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

 

Date:                      

Time:

Meeting Room:

Venue:

 

Thursday, 21 July 2016

9.30am

Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland

 

Finance and Performance Committee

 

OPEN 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

 

Deputy Mayor Penny Hulse

 

 

Cr Denise Krum

 

 

Cr Mike Lee

 

 

(Quorum 11 members)

 

 

 

Mike Giddey

Democracy Advisor

 

14 July 2016

 

Contact Telephone:  (09) 890 8143

Email: mike.giddey@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 


 


TERMS OF REFERENCE

 

Responsibilities

 

This committee will be responsible for monitoring overall financial management and the performance of the council parent organisation and the financial monitoring of the Auckland Council Group. It will also make financial decisions required outside of the annual budgeting processes. Key responsibilities include:

 

·           Financial management

·           Approval of non-budgeted expenditure

·           Write-offs

·           Acquisition and disposal of property relating to the Committee’s responsibilities

·           Monitoring achievement  of  financial and other measures of  performance and service levels

·           Recommending the Annual Report to the Governing Body

·           Development of the 2016/17 Annual Plan and amendments to the LTP including:

-        Local Board agreements

-        Financial Policy related to AP (recommendation to the Governing Body)

-        Setting of rates (recommendation to the Governing Body)

-        Preparation of the consultation document and supporting information for the LTP and Annual Plan (recommendation to the Governing Body)

·           Financial policy outside the LTP and AP

 

Powers

 

(i)      All powers necessary to perform the committee’s responsibilities.

 

Except:

(a)       powers that the Governing Body cannot delegate or has retained to itself (section 2)

(b)       where the committee’s responsibility is limited to making a recommendation only

 

(ii)      Approval of a submission to an external body

 

(iii)     Powers belonging to another committee, where it is necessary to make a decision prior to the next meeting of that other committee.

 

(iv)    Power to establish subcommittees.

 

 

 

 


EXCLUSION OF THE PUBLIC – WHO NEEDS TO LEAVE THE MEETING

 

Members of the public

 

All members of the public must leave the meeting when the public are excluded unless a resolution is passed permitting a person to remain because their knowledge will assist the meeting.

 

Those who are not members of the public

 

General principles

 

·           Access to confidential information is managed on a “need to know” basis where access to the information is required in order for a person to perform their role.

·           Those who are not members of the meeting (see list below) must leave unless it is necessary for them to remain and hear the debate in order to perform their role.

·           Those who need to be present for one confidential item can remain only for that item and must leave the room for any other confidential items.

·           In any case of doubt, the ruling of the chairperson is final.

 

Members of the meeting

 

·           The members of the meeting remain (all Governing Body members if the meeting is a Governing Body meeting; all members of the committee if the meeting is a committee meeting).

·           However, standing orders require that a councillor who has a pecuniary conflict of interest leave the room.

·           All councillors have the right to attend any meeting of a committee and councillors who are not members of a committee may remain, subject to any limitations in standing orders.

 

Independent Māori Statutory Board

 

·           Members of the Independent Māori Statutory Board who are appointed members of the committee remain.

·           Independent Māori Statutory Board members and staff remain if this is necessary in order for them to perform their role.

 

Staff

 

·           All staff supporting the meeting (administrative, senior management) remain.

·           Other staff who need to because of their role may remain.

 

Local Board members

 

·           Local Board members who need to hear the matter being discussed in order to perform their role may remain.  This will usually be if the matter affects, or is relevant to, a particular Local Board area.

 

Council Controlled Organisations

 

·           Representatives of a Council Controlled Organisation can remain only if required to for discussion of a matter relevant to the Council Controlled Organisation.

 

 


Finance and Performance Committee

21 July 2016

 

ITEM   TABLE OF CONTENTS                                                                                        PAGE

1          Apologies                                                                                                                        7

2          Declaration of Interest                                                                                                   7

3          Confirmation of Minutes                                                                                               7

4          Petitions                                                                                                                          7

5          Public Input                                                                                                                    7

5.1     Public Input - Kevin Clarke, representing Northcote Residents' Association - SkyPath appeal                                                                                                     7

5.2     Public Input - Barbara Cuthbert, representing Bike Auckland - SkyPath     7

5.3     Public Input - Ryan Mearns, representing Generation Zero - SkyPath         8

6          Local Board Input                                                                                                          8

6.1     SkyPath project proposal                                                                                    8

7          Extraordinary Business                                                                                                8

8          Notices of Motion                                                                                                          9

9          Disposal Recommendation Report                                                                           11

10        13 Crown Lynn Place, New Lynn                                                                               17

11        Report 1 - SkyPath - Project Update                                                                         21

12        Report 2 - SkyPath - Consideration of the Public Private Partnership (PPP) Proposal                                                                                                                                       25

13        Update on St James Theatre                                                                                    153

14        Transfer of Moire Road Hall to the Leataata O Le Lumanai Samoan Trust Incorporated                                                                                                                                     161

15        Contributions Policy                                                                                                 167

16        Bruce Pulman Park Trust - Request for Loan Guarantee                                    207

17        Reports Pending Status Update - 21 July 2016                                                      229  

18        Consideration of Extraordinary Items 

PUBLIC EXCLUDED

19        Procedural Motion to Exclude the Public                                                               239

C1       Badminton Waitakere - Request to Restructure Community Loan                     239  

 


1          Apologies

 

An apology from Cr DA Krum has been received.

 

2          Declaration of Interest

 

Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.

 

3          Confirmation of Minutes

 

That the Finance and Performance Committee:

a)         confirm the ordinary minutes of its meeting, held on Thursday, 16 June 2016, as a true and correct record.

 

4          Petitions

 

At the close of the agenda no requests to present petitions had been received.

 

5          Public Input

 

Standing Order 7.7 provides for Public Input.  Applications to speak must be made to the Democracy Advisor, in writing, no later than one (1) clear working day prior to the meeting and must include the subject matter.  The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.  A maximum of thirty (30) minutes is allocated to the period for public input with five (5) minutes speaking time for each speaker.

 

5.1       Public Input - Kevin Clarke, representing Northcote Residents' Association - SkyPath appeal

Purpose

Kevin Clarke, representing Northcote Residents’ Association, will be in attendance to present regarding the funding of SkyPath’s defence of the current SkyPath appeal.

Recommendation/s

That the Finance and Performance Committee:

a)      receive the presentation regarding the SkyPath appeal and thank Kevin Clarke for his attendance.

 

5.2       Public Input - Barbara Cuthbert, representing Bike Auckland - SkyPath

Purpose

Barbara Cuthbert, representing Bike Auckland, will be in attendance to present regarding the SkyPath Project.

Recommendation/s

That the Finance and Performance Committee:

a)      receive the presentation regarding the SkyPath project and thank Barbara Cuthbert for her attendance.

 

 

5.3       Public Input - Ryan Mearns, representing Generation Zero - SkyPath

Purpose

Ryan Mearns, representing Generation Zero, will be in attendance to present regarding the SkyPath Project.

Recommendation/s

That the Finance and Performance Committee:

a)      receive the presentation regarding the SkyPath project and thank Ryan Mearns for his attendance.

 

6          Local Board Input

 

Standing Order 6.2 provides for Local Board Input.  The Chairperson (or nominee of that Chairperson) is entitled to speak for up to five (5) minutes during this time.  The Chairperson of the Local Board (or nominee of that Chairperson) shall wherever practical, give one (1) day’s notice of their wish to speak.  The meeting Chairperson has the discretion to decline any application that does not meet the requirements of Standing Orders.

 

This right is in addition to the right under Standing Order 6.1 to speak to matters on the agenda.

 

6.1       SkyPath project proposal

Purpose

Pippa Coom, Deputy Chairperson of the Waitemata Local Board and Kay McIntyre, Chairperson of the Kaipatiki Local Board will be in attendance to present jointly on the SkyPath project proposal.

Recommendation/s

That the Finance and Performance Committee:

a)      receive the joint presentation regarding the SkyPath project proposal and thank Pippa Coom and Kay McIntyre for their attendance.

 

7          Extraordinary Business

 

Section 46A(7) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

 

“An item that is not on the agenda for a meeting may be dealt with at that meeting if-

 

(a)        The local  authority by resolution so decides; and

 

(b)        The presiding member explains at the meeting, at a time when it is open to the public,-

 

(i)         The reason why the item is not on the agenda; and

 

(ii)        The reason why the discussion of the item cannot be delayed until a subsequent meeting.”

 

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

 

“Where an item is not on the agenda for a meeting,-

 

(a)        That item may be discussed at that meeting if-

 

(i)         That item is a minor matter relating to the general business of the local authority; and

 

(ii)        the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

 

(b)        no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

 

8          Notices of Motion

 

At the close of the agenda no requests for notices of motion had been received.

 


Finance and Performance Committee

21 July 2016

 

Disposal Recommendation Report

 

File No.: CP2016/14046

 

  

Purpose

1.       This report seeks approval to sell one non-service council owned property that Panuku Development Auckland (Panuku) considers suitable for sale.

Executive summary

2.       Panuku is required to identify properties from within council’s portfolio that may be suitable for potential sale to a combined value of $45 million by 30 June 2017.  Capital receipts from the sale of surplus properties contributes to the Auckland Plan outcomes and the Long-term Plan 2015-2025 by providing the council with an efficient use of capital and prioritisation of funds to achieve its activities and projects. 

3.       The property presented in this report, 235 Harbourside Drive, Hingaia is a vacant residential site that was acquired by the Papakura District Council to enable utility access.  An easement has now been registered on the title which provides this.  The rationalisation process for this property commenced in 2014.  Consultation with council and its CCOs, iwi authorities and the Papakura Local Board has now taken place.  No planned or funded service uses have been identified for this property and the feedback received during the consultation process has been supportive of the proposed divestment of this property.  Due to this, Panuku recommends this site be divested. 

 

Recommendation/s

That the Finance and Performance Committee:

a)      approve, subject to the satisfactory conclusion of any required statutory processes, the disposal of the land at 235 Harbourside Drive, Hingaia more or less being Lot 58 Deposited Plan 382903 comprising approximately 728m2 contained in certificate of title 331182; and

b)      agree that final terms and conditions be approved under the appropriate delegations.

 

 

Comments

4.       Panuku and the Corporate Finance and Property team work jointly on a comprehensive review of council’s property portfolio.  One of the outcomes of the review process is to identify properties in the council portfolio that are potentially surplus to requirements and that may be suitable to sell.  The subject site was identified as potentially saleable through the review process.

5.       Once a property has been identified as potentially surplus, Panuku engages with council and its CCO’s through an expression of interest process, to establish whether the property must be retained for a strategic purpose or is required for a future funded project.  Once a property has been internally cleared of any service requirements, Panuku then consults with local boards, mana whenua and ward councillors.  All disposal recommendations must be approved by the Panuku Board before it makes a final recommendation to the Auckland Council governing body.


Property information

6.       235 Harbourside Drive, Hingaia is a flat, vacant, 728m2 site located on a residential street.  It was transferred to the former Papakura District Council in 2010 for the purpose of providing utility access.  The Papakura District Council resolved to re-sell this site after creating an access easement.  The easement was registered on the title on 08 November 2010.

7.       The Proposed Auckland Unitary Plan zoning for this property is Single House.  It has a 2014 capital value of $290,000.

Internal consultation

8.       The rationalisation process for this property commenced in December 2014.  An expression of interest was received from Auckland Transport during the internal consultation phase, requesting additional time to undertake investigation with the New Zealand Transport Agency (NZTA) to confirm if this property was required for a cycleway link along the Southern Motorway.  This was investigated and Auckland Transport and NZTA subsequently advised that this site is not required for the cycleway. 

9.       As no planned or funded alternative service uses have been identified for this site, Panuku considers it a candidate for disposal.

Consideration

Local board views and implications

10.     The Papakura Local Board endorsed the proposed divestment of this site at its May 2016 business meeting. 

Māori impact statement

11.     The importance of effective communication and engagement with Māori on the subject of land is understood.  Panuku has a robust form of engagement with mana whenua groups across the region.  Each relevant mana whenua group is contacted independently by email.  Each group is provided general property details, including a property map, and requested to give feedback within 15 working days.  Confirmation of any interest expressed is sent in writing and recorded for inclusion in the disposal recommendation report. 

12.     Panuku’s engagement requests mana whenua to respond with any issues of particular cultural significance the group would like to formally express in relation to the subject properties.  We also request express notes regarding any preferred outcomes that the group would like us to consider as part of any disposal process.  Mana whenua groups are also invited to express potential commercial interest in any sites and are put in contact with Panuku’s Development team for preliminary discussions if appropriate to the property.  This facilitates the groups’ early assessment of the merits of a development opportunity to their iwi.  In the event a property is approved for sale all groups are alerted of the decision, and all groups are alerted once a property comes on the market.

13.     10 iwi authorities were contacted regarding the proposed divestment of 235 Harbourside Drive, Hingaia. The following feedback was received.

a)      Te Kawerau-ā-Maki

14.            No site specific feedback received.

b)      Ngai Tai ki Tāmaki

No site specific feedback received.

c)      Ngāti Tamaoho

No site specific feedback received.

d)      Te Akitai Waiohua

Te Akitai Waiohua has expressed potential commercial interest in the property.

e)      Ngāti Te Ata Waiohua

No site specific feedback received.

f)       Ngāti Paoa

No site specific feedback received.

g)      Ngāti Whanaunga

No site specific feedback received.

h)      Ngāti Maru

No site specific feedback received.

i)        Ngāti Tamaterā

No site specific feedback received.

j)        Waikato-Tainui

No site specific feedback received.

Implementation

14.     The results of the rationalisation process are that 235 Harbourside Drive, Hingaia is not required for current or future service purposes.  Accordingly, we recommend that it be divested.  Should a resolution be obtained from the Finance and Performance Committee dispose of this site, Panuku will seek to dispose of this site in a manner which provides an optimal return to council and ideally a housing outcome. 

15.     No acquisition files for this site have been located.  Therefore it has not been possible to determine if the site is required to be offered back to the former owners pursuant to section 40 of the Public Works Act 1981. In this situation, the site must be offered back.

16.     The subject property is not one of council’s strategic assets to which the Significance Policy applies.

 

Attachments

No.

Title

Page

aView

Images of 235 Harbourside Drive, Hingaia

15

      

Signatories

Author

Letitia McColl - Team Leader Portfolio Review, Portfolio Strategy, Strategy and Engagement, Panuku Development Auckland

Authorisers

Marian Webb – Manager Portfolio Strategy, Strategy and Engagement, Panuku Development Auckland

David Rankin – Director, Strategy and Engagement, Panuku Development Auckland

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

13 Crown Lynn Place, New Lynn

 

File No.: CP2016/14469

 

  

Purpose

1.       13 Crown Lynn Place, New Lynn was previously approved for disposal by way of land exchange with a nearby property.  The proposed land exchange is no longer required.  Panuku now seeks confirmation of approval from the Finance and Performance Committee to dispose of this property.

Executive summary

2.       13 Crown Lynn Place, New Lynn is a 2,696m2 council owned property that currently has an industrial building located on it.  The property is adjacent to land that Auckland Council will develop as park and open space as part of the Crown Lynn Precinct.

3.       13 Crown Lynn Place was acquired in 2010 by the legacy Waitakere City Council for open space purposes.  The current zoning for this property is Industrial.  The Proposed Auckland Unitary Plan zoning is Metropolitan Centre and Public Open Space – Informal Recreation.  The 2014 capital value of the site is $1,625,000.00.

4.       In September 2014, the Auckland Development Committee approved the disposal of 13 Crown Lynn Place by way of exchange with a nearby site (resolution AUC/2014/98).  The intention of this was to offset the cost of council acquiring land for stormwater, road and open space purposes in the Crown Lynn Precinct. 

5.       Following the resolution of the Auckland Development Committee approving the proposed land exchange, negotiations culminated in an agreement being reached for council to purchase the land required for stormwater, road and open space purposes.  Due to this, 13 Crown Lynn Place is no longer required to be disposed of by way of land exchange.  Disposal of 13 Crown Lynn Place can still occur, but requires approval from the Finance and Performance Committee that the disposal does not have to occur by way of exchange.

6.       Master planning for the Crown Lynn Precinct is currently underway.  Consultation with the Whau Local Board and relevant iwi was undertaken as part of the original disposal recommendation and is ongoing as part of master planning and proposed development of the Crown Lynn Precinct.  The master planning may result in an easement being required over part of this site to facilitate pedestrian and cycleways through the precinct.  The requirements for this will become clearer as the master plan develops.

 

Recommendation/s

That the Finance and Performance Committee:

a)      approve the disposal of 13 Crown Lynn Place, New Lynn described as part Lot 1 DP 150583 contained in certificate of title NA89D/527 subject to the satisfactory conclusion of any required statutory processes; and

b)      agree that the final terms and conditions be approved under appropriate delegated authority.

 


 

Attachments

No.

Title

Page

aView

Images of 13 Crown Lynn Place, New Lynn

19

     

Signatories

Author

Letitia McColl - Team Leader Portfolio Review, Portfolio Strategy, Strategy and Engagement, Panuku Development Auckland

Authorisers

Marian Webb – Manager Portfolio Strategy, Strategy and Engagement, Panuku Development Auckland

David Rankin – Director, Strategy and Engagement, Panuku Development Auckland

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

Report 1 - SkyPath - Project Update

 

File No.: CP2016/10701

 

  

Purpose

1.       The purpose of this report is to provide an update on the progress of the SkyPath project. 

Executive summary

2.       The SkyPath project was last reported to the Governing Body in December 2013. 

3.       The project is to complete the missing link in the walking and cycling network across the Waitematā Harbour.  The Auckland Harbour Bridge Pathway Trust (the Trust) developed the “SkyPath” concept in 2011. 

4.       The project progress since 2013 is summarised in paragraphs 13 to 15 of this report.

5.       There is a separate report on the agenda that details the public private partnership (PPP) proposal presented by H.R.L Morrison & Co’s Public Infrastructure Partnership Fund (the PIP Fund) and the Trust to provide private sector financing for the construction, maintenance and operation of SkyPath. 

 

Recommendation/s

That the Finance and Performance Committee:

a)      receive the update report on the SkyPath project. 

 

Comments

Background

6.       The SkyPath project was proposed by the private sector in August 2011 to complete the missing link for walking and cycling access across the Waitematā Harbour.  Subject to all approvals, it will attach to the eastern (southern clip-on) side of the Auckland Harbour Bridge (AHB). 

7.       SkyPath will be used by commuters, recreational users and tourists.  It will be 4m wide and approximately 1km long.  It has been designed with five viewing platforms and will be open for 16 hours per day from 6am to 10pm.  It will be constructed out of composite material due to its light weight and durable nature, as well its ability to handle conditions in the marine environment.

8.       The delivery of the Auckland Cycle Network (ACN) was prioritised, in conjunction with the Mayor’s Cycle Advisory Group in 2015, with projects ranked for their strategic importance in terms of increasing the modal share for cycling in Auckland.  SkyPath was identified as the number one priority for the ACN because of the critical linking nature a link over the Waitematā Harbour would have.

9.       The SkyPath project has high strategic alignment with Council policy and direction, particularly the Auckland Plan and the need to investigate alternative means of financing infrastructure.  It will have key benefits for the Auckland community including transport, recreational, tourism, health to local economic benefits. 

10.     The NZ Transport Agency (NZTA) is the custodian of the AHB.  NZTA will need to provide a licence to occupy for the SkyPath structure to be attached to the AHB.  This will be similar to the AJ Hackett facility.  It is proposed that the licence would be issued to Council and then Council would sub-license it to the PIP Fund with conditions. 

11.     The Auckland Transport Alignment Project’s (ATAP) Foundation Report states it is anticipated that Additional Waitematā Harbour Crossing (AWHC) (if funded) would be completed in the 2035-45 decade.  In that situation (with AWHC in place), it is considered that the modes could be split with SkyPath being used as a covered walkway, while a lane on the AHB would be used by cyclists.  AWHC is currently in the planning stage, and a decision on when to proceed will not be made until after the notices of requirement (NoR) are obtained and a detailed business case has been completed.  NZTA has stated that no decision is required for some years on the exact timing of construction. 

Progress update

12.     Since December 2013, there has been progress on a number of matters for the project and these are summarised below.

13.     Technical

a)  NZTA has indicated that the current SkyPath proposal is technically feasible, subject to the review of wind tunnel testing results and appropriate user demand management controls.  NZTA will report to its Board in August 2016.

b)  Wind tunnel testing was completed in April 2016 and did not identify any significant concerns.  NZTA’s consultants have reviewed the results of the wind tunnel testing and advise it has not identified any fatal flaws.  Those assessments have confirmed the need to strengthen the Bridge, but from a structural engineering perspective, have identified no impediment to SkyPath being attached to the bridge. 

14.     Resource consent

a)  Resource consents for the SkyPath proposal were granted by Independent Hearing Commissioners, appointed to hear the application on behalf of Council’s regulatory arm, in July 2015. 

b)  Three parties have filed appeals in the Environment Court against the decision to grant consents, with one party recently withdrawing.  Mediation did not resolve the appeals.  A reporting memorandum was provided to the Court on 27 May 2016, which set out the issues that have been resolved and those which remain unresolved.  Timetable directions have been confirmed by the Court, with evidence exchange commencing in early September 2016 and a hearing in October or November 2016. 

15.     Connections

a)  Auckland Transport (AT) is working on the design for the Northcote Safe Cycle route from Smales Farm to Northcote Point taking into account feedback from consultation last year. 

b)  AT will begin consulting the local community in July on a number of options for a parking scheme at Northcote Point, to be implemented if SkyPath proceeds. 

c)  The design of the SkyPath structure has been taken forward into concept design.  Panuku Development Auckland has worked with the designers to enable the southern landing to be located under the AHB at Westhaven, and for good connections to be provided to Harbour Bridge Park and the Westhaven Promenade, if SkyPath proceeds. 

d)  SeaPath is a cycling and walking facility proposed by NZTA between Esmonde Road, Takapuna, and Northcote Point.  NZTA undertook public consultation on the preferred (landward) alignment, and two connection points to SkyPath, in March and April 2016.  NZTA advise that there was overwhelming public support for a walking and cycling facility in the area.  Initial analysis of the feedback received has highlighted the importance of safe and practical connections at either end of the path and “the southern end of the path needs to provide a clear connection to the proposed SkyPath crossing”.  The next step for SeaPath is to undertake further investigations on the alignment.

Public engagement

16.     The concept of SkyPath has been in the public domain for 12 years, and there has been extensive engagement and consultation with the Auckland community about a cycling and walking pathway over the Waitematā Harbour during this time.  This includes information sharing, informal feedback and consultation undertaken by the Trust, and formal consultation and feedback opportunities by the Council group. 

17.     There was a petition to Parliament in 2003 with 5,800 signatures which asked for Transit NZ (now the NZTA) to undertake a feasibility study into walking and cycling access on the AHB.  From this, came the GetAcross campaign in 2008 with 12,000 supporters.  There was a public demonstration of support for a walking and cycling pathway across the AHB on 30 May 2009, when over 5,000 Aucklanders joined the march.

18.     A formal consultation process for SkyPath’s notified resource consent was undertaken in 2014.  It received 11,413 submissions in support, while five submissions were neutral and 168 submissions were in opposition.  Those submissions in support came from across the region, as well as a small number from overseas.  In terms of the individual submissions from those located close to the landing plazas, there was overall support for the project. 

19.     This link across the Waitematā Harbour has been shown on regional cycling and walking documentation for over 15 years by the Auckland Regional Council and subsequently Auckland Council, including the Auckland Plan, City Centre Master Plan, and the Waterfront Plan.  These plans were adopted following formal consultation processes. 

20.     The SkyPath project was included in the draft Auckland Council Long-term Plan 2015-2025 (LTP) and the Regional Land Transport Plan 2015-2025.  It was included in the supporting material as an unfunded project in the expectation that the construction costs would be met by the private sector.  In total, 558 people provided feedback on SkyPath through the LTP process with 485 in favour, 60 against and 13 other comments made.

Consideration

Local board views and implications

21.     The Waitematā, Kaipatiki, and Devonport-Takapuna Local Boards are supportive of the project and have either included it in their Local Board Plans (as an unfunded item) following a consultation process and/or passed resolutions of this nature.  These Local Boards spoke in support of the SkyPath at the Governing Body meeting in December 2013 and indicated feedback from the community was overall supportive of the project. 

Māori impact statement

22.     Mana whenua have a strong interest in the pathway because it would be located near to a wāhi tapu site at Point Erin and would traverse over Te Onewa Pa site.  At Point Erin or Harbour Bridge Park, there is a wāhi tapu site where Ureia (a taniwha) used to sleep.  Although much of Te Onewa Pa has been destroyed, the site is considered to retain strong cultural, spiritual, heritage and archaeological values, and be of high significance.

23.     All iwi with mana whenua connections were contacted by the Trust.  Those groups that expressed an interest (Ngai Tai Ki Tāmaki, Ngāti Whātua o Orākei, Te Kawerau a Maki and Ngāti Paoa) were engaged though a number of hui.  These meetings were positive and, in principle, were supportive of SkyPath.  They expressed a desire to have input at preliminary stages of design to ensure SkyPath does not impact on any of the physical remnants at Te Onewa Pa, enhances the area, and reflects the values inherent in the southern side of the harbour.  The design of each landing was undertaken in coordination with artists nominated by mana whenua.

Implementation

24.     Implementation matters are discussed in Report 2 - SkyPath - Consideration of the Public Private Partnership (PPP) Proposal. 

 

Attachments

There are no attachments for this report.     

Signatories

Author

Marguerite Pearson – Senior Project Manager

Authorisers

John Duncan – Executive Director, Auckland Investment Office

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

21 July 2016

 

Report 2 - SkyPath - Consideration of the Public Private Partnership (PPP) Proposal

 

File No.: CP2016/11068

 

  

Purpose

1.       To evaluate the merits of using a hybrid public private partnership (PPP) as a procurement option to deliver the SkyPath project, and describe H.R.L. Morrison & Co’s Public Infrastructure Partnership Fund’s (the PIP Fund) hybrid PPP proposal. 

Executive summary

2.       The Governing Body resolved on 19 December 2013 that Council should explore options to deliver the project through a PPP with the PIP Fund.  The PIP Fund’s proposal was for a user pays facility with the support of a conditional revenue underwrite by Council.

3.       Since December 2013, Council has entered into a non-binding Heads of Agreement with the PIP Fund to conduct preliminary key terms negotiations.  This report takes into account the due diligence undertaken, the non-binding key terms negotiations that have occurred and the development of a business report on the SkyPath proposal. 

4.       A detailed business report (appended in Attachment A) has been prepared in response to resolutions from the Governing Body meeting in 2013.  The business report has been reviewed by Pricewaterhouse Coopers (PwC) and its review is in Attachment B. 

5.       The PIP Fund’s PPP proposal is to finance, design, build, maintain and operate SkyPath as a user pays facility for 25 years, after which it “reverts” to Council ownership. In return:

·   Council would underwrite actual revenues to a pre-agreed dollar amount in the “base case” (the agreed financial model that sets out the cost envelope), and have a share of upside profits above a specific threshold.

·   The PIP Fund’s returns depend on it managing its costs and performance within the parameters of the fixed base case.  Any cost overruns are the PIP Fund’s responsibility.

6.       PPPs are procurement options for financing and delivering public infrastructure projects. In broad terms, a PPP must yield outcomes more cost-effectively than standard delivery, and strike a fair balance between risk and reward for the public and private parties. 

7.       This report outlines how Council has evaluated and negotiated the PIP Fund proposal.  The benefits of the PPP proposal are:

·   SkyPath can be delivered sooner than would otherwise be possible, and without Council carrying the entire financing cost.

·   The private sector is incentivised to design, manage, finance, operate and maintain SkyPath on an innovative and efficient “whole of life” basis.

·   Appropriate delivery and operating risks are transferred to the private sector.

8.       This report is seeking approval to proceed with the SkyPath proposal using a hybrid PPP approach, and to include Council’s financial implications (including contingent underwrite risk) in the 2017/18 Annual Plan.  The project remains subject to the satisfactory resolution of technical, legal and regulatory issues. 

9.       A delegation to the Chief Executive is also sought to continue to negotiate with the PIP Fund to ensure Council’s underwrite obligation have minimal financial impact and trigger only when all revenue (meaning user fares and third party revenue) is below an agreed level.  If this cannot be achieved, the Chief Executive would report back to the Governing Body.

 

10.     If Council does not wish to proceed with delivery of the project through a PPP with the PIP Fund, it could reconsider its preferences for funding and delivering the project.  This means looking afresh at business case assessment, procurement activity (e.g. for construction and contracted operators), and redevelopment and/or purchase of the project intellectual property (IP).

 

Recommendation/s

That the Finance and Performance Committee recommend to the Governing Body that it:

a)      agree to proceed with the SkyPath project and that the hybrid Public Private Partnership proposal is the preferred procurement option to deliver SkyPath.

b)      authorise the Chief Executive to enter into all necessary agreements in relation to the SkyPath proposal, subject to minimal financial impacts, and to take any other actions in the Chief Executive’s delegation to facilitate the progress of the project.

c)      agree to make appropriate provision for the project in the 2017/18 Annual Plan and the 2018/28 Long-term Plan. 

 

Comments

Background

11.     In the report of 19 December 2013 (GB/2013/163), Governing Body authorised the Chief Executive to progress negotiations with the PIP Fund under a Heads of Agreement, and report back to Council on the recommended procurement option before entering into any binding agreement.  Report 1 describes the strategic significance and key benefits of the project.  This report is concerned with how the project should be procured.

12.     The work to determine the preferred funding approach was undertaken in 2013 by Council and the report to the Governing Body in 2013 answered two significant points:

·   Should SkyPath be user pays or fully funded?

Council has not budgeted to fully fund the project and the NZ Transport Agency (NZTA) has consistently and clearly stated it does not wish to be involved in the actual procurement.  Therefore, user pays is the proposed approach.

·   Why is Council offering to underwrite some of the revenue risk?

Demand risk for SkyPath exists irrespective of the procurement option. Market soundings were undertaken in 2011-12.  Thirteen potential investors and sponsors, financiers and infrastructure developers were contacted and this identified (as outlined in section 7.2 of Attachment C) that no private sector party was willing to take all of the unknown revenue risks for this public infrastructure.  It was identified that the PIP Fund was willing to take the construction, maintenance and operation risks that it could control on the basis of a conditional underwrite guarantee.

13.     It is noted that if Council prefers a user pays facility, it cannot avoid underwriting some of the revenue risk, irrespective of whether the public or private sector delivers the project.

What is a PPP?

14.     The Australian Federal Government’s National PPP Guidelines state (p3):

The aim of a PPP is to deliver improved services and better value for money primarily through appropriate risk transfer, encouraging innovation, greater asset utilisation and an integrated whole-of-life management, underpinned by private financing…  Value for money is the driver for adopting the PPP approach, rather than capital scarcity or the balance sheet treatment.

15.     The private sector can be efficiently tasked with project design, construction, operation and project financing responsibilities. Where these functions are bundled, the private partner has even more opportunities for innovation and synergies to increase project efficiencies. These benefits are shared by both parties through the commercial terms.

16.     Important points to note about PPPs include:

a)  PPPs are distinct from the projects they deliver. PPPs are only one of many procurement options for delivering projects. The strategic and economic business case for “projects” should not be confused with the assessment of procurement options.

b)  PPPs are not funding mechanisms for projects. Projects are funded by those who ultimately pay - either the public entity in the case of a fully-funded “availability” PPP, or the user for “concession” PPPs. 

c)  PPPs may yield economic and financial benefits that make PPPs a better procurement option than standard delivery (i.e. compared to Council led procurement and delivery).

d)  The benefits of a PPP over standard procurement usually relate to the integration of financing, design, build and operation solutions that allow for innovation and leverage by the private sector, and transfer of appropriate risks that the private sector can manage. 

e)  Accounting rules are neutral as to procurement method for “reversionary” assets such as PPP delivered public infrastructure. The asset would be “on balance sheet” either way and any contingencies arising from underwrite must still be accounted for.

Key terms of the hybrid PPP proposal

17.     PPPs as a procurement option are well-established internationally.  Council and the PIP Fund have relied on the New Zealand Government’s Model Agreement for PPPs which provides a baseline template for the common PPP terms, including:

·   Works provisioning and acceptance testing;

·   Risk allocation;

·   Termination events (including at Council’s option, for breach, and force majeure as detailed in section 8.8 of Attachment A); and

·   Hand-over regimes on termination or expiry.

18.     Negotiations with the PIP Fund have largely focused on the financial terms and specific project execution details.  Details of the key terms are provided in section 8 of Attachment A, and the main points are:

a)  The PIP Fund (through a special purpose vehicle (SPV)) will design, build, finance and operate SkyPath for a 25 year term, after which control of SkyPath “reverts” to Council.

b)  During the term, the PIP Fund will run SkyPath on a user pays basis and seek to maximise other revenues such as sponsorship:

i. If total revenues do not reach achieve a minimum return on the pre-agreed base case costs for the project, then Council will make “top up” payments (this is the underwrite). All revenue (this is user fares and any third party revenue i.e. sponsorship) is counted as “in” for the purposes of calculating the underwrite, if any

ii.     If profits (i.e. total revenues against actual costs) reach a certain level, then Council will share in those profits.

19.     The limited underwrite and upside share ensure the private partner can still achieve a positive return if it controls all its costs and project risks, and restricts the amount of outsized profits it could earn without depriving it of all its ongoing performance incentive.

20.     Good operational practice is also incentivised through a service level and key performance indicators (KPIs) regime, operational compliance and high customer service levels.  These are outlined in section 8.5.2 of Attachment A.  Enabling HOP card use and other requirements are specified.

21.     User charging forms part of the management of loading number and user safety.  Council will have input into pricing decisions, but ultimately the PIP Fund is responsible for operating the facility on a business footing.  Important points on pricing are:

a)  The costs of the project are mostly fixed and non-variable, therefore SkyPath will be a “volume” business where maximising patronage will maximise profits.  The PIP Fund is incentivised to price accordingly, which aligns with Council’s strategic objectives.

b)  Different segments of consumers (e.g. commuters and tourists) will be priced differentially, especially as they are likely to use the facility at different times of day.  This will help achieve fair pricing for users.

c)  Non-discriminatory access terms are required, but implementation of access arrangements for user groups is to some extent dependent on technical and operational constraints.  This will be progressed prior to base case finalisation.

Council’s assessment of the proposal

22.     Council’s PPP Procurement Plan (Attachment C), dated October 2014, covers in detail the overall decision-making framework, key process and accountability issues, PPP assessment criteria, and negotiation issues.  Important points to note in the Procurement Plan are:

a)  There is significant international literature and guidelines for PPPs, including New Zealand Government, Auditor General, and Australian Federal Government Guidelines. In particular, the New Zealand Treasury has a Model Agreement and Schedules for PPPs which Council and the PIP Fund have relied on.

b)  The Local Government statutory decision-making framework is heavily weighted towards the efficient provision of good local public infrastructure. SkyPath qualifies as such infrastructure, and the assessment of the PPP proposal and key terms negotiations have focused on the financial efficiency of the proposal.

c)  Transparency is important for public confidence in Council’s decision-making. The Heads of Agreement set out a process for key terms negotiations, aiming at transparency and cost-effectively progressing negotiations towards final approvals.

d)  Key negotiation issues for Council were identified and addressed before key terms negotiations commenced. This assessment has been redacted from the attached Procurement Plan, because some points are still under negotiation and some financial details remain confidential.

23.     Council’s assessment relates to whether a PPP solution is the most appropriate procurement method to deliver the infrastructure.  In other words, is a user pays facility like SkyPath best delivered by Council or by the private sector?  If the private sector, is Council confident it has negotiated the best deal possible in the circumstances?

24.     Using a traditional procurement model, Council would need to borrow the upfront capital cost to construct the facility, allocate a large staff budget to implement it, undertake competitive tendering processes, and develop or acquire the project’s IP which Council does not own.  A decision to use a traditional procurement model may trigger the need to undertake additional consultation to meet the requirements of Council’s Significance and Engagement Policy and the Local Government Act.  This is discussed in sections 9.1 and 9.3 of Attachment A. 

25.     In addition, a traditional procurement model would mean Council was responsible for managing the design, construction and operating costs and risks.  In this situation, Council would essentially be running a user pays business.  One of the benefits of the PPP approach is bringing private sector capability, drive and commercial acumen to a project.  If incentives are aligned, and risk appropriately allocated, a better overall outcome can be achieved for Council and the community.

26.     Even if Council wished to fully fund the project through rates (rather than user pays), a PPP might still achieve better whole-of-life efficiencies and outcomes than Council led delivery.

 

Base case and the underwrite

27.     The private sector (through the market soundings) indicated that it would not be willing to take on all of the demand risk and this is the reason the PIP Fund has based its proposal on an underwrite approach.  Council’s revenue underwrite obligation would be limited to the amount necessary to “top up” actual revenue to a pre-agreed dollar amount.  These amounts would be set (as base case) in the financial model, which must be approved by the Chief Executive.  Effectively, Council would be guaranteeing a minimum pre-tax Internal Rate of Return (IRR) to the PIP Fund on the budgeted project costs. 

28.     Negotiating appropriate base case costs will be crucial, as well as ensuring contingencies are appropriately managed so that the risk allocation and incentives are not misaligned.  Base case negotiations cannot begin until detailed design, consent conditions, construction tendering and insurance are complete or more clearly understood.

29.     Council’s potential underwrite risk would not be affected by how well or poorly the PIP Fund manages its costs, or any changes to the PIP Fund’s cost of capital.  However, it could be affected by the following external factors impacting on the actual revenue of the project.  These risks would not be avoidable by Council under any procurement option.

·   Commuter and tourist demand being lower than expected.

·   Extreme price sensitivity of users.

·   Extended bad weather suppressing use.

·   Sponsorship agreements not able to be rolled-over.

30.     Poor operation and management of SkyPath that adversely impacts on revenue would be the PIP Fund’s risk. It has a financial incentive to avoid this, and contractual incentives are provided under the service level and KPI regime.

31.     To help manage and mitigate Council’s potential underwrite risk, the following measures have been undertaken or sought:

a)  Conservative patronage numbers have been used in the financial modelling (undertaken by Angus & Associates Ltd in late 2013);

b)  The patronage assessment is based on 2006 census data and has not taken into account the steady growth in migration, tourism and cycling usage since 2013;

c)  All revenue would be included in calculating whether any underwrite is payable (this includes user fares and any third party revenue i.e. sponsorship) as agreed to during key terms negotiations;

d)  Incentive provisions to manage and operate SkyPath in an innovative and efficient manner through KPIs were included in the key terms;

e)  It is intended that SeaPath would be opened at a similar time to SkyPath to increase patronage by providing a more direct route to Takapuna; and

f)  The financial model has also been reviewed by PwC to ensure accuracy.

Conclusion

32.     The hybrid PPP is the preferred option to proceed with to complete SkyPath.  The decision on “best” value for money is not a simple comparison of cost of funds, but needs to consider the whole of life costs and an assessment of where all the project risks sit.  For instance, under a traditional procurement process, Council would bear the risk of all operating costs, capital cost escalations and implementation costs. 

33.     If Council supports delivering the project through a PPP with the PIP Fund, the parties would enter into a formal agreement on the basis of the non-binding key terms.  This agreement would still be conditional on the matters outlined in section 8.4 of Attachment A.  If those conditions are met, “financial close” would occur, a commercial agreement would be entered into and construction could commence.

 

34.     If the decision is made to proceed, there would be a change in roles with the Trust stepping back from its current role of spearheading the project.  Council would become the lead agency while a commercial agreement is negotiated with the PIP Fund.  If a commercial agreement is approved, the PIP Fund (and its SPV) would become the lead agency to construct and manage the facility, and contract the operating, maintenance and cleaning companies.  NZTA would provide a licence to occupy for the structure to be attached to the bridge.  This is outlined in section 10.1 of Attachment A.

35.     Approval to proceed with the project using a hybrid PPP is sought, as well as a delegation to the Chief Executive to enter into a commercial agreement and to take all necessary steps to resolve outstanding matters.  This is subject to two decision points of the Chief Executive to reassess the financials after the detailed design process, and continue to negotiate in order to manage Council’s risk around the potential underwrite and ensure if triggered it would have a minimal financial impact.  At these decision points, the Chief Executive will determine if the preferred procurement option remains the best solution.  If not, the Chief Executive would report back to Governing Body to seek direction. 

Consideration

Local board views and implications

36.     The Waitematā, Kaipatiki, and Devonport-Takapuna Local Boards are supportive of the proposal and have indicated feedback from the community was overall supportive.  The relevant members of the three Local Boards were recently briefed on the hybrid PPP proposal and the findings of the Business Report.

Māori impact statement

37.     All iwi with mana whenua connections were contacted in 2013 and 2014.  Those mana whenua (Ngai Tai Ki Tāmaki, Ngāti Whātua o Orākei, Te Kawerau a Maki and Ngāti Paoa) that expressed an interest were engaged though a number of hui.  These hui were positive and, in principle, were supportive of SkyPath.  No issues were raised relating to the procurement approach. 

Implementation

38.     If a commercial agreement is entered into, then the existing budgets of Panuku Development Auckland and Auckland Transport would need to be rephased in the 2017/18 Annual Plan and the 2018/28 Long-term Plan to support the delivery of SkyPath.  A small budget would also be required for realignment of the part of a path (within a Council park) between the Northern Landing and the Northcote Point wharf.  This rephrasing and budget allocation would be sought as part of the usual 2017/18 Annual Plan process. 

39.     How Council’s Significance and Engagement Policy applies at this stage has been considered by Council.  It is noted that:

a)  The potential underwrite risk and overall financial impact on Council is not “significant”. 

b)  SkyPath has been in the public domain for 12 years and the subject of various forms of engagement with special interest groups and the wider public.  This engagement and the feedback received is summarised in Report 1.

c)  Most public interest in SkyPath comes from the special interest groups.  These groups have been actively engaged with the project and their views are well known to Council. 

d)  The proposal does not involve a change of ownership or control of a strategic asset of Council. 

e)  The addition of SkyPath to the existing cycle network will not significantly alter this service level in terms of Annual Plan reporting.

 

40.     The project (and the potential underwrite risk) is not provided for in the current Annual Plan because a commercial agreement has not yet been entered into.  If the decision is to proceed with the project as recommended and a commercial agreement is entered into, the financial implications for Council (including potential underwrite risk) as negotiated will be appropriately provided for in the 2017/18 Annual Plan and the 2018/28 Long-term Plan.  As part of the normal Annual Plan process, the application of the Significance and Engagement Policy will be reassessed.

41.     It is noted that at the time the original proposal was received, Council did not have a Procurement Policy or process for handling unsolicited proposals.  Both of these have subsequently been developed and adopted by Council and when running the proposal retrospectively through these tools, no issues arose.

42.     An assessment in relation to Council’s PPP Policy has been undertaken and the proposal is in accordance with this Policy. 

43.     The resource consent granted by Independent Commissioners for Council’s regulatory arm has been appealed to the Environment Court.  These appeals will need to be resolved prior to negotiations being completed.

 

Attachments

No.

Title

Page

aView

Business Report - SkyPath

33

bView

PwC review letter

113

cView

Procurement Plan

117

     

Signatories

Authors

Marguerite Pearson – Senior Project Manager

Bram van Melle – Manager Property and Commercial Legal

Authorisers

John Duncan – Executive Director, Auckland Investment Office

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

Update on St James Theatre

 

File No.: CP2016/13481

 

  

Purpose

1.       To update council on funding negotiations relating to the restoration of St James Theatre (theatre) and to seek the approval to provide a council financial contribution towards the restoration through a secured suspensory loan to the owner of up to $15 million.

Executive summary

2.       In November 2015 the Finance and Performance Committee resolved to support in principle a financial contribution of up to $15 million towards the restoration of the theatre. This funding was contemplated to be in conjunction with the owner as well as Crown and philanthropic organisations.

3.       Council’s conditions of the in-principle agreement required a different ownership structure in order to achieve a comprehensive public sector and philanthropic sector funding package.

4.       After discussions with the owner and other potential funding agencies it has not been possible to agree an ownership structure with the current owner that meets council’s and other potential funders’ requirements. This has resulted in some uncertainty as to the theatre’s restoration.  There has also been uncertainty around the schedule of works and what would be delivered as a result of council’s contribution.

5.       Officers have therefore explored different options to enable restoration to commence and progress while still securing the desired outcomes from council’s investment.

6.       The proposal contained in this report is that council match the owner ‘dollar for dollar’ on the stage 1 works up to a maximum of $15 million. This funding is proposed in the form of a suspensory loan secured against the property.  This would be in the form of a registered mortgage and would not be drawn down until the completion of agreed tangible physical works milestones.  The full amount of the loan would not be advanced until all stage 1 works are completed and council receives appropriate certification as to completion of the works and the funds expended by the owner. Repayment of the loan would be suspended as long as the owner meets agreed conditions as to public access to the theatre and its availability for hire.

7.       The second stage works to bring the theatre to a higher standard of refurbishment and operating capacity will need the ownership structure to be changed to enable other funders to contribute.

Recommendation/s

That the Finance and Performance Committee:

a)      agree to fund up to $15 million towards the restoration of St James Theatre by way of a secured suspensory loan from funds already budgeted for restoration works.

b)      agree that this loan be paid to the owner on satisfaction of certain conditions, to be agreed between council and the owner, including completion of the stage 1 works and certification as to owner funds spent.

c)      agree that repayment of the loan will be suspended as long as agreed conditions relating to public access and theatre availability are met by the owner.

d)      agree that the loan be waived once stage 2 works have achieved practical completion, or earlier, based on a change from private to philanthropic ownership.

e)      agree that the details of the loan arrangements in accordance with resolutions a-d above be delegated to the Chief Executive to approve.

Comments

Background

8.       The St James Theatre is one of the last iconic early 20th Century theatres in Auckland and is scheduled as a Category A heritage building in the legacy plan and Proposed Auckland Unitary Plan (PAUP).

9.       At its 19 November 2015 meeting the Finance and Performance committee considered a report on the restoration of the St James Theatre (theatre) and the potential for a council contribution. The theatre is owned privately and the indicative cost for full restoration has been advised as $66.6 million.

10.     The Finance and Performance committee agreed in principle to allocate up to $15 million towards this restoration cost (resolution number FIN/2015/127).  The conditions that were attached to this contribution are summarised below:

·   the proposed basis, timing, purpose and quantum of funding

·   the appropriate ownership structure of the theatre and its acceptability to other potential public sector and philanthropic funders

·   continued public access to the theatre

·   quality assurance and risk management measures

Update on progress

11.     Since November, officers have worked to confirm information necessary to satisfy the conditions of council’s proposed contribution; including:

·   Meeting with the owner of the theatre to discuss ownership structures, the proposed budget and design for restoration works, the timing and specification of such works, funding requirements and the post-restoration business case for the theatre;

·   Meeting with other potential public and philanthropic funders to clarify in respect of each, the quantum of potential funding, timing and availability of funds, applicable funding criteria and prerequisite requirements in respect of ownership structures; and

·   Commissioning costing and scheduling information that has been confirmed with the owner.

Owner’s proposal

12.     The owner is proposing to undertake the restoration works in 2 phases:

13.     Stage 1 –structural upgrades, including earthquake strengthening, and envelope upgrades, and essential services reinstatement/replacement including electrical, water and fire protection. The estimated cost of this phase of the work is $41.3 million. This estimated cost includes $12.4 million for works which are required to comply with resource consent conditions and are therefore at the developer’s sole cost and excluded from subsequent funding calculations. This leaves a balance of $29 million. Further detail of the work is provided in Attachment A.

14.     Stage 2 – reinstatement of the finishes, fittings and remaining services, e.g. air-conditioning and backstage equipment and the restoration of the dress and upper circle. Estimated cost $25.4 million.

15.     The owner would undertake stage 1 of the theatre restoration works. Council’s financial contribution would be applied to this phase of work.  The council’s $15 million contribution would be matched by the owner’s contribution of $14 million over and above the $12 million of works required to meet conditions of resource consent.


 

16.     At the completion of stage 1 works, the ground floor space will have limited operational use, being capable of holding concerts, events and performances. At this time ownership of the theatre building and improvements (but not the land) transfer to the Trust, and the owner would grant a long- term ground lease (for the underlying land) to the Trust.  The Trust would then assume management and operation of the theatre.

17.     The owner contemplates that the Trust, with support from the owner could then undertake stage 2 of the restoration works over time as other funding becomes available.

18.     As the owner is making a significant contribution to the theatre’s restoration they wish to retain ownership of the land.

Assessment of the owners’ proposal

19.     A key condition for the council is the acceptability of the ownership structure to other agencies and organisations which are likely funding sources.  However preliminary feedback is that several agencies may not contribute funds given the leasehold structure and the uncertainty as to the operational stability of the theatre going forward.  

20.     It has also become apparent that the extent of possible funding from existing central Government (absent a specific one-off grant) and philanthropic agencies falls short of the required sum needed to be able to progress the restoration in one phase. That is the reason for the owners’ proposal for a two stage restoration process.

21.     The council conditions are based on the premise of full restoration of the theatre to a high operating standard. This is unlikely in the short to medium term given a two stage restoration process is contemplated and the uncertainty of available funding to complete both stages.

22.     Indicative operating budgets contemplate ongoing financial support by council, whether directly or as defacto underwriter of the Trust.

23.     Given the above circumstances, it has not been possible to confirm all the conditions of council’s potential contribution. Staff are satisfied around the matters of the scope of works, phasing and cost estimates to complete stage 1.

24.     It is clear that the current proposal will not satisfy funding criteria for a number of possible funding agencies. The owner, who is contributing approximately half the restoration cost, is seeking some security for its contribution through land ownership, while public and philanthropic agencies are requiring public/charitable ownership.

Options

25.     In light of the circumstances, and with the benefit of more complete information as to timing, funding sources and scope, staff have considered possible options:

Status Quo

26.     The council could retain its current position and wait until all funding parties have been secured to enable the full restoration works to be committed. However waiting for all issues of all parties to be resolved will take some time and may not be possible at all.

27.     A key consideration has been the need to advance critical foundation and structural support works included in stage 1 of the restoration. There are real efficiencies that arise as a result of doing this work in conjunction with the closely linked adjoining apartment development, and more importantly the works address key risks of structural integrity of the theatre building, earthquake strengthening and fire. Some but not all of this work is a condition of the resource consent.


 

Alternative funding structure – Loan to Owners to complete Phase 1 Works

28.     Given the number of issues noted above, and the difficulties experienced in trying to move forward on these matters, a possible alternative structure contemplates council contributing its funding by way of a secured suspensory loan to the owner to enable the stage 1 works to be undertaken. 

29.     The parameters of this option are:

·   Ownership of the theatre stays with the current owner who remains primarily responsible for the restoration and operation of the theatre.  There is no shift of liability to a Trust and council would not find itself in a defacto underwriting position for a Trust for the restoration or ongoing maintenance.

·   Council loans funds to the owner for the specific purpose of funding the earthquake strengthening and associated works identified in stage 1.  The loan would be secured by a registered mortgage against the property.  There would be no interest payable.

·   The loan would be paid on completion of stage 1 works and possibly at agreed milestones. In order to be satisfied that there is matching funding from the owner the loan would include conditions around certification of accounts and funds spent.

·   The terms of the loan could provide for its full remission once stage 2 works (full restoration) are complete.

·   A failure to comply with terms or the sale of the theatre would trigger repayment.

30.     Issues arising with this alternative option are:

·   There is no certainty of funding contributions from other agencies given the theatre would remain in private ownership.

·   Stage 1 works may in fact be the extent of restoration that is completed as there is no guarantee that stage 2 works will be completed.

Initial Evaluation of Options

31.     Neither of the options achieves full restoration of the theatre.

32.     Additional funding sources are not currently available, may never eventuate given the ownership structure, or may become available over time but in amounts much less than required.  Accordingly the goal of full restoration may be unachievable in the timeframes contemplated by parties.

33.     The status quo option does not resolve this matter.  While work required to comply with resource consent conditions will be completed by the owner, the owner has indicated that the additional works contemplated in stage 1 would not be undertaken and the theatre would remain largely in its current state.

34.     The secured suspensory loan option is in effect a reasonable compromise.  It achieves the immediate goal of having the theatre restored to a base level better than its current state and enabling its limited operational use.  Subject to appropriate structuring of the loan terms, public access and enjoyment can be secured while leaving the responsibility (and associated liability) for its ongoing restoration and maintenance with the owner.  Concerns regarding the investment of public funds into a private asset can be addressed on this basis.

35.     It enables the restoration project to advance in the short term.  Currently the project is in limbo as parties are looking for certainty as to funding for the full project – which cannot be achieved.

Consideration

Local board views and implications

36.     This matter has not been canvassed with the local board although they are aware of council’s in-principle support.

Māori impact statement

37.     This report addresses a potential council contribution from the Built Heritage Acquisition Fund and as such there is no obvious impact on Māori.

38.     Any statutory issues related to the redevelopment of the entire site have been addressed through the resource consent process.

Implementation

39.     While the management of the project is the responsibility of the owner, the council must be diligent in the way that the restoration project is established and managed, particularly relating to how the line between the public and private benefits of the project are managed. This has proven difficult. The council now has a clear idea of the costs and scope of the proposed restoration. On this basis, providing council’s contribution as a secured suspensory loan is an appropriate vehicle by which any risks can be managed.

 

Attachments

No.

Title

Page

aView

Phase 1 refurbishment costs

159

     

Signatories

Author

Noel Reardon - Manager Heritage

Authorisers

John Duguid - General Manager - Plans and Places

Jim Quinn - Chief of Strategy

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

Transfer of Moire Road Hall to the Leataata O Le Lumanai Samoan Trust Incorporated

 

File No.: CP2016/14033

 

  

Purpose

1.       To seek approval from the Finance and Performance Committee for Moire Road Hall (the community hall) to be transferred to the Leataata O Le Lumanai Samoan Trust Incorporated to enable the trust to demolish the community hall and build a new community owned facility on the site. (Attachment A)

Executive summary

2.       The community hall is located at 93 Moire Road, West Harbour.  The building sits on a reserve that is held by the Crown through DOC and vested in Auckland Council.  It is a council owned building, managed by the Leataata O Le Lumanai Samoan Trust Incorporated (the trust) through a lease that expires in 2025. 

3.       The trust have long held a desire to demolish the community hall and build a new facility that will better cater for the needs of their community, with a strong focus on empowering Samoan children and their families and preparing them for long term education.

4.       The community hall is a 1960’s prefab and was not designed to last as long as it has.  Its condition is of concern and to bring it up to standard for long term occupancy would require significant work, including removal of asbestos cladding and replacement with new cladding, replacement of the floor, sub-floor repairs, new toilets, insulation etc.

5.       A needs assessment undertaken in 2015 recommended that Council consider divesting this facility to the community.

6.       Key stakeholders in the area were consulted and are in support of the asset transfer.

7.       In September 2015 an agenda report to the Henderson-Massey local board approved the following resolution:

That the Henderson-Massey Local Board:

a)   Approves the public notification process for the proposed asset transfer of the Moire Road Hall to the Leataata O Le Lumanai Samoan Trust and report back to the Henderson-Massey Local Board the outcome.

HM/2015/123

8.       Legal advice was sought around the public notification process.  Their advice was that the council is not obligated to publically notify, but should inform the community through a press release in any publications that the local board may release.

9.       In June 2016 an agenda report to the Henderson-Massey Local Board approved recommending to the Governing Body the transfer of the community Hall to the trust.

That the Henderson-Massey Local Board:

a)   recommend to the Governing Body that the Moire Road Hall be transferred at nil value to the Leataata O Le Lumanai Samoan Trust Incorporated.

b)   request officers liaise with the trust to surrender the current lease and apply for a new agreement to lease outlining demolition and future development plans and timeframes, (pending the successful transfer of the Moire Road Hall to the Leataata O Le Lumanai Samoan Trust Incorporated)

HM/2016/84

10.     The responsibility for all divestment of community facilities lies with the governing body.

 

Recommendation/s

That the Finance and Performance Committee:

a)      approve the asset transfer of the Moire Road Hall at nil value to the Leataata O Le Lumanai Samoan Trust Incorporated.

b)      pending the successful transfer of the Moire Road Hall to the Leataata O Le Lumanai Samoan Trust Incorporated, request officers liaise with the trust to surrender the current deed of lease of land and building dated 2 December 2010 and enter into an agreement to lease and community lease for the land to enable the trust to build the proposed new community facility.

c)      agree that demolition and future development plans and timeframes will be subject to Council’s prior approval.

Comments

11.     The trust has managed the community hall since 1999; it runs a range of programmes mostly around community education, health and wellbeing workshops and exercise classes.  The facility is booked every morning, afternoon and evening from Monday to Saturday each week. 

12.     The trust holds a current lease of the building with a right of renewal for a further nine years and a final expiry date of 31 October 2025. 

13.     The community hall is co-located on the site with a pre-school building that is owned by the trust; the land lease for the preschool expires on 31 October 2017.  Under the Community Occupancy Guidelines adopted in July 2012, the trust have automatic right to re-apply at the end of their occupancy terms without public notification and be entitled to a term of 10 years with a further right of renewal of 10 years.

14.     The community hall is a 1960’s prefab and was not designed to last as long as it has.  There are significant issues that would need to be addressed if this building was to stay long term as part of the network of community facilities.  These include:

·   uplift of all of all the existing floors and relaying with new flooring

·   new carpet and vinyl throughout

·   sub-floor repairs

·   removal and replacement of asbestos cladding

·   installation of insulation

·   replacement of some of the windows

·   toilet and kitchen upgrades

·   wiring upgrade

·   full interior and exterior repaint.

15.     Various options regarding the future of the site were considered, these include: 

·   Demolish existing building and council build new community facility to replace it.  This would:

o create a council asset at a cost of $1.2m, which has not been identified in the Community Facilities Network Plan as a priority or budgeted in councils Long Term Plan

o require ongoing consequential OPEX

o duplicate a recently completed community facility 350 metres away

o not respond to the trusts wish to own their own building, rather than lease a council owned building

o reduce the potential to leverage external funding comes with community ownership of facilities.

·   Demolish existing building.  This would:

o see removal of a not fit for purpose asset at a cost of $80,000

o reduce maintenance and consequential costs

o mean the loss of a key community service that has been delivered since 1999

o require reinstatement of the park with its associated costs.

·   Go out to expression of interest (EOI) for use of the site.  This would:

o allow for open and transparent process of allocating council resources

o identify other service providers who may address different community needs

o be contractually difficult as the trust has an existing lease with a right of renewal until 2025

o compromise the operation of the existing preschool that is on the same site

·   Sale of the building and/or the land.  This would:

o return a small investment for council, but it is not seen as an option as the condition of the building is such that there would be very little value in it

o the building sits on Crown owned land vested in council by DOC and a sale is not an option as we have no ownership of the land

16.     The conclusion of the needs assessment and consideration of the options identified was that council divest the facility to the trust because of:

·   the age and the condition of the Hall

·   the fact that Council has recently opened a new community facility (Manatewhau Hub) within 350 metres from the community hall

·   there are other non council community facilities in the area that have capacity for community use

·   population projections show that there will be low population growth between now and 2033

·   the trust has a deed of lease with council with final expiry in 2025

·   the trust is delivering quality services to their community

·   the desire of the Leataata O Le Lumanai Samoan Trust to develop a purpose built facility that would meet the long term needs of the area specifically around educational outcomes for the Pacific Island community.

17.     It will be necessary to make sure that the building is in a safe condition before approval of any asset transfer, as the process of designing and funding the proposed facility could take three to five years.  Budget has been sourced for this work and it is planned to be completed within the next month with an expected cost of around $20,000.

18.     The Community Facilities Network Plan (the network plan) provides guidance on how Auckland Council will invest in community facilities over the next 20 years, in section 2.8 of the network plan it states:

“A significant proportion of the existing network of facilities are old, in poor condition or not fit for purpose and either need to be upgraded or considered for divestment”.

          The needs assessment clearly identifies the community hall to be old, in poor condition and not fit for purpose and as such fit within the criteria of divestment in the network plan.

19.     Consultation with key community stakeholders has occurred and all those spoken with have indicated their support for the proposal to transfer the asset to the trust.

20.     Auckland Council legal advice has been obtained on the process and advised in regards to the asset transfer:

·   “we consider that you do not need to publish anything in the newspaper or mail any affected parties as consultation is not required”

·   “that the existing lease will need to be surrendered and a new agreement to lease should be drafted that incorporates a development agreement.  In the development agreement it will put an obligation onto the tenant to demolish and rebuild (get resource consents – have building design approved by council).  The agreement to lease would include matters such as a sunset clause, i.e. council could cancel the lease if the tenant fails to progress the demolition and rebuild within a certain time frame”. 

21.     The trust will be required to follow all necessary processes in regard to their proposal to demolish and build a new community facility on the site, including landowner approval, building and resource consents.

Consideration

Local board views and implications

22.     Discussion around asset transfer of the community hall has occurred with the Henderson-Massey Local Board at workshops in September 2015 and February 2016. In June 2016 the local board resolved to recommend to the Governing Body that the asset transfer be approved.

Māori impact statement

23.     One kilometre from the community hall is the Te Piringatahi O Te Maunga Rongo Marae who delivers services to their community.  Throughout the process of consultation the Marae has been kept informed by phone and emails of the proposal of the asset transfer, council requested to meet with the Marae but this request was not accepted.  No response either in support or against the asset transfer was received from the Marae.

24.     Should the asset transfer be successful and the trust wish to pursue development of the site, any new lease or development plans would require consultation with mana whenua.

Implementation

25.     Should recommendation of the asset transfer be granted by the Finance and Performance Committee the following implementation steps need to occur:

·   formal legal asset transfer of building

·   surrender of existing building lease, and grant of an agreement to lease and new community ground lease.

 

Attachments

No.

Title

Page

aView

Aerial of site of Moire Road Hall

165

     

Signatories

Author

Jan Brown - Principal Policy Analyst

Authorisers

Rod Sheridan - General Manager Community Facilities

Ian Maxwell - Director Community Services

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

Contributions Policy

 

File No.: CP2016/14436

 

  

Purpose

1.       This report recommends the adoption of the Contributions Policy 2015 Variation A to increase the number of funding areas for parks and stormwater.

Executive summary

2.       At its meeting on 17 March 2016 the Finance and Performance Committee approved consultation on proposed amendments to the Contribution Policy 2015.  Consultation was undertaken between 1 and 21 April 2016.

3.       Staff recommend that the council approve the increase in the number of funding areas for stormwater from 22 to 36 and for parks from four to 26.  These changes reflect:

·   geographic characteristics of stormwater and parks (reserve acquisition, reserve development and community infrastructure activities) usage

·   growth priority areas

·   desire for a stronger connection between where development contributions are collected and spent

·   retention of flexibility to amend plans to accommodate changes in the pattern of planned growth.

4.       Feedback from consultation supported the proposed changes.

 

Recommendation/s

That the Finance and Performance Committee:

a)      adopt the amendments to Contributions Policy 2015 Variation A attached to this report.

Comments

Consultation

5.       A statement of proposal and a draft of the amended contributions policy was posted on Our Auckland and sent to 250 interested parties.  Staff held one Consultation event with 45 attendees.  The majority of feedback from this event supported the proposed variation.  A report was included on the agendas of all local board meetings in April / May 2016. 16 local boards provided feedback.

Feedback

6.       Four written submissions were received. One submission suggested limiting the number of stormwater funding areas to 30 to allow for more averaging of charges.  Three of the submissions made comments outside the scope of the proposed amendment.  These will be considered as part of the next contributions policy review.

7.       Feedback was received from 16 Local Boards with 15 supporting the proposed amendments.  The Orakei Local Board indicated that they could not support the proposed variation unless the council could confirm the ongoing support of renewal and capacity increase in the isthmus.  The Mangere-Otahuhu Local Board requested further investigation into whether the definition of boarding houses can be incorporated into the policy.  Staff will consider this issue when the policy is next reviewed.  The Whau and Maungakiekie-Tamaki Local Boards requested that central government reinstate the use of contributions to fund aquatic centres, recreations centres and libraries. Several Local Boards requested further refinement of significant growth areas and greater alignment with local board boundaries.

Analysis

8.       Staff recommend the adoption of the proposed amendments to the Contributions policy set out in Contributions Policy 2015 Variation A attached to this report.  Minor amendments have been made in response to feedback including:

·   policy and pricing schedules have been updated to reflect the new funding areas and

·   changes to capital budgets arising from adoption of the Annual Plan 2016/2017

·   small text changes have been made for the purpose of clarification.

9.       None of these changes are material.

Consideration

Significance of Decision

10.     The amendments proposed to the contributions policy are not significant.

Consultation

11.     The council was required to consult on amendments to the Contributions policy under section 82 of the Local Government Act 2002.  Consultation with the public occurred in April 2016. 

Local board views and implications

12.     The governing body has decision making authority for setting the contributions policy. Feedback from local boards is noted above.  Staff will consider feedback provided outside the scope of the consultation proposal when next reviewing the policy.

Māori impact statement

13.     Council does not hold information on the ethnicity of developers.  The impact on Māori will be similar to the impact on other residents and ratepayers.

14.     The council offers a grants scheme that provides funds equivalent to the cost of development contributions for qualifying papakāinga housing. 

Implementation

15.     There are no implementation issues. There will be a small upgrade to online assessment tool.

Financial and Resourcing Implications

16.     There are no financial or resourcing implications.

Legal and Legislative Implications

17.     The options presented in this report comply with the requirements of the Local Government Act 2002.

 

Attachments

No.

Title

Page

aView

Contributions Policy 2015 Variation A

169

bView

Submissions Summary

203

Signatories

Authors

Bobbi Parkinson – Principal Advisor, Financial Policy

Andrew Duncan - Manager Financial Policy

Authorisers

Matthew Walker - GM Financial Strategy and Planning

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 




Finance and Performance Committee

21 July 2016

 

Bruce Pulman Park Trust - Request for Loan Guarantee

 

File No.: CP2016/06964

 

  

Purpose

1.       To seek approval to the request from Bruce Pulman Park Trust for Council to:

·   approve the Trust borrowing up to $7M from HEB Land Holding Ltd;

·   approve the Related Party Transaction between Bruce Pulman Park Trust and HEB Land Holding Ltd;

·   provide a loan guarantee facility of up to $4M to HEB Land Holding Ltd;

·   approve, as an option for the Trust, to defer first principal repayment due under the $4M loan arrangement with Council from 31 December 2017 out to 31 March 2018;

·   increase the annual operational grant funding to $450,000, utilising a reduction in the interest rate charged on the Councils $4M from 5.66% pa to 3.66% pa;

Executive Summary

2.       The Bruce Pulman Park Trust leases land from Council which it is developing into a significant sports and recreation facility in southern Auckland.  In 2014, Auckland Council approved a loan of $4M to the Trust towards the construction of the Indoor Court Centre.  The loan agreement contains restrictions preventing the Trust from borrowing further funds without Council’s prior approval.

3.       The Trust has chosen to undertake further enhancements to the Indoor Court Centre which it wishes to complete by early 2017 so that the facility can be used as a venue for the 2017 World Masters Games. The overall project costs have risen to $27.1M.

4.       The Trust wishes to borrow up to $7M from a related party, (related by virtue of similar directors and shareholders), HEB Land Holding Ltd to help cover the additional costs.  The 2014 Loan Agreement with Council requires the Trust to obtain Council’s prior written approval to both the additional borrowings, and transactions with related parties.

5.       The Trust subsequently also asked for increased operational funding from $372,000 to $450,000 per annum from 2016-2017 to cover costs associated with the provision of the sports fields and other facilities at Bruce Pulman Park.  The provision of this operational funding is a requirement of the 2002 and 2014 lease arrangements.

6.       When considering the requests from the Trust, Council staff have identified a number of matters that need further discussion and negotiation with the Trust to bring about changes to:

a)           previously agreed provisions in the 2002, 2009 and 2014 lease agreements; and

b)      governance arrangements of the Trust to reflect the role Bruce Pulman Park plays in the network of recreation facilities across the Auckland region.

7.       Having assessed the request from the Trust, Council staff would recommend:

a)      a loan guarantee facility of up to $4M in favour of HEB Land Holding Ltd, conditional on the normal arrangements for loan guarantees being implemented, with added conditionality requiring Bruce Pulman Park Trust to undertake both the review of governance (by 30 November 2016) and modifying the lease agreements to the satisfaction of Auckland Council, failure to do so being termination events for the loan guarantee facility.

b)      reducing the interest rate on the $4M loan from Council to the Trust from 5.66% per annum to 3.66% per annum, with the interest savings of $80,000 in 2016-2017 forming part of the contribution to the Trust towards operational funding of $450,000 in 2016-2017, recognising the $372,000 direct contribution the Council will make to the Trust in 2016-2017.

 

Recommendation/s

That the Finance and Performance Committee:

a)      approve the loan from HEB Land Holding Limited to the Bruce Pulman Park Trust for an amount of up to $7M.

b)      approve the Related Party transaction between Bruce Pulman Park Trust and HEB Land Holding Limited.

c)      approve a loan guarantee facility of up to $4M favour of HEB Land Holding Ltd, with the loan guarantee being condition subsequent on:

i)        the Trust undertaking a review of governance in conjunction with Auckland Council and to reflect the role Bruce Pulman Park plays in the network of recreation facilities across the Auckland region, with the view to having a new agreed governance structure in place by 30 November 2016;

ii)       the existing lease agreements be reviewed with the intention of updating them to reflect the changed circumstances of the contracting parties and to reflect the role Bruce Pulman Park plays in the network of recreation facilities across the Auckland region;

iii)      with failure to undertake both the review of governance and modifying the lease agreements to the satisfaction of Auckland Council being termination events for the loan guarantee facility.

d)      approve the interest rate on the existing $4M community loan between Auckland Council and the Bruce Pulman Park Trust being reduced from 5.66% per annum down to 3.66% per annum, noting that in 2016-2017 this represents a saving to the Trust of $80,000.

e)      approve the 2016-2017 operational funding from Auckland Council to Bruce Pulman Park Trust of $452,000 comprising a direct funding provision of $372,000 and the interest concession of $80,000.  Subsequent year operational funding is to be to account for the value of the interest savings, and adjusted accordingly.

f)       approve the first principal repayment date in respect of the $4M Auckland Council loan being moved from 31 December 2017 to 31 March 2018, if required by the Trust.

g)      require the Bruce Pulman Park Trust to enter into a Guarantee Side Deed with Auckland Council recording the terms and conditions under which Council will enter into the loan guarantee arrangements with HEB Land Holding Limited.

h)      authorise the Group Chief Financial Officer (or delegate) to approve:

i)        The final terms and conditions of the loan guarantee facility between Auckland Council and HEB Land Holding Ltd;

ii)       The final terms and conditions of the Guarantee Side Deed between Auckland Council and Bruce Pulman Park Trust;

iii)      The final terms and conditions of any other agreement, existing, or new, necessary to implement the loan guarantee arrangements, including securities, and other changes arising from the review of the governance and lease arrangements.

 

 


 

Comments

Request Received from the BPPT

8.       In April 2014, the Finance and Performance Committee approved a request from Bruce Pulman Park Trust (the Trust) for a community loan of $4 million to support the continued development of the Indoor Court Centre at Bruce Pulman Park.  At the time, the costs of completing the enhanced development had risen from $10.9M in 2010 to $17M in 2014 as a result of an enlarged facility.   This loan is additional to the $3.9M grant approved by Papakura District Council in respect of this facility.

9.       Further expansion and enhancements to the facility (Stage 2) has resulted in the latest (March 2016) overall budget of $27.1M.

10.     In order to cover the additional costs, the Trust is looking to borrow a further sum of up to $7M from HEB Land Holding Limited (a company related to one of the trustees of the Trust) to complete the second stage development.  

11.     The Trust is seeking a loan guarantee facility from Auckland Council to cover part of the loan in favour of HEB Land Holding Limited of up to $4 million for five years.  The balance of the loan from HEB Land Holding Limited to the Trust ($3M) would be unsecured.  The letter of request is at Attachment A.

12.     The Trust is also seeking a variation to the existing $4M Term Loan Agreement for an option to defer the date of payment of the first principal amount of $500,000 from 31 December 2017 out to 31 March 2018 if the Trust needs to do so for cash flow reasons.  This variation requires Auckland Council consideration and approval.

13.     Under the terms of the existing $4M Term Loan Agreement between Auckland Council and the Trust dated 17 September 2014, the Trust is also required to obtain Council’s approval prior to borrowing or incurring any other loan, overdraft or other form of borrowing (clause 9.5(a) of the General Terms), and for transactions with related parties.

14.     In seeking approval for the loan guarantee, the Trust is also seeking approval for the increased borrowings as required under clause 9.5(a) as noted in paragraph 10 above.  If approved, total loans taken out by the Trust will be around $11M.

15.     The Bruce Pulman Park Trust is proposing that the Auckland Council loan be fully repaid by December 2019 (if the three month deferral option described in paragraph 12 is not exercised, or by March 2020, if it is), after which principal repayments will begin to be made on the loan from HEB Land Holding Limited. 

Trust Sources of Funding

16.     Loan repayments of the Council loan facility are essentially being funded from distributions the Trust receives from the Manukau Counties Community Facilities Charitable Trust (MCCFCT).  The Trust is the largest single recipient of funding from the MCCFCT.

17.     Under the terms of the existing Council loan facility, the grants received in years 2 and 3, (of the Council loan), from MCCFCT will be used to finance the Indoor Court Centre project, following which the grants received in years 4 and 5 (late 2017 to late-2019) would be used to repay the Council loan at the rate of $2M per annum (plus interest).


 

18.     The following table illustrates the donations received by the Trust from MCCFCT since 2009:

Year

Donation

2016

$2,428,593

2015

$3,023,638

2014

$2,746,896

2013

$3,158,995

2012

$3,110,474

2011

$2,717,691

2010

$1,853,353

2009

$1,589,513

 

19.     The financial reports of the Trust indicate very healthy trading results for the 9 years ended 31 March 2015.  Accumulated surpluses exceed $22 million, with the vast majority of this funding being redirected back into the development of the park and facilities.  A summary of the trading results for each of the Trust and MCCFCT is included at Attachments B and C.

20.     The Trust shares two trustees in common with MCCFCT: Noeline Hodgins and Bruce Pulman.  The significance of this being that there is probably a reasonable expectation that the Trust will continue to be a significant beneficiary of the MCCFCT for the foreseeable future, ensuring that the Trust has sufficient funding to undertake and complete the Indoor Courts Centre development at Bruce Pulman Park, and then to repay the loan in the last two years of the proposed term.  A copy of the summary sheets obtained from Charites Services outlines key information about each entity are attached as Attachments D and E.

21.     A copy of the latest MCCFCT Grants Distribution Policy dated 31 October 2013 has been provided.  This has been prepared in accordance with the provisions of the Gaming Act 2003.  The authorised purposes of the Trust include the following items:

·   Grants for the provision, maintenance and development of facilities and activities at Bruce Pulman Park, including additions to the park by way of land purchase;

·   Funds for the charitable purposes of the Bruce Pulman Park Trust for community sporting and other community activities.

Additional Loan from HEB Land Holding Limited

22.     The Trust has advised that it wishes borrow up to $7M from a related party, HEB Land Holding Ltd; subject to Council approving a loan guarantee in favour of HEB Land Holding Ltd; with repayments to commence only once the $4M Council loan has been fully repaid.  The Trust has supplied documentation in support of the request, including copies of the draft loan agreement between the Trust and HEB Land Holding Ltd.

23.     Ordinarily, if approved, Council would enter into a number of legal agreements with the other parties to record the terms and conditions under which the loan guarantee would be provided by Council.  There would typically be conditions precedent that needed to be satisfied before the loan guarantee would become operative. 

24.     Due to the nature of the conditions which would be implemented in respect of this guarantee facility it will be impractical for these conditions precedent to be met by the Trust, instead they can be included as conditions subsequent.  The nature of and reason for the conditionality is discussed below.

Added Conditionality for Loan Guarantee

Changes to lease agreements

25.     There are two leases in respect of Bruce Pulman Park.  These effectively mirror each other regarding terms and conditions.  The agreements were entered into by the former Papakura District Council and extend a larger than normal number of rights to the lessee (i.e. the Trust).

26.     The basic terms of the agreement are as follows:

a)      Thirty-three year term commencing from 1 August 2001 with a right of renewal for a minimum of a further 33 years, on essentially the same terms and conditions.

b)      $1 per annum rent, with no rent reviews.

c)      The trust will not pay any land rates on the leased area.

d)      The trust would undertake a certain minimum level of improvements at the park.   However in approving the lease agreement, the Council in its capacity as lessor (not regulatory), pre-approved all matters relating to the improvements (including alterations, additions and renewal), giving the Trust full and unfettered discretion to decide all matters relating to the nature of improvements at the park.

e)      If, for any reason, the Trust is unable to complete the work on the improvements within a reasonable period of time, the Trust is permitted to advise the Council, following which the Council (although under no obligation to do so) can either complete the work itself, or provide funding to the Trust to complete the works.  Any amount advanced shall be a debt owing to the Council, unless agreed otherwise.

27.     The effect of these clauses is that provided the improvements are consistent with the stated “Permitted Use of the Land” the Trust has the ability to develop the park as it wishes, produce and amend plans for improvements as it desires, and should there be any funding shortfall, it can request Council to assist to remedy the situation (which by implication means provide funding), although Council is under no obligation to do so.

28.     Of further concern for Council is the potential for dis-connect between the proposed and actual development of the park (facilities), and the obligations this places on Council by way of infrastructure development and provision of consequential operational funding as provided for under the leases.

29.     Ideally, major facilities developments at the park should be discussed with the Papakura Local Board and/or Auckland Council prior to the Trust committing to progressing the project.  This will allow the Local Board and Council time to consider, agree, plan and budget for any obligations that may arise from the proposed development.

30.     Auckland Council needs to be in a position where it can properly consider the ‘cost’ of the developments at Bruce Pulman Park and its obligation to provide funding for these and weigh this up against other projects and demands for funding across other areas of Council’s operations.

31.     Coupled with this discussion is the need to determine where Bruce Pulman Park sits within the wider Council network of parks.  Although the park was originally conceived as of local significance for Papakura and its immediate environs, the park is developing into regional importance due to the activities that are being undertaken there, and the nature of the lease agreement means that many decisions relating to Councils obligations under the lease will be considered by committees of the whole, or the Governing Body.

32.     It is acknowledged however that this particular arrangement at Bruce Pulman Park represents a precedent and was the first Public/Private/Partnership (PPP) arrangement for the new Auckland Council to deal with.

 

33.     Given the planned future development of the park by the Trust, (subject to availability of funding), it may be appropriate for Council and the Trust to enter discussions regarding the terms and conditions of the leases to determine whether the agreements need to be modified to reflect the nature of Auckland Council and its plans for the future development of greater Auckland and where the park sits within the great Auckland Council parks network.  This acknowledges the different priorities that exist within Auckland Council versus what existed at the time the original agreements were entered into under the former Papakura District Council.

Changes to governance

34.     The Trust has been considering a number of issues relating to the future governance of the Trust, in particular issues such as trustee renewal / rotation; on-going operational sustainability; future direction (policies, strategic and business planning).

35.     The Trust has held informal discussions with Council staff and indicated a willingness to work with Council to investigate options to review the governance of general operations of the Trust.  Given the previous reliance on a few trustees taking the lead on a number of projects and issues of the Trust, Council staff are encouraged by this willingness to work together to review governance overall, including working to seek a suitable mix of trustees, clarity of role and the future direction of the Trust.  To signal the importance of this matter,  the parties should work towards having a new agreed governance structure in place by 30 November 2016.

Increased Annual Operational Funding

36.     The Trust has raised the matter of Council providing increased operational funding in respect of the costs of providing Bruce Pulman Park.

37.     In 2015-2016 operational funding of $372,000 was provided by Council to the Trust.  The Trust is seeking an increased grant of $450,000 per annum for 2016-2017 onwards.  The 2016-2017 and subsequent year’s operational funding is budgeted to be $385,000.

38.     This request for additional operational funding support has been reviewed by Council staff to determine whether it is fair and reasonable when compared to the cost incurred by Council for similar facilities / activities.  The outcome of this process has been that while the make-up of the individual items differs, the overall estimate of the cost of the work is very similar.

39.     Council staff have therefore examined options of how this increased funding could be accommodated.  As mentioned in earlier paragraphs, Council approved a community loan of $4M to the Trust in 2014.  The Trust has been drawing down against the loan since 2014 and by June 2016 the full $4M had been paid to the Trust.  Interest is payable on the loan at the rate 5.66% per annum.  To date, all interest charges have been paid in full and on time.

40.     Council staff have examined the option of reducing the interest rate by 200 points (2.0 percentage points) from 5.66% to 3.66%.  This results in an annual saving in 2016-2017 in excess of $80,000.  If this ‘savings’ is added to the 2016-2017 annual operational funding, this results in the Trust effectively receiving equivalent operational funding of $450-460,000.

41.     An interest rate of 3.66% per annum is significantly lower than the Trust could ever borrow funds, but still provides Council a margin over its current cost of borrowing.

42.     If the interest reduction is applied to the remainder of the term of the Council loan the resultant savings are as follows:

 

5.66%

3.66%

 

Savings

Rounded

2016-2017

 $      226,762

 $       146,634

 

 $  80,128

$80,000

2017-2018

 $      205,175

 $       141,825

 

 $  63,350

$63,000

2018-2019

 $        99,050

 $        82,350

 

 $  16,700

$16,500

2019-2020

 $         7,075

 $        13,725

 

-$    6,650

-$6,500

Totals

 $      538,062

 $       384,534

 

 $153,528

$153,000

 (Assumes a deferred start to loan repayments from Dec 2017 to March 2018) 

 

 

43.     When applied against the budgeted annual operating funding, it indicates that additional real funding support is not required until 2018-2019:

Bruce Pulman Park Trust

 

2016-2017

2017-2018

2018-2019

2019-2020

 

 

 

 

Operational Funding Budgeted

           372,000

           385,000

           385,000

           385,000

 

 

 

 

Interest Savings

             80,000

             63,000

             16,500

-              6,500

 

 

 

 

 

Total

           452,000

           448,000

           401,500

           378,500

 

 

 

 

Balance required to achieve $450,000

 

               2,000

             48,500

             71,500

 

 

 

 

Total

           452,000

           450,000

           450,000

           450,000

 

 

 

 

 

 

44.     If the 2016-2017 operational funding remains the same at $372,000, the interest savings of $80,000 provides the necessary funding of $450,000 in 2016-2017 with no actual additional funding required from Council.  An increase in the base funding to $385,000 in 2017-2018 and beyond means that no additional funding is required in 2017-2018, however $48,500 is needed in 2018-2019 and $71,500 in 2019-2020.  This provides sufficient time for Council to consider these increases and to make the necessary budget provisions if it wishes to provide funding at this level.

Conditions subsequent

45.     The request for a loan guarantee facility usually necessitates the borrower paying the guarantor a fee in exchange for the guarantor providing the guarantee.  It is not usual for Council to charge such a fee, however it is normal for Council to require that certain conditions precedent are met by the borrower prior to the guarantee becoming operative.  These are recorded in a Guarantee Side Deed.

46.     The Trust has indicated it needs to access the funds from HEB Land Holding Limited as soon as possible in order for the next phase of construction work to proceed.  In order to facilitate this, and as the guarantee is with a private company, not a trading bank, it will be possible to include conditions subsequent (rather than conditions precedent) that the borrower would agree to undertaking in order for the guarantee to remain operative.  Failure of the Trust to fulfil the undertakings would leave Council with the option of terminating the agreements, including the guarantee facility.

47.     Items to be included (but not limited to) in the conditions attached to the guarantee should include:

a)   A review of governance arrangements of the Trust on terms acceptable to Council;

b)   A review of the leases and other legal agreements with the intention of modifying them to reflect the changed position and circumstances of the parties since they were first entered into in 1998;

c)   Repayment of the Council loan is to be prioritised over any other loans, principally the HEB Land Holdings Ltd loan, and failure to do so will represent a termination event;

d)   Limitations of further facility development at Bruce Pulman Park until the loans are repaid;

e)   Security arrangements for the existing loan arrangement are to be extended to cover the duration of any loan guarantee provided.

48.     Failure to undertake the activities outlined above (para 42) within agreed timeframes can be inserted as a termination event of the loan guarantee, thereby terminating the guarantee arrangement.  This arrangement would also have the effect of terminating of the HEB Land Holding Ltd loan under the termination events clause in the proposed loan agreement between the Trust and HEB Land Holding Ltd.

Security for the Loan Guarantee

49.     As part of the loan documentation implemented in 2014, the lease agreements were varied to include cross-default clauses between the loan and lease agreement.  A General Security Agreement in favour of Council was also registered against the assets of the Trust.

50.     The variations to the lease and General Security Agreement will be reviewed to determine if further amendments are required to extend the period of the cross-default provisions for the duration of the loan guarantee to ensure on-going security to Council.

Risks

51.     Ensuring repayment of the Council’s $4M is paramount, and if the guarantee facility is approved, the legal agreements will be reviewed (and if necessary strengthened) to ensure this occurs.

52.     Failure to approve the loan guarantee facility may result in the Trust seeking assistance directly from Council to complete the facility in accordance with the provisions of the existing lease arrangements.

53.     The Trust has signalled a desire to complete construction of the Indoor Court Centre in readiness for the World Masters Games in 2017.  There are no requirements by World Masters Games organisers for new facilities to be constructed.  Use of existing or newly completed facilities is encouraged.  Therefore, although there is no contractual obligation for the Trust to complete the Indoor Court Centre in readiness for the World Masters Games in 2017, failure to have the facility available may reflect badly on the Trust, Council, city and country as a whole.

54.     Given the existing provisions of the lease agreements which give wide reaching powers to the Trust to amend the plans without reference to Council (in its capacity as lessor), without prohibitions being included in the legal agreements, it is possible that there could be further enhancements to the Indoor Court Centre, or other facilities, which will put further strains on the budgets for the project.

55.     Despite best intentions, project costs for the Trust could increase to a level beyond current or future levels of available funding.

56.     The BPPT could commence other projects that divert funds away from completing the Indoor Court Centre facility, although the intention is to limit this exposure by added conditionality in the legal agreements.

57.     Under the terms of the various agreements relating to the leases and loan, and those that would be put in place for a loan guarantee facility, should a termination event occur that results in the foreclosure of the loan, guarantee and/or leases, the facility at Bruce Pulman Park would revert to Council control and ownership.

Options for the Community Loan Guarantee

58.     There are basically two options available to Auckland Council in respect of this request for a loan guarantee.  These include:

a)    Not approving the loan guarantee request, or

b)    Approving the request.

Not Approving the Loan Guarantee

59.     Not approving the loan guarantee may result in HEB Land Holding Ltd withdrawing its offer to advance the $7M to the Trust preventing or slowing the completion of the final stages of the Indoor Court Centre facility.

60.     Based on past financial results, budgets and general knowledge of the grant funding environment, the Trust is very unlikely to be able to raise the funds needed from any other sources soon enough to enable the development to be completed in time for the World Masters Games in 2017, (although as noted previously, the Trust is not contracted to complete the facility in time for the games).

61.     As noted in paragraph 62 below, the Trust must also obtain Council’s prior written approval before entering into any arrangements to borrow further funds from either third or related parties.

62.     In addition, should the Trust wish to borrow funds from others sources, it is likely that any lender will require security for the loan.  As the underlying land is owned by Council, it will not be possible for the Trust to offer mortgage security to a third-party lender.  Instead, the Trust may again request that Council act as guarantor for the loan arrangement in which case further legal arrangements would need to be implemented and Council would be under contractual arrangements to the bank and have to rely on the Trust fulfilling its obligations under the contracts.

63.     Under the terms of the lease agreements the Trust can also seek assistance directly from Council to help finance the completion of the facility.

Approving the Loan Guarantee as Requested

64.     The 2014 $4M Council loan to the Trust was documented in a comprehensive loan agreement, where the Trust has provided the following undertakings (abbreviated to only show relevant clauses):

9.5 Undertakings:  The Borrower undertakes to the Council that it shall:

(a)     not borrow or incur any other loan, overdraft or other form of borrowing without the prior written consent of the Council;

(e)  provide to the Council all financial and other information in relation to it and its assets, business and activities, including copies of its financial accounts, as reasonably requested by the Council from time to time;

(f)      not grant or agree to grant any charge or security interest in relation to its assets or business without the prior written consent of the Council; 

(g)     not sell, dispose of, transfer, or assign any of its major assets (including any land owned or leased by the

(i)      not enter into any Related Party Transactions unless:

       (i)      Council has consented in writing to the Related Party Transaction or the Related Party Transaction was disclosed to Council prior to the date of this Agreement; or

       (ii)      the Borrower can objectively demonstrate that the Related Party Transaction is on bona fide arms-length terms; and

(j)      if requested, permit the Council (or any authorised officer or agent of the Council) to inspect its premises, financial accounts, documents and records.

9.6 Breach of Undertaking: Without limiting the rights of the Council, the Borrower acknowledges and agrees that in the event of a breach [of] its undertakings in clause 9.5, any money it receives as a result, up to an amount equal to 100% of the amount of the Loan and any interest outstanding, will be held by the Borrower on trust for and payable to the Council.

 

65.     The current request comprises three components:

i)        Approval to borrow further funds;

ii)       Approval to enter into a Related Party Transaction**; and

iii)      Consideration and approval of Council providing a loan guarantee facility in favour of HEB Land Holdings Limited.

** HEB Land Holdings Limited is a related party by virtue of Bruce Pulman being a Director of the company and trustee of Bruce Pulman Park Trust and Manukau Counties Community Facilities Charitable Trust, plus the 100% shareholder, Pulman Trustees Limited, is in turn 100% owned by Mr Robert Bruce Pulman and Mrs Jessie Florence Pulman.

66.     Adequate and suitable security for the loan must be provided by the Trust, although this is likely to be limited to cross-default provisions in the loan and lease agreements and the General Security Agreement currently in place.

Approve the Loan from HEB Land Holding Ltd

67.     As noted earlier in this report, under the terms of the leases, the Trust has the unfettered ability to develop Bruce Pulman Park as it determines at it sole discretion.  This includes both the nature and scale of the developments.  The provisions in the lease agreements provide that where the Trust requires additional funding to complete a development, it can seek assistance from Council to either complete the work or provide funding to enable the work to be completed.  If Council, who is under no obligation to do so, undertakes the work or provides funds, the value of the works/funds shall become a debt owing by the Trust to the Council.

68.     In this instance a related third party is offering to provide the funding necessary to complete the development, on an interest free basis, with repayments of the loan only occurring once the Council loan has been fully repaid or otherwise satisfied.   A copy of the draft loan agreement has been supplied to Council staff to review.  The agreement appears to have been modelled on the Council loan agreement documentation.  If the guarantee is approved, approval of the final form of the loan agreement will be required by Council prior to the document being executed.

69.     If a loan guarantee is approved, further legal agreements to record the transaction will be developed that ensures Council’s first ranking position to be repaid is maintained and prioritised.

Approval of Related Party Transaction

70.     As noted above, the proposed loan from HEB Land Holding Limited is a related party transaction because of the directorships and shareholdings.  The Trust has a record of undertaking related party transactions, and in this instance the company is willing to advance the funds in a situation where a bank may not be able to because of prior Council lending and the limitations of the Trust providing security.

Recommended Course of Action

71.     Council staff having considered the information provided by the Trust are of the opinion that;

i.     The loan from HEB Land Holding Limited to the Bruce Pulman Park Trust for an amount of up to $7M be approved;

ii.     The Related Party transaction between Bruce Pulman Park Trust and HEB Land Holding Limited be approved;

iii.    A loan guarantee facility of up to $4M be provided by Auckland Council in favour of HEB Land Holding Ltd;


 

iv.   The interest rate on the existing $4M community loan being reduced from 5.66% per annum down to 3.66% per annum, noting that in 2016-2017 this represents a saving to the Trust of $80,000.  When added to the annual operational funding of $372,000 the total financial support for operational purposes will total $452,000 in 2016-2017.  Interest savings in subsequent years will provide the basis for discussions on future year operational funding requirements.

v.    The first principal repayment date in respect of the $4M Auckland Council loan being moved from 31 December 2017 to 31 March 2018, if required by the Trust;

vi.   The loan guarantee being condition subsequent on:

The Trust undertaking a review of governance in conjunction with Auckland Council and to reflect the role Bruce Pulman Park plays in the network of recreation facilities across the Auckland region, with the view to having a new agreed governance structure in place by 30 November 2016;

The existing lease agreements be reviewed with the intention of updating them to reflect the changed circumstances of the contracting parties and to reflect the role Bruce Pulman Park plays in the network of recreation facilities across the Auckland region;

Failure to undertake both the review of governance and modifying the lease agreements to the satisfaction of Auckland Council being termination events for the loan guarantee facility.

Local Board views and implications

72.     Due to the continuing development of this particular proposal it has not been possible to seek the input of the Papakura Local Board prior to completion of this report.  A verbal update on the views of the Papakura Local Board can be provided at the committee meeting.

Māori impact statement

73.     Provision of a loan guarantee facility and increased operational funding to the Trust will have little direct impact on Māori.  However the demographic make up of users of Bruce Pulman Park and its facilities would suggest that a large number of the Māori community would be users of the park and would therefore benefit from the completion of the various facilities at the park, including the Indoor Court Centre.

Implementation

74.     If the request to approve the loan from HEB Land Holding Ltd is approved, there are a number of legal matters arising that will need to be comprehensively documented.  Legal Services are currently providing advice on this matter and will be actively involved in all discussions relating to the development of the legal agreements.

75.     The review of governance and the lease arrangements will necessitate Council staff working closely with the Trust to reach agreement on the scope of the review and the extent of the changes to the leases.


 

Attachments

No.

Title

Page

aView

Bruce Pulman Park Trust Loan Guarantee Request

219

bView

Bruce Pulman Park Trust Trading Results to 31 March 2016

221

cView

Manukau Counties Community Facilities Charitable Trust Trading Results to 31 March 2016

223

dView

Bruce Pulman Park Trust Charities Services Summary

225

eView

Manukau Counties Community Facilities Charitable Trust Charities Services Summary

227

     

Signatories

Author

Leigh Redshaw - Strategic Funding Advisor

Authorisers

Kevin Ramsay - General Manager Corporate Finance and Property

Ian Maxwell - Director Community Services

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

Reports Pending Status Update - 21 July 2016

 

File No.: CP2016/14386

 

  

Purpose

1.       To update the committee on the status of Finance and Performance Committee resolutions from July 2015 requiring follow-up reports.

Executive summary

2.       This report is a regular information only report that provides committee members with greater visibility of committee resolutions requiring follow-up reports (Attachment A). It updates the committee on the status of such resolutions. It covers committee resolutions from July 2015 and will be updated for every regular meeting.

3.       This report covers open resolutions only. A separate report will be prepared in future covering any confidential resolutions requiring follow-up reports.

4.       The committee’s Forward Work Programme 2015/2016 is also attached for information (Attachment B).

5.       Arising from the meeting on 19 November 2015 attached is also an Alternate Financing Programme Overview schedule for information (Attachment C).

 

Recommendation/s

That the Finance and Performance Committee:

a)      receive the Reports Pending Status Update report.

 

 

Attachments

No.

Title

Page

aView

Reports Pending Status Update

231

bView

Forward Work Programme 2015/2016

233

cView

Alternate Financing Programme Overview

237

     

Signatories

Author

Mike Giddey - Democracy Advisor

Authoriser

Sue Tindal - Group Chief Financial Officer

 


Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

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Finance and Performance Committee

21 July 2016

 

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

 

That the Finance and Performance Committee:

a)      exclude the public from the following part(s) of the proceedings of this meeting.

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 follows.

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 relevant part of the proceedings of the meeting in public, as follows:

 

C1       Badminton Waitakere - Request to Restructure Community Loan

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

Ground(s) under section 48(1) for the passing of this resolution

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

s7(2)(a) - The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

In particular, the report contains information about private individuals and their dealings with Badminton Waitakere.

s48(1)(a)

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.