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

 

Date:

Time:

Venue:

 

Thursday, 21 October 2021

10.00am

This meeting will be held remotely and can be viewed on the Auckland Council website
https://councillive.aucklandcouncil.govt.nz/

 

 

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

 

14 October 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)

 

Code of conduct

 

For information relating to Auckland Council’s elected members code of conduct, please refer to this link on the Auckland Council website - https://www.aucklandcouncil.govt.nz/about-auckland-council/how-auckland-council-works/elected-members-remuneration-declarations-interest/Pages/elected-members-code-conduct.aspx

 


 

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

21 October 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

6.1     Local Board Input:  Papakura Local Board - disposal of 26-32 O’Shannessey Street, Papakura and 36 Coles Crescent, Papakura                                                      7

7          Extraordinary Business                                       8

8          Presentation from Eden Park Trust Board        9

9          Asset recycling property disposal                   13

10        Additional properties for inclusion in Unlock Old Papatoetoe                                                   23

11        Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill 2021 submission          33

12        Options for Insurance Arrangements for the Auckland Council group                                    43

13        Support for businesses affected by COVID-19                                                                              89

14        Summary of Finance and Performance Committee information memoranda and briefings, including the Forward Work Programme - 21 October 2021                          97

15        Consideration of Extraordinary Items

 


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 Finance and Performance Committee:

a)          confirm the ordinary minutes of its meeting held on Thursday, 19 August 2021, including the confidential section; and the extraordinary minutes of its meeting held on Thursday, 16 September 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.

 

6.1       Local Board Input:  Papakura Local Board - disposal of 26-32 O’Shannessey Street, Papakura and 36 Coles Crescent, Papakura

Te take mō te pūrongo

Purpose of the report

1.       To enable Papakura Local Board chair, Brent Catchpole to address the Finance and Performance Committee regarding the disposal of 26-32 O’Shannessey Street, Papakura and 36 Coles Crescent, Papakura.

 

 

Whakarāpopototanga matua

Executive summary

2.       Papakura Local Board chair, Brent Catchpole, will address the Finance and Performance Committee regarding the disposal of 26-32 O’Shannessey Street, Papakura and 36 Coles Crescent, Papakura which is an item on this agenda.

 

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a)      riro / receive the Papakura Local Board input regarding the disposal of 26-32 O’Shannessey Street, Papakura and 36 Coles Crescent, Papakura and thank Chair Brent Catchpole for his attendance.

 

 

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

21 October 2021

 

Presentation from Eden Park Trust Board

File No.: CP2021/02766

 

  

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 Auckland Council) to present to the committee on its performance and financial projections. Their last appearance before the committee was on 18 March 2021.

2.       To provide a further update on progress against the resolutions of this committee from 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 September 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). The impact of COVID-19 was making it highly possible that Eden Park would be unable to meet this covenant.

c)      Since that time, the council has twice agreed to extend the waiver on the same grounds as the initial waiver. The most recent of these follows a request from the Eden Park Trust Board on 31 August 2021 for a further extension from 31 October 2021 through to 31 October 2022 due to ongoing uncertainty over lockdown restrictions on their activities. This request was agreed to on 7 September 2021. As at their most recent reporting date (31 July 2021), the Eden Park Trust Board were complying with the covenant so were not reliant on the waiver.

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

e)      Eden Park’s loan balance as at 30 September 2021 was $44.250 million, compared to $46 million at the end of February 2021. 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.

a)      The trust has been drawing down against the grant – a total of $5,489,002 has been released as at 20 September 2021 for replacement of emergency lighting, new turf, a video replay screen, electrical, security and facilities upgrades in accordance with the Development Funding Agreement.

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

b)      The CCO review findings were released in August 2020. The recommendations included 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)      A confidential workshop was held on 7 July 2021 with the CCO Oversight Committee to discuss how Auckland Unlimited should progress work with the Eden Park Trust Board and on stadiums.

d)      A further confidential workshop was held on 22 September 2021 to discuss progress that is being made in relation to the operating model for the region’s stadiums. Auckland Unlimited will continue to progress this work with the Eden Park Trust Board, and other stakeholders. 

e)      Further work on the governance model for stadiums will continue once management and operational issues have been sufficiently progressed.

8.       Resolution d) – Eden Park reporting to Finance & Performance Committee: the Eden Park Trust Board previously presented to this committee on 18 March 2021 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, the 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

Authors

John Bishop - Group Treasurer

Kerri Foote - Executive Officer: Chief Financial Office Division

Authoriser

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

21 October 2021

 

Asset recycling property disposal

File No.: CP2021/01033

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To approve the disposal of two properties for urban renewal purposes.

Whakarāpopototanga matua

Executive summary

2.       Asset recycling is an important lever for the council allowing capital to be invested in the most strategically important activities. The Recovery Budget includes $70 million proceeds to be realised from asset recycling in 2021/2022.

3.       Approval is being sought for the disposal of two sites identified as candidates for disposal. 26-32 O’Shannessey Street, Papakura and 36 Coles Crescent, Papakura are off-street car parks no longer required for transport service purposes. The sites were recommended for disposal to council’s Finance and Performance Committee in December 2018.  The committee’s decision was that a disposal be deferred for up to three years to allow further town centre planning.

4.       Following the Papakura Local Board’s July 2021 endorsement, these properties are recommended for disposal for urban renewal purposes.  If approved for disposal by the committee, Eke Panuku will seek urban renewal outcomes under its ‘Support’ development category which will support the revitalisation of the Papakura town centre.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a)      approve subject to the satisfactory conclusion of any required statutory processes the disposal of:

i)       26-32 O'Shannessey Street, Papakura being Lot 4 DP 41591, Lot 5 DP 41591, Lot 6 DP 41591 and Lot 7 DP 41591NA1395/45 contained in certificate of title NA1395/45; and

ii)       36 Coles Crescent, Papakura being part Lot 15 DP 38891, Lot 3 DP 71153, Lot 4 DP 71153, Lot 1 DP 65193, Lot 2 DP 65193, Lot 2 DP 60317 and Lot 4 DP 60317; and

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

Horopaki

Context

5.       Asset recycling is an important lever for the council allowing capital to be invested in the most strategically important activities. Principles to support decision making and guide implementation were agreed by the Finance and Performance Committee and the Governing Body on 16 July 2020 (resolution GB/2020/71) and these are being effectively used.

6.       The 10-year Budget 2021-2031 (Recovery Budget) has financial targets from asset recycling. This will be achieved from two focus areas; disposal of surplus property and alternative commercial arrangements (leasing, sale of lease interests) including carparks. The asset recycling target for 2021/2022 is $70 million.

7.       A key consideration for asset recycling is the opportunity cost of holding an asset which is not providing a service or generating an appropriate financial return against the opportunity of investing in new assets which deliver council services.

Property rationalisation

8.       The property rationalisation process is well developed. It includes identifying properties in the council portfolio that are no longer required for future council services or public work purposes and may be suitable for sale, and development if appropriate.

9.       Once a property has been identified as no longer required for current public work purposes, engagement is undertaken with relevant council business units and CCOs to establish whether the property must be retained for a strategic purpose or is required for a future funded public work. The rationalisation process also includes engagement with ward councillors, local boards and mana whenua. It is designed to ensure that the council complies with any statutory obligations in relation to the land, including under the Local Government Act 2002, the Public Works Act 1981 and the Reserves Act 1977.

10.     In September 2020, the Audit and Risk Committee reviewed the property rationalisation process and resolved the property rationalisation approach has reasonable and effective controls in place to ensure that risks are being appropriately managed (resolution AUD/2020/71).

Tātaritanga me ngā tohutohu

Analysis and advice

Property information - 26-32 O’Shannessey Street, Papakura

11.     26-32 O’Shannessey Street is a 809m2 council owned site that was acquired by the former Papakura City Council in 1983 for parking purposes. The site is subject to a right of way obligation providing access to the adjoining property at 22 O’Shannessey Street. (Attachment A – Figures 3 and 4).

12.     26-32 O’Shannessey Street was managed by Auckland Transport (AT) as part of its car parking network. In 2015, the AT Board resolved that it was no longer required for AT’s infrastructure or transport service purposes.

13.     The Auckland Unitary Plan (AUP) zoning is Metropolitan Centre. The site has a council rating valuation of $580,000.

Property information - 36 Coles Crescent, Papakura

14.     36 Coles Crescent is a 3,586m2 site that comprises of five separate parcels that are local purpose (parking) reserves, and two that are local purpose (service lane) reserves subject to the Reserves Act 1977 (Attachment A – Figures 1 and 2).

15.     The seven parcels were acquired by the former Papakura Borough Council and former Papakura District Council between 1953 and 1983 for parking and service lane purposes.

16.     Another service lane reserve adjoins the northern boundary of the site. That 97m2 site is not recommended for disposal. Access to this service lane area will be maintained by easements should 36 Coles Crescent be approved for disposal. As will the existing public access via the southern end of the site.

17.     Following an enquiry from a member of the public seeking to purchase the site, a review established there is no requirement to use the site for transport purposes. Eke Panuku subsequently commenced the rationalisation process in 2017.

18.     The parcels that make up 36 Coles Crescent are subject to the Reserves Act 1977. The Finance and Performance Committee previously approved the commencement of the reserve revocation process in 2018 (resolution FIN/2018/178). The reserve status of the land needs to be revoked prior to a proposed disposal occurring. Final revocation of the reserve status is subject to completing the statutory requirements of the Reserves Act 1977 and Local Government Act 2002, including public advertising.

19.     The AUP zoning of 36 Coles Crescent and the adjoining service lane is Metropolitan Centre. The combined parcels have a council rating valuation of $1.7 million.

Tauākī whakaaweawe āhuarangi

Climate impact statement

20.     The proposed sale of 26-32 O’Shannessey Street and 36 Coles Crescent for urban renewal purposes is likely to lead to land use changes. It is acknowledged that any form of construction and development can increase carbon emissions.

21.     Emissions associated with any potential redevelopment can be reduced through development standards agreed through future development agreements, application of Eke Panuku’s Homestar 6 policy and requirements to reduce carbon emissions in commercial developments.

22.     36 Coles Crescent is located within a flood prone area. Should the site be approved for disposal, Eke Panuku will inform potential purchasers of the potential flooding risk.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

23.     Asset recycling takes a group approach. Council and CCO’s all identify potential opportunities and prior to any disposal checks are made that council departments or a CCO do not have an alternative public requirement.

24.     Implementing the resolutions in this report will require input from council and Eke Panuku.

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

Local impacts and local board views

25.     Engagement with the Papakura Local Board regarding 26-32 O’Shannessey Street and 36 Coles Crescent commenced in 2015 and 2018 respectively.

26.     In 2018, Eke Panuku informed the local board of the potential to enter into development agreements with adjoining landowners to achieve mixed-use developments with housing outcomes for both 26-32 O’Shannessey Street and 36 Coles Crescent. The proposed developments align with the outcomes of the planning work completed by the Papakura Commercial Group on behalf of the local board.

27.     However due to concerns regarding the sale of the subject sites, the local board resolved (resolution PPK/2018/197) at its October 2018 business meeting to oppose a disposal on the basis that it wished to retain the sites to allow further strategic planning work and for an operational parking review to be undertaken.

28.     In December 2018 following a presentation from the local board, the Finance and Performance Committee resolved (resolution FIN/2018/178) to retain both sites for up to three years to inform strategic planning. The committee approved the revocation of the reserve status for 36 Coles Crescent.

29.     Eke Panuku continued to work with the Papakura Local Board on these properties. Eke Panuku has confirmed interest from developers remain and that it will seek urban renewal outcomes for 26-32 O’Shannessey Street and 36 Coles Crescent under its ‘Support’ development category, which will support the revitalisation of the Papakura town centre.

30.     At its 28 July 2021 meeting, the local board resolved (resolution PPK/2021/129 – Attachment B) to endorse the disposal of the two subject sites, noting that Eke Panuku has responded to the local board’s requests and that the local board seeks meaningful consultation as part of the ‘Support’ development approach for the sites.

Tauākī whakaaweawe Māori

Māori impact statement

31.     Māori have an active and specific role in Auckland, including kaitiakitanga (guardianship) of our land and marine resources. Land has a specific role in protecting, enabling and building Māori social and cultural capital. Local marae, kohanga reo, and other Māori entities offer spiritual, cultural, as well as a range of social, educational, health and justice services for the community.

32.     The importance of effective communication and engagement with Māori about land is understood. Each relevant mana whenua group is contacted independently regarding council-owned land that is subject to rationalisation and requested to give feedback. This provides mana whenua the opportunity to respond with any issues of cultural significance the group would like to formally express in relation to the subject properties.

33.     Mana whenua iwi authorities were previously consulted regarding 26-32 O’Shannessey Street and 36 Coles Crescent through the Eke Panuku-led mana whenua engagement process and through council’s Emergency Budget in 2020. Mana whenua engagement to date is summarised below:

Property

Mana whenua engagement

26-32 O'Shannessey Street, Papakura

Ngāti Tamaoho advised that the site is located in an area of high cultural significance to Ngāti Tamaoho, who occupied the Papakura area for centuries. This area has the highest population of those who identify with Tamaoho.

This information has been previously considered by the committee in 2018 as part of the decision-making process.

Ngāti Tamaoho, Ngāi Tai ki Tamaki and Te Akitai Waiohua previously registered commercial interests for 26-32 O’Shannessey Street.

36 Coles Crescent, Papakura

Ngāti Tamaoho advised that the site is located in an area of high cultural significance to Ngāti Tamaoho, who occupied the Papakura area for centuries. This area has the highest population of those who identify with Tamaoho.

This information has been previously considered by the committee in 2018 as part of the decision-making process.

34.     In the event 26-32 O’Shannessey Street and 36 Coles Crescent are approved for divestment, all iwi entities will be advised of the decision. Should the potential developers for the two sites withdraw their interest, Eke Panuku will then undertake its standard process of informing all iwi entities of upcoming commercial opportunities to acquire the properties six weeks before they are brought to the open market.

Ngā ritenga ā-pūtea

Financial implications

35.     Capital receipts from the proposed sale of these two Papakura properties that are no longer required by council will contribute to the asset recycling targets in the Recovery Budget 2021-2031 by providing council with an efficient use of capital and prioritisation of funds to achieve its activities and projects.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

36.     The access to adjacent properties provided by the existing service lane reserve adjacent to 36 Coles Crescent will need to be protected in any future development by easements registered on titles should the reserve status be revoked. 

Ngā koringa ā-muri

Next steps

37.     Should the Finance and Performance Committee approve the proposed disposals, Eke Panuku will undertake public notification of the proposed reserve revocation for 36 Coles Crescent.

38.     The terms and conditions of the proposed disposals of 26-32 O’Shannessey Street and 36 Coles Crescent will include confirmed urban renewal outcomes to be achieved and associated timeframes and will be approved under appropriate financial delegation.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Images of 26-32 O'Shannessey Street and 36 Coles Crescent

19

b

Local board resolutions

21

     

Ngā kaihaina

Signatories

Author

Marian Webb – General Manager, Assets and Delivery, Eke Panuku Development Auckland

Authorisers

Ross Chirnside – General Manager, Value for Money

David Rankin – Chief Executive Officer, Eke Panuku Development Auckland

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

21 October 2021

 

PDF Creator

PDF Creator


Finance and Performance Committee

21 October 2021

 

PDF Creator


Finance and Performance Committee

21 October 2021

 

Additional properties for inclusion in Unlock Old Papatoetoe

File No.: CP2021/14665

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To approve the divestment of four properties located within the boundaries of the Unlock Old Papatoetoe High Level Project Plan (HLPP) for urban renewal purposes.

Whakarāpopototanga matua

Executive summary

2.       The Unlock Old Papatoetoe High Level Project Plan (HLPP) was approved by the Planning Committee on 4 July 2017 (resolution PLA/2017/78).  The Finance and Performance Committee subsequently approved the divestment of properties located within the Unlock Old Papatoetoe HLPP boundary on 15 August 2017 (resolution FIN/2017/109) for urban renewal purposes.

3.       15 Kolmar Road, Papatoetoe and 98 St George Street, Papatoetoe are located within the Unlock Old Papatoetoe HLPP boundary. At the time the Unlock Old Papatoetoe HLPP was approved, these properties were held by Auckland Transport (AT) to enable realignment of an intersection and were not included in the properties approved for divestment as part of the HLPP. AT has subsequently confirmed that 15 Kolmar Road, Papatoetoe and 98 St George Street, Papatoetoe are no longer required, and they have been identified for inclusion in the Unlock Old Papatoetoe HLPP.

4.       Part of 27 St George Street, Papatoetoe and 12Z Wallace Road, Papatoetoe are also located within the Unlock Old Papatoetoe HLPP boundary and have subsequently been identified as suitable for divestment for urban renewal purposes. The balance of 27 George Street, Papatoetoe was approved for sale by the Finance and Performance Committee in August 2017.

5.       Approval is now being sought to divest these four properties for urban renewal purposes in accordance with the outcomes set out in the Unlock Old Papatoetoe HLPP.

 

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a)      approve, subject to the satisfactory conclusion of any required statutory processes, the disposal of the following properties for urban renewal purposes:

i)       15 Kolmar Road, Papatoetoe (section 2 SO 63139, NA71D/520);

ii)       98 St George Street, Papatoetoe (section 1 SO 63139, NA71D/519);

ii)       12Z Wallace Road, Papatoetoe (Lot 1 DP 54864, vested on DP 54864); and

iii)      part 27 St George Street, Papatoetoe (part section 2 SO 477408, RT 725094; part section 3 SO 477408, RT 725092; Lot 3 DP 19713, RT 725093; Lot 4 DP 19713, RT 725093 and part Lot 5 DP 19713, RT 725093);

b)      approve the commencement of the reserve revocation process for 27 St George Street, Papatoetoe; and

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

 

Horopaki

Context

6.       Old Papatoetoe is poised for significant growth. Approximately 10,000 people moved into the local board area in the last five years and many more are expected in the coming years. Auckland Council acknowledges this and has charged Eke Panuku to make better use of council land and improve the town centre economy under the Unlock Old Papatoetoe urban regeneration programme.

7.       On 4 July 2017 the Planning Committee approved the Unlock Old Papatoetoe HLPP.  A number of properties located within the Old Papatoetoe boundary had previously been approved for sale by the legacy Manukau City Council on 6 October 2009 for development purposes. The Unlock Old Papatoetoe HLPP updated the strategic direction and sought approval to dispose of additional properties for urban renewal purposes.

8.       Eke Panuku has been progressing the Unlock Old Papatoetoe programme for the last five years, undertaking small improvements while setting the groundwork for bigger change. The next big move Eke Panuku will action is improvements to Stadium Reserve. The subject properties play a key part in the redevelopment of this reserve so that it becomes a well-loved and frequently used green space in the heart of the town centre.

9.       At the time the Unlock Old Papatoetoe HLPP was approved, 98 St George Street and 15 Kolmar Road were managed by AT to enable an intersection realignment. Due to this, the properties were not included in the Unlock Old Papatoetoe HLPP. This project did not subsequently progress, and AT subsequently transferred the properties to Eke Panuku. 

10.     12Z Wallace Road and part of 27 St George Street were subsequently identified as being required for the Unlock Papatoetoe HLPP. 12Z Wallace Road is currently formed as a service lane knows as ‘Mawkes Lane’. It would continue to be utilised for this purpose as part of a wider redevelopment of the surrounding land. The balance of 27 St George Street was previously approved for divestment by the Finance and Performance Committee in 2017.

11.     Attachment B provides a map which identifies the properties previously approved for sale and the properties recommended for sale in this report. Attachment B also includes images of the subject properties.

Tātaritanga me ngā tohutohu

Analysis and advice

12.     The subject properties are recommended for disposal for urban renewal purposes, enabling them to be utilised to achieve the outcomes and objectives set out in the Unlock Old Papatoetoe HLPP. The strategic moves and project initiatives identified in the HLPP include:

a)      town centre vitality;

b)      a step change in housing;

c)      improve connections to and within the town centre;

d)      look for opportunities to provide for collaborative partnerships with mana whenua; and

e)      demonstrate leadership in sustainable development.

13.     Property specific information including the legal descriptions, council valuations and zoning are contained in Attachment A to this report.

14.     The disposal of the subject properties is not deemed significant under Auckland Council’s Significance and Engagement Policy.

15.     15 Kolmar Road and 98 St George Street are subject to s27B State-Owned Enterprises Act 1986, which provides that in certain circumstances the Waitangi Tribunal may return the land to claimants, irrespective of the current ownership.  Legal advice is that this condition would remain on the title even if the properties were developed and sold to a third party. 

16.     27 St George Street, Papatoetoe is formed as a recreation reserve and local purpose (carpark and accessway) reserve subject to the Reserves Act 1977.  The reserve status of the land would need to be revoked prior to the proposed disposal occurring. Final revocation of the reserve status will be subject to completing the statutory requirements of the Reserves Act 1977 and Local Government Act 2002, including public advertising. 

Tauākī whakaaweawe āhuarangi

Climate impact statement

17.     The subject properties are not located in a flood prone area and are not coastal properties likely to be impacted in the future by rising sea levels. 

18.     The proposed divestment of these properties for urban renewal purposes will lead to land use changes. It is acknowledged that any form of construction and development can increase carbon emissions.

19.     Emissions associated with any potential redevelopment can be reduced through development standards agreed through a future development agreement, application of Eke Panuku’s Homestar 6 policy and requirements to reduce carbon emissions in commercial developments.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

20.     Council departments and CCOs have been engaged by Eke Panuku through the development of the Unlock Old Papatoetoe HLPP. Engagement is ongoing.  The properties presented in this report are not required to be retained by Auckland Council for its service purposes or by AT for its transport and infrastructure purposes. 

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

Local impacts and local board views

21.     The Otara-Papatoetoe Local Board has had and will have an ongoing important role in the Unlock Old Papatoetoe HLPP. Engagement with the board has been ongoing since the approval of the HLPP. Monthly workshops are held with the board. 

22.     At a workshop held in February 2021, the master plan for Old Papatoetoe was agreed with the board.  The master plan provides a roadmap for significant change in the town centre on council land. The master plan carefully balances community amenities with the need to boost the number of homes, vitality and safety in the town centre. It requires the subject properties to deliver meaningful urban renewal. The board provided feedback that it was in support of the master plan and the proposed disposal of the subject properties.

23.     Community consultation was held on the master plan in August 2021. This provided the community with information about what is proposed while asking what they would like Eke Panuku to consider adding or amending in the plan (focusing mostly on the community spaces). Early conversations in workshops identified thoughts around the need to straighten the end of Kolmar Road where it connects with St George Street and Wallace Road. Commentary around housing was also raised and included a mix of views on demand, quality of design and height. The results of the master plan consultation is currently being compiled and further analysis will be provided to the board when complete.

24.     At its 21 September 2021 meeting, following additional advice from Eke Panuku staff, the board resolved to endorse the disposal of the four subject properties for urban renewal purposes and endorse the reserve revocation of 27 (part) St George Street. Noting that the endorsement to dispose of 15 Kolmar Road and 98 St George Street is subject to investigations into intersection realignment options and consideration of the funding impacts of HLPP priorities.

25.     Eke Panuku will work with the board and AT on the feasibility of aligning the intersection and associated budget impacts.

Tauākī whakaaweawe Māori

Māori impact statement

26.     Twelve Tāmaki Makaurau Mana whenua iwi and hapū have interests in the broader Old Papatoetoe area. Eke Panuku engagement with mana whenua through the Unlock Old Papatoetoe mana whenua project working group has been ongoing since 2016.

27.     In the event these properties are approved for divestment, all iwi entities will be advised of the decision.

Ngā ritenga ā-pūtea

Financial implications

28.     As the subject properties are located within the Unlock Old Papatoetoe boundaries, if approved for disposal, the sale proceeds will contribute towards projects identified in Eke Panuku’s Transform and Unlock priority location programme. Delivery of the programme requires the sale of the subject properties.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

29.     There is a risk that the revocation of the reserve status of 27 St George Street, Papatoetoe may not be approved following completion of the reserve revocation process.  Eke Panuku will ensure a robust process is followed. Should any objections be received to the proposed reserve revocation, it will seek to have independent commissioners appointed to consider any objections.

30.     As 12Z Wallace Road, Papatoetoe is legal road, there is a risk that the road stopping may not be able to be completed.  Eke Panuku will work closely with AT to progress this and ameliorate any potential issues.

Ngā koringa ā-muri

Next steps

31.     Subject to Finance and Performance Committee approval and the completion of all required statutory processes, Eke Panuku will progress the proposed divestment of the subject properties for urban renewal purposes.

32.     The terms and conditions of the proposed disposals will include confirmed development outcomes to be achieved and associated timeframes and will be approved under appropriate financial delegation.

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Property summary

27

b

Property images

29

Ngā kaihaina

Signatories

Authors

Richard Davison – Priority Location Director - South, Eke Panuku Development Auckland

Letitia Edwards – Head of Strategic Asset Optimisation, Eke Panuku Development Auckland

Authorisers

Ian Wheeler – Chief Operating Officer, Eke Panuku Development Auckland

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

21 October 2021

 

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Finance and Performance Committee

21 October 2021

 

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Finance and Performance Committee

21 October 2021

 

Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill 2021 submission

File No.: CP2021/15438

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To delegate authority to the chair and deputy chair of the Finance and Performance Committee and the group chief financial officer to approve Auckland Council’s submission on the Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill 2021.

Whakarāpopototanga matua

Executive summary

2.       The Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill 2021 (the bill) amendments are aimed at setting the annual rates of income tax for the 2021-22 tax year, and improving current tax setting, tax administration, the GST regime, Kiwi Saver, and social policy rules administered by Inland Revenue.

3.       Auckland Council tax team and PwC (our tax advisors) have significant concerns about the impacts the proposed amendments will have on the Auckland Council Consolidated Income Tax Group. Most significantly the proposals will:

·        treat the interest received from Watercare treasury funding as taxable to Auckland Council, with no deduction offset for interest paid by Auckland Council on the underlying borrowings (last year this amounted to $88 million representing $25 million of additional tax)

·        disallow the charitable donations credit (last year we claimed a $29 million deduction representing $8 million of additional tax).

4.       A submission on the bill is being prepared with assistance from PwC and a current draft is provided as Attachment A. The deadline for submissions is 9 November 2021.

5.       Given the additional tax impacts of this bill at a council group level, and the significant consequential implications for rates, it is important that elected members are aware of this bill. However, due to the submission timeframes and the technical nature of the tax amendments, delegation is sought for the chair and deputy chair of the Finance and Performance Committee and the group chief financial officer to approve Auckland Council’s submission.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a)      note the council’s draft submission on the Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill 2021 (Attachment A of the agenda report)

b)      delegate authority to the chair and deputy chair of the Finance and Performance Committee and the group chief financial officer to approve the council’s submission on the Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill 2021.

 


 

Horopaki

Context

6.       The bill proposes two changes that will have a significant impact on the taxation of the Auckland Council Group including:

·        The proposed interest deduction change: The denial of tax deductions for interest paid on funds borrowed by a local authority that are on-lent to a council-controlled organisation (CCO) which is not a council-controlled trading organisation (CCTO) as defined in the Local Government Act 2002 (‘LGA 2002’). This would treat the interest received from Watercare treasury funding as taxable to Auckland Council, with no deduction offset for interest paid by Auckland Council on the underlying borrowings (last year this amounted to $88 million representing $25 million of additional tax)

·        The proposed donations change: The removal of tax deductions for charitable donations made by local authorities. This would disallow the charitable donations credit (last year we claimed a $29 million deduction representing $8 million of additional tax).

7.       There are a number of other proposed changes in the bill regarding the imputation rules for councils, but none of these are expected to impact Auckland Council given that our current practices are already aligned with the proposed changes.

8.       As the largest council in New Zealand, our tax submissions are generally specific to Auckland Council. We are one of only five councils who have a consolidated income tax group, made necessary by our structure of CCOs.

9.       The council itself is not a taxpayer on general income but is on income from CCOs. This has always been offset if a line of sight can be maintained showing the council is not profiting from the transaction by offsetting actual costs. This longstanding tax concession would be disallowed under the proposed amendments.

10.     The treasury functions of Watercare were consolidated with Auckland Council in 2018 to access lower priced funding and reduce interest costs for the Auckland Council Group.

Tātaritanga me ngā tohutohu

Analysis and advice

11.     If adopted, the changes will give Auckland Council an estimated additional annual tax bill of $33 million, which represents an annual rates increase of almost 2 per cent.

Interest deductions change

12.     The proposal to limit interest deductions to finance that is provided to CCTOs may be a definitional error. A CCO is defined differently in the Income Tax Act 2007 from how it is defined in the Local Government Act 2002. Therefore, the exclusion of interest deductions to finance related to CCOs is perhaps unintentional.

13.     Auckland Council proposes to submit that these definitions should be carefully reviewed, to ensure the draft legislation applies as intended and a deduction for interest related to financing CCOs continues to apply. This would avoid a mismatch whereby interest on funds on-lent to a CCO would be denied a deduction, despite any interest received from the CCO being subject to tax. The proposal, as drafted, will lead to inefficiencies especially if a local authority has a centralised treasury function.

Donations change

14.     The bill also proposes preventing a local authority from accessing the corporate deduction for a donationThe purpose of the donation deduction is to encourage philanthropic giving. Limits are placed upon the level of deduction by limiting it to taxable income. By exempting dividend income from tax, local authorities will naturally be limited in their ability to claim a donation deduction.

15.     The proposal to deny all deductions seems contrary to the policy intent of the corporate donation deduction. Given the extensive support that local authorities give to the charitable sector, the bill will potentially see that sector suffer a significant fall in income. This will in turn place additional pressure on ratepayers (if a decision is nevertheless made for the council to continue to support local charities) and/or on central government to provide additional funding. This pressure will likely be exacerbated during the current COVID-19 environment.

Tauākī whakaaweawe āhuarangi

Climate impact statement

16.     The decision to delegate approval of the submission will not have direct climate impacts. However, if the bill proceeds as proposed, the additional tax costs incurred by the council may have an impact on our ability to fund climate change initiatives.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

17.     Relevant CCO finance staff have been invited to provide feedback for inclusion in the council’s submission.

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

Local impacts and local board views

18.     Given the tight timeframes and technical nature of the proposed bill, local boards have not been specifically consulted on this submission. However, a memo has been provided to local board members providing them an opportunity to input by contacting staff.

Tauākī whakaaweawe Māori

Māori impact statement

19.     The decision to delegate approval will not have a direct impact on Māori. However, if the bill proceeds as proposed, the additional tax costs incurred by the council may have an impact on Māori as the council may need to raise rates or cut costs elsewhere to cover the unbudgeted tax expenditure.

Ngā ritenga ā-pūtea

Financial implications

20.     It is estimated the bill will result in $33 million additional tax payable, which will increase as Watercare’s need for funding increases. This may result in higher rates and/ or decreased services to cover costs, and the charitable entities that council supports missing out on funding which directly affects a less affluent section of the community that council is trying to assist.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

21.     Without this delegation there is a likely risk of missing the submission deadline. Failing to meet the deadline and the panel not receiving our feedback would result in legislation being passed that is not in the interests of Auckland Council with resultant ongoing tax costs.

22.     As part of the submission process, the Taxation team have been working closely with PwC to draft the submission. PwC have been the main source of the council’s tax advice for several years and have a very good understanding of the impact this bill would have on our business. PwC direct contacts with IRD are also of assistance in understanding the drivers for the proposed changes and enable our submission to address these concerns within IRD.

Ngā koringa ā-muri

Next steps

23.     Staff will finalise the submission and provide it to the chair and deputy chair of the Finance and Performance Committee and the group chief financial officer for sign off under delegation.

24.     The council’s response will be submitted before the closing date of 9 November 2021.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Draft Auckland Council submission on the Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill 2021

37

     

Ngā kaihaina

Signatories

Authors

Barry Davis – Team Leader Taxation

Francis Caetano - Group Financial Controller

Authorisers

John Bishop - Group Treasurer

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

21 October 2021

 

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Finance and Performance Committee

21 October 2021

 

Options for Insurance Arrangements for the Auckland Council group

File No.: CP2021/14921

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To provide a briefing on the evaluation undertaken of practical options and recommend the preferred option for future insurance arrangements for the Auckland Council group.

Whakarāpopototanga matua

Executive summary

2.       The council group currently relies on the traditional insurance markets for its insurance cover. Over recent years, insurance premiums have risen significantly while exclusions are increasing. The 2020/2021 group insurance premium was $12.7 million (excluding levies and GST). The Long-term Plan 2021-2031 (the 10-year Budget) projects the group premium in 2031 to be $31 million. However, extrapolating the increases in premium experienced over the past four years the group premium could reach $91 million by 2031.

3.       Three practical options for self-insurance have been evaluated (pure captive insurance company, protected cell captive and a self-insurance fund), along with the options of maintaining the status quo, and not purchasing any insurance. The pure captive insurance company and self-insurance fund options are used by other public and private sector entities in New Zealand.

4.       The option preferred through discussions at two workshops and collaboration with council-controlled organisations (CCOs) is to progressively move to a greater use of risk-based self-insurance via the use of a self-insurance fund. This option proposes to:

a)      initially capitalise the self-insurance fund to the amount of $20 million

b)      implement these arrangements for the insurance year beginning 1 July 2022.

5.       A self-insurance fund provides council with the greatest degree of control of the three self-insurance options. It is the most cost-efficient to both establish and operate, generating the highest retained earnings over the forecast period. It does not subject council to the legislative and regulatory compliance and reporting frameworks that the pure captive insurance company and protected cell captive options do. Nor does it subject council to the risk of the legislative and regulatory environments, that the pure insurance company and protected cell captive would be subject to, changing in the future.

6.       The captive insurance company option has the further disadvantage that it would be a CCO. The protected cell captive is not available in New Zealand. It would be required to be domiciled offshore in either Guernsey, the Cayman Islands or Singapore. This creates a perception risk for council. It is also tax inefficient as profits would not be able to be offset at the group level.

7.       The detailed assessment of the identified options is attached at Attachment A. The slide pack that summarises the options assessment is attached at Attachment B.

 


 

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a)      note the options analysis on practical options for self- insurance that has been performed

b)      note the preferred option to progressively move to a greater use of risk-based self-insurance via the use of a self-insurance fund

c)       approve the establishment of a self-insurance fund to take effect from 1 July 2022

d)      delegate further decisions relating to the set up and operation of the self-insurance fund to the group chief financial officer, and council’s director governance and CCO partnerships.

Horopaki

Context

8.       Options for future insurance arrangements were workshopped with the Finance and Performance Committee on 30 June 2021. The Finance and Performance Committee requested that the Audit and Risk Committee review the assessment of the options and provide feedback on them, before referring them back to that committee in October 2021 with a preferred option and recommendation for a decision.

9.       The options were subsequently workshopped with the Audit and Risk Committee on 23 August 2021. No changes to the assessment, or the preferred option arose out of that workshop.

10.     The chief executives and chief financial officers of our CCOs have been briefed on the options analysis and proposed recommendation who are supportive of the planned approach.

11.     The proposed approach has been discussed with the respective boards of our CCOs, with the exception of Eke Panuku Board who will receive an information report at their 27 October meeting..

Tātaritanga me ngā tohutohu

Analysis and advice

Analysis of practical options

12.     In November 2020, the Governing Body approved the performance objectives of council’s chief executive. Under the performance objective of Balance Sheet Management, the following insurance-related measure was included:  

·        Optimise insurance arrangements to reflect the size and scale of Auckland Council group and appropriate transfer and management of Auckland Council group risks.

13.     To deliver on the chief executive objective, we have identified three commonly used methods of self-insurance, maintaining the status quo, and a scenario whereby the group doesn’t procure any insurance cover for further consideration. These are noted below:

·    Status quo (do nothing): The current transactional approach to procuring insurance cover is inefficient and poses a significant risk that future premium increases are higher than budgeted.

·    Self-insurance fund: A ringfenced liquid investment fund overseen by the council. This can be structured in such a way as to cover currently insured risks with small loss limits, whilst insurance cover for large risks would continue to be insured through the insurance market above a certain limit. Several other councils already use self-insurance funds. Management of the investment portfolio would be outsourced but the council could still determine its preferred investment strategy.

·    Pure captive: A pure captive insurer is a wholly owned subsidiary business that provides cover for its parent company and/or a group of related companies. For a New Zealand local authority subject to the requirements of the Local Government Act 2002, this would necessitate the creation of a CCO. Pure captive insurers are required to be incorporated as registered insurance companies. As their primary purpose is to insure their owners' risks, the group benefits from the captive's underwriting profits. Pure captives also support direct access to the reinsurance market, where there is greater capacity in terms of coverage and loss limits than that borne by commercial insurers.

·    Protected cell captive: A protected cell captive is a captive insurance company that can be used or rented by unrelated entities. It allows participants to benefit from a captive insurance arrangement without participating in the captive insurance company's ownership or management. Rather than pool its insureds' risks, a cell captive maintains a separate underwriting account (cell) for each insured participant. In some domiciles, the cells are legally separated and called protected cell captives, indicating that each insured's assets are ringfenced. That is, the assets in one participant's cell can't be used to pay liabilities in another. The protected cell captive is not available in New Zealand. It would be required to be domiciled offshore in either Guernsey, the Cayman Islands or Singapore.

·    No insurance cover: This involves the council group cancelling all its insurance policies and retaining all the associated risks. This would save approximately $210 million of net premium expense over the next ten years. However, the resultant increased business risk would be viewed negatively by credit rating agencies, potentially leading to downgraded credit ratings and higher borrowing costs. The potential extra exposure (maximum current loss limit less deductible) to Auckland Council under a catastrophic event is $1.49 billion. This is an unacceptable level of risk for a public entity.

14.     A memorandum that assesses the identified options is attached at Appendix A.  A slide pack that summarises the options assessment is attached at Appendix B.

15.     The preferred option is the establishment of a self-insurance fund.

16.     The assessment of the options analysis is summarised as:

·    Status quo. The current ‘transactional’ approach to procuring insurance cover is inefficient, and there is significant risk that future premium increases are higher than budgeted, and risk that parts of existing cover are excluded by insurers in the future. Not recommended.

·    No insurance cover. The quantum of retained risk is too great for a public entity. Not recommended.

·    Self-insurance fund. This option provides council with the greatest degree of control of the three self-insurance options and is the most cost-efficient to both establish and operate, generating the highest retained earnings over the forecast period. There is a risk that it may be viewed as a ‘rainy day’ fund by elected representatives, although this could be addressed by a policy regulating its use. Discussions with the Reserve Bank indicate that this arrangement would not be subject to the regulatory regime imposed by the Insurance (Prudential Supervision) Act 2010 and Regulations. This is subject to the Reserve Bank reviewing the details of the proposed scheme, which is being arranged. Preferred option.

·    Pure captive. This is the costliest of the three self-insurance options to establish and has the highest operating costs. This would necessitate the creation of a CCO. It has a greater degree of control than the protected cell captive option, but the likelihood of push-back from stakeholders nevertheless exists. This option is exposed to statutory and regulatory risk. Not recommended.


 

·    Protected Cell Captive. This option is more cost-effective and easier to establish and operate than the pure captive option, providing higher returns of benefits relative to the 10-year Budget assumptions. It is not as economically attractive as the self-insurance fund option however as the offshore domicile means that any tax liabilities would be unable to be offset against the group’s wider tax position. It is also exposed to statutory and regulatory risk, likely to see pushback from stakeholders, and the off-shore domicile creates a perception risk for council. Not recommended.

17.     Notwithstanding the preferred option above, it is envisaged that we will continue to use the traditional insurance markets where the use of a self-insurance fund is not appropriate e.g., for catastrophe cover over the limit of the fund; motor vehicle, travel, directors’ and officers’ liability and contract works policies.

Proposed Governance Arrangements

18.     It is proposed that the investments of the self- insurance fund will be managed by an external professional funds manager, who will be appointed through a competitive procurement process.

19.     A governance group will be established to provide oversight and direction for the self-insurance fund. It is proposed that this will operate in a similar manner to the Treasury Management Steering Group which oversees the group’s treasury function. It will include a formal charter to be approved by the chief executive and the chair of the Finance and Performance Committee.

20.     The governance group will comprise the group chief financial officer, council’s director governance and CCO partnerships, the group treasurer, the general manager risk and assurance, representatives from CCOs, and up to three independent external advisors.

21.     Regular reporting will be provided to the Finance and Performance Committee which will include financial information, claims data and investment fund performance.

Establishment of Fund

22.     It is proposed to initially capitalise the self-insurance fund to the amount of $20 million. The risk on any one insurance policy will be limited initially to $10 million.

23.     The investment of the self-investment fund assets (initial capital and premium inflows) will be managed by an external investment fund manager appointed through a competitive procurement process.

24.     The external investment fund manager will be expected to:

1.      comply with council’s responsible investment policy

2.      maintain an investment strategy where the returns are least impacted by a natural disaster event in Auckland

3.      ensure sufficient liquidity in the fund to pay claims as they fall due

4.      provide regular reporting and commentary on investment performance.

Tauākī whakaaweawe āhuarangi

Climate impact statement

25.     It is anticipated that in future years there will be an impact on insurance from events related to climate change. The extent of the impact is not yet clear. It is anticipated that, depending on the insurance industry capacity and risk assessments, there may be exclusions imposed by insurers on claims related to climate change in the next renewal.

26.     The group’s lead property insurers (local and overseas) are starting to consider the impact of wide-spread flood events and may look to impose flood loss limits to our current policies. In simple terms, this may mean reduced cover from traditional markets.

27.     Staff are exploring options to address this increased risk and exposure from climate change risks and alternative risk transfer mechanisms in the council group’s insurance strategy 2021-2023. The use of the self- insurance fund forms part of this consideration.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

28.     Staff from council and the CCOs worked collaboratively through the insurance leadership group to formulate the group insurance strategy and the insurance options assessment.

29.     The chief executives and chief financial officers of our CCOs have also been briefed on the options analysis and proposed recommendation who are supportive of the planned approach.

30.     The proposed approach has been discussed with the respective boards of our CCOs, with the exception of Eke Panuku Board who will receive an information report at their 27 October meeting. If any concerns are raised, the group chief financial officer and the director governance and CCO partnerships will consider this in the set up and operation of the fund.

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

Local impacts and local board views

31.     The proposed move to a self- insurance strategy for the council group is a region-wide issue and not specific to local boards, and no local boards are specifically impacted by this matter. Accordingly, there has not been any consultation undertaken directly with local boards.

32.     The council group insurance programme includes a community assets insurance policy – for property assets.  This policy covers a range of assets for approximately 123 community entities and organisations.  Insurance arrangements for these entities will not be impacted by the establishment of the self-insurance fund.

Tauākī whakaaweawe Māori

Māori impact statement

33.     The property insurance arrangements for the Independent Māori Statutory Board, the Tūpuna Maunga o Tāmaki Makaurau Authority, the Ngāti Whātua Ōrākei Reserves Board and Te Poari o Kaipātiki ki Kaipara are included in the Auckland Council group arrangements. Insurance arrangements for these entities will not be impacted by the establishment of the self-insurance fund.

Ngā ritenga ā-pūtea

Financial implications

34.     It is proposed to initially capitalise the self-insurance fund to the amount of $20 million. The risk on any one insurance policy will be limited initially to $10 million.

35.     The $20 million capital injection to seed the fund will be funded by an increase in debt. This increase in debt will add less than 0.5 per cent to our debt to revenue calculation. At all times borrowing limits set by the council’s treasury policies will be complied with.

36.     The financial performance of the fund will be impacted by investment returns, premium income and the level of claims and is therefore difficult to estimate with accuracy.

37.     Based on the premium rate increase and asset growth assumptions in the 10-year Budget, a claims payout ratio based on the last four years average, an investment return of 6.10 per cent (based on the Morningstar investment return average for the last ten years), and premium income estimates for the self-insurance fund provided by AON, the fund is forecast to increase in value to approximately $60 million by 2031.


 

38.     All claims below deductible levels (that is the deductible for the self-insurance fund or external insurers depending on the policy) will be required to be met by the individual business unit or CCO concerned. A change strategy is being prepared for business units and CCOs.

39.     The self-insurance fund will be excluded from our financial covenants and credit rating ratio calculations. This provides comfort that it the self-insurance fund is exhausted, it will not have a negative impact on our credit rating.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

40.     Insurance is a transfer of risk. The proposed diversification to include self-insurance reflects the management of the council group risks. The final procurement and placement of insurance policies reflects the current risk exposure and tolerance of the council group. The policies, limits and deductibles are reviewed and assessed annually to ensure that council risks are appropriately managed.

41.     There is a risk that claims could exceed the assets in the self-insurance fund. While this is considered unlikely, this would require council to recapitalise the self-insurance fund or otherwise meet these losses. It should be noted that if council did not have a self-insurance fund, we would still be exposed to the impact of an sharp increase in claims as external insurers would look to recoup their losses through increasing premiums.

Ngā koringa ā-muri

Next steps

42.     It is proposed that further decisions regarding the set up and operation of the fund are to be delegated to the group chief financial officer and the director governance and CCO partnerships. This includes the finalisation of governance arrangements, procurement and appointment of the external investment fund manager, and approval of insurance policies.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Insurance Options Assessment

49

b

Insurance Options Slide Pack

67

     

Ngā kaihaina

Signatories

Authors

Mark Maloney - General Manager Risk and Assurance

John Bishop - Group Treasurer

Authorisers

Phil Wilson - Director, Governance & CCO Partnerships

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

21 October 2021

 

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Finance and Performance Committee

21 October 2021

 

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Finance and Performance Committee

21 October 2021

 

Support for businesses affected by COVID-19

File No.: CP2021/14667

 

  

Te take mō te pūrongo

Purpose of the report

1.       To consider support options for Auckland businesses affected by Alert Level 3 and 4 in 2021/2022.

Whakarāpopototanga matua

Executive summary

2.       Recent lockdowns have impacted on economic activity in Auckland and severely limited some businesses’ operations. Many businesses are facing both immediate cash challenges and medium to longer term uncertainty.

3.       The recent lockdowns have also impacted negatively on Auckland Council finances with revenue forecast to reduce by $65 million to $160 million in 2021/2022 alone. The positive financial performance last financial year and contingencies in our 10-year Budget 2021-2031 mean the council is in a solid position to manage the immediate financial impacts from this lockdown.

4.       While all businesses have been impacted to some degree, the hospitality sector is particularly vulnerable as their operations are very limited at Alert Levels 2 and 3. These businesses have reduced revenue and must continue to pay wages and rent which make up the bulk of their costs. The government is providing support via the Wage Subsidy and Resurgence Support Payments and is seeking to amend legislation to require landlords and tenants to agree a fair proportion of rent payable when they can’t operate.

5.       In previous lockdowns, Auckland Council has provided support to business through rates postponement and extensions to licence periods for some regulatory licences. In response to the current lockdown, the council has:

·        extended existing street trading licence periods for a time equal to the lockdown (currently to a maximum of six months given the uncertainty around alert level time-periods)

·        waived application fees and street trading rents for new applications or extensions to existing licenses while in Alert Level 2 or higher (currently to a maximum of six months given the uncertainty around time-periods), all applications and extensions will be fast tracked

·        suspended debt collection processes during Alert Level 4, not resuming until Alert Level 2

·        supported ratepayers facing financial hardship by remitting penalties where the ratepayer meets agreed payment arrangements

·        provided information online in OurAuckland summarising the council’s support options for business, including details on how to access this support  - https://ourauckland.aucklandcouncil.govt.nz/news/2021/10/covid-19-support-for-auckland-businesses/.

6.       Officers recommend that the council continue with the actions identified above. Council costs are a very small proportion of overall costs for hospitality business and will only marginally impact on their viability.

7.       In addition to the actions above, the council could reinstate by resolution the Postponement of Rates for Ratepayers Impacted by COVID-19 scheme, which closed to new applications on 31 December 2020. Officers consider postponement is unnecessary as:


 

·        our relationship is the with the ratepayer and many struggling businesses are tenants

·        analysis of recent direct debit dishonours does not show any increased payment issues

·        existing rates policy settings provide flexibility to support businesses in hardship by providing remission of penalties where agreed payment arrangements are met

·        only 198 out of 44,000 business and farm properties took up the scheme in 2020.

8.       Alcohol licensing fees cannot be waived or deferred. Legislation requires that the application fee must be paid when the application is made. Additionally, licenses are automatically suspended if the relevant annual fee is not paid within 30 days after application.

9.       Auckland Council, through Auckland Unlimited, provides a range of support services to business including a free helpline service, Business Toolkit, and Regional Business Partner programme. Businesses in financial hardship are encouraged to contact Auckland Council to ensure that they can access the full range of support options available to them.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a)      note the support being provided to businesses affected by the impact of COVID-19 Alert Levels 2, 3 and 4 including;

i)       extending existing street trading license periods for a time equal to the lockdown (to a maximum of six months)

ii)       waiving street trading application fees and rents for new applications or extensions to existing licenses while in Alert Level 2 or higher (to a maximum of six months), all applications will be fast tracked

iii)      suspending debt collection processes during Alert Level 4, not resuming until Alert Level 2

iv)      supporting ratepayers facing financial hardship by remitting penalties where the ratepayer meets agreed payment arrangements

b)      request the government to continue its support for businesses impacted by COVID-19 and consider whether any additional assistance can be provided to them

Horopaki

Context

Impact on business and hospitality

10.     Auckland is presently facing an eighth week in lockdown. Crown Treasury estimate that between 26 to 30 per cent of economic activity is restricted under Alert Level 4 and between 15 to 20 per cent under Alert Level 3. Based on this, council’s Chief Economist estimates Auckland’s GDP lost between $85 million to $100 million per day under Alert Level 4 and between $50 million to $70 million per day under Alert Level 3.

11.     Some sectors such as retail and hospitality are likely to be hit harder than others in Alert Levels 3 and 4. Retail trade data shows that the overall level of retail spend has grown over the last 18 months including during various lockdowns. However, the composition of spending between sectors has changed, which means that each sector feels different pains during and after lockdowns. Pent up demand has seen spending in sectors such as hospitality and retail surge quickly coming out of lockdowns. At the same time, lockdowns have also meant that some businesses have failed.


 

12.     Infometrics estimate that under Alert Levels 4 and 3, between 62 and 80 per cent of the workforce remains operational (essential workers plus workers from home). In the short-term, targeted business support is one way to address the immediate costs of lockdowns on businesses.

Government support available to businesses

13.     Businesses may be eligible for a number of different support mechanisms from the government. The two key schemes provided are the Resurgence Support Payment through Inland Revenue (IRD) and the Wage Subsidy through Ministry of Social Development (MSD). 

14.     Since the country moved to Alert Level 4 on 18 August, MSD have provided four rounds of Wage Subsidy and the IRD three rounds of Resurgence Support Payments to business.

15.     Each round of the Wage Subsidy is for a two-week lump-sum payment at the rate of $600 a week for each full-time employee and $359 a week for each part-time employee. Each round of the Resurgence Support Payment is paid as a lump sum of $1,500 plus $400 per full-time equivalent (FTE) employee, up to a maximum of 50 FTEs.

16.     In the first round of the Wage Subsidy, just over 1.02 million jobs were supported, this dropped to around 669,000 in the second round. More than 78,000 jobs were supported in the third round. The latest round is open to 14 October. As of 24 September, the second round of the Resurgence Support Payment has been open for a week and $256.8m has been paid out to around 87,600 applicants.

17.     The Wage Subsidy Scheme is available while any part of the country is in Alert Levels 3 or 4. The Resurgence Support Payment is available to businesses who experienced a decline in revenue due to a COVID-19 alert level increase to Alert Level 2 or higher.

18.     The government is currently seeking to make changes to the Property Law Act to require landlords and tenants to strike deals over lockdown-related rent relief.

Estimated impact on Auckland Council finances

19.     Similar to the previous COVID-19 lockdowns, the current lockdown will impact the council group’s finances negatively. There is expected to be revenue losses in areas such as public transport fares and parking revenue, regional fuel tax collections, commercial water usage charges and revenue loss from facility closures.

20.     The latest scenario modelling exercise undertaken across the group forecasts a revenue reduction ranging from $65 million to $160 million in the current financial year depending on the length of this lockdown. Longer-term impacts particularly the inflationary impact on resources and behavioural implications for service users are under investigation. 

21.     The positive financial performance last financial year and contingencies factored into our 10-year Budget 2021-2031 (Our Recovery Budget) provides some flexibility to manage COVID-19 impacts. With our current understanding of the estimated impacts, the council is in an adequate position to manage the financial impacts from this immediate lockdown. 

22.     Work is ongoing to monitor the current and developing situation closely and review the risks and impact across the council group to ensure that we are able to respond as needed.

Postponement of rates for ratepayers impacted by COVID-19

23.     In June 2020, the council amended its Rates Remission and Postponement Policy to introduce a Postponement of Rates for Ratepayers Impacted by COVID-19 scheme to support ratepayers who were financially affected by COVID-19.

24.     The scheme was targeted at residential ratepayers as well as small to medium sized businesses who were facing financial hardship. Under the scheme, eligible ratepayers could postpone up to $20,000 of their 2020/2021 rates and $5,000 of their 2019/2020 rates. Eligibility was limited to ratepayers who owned their property before 26 March 2020 when New Zealand first went into Alert Level 4. A postponement fee was added to rates postponed under this scheme to cover the financial cost to council of the postponement (interest and administration costs).

25.     Applications for postponement under the scheme were open until 31 December 2020, with rates being postponed until 30 June 2022. Under this scheme around 198 business and farm properties postponed around $2.1 million in rates. Since then, around 34 properties have exited the scheme and brought their rates up to date.

26.     The scheme provides that it can be reinstated by council resolution to cover the rates for the 2021/2022 and subsequent years. The scheme can be reinstated without requiring further consultation.

Tātaritanga me ngā tohutohu

Analysis and advice

Rates support

27.     Rates are a fixed cost for property owners. For those who have become unemployed, or are facing major falls in business income, rates may present a demand on cash they cannot easily meet now or over the next few months.

28.     Rates are required to be paid by the ratepayer. This will be the business owner if they own their property. However, in many cases the ratepayer is the landlord rather than the business owner. In these circumstances the landlord will likely have a contractual relationship with the business owner for payment of rates. As our relationship is with the ratepayer, any support we provide to the ratepayer may not be passed onto the business owner. 

29.     For businesses, rates are included within the costs that the landlord seeks to recover and on average are likely to consist of around 0.5 per cent of property values. Businesses will be facing much higher rental costs when compared to rates. The return sought on commercial property is generally more than 5 per cent which is ten times business rates. Rates based relief measures are also relatively small relative to the support available through the government’s Wage Subsidy or Resurgence Support Payment. As noted above, the government is seeking to make legislative changes requiring landlords and tenants to strike deals over lockdown-related rent relief.

30.     Direct debit dishonours provide some indication of ratepayer payment difficulties. Analysis of September direct debit dishonours shows that, after adjusting for annual increases in the general rate, dishonours for 2021 are on par with dishonours for 2019. This indicates that in general ratepayers are not having any additional difficultly with paying their rates because of COVID-19.

31.     Any ratepayers who are struggling to pay their rates are encouraged to contact the council. Existing rates policy settings provide for the council to help ratepayers who are struggling financially to make payment arrangements to clear their rates by the 30 June 2022. Additionally, council promotes the use of direct debit to manage rates payments. With direct debit, ratepayers are able to choose a variety of different payment frequencies to better suit their own cashflow requirements.

32.     The Postponement of Rates for Ratepayers Impacted by COVID-19 scheme provides for the council to resolve to reinstate the scheme by extending it to cover the rates for 2021/2022 and subsequent years. In order to be effective, any such resolution would need to state:

·        the date that applications must be received by, suggested 31 December 2021

·        the financial year for which rates are eligible to be postponed, suggested 2021/2022

·        the date by which the ratepayer must have owned the property, suggested 17 August 2021.

33.     Officers do not recommend extending the application of the Postponement of Rates for Ratepayers Impacted by COVID-19 scheme to the 2021/2022 financial year as existing rates policy settings currently allow the council to assist ratepayers facing difficulty paying their rates and there wasn’t material demand in 2020/2021.

34.     Any extension of the scheme would also apply to residential ratepayers. Residential ratepayers who live in their own home can currently access council’s other postponement scheme. Extending the scheme would mean landlords of residential tenancies would also be able to access postponement.

Alcohol and food licensing fees

35.     Auckland Council collects around $8 million per annum on alcohol and food licensing fees and street trading licence fees. Annual alcohol licencing fees range from $161.00 to $1,437.50 and new applications/renewals range from $368.00 to $1207.50 depending on risk category. The annual street trading application fee is $382.00 and annual street trading rents range from $20 per square metre to $146 per square metre depending on location.

36.     Waivers (through the extension of the time the licences applied) were provided for the rent component in these fees in prior lockdowns, but not the application component.

37.     The council has statutory responsibilities to ensure businesses are operating correctly. These responsibilities are centred on safety and reducing risk and harm to consumers and surrounding communities. In making decisions about these fees, the council should bear in mind the purpose for their imposition.

38.     The alcohol and food licences are a guarantee to the public that, for the period of the licence, the premises are “safe” for consuming food and alcohol or for the operation of commercial services that pose an associated health risk. They are not a time-limited licence to operate. These fees include an inspection element to ensure public safety.

39.     Fees for alcohol and food licensing are a recovery mechanism for costs imposed on council for carrying out its regulatory function. These fees mostly consist of staff time for processing licences, undertaking inspections and verifications, monitoring and enforcement activities. In the case of alcohol licensing fees, some are set by regulation. The level of fees charged do not change with differing operating times or the amount of turnover that businesses have. These services are also partially funded from ratepayers reflecting a partial public good element of their function.

40.     The Sale and Supply of Alcohol Act 2012 (SASAA) does not allow any flexibility in licensing and inspection requirements or the ability to waive or defer payment. Legislation requires alcohol licensing fees to be paid at set times including that every application fee must be paid when the application is made. In addition, section 287 of SASAA provides that licenses will automatically be suspended if the relevant annual fee is not paid within 30 days after the day on which it is due.

41.     The SASAA requires areas where alcohol is sold and consumed to be defined specifically and an amendment to licences is required to alter that. These applications require vetting by the Police and Ministry of Health. Delays for processing of these applications can occur as both of these organisations are involved in the COVID-19 response. The act also contains provision for objections by the general public.

42.     During lockdowns last year, street trading licences were extended for a period of time equal to the duration of the lockdown. Street trading licences are similar to a lease in that they give permission to occupy the footpath for a period of time. Previous licence extensions were in recognition that businesses were unable to utilise the footpath that their license covered during the lockdown.

43.     Existing and new street trading licences issued under council’s Trading and Events in Public Places Bylaw will be extended again this lockdown without cost for an equivalent period of time to the trading restrictions during which Alert Levels 4, 3 and 2 are in place, to a maximum of six months. With recent government announcements, it is not clear whether the alert level system will remain or for how long Alert Level 3 or 2 might last. A street trading licence is not required for using the area in front of the business for contactless pick-ups.


 

44.     Licensees will pay the license fee when charging resumes, this will be not more than six months. During this time, licensees will not be charged a rental fee. Officers estimate that this will be up to $300,000 of foregone revenue. Because other revenue within the Licensing and Regulatory Compliance Department is now forecast to be $500,000 favourable to budget at year end, even if the full $300,000 of revenue is foregone the impact on overall revenue would not be material.

45.     Additionally, the fees for new applications or extensions to existing street trading licenses and street trading rents will be waived while in Alert Level 2 or higher, for a maximum of six months. Waiving these fees will not impact on budgeted revenue as we hadn’t forecast demand for new applications and extensions. They will however represent a missed revenue opportunity. New application fees and street trading rents will resume once Auckland is no longer in Alert Level 2 or higher or be reassessed after six months.

46.     Officers recognise the challenges facing the retail and hospitality sector and will support businesses to the extent possible within the existing regulatory environment and the additional restrictions imposed by the COVID-19 response without transferring additional costs to ratepayers. Where possible licence applications will be fast-tracked. This will mainly be for food-only street trading licences and extensions of existing licences. This is possible as these licences are issued under a council bylaw and that enables us to be more responsive.

Auckland Unlimited

47.     Auckland Unlimited provides a free helpline service for businesses. Through this service businesses can find information on available support options. The freephone helpline also offers expert business advice, as well as guidance on accessing government support. Auckland Unlimited provides a Business Toolkit that includes free resources and tools to help businesses manage the impacts of changing economic conditions.

48.     Auckland Unlimited also provides a range of broader support options for businesses. This includes access to business clinics, research and development funding, coaching and training opportunities. They also connect businesses with co-funded coaching/training via the Regional Business Partner (RBP) network’s Management Capability Development Fund.

Debt collection suspension

49.     All debt collection processes were suspended during Alert Level 4. At Alert Level 3, conversations recommenced with debtors that were having difficulty paying prior to New Zealand moving to Alert Level 4 on 18 August 2021. The key intent of our debt collection process is to engage with debtors to discuss their situation and try to establish suitable payment plans.

50.     Standard debt collection processes will restart at Alert Level 2. These involve automated phone calls and a series of four letters which include:

·        reminders about outstanding payments

·        alerting customers about failed transactions

·        encouraging engagement with council regarding overdue amounts

·        advising ways in which the council can assist them with making payment

·        highlighting availability of other assistance, such as rates rebates, rates postponement, or free financial helpline

·        advising that additional penalties may apply.

51.     Special debtors and those with large amounts owing are contacted directly by members of the credit control team to work through the support options available. If all options prove unsuccessful then other debt collection methods are used where appropriate such as mortgagee demands, follow up from internal Litigation and Dispute Resolution team, or referral to debt collection agencies and Ministry of Justice.

Tauākī whakaaweawe āhuarangi

Climate impact statement

52.     There are no climate implications based on decisions recommended in this report.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

53.     This report has been prepared with input from Regulatory Services, Auckland Unlimited, Rates, and Credit Control.

54.     This report has been reviewed by Legal Services to check compliance with relevant legislation.

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

Local impacts and local board views

55.     Local board views have not been sought for this report. However, local board members have expressed interest about providing support to businesses impacted by COVID-19. The issues discussed in this report relate to rates, regulatory and regional economic development which are decision-making responsibilities of the Governing Body.

Tauākī whakaaweawe Māori

Māori impact statement

56.     Māori have lower than average home ownership levels so would benefit less from any extension of the postponement scheme. Māori who own their home will be able to access the support options laid out in this report. Residential tenants needing support can access central government’s accommodation supplement scheme.

57.     Remissions for Māori land currently offered by Auckland Council will not be affected by the extension of the postponement scheme.

Ngā ritenga ā-pūtea

Financial implications

58.     The financial implications of the recommendations included in this report are not material.

59.     Officers expect that an extension of the Postponement of Rates for Ratepayers Impacted by COVID-19 scheme can be managed within existing resources and budgets. If the scheme is extended to cover the rates for 2021/2022 then the financial impact over the course of the postponement will be neutral due to the application of the postponement fee (interest and administration costs). There will be short term impact on cashflow, however, this is not expected to be material.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

60.     There are no risks associated with the recommendation in this report.

61.     There are two risks associated with an extension of the Postponement of Rates for Ratepayers Impacted by COVID-19 scheme. The first is that there is significant uptake of the scheme. Should the committee resolve to extend the scheme, this risk will be managed by monitoring the uptake of the scheme.  If uptake of the scheme looks likely to be significant with an associated higher than expected impact on council finances, then council can make amendments to the scheme to ensure it remains affordable. Any amendments would require public consultation before they can be made.


 

62.     There is also the risk that some ratepayers who do not require assistance may apply for postponement to take advantage of the council’s relatively low interest rates. As previously, this would be managed by requiring applicants to declare that they are in financial difficulty and to provide evidence to support that claim. Council staff can review the evidence supplied by all applicants. In addition, we can undertake an in-depth audit of a sample of applicants.

Ngā koringa ā-muri

Next steps

63.     As council has already provided information online in OurAuckland summarising the council’s support options for business, no further steps are proposed. Communications and online content will be updated to reflect any further decisions made by Finance and Performance Committee. Officers will continue to monitor the situation and report back if necessary.

 

Ngā tāpirihanga

Attachments

There are no attachments for this report.    

Ngā kaihaina

Signatories

Authors

Aaron Matich - Principal Advisor – Financial Policy

Andrew Duncan - Manager Financial Policy

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

 


Finance and Performance Committee

21 October 2021

 

Summary of Finance and Performance Committee information memoranda and briefings, including the Forward Work Programme - 21 October 2021

File No.: CP2021/12936

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To tuhipoka / note progress on the forward work programme 2021 and 2022 appended as Attachment A.

2.       To riro / 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

2/9/2021

Memo – Property Revaluation Process 2021/2022 – Attachment B

1/9/2021

Confidential Memo - Sale of AIM Services – August update, no attachment

5/10/2021

Confidential Memo - Sale of AIM Services – September update, no attachment

11/10/2021

Memo – Quarterly Performance Report (Q4 FY20) – Attachment C

13/10/2021

Memo - Draft Tūpuna Maunga Operational Plan 2022/2023 – Attachment D

5.       The following workshops have taken place:

Date

Workshop/Briefing

18/8/2021

Finance and Performance Committee workshop (Business Improvement Districts (BID) Policy Review) – Attachment E

9/8/2021

Finance and Performance Committee workshop (Development Contribution Policy Review) – confidential, no attachment

15/9/2021

Finance and Performance Committee workshop (Annual Budget 2022/2023) – confidential, no attachment

22/9/2021

Finance and Performance Committee workshop (Annual Budget 2022/2023) – no attachment

29/9/2021

Finance and Performance Committee workshop (Annual Budget 2022/2023), - no attachment

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)      tuhipoka / note the progress on the forward work programme for 2021 and 2022 as appended in Attachment A of the agenda report.

b)      riro / receive the Summary of Finance and Performance Committee information memorandum and briefings as at 21 October 2021.

 

Ngā tāpirihanga

Attachments

No.

Title

Page

a

Finance and Performance Committee Forward Work Programme

99

b

Memo – Property Revaluation Process 2021/2022 - 2 September 2021 (Under Separate Cover)

 

c

Memo – Quarterly Performance Report (Q4 FY20), 11 October 2021 (Under Separate Cover)

 

d

Memo – Draft Tūpuna Maunga Operational Plan 2022/2023, 13 October 2021 (Under Separate Cover)

 

e

Finance and Performance Committee workshop (Business Improvement Districts (BID) Policy Review, 18 August 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

21 October 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

Annual Budget
(2022/2023)

General Manager Financial Strategy and Planning

Statutory Process

Hold workshops regarding process/content/policies

Decision to agree Mayoral Proposal (December 2021)

Recommend consultation document to consult with public (February 2022)

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

Consultation period – (22 February 2022 - 22 March 2022)

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

Decisions made for Annual Budget (June 2022)

Recommend final Annual Budget (June 2022)

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

 

Progress to date:

Confidential workshops held 15 September 2021, 22 September 2021,
29 September 2021 and 13 October 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

Half-yearly and annual reporting

Group Treasurer and Group Financial Controller

Statutory requirement and NZX listing requirement

Receive and approve half-year (February) and preliminary full year NZX release (delegation to chair and deputy chair)

Receive annual report (September)

Recommend adoption of annual report to Governing Body (September)

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:

Auckland Council Group and Auckland Council quarterly performance report for the 6 months to 31 December 2020 – 18 March 2021
Link to decision

Auckland Council Group and Auckland Council quarterly performance report to 30 June 2021 – 16 September 2021
Link to decision

CONFIDENTIAL: Recommendation of the draft Auckland Council Annual Report 2020/2021 and draft Auckland Council Summary Annual Report 2020/2021 – 16 September 2021
Link to decision

CONFIDENTIAL: Adoption of draft Auckland Council Annual Report 2020/2021 and draft Auckland Council Summary Annual Report 2020/2021 – 23 September 2021 (Governing Body)
Link to Governing Body decision

 

 

 

 

 

 

 

 

 

 

 

 

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) –18 February 2021
Link to decision

Emergency Budget 2020/2021 - Update March 2021 – 18 March 2021
Link to decision

Emergency Budget 2020/2021 – Update April 2021 – 22 April 2021
Link to decision

Emergency Budget 2020/2021 – Update May 2021 –20 May 2021
Link to decision

Emergency Budget 2020/2021 - Update June 2021 – 17 June 2021
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) – 18 February 2021
Link to decision

Presentation from Eden Park Trust Board – 18 March 2021
Link to decision

CONFIDENTIAL: Woodhill Sands Equestrian Centre – Support – 19 August 2021
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 (March), Q3 (May), Q4 (September), Q1 (December)

Note:   Reporting in September must be considered as a confidential report until results are sent to NZX at the end of September.

 

Progress to date:

Auckland Council Group and Auckland Council quarterly performance report for the 6 months to 31 December 2020 – 18 March 2021
Link to decision

Auckland Council Group and Auckland Council quarterly performance report for the 9 months to 31 March 2021 – 20 May 2021
Link to decision

Auckland Council Group and Auckland Council quarterly performance report to 30 June 2021 – 16 September 2021
Link to decision

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance reporting quarterly – group

General Manager Financial Strategy and Planning

Financial management

Monitor Auckland Council group financial requirements on a quarterly basis.

Q2 (March), Q3 (May), Q4 (September), Q1 (December)

Note:   Reporting in September must be considered as a confidential report until results are sent to NZX at the end of September.

 

Progress to date:

Auckland Council Group and Auckland Council quarterly performance report for the 6 months to 31 December 2020 –18 March 2021
Link to decision

Auckland Council Group and Auckland Council quarterly performance report for the 9 months to 31 March 2021 –20 May 2021
Link to decision

Auckland Council Group and Auckland Council quarterly performance report to 30 June 2021 – 16 September 2021
Link to decision

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational

Disposals

Auckland Council and Eke Panuku Development Auckland

Eke 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.

·      Approve approach to implement a long-term lease for Bledisloe House as provided for in the 10-year Budget 2021-2031 (Aug)

 

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 – 18 February 2021
Link to decision

Memorandum – Emergency Budget 2021/2021 – Asset Recycling – Reserve Revocation – 23 February 2021 – 18 March 2021
Link to memorandum

C40 development additional land disposal recommendation – 331 (part) Great North Road, Henderson – 22 April 2021
Link to decision

Disposal Recommendation report – part of 16 Amersham Way, Manukau – 20 May 2021
Link to decision

24 Upper Municipal Place, Onehunga disposal recommendation – 17 June 2021
Link to decision

 

 

Recommendation from Parks, Arts, Community and Events Committee, 8 July 2021 - Proposed land exchange - Bellgrove Reserves, Avondale – 19 August 2021
Link to decision

Te Wharau o Horotiu Bledisloe House – long-term lease – 19 August 2021
Link to decision

Recommendation from Parks, Arts, Community and Events Committee, 8 July 2021 - Proposed exchange of reserve land at Murray Halberg Park, Ōwairaka – 19 August 2021
Link to decision

CONFIDENTIAL: Land exchange at Three Kings – 19 August 2021
Link to decision

 

Note: Properties are recommended for acquisitions and disposal to the committee for approval in accordance with the Long-term Plan/Annual Budget.

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 (May/Jun)

 

Progress to date:

Approval of the Auckland Regional Amenities Funding Levy – 18 March 2021
Link to decision (note this report was deferred to 22 April 2021)

Consideration of ARAFA, MOTAT and Auckland Museum annual plans and council funding contributions, 2021/2022 – 22 April 2021
Link to decision

Presentations from the Auckland Regional Amenities – 20 May 2021
Link to decision

Presentations from the Auckland Regional Amenities – 17 June 2021
Link to decision

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance Strategy and Placement

GM Risk and Assurance

 

Receive results of the insurance options assessment and approve option to progress (Oct)

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Review of Policies

 

Approve council policies:

·         Significance and Engagement Policy (Sept 2021 – Governing Body; decision February 2022)

·         Development Contribution Policy (September 2021/December 2021)

·         Business Improvement District Policy (2022)

Receive updates on:

·         Infrastructure Funding and Financing (IFF) (as required)

 

Progress to date:

Exploring alternative funding and financing opportunities – 17 June 2021
Link to decision

Significance and Engagement policy: Approval of draft policy for consultation – 23 September 2021
Link to Governing Body decision

Development Contributions Policy 2012 Consultation – 16 September 2021
Link to decision

 

 

 

 

 

 

 

 

 

 

 

 

 

Review of committee forward work programme

Governance

Regular reporting

Receive updates (monthly)

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

 

Progress to date:

Review of work programme – 18 February 2021
Link to decision

Review of work programme – 19 August 2021
Link to decision

 

 

Review work programme

 

 

 

 

 

Review work programme

 

 

 

 

 


 

 

Completed

Area of work

Committee role

(decision and/or direction)

Decision

10-year Budget (Long Term Plan)

2021-2031

General Manager Financial Strategy and Planning

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, 2 December 2020, 10 February 2021, 10 March 2021, 14 April 2021, 21 April 2021, 28 April 2021, 3 May 2021, 5 May 2021, 10 May 2021, 12 May 2021, 19 May 2021 and 23 June 2021)

10-year Budget 2021-2031 – Process overview - 9 December 2020
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 – 9 December 2020
Link to decision  Link to governing body decision

10-year Budget 2021-2031: regional topics for consultation - local board input – 9 December 2020
Link to decision

10-year Budget 2021-2031 - Mayoral Proposal items for consultation – 9 December 2020
Link to decision  Link to governing body decision

10-year Budget 2021-2031 - Other matters for consultation – 9 December 2020
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 – 9 December 2020
Link to decision  Link to Governing Body decision

Other Rates and Fees Issues for 10-Year Budget 2021-2031 – 9 December 2020
Link to decision  Link to Governing Body decision

Upper Harbour Local Board Transport Targeted Rate for consultation – 15 December 2020
Link to decision 

Item withdrawn at Governing Body meeting, 17 December 2020.

Paremoremo Public Transport Targeted Rate – 18 February 2021
Link to decision  Link to Governing Body decision

Amendments to the Revenue and Financing Policy – 18 February 2021
Link to decision  Link to Governing Body decision

10-year Recovery Budget 2021-2031: Adoption of consultation material – 18 February 2021
Link to decision  Link to Governing Body decision

10-year Recovery Budget 2021-2031 Communications and Engagement Plan – 18 February 2021
Link to decision  Link to Governing Body decision

Accommodation Provider Targeted Rate Suspension – 22 April 2021
Link to decision

 

Overview to decision making for the Recovery Budget (10-year Budget 2021-2031) – 25 May 2021
Link to decision

Recovery Budget (10-year Budget 2021-2031) - local board feedback and advocacy – 25 May 2021
Link to decision

Recovery Budget (10-year Budget 2021-2031) - Mayor's final proposal – 25 May 2021
Link to decision   Link to Governing Body decision

Recovery Budget (10-year Budget 2021-2031): Other proposals –25 May 2021
Link to decision   Link to Governing Body decision

Paremoremo Public Transport Targeted Rate – 25 May 2021
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 – 25 May 2021
Link to decision   Link to Governing Body decision

Other Rates and Fees Issues for Recovery Budget (10-year Budget 2021-2031) – 25 May 2021
Link to decision   Link to Governing Body decision

Adoption of the Recovery Budget (10-year Budget 2021-2023 – 29 June 2021
Link to decision

Review of Policies

Approve council policies:

·          Treasury Management Policy (May)

·          Group Procurement Policy (June)

·          Revenue and Financing Policy (June)

 

Treasury Management Policy review – 20 May 2021
Link to decision

Auckland Council Group Procurement Policy – 17 June 2021
Link to decision

Adoption of the Revenue and Financing Policy – Governing Body 29 June 2021
Link to decision

Insurance Strategy and Placement

Approve the council group insurance strategy 2021-2023

Approve the annual insurance placement for Council Group 2021/2022

Insurance Renewal, Strategy and Progress on Options for Insurance Arrangements – 17 June 2021
Link to decision

CONFIDENTIAL: Insurance Renewal, Strategy and Progress on Options for Insurance Arrangements – 17 June 2021
Link to decision

 

 


 

Te Komiti ā-Pūtea, ā-Mahi Hoki/Finance and Performance Committee
Forward Work Programme 2022/23

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

2022

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Planning and funding

Annual Budget
(2022/2023)

General Manager Financial Strategy and Planning

Statutory Process

Hold workshops regarding process/content/policies

Decision to agree Mayoral Proposal (December 2021)

Recommend consultation document to consult with public (February 2022)

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

Consultation period – (22 February 2022 - 22 March 2022)

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

Decisions made for Annual Budget (June 2022)

Recommend final Annual Budget (June 2022)

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

 

Progress to date:

Confidential workshops held 15 September 2021, 22 September 2021,
29 September 2021 and 13 October 2021.

 

 

 

 

 

 

 

 

 

 

 

 

Half-yearly and annual reporting

Group Treasurer and Group Financial Controller

Statutory requirement and NZX listing requirement

Receive and approve half-year (Mar) and preliminary full year NZX release (delegation to chair and deputy chair)

Receive annual report (Sept)

Recommend adoption of annual report to Governing Body (Sept)

Note:  

·        NZX announcements are presented to the Audit and Risk Committee

·        There is a delegation from the Committee to Chair and Deputy Chair of Finance and Performance to approve the release of the interim and full year Auckland Council group financial results to the NZX for each reporting period through to 30 June 2022.

·        Formal adoption of annual report is by the Governing Body

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial and Budget Updates

General Manager Financial Strategy and Planning

Financial Management

Receive updates and make decisions on any recommended budget changes outside of the Annual Budget/Long-term Plan, as required

Note:   This includes significant unbudgeted one-off expenditure.

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan guarantees and grant funding

Group Treasurer

Financial management

Review information and make decisions on loan guarantees and restructuring (including Parks)

Receive an update on the Eden Park loan guarantee and grant funding (six-monthly)

Receive progress update memos when appropriate

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

Reporting and performance

Performance reporting quarterly – parent

General Manager Financial and Business Performance

Financial management

Monitor council parent financial and non-financial performance results on a quarterly basis, including Māori outcomes expenditure.

Q2 (March), Q3 (May), Q4 (September)

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 (March), Q3 (May), Q4 (September)

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

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

Operational

Disposals

Auckland Council and Eke Panuku Development Auckland

Eke 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:

 

Note: Properties are recommended for acquisitions and disposal to the committee for approval in accordance with the Long-term Plan/Annual Budget.

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 (Mar); and Auckland War Memorial Museum (Mar)

Receive presentations from amenities via memorandum (May/July)

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance Strategy and Placement

GM Risk and Assurance

 

Approve the annual insurance placement for Council Group 2022/2023 (May)

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Review of Policies

 

Approve council policies:

·        Business Improvement District Policy

·        Significance and Engagement Policy (decision February 2022 – Governing Body)

Receive updates on:

·        Infrastructure Funding and Financing (IFF) (as required)

 

Progress to date:

 

 

 

 

 

 

 

 

 

 

 

 

 

Review of committee forward work programme

Governance

Regular reporting

Receive updates (monthly)

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

 

Progress to date:

 

 

 

 

Review work programme

 

 

 

Review work programme

 

 

 

 

 

 

 

 

Updated: 14 October 2021