Agenda of Finance and Performance Committee

Terms of Reference

Responsibilities

The purpose of the committee is to:

a) advise and support the mayor on the development of the Long-term Plan (LTP) and Annual Plan (AP)

b) monitor the overall financial management and performance of the council parent organisation and Auckland Council group

c) make financial decisions required outside of the annual budgeting processes.

The committee will establish an annual work programme outlining key focus areas in line with its key responsibilities, which include:

· advising and supporting the mayor on the development of the LTP and AP for consideration by the Governing Body including:

o local board agreements

o financial policy related to the LTP and AP

o setting of rates

o preparation of the consultation documentation and supporting information, and the consultation process, for the LTP and AP

· monitoring the operational and capital expenditure of the council parent organisation and Auckland Council Group, and inquiring into any material discrepancies from planned expenditure

· approving the financial policy of the council parent organisation

· establishing and managing a structured approach to the approval of non-budgeted expenditure (including grants, loans or guarantees) that reinforces value for money and an expectation of tight expenditure control

· approve the council insurance strategy and annual insurance placement for Council

· performance measures and monitoring

· write-offs

· acquisition of property in accordance with the LTP

· disposals in accordance with the LTP

· recommending the Annual Report to the Governing Body

· funding for achieving improved outcomes for Māori.

Powers

(i) All powers necessary to perform the committee’s responsibilities, including:

(a) approval of a submission to an external body

(b) establishment of working parties or steering groups.

(ii) The committee has the powers to perform the responsibilities of another committee, where it is necessary to make a decision prior to the next meeting of that other committee.

(iii) If a decision is a budgetary or financial decision that relates primarily to the Finance and Performance Committee responsibilities, the Finance and Performance Committee has the powers to make associated decisions on matters that would otherwise be decided by other committees. For the avoidance of doubt, this means that matters do not need to be taken to multiple committees for decisions.

(iii) The committee does not have:

(a) the power to establish subcommittees

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

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.

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, 17 March 2022 as a true and correct record.

4 Petitions

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

5 Public Input

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

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

6 Local Board Input

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

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

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

7 Extraordinary Business

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

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

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

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

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

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

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

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

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

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

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

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

Finance and Performance Committee

19 May 2022

Asset recycling disposal recommendations

File No.: CP2022/04630

Te take mō te pūrongo

Purpose of the report

1. To approve the disposal of four properties no longer required by Auckland Council for service purposes, being 84 (part) Hobsonville Road, Hobsonville; 1 Levene Place, Mount Wellington; 21 Newton Road, Newton and Nuffield Lane (part), Newmarket (Allot 31 Sec 11 and Lots 36 & 37 DP 22483).

Whakarāpopototanga matua

Executive summary

2. Approval is being sought for the disposal of four properties not required for council service or public work purposes.

3. 84 Hobsonville Road, Hobsonville comprises two parcels of vacant land acquired in 2016 for stormwater, open space and access purposes. An area of 1905m² is to be retained in council ownership. The subject parcel is a narrow 20m wide strip comprising approximately 3851m² and is bordered on both sides by the adjacent development. Following a purchaser enquiry from the adjacent landowner and a review by council, approximately 3851m² was identified as no longer required for the purpose for which it was acquired. Due to size and configuration, it could only be disposed of to the neighbouring property owner.

4. 1 Levene Place, Mount Wellington is a commercial property that was acquired in 2005 for future transport infrastructure purposes (being the possible route alignment for a proposed Eastern Transport Corridor initiative). The property is subject to covenants relating to access restrictions and future development/use requiring approval by the former owner. In February 2021, the Auckland Transport Board declared that 1 Levene Place is no longer required for transport purposes and it was subsequently transferred to Auckland Council.

5. Legal advice has confirmed that the provisions in the 2005 sale and purchase agreement between the former owner and council specify that 1 Levene Place can only be used for a transport related public work. No other council use or development is permitted. As the property is no longer required for transport purposes, the 2005 sale and purchase agreement requires council to offer the property back to the former owner. The legal advice further recommends that an offer back to the former owner proceed as soon as possible.

6. 21 Newton Road, Newton is a commercial property that was acquired in 2003 for transport infrastructure (road widening) purposes. Approximately 53m² of the property is required for the planned pedestrian/cycling connection between Great North Road / Karangahape Road / Ponsonby Road, and the Northwestern shared path. The remaining portion of the property comprising approximately 353m² is not required for transport purposes.

7. Nuffield Lane, Newmarket (Allot 31 Sec 11 and Lots 36 & 37 DP 22483) is formed and used as a service lane but has never been legalised as such. The 989m²lane provides rear access to the block of properties bordered by Broadway, Remuera Road, Nuffield Street and Balm Street, Newmarket. Due to its existing configuration and use, no alternate council use or future development is possible. The surrounding block of properties are all owned by a single landowner, who is the main beneficiary of the service lane the property provides. It is proposed to dispose of 155m² of the property. The remaining 834m² parcel is to be retained by council as a service lane. The adjoining landowner has registered an interest in acquiring the 155m² area should it be approved for disposal by council.

8. Consultation with council and its council-controlled organisations (CCOs), iwi and relevant local boards has taken place. No issues regarding the disposal of the four properties has been received.

9. Sales proceeds from the proposed disposals will be allocated towards the asset recycling target contained in Auckland Council’s 2021-2031 Recovery Budget.

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) 3,851m² of 84 Hobsonville Road, Hobsonville (subject to survey) comprised of an estate in fee simple being Section 2 SO 509537 contained in record of title 798035;

ii) 1 Levene Place, Mount Wellington comprised of an estate in fee simple being Lot 1 DP 341877 contained in record of title 172271;

iii) 21 Newton Road, Newton comprised of an estate in fee simple being Part Lot 7 of the Subdivision of Allotment 12 Section 7 Suburbs of Auckland contained in record of title NA75B/448; and

iv) 155m²of Nuffield Lane, Newmarket (subject to survey) comprised of an estate in fee simple being Allotment 31 Sec 11 & Lot 36 & 37 DP 22483 contained in record of title NA8A/1059.

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

Horopaki

Context

Asset recycling budget

10. Asset recycling is an important lever for council, releasing capital from poorly performing and/or non-strategic assets to allow greater investment in the most important strategically aligned activities.

11. The recovery budget includes $70 million in 2021/2022, with $430 million to be realised from asset recycling over the full 10-year budget period.

Financial Year	21/22	22/23	23/24	24/25	25/26	26/27	28/29	Recovery Budget Total
Budget ($ million)	70	70	70	70	70	60	20	430

Property rationalisation process

12. 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 or development if appropriate.

13. 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.

14. 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 - 84 (part) Hobsonville Road, Hobsonville

15. 84 Hobsonville Road comprises two parcels of vacant land totaling 5766m². Both parcels were acquired in 2016 by Auckland Council for stormwater open space and access purposes. An area of 1905m² is to be retained in council ownership.

16. The subject 3851m² parcel is a narrow 20m wide strip bordered on two sides by the adjacent development. The parcel was originally planned as an entrance to the proposed Rawiri Stream greenway, a route in the Upper Harbour Greenways Plan. However, an alternative entrance has been formed from a new road adjacent to the parcel. The new road includes a separated walkway and cycleway along its entire length within the road corridor to facilitate access from Hobsonville Road to the start of the Rawiri Stream greenway.

17. Council’s Healthy Waters department has confirmed that it does not require the subject 3851m² parcel to form the Rawiri Stream greenway or for stormwater management purposes.

18. Council’s Community Investment team (formerly the Parks and Recreation Policy team) assessed the subject 3851m² parcel in July 2020 and advised it is not required to form the proposed aspirational greenway. Due to its size, shape and location, it is not needed to help meet the council’s recreational open space provision targets now or in the future. As this parcel is no longer needed to form the greenway, there is no strategic reason to retain it.

19. The 3851m² subject parcel is zoned Open Space – Informal Recreation under the Auckland Unitary Plan (AUP). The entirety of 84 Hobsonville Road has a 2021 council rating valuation of $265,000. A registered valuation for the subject 3851m² parcel will be undertaken as part of any disposal process. Attachment A includes aerial and street view images of the subject 3,851m² parcel.

Property information - 1 Levene Place, Mount Wellington

20. 1 Levene Place is a 4,026m² property that was acquired by the former Auckland City Council in 2005 for future transport infrastructure purposes (being part of a possible route alignment for the proposed Eastern Transport Corridor initiative). It was never designated for roading purposes. Despite the property being on the market for sale at the time, the former owner did not waive its offer back rights under s40 of the Public Works Act 1981. In addition, a clause in the 2005 sale and purchase agreement requires that the property be offered back to the former owner if council no longer requires it for public roading or public transport purposes.

21. Eke Panuku manages the property on behalf of Auckland Council and it is currently leased for commercial purposes.

22. In February 2021, the Auckland Transport (AT) Board declared 1 Levene Place to no longer be required for transport purposes and it was subsequently transferred to Auckland Council in June 2021.

23. Legal advice has confirmed the 2005 sale and purchase agreement between former owner Quadrant Properties Limited and the former Auckland City Council specifies that 1 Levene Place can only be used by council for a transport related public work. No other alternative council use or development is permitted. As the property is no longer required for transport purposes, it must be offered back to the former owner.

24. Legal advice received recommends that an offer back to the former owner proceed immediately.

25. The property is zoned under the AUP as Business - Light Industry. The property has a 2021 council rating valuation of $4.35 million. Attachment A includes aerial and street view images of the property.

Property information - 21 Newton Road, Newton

26. 21 Newton Road is a 409m² commercial property. It was acquired by the former Auckland City Council in 2003 for transport infrastructure (road widening) purposes. The property is tenanted with the tenancy managed by Eke Panuku.

27. A 5m strip of the property facing Newton Road comprising approximately 53m² is subject to a designation for road widening and is required for the pedestrian/cycling connection between Great North Road / Karangahape Road / Ponsonby Road, and the Northwestern shared path (refer to Figure 5 and 6 in Attachment A).

28. The remaining property comprises approximately 353m² and is not required for transport purposes. Accordingly, it is proposed for disposal as part of the asset recycling programme.

29. AT will legalise the 53m² area subject to the transport designation and will remove the off-street car parking at the front of the property. The planned legalisation and construction of the pedestrian/cycling path will require extensive reconfiguration or demolition of the current building. Should this property be approved for sale, Eke Panuku will investigate building removal/demolition options as part of a disposal strategy. Council departments and Eke Panuku will make best endeavours to work with the existing tenant to find an alternate location.

30. 21 Newton Road is not subject to s40 Public Works Act 1981 offer back obligations.

31. The AUP zoning is Business - Mixed Use. The entirety of the property has a 2021 council rating valuation of $2.6 million.

Property information - Nuffield Lane (part), Newmarket (Allot 31 Sec 11 and Lots 36 and 37 DP 22483).

32. Nuffield Lane (Allot 31 Sec 11 and Lots 36 & 37 DP 22483) is a 989m² property formed and used as service lane but with no legal status as such. It provides rear access to a block of properties bordered by Broadway, Remuera Road, Nuffield Street and Balm Street, Newmarket. The lane consists of three parcels, Allot 31 Sec 11 and Lots 36 & 37 DP 22483. The three parcels were acquired from the Crown by the former Newmarket Borough Council in 1966.

33. Council records indicate that in 1995 the former Auckland City Council commenced the process to declare Nuffield Lane (Allot 31 Sec 11 and Lots 36 & 37 DP 22483) as a service lane, however Land Information New Zealand (LINZ) has confirmed the legalisation never occurred. The lane continued to be held in fee simple by Auckland Council for no specified purpose. AT has confirmed the property is not an AT asset.

34. Following a purchaser enquiry from the adjoining landowner, which owns all the surrounding properties bordering the lane, a review by AT and council departments determined that Nuffield Lane may be disposed of. Subsequent discussions determined that an 834m² area should remain in council ownership as a service lane, and that the northern 155m² area of Nuffield Lane can be progressed for potential disposal.

35. Due to the current configuration and use, no alternate council use or future development is possible. All the adjacent properties in the surrounding block are owned by a single owner, which is interested in purchasing the approximately 155m² northern portion of the Lane (refer to Figure 7 and 8 in Attachment A to this report).

36. The AUP zoning is Road. The entirety of Nuffield Lane (Allot 31 Sec 11 and Lots 36 & 37 DP 22483) has a 2021 council rating valuation of $1,160,000. Subject to approval by the committee, a registered valuation for the subject 155m² area will be undertaken as part of any disposal process.

37. The property is subject to offer back obligations to the former owner in accordance with s40 of the Public Works Act 1981.

Tauākī whakaaweawe āhuarangi

Climate impact statement

38. The proposed disposal of 84 (part) Hobsonville Road, 1 Levene Place and Nuffield Lane (part) is likely to lead to land use changes.

39. The legalisation and construction of the of pedestrian/cycling path adjacent to 21 Newton Road will lead to land use changes and carbon emissions. It is likely the demolition of the building at 21 Newton Road will result in carbon emissions.

40. While it is acknowledged that any form of construction and development can increase carbon emissions, the proposed disposal of these properties can support or occur in conjunction with the planned construction of shared pathways/cycleways in Hobsonville and Newton and support the rejuvenation of the Newmarket business area.

41. The entirety of Nuffield Lane (Allot 31 Sec 11 and Lots 36 & 37 DP 22483) is in a flood prone area and council’s Healthy Waters department advises that stormwater catchpits located in the property will need to be transferred to the new owner in the event the subject portion is approved for disposal.

42. The subject four properties presented in this report are not coastal properties and are not 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

43. Council’s Value for Money team and Eke Panuku have provided advice to all relevant council departments and CCOs regarding 1 Levene Place. The advice confirmed that no alternate council use is possible for 1 Levene Place and that the property should be offered back to the former owner as soon as possible.

44. All relevant council departments and CCOs have been consulted on the proposed disposal of 84 (part) Hobsonville Road, 21 Newton Road, and Nuffield Lane (part).

45. The entirety of Nuffield Lane was originally investigated for potential disposal. Following discussions with AT and the adjoining landowner, only the northern 155m² area of Nuffield Lane is now proposed for disposal. The remaining 834m² area is to be retained by council in the immediate future for the existing service it provides.

46. Council’s Heritage team has highlighted that a number of buildings adjacent to Nuffield Lane are within the AUP Newmarket Business Special Character Area Overlay.

47. No other substantive feedback was received in response.

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

Local impacts and local board views

48. The Upper Harbour Local Board supports the disposal of 84 (part) Hobsonville Road (resolution number: UH/2021/116).

49. Advice has been provided to the Maungakiekie-Tamaki Local Board regarding 1 Levene Place. The advice confirmed that no alternate council use is possible for 1 Levene Place and that the property must be offered back to the former owner. No feedback was received in response.

50. The Waitematā Local Board supports the disposal of 21 Newton Road and Nuffield Lane (part only) (resolution number: WTM/2022/58).

Tauākī whakaaweawe Māori

Māori impact statement

51. Advice has been provided to 19 iwi entities regarding council’s requirement to offer back 1 Levene Place to the former owner and that should any issues of cultural significance be received, that information will be provided to the former owner.

52. Nineteen mana whenua iwi authorities were contacted for site-specific feedback regarding 84 (part) Hobsonville Road, 21 Newton Road and Nuffield Lane (part). This engagement sought to understand if there are any issues of cultural significance associated with the properties.

53. Eke Panuku received a notification of cultural significance from Te Runanga o Ngāti Whātua regarding 84 (part) Hobsonville Road. Eke Panuku has acknowledged the notification and confirmed its interests have been noted on the property files. Eke Panuku has further discussed with Te Runanga o Ngāti Whātua how council can recognise the significance, it has been confirmed there is no further interest beyond noting the cultural significance as part of the decision-making process.

54. No other notifications of cultural significance were received in response.

Ngā ritenga ā-pūtea

Financial implications

55. Should the disposal of the subject four properties be approved, the proceeds of sale will contribute to the asset recycling targets set in the 10-year (2021-2031) Recovery Budget by providing the council with an efficient use of capital and prioritisation of funds to achieve its planned activities and projects.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

56. As the successor to the former Auckland City Council, Auckland Council has contractual offer back obligations to the former owner of 1 Levene Place as the property is no longer required for transport purposes. Legal advice received recommends that an offer back to the former owner proceed immediately.

Ngā koringa ā-muri

Next steps

57. Subject to the approval by the Finance and Performance Committee, the terms and conditions of the divestment of 84 (part) Hobsonville Road, 1 Levene Place, 21 Newton Road and Nuffield Lane (part) will be approved under appropriate financial delegation.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Images	17

Ngā kaihaina

Signatories

Authors

Anthony Lewis - Senior Advisor, Portfolio Review, Eke Panuku Development Auckland

Matt Casey – Team Leader, Portfolio Review, Eke Panuku Development

Authorisers

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

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

19 May 2022

Auckland Council Group and Auckland Council Quarterly Performance Report for the nine months ending March 2022

File No.: CP2022/05725

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 Long-term Plan 2021-2031 (the Recovery Budget) for the nine months to 31 March 2022.

Whakarāpopototanga matua

Executive summary

2. The results for the nine months to 31 March 2022 continue to demonstrate that the pressures anticipated in our Recovery Budget have materialised.

3. Auckland started the third quarter of its financial year in the orange setting of the COVID-19 Protection Framework but with the emergence of the Omicron variant, the city moved to a red setting on 23 January for the remainder of the quarter. The resulting restrictions, and high levels of isolation and illness once Omicron took hold, resulted in lower use of our facilities and transport usage, which in turn impacted revenues. In addition, the COVID-19 restrictions and illnesses affected almost all capital works and affected the group’s performance and our ability to deliver services.

4. Coming on top of the effects of the COVID-19 pandemic lockdown in the first six months of the financial year, the further restrictions resulted in capital spend of $1.481 billion for the nine months to the end of March, which was down $250 million on the same period last year, 74 per cent of the $2 billion budget for the period.

5. Despite being under the COVID-19 Protection Framework in the third quarter, which allowed greater freedom than the previous Alert Level settings, high levels of illness, isolation and caution resulted in lower use of our facilities and public transport, which in turn impacted revenues. This means that our performance for quarter three followed a similar trend to the first half of the year.

6. The more substantive economic conditions such as the global and local supply chain delays, increased construction costs, labour shortages, higher inflation, increased interest rates and a softening in the property sector all impacted on our results.

Group performance

7. Capital investment was $1.5 billion, a 74 per cent delivery of the $2 billion budget. The COVID-19 restrictions and impacts, both lockdowns in the first six months and Omicron illnesses in quarter three adversely affected almost all capital works including projects such as the City Rail Link and Central Interceptor. Despite this, the Waikato 50MLD drought project was moved into service and became fully operational during the third quarter. In addition, the construction of the Waikato boost pump station drought project was completed with commissioning ahead of schedule.

8. Net debt increased by $227 million to help fund capital investment. As part of our ongoing commitment to sustainable finance initiatives, council migrated an existing $200 million standby bank facility into its first sustainability-linked facility. Council also executed its first sustainability linked derivative (interest rate swap) which provides cover for $120 million.

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

10. Direct revenue was $19 million unfavourable against budget, with areas such as public transport and parking and enforcement, significantly below budget. In addition, water revenues in quarter three have not recovered from the impact of the drought in quarter one. The pandemic restrictions and illnesses impacted community services, and visitor or attendance numbers, reducing revenue from events and community facilities.

11. Direct expenditure was $81 million favourable to budget. This was mainly driven by work programme delays as well as reduced costs of service related to public transport and cancelled or postponed events.

12. There was a year-to-date increase of 443 full-time equivalent employees (FTE) across the council group. Much of the increase related to the filling of prior period vacancies. In addition, new roles were added in the sustainability area; to support the national policy statements on urban development; freshwater management; and the three waters reform programme. Parks, sports and recreation had a large seasonal increase to support the summer season in our parks – this FTE is expected to reduce in quarter four.

Auckland Council performance

13. Capital expenditure for the nine months to 31 March was $200 million which was 59 per cent of budget. This was mainly due to construction delays as the result of restrictions, supply chain issues and finding suitably skilled staff.

14. Direct revenue was $9 million favourable to budget with regulatory fee revenue $21 million higher than budget, driven by both higher volumes and increased complexity of consents.

15. Direct operating expenditure was $63 million favourable to budget. Most of the underspend to date was due to lockdown restrictions and Omicron illness causing delays and ongoing labour market constraints.

16. At 31 March 2022, the council had achieved $83.5 million (or 93 per cent) towards the
$90 million Recovery Budget savings target. $32.1 million of this relates to one-off cost reductions and $51.4 million are ongoing cost reductions.

17. A total of 24 of the council’s 70 performance measures were updated this quarter: 50 per cent (12) were achieved or substantially achieved and 50 per cent (12) 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 nine months ended 31 March 2022.

Horopaki

Context

18. 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.

19. 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).

20. Representatives of the substantive council-controlled organisations (CCOs) and Ports of Auckland’s’ boards, chief executives and chief financial officers present their 31 March 2022 quarterly results at the 24 May 2022 CCO Oversight Committee.

Tātaritanga me ngā tohutohu

Analysis and advice

21. 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

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

23. As well as the direct impact of lockdowns, illness 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.

24. Capital investment was $1.5 billion, a 74 per cent delivery of the $2 billion budget. This was an increase in delivery compared to quarter two’s 71 per cent. The year-to-date under delivery was mainly the result of construction activities being suspended or slowed because of COVID-19 restrictions.

25. The largest underspends were at Auckland Council, Auckland Transport and Watercare. The main Auckland Council projects affected by delays were stormwater asset renewals, the WorkSmart project and land acquisition. The main Watercare projects that were affected by the delays were the Central Interceptor and the Huia1 and Nihotupu Replacement projects. Auckland Transport projects that were affected by the delays were the Asset Management programme, Operational programme, Matakana Link Road and Huapai Improvement project.

26. Net debt increased by $227 million to help fund capital investment, which was under budget due to the capital underspend. Auckland Council converted an existing $200 million standby bank facility into its first sustainability linked facility and, also executed its first sustainability linked derivative (interest rate swap) for $120 million, as part of its ongoing commitment to sustainable finance initiatives.

27. Direct revenue was $19 million or 1 per cent 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. The pandemic restrictions, illness and behavioral changes also impacted community services, and visitor or attendance numbers, reducing revenue from events and community facilities.

28. Direct operating expenditure was $81 million or 4 per cent favourable to budget. This was mainly driven by work programme delays and reduced costs to service due to cancelled or postponed events and delayed repairs and maintenance.

29. There was an increase of 443 full-time equivalent employees (FTEs) across the group since 30 June 2021. Auckland Council accounted for an increase of 185 FTEs mainly due to filling previously vacant positions and additional FTEs for new climate change roles. Watercare’s FTEs increased by 115 due to filling vacancies, gearing up for the Three Waters Reform programme and the hiring of summer interns.

30. City Rail Link Limited’s tunnel boring machine (TBM) was dismantled at Aotea Station and transported back to Mount Eden where it was being reassembled. The TBM will be relaunched in quarter four to commence the second drive towards Aotea Station. Works to construct the remaining portions of the North Auckland Line rail connection structures at Mount Eden commenced.

Summary of overall Auckland Council quarterly performance

31. Capital expenditure was $200 million which was 59 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 illness and finding suitably skilled staff.

32. Direct revenue was $9 million or 3 per cent favourable to budget with regulatory fee revenue $21 million higher than budget, driven by both higher volumes and increased complexity of consents.

33. Direct expenditure was $63 million or 6 per cent 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 lower repairs and maintenance, and a lower requirement for outsourced works. Employee benefits was $13 million favourable to budget due to tight labour market conditions, limiting the ability to find suitable staff.

34. A total of $83.5 million (or 93 per cent) towards the $90 million Recovery Budget savings target has been achieved. $32.1 million of this relates to one-off cost reductions and $51.4 million are ongoing cost reductions.

35. All key waste programmes and water quality programmes are on track including the safe networks programme where sampling investigations are still limited by COVID-19 and high staff turnover of external contractors.

36. A total of 24 of the council’s 70 performance measures were updated this quarter, of which 50 per cent (12) were achieved or substantially achieved. Stormwater have been consistently performing well and achieved all five measures even with the significant storm event in late March that saw 600 requests for service alone. Local Community Services were significantly impacted by COVID-19 and did not meet their targets. Regional Community Services provided alternative solutions to access library services such as e-collections and click & collect. Regulatory was impacted by COVID-19 restrictions and illness, resourcing challenges and increased building and resource consent volumes resulting in three measures being achieved. Despite this customer satisfaction is still above target.

37. The Auckland Council Group statutory results nine months ending 31 March 2022 have been prepared in accordance with applicable financial reporting standards (Attachment C).

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

Tauākī whakaaweawe āhuarangi

Climate impact statement

39. 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

40. The group quarterly performance report reflects the results of the group for the nine months ended 31 March 2022. 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

41. 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.

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

Tauākī whakaaweawe Māori

Māori impact statement

43. Māori outcomes are a group and council strategic focus area. Attachments A and B provide key information and progress of delivery on the agreed programmes for the group and the council respectively.

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

Ngā ritenga ā-pūtea

Financial implications

45. 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

46. 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.

47. 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 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 new opportunities. Further, we have systems and processes in place to ensure that staff can work safely on our premises, can work remotely where possible, and are supported to cope with the pressures that COVID-19 brings.
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.	Auckland Council management is implementing many measures to improve talent retention and attraction such as recruitment support, improving our value proposition and implementing talent management.
Growing inflationary pressures and supply chain challenges These will continue to affect project timelines and costs as well as costs of outsourced works contracts such as public transport, facilities maintenance etc.	This is being partially mitigated through early engagement with suppliers, more advanced planning of projects 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.
Softening in the property market Decreases in property prices are likely to affect the timeframes of our asset recycling programme and reduce our ability to achieve those targets when planned in the short term. This, in combination with the increase in interest rates, inflation and supply chain pressures, is making development opportunities which were feasible six months ago, uneconomic. As a result, there is a risk that some conditional agreements will not become unconditional.	Management is focussing on the larger opportunities where there is likely to be less volatility given the type of potential purchasers.

Risk

Mitigation

COVID-19 variants

The continuing presence of COVID-19 variants 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 new opportunities.

Further, we have systems and processes in place to ensure that staff can work safely on our premises, can work remotely where possible, and are supported to cope with the pressures that COVID-19 brings.

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.

Auckland Council management is implementing many measures to improve talent retention and attraction such as recruitment support, improving our value proposition and implementing talent management.

Growing inflationary pressures and supply chain challenges

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

This is being partially mitigated through early engagement with suppliers, more advanced planning of projects 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.

Softening in the property market

Decreases in property prices are likely to affect the timeframes of our asset recycling programme and reduce our ability to achieve those targets when planned in the short term. This, in combination with the increase in interest rates, inflation and supply chain pressures, is making development opportunities which were feasible six months ago, uneconomic. As a result, there is a risk that some conditional agreements will not become unconditional.

Management is focussing on the larger opportunities where there is likely to be less volatility given the type of potential purchasers.

Ngā koringa ā-muri

Next steps

48. CCO and Ports of Auckland will present their nine-month results at the CCO Oversight Committee on 24 May 2022.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Auckland Council Group Quarterly Performance Report 31 March 2022	27
b ⇩	Auckland Council Quarterly Performance Report 31 March 2022	47
c ⇩	Auckland Council Group Statutory Financial Report 31 March 2022	75
d ⇩	Auckland Council Group reconciliation of management to statutory results 31 March 2022	83

Ngā kaihaina

Signatories

Authors

Karuna Dahya - Manager Group Performance Reporting

Tracy Gers - Group Accounting & Reporting Manager

Kent Annear - Senior Group Performance Advisor

Authorisers

John Bishop - Group Treasurer

Ross Tucker - General Manager, Financial Strategy and Planning

Nicola Mills - General Manager Financial and Business Performance

Peter Gudsell - Group Chief Financial Officer

Finance and Performance Committee

19 May 2022

Council Group Insurance Renewal 2022

File No.: CP2022/06184

Te take mō te pūrongo

Purpose of the report

1. To seek approval of the proposed council group insurance programme for 2022-2023.

2. To request delegation for the final placement of the insurance policies to the Group Chief Financial Officer.

Whakarāpopototanga matua

Executive summary

3. In the confidential agenda, there is a report that:

· seeks approval of the indicative 2022-2023 group insurance renewal

· updates progress on the assessment of options for insurance arrangements moving forward.

4. That report is in the confidential section of the agenda, as it contains details of the proposed insurance strategy, and policies and programmes for which terms and costings are being sought from and being negotiated with the insurance market.

5. The council group’s annual insurance programme expires on 30 June 2022.

6. Insurance market conditions remain challenging. In addition to COVID-19, climate change and associated weather events are placing upward pressure on premiums and impacting the terms of the insurance coverage.

7. Renewal process preparation for the upcoming renewal commenced in December 2021. The main activities undertaken include:

· policy reviews

· asset data valuations and risk surveys

· renewal submissions and remarketing of the group insurance programme.

8. Some policies have been re-assessed for the 2022-2023 renewal.

9. It is proposed to no longer purchase cyber insurance and environmental liability. This has been discussed and endorsed with the relevant general managers and subject matter experts. Watercare and Auckland Transport may choose to continue to purchase these insurances separately.

10. The Reserve Bank is currently of the view that a self-insurance fund (SIF) requires an insurance licence. We are in discussion with the Reserve Bank to have them review their decision. These discussions are led by the chair of the Insurance Management Steering Group.

11. Phase two of the cumulative loss modelling study is currently underway. The project has experienced a delay in phase two renewal related deliverables; however, the deliverables are still expected to be available in time to inform the overall 2022-2023 insurance renewal decision-making.

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

a) note that there is a confidential report included in the agenda on the approval of the insurance programme for 2022/2023.

Horopaki

Context

12. The council group’s insurance policies are due to expire on 30 June 2022.

13. The proposed insurance renewal will be considered by the Audit and Risk Committee for oversight and review on 17 May 2022.

14. The final terms and premiums are presently being negotiated with insurers. It is recommended that the committee delegate final placement of the insurance policies to the Group Chief Financial Officer.

Tātaritanga me ngā tohutohu

Analysis and advice

Market Update

15. Insurance market conditions remain challenging. The impacts of climate change, COVID-19 and recent domestic and global weather events are placing upward pressure on premiums.

16. Asset valuations have increased sharply as a result of new assets coming into service and increasing construction costs resulting in increased replacement asset values. This trend is likely to continue in the medium term, due to supply constraints and increasing inflation.

Renewal process 2022/2023

17. Preparation for the upcoming renewal commenced in December 2021. The following activities have been undertaken:

· policy reviews

· continuous improvement on data integrity for property assets

· recent asset valuations from external valuers

· asset risk surveys for 16 group assets

· renewal submissions and remarketing of the group programme to local and overseas markets

· progress on the establishment of a self-insurance fund.

Proposed changes

18. Some changes to policies have been proposed for the 2022-2023 renewal.

19. It is proposed to no longer purchase cyber insurance. This has been discussed with and endorsed by the Director of ICT.

20. We are of the view that the insurance coverage available in the market is limited and the $10 million loss limit may not be adequate. It is highly possible that the policy would not respond to an event due to the restrictive wording. The view is that the funds used for premium spend on cyber insurance are better directed toward further improvements in ICT security (such as those achieved through the security investment in the Cloud project).

21. Note that the CCOs who operate separate IT systems (Auckland Transport and Watercare) may choose to continue to purchase cyber insurance separately.

22. It is also proposed to no longer purchase environmental liability insurance. This has been discussed and endorsed with the General Manager Resilient Land and Coasts and the Manager Closed Landfills

23. For Auckland Council, the cover is purchased to cover the liability risk from contaminated landfills. The level of disclosure required to insurers and the restrictions in coverage make it highly possible that the policy would not respond to an event.

24. Note that some CCOs may choose to continue to purchase this insurance depending on their environmental liability risk.

25. In addition, it is planned to change the above-ground fire loss limit due to the updated fire loss modelling work undertaken in the first quarter of 2022.

Self-Insurance Fund (SIF)

26. Planning is still underway for the establishment of the SIF and the procurement of the fund's investment manager.

27. Oversight arrangements for the self-insurance fund have been confirmed through the establishment of the Insurance Management Steering Group (IMSG). A copy of the IMSG Terms of Reference is attached as Attachment A.

28. The Reserve Bank is currently of the view that a SIF requires an insurance licence. The requirements of an insurance licence (e.g. obtaining a credit rating, appointing an actuary, separate financial statements) would significantly add to the administrative costs of the SIF and make the SIF uneconomic.

29. We are currently in discussions with Reserve Bank in an effort to have them review their decision. These discussions are led by the chair of the IMSG.

Other changes from 1 July 2022

30. At present, the insurance and claims budget covers small losses on policies below the current deductibles. These costs will now be met by the relevant council business units who will have their own budgets as appropriate for these types of events and losses.

31. Management of the below deductible claims will remain with the Insurance and Claims team.

Cumulative Loss Modelling

32. Phase two of the study is currently underway. This includes a refresh of asset datasets and modelling of the potential losses from flood and earthquake shaking hazards on Auckland Council Group assets.

33. The results from this modelling, to inform the 2022-2023 insurance renewal, will be available from mid-May 2022.

Tauākī whakaaweawe āhuarangi

Climate impact statement

34. No direct climate implications arise from this information report. However, climate change response is a focus for insurers who are applying increased scrutiny to the environmental practices of high-risk industries

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

35. Representatives from all the CCOs and the council continue to work collaboratively through the insurance leadership group to complete the renewal and ensure adequate risk management.

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

Local impacts and local board views

36. The placement of insurance for the council group is a region-wide issue and not specific to a particular local board, and no local boards are specifically impacted by this matter. Accordingly, there has not been any consultation undertaken directly with local boards.

Tauākī whakaaweawe Māori

Māori impact statement

37. The council group insurance programme extends to 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 (formerly the Parakai Recreation Reserve Board).

Ngā ritenga ā-pūtea

Financial implications

38. The overall indicative group premium is within the anticipated budget provisioned for year 2022-2023. Negotiations are underway to refine and firm up terms to secure the most cost-effective arrangements.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

39. The indicative insurance programme is aligned with the council’s risk profile and appetite. All efforts have been taken to manage the risk of incomplete or inaccurate information. Additional efforts to work with key internal stakeholders (for example finance, asset management) has improved the robustness of data and information.

Ngā koringa ā-muri

Next steps

40. Following consideration and approval by the Finance and Performance Committee, we will continue to work with our broker to finalise placements. It is proposed that the final insurance placement is delegated to the Group Chief Financial Officer.

Ngā tāpirihanga

Attachments

There are no attachments for this report.

Ngā kaihaina

Signatories

Author

Varsha Prasad - Senior Insurance and Claims Advisor

Authorisers

John Bishop - Group Treasurer

Peter Gudsell - Group Chief Financial Officer

Finance and Performance Committee

19 May 2022

Summary of Finance and Performance Committee information memoranda and briefings, including the Forward Work Programme - 19 May 2022

File No.: CP2022/04066

Te take mō te pūrongo

Purpose of the report

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

2. To tūtohi / 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
29/4/2022	Progress update on the development of the Business Improvement District (BID) Policy (2022) (Kaupapa Here ā-Rohe Whakapiki Pakihi) – Attachment B

5. The following workshops have taken place:

Date	Workshop/Briefing
13/4/2022	Finance and Performance Committee workshop (Annual Budget 2022/2023) – confidential, no attachment
13/4/2022	Finance and Performance Committee workshop (Annual Budget 2022/2023) – confidential, no attachment
4/5/2022	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Regional Feedback), - Attachment C
4/5/2022	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Climate) – Attachment D
4/5/2022	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Waste) – Attachment E
11/5/2022	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Capex prioritisation) – confidential, no attachment
11/5/2022	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Capex prioritisation) – confidential, no attachment
11/5/2022	Finance and Performance Committee workshop (Business Improvement District [BID] Policy) – Attachment F

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

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

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

b) tūtohi / receive the Summary of Finance and Performance Committee information memorandum and briefings as at 19 May 2022.

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Finance and Performance Committee - forward work programme	91
b ⇨	Progress update on the development of the Business Improvement District (BID) Policy (2022) (Kaupapa Here ā-Rohe Whakapiki Pakihi), 29 April 2022 (Under Separate Cover)
c ⇨	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Regional Feedback), 4 May 2022 (10.00am) (Under Separate Cover)
d ⇨	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Climate), 4 May 2022 (11.45am) (Under Separate Cover)
e ⇨	Finance and Performance Committee workshop (Annual Budget 2022/2023 – Waste), 4 May 2022 (3.30pm) (Under Separate Cover)
f ⇨	Finance and Performance Committee workshop (Business Improvement District [BID] Policy), 11 May 2022 (1.45pm) (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

19 May 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: Auckland Council Group and Auckland Council Quarterly Performance Report for the six months ending December 2021 - 17 March 2022 Link to 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: CONFIDENTIAL: Auckland Film Studios budget update – February 2022 – 8 February 2022 Link to decision Sport and Recreation Facility Investment Fund – Budget update – 17 March 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: Auckland Council Group and Auckland Council Quarterly Performance Report for the six months ending December 2021 - 17 March 2022 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) 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 six months ending December 2021 - 17 March 2022 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. 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: 4 Blomfield Spa, Takapuna – s138 Local Government Act 2022 consultation – 17 March 2022 Link to decision	As required
Funding and Levies (including Auckland Regional Amenities Funding Board, Museum of Transport and Technology and Auckland War Memorial Museum) Manager CCO/ External Partnerships team	Statutory process	Approve annual funding levies for Auckland Regional Amenities Funding Board (April [Governing Body]); Museum of Transport and Technology (April [Governing Body]); and Auckland War Memorial Museum (April [Governing Body]) Receive presentations from amenities (July) Progress to date: Consideration of funding contributions to regional cultural and safety amenities 2022/2023, 28 April 2022 Link to decision
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 (July) · 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: Annual Budget 2022/2023: Rating of Whenua Māori Changes to Financial Policies – 8 December 2021 Link to decision Link to Governing Body decision Significance and Engagement Policy 2022 – 24 February 2022 - Governing Body 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 the Forward Work Programme – Finance and Performance Committee – 17 March 2022 Link to decision			Review work programme				Review work programme

Updated: 13 May 2022

Finance and Performance Committee

19 May 2022

Summary of Confidential Decisions and related information released into Open

File No.: CP2022/04241

Te take mō te pūrongo

Purpose of the report

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

Whakarāpopototanga matua

Executive summary

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

3. The following reports and minutes can now be released:

Date of Decision	Subject
17/6/2021	Finance and Performance Committee, 17 June 2021 – Confidential agenda report Note: Redactions have been made to this document as the withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities under section 7(2)(h) of the Local Government Official Information and Meetings Act 1987.
17/6/2021	Finance and Performance Committee, 17 June 2021 – Confidential minutes Note: Redactions have been made to this document as the withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities under section 7(2)(h) of the Local Government Official Information and Meetings Act 1987.
29/7/2021	Finance and Performance Committee, 29 July 2021 – Confidential agenda report Note: Redactions have been made to this document as the withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities under section 7(2)(h) of the Local Government Official Information and Meetings Act 1987.
29/7/2021	Finance and Performance Committee, 29 July 2021 – Confidential minutes Note: Redactions have been made to this document as the withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities under section 7(2)(h) of the Local Government Official Information and Meetings Act 1987.

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

Ngā tūtohunga

Recommendation/s

That the Finance and Performance Committee:

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

Ngā tāpirihanga

Attachments

No.	Title	Page
a ⇩	Finance and Performance Committee, 17 June 2021 – Confidential agenda report	99
b ⇩	Finance and Performance Committee, 17 June 2021 – Confidential minutes	119
c ⇩	Finance and Performance Committee, 29 July 2021 – Confidential agenda report	121
d ⇩	Finance and Performance Committee, 29 July 2021 – Confidential minutes	173

Ngā kaihaina

Signatories

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

Finance and Performance Committee

19 May 2022

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

That the Finance and Performance Committee

a) exclude the public from the following part(s) of the proceedings of this meeting.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution follows.

This resolution is made in reliance on section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public, as follows:

C1 CONFIDENTIAL: Council Group Insurance Renewal 2022

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

Ground(s) under section 48(1) for the passing of this resolution