Agenda of Council Controlled Organisation Oversight Committee

Terms of Reference

Responsibilities

The purpose of the committee is to:

· have a general overview and insight into the strategy, direction and priorities of all Council Controlled Organisations (CCO)

· set policy relating to CCO governance

· approve CCO Statements of Intent

· monitor performance of CCOs and other entities in which the council has an equity interest (such as CRLL, Tāmaki Regeneration Company and Haumaru Housing).

Key responsibilities include:

· monitoring the financial and non-financial performance targets, key performance indicators, and other measures of each CCO and the performance of each organisation

· advising the mayor on the content of the annual Letters of Expectations (LoE) to CCOs and Ports of Auckland Limited

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

· exercising relevant powers under Part 1 of the Port Companies Act 1988, which relate to the Statements of Corporate Intent for port companies

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

· approval of a work programme which includes a schedule of quarterly reporting of each CCO to balance reporting across the meetings.

Powers

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

Except:

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

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

(ii) Power to establish subcommittees.

Auckland Plan Values

The Auckland Plan 2050 outlines a future that all Aucklanders can aspire to. The values of the Auckland Plan 2050 help us to understand what is important in that future:

Exclusion of the public – who needs to leave the meeting

Members of the public

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

Those who are not members of the public

General principles

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

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

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

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

Members of the meeting

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

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

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

Independent Māori Statutory Board

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

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

Staff

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

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

Local Board members

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

Council Controlled Organisations

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

1 Apologies

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

2 Declaration of Interest

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

3 Confirmation of Minutes

That the Council Controlled Organisation Oversight Committee:

a) confirm the ordinary minutes of its meeting, held on Tuesday, 24 November 2020, including the confidential section, as a true and correct record.

4 Petitions

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

5 Public Input

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

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

6 Local Board Input

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

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

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

7 Extraordinary Business

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

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

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

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

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

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

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

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

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

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

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

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

No.	Title	Page
a ⇩	Forward Work Programme	13

Council Controlled Organisation Oversight Committee

08 December 2020

Ports of Auckland: final statement of corporate intent 2020-2023

File No.: CP2020/16593

Te take mō te pūrongo

Purpose of the report

1. To receive Ports of Auckland Limited’s final statement of corporate intent for 2020-2023.

Whakarāpopototanga matua

Executive summary

2. Ports of Auckland provided a revised statement of corporate intent to Auckland Council, and a letter to the Mayor detailing changes following the council’s feedback to it in August 2020.

3. The revised statement of corporate intent responds to most of the council’s feedback. There are some issues where we recommend that the committee ask Ports of Auckland for clarification or more ambition, relating to:

a) Māori outcomes plan.

b) estimated timeframes for work on Bledisloe Wharf and alternatives to dredging.

4. Regarding Ports of Auckland’s performance, there is currently significant congestion at the port, and the delay to the automation project is playing a role in that. We also recommend that Ports of Auckland should be asked to commission an independent post-implementation review of the automation project and share the results with Auckland Council.

Ngā tūtohunga

Recommendation/s

That the Council Controlled Organisation Oversight Committee:

a) receive Ports of Auckland Limited’s final Statement of Corporate Intent 2020-2023.

b) agree that the Mayor and Deputy Mayor write to Ports of Auckland Limited about:

(i) implementing a more ambitious timeframe for a Māori outcomes plan and associated reporting.

(ii) clarification of estimated timeframes for work on Bledisloe Wharf and alternatives to dredging.

(iii) asking the Ports of Auckland Chair to provide a letter in response.

Horopaki

Context

Statement of corporate intent process

5. The Governing Body agreed feedback on Ports of Auckland’s draft statement of corporate intent in August 2020 (Governing Body resolution GB/2020/92). Ports of Auckland has provided a revised statement of corporate intent to the council responding to this feedback (Attachment A), and a letter to the Mayor detailing the changes (Attachment B).

6. Under the Port Companies Act 1988, the council has the ability to modify Ports of Auckland’s statement of corporate intent. Before the council can do this, it must:

c) ‘have regard to’ the principal objective of a port company (which is to operate as a successful business) and its reporting requirements; and

d) consult the board about the proposed changes.

7. Ports of Auckland’s performance report for the first quarter of the 2020/2021 financial year is also on the agenda of this meeting. The chief executive and chief financial officer will be present at the meeting to answer questions.

Tātaritanga me ngā tohutohu

Analysis and advice

8. The council’s feedback on the statement of corporate intent, which was approved in August 2020, and Ports of Auckland’s response is contained in Table A.

Auckland Council feedback	Ports of Auckland response	Advice
Include a work programme to work with the council, Panuku Development Auckland and Auckland Transport to come up with a solution for berthing cruise ships making use of Bledisloe West.	POAL has included reference to work on Bledisloe West, although with no timeframe (page 5)	We recommend that you request a timeframe for the work at this meeting.
Include a work programme to explore alternatives to dumping of dredged materials in the marine environment.	POAL has included this, although with no timeframe (page 5)	We recommend that you request a timeframe for the work at this meeting.
Refer to ‘giving effect to’ the council’s plans, rather than simply aligning its strategic priorities where practicable (on page 4) and include the correct and up-to-date plans of Auckland Council.	POAL has not referred to ‘giving effect to’ the council’s plans. It states in the response letter: “As a separate legal entity, with its own purpose, vision and strategy, the Board considered that it could not categorically state in the SCI that POAL will always maintain its strategic priorities in a way that gives effect to the Council’s plans. Regardless we will continue to engage with the Governing Body to ensure that POAL’s vision and strategic objectives are consistent with the Council’s wider objectives for the port and waterfront land.”	The board are likely to be worried about conflicts arising between that objective and their principal objective under s5 of the Port Companies Act of running a successful business. The current council strategies for the port do not provide a great detail of clarity about what impact they would have on the port’s operations; there may be some uncertainty as to how its strategic priorities would be expected to give effect to the council’s plans. As an alternative, you could ask Ports of Auckland to restate: “The company will maintain its strategic priorities in a way that gives effect to the Council’s plans unless the board determines, in consultation with the Governing Body and acting reasonably, that it is not practicable to do so.”
Correct the statement on page 5 to note that the Ports of Auckland Draft 30-year Master Plan aligns with the general direction of council’s City Centre Master Plan, Waterfront Plan and Central Wharves Strategy, and is consistent with the recommendations of the Ports Future Study.	POAL has amended this (page 5).	-
Include a measure for mana whenua engagement which is specific, time-bound and realistic, and should be reported against in quarterly reports.	POAL has included a target to “develop and implement a Māori outcomes framework” by 2023 (page 8).	Refer to Māori impact statement
Provide more detail for the carbon emissions metric, including what baseline these are being measured against and whether it is gross or net emissions.	POAL has included more detail and explained that the target is for emissions intensity i.e. emissions per ton rather than total emissions. (page 8)	We recommend that Ports of Auckland should brief you at the next governance workshop about how this will enable it to reach its long-term target
In the ‘Key Performance Targets’ section on Page 7 include a column setting out the previous year’s results.	Previous year’s results included (page 8).	-

Changes to productivity and the automation project

9. In the revised version of the statement of corporate intent, Ports of Auckland has also reduced its targets for crane rate from 35.25 to 32 and ship rate from 83 to 75 for the 2020/2021 year. The crane rate is the number of containers a crane lifts on and off a container ship in an hour, while the ship rate is the number of containers moved on and off a container ship in an hour. Its revised targets are closer to the actual results achieved in the 2019/2020 year (30.9 and 74.6).

10. It has also increased one of the measures for truck turn-around time, which is a measure of the total time that trucks spend in the terminal area (and another measure of port productivity).

11. In the cover letter, Ports of Auckland describes these changes as a result of the delay to the completion of the automation project which it partly attributes to the fatality at the port in August 2020.

12. Since the end of September, it has become clear that there is significant congestion at the port which is affecting how quickly customers receive their goods and the delay to the automation project is playing a role in that.

13. As the shareholder, we suggest that council needs to better understand how well the automation project was conceived of and implemented. Once it is fully operational, Ports of Auckland should commission an independent review of the automation project and share the results of that with the council. The council should have an opportunity to input into the terms of the review.

Tauākī whakaaweawe āhuarangi

Climate impact statement

14. Ports of Auckland’s statement of corporate intent includes a target for carbon emission reductions.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

15. There are no specific council group impacts. The statement of corporate intent contains a commitment to working collaboratively with Auckland Council and the council-controlled organisations.

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

Local impacts and local board views

16. The governance of Ports of Auckland is a Governing Body responsibility, and therefore we have not consulted with local boards. Ports of Auckland should include its engagement with local boards in its quarterly reports.

Tauākī whakaaweawe Māori

Māori impact statement

17. In its 2018-2021 statement of corporate intent, Ports of Auckland committed to developing a Māori responsiveness plan in 2019 and strengthening relationships with mana whenua. In this statement of intent, Ports of Auckland has included an objective to develop a Māori outcomes plan by 2023. We recommend that you ask Ports of Auckland to include a more ambitious timeline and to include in the statement of corporate intent at least one relationship hui annually with mana whenua which should be reported on in quarterly reporting.

Ngā ritenga ā-pūtea

Financial implications

18. There are no direct financial implications associated with this advice.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

19. There are no direct risks associated with this advice.

Ngā koringa ā-muri

Next steps

20. If the recommendations in this report are approved, staff will prepare a letter to Ports of Auckland on behalf of the Mayor and Deputy Mayor which addressed the concerns in recommendation (b), and requesting a response from Ports of Auckland.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Ports of Auckland Limited final statement of corporate intent 2020-2023	27
b ⇩	Cover letter for 2020-2023 statement of corporate intent	37

Ngā kaihaina

Signatories

Author	Sarah Holdem - Principal Advisor
Authoriser	Alastair Cameron - Manager - CCO Governance & External Partnerships

Council Controlled Organisation Oversight Committee

08 December 2020

Ports of Auckland quarter 1 performance report ending 30 September 2020

File No.: CP2020/18051

Te take mō te pūrongo

Purpose of the report

1. To receive Ports of Auckland’s performance report for the quarter ending September 30 2020.

Ngā tūtohunga

Recommendation/s

That the Council Controlled Organisation Oversight Committee:

a) receive the first quarter report of Ports of Auckland, Attachment A to the agenda report.

Horopaki

Context

2. Under the Memorandum of Understanding between Ports of Auckland Limited and Auckland Council, Ports of Auckland is to provide a quarterly report to the council.

Tātaritanga me ngā tohutohu

Analysis and advice

3. During this quarter, stevedore Pala’amo Kalati was fatally injured on 30 August while working in a vessel at Fergusson container terminal. In response, the Mayor initiated an independent review into health and safety at Ports of Auckland which the board supported. The Construction Health and Safety Trust New Zealand has been contracted by the council to undertake the review, and it will provide a confidential interim report to the members of this committee before Christmas.

4. Ports of Auckland has not met a majority of its non-financial key performance targets. Its productivity is below target and it attributes this to late vessels, industrial action in Australia and delays to the automation project because of Covid-19.

5. Ports of Auckland has met all its financial key performance targets. Both revenue and costs are favourable to budget for this quarter, while capital expenditure (automation) is $2.3 million below budget. It is noted that the financial targets have been reduced from previous years to reflect the impact of Covid-19 on Ports of Auckland’s operations.

Tauākī whakaaweawe āhuarangi

Climate impact statement

6. Ports of Auckland’s statement of corporate intent includes an emissions target reduction, which will be reported at the end of the year.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

7. There are no relevant council group impacts.

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

Local impacts and local board views

8. The governance of Ports of Auckland is a responsibility delegated to the CCO Oversight Committee. We have not sought the views of local boards.

9. The quarterly report should provide a summary of the engagement that Ports of Auckland has carried out with local boards during the quarter; there has been none during this quarter.

Tauākī whakaaweawe Māori

Māori impact statement

10. The report should detail Ports of Auckland’s contribution to Māori outcomes and engagement with iwi. Ports of Auckland has yet to develop a Māori outcomes plan.

Ngā ritenga ā-pūtea

Financial implications

11. There are no direct financial implications for this report.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

12. The report provides a high-level summary of risks at Ports of Auckland.

Ngā koringa ā-muri

Next steps

13. This report is primarily for information purposes. The next quarterly report will be provided to the CCO Oversight Committee in March 2021.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Ports of Auckland Limited first quarter report 2020/2021	41

Ngā kaihaina

Signatories

Author	Sarah Holdem - Principal Advisor
Authoriser	Alastair Cameron - Manager - CCO Governance & External Partnerships

Council Controlled Organisation Oversight Committee

08 December 2020

Council-controlled Organisations - Quarter 1 Performance Reports ending 30 September 2020

File No.: CP2020/16588

Te take mō te pūrongo

Purpose of the report

1. To receive a high-level summary and comments on the Council-controlled Organisation (CCO) quarter 1 performance reports, ending 30 September 2020.

Whakarāpopototanga matua

Executive summary

1. Auckland Council and the Auckland Council Group have delivered a positive financial performance for the three months ending 30 September 2020, with a capital delivery of $575 million, and a net direct expenditure of $208 million.

2. The Auckland Council group and parent financial results were presented at the Financial and Performance Committee meeting on 19 November 2020 (Resolution number FIN/2020/77). This report focuses on the individual CCOs’ results.

3. The CCOs quarterly performance is impacted by the COVID-19 lockdowns, with the degree of impacts varying across the CCOs. Regional Facilities Auckland (RFA) and Auckland Transport (AT) experienced significant impacts on public transport patronage and venue patronage. Capital delivery, while progressing, is behind for many work programmes due to delays being experienced as a result of COVID-19 lockdowns. Government grants and contributions to work programmes has helped reduce some of the impacts.

4. Timing and the currency of quarterly reporting is problematic. The CCO review recommended (R48) that the CCO chairs meet four times a year to strengthen relationships, build trust and generally provide a forum to share information and views. Staff recommend that the first of these meetings is scheduled for early next year, and the timeliness and ways to streamline the reporting process to ensure it is relevant are discussed.

5. A new section has been included in the quarterly report template that allows for progress on implementing the CCO Review recommendations to be reported. All CCOs are working with the council group to progress implementation of the Review’s recommendations.

Ngā tūtohunga

Recommendation/s

That the Council Controlled Organisation Oversight Committee:

a) receive the first quarter reports of the substantive council-controlled organisations’ results, provided as attachments A to E of the agenda report.

b) request that staff schedule a CCO board chairs meeting early in 2021, with an agenda item on how to improve the timeliness of the reporting process.

Horopaki

Context

6. Each substantive CCO must provide a quarterly report to the Council-Controlled Organisation Oversight Committee. They are required to;

· summarise the CCOs performance against the approved budget and agreed targets in the 10-year Budget and statement of intent

· provide a forecast of the CCOs performance

· identify the cause of major variances

· highlight major achievements for the quarter

· signal any potential or developing issues

7. The reports for the first quarter of 2020/2021 are contained in attachments A to E.

8. The second quarter finishes on 31 December. CCOs must produce their “half-yearly reports” within two months of that date. As the amalgamation of RFA and Auckland Tourism, Events and Economic Development (ATEED) takes place on 1 December 2020, Auckland Unlimited Limited will need to produce its half-yearly report by 28 February 2021. This report is to be prepared on the basis of an amalgamated entity (i.e: RFA and ATEED). As ATEED will not exist as at 31 December 2020, they will not need to submit a half-yearly report.

Tātaritanga me ngā tohutohu

Analysis and advice

CCO Review recommendations

9. A new section has been added into the quarterly performance template that records progress being made on implementing the relevant CCO Review recommendations. All CCOs are working together to improve collaboration and implement the relevant Review recommendations. A summary of key actions is provided below:

· ATEED and RFA – completing the merger and associated workstreams

· Panuku funding model (Review recommendation 8) was discussed at the Finance and Performance Committee Long-term Plan workshop on 14 October

· work on a water strategy (Review recommendation 15) is continuing, with the Environment and Community Committee endorsing a work programme on 12 November

· Auckland Transport are working with council on transport strategy and bylaws

· collaborating on the following Review recommendations:
developing the scope for the Economic Development strategy (21),
development of a new SOI template (23),
working more strategically on budgeting and planning (21),
local board engagement (34), and
participating in the CCO CE group (47)

10. The currency of quarterly reporting is an ongoing issue. The first quarter ended September 30, but due to the current expectation that reports be provided to CCO boards prior to coming to council, it can take at least two months before the council has a chance to comment and reflect on them. Often other processes, like the long-term plan workshops intervene and can impact on the currency of information being provided to the council.

11. The CCO Review recommended that the CCO chairs meet four times a year to strengthen relationships and provide a forum to share information and views. Staff recommend that the first of these meetings is scheduled for early in 2021 and that a discussion is held on ways to streamline the reporting process to improve timeliness.

Auckland Transport (AT)

Financial results

12. Auckland Transport had a favourable net operating result of $22 million for the quarter.

13. Revenue is $2 million favourable to budget due to higher than anticipated infringement ticket issuances and usage of on and off-street parking ($2.6 million), and rental, permit and mooring fee revenue ($5 million) due to faster recovery than expected.

14. This is partly offset by lower than budgeted public transport income ($4.1 million) due to the impact of COVID-19 on patronage and disruptions caused by KiwiRail track closures and NZTA operating subsidies being marginally lower than budget ($2 million).

15. Direct expenditure is below budget by $15 million mainly due to lower than budgeted professional services and maintenance activity (following July approval of the emergency budget), strong management of COVID-19 related cleaning and safety equipment costs and streetlight electricity expenditure. Depreciation is $5 million favourable to budget, although this is a non-cash item.

16. Capital delivery is $42 million lower than budget mainly driven by delays caused by COVID-19 in Spain affecting EMU delivery, and unexpected track maintenance by KiwiRail resulting in delays to testing of new EMUs. There is a further underspend for the quarter which reflects the late release of the emergency budget and COVID-19 related delays which will be addressed in the balance of the year.

17. NZTA capital funding revenue is $13 million unfavourable against budget, mainly due to the timing of some capital projects leading to delayed NZTA funding claims. This is partially offset by capital funding received from the Crown as part of the post COVID-19 Crown Infrastructure funded capital programme being $8 million favourable to budget. This includes funding for prior year capital spend.

Performance against indicators and other issues

18. Auckland Transport’s performance reflects the impact of and recovery of COVID-19 lockdowns, which occurred during the quarter. Public transport boardings are significantly down against original targets, as expected. Boardings on the Rapid and Frequent Network in particular has been slower to recover, while parking has recovered stronger, but is still below target. It will be important to monitor these changes over time, to see if the impact of increased work from home and ongoing work on the rail network by KiwiRail is a short or long-term change.

19. In contrast, the safety measure (deaths and serious injuries – DSI) has reduced significantly and measures of the productivity of the arterial and freight roading networks are exceeding targets.

20. Despite COVID-19, Auckland Transport has continued to deliver on much of its intended activity, with most aspects of its work programme on track. Some delays are noted, with explanations provided in the future outlook column of the work programme tables.

21. The Regional Fuel Tax table shows a few minor variances from original plans, with the commentary noting that some projects are now being delivered by Waka Kotahi. It would be useful in future reports for commentary to be provided about how this will change the RFT programme (page 11 notes that changes to the Order in Council are underway to reflect these shifts in delivery).

Auckland Tourism, Events and Economic Development (ATEED)

Financial results

22. Auckland Tourism, Events and Economic Development had a favourable net direct expenditure result of $4.6 million against budget. This is mainly as a result of operating subsidies being $1.5 million favourable to budget due to funding from Central Government to respond to the impacts of COVID-19.

23. Direct expenditure is $3.1 million favourable to budget due to reprioritisation and rephasing of activities to focus on recovery activities, and timing of recruitment and unfilled positions being put on hold.

Performance against indicators

24. ATEED has a total of four 10-year Budget measures among seven statement of intent measures. Four performance measures are measured twice a year with results available in quarters two and four only. Two measures do not have a result as they are new measures and KPI10 (ATEED delivered events) are not held in quarter one.

25. The three remaining measures have been met for the quarter. KPI7 and KPI8 year to date results already exceed the yearly target due to the increased demand for the Regional Business Partner programme due to COVID-19.

Panuku Development Auckland (Panuku)

Financial results

26. Panuku, including the commercial property portfolio it manages, reported a $4.5 million favourable net direct expenditure result.

27. Direct revenue for the quarter is $2 million favourable to budget due to tenant hardship impacts in the quarter being lower than expected.

28. Direct expenditure is $2.5 million favourable to budget due to mainly due to slower recruitment and the impact of voluntary salary reductions. Spend in Priority Locations is behind the phased budget due to the impact of the August COVID-19 lockdown on placemaking activities and marina maintenance.

29. Capital delivery is $11.9 million lower than budget. The variance includes $3 million due to the phasing of decontamination payments to Waterfront development partners and $4.8 million related to project delays due to the August COVID-19 lockdown.

30. The strategic development fund (SDF) is a credit facility available to take advantage of any acquisition opportunities for town centre regeneration outcomes. Plans are to use the fund this year to purchase properties in Northcote Town Centre. This has been delayed as they work through a Public Works Act process on two properties.

Performance against indicators

31. Panuku has 19 performance measures, five of which are new measures this year. All of the statement of intent measures are on track. Seven measures have not yet been measured as this will occur at the end of financial year.

32. Panuku has completed and handed over the TechPark Campus building in Manukau and worked with Kainga Ora in Avondale and Henderson, that will enable approximately 233 homes to be built.

33. Delays in Panuku programme have occurred for Ormiston and in their service property optimisation programme. These are a result of delays by the council due to emergency budget impacts and COVID-19. Panuku has been working closely with the council on asset recycling over the last quarter.

Regional Facilities Auckland (RFA)

Financial results

34. Regional Facilities Auckland’s (RFA) net direct expenditure for the quarter is $3.5 million favourable against budget.

35. Direct revenue is $1.3 million favourable mainly due to the receipt of unbudgeted Central Government grants from the wage subsidy extension and first tranche of Strategic Tourism Asset Protection Programme grant funding.

36. Capital delivery is $6.2 million lower than budget due mainly to COVID-19 related delays to renewals and the Zoo redevelopment but expected to be on track at year end.

Performance against indicators and other issues

37. While COVID-19 has obviously had significant impacts on attendance at RFA’s venues, RFA itself has been able to continue with other aspects of its work programmes. Progress with Zoo projects continues (albeit delayed by COVID-19) and the updated cost estimate to complete the ‘south east Asia jungle track’ is within budget. The overall south east Asia precinct is now expected to be complete in November 2021.

38. A key strategic focus area is the amalgamation with ATEED. The various workstreams for this are appropriately identified, along with key risks.

39. Despite the difficulties faced by RFA with COVID, and the imminent major organisational changes, its ‘net promoter score’ has remained very strong indeed.

Watercare Services Limited (Watercare)

Financial results

40. Watercare’s net direct revenue is $16.4 million favourable against budget.

41. Direct revenue is $16.3 million favourable against budget mainly due to higher than budget infrastructure growth charges (IGCs) and revenue associated with new developments. The impact of COVID-19 on revenue is assessed to be minimal at this stage.

42. Direct expenditure is tracking to budget.

43. Capital delivery was $175.8 million against a budget of $168.7 million. Most of the overspend is on the Waikato 50MLD project ($10.9m) as the project is currently ahead of the programme.

Performance against indicators and other matters

44. The additional drought infrastructure projects (an additional 40 megalitres per day) are either ahead of time or on time for delivery by February 2021.

45. Watercare has met all of its existing KPIs where it has results available, including the percentage of real water loss from the reticulated network which it did not meet in the last financial year (12.8 per cent this quarter compared to 13.2 per cent). The average consumption of drinking water per resident has also trended downwards, which will be related to the campaign to save water. Some of the KPIs still require targets to be adopted.

46. For the measure on Watercare group’s debt headroom, a measure of 3.54 has been adopted. This should be a measure that is discussed during the development of the 10-year budget.

47. Further discussion is required regarding how the contract with Waikato District Council is progressing, and whether, in light of the three water reform programme, there is any intent to push out the date the contract progresses into a 30 year agreement (it is currently in a two-year provisional phase).

Tauākī whakaaweawe āhuarangi

Climate impact statement

48. The quarterly performance reports are a key tool to monitor the progress of each CCO in action on climate change.

49. AT is using an industry sustainability certification scheme to assess and rate the performance of the Eastern Busway 2 and 3 projects, and with Waka Kotahi considering using it on other projects that have shared funding over $15m.

50. The draft Panuku Climate Change Strategy was discussed with the Panuku Mana Whenua Governance Forum in August, and in September Panuku attended the Environment and Climate Change Committee to update the council on their work programme.

51. ATEED presented two programme proposals – Climate innovation hub and moving towards a more resilient and regenerative economy – to the Long-Term Plan Finance and Performance workshop. ATEED’s Climate Change and Sustainability report was being completed over this quarter and was recently released.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

52. Each CCOs quarterly report contains information on how they are contributing to the council’s outcomes and objectives for them.

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

Local impacts and local board views

53. The governance of CCOs is a responsibility delegated to the CCO Oversight Committee. We have not sought the views of local boards. CCOs provide six-monthly progress and performance reports to local boards. The quarterly reports provide a summary of the engagement that CCOs have carried out with local boards during the quarter.

Tauākī whakaaweawe Māori

Māori impact statement

54. Each CCO reports on their contribution towards achieving Māori Outcomes in their quarterly report.

55. For the first time, Māori outcomes have been identified as a key deliverable in AT’s Enterprise Business plan. A number of key activities contribute to the programme and this is noted in their report.

56. The Toi Tu Toi Ora exhibition at the Auckland Art Gallery, opening on 5 December, has high cultural significance and will showcase the contemporary work of 120 Māori artists from a 70-year period.

57. Eke Panuku has achieved 28 initiatives that support Māori Outcomes in the first quarter. These include entering into negotiations with mana whenua about the disposal of three development sites and continued engagement on a number of neighbourhood projects.

Ngā ritenga ā-pūtea

Financial implications

58. The financial results are discussed further as part of the Auckland Council Group quarterly performance report that went to the November Finance and Performance Committee.

59. Each of the CCOs quarterly reports contains information regarding their financial performance.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

60. The quarterly reports provide a summary of the top risks and mitigations. This supports more detailed quarterly reporting to the Audit and Risk Committee.

Ngā koringa ā-muri

Next steps

61. This report is primarily for information purposes. The next quarterly report will be provided to the CCO Oversight Committee in March 2021.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	ATEED Quarter 1 report 2020	61
b ⇩	Auckland Transport Quarter 1 report, 2020-2021	71
c ⇩	Panuku Quarter 1 report 2020	87
d ⇩	RFA Quarter 1 report 2020-2021	107
e ⇩	Watercare Quarter 1 report 2020	119

Ngā kaihaina

Signatories

Authors

Claire Gomas - Principal Advisor

Edward Siddle - Principal Advisor

Sarah Holdem - Principal Advisor

Sarah Johnstone-Smith - Principal Advisor

Authoriser

Alastair Cameron - Manager - CCO Governance & External Partnerships

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

Date	Workshop/Briefing
24/11/20	CONFIDENTIAL: Long-term Plan Capital Expenditure

Author	Michelle Judge - Kaitohutohu Mana Whakahaere / Governance Advisor
Authoriser	Alastair Cameron - Manager - CCO Governance & External Partnerships