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

 

Date:

Time:

Meeting Room:

Venue:

 

Thursday, 18 March 2021

10.00am

Reception Lounge
Auckland Town Hall
301-305 Queen Street
Auckland

 

Kōmiti ā Pūtea, ā Mahi Hoki /
Finance and Performance Committee

 

OPEN AGENDA

 

 

MEMBERSHIP

 

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

 

 

(Quorum 11 members)

 

 

 

Sandra Gordon

Kaitohutohu Mana Whakahaere Matua / Senior Governance Advisor

 

11 March 2021

 

Contact Telephone: (09) 890 8150

Email: sandra.gordon@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 


 


 

Terms of Reference

 

Responsibilities

 

The purpose of the committee is to:

 

a)    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

18 March 2021

 

ITEM   TABLE OF CONTENTS                                                                                         PAGE

1          Apologies                                                                                                                        7

2          Declaration of Interest                                                                                                   7

3          Confirmation of Minutes                                                                                               7

4          Petitions                                                                                                                          7  

5          Public Input                                                                                                                    7

6          Local Board Input                                                                                                          7

7          Extraordinary Business                                                                                                8

8          Presentation from Eden Park Trust Board                                                                 9

9          Auckland Council Group and Auckland Council quarterly performance report for the 6 months to 31 December 2020                                                                           13

10        Emergency Budget 2020/2021 - Update March 2021                                               85

11        Approval of the Auckland Regional Amenities Funding Levy 2021/2022             91

12        Summary of Finance and Performance Committee information memoranda and briefings, including the Forward Work Programme - 18 March 2021                  161

13        Consideration of Extraordinary Items

 


1          Apologies

 

An apology from Cr P Coom for absence, on council business, has been received.

 

 

2          Declaration of Interest

 

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

 

 

3          Confirmation of Minutes

 

That the Finance and Performance Committee:

a)         confirm the ordinary minutes of its meeting, held on Thursday, 18 February 2021, 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.”


Finance and Performance Committee

18 March 2021

 

Presentation from Eden Park Trust Board

File No.: CP2021/00193

 

  

Te take mō te pūrongo

Purpose of the report

1.       To provide a further opportunity for the Eden Park Trust Board (which is partially funded by the Auckland Council) to present to the committee on its performance and financial projections. Their last appearance before the committee was on 17 September 2020.

2.       To provide a further update on progress against the resolutions of this committee on 19 March 2019 (FIN/2019/24, FIN/2019/25, FIN/2019/26 and FIN/2019/27).

Whakarāpopototanga matua

Executive summary

3.       The Finance & Performance Committee agreed to provide the Eden Park Trust Board with funding on 19 March 2019 (Resolutions FIN/2019/24, FIN/2019/25, FIN/2019/26 and FIN/2019/27) as follows:

a)      authorise and delegate all necessary powers to the chief executive to:

i)       reach an agreement with Eden Park Trust and ASB Bank for Auckland Council to take over the $40 million loan from ASB Bank to Eden Park Trust together with other facilities provided by ASB Bank to Eden Park Trust before 30 September 2019.

ii)       reach an agreement with Eden Park Trust to consolidate the loans acquired from ASB Bank and Auckland Council loans into one or more new facilities on commercial terms including:

A)      first-ranking security over Eden Park Trust’s assets

B)      a term of up to ten years

C)      an interest rate set at council’s cost of funds plus a margin.

b)      authorise the chief executive to agree a grant to fund capital expenditure of up to $9.8 million over a three-year period from 1 July 2019 under a Development Funding Agreement.

c)      agree that the chief executives of Auckland Council, Eden Park Trust and Regional Facilities Auckland jointly prepare an operational partnering proposal to be completed by March 2020.

d)      invite Eden Park Trust Board to report to the Finance and Performance Committee on at least a six-monthly basis to outline its performance and financial projections.

e)      initiate discussions with the Government to seek amending the Eden Park Trust Deed to appropriately align the governance of Eden Park with funding.

4.       In accordance with clause d), representatives of the Eden Park Trust Board will attend the meeting.

Update on previous resolutions

5.       Resolution a) – Loan: Auckland Council took over ASB Bank loans and facilities to Eden Park Trust:

a)      On 30 September 2019, Auckland Council took over ASB Bank loans and facilities to Eden Park Trust by paying ASB Bank $40 million (the par value of all amounts outstanding from Eden Park Trust to ASB Bank as at 30 September 2019) and consolidating $6.5 million of existing Council loans into one $54 million revolving facility with a drawn loan balance of $46.5 million.

b)      In April 2020 Council agreed to grant Eden Park Trust a waiver on its financial covenant relating to the loan from Council until 31 January 2021.  In simple terms the financial covenant states that the ratio of EBITDA (earnings before interest, tax, depreciation and amortisation) to interest for the financial year in question will be equal to or greater than 1.1. The waiver is similar to what other lenders have agreed to in similar situations where the revenue of a business has fallen significantly due to the impacts of COVID-19, and was granted due to the impact that COVID-19 was having on Eden Park’s business (mainly in the form of reduced revenue) which was making it highly possible that Eden Park would be unable to meet this covenant.

c)      As noted in the previous update to this committee in September 2020, on 2 September 2020 the Eden Park Trust Board made a request for a further extension of the waiver through to 31 October 2021 (their next financial year end). This request was agreed to by Council on 16 October 2020 on the same basis as the previous waiver, although currently the Eden Park Trust Board are complying with the covenant so are not reliant on that waiver.

d)      Council will continue to monitor the situation in conjunction with the Eden Park Trust.

e)      Eden Park’s loan balance as at 28 February 2021 was $46 million, compared to $44.5 million at the end of April 2020. The maximum amount that may be borrowed under the facility at any point in time is $54 million.

f)       Eden Park Trust continues to pay interest on the loan.

6.       Resolution b) – Funding: A Development Funding Agreement was executed with Eden Park Trust in late 2019.

g)      The Trust has been drawing down against the grant –a total of $3,908,598 for replacement of emergency lighting and new turf, the new video replay screen and facilities upgrades has been released as at 31 January 2021.

7.       Resolution c) – Operational Partnering Proposal and resolution e) Governance:

a)      Work on an operational partnering proposal was progressed but ultimately put on hold to await the outcomes of the Auckland Council CCO Review. 

b)      The CCO review findings were released in August 2020. The recommendations include a merger of Regional Facilities Auckland Limited (RFAL) and Auckland Tourism, Events and Economic Development (ATEED) and that “The merged entity explores, at the council’s direction, the critical need for joint management and operation of the city’s four stadiums with the Eden Park Trust.”

c)      On 27 August 2020 the Governing Body agreed (GB/2020/90) to the establishment of a merged council controlled organisation by amalgamating RFAL and ATEED. Auckland Unlimited came into being on 1 December 2020.

d)      A workshop will be held in the first half of 2021 to discuss how Auckland Unlimited should progress work with the Eden Park Trust Board and on stadiums. 

e)      In relation to governance, previous updates noted that staff had been engaging with government officials from the Ministry for Culture and Heritage.  Further work on the governance model for stadiums will be looked at following the workshop with Auckland Unlimited and once management and operational issues have been progressed.

8.       Resolution d) – Eden Park reporting to Finance & Performance Committee: the Eden Park Trust Board previously presented to this committee on 17 September 2020 and will present to the committee at this meeting. This reporting is to continue on at least a six-monthly basis.

Eden Park Trust Board presentation

9.       The Eden Park Trust Board continue to comply with their reporting obligations to the council. They provided their annual report on 29 January 2021 and continue to provide their quarterly compliance reports.

10.     In accordance with resolution d), representatives of the Eden Park Trust Board will attend the meeting. They will present high level financial information, recent highlights and impact of COVID-19 and their ongoing engagement with Auckland Unlimited.

11.     Council finance staff have considered the presentation prior to this meeting and do not have any risks or issues to raise with the committee.

 

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a)      thank the representatives of the Eden Park Trust Board for their attendance and the information provided.

 

 

Ngā tāpirihanga

Attachments

There are no attachments for this report.      

Ngā kaihaina

Signatories

Author

Anita Furniss - Executive Officer - Finance Division

Authoriser

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

18 March 2021

 

Auckland Council Group and Auckland Council quarterly performance report for the 6 months to 31 December 2020

File No.: CP2021/01749

 

  

 

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 six months to 31 December 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 group capital investment for the year

·   $200 million in group savings and temporary cost reductions

·   $244 million from asset recycling.

3.       Despite the ongoing COVID-19 disruption, the Auckland Council Group delivered a satisfactory performance for the six months to 31 December 2020. The capital delivery of $1.2 billion was in line with the same period last year, and the net direct operating result was $190 million favourable compared to the Emergency Budget.

4.       Full-time equivalents for the group decreased by 167 to 10,912, mainly due to attrition, restructuring and tight recruitment controls.

5.       The Auckland Council Group interim report was released to the NZX and the public on 26 February 2021 and can be accessed on the Auckland Council website.

6.       Representatives of the substantive council-controlled organisations (CCOs) boards, chief executives and chief financial officers will be presenting their 31 December 2020 results at the 23 March 2021 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 six months ended 31 December 2020.

Horopaki

Context

7.       The committee is provided with management and statutory results on a quarterly basis. While these two sets of results reconcile, they are aggregated and analysed with different lenses. The quarterly performance report provides a governance and management view of the organisation’s performance and is tailored to highlight key performance areas (refer Attachments A and B). The statutory results provide an investor view and are based on accounting standards (refer Attachment C).

8.       Representatives of the substantive council-controlled organisations (CCOs) boards, chief executives and chief financial officers will be presenting their 31 December 2020 results at the 23 March 2021 CCO Oversight Committee.

Tātaritanga me ngā tohutohu

Analysis and advice

Summary of Group Quarterly Performance

9.       The Auckland Council Group has delivered a satisfactory performance for the six months to 31 December 2020.

10.     Good progress is being made with capital investment of $1.2 billion over the six month period. This is in line with the same period last year and represents 93% of budgeted delivery despite the COVID-19 disruptions. 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 August 2020 COVID-19 Alert Level 3 lockdown in New Zealand.

11.     The group achieved a positive operating performance result for the six-month period. Direct revenue of $1 billion was $100 million ahead of budget, and direct expenditure of $1.4 billion was $90 million favourable to budget. Included in direct revenue is a $58 million surplus against budget related to Watercare’s infrastructure growth charges. Overall, the net direct operating result was $190 million favourable to budget.

12.     Good progress is being made with the pipeline of property rationalisation opportunities, but there will be a significant timing delay in receipt of the cashflow benefits. $34 million has been achieved for the six months to December 2020 out of the $244 million asset recycling target for the year. There are currently properties valued at approximately $100 million in an active sales phase with a further $70m approved and being prepared for sale.

13.     During the six-month period, the council issued $550 million of new floating rate notes to the Local Government Funding Agency and $500 million in 30-year domestic fixed rate green bonds.

14.     The group’s benchmark debt-to-revenue ratio is 270 per cent. Current indications are that the group’s debt to revenue ratio will be circa 285 per cent at the end of the year, which is slightly lower than the Emergency Budget’s limit of 290 per cent.

15.     The capital investment over the quarter resulted in net debt rising to $10.1 billion as at 31 December 2020, with a net debt to total assets ratio of 17 per cent.

16.     Full-time equivalents (FTEs) for the Auckland Council Group decreased by 167, with Auckland Council being the largest contributor with a decrease of 160. Auckland Council FTEs have decreased largely due to attrition, redundancies and tight recruitment controls. Restructures took place at Panuku Development Limited and Ports of Auckland Limited resulting in a decrease of 35 FTE. Auckland Unlimited saw a decrease as a result of reduced events and programmes combined with a recruitment freeze. Both Watercare Services Limited and Auckland Transport had moderate increases of 62 and 13 respectively, both in frontline revenue-generating areas.

17.     Key financial risks for achieving the Emergency Budget targets are:

·   The risk of further COVID-19 disruptions and a consequential decline in economic conditions

·   Delays in achieving cash flow benefits from asset recycling.


 

18.     28 out of the 80 LTP Performance measures were updated during the period, of which 12 have been met and 16 have not been met. The impact of COVID-19 continues to be reflected in performance measure results with lower usage of our facilities (although usage is recovering it remains below target).  High consenting volumes have also impacted timeliness. Customer satisfaction targets continue to be met in building consent service delivery and our food and hygiene licensing service.

Summary of Auckland Council Quarterly Performance

19.     Auckland Council’s capital expenditure tracked within its budget at 81% for the six month period. Capital expenditure was slower than budgeted across the organisation, including in the city centre, stormwater, community facilities and ICT, partly due to the late budget and local board work programme adoption. Remedial actions are being taken to accelerate projects, expenditure and delivery.

20.     Net direct expenditure was $51 million favourable to budget. This is largely due to a combination of strong regulatory revenue, the continuation of tight spending controls in response to COVID-19 and reduced project operating costs from delays in capital projects.

21.     At 31 December 2020, the council had achieved $105 million towards the $120 million Emergency Budget savings target.

Detailed Performance Reporting

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

Auckland Council Group Interim Report

23.     The Auckland Council Group Interim Report (interim report) for the six months ending 31 December is included in Attachment C. It was prepared on a statutory basis and was reviewed by Audit New Zealand. They provided an unmodified review opinion, with an emphasis of matter drawing readers attention to the impact of COVID-19.

24.     The judgements, assumptions and new accounting policies used in preparing the interim report were reviewed by the Audit and Risk Committee on 9 December 2020 and 22 February 2021 and at the latter meeting, the committee endorsed the judgements, assumptions and new accounting policies.

25.     The interim report was reviewed and approved by the chair and deputy chair of this committee as well as the chief executive on 24 February 2021. It was then reviewed and approved by the Mayor on 25 February 2021 and released to the NZX and the public on 26 February 2021.

26.     The results in the interim report reconcile with the results in the Group Quarterly Performance Report. A copy of the reconciliation is included in Attachment D.

Tauākī whakaaweawe āhuarangi

Climate impact statement

27.     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.

28.     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.

29.     Climate action projects have been added to strategic focus areas in the Auckland Council Group quarterly reporting pack in Attachment A. 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 its 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

30.     The group quarterly performance report and quarterly statutory financial report reflect the results of the group for the six months ended 31 December 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

31.     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.

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

Tauākī whakaaweawe Māori

Māori impact statement

33.     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.

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

Ngā ritenga ā-pūtea

Financial implications

35.     No financial decisions are sought and accordingly there are no financial implications directly arising from the information contained in the report.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

36.     There is a risk that the information lacks accuracy and completeness due to it not being subject to a formal audit. Management has performed due diligence by obtaining detailed explanations from all Auckland Council business units as well as group entities supplemented by representation letters provided by CCOs and POAL’s Audit and Risk chairs and CEOs.

Ngā koringa ā-muri

Next steps

37.     Management will provide the committee with a quarterly performance report for the third quarter of 2020/2021 at the May 2021 meeting.

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Auckland Council Group Quarterly Performance Report 31 December 2020

19

b

Auckland Council Quarterly Performance Report 31 December 2020

39

c

Auckland Council Group Interim Report 31 December 2020

59

d

Reconciliation of management results to statutory results 31 December 2020

83

     

Ngā kaihaina

Signatories

Authors

Tracy Gers - Group Accounting & Reporting Manager

Karuna Dahya - Strategy Analyst

Pramod Nair - Head of Group Financial Planning

Francis Caetano - Group Financial Controller

Authorisers

Nicola Mills - General Manager Financial and Business Performance

John Bishop - Group Treasurer

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

18 March 2021

 

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Finance and Performance Committee

18 March 2021

 

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Finance and Performance Committee

18 March 2021

 

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Finance and Performance Committee

18 March 2021

 

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Finance and Performance Committee

18 March 2021

 

Emergency Budget 2020/2021 - Update March 2021

File No.: CP2021/01611

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide the committee with financial update information since the Emergency Budget was adopted. This update is as at the end of February 2021.

Whakarāpopototanga matua

Executive summary

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

3.       The final budget included a projected reduction in cash operating revenue of around $450 million for 2020/2021 as a result of COVID-19 and a range of measures such as reductions in operating expenditure, temporarily elevated debt levels, capital expenditure deferrals, and asset recycling to mitigate the impact of this revenue shortfall as well as the unprecedented drought situation.

4.       As the COVID-19 situation is still evolving, its financial impacts on council remain uncertain. Finance staff will monitor the progress for 2020/2021, including the financial performance of Auckland Council and its CCOs, and progress on other key mitigations to ensure the group can respond to any material changes to the Emergency Budget. Staff will report on progress to the Finance and Performance Committee on a monthly basis.

5.       This month the updates are:

·    Progress for 2020/2021 against the Emergency Budget

·    Watercare revenue and capex increase for 2020/2021.

Progress for 2020/2021 against the Emergency Budget

6.       A verbal update on the group financial performance for February 2021, accompanied by a performance dashboard, will be provided at the meeting.

7.       Auckland Council continued to make progress towards the $120 million savings. A further $2 million of savings has been achieved since January 2021, keeping progress on track and bringing the total achieved savings to $107 million or 89 per cent.

Watercare capex increase for 2020/2021

8.       During the setting of the Emergency Budget, Watercare reduced its forecasts for all major revenue streams as a result of impacts from COVID-19.

9.       Watercare’s capex budget, including $224 million of drought projects in 2020/2021, was also reduced from $780 million to $738 million to remain within a debt to revenue ratio of 350 per cent, which was the borrowing limit allocated to Watercare when preparing the Emergency Budget. This debt limit for Watercare helps ensure the Council Group debt to revenue ratio does not exceed acceptable levels.

10.     However, to remain within the prioritised $738 million capex budget there are substantial flow on implications, including additional costs to suspend and restart projects in delivery, contractual obligations, and impacts to delivery of the future capex programme.

11.     Following a review of the current financial position, Watercare’s forecast revenue streams are now significantly above the position in the Emergency Budget and current trends indicate this is likely to continue for the remainder of 2020/2021. This revenue uplift will result in an improved year-end debt to revenue ratio for Watercare.

12.     Considering the improved debt position and flow on impacts of not proceeding with planned capital projects, Watercare’s board has approved a capital investment increase of $22 million compared to the Emergency Budget, totalling to $760 million.

13.     After incorporating the additional investment, Watercare’s forecast debt to revenue ratio for 2020/2021 will remain below the agreed Emergency Budget ratio limit. The ratio for future financial years is also projected to be below the limit set for the draft 10-year Budget 2021-2031 (long-term plan).

14.     Any consequential operating expenditure requirements to support the operation of these new assets will be included in Watercare’s long-term plan.

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 $107 million towards the $120 million council organisation savings target.

c)      note the Watercare capital investment increase of $22 million above the Emergency Budget and note this will not have any adverse impact on group debt compared to the Emergency Budget projections.

Horopaki

Context

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

16.     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.

17.     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 were implemented 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.

18.     As the COVID-19 situation is still evolving, its financial impacts on council remain uncertain. Staff will continue to 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 (February)

19.     A verbal update on the group financial performance for February 2021, accompanied by a performance dashboard, will be provided at the meeting.


 

Savings progress for Auckland Council

20.     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 to the CCO Oversight Committee.

21.     At the end of February, Auckland Council has achieved $107 million (89 per cent) towards the $120 million savings target, an increase of $2 million savings from January 2021. Savings of note in the month include:

·    $1.2 million one-off procurement savings through maintenance contract negotiations for service reductions during lockdown

·    $0.3 million permanent reduction of corporate property utilities cost achieved through vacation of Bledisloe House

·    $0.3 million savings ($1.0 million annualised permanent savings) confirmed following phase one of the Customer and Community Services directorate restructure. This restructure integrated the management of libraries, community places, art, community empowerment and events to form the Connected Communities department and Regional Services Planning, Investment and Partnerships department.

Watercare revenue and capital expenditure increase for 2020/2021

22.     As a result of impacts from COVID-19, Watercare reduced its forecasts for all major revenue streams in the Emergency Budget, including infrastructure growth charges (IGC), new connections and water/wastewater tariffs. Reduced forecast revenue negatively impacted the council group’s debt headroom. In response to the reduced funding capacity, Watercare’s capital programmes were necessarily constrained, and this was incorporated in the Emergency Budget.

23.     Watercare’s capital budget, including $224 million of drought projects in 2020/2021, was reduced from $780 million to $738 million to remain within a debt to revenue ratio of 350 per cent, which was the borrowing limit used when preparing the Emergency Budget. This debt limit for Watercare ensures the Council Group debt to revenue ratio did not exceed acceptable levels.

24.     However, the Watercare capital programme delivery team recently determined that to remain within the prioritised $738 million capital budget they would also need to:

·    slow or stop some projects that are in delivery, which will have contractual implications and additional costs to suspend and then restart these projects, as well as delays in delivery of expected operational and customer benefits

·    constrain the operational renewal programme, impacting business efficiency

·    stop the planning and design for projects where construction was to commence in 2021/2022, impacting delivery of the future capex programme.

25.     Examples of projects that would be impacted include:

·    Warkworth to Snells transfer pipeline — impacting growth.

·    Huia 1 and Nihotupu 1 replacement pipeline — impacting resilience and renewals.


 

·    Orewa 1 pipeline — impacting growth.

·    Northern Interceptor — impacting growth and the environment.

26.     There is also significant potential for impacts on key contractors and suppliers already negatively impacted by COVID-19.

27.     Following a review of the current financial position, Watercare’s forecast revenue streams are now significantly above the position in the Emergency Budget and current trends indicate this is likely to continue for the remainder of 2020/2021. It is largely driven by increased IGC and new developments revenue which at the end of January 2021 was being forecasted to be $67 million and $14 million over budget for the year respectively. Watercare’s total revenue is forecast to be $101 million over budget. This forecast revenue uplift will result in an improved year-end debt to revenue ratio for Watercare.

28.     As such, Watercare proposed to relieve their constrained capital programme with the support of higher IGC revenue and an improved debt position. This additional revenue is over and above what is required for the $121 million of drought infrastructure related debt headroom savings.

29.     Considering the improved debt position and flow on impacts of not proceeding with planned capital projects, Watercare’s board has approved a capital investment increase of $22 million compared to the Emergency Budget, totalling to $760 million. This additional investment relates to the current financial year and is not a bring forward of future year spend.

30.     After incorporating the additional investment, Watercare’s forecast debt to revenue ratio for 2020/2021 will still be below the agreed Emergency Budget ratio limit. The ratio for future financial years is also projected to be below the limit set for the draft 10-year Budget 2021-2031 (long-term plan).

31.     Future consequential operating expenditure requirements to support the operation of these new assets will be included in Watercare’s long-term plan. These changes would not otherwise impact on the 10-year Budget projections or the price increase required to support the planned investment. 

32.     The Finance and Performance Committee has previously agreed that it would be prudent to use any favourable revenue variances during the current year to reduce group debt. Council staff consider that this proposal represents a prudent exception to this rule given that:

·    remaining within the prioritised $738 million capex budget would impact on contracted projects in delivery, renewal projects and the delivery of future projects

·    investment in these kinds of projects scored highly in the group capex prioritisation exercise used for the 10-year Budget 

·    the favourable revenue impacts experienced to date are of significant magnitude that even if there was a strong revenue downturn for the remainder of the year, it is likely that the Watercare would still be able to achieve its debt targets.

Tauākī whakaaweawe āhuarangi

Climate impact statement

33.     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. 

34.     Impacts on climate change are taken into consideration as part of Council Group’s construction programme.

35.     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

36.     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.

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

Local impacts and local board views

37.     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.

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

Tauākī whakaaweawe Māori

Māori impact statement

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

40.     Auckland Council has obligations under Te Tiriti o Waitangi and the Significance and Engagement Policy to take special consideration when engaging with Māori to enable Māori participation in council decision making to promote Māori well-being. The Emergency Budget public consultation engagement programme included:

·     Raising awareness of the opportunity to give feedback through the current Māori database

·     Targeted Māori community engagement through partners, covering our high population areas and regionwide, supporting feedback through online and hard copy submission forms

·     Live discussions and Q&A with elected members and subject matter experts through Radio Waatea, with a focus on high population areas in the West and South and including the opportunity for audience and online feedback direct to decision-makers

·     Māori-focused social media campaign.

41.     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.

42.     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

43.     The financial implications relating to the Watercare revenue and capital expenditure increase are covered in the main section of this report.

44.     Staff will continue to advise the committee on any resultant budget changes required to stay within the overall key financial parameters set for the Emergency Budget as the remainder of the financial year progresses.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

45.     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.

Ngā koringa ā-muri

Next steps

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

 

Ngā tāpirihanga

Attachments

There are no attachments for this report.     

Ngā kaihaina

Signatories

Authors

Tracy Xu - Senior Analyst

Susan Jiang Su - Financial Analyst

Pramod Nair - Head of Group Financial Planning

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

18 March 2021

 

Approval of the Auckland Regional Amenities Funding Levy 2021/2022

File No.: CP2020/19259

 

  

Te take mō te pūrongo

Purpose of the report

1.       To consider the Auckland Regional Amenities Funding Act (ARAFA) levy for 2021/2022. 

Whakarāpopototanga matua

Executive summary

2.       The ARAFA provides for ten regional organisations to submit annual funding applications to the Auckland Regional Amenities Funding Board (Funding Board).  Eight amenities have made applications for funding through the Act. Those amenities are:

·    Auckland Festival Trust

·    Auckland Philharmonia Trust

·    Auckland Rescue Helicopter Trust

·    Auckland Theatre Company Ltd

·    Drowning Prevention Auckland – Watersafe Auckland Incorporated

·    New Zealand Opera Limited

·    Stardome – Auckland Observatory and Planetarium Trust Board

·    Surf Live Saving Northern Region Inc

3.       The Funding Board must analyse the funding applications and prepare a draft Funding Plan.  Following a period for submissions the final Funding Plan (Attachment A) has been approved by the Funding Board.  This is for a total of $15,435,500.

4.       The proposed levy is within the levy cap provided for by legislation but marginally more ($129,000) than what has been allowed for in the draft 10-year Budget 2021-2031.  If approved, appropriate adjustments will need to be made.

5.       Auckland Council’s submission on the Funding Plan (Attachment B) noted council’s concern about the indicative requests signalled by the amenities for the 2022/23 and 2023/24 financial years. The submission noted that council is unable to consider any significant increases in funding for the foreseeable future

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a)      approve the Auckland Regional Amenities Funding Board’s proposed levy for 2021/22 of $15,435,500.

Horopaki

Context

6.       The ARAFA was put in place in 2008 as a mechanism to provide adequate, sustainable and secure funding for the specified amenities, given the difficulties of securing funding from the multiple councils before the 2010 amalgamation.  Although obligations under the ARAFA were transferred to Auckland Council following its formation in 2010, its prescribed responsibilities were largely unchanged.

7.       The ARAFA established a Funding Board, which is an independent body whose role is to receive annual funding applications from the specified amenities identified in the Act, and to assess what would be a reasonable contribution towards the amenities’ operational costs. 

8.       The Funding Board assesses the annual funding applications received from the amenities against the funding principles within ARAFA, and any additional principles adopted by Auckland Council.  The funding principles include the following:

·   funding is primarily for provision of facilities or services by the amenities (i.e. operational)

·   funding is not available for capital expenses

·   funding is not for any part of facilities or services provided outside the Auckland region

·   funding is available only if the amenity has made all reasonable endeavours to maximise their funding from other available sources

·   the Funding Board must have regard to council’s proposed rates increase for the forthcoming year

·   the amenities should align their activities to the Auckland Plan, and adopt relevant performance measures.

9.       Once the Funding Board has conducted the analysis of the amenities’ funding applications it is required under the ARAFA to prepare a Funding Plan. The Funding Board must then call for public submissions. Council may provide a submission on the Funding Plan, as may the amenities themselves. The Funding Board must consider the submissions received when preparing the final Funding Plan.

10.     The Funding Board, having considered any submissions, then proposes a total levy to the council for approval. 

11.     The council’s decision-making role regarding the levy is confined to providing a submission on the Funding Board’s draft Funding Plan, reviewing the total levy proposed by the Funding Board, and either agreeing to or rejecting the proposed levy.  Allocations to individual amenities are the role of the Funding Board, not the council.  While the ARAFA requires that the Funding Plan must provide any information that is necessary for council to make an informed assessment of the annual levy (section 25(2)(i)), council is not able to comment on the amount of the funding being provided to the individual amenities, as it is the role of the Funding Board to analyse the funding requirements of each amenity. This report does not therefore discuss individual amenities.

12.     The introduction and background sections of the Funding Plan (pages 5 and 6) provide more detailed information about how the Funding Board operates in practice. 

Council’s submission on the 2021/2022 Funding Plan

13.     At its 15 December 2020 meeting the Finance & Performance Committee delegated approval of the council’s submission on the Funding Board’s draft annual plan to the chair and deputy chair of this committee (FIN/2020/101). This submission (Attachment C) noted the contribution provided by the Funding Board and the eight regional amenities in making Auckland a better place to live and visit.

14.     The submission noted that Auckland’s residents have provided generous financial support to these regional amenities since 2008.  The submission highlighted to the Funding Board that there are significant constraints to Auckland’s ratepayer budget due to the ongoing impacts of the COVID-19 pandemic. 

15.     The Funding Board’s role in analysing each individual amenities’ allocation is noted and the council appreciates that the conditions which have been applied to the provisional allocation of some grants is highlighted in the draft Funding Plan. 

16.     The submission signals council’s concern at the indicative future funding requests from the amenities. 

Tātaritanga me ngā tohutohu

Analysis and advice

17.     The final 2021/2022 Funding Plan proposes a total levy of $15,435,500.  This represents an overall increase of $755,000, or 5 per cent compared to 2020/2021.  The levy is around 41 per cent of the total possible levy (which is a maximum of 2 per cent of council’s rates income), indicating the restrained approach the Funding Board adopts when considering the amenities’ requests. 

18.     The indicative total request for 2022/23 is $18,359,979, which would represent an increase of 19 per cent on the current proposed levy.  However, we note that typically the Funding Board takes a careful approach with the amenities, and any increase is likely to be significantly lower than this. 

19.     AFAFA provides a ‘needs based’ funding mechanism, where the amenities receive the funding they require to keep them sustainable.  That level of funding will vary over time for each amenity, due to changes in their operating environments.  It is therefore difficult to make direct comparisons with previous year’s levies. The proposed increase in the levy is not out of line with previous year’s increases.

20.     In line with the council’s role in the ARAFA levy process the following options are outlined below.

a.       The first option is to approve the levy.  Staff have no reason to believe that the proposed levy is contrary to the funding principles contained in the ARAFA, and therefore there is no reason for council to not approve the levy. 

b.       The second option is to reject the proposed levy.  The Act only gives council the ability to reject the entire levy, even if it only disagrees with a part of it.  Rejecting the levy is not recommended, as the allocations appear to satisfy the criteria in the ARAFA. 

21.     We therefore recommend the levy is approved. This will reinforce council’s ongoing commitment and long-term support for the work, services and programmes that each amenity provides to Aucklanders across the region.  Nonetheless, it is important that each amenity notes that it is ratepayer funded and that this funding is 'funding of last resort'

Tauākī whakaaweawe āhuarangi

Climate impact statement

22.     The Funding Board, as part of its deliberations, has considered the impact of the amenities’ programmes in relation to climate change.  The Funding Plan includes particular reference to this in relation to the Auckland Arts Festival and Stardome.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

23.     There are no particular impacts on other parts of the council group, including council-controlled organisations.

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

Local impacts and local board views

24.     Decision making and oversight on regional activities is the responsibility of the Governing Body.  This report relates to the funding relationship between the council, the Funding Board and the nine regional amenities.

Tauākī whakaaweawe Māori

Māori impact statement

25.     The amenities have the ability to make positive contributions to Māori wellbeing, and to deliver on Auckland Plan outcomes and contribute to effective Māori capacity. Therefore, Māori wellbeing and perspectives are criteria for consideration throughout the Funding Board discussion at meetings.  

26.     The amenities have outlined the various programmes delivered that contribute to Māori wellbeing, and this has been considered as part of the Board’s deliberations. 

27.     Additionally, a Funding Board member (Precious Clark) has been appointed to represent the interests of Māori in the Auckland region, as required by the ARAFA. 

Ngā ritenga ā-pūtea

Financial implications

28.     The proposed levy is within the levy cap provided for by legislation but is $129,000 more than what is budgeted for in the draft 10-year Budget 2021-2031.  This will need to be accounted for, taking into account other levies from third-party amenities (Auckland Museum and MOTAT). 

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

29.     The ongoing risk to council is that the Auckland Regional Amenities Funding system provides little ability for council to ensure value for money from the amenities, and the indicated future funding requests from the amenities.  There is no direct accountability to council for the funding that the amenities receive.

30.     However, this risk is more to do with the legislative scheme than the current operation of the Funding Board itself.  The Funding Board takes a conservative and restrained approach to implementing the provisions of the legislation and keeps council staff well-informed of its deliberations.  Continued rigorous scrutiny of the amenities’ activities will mitigate the risk to council created by the legislative scheme. 

Ngā koringa ā-muri

Next steps

31.     If the committee approves the proposed levy, payment will be made to the Funding Board on or before 1 July 2021. 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

ARAFA Funding Plan 2021/22

95

b

Auckland Council submission on draft ARAFA Funding Plan 2021/22

157

c

ARAFB letter to Auckland Council re levy request, 18 February 2021

159

Ngā kaihaina

Signatories

Author

Edward Siddle - Principal Advisor

Authorisers

Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

18 March 2021

 

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Finance and Performance Committee

18 March 2021

 

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Finance and Performance Committee

18 March 2021

 

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Finance and Performance Committee

18 March 2021

 

Summary of Finance and Performance Committee information memoranda and briefings, including the Forward Work Programme - 18 March 2021

File No.: CP2021/01576

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To note progress on the 2021 forward work programme appended as Attachment A.

2.       To receive a summary and provide a public record of workshops, memoranda or briefing papers that may have been held or been distributed to Finance and Performance Committee members.

Whakarāpopototanga matua

Executive summary

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

4.       The following information has been circulated to members:

Date

Subject

22/2/2021

Memorandum from Head of Asset Management and Investment Programme; and Acting General Manager, Regional Service Planning, Investments and Partnerships (LTP Capex Budgets – Parks and Community Services) – Attachment B

23/2/2021

Memorandum from Programme Lead (Emergency Budget 2020/2021 – Asset Recycling – Reserve Revocation) - Attachment C

24/2/2021

Memorandum from Group Treasurer (Retrofit Your Home Programme) – Attachment D

 

5.       These documents can be found on the Auckland Council website, at the following link: http://infocouncil.aucklandcouncil.govt.nz/

at the top left of the page, select meeting/Te hui “Finance and Performance Committee” from the drop-down tab and click “View”;

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

6.       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)      receive the progress on the 2021 forward work programme as appended in Attachment A of the agenda report.

b)      receive the Summary of Finance and Performance Committee information memorandum and briefings as 18 March 2021.

 

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Finance and Performance Committee - Forward Work Programme

163

b

Memorandum - LTP Capex Budgets – Parks and Community Services - 22 February 2021 (Under Separate Cover)

 

c

Memorandum - Emergency Budget 2020/2021 – Asset Recycling – Reserve Revocation - 23 February 2021 (Under Separate Cover)

 

d

Memorandum - Retrofit Your Home Programme - 24 February 2021 (Under Separate Cover)

 

     

Ngā kaihaina

Signatories

Author

Sandra Gordon - Kaitohutohu Mana Whakahaere Matua / Senior Governance Advisor

Authoriser

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

18 March 2021

 

 

Te Komiti ā-Pūtea, ā-Mahi Hoki/Finance and Performance Committee
Forward Work Programme 2021/22

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

2021

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Planning and funding

10-year Budget (Long Term Plan)

2021-2031

General Manager Financial Strategy and Planning

Statutory Process

Hold workshops regarding process/content/policies

Decision to agree Mayoral Proposal (9 Dec 2020)

Recommend consultation document to consult with public (Feb 2020)

Adopt consultation document to consult with public (18 Feb 2020) (Governing Body)

Consultation period – 22 February 2021 – 22 March 2021

Hear feedback and deliberate budget scenarios (Apr/May 2021)

Decisions made for Long-Term Plan (25 May 2021)

Recommend final Long-Term Plan (25 May 2021)

Adopt final Emergency Budget (Governing Body) (29 June 2021)

 

 

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, 11 November 2020, 18 November 2020, 25 November 2020 and 2 December 2020)

10-year Budget 2021-2031 – Process overview – Link to decision

10-year Budget 2021-2031 – 10-Year Budget 2021-2031 - Adoption of the Draft Tūpuna Maunga o Tāmaki Makaurau Operational Plan 2021/2022 and summary – Link to decision  Link to governing body decision

10-year Budget 2021-2031: regional topics for consultation - local board input– Link to decision

10-year Budget 2021-2031 - Mayoral Proposal items for consultation – Link to decision  Link to governing body decision

10-year Budget 2021-2031 - Other matters for consultation – Link to decision  – Link to Governing Body decision

Changes to the Urban Rating Area and Rating of Farm and Lifestyle Properties within the Urban Rating Area – Link to decision  Link to Governing Body decision

Other Rates and Fees Issues for 10-Year Budget 2021-2031 – Link to decision  Link to Governing Body decision

Upper Harbour Local Board Transport Targeted Rate for consultation  - Link to decision  Item withdrawn at Governing Body meeting, 17 December 2020.

Paremoremo Public Transport Targeted Rate – Link to decision  Link to Governing Body decision

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

10-year Recovery Budget 2021-2031: Adoption of consultation material - Link to decision  Link to Governing Body decision

10-year Recovery Budget 2021-2031 Communications and Engagement Plan - Link to decision  Link to Governing Body decision

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Budget

(2022/2023)

General Manager Financial Strategy and Planning

Statutory Process

Hold workshops regarding process/content/policies

Decision to agree Mayoral Proposal (Dec 2021)

Recommend consultation document to consult with public (Feb 2022)

Adopt consultation document to consult with public (Feb 2022) (Governing Body)

Consultation period – To be confirmed

Hear feedback and deliberate budget scenarios (Apr/May 2022)

Decisions made for Long-Term Plan (May 2022)

Recommend final Long-Term Plan (June 2022)

Adopt final Emergency Budget (Governing Body) (June 2022)

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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) (Feb)

Receive annual report (16 Sept - extraordinary)

Recommend adoption of annual report to Governing Body (16 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:

Emergency Budget 2020/2021 - Update February 2021 (considered in confidential; restatements only released to the open record) – 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:

Q Theatre loan and funding (considered in confidential, resolutions released to the open record) – 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.

Q2 (Mar), Q3 (May), Q4 (16 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 (16 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.

 

Agree to proceed with recommended disposals or acquisition, as required.

 

Progress to date:

Recommendation from Parks, Arts, Community and Events Committee, 10 December 2020 - Proposed exchange of reserve land at Watchfield Close and Mayflower Park - Māngere East and West – Link to decision

 

 

Note: 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.

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 (Mar); 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 Policies

 

Approve council policies:

·    Business Improvement District Policy

·    Development Contribution Policy

·    Group Procurement Policy

·    Revenue and Financing Policy (through the 10-year Budget process)

·    Significance and Engagement Policy

·    Treasury Management Policy

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Review of committee forward work programme

Governance

Regular reporting

Receive updates (monthly until June 2021, bi-monthly from July 2021)

Review content of the forward work programme (six-monthly)

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Updated: 11 March 2021