Agenda of Finance and Performance Committee

Finance and Performance Committee

17 March 2022

Presentation from Eden Park Trust Board

File No.: CP2022/02666

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 21 October 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 COVID-19 lockdown restrictions on their activities. This request was agreed to on 7 September 2021. As at their most recent reporting date (31 January 2022), 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 28 February 2022 was $48.75 million, compared to $44.250 million at the end of September 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 $8,628,939 has been released as at 9 March 2022 for replacement of emergency lighting, new turf, a video replay screen, electrical, turnstiles, security and facilities upgrades in accordance with the Development Funding Agreement. The funding agreement expires on 30 June 2022 and the trust is on target to draw down the balance of the grant ($1.171 million) prior to this date.

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 potential for a single operating model for the region’s stadiums. A further workshop was held on 15 December 2021 to discuss the process for establishing a potential single operating model and governance structure, and how and when various questions raised at the previous workshop will be addressed through this process.

e) Auckland Unlimited will continue to progress this work with the Eden Park Trust Board, and other stakeholders.

8. Resolution d) – Eden Park reporting to Finance & Performance Committee: the Eden Park Trust Board previously presented to this committee on 21 October 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 28 January 2022 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 as it signals financial sustainability risks it is recommended that Eden Park Trust Board put forward any future funding request through an annual budget submission for formal consideration by the committee as part of the annual budget process.

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

17 March 2022

4 Blomfield Spa, Takapuna - s138 Local Government Act 2002 consultation

File No.: CP2022/01058

Te take mō te pūrongo

Purpose of the report

1. To report back the outcome of the public consultation for 4 Blomfield Spa, Takapuna which was approved for sale as part of the Emergency Budget on 16 July 2020.

Whakarāpopototanga matua

Executive summary

2. 4 Blomfield Spa is a vacant parcel of land that comprises 496m². It is the residue of land acquired by the former Takapuna City Council from the Crown in 1969 for the purpose of a service lane (now Club Lane, Takapuna).

3. Over time, it was used by nearby office workers for informal recreation purposes and two park benches, ashtrays and rubbish bins were installed. However, it was not acquired or formally held for open space or recreational purposes; it was held and managed by Auckland Transport.

4. In 2015, Auckland Transport transferred 4 Blomfield Spa to Auckland Council following the Auckland Transport Board declaring that this property had no current or future transport function.

5. The property was approved for sale as part of the Emergency Budget on 16 July 2020 (resolution number FIN/2020/31).

6. As 4 Blomfield Spa had been utilised for informal recreational purposes, it is subject to s138 Local Government Act 2002 which requires local authorities to consult on the proposal to dispose of parks (by sale or otherwise). “Park” means land acquired or used principally for community, recreational, environmental, cultural, or spiritual purposes.

7. Eke Panuku Development Auckland has now completed consultation in accordance with s138 Local Government Act 2002 regarding the Finance and Performance Committee decision to sell 4 Blomfield Spa.

8. 20 submissions were received. The following are the key issues raised in the submissions:

· that the property is used by locals as a pocket park, that open space is required for mental health and that there is a lack of green space in Takapuna and biodiversity

· that the land was gifted

· that the Devonport-Takapuna Local Board do not support the divestment.

9. Staff have reviewed and considered the issues raised in the submissions, and are of the view that 4 Blomfield Spa does not need to be retained for open space purposes as:

· there are other open spaces that are within 400 metres of 4 Blomfield Spa that are larger, provide better recreational benefits and more trees for wildlife. There is currently no gap in the provision of neighbourhood parks in the immediate area;

· the land is residual land acquired for road. It was not gifted land;

· the local board resolved (resolution DT/2020/87) in July 2020 that it supports the concept of asset recycling and the sale of council assets / holdings as a means of increasing revenue to fund council initiatives, but only if those assets proposed for recycling or divestment have been identified as not serving any current or future service requirement.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a) note the 20 submissions received regarding the disposal of 4 Blomfield Spa, Takapuna

b) confirm the 16 July 2020 approval to dispose of 4 Blomfield Spa, Takapuna as it is not required to be retained by council for open space or recreational purposes.

Horopaki

Context

10. 4 Blomfield Spa is a 496m² strip of land that was the residue of land acquired by the former Takapuna City Council from the Crown for the purpose of a service lane (now Club Lane) in 1969. The requirement for a service lane is a public work for the purposes of s40 Public Works Act 1981 and the property is subject to offer back obligations to its former owners. It is zoned Business – Metropolitan Centre Zone.

11. While the property was not acquired for open space purposes and no formal decision was made to hold it for open space purposes, over time it was utilised for passive recreational purposes by nearby office workers. Two park benches, ashtrays and rubbish bins were added for amenity. There is no playground or sporting equipment on the property. There is also a power transformer located on the property, protected by an easement to Vector Limited.

12. Council’s Community Investment team undertook two assessments in 2015 and 2017 of 4 Blomfield Spa against council’s open space provision and open space acquisition policies. The Community Investment team advised that 4 Blomfield Spa does not need to be retained for open space purposes as it is not consistent with the outcomes sought in the Parks and Open Spaces Strategic Action Plan, the Parks and Open Space Acquisition Policy or the Open Space Provision Policy. Further, its retention would not “contribute to the provision of a quality open space network now or in the future”. The key points of the assessment were that:

· 4 Blomfield Spa is less than the Open Space Provision Policy’s 1000m² minimum size requirement for pocket parks

· 4 Blomfield Spa does not connect, and could not establish connections between, existing parks and open spaces due to its small size and relative isolation

· 4 Blomfield Spa does not currently contribute to the provision of access to, the functionality of, or the performance of the parks and open space network

· there is currently no gap in the provision of neighbourhood parks in the immediate area

· due to the relative isolation of 4 Blomfield Spa and the existing provision of neighbourhood parks in the locality, it is not needed to support the performance of the parks and open space network in the future, either by connection to future parks and open space or expansion through future acquisitions

· there is currently no opportunity to use 4 Blomfield Spa in an exchange, amalgamation or development opportunity to improve the parks and open space network in the area and due to current provision in the locality it is not needed for those purposes in the future.

13. The advice provided by the Community Investment team was peer reviewed by Eke Panuku’s Plans and Places team, which agreed with the advice provided by the Community Investment team that 4 Blomfield Spa did not need to be retained as open space, and the rationale upon which this advice was based.

14. Eke Panuku’s Plans and Places team further noted that when considering 4 Blomfield Spa against Crime Prevention Through Environmental Design (CPTED) criteria, it offers little in the way of passive surveillance, particularly outside of business hours. The team further found that “the isolation of the site presents opportunities for undesirable activity” given its lack of visibility from the main centre.

15. On 16 July 2020, the Finance and Performance Committee unanimously approved the sale of 4 Blomfield Spa, subject to completion of required statutory processes (resolution FIN/2020/31). The proceeds of sale from this property will contribute to the asset recycling targets set by council in its Emergency and Recovery Budgets.

16. 4 Blomfield Spa is considered a “park” in accordance with s138 Local Government Act 2002 as it has been utilised for recreational purposes. S138 Local Government Act 2002 stipulates that “A local authority proposing to sell or otherwise dispose of a park or part of a park must consult on the proposal before it sells or disposes of, or agrees to sell or dispose of, the park or part of the park.”

17. Accordingly, Eke Panuku, on behalf of Auckland Council, has consulted on the proposal to dispose of 4 Blomfield Spa following the Finance and Performance Committee divestment approval.

Tātaritanga me ngā tohutohu

Analysis and advice

18. A public notice was placed in the North Shore Times on 30 September 2021. The notice was also placed on the council’s website and letters were sent to the adjoining owners. The notification period initially ran until 5 November 2021 but was extended to 12 November 2021. Iwi were notified on 11 February 2022.

19. 20 submissions were received from members of the public. The following table outlines all the submissions received and staff comments:

Submitter	Matters Raised	Staff Comments (Eke Panuku, Land Advisory Services and Community Investments)
Patricia Watt	- Concerned that council is considering selling off green space - Suggests council should buy buildings from businesses affected by Covid, re-zone and develop - Green spaces are needed for well-being	- The property does not meet council’s open space policy requirements - There are other parks in the area. Takapuna Beach Reserve and Hurstmere Green are both 400 metres to the north of the property. There is currently no gap in the provision of neighbourhood parks in the immediate area.
Jan O’Connor	- Complaint received about the incorrect notice on the council website and requesting an extension to the notification period end date by seven days	- The notice period was extended by seven days to 12 November 2021
John Potter	Objects on the basis that: - It is being used daily by workers in the Takapuna Metropolitan Centre as a relatively quiet place for lunch - Is the only piece of grass lawn available for this purpose in the area - Is one of the few pieces of public open space in central Takapuna - With urban growth and the likelihood of an increase in apartments, the numbers of backyards will naturally disappear - Overseas cities compensate by supporting a network of pocket parks for residents and children - Is small and therefore inexpensive for Council to maintain - Its size makes it suited for its purpose as a pocket park	- There are currently other open spaces in the vicinity. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property. - There is currently no gap in the provision of neighbourhood parks in the immediate area. - Takapuna Rose Gardens/Potters Park is approximately 430m walk from the subject site -4 Blomfield Spa does not connect, and could not establish connections between, existing parks and open spaces due to its small size and relative isolation - The Open Space Provision Policy’s minimum size requirement for pocket parks is 1000m². This property is substantially smaller than the minimum size set out in the Open Space Provision Policy. Due to its size and location, it does not and could not contribute meaningfully to the functionality of the Takapuna open space network.
Zaineb Jabawi	Objects to the sale of the land – no reason mentioned
Debbi Beadle	- The intention of its gift was to be part of a reserve conservation - Not right to sell the property for development	- This property was not gifted. It is the residue of land that was acquired by the former Takapuna City Council from the Crown in 1969 for the purpose of a service lane (now Club Lane, Takapuna). - The property does not meet council’s open space policy requirements
Lewis Foster	- Should not be sold for development - Green space needs to be cherished for the enjoyment of all - Is being used by nearby workers as a place of leisure - Wildlife (birds) make use of the trees which will be removed should the property be developed - Sale of the site sends a bad message and is a cash grab	- The property does not meet council’s open space policy requirements - There are currently other open spaces in the vicinity. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property. These open spaces have a larger area and more trees for wildlife
Gilbert Hunt	Objects on the grounds that: - The surrounding area is subject to future high-rise development - This small area of publicly owned green space will continue to provide a buffer between commercial and nearby residential zones.	- There is currently no gap in the provision of neighbourhood parks in the immediate area. - There are currently other open spaces in the vicinity. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property. - It offers little in the way of passive surveillance, particularly outside of business hours. Furthermore, the isolation of the site presents opportunities for undesirable activity given its lack of visibility from the main centre. - CPTED issues may worsen as the area is further intensified and the property may also end up in almost perpetual shade in the future due to surrounding building heights and form.
Jane & Gary Whetton	- Council has no right to sell this land that was gifted and has been dedicated as green space - Council should see the community value of the land - Forms an important part of Takapuna landscape	- This property was not gifted. It is the residue of land that was acquired by the former Takapuna City Council from the Crown in 1969 for the purpose of a service lane (now Club Lane, Takapuna). - There is currently no gap in the provision of neighbourhood parks in the immediate area. - 4 Blomfield Spa does not connect, and could not establish connections between, existing parks and open spaces due to its small size and relative isolation
Susan Dalton	Objects to the sale of the land – no reason mentioned
Shirley Lam	Objects to the sale of the land – no reason mentioned
Jon Barker	- Resides nearby and regularly visits the park which has been observed to be used by locals - Council is required to reduce carbon emission and the sale to a developer does not align with this - Suggestion to remove car parks from Club Lane and create space for people including food trucks and benches	- There is currently no gap in the provision of neighbourhood parks in the immediate area. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property. - It offers little in the way of passive surveillance, particularly outside of business hours. Furthermore, the isolation of the site presents opportunities for undesirable activity given its lack of visibility from the main centre. - It is acknowledged that any form of construction and development can increase carbon emissions - There is currently no opportunity to use 4 Blomfield Spa in a development opportunity to improve the parks and open space network in the area and due to current provision in the locality it is not needed for those purposes in the future.
Matt Ingham	- Need to protect the green spaces and not sell them off - The land will be developed and the reserve will be lost forever - Increase in housing development makes this green space even more important - The reserve must be protected	- The property does not meet council’s open space policy requirements - There is currently no gap in the provision of neighbourhood parks in the immediate area. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property.
Suzanne Brade	- A public park that was gifted to the people of Takapuna, for any purpose - With the increase of infill housing being built in the area, there is a need for parks and green space - Highly negligent and immoral of the council to sell the park	- This land was not gifted. It is the residue of land that was acquired by the former Takapuna City Council from the Crown in 1969 for the purpose of a service lane (now Club Lane, Takapuna). - There is currently no gap in the provision of neighbourhood parks in the immediate area. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property. - This property was included in council’s Emergency Budget 2020-2021 asset recycling target, with sale proceeds allocated to helping council achieve its planned activities and projects
Natasha McNeill-O'Keeffe	- Intended for the purpose of recreation and relaxation and in theory belongs to and maintained by ratepayers for this purpose - Public property should not be used to offset debt or raise income; council should not be permitted to sell property belonging to and for the use of ratepayers - Once sold, parks and green space are lost forever. New Zealand has a ‘clean green’ image worldwide which may be affected with the sale of our parks and reserves - With the increase in housing developments and population growth, there’s a need for more parks and reserves (as recognised by Mayor Phil Goff who also noted these areas are vital as Auckland grows) - Council acquired land for parks and reserves in previous years, yet are willing to sell this reserve - The park is being used by employees in the surrounding areas who will be robbed of an area owned by the public and intended for their use - Auckland Council have acquired land for reserves and parks and are selling for a profit which undermines the principles of utilising ratepayer funds appropriately - Believes Auckland Council have not upheld the Open Space Provision Policy by putting the emergency budget first with no regard for or consultation or input from ratepayers	- There is currently no gap in the provision of neighbourhood parks in the immediate area. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property - This property was included in council’s Emergency Budget 2020-2021 asset recycling target, with sale proceeds allocated to helping council achieve its planned activities and projects - There is currently no opportunity to use 4 Blomfield Spa in an exchange, amalgamation or development opportunity to improve the parks and open space network in the area and due to current provision in the locality it is not needed for those purposes in the future. - Due to the relative isolation of 4 Blomfield Spa and the existing provision of neighbourhood parks in the locality, it is not needed to support the performance of the parks and open space network in the future, either by connection to future parks and open space or expansion through future acquisitions - The subject site is not needed to help meet the open space provision targets in the Open Space Provision Policy (2016). - The intention to sell this property was consulted on via a public notice in the North Shore Times and the Auckland Council website. Letters were also sent to the adjoining owners. Public consultation was also carried out on the Emergency Budget in mid-2020 for which this property was included.
Chris Scott	- Land was the result of a deal, agreement or contract made between the developer and the former North Shore City Council and effectively gifted to Council. It is a serious breach of trust to seek to dispose of any land acquired under such conditions - In terms of future dealings with developers and gifted land for the purpose of a park that at a later time can be sold by council is appalling conduct and bordering on corruption - If sold to an adjoining owner, would require assurance there’s no beneficial relationship between the original owner or developer and the current adjoining owners. If so, the ‘deal’ could be construed as fraud given the value of the land would increase significantly if joined with the land of the adjoining owner - The local board objected to this sale - Not adverse to the sale of the land if the proceeds are used to purchase other land for parks in the area	- It is the residue of land that was acquired by the former Takapuna City Council from the Crown in 1969 for the purpose of a service lane (now Club Lane, Takapuna). - As the property is subject to s40 Public Works Act, it is required to be offered back to the former owners in the first instance. If the former owners do not take up the offer back, the property will be sold on the open market. There is no preference given to adjoining owners. - As part of its feedback on council’s Emergency Budget 2020/2021, the Devonport-Takapuna Local Board resolved (resolution DT/2020/87) in July 2020 that it supports the concept of asset recycling and the sale of council assets / holdings as a means of increasing revenue to fund council initiatives, but only if those assets proposed for recycling or divestment have been identified as not serving any current or future service requirement.
Janet Moen	- Green spaces are essential for people’s wellbeing - Too many green spaces have been sold to boost council’s finances	- There is currently no gap in the provision of neighbourhood parks in the immediate area. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property - The property does not meet council’s open space policy requirements
M.R Rezaei Abyaneh	- Object as an adjoining owner who uses the park personally for relaxation and leisure. Their tenants also use the park for the same reason during work breaks.	- There are other open spaces in the vicinity. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property
Tabitha Becroft	- Auckland Council has declared that we are facing a climate emergency, yet at the same time Auckland Council is selling land that can help mitigate the effects of climate change. - The park provides ecological services that add together with all the other small pieces of land to help mitigate the effects the climate changes has on our health and wellbeing. - The mental wellbeing effect of being outdoors has been proven, therefore we need more open space in Takapuna not less - Intensification has already started in Takapuna, with more people living and working in the area, therefore we need more open space. - Biodiversity decline is a major concern, especially in our cities, with intensification there will be even more impact on our declining biodiversity. - Biodiversity builds resilience into our neighbourhoods and helps us cope with climate change	- It is not known at this point what the potential future use of this property will be and therefore what the potential impacts could be on carbon emissions. A sale of the property could lead to land use changes. It is acknowledged that any form of construction and development can increase carbon emissions. - Takapuna Rose Gardens/Potters Park is approximately 430m walk from the subject site. - There is currently no gap in the provision of neighbourhood parks in the immediate area. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property. These open spaces have a larger area and more trees for wildlife.
Samantha Beattie on behalf of Forest & Bird North Shore Branch	- Council has not provided reasons why the property is not required for a park - F&B is concerned about the general lack of green space in Takapuna, and that disposing of existing green space will make this issue worse. - With the increase in intensification in the area, it is vital that existing green space is preserved. New green space is exceptionally difficult to obtain. - The property was intended for disposal in 2017 which was opposed by residents and the Local Board. It is not clear that there has been any change since 2017 that would justify the Council’s revised intention to dispose of the park.	- The Community Investment team found that retention is not consistent with the outcomes sought in the Parks and Open Spaces Strategic Action Play, the Parks and Open Space Acquisition Policy or the Open Space Provision Policy. Further, its retention would not “contribute to the provision of a quality open space network now or in the future”. - There is currently no gap in the provision of neighbourhood parks in the immediate area. There are other open spaces in the vicinity. Takapuna Beach Reserve and Hurstmere Green are both within 400 metres to the north of the property. - As part of its feedback on council’s Emergency Budget 2020/2021, the local board resolved (resolution DT/2020/87) in July 2020 that it supports the concept of asset recycling and the sale of council assets / holdings as a means of increasing revenue to fund council initiatives, but only if those assets proposed for recycling or divestment have been identified as not serving any current or future service requirement.
Bridget Thrussell	- It is in an area which has been reported to be short of public parks at present and this shortage will be exacerbated by this sale. - The beach area is always over full at weekends, so a quieter park is needed. It is valued by the nearby workers. - A decrease in green space aggravates depression, so it will affect the mental health of those who use it or live nearby. - in the age of climate change any destruction of green space and trees and coverage by concrete (foundations) increases our carbon emissions.	- There is currently no gap in the provision of neighbourhood parks in the immediate area. - There are other parks in the area. Takapuna Beach Reserve on The Strand and Hurstmere Green are both within 400 metres to the north of the property. These locations present greater opportunity for wider community gathering, fostering social capital, and people’s wellbeing due to quality of outlook and facilities - Takapuna Rose Gardens/Potters Park is approximately 430m walk from the subject site. - It is not known at this point what the potential future use of this property will be and therefore what the potential impacts could be on carbon emissions. A sale of the property could lead to land use changes. It is acknowledged that any form of construction and development can increase carbon emissions.

20. Staff continue to support the divestment of 4 Blomfield Spa as it is not required to be retained as a park as it is less than the Open Space Provision Policy’s 1000m² minimum size requirement, it does not connect existing parks and open spaces due to its small size and relative isolation and it does not contribute to the provision of access to, the functionality of, or the performance of the parks and open space network. Disposal will not create a gap in the provision of open space in the immediate area.

Tauākī whakaaweawe āhuarangi

Climate impact statement

21. It is not known at this point what the potential future use of this property will be and therefore what the potential impacts could be on carbon emissions. Sale of the property could lead to land use changes. It is acknowledged that any form of construction and development can increase carbon emissions.

22. 4 Blomfield Spa is not located in flood prone area and is not a coastal property likely to be impacted in the future by rising sea levels.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

23. Council’s Community Investment team reviewed this property in 2015 and 2017 against council’s open space provision and open space acquisition policy and confirmed it does not need to be retained for open space or recreation purposes.

24. Consultation has been undertaken with relevant council departments and CCOs regarding the subject site. No further feedback was received regarding open space values associated with the site and no other issues were raised.

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

Local impacts and local board views

25. The Devonport-Takapuna Local Board resolved at its 21 March 2017 business meeting that it is opposed to the proposed disposal of 4 Blomfield Spa on the basis that it is required for open space purposes. The local board also requested that tabled public documents regarding a proposed disposal be included in reports to council.

26. The local board later presented additional rationale as the basis for retention, including open space values; as an offset for future intensification; historical resource consent conditions and the legacy council’s intentions for the reserve.

27. In all instances, responses to the local board’s concerns have been provided by council’s Community Investment team, Eke Panuku and council’s Legal Services team.

28. As part of its feedback on council’s draft Emergency Budget 2020/2021 which included the proposal to sell 4 Blomfield Spa, the local board resolved (resolution DT/2020/87) in July 2020 that it supports the concept of asset recycling and the sale of council assets / holdings as a means of increasing revenue to fund council initiatives, but only if those assets proposed for recycling or divestment have been identified as not serving any current or future service requirement.

Tauākī whakaaweawe Māori

Māori impact statement

29. Nineteen mana whenua iwi authorities were consulted regarding open space values associated with 4 Blomfield Spa.

30. One notification from Te Runanga Ngati Whatua was received. The response advised that Te Runanga Ngati Whatua is seeking for 4 Blomfield Spa to be offered back in a right of first refusal process. In response Eke Panuku has advised Te Runanga Ngati Whatua that council owned land is not subject to right of first refusal for Treaty settlements.

31. As the Crown is the former owner of 4 Blomfield Spa, Eke Panuku has also advised that there may be an opportunity for Te Runanga Ngati Whatua (and other iwi) to advocate to the Crown for it to take up its offer back in accordance with s40 Public Works Act 1981, from where further Treaty settlement discussions may be able to progress between the Crown and Te Runanga Ngati Whatua.

Ngā ritenga ā-pūtea

Financial implications

32. Capital receipts from the sale of properties not required by Auckland Council contribute to the asset recycling targets set in the Emergency Budget 2020-21 and the Recovery Budget 2021-2031 by providing the council with an efficient use of capital and prioritisation of funds to achieve its activities and projects.

33. 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.

34. The proceeds of sale from this property will contribute to the asset recycling targets set by council in the Emergency and Recovery Budgets.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

35. The following table summarises the risks and mitigations:

Risks	Mitigations
Loss of open space	There is currently no gap in the provision of neighbourhood parks in the immediate area. Due to the relative isolation of 4 Blomfield Spa and the existing provision of neighbourhood parks in the locality, it is not needed to support the performance of the parks and open space network in the future, either by connection to future parks and open space or expansion through future acquisitions.
Increase in carbon emissions	It is not known at this point what the potential future use of this property will be and therefore what the potential impacts could be on carbon emissions. A sale of the property could lead to land use changes. The property is currently zoned Business – Metropolitan Centre Zone. It is acknowledged that any form of construction and development can increase carbon emissions.
Trees a loss to wildlife	There are currently other open spaces in the vicinity. Takapuna Beach Reserve and Hurstmere Green are both 400 metres to the north of the property. These open spaces have a larger area and more trees for wildlife
Possible flooding risks	There are no known flooding risks

Ngā koringa ā-muri

Next steps

36. Subject to the Finance and Performance Committee confirming its approval to dispose of this property, the terms and conditions of sale will be approved under appropriate financial delegation. The sales process will include addressing the s40 Public Works Act 1981 offer back obligations to the former owner (being the Crown).

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Images	29
b ⇩	Open space in the nearby vicinity	37
c ⇩	Copy of public notice	39
d ⇩	John Potter submission	41
e ⇩	Patricia Watt submission	43
f ⇩	Zaineb Jabawi submission	45
g ⇩	Debbi Beadle submission	47
h ⇩	Lewis Foster submission	49
i ⇩	Jan O'Connor submission	51
j ⇩	Jane and Gary Whetton submission	53
k ⇩	Susan Dalton submission	55
l ⇩	Shirley Lam submission	57
m ⇩	Jon Barker submission	59
n ⇩	Matt Ingham submission	61
o ⇩	Suzanne Brade submission	63
p ⇩	Natasha McNeill-O'Keeffe submission	65
q ⇩	Chris Scott submission	67
r ⇩	Janet Moen submission	69
s ⇩	M.R Rezaei Abyaneh submission	71
t ⇩	Tabitha Becroft submission	73
u ⇩	Bridget Thrussell submission	75
V	Forest & Bird North Shore submission	76
⇩W	Gilbert Hunt submission	77

Ngā kaihaina

Signatories

Authors

Moira Faumui – Property Asset Advisor, Eke Panuku Development Auckland

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

Authorisers

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

Ross Chirnside - General Manager Value For Money

Peter Gudsell - Group Chief Financial Officer

Finance and Performance Committee

17 March 2022

Auckland Council Group and Auckland Council Quarterly Performance Report for the six months ending December 2021

File No.: CP2022/01254

Te take mō te pūrongo

Purpose of the report

1. To provide an update on the performance for the Auckland Council Group and Auckland Council against year one of the Recovery Budget 2021-2031 (the Recovery Budget) for the six months to 31 December 2021.

Whakarāpopototanga matua

Executive summary

Context

2. The results for the first six months to the end of December 2021 confirm many of the pressures anticipated in our Recovery Budget have materialised.

3. The uncertainty and disruption caused by both the COVID-19 pandemic and unfavourable economic trends has placed pressure on our operations and finances in the six months to the end of December 2021. The COVID-19 lockdown affected group performance and our ability to deliver until Auckland moved to the COVID-19 Protection Framework (traffic light system) in early December. In addition, more substantive economic conditions such as the global and local supply chain delays, increased construction costs, labour shortages, higher inflation, and increased interest rates impacted on our results.

Group performance

4. Capital investment was $917 million, a 71 per cent delivery of the $1,296 million budget. The COVID-19 lockdowns adversely affected almost all capital works including projects such as the City Rail Link, Central Interceptor and the Transform Manukau programme. However, Stage 1 of the Eastern Busway was completed ahead of schedule. It will provide greater access to frequent and reliable public transport options for East Auckland.

5. Net debt increased by $106 million to help fund capital investment. Borrowing activity for the quarter included the issuance of EUR500 million in green bonds, our first offshore green bond issuance. Given the uncertainty in the markets due to COVID-19, debt was raised in advance of the need to refinance existing debt due to mature in March and April. A total of $812 million of the debt raised was invested in term deposits until the relevant debt maturities.

6. The council’s credit ratings from S&P Global Ratings and Moody’s Investor Services remain at AA and Aa2 respectively. Both are on stable outlook.

7. Direct revenue was $35 million unfavourable against budget as a result of the extended COVID-19 lockdown and water restrictions in the first quarter. The largest shortfalls were in fees and service charges, which are reliant on public usage.

8. Direct expenditure was $43 million favourable to budget. This was mainly driven by work programme delays and reduced costs to services for public transport and cancelled or postponed events.

9. There was an increase of 381 full-time equivalent employees across the council group. This included the hiring of staff such as seasonal workers and summer interns as well as the filling of vacancies.

Auckland Council performance

10. Capital expenditure was $116 million which was 54 per cent of budget. This was mainly due to construction delays as the result of the COVID-19 lockdowns, supply chain issues and finding suitably skilled staff. However, our commitment to Kaipara Moana was progressed with the completion of stage one of the Kaipara Moana Remediation Programme.

11. Direct revenue was $11 million favourable to budget with regulatory fee revenue $18 million higher than budget, driven by both higher volumes and increased complexity of consents.

12. Direct expenditure was $38 million favourable to budget. Most of the underspend to date was due to lockdown restrictions causing delays.

13. At 31 December 2021, the council had achieved $70.6 million towards the $90 million Recovery Budget savings target.

14. A total of 26 of the council’s 70 performance measures were updated this quarter: 58 per cent (15) were achieved or substantially achieved and 42 per cent (11) measures were not achieved.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a) receive the Auckland Council Group and Auckland Council quarterly performance reports for the six months ended 31 December 2021.

Horopaki

Context

15. The Recovery Budget was adopted in July 2021. The budget focused on tackling the uncertainty and challenges arising from public health restrictions and economic impacts associated with the COVID-19 pandemic while continuing to invest in the region’s infrastructure and natural environment. Key aspects of the budget for the 2021/2022 financial year included:

· an average general rates increase of 5 per cent

· $2.9 billion capital investment for the year

· $90 million in savings and cost reductions

· $70 million from targeted asset recycling.

16. The committee is provided with management and statutory results on a quarterly basis. While these two sets of results reconcile, they are aggregated and analysed with different lenses. The quarterly performance report reflects management’s view of the group and the organisation and is tailored to highlight key performance areas (refer Attachments A and B respectively). The statutory results are externally focussed and based on financial reporting standards (refer Attachment C).

17. Representatives of the substantive council-controlled organisations (CCOs) and Ports of Auckland’s’ boards, chief executives and chief financial officers present their 31 December 2021 quarterly results at the 22 March 2022 CCO Oversight Committee.

Tātaritanga me ngā tohutohu

Analysis and advice

18. The Auckland Council Group and Auckland Council quarterly performance reports are provided in attachments A and B to this report.

Summary of overall Auckland Council Group quarterly performance

19. The group’s performance in the first six months of the Recovery Budget has been under pressure from the ongoing effects of the COVID-19 pandemic.

20. As well as the direct impact of lockdowns and restrictions of movement, the COVID-19 pandemic has impacted the economic environment leading to global and local supply chain delays, increased construction costs, labour shortages, higher inflation, and increased interest rates placing pressure on group performance and its ability to deliver.

21. Capital investment was $917 million, a 71 per cent delivery of the $1,296 million budget. The under delivery was mainly the result of construction activities being suspended during the lockdown.

22. The largest underspends were at Auckland Council and Watercare. Auckland Council’s underspend were mainly due to delays in community facilities projects such as Te Whau Pathway, corporate property and support services project such as the Worksmart programme, and healthy waters asset renewals. Watercare’s delays were largely attributable to the Central Interceptor and the Huia1 and Nihotupu Replacement projects.

23. In addition, the Film Studio project and the Transform Manukau programme were also impacted.

24. However, Stage 1 of the Eastern Busway was completed ahead of schedule. It will provide greater access to frequent and reliable public transport options for East Auckland.

25. Net debt increased by $106 million to help fund capital investment. Borrowing activity for the quarter included the issuance of EUR500 million in green bonds, our first offshore green bond issuance. Given the uncertainty in the markets due to COVID-19, debt was raised in advance of the need to refinance existing debt due to mature in March and April. A total of $812 million of the debt raised was invested in term deposits until the relevant debt maturities.

26. Direct revenue was $35 million unfavourable against budget. Revenue continues to be impacted by COVID-19 in areas such as public transport, parking and enforcement, which were significantly below budget. Pandemic restrictions also impacted community services, and visitor or attendance numbers, reducing revenue from events and community facilities. Overall strength in the construction sector positively impacted Watercare’s infrastructure growth charges and regulatory revenue, however there was a significant decrease in development contributions due to the inability for construction to be completed during the COVID-19 lockdown.

27. Direct expenditure was $43 million favourable to budget. This was mainly driven by work programme delays and reduced costs to provide services due to cancelled or postponed events and delayed repairs and maintenance.

28. There was an increase of 381 full-time equivalent employees (FTEs) across the group. Auckland Council accounted for an increase of 211 FTEs mainly due to filling previously vacant positions and the hiring of seasonal workers. Watercare’s FTEs increased by 104 due to filling vacancies, gearing up for the Three Waters Reform programme and the hiring of summer interns.

29. City Rail Link Limited completed the Britomart and Lower Street contract in October 2021 and work is progressing on Britomart East, Aotea Station and Karangahape Station. The company’s management appeared before the Transport and Infrastructure Select Committee in early February, noting their expectation of receiving a claim for additional construction costs arising from COVID-19 matters. CRLL are engaging with Link Alliance to get a better understanding of this claim and will then be in a position to inform the sponsors of the effect on funding.

30. The mana whenua resource consents portal in Te Mātāpuna 2 went live in December 2021.

Summary of overall Auckland Council quarterly performance

31. Capital expenditure was $116 million which was 54 per cent of the budget. This was mainly due to construction delays as a result of the COVID-19 lockdowns, supply chain issues and labour availability including finding suitably skilled staff.

32. Direct revenue was $11 million favourable to budget with regulatory fee revenue $18 million higher than budget, driven by both higher volumes and increased complexity of consents.

33. Direct expenditure was $38 million favourable to budget. Most of the underspend to date was due to lockdown restrictions during COVID-19 Alert Levels 3 and 4 which resulted in deferral of repairs and maintenance, and a lower requirement for outsourced works. Employee benefits was $7 million favourable to budget due to tight labour market conditions, limiting the ability to find suitable staff.

34. All key water quality programmes are on track except the Safe Networks programme which had to be paused during the COVID-19 lockdown as it involved private property inspections. All key natural environment programmes are on track.

35. Kaipara Moana Remediation’s South Kaipara Stream Stage 1 project was completed. This initiative strives for the protection of Kaipara Moana to ensure the waterways and wetlands of the catchment are healthy and enhanced.

36. All key waste programmes are on track except the food scraps programme which has been deferred to the third quarter of 2022/2023 due to COVID-19 and supply chain constraints.

37. A total of 26 of the council’s 70 performance measures were updated this quarter: 58 per cent (15) were achieved or substantially achieved and 42 per cent (11) measures were not achieved. Our stormwater and waste results have been consistently performing well. Although statutory consenting timeframes remain a challenge, customer satisfaction has improved and are above target. Local community service measures have been significantly impacted due to COVID-19.

Auckland Council Group Interim Report

38. The Auckland Council Group Interim Report (interim report) for the six months ending 31 December has been prepared in accordance with applicable financial reporting standards (Attachment C). It was prepared on a statutory basis and reviewed by Audit New Zealand and the Office of the Auditor-General, the latter whom provided an unmodified review opinion.

39. The judgements, assumptions and new accounting policies used in preparing the interim report were reviewed by the Audit and Risk Committee on 9 December 2021 and 22 February 2022 and at the latter meeting, the committee endorsed the judgements, assumptions and new accounting policies.

40. The interim report was reviewed and approved by the chair and deputy chair of this committee as well as the chief executive on 23 February 2022. It was then reviewed and approved by the mayor on 25 February 2022 and released to the NZX and the public on 28 February 2022.

41. The results reconcile with the group quarterly performance report. A copy of the reconciliation is included in Attachment D.

Tauākī whakaaweawe āhuarangi

Climate impact statement

42. This committee paper is an information report providing an update on performance across the Auckland Council Group. No decision is sought in this paper that has a direct impact on the group’s greenhouse gas emissions nor the group’s approach to preparing for climate change. Climate action is a strategic focus area for the group and an update on the progress of climate action projects is provided in Attachment A.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

43. The group quarterly performance reports reflect the results of the group for the six months ended 31 December 2021. CCOs and Ports of Auckland Limited provide input into the preparation of these reports.

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

Local impacts and local board views

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

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

Tauākī whakaaweawe Māori

Māori impact statement

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

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

Ngā ritenga ā-pūtea

Financial implications

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

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

49. There is a minor risk that the information in this report and the attachments may lack accuracy or completeness due to it not being subject to an audit. Management has performed due diligence by obtaining detailed explanations from all Auckland Council business units as well as group entities supplemented by representation letters provided by CCOs and Ports of Auckland Limited’s Audit and Risk committee chairs and chief executives.

50. The greatest matters of concern that are presenting a risk to achieving our performance targets are:

Risk	Mitigation
COVID-19 variants The continuing presence of COVID-19 variants which places restrictions on activities and the demand for the group’s services. This negatively affects our revenue, and results in delays and additional costs on capital projects. Further, the mass infection of employees poses a risk to business continuity.	Management will continue to closely monitor the effect of COVID-19 on our revenue and services and seek to balance any losses with appropriate mitigations. As an organisation we are supporting our people with: · Rapid Antigen Testing for critical workers · time off to get tested and be vaccinated · providing a safe workplace aligned to Ministry of Health guidelines · leave support · working from home · business continuity planning specifically related to COVID-19, especially for critical services · other wellbeing services.
Ongoing international travel restrictions International travel restrictions continue to restrict our ability to employ specialist staff. The inability to fill key positions has negatively impacted the delivery of projects and services. The progressive lifting of borders over the course of the year may have a positive impact on talent retention and attraction, however higher salaries in certain job groups abroad could see an outflux of talent from New Zealand.	The progressive lifting of border restrictions is expected to provide some relief. In addition, we are putting in a number of talent retention and attraction measures, discussed below.
The Great Resignation The Great Resignation is a phenomenon that describes record numbers of people leaving their jobs after the COVID-19 pandemic ends. The psychological effects of physical distancing and lack of face-to-face contact is already leading to employees evaluating their careers and leaving their jobs in record numbers. Retention of staff and ensuring their wellbeing is becoming a priority.	Auckland Council management is implementing many measures to improve talent retention and attraction. They include · additional recruitment resource · increasing use of contingent workers and external agencies · defining a value proposition incorporating the recent findings of the Employer Brand research · a return to a formalised graduate programme for 2022 · a remuneration and benefits review comparing to market rates · a review of our flex-offering · improving our culture mahi · building capability using a hub and spoke model · Implementing talent management.
Growing inflationary pressures and supply chain challenges These will continue to affect capital projects timelines and costs as well as costs of outsourced works contracts such as public transport, full facilities maintenance etc.	This is being partially mitigated through early engagement with suppliers and a strategic procurement approach.
Higher than anticipated interest rates Increasing long term interest rates will continue to increase the cost of our unhedged debt.	Management will continue to monitor the level of hedging of debt in conjunction with advice from external experts on the Treasury Management Steering Group.

Risk

Mitigation

COVID-19 variants

The continuing presence of COVID-19 variants which places restrictions on activities and the demand for the group’s services. This negatively affects our revenue, and results in delays and additional costs on capital projects. Further, the mass infection of employees poses a risk to business continuity.

Management will continue to closely monitor the effect of COVID-19 on our revenue and services and seek to balance any losses with appropriate mitigations.

As an organisation we are supporting our people with:

· Rapid Antigen Testing for critical workers

· time off to get tested and be vaccinated

· providing a safe workplace aligned to Ministry of Health guidelines

· leave support

· working from home

· business continuity planning specifically related to COVID-19, especially for critical services

· other wellbeing services.

Ongoing international travel restrictions

International travel restrictions continue to restrict our ability to employ specialist staff. The inability to fill key positions has negatively impacted the delivery of projects and services.

The progressive lifting of borders over the course of the year may have a positive impact on talent retention and attraction, however higher salaries in certain job groups abroad could see an outflux of talent from New Zealand.

The progressive lifting of border restrictions is expected to provide some relief. In addition, we are putting in a number of talent retention and attraction measures, discussed below.

The Great Resignation

The Great Resignation is a phenomenon that describes record numbers of people leaving their jobs after the COVID-19 pandemic ends. The psychological effects of physical distancing and lack of face-to-face contact is already leading to employees evaluating their careers and leaving their jobs in record numbers. Retention of staff and ensuring their wellbeing is becoming a priority.

Auckland Council management is implementing many measures to improve talent retention and attraction. They include

· additional recruitment resource

· increasing use of contingent workers and external agencies

· defining a value proposition incorporating the recent findings of the Employer Brand research

· a return to a formalised graduate programme for 2022

· a remuneration and benefits review comparing to market rates

· a review of our flex-offering

· improving our culture mahi

· building capability using a hub and spoke model

· Implementing talent management.

Growing inflationary pressures and supply chain challenges

These will continue to affect capital projects timelines and costs as well as costs of outsourced works contracts such as public transport, full facilities maintenance etc.

This is being partially mitigated through early engagement with suppliers and a strategic procurement approach.

Higher than anticipated interest rates

Increasing long term interest rates will continue to increase the cost of our unhedged debt.

Management will continue to monitor the level of hedging of debt in conjunction with advice from external experts on the Treasury Management Steering Group.

Ngā koringa ā-muri

Next steps

51. CCOs and Ports of Auckland Limited will present their six-month results at the CCO Oversight Committee on 22 March 2022.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Auckland Council Group Quarterly Performance Report 31 December 2021	87
b ⇩	Auckland Council Quarterly Performance Report 31 December 2021	107
c ⇩	Auckland Council Group Statutory Financial Report 31 December 2021	133
d ⇩	Auckland Council Group reconciliation of management to statutory results 31 December 2021	157

Ngā kaihaina

Signatories

Authors

Karuna Dahya - Manager Group Performance Reporting

Tracy Gers - Group Accounting & Reporting Manager

Pramod Nair - Head of Group Financial Planning

Authorisers

Nicola Mills - General Manager Financial and Business Performance John Bishop - Group Treasurer

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

Finance and Performance Committee

17 March 2022

Sport and Recreation Facility Investment Fund - Budget update

File No.: CP2022/02697

Te take mō te pūrongo

Purpose of the report

1. To approve the Parks, Arts, Community and Events (PACE) Committee request to convert $300,000 operational budget from the Sport and Recreation Facility Investment Fund to the capital budget to properly account for the Māngere Centre Park project.

Whakarāpopototanga matua

Executive summary

2. The Sport and Recreation Facility Investment Fund (SRFIF) provides for capital grants that are debt funded for the purpose of supporting the development of sport and recreation facilities to address gaps in provision in the Auckland region.

3. On 11 November 2021, the PACE Committee approved a $300,000 budget allocation (Resolution number PAC/2021/59) from the SRFIF for the Māngere Centre Park upgrade.

4. The project will be managed by Community Facilities as part of the targeted sports field investment programme. As the $300,000 allocation is for a council owned asset, it will need to be accounted as capital expenditure for Auckland Council.

5. Finance and Performance Committee approval for the conversion in budget is sought to progress the Māngere Centre Park project.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a) approve the change in budget to convert $300,000 operational budget from the Sport and Recreation Facility Investment Fund to Auckland Council’s capital budget to properly account for the delivery cost of the Māngere Centre Park project.

b) note that there are no additional funding implications from this decision to convert the budget from operational expenditure to capital expenditure.

Horopaki

Context

6. On 11 November 2021 the Parks, Arts, Community and Events Committee resolved (PAC/2021/59):

That the Parks, Arts, Community and Events Committee:

a) approve $300,000 from the 2021/2022 Sport and Recreation Facility Investment Fund to be managed by Community Facilities as part of a targeted sports field investment programme.

b) endorse the request that the Finance & Performance Committee approve the change in budget to convert $300,000 operational budget to capital budget to properly account for the Māngere Centre Park project.

c) authorise the General Manager - Community Facilities to oversee allocation of the sports field investment programme funded through the Sport and Recreation Facility Investment Fund into the following parks:

i) Māngere Centre Park

ii) Papatoetoe Recreation Ground

iii) Mountfort Park

iv) Manurewa War Memorial Park

d) note the upcoming funding round of the Sport and Recreation Facilities Investment Fund opening on 15 November 2021.

7. The SRFIF is generally allocated to third parties towards community-owned facility projects for which council does not have ongoing operational or renewal cost obligations. Even though the budget is operational due to it being a capital grant, it is debt funded.

8. The $300,000 allocation approved by PACE is for a council owned asset so will need to be accounted for as capital expenditure. This report recommends that the committee approve the conversion of $300,000 of operational budget from the Sport and Recreation Facility Investment Fund to Auckland Council’s capital budget to properly account for the Māngere Centre Park project.

9. The consequential operational expenditure costs arising from the proposed investment are expected to be minimal as it is an improvement to an existing asset rather than a new asset. Community Facilities have confirmed any additional costs that may arise can be managed within existing approved operational budgets.

Tātaritanga me ngā tohutohu

Analysis and advice

10. Across the $5.7 million sports field investment programme funded through the SRFIF, there is a mix of projects that have come in over and under budget in final costings through the tender process.

11. The final costings for the Māngere Centre Park are around $479,000 above the original budget. The additional costs required to deliver the project are due to additional earthworks to level the field and an increased surface area being upgraded, that also includes kilikiti/ cricket wickets.

12. The PACE Committee allocation of $300,000 from the SRFIF will partly offset the shortfall in budget required to deliver the Māngere Centre Park upgrade. The $300,000 was surplus budget available for allocation from the SRFIF this financial year.

13. The remaining shortfall will be covered through the reallocation of budgets within the sports field investment programme managed by the Community Facilities department.

Tauākī whakaaweawe āhuarangi

Climate impact statement

14. The environmental impacts were a key consideration for the Māngere Centre Park project. The sports field will be upgraded from soil-based to sand-based fields that will improve drainage and LED energy saving lights will be used for the lighting upgrade.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

15. The advice provided to PACE Committee on the budget allocation was developed by Parks, Sport and Recreation and Community Facilities staff, with support from Local Board Services and Finance.

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

Local impacts and local board views

16. Local board views were not sought for in the preparation of this report. The Māngere-Ōtāhuhu Local Board impacts and views were considered in the preparation of the report to the PACE Committee.

17. Local stakeholder feedback on the project itself is aligned in that it is supportive of the upgrades proposed at Māngere Centre Park to maximise outcomes for winter and summer sport as well as informal use.

Tauākī whakaaweawe Māori

Māori impact statement

18. There are no direct Māori impacts from the decision to approve the budget conversion.

19. Mana whenua are supportive of the potential for positive Māori sport and recreation outcomes when the field upgrades in Māngere were originally proposed.

Ngā ritenga ā-pūtea

Financial implications

20. There is no additional cash funding impact from converting $300,000 of the SRFIF to capital expenditure. Even though the budget is operational due to it being a grant, it is debt funded. By converting this budget to capital expenditure, it will continue to be debt funded.

21. The Community Facilities department have confirmed that no additional consequential operational expenditure is needed as the funding is for a renewal project and any minor additional costs can be managed within existing Community Facility budgets.

22. If the conversion is not approved there would potentially be a minor saving if the $300,000 surplus funding from the SRFIF was not allocated in this financial year.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

23. If conversion of budget is not approved, the project can’t be delivered without alternative funding or reprioritisation. Auckland Council would not realise its return on investment at Māngere Centre Park as field upgrades will be completed without lighting which will fail to deliver the intended benefit. The community sport need for midweek floodlit training venues was the driver for investment.

24. In addition, if groundworks at Māngere Centre Park are not progressed within the current earthworks season (ending May 2022) it will not be suitable as a potential training venue for the FIFA Women’s World Cup.

25. There is a risk of further cost escalation to deliver the project, however this risk is mitigated due to the contingency built into the project cost and the budget being based on tenders that have already been received.

Ngā koringa ā-muri

Next steps

26. Should the committee approve the PACE request, the converted budget will be allocated from SRFIF to Community Facilities for the Māngere Centre Park (fields and lighting) project.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Report to PACE Committee - Thursday, 11 November 2021	163

Ngā kaihaina

Signatories

Authors

Daniel Yoon - Financial Analyst

Pramod Nair - Head of Group Financial Planning

Authorisers

Ross Tucker - General Manager, Financial Strategy and Planning

Peter Gudsell - Group Chief Financial Officer

No.	Title	Page
a ⇩	Finance and Performance Committee Forward Work Programme	175

Finance and Performance Committee

17 March 2022

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
Area of work and Lead Department	Reason for work	Committee role (decision and/or direction)	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Planning and funding
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 – (28 February 2022 - 28 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: Workshops held 15 September 2021, 22 September 2021, 29 September 2021, 13 October 2021, 20 October 2021, 27 October 2021, 3 November 2021, 17 November 2021, 23 November 2021, 24 November 2021, 25 November 2021 and 1 December 2021; and 2 February 2022 Summary of Finance and Performance Committee information memoranda and briefings, including the Forward Work Programme – 9 December 2021 Link to decision Summary of Confidential Decisions and related information released into open – 9 December 2021 Link to decision Annual Budget 2022/2023: Overview to decision making – 8 December 2021 Link to decision Annual Budget 2022/2023: Regional topics for consultation – 8 December Link to decision Tūpuna Maunga Authority Operational Plan 2022/2023 – 8 December 2021 Link to decision Link to Governing Body decision Annual Budget 2022/2023: Mayoral Proposal items for consultation – 8 December 2021 Link to decision Link to Governing Body decision Annual Budget 2022/2023: Budget Update – 8 December 2021 Link to decision Annual Budget 2022/2023: Kerbside refuse charging policy review – 8 December 2021 Link to decision Link to Governing Body decision Annual Budget 2022/2023: Other Rates and Fees Matters – 8 December 2021 Link to decision Link to Governing Body decision Annual Budget 2022/2023: Rating of Whenua Māori Changes to Financial Policies – 8 December 2021 Link to decision Link to Governing Body decision Annual Budget 2022/2023: Communications and Engagement Plan – 8 February 2022 Link to decision Annual Budget 2022/2023: Adoption of consultation material – 8 February 2022 Link to decision Link to Governing Body decision Rating of Whenua Māori Changes to Financial Policies: Approval of consultation material – 8 February 2022 Link to decision Link to Governing Body decision
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: CONFIDENTIAL: Auckland Film Studios budget update – February 2022 – 8 February 2022 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:
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:
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. 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. Progress to date:	As required
Funding and Levies (including Auckland Regional Amenities Funding Board, Museum of Transport and Technology and Auckland War Memorial Museum) Manager CCO/ External Partnerships team	Statutory process	Approve annual funding levies for Auckland Regional Amenities Funding Board (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) · Revenue and Financing Policy (annual budget consultation February, decision June) · Rates Remission and Postponement Policy (annual budget consultation February, decision June 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: 10 March 2022

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, MNZM	Cr Paul Young
	Cr Christine Fletcher, QSO

Date	Subject
10/3/2022	Memorandum from Principal Advisor Quality Advice Leadership – Quality Advice Programme update, November 2020 - February 2022 – Attachment A

Date	Workshop/Briefing
2/2/2022	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Consultation Document and Supporting Information) – Attachment B
2/2/2022	Finance and Performance Committee workshop (Communications and Engagement Plan) – Attachment C
9/2/2022	Finance and Performance Committee confidential workshop (Auckland Film Studio site in Henderson) – no attachment
16/2/2022	Finance and Performance Committee confidential workshop (Own Your Own Home Scheme [Future Opportunities]) – no attachment

No.	Title	Page
a ⇨	Memorandum from Principal Advisor Quality Advice Leadership – Quality Advice Programme update, November 2020 - February 2022, 10 March 2022 (Under Separate Cover)
b ⇨	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Consultation Document and Supporting Information) - 2 February 2022 (Under Separate Cover)
c ⇨	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Consultation Document and Supporting Information) - 2 February 2022 (Under Separate Cover)

Author	Sandra Gordon - Kaitohutohu Mana Whakahaere Matua / Senior Governance Advisor
Authoriser	Peter Gudsell - Group Chief Financial Officer