I hereby give notice that an extraordinary
meeting of the Finance and Performance Committee will be held on:
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Date:
Time:
Meeting Room:
Venue:
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Thursday, 22
October 2020
10.00am
Reception
Lounge
Auckland Town Hall
301-305 Queen Street
Auckland
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Kōmiti ā Pūtea, ā
Mahi Hoki /
Finance and Performance Committee
OPEN AGENDA
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MEMBERSHIP
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Chairperson
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Cr Desley Simpson, JP
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Deputy Chairperson
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Cr Shane Henderson
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Members
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Cr Josephine Bartley
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Mayor Hon Phil Goff, CNZM, JP
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IMSB Member Renata Blair
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Cr Richard Hills
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Cr Dr Cathy Casey
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Cr Tracy Mulholland
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Deputy Mayor Cr Bill Cashmore
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Cr Daniel Newman, JP
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Cr Fa’anana Efeso Collins
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Cr Greg Sayers
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Cr Pippa Coom
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Cr Sharon Stewart, QSM
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Cr Linda Cooper, JP
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IMSB Chair David Taipari
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Cr Angela Dalton
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Cr Wayne Walker
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Cr Chris Darby
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Cr John Watson
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Cr Alf Filipaina
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Cr Paul Young
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Cr Christine Fletcher, QSO
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(Quorum 11 members)
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Sandra Gordon
Kaitohutohu Mana Whakahaere Matua /
Senior Governance Advisor
19 October 2020
Contact Telephone: (09) 890 8150
Email: sandra.gordon@aucklandcouncil.govt.nz
Website: www.aucklandcouncil.govt.nz
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Terms of Reference
Responsibilities
The purpose of the committee is to:
a)
advise and support the mayor on the development of the Long-term Plan
(LTP) and Annual Plan (AP)
b)
monitor the overall financial management and performance of the council
parent organisation and Auckland Council group
c) make financial
decisions required outside of the annual budgeting processes.
The committee will establish an annual work programme
outlining key focus areas in line with its key responsibilities, which include:
·
advising and supporting the mayor on the development of the LTP
and 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
·
approving the financial policy of the council parent organisation
·
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
·
approve the council insurance strategy and annual insurance
placement for Council
·
performance measures and monitoring
·
write-offs
·
acquisition of property in accordance with the LTP
·
disposals in accordance with the LTP
·
recommending the Annual Report to the Governing Body
·
funding for achieving improved outcomes for Māori.
Powers
(i) 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.
(ii) 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.
(iii) If
a decision is a budgetary or financial decision that relates primarily to the
Finance and Performance Committee responsibilities, the Finance and Performance
Committee has the powers to make associated decisions on matters that would
otherwise be decided by other committees. For the avoidance of doubt, this
means that matters do not need to be taken to multiple committees for
decisions.
(iii) The
committee does not have:
(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.
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Finance and
Performance Committee
22 October
2020
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ITEM TABLE
OF CONTENTS PAGE
1 Apologies 7
2 Declaration of
Interest 7
3 Petitions 7
4 Public Input 7
5 Local Board
Input 7
6 Extraordinary
Business 7
7 Emergency
Budget 2020/2021 - Update October 2020 9
8 Emergency
Budget 2020/2021 Asset Recycling Implementation 17
9 Preparation of
the draft Auckland Council Annual Report 2019/2020 and draft Auckland Council
Summary Annual Report 2019/2020 33
10 Consideration of
Extraordinary Items
PUBLIC EXCLUDED
11 Procedural
Motion to Exclude the Public 41
C1 CONFIDENTIAL: Recommendation of
the draft Auckland Council Annual Report 2019/2020 and draft Auckland Council
Summary Annual Report 2019/2020 41
C2 CONFIDENTIAL: Emergency Budget
2020/21 asset recycling prepaid lease opportunity (Covering report) 41
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 Petitions
There is no
petitions section.
4 Public
Input
There is no
public input section.
5 Local
Board Input
There is no
local board input section.
6 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.”
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Finance and
Performance Committee
22 October
2020
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Emergency
Budget 2020/2021 - Update October 2020
File No.: CP2020/14400
Te take mō te
pūrongo
Purpose of
the report
1. To provide the committee with financial update information since the
Emergency Budget was adopted, including the monitoring of emergency budget
savings.
Whakarāpopototanga matua
Executive summary
2. The
Emergency Budget 2020/2021 was adopted by the Governing Body on 30 July 2020.
3. The
final budget included a projected reduction in cash operating revenue of around
$450 million for 2020/2021 as a result of COVID-19 and a range of measures such
as reductions in operating expenditure, temporarily elevated debt levels,
capital expenditure deferrals, and asset recycling to mitigate the impact
of this revenue shortfall as well as the unprecedented drought situation.
4. As the COVID-19 situation is still evolving, its financial impacts
on council remain uncertain. Finance staff will monitor the progress for
2020/2021, including the financial performance of Auckland Council and its
CCOs, and progress on other key mitigations to ensure the group can respond to
any material changes to the Emergency Budget. Staff will report on progress to
the Finance and Performance Committee on a monthly basis.
5. This
month the key updates are:
· progress
for 2020/2021 against the Emergency Budget
· update
on the Value for Money (VfM) programme
· update
on the 36th America’s Cup commercial arrangements.
Progress for 2020/2021 against the
Emergency Budget
6. A
verbal update on the group financial performance for September 2020,
accompanied by a performance dashboard, will be provided at the meeting.
7. Auckland
Council continued to make progress towards the $120 million savings target in
the month of September 2020. A further $9 million of savings was achieved,
bringing the total achieved savings to $78 million or 65 per cent.
8. As
at the quarter ended 30 September 2020, Auckland Council had a total FTE
(Full-Time Equivalent) of 6,341, a net reduction of 129 FTE compared to the
year ended June 2020.
Update on the Value for Money (VfM) programme
9. As
part of the Value for Money work programme for this year, work has progressed
on determining the amount of efficiency savings achieved since the
amalgamation.
10. A
strong focus has been placed on achieving savings targets set each year in the
annual and 10-year (long-term plan) budgets.
11. Cumulative
savings of $1.9 billion have been realised so far across financial years
2011/2012 to 2019/2020. If these savings had not been made, the total rates
requirement would have been 14 per cent higher over these years.
Update on the 36th America’s Cup commercial arrangements
12. Panuku
has provided an update on the progress of relocating commercial tenants in
Wynyard Quarter and Viaduct Marina to enable the 36th America’s Cup
infrastructure works in this report.
13. The remaining
obligations associated with commercial arrangements, with an estimated cost of
no more than $4 million, will be managed within the existing budgets related to
the delivery of the AC36 programme.
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Ngā tūtohunga
Recommendation/s
That the Finance and Performance
Committee:
a) receive
the update on progress for financial year 2020/2021.
b) note
that Auckland Council has achieved $78 million towards the $120 million
council organisation savings target.
c) receive
the update on the Value for Money programme.
d) receive
the update on the 36th America’s Cup commercial arrangements.
|
Horopaki
Context
14. The Emergency
Budget 2020/2021 was adopted by the Governing Body on 30 July 2020.
15. The financial
implications of COVID-19 were highly uncertain at the time when the Emergency
Budget was prepared. Therefore, the adopted budget was developed based on a set
of forecasting assumptions for a “most likely scenario”. Key
assumptions included government decisions on alert levels and the economic
outlook.
16. The
final budget included a projected reduction in cash operating revenue of around
$450 million for 2020/2021 as a result of COVID-19 and a range of measures
including reductions in discretionary expenditure, temporarily elevated debt
levels, capital expenditure deferrals, temporary reductions in operating
service levels and asset recycling to mitigate the impact of this revenue
shortfall as well as the unprecedented drought situation.
17. As the
COVID-19 situation is still evolving, its financial impacts on council remain
uncertain. As the 2020/2021 year progresses, staff will monitor the financial
performance of the council and its CCOs to ensure the group can respond to any
material variations from the Emergency Budget. Staff will report on progress to
the Finance and Performance Committee on a monthly basis.
Tātaritanga me ngā
tohutohu
Analysis and advice
Progress for 2020/2021 against the Emergency Budget
Financial performance
18. A verbal
update on the group financial performance for September 2020, accompanied by a
performance dashboard, will be provided at the meeting.
Savings progress for Auckland
Council
19. The Emergency
Budget included group savings and cost reductions of over $200 million compared
to the group budget submitted in March 2019. The progress towards the savings
target for Auckland Council of $120 million is reported monthly. Progress of
the CCOs towards their savings targets will be reported through the quarterly
performance reporting.
20. As
at the end of September, Auckland Council has achieved $78 million towards the
$120 million savings target, an increase of $9 million savings from August.
Savings amounts reflect the reduction in the annual budget as a result of the
initiative. Savings of note in the month include:
· $2.50 million
reduction in organisational strategy operating expenditure budget
· 
$2.52 million of ACC savings based on review of forecast costs vs
budget
· $1.45 million
savings from management of staff to reduce overtime; and use of temporary staff
and contingent workers across all services by reducing facilities opening hours
or adjusting staffing levels when facilities are not busy
· $0.75 million from
reducing higher duties and secondment allowances through strict application of
guidelines
· $0.38 million of
direct facility costs savings by reducing opening hours, based on utilisation
information and with local board consultation
· $0.34 million saved
from reviewing front of house services by driving uptake of online and
telephone services to maintain service levels
· $0.31 million
savings from organisational design changes
· $0.18 million from
gyms moving to an in-house developed fitness programme
· $0.10 million from
reduction in spend on dedicated couriers and stationery
· $0.06 million
operating cost savings from additional 20 vehicles sold (total vehicles sold =
55).
Auckland Council FTE position
21. As at the quarter ended September 2020, Auckland Council’s FTE
(Full-Time Equivalent) number was 6,341, a decrease of 129 FTE compared to the
30 June 2020 FTE of 6,470.
22. The
overall reduction in FTE has primarily been managed through attrition
(resignation, retirement, end of contract and redundancy) and tight recruitment
controls. There were 56 FTE who commenced employment with the council during
the quarter.
23. Auckland
Council has also established a redeployment team which has been effective in
filling vacancies through internal transfers. Around 70 per cent of vacancies
have been filled internally, which has the benefit of being less disruptive to
staff and minimises potential redundancy costs.
24. In
the quarter to 30 September 2020 23 employees were made redundant at a cost of
$1.1 million.
25. Auckland
Council estimates FTE will be around 6,000 by the end of the financial year as
a result of attrition, restructuring activity and operating model changes.
Areas currently being considered for operating model changes include functional
areas such as project management, learning and development, grants
administration, and transformation/change management.
Update on the Value for Money (VfM) programme
26. 1 November
2020 marks the 10th anniversary since the amalgamation of local government
authorities in Auckland and the formation of Auckland Council. As part of the
Value for Money work programme for this year, work has progressed on determining
the amount of efficiency savings achieved since the amalgamation.
Prior year
savings since the amalgamation
27. Following the
formation of Auckland Council, savings targets have been incorporated into its
annual and 10-year (long-term plan) budgets with a strong focus on achieving
them each year.
28. The targets
were based on cost reductions over and above what was planned to be spent by
the legacy councils. Savings achieved from financial year 2011/2012 to
2019/2020 are set out in the table below:
|
Financial Year
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2011/12
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2012/13
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2013/14
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2014/15
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2015/16
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2016/17
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2017/18
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2018/19
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2019/20
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Total
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|
LTP
savings ($m)
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81
|
50
|
14
|
38
|
41
|
29
|
17
|
23
|
23
|
316
|
|
Cumulative
savings ($m)
|
81
|
131
|
145
|
183
|
224
|
253
|
270
|
293
|
316
|
1,896
|
29. Achievement
of these savings so far means that Council is now operating at over $316
million a year less than it would have been for the same level of service in
2011/12.
30. The savings
reflect permanent cost reductions and the impact of realising them has a
compounding effect with $1.9 billion of savings made so far.
31. These savings
and efficiencies have been achieved from leveraging the combined size of a
larger council, a focus on value for money, as well as continuous process
(including utilising more advanced technology) and organisational structural
improvements.
32. Had no
savings been made, additional rates revenue would be required for delivering
the same level of service. This means rates revenue would be 14 per cent
cumulatively higher compared to the actual rates revenue for the financial
years 2011/2012 to 2019/2020.
Specific savings
initiatives
33. In the
earlier years of Auckland Council, focus was placed on achieving budget while
delivering services and realising savings through economies of scale from the
amalgamation. It is difficult to identify specific initiatives that made up the
savings.
34. In more
recent years, a centralised process for identifying, measuring, and reporting
on savings to improve transparency on the achievement of the savings target has
been developed. Some illustrative examples from the past few years include:
Technology and process
improvements in Regulatory Services
35. Process
improvements implemented in Regulatory Services, including the roll-out of
mobile consents inspection platform, billing process improvements, and the
in-sourcing programme in the Regulatory Engineering department have resulted in
$2.6 million of savings for 2019/2020 financial year.
Organisational design
changes
36. Organisational
structure changes to minimise duplication and leverage capability and capacity
more efficiently were implemented throughout 2019/2020 financial year. Key
structure changes implemented include the disestablishment of vacant positions
and increasing spans of control by reducing management layers. Changes in
back-office areas such as Finance, Information Communication Technology (ICT),
People & Performance and Legal & Risk led to cost savings of $4.6
million.
Procurement
37. Efficiency
gains have been made by leveraging the council’s size and negotiating
better terms in procurement. Initiatives that led to savings in recent years
include negotiating lower reparation costs for property leases that were up for
renewal ($0.8 million), negotiating better prices for the council’s
internet service contracts ($0.2 million) and implementing a supplier panel for
professional services related to processing resource consents and other
applications ($0.1 million).
Prudent financial
management
38. A continuous
focus on managing costs prudently through a culture of questioning and
challenging all expenditure and managing spend against budgets has improved
efficiencies and value for money.
39. Through
specific initiatives such as in-sourcing programmes and setting performance
targets around sensitive expenditure lines, the past years have seen a 40 per
cent reduction in consultancy and professional services expenditure for the
council group (the majority of reductions coming from Auckland Council) from
$194 million in 2011/2012 to $116 million in 2019/2020. Travel spend for
Auckland Council also reduced by over 50 per cent from $1.9 million in
2016/2017 to $0.9 million in 2019/2020.
Value for Money s17a
programme benefits
40. In addition
to the financial savings (benefits that will reduce the council’s
operating expenditure funding requirement), the Value for Money s17A programme
has realised $270 million of benefits to date through the reviews completed.
These include financial benefits such as cost avoidance, achieving better
service outcomes for the same level of spend and reductions in the cost of the
group’s capital programme.
The Emergency Budget
2020/2021 savings
41. The Emergency
Budget included over $200 million of savings and cost reductions across the
council group. The progress of Auckland Council’s savings target of $120
million has been covered in the section above. More detailed savings reporting
for the council group will be provided in the upcoming quarterly performance
reports to this committee.
Update on the 36th America’s Cup commercial arrangements
42. On
29 March 2018, the Governing Body endorsed the “Wynyard Hobson
Proposal” for the location of the 36th America’s
Cup (AC36) team bases. This proposal was directed at the land and adjacent
water space around Wynyard Wharf, Halsey Wharf and Hobson Wharf.
43. As
part of this decision it was identified that there was a need to relocate
existing tenants to allow for the construction of the future team bases and
associated infrastructure for the event.
44. Over
the past two and a half years, Panuku, on behalf of Auckland Council, has been
working through tenant requirements in a phased way, to enable relocation to
occur prior to AC36 construction works.
45. Significant
progress has been made and parties have worked constructively together to exit
the Wynyard Quarter and Viaduct Marina either permanently or temporarily during the event.
46. However,
there are outstanding obligations associated with the remaining commercial
commitments. These are relocation costs, or obligations arising as a result of
agreements to surrender mid to long term tenancies.
47. The
total cost associated with all remaining arrangements will not exceed $4
million and can be managed within the existing budgets related to the delivery
of the AC36 programme.
Tauākī
whakaaweawe āhuarangi
Climate impact statement
48. Updates on
the financial progress for 2020/2021 provided in this report do not have any
direct impact on climate change. However, close monitoring and providing
visibility to this committee enables continued prudent financial management of
the Auckland Council Group. Achieving efficiency savings and maximising
financial benefits will assist in freeing up resources for applying to the
council’s strategic priorities such as climate change.
49. Consideration
for the effects on climate change has been made in the process of identifying
and implementing savings initiatives since the amalgamation of Auckland
Council.
50. There is no
additional climate impact in relation to the other updates in this report.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
51. Progress
against the Emergency Budget is closely monitored across the entire council
group, based on performance information provided by the council and respective
CCO finance teams.
52. The oversight
and governance of the AC36 programme is undertaken by the Joint Chief Executive
Group (JCEG) with membership from Auckland Council, Panuku, ATEED and Auckland
Transport. Progress on the early works programme has been reported monthly
through to JCEG.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
53. Local board
views and preferences were taken into account during the Emergency Budget
process. The monitoring of progress against the Emergency Budget includes local
board budgets.
54. Reporting on
updates for the AC36 commercial arrangements has been provided confidentially
through JCEG members and Panuku Board members. As for the overall AC36
programme, the council group engages regularly with the local boards directly
impacted by the event. All 21 local boards receive quarterly updates on the
programme.
Tauākī whakaaweawe
Māori
Māori impact statement
55. Māori
impacts were a key consideration in the Emergency Budget process.
56. There are no
additional Māori impacts in relation to the updates provided in this report.
Ngā ritenga
ā-pūtea
Financial implications
57. The financial
implications for the AC36 commercial arrangements are addressed in the body of
the report. There are no additional financial implications regarding the
updates provided in this report.
Ngā raru tūpono me ngā
whakamaurutanga
Risks and mitigations
58. As the
financial year progresses and the COVID-19 situation develops, there is a risk
of further impacts on the council’s financial projections. This will
require close monitoring to ensure council is able to best respond to these
changes.
59. Panuku and Auckland
Council will continue to work to mitigate the costs associated with the
outstanding AC36 commercial commitments.
Ngā koringa ā-muri
Next steps
60. Finance staff
will continue to monitor the financial performance and projections and update this
committee when there are further developments.
61. Final legal
agreements need to be completed for the outstanding AC36 related commercial
arrangements, along with relocation parameters and costs to be finalised.
Ngā tāpirihanga
Attachments
There are no attachments for this report.
Ngā kaihaina
Signatories
|
Authors
|
Tracy Xu - Senior Analyst
Susan Jiang Su - Financial Analyst
Ross Chirnside – Programme Lead
|
|
Authorisers
|
Ross Tucker - General Manager, Financial Strategy and
Planning
Kevin Ramsay - Acting Group Chief Financial Officer
|
|
Finance and
Performance Committee
22 October
2020
|
|
Emergency Budget 2020/2021 Asset
Recycling Implementation
File No.: CP2020/14976
Te take mō te pūrongo
Purpose of the report
1. To seek approval, subject to the satisfactory conclusion of any
required statutory processes, for the disposal of several properties as part of
Emergency Budget asset recycling.
Whakarāpopototanga matua
Executive summary
2. Asset recycling is an important lever for the council allowing
capital to be invested in the most strategically important activities. The
Emergency Budget includes $244m proceeds to be realised from asset recycling in
2021/2022. This is an increase of over $200m from
the 10-year budget and will be achieved from two focus areas – property
rationalisation and alternative commercial arrangements.
3. Principles to support decision making and guide implementation were
agreed by the Finance and Performance Committee and Governing Body on 16 July
2020 (GB/2020/71) and these are being effectively used.
4. Approval is sought for 23 properties identified as candidates for
rationalisation. These properties are in the Hibiscus and Bays Local Board area
with the local board providing its views and preferences to the committee. The
approval sought is subject to the completion of statutory processes.
5. The property rationalisation process is
dynamic with properties being added (as new opportunities are identified) and
removed (when investigation indicates the property is no longer a
rationalisation candidate).
6. Further approvals together with progress reporting will be provided
to the Finance and Performance Committee at future meetings.
|
Ngā tūtohunga
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 properties (legal description detailed in
Attachment A to this report) with the final terms and conditions to be
approved under the appropriate delegations:
i) 4
Brightside Road, Stanmore Bay
ii) 6 Brightside Road, Stanmore Bay
iii) 472 Whangaparāoa Road, Stanmore Bay
iv) 474 Whangaparāoa Road, Stanmore Bay
v) 476 Whangaparāoa Road, Stanmore Bay
vi) 478 Whangaparāoa Road, Stanmore Bay
vii) 480 Whangaparāoa Road, Stanmore Bay
viii) 482 Whangaparāoa Road, Stanmore Bay
ix) 484 Whangaparāoa Road, Stanmore Bay
x) 486 Whangaparāoa Road, Stanmore Bay
xi) 488
Whangaparāoa Road, Stanmore Bay
xii) 1/490
Whangaparāoa Road, Stanmore Bay
xiii) 2/490
Whangaparāoa Road, Stanmore Bay
xiv) 492 Whangaparāoa
Road, Stanmore Bay
xv) 494 Whangaparāoa
Road, Stanmore Bay
xvi) 496 Whangaparāoa
Road, Stanmore Bay
xvii) 498 Whangaparāoa
Road, Stanmore Bay
xviii) 498B Whangaparāoa Road, Stanmore Bay
xix) 500 Whangaparāoa Road, Stanmore Bay
xx) 502 Whangaparāoa Road, Stanmore Bay
xxi) 599
Whangaparāoa Road, Stanmore Bay
xxii) 616A
Whangaparāoa Road, Stanmore Bay
xxiii) 750A
Whangaparāoa Road, Manly
b) note
that Auckland Transport has provided advice that the completion of Penlink
will see a significant reduction in general traffic movements on
Whangaparāoa Road.
c) note that Auckland Transport has legalised as road parts of the
properties from 484 to 492 Whangaparāoa
Road and from 494
to 502 Whangaparāoa Road to accommodate the
future provision of additional traffic management solutions and treatments.
|
Horopaki
Context
7. Asset recycling is an important lever for the council allowing capital
to be invested in the most strategically important activities.
8. The 10-year budget has financial targets from asset recycling
(excluding asset sales linked directly to specific projects and programmes such
as the unlock and transform programme).
9. A key consideration for asset recycling is the opportunity cost of
holding an asset which is not providing a service or generating an appropriate
financial return against the opportunity of investing in new assets which
deliver council services.
10. The Emergency Budget includes $244m proceeds to be realised from
asset recycling in 2021/2022. This is an increase of
$220m from the 10-year budget and will be achieved from 2 focus areas.
|
Focus area
|
Low ($m)
|
High ($m)
|
|
Property
rationalisation
|
100
|
150
|
|
Alternative
commercial arrangements (leasing, sale of lease interests) including carparks
|
100
|
200
|
|
Total
|
200
|
350
|
Tātaritanga me ngā
tohutohu
Analysis and advice
Status update
11. A detailed update on progress will be provided at the next
Committee meeting as part of the quarterly report.
Property rationalisation
12. The
property rationalisation process is managed by Panuku. Panuku operate across
the council group identifying property (land
and buildings) which do not have a current or future service use and could be
candidates for rationalisation. This includes identifying properties in the
council portfolio that are no longer required for future services (or public
work) purposes and may be suitable for sale, and development if appropriate. It
also includes open space where there is an over provision in certain areas to
allow re-investment where there is less provision.
13. The
property rationalisation process is well developed. Once a property has been
identified as no longer required for current public work purposes, Panuku
engages with the council and its CCOs to establish whether the property must be
retained for a strategic purpose or is required for a future funded public
work. The rationalisation process also includes engagement with ward
councillors, local boards and mana whenua. It is designed to ensure that the
council complies with any statutory obligations in relation to the land,
including under the Local Government Act 2002 and the Reserves Act 1977.
14. At
the request of the Finance and Performance Committee the Audit and Risk
Committee have reviewed the property rationalisation process. The Audit
and Risk Committee resolved the property rationalisation approach has
reasonable and effective controls in place to ensure that risks are being
appropriately managed (AUD/2020/71).
15. The
Emergency Budget included a list of properties identified as candidates for
disposal. In July the Finance and Performance
Committee and Governing Body considered and approved 48 properties for
disposal with a capital value (rating value) of $34.5m. In September the Finance and Performance Committee considered and
approved 13 properties for disposal with a capital value (rating value) of
$20.7m.
Consideration of further properties for disposal
16. Approval
in this report is sought for the disposal (subject to
the satisfactory conclusion of any required statutory processes) of 23 properties with a capital value (rating value) of $13.9m. No
alternative uses have been identified for these properties.
17. The
subject 23 properties are located on Brightside Road and Whangaparāoa Road, Stanmore Bay.
Property legal descriptions and valuation details are summarised in Attachment
A. Aerial images are shown at Attachment B.
18. The properties were acquired by the former Rodney District Council
for the legacy Whangaparāoa Road widening project. Auckland Transport (AT) and Waka Kotahi New Zealand Transport Agency
have confirmed the properties are not required for current or future roading
purposes. Views were sought from council departments and CCOs, mana
whenua, the Hibiscus and Bays Local Board and the
Albany ward councillors.
19. Through this engagement, concerns were raised by the Albany ward
councillors and the Hibiscus and Bays Local Board regarding AT’s strategic
network planning for the area and transport infrastructure and safety traffic
issues in the proximity of the subject properties.
20. Network plans for the areas were reviewed by
AT. As a result, a portion of land from 484 to 492 Whangaparāoa Road
and from 494 to 502 Whangaparāoa Road has been retained to enable future
transport solutions and treatments to be implemented. These include
widening Whangaparāoa Road to allow the provision of a flush median and
retaining structures, and to enable the road widening of the Brightside Road and Whangaparāoa Road intersection, which will
likely include installing traffic signals.
21. At the request of one of the ward councillors the CEO of AT reviewed
these properties to determine whether they were required for future transport
purposes. AT’s Chief
Executive has advised that that the completion of Penlink will see a
significant reduction in general traffic movements on Whangaparāoa
Road. Penlink will become the primary link to the Whangaparāoa
peninsula for cycling and public transport.
22. AT has confirmed that the
remaining areas of the subject 23 properties are not required from a transport
perspective and should be released for sale. AT’s full response is
contained in Attachment C and was copied to the local board chair.
23. All
these properties were identified as potential disposals in the Emergency Budget
consultation document and none of these properties are deemed significant under
Auckland Council’s Significance and Engagement Policy.
Public consultation views on asset recycling
24. As previously reported, feedback was received on asset recycling as part of the Emergency Budget:
|
Description
|
Number supporting
|
Number opposing
|
|
General
submissions
|
175
|
186
|
|
Submission on
an identified property
|
1
|
20
|
25. No specific feedback was received supporting specific properties
recommended for disposal as part of this report. Feedback was received that did
not support the sale of the properties:
|
Property address
|
Number opposing
|
|
472-502 Whangaparāoa Road / 4-6 Brightside Road
|
1
|
|
Whangaparāoa
Road
|
4
|
Tauākī whakaaweawe
āhuarangi
Climate impact statement
26. Recommendations in this report have a neutral
climate impact. However, should these properties be sold, future development
may have an adverse climate impact.
27. At the same time should these sites be sold the
cash receipts allow council to respond to climate impacts.
Ngā whakaaweawe me
ngā tirohanga a te rōpū Kaunihera
Council group impacts and views
28. Asset
recycling takes a group approach. Council and CCO’s all identify
potential opportunities and prior to any disposal checks are made that council
or a CCO do not have an alternative use.
29. Implementing
the resolutions in this report will require input from council, Auckland
Transport and Panuku.
Ngā whakaaweawe
ā-rohe me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
30. In
2019 the Hibiscus and Bays considered the properties. At that time the
board opposed the disposal and requested the retention of the properties for a
transport related purpose. AT further reviewed the properties and
considered the feedback from the local board. As a result a portion of land from 484 to 492
Whangaparāoa Road and from 494 to 502 Whangaparāoa Road has been
retained to enable future transport solutions and treatments to be implemented.
31. In
August 2020 the local board further considered the properties and requested
Auckland Transport attend a workshop with the local board around the future
transport purposes for the intersection at Brightside and Whangaparaoa roads.
32. AT
traffic engineers have identified that buses have constrained tracking out of
this intersection, and some widening would be required on Brightside Road to
accommodate this movement. These changes are not planned for the 2020/21
improvement programme but AT will be investigating some form of road safety
treatment for the intersection. This will likely involve signalisation of
the Whangaparaoa Road/Brightside Road intersection allowing for a separate
left-turn and through lanes on Whangaparaoa Road.
33. To
enable this intersection improvement and safety treatments to occur AT have
legalised land as road on the western side of Brightside Road due to the steep
incline on the eastern side that would constrain widening in the case that the
intersection is signalised.
34. The response from AT (Attachment C) provides an overview of the
approach to addressing the intersection at Brightside and Whangaparaoa roads as
requested by the local board. AT will brief the board on these plans at a
workshop on 22 October 2020.
Tauākī whakaaweawe
Māori
Māori impact statement
35. Māori
have an active and specific role in Auckland, including kaitiakitanga
(guardianship) of our land and marine resources. Land has a specific role in
protecting, enabling and building Māori social and cultural capital. Local
marae, kohanga reo, and other Māori entities offer spiritual, cultural, as
well as a range of social, educational, health and justice services for the
community.
36. The
importance of effective communication and engagement with Māori about land
is understood. The process to date undertaken by Panuku is engagement with mana
whenua groups across the region. Each relevant mana whenua group is contacted
independently regarding council-owned land subject to rationalisation and
requested to give feedback. This provides mana whenua the opportunity to respond
with any issues of cultural significance the group would like to formally
express in relation to the subject properties.
37. Mana
Whenua engagement for the subject 23 properties has been undertaken. As part of
Panuku’s disposal process, all iwi entities will be given early notice
before subject properties are taken to market.
38. Mana
Whenua engagement for the subject properties is summarised below:
|
Ref.
|
Property
|
Mana whenua engagement
|
|
A to W
|
4 & 6
Brightside Road, Stanmore Bay;
472, 474, 476,
478, 480, 482, 484, 486, 488,1/490, 2/490, 492, 494, 496, 1/498, 498B, 500,
502, 599A and 616A Whangaparāoa
Road, Stanmore Bay;
750A
Whangaparāoa Road, Manly.
|
No feedback was
received regarding the subject properties.
|
Ngā ritenga
ā-pūtea
Financial implications
39. Capital receipts from the sale of properties not required by Auckland
Council contribute to the Emergency and 10-year Budgets by providing the
Council with an efficient use of capital and prioritisation of funds to achieve
its activities and projects.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
40. The subject
23 properties in this report are not required for a council service use. The
following are potential risks of retaining the properties:
· Increased
current and future maintenance costs
· The
opportunity cost of not being able to invest in strategically important
activities
· Economic
downturn making it more difficult to attract potential purchasers at the
optimum price.
41. There may be
a perceived risk that disposing of these properties means that they will not be
available for future council group use if required and further purchases may be
necessary. This risk is considered low because we have carefully confirmed
throughout the group that these properties are not required now or in the future
for a council service use.
Ngā koringa ā-muri
Next steps
42. Should
the Finance and Performance Committee approve the proposed disposals, the
following will be completed (in accordance with the principles):
a. Completion
of any statutory obligations
b. Prepare
property for sale and complete sales process.
43. The Finance and Performance Committee will receive regular reporting
on progress.
Ngā tāpirihanga
Attachments
|
No.
|
Title
|
Page
|
|
a⇩
|
Legal descripton
|
23
|
|
b⇩
|
Aerial images
|
25
|
|
c⇩
|
Letter from Auckland Transport Chief Executive
|
27
|
|
d⇩
|
Local board resolutions
|
31
|
Ngā kaihaina
Signatories
|
Author
|
Ross Chirnside - Programme Lead
|
|
Authoriser
|
Kevin Ramsay - Acting Group Chief Financial Officer
|
|
Finance and
Performance Committee
22 October
2020
|
|
|
Finance and
Performance Committee
22 October
2020
|
|
|
Finance and
Performance Committee
22 October
2020
|
|
|
Finance and
Performance Committee
22 October
2020
|
|
|
Finance and
Performance Committee
22 October
2020
|
|
Preparation of the draft Auckland
Council Annual Report 2019/2020 and draft Auckland Council Summary Annual
Report 2019/2020
File No.: CP2020/14299
Te take mō te
pūrongo
Purpose of the report
1. To
provide the Finance and Performance Committee with assurance that due process
was followed in the preparation of the draft Auckland Council Annual Report
2019/2020 and the draft Auckland Council Summary Annual Report 2019/2020
(together referred to as the annual reports).
Whakarāpopototanga matua
Executive summary
2. The
Governing Body will be asked to adopt the annual reports at its meeting on 29
October 2020. Preparing and publishing annual reports is a legislative
requirement and ensures that we are transparent about our operations with
investors and ratepayers.
3. The
annual reports cover the 12 months to 30 June 2020. They have been prepared by
council staff and audited by Audit New Zealand on behalf of the
Auditor-General. The annual reports compare and comment on the performance of
the group and the council against the budgets and performance targets set in
the Annual Budget 2019/2020 and the amended 10-year Budget 2018-2028.
4. The
Deputy Auditor-General attended the Audit and Risk Committee on 15 September
2020 and commented on the:
· audit
process
· draft
proposed audit opinion, including commentary on the key audit matters
· status
of the annual reports.
5. There
are no significant outstanding audit or process issues relating to the annual
reports.
6. The Auckland Council Group’s quarterly performance
reporting to 30 June 2020 against the Annual Budget 2019/2020
and 10-year Budget 2018-2028 was discussed in the confidential part of the 17
September 2020 Finance and Performance Committee meeting.
7. Each substantive council-controlled
organisation presented their fourth quarter 2019/2020 financial
performance reports in the
confidential part of the 22 September 2020
Council-Controlled Organisation Oversight Committee meeting.
|
Ngā tūtohunga
Recommendation/s
That the Finance and
Performance Committee:
a) note
the confirmation by the Audit and Risk Committee that the audit process in
respect of the Auckland Council Annual Report 2019/2020 and the Auckland
Council Summary Annual Report 2019/2020 has been completed satisfactorily
(Attachment A)
b) note
the draft Auckland Council Annual Report 2019/2020 and the draft Auckland
Council Summary Annual Report 2019/2020 will be discussed in the confidential
section of this meeting.
|
Horopaki
Context
8. The
following diagram sets out the reporting milestones and provides an outline of
the process underway to approve and adopt the annual reports.
Tātaritanga me ngā
tohutohu
Analysis and advice
9. The
Local Government Act 2002 (LGA 2002) requires Auckland Council to prepare and
adopt an annual report and summary annual report each year. The council is also
required to publish an annual report under the NZX listing rules.
10. The annual
reports for the year to 30 June 2020 have been prepared by council staff and
audited by Audit New Zealand on behalf of the Auditor-General.
11. The Audit and
Risk Committee reviews the quality of the annual reports, the processes used by
management, and compliance with legislation and the financial reporting
standards. They also review the audit process with the Office of the
Auditor-General and Audit New Zealand. The Audit and Risk Committee completed
their review on 14 October 2020 (Attachment A).
12. The terms of
reference for the Finance and Performance Committee include recommending the
annual reports to the Governing Body for adoption. This committee report, and
the report to be presented in the confidential agenda (titled CONFIDENTIAL:
Recommendation of the draft Auckland Council Annual Report 2019/2020 and draft
Auckland Council Summary Annual Report 2019/2020) enable the committee to
execute that responsibility.
13. The annual
reports are for the Auckland Council Group which is the result of consolidating
the financial and performance results of Auckland Council, its
council-controlled organisations and Ports of Auckland. Financial statements of
Auckland Council are included to comply with the LGA 2002. All budgets and
performance targets are those set out in the 10-year Budget 2018-2028 and the
Annual Budget 2019/2020.
14. The annual
report consists of four separate volumes (to be presented in confidential):
· Volume
1: Overview and service performance
· Volume
2: Local boards (comprising of 21 local board reports)
· Volume
3: Financial statements
· Volume
4: Climate change risk
15. The summary
annual report is a separate stand-alone document.
16. On 28
September 2020, the Auckland Council Group released preliminary results to the
NZX as required by the listing rules. The NZX preliminary announcement, primary
financial statements and media release was reviewed by the Audit and Risk
Committee on 15 September 2020, before being approved by the chair and deputy
chair of the Finance and Performance Committee under delegation.
17. The annual
reports are 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.
Tauākī whakaaweawe
āhuarangi
Climate impact statement
18. This
committee paper relates to financial reporting. Although Volume 4 of the annual
report discusses climate change, no decision is sought in this paper that has
an impact on greenhouse gas emissions and the council’s approach to
reduce emissions.
Ngā whakaaweawe me ngā
tirohanga a te rōpū Kaunihera
Council group impacts and views
19. The annual
reports reflect the results of the Auckland Council Group for the year ended 30
June 2020. The council-controlled organisations are involved in the preparation
of this information.
Ngā whakaaweawe ā-rohe
me ngā tirohanga a te poari ā-rohe
Local impacts and local board views
20. Volume 2 of the annual report includes a section featuring the achievements in each local board area. Local boards were engaged to collect and
review this information and each chair has prepared a message which is included
in their respective report.
Tauākī whakaaweawe
Māori
Māori impact statement
21. The annual
reports cover all aspects of the group’s governance and public
accountability. The annual reports include commentary on the
Auckland Council Group’s contribution to outcomes for Māori, the
role of the Independent Māori Statutory Board and the council’s
Ngā Mātārae - Māori Strategy and Relations department.
Ngā ritenga
ā-pūtea
Financial implications
22. There are no
financial implications directly arising from the information contained in the
report.
Ngā raru tūpono me
ngā whakamaurutanga
Risks and mitigations
23. The following
risks have been identified:
Risk of
error, omission or non-compliance in preparation of annual report and summary
annual report
24. There
is a risk that errors or non-compliance with legislation and accounting
standards could occur in the preparation of the annual reports. To mitigate
this risk, quality assurance reviews were performed on the consolidated results and commentary and the year-end reports. The reviews
focused on accuracy, completeness and reasonableness of disclosures, legislative compliance and
adherence to the council’s communications standards.
25. There
is also a risk that the annual reports present a biased view of the performance
of the Auckland Council Group. Trust lens reviewers are used to review these
reports to ensure that the annual reports tell a fair and balanced story, that
good news stories are truthful and accurate and the poor performance stories
are honest and transparent. They review the overall story for consistency
through all volumes.
Compliance
reviews
26. Auckland
Council’s Legal Services review the summary annual report and volumes 1-3
of the annual report for compliance with local government legislation.
27. The
Chief Sustainability Office reviews volume 4 of the annual
report for compliance with the Taskforce on Climate-related Financial
Disclosures (TCFD) framework.
28. Mayne
Wetherell reviews volume 3 of the annual report as
well as the summary annual report for compliance with NZX listing rules, and
compliance with the Financial Reporting Act 2013 and the Financial Markets
Conduct Act 2013.
Reviews
of accuracy, completeness and fairness
29. Several
reviews of the annual reports take place by people with differing levels and
areas of involvement in financial reporting. A summary of the reviews is as follows:
|
Reviewer
|
Volume 1
|
Volume 2
|
Volume 3
|
Volume 4
|
Summary Annual Report
|
|
Acting group chief financial officer
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
Group treasurer
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
General manager financial strategy and planning
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
General manager financial & business performance
|
|
|
ü
|
|
|
|
Group financial controller
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
Manager corporate and local board performance
|
ü
|
ü
|
|
|
ü
|
|
Manager group accounting and reporting
|
|
|
ü
|
ü
|
ü
|
|
Manager financial strategy
|
ü
|
ü
|
ü
|
|
ü
|
|
Senior group reporting technical accountant
|
|
|
ü
|
|
ü
|
|
Financial accounting manager
|
|
|
ü
|
ü
|
ü
|
|
Trust lens reviewers
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
Legal services
|
ü
|
ü
|
ü
|
|
ü
|
|
Chief Sustainability Office
|
|
|
|
ü
|
|
|
Mayne Wetherell
|
ü
|
ü
|
ü
|
|
ü
|
30. In addition
to these reviews, the council’s Financial Control team completes a
detailed reporting checklist to ensure all financial reporting and disclosure
requirements have been met.
31. Two
trust lens reviewers provided feedback on the financial statements. Both
reviewers are not within the council’s finance division, and neither were
involved in the preparation of the annual reports.
32. All
the technical quality assurance reviewers who perform reviews from a financial perspective are Chartered Accountant (CA) qualified or equivalent
and have the appropriate technical accounting skills and knowledge.
Breach of confidentiality
33. All Auckland
Council, council-controlled organisations and Port of Auckland Limited
employees who are involved in the preparation and review of the annual reports
have been briefed on confidentiality requirements.
34. Draft copies
of the annual reports were provided to members prior to this meeting. Attached
to the annual reports was a cover memo reminding councillors of NZX confidentiality
obligations. The annual reports will be discussed in the confidential part of
this meeting.
Ngā koringa ā-muri
Next steps
35. The annual
reports will be adopted by the Governing Body at its meeting on 29 October 2020
and released to the NZX and the public on 30 October 2020.
Ngā tāpirihanga
Attachments
|
No.
|
Title
|
Page
|
|
a⇩
|
Resolutions from the Audit and Risk Committee meeting
on 14 October 2020
|
39
|
Ngā kaihaina
Signatories
|
Authors
|
Tracy Gers - Group Accounting & Reporting Manager
Maria Marin Godoy - Financial Accounting Manager
Francis Caetano - Group Financial Controller
|
|
Authorisers
|
John Bishop - Group Treasurer
Kevin Ramsay - Acting Group Chief Financial Officer
|
|
Finance and
Performance Committee
22 October
2020
|
|
|
Finance and
Performance Committee
22 October
2020
|
|
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 CONFIDENTIAL:
Recommendation of the draft Auckland Council Annual Report 2019/2020 and draft
Auckland Council Summary Annual Report 2019/2020
|
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)(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 that may not be released to the
public until it is released to the NZX on 30 October 2020.
|
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 CONFIDENTIAL:
Emergency Budget 2020/21 asset recycling prepaid lease opportunity (Covering
report)
|
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)(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 that involves the commercial interests of the
council
|
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.
|
