Agenda of Finance and Performance Committee

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.

Finance and Performance Committee

19 November 2020

Auckland Council Group and Auckland Council quarterly performance reports to 30 September 2020

File No.: CP2020/16485

Te take mō te pūrongo

Purpose of the report

1. To provide an update on the financial and non-financial performance for the Auckland Council Group and Auckland Council against the Emergency Budget 2020/2021 for the three months to 30 September 2020.

Whakarāpopototanga matua

Executive summary

2. The Emergency Budget 2020/2021 was adopted in July 2020. Key aspects of the emergency budget include:

· an average general rate increase of 3.5 per cent

· over $2.5 billion capital investment for the year

· $200 million in savings and temporary cost reductions

· $244 million from asset recycling.

3. Despite more COVID-19 disruption than anticipated, the Auckland Council Group delivered a positive performance for the three months to 30 September 2020. The capital delivery of $575 million was $23 million higher than the same period last year, and the net direct operating result was $71 million favourable compared to the Emergency Budget.

4. Full-time equivalents for the group decreased by 174 to 10,909, mainly as a result of attrition and tight recruitment controls.

5. Representatives of the substantive council-controlled organisations (CCOs) boards, chief executives and chief financial officers will be presenting their 30 September 2020 results at the 8 December 2020 CCO Oversight Committee.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a) receive the Auckland Council Group and Auckland Council quarterly performance report for the period ended 30 September 2020.

Horopaki

Context

6. The committee is provided with management and statutory results on a quarterly basis. These two sets of results reconcile, however are aggregated and analysed with different lenses. The quarterly performance report reflects management’s view of the organisation and is tailored to highlight key performance matters (refer Attachments A and B). The statutory results are externally focussed, based on accounting standards (refer Attachment C).

7. Representatives of the substantive council-controlled organisations (CCOs) boards, chief executives and chief financial officers will be presenting their 30 September 2020 results at the 8 December 2020 CCO Oversight Committee.

Tātaritanga me ngā tohutohu

Analysis and advice

Summary of Group Quarterly Performance

8. The Auckland Council Group has delivered a positive performance for the three months to 30 September 2020.

9. Good capital progress is being made with $575 million of capital expenditure for the group over the three-month period. This is a $23 million increase compared to the same period last year, although it was $65 million lower than planned. Auckland Council and Auckland Transport made up the largest shortfall against budget. Both were behind budget due to late adoption of budgets, with Auckland Transport also experiencing delays because of COVID-19 in Spain affecting EMU (Electric Multiple Units i.e. trains) delivery, unexpected track maintenance by KiwiRail resulting in delays to testing new EMUs and the COVID-19 Alert Level 3 lockdown in New Zealand.

10. The group achieved a positive operating performance result for the three-month period. Direct revenue of $523 million was $36 million ahead of budget, and direct expenditure of $731 million was $35 million favourable to budget. Included in direct revenue is a $16 million surplus against budget related to Watercare’s infrastructure growth charges which is necessary to mitigate additional debt associated with their drought-related capital expenditure. Overall, the net direct operating result was $71 million favourable to budget.

11. The Asset Recycling Programme is underway with four properties having gone unconditional post 30 September 2020, with a total value of $34 million. Therefore, this is not yet reflected in the group’s financial results.

12. During the quarter, the council issued $450 million of new floating rate notes from the Local Government Funding Agency and $500 million in 30-year fixed rate green bonds. The green bonds have the longest tenor of any bond ever issued in New Zealand.

13. The group’s benchmark debt-to-revenue ratio is 270 per cent. Current indications are that the group’s debt to revenue will be 290 per cent at the end of the year per the Emergency Budget, with plans to bring the ratio to prudent and sustainable levels in future financial years as the impacts of COVID-19 dissipate.

14. The capital investment over the quarter resulted in net debt rising to $10.2 billion at 30 September, with a net debt to total assets ratio of 17 per cent.

15. Full-time equivalents (FTEs) for the Auckland Council Group decreased by 174, with Auckland Council being the largest contributor with a decrease of 129. Auckland Council FTEs have decreased largely due to attrition, redundancies and tight recruitment controls. As restructures get underway at Auckland Transport and Auckland Council, they are expected to significantly impact FTEs by the end of Q2.

16. The risk of further COVID-19 disruptions and a consequential decline in economic condition is considered to be the biggest threat to achieving Emergency Budget targets. The timing of when the asset recycling target will be achieved is also a key risk.

17. 27 out of the 80 LTP Performance measures were updated. A number of measures were impacted by COVID-19, however, targets were met in food and alcohol licensing and waste services.

Summary of Auckland Council Quarterly Performance

18. Auckland Council’s capital expenditure was tracking within its budget at 83% for the first quarter of 2020/2021. The lower investment is mainly related to timing of delivery of projects in Customer and Community and disruption caused by late budget and Local Board Plan adoption in July and August respectively.

19. Net direct expenditure was $21 million favourable to budget. This is largely due to a combination of strong regulatory revenue results and the continuation of applying tight spending controls in response to COVID-19.

20. As at the end of September, Auckland Council had achieved $78 million towards the $120 million savings target set in the Emergency Budget.

Detailed Performance Reporting

21. Detailed financial and non-financial performance of the Auckland Council Group and Auckland Council are provided in the attachments to this report.

Tauākī whakaaweawe āhuarangi

Climate impact statement

22. This committee paper relates to financial reporting. No decision is sought in this paper that has a direct impact on the group’s greenhouse gas emissions nor the group’s approach to preparing for climate change.

23. However, it is acknowledged that the activities undertaken by the group and reported on within the quarterly reporting packs have the potential to be impacted by climate change and can also reinforce or weaken our climate action response.

24. Climate action projects have been added to strategic focus areas in the Auckland Council Group quarterly reporting pack in Attachment C. This section details highlights, risks and progress on key programmes of work. These disclosures assist in holding the Auckland Council publicly accountable, and ensures the business maintains their focus on addressing climate change risk at all levels across the council.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

25. The group quarterly performance report and quarterly statutory financial report reflect the results of the group for the three months ended 30 September 2020. The council-controlled organisations and Ports of Auckland 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

26. Community investment is one of Auckland Council’s strategic focus areas. The Auckland Council quarterly report in Attachment B provides highlights, issues and risks related to local and regional projects.

27. No decisions are being sought in this report that could have an impact on local boards.

Tauākī whakaaweawe Māori

Māori impact statement

28. Māori outcomes is one of our group and council’s strategic focus areas. Attachments A and B provide key information and progress of delivery on the agreed programmes for the group and the council respectively.

29. No decisions are being sought in this report that could have an impact on Māori.

Ngā ritenga ā-pūtea

Financial implications

30. There are no financial implications directly arising from the information contained in the report.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

31. There is a risk that the information lacks accuracy and completeness due to it not being subject to audit review. Management has performed due diligence by obtaining detailed explanations from all group entities supplemented by representation letters provided by Audit and Risk chairs and CEOs.

Ngā koringa ā-muri

Next steps

32. Management will provide the committee with a quarterly performance report for the second quarter of 2020/2021 at the March 2021 meeting. The report will include financial information that will have been subject to audit review.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Auckland Council Group Q1 Quarterly Performance Report 30 September 2020	13
b ⇩	Auckland Council Q1 Quarterly Performance Report 30 September 2020	35
c ⇩	Auckland Council Group Q1 Statutory Financial Report 30 September 2020	53

Ngā kaihaina

Signatories

Authors

Tracy Gers - Group Accounting & Reporting Manager

Pramod Nair - Head of Group Financial Planning

Karuna Dahya - Strategy Analyst

Francis Caetano - Group Financial Controller

Authorisers

John Bishop - Group Treasurer

Ross Tucker - General Manager, Financial Strategy and Planning

Kevin Ramsay - Acting Group Chief Financial Officer

Finance and Performance Committee

19 November 2020

Emergency Budget 2020/2021 - Update November 2020

File No.: CP2020/16368

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 and asset recycling implementation.

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.

Progress for 2020/2021 against the Emergency Budget

5. A verbal update on the group financial performance for October 2020, accompanied by a performance dashboard, will be provided at the meeting.

6. Auckland Council continued to make progress towards the $120 million savings target in the month of October 2020. A further $9 million of savings was achieved, bringing the total achieved savings to $87 million or 72.5 per cent.

7. The asset recycling budget of $244 million to be achieved by the end of 2020/2021 is at risk. Good progress is being made on property rationalisation but there is high uncertainty in respect of the proposed carpark concession. There is greater confidence that the budget of $244 million will be achieved in early 2021/2022 financial year. The increased confidence is due to the time, or runway available, to affect the proposed sales while maximising value for money. Staff focus is on the highest value opportunities and continuing to improve the property rationalisation process.

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 $87 million towards the $120 million council organisation savings target.

c) note the status update on implementing the asset recycling budget.

Horopaki

Context

8. The Emergency Budget 2020/2021 was adopted by the Governing Body on 30 July 2020.

9. 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.

10. 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.

11. 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

12. A verbal update on the group financial performance for October 2020, accompanied by a performance dashboard, will be provided at the meeting.

Savings progress for Auckland Council

13. 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.

14. As at the end of October, Auckland Council has achieved $87 million (72.5 per cent) towards the $120 million savings target, an increase of $9 million savings from September. Savings amounts reflect the reduction in the annual budget as a result of the initiative. Savings of note in the month include:

· $1.86 million reduction in operating expenditure budget due to underspend in the first quarter

· $5.00 million of additional interest cost savings in FY21

· $1.00 million saved from Regulatory Services training budget with lower forecast spend required based on FTE projections

· $0.86 million savings from disruption to inorganic collection services due to COVID-19 lockdowns

· $0.50 million savings from restructure in Community Facilities (vacant roles not replaced)

· $0.19 million of Tūpuna Maunga Authority and Kāipatiki Reserve Board operating expenditure deferral confirmed

· $0.04 million operating cost savings from additional 9 vehicles sold (total vehicles sold = 64 with total operating cost savings in FY21 of $0.24 million).

Asset recycling implementation

Status update

15. Achieving the asset recycling budget of $244 million by the end of 2020/2021 is at risk. There is greater confidence of achieving the budget by 30 September 2021. This increased confidence is due to the time, or runway available, to affect the proposed sales.

16. The increased volume of transactions, complex sales processes and negotiations, and the focus on maximising value for money all add pressure to achieving the budget by end of 2020/2021 financial year. However, sales not occurring this financial year will likely occur early in the following financial year.

17. Work on the asset recycling budget continued to be guided by the principles agreed by the Finance and Performance Committee and Governing Body in July. The principles provide an operating framework for elected members and council staff to operate as the budget is implemented.

18. Good progress is being made on property rationalisation but there is high uncertainty in respect of the proposed carpark concession.

19. Attachment A includes more detail on the status of the asset recycling budget.

$ Million	Budget	Achieved	Forecast	Status
Property rationalisation	125	33	100 - 150	On track
Alternative commercial arrangements	119	0.4	TBC	At risk
Total	244	33.4	100-125	At risk

Property rationalisation

20. The approved pipeline of all opportunities is $191.2 million. Approved properties are at various stages of pre-sale activity with focus on the largest opportunities. Estimating time of sale and settlement at this stage is difficult due to the number of unknown factors.

21. The top 10 properties are worth $112.9 million. These are anticipated to be sold by June 2021 or early in the next financial year. The sales approach for these has been agreed by the Panuku Board.

22. The majority of properties included in the Emergency Budget have been approved by the committee. For those not approved, staff are working through known issues and engaging with local boards prior to committee consideration in 2021.

23. 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).

24. Approval of the committee will be sought for further disposals during the balance of the financial year and these properties will contribute towards the budget for 2021/2022.

Alternative commercial arrangements

25. Auckland Transport are progressing the business case for the sale of the carpark concession. Market engagement indicates strong interest but any transaction will be dependent on the conditions, if any, that may be required. For example, the balance of short-stay versus long-stay parking.

26. Consideration is also being given to how an arrangement is structured. Credit rating agencies and the required accounting treatment view sale and leaseback type arrangements as debt. While there may be other valid drivers for the carpark concession, if any transaction was treated as debt this would not assist the current debt to revenue ratio.

27. Staff had originally anticipated details of the proposal to be discussed in detail with the Committee in a workshop in late 2020. This will now be in 2021.

Other opportunities

28. Optimisation of the vehicle fleet continues. To date, 64 vehicles of the target of 180 have been sold.

29. Other opportunities are being assessed by staff and will be brought for committee consideration in due course.

Tauākī whakaaweawe āhuarangi

Climate impact statement

30. 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.

31. 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

32. 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.

33. Asset recycling takes a group approach. Council and CCOs all identify potential opportunities and prior to any disposal checks are made that council or a CCO do not have an alternative use.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

34. 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.

35. Local boards have provided feedback on the overall approach to asset recycling via Local Board feedback resolutions, or to staff from ward councillors. Local boards have also asked for greater communication and early engagement which has been incorporated in the principles approved by this committee and the Governing Body in July 2020.

36. There is no specific impact on local communities from the updates provided in this report.

Tauākī whakaaweawe Māori

Māori impact statement

37. This budget update report is for information only and therefore does not have direct impact on Māori.

38. When developing the draft Emergency Budget for consultation, a key principle taken by council staff was in ensuring that we continue to honour our commitments to Māori and continue to act in accordance with our statutory provisions relating to Te Tiriti o Waitangi to guide thinking about the appropriate balance between the levers and the extent of change for each lever.

39. Feedback was collated as part of the Emergency Budget process and presented by iwi to the Governing Body on 17 June 2020 and subsequently presented to councillors as part of the main feedback report for their consideration at the Finance and Performance Committee on 8 July 2020.

40. This month’s update included savings due to operating expenditure deferrals from the Tūpuna Maunga Authority approved at its hui in July 2020, and the Kaipātiki Reserve Board approved at its hui in May 2020.

41. For asset recycling 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.

42. Mana Whenua feedback is then considered as part of any disposal decision. All iwi entities are given notice before subject properties are taken to market should they have a commercial interest in acquiring the property.

43. Future agenda items may have implications for Māori and the Emergency Budget identified relevant Maori outcomes which will be addressed in the respective reports.

Ngā ritenga ā-pūtea

Financial implications

44. 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.

45. Staff will reassess the overall group financial position after the half-year finishes on 31 December 2020 based on the six-monthly operating and capital financial performance as well as progress with asset recycling. Staff will advise the committee on any resultant budget changes required to stay within the overall key financial parameters set for the Emergency Budget.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

46. 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.

47. The timing of achieving the asset recycling budget of $244 million by the end of 2020/2021 is at risk. However, there is greater confidence of achieving the budget by 30 September 2021. This increased confidence is due to the time, or runway available, to affect the proposed sales. More detailed risks relating to the asset recycling update are covered in Attachment A.

Ngā koringa ā-muri

Next steps

48. Finance staff will continue to monitor the financial performance and projections and update this committee when there are further developments.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Asset Recycling status update - October	67

Ngā kaihaina

Signatories

Authors

Tracy Xu - Senior Analyst

Susan Jiang Su - Financial Analyst

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Kevin Ramsay - Acting Group Chief Financial Officer

Finance and Performance Committee

19 November 2020

Submission on the MBIE consultation on Government Procurement Rules

File No.: CP2020/16956

Te take mō te pūrongo

Purpose of the report

1. To seek approval for the Auckland Council submission to the Ministry of Business, Innovation and Employment (MBIE) consultation on extending the requirement to apply the Government Procurement Rules to all government entities in the New Zealand public sector.

Whakarāpopototanga matua

Executive summary

2. MBIE is undertaking a public consultation to understand the potential benefits, opportunities, and other impacts of extending the “requirement” to apply Government Procurement Rules (Rules) to a wider set of government entities in the New Zealand public sector.

3. This extension would mean that local government organisations, including Auckland Council Group, would be subject to mandatory application of the Rules.

4. Local government organisations are currently “encouraged” to apply the Rules.

5. While the rules are useful and generally applied as a matter of good practice by Auckland Council, there are some implications of mandatory application which could impact adversely on current procurement practice and outcomes.

6. Local authorities already work under a framework that ensures accountability for the appropriate use of rate payers’ money and the well-being of their communities in the context of procurement practices so overlay of the Rules will add little in substance and practice.

7. It appears, based on draft submissions sighted, that most local government organisations are opposed to the application of the Rules to the local government sector.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a) approve the submission on the Ministry of Business, Innovation and Employment consultation on extending the Government Procurement Rules to government entities in the New Zealand public sector (Attachment A of the agenda report).

b) delegate to the Group Chief Financial Officer to authorise any minor amendments to the submission.

Horopaki

Context

Purpose of the consultation

8. MBIE is undertaking a public consultation to understand the potential benefits, opportunities, and other impacts of extending the Rules to a wider set of government entities in the New Zealand public sector.

9. This consultation will inform their policy development process and advice to Ministers.

10. The New Zealand public sector encompasses a broad range of government entities that include:

· Ministries and departments, eg MBIE

· Crown entities, eg the Accident Compensation Corporation (ACC) and District Health Boards

· Crown Research Institutes, eg the National Institute of Water and Atmospheric Research Limited (NIWA)

· Public Finance Act Schedule 4A Companies, eg Ōtākaro Limited and City Rail Link Limited

· School Boards of Trustees

· Public Finance Act Schedule 4 Organisations, eg Fish and Game Councils

· Offices of Parliament, eg The Controller and Auditor-General and the Office of the Ombudsmen

· Universities

· State-Owned Enterprises, eg KiwiRail Limted

· Regional and Territorial Authorities, eg Tauranga Regional Council and Auckland Council.

11. Government procurement is guided in New Zealand by the Government Procurement Rules (4th edition), which came into force on 1 October 2019 (the Rules).

12. New Zealand has a devolved procurement model. Outside core public sector departments, ministries and state services, have individual chief executives and governing bodies who are accountable for their organisation's procurement activity and good practice performance.

13. Currently, it is mandatory for approximately 135 government entities to apply the Rules.

14. Most government entities are ‘encouraged’ to apply the Rules as good procurement practice. This includes a significant proportion of the remainder of the New Zealand public sector, including 2,400 School Board of Trustees and 78 regional and territorial authorities (with annual collective spend of approximately $8 billion).

15. These government entities, including local authorities, can choose whether to follow the good practice standards in the Rules, including those rules requiring transparent and openly competitively processes and seeking to achieve wider economic, social, cultural and environmental benefits to New Zealand from public money spent.

16. MBIE states the following in its consultation document:

In the current policy settings, Government is limited in its ability to influence government procurement policies in the State and Public Sector, implement system-wide improvements to procurement practices and achieve greater public good from the $42 billion that is spent each year by the government sector.

If a wider set of government entities that are currently ‘encouraged’ to apply the Rules were required to apply them, there would be a number of potential benefits and opportunities:

· Consistency of procurement policies and practices across government.

· Greater transparency and visibility of government procurement opportunities for businesses.

· The potential for greater uptake of social procurement practices, achieving wider economic, social and environmental outcomes and greater impact from future policies.

· A greater focus on achieving ‘public value’. Public value means selecting the best possible outcome rather than the lowest cost. This would empower government entities to use procurement as lever to effect wider societal benefits, for example by reducing negative environmental impacts such as carbon emissions and promoting regional employment.

· More accountability for good procurement practices and strengthening recourse for businesses to challenge processes.

There would be some likely costs and other impacts:

· There may be a curtailment of current procurement flexibility and an increase in operational costs and process time and resource.

· There may be less scope for direct sourcing.

· Participation in Rules complaint processes may increase tendering costs for businesses.

· There may be insufficient procurement capability and resources in some government entities to implement the Rules.

· Some government entities will have specific statutory objectives and obligations that may be impacted. For example, regional and territorial authorities derive funding from local ratepayers (rather than taxpayers).

· Increased reporting requirements may put pressure on available resources.

Tātaritanga me ngā tohutohu

Analysis and advice

Existing benefits of being an eligible agency

17. Auckland Council and its Council Controlled Organisations (CCO’s) already operate in accordance within the principles of government procurement which are reflected in the Auckland Council Group Procurement Policy.

18. Council group procurement teams work closely with MBIE and take advantage of the benefits derived from being an eligible agency under the Rules, including participation in All of Government (AoG) contracts, where those contracts provide better benefits than we could procure in the market ourselves.

19. Council group also works closely with MBIE in developing policy programmes such as broader outcomes from procurement which closely aligns with council’s Sustainable Procurement Framework.

20. MBIE also provide useful procurement capability measurement tools and other learning and development opportunities for the whole government procurement sector.

Local Government Context

21. Local authorities are covered by the Public Audit Act 2001 and it is expected that our procurement policies and procedures compare favourably with the benchmark guidelines set out in the Office of the Auditor-General’s Procurement Guidance for Public Entities (June 2008).

22. Council group procurement strategies and our Sustainable Procurement Framework already align to government’s broader outcomes but are focussed more on outcomes identified in the Auckland Plan and other strategic planning documents.

23. Council group procurement capability is at an advanced level compared to many parts of the broader government sector. There are a number of highly skilled procurement professionals and teams within the wider council group, which means we are often leading the way in procurement practices and innovation in the government sector.

24. Mandatory application of the Rules could limit this innovation and require a more prescriptive approach to procurement practices in council with impacts on timeframes and costs.

25. Key areas of concern are:

· Delays caused by requirements to consult with MBIE on large or complex procurement activities;

· Extra approval or review steps that may be implemented;

· Central government policy changes, in particular broader outcomes, that may not align to Auckland Council priorities;

· Additional costs associated with AoG contracts that deliver less value than council can get from the market;

· Flexibility and autonomy of council decision making in procurement outcomes.

26. These impacts need to be balanced against the value outcomes achieved for ratepayers.

27. It appears, based on draft submissions sighted, that most local government organisations are opposed to the application of the Rules to the local government sector. The council group’s external legal counsel (Simpson Grierson) are also proposing to independently submit to the consultation and consider the proposed extension of the rules to be unnecessary.

Tauākī whakaaweawe āhuarangi

Climate impact statement

28. Government requirements around broader outcomes in procurement also include the following requirement:

Supporting the transition to a net zero emissions economy and assisting the Government to meet its goal of 'significant' reduction in waste by 2020. For certain contracts, government entities must support the procurement of low-waste and low-emissions goods and services and encourage innovation in the procurement process to significantly reduce climate and waste impacts.

29. Council’s Sustainable Procurement Framework and objectives already support council’s Climate Action Framework and are giving effect to the requirements to lower emissions and waste reduction in all our procurement activities.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

30. As a condition of receiving funding from Waka Kotahi NZTA, Auckland Transport (AT) is required to comply with the NZTA Procurement Manual which aligns with the Rules. Adherence to this manual therefore means that AT already has obligations relating to the Rules. Particular obligations relating to the Rules are the Principles of Government Procurement and Government Procurement Charter and Broader Outcomes.

31. Auckland Transport and Watercare have indicated that they will consider a joint submission to MBIE with council and support the council’s views expressed in the submission.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

32. We have not sought specific local board input for this submission. However, the application of the Rules could have impacts on promotion and use of local suppliers if central government policy settings require different outcomes.

Tauākī whakaaweawe Māori

Māori impact statement

33. Extending the Rules to apply to local government may have some impacts on council’s current approach to delivering Māori outcomes through our current policy and framework settings. These impacts may be related to central government policy settings however these are unknown at present.

34. Council group procurement is progressing well with implementing strategies to improve Māori business participation and outcome delivery in council procurement activities and these are being measured using the Kia Ora Tāmaki Makaurau framework. These activities are supported by council’s internal resources as well as central government support.

Ngā ritenga ā-pūtea

Financial implications

35. There are no financial impacts in deciding to make a submission. There could however be financial impacts to Auckland Council group if the Rules are mandatory for local government, including the requirement to participate in AoG agreements or be subjected to mandated central government policies such as prompt or shortened payment terms with suppliers.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

36. The risks for Auckland Council if the Rules were made mandatory are discussed in the body of the report. There are no risks in approving this submission.

Ngā koringa ā-muri

Next steps

37. If approved, the Auckland Council submission on the Ministry of Business, Innovation and Employment consultation on extending the Government Procurement Rules to government entities in the New Zealand public sector will be sent by the deadline of 23 November 2020.

38. All feedback received by MBIE will inform their policy development process and advice to Ministers.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Author	Jazz Singh - General Manager Procurement
Authoriser	Kevin Ramsay - Acting Group Chief Financial Officer

Finance and Performance Committee

19 November 2020

Treasury Management Policy Review

File No.: CP2020/16391

Te take mō te pūrongo

Purpose of the report

1. To seek approval for the revised Treasury Management Policy.

Whakarāpopototanga matua

Executive summary

2. The Treasury Management Policy details the most significant elements of the council group’s treasury policy.

3. There are no significant changes proposed to the Treasury Management Policy. The current policy is still deemed appropriate, and only minor cosmetic changes are proposed.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a) approve the revised Treasury Management Policy (Attachment A of the agenda report).

Horopaki

Context

4. The Treasury Management Policy details the most significant elements of the council group’s treasury policy.

5. While there is no formal requirement to regularly review and ‘re-approve’ the policy, it is generally approved every three years as part of the long-term plan process (or as required) by the appropriate governing body committee. It is considered good practice to undertake periodic reviews. The Treasury Management Policy was last approved in November 2017.

6. The Treasury Management Policy is a requirement pursuant to section 102 of the Local Government Act 2002 (it is both the council group’s liability management and investment policy).

7. The council also produces a Treasury Operating Manual (TOM) that is approved by the council’s Treasury Management Steering Group. The Treasury Operating Manual must be consistent with the Treasury Management Policy and includes more detailed operational policies.

8. The council also has a Responsible Investment Policy which covers the types of investments council will enter into. That policy was relevant when council held a diversified financial asset portfolio. The investment content in the Treasury Management Policy relates to how treasury invests surplus cash in the short term.

Tātaritanga me ngā tohutohu

Analysis and advice

9. There are no significant changes proposed to the Treasury Management Policy. The current policy is still deemed appropriate.

10. The only proposed minor changes are:

· recognising the formal change in the name of one of our credit rating agencies to S&P Global

· clarifying that S&P Global is the main credit rating agency to be used and other credit rating agencies (such and Moody’s or Fitch) are only utilised if S&P Global does not rate the counterparty being considered.

11. The changes to the Treasury Management Policy were endorsed by the Treasury Management Steering Group in June 2020.

12. The council is undertaking work with both credit rating agencies to stress test our credit rating debt thresholds. This work will inform our Long-term Plan 2021-2031 and may result in proposed changes to the Treasury Management Policy in the future (for example, our debt to revenue limit).

Tauākī whakaaweawe āhuarangi

Climate impact statement

13. Climate-related treasury activities (i.e. issuing green bonds) are subject to the Treasury Management Policy.

14. While the Treasury Management Policy does not explicitly address climate issues, it does enable council treasury to lead developments in this area, for example being the first institution in New Zealand to issue a green bond. Council’s Sustainable Finance Framework lists the overarching criteria and guidelines on sustainable financing by council.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

15. The Treasury Management Policy applies to the council and all 100% owned CCOs (except where specifically excluded – for example Ports of Auckland). It specifies that CCOs will be consulted on any treasury matters of material significance to that COO.

16. For this reason, the Treasury Management Steering Group includes senior finance members of Watercare and Auckland Transport. They considered the views of their CCO in their decision to endorse the Treasury Management Policy in June 2020.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

17. The Treasury Management Policy is applied at a group level and has no direct impact on local boards.

Tauākī whakaaweawe Māori

Māori impact statement

18. The Treasury Management Policy relates to the council’s borrowings and investments which enable the council to carry out its activities; including those focused on Māori outcomes.

Ngā ritenga ā-pūtea

Financial implications

19. The changes proposed to the Treasury Management Policy are minor, therefore the decision to approve the revised policy will have no implications on how we are currently managing out treasury activities.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

20. The Treasury Management Policy is one of the policies we have in place to manage our treasury-related risks. It is revised regularly (at least every three years) to ensure it is still appropriate.

Ngā koringa ā-muri

Next steps

21. The revised Treasury Management Policy will be final and adopted when it is approved by the Finance and Performance Committee.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Proposed Treasury Management Policy 2020	83

Ngā kaihaina

Signatories

Author	John Bishop - Group Treasurer
Authoriser	Kevin Ramsay - Acting Group Chief Financial Officer

No.	Title	Page
a ⇩	Finance and Performance Committee Forward Work Programme - 19 November 2020	91
b ⇨	Memorandum from Head of Corporate Property (82 Manukau Road, Pukekohe) - 25 September 2020 (Under Separate Cover)

Finance and Performance Committee

19 November 2020

Te Komiti ā-Pūtea, ā-Mahi Hoki/Finance and Performance Committee
Forward Work Programme 2020/2021

This committee controls expenditure across the Auckland Council Group and deals with the overall financial management and performance of the council parent organisation and Auckland Council Group and makes financial decisions outside of the annual budgeting processes. The full terms of reference can be found here: Auckland Council Governing Body Terms of Reference

Area of work and Lead Department	Reason for work	Committee role (decision and/or direction)	Expected timeframes 2020
Area of work and Lead Department	Reason for work	Committee role (decision and/or direction)	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Planning and funding
10-year Budget (Long Term Plan) General Manager Financial Strategy and Planning	Statutory Process	Hold workshops regarding process/content/policies Decision to agree Mayoral Proposal (Nov) Recommend consultation document to consult with public (Feb) Adopt consultation document to consult with public (Feb) (Governing Body) Consultation period – 15 February 2021 – 15 March 2021 Hear feedback and deliberate budget scenarios (Apr/May) Decisions made for Long-Term Plan (May) Recommend final Long-Term Plan (May) Adopt final Emergency Budget (Governing Body) (June) Progress to date: Workshops held (26 August 2020, 9 September 2020, 16 September 2020, 23 September 2020, 14 October 2020, 21 October 2020, 28 October 2020, 4 November 2020 and 11 November 2020)
Half-yearly and annual reporting Group Treasurer and Group Financial Controller	Statutory requirement and NZX listing requirement	Receive and approve half-year and preliminary full year NZX release (delegation to chair and deputy chair) (March) Receive annual report (Oct) Recommend adoption of annual report to Governing Body (Oct) Note: · NZX announcements are presented to the Audit and Risk Committee · There is a delegation from the Committee to Chair and Deputy Chair of Finance and Performance to approve the release of the interim and full year Auckland Council group financial results to the NZX for each reporting period through to 30 June 2022. · Formal adoption of annual report is by the Governing Body Progress to date: Delegation for approval for releasing the interim and full year Auckland Council Group results to the NZX – Link to decision Councillor approval of results announcement to the market for the half year ended 31 December 2019 – NZX Half Year Announcement – Link to document Recommendation of the draft Auckland Council Annual Report 2019/2020 and draft Auckland Council Summary Annual Report 2019/2020 – Link to decision Adoption of the draft Auckland Council Annual Report 2019/2020 and draft Auckland Council Summary Annual Report 2019/2020 – Link to Governing Body decision Link to Annual Report released 30 October 2020
Financial and Budget Updates General Manager Financial Strategy and Planning	Financial Management	Receive updates and make decisions on any recommended budget changes outside of the Annual Budget/Long-term Plan, as required Note: This includes significant unbudgeted one-off expenditure. Progress to date: Monthly updates – August - Link to decision Monthly update – September – Link to decision Monthly update – October – Link to decision
Loan guarantees and grant funding Group Treasurer	Financial management	Review information and make decisions on loan guarantees and restructuring (including Parks) Receive an update on the Eden Park loan guarantee and grant funding (six-monthly) Receive progress update memos when appropriate Progress to date: Presentation from the Eden Park Trust Board – Link to decision Woodhill Sands Trust - Guarantee (Loan Reset Request) – Link to decision Community Loans Under $1 million – Link to decision Presentation from the Eden Park Trust Board – Link to decision
Reporting and performance
Performance reporting quarterly – parent General Manager Financial and Business Performance	Financial management	Monitor council parent financial and non-financial performance results on a quarterly basis, including Māori outcomes expenditure. Q1 (Nov), Q2 (Mar), Q3 (Jun), Q4 (Sept) Q1 Nov Note: Reporting in September must be considered as a confidential report until results are sent to NZX at the end of September. Progress to date: Auckland Council Group and Auckland Council 2019/2020 quarter one performance report to 30 September 2019 – Link to decision – Link to decision Auckland Council Group and Auckland Council quarter two performance report to 31 December 2019 – Link to decision Auckland Council Group and Auckland Council quarter three performance report to 31 March 2020 – refer to information memorandum contained on the agenda for 18 June 2020 – Link to decision Memorandum from General Manager Financial Strategy and Planning, General Manager Financial and Business Performance, Group Treasurer and Group Financial Controller regarding the Summary of Auckland Council and Auckland Council Group quarter three performance – Link to information memorandum Auckland Council Group and Auckland Council quarter four performance report to 3 June 2020 – Link to decision
Performance reporting quarterly – group General Manager Financial Strategy and Planning	Financial management	Monitor Auckland Council group financial requirements on a quarterly basis. Q1 (Nov), Q2 (Mar), Q3 (Jun), Q4 (Sept), Q1 (Nov) Note: Reporting in September must be considered as a confidential report until results are sent to NZX at the end of September. Progress to date: Auckland Council Group and Auckland Council 2019/2020 quarter one performance report to 30 September 2019 – Link to decision – Link to decision Auckland Council Group and Auckland Council quarter two performance report to 31 December 2019 – Link to decision Auckland Council Group and Auckland Council quarter three performance report to 31 March 2020 – refer to information memorandum contained on the agenda for 18 June 2020 – Link to decision Memorandum from General Manager Financial Strategy and Planning, General Manager Financial and Business Performance, Group Treasurer and Group Financial Controller regarding the Summary of Auckland Council and Auckland Council Group quarter three performance – Link to information memorandum Auckland Council Group and Auckland Council quarter four performance report to 3 June 2020 – Link to decision
Operational
Disposals Auckland Council and Panuku Development Auckland	Panuku, working with all areas of council, is required through its Statement of Intent to identify and recommend to council properties that are surplus to requirements and can be considered for disposal. These include general disposals to fund Long-term Plan projects. Properties are recommended for acquisitions and disposal to the committee for approval in accordance with the Long-term Plan. Properties are also identified for disposal via the Emergency Budget 2020/2021 asset recycling process.	Agree to proceed with recommended disposals or acquisition, as required. Progress to date: Emergency Budget 2020/2021 - Asset recycling – 16 July 2020 – Link to committee decision Emergency Budget 2020/2021 - Asset recycling – 16 July 2020 – Link to GB decision Emergency Budget 2020/2021 - Asset recycling – 17 September 2020 – Link to decision Emergency Budget 2020/2021 - Asset recycling – 22 October 2020 – Link to decision	As required
Funding and Levies (including Auckland Regional Amenities Funding Board, Museum of Transport and Technology and Auckland War Memorial Museum) Manager CCO/ External Partnerships team	Statutory process	Approve annual funding levies for Auckland Regional Amenities Funding Board (Apr); Museum of Transport and Technology (Apr); and Auckland War Memorial Museum (Jun) Approve Auckland Regional Amenities Funding Board (Apr) Receive presentations from amenities via memorandum (Jun) Progress to date: Auckland Regional Amenities Funding Board: Delegate approval of Auckland Council’s submission for the 2020/2021 Funding Levy – Link to decision Approval of the Auckland Regional Amenities Funding Levy 2020-2021 – Item had been deferred from the Finance and Performance Committee meeting held on 19 March 2020 to the meeting scheduled to be held on 23 April 2020. Due to COVID-19, the item was considered at the Emergency Committee meeting held on 23 April 2020- Link to decision MOTAT Annual Plan 2020-2021 – Item had been deferred from the Finance and Performance Committee meeting held on 19 March 2020 to the meeting scheduled to be held on 23 April 2020. Due to COVID-19, the item was considered at the Emergency Committee held on 30 April 2020 – Link to decision Auckland War Memorial Museum 2020/2021 levy – Item had been deferred from the Finance and Performance Committee meeting held on 19 March 2020 to the meeting scheduled to be held on 18 June 2020 – Link to decision
Review of committee forward work programme Governance	Regular reporting	Approve forward work programme (Mar) Receive updates (bi-monthly) Review content of the forward work programme (six-monthly, commencing Sept) Progress to date: Finance and Performance Committee Forward Work Programme – Link to decision Finance and Performance Committee Forward Work Programme – Updated Finance and Performance Committee Forward Work Programme – Updated and reviewed

Completed - 2020

Lead Department	Area of work	Committee role (decision and/or direction)	Decision
Annual Budget General Manager Financial Strategy and Planning	Statutory Process including review of rating policies	Decision to agree to the Consultation items Recommend consultation document to consult with public (Feb); Emergency Budget (May) Adopt consultation document to consult with public (Governing Body) Consultation period – 21 February 2020 – 22 March 2020; 29 May 2020 – 19 June 2020 (Emergency Budget) Hear feedback and deliberate budget scenarios (Apr) Decisions made for Emergency Budget (Jul) Recommend final Emergency Budget (Jul) Adopt final Emergency Budget (Governing Body) (Jul)	*February* Mayoral Proposal for the Annual Budget 2020/2021 - Link to decision Annual Budget 2020/2021 – consultation material overview - Link to decision Link to Governing Body decision Rates and Fees Issues for Annual Budget 2020/2021 - Link to decision Link to Governing Body decision Adoption of consultation Material: Annual Budget 2020/2021 – Link to decision; Link to Governing Body decision Amendments to the Revenue and Financing Policy – Link to decision; Link to Governing Body decision Annual Budget 2020/2021 communication and engagement approach – Link to decision; Link to Governing Body decision Annual Budget 2020/2021 consultation part 1 - local board feedback – Link to Emergency Committee decision *May* Rates and Fees Issues for the Emergency Budget 2020/2021 - Link to Emergency Committee decision Rates Postponement for properties affected by COVID-19 - Link to Emergency Committee decision Annual Budget 2020/2021 Emergency Budget public consultation approach - Link to Emergency Committee decision Adoption of Consultation material: Emergency Budget Annual Budget 2020/2021- Link to Emergency Committee decision Recommendations from the Emergency Committee 28 May 2020 on the Adoption of Consultation Material: Emergency Budget Annual Budget 2020/2021 -Link to Governing Body decision *July* Emergency Budget 2020/2021 - Asset Recycling Link to decision Link to Governing Body decision Rates Issues for the Emergency Budget 2020/2021 Link to decision Link to Governing Body decision Budget decision-making for 2020/2021 / Emergency Budget 2020/2021 - Mayoral Proposal Link to decision Link to Governing Body decision Adoption of the Emergency Budget 2020/2021 (Annual Budget) – Link to Governing Body decision Rates setting 2020/2021 – Link to Governing Body decision
Insurance Strategy and Placement Chief Risk Officer		Approve the council insurance strategy Approve the annual insurance placement for Council	Collection for data for insurance renewals currently underway and preparations being made for insurance roadshows where deductibles, limits and policy coverage will be assessed against market expectations. Council Group Insurance Renewal 2020 – Link to decision

Lead Department

Area of work

Committee role

(decision and/or direction)

Decision

Annual Budget

General Manager Financial Strategy and Planning

Statutory Process including review of rating policies

Decision to agree to the Consultation items

Recommend consultation document to consult with public (Feb); Emergency Budget (May)

Adopt consultation document to consult with public (Governing Body)

Consultation period – 21 February 2020 – 22 March 2020; 29 May 2020 – 19 June 2020 (Emergency Budget)

Hear feedback and deliberate budget scenarios (Apr)

Decisions made for Emergency Budget (Jul)

Recommend final Emergency Budget (Jul)

Adopt final Emergency Budget (Governing Body) (Jul)

February

Mayoral Proposal for the Annual Budget 2020/2021 - Link to decision

Annual Budget 2020/2021 – consultation material overview - Link to decision Link to Governing Body decision

Rates and Fees Issues for Annual Budget 2020/2021 - Link to decision Link to Governing Body decision

Adoption of consultation Material: Annual Budget 2020/2021 – Link to decision; Link to Governing Body decision

Amendments to the Revenue and Financing Policy – Link to decision; Link to Governing Body decision

Annual Budget 2020/2021 communication and engagement approach – Link to decision; Link to Governing Body decision

Annual Budget 2020/2021 consultation part 1 - local board feedback – Link to Emergency Committee decision

May

Rates and Fees Issues for the Emergency Budget 2020/2021 - Link to Emergency Committee decision

Rates Postponement for properties affected by COVID-19 - Link to Emergency Committee decision

Annual Budget 2020/2021 Emergency Budget public consultation approach - Link to Emergency Committee decision

Adoption of Consultation material: Emergency Budget Annual Budget 2020/2021- Link to Emergency Committee decision

Recommendations from the Emergency Committee 28 May 2020 on the Adoption of Consultation Material: Emergency Budget Annual Budget 2020/2021 -Link to Governing Body decision

July

Emergency Budget 2020/2021 - Asset Recycling Link to decision Link to Governing Body decision

Rates Issues for the Emergency Budget 2020/2021 Link to decision Link to Governing Body decision

Budget decision-making for 2020/2021 / Emergency Budget 2020/2021 - Mayoral Proposal Link to decision Link to Governing Body decision

Adoption of the Emergency Budget 2020/2021 (Annual Budget) – Link to Governing Body decision

Rates setting 2020/2021 – Link to Governing Body decision

Insurance Strategy and Placement

Chief Risk Officer

Approve the council insurance strategy

Approve the annual insurance placement for Council

Collection for data for insurance renewals currently underway and preparations being made for insurance roadshows where deductibles, limits and policy coverage will be assessed against market expectations.

Council Group Insurance Renewal 2020 – Link to decision

Area of work and Lead Department	Reason for work	Committee role (decision and/or direction)	Expected timeframes 2021
Area of work and Lead Department	Reason for work	Committee role (decision and/or direction)	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Planning and funding
10-year Budget (Long Term Plan) General Manager Financial Strategy and Planning	Statutory Process	Recommend consultation document to consult with public (Feb) Adopt consultation document to consult with public (Feb) (Governing Body) Consultation period – 15 February 2021 – 15 March 2021 Hear feedback and deliberate budget scenarios (Apr/May) Decisions made for Long-Term Plan (May) Recommend final Long-Term Plan (May) Adopt final Emergency Budget (Governing Body) (June) Progress to date:
Annual Budget General Manager Financial Strategy and Planning	Statutory Process	Programme to be advised
Half-yearly and annual reporting Group Treasurer and Group Financial Controller	Statutory requirement and NZX listing requirement	Receive and approve half-year and preliminary full year NZX release (delegation to chair and deputy chair) (March) Receive annual report (Sept - extraordinary) Recommend adoption of annual report to Governing Body (Sept - extraordinary) Note: · NZX announcements are presented to the Audit and Risk Committee · There is a delegation from the Committee to Chair and Deputy Chair of Finance and Performance to approve the release of the interim and full year Auckland Council group financial results to the NZX for each reporting period through to 30 June 2022. · Formal adoption of annual report is by the Governing Body Progress to date:
Financial and Budget Updates General Manager Financial Strategy and Planning	Financial Management	Receive updates and make decisions on any recommended budget changes outside of the Annual Budget/Long-term Plan, as required Note: This includes significant unbudgeted one-off expenditure. Progress to date:
Loan guarantees and grant funding Group Treasurer	Financial management	Review information and make decisions on loan guarantees and restructuring (including Parks) Receive an update on the Eden Park loan guarantee and grant funding (six-monthly) Receive progress update memos when appropriate Progress to date:
Reporting and performance
Performance reporting quarterly – parent General Manager Financial and Business Performance	Financial management	Monitor council parent financial and non-financial performance results on a quarterly basis, including Māori outcomes expenditure. Q2 (Mar), Q3 (May), Q4 (Sept - Extraordinary), Q1 (Dec) Note: Reporting in September must be considered as a confidential report until results are sent to NZX at the end of September. Progress to date:
Performance reporting quarterly – group General Manager Financial Strategy and Planning	Financial management	Monitor Auckland Council group financial requirements on a quarterly basis. Q2 (Mar), Q3 (May), Q4 (Sept - Extraordinary), Q1 (Dec) Note: Reporting in September must be considered as a confidential report until results are sent to NZX at the end of September. Progress to date:
Operational
Disposals Auckland Council and Panuku Development Auckland	Panuku, working with all areas of council, is required through its Statement of Intent to identify and recommend to council properties that are surplus to requirements and can be considered for disposal. These include general disposals to fund Long-term Plan projects. Properties are recommended for acquisitions and disposal to the committee for approval in accordance with the Long-term Plan. Properties are also identified for disposal via the Emergency Budget 2020/2021 asset recycling process.	Agree to proceed with recommended disposals or acquisition, as required. Progress to date:	As required
Funding and Levies (including Auckland Regional Amenities Funding Board, Museum of Transport and Technology and Auckland War Memorial Museum) Manager CCO/ External Partnerships team	Statutory process	Approve annual funding levies for Auckland Regional Amenities Funding Board (Apr); Museum of Transport and Technology (Apr); and Auckland War Memorial Museum (Apr) Receive presentations from amenities via memorandum (Jun) Progress to date:
Insurance Strategy and Placement GM Risk and Assurance		Approve the council group insurance strategy 2021-2023 Approve the annual insurance placement for Council Group 2021/2022 Progress to date:
Review of committee forward work programme Governance	Regular reporting	Receive updates (bi-monthly) Review content of the forward work programme (six-monthly) Progress to date:

Updated: 12 November 2020

Finance and Performance Committee

19 November 2020

Summary of Confidential Decisions and related information released into Open

File No.: CP2020/10845

Te take mō te pūrongo

Purpose of the report

1. To note confidential decisions and related information released into the public domain.

Whakarāpopototanga matua

Executive summary

2. This is a regular information-only report which aims to provide greater visibility of confidential decisions made which can now be released into the public domain.

3. The following decisions/documents are now publicly available:

Date of Decision	Subject
24/6/2020	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 – Emergency Budget (Customer and Community Services Directorate Update and Regional Capital Work Programmes) – Attachment A
26/6/2020	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Update on Financial Position and Asset Recycling) – Attachment B
30/6/2020	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Healthy Waters – capital programme priorities, Auckland Council Parent and Regional Facilities Auckland) – Attachment C
2/7/2020	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Watercare Emergency Budget Update) – Attachment D
7/7/2020	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Public feedback and Auckland Transport) – Attachment E
8/7/2020	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Rates Policy, 2021 Events [Auckland Transport and ATEED], ATEED and City Centre and Local Development [Panuku and Development Programme Office]) – Attachment F
9/7/2020	Finance and Performance Committee confidential workshop – Annual Budget 2020/2021 – Emergency Budget (Asset Recycling) – Attachment G
14/7/2020 (am)	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Local Board Feedback) – Attachment H
14/7/2020 (pm)	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Watercare update and Budget decision-making) – Attachment I
15/7/2020	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Mayoral Proposal and Budget discussion) – Attachment J

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

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a) note the confidential decisions and related information that are now publicly available.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇨	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Update on Financial Position and Asset Recycling) - 24 June 2020 (Under Separate Cover)
b ⇨	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 – Emergency Budget (Customer and Community Services Directorate Update and Regional Capital Work Programmes) - 26 June 2020 (Under Separate Cover)
c ⇨	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Healthy Waters – capital programme priorities, Auckland Council Parent and Regional Facilities Auckland) – 30 June 2020 (Under Separate Cover)
d ⇨	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Watercare Emergency Budget Update) – 2 July 2020 (Under Separate Cover)
e ⇨	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Public feedback and Auckland Transport) – 7 July 2020 (Under Separate Cover)
f ⇨	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Rates Policy, 2021 Events [AT and ATEED], ATEED and City Centre and Local Development [Panuku and Development Programme Office]) – 8 July 2020 (Under Separate Cover)
g ⇨	Finance and Performance Committee confidential workshop – Annual Budget 2020/2021 – Emergency Budget (Asset Recycling) – 9 July 2020 (Under Separate Cover)
h ⇨	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Local Board Feedback) – 14 July 2020 (Under Separate Cover)
i ⇨	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Watercare update and Budget decision-making) – 14 July 2020 (Under Separate Cover)
j ⇨	Finance and Performance Committee confidential workshop - Annual Budget 2020/2021 - Emergency Budget (Mayoral Proposal and Budget discussion) – 15 July 2020 (Under Separate Cover)

Ngā kaihaina

Signatories

Author	Sandra Gordon - Kaitohutohu Mana Whakahaere Matua / Senior Governance Advisor
Authoriser	Kevin Ramsay - Acting Group Chief Financial Officer

Chairperson	Cr Desley Simpson, JP
Deputy Chairperson	Cr Shane Henderson
Members	Cr Josephine Bartley	Mayor Hon Phil Goff, CNZM, JP
	IMSB Member Renata Blair	Cr Richard Hills
	Cr Dr Cathy Casey	Cr Tracy Mulholland
	Deputy Mayor Cr Bill Cashmore	Cr Daniel Newman, JP
	Cr Fa’anana Efeso Collins	Cr Greg Sayers
	Cr Pippa Coom	Cr Sharon Stewart, QSM
	Cr Linda Cooper, JP	IMSB Chair David Taipari
	Cr Angela Dalton	Cr Wayne Walker
	Cr Chris Darby	Cr John Watson
	Cr Alf Filipaina	Cr Paul Young
	Cr Christine Fletcher, QSO

Date	Subject
25/9/2020	Memorandum from Head of Corporate Property (82 Manukau Road, Pukekohe) – Attachment B

Date	Workshop/Briefing
16/9/2020	Finance and Performance Committee confidential workshop – 10 -year Plan 2021-2031 (no attachment)
23/9/2020	Finance and Performance Committee confidential workshop – 10-year Plan 2021-2031 (no attachment)
14/10/2019	Finance and Performance Committee confidential workshop – 10-year Plan 2021 – 2031 (no attachment)
21/10/2020	Finance and Performance Committee confidential workshop – 10-year Plan 2021-2031 (no attachment)
28/10/2020	Finance and Performance Committee confidential workshop – 10-year Plan 2021-2031 (no attachment)
4/11/2020	Finance and Performance Committee confidential workshop – 10-year Plan 2021-2031 (no attachment)
11/11/2020	Finance and Performance Committee confidential workshop – 10-year Plan 2021-2031 (no attachment)

Author	Sandra Gordon - Senior Governance Advisor
Authoriser	Kevin Ramsay - Acting Group Chief Financial Officer