Decision digest | Finance and Performance Committee

17 March 2016

Funding Aucklanders’ favourite things and a robust look at financing

The council’s Finance and Performance Committee agreed funding for some of Auckland’s best loved amenities, considered savings and financing opportunities with reports on amenities funding, swimming pool pricing policies and financing all featuring.

The agenda is available on Auckland Council’s website and minutes will be added once confirmed. This meeting was alsowebcast on the council’s website and items are available on demand.

Items 1-6 and 8 are administrative items.

Item 7: Extraordinary business

Mayor Len Brown announced Auckland received a special mention in the Lee Kuan Yew award. The winning city was Medillen in Colombia. Other special mentions were Sydney, Toronto and Vienna. The Office of the Mayor has issued a separate media release on this.

Item 9: Auckland Regional Amenities Funding Board

This item featured presentations from Auckland Philharmonia Orchestra and New Zealand Opera on their work programmes, key achievements and aspirations for the future.

Item 10: Disposals recommendations

The committee approved the sale of three non-service council properties.

1. A rooftop car park and a share in a ground floor car park at 146-152 Great South Road, Papakura.

2. Middleton Road – a long piece of landlocked stopped road that is currently leased to Winstone Aggregates for quarrying purposes.

3. Part of Horseshoe Bush Road, Dairy Flat, which is a stopped road currently leased to Waste Management NZ Ltd.

Panuku Development Auckland is required to identify properties from within council‘s portfolio that may be suitable for potential sale to a combined value of $40 million by June 2016. All sales are subject to the satisfactory conclusion of required statutory processes.

Item 11: Extending Auckland Council’s Guarantee of Eden Park Trust’s $40 million ASB bank facility

The committee approved the delegation to the Group Chief Financial Officer to approve the terms to extend Auckland Council’s guarantee for Eden Park Trust’s $40 million ASB Extendible Term Committed Cash Advances Facility Agreement to 1 October 2019.

The committee also approved delegation to the Group Chief Financial Officer to approve the terms of the Guarantee Side Deed to extend the principal repayment holiday of Auckland Council’s $6,544,550 loan to Eden Park Trust to 1 October 2019.

Item 12: Built Heritage Acquisition Fund: Vos Yard – six monthly progress report

The committee received a progress report on the restoration for Vos Yard, Wynyard Quarter.

In July 2015 the committee supported the proposal to commit $2.3 million of the Built Heritage Acquisition Fund for the restoration costs of the yard. The vision for the yard is to create an engaging visitor experience; the yard will also house the restoration and maintenance of wooden boats. The fundraising plan has been updated with a focus on capital fundraising and Sir Bob Harvey has accepted the role of patron of the project. Interim users have been engaged including various wooden boat owners working on individual small scale projects.

Item 13: Auckland Regional Amenities Draft Funding Plan 2016/2017

The committee approved the 2016/17 levy of $16,142,000 recommended by the Auckland Regional Amenities Funding Board. The main features of the draft plan include:

• Auckland Regional Helicopter trust (ARHT) did not make an application in 2015/16 but a part of the long-term plan did receive $450,000 towards the purchase of a new helicopter. ARHT applied to the funding board for 2016/17 for $694,828, the board has made a provisional allocation of $450,000.

• The Stardome Observatory and Planetarium and New Zealand Opera received a higher percentage increase than the other eight amenities. The board has proposed an additional sum of $180,000 towards implementing the first stages Strategic Review of Operations completed in 2014/15

• New Zealand Opera (NZO) is implementing its strategic plan, including developing new audiences by presenting ‘boutique’ operas. This work will help with revenue for NZO. The funding board has proposed an extra $100,000 to assist with this work.

Item 14: Museum of Transport and Technology – 2016/17 funding levy

The committee approved the 2016/17 levy of $13.1 million. It also asked the museum to focus on generating non-rates revenue and advised the museum that Auckland Council must agree council’s funding of any major capital redevelopment of the museum before and funding for future levy requests in respect of the master plan is considered.

Item 15: Auckland War Memorial Museum funding 2016/17: approval of the Annual Grant

The committee approved funding of $20,795,000. The committee also delegated the chair and deputy chair of the Finance and Performance Committee to agree the terms for funding the capital requirement for the Auckland War Memorial Museum.

Item 16: Impact assessment of the region-wide swimming pool pricing policy

In early 2013 the council introduced free casual swimming for young people aged 16 and under. This initiative was developed under a new region wide swimming pool pricing policy and its impact was presented to the committee today.

The report, which will now be circulated to local boards for their information and will be used to inform the 2017/18 Annual Plan process, highlights a variety of patterns at council-owned pools across the region.

Item 17: Contributions Policy

The committee agreed to provide a stronger connection between where development contributions are collected and spent by increasing the number funding areas for development contributions. It agreed to:

• Increase storm water funding areas from 22 to 36

• To increase parks funding areas from 4 to 26

• Adopt for consultation a proposal to amend to the funding areas for storm water, reserve acquisition, reserve development and community infrastructure in the Contributions policy and other minor amendments.

Item 18: Auckland Council Group half year financial results

The committee received the report on the financial results to 31 December 2015. The group generated an operating surplus before gains and losses of $948 million for the six months to 31 December 2015, compared to the phased budget of $864 million.

Total revenue excluding gains is ahead of budget by $41 million primarily due to higher volume of vested assets received than expected. Total expenditure excluding losses is lower than budget by $43 million primarily due to the timing of when expenditure is incurred. Overall financial performance is in line with the phased Long-term Plan.

Item 20: Treasury Management Policy

The committee approved a minor amendment to the Treasury Management Policy for the Local Government Act, Local Government Funding Agency, Crown Loan and foreign currency borrowings. Also approved was the amendment to the Treasury Management Policy to clarify that Treasury staff carry out the council’s treasury activity in accordance with the Treasury Management Policy

Item 21: Alternative Sources of Financing work programme

The committee was updated on the council’s programme of work relating to the two independent reports (from Cameron Partners and EY) on alternative sources of financing.

Certain options identified in the reports would require council to amend its Long-term Plan prior to any final decision making. An amendment would require a full audit and community consultation. Other opportunities identified in the reports are more operational and relate to corporate support functions. The forward programme of work includes: strategic procurement, corporate accommodation usage; corporate accommodation financing; the fleet and shared back office services.

Item 22: Diversified Financial Asset Portfolio and Insurance

The committee noted a report on the intention to examine utilising part of the Diversified Financial Asset Portfolio (DFAP) to fund current uninsured underground asset risks. Also the intention to liquidate the remaining DFAP balance to fund infrastructure investment and future high-level strategic plans to optimise Auckland Council’s groups insurance arrangements.

Item 23: Information and Communication Technology (ICT)

See separate media release.

Item 24: Reports Pending Status update

The committee received reports highlighting the status of previous Finance and Performance Committee resolutions. Status updates included: Vos Yard, Community Loans and Loan Guarantees, Auckland Regional Amenities Funding model review and Maori transformational shift and co-governance activity budget update.

ENDS

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