Agenda of Finance and Performance Committee

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

Date:

Time:

Meeting Room:

Venue:

Thursday, 22 September 2016

9.30am

Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland

Finance and Performance Committee

OPEN AGENDA

MEMBERSHIP

Chairperson	Cr Penny Webster
Deputy Chairperson	Cr Ross Clow
Members	Cr Anae Arthur Anae	Cr Calum Penrose
	Cr Cameron Brewer	Cr Dick Quax
	Mayor Len Brown, JP	Cr Sharon Stewart, QSM
	Cr Dr Cathy Casey	Member David Taipari
	Cr Bill Cashmore	Member John Tamihere
	Cr Linda Cooper, JP	Cr Sir John Walker, KNZM, CBE
	Cr Chris Darby	Cr Wayne Walker
	Cr Alf Filipaina	Cr John Watson
	Cr Hon Christine Fletcher, QSO	Cr George Wood, CNZM
	Deputy Mayor Penny Hulse
	Cr Denise Krum
	Cr Mike Lee

(Quorum 11 members)

Mike Giddey

Democracy Advisor

15 September 2016

Contact Telephone: (09) 890 8143

Email: mike.giddey@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

TERMS OF REFERENCE

Responsibilities

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

· Financial management

· Approval of non-budgeted expenditure

· Write-offs

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

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

· Recommending the Annual Report to the Governing Body

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

- Local Board agreements

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

- Setting of rates (recommendation to the Governing Body)

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

· Financial policy outside the LTP and AP

Powers

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

Except:

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

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

(ii) Approval of a submission to an external body

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

(iv) Power to establish subcommittees.

EXCLUSION OF THE PUBLIC – WHO NEEDS TO LEAVE THE MEETING

Members of the public

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

Those who are not members of the public

General principles

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

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

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

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

Members of the meeting

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

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

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

Independent Māori Statutory Board

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

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

Staff

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

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

Local Board members

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

Council Controlled Organisations

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

Finance and Performance Committee

22 September 2016

ITEM TABLE OF CONTENTS PAGE

1 Apologies 7

2 Declaration of Interest 7

3 Confirmation of Minutes 7

4 Petitions 7

5 Public Input 7

6 Local Board Input 7

6.1 Michael Wood - Puketapapa Local Board - Whare building at Monte Cecilia Park 7

7 Extraordinary Business 8

8 Notices of Motion 8

9 Disposals Recommendation Report 9

10 Approval of and recommendation for adoption of the 2015/2016 Annual Report and Summary Annual Report for Auckland Council and Group 29

11 Budget update September 2016 33

12 Health, Safety and Wellbeing August 2016 update - report from Audit and Risk Committee meeting on 8 August 2016 43

13 Whare Redevelopment Monte Cecilia Park 87

14 Reports Pending Status Update - 22 September 2016 91

15 Summary of information memos and briefings - 22 September 2016 99

16 Consideration of Extraordinary Items

PUBLIC EXCLUDED

17 Procedural Motion to Exclude the Public 101

C1 Shareholder Approval for GridAKL lease 101

1 Apologies

At the close of the agenda no apologies had been received.

2 Declaration of Interest

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

3 Confirmation of Minutes

That the Finance and Performance Committee:

a) confirm the ordinary minutes of its meeting held on Tuesday, 9 August 2016, including the confidential section, as a true and correct record.

4 Petitions

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

5 Public Input

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

At the close of the agenda no requests for public input had been received.

6 Local Board Input

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

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

6.1 Michael Wood - Puketapapa Local Board - Whare building at Monte Cecilia Park

Purpose

1. Michael Wood, Puketapapa Local Board member will be in attendance to make a presentation on the restoration of the Whare building at Monte Cecilia Park.

Recommendation/s

That the Finance and Performance Committee:

a) receive the presentation regarding the restoration of the Whare building at Monte Cecilia Park and thank Michael Wood for his attendance.

7 Extraordinary Business

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

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

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

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

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

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

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

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

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

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

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

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

8 Notices of Motion

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

Finance and Performance Committee

22 September 2016

Disposals Recommendation Report

File No.: CP2016/19406

Purpose

1. This report seeks approval to sell four 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 $75 million by 30 June 2017. Capital receipts from the sale of surplus properties contributes to the Auckland Plan outcomes and the Long-term Plan 2015-2025 by providing the council with an efficient use of capital and prioritisation of funds to achieve its activities and projects.

3. The first property presented in this report, 201 Murphys Road, Flat Bush is a residential property with a vacant, residential dwelling located on it. It was acquired in 2011 for roading works which have now been completed. Consultation has been undertaken with council and its CCOs, iwi authorities and the Howick Local Board. No alternative service uses have been identified for this site. As such, we recommend this property be divested. 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, 1 Victoria Street, Ōtāhuhu is a small, at grade car park. It was reviewed by Auckland Transport and found to no longer be required for car parking purposes. Consultation with council and its CCOs, iwi authorities and the Māngere-Ōtāhuhu Local Board has now taken place. No alternative service uses were identified for this property through the rationalisation process and the feedback received has been supportive of the proposed divestment. Due to this, we recommend that this site be divested. Site specific detail, including information and feedback gathered through the rationalisation process is contained in Attachment B of this report.

5. The third property presented in this report, 15 Waitai Road, Waiheke Island was acquired by Auckland City Council to provide a wastewater field for the adjoining pensioner housing complex at 18 Belgium Street. The adjoining housing complex was subsequently sold to Housing New Zealand. 15 Waitai Road was inadvertently omitted from the transfer, and Housing New Zealand now wish to acquire 15 Waitai Road as it is required to service its housing complex at 18 Belgium Street. Consultation has been undertaken with council and its CCOs, iwi authorities and the Waiheke Local Board. No alternative service uses have been identified for this site. Due to this, we recommend this site be sold to Housing New Zealand, to enable it to continue to be utilised for the public work for which it was acquired. Site specific detail, including information and feedback gathered through the rationalisation process is contained in Attachment C of this report.

6. The fourth property presented in this report, 70R Tidal Road, Māngere is a small, triangular shaped parcel of land that an adjoining landowner is partially encroached on. Consultation with council and its CCOs, iwi authorities and the Māngere-Ōtāhuhu Local Board has now taken place. No alternative service uses have been identified for this site through the rationalisation process and the feedback received has been supportive of the proposed divestment. Due to this, we recommend this site be divested. Site specific detail, including information and feedback gathered through the rationalisation process is contained in Attachment D 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) 201 Murphys Road, Flat Bush comprised of an estate in fee simple more or less being Section 14 SO 465808 comprising approximately 1,368m² contained in computer freehold register 653180;

ii) 1 Victoria Street, Ōtāhuhu comprised of an estate in fee simple more or less being Lots 79-80 Part Fairburn’s Grant 269A and Lot 2 DP 13598 comprising approximately 1,093m² contained in certificates of title NA555/109 and NA312/122;

iii) 15 Waitai Road, Waiheke Island comprised of an estate in fee simple more or less being Lot 303 Deposited Plan 14189 comprising approximately 1,062m²contained in certificate of title NA95C/433;

iv) 70R Tidal Road, Māngere more or less being Lot 37 DP 61861 comprising approximately 296m²;

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

Comments

7. Panuku and the Auckland Council’s Land Advisory Services 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.

8. 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.

9. 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.

10. 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.

11. Once a property has been internally cleared of any service requirements, Panuku then consults with local boards, mana whenua and ward councillors.

12. All sale recommendations must be approved by the Panuku board before a final recommendation is made to the governing body.

Consideration

Local board views and implications

13. 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.

14. 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.

15. The views of the relevant local boards about the subject sites are contained in Attachments A to D of this report.

Māori impact statement

16. 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.

17. 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.

18. 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.

19. 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

20. 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 ⇩	201 Murphys Road, Flat Bush property information	13
b ⇩	1 Victoria Street, Ōtāhuhu property information	17
c ⇩	15 Waitai Road, Waiheke Island	21
d ⇩	70R Tidal Road, Māngere property information	25

Author

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

Authorisers

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

Sue Tindal - Group Chief Financial Officer

Signatories

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Finance and Performance Committee

22 September 2016

Approval of and recommendation for adoption of the 2015/2016 Annual Report and Summary Annual Report for Auckland Council and Group

File No.: CP2016/19740

Purpose

1. To inform the Finance and Performance Committee of the process followed to prepare the 2015/2016 Annual Report and Summary Annual Report for the Auckland Council group and to recommend adoption to the Governing Body.

Executive summary

2. The Governing Body, at the meeting to be held on 29 September 2016, will be asked to adopt the 2015/2016 Annual Report and Summary Annual Report for the Auckland Council group. Preparing and publishing an Annual Report and Summary Annual Report is a legislative requirement.

3. The draft 2015/2016 Annual Report covering the twelve months to 30 June 2016 has been prepared by council officers and audited by Audit New Zealand on behalf of the Auditor-General. The draft 2015/2016 Annual Report compares and comments on the performance of council and the group against the budgets and performance targets set in the Long-term Plan 2015-2025.

4. The Audit and Risk Committee will review the report at its meeting on 13 September 2016 and will provide its recommendation to this Committee.

Recommendation/s

That the Finance and Performance Committee:

a) note the confirmation by the Audit and Risk Committee that the audit process has been completed satisfactorily; and

b) agree to recommend adoption of the draft 2015/2016 Annual Report and Summary Annual Report to the Governing Body subject to editorial and technical changes to the document to be approved by the Group Chief Financial Officer and the Chairperson of the Finance and Performance Committee.

Comments

5. The Local Government Act 2002 requires Auckland Council to prepare and adopt an Annual Report and Summary Annual Report each year. Auckland Council is also required under the New Zealand Stock Exchange listing rules to publish an annual report. The draft Annual Report, including the financial statements and the Summary Annual Report for the year to 30 June 2016 have been prepared by council officers and audited by Audit New Zealand on behalf of the Auditor-General.

6. The Audit and Risk Committee reviews the quality of the draft Annual Report and Summary Annual Report, the processes used by management, and compliance with legalisation and the financial reporting standards. They also review the audit risk process with the Office of the Auditor-General and Audit New Zealand. The Audit and Risk Committee will carry out their review on 13 September 2016.

7. The terms of reference for the Finance and Performance Committee includes recommending the Annual Report to the Governing Body. This report enables the committee to execute that responsibility.

8. The draft 2015/2016 Annual Report and Summary Annual Report are for the Auckland Council group, which is the result of consolidating the financial and performance results of the Auckland Council and all of its CCOs. For legislative compliance purposes the financial statements of Auckland Council parent entity are included. All budgets and performance targets are those set out in the Long-term Plan 2015-2025.

9. The draft 2015/2016 Annual Report and Summary Annual Report have been streamlined this year to improve readability and flow, and to remove duplicate and immaterial information. This year’s draft Annual Report consists of three volumes; Volume 1: Overview and service performance, Volume 2: Local boards and Volume 3: Financial statements.

10. During the year the CCO Governance and Monitoring Committee monitored the performance of the substantive CCOs through the quarterly reporting by each CCO. The Finance and Performance Committee monitored the performance of the group through the reporting of quarterly consolidated financial results and quarterly reporting by the Auckland Council parent.

11. The draft 2015/2016 Annual Report and Summary Annual Report follow the same pattern and complete the reporting for the financial year to 30 June 2016. At the 6 September 2016 meeting the CCO Governance and Monitoring Committee received reports for the substantive CCOs. The Finance and Performance Committee received a report on the performance of Auckland Council parent at the meeting held on 9 August 2016.

12. On 29 August 2016 Auckland Council released preliminary results to the New Zealand Stock Exchange as required by listing rules. The release was approved by the Chair and Deputy Chair of the Finance and Performance Committee under delegation. The preliminary announcement was provided to all Councillors at the time of release.

13. The draft 2015/2016 Annual Report and Summary Annual Report is currently undergoing a final review by Audit New Zealand and may be subject to some editorial changes prior to final submission to the Governing Body and subsequent publication.

Consideration

Local board views and implications

14. The draft Annual Report Volume 2: Local boards, highlights activities and achievements in each local board area. Local boards’ views were sought in identifying these highlights and each Chair has drafted their Chairperson’s Message.

15. Reporting requirements were amended, which requires from this financial year that Local Board Funding Impact Statements are included in Volume 2: Local boards of the draft 2015/2016 Annual Report.

Māori impact statement

16. The draft 2015/2016 Annual Report Volume 1: Overview and service performance, includes information and activities relevant to achieving the outcomes with and for Māori. There were no process issues with how these were measured and reported.

Implementation

17. There are no implementation issues.

Attachments

No.	Title	Page
a ⇨	Draft Summary Annual Report 2015/2016 (Under Separate Cover)
b ⇨	Draft Annual Report 2015/2016 Volume 1: Overview and service performance (Under Separate Cover)
c ⇨	Draft Annual Report 2015/2016 Volume 2: Local boards (Under Separate Cover)
d ⇨	Draft Annual Report 2015/2016 Volume 3: Financial statements (Under Separate Cover)

Author

Francis Caetano - Group Financial Controller

Authorisers

Kevin Ramsay - General Manager Corporate Finance and Property

Sue Tindal - Group Chief Financial Officer

Signatories

Finance and Performance Committee

22 September 2016

Budget update September 2016

File No.: CP2016/20416

Purpose

1. To approve a capital grant of $2 million, funded by the City Centre Targeted Rates, to James Liston Hostel to provide emergency housing for the homeless in the city centre.

Executive summary

2. In August, the Auckland City Centre Advisory Board (ACCAB) considered a proposal (Attachment A) to address the rough sleeping issue in the city centre. It supported in principle the allocation of $2 million from the City Centre Targeted Rates (CCTR) for capital investment in the James Liston Hostel (Attachment B).

3. Staff have reviewed the overall work programme funded by CCTR, and propose that the $2 million grant be accommodated within the 2016/2017 CCTR spending envelope. The $1.8 million deferral of the K-Road public realm improvement project and savings from Federal Street stage one and O’Connell Street upgrades allow for the proposed budget changes. This minimises the funding impact.

4. The $2 million grant has no impact on debt or rates requirement, but would reduce the projected operating surplus by $2 million for 2016/2017.

Recommendation/s

That the Finance and Performance Committee:

a) approve a grant of $2 million for capital investment in the James Liston Hostel, funded from the existing City Centre Targeted Rates spending envelope, subject to due-diligence and appropriate legal structures or contractual arrangements to ensure the council’s investment is used to deliver the proposed outcome.

Attachments

No.	Title	Page
a ⇩	Proposal for funding of the James Liston Hostel	35
b ⇩	Minutes of Auckland City Centre Advisory Board 24 August 2016	41

Signatories

Author

Neil Huang - Senior Analyst

Authorisers

Robert Irvine - Financial Planning Manager CCOs

Matthew Walker - GM Financial Strategy and Planning

Sue Tindal - Group Chief Financial Officer

Finance and Performance Committee

22 September 2016

Health, Safety and Wellbeing August 2016 update - report from Audit and Risk Committee meeting on 8 August 2016

File No.: CP2016/19737

Purpose

1. To provide the Health, Safety and Wellbeing August 2016 update report and presentation for the committee’s consideration, along with more recent Health, Safety and Wellbeing delivery and performance information.

Executive summary

2. At a meeting of the Audit and Risk Committee on 8 August 2016 the Health, Safety and Wellbeing August 2016 update report was considered and it was resolved as follows:

That the Audit and Risk Committee:

a) receive the update report and presentation on Health, Safety and Wellbeing.

b) refer this report to the Finance and Performance Committee for its consideration.

c) note that this report will also be provided to all Local Boards for their information.

3. Both the Audit and Risk Committee agenda report and supporting presentation are provided as Attachment A and B.

4. In addition, to provide the committee with the most up to date delivery and performance information, the September Executive Leadership team (ELT) and Officer report is included as Attachment C.

Recommendation/s

That the Finance and Performance Committee:

a) receive the Health, Safety and Wellbeing August 2016 update report.

Attachments

No.	Title	Page
a ⇩	Report from Audit and Risk Committee meeting on 8 August 2016	45
b ⇩	Presentation to Audit and Risk Committee on 8 August 2016	47
c ⇩	ELT & Officer report - September 2016	65

Signatories

Author	Claire Richardson – Head of Health, Safety and Wellbeing
Authoriser	Sue Tindal - Group Chief Financial Officer

Finance and Performance Committee

22 September 2016

Whare Redevelopment Monte Cecilia Park

File No.: CP2016/20644

Purpose

1. To approve the reallocation of capital expenditure towards a Whare restoration project at Monte Cecilia Park and provide information on the viability of a charitable trust structure to secure funding and oversee the project.

Executive summary

2. Following the demolition of the Monte Cecilia School on Monte Cecilia Park the school hall (called the Whare) remains on-site and is fenced off.

3. The retention of the Whare was identified in the 2007 Monte Cecilia Park Master Plan. The building may present options for community use, functions and educational use for the TSB Bank James Wallace Arts Centre.

4. A needs assessment has not been undertaken to determine a need for an additional community facility and the Whare has not been identified as an action in the Community Facilities Network Plan.

5. A restored Whare could generally address the outcomes sought by the functions facility at the Pah homestead site project. It would therefore be appropriate to reallocate this budget to the Whare restoration.

6. Auckland Council has in the past successfully entered into partnerships with charitable trusts to fundraise and develop capital builds. As the asset owner, Auckland Council bears long term responsibility for the replacement and future investment in the building.

7. The James Wallace Arts Trust (JWAT) has proposed their trust as a vehicle to secure funding for, and oversee, the restoration of the Whare.

8. Council has an existing Relationship Agreement with the JWAT. Established under the Relationship Agreement is the Joint Liaison Board (JLB) that currently has three voting members from both the trust and Council. Together with the JWAT, the JLB would present a feasible vehicle for sourcing funding and redevelopment.

9. A Business case for the Whare redevelopment has been prepared by the JWAT with input from the Puketāpapa Local Board.

10. Further work is required to quantify the extent of physical works required to deliver an asset that performs to the standard desired by the JWAT and determine long term operational costs for council.

11. Prior to spending against any allocated budget for the restoration of the Whare, a business case needs to be developed to consider and recommend the ultimate use and the consequential opex required to ensure long term return on investment for the site.

Recommendation/s

That the Finance and Performance Committee:

a) re-allocate $300,000 capital expenditure from the budget for a functions facility at the Pah homestead site to the Whare restoration project.

b) note a council and charitable trust partnership model to fundraise and oversee the Whare redevelopment project is feasible.

c) note the existing James Wallace Arts Trust and the Joint Liaison Board may provide suitable vehicles for this function if the existing Relationship Agreement is refreshed to accommodate this purpose.

d) note that prior to spending against any allocated budget for the restoration of the Whare or approval of a joint council and trust venture, an independent business case needs to be developed to consider the ultimate use of the Whare, and the provision of consequential operational budget.

Comments

Background

12. Monte Cecilia Park is a highly valued and sensitive landscape. Initially occupied by Māori as a fortified pa (Whataroa) it was later farmed by European settlers and then used by St Johns College, then the Sisters of Mercy and the Catholic Church for religious, community and education functions. As such, many stakeholders within Auckland Council, iwi and external heritage groups (Heritage NZ) have a strong interest in how the park develops.

13. Monte Cecilia Park has a number of built assets, the most notable are:

· the historic Pah Homestead, fully restored and currently in use as an arts facility

· the Monte Cecilia School Hall, (the ‘Whare’) a building with heritage values in a state of disrepair (constructed in the 1880’s and relocated to the site in 1902)

· Liston Village, housing for older persons, in transition to council ownership

· the Stables, an historic and ornate brick and plaster structure currently repurposed into housing for older persons as part of Liston Village.

14. Following the demolition of the Monte Cecilia School in January 2016 the Whare remains on site and is fenced off. The retention of the Whare was identified in the 2007 Monte Cecilia Park Master Plan. The building may present options for community use as well as for functions and educational use for the TSB Bank James Wallace Arts Centre.

15. No budget is currently allocated towards the restoration and renovation of the Whare.

16. A needs assessment has not been undertaken to determine a need for an additional community facility and the Whare has not been identified as an action in the Community Facilities Network Plan.

17. Investigations into the quality of the built structure identified the extent of the Whare’s disrepair, asbestos content and uncertainty on the condition of framing under the cladding. An initial costing of the restoration work was estimated to be in the range of $1.2 million to $2 million depending on the fit out and end purpose of the building.

18. The original business case for JWAT to operate from the Pah Homestead envisaged that the trust would generate sustainable operating income through the development of a catering/ functions business by 2015. A marquee situated on the grounds of Pah Homestead was the cornerstone of the potential functions business and $300,000 of capital expenditure was allocated to its construction. The construction and operation of the marquee was determined to be unfeasible.

19. In the 2015-2025 Long-term Plan the Governing Body allocated annual funding to JWAT in order to remove reliance on the functions business to cover operational expenditure. The level of funding provided was set at a base level, representing a minor drop in current levels of service. JWAT was encouraged to continue to find new ways of generating income to maintain and grow levels of service by maximising use of the Pah Homestead, improving integration with Monte Cecilia Park and providing art programmes of interest to diverse communities.

Reallocation of Capital Expenditure

20. As a result of the decision not to pursue a marquee functions centre on Monte Cecilia Park, the Puketāpapa Local Board has $300,000 capital expenditure project allocated towards a functions centre in the 2015/16 financial year, however no immediate project to invest in.

21. The JWAT maintains an interest in having a functions and education space to help subsidise operational funding and maximise the occupancy and use of the Park.

22. When completed and fully operational, the Whare project would generally address the outcomes sought by the functions facility at the Pah homestead. However, the Whare project is not developed enough to recommend granting this expenditure to a trust at this stage.

23. Prior to spending against any allocated budget for the restoration of the Whare a business case needs to be developed to consider and recommend the ultimate use of the Whare and the consequential opex required to ensure long term return on investment for the site.

Potential Trust Structure to lead Whare redevelopment

24. Auckland Council has in the past successfully entered into partnerships with charitable trusts to fundraise and develop capital builds. The Lopdell Precinct project is one such project. In the case of Lopdell Precinct, Auckland Council managed the physical works, owned the resulting asset and carried the risks of project overruns. As the asset owner Auckland Council bears long term responsibility for the replacement and future investment in the building.

25. To reduce the consequential operational costs of Lopdell Precinct the trust was given permission to commercially rent part of the premises to recover costs and self-manage the building repairs and maintenance programme.

26. The JWAT has proposed their trust as a vehicle to secure funding and oversee the restoration of the Whare. The established nature of the trust, its reputation and interests in the long term operation of the site make JWAT an appropriate choice for the trust structure.

27. Council has a Relationship Agreement with the James Wallace Arts Trust to manage interactions and formalise the partnership between parties with respect to the operations of the Pah Homestead site. Established under the Relationship Agreement is the JLB that currently has three voting members from both the trust and Council.

28. In order to create transparency and offer an appropriate level of robust attention to the project there would ideally be a Whare redevelopment sub-committee with representation from Council established. The existing JLB may provide such purpose. The terms of reference would require changing and membership of the JLB reconstituted to better meet the stakeholder involvement and skills required for a successful capital build. Such changes would require an alteration to the existing Relationship Agreement.

Whare Business case

29. A business case has been prepared by JWAT with input from the Puketāpapa Local Board for the redevelopment of the Whare.

30. Further work is required to quantify the extent of physical works required to deliver an asset that performs to the standard desired by the JWAT.

31. An analysis of long term operational performance of the building for the trust and the consequential impact of the asset on Auckland Council’s ability to service the community facilities portfolio of buildings. Typically this analysis would be undertaken as part of a feasibility and subsequent developed design.

32. There is a risk that, as the asset owner, shortfalls in funding targets will likely fall with Auckland Council. The operation of the Whare may not fulfill its cost neutral proposition and require ongoing costs.

33. The scope of work required to provide independent analysis and further development of a business case is $20,000. There currently exists no identified provision for this expenditure.

34. Staff from Community Services and Community Facilities will meet to determine the appropriate scope and resourcing of a business plan and project lead to inform future decision points.

Consideration

Local board views and implications

35. The Puketāpapa Local Board has identified the Whare restoration project as Priority Three in their Annual Plan advocacy items.

36. The Puketāpapa Local Board has engaged with community in the development of the Monte Cecilia Park Plan which seeks to retain the Whare as a park asset.

Māori impact statement

37. The Monte Celica site was once occupied by Maori as a fortified pa (Whataroa). Engagement with iwi has formed the development of the Monte Cecilia Park Plan.

38. The substantive funding agreement for the operations of the Pah site has specific KPIs around Māori participation and programming.

Implementation

39. There are no implementation issues with the recommendations.

Attachments

There are no attachments for this report.

Signatories

Author

Richard McWha - Manager Sector Engagement and Production

Authorisers

Graham Bodman - General Manager Arts, Community and Events

Ian Maxwell - Director Community Services

Sue Tindal - Group Chief Financial Officer

Finance and Performance Committee

22 September 2016

Reports Pending Status Update - 22 September 2016

File No.: CP2016/18510

Purpose

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

Executive summary

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

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

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

Recommendation/s

That the Finance and Performance Committee:

a) receive the Reports Pending Status Update report.

Attachments

No.	Title	Page
a ⇩	Reports Pending Status Update	93
b ⇩	Forward Work Programme 2015/2016	95

Signatories

Author	Mike Giddey - Democracy Advisor
Authoriser	Sue Tindal - Group Chief Financial Officer

Finance and Performance Committee

22 September 2016

Summary of information memos and briefings - 22 September 2016

File No.: CP2016/19287

Purpose

1. To receive a summary and provide a public record of memos or briefing papers that may have been distributed to committee members.

Executive Summary

2. This is a regular information-only report which aims to provide greater visibility of information circulated to committee members via memo or other means, where no decisions are required.

3. The following presentations/memos/reports were presented/circulated as follows:

· 24 August 2016 – $3M Allocation to Harbour Access Trust

4. These and previous documents can be be found on the Auckland Council website, at the following link:

http://infocouncil.aucklandcouncil.govt.nz/

o at the top of the page, select meeting “Finance and Performance Committee” from the drop-down tab and click ‘View’;

o Under ‘Attachments’, select either HTML or PDF version of the document entitled ‘Extra Attachments’

5. Note that, unlike an agenda report, staff will not be present to answer questions about these items referred to in this summary. Committee members should direct any questions to the authors.

Recommendation/s

That the Finance and Performance Committee:

a) receive the summary of information memos and briefings – 22 September 2016.

Attachments

No.	Title	Page
a ⇨	$3M Allocation to Harbour Access Trust (Under Separate Cover)

Signatories

Author	Mike Giddey - Democracy Advisor
Authoriser	Sue Tindal - Group Chief Financial Officer