a fast transition of a funding assistance rate (FAR) to 52 per cent for Auckland Transport

c)      request that the report be circulated to all local boards and be considered by the Finance and Performance Committee

d)      encourage Auckland Transport and council staff to liaise with its counterparts in the other public transport councils and Local Government New Zealand.

 

3.       The Finance and Performance Committee will need to consider the changes in Funding Assistance Rates for the transport programme in the Long-term Plan 2015-2025.

 

Recommendation/s

That the Finance and Performance Committee:

a)      receive the Funding Assistance Rates report, noting the initial decisions of the NZ Transport Agency regarding proposed Funding Assistance Rates.

b)      incorporate changes to the Funding Assistance Rates in the funding components of the Long-term Plan 2015-2025.

 

Attachments

No.

Title

Page

aView

Original Funding Assistance Rates report to the Infrastructure Committee of 4 June 2014

7

      

Signatories

Authors

Barbara Watson - Democracy Advisor

Authorisers

Grant Taylor - Governance Director

Andrew McKenzie - Chief Finance Officer

 


Finance and Performance Committee

24 July 2014

 

 













Finance and Performance Committee

24 July 2014

 

 

Monthly Budget Update

 

File No.: CP2014/13693

 

  

 

 

Purpose

1.       This report is provided on a monthly basis as required. It collates decisions required of the Finance and Performance Committee on changes to the budgets, and provides a financial context within which the decisions can be made.

Executive summary

2013/2014 Budget underspends to be spent in 2014/2015

2.       Auckland Council’s financial policies do not allow the general deferral of operational expenditure (opex) budgets from year to year.

3.       For specific time-bound projects or events where the timing has changed, departments have requested that budgets which were funded in 2013/2014 and remain unspent, be approved for spend in 2014/2015. Staff have assessed the requests against Auckland Council’s internal financial policies, and recommend approval in this report of the items which meet the criteria.

4.       The timing changes recommended do not have any funding impact on the 2014/2015 budgets as the items have either already been funded through rates and external revenue sources, or they relate to a capital grant which is debt funded at the time it is paid.

5.       The following projects which are underspent in 2013/2014 have been recommended to be re-phased and spent in 2014/2015:

·    Alternative Transport Strategy Funding

·    Priority Maori Outcomes Project

·    Hauraki Gulf Forum

·    Hauraki Gulf Marine Spatial Plan

·    Great Barrier Broadband Development Project

·    Data Centre Consolidation Project

·    Performance Monitoring and Progress Reporting Tool

·    Independent Maori Statutory Board (IMSB) capital grant

·    Hobsonville Pump Station

·    Kaipatiki Education Centre capital grant

·    Albany Community Hub

 

6.       The National Ocean Water Sports Centre (NOWSC) unspent budget in 2013/2014 and budget in 2014/2015 is proposed to be re-phased into 2017/2018, as a resource consent application and other issues remain outstanding.

 

Recommendation/s

That the Finance and Performance Committee:

a)      agree that the following 2013/2014 underspends be spent in the 2014/2015 financial year:

i)        $2,170,000 to progress work on Alternative Transport Funding

ii)       $150,000 for priority Māori Outcomes

iii)      $177,000 for the Hauraki Gulf Forum

iv)      $91,000 for the Hauraki Gulf Marine Spatial Plan

v)      $226,000 capital grant for the completion of the Great Barrier Broadband Development Project

vi)      $1,900,000 for the completion of the Data Centre Consolidation project

vii)     $548,000 for the completion of the Performance Monitoring and Progress Reporting Tool

viii)    $50,000 capital grant to the Independent Maori Statutory Board to develop an educational tool

ix)      $750,000 for the Hobsonville Pump Station

x)      $105,000 capital grant for the Kaipatiki Education Centre

xi)      $99,000 for the scoping of the Albany Community Hub

b)      agree that $500,000 underspend from 2013/14 and $2,500,000 budget from 2014/2015 for the National Ocean Water Sports Centre to be re-phased in 2017/2018, and

c)      agree that the council’s budgets be updated to reflect the financial implications of the above decisions.

 

Comments

 

Background

7.       The Finance and Performance Committee has delegated authority to approve changes to budgets during a financial year. Occasionally, it may be necessary for this committee of the whole to make urgent decisions on the budgets for future years, which would ordinarily be made by the Budget Committee as part of the annual/long-term planning processes.

8.       Rates for 2013/2014 and 2014/2015 have been set with no provision made for accommodating new or additional expenditure items. Any new expenditure committed to will either require reprioritisation of existing budgets or increased borrowing. When considering requests, the impact on 2014/2015 and 2015/2016 operating expenditure also needs to be considered.

2013/2014 Budget underspends to be spent in 2014/2015

9.       Auckland Council’s financial policies do not allow the general deferral of opex budgets from year to year.

10.     The requests generally relate to specific time-bound projects which have been funded and the timing has changed, or commitments for capital grants where conditional criteria are not yet met.

11.     A number of requests have been received to seek the approval of unspent opex funding in 2013/2014 to be spent in 2014/2015. Staff have assessed the requests against Auckland Council’s internal financial policies and have included in this report the items that meet the criteria for consideration.

Alternative Transport Funding Project

 

12.     The Alternative Transport Funding project is an important piece of work required for investigating credible alternative funding options for the development of the Long-term Plan (LTP) 2015-2025. This work is led by the Chief Executive’s office.

13.     In December 2013, this committee resolved to allocate an additional $2,000,000 to this project in addition to the $400,000 budget in 2013/2014. (Resolution number FIN/2013/5)

14.     At the end of the 2013/2014 financial year, $2,170,000 of the $2,400,000 budget remains unspent and there is no funding for a continuation of this work in 2014/2015.

Priority Maori Outcomes

 

15.     Resolution number SF/2013/59 stated “that $900,000 of the $2 million budget in 2012/2013 for addressing urgent actions arising from the Te Tiriti o Waitangi Audit be reallocated to priority Māori outcomes and note that some of this budget may now be spent in 2013/2014”. This work is on-going.

16.     At the end of the 2013/2014 financial year end, $150,000 of the $900,000 budget is unspent and there is no funding in the 2014/2015 budget to complete the work relating to the remaining priority actions.

The Hauraki Gulf Forum

 

17.     The Hauraki Gulf Forum is a statutory body, which promotes and facilitates integrated management and the protection and enhancement of the Hauraki Gulf under the Hauraki Gulf Marine Park Act 2000. In addition to rates funding, $122,000 external funding was received from the other contributing councils and the Minister of Conservation.

18.     An amount of $177,000 remains unspent at the end of the 2013/2014 year, and the forum have committed to the completion of activities which are funded by the amounts received to date. In order to fulfill the obligations of the forum, this funding is required to be spent in 2014/2015.

Hauraki Gulf Marine Spatial Plan

 

19.     The Hauraki Gulf Marine Spatial Plan is a partnership led by mana whenua with central and local governments formed to create Sea Change – Tai Timu Tai Pari, a marine spatial plan designed to safeguard the Hauraki Gulf and to secure a healthy, productive and sustainable resource for all users.

20.     This project is funded by Auckland Council and Waikato Regional Council. It is the first Marine Spatial plan in New Zealand and is expected to be used as a model for other Marine Spatial plans around the country.

21.     An unspent 2013/2014 budget of $91,000 is required to be spent in 2014/2015 in order for this plan to be completed as there is insufficient funding provided in this year to complete the plan.

Great Barrier Broadband Development Project

 

22.     This broadband development project is key to providing improvements in broadband availability on the island. The project has had unexpected timing delays, as the land on which the second tower would be placed was due to be agreed on. An agreement has recently been reached and work is to recommence shortly.

23.     A capital grant was budgeted for in 2013/2014, and $226,000 of this grant remains unspent at year end. In order to complete the project, the funds are required to be spent in the 2014/2015 financial year. The Great Barrier Local Board agreed a balanced budget for 2014/2015 subject to this funding being available in 2014/2015.

Data Centre Consolidation Project

 

24.     This project involves consolidating the existing data centres of the council into data centres hosted by Revera. It involves the migration of all legacy servers as noted in the business case presented to the Governing Body in May 2013.

25.     The council’s current data centre profile represents a significant operating risk, as all are at operating capacity or are extremely old, with no disaster recovery functionality in place.

26.     The project is expected to be completed in October 2014. Of the $6 million budget approved by the Governing Body for 2013/14, $1.9 million remains unspent. This budget is required to be spent in 2014/2015 in order to complete the project.

Performance Monitoring and Progress Reporting Tool

 

27.     A project (Sentient) was initiated in May 2014 to develop a performance monitoring tool, which would deliver dashboard reports to the senior and executive managers on major capital items of expenditure. The tool will increase visibility of major project delivery and cost management at a project line level.

28.     The project involves a combination of external costs and internal staffing. The project is in its final stages of implementation, training and testing. Once testing is complete, a final payment will be due to the external suppliers, which had been budgeted for in 2013/2014.

29.     The project is anticipated to be completed by 31 October 2014. An underspend of $548,000 in 2013/12014 on this project is required to be spent in 2014/2015.

IMSB capital grant

 

30.     The funding agreement between the council and the IMSB for the 2013/2014 year included $50,000 for capital projects relating to development of an educational tool. The IMSB did not spend this amount, but are keen to still develop the tool. The capital grant requirement was not included in the new funding agreement for 2014/2015 as this was already budgeted for in 2013/2014.

31.     The IMSB have requested that the Governing Body approve this spend in the 2014/2015 year in addition to their current agreed funding.

Hobsonville Pump Station

 

32.     An Infrastructure Funding Agreement between the council and the Hobsonville Land Company (HLC) requires the council to fund 50 per cent of the cost of a wastewater pumping station at the Landing, as it serves the Marine Industrial precinct as well as HLC.

33.     Delays in the payment from the budget allocated in the 2013/2014 budget were a result of negotiations around the final cost of the pump which was being shared. An agreement has been reached and the council is required to pay $750,000 in July 2014.

Kaipatiki Environment Education Centre capital grant

 

34.     The Kaipatiki Local Board resolved to contribute a capital grant over a number of years to assist with the development of the environment education centre. There has been a delay in the centre meeting its funding agreement conditions in order for the local board to make their contribution.

35.     An unspent budget of $105,000 in 2013/2014 is likely to be required in 2014/2015 when the centre is expected to meet its obligations.

Scoping of Albany Community Hub

 

36.     As indicated in their draft local board plan, the Upper Harbour Local Board are scoping and developing preliminary designs for the Albany Community Hub, which is expected to be constructed in 2015/2016 and 2016/2017. This work has commenced, but was not completed in 2013/2014, due to resourcing issues.

37.     The unspent budget of $99,000 in 2013/2014 is required in 2014/2015 to complete the scoping and preliminary design work for this project.

National Ocean Water Sports Centre capital grant

 

38.     A funding agreement between the council and Harbour Access Trust (HAT) is being finalised which commits the council to a $3 million capital grant towards the development of the National Ocean Water Sports Centre which was approved in 2010 by the then North Shore City Council. There have been delays in the payment of this grant due to conditions outstanding including finalising an agreement on community access, land lease issues and HAT acquiring a resource consent.

39.     It was originally envisaged and budgeted that the council would contribute $500,000 in 2013/2014 and $2,500,000 in 2014/2015. It is now expected that these conditions would only be met in 2017/2018, and therefore it is proposed that the budgets be re-phased accordingly.

Consideration

Local board views and implications

40.     The Broadband development project is a key priority project for the Great Barrier Local Board. The local board has formally indicated its support for this spend in 2014/2015 from the 2013/2014 budget.

41.     The Kaipatiki Local Board consider the development of the Environment Education Centre an important community initiative to help protect their natural environment.

42.     The Albany Community Hub has been highlighted by the Upper Harbour Local Board as a key project in their draft Local Board Plan which is being consulted on. Scoping of this project is therefore important.

43.     The Devonport-Takapuna Local Board are not opposed in principle to the NOWSC facility being located somewhere in Takapuna, but consider the existing relationship agreement outdated and deficient. The board have resolved to request the Governing Body form a joint working party with the board to oversee the council’s relationship with the Harbour Access Trust and the delivery of the NOWSC. 

Maori impact statement

44.     The work programme relating to priority Māori outcomes is of significant interest and benefit to Māori.

45.     The work that will be delivered through the Hauraki Gulf Forum and the Hauraki Marine Spatial Plan are important to Maori in delivering Maori outcomes.

Implementation

46.     Budgets will be amended in core financial systems and used for internal management reporting, regular reporting to councillors and financial control for the 2014/2015 financial year.

 

Attachments

There are no attachments for this report.     

Signatories

Authors

Neil Huang - Senior Analyst - Evaluation

Taryn Crewe – Financial Planning Manager

Authorisers

Ross Tucker - Team Leader Capital Planning

Matthew Walker - Manager Financial Plan Policy and Budgeting

Andrew McKenzie - Chief Finance Officer