Agenda of Finance and Performance Committee

Finance and Performance Committee

19 May 2016

Disposals recommendation report

File No.: CP2016/07834

Purpose

1. This report seeks approval to sell two non-service council owned properties 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 $40 million by 30 June 2016. Capital receipts from the sale of surplus properties will contribute to all Auckland Plan outcomes by providing the council with an efficient use of capital and prioritisation of funds to achieve its activities and projects.

3. The first property presented in this report, 15 Austen Place, Pukekohe, was acquired for a dog pound and a refuse transfer station. Approximately 720m² of this site was not used for the purpose for which it was acquired and remains vacant. This 720m² has been the subject of the rationalisation process, which commenced in August 2015. Consultation with council and its CCOs, iwi authorities and the Franklin Local Board has now taken place. No alternative service uses have been identified for the subject site through the rationalisation process and the feedback received has been supportive of the proposed divestment of this site. Due to this, Panuku recommends divestment of the 720m² vacant part of 15 Austen Place. Site specific detail, including information and feedback gathered through the rationalisation process is contained in Attachment A of this report.

4. The second property presented in this report, 601 Beach Road, Rothesay Bay, is a small landlocked site upon which public bathroom facilities are located. Legal access to this landlocked property is provided via easements from adjoining properties. An adjacent property is being redeveloped and the owners wish to have the easements from its property to 601 Beach Road removed to maximise its commercial redevelopment. To ensure no loss of amenity value to the public, the owners of the adjacent property will provide new public bathroom facilities as part of its commercial development. Once the new public facilities are provided in the adjacent commercial development, 601 Beach Road will no longer be required for public bathroom facilities. The rationalisation process for 601 Beach Road commenced in May 2015. Consultation with council and its CCOs, iwi authorities and the Hibiscus and Bays Local Board has now taken place. Part of 601 Beach Road will be required for a service lane. No alternative service uses have been identified for the balance of this site not required for service lane through the rationalisation process, and the feedback received has been supportive of the proposed divestment of this site. Due to this, Panuku recommends disposal of the balance of this site not required for a service lane. Site specific detail, including information and feedback gathered through the rationalisation process is contained in Attachment B of this report.

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:

i) part of 15 Austen Place, Pukekohe comprised of an estate in fee simple more or less being part Lot 1 Deposited Plan 456707 comprising approximately 720m²(subject to survey) contained in freehold title CFR 591003; and

ii) 601 Beach Road, Rothesay Bay comprised of an estate in fee simple comprising approximately 334m² more or less being Lot 1 Deposited Plan 52743 contained in certificate of title NA3D/1428;

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

Comments

5. Panuku and the Auckland Council’s Corporate Finance and Property team work collaboratively on a comprehensive review process to identify properties in the council portfolio that may be suitable to sell. Once identified as a potential sale candidate Panuku takes the property through a multi stage engagement process.

6. The first phase of the process involves engagement with all council departments and relevant CCOs. The engagement establishes whether a property is needed for a future funded project or whether it must be retained for a clear strategic purpose. This is determined by an expression of interest (EOI) process whereby officers can request that all or part of a property is retained. Alternatively officers may request that the property be encumbered or covenanted as part of the disposal process. If the EOI sets out a robust financial analysis and evidence based rationale to retain the properties, then the EOI is endorsed.

7. If however the reasoning is more subjective a thorough business case is required. An inter-disciplinary steering group comprised of senior managers meets to assess the business cases. This provides an opportunity for properties to be considered in a cohesive and integrated manner by relevant council departments and CCOs.

8. The Heritage Unit is invited prior to the EOI process to flag any sites of particular archaeological merit that need to be assessed further. Panuku also engages with the Closed Landfills and Contaminated Land Response team prior to the EOI process commencing to ensure any possible contamination issues that may be associated with a property are identified.

9. Once a property has been internally cleared of any service requirements, Panuku then consults with Local Boards, Ward Councillors, Mana Whenua and the Independent Maori Statutory Board.

10. All sale recommendations must be approved by the Panuku board before a final recommendation is made to the Finance and Performance Committee.

Consideration

Local Board views and implications

11. Local boards are informed of the commencement of the rationalisation process for specific properties. Following the close of the EOI period, relevant local boards are engaged with. Panuku attend workshops with the relevant local board and provide information about properties being rationalised in its local board area. A report is subsequently prepared for the local board business meeting so that its views can be formalised.

12. If a local board wishes to retain a site, its views are considered by Panuku and if necessary referred to relevant council departments for consideration. The local board may be asked to prepare a business case which sets out the service need that will be met by retaining the site, along with how the service use will be funded. Panuku and relevant council departments or CCOs work with local boards in preparing the business case. The business case is then considered by the cross council steering group. If the business case is accepted and funding is identified, the property is transferred back to the service portfolio. If the business case is not accepted, the business case is included in the report to the governing body for a political decision.

13. The views of the relevant local boards about the subject sites are contained in Attachments A and B of this report.

Māori impact statement

14. 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 based on a contact list which is regularly updated. Each group is provided general property details, including a property map, and requested to give feedback within 15 working days. Contacts are sent reminder notices a week out from the due date, and alerted of the passing of the due date in the week following if no feedback has been submitted. Confirmation of any interest expressed is sent in writing and recorded for inclusion in the disposal recommendation report. A feedback spreadsheet is provided to facilitate responses. Any requests for extensions of a due date are handled on a case by case basis.

15. Panuku’s engagement directs 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.

16. From discussions with our Māori and Strategy Relations team we are developing an understanding of what could amount to a ‘matter of significant cultural relevance’ to Iwi. We are also developing a range of reasonable outcomes that could be employed when such a matter of cultural significance is raised in relation to a potential disposal property. Possible outcomes could include commemoration or physical acknowledgment in the form of plaques or other mutually agreed means of recognition. In the event of any issues of particular cultural significance being raised, Panuku will work with the relevant council departments to assess the merits of any such requests and keeps the interested parties informed along the way.

17. 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.

Implementation

18. As part of the overall review process each property is also legally assessed to see if there are any impediments to sell or if there is a prescribed legal way in which it must be sold. The last stage of the process is triggered once a resolution to sell is obtained. This involves a robust ‘add value’ assessment as part of the development of the final sales strategy. There is specific attention applied to the possible suitability of the site for housing purposes.

Attachments

No.	Title	Page
a View	Part of 15 Austen Place, Pukekohe property information	13
b View	601 Beach Road, Rothesay Bay property information	17

Signatories

Author

Letitia McColl, Senior Advisor Portfolio Review, Strategy and Engagement, Panuku Development Auckland

Authorisers

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

Kevin Ramsay – Acting Group Chief Financial Officer

Finance and Performance Committee

19 May 2016

Te Toa Takitini - Quarter three Māori responsiveness portfolio report

File No.: CP2016/05234

Purpose

1. To report quarter three results for the 2015/2016 Te Toa Takitini Māori Responsiveness Portfolio.

2. To report quarter three update for the Treaty of Waitangi Audit response work programme.

Executive Summary

3. Te Toa Takitini Māori Responsiveness Portfolio monitors and reports on activity and expenditure including Māori transformational shift priorities and co-governance activity.

Māori Transformational Shift Activity

2015/2016 budget

4. In the 2015/2016 financial year, Māori transformational shift programmes, projects, or activities had a previously reported budget of $9,142,000. This figure has now been revised to $9,010,000 after corrections were made to budget information in the last quarter. The corrections are detailed in this report.

Year to date expenditure

5. Year to date (YTD) expenditure for the 2015/2016 third quarter Māori transformational shift activity is $4,034,000 against an YTD budget of $4,343,000. This indicates a variance of $309,000 or seven per cent (reduced from 16 per cent in quarter two). Paragraph 23 provides further detail on this.

6. The key activities that have exhibited significant underspend include:

· Auckland Transport - Māori Wardens programme

· Watercare - iwi engagement on projects

· Papakura Local Board – waahi tapu protection

Year-end tracking

7. The year-end expenditure is tracking towards an underspend of an estimated $1,117,000 (or 13 per cent) of the 2015/2016 budget of $9,010,000.

8. Te Toa Takitini portfolio staff will continue to monitor the remaining quarter and meet with managers with the aim of improving progress on these priorities.

Co-governance/co-management Activity

9. Eight activities totalling $6,036,000 were identified as co-governance or co-management activities for FY 2015/2016, delivering on the priorities agreed in council’s 2015-2025 Long-term Plan (LTP).

10. YTD expenditure for the third quarter co-governance and co-management activity was $2,940,000 against a YTD budget of $4,608,000 - a variance of $1,668,000. The majority of this relates to delays in the development of the Integrated Management Plan for the Tūpuna Maunga o Tāmaki Makaurau Authority, creating delays to capital projects. We anticipate year end expenditure of $5,518,000 for 2015/2016.

Treaty Audit Response work programme

11. The Treaty of Waitangi Audit response work programme sits within the Whai Tika – Effectiveness for Māori programme of Te Toa Takitini.

12. Māori Responsiveness Planning is progressing steadily. Ten Māori Responsiveness Plans are in development and one is ready for sign-off. First stage discussions are also taking place with another seven departments and CCOs. Attachment B provides further information.

13. Te Tiriti o Waitangi Audit Report 2015 has 25 ‘action groups’ covering specific recommendations and closure criteria for them. The Waharoa group, comprised of representatives from Te Waka Angamua, Internal Audit and the IMSB, has determined that two action groups have been fully completed and a number of individual actions within other groups are complete. Further detail about this is provided in the report.

14. The Waharoa group notes that a number of Treaty Audit action groups are nearing completion and should show significant progress by the end of next quarter. These include the Māori Responsiveness Planning, Significance and Engagement Policy, Good Practice Benchmarking and Performance Framework action groups. Attachment C is a register of progress on Treaty Audit actions.

2016/17 Annual Plan Update

15. The 2016/2017 draft Annual Plan budget (year two of the Long-term plan budget) for Māori Transformational Shift priorities is $9,900,000.

16. The Executive Leadership Group (ELG) of Te Toa Takitini meets quarterly to track progress on this portfolio of work and identified the need to re-prioritise some of the LTP Maori Transformational Shift actions for FY 2016/2017.

17. Re-prioritisation is designed to ensure that council’s programmes and activities will achieve real progress on the Auckland Plan goal of ‘significantly lifting Māori social and economic well-being’ and will achieve better outcomes with and for Māori.

18. The re-prioritisation work has identified nineteen new initiatives that include two proposed by the Independent Māori Statutory Board for consideration by the ELG. Total estimated budget required for 2016/2017 exceeds the agreed budget envelope and further work is needed to agree which of these proposals will go ahead in 2016/2017. The ELG meets on 8 June to confirm this.

19. In 2016/2017 the Finance and Performance Committee will receive three reports per year on the Te Toa Takitini portfolio of work.

Recommendation/s

That the Finance and Performance Committee:

a) receive the Te Toa Takitini - quarter three Māori responsiveness portfolio report.

Comments

2015/16 Māori Transformational Shift Activity overview

20. In the 2015/2016 financial year, programmes, projects and activities with a combined budget of $9,010,000 have been identified as Māori transformational shift activity and will contribute to ‘significantly lift Māori social and economic well-being’. In addition, eight activities totaling $6,036,000 have been identified as co-governance or co-management activities for 2015/2016. These activities are delivering on the priorities agreed in council’s 2015-2025 Long-term Plan.

21. The 2015/2016 budget was previously reported as $9,142,000. This figure has been revised to $9,010,000 after corrections were made to budget information in the last quarter. These corrections include:

· Auckland Transport’s dual naming signage capex programme ($50,000) has been removed from the Māori transformational shift activity programme as it was wrongly included in the Long-term Planning process. The delivery of this activity has been incorporated in to Auckland Transports wider signage programme and delivered within each project.

· A correction has also been made in the report to the budget for Māori capacity contracts. This is to address an inconsistency between the budget previously reported of $1,050,000 and the correct budget of $950,000, which is based on 19 contracts at $50,000 each

22. Table one below provides an overview of the Māori transformational shift budget

Māori Transformational Shift Activity	Opex $000	Capex $000	Budget 2015/2016 $000
Whai Rawa – Economic Development	1,125	0	1,125
Whai Painga - Māori Social Well-Being	1,350	0	1,350
Whai Tiaki - Māori Cultural Well-Being	5,532	309	5,841
Whai Tika- Effectiveness for Māori	644	0	644
Whai Tahinga –Treaty Settlement	50	0	50
GRAND TOTAL	8,701	309	9,010

Table One

23. YTD expenditure for the 2015/2016 third quarter Māori transformational shift activity is $4,034,000 against an YTD budget of $4,343,000. This indicates a variance of $309,000 or 7 per cent (reduced from 16 per cent in quarter two).

Māori Transformational Shift Activity		Q3 YTD 2015/2016 $000
Activities	Annual Budget FY16 $ 000	YTD Q3 Budgets $000	YTD Q3 Actuals $000	Variance
Whai Rawa – Economic Development	1,125	870	831	39
Whai Painga - Māori Social Well-being	1,350	605	416	189
Whai Tiaki - Māori Cultural Well-being	5,532 (Opex)	2,472	2,383	89
Whai Tiaki - Māori Cultural Well-being	309 (Capex)	183	188	(5)
Whai Tika- Effectiveness for Māori	644	208	211	(3)
Whai Tahinga –Treaty Settlement	50	5	5	0
OPEX TOTAL	8,701	4,160	3,846	314
CAPEX TOTAL	309	183	188	(5)
GRAND TOTAL	9,010	4,343	4,034	309

Table Two

24. The key activities that have exhibited significant underspend include:

· Auckland Transport - Māori Wardens programme

· Watercare - iwi engagement on projects

· Papakura Local Board – waahi tapu protection

25. For further detail please refer to attachment A.

26. Te Toa Takitini portfolio staff will continue to monitor the remaining quarter and meet with managers with the aim of improving progress on these priorities.

2015/16 Co-governance and co-management overview

27. Co-governance and co-management activities. These activities also deliver on the priorities agreed in Council’s 2015-2025 Long-term Plan and are reported separately from Māori transformational shift activity. Eight activities totalling $6,036,000 have been identified as co-governance or co-management activities for 2015/2016.

28. YTD expenditure for the third quarter co-governance and co-management activity was $2,940,000 against a YTD budget of $4,608,000 - a variance of $1,668,000. The majority of this relates to delays in the development of the Integrated Management Plan for the Tūpuna Maunga o Tāmaki Makaurau Authority, creating delays to capital projects. We anticipate year end expenditure of $5,518,000 for 2015/2016.

Co- governance and co management activity

Opex

Capex

Budget 2015/16

$000

Co-governance-co-management

3,083

2,435

5,518

GRAND TOTAL

5,518

Table Three

Summary of Whai Rawa - Māori Economic Well-being activity

29. The Whai Rawa programme consists of projects and initiatives that contribute to Māori Economic well-being. The narrative below provides highlights from quarter three activity. Further detail of activity and expenditure is located in Attachment A.

Quarter three highlights

· Māori Signature Event -Te Herenga Waka festival successfully delivered

· Waka Development programme – new waka key part of Te Herenga Waka festival

· Māori Economic Growth Forum activities.

· Tourism opportunities

Key priorities for the fourth quarter 2015/2016

· Finalise evaluation of the Tamaki Herenga Waka Festival on Auckland Anniversary weekend 2016 and commence 2017 Festival planning

· Initiate Māori business ecosystem research in partnership with the Independent Māori Statutory Board (IMSB)

· Continue to pursue Māori tourism opportunities

· Māori Economic Forum – ATEED has confirmed that the next Māori Business Growth

workshop will be in June 2016.

Summary of Whai Painga - Māori Social Well-being activity

30. Whai Painga programme consists of projects and initiatives that contribute to Māori social well-being. The narrative below provides highlights from quarter three activity. Further detail of activity and expenditure is located in attachment A.

Quarter three highlights

· Māori sport and recreation plan (draft) Te Whai Oranga o Tāmaki Makaurau, was presented to both the Roopu Manaaki of Active Auckland and One Voice governance group.

· Iron Māori Triathlon Event held 1^st and 2^nd April.

· Māori Housing Policy/Whare for Life - Progress has been made in the delivery of a housing policy and research programme to better understand the issues associated with Māori housing in Tāmaki Makaurau, assess the current range of council interventions, and develop advice for the council on what other interventions, if any, council might want to consider in order to address these issues.

Key priorities for the fourth quarter 2015/2016

· Recruitment of an FTE by Auckland Transport to deliver on Māori Road Safety initiatives focused around education programmes

· Progress Early Years Project

· Māori Housing Policy/Whare for Life - continue to develop intervention options

· Progressing Māori housing policy review to meet programme milestone.

· Confirm the inclusion of the three Whai Painga Business Cases in the 2016/2017 Annual Plan process:

o Early Years

o Whare for Life

o Review of Māori Housing Policy

Summary of Whai Tiaki- Māori Cultural Well-being activity

31. The Whai Tiaki programme consists of projects and initiatives that contribute to Māori cultural well-being. The narrative below provides highlights from quarter three activity. Further detail of activity and expenditure is located in attachment A.

Quarter three highlights

· mana whenua kaitiaki rangers - of the eight (four council and four DOC) mana whenua kaitiaki rangers that undertook training as summer rangers, six have found ongoing employment in kaitiaki work

· Auckland Design Office – Kaihautū Tākina ngā tohu Ao Māori Principal Specialist - Mana Whenua Urban Design employed.

· Waitangi Day events – Hayman Park, Takaparawhau, Hoani Waititi Marae

· Para Kore ki Tāmaki-Zero Waste Marae - Marae waste diversion rate for 11 marae over a three month period shows an 83 per cent diversion of waste to landfill (89,340 litres)

· Māori Public Art - project with Ngāti Tamaoho progressing.

· Māori sites of significance - Eighty four new Māori sites of significance have been identified for assessment with 11 iwi as at the end of quarter three

· Panuku has engaged a mana whenua research resource to compile amalgamated synopsis of feedback previously supplied by iwi

· Hui held in February to invite applications for Cultural initiatives (Marae development) grants for 2015/2016. Applications closed 15^th April with assessment and notification beginning of May. Ongoing monitoring of 2014/2015 funded projects.

· Progressing with work that includes incorporating cultural wellbeing indicators work with outcomes assessment and gap analysis.

· Programme of work within the kaitiaki theme, suitable for collaborative partnerships (governance/ design and management / delivery) included as part of Regional Kaitiaki Ranger new initiative proposal in 2016/2017 Annual Plan.

Key priorities for the fourth quarter 2015/2016

· Continue with work incorporating cultural wellbeing indicators into outcomes assessment and gap analysis.

· Continue establishing a Whai Tiaki Community of Practice to enable sharing of knowledge, resources, addressing performance issues. This work is closely linked with the development on the Māori Engagement Hub Proposal and the Māori information Portal in the Whai Tika Portfolio.

· Closing remaining capacity contracts.

· Maramataka Toi Māori – Matariki festival June 2016

· Place making initiative in Pukekohe with Ngāti Tamaoho. Art project – complete by Matariki festival June

· Cultural Initiatives – first tranche of marae grants announced.

· Māori Sites of Significance – further progress in identifying and assessing sites

· Confirm the inclusion of the four Whai Tiaki Business Cases in the 2016/2017 Annual Plan process:

o Regional Kaitiaki Forum

o Beneath our feet

o Cultural wellbeing Indicators

o Regional Kaitiaki Ranger Programme.

Summary of Whai Tika - Effectiveness for Māori

32. The Whai Tika programme is made up of two distinct workstreams the Treaty of Waitangi Audit response work programme and the Effectiveness for Māori workstream.

33. Further detail of activity and expenditure is contained in attachment A.

Quarter three highlights

Effectiveness for Maori work programme

34. Further project planning for the following initiatives:

· Māori Responsiveness Plans

· Māori engagement hub.

· Increasing Diversity and Leadership programme.

· Learning application.

35. Learning and development activities that build council capability to respond effectively to Māori have been provided, including: e-learning modules; group learning workshops; and role-specific training for elected members, senior managers, technical/professional roles, and Māori specialist roles.

36. A Brand Style Guide and templates for Māori responsiveness communications and collateral are being developed and will be made available across the council group. Communications and Engagement have completed some design templates and are working in conjunction with council’s brand agency incorporating the use of Māori design elements.

Treaty Audit Response Work Programme

Maori responsiveness plans

37. Māori Responsiveness Planning is progressing steadily. Ten Māori Responsiveness Plans are in development and one is ready for sign-off. First stage discussions are also taking place with Auckland Transport, Watercare Services, Resource Consents, Community and Social Policy, Animal Control and Customer Services. Attachment B contains further detail on Māori Responsiveness Plans status. Attachment B provides further information.

38. Te Waka Angamua staff are working with units and departments, guiding them through the development of their Māori Responsiveness Plans. With recent additional guidance provided through an improved toolkit a number of departments are moving into the formal sign off phase. We expect that the Māori Responsiveness Plans for Arts Community and Events and Communications and Engagement will be completed by the end of next quarter.

39. To better assist the development of Māori Responsiveness Plans, Auckland council’s Legal department has developed a legal template. This is a preformatted statutory resource that can be applied to all Māori Responsiveness Plans.

Closure of Treaty Audit actions

40. Te Tiriti o Waitangi Audit Report 2015 includes a “Summary of Recommended Actions”, in which 25 action groups are contained; these are linked to specific recommendations of the audit report. Each action has a set of closure criteria, when these are met the Waharoa group will jointly agree to close the action (and the linked Treaty Audit Recommendation). When all actions within a group are closed, the action group can be closed.

41. The Waharoa group, comprised of representatives from Te Waka Angamua, Internal Audit and the IMSB, has determined that two action groups have been completed. Smaller projects within other action groups have also been completed. These relate largely to the Treaty Audit recommendations about the Māori Responsiveness Planning Toolkit. During quarter three some activities were referred back to owners with minor requirements to address before being signed off for closure.

Action Groups

Open

Closed

Good progress made against action group Māori Responsiveness Planning. Two individual actions within the action group have been completed five are near completion.

The Hearings Policy action group (nine) and Governance Statement action group (three) are closed.

Table Four Te Tiriti O Waitangi Audit Report 2015 progress to date

42. The Waharoa group notes that a number of Treaty Audit action groups are nearing completion and should show significant progress by the end of next quarter. These include the Māori Responsiveness Planning, Significance and Engagement Policy, Good Practice Benchmarking and Performance Framework action groups. Attachment C is a register of progress on Treaty Audit actions.

Key priorities for the fourth quarter 2015/2016

· The Treaty Audit Response work programme

· Māori Responsiveness Plans and review process

· Performance Framework.

Summary of Whai Tahinga -Treaty of Waitangi Settlements activity

43. The Whai Tahinga programme Māori transformational shift activity supports Treaty settlement activity and is a multi-faceted programme of work. The narrative below provides highlights from quarter three activity. Further detail of activity and expenditure is located in attachment A.

Quarter three highlights

· Ongoing engagement with Crown and mana whenua groups in Treaty settlement negotiations where Auckland Council interests are involved.

· Draft Tūpuna Maunga o Tāmaki Makaurau Integrated Management Plan released for consultation

· Kaipara Moana Working Party (with Northland Regional Council, Kaipara District Council and Whangarei District Council) established work programme for anticipated Kaipara Harbour negotiations

· Further engagement between Manukau Harbour Forum and mana whenua, building relationships and common understanding of environmental and other issues affecting Manukau Harbour.

· Ongoing work of co-governance entities such as Parakai Recreation Reserves Board, Ōrākei Reserves Board and others.

Key priorities for the fourth quarter 2015/2016

· Finalisation of Tūpuna Maunga o Tāmaki Makaurau Integrated Management Plan

· Kaipara Moana Working Party – engage pro-actively with Ngāti Whātua and Crown on harbour negotiations as required.

· Facilitate further engagement between Manukau Harbour Forum and mana whenua groups

· Continue to pursue opportunities for collaboration with post-settlement and mana whenua groups in Treaty settlement negotiations with Crown.

· Ongoing work across council family on development and implementation of co-governance and partnering relationships with mana whenua groups, including in natural resources space.

· Development of internal information resource on Treaty settlements in the Auckland Council region.

· Update Treaty-settlement information in non-statutory layer of Unitary Plan viewer.

Consideration

Local Board views and implications

44. Local boards through their advisors have been consulted in the identification of local board Māori transformational shift activity. Local boards will be included in the business partnering process to support the implementation of the monitoring and reporting system Māori transformational activity.

Māori impact statement

45. This report provides information on the quarter three activities for 2015/2016 identified as Māori transformational shift activity. This report also provides information on the quarter three activities identified as co-governance or co-management. These activities are delivering on the priorities agreed in council’s 2015-2025 Long-term Plan.

46. The Treaty of Waitangi Audit response work programme enables the council to strengthen their responsiveness to Māori through targeted actions and improvements.

Implementation

47. Te Waka Angamua and Finance staff to work with business owners of projects that have not fully utilised forecasted budgets to improve progress.

48. ELG confirmation of Maori Transformational Shift priorities for 2016/2017 on 8 June.

Attachments

No.	Title	Page
a View	Te Toa Takitini Activity and Expenditure	33
b View	Māori Responsiveness Plans Status	49
c View	Treaty Audit Register	51

Signatories

Author

Shane Cook - Kaihautu Whakatuturu Puni - Senior Maori Effectiveness Advisor

Authorisers

Johnnie Freeland - Paearahi Matua - Manager

Phil Wilson - Governance Director

Kevin Ramsay – Acting Group Chief Financial Officer

Finance and Performance Committee

19 May 2016

Quarterly Report on Non-Rateable property rating treatment

File No.: CP2016/07247

Purpose

1. To inform the Committee on the programme of work to standardise the rating treatment of non-rateable properties across Auckland.

Executive Summary

2. Schedule 1 of the Local Government Rating Act (2002) recognises categories of land to be given a non-rateability status. This review is being conducted to ensure that we have consistently applied this legislation across Auckland and rated commercial parts of non-rateable land separately where appropriate.

3. A high-level review of non-rateable properties identified a number of possible issues that require further analysis.

4. There are over 10,000 properties to be reviewed. A programme of work has been put in place including a list of what checks are going to be completed.

5. The table below shows the work which needs to be undertaken and what has been completed so far, along with the nett difference in rates after adjustments made. As at 18 April 2016, 2,384 properties have been reviewed with two confirmed as rateable and 380 requiring more detailed investigation.

Legacy	Non-rateable properties	Total reviewed	Confirmed non-rateable	Confirmed rateable	Require more investigation	Balance for review	Nett $ rates changes
ACC	3,816	0	0	0	0	3,816	-
MCC	2,495	186	51	0	135	2,309	-
NSCC	1,770	855	805	2	50	915	310,000
WCC	1,123	555	449	0	106	568	-
RDC	1,412	788	699	0	89	624	-
Total	10,616	2,384	2,004	2	380	8,232	310,000

6. Due to the work required for the NewCore implementation and other constraints on our rates and valuations team, the programme of work is currently scheduled to be completed by February 2018. We will be in a better position to advise whether this programme can be accelerated after the categories due to be completed by 30 June 2016 have been finalised.

Recommendation/s

That the Finance and Performance Committee:

a) receive the report on the progress of the review of non-rateable land rating treatment.

Comments

7. A high-level review of non-rateable properties identified a number of possible issues that require further analysis including:

· reserves and other land in private ownership requires verification of non-rateable status

· DHB/university and schools/council properties require verification that shops, banks etc within them are treated as fully rateable

· government land requires verification of use to confirm whether rateable/non-rateable

· churches require verification that areas not used primarily as places of worship are treated as rateable

· different rating treatment of QE2 conservation land - rateable with 100% remission in some former council areas, non-rateable in others

8. The following table shows the timeline for the work programme:

Property Type	Review completed by
Non-rateable land in private ownership	30 June 2016
DHB/university/school/council properties	30 June 2016
Land in Defence Force ownership	30 June 2016
QE2 conservation land	30 June 2017
Government land	30 June 2017
Churches	30 June 2017
All other non-rateable properties	28 February 2018

9. Over 10,000 properties need to be reviewed. Therefore, a risk-based approach is being taken. Physical inspections by valuers will take place if there are anomalies in initial checks or for very high value properties (including all defence land).

10. Properties which require physical inspections need input from a senior valuer and our legal team which increases time spent and therefore costs (e.g. the Devonport Naval Base took ten days senior valuer time plus one day senior solicitor and half a day administration time - Naval Base capital value approx. $270 million). Costs of time spent by staff is approximately $5,000.

11. We have a team of three working on initial checks to determine if an inspection or further investigation is required.

12. A quarterly report will be provided to the Finance and Performance Committee on progress.

13. There will be cases where a property has both rateable and non-rateable components. If a property (or a portion of) that was classified as non-rateable is found to be rateable, the council can recover rates from the beginning of the current rating year. If a property (or a portion of) that was classified as rateable is found to be non-rateable, the council is liable to refund rates paid for the previous five rating years.

14. A communication plan has been put in place to liaise with impacted ratepayers.

15. The Rates Team is working closely with the Policy Team and Customer Services to ensure alignment and a standardised approach.

16. The table below shows the work which needs to be undertaken and what has been completed so far, along with the nett difference in rates after adjustments made. As at 18 April 2016, 2,384 properties have been reviewed with two confirmed as rateable and 380 requiring more detailed investigation

Legacy	Non-rateable properties	Total reviewed	Confirmed non-rateable	Confirmed rateable	Require more investigation	Balance for review	Nett $ rates changes
ACC	3,816	0	0	0	0	3,816	-
MCC	2,495	186	51	0	135	2,309	-
NSCC	1,770	855	805	2	50	915	310,000
WCC	1,123	555	449	0	106	568	-
RDC	1,412	788	699	0	89	624	-
Total	10,616	2,384	2,004	2	380	8,232	310,000

Consideration

Local Board views and implications

17. Local Board views have not been sought as the recommendations relate to financial obligations of the council and not a local board.

Māori impact statement

18. The rules for rating Māori customary land, land that is set apart under section 338 of Te Ture Whenua Māori Act 1993, and Māori freehold land are more complex than for general land. Staff are undertaking a separate review of Māori land data that will be completed by 30 June 2018.

19. A communication plan has been put in place to liaise with impacted ratepayers.

Implementation

20. There will be cases where a property has both rateable and non-rateable components. If a property (or a portion of) that was classified as non-rateable is found to be rateable, the council can recover rates from the beginning of the current rating year. If a property (or a portion of) that was classified as rateable is found to be non-rateable, the council is liable to refund rates paid for the previous five rating years.

Attachments

There are no attachments for this report.

Signatories

Author

Deborah Acott – Manager Rates and Valuations

Authorisers

Sharmaine Naidoo – Head of Transaction Services

Sue Tindal - Group Chief Financial Officer

Finance and Performance Committee

19 May 2016

Auckland Council Investments Limited debt to equity conversion

File No.: CP2016/08784

Purpose

1. To request approval for Auckland Council to agree to release a debt owed to it by Auckland Council Investments Limited (ACIL) in exchange for the issue to it of further shares in ACIL (debt capitalisation).

2. To request Auckland Council’s approval, as shareholder of ACIL, to ACIL’s conversion of parent debt to equity and issue of the resulting shares to Auckland Council.

Executive Summary

3. ACIL has two wholly owned subsidiaries (Airport Shares (Auckland) Limited (ASAL) and Airport Shares (Manukau) Limited (ASML)) that collectively hold council’s 22.4% stake in Auckland International Airport Limited (AIAL).

4. Manukau City Council established the subsidiary shareholding structure for financing reasons, which Auckland Council inherited. A subsidiary was created by statute to hold Auckland City’s AIAL shares to replicate the Manukau City financing arrangement. As a result of this structure there are debts owing from ASAL and ASML to ACIL, and from ACIL to Auckland Council.

5. The financing structure was not implemented in respect of ASAL’s AIAL shares and the ASML financing arrangement expired in September 2015 and the subsidiary structure is now redundant. Therefore, it would be efficient for ACIL to directly hold the AIAL shares to reduce on-going administrative and compliance costs.

6. The preferred option for winding up the subsidiaries is to amalgamate them into ACIL via a short-form amalgamation under the Companies Act 1993 (Act).

7. A specific resolution or decision from council is not required as the proposed amalgamation:

a. will not transfer ultimate ownership or control of the shares in AIAL to or from council

b. can, under the Act, be approved by the boards of ACIL, ASAL and ASML without shareholder approval.

8. The ACIL, ASAL and ASML boards have resolved for the amalgamation to proceed on 31 May 2016.

9. Following the amalgamation, there will be a debt of $299 million owing from ACIL to council (remaining from the expired finance structure), which is no longer required. It is proposed that after the amalgamation this debt from ACIL to Auckland Council be capitalised by council accepting shares in ACIL in exchange for releasing the debt.

10. Note that the amalgamation and debt conversion was discussed at the Finance and Performance Committee workshop on Thursday, 28 April 2016.

Recommendation/s

That the Finance and Performance Committee:

a. note that Airport Shares (Auckland) Limited and Airport Shares (Manukau) Limited will be amalgamated into Auckland Council Investments Limited (ACIL) and that the amalgamation does not require any consultation by Auckland Council, nor any Governing Body decision

b. approve the conversion of the $299 million owed to council by ACIL (debt) into ACIL equity and accept the resulting issue of shares from ACIL

c. provide the shareholder approvals required under the Companies Act 1993 to enable ACIL to convert the debt to equity and issue the resulting shares to Auckland Council

d. authorise the Chief Executive to sign all documentation and take any other actions on behalf of council in the Chief Executive’s discretion required to facilitate and effect the above amalgamation and debt capitalisation transactions.

Comments

11. Prior to amalgamation, Auckland City and Manukau City Councils each held shares in Auckland International Airport Limited (AIAL), with Manukau’s shares being held through a subsidiary to accommodate its financing arrangements (financing structure).

12. On formation, Auckland Council inherited Auckland City’s AIAL shares, the Manukau subsidiary holding Manukau’s AIAL shares and Manukau’s financing structure. A subsidiary was created by statute to hold Auckland City’s AIAL shares. The Auckland Council Investments Limited (ACIL) structure is depicted below.

13. The financing structure was not implemented in respect of ASAL’s AIAL shares and in September 2015 the ASML financing structure expired, making both ASAL and ASML redundant. Therefore, it is now for efficient for ACIL to directly hold the AIAL shares directly to reduce on-going compliance and administrative costs of holding AIAL shares.

14. The preferred option for winding the subsidiaries up is to amalgamate them into ACIL via a short form amalgamation under the Companies Act 1993. This will effectively make ACIL the owner of the AIAL shares.

15. A specific resolution or decision from council is not required to effect the proposed amalgamation, which will not transfer ultimate ownership or control of the shares in AIAL to or from the council, as it only involves the amalgamation of two wholly owned subsidiaries into another wholly owned subsidiary. The amalgamation will not trigger any tax or compliance issues. Specifically, Legal Services has confirmed that:

a. there is a technical change in the ownership of a strategic asset (the AIAL shares) at an intermediate shareholder level, but not in the ultimate ownership and control of that asset, which remains with council through ACIL (unchanged)

b. no consultation is required under council’s Significance and Engagement Policy

c. the amalgamation is not a major transaction under Council’s Accountability Policy - it is an operational matter for the board of each of ACIL, ASAL and ASML, and no Governing Body approval or decision is required (nor is the amalgamation required to be described in the council’s Long-term Plan)

d. the amalgamation is consistent with council’s Auckland Airport Shareholding Policy.

16. The ACIL, ASAL, and ASML boards have resolved for the amalgamation to proceed on 31 May 2016.

17. There are currently debts owing from ACIL to council remaining from the expired finance structure or held for future structures of $299 million.

18. Following the amalgamation it is proposed that the debt from ACIL to Auckland Council be capitalised by council accepting shares in ACIL in exchange for releasing the debt. This capitalisation and release of debt requires council approval (as lender). Council must also approve the capitalisation and issue of shares as the shareholder of ACIL.

Consideration

Local Board views and implications

19. Local boards were not consulted on this report as this is an administrative matter and not specific to a particular local board.

Māori impact statement

20. An administrative matter not significant to Māori.

Implementation

21. Auckland Council accepting equity for the release of debt in ACIL will happen post the amalgamation of ACIL and its subsidiaries ASML and ASAL but before 30 June 2016.

Attachments

There are no attachments for this report.

Signatories

Author

Andrew John - Treasury Funding Manager

Authorisers

Andrew John – Acting Treasurer & GM Transaction Services

Kevin Ramsay – Acting Group Chief Financial Officer

Finance and Performance Committee

19 May 2016

Auckland Council Performance Report for the period 1 July 2015 to 31 March 2016

File No.: CP2016/08120

Purpose

1. This report provides an overview of the Auckland Council parent performance results for the period 1 July 2015 to 31 March 2016.

Executive Summary

2. The performance results presented in this report are for the Auckland Council parent, not the group. The group financial results will be presented to the Finance and Performance Committee at the June 2016 meeting.

3. The report includes an overview of the highlights and achievements in the key areas to achieve organisational objectives. There are a range of highlights and achievements over the quarter, including the following:

· Auckland received a Special Mention in the prestigious Lee Kuan Yew World City Prize 2016, which was in recognition of the region’s success in “overcoming its planning challenges faced over the past 20 years, notably through a highly integrated and innovative governance model”.

· Forty-eight new Special Housing Areas (SHAs) within Tranches 9 and 10 have been approved by the council's Governing Body. This brings the total number of SHAs to 154, with a potential yield of 55,757 sites and dwellings.

· The Sculpture in the Gardens exhibition attracted more than 320,000 visitors to Auckland Botanic Gardens over the summer months.

Performance measure results

4. In this quarter, we are reporting results on 57% of the total number of LTP measures. The remaining performance measures are dependent on annual surveys (31%) or data that is collected once per year (12%).

5. The nine month results show that 68% of the targets were achieved, 7% substantially achieved and 25% were not achieved. The majority of measures that did not achieve the target are within the regulatory space, where activity volumes have increased significantly since last year.

6. The report includes information about the year-end outlook for performance measure results. This is indicative, based on current information and work plans over the rest of the financial year. The overall year-end outlook is slightly improved compared to results reported to date.

7. The Internal Audit department have been working with business units, and systematically reviewing and testing underlying business processes that produce the information used to report against the performance measures. This work is substantially complete. No significant unresolved issues remain from the review work completed to-date.

Financial performance results

8. The financial performance results provide an indication of how the organisation is performing against the budget and associated financial risks. The third quarter net operating financial results are largely on track compared to budget, with a $3 million favourable variance to budget.

9. Capital delivery performance is largely on track, with a $281 million capital expenditure completed to date. There are, however, some delays being experienced in the commercial property and community facilities project portfolios.

10. Treasury management performance is included in the report. Total gross debt of $6.8 billion aligns to LTP projections. The average funding costs of debt is tracking in line with the budgeted levels.

Recommendation/s

That the Finance and Performance Committee:

a) receive the Auckland Council Performance report for the period 1 July 2015 to 31 March 2016.

Comments

11. This report provides an overview of the Auckland Council parent performance results for the period 1 July 2015 to 31 March 2016. The group financial results will be presented to the Finance and Performance Committee in June 2016.

Highlights and achievements

12. Key highlights and achievements for the third quarter are summarised here. These are sorted by the service delivery themes as expressed in the LTP.

Auckland development

13. Forty-eight new Special Housing Areas (SHAs) within Tranches 9 and 10 have been approved by the council's Governing Body. This brings the total number of SHAs to 154, with a potential yield of 55,757 sites and dwellings.

14. The central government confirmed its funding commitment to the City Rail Link, which will allow the main works to begin in 2018.

15. The Auckland Transport Alignment Project foundation report was publicly released on 19 February. It outlines Auckland’s current and future transport challenges, and how the transport system needs to develop to meet the region’s needs. It also sets out how possible transport projects, services and policies will be evaluated in the next stages of the project.

16. Auckland received a Special Mention in the prestigious Lee Kuan Yew World City Prize 2016. The advisory letter noted Auckland’s success in “overcoming its planning challenges faced over the past 20 years, notably through a highly integrated and innovative governance model”.

17. Consultation commenced with those involved in designing, building or constructing mixed-use developments for Auckland to create a Mixed Use Design Guide for the Auckland Design Manual.

18. The Private Plan Change to rezone Queen Elizabeth Square has been approved. The request sought the rezoning of QE Square land so that the public open space and road provisions are changed to City Centre Zone to allow development.

Environmental management and regulation

19. Work experience volunteers worked with Animal Management to contact all owners of known unregistered dogs in the Manukau area. They made 3,786 calls to dog owners, resulting in 241 dogs being registered. This has had a positive impact on revenue and helped to bring the database up to date.

20. New fees were adopted by the Governing Body to recover costs associated with the various functions performed under the Food Act 2014. The Act and the new fees provide incentives for businesses to be compliant, which will result in reduced verifications and less costs.

21. After surveying 100 English-speaking cities around the globe on how realistic their civil emergency planning is, Dr Allan Bonner from the University of Toronto Crisis Management has described Auckland as having a “stand-out civil emergency plan that other global cities should learn from”.

22. The new inorganic collections service started in February 2016 and has been rolled out across the region. Currently, the number of households booking an inorganic collection is 15 per cent of all eligible households.

23. Animal Management’s second Doggy Speed Dating event at Victoria Park attracted around 2000 people and resulted in all dogs being adopted. Extensive media coverage further promoted adoption from Auckland Council animal shelters, with a large number of people contacting the shelters.

24. The Retrofit Your Home programme celebrated its 10,000th home insulated. The voluntary programme delivers Auckland residents and ratepayers financial assistance, advice and information to assist in creating improved sustainable home environments.

25. Two plan variations (6 Flat Bush and 8 Hingaia) have been approved to rezone approximately 257 hectares of land from Future Urban and Countryside Living zone to Mixed Housing Urban, Mixed Housing Suburban and Neighbourhood Centre zone. The plan variations will facilitate development of 3400 sites.

26. Funding was approved for 29 applications to the Waterway Protection Fund. These grants focus on incentivising private landowners to improve protection of waterways.

27. The $20 million Te Auaunga Awa (Oakley Creek) stormwater project has received resource consents. The project will deliver flood mitigation, amenity and ecosystem, and other community services outcomes, and is on track to commence this calendar year.

Parks, community and lifestyle

28. The Sculpture in the Gardens exhibition attracted more than 320,000 visitors to Auckland Botanic Gardens over the summer months.

29. Auckland International Cultural Festival celebrated Auckland’s diversity with over 12,000 visitors, 20 per cent more than in 2015.

30. The inaugural Waikumete Cemetery Open Day attracted over 2000 visitors, who were given a unique opportunity to go behind the scenes to find out how a cemetery works and take part in a variety of walks, talks and demonstrations.

31. Waitangi Day was celebrated across Auckland, with estimated attendances of 4000 for Waitangi Day Family Celebrations in Hayman Park, 10,000 for Waitangi @ Waititi at Hoani Waititi Marae in Glen Eden, and 7000 for Waitangi Day 2016 at Takaparawhau (Bastion Point).

32. A record number of people attended Auckland Lantern Festival at the Auckland Domain. This was the first time the festival had been held in the domain and positive feedback has been received. City Parks Sanitation event management team provided effective rubbish collection for the festival, focusing on waste minimisation with an emphasis on recycling and sorting at source.

33. Hundreds of campers flocked to 44 campgrounds for the Big Campout, celebrating 50 years of regional parks.

34. Music and Movies in Parks concluded at Easter weekend. In total nearly 80,000 Aucklanders visited a local park to enjoy music or movie screenings. Compared to 2015, attendance was up 30 per cent for music and 70 per cent for movies.

35. Auckland Libraries’ Dare to Explore summer reading programme was a huge success, with 12,265 registrations, up 26.8 per cent on last year. The campaign resulted in 1553 new members signing up with libraries.

36. Pasifika, Chinese New Year and Pride Week were celebrated at Auckland Libraries across the region with themed story times, events and workshops.

37. Leisure’s holiday programmes were well attended this year. 13,416 children participated, with attendance 11 per cent ahead of last year and at capacity for the summer season.

38. Auckland Council hosted an event to launch a range of sport- and recreation-related reports. The research includes adult participation figures from Sport NZ’s latest Active NZ Survey, which show that 78 per cent of Auckland adults take part in sport and recreation in any given week (compared with 74 per cent nationally). The research also shows that sport and recreation contributes $1.7 billion per annum to the Auckland economy – 2.2 per cent of regional GDP.

39. An additional 217 hectares of land has been added to the regional parks portfolio as a result of consent conditions resulting from subdivision and the subsequent vesting of land to the council at Te Arai North. This brings the total area of Te Arai Regional Park to approximately 300 hectares.

40. Auckland Domain Master Plan consultation was carried out through multiple engagement channels, generating high interest in the media and online.

Governance and support

41. Release to the relevant stock exchanges of the half-year financial report for the Council Group, with a clear review opinion issued by the Auditor-General.

42. The council successfully issued a four-year, $250 million retail bond on 30 March 2016.

Performance measures

43. For each of the activities delivered by the council, the LTP includes level of service statements and associated performance measures. This section provides interim results showing how we are tracking on the performance measures for the third quarter ending 31 March.

44. The performance measures included in the 2015-2025 LTP changed significantly from the previous LTP. The 2015/2016 Annual Report will be the first time that the council will report back externally against the performance measures as contained in the LTP. A number of the measures are new. The external auditors will audit and issue an audit opinion on the council’s reported performance against the LTP measures.

Internal Audit

45. In the previous quarterly performance report to this committee, we reported that business units are working to put robust systems in place to ensure quality results are reported against these measures.

46. To this end, Internal Audit has been working with business units, and systematically reviewing and testing underlying business processes that produce the information used to report back against the performance measures.

47. The purpose of this work is to provide comfort to the external auditors that underlying business processes have integrity i.e. the right controls are in place and operating, and will provide assurance that the information being produced and reported is complete and accurate.

48. Underlying systems for all measures are being reviewed, with the exception of Building Consents (“percentage of building consent applications processed within 20 days”). This is due to the fact that the external auditors review and test underlying systems for this measure every year. Building consent processes are also subject to external review by IANZ every two years.

49. Internal Audit’s work is substantially complete. As at the date of this report, measures remaining to be reviewed relate to Libraries, and year-end survey measures that are coordinated by the Communications and Engagement department.

50. In summary, no significant unresolved issues remain from the review. Where issues have been identified they have been rectified by the business unit at the time of the review.

51. The results of Internal Audit’s work will be formally reported to the Audit and Risk Committee.

Year-to-date results

52. The performance results presented here represent the performance measures with results available to date. In this quarter, we are reporting on 57% of the total number of LTP measures. The remaining results are dependent on annual surveys (31%) or data that is collected once per year (12%).

53. This report includes information about the year-end outlook for performance measures. This is indicative, based on current information and work plans covering the rest of the financial year. The overall year-end outlook is a slightly improved result compared to results reported to date.

54. Results show that 40 measures (68%) achieved the targets set, four measures (7%) achieved a result close to target (termed ‘substantially achieved’), and 15 measures (25%) did not achieve their targets.

55. The majority of measures that did not achieve the targets are within the regulatory space, where activity volumes have increased significantly since last year.

56. There is high demand for regulatory services, with ever-increasing pressure from other territorial local authorities and industry for technical resources. Plans are currently in place to mitigate the impact of this – a remuneration review of technical staff has been completed (to align with market), overflow contracts are in place with Wellington City Council and Porirua City Council, and there has been reallocation of our staff resources to key pressure points around the Auckland region.

57. The next graphs provide a summary of key performance measures for the quarter. Further detailed information can be found in Appendix 1.

58. The symbols below are used to summarise the results. These align with the symbols used in the Annual Report.

Achieved	Substantially achieved	Not achieved but progress made	Not achieved

59. Percentage of registered food premises graded annually

60. Percentage of high-risk alcohol premises inspected annually

61. Percentage of urgent animal management complaints such as dog attacks responded to within one hour

62. Percentage of noise complaints responded to within 30 minutes for urban areas or 60 minutes for rural areas

63. Number of dwellings and sites consented towards Auckland housing targets

64. Percentage of building consent applications processed within 20 days

65. Percentage of non-notified resource consent applications processed within 20 working days

66. Percentage of notified resource consent applications processed within 70 working days

67. Domestic kerbside refuse (kilograms per capita per annum)

68. The median response time (in hours) to attend a flooding event, from the time that Auckland Council receives notification to the time that service personnel reach the site

69. Facility utilisation – utilisation at peak times for council-managed community centres and venues for hire

70. Facility utilisation – utilisation at off-peak times for council-managed community centres and venues for hire

71. Percentage of community facilities bookings used for health and wellbeing related activity

72. Number of visits to library facilities per capita

73. Number of library items borrowed (millions)

74. Rolling 10-year return for diversified financial assets portfolio, compared to reference portfolio

Financial performance results

75. This section provides an overview of the financial performance results for the council for the nine months ended 31 March 2016.

$millions	YTD Actual	YTD Revised Budget	YTD Variance	FY Revised Budget	FY Annual Plan	YE Out- look
Operating revenue	330	341	(11)	518	513
Operating expenditure	1,507	1,526	19	2,044	2,027
Net operating expenditure	1,177	1,185	8	1,526	1,514
Rates revenue	1,578	1,583	(5)	1,580	1,584
Net operating surplus/(deficit)	401	398	3	54	70
Net non-operating revenue/ (expenditure)	(395)	(149)	(246)	(275)	(275)
Net surplus/(deficit)	6	249	(243)	(221)	(205)

76. Year-to-date (YTD) results: The overall result shows a surplus of $6 million, which is $243 million unfavourable compared to the YTD budget. The net operating result included in this of $401 million is $3 million favourable compared to budget.

77. The full rates generation income is recognised at the beginning of the year due to the revenue recognition requirements of the current accounting standards (International Public Sector Accounting Standards). This early revenue recognition of rates revenue results in a large surplus at the beginning of the year, which reduces as the year progresses.

78. Operating revenue: The overall result to date is $11 million (3%) unfavourable to budget. Losses (non-cash) incurred on the Diversified Financial Assets (DFA) portfolio due to a downturn in global markets have been partially offset by additional dividend income, higher regulatory services revenue and property rental revenue.

79. Operating expenditure is $19 million (1%) favourable to budget. This is mainly due to expenditure expected to be incurred later than originally planned across a number of areas.

80. Rates revenue is slightly below budget, mainly due to lower penalty income than budgeted.

81. Non-operating revenue/expenditure is $246 million unfavourable compared to budget, which is mainly due to accounting (non-cash) adjustments related to fair value of treasury derivatives portfolio together with lower development contributions income than budgeted. This is offset partially by higher vested assets revenue, and underspend in capital funding to CCOs largely due to timing delays.

82. Net operating performance results by theme

The next table provides a split of the net operating result by each of the LTP themes.

The net operating results presented by theme shows YTD underspends across all the themes except for ‘Governance and support’. The underspends are largely due to expenditure expected to be incurred later than planned. For ‘Governance and support’ the unfavourable variance of $16 million is largely due to the DFA portfolio losses mentioned previously.

83. Net operating result by theme

$million	YTD Actual	YTD Revised Budget	YTD variance		FY Revised Budget	FY Annual Plan
Auckland development	104	112	8	8%	154	142
Economic and cultural development	64	69	5	8%	92	91
Environmental management and regulation	214	222	8	4%	298	288
Parks, community and lifestyle	347	349	2	0%	473	469
Transport	291	292	1	0%	389	389
Governance and support	157	141	(16)	(11%)	120	135
Net operating expenditure	1,177	1,185	8	1%	1,526	1,514
Rates revenue	1,578	1,583	(5)	0%	1,580	1,584
Net operating surplus	401	398	3	1%	54	70

84. Capital delivery performance

In the first nine months of the year there was $281 million of capital investment completed, which is 51% of the full programme of $548 million approved for the year.

85. Capital delivery performance by theme

$million	YTD Actual	YTD Revised Budget	YTD variance	FY Revised Budget	FY Annual Plan	% Complete
Auckland development	62	107	45	137	101	45%
Environmental management and regulation	59	60	1	99	112	60%
Parks, community and lifestyle	95	140	45	212	256	45%
Governance and support	65	65	0	100	85	65%
Capital expenditure	281	372	91	548	554	51%

Capital delivery performance to date is largely on track except for some areas where there have been delays and projects are expected to be delivered later than originally planned. The community facilities portfolio (part of the ‘Parks, community and lifestyle’ theme) is underspent due to delays across a number of projects, including Uxbridge Arts Centre, Albany Community Hub, Hobsonville Community House and land acquisitions. The year-end outlook is for a programme delivery of about $500 million for the year. There is uncertainty about the timing of the delivery of some Commercial Property strategic development projects, which could impact this (part of the ‘Auckland development’ theme).

86. Balance sheet performance

$million	Actual as at March 2016	Projected per LTP June 2016	Actual audited June 2015
Assets
Property, plant and equipment	12,205	12,077	12,064
Other assets and investments	24,567	23,992	24,161
Less Liabilities
Borrowings	6,858	7,175	6,557
Other liabilities	1,636	1,175	1,396
Net assets (ratepayers’ equity)	28,278	27,719	28,272

87. Property, plant and equipment: asset revaluations at year-end 30 June 2015 resulted in asset values higher than projected in the LTP.

88. Other assets and investments: the increase in this category is mainly due to an increase in Accounts Receivable category for rates, being the rates generation billed for the full year upfront and expected to reduce across the year as each rates instalment becomes due.

89. Total gross debt at 31 March 2016 was $6.8 billion and forecast debt is expected to be in line with the LTP.

Treasury management

90. Treasury management information can be found in Appendix 3 - Treasury report. This report includes treasury compliance information together with information about the performance of treasury activities against benchmarks.

91. The focus of the treasury team continues to be on minimising funding costs, managing liquidity and interest rate risk, diversifying the investor base and lengthening the term of debt. The council was fully compliant with all treasury management policy limits at 31 March 2016.

92. Funding costs: the year-to-date average cost of funds was 5.19%, which aligns with the budgeted level of 5.19%.

93. The Diversified Financial Assets portfolio totaled $335 million at the end of the third quarter. The LTP performance measure relating to this portfolio is a long-term rolling average return compared to the reference portfolio. The return this year to 31 March 2016 is 2%.

94. Debtors’ management information can be found in Appendix 7. Rates debt collection at 31 March is largely on track and progressing well when compared to the prior years.

95. Further information available in the appendices to this report include:

· Appendix 1 – Performance measure information

· Appendix 2 – Auckland economic update

· Appendix 3 – Treasury report

· Appendix 4 – Professional services expenditure information

· Appendix 5 – LGOIMA information

· Appendix 6 – Customer service information

· Appendix 7 – Debtors information.

Consideration

Local Board views and implications

96. Local boards receive their own reporting for their respective areas. The local board quarterly performance reports have been enhanced to improve reporting on the LTP performance measures. The aim here is to provide an early indication to the local boards as to how performance is tracking against targeted levels.

Māori impact statement

97. The report details some high-level activities delivered in the third quarter of 2015/2016, of which there are several initiatives with positive impacts on, or for, Māori. While this is not a complete list, key activities with positive impacts on and for Māori include:

· Waitangi Day was celebrated across Auckland, with estimated attendances of 4000 for Waitangi Day Family Celebrations in Hayman Park, 10,000 for Waitangi @ Waititi at Hoani Waititi Marae in Glen Eden, and 7000 for Waitangi Day 2016 at Takaparawhau (Bastion Point).

Implementation

98. There are no financial or resourcing implications arising from receipt of this report.

99. Quarterly reporting on performance is not a legal requirement and there are no legislative implications from the receipt of this request.

Attachments

No.	Title	Page
a View	Performance Report Appendices March 2016	85

Signatories

Author

Jenny Livschitz - Manager Corporate Performance and Reporting

Authorisers

Kevin Ramsay - General Manager Corporate Finance and Property

Sue Tindal - Group Chief Financial Officer

Finance and Performance Committee

19 May 2016

Alternate Financing - Corporate Property

File No.: CP2016/09600

Purpose

1. To seek delegation to the Auckland Council Chief Executive, Group Chief Financial Officer and Chair of the Finance and Performance Committee to bring a financing proposal in relation to 135 Albert Street and 35 Graham Street to the Finance and Performance Committee.

Executive Summary

2. Auckland Council owns a range of corporate office buildings with an approximate 2014 capital value of $311 million. The current market value is expected to be higher. The largest, both in terms of office space and value, is 135 Albert Street.

3. The extent of ownership of the office buildings reflects legacy council ownership structures, and the 2012 decision to buy 135 Albert Street.

4. Both Ernst & Young (EY) and Cameron Partners identified re-structuring the corporate accommodation portfolio as a financing opportunity, when they were commissioned by the council to investigate sources of alternative financing.

5. Staff recommend delegation to the Auckland Council Chief Executive, Group Chief Financial Officer and Chair of the Finance and Performance Committee to bring a financing proposal in relation to 135 Albert Street and 35 Graham Street to the Finance and Performance Committee. No other properties in the corporate property portfolio are being considered due to commercial and complexity reasons.

6. The preliminary assessment indicates that a full sale and leaseback best aligns with the considerations that underline an ownership versus lease decision. The considerations being:

a) the necessity for holding control of the asset,

b) the level of operational risk an organisation wishes to hold,

c) the financial impact, and

d) the organisation’s capital scarcity.

7. Preliminary analysis of Auckland Council’s corporate property portfolio indicates that there is no necessity for maintaining ownership control of the two corporate office buildings. It divests some operating responsibilities, and will provide debt headroom.

8. The terms of the proposal and impacts on rates and debt will be brought back to the Finance and Performance Committee for approval. This will include a comparison against other options considered.

Recommendation/s

That the Finance and Performance Committee:

a) approve delegation to the Auckland Council Chief Executive, Group Chief Financial Officer and Chair of the Finance and Performance Committee to bring a financing proposal in relation to 135 Albert Street and 35 Graham Street to the Finance and Performance Committee.

Comments

Background

9. Auckland Council owns a range of corporate office buildings across the city used predominately for administrative purposes.

10. The portfolio identified by Cameron Partners for review includes the following buildings:

Site	Area	Building ($m)	Land ($m)	Total value ($m)
Council Tower Albert Street	Auckland Central	102.5	31	133.5
Waitakere Civic Centre	Henderson	40.4	3	43.4
Bledisloe House	Auckland Central	9	19	28
Graham Street	Auckland Central	15.5	17	32.5
Pacific Tasman Building	Orewa	18.6	3.4	22
Manukau Civic Building	Manukau	7.9	16.1	24
Central One	Henderson	8.7	3.4	12.1
Kotuku House	Manukau	6.2	1.5	7.7
Pukekohe Service Centre	Pukekohe	1.1	4.4	5.5
Papakura Service Centre	Papakura	0.5	2.2	2.7
	Total	210.4	101	311.4

11. The $311.4 million is based off the 2014 capital value. It is expected that the current market value will be higher, with a formal valuation undertaken as part of any proposal.

12. The ownership structure of the office buildings reflects decisions made by legacy councils and the 2012 decision to buy 135 Albert Street.

13. Both EY and Cameron Partners identified re-structuring the corporate property portfolio as a financing opportunity and recommended the council explore the merits of transferring the ownership to a private operator in return for a favourable and flexible rental agreement, as well as cash inflow reducing debt.

14. In developing the recommendation, the financing options were assessed against considerations on the level of control, operational risk, and financial and capital impacts.

Control

15. When determining the necessity to maintain control, the strategic or specialised nature of a property should be considered.

16. Non-strategic or non-specialised properties can be broadly described as those properties which house administrative functions. These assets are usually generic and indistinguishable from other corporate properties. They can easily be passed on from occupier to occupier with little to no modifications.

17. Specialised or strategic properties are not considered generic and are seldom provided by the private sector. These properties are typically not interchangeable with private sector requirements.

18. In a government context, specialised properties would include schools, hospitals, defence properties, police stations. For council, this will include buildings such as the Auckland Town Hall.

19. Several commercial entities own properties in order to house strategic parts of their operations. Spark owns key exchanges and data centres and Fonterra owns a range of milk processing plants. However, in most cases these organisations do not own their corporate offices.

Operational risk

20. An entity with a core purpose of investing and managing properties will generally deliver a greater level of operational efficiency through wider access to expertise and resources.

21. There are also ongoing risk exposure considerations for any major renewal or repairs.

Financial

22. The nature of the arrangement will determine the overall impact on the balance sheet, the income statement, rates and treasury ratios.

23. It is important to ensure that no option negatively impacts council’s credit rating.

24. The tenure of contracts is also an important consideration. For example, if council sold its office buildings and entered into a long-term lease, it is likely it would be assessed as a finance lease with the present value of the lease recognised as a liability on council’s balance sheet.

25. The nature of the arrangement will also need to be structured to ensure council is not exposed to any tax liabilities.

26. Weighing up the council’s cost of capital versus the return a third party would require needs to be considered, alongside any efficiency in operations.

Capital scarcity

27. Local government entities generally have the lowest cost of capital of any entity (excluding central government). However, under a capital constraint, the decision to retain ownership of an asset should consider the alternative use of the capital involved.

28. The underlying reason for government organisations to lease assets rather than own appears to be capital rationing. Where Auckland Council must borrow in order to fund a property purchase, it could be beneficial to rely on the private sector to provide that capital and simply pay for accommodation through a lease arrangement funded out of rates.

29. This means that the capital can be deployed elsewhere, for Auckland Council this could be storm water and transport infrastructure.

Property considerations

30. A preliminary assessment of the review portfolio has been undertaken and the following features/functions of each building have been identified.

	Council Tower Albert St	Waitakere Civic Centre	Bledisloe House	Graham Street	Pacific Tasman Building	Manukau Civic Building	Central One	Kotuku House	Pukekohe Service Centre	Papakura Service Centre
Customer facing area		x	x	x	x			x	x	x
Local board office		x			x	x			x	x
Office space	x	x	x	x	x	x	x	x	x	x
Commercial space			x				x
Specialised function		x								x

31. There are specialised features / functions at the Waitakere Civic Centre and the Papakura Service Centre.

Site	Comment
Waitakere Civic Centre	Contains a large council chamber with viewing platform. This chamber is used on some occasions in place of the Auckland Town Hall for governing body meetings. The building also contains access to the adjacent train station. This allows public access from the train station, through and out of the building.
Papakura Service Centre	Contains a public toilet facility within its grounds and also includes some public open space.

32. The Manukau Civic Building also contains council chambers. However it is concluded that this is not a specialised feature as the room can be reutilised as a common board room.

33. All other properties remain within scope in the context of control requirements. The remaining properties do not provide any specialised function to the public that cannot be conducted elsewhere in a similar commercial property.

34. For example, customer facing areas and local board offices are simply offices with a reception area which is common among most if not all commercial office buildings.

35. Another factor included linkage with future development plans. The Henderson and Manukau buildings have not been included due to wider potential development plans for the area.

36. A number of sites on which council’s corporate properties sit upon have legal constraints on any proposed changes to ownership. These restrictions are in place for the following properties.

Site	Comment
Bledisloe House	State-Owned Enterprises Act resumption of land on recommendation of Waitangi Tribunal
Pacific Tasman Building	State-Owned Enterprises Act resumption of land on recommendation of Waitangi Tribunal
Kotuku House	Land covenant prohibition on retail and wholesale activities
Papakura Service Centre	Subject to Section 23 Land Transfer (Compulsory Registration of Titles) Act 1924 (no power to sell land, held under trust, however this expires in 2021)

37. Given the assessment of properties from points 30 to 36, for commercial and complexity reasons, a financing option and recommendation will only be developed for 135 Albert Street and 35 Graham Street.

Financing options

38. Financing options include maintaining current full ownership, entering into a structure for partial ownership, or a full sale and lease back.

39. Full sale and lease back offers the lowest level of control over our corporate accommodation, however it transfers the most risk in operating the building, and it releases the most capital. Full ownership maintains the control, however any risk in operating the building rests with council, and it releases no capital. A partial sale falls in the middle of these options.

40. The preliminary assessment indicates that full sale and leaseback of 135 Albert Street and 35 Graham Street properties best aligns with the principles that underline an ownership versus lease decision.

41. At this preliminary stage there is no identified strategic need for maintaining ownership of the two properties as they do not offer any specialised feature or allow functions to be performed which cannot be performed elsewhere.

42. Full sale and leaseback would enable divestment of operating responsibilities, allowing Auckland Council to focus on activities that add value to Auckland.

43. This option has the largest potential for unlocking capital and improving Auckland Council’s prudential ratios.

44. There may be an increase in rates due to the higher yield required by a private operator versus Auckland Council’s cost of debt However, this will be subject to negotiation and conditions of sale.

45. The other options and their variants did not meet some or all of the requirements to the same extent as the preferred option. Furthermore, certain options, such as partial ownership, would create additional governance requirements and administration costs.

Consideration

Local Board views and implications

46. No Local Board views have been sought as the decision-making over corporate accommodation property portfolio is regional.

Māori impact statement

47. At this stage, no engagement with Māori has been undertaken.

Implementation

48. There are no anticipated implementation issues.

Attachments

There are no attachments for this report.

Signatories

Author

Robert Irvine - Financial Planning Manager CCOs

Authorisers

Matthew Walker - GM Financial Strategy and Planning

Kevin Ramsay – Acting Group Chief Financial Officer

Finance and Performance Committee

19 May 2016

Budget Update

File No.: CP2016/08500

Purpose

1. This budget update report includes an amendment to a resolution relating to a grant to the New Zealand Maritime Museum (NZMM) and recommendations from the Auckland Development Committee (ADC) relating to Transform Manukau.

2. The recommendations in this report are predominantly of procedural nature, as they have been previously considered by committees of the whole.

Executive Summary

Funding to Development Auckland Limited regarding Hobson Wharf

3. In February, this committee approved a grant of up to $1,285,000 to the New Zealand Maritime Museum in the current financial year to cover a shortfall in providing for its share of Hobson Wharf works, this funding to be met from $860,000 additional borrowing and a re-allocation of $425,000 budget from Development Auckland Limited (Panuku).

4. The purpose of the funding is to enable renewal works on Hobson Wharf, as set out in more detail in the confidential report to the Committee for the 25 February 2016 meeting.

5. Panuku (as landlord) has been working with NZMM (as tenant) to determine how to best manage the wharf maintenance project. As a result of those discussions, Panuku and NZMM have requested that the funding flow directly from the council to Panuku, which is practically more straightforward.

6. Staff recommend amending the wording of the original resolution to provide for direct funding to Panuku. This is a procedural matter, and does not change the intent of the original decision or lead to any additional financial impact than what was reported (in confidence) in February.

Transform Manukau

7. Transform Manukau is an urban regeneration project with the vision of Manukau being the thriving heart and soul of the south. On 14 April, the Auckland Development Committee considered and adopted the High Level Project Plan for Transform Manukau. ADC also endorsed Panuku as the lead council agency for the project. The full resolutions of ADC are outlined in attachment A.

8. Panuku will develop a Framework Plan for Manukau, which will progress and refine the alignment between parties and entities to confirm an integrated approach to development. It will include contributions to empowering communities, lifting socio-economic well-being and building quality, people oriented urban environments collaboratively.

Property disposal and reinvestment approach

9. It is envisaged that the project would require significant investment, such as streetscape upgrades, greenways, stream restorations and place activation. Other initiatives will focus on better integration between current projects and work streams in the area. However, the funding for these investments is not provided for in the Long-term Plan (LTP) 2015-2025, and therefore would ultimately require reprioritisation of budgets.

10. Panuku proposed to sell 10 council owned sites within the Transform location (attachment B), which were identified with redevelopment potential in the immediate and near term, and to utilise the proceeds for the investment required for Transform Manukau. ADC supported in principle the sale of five sites, as well as the reinvestment approach, with future expenditure subject to a detailed business case process.

11. ADC noted that the remaining sites had been approved for sale through the usual property disposal process. However, an error was subsequently discovered that 50 Manukau Station Road (vacant land adjacent to police station) did not have an approved status, and therefore should have been added to the list above for approval of sale.

12. In addition to the conditions of sale pertaining to statutory processes, agreement on transport outcomes, and car park requirement for Rainbow’s End, it is expected that Panuku will continue to engage and work with mana whenua as per its usual disposal process.

Cost and funding of early planning work

13. Panuku will commence the framework, design, engagement and implementation planning along with early place-making initiatives, which is estimated to cost $1.9 million. The $1.9 million will be funded as part of the overall transform area costs, with funding to come from Panuku’s budgets first where available utilising a reinvestment approach.

Recommendation/s

That the Finance and Performance Committee:

a) agree to alter Resolution number FIN2016/13 to read:

“That the Finance and Performance Committee:

a) approve capital funding (to be met by additional borrowing) of up to $860,000 to Development Auckland Limited (Panuku) in the 2015/2016 financial year with any unspent portion to be returned to Auckland Council; this funding to be in addition to $425,000 that has been re-allocated from Panuku’s existing budget, recognising that the combined amount of up to $1,285,000 is to be applied by Panuku to help meet New Zealand Maritime Museum’s share of obligations arising under its lease from Panuku in respect of wharf works.”

b) approve the disposal of the following six properties within the Transform Manukau project area to contribute to achieving the outcomes in the High Level Project Plan, and with the objective of achieving urban regeneration, renewal and housing:

i) 2 Clist Crescent car park (in front of Rainbow’s End) - Lot 1 DP 87801

ii) 2 Davies Avenue (Ronwood car park) - CT 49758

iii) 8 Davies Avenue (car park) - CT NA62D 735

iv) 14 Davies Avenue (car park) - CT NA25B 679; CT NA62D 740

v) 9 Osterley Way (car park) - CT NA62D 733

vi) 50 Manukau Station Road (vacant land adjacent to Police Station) - residue land in CFR NA44C/3 and identified on SO 435724 as Section 17

subject to:

1) the satisfactory conclusion of the required statutory processes

2) agreement with Auckland Transport on the transport outcomes required for the sites (ii to v above)

3) Panuku addressing car parking requirements with Rainbow’s End

4) engagement with mana whenua as per Panuku’s usual property disposal process.

c) inform the Auckland Development Committee of b) vi) above.

d) agree to the reinvestment of proceeds from sales of development sites in the Transform project area, into projects and initiatives that progress the intent of the High Level Project Plan and Framework Plan, conditional upon a satisfactory review of a detailed business case for new investments within Transform Manukau.

e) approve operating expenditure budget of $1.9 million as part of the overall transform area costs, with funding to come from Panuku’s budgets first where available utilising a reinvestment approach, and

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

Comments

Funding to Development Auckland Limited regarding Hobson Wharf

14. In February, this committee approved a grant of up to $1,285,000 to the New Zealand Maritime Museum in the current financial year to cover a shortfall in providing for its share of Hobson Wharf works. This funding is to be met from $860,000 additional borrowing and a re-allocation of $425,000 budget from Panuku.

15. It was envisaged that the council would provide $860,000 to NZMM, which would in turn pass the same to Panuku. Panuku would lead the physical works as the owner of the wharf infrastructure, utilising an additional $425,000 from its existing budget, as well as contributing its own funds to meet its share of the work. However, it has been identified since then that the most practical and tax effective way of making the funding available would be for council to provide the funding directly to Panuku.

16. Staff recommend the original resolution in relation to the grant be amended to enable the funding of up to $860,000 to be made to Panuku directly, as opposed to through NZMM, recognising the combined amount of up to $1,285,000 (i.e. $860,000 plus $425,000) as contributing to NZMM’s share of obligations to undertake the wharf works. This is a procedural matter, and does not change the intent of the original decision or lead to any additional financial impact than what was reported in February.

Transform Manukau

17. Transform Manukau is an urban regeneration project, where Manukau Metropolitan Centre becomes the thriving heart of the south, an attractive visitor destination, business centre and place to shop, live, learn work and play. It aspires to bring benefits and outcomes that will position Manukau as s strong, competitive and complementary metropolitan centre to the city centre.

18. In April, the Auckland Development Committee (ADC) considered and adopted the High Level Project Plan for Transform Manukau. ADC endorsed Panuku as the lead council agency for the project, given its status as a Panuku Transformation location. Full resolutions of ADC are included in attachment A.

19. Panuku will develop a Framework Plan for Manukau, which will progress and refine the alignment between parties and entities to confirm an integrated approach to development. It will include contributions to empowering communities, lifting socio-economic well-being and building quality, people oriented urban environments collaboratively.

Property disposal and reinvestment approach

20. It is envisaged that the project would require significant investment, such as streetscape upgrades, greenways, stream restorations and place activation. Other initiatives will focus on better integration between current projects and work streams in the area. However, the funding for these investments is not provided for in the LTP 2015-2025, and therefore would ultimately require reprioritisation of budgets.

21. Panuku proposed to sell 10 council owned sites within the Transform location (attachment B), which were identified with redevelopment potential in the immediate and near term, and to utilise the proceeds for the investment required for Transform Manukau. ADC supported the sale of the following five sites:

i) 2 Clist Crescent car park (in front of Rainbow’s End) - Lot 1 DP 87801

ii) 2 Davies Avenue (Ronwood car park) - CT 49758

iii) 8 Davies Avenue (car park) - CT NA62D 735

iv) 14 Davies Avenue (car park) - CT NA25B 679; CT NA62D 740

v) 9 Osterley Way (car park) - CT NA62D 733

subject to:

1) the satisfactory conclusion of the required statutory processes

2) agreement with Auckland Transport on the transport outcomes required for the sites (ii to iv above)

3) Panuku addressing car parking requirements with Rainbow’s End.

22. ADC noted that the remaining sites had been approved for sale through the usual property disposal process. However, an error was subsequently discovered that Section 17, 50 Manukau Station Road residue land in CFR NA44C/3 and identified on SO 435724 (vacant land adjacent to police station) did not have an approved status, and therefore should have been added to the list above for approval of sale.

23. In addition to the conditions of sale articulated in the ADC resolution, it is expected that Panuku will continue to engage and work with mana whenua as per its usual disposal process.

24. ADC supported the reinvestment approach proposed by Panuku, although there were questions as to what the budgetary impact would be, in particular regard to the asset sales target, debt and rates. Any associated group debt and rates impact will need to be approved by this committee.

Cost and funding of early planning work

25. Panuku will commence the framework, design, engagement and implementation planning along with early place-making initiatives, which is estimated to cost $1.9 million. The breakdown of the cost for this stage is detailed in the table below.

Description	Total
Framework Plan	$810,000
Communication and Engagement Plan	$170,000
Implementation Plan	$440,000
Early Place-making	$480,000
Total	$1,900,000

26. The operating expenditure budget of $1.9m as part of the overall transform area costs will be funded from Panuku’s budgets first where available utilising a reinvestment approach. This may be from re-prioritisation and any under-spend against existing budgets.

Overall budget impact

27. The recommendations considered in this report do not have budgetary impact.

Consideration

Local Board views and implications

28. The Ōtara-Papatoetoe and Manurewa Local Boards strongly support Manukau for regenerative urban renewal within the Panuku work programme and more broadly as a Spatial Priority Area.

29. Panuku will consider in conjunction with the boards an effective redevelopment of Hayman Park, facilitating a streamlined advocacy path regarding Te Papa, ensuring there is an element of affordable housing in the mix, consideration of a quality athletic park and generally pedestrian friendly quality urban built form.

30. Of particular significance to the boards is that green open space, sufficient for the needs of future residents, workforce and visitors are given adequate consideration during the framework planning phase.

Māori impact statement

31. Panuku is committed to a collaborative partnership approach to relationships with affected Māori. Through deepening these relationships Panuku has the potential to materially uplift contribution to Māori outcomes across social, cultural and economic well-beings.

32. Panuku will work closely with mana whenua on the following areas during the framework and implementation planning phase.

· best care for land and people, and protection of waahi tapu and the optimum health of the mauri of the natural environment

· application of Te Aranga Design principles

· cultural values assessments if appropriate/requested

· development partnership opportunities.

Implementation

33. Budgets would be amended in core financial systems and used for internal management reporting, regular reporting to councillors and financial control for the 2015/2016 financial year.

Attachments

No.	Title	Page
a View	Transform Manukau Resolution Auckland Development Committee 14 April 2016	117
b View	Schedule of Key Council Properties in Transform area (amended)	119

Signatories

Author

Neil Huang - Senior Analyst

Authorisers

Robert Irvine - Financial Planning Manager CCOs

Matthew Walker - GM Financial Strategy and Planning

Kevin Ramsay – Acting Group Chief Financial Officer

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

Author	Mike Giddey - Democracy Advisor
Authoriser	Kevin Ramsay – Acting Group Chief Financial Officer