Decision digest | Finance and Performance
17 September 2015

Regional amenities, independent review of rail costs and Annual Report on finance agenda

A number of reports were presented and discussed at today’s Finance and Performance Committee. The following is a digest of decisions made.

The agenda is available on Auckland Council’s website and minutes will be added once confirmed. This meeting was also webcast on the council’s website and items will be available on demand within 24 hours of the meeting.

Items 1- 8 were administrative items. There was no public or local board input, and no extraordinary items.

Item 9: Auckland Regional Amenities Funding Act (ARAFA) Funding Model Review - Evaluation Report
On 26 February 2015, Auckland Council initiated a review of the funding model under the Auckland Regional Amenities Funding Act 2008 (the Act).

The review sought to determine whether the funding model remains fit for purpose and to identify any changes which would enhance its effectiveness in the context of Auckland Council’s establishment.

The committee previously endorsed seven different options, including the status quo option, for further evaluation which has now been completed.

The committee was asked to endorse the development of a framework for sustainable funding as the preferred option for each amenity. Sustainable funding would be defined within the context of the Act.

This framework would allow each amenity to develop medium term plans (suggested 3 to 5 years) which will enhance the annual decision-making process and consider:
• Appropriate levels of reserves and amenity,
• The level of surpluses an amenity needs,
• Outline planned levels of service and how projected needs will be met,
• The strategic outcomes that the amenity is looking to achieve.

The Auckland Regional Amenities Funding Board will lead the process to define what financial sustainability looks like for each amenity, and to develop and establish this framework.

Once the framework is established, the council would create a new funding principle under section 22 of the Act.

The committee agreed to endorse the development of a framework for sustainable funding as the preferred option and that council staff will continue to work with the Funding Board and the amenities to develop an implementation plan for the framework. The Funding Board will report back at a later date regarding costs and time frames.

The Evaluation Report is available online within the Finance and Performance agenda.

Item 10: Government Broadband Investment - Digital Enablement Plan
The committee was asked to endorse Auckland Council’s Digital Enablement Plan (the Plan) for submission to the Ministry of Business, Innovation & Employment (MBIE) in support of MBIE’s funding allocation process for broadband infrastructure.

In March 2015, MBIE announced $210 million of additional funding to extend Ultrafast Broadband (UFB), $100 million to extend the Rural Broadband Initiative (RBI), and $50 million to address mobile coverage black spots.

This funding would be allocated through a contestable process. As part of the funding allocation process, MBIE has invited local authorities to submit a Digital Enablement Plan by 18 September 2015.

This Plan outlines what a local authority would do to support the uptake and use of better broadband where it is made available.

It supports community enablement and business growth, drawing on existing activity from across the council family with a focus on access to broadband technology (including through libraries), supporting people to develop digital skills, and raising awareness to help people understand broadband and digital technology.

The undersupply of broadband infrastructure and services was out of scope of the Plan, however council continues to respond to this issue under the rural broadband work programme.

The committee agreed to endorse the Plan for submission to MBIE and for staff to work with the rural broadband working party to continue to develop Auckland Council’s rural broadband work programme.

The Auckland Digital Enablement Plan is available online within the Finance and Performance Committee agenda.

Item 11: Approval of and recommendation for adoption of the 2014/15 Annual Report and Summary Annual Report for Auckland Council and Group
The full Auckland Council Annual Report and Summary Annual Report for the year to 30 June 2015 were presented to the committee, for recommendation to the Governing Body to be adopted on 24 September 2015.

The report covers the financial and non-financial performance of council and the Group against budgets and operating targets set in the Annual Plan.

Highlights included:
· Operating surplus before gains and losses of $80 million,
· Gross debt levels below forecast at $7.3 billion,
· Asset value of $42.2 billion, increased by $2.3 billion from the prior year,
· Efficiency targets of $183 million met,
· Capital expenditure of approximately $1.5 billion invested in major infrastructure projects.

The committee noted the significant population growth in Auckland of approximately 132,000 people since the council was established in 2010, the investment in infrastructure needed to support this growth with $1.5 billion of capital expenditure and the increased demands on council’s services.

The committee agreed to recommend adoption of the full 2014/15 Annual Report and Summary Annual Report to the Governing Body.

Item 12: Budget Update
A presentation was made to update the committee on business as usual year end budget changes. No decisions were required.

Item 13: Rating small accommodation providers
A report was provided on rating for small accommodation providers which operate from residential properties, such as small bed and breakfast operations and private holiday homes that are available for rent for only part of the year. These are currently charged residential rates.

The report recommended that no change be made to the rating treatment of residential properties used for commercial accommodation purposes. There was no discussion and the item was passed.

Item 14: Procurement Strategy Implementation Update
A presentation was made to the committee about the implementation of Auckland Council’s Procurement Strategy, which detailed the approach, progress to date and roadmap for the next 12 months.

No decisions were required and the committee voted to accept the presentation.

Item 15: Independent Review of Operating Costs of the Rail Network in Auckland Compared to Wellington
This report presented an independent review of the operating costs of the rail network in Auckland compared to Wellington, as directed by the Governing Body in June 2015.

Mr Paul Callow, an independent consultant, completed the report and made a presentation summarising the key conclusions and recommendations. A copy of the full Rail Cost Review report isavailable online within the Finance and Performance Committee agenda.

No decisions were required on this item, with the committee agreeing to receive the independent review and to refer the report to the board of Auckland Transport.

ENDS

© Scoop Media