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:

Tuesday, 21 November 2017

9.30am

Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland

Finance and Performance Committee

OPEN AGENDA

MEMBERSHIP

Chairperson	Cr Ross Clow
Deputy Chairperson	Cr Desley Simpson, JP
Members	Cr Dr Cathy Casey	Cr Daniel Newman, JP
	Deputy Mayor Bill Cashmore	Cr Dick Quax
	Cr Fa’anana Efeso Collins	Cr Greg Sayers
	Cr Linda Cooper, JP	Cr Sharon Stewart, QSM
	Cr Chris Darby	IMSB Chair David Taipari
	Cr Alf Filipaina	Cr Sir John Walker, KNZM, CBE
	Cr Hon Christine Fletcher, QSO	Cr Wayne Walker
	Mayor Hon Phil Goff, CNZM, JP	Cr John Watson
	Cr Richard Hills
	IMSB Member Terrence Hohneck
	Cr Penny Hulse
	Cr Mike Lee

(Quorum 11 members)

Sandra Gordon

Senior Governance Advisor

15 November 2017

Contact Telephone: (09) 890 8150

Email: sandra.gordon@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

TERMS OF REFERENCE

Responsibilities

The purpose of the Committee is to:

(a) control and review expenditure across the Auckland Council Group to improve value for money

(b) monitor the overall financial management and performance of the council parent organisation and Auckland Council Group

Key responsibilities include:

· Advising and supporting the mayor on the development of the Long Term Plan (LTP) and Annual Plan (AP) for consideration by the Governing Body including:

o Local Board agreements

o Financial policy related to the LTP and AP

o Setting of rates

o Preparation of the consultation documentation and supporting information, and the consultation process, for the LTP and AP

· Monitoring the operational and capital expenditure of the council parent organisation and Auckland Council Group, and inquiring into any material discrepancies from planned expenditure

· Monitoring the financial and non-financial performance targets, key performance indicators, and other measures of the council parent organisation and each Council Controlled Organisation (CCO) to inform the Committee’s judgement about the performance of each organisation

· Advising the mayor on the content of the annual Letters of Expectations (LoE) to CCOs

· Exercising relevant powers under Schedule 8 of the Local Government Act 2002, which relate to the Statements of Intent of CCOs

· Exercising Auckland Council’s powers as a shareholder or given under a trust deed, including but not limited to modification of constitutions and/or trust deeds, granting shareholder approval of major transactions where required, exempting CCOs, and approving policies relating to CCO and CO governance

· Approving the financial policy of the Council parent organisation

· Overseeing and making decisions relating to an ongoing programme of service delivery reviews, as required under section17A of the Local Government Act 2002

· Establishing and managing a structured approach to the approval of non-budgeted expenditure (including grants, loans or guarantees) that reinforces value for money and an expectation of tight expenditure control

· Write-offs

· Acquisition and disposal of property, in accordance with the long term plan

· Recommending the Annual Report to the Governing Body

· Te Toa Takatini

Powers

(a) All powers necessary to perform the committee’s responsibilities, including:

a. approval of a submission to an external body

b. establishment of working parties or steering groups.

(b) The committee has the powers to perform the responsibilities of another committee, where it is necessary to make a decision prior to the next meeting of that other committee.

a. the power to establish subcommittees

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

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.

1 Apologies

An apology from Cr P Hulse has been received.

2 Declaration of Interest

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

3 Confirmation of Minutes

That the Finance and Performance Committee:

a) confirm the ordinary minutes of its meeting, held on Monday, 6 November 2017 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 Governance 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.

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

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

There were no notices of motion.

Finance and Performance Committee

21 November 2017

Approval of Treasury Management Policy

File No.: CP2017/23491

Purpose

1. To approve the revised Treasury Management Policy (TMP) attached as Attachment A.

Executive summary

2. The Local Government Act 2002 requires local authorities to adopt a liability management policy and an investment policy.

3. The TMP was last approved by the Finance and Performance Committee at its meeting in March 2016.

4. The main changes are:

· This policy now includes Watercare (as they have agreed to a centralised treasury operation)

· Explicitly recognise that Council Controlled Organisations (CCOs) will be consulted on matters of material significance to that CCO

· Update the credit rating objective from “at least A+” to “AA”. This is to confirm Council’s commitment to maintain its current credit rating

· The borrowing limits have been adjusted to make the calculations consistent with the methodology used by Standard & Poor’s. This has been done to avoid unnecessary confusion especially with regard to the key Debt/Revenue ratio

· To explicitly recognise the covenants we have with the Local Government Funding Agency (LGFA).

5. The TMP has also been internally approved by the Treasury Management Steering Group (TMSG) in February 2017 and again in October 2017. The TMSG is chaired by the Group Chief Financial Officer, with members including the Chief Executive, the Chief Economist, the Chief Financial Officer of Auckland Transport together with other senior council parent staff and an independent treasury expert advisor.

Recommendation/s

That the Finance and Performance Committee:

a) approve the revised Treasury Management Policy attached as Attachment A to this report.

Consideration

Local board views and implications

6. Local boards were not consulted on this report as this is a region-wide issue and not specific to a particular local board.

Māori impact statement

7. The decision to review the TMP is not a significant decision for Māori.

Implementation

8. Implementation of the TMP will be effective immediately following Finance and Performance Committee approval.

Attachments

No.	Title	Page
a ⇩	Treasury Management Policy	15

Signatories

Author	John Bishop - Treasurer and General Manager Financial Transactions
Authoriser	Matthew Walker – Acting Group Chief Financial Officer

Finance and Performance Committee

21 November 2017

10-Year Budget 2018-2028 and Auckland Plan Refresh – How Aucklanders will provide feedback during the public consultation

File No.: CP2017/19423

Purpose

1. To approve the methods of receiving verbal feedback during the public consultation period for the 10-year Budget 2018-2028 (LTP) and the Auckland Plan.

Executive summary

2. The broader communications and engagement approach to engage Aucklanders across the region was discussed at the Finance and Performance and Planning workshop on 15 November 2017. This report focuses specifically on how council will receive verbal feedback from the public at both council and community led events during the consultation period for both plans.

3. The LTP and the Auckland Plan both require use of the special consultative procedure under the Local Government Act 2002 (LGA). The Planning Committee agreed at the meeting on 28 March 2017, (PLA /2017/30) to use the Special Consultative Procedure on the refreshed draft Auckland Plan concurrent with the LTP consultation.

4. In 2014 the LGA was amended, and now provides far more flexibility on how councils consult with their community, including how verbal feedback can be collected. The intent of the legislation is to enable communities to engage in the public consultation process in a variety of ways to suit their personal preferences including how they can provide verbal feedback.

5. The LTP/Auckland Plan consultation period will run for four weeks from 28 February 2018 to 28 March 2018. Given the timeline of the LTP and the Auckland Plan and the steps involved during April to June 2018, it is not possible to apportion time for traditional hearings for the general public following the consultation period

6. It is recommended that a range of methods are used to enable Aucklanders to understand and provide feedback using written, verbal and digital channels. The following events will be delivered specifically to collect verbal feedback:

· Up to 25 Have Your Say events held across the region

· Four regional stakeholder events will be held in a traditional hearing style in the Auckland Town Hall. These will be with listed regional stakeholders, infrastructure stakeholders, transport stakeholders and central government stakeholders.

· Hui with mana whenua and mataawaka will also be held to discuss regional topics of interest.

· In addition, it is proposed to hold four to six community events with different demographic groups and ethnic communities (Youth, Seniors, Pacific, Ethnic, Rainbow and Disability) to gather their feedback.

· An independently commissioned quantitative survey will be conducted with a statistically representative sample of Aucklanders that aligns with the demographic profile of Auckland.

Recommendation/s

That the Finance and Performance Committee:

a) approve the approach (set out in Option one, paragraphs 15 – 18 of this report) to receive verbal feedback from Aucklanders on the Long-term Plan and Auckland Plan from 28 February 2018 to 28 March 2018 comprising of:

· up to 25 Have Your Say events targeting general Auckland residents are held in local board areas across the region;

· four regional stakeholder events (traditional hearing style);

· an independently commissioned quantitative survey;

· four to six community specific events to collect feedback from different demographic groups. These events will target Youth, Seniors, Pacific, Ethnic, Rainbow and Disability communities;

· hui with mana whenua and mataawaka.

b) require Councillors to attend a minimum of three Have Your Say events each to hear the views of Aucklanders.

Comments

Background

7. Prior to legislative changes in 2014, all submitters had to provide a written submission and were also given a choice of speaking to that submission (indicated via a tick box on the submission form). If a submitter indicated they wished to be heard, they were contacted and booked into a local or regional time slot following consultation, where they presented the same content as their written submission. The hearings were conducted via a formally constituted public meeting (usually a full committee meeting). The regional hearings would take a full week of elected members’ time and around one day per local board for local hearings.

8. Amendments to the LGA in 2014 have since provided far more flexibility in how public feedback can be received. The intent of the legislation is to enable communities to engage in the public consultation process in ways to suit their personal preferences. Given Auckland’s diverse communities, this was seen as a great opportunity to revisit the traditional, more formal processes that had existed prior to the legislative amendment and provide more options.

9. The Planning Committee agreed at the meeting on 28 March 2017, (PLA /2017/30) to use the Special Consultative Procedure on the refreshed draft Auckland Plan, concurrent with the LTP.

10. In adopting the LTP and the Auckland Plan, council must use the Special Consultative Procedure prescribed by the LGA. In particular:

i) Council must make sure that any person who wishes to present their views using “spoken interaction” is given a reasonable opportunity to do so and is informed about how and when he or she may take up that opportunity.

ii) The term “spoken interaction” replaced the former requirement for the council to provide a submitter with a “reasonable opportunity to be heard”. The new term is not intended to replace or restrict the usual daily engagement that elected members and staff will continue to have with communities in phone calls, conversations and emails.

iii) Section 80(1) of the Local Government (Auckland Council) Amendment Act 2010 states “The Auckland Council must involve central government, infrastructure providers (including network utility operators), the communities of Auckland, the private sector, the rural sector, and other parties (as appropriate) throughout the preparation and development of the spatial plan.”

11. The LTP 2015 - 2025 consultation period ran for seven and a half weeks. 1412 people participated in council led events plus approximately a further 900 at community led events. In comparison the LTP 2012-2022, when traditional style hearings were held, council heard from 673 submitters. For more information that supports the positive trend associated with HYS events see Attachment A.

12. HYS events were first introduced in 2015 as part of the last LTP consultation process. The events were spread across the Auckland region and scheduled mostly after working hours and on weekends to ensure convenience for residents. These HYS events were designed to be traditional or modern, or a formal or informal style. They enable Aucklanders to share their views with council and other Aucklanders, also to hear different perspectives so they could better understand the scale and complexity of the decisions council will make.

13. An independently commissioned quantitative survey will be conducted with a statistically representative sample of up to 5000 Auckland residents that aligns with the demographic profile of the Auckland population. The survey has not yet been commissioned so cost and scale are yet to be determined. This survey will be independently reviewed by the University of Auckland to ensure technical accuracy.

Options for receiving verbal feedback from Auckland residents

14. Given the timeline of the LTP and the Auckland Plan and the steps involved during April to June 2018, it is not possible to apportion time for any spoken interaction events following the consultation period. There are two options to receive verbal feedback from the general Auckland resident population during the consultation period. These are:

· Option One – HYS events only

· Option Two – Traditional hearings and HYS events

Option One – HYS events only

15. Up to 25 HYS events are proposed to be held across the region. This consists of one event per local board plus additional events in larger geographic or more heavily populated areas as required. It is anticipated that no more than four additional events will be needed. The format of these HYS events will be decided by local boards and tailored to the preference of each community. The formats are likely to range from a more traditional formal hearing style to a less formal round table approach. The Citizen Engagement and Insights unit in collaboration with Local board Services and Democracy Services will confirm the number, scheduling and scope of events by 15 December 2017. This will inform the level of resource and associated costs of delivering the events.

16. Training and briefing of elected members as to their roles, formats and programme for each HYS event will take place in February prior to the consultation period.

17. Councillors are encouraged to attend at least three HYS events across the region to hear the views of Aucklanders. Local boards will seek feedback specifically on their local board agreements, however understanding local views on regional issues are also a priority.

18. HYS events provide more flexibility and capacity for elected members and staff to support. Aucklanders also enjoy more flexibility as they are not required to register to attend or be heard.

19. This is the recommended option.

Option Two – Both traditional hearing events and HYS events

20. This option offers Aucklanders both traditional hearings and HYS events.

21. Traditional hearings on the regional issues could be held at a sub-regional level: North, South, East, West and Central outside of working hours to ensure convenience and accessibility for Aucklanders.

22. However, there are inherent challenges and risks for residents and council alike with this option which include:

· Likely lower attendance at locally held HYS events, given some people will perceive presenting to all councillors to be more influential

· Possible public confusion about which event to attend (particularly when there is a mixture of local and regional views)

· Significant councillor time is required to attend these hearings in addition to the four regional stakeholder events, 25 HYS events as well as the targeted spoken interaction events over the four week consultation period. Currently only Mondays and Fridays are available during the consultation period for councillors.

· If hearings on regional issues are held, it is likely that residents will want to be heard on local issues in their local board areas. To ensure convenience and fairness for Aucklanders this could mean an additional 21 hearings for councillors to attend in the four week consultation period.

· The significantly high level of additional staff resourcing and cost required to support these additional events on top of the proposed HYS events and regional stakeholder events is a risk. Please refer to Attachment C.

Targeted spoken interaction events to receive verbal feedback from regional stakeholders, Maori, specific ethnic communities and demographic groups

23. Approximately four to six targeted events and forums will be held to engage different demographic groups and communities. Council advisory panels will provide input in designing these sessions. These events will target Youth, Seniors, Pacific, Ethnic, Rainbow and Disability communities.

24. Targeted Māori events with mana whenua and mataawaka will also be scheduled to discuss topics important to Māori, listen to their views and collect their feedback.

25. Approximately four regional stakeholder events will be held during the consultation period. These sessions will be with listed regional stakeholders, infrastructure stakeholders, transport, stakeholders and central government.

26. Since 2015 regional stakeholders have been identified prior to the consultation period and invited to a traditional style regional HYS event. Each year a list of stakeholders is developed which captures large groups of people who have generally regional views from previous consultations. Further stakeholder groups are then added based on the topics being consulted on. For example, in the last Annual Plan process, accommodation providers were added to the list due to the proposed accommodation targeted rate. Attachment B of this report provides guidelines of how the different stakeholders are grouped. This shows examples of the groups and/or organisations and the suggested feedback event to match

Consideration

Local board views and implications

27. The role of local boards in the public consultation process is an integral part of our approach. If the recommendations of this report are approved, locally held HYS events will be deployed across the region to collect feedback on regional and local issues to inform the Long-term Plan (including Local Board Agreements) and the Auckland Plan Refresh.

28. Local boards will then have the discretion within the consultation period to hold HYS events that are designed to suit the preference of their local communities. This may or may not include a traditional style event. While councillors will make every effort to attend, a delegation from Governing Body would be required for local board members to hear regional views if Governing Body members were not present at an event.

Māori impact statement

29. The council’s budgeting proposals will impact on Māori through investment in service design and delivery across general community and in Māori focused initiatives. It is therefore vital that the council provides for an approach that ensures Māori are aware of the decisions being made, and have appropriate opportunity to participate in the decision-making process.

30. Māori have directed the council around their preferences for engaging in consultation. An approach has been developed that takes these preferences into account. Although no formal survey with Māori communities on this specific question have taken place, these preferences do not include a traditional hearings environment. The approach provides for engagement across our 19 Mana Whenua entities both at a collective level, and on an individual entity basis Kanohi ki te Kanohi including with council governance through the Mayor and the joint committee meetings.

Implementation

31. A decision to continue with the planned approach to collect verbal feedback will allow time for staff to finalise the consultation process and complete the statutory requirements to enable the Governing Body to adopt the consultation document at the meeting scheduled on 7 February 2018.

Attachments

No.	Title	Page
a ⇩	Further detail on the statistics of past consultations	27
b ⇩	Engagement - stakeholders criteria	29
c ⇩	Cost breakdown of including hearing style events within the consultation period	31

Signatories

Author

Kenneth Aiolupotea - Head of Citizen Insights & Engagement

Authorisers

Karl Ferguson - Communication & Engagement Director

Jim Quinn - Chief of Strategy

Matthew Walker – Acting Group Chief Financial Officer

Finance and Performance Committee

21 November 2017

Haumaru Housing : Delegated authority to sign and act as Auckand Council's representative

File No.: CP2017/23634

Purpose

1. To authorise the chief operating officer of Auckland Council to act as its representative to undertake administrative and operational matters in relation to Haumaru Auckland Limited.

Executive summary

Haumaru Housing

2. The Governing Body, at its 25 August 2016 meeting, passed resolutions (GB/2016/209) to approve a partnership with the Selwyn Foundation for the management and operation of Auckland Council’s housing for older people portfolio. The portfolio is managed through a joint venture that is now known as Haumaru Auckland Limited (Haumaru).

3. Haumaru is owned jointly by Auckland Council and the Selwyn Foundation, with council holding 49 per cent and the Selwyn Foundation holding 51 per cent interests. The Selwyn Foundation has the right to appoint three directors, and council can appoint two directors. This means Haumaru is not a council-controlled organisation.

4. Haumaru has become a Community Housing Provider eligible to receive Income Related Rent Subsidy funding, which would not have been possible had they been a council-controlled organisation.

5. Haumaru took over active management of the housing for older people portfolio on 1 July 2017.

Companies Act 1993

6. Section 120 of the Companies Act 1993 (the Act) requires the board of a company to call an annual meeting of shareholders. This meeting is to be held not later than six months after the balance date of the company.

7. Section 122(1) of the Act permits shareholders to pass written resolutions on various matters, instead of holding an annual meeting, provided such resolution is signed by not less than 75 per cent of shareholders’ entitled to vote on it.

8. This report recommends that the committee authorise the chief operating officer of Auckland Council to act as its representative in administrative and operational matters including but not limited to, executing written resolutions in lieu of holding annual 2016/2017 shareholders’ meeting .

9. The Selwyn Foundation is supportive of not holding an annual shareholders meeting.

Recommendation/s

That the Finance and Performance Committee:

a) authorise the chief operating officer of Auckland Council to act as Auckland Council’s shareholder representative to execute a written shareholders resolution not to hold an annual meeting of the shareholder for 2016/2017.

Comments

Background: Housing for older people – joint venture partnership

10. The Governing Body, at its 25 August 2016 meeting, approved a joint venture between council and the Selwyn Foundation (GB/2016/209) for the management and operation of council’s housing for older people portfolio.

11. The joint venture is a limited partnership, with Auckland Council holding 49 percent and the Selwyn Foundation holding 51 per cent interests.

12. Auckland Council will retain ownership of the portfolio land subject to any proposed redevelopment and rationalisation of the portfolio. The housing assets will be leased to the joint venture entity for an initial period of 25 years at a peppercorn rental, with three rights of renewal of 25 years each, subject to performance criteria.

13. Council has delegated authority to Panuku Development Auckland Limited to act on behalf of Auckland Council in all respects in relation to the management agreement and the lease that have been entered into with Haumaru.

14. Council also agreed to make appropriate financial provision in the 2017/2018 Annual Plan and the Long-term Plan 2018-2028.

Companies Act 1993

15. The Act requires that companies hold an annual shareholders meeting not later than six months after the balance date of the company.

16. Section 122(1) of the Act permits the shareholders to pass written resolutions on various matters instead of holding a shareholders meeting, provided such resolution is signed by not less than 75 per cent of shareholders entitled to vote on it. Such a resolution is as valid as if it had been passed at an annual meeting of the shareholder.

17. The business to be conducted at Haumaru’s 2016-2017 annual shareholders’ meeting would be to:

(i) note the appointment of the company’s auditor

(ii) note that Haumaru has provided a copy of its first annual 2017 report (for the seven months ending 30 June 2017)

(iii) confirm the appointment of directors to Haumaru

(iv) note the amendments to the Auckland Council’s Board Appointment and Remuneration Policy following the 2017 review.

18. It should be noted that Haumaru’s activities were very limited in the period ending 30 June 2017. Activities in this period were focused on preparation for taking over management of the housing for older people portfolio. Active management of the portfolio did not commence until 1 July 2017, which is outside of the period covered by Haumaru’s annual report.

19. Due to the administrative nature of the business to be conducted at the 2016-2017 annual shareholders’ meeting, this report recommends that the committee authorise the chief operating officer of Auckland Council to execute written resolutions in lieu of the annual shareholders’ meeting.

20. The Selwyn Foundation is supportive of not holding a shareholders meeting.

21. If this recommendation is approved by the committee, the CCO Governance and External Partnerships department will arrange for the appropriate paperwork to be signed by council’s chief operating officer and all other statutory requirements to be completed by Haumaru and forwarded to the Companies Office by 30 November 2017.

Local board views and implications

22. Governance of Haumaru is the responsibility of the governing body given the regional nature of its activities, and the views of the local boards have not been sought in the preparation of this report.

23. In addition, the matters for decision in this report are of an administrative nature and do not raise any implications for local boards to consider.

Māori impact statement

24. This report does not raise any issues of significance or adverse impacts for Māori, nor does it raise any issues that will be of benefit to Māori.

Implementation

25. Council staff will prepare appropriate documentation and company resolutions to ensure compliance with the statutory timeframes.

Attachments

There are no attachments for this report.

Signatories

Author

Josie Meuli - Senior Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Matthew Walker – Acting Group Chief Financial Officer

Finance and Performance Committee

21 November 2017

Shareholder approval of Regional Facilities Auckland lease for developing a climbing facility at QBE Stadium

File No.: CP2017/22487

Purpose

1. To provide information about Regional Facilities Auckland’s (RFA) proposal to grant a lease on QBE Stadium land to a company wanting to develop a climbing facility, noting that the decision whether or not to approve the grant of lease will be considered in the confidential section of the committee meeting.

Executive summary

2. RFA was approached in 2016 to lease a portion of the land comprising QBE Stadium (formerly North Harbour Stadium) and develop an indoor climbing gymnasium.

3. QBE Stadium is listed as a strategic asset in Auckland Council’s Significance and Engagement Policy. RFA and the company concerned have drafted a lease agreement with a term of up to 35 years. This means the proposed lease triggers the need for council approval for RFA entering into the arrangement.

4. When considering such approvals, three aspects should be considered: strategic fit of the proposal, financial implications, and the process the board has followed to reach a proposed deal.

5. The development of this land fits with RFA’s strategic priorities for QBE Stadium as a facility hosting high-performance and community training facilities, in addition to its stadium. The proposal is expected to have a positive financial impact for Regional Facilities Auckland. RFA’s board considered and approved a paper on the indoor climbing proposal on 21 August 2017.

6. The detailed proposal will be considered in an item on the confidential agenda of this Finance and Performance Committee meeting. That paper will seek the committee’s approval for RFA to enter into the lease arrangement. Representatives from RFA will attend the committee meeting, and will be available to answer questions on the proposal.

Recommendation/s

That the Finance and Performance Committee:

a) note the proposal for Regional Facilities Auckland to enter into a 35-year lease arrangement with a company wishing to develop a climbing facility on QBE Stadium land

b) note that as QBE Stadium is a strategic council asset, shareholder approval is required for a lease of this length

c) note that the detail of the proposal and the formal approval will be sought through a separate confidential report on this Finance and Performance Committee agenda.

Comments

7. RFA was approached in 2016 by a company wanting to lease a portion of the land comprising QBE Stadium (formerly North Harbour Stadium) and develop an indoor climbing gymnasium. This followed an extensive period of the company unsuccessfully trying to secure other land in the Albany area, including council land.

8. The proposed lessee wishes to develop a climbing gymnasium that caters for both domestic and international competitive climbers, and provides the best equipment and facilities in Australasia. It is seeking to leverage rock climbing’s entry into the Olympics in 2020 to deliver a fit-for-purpose, high performance facility capable of hosting significant events, including World Cup events.

9. RFA is supportive of the proposed development because of its alignment with its plans for QBE Stadium and its wider strategic goals as an organisation. It aligns through providing high performance sport facilities, the potential for the development to complement the recently opened aquatic centre and add to the vibrancy and profile of the stadium precinct, and the opportunity to access third party investment to add a valuable recreation asset on a currently under-utilised area of the stadium.

10. RFA’s board considered and approved the indoor climbing development proposal on 21 August 2017.

Why this proposal needs council approval

11. The Council-controlled Organisation Accountability Policy in the Long-term Plan 2015-2025 refers to assets listed in the Significance and Engagement Policy as being strategic, and North Harbour Stadium (now QBE Stadium) is listed in the Significance and Engagement Policy.

12. A major transaction in the Accountability Policy includes “any long-term contracts for the development or operation of a strategic asset”. The lease proposed by RFA triggers the long-term threshold provision, even though the lease affects only a small part of the area of QBE Stadium. The issue of significance was tested with Auckland Council’s legal staff, who confirmed that council approval is required.

13. However, the transaction is at the minor end of the scale, and staff advise that it does not need to be provided for in the Long-term Plan 2018-2028 and consulted on through that mechanism.

14. In assessing whether approval should be given for a major transaction, there are three key areas to consider:

· whether the proposal is consistent with council’s strategic goals relating to Regional Facilities Auckland, and in particular stadiums and community facilities

· the decision-making process that the Regional Facilities Auckland board has used

· any possible financial implications of the proposal.

Alignment with council’s strategic objectives

15. Regional Facilities Auckland’s role is to promote an equitable provision of cultural, heritage and lifestyle opportunities through a regional perspective on the provision of social and community infrastructure. One of RFA’s key strategic directions under its Statement of Intent is to “invest in our venues and services”. This includes developing Auckland’s stadiums to “underpin future opportunities to advance our community’s social and cultural wellbeing and further contribute to Auckland’s economic growth.”

16. The 21 August 2017 RFA board paper refers to the operational alignment of the proposal with the strategic priorities of Auckland Stadiums (the division of RFA which manages QBE Stadium), and in particular RFA’s overall plans for QBE Stadium.

17. The proposal will support a number of wider council priorities, such as contributing to delivery of a wide range of cultural and social activities for the Auckland region, and maximising financial sustainability of assets which RFA manages on behalf of council. The proposal is consistent with the aspirations of the Auckland Sport and Recreation Strategic Action Plan.

Decision-making process used by Regional Facilities Auckland board

18. RFA’s board considered and approved a paper on the proposal on 21 August 2017. It also considered other aspects of the proposal at its meetings in March, April and June 2017 as the proposal was developed.

19. The following matters were considered:

· strategic and operational alignment (as discussed above)

· the need for council approval

· due diligence about the lessee, including why they want the site, who the shareholders are, the business concept, and the financial forecasts of the company

· the need for RFA to do site preparations, balanced by the expected rental, based on a market valuation prepared by CBRE

· the key lease terms, including some (at the time) unresolved issues around car-parking access when there are clashing events at the stadium.

20. The paper also considered risks of entering into the ground lease arrangement, namely: pressure on car parks at the stadium, and a failure by the company to complete initial works on what is a high-profile area of the QBE Stadium site.

Financial implications of the proposal

21. The proposed lease agreement is predicated on market-based commercial terms. In this regard, there is no financial advantage to the lessee in being based on RFA land relative to private sector land.

22. RFA expects to pay for site preparation works as part of the lease terms. This is balanced by the income RFA will receive from the annual ground lease rental for the site. As the lease is for 35 years, and that the land is currently unused, the financial implications are positive.

23. The ground rental is market-based and has been determined by an independent valuation undertaken for RFA by CBRE in June 2017.

Conclusion

24. The RFA board has considered the proposal several times. Discussions with RFA staff have demonstrated that the full range of issues have been considered. The proposed lease has positive financial implications, and carries low risk even in the event of the climbing business failing.

25. A confidential report on the committee agenda will provide additional detail of the commercial terms of the lease, to support the committee’s decision regarding the lease.

Consideration

Local board views and implications

26. Shareholder and funding decisions relating to RFA are a matter for the governing body.

27. The Upper Harbour Local Board has been informed of the proposal, which broadly aligns with the draft local board plan which is currently being developed.

Māori impact statement

28. No consideration has been given to the Māori impact of approving RFA entering into this lease.

Implementation

29. If council approves the lease arrangement, RFA will proceed to finalise the lease arrangements alongside Auckland Council’s legal staff.

Attachments

There are no attachments for this report.

Signatories

Author

Edward Siddle - Principal Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Matthew Walker – Acting Group Chief Financial Officer

Finance and Performance Committee

21 November 2017

Unlock Avondale

File No.: CP2017/23973

Purpose

1. For the Finance and Performance Committee to approve the disposal of property set out in the Unlock Avondale High Level Project Plan (HLPP), which was endorsed by the Planning Committee on 7 November 2017.

Executive summary

2. Unlock Avondale is an urban regeneration project which seeks to create the momentum for change and reinvigorate Avondale by leveraging off existing council land holdings within the Unlock Avondale boundary.

3. On 7 November 2017, the Planning Committee considered and adopted the HLPP for Unlock Avondale. The Planning Committee authorised Panuku Development Auckland (Panuku) as Auckland Council’s lead delivery agency for Avondale (resolution number PLA/2017/142). Panuku will actively collaborate with the wider council group and its controlled organisations to integrate the planned activities in order to align projects and implementation to achieve the outcomes in the HLPP.

4. The Planning Committee also endorsed the disposal of the following site to enable it to be utilised for the urban renewal and housing outcomes set out in the Avondale HLPP:

Property

Certificate of Title

2014 Capital Value

93-99 Rosebank Road, Avondale

NA25A/557, NA133/52 (part-cancelled), NA133/53 (part-cancelled) and 93NA218/152 (part-cancelled)

$3,350,000 (93 Rosebank Road)

$2,450,000 (99 Rosebank Road)

5. The Finance and Performance Committee need to approve the disposal of the aforementioned property to enable Panuku to progress Unlock Avondale.

Recommendation/s

That the Finance and Performance Committee:

a) approve, subject to the satisfactory conclusion of any required statutory processes, the disposal of the following property, with the objective of contributing to the outcomes of the Avondale High Level Project Plan of urban regeneration, renewal and housing:

i) 93-99 Rosebank Road, Avondale being Lot 1 DP 68893, part Lot 26 DP 177, part Lot 26 Allotment 7 Parish of Titirangi and part Lot 1 DP 8900 contained in computer freehold registers NA25A/557, NA133/52 (part-cancelled), NA133/53 (part-cancelled) and NA218/152 (part-cancelled), subject to this site no longer being required by Community Facilities; and

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

Attachments

No.	Title	Page
a ⇩	Unlock Avondale resolutions	43

Signatories

Authors

John Carter – Senior Project Planning Leader, Panuku Development Auckland

Letitia Edwards - Team Leader Portfolio Review, Panuku Development Auckland

Authorisers

David Rankin – Chief Operating Officer, Panuku Development Auckland

Matthew Walker – Acting Group Chief Financial Officer

Finance and Performance Committee

21 November 2017

Finance and Performance Committee - Information Report - 21 November 2017

File No.: CP2017/23572

Purpose

1. To receive a summary and provide a public record of memos or briefing papers for the Committee’s information and any other information that may have been distributed to committee members since 24 October 2017.

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 information only report is attached:

· Finance and Performance Committee Forward Work Programme to 30 June 2018 (Attachment A)

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

· 18 October 2017 – Long-term Plan 2018-2028 workshop minutes (Attachment B)

· 26 October 2017 – Long-term Plan 2018-2028 workshop minutes (Attachment C)

· 26 October 2017 – Long-term Plan 2018-2028 enquiries and workshop actions (Confidential – no attachment)

· 2 November 2017 – Long-term Plan 2018-2028 workshop minutes (Attachment D)

5. The workshop papers and any previous documents can be found on the Auckland Council website at the following link: http://infocouncil.aucklandcouncil.govt.nz/

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

· under ‘Attachments’, select either HTML or PDF version of the document entitled ‘Extra Attachments’.

6. Note that, unlike an agenda decision 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 information report – 21 November 2017.

Attachments

No.	Title	Page
a ⇩	Finance and Performance Committee Forward Work Programme to 30 June 2018	47
b ⇨	18 October 2017 - Long-term Plan 2018-2028 workshop minutes (Under Separate Cover)
c ⇨	26 October 2017 - Long-term Plan 2018-2028 workshop minutes (Under Separate Cover)
d ⇨	2 November 2017 - Long-term Plan 2018-2028 workshop minutes (Under Separate Cover)

Signatories

Author	Mike Giddey - Senior Governance Advisor
Authoriser	Matthew Walker – Acting Group Chief Financial Officer

Finance and Performance Committee

21 November 2017

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

That the Finance and Performance Committee:

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

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

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

C1 Shareholder approval of a Regional Facilities Auckland lease at QBE Stadium

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

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

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

s7(2)(i) - The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

In particular, the report contains information about proposed lease term arrangements. The attachment to the report is a Regional Facilities Auckland board paper which include further details about proposed lease arrangements and the prospective lessee, with which the negotiations have not yet been finally concluded.

s48(1)(a)

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

C2 Unlock Avondale

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

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

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

s7(2)(b)(ii) - The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.

s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

In particular, the report contains information which relates to the commercial activities of third parties.

s48(1)(a)

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