HuttCity_TeAwaKairangi_BLACK_AGENDA_COVER

 

 

Komiti Iti Mahere ā-Ngahurutanga / Mahere ā-Tau Long Term Plan/Annual Plan Subcommittee

 

 

17 May 2021

 

 

 

Order Paper for the meeting to be held in the

Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt,

on:

 

 

 

Monday 24 May 2021 commencing at 9.30am

 

 

Membership

 

 

Mayor C Barry (Chair)

Deputy Mayor T Lewis (Deputy Chair)                                                                                            

Cr D Bassett

Cr J Briggs

Cr K Brown

Cr B Dyer

Cr S Edwards

Cr D Hislop

Cr C Milne

Cr A Mitchell

Cr S Rasheed

Cr N Shaw

Cr L Sutton

 

 

 

For the dates and times of Council Meetings please visit www.huttcity.govt.nz

 

Have your say

You can speak under public comment to items on the agenda to the Mayor and Councillors at this meeting. Please let us know by noon the working day before the meeting. You can do this by emailing DemocraticServicesTeam@huttcity.govt.nz or calling the Democratic Services Team on 04 570 6666 | 0800 HUTT CITY

 


HuttCity_TeAwaKairangi_SCREEN_MEDRES

 

PURPOSE

To carry out all necessary considerations and hearings, precedent to the Council’s final adoption of Long Term Plans (LTP) and Annual Plans (AP) which give effect to the strategic direction and outcomes set by the Policy, Finance and Strategy Committee through setting levels of service, funding priorities, the performance framework and budgets.

 

Determine:

§  Development of a framework and timetable for the LTP and AP processes.

§  The nature and scope of engagement and public consultation required.

§  Statements to the media.

§  Such other matters as the Subcommittee considers appropriate and which fall within its Terms of Reference.

§  Informal engagement with the community, and the hearing of any formal public submissions.

§  Consideration of submissions on Hutt City Council’s Assessment of Water and Sanitary Services.

 

Consider and make recommendations to Council:

§  Levels of service, funding priorities, performance framework, budgets, rating levels and policies required as part of the LTP or AP, excluding any policies recommended to Council by the Policy, Finance and Strategy Committee.

§  Consultation Documents.

§  Council’s proposed and final LTP.

§  Council’s proposed and final AP.

§  Final content and wording, and adoption of the final Hutt City Council Assessment of Water and Sanitary Services.


 

Note:

Extract from the Controller and Auditor General’s October 2010 Good Practice Guide: Guidance for members of local authorities about the Local Authorities (Members’ Interests) Act 1968

 

Appointment as the local authority’s representative on another organisation

5.47         You may have been appointed as the authority’s representative on the governing body of a council-controlled organisation or another body (for example, a community-based trust).

5.48         That role will not usually prevent you from participating in authority matters concerning the other organisation – especially if the role gives you specialised knowledge that it would be valuable to contribute.

5.49         However, you could create legal risks to the decision if your participation in that decision raises a conflict between your duty as a member of the local authority and any duty to act in the interests of the other organisation. These situations are not clear cut and will often require careful consideration and specific legal advice.

5.50         Similarly, if your involvement with the other organisation raises a risk of predetermination, the legal risks to the decision of the authority as a result of your participation may be higher, for example, if the other organisation has made a formal submission to the authority as part of a public submissions process.

 

    


HUTT CITY COUNCIL

 

Komiti Iti Mahere ā-Ngahurutanga / Mahere ā-Tau
Long Term Plan/Annual Plan Subcommittee

 

Meeting to be held in the Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt on

 Monday 24 May 2021 commencing at 9.30am.

 

ORDER PAPER

 

Public Business

 

1.       OPENING FORMALITIES - Karakia Timatanga 

Kia hora te marino

Kia whakapapa pounamu te moana

He huarahi mā tātou i te rangi nei

Aroha atu, aroha mai

Tātou i a tātou katoa

Hui e Tāiki e!

May peace be wide spread

May the sea be like greenstone

A pathway for us all this day

Let us show respect for each other

For one another

Bind us together!

 

2.       APOLOGIES 

3.       PUBLIC COMMENT

Generally up to 30 minutes is set aside for public comment (three minutes per speaker on items appearing on the agenda). Speakers may be asked questions on the matters they raise.       

4.       CONFLICT OF INTEREST DECLARATIONS

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      

5.       Recommendations to Council |Te Kaunihera o Te Awa Kairangi - 24 May 2021

a)      Long Term Plan 2021-2031 - progressing decisions for Hutt City Community Facilities Trust (21/654)

Report No. LTPAP2021/2/120 by the Financial Accounting Manager     7

Chair’s Recommendation:

“That the recommendations contained in the report be discussed following the hearing of public submissions on 20 and 21 May 2021.”

 


 

b)      Council performance overview for the third quarter ended 31 March 2021 (21/436)

Report No. LTPAP2021/2/118 by the Head of Chief Executive's Office 36

Chair’s Recommendation:

“That the recommendation contained in the report be endorsed.”

                                           

c)      2021-2031 draft Long Term Plan - Submissions Analysis Summary (21/765)

Report No. LTPAP2021/2/119 by the Head of Strategy and Planning   98

Chair’s Recommendation:

“That the recommendations contained in the report be discussed following the hearing of public submissions on 20 and 21 May 2021.”

 

d)      Long Term Plan 2021-2031, progressing decisions related to Urban Plus Limited (21/653)

Report No. LTPAP2021/2/121 by the Senior Accountant                     130

Chair’s Recommendation:

“That the recommendations contained in the report be discussed following the hearing of public submissions on 20 and 21 May 2021.”

 

e)      Three Waters Investment Advice (21/706)

Report No. LTPAP2021/2/122 by the Strategic Advisor                        159

Chair’s Recommendation:

“That the recommendations contained in the report be discussed following the hearing of public submissions on 20 and 21 May 2021.”

 

f)       RiverLink Project Budget (21/762)

Report No. LTPAP2021/2/127 by the Project Manager Riverlink         221

Chair’s Recommendation:

“That the recommendations contained in the report be discussed following the hearing of public submissions on 20 and 21 May 2021.”

 


 

g)      Development and Financial Contributions Policy 2021-2024 (21/677)

Report No. LTPAP2021/2/123 by the Head of Strategy and Planning 253

Chair’s Recommendation:

“That the recommendations contained in the report be discussed following the hearing of public submissions on 20 and 21 May 2021.”

 

h)      Progressing decisions for the final Long Term Plan 2021–2031, Rating Policy (21/609)

Report No. LTPAP2021/2/124 by the Business Analyst - Rates            313

Chair’s Recommendation:

“That the recommendations contained in the report be discussed following the hearing of public submissions on 20 and 21 May 2021.”

 

i)       Progressing decisions for the final Long Term Plan 2021-2031, Financial Aspects (21/630)

Report No. LTPAP2021/2/125 by the Budgeting and Reporting Manager               341

Chair’s Recommendation:

“That the recommendations contained in the report be discussed following the hearing of public submissions on 20 and 21 May 2021.”

 

6.       QUESTIONS

With reference to section 32 of Standing Orders, before putting a question a member shall endeavour to obtain the information. Questions shall be concise and in writing and handed to the Chair prior to the commencement of the meeting.   

 

 

 

 

Kate Glanville

SENIOR DEMOCRACY ADVISOR

            


                                                                                       7                                                              24 May 2021

Long Term Plan/Annual Plan Subcommittee

06 May 2021

 

 

 

File: (21/654)

 

 

 

 

Report no: LTPAP2021/2/120

 

Long Term Plan 2021-2031 - progressing decisions for Hutt City Community Facilities Trust

 

Purpose of Report

1.    The purpose of this report is to provide further advice to Council in relation to the future of Hutt City Community Facilities Trust (CFT) and to progress decisions following the public consultation on the Draft Long Term Plan (DLTP) 2021-2031.

Recommendations

The Subcommittee recommends that Council:

(1)     notes the public consultation undertaken for the draft Long Term Plan 2021-2031  in regards to the future of Hutt City Community Facilities Trust (CFT), attached as Appendix 1 to the report ;

(2)     agrees in principle to proceed with the wind-up of CFT and the distribution of assets to Council on 30 June 2021;

(3)     directs officers to progress planning and preparation for the wind up of CFT and the distribution of assets to Council; and

(4)     considers any further guidance and direction to be provided to officers and CFT ahead of finalising decisions in regards to CFT.

 

Background

2.      Council established CFT in 2012 with the intention of increasing community involvement in the provision of sporting and other community facilities.

3.      Since its inception, the trust has successfully developed four community hubs – Walter Nash Centre (WNS), Koraunui Stokes Valley Community Hub (KSVCH), Naenae Bowling Centre (NBS) and RICOH Sports Centre (home of Fraser Park Sportsville). These facilities are all well used and highly valued in their communities.  WNS and KSVCH are both leased back to Council, while the other facilities are leased to community tenants.

4.      The total value of the assets owned by the Trust as at 30 June 2020 amounted to $41M. A revaluation of assets is underway ahead of the 30 June 2021 financial year end. As at 30 April 2021, total loans from HCC were $3.28M and cash held by CFT was $0.3M.

5.     Extract from the 2020 CFT Statement of Intent:

CFT was established by the Hutt City Council (Council) in August 2012 as a CCO to promote, develop, own, operate, and maintain recreational, leisure, and community facilities in Lower Hutt.

The main role of the CFT has been to develop and then maintain a range of fit-for-purpose, leisure, recreation and community facilities that are attractive to the residents and visitors of Lower Hutt.

In 2019 the trustees conducted a strategic review of the CFT’s future direction and concluded that while it will remain a landlord of its existing facilities, most day to day work to provide ongoing management for these is best conducted by Council staff as is future project management of new builds. The board concluded that CFT’s main focus will be to provide leadership in the identification, promotion and fundraising for new projects which support Council’s overall strategic objectives.

6.   In the Annual Plan 2020/21 process and the preparation of the Draft LTP 2021-2031 there were no projects planned for the future that would be delivered through CFT.

 

Draft Long term plan 2021-2031 public consultation on CFT future

 

7.      A report was presented to the LTP Subcommittee on 30 November 2020 entitled “Hutt City Community Facilities Trust – options for the future” (Report Number LTPAP2020/6/294). 

8.      The background to this report included a number of funding challenges for CFT which required Council to approve additional funding; in particular in regards to Ricoh Sports Centre (operated by Fraser Park Sportsville) and other asset maintenance/renewals related issues across CFT properties.

9.      External advice was sought from PWC about the options for CFT going forward.  The PWC report presented to the Subcommittee in November 2020 included the current state of play, options for the future and the advantages and disadvantages of the options.

10.    As a result of this advice, the Council resolved as follows:

Agreed to option 3 of the PwC report as the preferred option, being the transfer of the CFT assets to Council with CFT  retained as a non-active Trust for potential future use;

Agreed to include in the Draft LTP 2021-2031 for public consultation a proposal to transfer the assets from CFT to Council;

Noted that officers would progress further detailed assessment and planning in relation to option 3.

11.    The PWC advice was clear that a Council decision would be subject to a number of things, including

the venues continuing to be used for the benefit of the community,

there being no adverse tax consequences, and

public consultation supporting the proposal.

12.    Extract of content included in the Consultation Document of the draft LTP 2021-2031 for consultation:

Hutt City Community Facilities Trust

Council established the Hutt City Community Facilities Trust in 2012 with the intention of increasing community involvement in the provision of sporting and other community facilities. As a charitable trust, it was able to facilitate external fundraising for planned infrastructure projects, and trustees were all members of the local community.

Since its inception, the trust has successfully developed four community hubs – Walter Nash Centre, Koraunui Stokes Valley Community Hub, Naenae Bowling Club and RICOH Sports Centre (home of Fraser Park Sportsville) – which are all well used and highly valued in their communities. Walter Nash Centre and Koraunui Stokes Valley Community Hub are both leased back to Council, while the other facilities are leased to community tenants.

What we plan to do

Council is proposing that it take over responsibility and ownership for these four community facilities to gain efficiencies in the way they are run.

What do you think?

We have presented our proposed approach to addressing the future of the Hutt City Community Facilities Trust. However you may prefer a different approach. Use the feedback form to have your say on this proposal.

You can find more information on this in Council Controlled Organisations Section of the Draft Long Term Plan.

Public Consultation results

13.    There is no requirement to consult on a proposal to transfer the assets from CFT to Council. However in the interests of transparency, the proposal was included in the Draft LTP 2021-2031 for consultation. Table 1 provides a summary of these results. There was a high number of “Don’t know” responses (55%) however 35% of submitters supported the change whilst 10% did not support the change. There was some confusion about who the trust was and what their role is which is reflected in some of the detailed comments received. Appendix 1 provides details of commentary from the public.  

 

 


 

Table 1: Summary of engagement undertaken and feedback received to date

 

Further planning and consideration progressed ahead of Council decision

14.    Since the preparation of the initial advice by PWC in November 2020 there has been ongoing further consideration by CFT and Council officers, with PWC providing ongoing support and advice. This has included specifically consideration to the tax implications/risks, procedural steps required to implement a change of this nature and the operational planning aspects to be considered.

15.    CFT obtained independent legal advice in regards to the proposed change and shared this advice with Council officers.  As a result of this, CFT and Council officers have agreed that the most effective approach would be that the Trust is wound up rather than being retained as a non-active Trust. 

16.    A deed to wind up the Trust is being prepared with the key provisions being:

The Trust will wind up and properties and surplus assets of the Trust will be transferred to Hutt City Council. This is allowed under the Trust Deed.

Each property will transfer to Council without practical changes to the occupants or the current sponsorship agreements. Where the Council has ground leases to CFT and subsequent building leases from CFT to council, these will be surrendered back to Council. Where CFT has leases with 3rd parties they will remain in place with Council taking over as land lord for these leases.

Currently Squash New Zealand owns a portion of the Ricoh Centre. There are currently two means of dealing with this arrangement. Either Squash New Zealand continues to own the portion of the building and leases this to Council, or as per the current agreement CFT can buy this off Squash NZ for $1.00 after the 30th June 2021.

Any money held in maintenance funds by the Trust will be transferred to the Council. The Council will use these funds for their designated purposes. Any cash on hand held by the Trust will be used to pay down the balances of any loans made by Council to the Trust. 

The trustees shall take all reasonable steps to mitigate loss or liability. The Council Indemnifies the Trust and Trustees in relation to any liability including tax of any nature which arises as a consequence of the wind up and transfer.

The draft agreement is attached as Appendix 2.

 

Taxation risks

17.    On Council’s behalf, PwC has been in contact with both the Charities Commission and Inland Revenue Department with an outline of the winding up proposal for CFT.  Appendix 3 is a detailed memo prepared by PWC explaining the steps taken to assess the tax risks. In summary, the PWC advice concludes that the tax risk is “low”.  A copy of the Inland Revenue Department (IRD) indicative view is attached as appendix 4 to this report.

18.    To further mitigate tax risks, a binding ruling from the IRD is being progressed ahead of the planned wind up date of 30 June 2021. There are some risks that the binding ruling may not be completed by 30 June 2021. Council could choose to delay the wind up of CFT until this is received from IRD. Officer advice is to proceed with the wind-up and transfer of assets regardless; this is based on the assessment completed by PWC regarding overall low risk.

19.    Note that the PWC Director Phil Fisher will be in attendance at the meeting to support any queries in regards to the taxation risks.  

 

CFT Board engagement and feedback

20.    John Strahl, Chairman of the CFT board will attend the LTP Subcommittee meeting to provide the Boards view. To-date there has been ongoing engagement and planning with the CFT Board.

 

Continuing use and services at the facilities post 1 July 2021

21.    Under the proposal, all venues will continue to operate as they currently are into the future. A series of activities is planned to ensure a smooth transition, including meetings between the CFT Chair, the tenants and Council’s Asset management team, who will take over as ‘landlords’.  This includes meeting with the tenants each year to set an appropriate rent. Handover meetings are also being scheduled with all existing facility sponsors.

22.    Council’s Head of Parks and Recreation will continue to manage the relationship with Fraser Park Sportsville in relation to its operating grant.

23.    The CFT website will be retired, and relevant content will be transferred to HCC’s website.

24.    In regards to long-term management and maintenance, the facilities will be included in Council’s overall asset management approach.

 

Next steps

25.    This report seeks an in principal decision by Council to proceed with the wind-up of CFT and the transfer of assets to HCC. The report also seeks any further guidance and direction by Council to officers and CFT ahead of decisions being finalised.

26.    The final decision of Council about the wind of CFT is planned to take place on the 30 June 2021 after Council has adopted the Long Term Plan 2021-2031. The effective wind up date of CFT will be 30 June 2021 at 11:59pm.

27.    A report will be presented to 9 June 2021 LTP Subcommittee if required to further progress planning and final decisions on the 30 June 2021.

Climate Change Impact and Considerations

28.    The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.  There are no direct climate change impacts or considerations arising from this report other than those identified within the report.

Legal Considerations

1.   As set out in the body of this report and covered by the PWC advice. Council will need to ensure that matters addressed in this report are concluded before July 1. This includes:

1.   The surrendering of leases

2.   Advising tenants that Council is the new land lord

3.   Assignment of service/supply contracts to Council from CFT

4.   Assignment of any warranties to Council from CFT

5.   Assignment of Sponsorship agreements to Council

6.   Taxation and indemnities covered off.

Financial Considerations

29.    The revised and final SOI of CFT will be prepared based on the assumption that the Trust is wound up with effect 30 June 2021.All revenues and expenditures previously in CFT will transfer over to Council.

30.    There are no further financial considerations apart from those detailed in the report.


 

Appendices

No.

Title

Page

1

Appendix 1 - Draft LTP public submission process - detailed feedback collected in response to Community Facilities Trust question in Consultation Document

14

2

Appendix 2 : CFT Deed of Wind up - as at 7 May 2021

19

3

Appendix 3 : PWC advice: Hutt City Community Facilities Trust - proposed windup and distribution of assets

28

4

Appendix 4 : Inland Revenue Department indicative view re. Hutt City Community Facilities Trust

34

    

 

 

 

 

 

Author: Darrin Newth

Financial Accounting Manager

 

 

 

Author: Dominic Scott-Jones

Solicitor

 

 

 

 

 

 

Reviewed By: Jenny Livschitz

Group Chief Financial Officer

 

 

 

Reviewed By: Bradley Cato

Chief Legal Officer

 

 

 

Approved By: Andrea Blackshaw

Director Neighbourhoods and Communities

 


Attachment 1

Appendix 1 - Draft LTP public submission process - detailed feedback collected in response to Community Facilities Trust question in Consultation Document

 

Community Facilities Trust

Community

Community Facilities Trust

(321 responses)

Do you agree with the approach to addressing the future of the Hutt City Communities Facilities Trust

Yes

35%

No

10%

Don’t know

55%

 

 

Code: Community-CFT

Count of comments: 59

 

·    I do not believe that the community is actually getting the benefit from these services as they are poorly advertised.

·    Having a centralised body to manage social infrastructure like the trust is a great idea.

·    All I want is to take a pathway where spending will be done with existing funds.

·    I think the hubs (and more hubs) are very important.  I don't know enough about this to decide how they should be owned and run.  I think there could be a greater focus on the non-physical aspects of community connections e.g. websites, activities etc.  Physical facilities help with that and are definitely important but there are also other aspects of community connection, communication and development that council could support.

·    Agree with more facilities such as these. But unsure on the best approach for how they are managed.

·    Very supportive – essential.

·    One of the advantages of the current approach is that the facilities are run by their local communities.  I think it would be good if the council had an overview and looked for some cost savings, but the local trusts should be run by locals.

·    The public consultation with sports groups and community groups is a core council function, hence this needs to be done as part of the council planning operations. For council to invite proposals from interested stake holders that can inform council of the needs of the community. Unfortunately council vision can get brought back to functional needs of how to best provide community infrastructure for the budget available. Maybe this approach of engaging the community can help meet the council budget driven approach to priorities the existing limited expenditure, however I think we need to have a generational planned approach to public community facilities making Hutt City the best city to live in. Even surpassing Wellington making Hutt City the New Capital City of NZ. For council to step back and look at the goals of a great place to live and work then there will be creative solutions come out of the woodwork to provide community facilities. Look and Invercargill fundraising and building a new cancer hospital to meet community needs. How much more could our community build world class facilities for our community if they are given the vision to fund raise, build a user pays business plan and part rates funded community facility.

·    Trust seems to have focused on big bang infrastructure projects with an emphasis on competitive sports - we need to recognise that active recreation is more important for both mental and physical health and let competitive sports fund themselves more. Active recreation covers a greater sector of the population for much longer and does not require the same facility investment, much better returns for less investment.

·    I'm sure the communities can do this themselves - if they want to stop interfering in the lives of residents - This must all cost a lot of money.

·    It is a valuable tool for accessing gaming trust funds and sponsorships that won't otherwise come to council.

·    Make good use of those who have already gained experience in the management of these facilities!

·    With low level of funding it is better to do this.

·    The problem with this approach is it lets only those current in communities shape their future - not those that aspire to join those communities in future.  Lower Hutt is going to grow, and we need to ensure current residents don't focus on short-term status-quo maintenance to block transformative improvements that would benefit future communities. We're also becoming more diverse, and our communities must be open to change to accept new people coming in.

·    I agree. It is important to recognise Council has interests beyond rates, rats and rubbish, and that investing in people through facilities for art, culture, recreation, sport, etc, are very important, and not to be sacrificed when money is tight.

·    Linking the facilities in place is a great concept. It spread the population loadings at the same time investing and developing different areas of Hutt City. It’s a win win overall for the city.

·    It sounds good but I'm not sure exactly how this is being implemented.

·    Not needed and another waste of money.

·    I don't think council knows and understands enough in regards to communities so therefore falls short in this area.

·    Looking forward to have easy access and affordable community facilities

·    The plan provided wasn't clear what exactly you'd like to do. Libraries are so important and should be more invested in. I'm concerned with the cut back in hours. They are the community's living room, hub, place to relax and learn.

·    I don't see this as council’s role, and don't agree with rates being used to fund it.

·    Why does the Council need to be involved with all facilities. Is there going to be no clubs with their own facilities in the end. If not being managed efficiently and honestly by community groups then look at it again

·    Creating spaces for communities to come together and share what they are doing more across different sectors etc. for collaboration etc.

·    It is very important to keep these facilities local.

·    Takeover of Hutt City Facilities Trust should not be at a rate payers expense

·    Hubs have been beneficial. However although there is bilingual content in the plan, there is no mention of the HCC's responsibilities towards honouring Te Tiriti O Waitangi. Our libraries are outstanding. They provide a wide range of community services.

·    The current deficits of council’s recreation assets prove that this is not the best option. Utilising expert operators to manage these assets should be the preferred option.

·    The trust will have built strong relationships.  It's important that council work to build and maintain similar relationships

·    I am still unclear on the purpose of the responsibility being placed back with the Council.

·    Maybe an "advisory board" focussed on the purposes of the facilities would be useful giving community a voice

·    Get rid of community facilities trust.

·    We need affordable community facilities that ethnic communities and mainstream communities can enjoy.

·    CFT have help fund some amazing facilities with previous council and management. It should continue.

·    They need to be run by the community in order to best meet their needs.

·    We still need to find more of a balance to support all sports rather than the seemingly ad-hoc basis of support we currently have. Hopefully, the trust is a step in the correct direction.

·    Please learn from this mistake that cost ratepayers.

·    Seems to negate the main principle of building these facilities for the Council to take over ownership, and probably exclude the voice of the community from the running of these facilities and inevitably reduce service to these communities.

·    We think there is opportunity for hubs to be places of learning if they are resourced differently.  Hubs can be much more of a conduit to consultation, evaluation, and enabling and encouraging citizenship and greater participation with community.

·    Community hubs seem a very expensive way of providing benefit to a very small part of the community.  I don't know of any local people (rate payers) that use them at all, so I assume very few people use them a lot, but at great cost to the community rather than user pays.

·    Give community a chance to run the facilities.

·    We have enough facilities and amenities in Lower Hutt. Just manage them and that is fine. Thanks for listening to the public.

·    Creating and supporting opportunities for people to work comfortably from home or near home e.g. more local quiet co-working spaces with free WiFi, computers, printers etc. would be helpful. More free indoor play spaces for kids would also be great.  With active little ones and long periods of time when it's not great outside (expected to be increasingly the case with climate change) we could use more places for active play indoors.

·    Already we have lots of developers doing it and council should concentrate and maintaining the facilities at the current level.

·    I think council should stop increasing the rates and making investments. Just maintain the current assets in the sustainable way. It is not right to increase the rates and then pour that funds to new things.  We have sufficient facilities and amenities for the whole population in Lower Hutt.

·    I would like to see the re-establishment of community houses run by community groups, not council, and potentially handing over the management and delivery of hubs to the community. Re-instate community house funding and let communities go back to deciding on what is best for them.

·    Council have apportioned zero funds for Hutt Park. This park needs major investment in its playing surfaces with either an artificial pitch or sand based turf. The growth in usage with Touch, AFL and Football using it year round and massive growth in numbers can only have serious impact over the next decade. Stop investing so much at the Hutt Rec for a sport – rugby - that doesn't need that level of investment it gets with their sand based surface. A waste of money for a game played on top of the field.

·    I am absolutely puzzled by the ownership structure and the fact that HCC are leasing from it. Given what it has done why is it so unknown in Lower Hutt? It is practically invisible.  Further Fraser Park Sportsville is a dog.  It's aesthetically as mess and provides little to no provision for spectators come winter time. I am at a loss. The trust claims "Public/private partnerships can provide tremendous benefits to the investor as well as the community". With no evidence presented. Take it in house.

·    Simplify the ownership and administration of Council facilities.

·    Lower Hutt urgently needs to invest to mitigate future costs which could remove access to facilities.

 

 


Attachment 2

Appendix 2 : CFT Deed of Wind up - as at 7 May 2021

 

 

DRAFT Deed for the wind-up of the Hutt City Community Facilities Trust

 

Parties:

1.         Hutt City Council, 30 Laings Road, Lower Hutt, 5040 (HCC or Council)

2.         Hutt City Community Facilities Trust, 30 Laings Road, Lower Hutt, 5040 (CFT)

 

Background

A.      The CFT is a charitable trust that was established by the HCC in 2012 to enhance the health and well-being of Hutt City’s communities through promoting the effective and efficient provision, development and operation of community facilities throughout Hutt City. (the Purpose).

B.      Since the CFT’s formation it has been involved in the development, promotion and operation of the certain community facilities, the buildings of which from part of the trust fund of the CFT. The four community facilities developed and owned by CFT are set out in Schedule One (the Properties) which includes the outside Turfs owned by CFT at Fraser Park.

C.      The development of the Properties has now been completed, and there are no other facility development projects currently being undertaken or planned by the CFT, nor does it have the financial ability to undertake any new developments. As such, the focus of the CFT is therefore now largely focused on the best utilisation and management of those Properties in partnership with the respective lessees of the Properties (two of who are Council), to ensure that they remain available for charitable and community use in line with the general purposes of CFT.

D.      CFT is a CCO of Council and as such is subject to the reporting and audit requirements of all CCO’s. All operational requirements of CFT are contracted to Council under a service level agreement and governance is provided by the Trustees. These arrangements come with some cost and inefficiencies which to date has been funded by Council.

E.      Given the above, the Council has asked the Trustees of the CFT to consider winding up the trust and transferring all of the CFT’s Properties and surplus assets to Council, to be used exclusively for the benefit of the Community.

F.       As part of that proposed transfer Council will undertake to CFT that the Properties and any other assets of CFT that are transferred to Council, will be held for charitable and community purposes, including any income which is derived from them, and in a manner consistent with the Trust’s Purpose.

G.      Given that undertaking provided by Council, the Trustees have concluded that the Purpose of the Trust would be best achieved by transferring to Council the Properties and any other assets of CFT upon the terms of this deed.

1.     Definitions and Interpretation

1.1     Definitions

In this Deed:

CFT and/or the Trust means Hutt City Community Facilities Trust.

Council and/or HCC means the Hutt City Council.

Deed means this deed, as amended by the parties in writing.

Effective Time means 11:59pm on 30th June 2021.

Properties means the properties listed in Schedule 1, and the outside Turfs at Fraser Park.

Proposal means the winding up of the CFT in accordance with the terms of the Trust Deed.

Purpose means the charitable purpose of the trust as set out in clause 3 of the Trust Deed.

Trust Deed means the deed of trust establishing the CFT.

Trustees means the Trustees of the CFT.

1.2     Interpretation

In this Deed headings are for convenience only and do not affect the interpretation of this Deed and, unless the context otherwise requires:

(a)      words importing the singular include the plural and vice versa;

(b)      where a word or phrase is given a particular meaning, other parts of speech and grammatical forms of a word or phrase defined in this Deed have a corresponding meaning; and

(c)      a reference to:

(i)       anything (including any right) includes a part of that thing but nothing in this clause 1.2 implies that performance of part of an obligation constitutes performance of the obligation;

(ii)      a document (including this Deed) includes all amendments or supplements to, or replacements or novations of, that document; and

(iii)     a party is to a party to this Deed, and a reference to a party to a document includes that party’s executors, administrators, successors, substitutes (including persons taking by novation) and permitted assigns.

2.     The Proposal

2.1     In reliance of the undertakings provided by Council and recorded in this Deed, the Trustees have concluded that the Purpose of the Trust would be best achieved by the wind up the CFT in accordance with clause 17 of the Trust Deed, and the transfer to Council of the Properties and other surplus assets of the Trust on and from the Effective Time on the terms set out in this Deed.

2.2     With respect to the Proposal:

(a)      the Council approves the winding up of the CFT in accordance with clause 17.2 and 17.3 of the Trust Deed;

(b)      as the Properties have now been fully developed, the Trustees consider that winding up the CFT and distributing the Properties and surplus assets to the Council, will ensure that the Properties are operated on a prudent commercial basis with the view to such facilities being operated as successful, financially sustainable community assets;

(c)      the Council undertakes that the Properties and any other surplus assets of CFT which are transferred to it, including any income derived from those Properties or assets, will be used exclusively for the benefit of the community in New Zealand, for the benefit of the public and not for private profit, in particular benefitting Hutt City and its communities (with the intention that such Properties and assets will be available for recreation and use of the public); and

(d)      each of the parties, will do all things reasonably necessary to give full effect to this Deed and the transactions contemplated by this Deed.

3.     Additional provisions

3.1     Following the satisfaction of any of its liabilities, and subject to clauses 3.2 to 3.3, and the other provisions of this Deed, CFT shall transfer to the Council on and from the Effective Date the Properties and any of its surplus assets to be used in accordance with the undertaking provided in clause 2.2(b).

3.2     With respect to the transfer of the Properties and the other surplus assets, the parties agree that:

(a)      each of the Properties will be transferred to the Council subject to:

(i)       the novation to Council of any subleases that currently exist in relation to the Properties;

(ii)      Council managing and maintaining the Properties on an ongoing basis, as required by the subleases, any current insurance policy and any other statutory requirements;

(iii)     any lease between the Council and CFT in relation to the Properties will be transferred to Council or terminated (at the Council’s sole discretion), provided that the Council releases CFT from all obligations under such leases;

(b)      the agreements and/or contracts noted in Schedule 2, will be novated to the Council (together with all benefits and obligations);

(c)      any cash on hand (other than money held for general maintenance under clause 3.2(e) or reserves held under clause 3.2(f) below), will be used to pay down the balances of any loans made by Council to CFT;

(d)      subject to clause 3.2(c), the outstanding balances of any loans made by the Council to CFT will be cancelled; 

(e)      any money held in maintenance funds by CFT relating to the Ricoh turfs, the Ricoh Centre and the Naenae Bowls Centre will be transferred to the Council, who shall continue to hold such funds for their designated purpose and in compliance with any obligations under the subleases noted in clause 3.2(a)(i);

(f)      the amount of cash equivalent to the reserve held by CFT in its accounts on the Effective Date relating to the indoor green at the Naenae Bowls Centre will be transferred to the Council, who shall continue to hold such funds for their designated purpose; and

(g)      the Council will pay CFT’s reasonable and evidenced third party costs and expenses relating to the preparation of, and performance of, its obligations under this Deed.

3.3     Subject to the Trustees taking all reasonable steps to mitigate any loss or liability, the Council shall indemnify the Trustees and the CFT Trust in relation to any liability, including tax of any nature, which arises as a consequence of the Proposal or its implementation, provided that this indemnity will not apply in relation to any Trustee where any loss or liability of a Trustee is attributed to:

(a)      dishonesty or lack of good faith on the part of that Trustee; or

(b)      wilful conduct by the Trustee which is known to be in breach of trust.

4.     General

4.1     Variation

No variation, supplement, deletion or replacement of, to or from this Deed or any of its terms shall be effective unless made in writing and signed by or on behalf of each party to this Deed.

4.2     Counterparts

This Deed may be executed in any number of counterparts which read together will constitute one instrument.  A party may execute this Agreement by signing any counterpart.  This Deed is binding on the parties on exchange of counterparts.  A copy of a counterpart sent by facsimile machine or that is electronically scanned and emailed will be treated as an original counterpart.

4.3     Relationship

The parties acknowledge and agree that nothing in this Deed will constitute one party the partner of, employee of, agent of, or joint venturer with any other party and that no party will have the right to bind any other without the other’s prior written consent.

4.4     Third party rights

No person other than the parties have or is intended to have any right, power or remedy or derives or is intended to derive any benefit under this Deed.

4.5     Governing law and jurisdiction

This Deed is governed by the laws of New Zealand.

Executed and Delivered as a Deed:

THE COMMON SEAL of HUTT CITY COUNCIL was affixed in the presence of:

 

 

 

 

Authorised Signatory

 

 

 

Authorised Signatory

 

 

SIGNED and DELIVERED by:

 

 

acting in their capacity as trustee of the Hutt City Community Facilities Trust, in the presence of:

 

 

 

 

 

Signature of trustee

Signature of Witness

 

 

 

Name of Witness

 

 

 

 

 

Address of Witness

 

 

 

 

 

Occupation of Witness

 

SIGNED and DELIVERED by:

 

 

acting in their capacity as trustee of the Hutt City Community Facilities Trust, in the presence of:

 

 

 

 

 

Signature of trustee

Signature of Witness

 

 

 

Name of Witness

 

 

 

 

 

Address of Witness

 

 

 

 

 

Occupation of Witness

SIGNED and DELIVERED by:

 

 

acting in their capacity as trustee of the Hutt City Community Facilities Trust, in the presence of:

 

 

 

 

 

Signature of trustee

Signature of Witness

 

 

 

Name of Witness

 

 

 

 

 

Address of Witness

 

 

 

 

 

Occupation of Witness

SIGNED and DELIVERED by:

 

 

acting in their capacity as trustee of the Hutt City Community Facilities Trust, in the presence of:

 

 

 

 

 

Signature of trustee

Signature of Witness

 

 

 

Name of Witness

 

 

 

 

 

Address of Witness

 

 

 

 

 

Occupation of Witness

SIGNED and DELIVERED by:

 

 

acting in their capacity as trustee of the Hutt City Community Facilities Trust, in the presence of:

 

 

 

 

 

Signature of trustee

Signature of Witness

 

 

 

Name of Witness

 

 

 

 

 

Address of Witness

 

 

 

 

 

Occupation of Witness

 


 

Schedule 1 – The Properties

 

Address

Description

237 Taita Drive

Ricoh Sport House

Turfs

26 Taine Street, Taita

Walter Nash Stadium

(Includes Old and New building)

23-25 Treadwell Street, Naenae

Walter Mildenhall Naenae Bowls Centre

186 Stoke Valley Road

Koraunui Stokes Valley Hub

 

 


 

Schedule 2 – Agreements / Contracts

 

Insurance

·    CFT – Insurance Contract renewed June 2020 AIB

·    AON Certificate of Currency – CFT for Stokes Valley Hub, Community Hub and Library

·    AON Certificate of Currency Building/Sports Centre – CFT for Taita Sports & Community Centre building, Tocker Street

·    AON Certificate of Currency Building/Sports Facility –CFT for Naenae Bowling Club, Vogel Street

·    Insurance policy with Capricorn Risk relating to the relevant turfs

 

Sponsorship Agreements

·    CFT and Gillespie Young Watson – Sponsorship agreement

·    CFT and G & S Roofing Limited – Sponsorship agreement

·    CFT and Vision Enhancement NZ Limited – Sponsorship agreement

·    CFT and PCL Contracting Ltd – Sponsorship agreement

·    CFT and Kadima Furniture – Sponsorship agreement

·    CFT and Mexted Performance Sports Surfaces – Sponsorship agreement

·    CFT and Gee & Hickton Funeral Directors – Sponsorship agreement

·    CFT and Central Group NZ Ltd – Sponsorship agreement

·    CFT Rymans – sponsorship agreement

·    CFT and Woolyarns Limited – Sponsorship agreement

·    Sawrey – Sponsorship agreement

·    Cuttriss – Sponsorship agreement

·    AIB – Sponsorship agreement

 

Note all of the above except Rymans are sponsorship arrangements with RICOH Sports Centre.  Ryman’s is with Naenae Bowls Centre

 

Others

·    Agreement for sale and purchase of Squash Courts with sublease back – CFT / NZ Squash

 


Attachment 3

Appendix 3 : PWC advice: Hutt City Community Facilities Trust - proposed windup and distribution of assets

 


 


 


 


 


 


Attachment 4

Appendix 4 : Inland Revenue Department indicative view re. Hutt City Community Facilities Trust

 


 


                                                                                      40                                                             24 May 2021

Long Term Plan/Annual Plan Subcommittee

04 May 2021

 

 

 

File: (21/436)

 

 

 

 

Report no: LTPAP2021/2/118

 

Council performance overview for the third quarter ended 31 March 2021

 

Purpose of Report

1.    The report provides an overview of the Hutt City Council performance results for the period 1 July 2020 to 31 March 2021.

Recommendation

That the Subcommittee recommends that Council notes and receives the report.

 

Background

2.    The performance results presented in this report are for Hutt City Council – the parent entity and not the consolidated group. These are unaudited results for the third quarter ended 31 March 2021. An external audit by Audit New Zealand will be completed at the end of the financial year.

Quarterly highlights and achievements

3.   There were a number of highlights and achievements over the quarter. These are detailed in Appendix 1 attached to the report.  A selection of key highlights are:

a)   A major focus for this quarter was the work to finalise the draft Long Term Plan and draft District Plan. We were very pleased to receive audit clearance for the consultation document and draft 10 year plan (LTP) with an unmodified audit report.

b)   Council was proud to support the Ministry of Health’s efforts to roll out the Covid-19 vaccine when Walter Nash was utilised to vaccinate border workers’ household contacts and frontline health and emergency workers.

c)   The focus of central government on its reform programme continued with work on water reforms continuing and announcements of further details regarding the Resource Management Act.

d)   Stakeholder engagement was front and centre this quarter with key meetings with central and local government and locally with many hui held with Mana Whenua partners, Callaghan Innovation and the Hutt Valley Chamber of Commerce.

e)   Consenting has processed $60M more consents in terms of value than for the same time last year. This means we have already surpassed the full year value to 31 March 2021 compared with the year to 30 June 2020 with an extra $11M value of consents processed. Consents for mutli-unit developments have more than doubled compared to the same period last year (2.3 times more).

f)    A Council-wide team worked to prepare for the implementation of the new rubbish and recycling service from 1 July.

 

 

Performance measure results

4.    The third quarter key performance indicator (KPI) results are included in this report together with broader outcome trend information. Refer to Appendix 2 attached to the report for further detail information. Also included for further information is the December 2020 Infometrics quarterly economic monitor (Appendix 3 attached to the report).


 

Financial Performance Results

5.    This section provides an overview of the financial performance results for the period ended 31 March 2021. Further detailed information is available in Appendix 4 attached to the report.

6.    The financial performance results provide an indication on how Council performed against the approved budget, and the associated financial risks.

7.    Overview of results: The year-to-date (YTD) net operating financial result is $19.5M favourable to budget. The full year (FY) forecast is $8M or 32% favourable compared to the budget mainly due to higher forecast revenue of $13M partially offset by higher forecast operating expenditure of $5M. 

Table 1: Operating Results

$Millions

YTD Actual

YTD Revised Budget

Variance

FY Forecast

FY Revised Budget

Variance

FY Annual Plan

Operating revenue

50.8

39.4

11.4

29%

65.3

52.6

 

12.7

24%

52.2

Operating expenditure

(136.2)

 

(143.9)

7.7

5%

(195.9)

(191.0)

(4.9)

3%

(188.2)

Net operating deficit before rates income

(85.4)

(104.5)

19.1

18%

(130.6)

(138.4)

7.8

6%

(136.0)

Rates income

113.7

113.3

0.4

0.4%

113.5

113.3

0.2

0.2%

113.3

Net operating surplus/ (deficit)

28.3

8.8

 

19.5

222%

(17.1)

(25.1)

8.0

32%

(22.7)

Capital contributions

7.5

11.6

 

(4.1)

35%

14.5

15.7

(1.2)

8%

13.1

Net surplus/ (deficit) before adjustments

35.8

 

20.4

15.4

76%

(2.6)

(9.4)

6.8

72%

(9.6)

Other non-operating adjustments

13.2

-

13.2

13.2

-

(13.2)

-

Net surplus/ (deficit)

49.0

20.4

28.6

140%

10.6

(9.4)

20.0

213%

(9.6)

 

9.    Operating revenue: The overall result is forecast to be $12.7M favourable (24%) to budget. This is largely due to increased revenue across a number of areas including Three Waters Reform funding, parking infringements, landfill revenue and Reserves contribution income.  

10.  Operating expenditure (opex):  The opex spend for the year is forecast to be $4.9M (3%) unfavourable to budget of $191M. This is largely due to forecast increased Three Waters expenditure (which is funded from the Three waters Reform funding) and higher landfill costs (offset by revenue). Delays in operational projects (totalling $3.9M) are proposed to be deferred into later years and are reported in further details in this agenda (refer ‘LTP 2021-2031 Financial Aspects’ report). Delayed capital investment delivery has resulted to reduced forecast borrowing and depreciation costs for the year.

       An initial estimate of $1M for the Holiday Act compliance provision has been forecast, with further assessment of this provision underway ahead of the financial year end (refer Audit and Risk Subcommittee agenda 23 April 2021 ARSC2021/2/84).   

11.  Rates income: The rates income for the year of $113.5M is forecast to be $0.2M higher than budgeted mainly due to slightly higher growth than expected together with adjustments related to internal rates. 

12.  Capital contributions: These are forecast to be $1.2M lower than budgeted largely due to timing delays with Development Contribution income.

13.  Non-operating adjustments: Gains on the fair value of derivatives was $13.2M at 31 March 2021. These are accounting (non-cash) adjustments related to fair value of the treasury derivatives portfolio and reflects the financial markets at the time.

Capital investment

14.  Table 2: Capital expenditure results

$Millions

YTD Actual

YTD Revised Budget

Variance

FY Forecast

FY Revised Budget

Variance

FY Annual Plan

Replacements

13.8

19.4

5.6

25.4

24.2

(1.2)

24.7

Improvements

22.0

35.7

13.7

43.2

61.6

18.4

56.0

Net deficit

35.8

55.1

19.3

68.6

85.8

17.2

80.7

 

15.  Capital expenditure delivery to-date is $35.8M or 52% of the full programme forecast for the year of $69M.

16.  The risks related to the delivery of the full programme for the year have been previously reported through the half year performance report. A detailed review of capital projects has been undertaken to better understand the risks of under-delivery and the flow on impact to the LTP 2021-2031. The results have led to a reduction in forecast capital spend for 2020/21 from $86M to the forecast of $69M. A proposed deferral of $16M of capital budgets from 2020/21 to later years is reported separately in this agenda (refer ‘LTP 2021-2031 Financial aspects’ report).  Details for the reasons for the delays are included in this report and include for example delays due to Covid related supply issues.

       The key areas forecasting reduced investment delivery in 2020/21 than planned includes RiverLink, Three Waters, Transport, Integrated Community Services and Parks and Reserves.   

 

Project delivery performance

17.  Appendix 5 attached to the report provides a performance overview of key projects. This includes a status update, top risks and issues, financial summary, next major milestones and engagement activities planned. The projects included are the District Plan, Eastern Bays Shared Path, Naenae Pool and spatial plan, Riverlink, Kerbside collection and Three waters investment. There are a range of risks and issues being managed, with further more detailed reporting and briefings provided to relevant committees and the Major Projects Board. Officers will be in attendance at the meeting to provide further updates and respond to queries.

Note - This information was prepared in mid-April 2020. Subsequent to this there is updated information on some aspects such a Wellington Water Programme (refer separate report on this agenda on “Three Water Investment”) and RiverLink (also refer separate report).

 

Treasury Compliance

18. Council has been fully compliant with Financial Strategy borrowing limits:

Measures

Policy

Actual

31 March 2021

Compliance

Net external debt/total revenue

Maximum 150%

96%

Yes

Net interest on external debt/total revenue

Maximum 10%

2.8%

Yes

Liquidity ratio

Minimum 110%

125%

Yes

19. Following a credit rating review by Standard and Poor’s Credit Rating Agency in July 2020, Council’s credit rating was affirmed as AA with a Stable Outlook.

20. The average cost of funds at the end of March 2021 was 3.14 per cent, which was 0.3 per cent below the budgeted level. Interest cost savings of $0.64M have been achieved mainly due to the delayed capital investment and lower interest rate environment. Net debt (excluding cash holdings and CCO investment) at 31 March 2021 was $179M.

21. Further detailed treasury information is available in Appendix 6 attached to the report.

Climate Change Impact and Considerations

22.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.  The proposed deferral of capital investment plans from 2020/21 to later years in the LTP 2021-2031 is reported separately in the Order Paper (refer ‘LTP 2021-2031, Financial aspects’ report). There are no further climate change impacts or considerations arising from this report.

Consultation

23.  There are no consultation requirements arising from this report.

Legal Considerations

24.  There are no legal considerations arising from this report.

Financial Considerations

25.  There are no financial considerations in addition to those already noted in this report.

Appendices

No.

Title

Page

1

Appendix 1:Quarterly Performance Report 1 January to 31 March 2021

44

2

Appendix 2: Outcome and Q3 2020-2021 KPI Dashboard

57

3

Appendix 3: Infometrics Quarterly economic monitor, December 2020

69

4

Appendix 4 - Financial performance Results To 31 March 21

79

5

Appendix 5: Project performance overview for period ended 31 March 2021

88

6

Appendix 6: Treasury Report for the period ended 31 March 2021

95

    

 

Author: Caryn Ellis

Head of Chief Executive's Office

 

Author: Karl Eagle

Senior Management Accountant

 

Author: Catherine Taylor

Senior Research and Evaluation Advisor

 

Author: Wendy Moore

Head of Strategy and Planning

 

Reviewed By: Jenny Livschitz

Group Chief Financial Officer

 

Approved By: Jo Miller

Chief Executive  


Attachment 1

Appendix 1:Quarterly Performance Report 1 January to 31 March 2021

 

Quarterly Performance Report

1 January to 31 March 2021

 

Key Highlights and Achievements

A major focus for this quarter was the work to finalise the draft Long Term Plan and draft District Plan. Consultation commenced on 6 April and runs through until 6 May.

We were very pleased to receive audit clearance for the consultation document and draft LTP with an unmodified audit report. Uncertainty on three waters reforms (a matter impacting all councils), accuracy of three waters forecasts and the do-ability of the capital programme affected disclosures in documentation. The requirement to develop asset management plans and improved forecasts for three waters investment is a priority for Wellington Water.

RiverLink is making progress with officers working to review QS estimates and to resolve scope and cost allocations.

There has been a lot of preparatory work for three waters reform (see section below). Senior staff alongside elected members have been attending key briefing sessions.

We worked hard during the quarter on implementation of the new rubbish and recycling service (start date 1 July). See section below.

We experienced a change in Covid Alert Levels and had to adapt to this again. We remain in a state of readiness for resurgence. A meeting was held with the Chief Executives of the CCDHB and HVDHB with the Mayor and I attending. This relationship, along with Te Awakairangi Health Network, is critical to the successful rollout of the Covid-19 vaccination for our city.

Good progress was made on closing out long-standing audit recommendations raised by Audit NZ.

An organisation-wide group worked on a new risk management framework, risk appetite and updated risk criteria. The work of the group was externally reviewed and further developed for presentation to Audit and Risk Subcommittee.

Quality of Life Survey

During the quarter the 2020 Quality of Life Survey was published. This two-yearly survey collects data on a range of current and topical issues relevant to residents’ wellbeing in urban New Zealand. Issues include perceptions of local neighbourhoods, housing, safety, employment, public transport, crime and climate change.

Key highlights for Lower Hutt:

·      89% of respondents rated their overall quality of life positively (89% in 2018)

·      75% rated the wellbeing of their family/whanau positively

·      85% agree that Lower Hutt or their local area in Lower Hutt is a great place to live (81% in 2018)

·      75% felt they were in good or excellent health, with nearly a third undertaking physical exercise on 5 or more days a week.

·      74% believe they have good or excellent mental health; however 35% scored less than 13 on the WHO-5 wellbeing index. A score of 13 or under is indicative of poor emotional wellbeing. This compares to 25% who scored less than 13 in the 2018 survey.

·      93% feel safe in their own home and in the city during the day, two thirds feel safe walking alone in their local area at night and 54% feel safe in the city centre at night (significantly higher than the 8 cities total of 49%)

·      Most respondents (84%) felt traffic congestion was a problem which was on par with other cities. 61% perceive water pollution to be a problem in Lower Hutt; this was significantly higher than 8 city total of 53%

·      When asked about housing: 33% feel their housing costs are not affordable; 24% feel their home as problem with damp and mould; 11% have inadequate heating in their home, and; 16% have difficulty affording to heat their home

                                      

Areas where Lower Hutt had a significantly better result than the 8 cities[1] total

·      13% stated their satisfaction with government / local government made Lower Hutt a better place to live (8 city total = 5%)

·      Lower Hutt residents are frequent users of public transport with 32% using at least weekly. In addition: 75% feel it is safe to use; 80% find it easy to get to, and; 61% feel is frequent (comes often). 39% have confidence in council decision-making (7 cities total is 30%), 42% believe the public have an influence on council decision-making (8 cities total 31%).

 

Areas where Lower Hutt had a significantly worse result than the 8 cities total

·      Compared with the 8 city total Lower Hutt residents were less likely to state good/upgraded roads or a lively CBD as reasons for the area made the city a great place, The lack of liveliness in the CBD may have influenced respondents pride in the look and feel of the city (55%) which was significantly lower than the 8 city total (63%).

·      Homelessness and a lack of suitable, affordable housing, along with a lack of amenities were given as reasons for Lower Hutt being a worse place to live.

 

RMA Reforms

On 10 February 2021 the Government announced more details about this reform, including the process and some high-level direction. CLT is considering an approach on the reform of New Zealand’s resource management system, which includes repealing the Resource Management Act (RMA) and replacing it with three new pieces of legislation. This reform will directly affect Council functions and decisions, and our communities. CLT is in the process of identifying the potential opportunities and implications for Council and our communities. A presentation on the reforms will be made to the District Plan Subcommittee and there will also be a presentation to all elected members.

Housing

Housing our community remains a significant problem. Our population has increased reaching 111,800 by June last year so the population is growing strongly and safe, warm, dry affordable housing is lagging behind. Our assessment is that we need more than 10,000 additional dwellings in the period to 2047.

As at the December 2020 quarter 586 households were on the housing register for social housing – compared to 53 households in December 2015. A further 197 households were on the transfer register.  Combined this is 783 households.

912 emergency housing special needs grants (number of grants, not the number of households). These are to pay for households to stay in hotels as emergency housing. The average number of weeks in emergency accommodation for LH households is 16 weeks so families are often in insecure situations for lengthy periods of time.

Through the Long Term Plan, Council is consulting on an increased loan funding facility for UPL from $23M to $43M. The increase of funding being consulted on will enable UPL to deliver on a number of outcomes set out in their Statement of Intent.

UPL is currently exploring opportunities that will deliver on more housing outcomes within Hutt City that provide for need across the housing continuum, including social housing, shared equity, affordable and market sales (and others).

The partnership with UPL, HCC, Te Atiawa and Kahungunu Whanau Services is progressing positively with the procurement of the constructors currently underway.

Consents

After a slow start in January it has turned out to be a busy third quarter for the building team. We have issued 367 consents with the combined value of $134M. This compares to 389 consents and value of $108M for the same period last year.

There has been a noticeable spike in the number of building inspections undertaken during March. The highest single month recorded in the last three years. The booming construction market and the increase in multi-unit dwellings have contributed to the increase.

We are on track to once again exceed 1,600 building consents in the fiscal year. At the end of the 3rd quarter we have granted 1302 building consents with the value of work of $411M, compared to 1246 consents to value of $280M for the same period in the last year. 99% have been completed within the 20 day requirement.

Kainga Ora have received their registration from the Ministry of Business Innovation and Employment. They are now an active Building Consent Authority (BCA) capable of processing and inspecting their own building consents for new construction projects. There has been an agreement reached for HCC to continue to process and inspect a portion of Kainga Ora building consents for retrofitted repairs and alterations.

We are seeing some good results coming through from our energy audit resource. Energy performance and the progress we’re making to reducing emissions is reported quarterly to the CLT. What we’re seeing is that by making simple changes at our facilities and in areas such as street lighting we can make some serious savings and at the same time reduce our carbon footprint.

1.1     COVID-19

Hutt City Council remains vigilant and ready to respond in the event of any resurgence of COVID-19.

Hutt City Council has moved to strengthen its Emergency Management preparedness by doubling its investment in staff with the creation of a fulltime Emergency Management role with additional duties as the Controller for Hutt City. The creation of this role and its additional duties represents a significant increase and commitment to a vital function of council. The role will be recruited by the end of April 2021.

Since the update provided on 25 February 2021, on 28 February 2021 Auckland moved to Alert Level 3 and the rest of New Zealand to Alert Level 2. These Alert Levels were moved back from 7 March 2021, with Auckland subsequently joining the rest of the country in Alert Level 1 from 12 March 2021.

Council continues to have a methodology in place for continuous service delivery to seamlessly transition between Alert Levels 1, 2 and 3 and to manage and minimise the risk of COVID-19.

Hutt City Council is proud to be supporting the Ministry of Health’s efforts to roll out the Covid-19 vaccine. This involves vaccinations being provided at one of our centres (Walter Nash) to border workers’ household contacts and frontline health and emergency workers. Five community centres are now in operation across the region. A full site safety plan was submitted and approved prior to the Walter Nash Centre being approved for use as a Covid-19 vaccine clinic, to ensure the service could be provided safely for contractors, staff and other facility users.

A full update on the activities around managing the risks associated with COVID-19 are reported to the Audit and Risk Subcommittee.

Moving to online

We have been promoting online services and online payments. An additional 3,202 people have opted to receive their rate accounts by email between January 2021 and March 2021. This is a significant increase on last year’s uptake over the same period and takes the total of ratepayers receiving their accounts by email to 16,254. This is 43% of the total number of rates invoices generated which represents significant cost savings in printing, postage and efficiency.

Work has begun to phase out cheques in line with the major New Zealand banks who will stop processing cheques this year. Our bank Westpac will stop processing cheques after 25 June 2021 and the last day we will accept a cheque is 20 June 2021. We are reviewing all invoices, applications and the website to ensure payment by cheque references are removed as well as engaging directly with those customers who have paid us with a cheque recently to make sure they know about the change.

No ratepayers have taken up the offer of Rates relief via postponement - a few have enquired but we have been able to work through a payment plan to better suit their situation including new rates payment arrangements. There has been an increase in applications for the Department of Internal Rates Rebate. These are assessed on the prior year’s income (2019/2020) which means that people who have been impacted by Covid are ineligible. Officers are advising ratepayers to apply again next year.

Local Economy

Overall consumer spend in Lower Hutt is slightly above consumer spend for the same period last year (up 1.6% at 28 February 2021). Monthly spend data for February 2021 shows hospitality, tourism and retail sector spending is up slightly overall compared to same time last year although accommodation spend is half the level of this time last year.

The number of Jobseeker Support recipients in Lower Hutt continues to climb rising 20% to 4,854 in the December 2020 year reflecting some weakness in the local economy.  The city’s unemployment rate also edged up to 4.3% for the December 2020 year but remains under the Wellington Region rate of 4.5% and New Zealand rate of 4.6%.

Properties in Lower Hutt are becoming increasing unaffordable with house prices increasing 19% in the December 2020 quarter. The pipeline for new housing continues to increase with 274 consents issued in the same quarter.[2]

Staff health & wellbeing

During this period there’s been some uncertainty for staff while we consulted and confirmed decisions on phase 2 of our organisational design programme. CLT, People & Capability, People Leaders and our union partners have been supporting affected people throughout this period and it’s also been important to continue to remind staff of other support available should they require it.

The Staff Wellbeing Programme for the year commenced in the first quarter of 2021, with the focus on ‘Creating connection with wairua, mind and community’. This has included flax weaving workshops, promotion of bike the trail and financial information sessions.

Flu vaccinations for staff are scheduled for the month of May and bookings are currently being taken. Covid-19 vaccinations are currently scheduled to be available to the general public as of July according to current advice from the Ministry of Health.

1.2     A fit for purpose organisation with the right capability and culture

We continue to make good progress towards becoming a fit-for-purpose organisation and while progress is being made, it will take time to achieve our desired outcomes. The focus during this quarter has been on consulting with staff and our union partners, and then confirming our decisions on phase 2 of our organisational design programme.

We received 144 individual and group submissions during the consultation process with many responding to more than one proposal. It was pleasing to receive feedback from every area of the business and there’s no doubt that the level of engagement made it a better process whether people agreed, disagreed or provided their own recommendations for consideration.

Each submission was carefully reviewed by CLT and, as a result of the feedback and review process, we made a number of changes to the original proposals. We also decided to take some further time to consider the best approach for Information Services (IS) due to the large amount of feedback which led us to decide to go back to the drawing board. We remain committed to creating an organisational-wide IS function.

Via this phase of the organisation design programme we have remained in a net growth situation where the vast majority of people will find a home in the new structure. As we reorganise we will be moving to make the changes needed to reposition our organisation to meet our strategic objectives and the challenges ahead including delivering on the significant capital programme outlined in the draft LTP.

We will be moving as quickly as possible through our redeployment processes to provide certainty for everyone as soon as possible. The new structure will be effective on 3 May with transition arrangements underway over the months ahead to ensure the changes are embedded successfully.

Staff who are in roles that are impacted are receiving wrap-around support at this time.

The new Neighbourhoods & Communities strategy will inform phase three of our organisational change programme which is expected to be underway in the second quarter of 2021.

1.2.1    Reporting to governance

As reported in the last quarter, the key focus has been to standardise reporting, improve the quality of advice and to minimise the number of late reports.

Council adopted the draft Long Term Plan for consultation and engagement.

Council adopted a new model for the distribution of the elected members remuneration pool from 1 July 2021.  The new model allowed for additional remuneration for deputy chairs for their additional responsibilities.

Democratic services has achieved 100% of its KPIs for the quarter in terms of agendas and papers being published as per Standing Orders and the statutory timeframe.

1.2.2    Our people

Alongside the organisational design work, an organisational capability plan has been developed, with an initial focus for 2021 on setting the foundations. Some updates on key activities include:

·      The new capability framework is currently being finalised,

·      Work is underway on our ‘new ways of working’ project,

·      An engagement survey partner has been selected.

 

For the second year, we entered a team in the Taituarā Management Challenge. The challenge team ‘Team Auaha’ consists of staff from across council who will participate alongside teams from 13 other Councils. The Challenge *which is held in the Lower Hutt Events Centre) is Australasia’s premier forum for current and emerging local government leaders and is designed to enhance leadership and management skills of managers and staff in local government. 

During this quarter three senior staff have started the Taituarā Accelerated Leadership Programme, we’ve run How Local Government Works workshop, Child Protection Training, our GoodYarn programme, Report Writing training and a number of our frontline staff have attended Customer Service workshops. We also ran a very successful induction day to welcome our new staff.

1.2.3    Strategic Change Programme

We have been working on the Go Digital Programme priorities with staff from across council. The priorities will be discussed by the Corporate Leadership Team in April and confirmed. This will enable the programme timeline for the next 4 years to be completed and the projects for the coming year to be confirmed so they can get underway. While we have been working on priorities we have commenced some key projects:

·      Human Resources and Payroll - The business case is complete and we have identified a preferred solution. This project will be prioritised alongside other initiatives within the programme at the CLT session in April.

·      Te Pātaka Digital Workplace – Work anywhere, anytime, any device, to access, collaborate and share information including implementing the latest Microsoft Office applications

65 design sessions have been completed with staff from across Council over the last 3 months and are now beginning to build the solution. The first teams will go live in July with roll out continuing through to November. An expo was held for all staff on what the new digital workplace will look like and how it will change the way we work. It was a successful event with nearly 300 attendees, 65 people expressed interest in becoming Te Pātaka “Pros” (that’s over 20% of attendees), and we had 164 comments left on the feedback wall. This is the first of our change management activities to ensure we support our staff with adoption of the new tools.

·      Website
We have selected our preferred implementation partner (SQUIZ) and are in the early stages of initiating the project. This includes establishing the master services agreement with SQUIZ for project delivery and ongoing support, detailed project planning, and setting up the project board. We anticipate the first stage of the project (design, technical build and content refresh) to begin by the end of May with the new website going live in November 2021.

·      Right Foundations

We continue to work on a number of technical projects to ensure we have a stable, secure and fit for purpose technology platform. Our current focus is on:

·      setting up the exchange environment to support the build and roll out of Te Pātaka;

·      moving to a digital phones solution to mitigate risks with out of date and unsupported

       technology and better support mobility and new ways of working; and

·      completing a security audit to ensure our technical environment is secure and strengthen

       security settings where needed.

1.2.4    Organisational Cultural Competency

Recruitment for the Pou Reo Me ōna Tikanga (Cultural Advisor) is nearing completion with applicant interviews being held on 16 and 22 April for this role. Recruitment for the Pou Mahere Rautaki (Māori Policy Advisor) has begun and is ongoing. The primary outcomes for these roles will be to lead the development of our people and the organisation’s capacity to respond more effectively to Māori.

Coupled with these roles, recruitment for a Pou Whakamahere Kaupapa Here (Māori Policy Planner) will be commencing shortly to support the Planning Team in developing and maintaining the district plan and other planning and policy documents from a Māori world-view, and to enable the team to better interface with Māori in this space.

1.3     Community and Organisational Leadership

1.3.1    Asset management strategy

The Organisational Design programme has confirmed additional resourcing to support improved asset management practices. This includes a Head of Assets Facilities who will be responsible for leading the development of our asset management approach. We are currently recruiting for this role.

1.3.2    Draft Long Term Plan 2021-2031 (LTP) consultation and external audit

The Consultation Document and the draft LTP were adopted by Council on 31 March 2021, which enabled public consultation to proceed from 6 April 2021.

An unqualified audit report was issued by Audit New Zealand. Uncertainty on three waters reforms (a matter impacting all councils), accuracy of three water forecasts and the do-ability of the capital programme affected disclosures in documentation. The requirement to develop asset management plans and improve forecasts for three waters investment is a priority for Wellington Water. 

1.3.3    Financial policies update

A proposed change to the Rates Postponement Policy to provide financial support for homeowners who may be impacted by the “Know your Pipes” project was included in the LTP consultation process.

The Sensitive Expenditure Policy has been reviewed in light of the October 2020 new Office of the Auditor General guidance on this matter. The findings have been reported to the Audit and Risk Subcommittee 23 April 2021.

A rating sales policy has been endorsed by the Policy, Finance and Strategy committee

1.3.4    Financial results at year end 30 June 2021 are forecast to be within total budgets

We are tracking in line with the budgets approved by Council. There are however some projects/initiatives which have experienced delays. This will be reported to the LTP Subcommittee for consideration and review.

1.3.5    Continue reduction year on year in financial ‘carry forwards’

Further reviews are underway on the Long Term Plan budgets to ensure do-ability of the work programmes. Further advice is being prepared for the LTP Subcommittee in regards to this. The Organisation Redesign has considered the capacity and capability needed to deliver the future work programme.

1.4     Programme Management and Key Delivery Strategic Relationships Partnering

1.4.1    One Council, whole Council Group (including CCOs) approach to planning

As part of its commitment to become strategy led Hutt City Council recently approved its Strategic Framework. It articulates a need for a 30 year Hutt City Strategy to guide future LTP, and long term programmes such as RiverLink and significant projects such as the Naenae pool. The City Strategy project will begin in May 2021. The Strategic Framework further identified and approved the creation of a Hutt City Plan, providing a roadmap of our 3 year organisational priorities, enabling better synchronisation and coordination across Hutt City Council in line with our LTP priority of Financial Sustainability.

 

1.4.2    Strategic Relationships Partnering

Stakeholder engagement has been front and centre this quarter with many hui held with Mana Whenua partners (see below).

Hutt City Council joined leaders of  ESR, GNS, VUW and Wellington NZ at Callaghan Innovation where we agreed to move forward on a shared vision statement and to present a united front for how we innovate together to address significant issues our city, region and country faces into the future.

The Chief Executive attended a meeting with Hon Minister Mahuta with Mayor Barry to discuss place based partnerships with DPMC, DIA, and Taituarā and representatives from other Council - Rotorua, Wairoa, Hawkes Bay District Council and Napier..

Central government/local government briefings were held over the quarter with a Chief Executive briefing to connect with central government colleagues and to focus on ways of working, water reform, RMA reform, a security briefing and an economic outlook update from Treasury.

We continue to have a strong relationship with the Hutt Valley Chamber of Commerce. The Chamber is a key group representing the interests of business and the commercial sector in our LTP engagement.

1.4.3    Integrated Transport Strategy

 

In October 2020 we appointed WSP to assist with our development of an Integrated Transport Strategy (ITS). WSP developed a work programme to achieve this outcome which included a comprehensive Stakeholder and Community Engagement Plan.

A parallel work-stream to develop the City Spatial Plan (CSP) was added to the programme to exploit engagement opportunities and avoid activity duplication. An introductory letter from the Mayor was sent to relevant stakeholder groups on 9 February 2021 explaining the work programme and inviting feedback on how they would like to be involved. Since then circumstances have seen the City Spatial Plan delinked from this work programme, although the ITS engagement feedback will still inform the CSP development when this resumes.

In consideration of the community engagement associated with other plans, LTP and District Plan Review in particular, it has been agreed to delay the community engagement for the ITS until after 6 May. Other stakeholder engagement will continue and it is expected the ITS will still be delivered by year end.

1.4.4    Beltway Cycleway

The construction of the Beltway Cycleway, the new 2.5m wide off-road sealed and separated cycleway from Waterloo to The River Trail at Taita, is due to be completed at the end of May 2021.

1.4.5    Eastern Bays Shared Path

The Eastern Bays Shared Path was given $15M as part of the government’s Covid Response and Recovery Fund (shovel-ready), co-funding. Resource Consent was granted on 5 March 2021 following a Hearing in December 2020 however an appeal to the Environment Court was received for these consents.  We are anticipating starting construction through an early works package by July 2021, with main construction starting in September 2021 at Windy Point / Sunshine Bay.

1.4.6    Naenae Pool and Spatial Plan

A quantitative risk assessment of costs to rebuild Naenae Pool was completed by AECOM, project management services provider for the rebuild project. This work provides a more realistic and risk based project cost estimate by factoring things such as escalating costs in construction resulting from global supply chain disruption, increased demand for skilled labour, potential site issues that may be discovered during construction and the inclusion of improved technology that would support Council’s sustainability objectives.  The information was used as a basis for consultation on the draft LTP which started on 6 April that includes two options - a preferred investment option of $68M and an alternative option of $54M (estimate based on preliminary designs from 2019).

Planning and preparation for the demolition of the pool progressed.

A procurement process for the multi-disciplinary design team has been completed and we are currently in negotiation with a preferred candidate. The design process is scheduled to start before the end of April 2021.

The Naenae Community Advisory Group (CAG) held its inaugural meeting on 11 March 2021 and will meet again before the end of April 2021.

Oversight of Naenae projects and all major build projects is provided by the Major Projects Board which met throughout the quarter. Membership includes the Mayor, committee Chairs, Chief Executive and Project Sponsors. The role of the Board is to monitor the strategic direction and progress of the project, ensure budgets and risks are well managed and secure the necessary authorisation, funding and resources required to complete the project.

1.4.7    Wainuiomata Town Centre Framework and Streetscape Plan

Stakeholder engagement on the Wainuiomata Town Centre Framework and Streetscape is underway and runs through until 6 May. Information on the project is here: http://www.huttcity.govt.nz/Your-Council/Have-your-say/Consulting-on/wainuiomata-town-centre-framework-and-streetscape-plan

Feedback received will be reported to the Long Term Plan Committee in consideration of the final funding allocation to this project. The project team and/or project board members have to date met with representatives of the RSA, Wainuiomata Marae, Progressive Enterprises, local businesses and the Wainuiomata Community Board to present the proposed Framework and Streetscape.  

1.4.8    RiverLink

The lodgement date for the consent application has been put back to 30 June (consultant delays). The partners are continuing to progress discussions regarding the hybrid alliance procurement approach.

1.4.9    The Sebel Hotel – Lower Hutt and Events Centre

The hotel construction is continuing with all consents now received. The current estimated opening date is August 2021. Negotiations are progressing with the operator on a viable future operating model. Audited accounts for FY2019/20 for the purposes of the underwrite have been received and an underwrite payment made amounting to $626K. The net loss of the Events Centre for FY2019/20 inclusive of costs picked up directly by Council during Covid-19 lockdown is $657K. A further amount of $20K remains in dispute.

1.4.10 Rubbish and recycling

 

The go live date for the new service is 1 July and good progress is being made towards this. Key points are noted below.

·      We are working hard to see if we can decrease the cost of the 80 litre rubbish bin so we can reduce costs to lowest waste users. We expect to be in a position to report on this at the 9 June LTP subcommittee meeting.

·      Kerbside green waste options for the future – looking at a shared model (Waste Management runs a weekly service with the same resources as will be used for the Council 4 weekly service. The overall aim is to reduce the amount of green waste to landfill. This is a co-operative model that would start on 1 July 2021. Further refinements to this service will be looked at in the coming 12 months particularly focused on a fortnightly collection service.

·      All Multi-Unit Developments have been visited and bin solutions determined, based on size, lay-out and accessibility.  This information has been finalised and sent to WML in preparation for the roll-out. Letters have been, or are in the process of being sent to all MUD owners and residents advising them of the bins that will be delivered, advising if the service will be shared or individualised.

·      We have been working with Kainga Ora managers to resolve particular site issues for about 30 of its MUDs.  We will be working with Kainga Ora during the roll-out and over the first few months to iron out teething issues.

·      622 requests for assisted service/difficult access issues. We’re phoning people and visiting these homes as required.  This work is programmed to be completed by end of April

·      The centre where the bins will be assembled and distributed to people will be operative from April. First deliveries are scheduled for early May start with a gradual rollout across the city. This will take 6 -7 weeks with a two week buffer period before services commence

·      All planned new EV trucks won’t start on day one. Some will start a month later due to battery delivery held up overseas due to the pandemic.

 

You would have seen a flyer on the LTP consultation and rubbish and recycling starting on 1 July.  This was sent out with the rates invoice in early April. This is one element of our communications activities in support of the rollout of the new rubbish and recycling service.

The new microsite to support the initiative, hutt.citytoogoodtowaste.nz, went live on 16 April and will feature a number of areas to navigate for information including what to do when your bins arrive (storage options) and a reminder of what to put in each bin. The microsite functionality will be ‘mobile-friendly’ with features that quickly and easily direct users to useful information such as suburb-specific bin pick up days.

Sample bins have arrived and are being featured in promotional video shoots. The videos will be run across all of our channels and be complementary to the suite of rubbish and recycling promotional activities that are being run in the lead up to the service commencing on 1 July. Newspaper and radio advertisements will begin shortly, centred on bin arrival, suburb-by-suburb delivery dates and storage tips, as well as messaging around the importance of not using the bins until the service commences.

1.4.11 Partnerships with Mana Whenua

Several hui were held with Mana Whenua over the quarter with a key focus on discussions about Councils’ priorities for the draft Long Term Plan and consultation document, the ongoing review of the District Plan, the street naming policy review, the review and reset of the Hutt Valley Governance Group structure, and Māori Wards.

1.4.12 Pacific Peoples

 

After the Ministry of Pacific Peoples (MPP) funding talanoa (talk/discussion) earlier this year, approaches were made to us, for further funding advice from Pacific groups we had not worked with previously.  We have also been invited back to another MPP Funding talanoa event this month, which is another opportunity for us to connect with Pacific community groups.

 

We are in early discussions with Pacific Health Service Hutt Valley, who are based in Naenae, around how we can support them and the delivery of their strategic plan which is focussed around the wellbeing of our Pacific community

 

Hutt City Libraries secured additional funding from the National Library New Zealand Libraries Partnership Programme (NZLPP) to create a secondment role focused on outreach and partnerships. The role will work to expand the reach of library services, programmes, and content to ensure accessibility to those in our communities, particularly Pasifika and other minority groups, who are not currently using those services. Some mahi is this space has already been undertaken by our Library Digital Skills Advisor and Library Diversity and Workforce Development Adviser, and this new funded role will build on this.

 

1.4.13 Wellington Water

Chief Executives from councils across the lower North Island and top of the South Island continued to meet with the Water Reform programme manager to look at potential impacts/issues in water reform.

In mid-March the Mayor and Councillors Lewis, Briggs, Mitchell and Dyer, along with senior officers, attended the regional water reform workshop run by the Department of Internal Affairs

This workshop was an important step in the reform process enabling iwi and local government to provide feedback on options being considered by Government.

The discussions are extremely important in testing the reform proposals and refining DIA’s thinking ahead of providing advice to Cabinet later in the year.

A project team is being established to manage the transition process which is planned to take place over the next two years.

1.4.14 Wellington Regional Growth Framework

Consultation on the draft Wellington Regional Growth Framework is open and runs through to 10 May. The online engagement site is available here: wrgf.co.nz/have-your-say/progress

In the meantime progress is being made on the finding and appointment of a Chair for the Joint Committee; finalising the cabinet paper for Government appointments to the Joint Committee and meeting with remaining Iwi in relation to their appointments; finalising the secretariat role job descriptions and beginning the recruitment process.  

1.4.15 Climate change/zero carbon

Initiatives to reduce carbon emissions are out for consultation in the draft LTP. This includes removing natural gas from facilities. If this is approved we should achieve our 2024 target and a 50% saving in emissions (from facilities) by 2030. Further reductions would depend on New Zealand further decarbonising its electricity production from about 85% renewable energy currently and realising further efficiency opportunities at our facilities.

Our 50% investment in the energy advisor role (part-funded by EECA) is paying dividends. By making simple changes at our facilities and in areas such as street lighting we can make savings. A number of energy audits and assessments were completed during the quarter for the central administration building at 30 Laings Road, Koraunui Stokes Valley Community Hub, and RICOH Fraser Park Sportsville. Others are being planned over the coming months. As a result of these audits we work to realise energy savings opportunities wherever possible.

Work is underway to change practices at the Silverstream landfill whereby green waste will no longer be used for landfill cover and instead be composted offsite from July 2021.

Planning for engagement with the community to develop a city-wide roadmap for reducing emissions and responding to climate change impacts progressed with a lead group comprising community representatives. Engagement will be undertaken in phases with the initial phase getting underway in April/May. This will lead to a Council-wide organisational Carbon Reduction Plan (what will Council do, how will Council reduce its emissions, or help facilitate emissions in the wider community) that is planned to be completed by the end of June 2021. Later engagement will assist in developing a city-wide roadmap for reducing emissions and responding to climate change impacts (what will the community collectively do, what will key stakeholders such as large businesses do to reduce their emissions).

Work is progressing with Meridian Energy to roll-out new EV charging stations. These will be located in Days Bay and Eastbourne. The draft LTP includes plans to have additional charging stations across the city subject to 50% government funding.

 


Attachment 2

Appendix 2: Outcome and Q3 2020-2021 KPI Dashboard

 


 


 


 


 


 


 


 


 


 


 


 


Attachment 3

Appendix 3: Infometrics Quarterly economic monitor, December 2020

 


 


 


 


 


 


 


 


 


 


Attachment 4

Appendix 4 - Financial performance Results To 31 March 21

 


 


 


 


 


 


 


 


 


Attachment 5

Appendix 5: Project performance overview for period ended 31 March 2021

 

Project performance overview for the period ended 31 March 2021

NB- Note this content was prepared in mid-April 2021 and in some cases there is new information that has been received subsequently (refer separate reports on this agenda on Three Waters investment and RiverLink).

Officers are currently delivering several important projects supporting our strategic priorities.  The following is a summary:

 

Project Progress Snapshot

Project progress status indicators are:

Project Financial Summary

Project

Forecast

$M

Budget

$M

Variance

%

Comment

District Plan Review

7.10

7.10

0.00

0%

The project budget for 2021/22 onwards is subject to the upcoming Long Term Plan process and is likely to be higher.

Eastern Bays Shared Path

30.00

30.00

0.00

0%

 

Kerbside Collection implementation

0.99

0.32

(0.67)

(207%)

An operating budget variance of approx. $0.7M in 2020/21 to implement the project is being funded from reprioritisation of budgets.

Naenae Pool

68.00

68.00

0.00

0%

An exercise was undertaken to review the 2019 cost estimate based on preliminary designs and assess probability of achieving the estimate given the time that has passed, increased understanding of the project scope and current economic conditions.  Taking into consideration various risks, the Council agreed to include $68M in the LTP 2021-2031 consultation document as the preferred option.

Riverlink

121.50

72.91

(48.60)

(67%)

The increased investment from $57m to $121.5m will enable key components of the RiverLink project to proceed, including a pedestrian bridge, transport upgrades to connect with the new Melling Bridge and river edge enhancements. If the existing budget were retained then the project will be re-scoped and elements re-prioritised. This will mean the delivery of key elements may not be possible.

Urban Cycleways - Beltway

7.32

7.29

(0.03)

(0%)

 

Wellington Water Programme

25.1

30.5

5.5

18%

This variance is largely due to the pushing out of work the on the Barber Grove to Seaview Collecting Sewer project.


 

Project Status Comments

Project

Status Summary

District Plan Review

The preparation of a new District Plan, as required by legislation, and also aligned with Hāpori Ora - Thriving Communities/City Plan and City Wide Spatial Plan projects.

Detailed assessment work is in full swing on a range of topics, including heritage, noise, land instability, tsunami, flooding and residential character.  Community engagement commenced on 6th April in conjunction with the Long Term Plan engagement. In addition, targeted engagement with property owners has commenced on reviewing the heritage schedule. Reputation and timing risks associated with this engagement which could impact next phase of work. Some concerns remaining with finding a workable solution in partnering with mana whenua at an operational/detailed level for the review – about to commence recruitment of a policy planner with expertise in tikanga Maori to assist with managing this matter. Pending RMA reform may create uncertainty for the review, particularly in terms of scope and timing.  

Eastern Bays Shared Path

To construct a walking and cycling route, along Marine Drive (between Point Howard and the northern end of Days Bay, and the southern end of Days Bay to Eastbourne).

The Resource Consent Hearing with GWRC was undertaken on 15 – 17 December 2020 with a decision granting consent by the Hearing Commissioners on 5 March 2021. Appeal on the consent was received on 26 March 2021. Budget estimates for construction at this stage still have a level of uncertainty; however further updates will be undertaken regularly as the detailed design develops.  Tight timeframes to construction and meeting CiP requirements remain a concern. This is further compounded by the appeals process and its potential delays to the programme as well as impacts to the budget.

Kerbside Collection

To implement new kerbside collection services following the strategic review of waste management services.

 

The Project is on target though there are some aspects that are being closely managed to ensure the roll-out on 1 July is successful.  These are:

·      There has been a 3-week delay with bins coming from Australia mainly due to a cargo back-up at Auckland Port.  This is being mitigated by re-routing shipments to Tauranga and by-passing Auckland.

·      The number of assisted service requests is larger than expected (622).  Additional resource is being dedicated to this task which is aiming to have completed in April.

·      Some Kainga Ora selections appear to be difficult to implement.  This will be resolved following discussions with Kainga Ora this month.

BAU requirements have been identified and Dataprint engaged to make changes to Saber for end of May.

Naenae Pool and Spatial Plan

To deliver a new aquatic and fitness facility and agreed wider projects which reflect the Voice of the Community Report and contribute to the rejuvenation of Naenae’s town centre

The Council has agreed include $68M in the LTP consultation documents as the preferred option. Our project managers, AECOM, have updated their draft programme, and drafted a forecast project cashflow.  The programme needs input from the design team and will likely change following that.   We are nearing the end of the procurement process for the Multi-Disciplinary Design Team.  We have three strong proposals to assess.  Naenae Community Advisory Group (CAG) held its initiation meeting on 11 March 2021.

Riverlink

The RiverLink project seeks to achieve the integration of flood protection, transport and urban regeneration works between Ewen Bridge and Kennedy Good Bridge. 

PMO and project partners’ main focus has been on the consent submission at the end of May 21.  This is currently behind schedule.  This needs to be met to enable construction to commence in late 22.  The QS’ first draft of the whole of project cost estimates is being worked on and not yet ready to be reported.   The apportionment of costs between partners is yet to be confirmed.  The cost estimate needs to be fully reviewed to ensure it correctly matches HCC’s scope. All project partners face the challenge of ensuring that the project is deliverable within their approved/sought funding.

Urban Cycleways – Beltway

To develop the cycling network through the provision of safe routes and infrastructure that promoted an increased uptake of cycling for people. 

Construction on the Beltway is progressing with the project at 76% completion. The Contractor is still behind the scheduled programme of approximately 16 days and additional teams have been brought in to claw back this time. There is some mounting pressure on the contingency budget for the Beltway with a number of costs from stakeholders likely to increase. Delays to lighting luminaires and bollards from Europe for the Beltway due to COVID-19.

Wellington Water Programme

For the renewal and capital works programme for the Three Waters network.

 

This report covers the 3 Waters capital works programme for 2020/21 and is based on WWL reports for the third quarter. Total programmed budget is $30.5M covering all capital works expenditure for Water, Wastewater and Stormwater with a forecast year-end spend of $25.1M.  The programme scope is impacted by a timeline revision (pushed out) for Barber Grove to Seaview WWTP Main Collecting Sewer, with full contract award now programmed for late June 21 and commencement of physical works in the next financial year. The budget impact is estimated to be a $4.7M underspend for this year, for which a carry-over will be sought.  A further $715k of capital works is projected not to be completed in this financial year and again this will be the subject of a carry-over.


 

Projects Summary as at 31 March 2021

 


Next major milestones

Project

Next Major Milestones

Date

Days Bay Wharf Refurbishment

Refurbishment of wharf head

Mar 21

District Plan Review

Notification of ‘Draft’ District Plan (if applicable)

Late 21

Eastern Bays Shared Path

Finalise Design

May 21

Kerbside Collection

Bin and information roll-out

May-June 21

Naenae Pool and Spatial Plan

Project Initiation Meeting

 

Riverlink

Submission of resource consent application

31 Jun 21

Te Pātaka Project

Design and Build ECM workspaces

Jun 21

Urban Cycleways – The Beltway

Construction Complete

May 21

Wellington Water Programme

Seaview WWTP Seismic upgrade construction commence

Q3 – 2020-21

 

Seaview WWTP Wastewater Discharge & Storage Preliminary Design/Consents

Q3 – 2020-21

 

Petone Collector Sewer Concept

Q3 – 2020-21


Engagement activities

Description

Date Scheduled

District Plan Review

Community engagement on issues to be reviewed to be undertaken in April in conjunction with Long Term Plan engagement.

April 21

 

Targeted engagement with property owners of buildings/sites with potential heritage value

April 21

Eastern Bays Shared Path

Engagements with these community groups including from Windy Point and Sunshine Bay residents, Eastbourne Dunes Restoration Group

April 21

Meet with Little Penguin Interest Group to seek feedback into the BPP management plan finalisation

March / April 21

Kerbside Collection

Contact being made with residents requiring assisted an service

March/April

 

Letter to Coast Road residents and on private roads

April 21

 

Further meeting with Kainga Ora managers to go over roll-out plans

April 21

Naenae Pool and Spatial Plan

Naenae Community Advisory Group

TBC

 

Project update in the Naenae news

Monthly

 

Start of project update newsletters

Starts April 21

Riverlink

Mayor’s business breakfast with Chamber of Commerce

April 21

Urban Cycleways – The Beltway

Opening of the completed facility and community celebration

Late May / June 21


 


Top risks and issues

Project

top risk

mitigation / comments

District Plan Review

Time delay – absence of key data inputs

Identifying key data inputs early

 

Difficulty to partner adequately with mana whenua

Early involvement in the review will be required.  Bundling up packages for engagement also identified as helpful. Maintain close links with Kaitātari Tumuaki Māori team.  Kaitātari Tumuaki Māori team to establish process for partnering with Iwi/hapū at the start of the project.  Kaitātari Tumuaki Māori team to assist team with mana whenua partnership.

Eastern Bays Shared Path

Managing and meeting the funding requirements and milestones of CiP

A risk adjusted programme though to construction start has been produced by the Consultant.

The consent hearing was held in December 2020 and the consent was granted on 5 March 2021. Pre-Implementation risks are substantially reduced as a result of the progress made with consenting. Covid funding was dependent on the consents being obtained.

Procurement and Construction

The current construction market is very heated and there is significant demand meaning there is currently low capacity. We are currently working with Waka Kotahi to explore how we could possibly partner with them on their Te Ara Tupua Shared Path Project. The Consultant Team have also been asked to develop a Plan B for procurement and construction if the partnership with Waka Kotahi is not successful.

Naenae Pool

Managing the uncertainties around having sufficient budget to deliver Naenae programme of projects and desired outcomes.

Early engagement of AECOM's QS to provide as much certainty of cost as possible. Workshop to discuss project scope, risk areas and identify all project related costs. Commence design process as a matter of priority

Riverlink

Partner organisations fail to reach legal agreement

Continue proactive best-for-project outcomes focus

 

Partner organisations do not have adequate funding to deliver

Challenge cost estimates, value engineer the designs

 

Current project team is primarily focused on consent submission date, not quality or deliverability of project

Use influence at project board and steering group

Wellington Water Programme

The cost and timing of Barber Grove to Seaview WWTP MCS Project will have a large impact on the annual budgets for FY20/21 through to FY22/23 due to the project size.

As the project progresses through the early contractor involvement phase there will be more certainty. around the cost and schedule We are developing a regular communication that we can share with key. stakeholders to keep everyone in the loop with where we are up to

Project

top issue

mitigation / comments

Eastern Bays Shared Path

Restrictive policy framework under the NZCPS 2010, RPS, Regional Coastal Plan and PNRP (Decisions Version) make coastal development very challenging to consent:

The legal team are developing a robust response to GWRC and further avoidance and mitigation options will need to be explored to ensure that legal tests can be met.

Riverlink

Inadequate HCC resources

Communications support and engagement support have been strengthened, further project management support in consideration

Wellington Water Programme

Emergency works are on a wastewater pipe that crosses Bell Road.  A permanent solution is urgently required.

A team has been appointed to get the permanent solution consented, designed and built Options have been assessed and cost estimates are currently in development as more information becomes available around the appropriate solution Most options will require resource consent for works in the stream which means that the works will likely be carried out between February and June 2021. Keep Hutt City Council updated on progress as this project develop. Electric pump has been installed as temporary solution until permanent works are in place. Emergency Management Team have reduced frequency of meetings to once a month now that the situation is stable.

 


Attachment 6

Appendix 6: Treasury Report for the period ended 31 March 2021

 

Treasury Report for the quarter ended 31 March 2021

 

This treasury report provides a summary of how Hutt City Council is complying with Treasury Risk Management Policy limits and the performance of treasury activities against plans.

 

The focus of treasury management activity has been on:

 

Ø managing interest rate risk and minimising funding costs,

Ø monitoring cash flow and liquidity,

Ø managing debt requirements and the maturity profile.

 

Key highlights to 31 March 2021 include:

 

Ø An average cost of funds of 3.14% was achieved, which is 0.34% lower than budgeted

Ø Interest cost savings of $0.64M were achieved mainly due to the lower interest rate environment, along with savings from “blend and extend” of Interest Rate Swaps within the portfolio.

Ø Interest earned on cash holdings is slightly ahead of budget ($0.16M) primarily due to our high cash balances over the period.

 

Debt portfolio performance

 

Ø Net debt (which includes cash holdings and CCO investment) increased during the quarter from $172.3M at 31 December 2020 to $178.5M at 31 March 2021, whilst gross debt is unchanged at $221M.

Ø No debt issuance was completed during the quarter.   

Ø The revolving credit facility of $35M remained undrawn as at 31 March 2021.

 

 

Actual YTD

YTD Budget

Variance

Average cost of funds

3.14%

3.48%

(0.34%)

Interest expense – borrowings

($5.2M)

($5.8M)

$0.64

Interest earned

$0.24M

$0.08M

$0.16M

Fair value gain on derivatives

$13.0M

-

-

 

The Council has a range of interest rate swap agreements in place to manage interest rate risk and to provide some certainty of future interest costs. Due to fluctuations in the interest rate market the overall mark-to-mark value of these agreements is constantly changing.

 

The year to date fair value gain of the swap portfolio (derivatives) was $13.07M as at 31 March 2021. This is an accounting adjustment required to be recorded and there are no cash flow implications.

 


 

Policy compliance

 

Measures

Policy

Actual

 31 March 2021

Compliance

Net external debt/total revenue

Maximum 150%

96.0%

Yes

Net interest on external debt/total revenue

Maximum 10%

2.8%

Yes

Liquidity ratio

Minimum 110%

124.6%

Yes

 

Funding risk control limits

 

Period

Minimum %

Maximum %

Actual gross debt

Not including Revolving Credit Facility ($35M)

Actual %

31 December 2020

Compliance

0 to 3 years

15%

60%

$81M

37%

Yes

3 to 7 years

15%

60%

$95M

43%

Yes

7 years plus

10%

60%

$45M

20%

Yes

 

 

Total

$221M

100%

 

 

Funding maturity profile

 

Interest rate risk control limits

Interest rate risk is managed through the risk control limits. The graph that follows shows the level of fixed rate cover in place within the minimum and maximum limits of the treasury risk management policy.

After overlaying interest rate swaps, the split between fixed and floating debt is as follows:


                                                                                      95                                                             24 May 2021

Long Term Plan/Annual Plan Subcommittee

14 May 2021

 

 

 

File: (21/765)

 

 

 

 

Report no: LTPAP2021/2/119

 

2021-2031 draft Long Term Plan - Submissions Analysis Summary

 

Purpose of Report

1.    The purpose of this report is to provide Council with analysis of the submissions received and the results of engagement activity undertaken during the engagement on the draft Long Term Plan (LTP) 2021-2031.

Recommendations

That the Subcommittee recommends that Council:

(1)     notes the details of the engagement and consultation activity prior to and during the 2021-31 draft Long Term Plan engagement period
6 April to 6 May 2021;

(2)     notes that summarised feedback relevant to the specific consultation questions will be reported in other reports dealing with these issues; and

(3)     notes the summary analysis of all the feedback received and related Appendices.

 

Executive Summary

2.   One of the biggest challenges Te Awa Kairangi faces is the pressure that a growing population and climate change is putting on our ageing infrastructure and assets. Resilient infrastructure assets are crucial to both support the city’s growth and in response to the impacts of climate change and sea level rise.

 

3.   The key focus of the draft LTP 2021-2031 is getting the basics right and to do that, Council is proposing to double its investment in capital projects to $1.4B over the next decade.  Nearly three quarters of this will be spent on core infrastructure – $582M on our Three Waters network and $353M on transport projects. Investment in important community infrastructure, including the rebuild of Naenae Pool and Petone Wharf, is also planned as is accelerating efforts to tackle the housing crisis and taking steps to eliminate carbon emissions across all of Council facilities.

4.   The proposed draft LTP 2021-2031 aims to strike a balance between planned rates increases, while also including funding to progress key projects and avoiding significant service reductions.

5.   Council is proposing an overall 5.9 per cent increase in rates revenue for 2021/22 – this equates on average to $2.50 per week per residential household.  Note that the new waste and recycling services are being funded from a specific targeted rate charged to residential ratepayers receiving the service.  This is in addition to the overall rates increase and will offset costs for home owners as they no longer need to purchase rubbish bags or pay for a private rubbish collection service. The cost of the new service has been separated out so that ratepayers can see what they’re paying for in terms of rubbish (cost varies with size of bin), green waste etc.

6.   With financial sustainability and affordability front of mind Council has made $5.2M in annual savings ($1M equates to about one per cent of rates). This has helped avoid potentially larger rates increases.

7.   Given the importance of the decisions that need to be made considerable effort went into raising awareness of and increasing engagement on the draft 10 year Plan (LTP 2021-2031) process. The community has had multiple opportunities to provide feedback in their preferred settings or through their preferred channels at their pace. 

8.   For the first time as part of the engagement process, Council undertook early engagement with the community. This started in December 2020 through an online survey on www.haveyoursay.huttcity.govt.nz  and face-to-face workshops. This engagement enabled Council to “check in” with our communities to ask them if we were heading in the right direction with the focus on getting the basics right and the six key priorities. A series of hui with Iwi Mana Whenua were held during 2020 in the spirit of our partnership with them.

9.   Consultation on the draft 10 year Plan (LTP 2021-2031) began 6 April and closed midnight 6 May 2021. A dedicated web site attracted high numbers of visits with people engaging with the material available.  427 survey forms were completed via Bang the Table (BTT) during the engagement period (337 full forms and 90 single priority forms. An additional 25 paper forms were received. 

10. Further hui were held with Iwi Mana Whenua and a number of café style engagement hui were held in our community facilities. People were both surprised and engaged by the informal approach – they enjoyed and appreciated an opportunity to talk directly to Councillors and senior officers supporting the hui to share their present concerns and ideas for the future.  Hui occurred with a range of interest groups across the education, social services, business and community sector. 

11. Major enhancements were made to the consultation document (which was designed for the digital environment) and website.  The CD reflected a digital first approach to its design and a greater focus was put on using colour, illustrations and photos to engage the reader.  Auditor comment on the CD was complimentary of the new design approach.

12. Social media played a key role. There were at least 117 conversations on the Hutt City Council Facebook page relating to the 10 year plan and Facebook polls received 1617 responses 

13. The majority of feedback supports the overall direction Council is taking and the six priorities identified. The majority of feedback also supports the 5.9% rates increase, the six priorities and the initiatives proposed.

14. Opinion is split relatively evenly on Petone Wharf.  Analysis indicates that the lower level of support for Petone Wharf is related to the desire to reduce the rates increase, rather than fundamental opposition to the project.  People preferring a lower level of support for these projects also prefer a lower rates rise.  The same people support the three waters and transport investment and are looking for savings elsewhere.


 

Discussion

Draft LTP 2018-2028

15. Engagement on the draft LTP 2021-2031 built on the progress made in engaging with our community on line via the Council’s website during consultation on the draft 2018-2028 LTP.  The draft LTP 2018-2028 was much narrower in scope in terms of proposals for community input and promotion focused on traditional channels such as radio and billboard advertising. 

16. Some public information sessions and stakeholder meetings were held but were generally poorly attended.  Hard copies of the Consultation Document were made widely available. A computer was made available at all libraries, community hubs, the main administration building and public information sessions so the public were able to complete their submission online there. 

17. The consultation was successful in driving up online participation with over half (51%) being received online compared to 18% in 2017 for the Annual Plan. 194 submissions were received.  The number of submissions was lower than in previous years and was expected given the limited number of consultation topics. Some progress was made on engaging with those who are typically under- represented in civic-decision making processes. Submitters on average were younger and more ethnically diverse than in previous years.

Feedback Received

No. of responses 2021

No. of responses 2018

Haveyoursay online full form

337

194

Haveyoursay single priority form

90

Full paper feedback form

25

Single priority flyers

4

Emails

69

Physical letters

2

Facebook Conversations

117

 

Post-its from drop-ins

124

 

Post-its from Remakery sessions

28

 

Post-its from College sessions

25

 

 


 

2021 -2031 draft 10 year Plan (LTP 2021-2031)

 

Early engagement December/January 2020

 

18. The purpose of the early engagement was to assist Council to “check in” with our communities to ask them if we were heading in the right direction with the focus on getting the basics right and the six key priorities to frame the priorities for the draft LTP 2021-2031.  Engagement consisted of an online survey and face-to-face workshops and was to:

·    Inform our community about the six priorities and the projects and work Council was doing and considering under each

·    Get general feedback on these priorities and take note of any ideas our community had relating to the projects and work that might contribute to each and

·    Begin to establish our neighbourhood engagement approach through building our network of community champions and/or advocates who will be supported to continue conversations within the community both for LTP and future consultations.

19. The feedback largely supported the six key priorities with most respondents (over 80%) agreeing that investing in infrastructure (90%), caring for & protecting our environment (84%) and being financially sustainable (82%) should be priorities.  Around a fifth (20%) of respondents were unsure if increasing housing supply or an innovative, agile economy should be a priority and over a quarter of respondents were unsure about connecting communities being a priority.

Kanohi ki te kanohi 

 

20. The importance of people being aware of and having the opportunity to comment on the proposed investment in the city and the implications for them demanded a diverse, open and inclusive approach to engagement.  We ensure that barriers to participation were removed by combining online and kanohi ki te kanohi engagement.  While online engagement is vital in these connected times there continues to be an ongoing need for this to be complemented by more “their place, their pace” engagement with our communities.  In response, several enhancements were made to the engagement approach for the 2021-2031 draft LTP consultation. 

 

21. Further hui were held with Iwi Mana Whenua and ten café style engagement hui were held in our community facilities and at the Riverbank Market, Queensgate and the Naenae Market in the first two weeks. People were both surprised and engaged by the informal approach – they enjoyed and appreciated an opportunity to talk directly to Councillors and senior officers supporting the hui to share their present concerns and ideas for the future. 

 

22. Hui with a range of interest groups across the education, social services, business and community sector. Elected members also attended hui with community groups and the Mayor attended a number of hui with various organisations with a range of interest groups.

 

23. Consultation documents, feedback forms and topic flyers were sent out to all libraries and hubs in week two. Libraries and hubs were sent a pdf of the consultation document and full draft Long Term Plan (LTP) so that sections could be printed as requested.

 

Consultation document and web site

 

24. Major enhancements were made to the consultation document and web site.  A greater focus on using colour, illustrations and photos to engage the reader.  A stand-alone web site (microsite) was developed alongside the Consultation Document (CD) to ensure that the look and feel of the latter reflected the microsite closely. 

25. The complexity of the rating changes was focused on helping people to understand the issues and choices they were being asked to make.  Considerable effort was put into ensuring the information in the CD was accessible for people and to this end a video was developed to support this.  

26. There were 5081 page views and approximately 1,800 people visited the microsite primarily direct via social media.   There was a 50/50 split this time between mobile and desktop technology.

27. There was food engagement with the Financial Sustainability (approximately 30% of people visiting this part of the site) however the average engagement time seems relatively low (52 seconds) and other page views show a significantly smaller audience navigated the rest of the microsite.  138 people accessed the Mayor’s video and 32 people viewed the rates video on You Tube.

Facebook

28. The Facebook page messaging reached 27,455 people, had 865 post clicks, 85 reactions, 27 shares and 20 comments.  

29. A series of quick polls on Facebook began 27 April with a poll for each priority area and 1617 people responded to these. Analysis of the results is included in the feedback analysis and any questions asked by respondents as part of their feedback collated and sent to relevant officers for a response. The responses were posted on the Have Your Say project page as soon as they were available. Under the Local Government Act we are able to include social media comments as responses.

 

Overall approach

30.   A strong focus was placed on ensuring that the data resulting from the survey can be relied on as a true and accurate record of results. High quality data is essential to support decision making.


 

Submissions analysis

 

31.   Council received 393 submissions via Bang the Table (BTT) during the engagement period 6 April to midnight on 6 May.  There were 71 emails (69) and two physical letters.  Considerable effort was put in to ensuring the quality of the data to ensure that any duplicate/multiple submissions were picked up and the data entry was correct.  Officers have arranged for an external research company to peer review both the methodology used and the data analysis itself.

32.   There was a good response across wards. The majority of submissions came from people under 50 years (62%) with 11% from under 29 years 4% of which were under 20 years. 

33.   Of these 58% strongly agreed or agreed with the overall approach outlined in the draft Long Term Plan 2021-2031 while 14% either disagreed or strongly disagreed.

34.   Support for Council’s preferred options ranged from 85% (three waters) to 57% (RiverLink).  For Petone Wharf there was a higher level of support for option 2 (52%) There was more support for the CFT and Neighbourhoods and Communities approach proposed by Council than opposition, but both included a   high proportion of “don’t know” responses.

Iwi Mana Whenua

35. Engagement with Iwi mana whenua was a key focus and began prior to the development of the draft LTP 2021-2031, continuing throughout the year and engagement period.  Iwi mana whenua support council refocusing on the city's core infrastructure and the prioritisation of spending on three waters.

 

36. Taranaki Whanui hosted a hui at Waiwhetu mārae 15 October 2020. Iwi mana whenua emphasised the importance of partnership being a “constant” rather than a “once a year” accountability meeting and they welcome the commitment Council and the Chief Executive have made to ensuring constancy in the partnership. 

 

37. They expressed concern about the perceived inequity in funding received by mārae that are open to the community 24/7 compared with funding and support given by Council to community houses.  Funding has not been inflation adjusted and mārae are finding it more difficult to meet the needs of their communities.  Since 2013, allocated funding has gone from $160k per annum to $200k and the funding is shared between seven mārae.  The community houses funding was included in contestable community funding in 2019.   

 

38. Other issues raised were protecting and enhancing the natural environment, finding a better, more accessible way of communicating with each other and also addressing barriers to accessing health services. 

 

39. Ngahuru Charitable Trust also hosted a hui on 15 October. They support the move towards the four wellbeings in the draft LTP and also Council’s commitment to addressing climate change – the “quadruple bottom line”.  They addressed the importance of housing and working with those unable to find safe, secure housing.  They support more innovation in the recycling area and working together to get the best value out of our mutual assets, investing in EV stations and addressing congestion.  They urge Council to be bold and make the changes that are needed to secure the future for Te Awa Kairangi.

 

40. Ngāti Toa Rangatira also hosted a hui and have made a submission. They support any opportunity to empower mana whenua to engage in decision-making.  They ask that Council give much stronger planning and consideration to climate change impacts and help to shift awareness in our community.  They agree with the priority given to bulk infrastructure investment to support additional housing and support the proposed proactive approach to transport investment (as is preferred). 

 

41. They also support efforts to create a more resilient, connected and vibrant city for our community and to this end, support increasing investment in the RiverLink Project.

 

Three Waters

 

42. There was significant support for an increased investment in Three Waters infrastructure. Some respondents were concerned that the current infrastructure was not durable for the projected population increased, and noted that resilience and future-proofing was a priority. Some were apprehensive at the thought of water meters, while others considered that to be important in order to identify leakages.

 


 

Transport

43. The majority of respondents noted that change was needed to fix current traffic issues in Lower Hutt. There was some concern that the city is too car-centric, and the problems of congestion would only worsen if the roads were not adequate enough to allow more pedestrians and public transport in future. 

44. There were mixed views from respondents. Some had the perception that the Cross Valley Connection would reduce the traffic congestion, while others took the view that it would worsen the problem. Several respondents felt that this project was not consistent with Council’s environmental sustainability goals, and wanted a mode shift into increased pedestrian and cycle-oriented infrastructure.

45. Others thought building another road was not necessary and that if we need an east - west connection then can we look at public transport options. It has been proven time and time again that building new roads encourages more car usage and in this instance will just contribute to more congestion elsewhere in our network.

46. There may be some confusion here with people not quite understanding that the first years of the transport programme are focused on public transport and active transport improvements.  It would be useful to look at how awareness could be raised – perhaps through the Integrated Land Transport Strategy that is under development currently.

47. A safe transport infrastructure that supports micromobility and cycling is the focus of a majority of these responders. Many are advocating for a mode shift from cars towards walking and active transport with the view that moving away from private car usage is better for the environment as well as for the health of a community’s citizens. People have also commented forward that while building a comprehensive cycling and micromobility transport network warrants a large expenditure of money, it is needed to offset the projected intensification of housing. Further comments emphasise the need for equity in cycle path availability in all the suburbs of Lower Hutt.

48. A safe transport infrastructure that supports micromobility and cycling is the focus of a majority of these responders. Many are advocating for a mode shift from cars towards walking and active transport with the view that moving away from private car usage is better for the environment as well as for the health of a community’s citizens

RiverLink

49. RiverLink has been widely supported from its early conception as part of Making Places in 2010.  Over time the community has been asked to provide feedback on various aspects of the project from design to the preferred option for flood prevention.  Support has continued through a number of engagements since the community agreed a preferred flood protection approach and the three partners to RiverLink – Council, Greater Wellington Regional Council and Waka Kotahi – forming a joint Project Office to deliver the project.

 

50. When the project was first proposed the estimated cost was $40m. Since then more work has gone into understanding the costs and benefits of the project and Council wants to take this opportunity to present these new costings and gauge the level of continued support or otherwise. 

 

51. Council and rate payers have already invested considerable time and resources in delivering this “game changing” project for the city and its many communities.  Officers have tracked responses during the engagement period and it is worthwhile noting that support for Riverlink was tracking as relatively even between options 1 and 2. 

 

52. Analysis indicates that the lower level of support for RiverLink in this engagement is related to the desire to reduce the rates increase, rather than fundamental opposition to the project.  People stating a lower level of support for these projects also support the three waters and transport investment and are looking for savings elsewhere to get a lower rates rise.

53. Feedback about the RiverLink project has shown that the respondents are largely in favour of improving the transport infrastructure. Improved and safe accessibility to active transport and micromobility is highlighted, also in conjunction with better connectivity to public transport. In this context, the Melling Interchange is particularly mentioned as a desirable and positive investment. Of paramount concern is flood protection and resilience.  

 

 


 

Petone Wharf

 

54. Some submitters mentioned sea level rise and suggested that Petone Wharf would have a role to play in increasing food resilience while others saw sea level rise as a reason to not invest the wharf.  Others saw the wharf as a transport option to reduce congestion. The full refurbishment project will enable a ferry or boat to berth at the wharf.  This was the situation before the wharf was closed. In terms of community resilience, the shallow water at Petone Wharf makes it less than ideal for delivery of supplies and so on. It is more likely that the Seaview wharf would be used for this purpose.

 

 

Naenae Pool

55. The support for rebuilding the Naenae Pool to the same standard as it prior to its closure (option 1) has steadily increased. The question on Naenae Pool received the most responses. Almost all those who filled out the full form answered this question and many of those who filled out the infrastructure priority formed only filled out this question.


Caring for and Protecting our Environment

56.  There was a high level of support for greater investment in responding to climate change impacts.  Submitters were keen to see Council taking action sooner to address climate change impacts especially sea level rise.  The Cross Valley Transport Connection in particular was seen as being counter-intuitive with prioritisation of active and public transport modes and placing private vehicles at the lowest priority being the preferred approach.

57.  Submitters felt that achieving mode shift to active transport is critical to success and that the funding allocated to active modes does not reflect this criticality. They wanted a stronger financial commitment to micromobility, reducing carbon emissions, increasing biodiversity and creating a more connected and healthier city.

58.  Submitters supported the focus on EVs as a core way to reduce the 56% of emissions that come from private vehicle use but felt this was not enough.  Some felt EVs are an expensive option for Council vehicles at the present time and that Council should wait for them to be less expensive. Sustainable yes but it needs to be economical as well.   Others focused on Te Awa Kairangi and the importance of the health of the river for supporting flora and fauna and improve the quality of waterways.

General Rate

59. Support for the general rate was strongly in favour (85%) of option 1 for the rates share between residential and commercial rate payers - 62% residential share of the total general rate.  People who supported this option were more likely to be residential ratepayers and 15% of submitters support option 2.

 

 

60. The Southend Business group submit that the policy of reducing residential rates to just 60% of the total general rate is based on assumptions that have not been justified and can be challenged. They suggest that if the policy is confirmed, the resulting increase in rates for businesses in the central business district should be applied to development of the business area to improve the attractiveness to residents and other business customers.  They are advocating for the rates differential to be de-coupled from the policy target of 60% of general rates to be collected from residential properties. 

 

61. Diversified and Stride also oppose the rating differential and the policy of reducing residential rates to 60% over time.  Their view is that there is not an increased burden on residential rate payers where there is a corresponding increase in value (to the residential ratepayer’s dwelling/s).

 

62. They submit that Queensgate provides a range of services to the community to ensure it is an attractive place to work and visit, that it serves an important community function by being a place where friends and family can meet and recreate and that they have invested significant capital in ensuring the centre remains attractive to residents and visitors alike.  They are advocating for Council to return to a policy of reducing the commercial share of rates over time reflecting a Council decision in 2012 to reduce the commercial share to 2.29 of the general rate.

Hutt Valley Chamber of Commerce

63. The Hutt Valley Chamber of Commerce (HVCC) is the predominant voice for the small to medium enterprise (SME) sector across the Wellington region and in particular the Hutt Valley. More than 90% of their members operate small and medium sized businesses, each employing less than 20 people.

64. The Chamber hosted approximately 75 people at a Mayoral Breakfast on 14 April and another 30 people at a specific workshop focused on the Draft Development and Financial Contributions Policy. They have also run a five-month programme communicating details of the RiverLink project to the business community including the very constructive Spotlight on RiverLink event held in March which provided an effective forum for discussion and feedback.

 

65. They support council’s ongoing commitment to investing in core infrastructure and the approach to identifying significant additional cost savings. They also support the continued investment in water infrastructure and earthquake resilience and recognise that without these basic elements of infrastructure, businesses cannot operate.

 

66. General rate – the Chamber would like to see a more detailed analysis of the rating differential based on actuals rather than averages, along with consideration of various different segments of the business community. This analysis would give businesses a clearer picture of the impact of the rating differential decisions proposed in the Long Term Plan.

 

67. They note that in the current economic climate, the business community continues to face ever-increasing costs and this is being reflected in their local business confidence surveys, with interim data from the current survey showing almost 60% of local businesses are seeing costs increasing. They also expect to see this continuing for the next 3-12 months.

 

68. Development and Financial Contributions Policy - the Chamber is in support of some contribution from developers. However their view is that the current change in policy, which will result in large fee increases in some catchments, is being implemented in a very short space of time. This short time frame is causing a major demand spike on local businesses to get developments secured before the proposed fees come into place. Many businesses in the industry are experiencing considerable pressures in delivering services.  This issue is addressed in the detailed report.

 

69. The Chamber is also concerned that the business community is not aware of the proposed Development and Financial Contributions Policy and the extent of the proposed changes to charges.

 

70. The Chamber supports RiverLink, has asked that more be done to address parking and transport infrastructure and also that Council engage in planning for the impact of Transmission Gully on the congestion and other traffic issues it will cause in Lower Hutt.

 

Rural rating Category

71. 75% of submissions supported option 1 - align rural rating category definition with the District Plan with 25 % supporting option 2 - maintain the current rural category definition.  All comments made were by people opposing the change.  Their concerns mostly relate to their view of the value that they receive minimal value from council services such as community facilities, footpaths, roads, three waters services because of their rural location.  The detail for the rural rating category is discussed in a paper being prepared for the subcommittee meeting on 24 May 2021.

 

Commercial accommodation category

72. Seventy three percent of submitters preferred option 1 - remove the commercial accommodation category with 27% preferring option 2 - retain commercial accommodation category. There was one comment made with the submitter concerned about a possible knock-on effect of reduced accommodation across Lower Hutt.

 

Development and Financial Contributions Policy

73. A full report on the Development and Financial Contributions Policy will be made to the LTP subcommittee on 24 May 2021.

 

74. Of the 287 people who responded to this question, 70%  support the Council’s ‘growth pays’ funding approach in the Policy. The development sector would prefer to see ratepayers making some contribution towards the costs of growth. Their view is that the city benefits directly from development through an increased rating base.

 

Community Facilities Trust

75. We asked our community if they agree with the approach to addressing the future of the Hutt City Communities Facilities Trust.  There was a high number of “Don’t know” responses (55%) however 35% of submitters supported the change.  The confusion about who the trust was and what they do was further reflected in the comments with many respondents including comments about libraries, parks and playgrounds.

Neighbourhoods and Communities Strategic Direction

76. We asked our community if they agree with the direction we are taking on connected communities. Forty-nine per cent of submitters agreed however there was a high number of “Don’t know” responses.  This is to be expected with the Neighbourhoods and Communities team continuing to work with our diverse communities to develop on the new strategic approach.

Sports

77. There are several submissions from sports organisations requesting funding.   Work is continuing on the Neighbourhoods and Communities Strategic approach and an important part of this work is the development of a framework to inform and guide decision making on the level of funding and support given to various sporting organisations.  This framework will be developed and agreed by Council before the 2024-2034 LTP.

78. Increased funding of existing projects or funding new initiatives prior to the 2024-2034 LTP will require further rates funding now.

Other

79. Submitters proposed a range of other projects and funding proposals including comments not directly relating to proposed projects in the 10 year plan included respondents’ views on what they would like to see in Lower Hutt’s future, along with opinions on further actions Council could take. Common themes included were regarding investment in arts and culture programmes, along with strengthened consultation with the public, and expanding the range of resources available to residents and businesses.

Options

80.  There are no options to consider.

Climate Change Impact and Considerations

81.  There was a high level of support for greater investment in responding to climate change impacts. 

Consultation

82.  This submissions analysis presents an overview of feedback received during the draft LTP 2021-2031 engagement period of 6 April to 6 May. The engagement activity is outlined in the background and discussion sections of the paper.

Legal Considerations

83.  There are no legal considerations.

Financial Considerations

84.  There are no financial considerations.

Appendices

No.

Title

Page

1

10 Year Plan Submission Analysis - Final Summary

117

    

 

 

 

 

 

Author: Wendy Moore

Head of Strategy and Planning

 

 

 

Author: Catherine Taylor

Senior Research and Evaluation Advisor

 

 

 

 

 

 

Approved By: Matt Boggs

Director, Strategy and Engagement

 


Attachment 1

10 Year Plan Submission Analysis - Final Summary

 

10 Year Plan – Engagement & Feedback

Feedback received

 

Feedback Received

No. of responses

Haveyoursay online full form

337

Haveyoursay single priority form

90

Full paper feedback form

25

Single priority flyers

4

Emails

69

Physical letters

2

Facebook Conversations

117

Post-its from drop-ins

124

Post-its from Remakery sessions

28

Post-its from College sessions

25

Post-its from Naenae Clubhouse members

89

 

Over 900 pieces of feedback were received during the consultation period. In addition to the feedback listed in the table there are also have notes from the seven neighbourhood meetings taken by Research & Evaluation staff, and transcripts from over twenty ‘Community of Interest’ meetings attended by the Mayor and Councillors.

Compared to the Long Term Plan 2018 engagement process the total number of comments received is significantly higher. The biggest increase is in the youth involvement. Not only have we received feedback from two sessions held at Colleges and the Naenae Clubhouse brainstorm but the proportion of those aged under 30 filling out questions online or on paper also increased: 2% in 2018 to 11% in 2021.

Age Group

2021

Age Group

2018

Under 20

4%

Under 18

0%

20-29 years

7%

18-29 years

2%

30-39 years

21%

30-49 years

31%

40-49 years

30%

 

 

50-59 years

19%

50-64 years

32%

60-69 years

12%

 

 

70-79 years

6%

65 years +

35%

80 years +

0%

 

 

 

Compared to 2018 Wainuiomata residents were more engaged with the process in 2021 and this is evident in the commentary with suggestions on improvements and ideas about things they would like to see happen in their community. However, residents in the Northern Ward were less likely to have engaged in the process.

Ward

2021*

2018

Central

19%

27%

Eastern

20%

18%

Harbour

22%

16%

Northern

5%

10%

Wainuiomata

13%

8%

Western

21%

21%

*These percentages differ slightly from those in the results as ‘other’ has been removed from the analysis

 

What we have heard

Feedback received

A total of 337 responses received online via the full feedback form, 25 paper feedback forms and 90 short priority forms were also completed. Feedback was also received in the form of emails, letters, flyers, post-its and meeting notes. Nearly 300 pieces of feedback were received outside of the forms; this feedback has also been noted and summarised.

Results

The majority of feedback is in support of the overall direction being taken by Council, of the 5.9% rates increase proposed and the initiatives proposed. The two exceptions are Petone Wharf and RiverLink where opinion is split. The lower level of support for these two projects appears to be about wanting to reduce the rates increase, rather than a fundamental opposition to the project itself. The majority of respondents (58%) agreed with general direction being taken by Council and most (80%) either agreed or were neutral: 14 percent disagreed.

Figure 1: Overall agreement / disagreement with the general direction of the 10 year plan

When asked their thoughts on the proposed 5.9 percent rates increase required to cover Council’s preferred options 202 respondents clearly indicated whether they thought the increase was ok, or too high: 61 percent were accepting of this increase and a small sub group thought an even higher rise would be acceptable, 39 percent thought the rise was too.

Following are the results for each of the quantitative questions asked, a count of comments received on each project and a summary of these comments. The full comments along with the relevant quantitative result and summary are included in the appendices.

Investing in infrastructure

 Three Waters

Count of comments: 31

There was significant support for an increased investment in Three Waters infrastructure. Some respondents were concerned that the current infrastructure was not durable for the projected population increased, and noted that resilience and future-proofing was a priority. Some were apprehensive at the thought of water meters, while others considered that to be important in order to identify leakages.

Transport Infrastructure

Count of comments:      Transport – General: 77

                                                Transport – CVC: 21

                                                Transport-Cycling / Micromobility: 68

 

General

The majority of respondents noted that change was needed to fix current traffic issues in Lower Hutt. There was some concern that the city is too car-centric, and the problems of congestion would only worsen if the roads were not adequate enough to allow more pedestrians and public transport in future. 

CVC

There were mixed views from respondents. Some had the perception that the Cross Valley Connection would reduce the traffic congestion, while others took the view that it would worsen the problem. Several respondents felt that this project was not consistent with Council’s environmental sustainability goals, and wanted a mode shift into increased pedestrian and cycle-oriented infrastructure.

Cycling and Micromobility

A safe transport infrastructure that supports micromobility and cycling is the focus of a majority of these responders. Many are advocating for a mode shift from cars towards walking and active transport with the view that moving away from private car usage is better for the environment as well as for the health of a community’s citizens. People have also commented forward that while building a comprehensive cycling and micromobility transport network warrants a large expenditure of money, it is needed to offset the projected intensification of housing. Further comments emphasise the need for equity in cycle path availability in all the suburbs of Lower Hutt.

 

Naenae Pool

Count of comments:      Naenae Pool: 175

                                                Naenae Pool – Don’t build: 17

 

Many respondents expressed support for a rebuilt pool, with several noting the need to have a drawcard facility in the region for a variety of team sports and swimming events. Some expressed at the frustration at the time it was taking to begin work on the project. Several mentioned ideas of things they would like to see in the rebuild: e.g. extra slides, a spa and sauna, 10 lanes.  A small group felt the Hutt was well catered to with pools and there should be more consideration for the overall cost. There were an additional 17 comments noting that they did not want the pool rebuilt at all.

Petone Wharf

Count of comments: 122

There were several comments that talked about the Petone Wharf being an integral part of the historical landscape of Lower Hutt. Ideas about how the wharf could potentially be used as a community and communal space where also included. Concerns were raised about climate change and the future of the wharf. Many comments indicated that the option undertaken should not come at the expense of other priorities which were perceived as being more critical to the community at this time. Some respondents indicated a wish to see the Wharf demolished completely and not replaced.

 


 

Economy

RiverLink

Count of comments        RiverLink: 97

                                                Melling: 7

 

Feedback about the RiverLink project has shown that the respondents are largely in favour of improving the transport infrastructure. Improved and safe accessibility to active transport and micromobility is highlighted. In addition, flood protection and resilience is of major concern. In the interest of effective and efficient connectivity in public and rail transport, the Melling Interchange is particularly mentioned as a desirable and positive investment that is essential to the community.

 

Innovative, Agile and Attractive Economy

Count of comments        Commerce: 21

                                                Other: 65

 

The revitalization of the commercial environment in Lower Hutt is seen as a general theme in feedback received. There is emphasis on support for business incubators and hubs as well as interest in making Hutt City a player in the technology sector and a science hub. In addition, there exists the desire for the provision of reliable spaces for pop-up stores and for small business which would give the economy a boost and further assist and enable local communities in their commercial ventures.

The key message taken from this feedback is the necessity of bringing revenue into Lower Hutt by refreshing the economic landscape. This is suggested to be done by supporting the renovation of hubs like pools for local, national and international events, energizing public spaces of commerce like the markets, highlighting local tourist-ready, eco-friendly outdoor activity and attractions, investing in the arts, investing in centres of education and improving amenities and services for families. All of this in combination with renovating and improving the infrastructure for public transport and mobility micromobility is felt to be essential if Hutt City is to thrive and move forward.

 

Connected Communities

Community Facilities Trust (CFT)

Count of comments: 61

There were a number of supportive comments about the importance of Council facilities. Some respondents emphasised that having a community-run focus was essential, although others were focused on the affordability and disagreed with the premise that more investment was needed.

Connected communities

Count of comments: 101

Many respondents felt that Council facilities were a priority to promote community activities, with some emphasising that governance should be in the hands of the community. Wainuiomata and Naenae were highly represented in comments expressing respondents’ ideas for further development. There was support for increased consultation between Council and communities.

Financial Sustainability

General Rates

Count of comments: 11

Respondents had some concern for the impact that the rates split would have on businesses, although several felt that it the rating split was due for a change to be fairer to residents. There was mention of the effect that COVID 19 has had on our economy, and how that has affected peoples’ ability to afford any potential increases.

 

Rural Rating Category

Count of comments: 15

There was some confusion regarding the rural rating changes, with respondents noting that the statements proposing change were not clearly worded. Some pointed out that they do not have the infrastructure to support a change to residential zoning.

Commercial Accommodation Rating Category

Count of comments: 1

Rates - General

Count of comments: 23

Comments were made regarding Council spending. Some respondents felt that they were not getting value for money, with others felt that the increase needed to be reduced.

 

Development Contributions

Count of comments: 27

Comments were evenly divided between those who felt that developers, who make a profit out of developing land, should pay the whole cost and, those who felt that developers providing much needed housing should not have to pay the full contribution.

 

Housing

Note: Comments about increasing housing supply, caring and protecting the environment, the 5.9 percent rates increase and ideas and thoughts for the city going forward are being analysed externally. This analysis will be made available as soon as possible.

Environment

Note: Comments about increasing housing supply, caring and protecting the environment, the 5.9 percent rates increase and ideas and thoughts for the city going forward are being analysed externally. This analysis will be made available as soon as possible.

Other

Public Transport

Count of comments: 54

Improving public transport connections has been a major thread in feedback from respondents. People stated goals of reducing carbon emissions and the dependence upon cars while prioritizing active transport and its accompanying infrastructure. Links were drawn between the projected intensification in housing in relation to the need for more bus and rail connections. It is hoped that that a heightened focus on a comprehensive and refined public transport system that includes better neighbourhood reach will accompany the higher population density that will inevitably occur.

Accessibility

Count of comments: 29

Feedback about the accessibility has focused generally around the need for accessible infrastructure to enable everyone to get safely everywhere they need to go – whether by foot, cycle, micromobility, wheelchair or walking frame. Concerns for people with mobility issues to be able to visit all public spaces – i.e. hubs, libraries, playgrounds, and pools, public toilets – have also been raised.  It is important to the respondents that everyday life journeys as well as attendance at social and community events are more readily facilitated in this way.

Other

Count of comments: 57

Comments not directly relating to proposed projects in the 10 year plan included respondents’ views on what they would like to see in Lower Hutt’s future, along with opinions on further actions Council could take. Common themes included were regarding investment in arts and culture programmes, along with strengthened consultation with the public, and expanding the range of resources available to residents and businesses.

 

Note: Comments about increasing housing supply, caring and protecting the environment, the 5.9 percent rates increase and ideas and thoughts for the city going forward are being analysed externally by Public Voice. This will be made available as soon as possible.

 

 

 

 

 

 


                                                                                     126                                                           24 May 2021

Long Term Plan/Annual Plan Subcommittee

06 May 2021

 

 

 

File: (21/653)

 

 

 

 

Report no: LTPAP2021/2/121

 

Long Term Plan 2021-2031, progressing decisions related to Urban Plus Limited

 

Purpose of Report

1.    The statutory deadline for approval by Council of the Urban Plus Limited (UPL) Statement of Intent (SOI) for the period 1 July 2021 to 30 June 2024 is the 30 June 2021.

2.    Following consultation on the draft Long Term Plan 2021-2031 direction is sought from Council in order to enable the UPL SOI to be finalised and presented to Council for review and approval on 9 June 2021.

Recommendations

That the Subcommittee recommends that Council:

(1)   notes that the increased borrowing requirements will enable Urban Plus Limited to progress the new strategic priorities and direction set by Council;

(2)   notes that the final Statement of Intent for Urban Plus Limited will be presented to the Council on 9 June 2021 for review and approval;

(3)   notes that Urban Plus Limited and Council officers will work together to ensure that the priorities stated within Urban Plus Limited’s Statement of Intent are achieved;

(4)   directs Urban Plus Limited to prepare a final Statement of Intent for Urban Plus Limited which includes the revised borrowing limit of $43M; and

(5)   considers any further direction and guidance to be provided to Urban Plus Limited ahead of the final Statement of Intent being presented to Council for approval.

 

 

Background

3.    Urban Plus Limited (UPL) was established in 2007 as a specialist property company charged with supporting the objectives of Council by providing housing outcomes for Lower Hutt. UPL has managed and invested into its portfolio of social housing ever since it took ownership of the portfolio from Council in 2007. UPL also provides specialist property services and advice to Council and is involved in a range of development activities.

4.    UPL’s primary focus has been on delivering social housing for low-income elderly and releasing affordable and market housing for sale. Council’s 2020 letter of expectation (appendix 1) sought from UPL the delivery of wider housing outcomes and benefits. This was done by issuing new strategic priorities for UPL, these priorities are:

a.    Provide for wider housing need

b.    Build more housing partnerships

c.     Build pathways to permanency

d.    Implement HomeStar6 rating and environmental standards

e.     Achieve wider outcomes

f.     Deliver on Plan Change 43

g.    Promote Māori outcomes

h.    Support Central Government initiatives

i.     Provision of accommodation

5.    Council’s broader expectations of UPL will see the delivery of a far wider range of housing outcomes including pathways to housing permanency such as shared equity, rent to buy, reduced deposit schemes, and other means of assisting households into home ownership.

6.    UPL will also take a leadership role in delivering medium-density housing according to the objectives and outcomes envisaged by District Plan Change 43 (where Plan Change 43 applies to a development site).

7.    UPL will also respond to Council’s commitment to meeting its carbon zero objectives by incorporating features into its dwelling design and development site layouts that lower carbon emissions and incorporate environmental design considerations into future projects to align these with the HomeStar rating assessment to achieve no less than six stars in future housing developments.

8.    The Council invests in UPL in order to achieve these important outcomes for the city. To date, this investment has been by way of loan facilities to UPL to the value of $22M. A commercial interest rate is charged to UPL in line with legislative requirements.

Draft Long Term Plan 2021-2031 context

9.    The draft Long Term Plan 2021-2031 (DLTP) included six key priority areas, with one of these being  “ Increasing housing supply - effectively planning for growth in our city, ensuring an increase in housing supply and working with organisations to ensure our people have warm, safe, dry homes to live in”.   

Included in this activity is reference to the Urban Plus Limited together with Wellington Regional Growth Framework and the District Plan review.

10.  To progress a larger proposed work programme for UPL over the life of the Long Term Plan 2021-2031, UPL sought additional loan funding lines of approximately $21M in the preparation of the DLTP. The draft Statement of Intent presented to the Policy, Finance and Strategy Committee 23 February 2021 (Report PFSC2021/1/22) included a broader work programme together with additional associated funding requirements.

11.  This funding is not required immediately but rather over the next few years of the DLTP, as development activity picks up, with a peak expected in 2023 of $43M. Following this peak, profit margins on several developments are expected to be realised, which will positively impact UPL’s cash position, allowing borrowings to reduce. Once this has occurred, borrowing requirements are not expected to reach the same level for the remainder of the Long Term Plan period.

12.  The Council approved for inclusion in the DLTP the increased funding lines for UPL of $43M. Content related to this was included in the DLTP Consultation Document (page 48 -48) and the full detailed draft LTP (pages 121 – 122). 

13.  It is important to note that UPL does not use ratepayer funding for its operations.  UPL’s developments are cyclical in nature and therefore require separate short-term lending per development project whereby loans are repaid at the end of each project. Cyclical project programming and borrowing is fundamental to successfully delivering the company’s objectives. The SOI contains the financial forecasts for the three year periods commencing 2021.

14.  The feedback from the public consultation process on the DLTP has presented in a separate report in this agenda.

Final UPL Statement of Intent for the period 1 July 2021-2024

15.  The final SOI is to be presented for review and adoption by Council on 9 June 2021. Ahead of this, direction and guidance is sought from Council as to final content to be included in the SOI. Officers’ advice is to include the higher loan funding lines of $43M to enable to broader UPL work programme.  

16.  The revised SOI of UPL is attached as appendix 2 to this report.  It sets out in greater detail how the housing outcomes and benefits outlined in Council’s 2020 letter of expectation will be delivered.  This includes the revised borrowing limit of $43 Million.

Climate Change Impact and Considerations

17.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.

18.  One of the key priorities set out by Council in the letter of expectation to UPL is the implementation of the HomeStar6 rating and environmental standards for buildings.

Legal Considerations

19.  There is an obligation on the board of a Council Controlled Organisation, that each SOI and each modification that is adopted to a SOI, “must be made available to the public within one month after the date on which it is delivered to the shareholders or adopted, as the case may be”.  The final SOIs will be made available to the public via the website of UPL immediately after receiving notification of approval of the final SOI by Council.

Appendices

No.

Title

Page

1

HCC Letter of Expectation for UPL

134

2

UPL GROUP DRAFT Statement of Intent 2021-2024

137

    

 

 

 

Author: Simon George

Senior Accountant

 

 

Author: Darrin Newth

Financial Accounting Manager

 

 

 

 

Reviewed By: Jenny Livschitz

Group Chief Financial Officer

 

 

Approved By: Kara Puketapu-Dentice

Director Economy and Development

 


Attachment 1

HCC Letter of Expectation for UPL

 

Campbell Barry Mayor of Lower Hutt Koromatua o

'   Te Awakai rangi ki tai

 

 

 

15 October 2020

Brian Walshe Chairperson

Urban Plus Limited

 

 

By email: brianwalshe49@gmail.com

 

 

 

Dear Brian,

 

Letter of expectations 2020-2022

 

This letter of expectations sets out Hutt City Council's priorities to inform the development of Urban Plus Limited's (UPL) draft Statement of Intent (SOI) for 2019-2021.

 

As you will be aware, on 24 August Councillors and officers undertook a workshop to explore potential priorities for the UPL SOI. The discussion reflected the current issues and concerns within the housing system - from homelessness and housing hardship and the provision of transitional housing, providing social or local authority housing for different cohorts, developing initiatives for assisted ownership and affordable rentals, through to home ownership.

 

Following the workshop, Council's Policy, Finance and Strategy Committee on 7 September agreed to recommend six priorities for the UPL SOI and these were agreed by Council at its meeting on 24 September.

 

Council direction and key messages Promote Maori Outcomes

Council is committed to improving outcomes for Maori and to working with our mana whenua partners to shape Lower Hutt for the future. UPL is expected to fully participate alongside Council in any formal relationship agreements with mana whenua as they relate to improving housing outcomes. In-line with Council I expect UPL to take an active and meaningful approach to engaging with mana whenua and Maori through all of its work.

 

Financial accountability

 

Preparation of Council's Long-Term Plan 2021-2031 is highlighting the significant challenges that the Council and group face in meeting the demands of a growing city in ways which are financially sustainable, particularly in the context of the COVID-19 pandemic. Council is undertaking a review of all its current and proposed activities to ensure they are the best way to achieve our social, cultural, environmental, and economic outcomes within agreed expenditure.


Climate Change

 

In June Hutt City Council declared a climate emergency citing the need to raise awareness on climate change and to prioritise reducing council and city-wide emissions to net zero carbon. A city-wide zero carbon plan is currently being scoped. I expect that UPL will participate in the city-wide zero carbon plan and develop and implement and commit to zero carbon by 2050.

 

Strategic Priorities

 

The six strategic priorities which should be reflected in UPL's SOI are outlined below.

 

Provide for wider housing need

 

This priority focuses on mandating UPL to provide for need across the housing continuum. This  requires UPL to develop a framework to enable the development of transitional housing, social housing for a range of households in addition to those who are 65+, market rental, affordable housing (sale at cost plus contingency), and commercially based developments (with a typical commercial profit margin). The primary focus of this priority is to bring more homes into the supply chain and meet housing needs across as many groups as possible.

 

Build More Housing Partnerships

 

In order to deliver homes across the housing continuum UPL will need to develop relationships with key organisations such as Community Housing Organisations (CHPs), mana whenua, non-governmental organisations, developers, as well as crown agencies with responsibilities for delivering housing. Partnerships with key organisations within the housing and social sectors will enable UPL to achieve outcomes that it cannot achieve on its own.

For example, delivering social housing to a range of households may require partnerships in relation to support provision. I expect UPL to build meaningful partnerships across the housing sector which is guided by agreed values, principles, objectives and outcomes which are appropriately measured and monitored.

 

Building Pathways to Permanency

 

This priority is about working with families, whanau, and individuals, and assisting them to transition into housing permanency. This could include 'rent for life' accommodation where UPL provides for rental accommodation that remains affordable and that people can make their home permanently (with any associated social support required), all the way through to home ownership. UPL will be required to deliver initiatives  such as shared equity, rent to buy, reduced deposit schemes, and other means of assisting households into home ownership. It is anticipated that such initiatives would be in partnership with Crown agencies, and partners such as CHPs and mana whenua. As noted above, the pathways to permanency will require consideration of affordable rental opportunities as well as the development and sale of homes (at cost plus contingency).


Application of Agreed Environmental Standards

 

UPL has recently adopted the Homestar 6 standard for all its housing, highlighting a progression to developing homes that are warm, safe, dry and reflect sustainability practices. Council has shown an appetite to be a leader in delivering solutions across the business that are environmentally sustainable, and to be stewards of our environment. For this reason, UPL will explore how implementing Homestar 6 standards will contribute towards Council achieving its aims of lowering carbon emissions and whether additional measures are required. The aim of this priority is for UPL and Council to show environmental leadership

by continuing to set higher standards for how we deliver sustainable, warm, safe, and dry homes.

 

Achieving Wider Outcomes

 

The achievement of these new priorities will require the development of a considerable number of new homes throughout Lower Hutt. This requires a skilled workforce that is ready and able to deliver. Delivering more supply is an opportunity for UPL to create and support local employment and training and to work with a tertiary education provider(s) to support capacity uplift in the building and construction and built environment sector and partner with the construction industry to offer employment and career development. Other opportunities to explore include supporting and enabling tertiary education providers to increase off-site construction, which again has the potential to increase supply and affordability.

 

Delivering on Plan Change 43

 

District Plan Change 43 enables greater housing capacity and a wider range of residential development in areas of the city which are located near transport and retail nodes. In delivering Council's priorities I expect UPL to seek housing opportunities around suburban shopping centres and transport hubs afforded by Plan Change 43 and to be an exemplar of the well-designed developments Council envisaged in the Medium Density Design Guide that accompanied the plan change.

 

I look forward to receiving a draft statement of intent addressing these priorities by 15 November 2020.

 

 


Nga mihi,

 

Campbell Barry

Mayor of Hutt City Council


Attachment 2

UPL GROUP DRAFT Statement of Intent 2021-2024

 

 

 

 

 

 

URBAN PLUS GROUP

 

STATEMENT OF INTENT

2021/22 – 2023/24

 

DRAFT

 

 


Contents

 

Contents. 2

Purpose. 3

Introduction. 3

Shareholder’s Mandate to Urban Plus Limited. 3

Our Statutory Objectives. 6

Our Business Objectives. 7

Nature and Scope of Activities to be undertaken by the Company. 8

Funding. 8

Performance Measures. 9

Risk Management 11

Board of Directors. 11

Financial Forecasts. 14

Statement of Accounting Policies. 18

 

 

 

 

 

                                                                                                                                       


Attachment 2

UPL GROUP DRAFT Statement of Intent 2021-2024

 

 

Purpose

The purpose of this Statement of Intent is to:

a.       State publicly the activities and intentions of this Council-Controlled Organisation for the year and the objectives to which those activities will contribute;

b.       Provide an opportunity for shareholders to influence the direction of the organisation; and

c.       Provide a basis for the accountability of the directors to their shareholders for the performance of the organisation.

This Statement of Intent covers the year 1 July 2021 to 30 June 2022 and forecasts for the following two financial years.  It has been prepared in accordance with Section 64 (1) of the Local Government Act 2002.

Introduction

Urban Plus Limited (UPL) is wholly owned by Hutt City Council (HCC) and operates as a Council Controlled Organisation (CCO) under the Local Government Act 2002.  UPL was established effective 1 May 2007 with principle objectives as stated below under ‘Our Business Objectives’. 

UPL is a company registered under the Companies Act 1993, is governed by the requirements of that Act and Section 6 of the Local Government Act 2002, and is covered by law and best practice.  It also has responsibilities under the general law including the Resource Management Act 1991.

The Urban Plus Group comprises Urban Plus Limited (UPL), UPL Limited Partnership (UPLLP) and UPL Developments Limited (UPLDL).

Shareholder’s Mandate to Urban Plus Limited

UPL is charged with providing housing outcomes for Lower Hutt. In alignment with the Shareholder’s revised 2020 – 2022 key priorities and expectations (set out below), UPL will set out to deliver wider housing outcomes and benefits than previous years.

 

Previously, UPL focussed on delivering social housing to the low income elderly and releasing affordable housing into the local market for sale.  These new, wider expectations and deliverables set by the Shareholder entail that UPL cannot act as developer and continue to hold property long term. Cyclical project programming is fundamental to successfully delivering the company’s objectives.  Future projects’ success and deliverables are reliant on a continued cycle of development and release (and repeat). 

 

1.    Provide for Wider Housing Need

 

UPL is to provide for need across the housing continuum. UPL will develop a framework to enable the development of social housing and transitional housing for a range of households in addition to those who are qualify as ‘low income elderly’ (see definition p7), market rental, affordable housing and commercially focussed developments. The primary focus of this priority is to bring more homes into the supply chain.

 

1.1 Release of Council-Owned Land for Development

 

To affect 1 (above), UPL will work closely with the Shareholder throughout the 2020-21 financial year and outer lying years to assist in reviewing and identifying parcels of land to enable further growth and assist in achieving its Urban Growth targets to assist in addressing the housing shortage currently being experienced in Lower Hutt.  There is formal direction^ from Central Government (NPS-UDC) to its local authorities to provide additional residentially zoned land for development than is currently being supplied due to projected population growth.

 

^Source: John Pritchard, Principal Research & Policy Advisor at HCC 4/11/2020 email extract: “The Housing and Business Development Capacity Assessment, completed in circa October 2019 in response to the National Policy Statement on Urban Development Capacity (NPS-UDC), population growth in Lower Hutt will mean [Lower Hutt]  needs between 5,233 and 9,606 additional dwellings up to 2047.  (For planning purposes the NPS-UDC requires Council to provide for more supply than the above so the figures are increased to 6,105 and 11,256. We also need to deliver a range of housing types to respond to population changes.”

 

1.2 Urban Growth Strategy

             UPL will assist HCC in the Urban Growth Strategy by applying knowledge, experience, expertise and skill from within UPL as and when called upon to assist the Shareholder wherever possible to invigorate growth, development, and property related assistance. 

 

 

2.    Build More Housing Partnerships

 

In order to deliver homes across the housing continuum, UPL is to develop relationships with key organisations such as Community Housing Providers (CHPs), mana whenua, non-governmental organisations, developers, as well as Crown agencies with responsibilities for delivering housing. Partnerships with key organisations within the housing and social sectors will enable UPL to achieve outcomes where it cannot achieve them on its own. UPL is charged with delivering housing to organisations which provide support and their own in-house management services.

 

3.    Build Pathways to Permanency

 

UPL will look to develop a framework which delivers opportunities for individuals, families / whanau, and assisting them to transition into housing permanency. Structures / arrangements  for UPL to investigate further could include 'rent for life' accommodation where UPL provides rental accommodation that remains affordable and that people can make their home permanently (with any associated social support required), all the way through to home ownership.

 

In addition, UPL will investigate, and deliver where appropriate, initiatives such as shared equity, rent to buy, reduced deposit schemes, and other means of assisting households into home ownership. It is anticipated that such initiatives can be aligned via partnerships with Crown agencies, and partners such as CHPs and mana whenua.

 

As noted above, the pathways to permanency will require consideration of affordable rental opportunities as well as the development and sale of homes.

 

4.    Implement HomeStar 6 Rating & Environmental Standards

 

The Shareholder has set its own carbon zero objective, and as such UPL aims to align with this direction where possible.  UPL has, and will continue to, incorporate features into its dwelling design and development site layouts that lower carbon emissions – to align with the Shareholder’s aspirations for the city to be ‘zero carbon’ by 2050.  Examples include using electricity or renewable sources of energy for space and water heating, minimising building waste, and making buildings ready for charging electric vehicles.

 

UPL will seek to incorporate design and environmental considerations into future projects, and align these with the HomeStar rating assessment to achieve no less than 6 stars in future housing development projects. UPL will explore how implementing HomeStar 6 standards will contribute towards Council achieving its aims of lowering carbon emissions and whether additional measures are required. The aim of this priority is for UPL and Council to show environmental leadership by continuing to set higher standards for how we deliver sustainable, warm, safe, and dry homes.

 

 

 

5.    Achieve Wider Outcomes

 

The achievement of these new priorities will require the development of a considerable number of new homes throughout Lower Hutt. This requires a skilled workforce that is ready and able to deliver. Delivering more supply is an opportunity for UPL to create and support local employment and training and to work with a tertiary education provider(s) to support capacity uplift in the building, construction and built environment sectors, and partner with the construction industry to offer employment and career development. UPL will explore opportunities which support and enable tertiary education providers to increase off-site construction, which again has the potential to increase supply and affordability.

 

6.    Deliver on Plan Change 43

 

District Plan Change 43 enables greater housing capacity and a wider range of residential development in areas of the city which are located near transport and retail nodes. UPL is mandated to seek housing opportunities around suburban shopping centres and transport hubs afforded by Plan Change 43 and to be an exemplar of the well-designed developments Council envisaged in the Medium Density Design Guide that accompanied the plan change.

 

Further, UPL is expected to align with the Shareholder’s aspiration in terms of:

 

7.    Promote Maori Outcomes

Council is committed to improving outcomes for Maori and to working with our mana whenua partners to shape Lower Hutt for the future. UPL will seek to fully participate alongside Council in any formal relationship agreements with mana whenua as they relate to improving housing outcomes.

 

8.    Support Central Government Initiatives

When sought by the Shareholder, UPL will look to support Central Government initiatives where it is financially, socially and environmentally prudent, and is to the overall betterment to Lower Hutt City.  Further, UPL will seek to work with any form of social or community housing providers which promote the growth of housing in Lower Hutt.

 

 

The Provision of Accommodation for the Low Income Elderly

 

In addition to the above priorities, UPL is also charged with the ongoing provision of housing to the low income elderly:

 

1.         A safe community

             The UPL portfolio of residential housing is predominantly occupied by those considered to be the ‘low-income elderly’.  We feel that an elderly presence in any community contributes to a safer community by having people present in residential areas during the working day.  This passive security presence provides ‘stability’ and value to a community by having people in the area while those of younger age may be at work or school. 

 

2.         A strong and diverse economy

             Providing appropriate accommodation for our elderly where they can retain independent living with dignity contributes significantly to community diversity by retaining the elderly in that community.

 

3.         An accessible and connected city

             The elderly can contribute significantly to the community and families by being actively involved in the community.  This connectivity with the community spans generations and encourages understanding and tolerance between young and old.

 

4.         Healthy people

             UPL has a significant role in providing warmer, drier, healthier homes to the low-income elderly who may not be in a position to self-fund independent accommodation.  The forecast is for steadily growing numbers of the over 65’s entering this sector as the population ages.  The changing Lower Hutt demographic will put increased pressure on UPL to provide an increased number of housing units in the future.  UPL has a significant role to play in appropriately housing this growing and aging demographic.

 

5.         A healthy natural environment

             UPL aims to be a good community citizen in the widest sense taking responsibility for project management, material selection and disposal in a way that minimises harm and impact on the environment.  We endeavour to apply HomeStar principles in terms of passive design (insulation, double glazing and where possible, positioning for solar gain) to minimise energy consumption promoting the concept of warmer, drier, healthier homes at minimal ongoing cost to the occupier.

 

6.         Actively engaged in community activities

             The provision of residential housing aimed at the low-income elderly is a community activity where we are using our skills, expertise and professionalism to assist those elderly that are in need of assistance in finding appropriate accommodation.

 

7.         Strong and inclusive communities

             Prior to embarking on any development, UPL considers the overall amenity value of the community including proximity to public transport, retail, medical centres, land contour etc. so our residents can live safely and in an engaged manner within the community, whilst retaining mobility and independence.

 

8.         A healthy built environment

             Our developments and management of the existing portfolio contribute to a healthy built environment by sound practice property maintenance, developments that are sympathetic to community values, and are complimentary to desirable urban planning aspirations and planning rules.  New properties are insulated, double glazed, warm, dry homes with accessibility issues minimised by prudent design.  It is recognised that those occupying warmer drier homes are naturally healthier, consume less energy in keeping those homes warm, and enjoy reduced doctors / hospital visits with increased longevity.

 

 Our Statutory Objectives

Section 59 of the Local Government Act 2002 provides:

 

Principal objective of council-controlled organisation

(1)        The principal objective of a Council-Controlled Organisation is to:

(a)     Achieve the objectives of its shareholders, both commercial and non-commercial, as specified in the Statement of Intent;

(b)    Be a good employer;

(c)     Exhibit a sense of social and environmental responsibility by having regard to the interests of the community in which it operates, and by endeavouring to accommodate or encourage these when able to do so; and

(d)    If the Council-Controlled Organisation is a Council-Controlled Trading Organisation, conduct its affairs in accordance with sound business practice.

(2)        In subsection 1.b, good employer has the same meaning as in clause 36 of Schedule 7 of the Local Government Act 2002.

Our Business Objectives

In addition to the Statutory objectives, the Business objectives of the Company are to:

1.1       operate as a successful and profitable undertaking;

1.2       provide for need across the housing continuum by developing property for housing outcomes such as: affordable, social, transitional, market rentals and commercial projects;

1.3       be a provider of housing into the local supply chain with various housing typologies;

1.4       build housing partnerships with local and nationwide community housing organisations, mana whenua and Crown agencies;

1.5       develop a framework to enable households to transition into housing permanency;

1.6       demonstrate environmental leadership by the implementation of HomeStar methodologies and other practices which lower carbon emissions;

1.7       support and advance training and employment opportunities within the construction and built environment sectors;

1.8       seek greater housing capacity outcomes afforded by Plan Change 43;

1.9       support Central Government initiatives where and when prudent, in alignment with the Shareholder;

1.10     provide for the long term a growing portfolio of rental housing for the low-income elderly[3] consistent with, and to give effect to, Council’s housing policy;

1.11     manage and develop the housing portfolio in a manner which increases its property values;

1.12     ensure that the housing portfolio for the low-income elderly is appropriate for the changing needs of the community in terms of the objectives outlined in Council’s housing policy;

1.13     purchase, develop, lease or on-sell future development projects in a manner which maximises its value at a level of risk appropriate for the investment of funds and aligns with the aspirations of the Shareholder;

1.14     comply with all legislative and regulatory provisions relating to its operations and performance;

1.15     ensure all assets owned by the company are maintained to the applicable standards;

1.16     maintain an effective business continuance plan;

1.17     maintain a register of current Council policies relevant to its business and operations; and

1.18     assist Council when asked to do so in its endeavours in regards to the Urban Growth Strategy.

These objectives will be monitored and where in conflict, these objectives will be pursued giving greater weight to the interests of maximising value to the Shareholder provided that in relation to the provision of social housing, value to the Shareholder will include the consideration of social value.


 

Nature and Scope of Activities to be undertaken by the Company

The nature and scope of activities of the Company are to:

1.         Operate as a successful business, returning benefits to the Shareholder;

2.         Own, operate and maintain, to an acceptable standard, a portfolio of rental housing to provide community housing for the low-income elderly in accordance with normal commercial guidelines and the housing policy of  Council;

3.         Ensure that the housing portfolio for the low-income elderly is appropriate for the changing needs of the community in terms of the objectives outlined in Council’s housing policy;

4.         Develop property in preparation for sale or lease, which is declared surplus to the needs of Hutt City Council and which provide an appropriate return for the costs and risks of development;

5.         Actively participate in the market with intent to acquire / purchase property to develop for sale, lease, portfolio retention or public market rental which provides appropriate returns for the levels of cost, risk and funds invested;

6.         Purchase, develop, lease or on-sell the development property portfolio in a manner which maximises its value at a level of cost and risk appropriate for the investment of funds and is in alignment with the aspirations of the Shareholder; and

7.         Otherwise become involved in property-related transactions and property-technical advisory services on a commercial basis that support the Shareholder’s vision for the future development of the city.  This specifically includes assisting with progressing the Urban Growth Strategic Objectives.

 

Section 59 of the Local Government Act 2002 also provides that the principal objectives of a Council-Controlled Trading Organisation include the objectives of its Shareholders.

 

In order to meet our objectives we focus our work activity on asset planning and development, capital project management, operations management, risk management, staff development and corporate governance.

Other

UPL will continue to be involved in property-related transactions on a commercial basis that support the Shareholders' vision for the future development of the city.

 

UPL will continue to provide a wide range of strategic property advice and property consultancy when required to the Shareholder.  Work has included:

1.         Advice and general direction for Making Places projects;

2.         Commercial leasing management advice for HCC property and subsidiaries;

3.         Specific property advice; and

4.         Assist with strategic HCC property acquisition and divestment as directed by the Shareholder.

Funding

UPL’s existing funding thresholds are very restrictive for what has been mandated by the Shareholder to action in the upcoming years. As such there is both an essential requirement and opportunity to seek alternative funding channels or further Shareholder support.  Future investigation is required into alternative mechanisms which will enable UPL to undertake scale developments. 

 

Mechanisms such as project funding (most UPL Group projects are cyclical in nature and require only short term funding peaks, and therefore funds can be recycled quickly upon each projects conclusion), directly engaging the Local Government Funding Agency (LGFA) as a direct CCO issuer or directly approaching banks for funding (either as corporate / project financing, or both) are some options to be progressed.  LGFA covenants and Regulatory aspects will be managed accordingly should alternative funding streams be engaged.

 

Leveraging the existing asset portfolio and divestment of existing housing are additional mechanisms which UPL can utilise, subject to Shareholder approval which must be received before proceeding with any divestment programmes. Any variation to existing debt-to-equity ratios, leveraging ratios and divestment programmes are subject to unanimous Board and Shareholder approval.

 

Ultimately, there will be a requirement within the next 3 financial years for a funding facility level of $42M – which includes an allowance to undertake current Board-approved projects, future projects, potential strategic purchases and other contingencies as they arise. This peak funding level is only for short term due to the cyclical nature of property development.

Performance Measures

The Company will meet the following measures for the next three years:

Rental Housing

1.1    Capital expenditure within budget.

1.2    Operational expenditure within budget.

1.3    Net Surplus before Depreciation and after Finance Expenses as a Proportion of the Net Book Value of Residential Land and Buildings at the Start of the Year – Greater than 3.5%.

1.4    Tenant satisfaction with the provision of the company’s rental housing greater than or equal to 90%.

1.5    Percentage of total housing units occupied by low-income elderly[4] greater than or equal to 85%.

1.6    Rentals charged shall not be less than 80% of ‘market’ rent.*

1.7    Increasing the portfolio size to 220 units by December 2023.

1.8    By 30 June 2021, assess the performance of the rental housing portfolio against the HomeFit® standard.

1.9    Any rental housing units purchased and not already utilising electricity or renewable sources of energy for space heating, water heating, and cooking facilities, shall be converted to utilise only electricity or renewable sources of energy within five years of acquisition.

1.10  New rental housing units constructed by UPL to utilise only electricity or renewable sources of energy for space heating, water heating and cooking facilities.

* With market rents rising at greater than inflation, the current 2019/20 FY 85% target is becoming increasingly harder for our tenants to afford.  Subject to significant lifts on market rental income levels, the Board reserves the right to decide on the level of rentals charged per unit, on a case by case basis.

 

 Property Development

1.11  Capital expenditure within budget.

1.12  Operational expenditure within budget.

1.13  From 1 July 2019, any new developments not already resource consented as at 30 June 2019, shall only utilise electricity or renewable sources of energy for space heating, water heating and cooking facilities.

1.14  By the year ending 30 June 2021, at least one housing unit (standalone house or townhouse) shall achieve a certified HomeStar design rating of at least six stars.

1.15  A return of not less than 20% on Development Costs including Contingency on each commercial development project.

1.16  A return of not less than 15% on Development Costs including Contingency on housing released to market as ‘Affordable’.

1.17  Value of divestment to Community Housing Providers (or socially-likeminded organisations) set at each project’s Development Cost (includes contingency and GST) plus a margin of no less than 10%. 

1.18  Long term public rental accommodation returns at no less than (or equal to) 3.5% after depreciation.3

3 Returns are specific to each project’s (Board Approved) business case where long term market rentals are developed.  Future rents are set as per independent annual review.

 

Professional Property Advice

1.19  Achieve a market return on additional services provided to the Shareholder.

 

UPL Developments Limited

1.20  Undertake, negotiate and execute tender and procurement processes for and on behalf of the Partnership and ‘parent’ company as required.

1.21  Facilitate civil and construction contracts for and on behalf of the Partnership and ‘parent’ company as required.

1.22  Facilitate payment of contract progress claims for Board approved contracts as well as payments to other suppliers engaged to provide services or goods to defined development projects.

1.23  Should UPLDL be used for future developments, the same performance measures apply as for Property Development (refer above).

1.24  Act as General Partner when a Limited Partnership structure is utilised for development projects.

 

UPL Limited Partnership

1.25  Develop land in a manner which maximises its value at a level of risk appropriate for the investment of funds.

1.26  To perform business undertakings in common with UPL with a view to profit from development projects for the purposes of funding for the elderly housing portfolio and meeting the Shareholder’s wider key priority outcomes.

1.27  Should UPLLP be used for future developments, the same performance measures apply as for Property Development (refer above).


Risk Management

Health and Safety in Employment

UPL will maintain sound industry practice with ongoing reviews of its Health and Safety policies to ensure they remain current in terms of compliance.

 

Business Continuity

UPL will maintain a Business Continuity Plan for unforeseen circumstances so any event will have minimal impact on the day-to-day operation of the business.

 

Insurances

UPL will maintain appropriate insurances to mitigate risk of portfolio damage, business interruption and professional indemnity.  This will include Directors and Office Bearers cover where appropriate.

 

Emergency preparedness

UPL will rehearse and maintain systems and procedures to best position itself to deal with emergency situations.

 

Commercial Risk

UPL will manage its affairs in a manner that minimises commercial risk recognising that some risk will need to be taken to achieve targets.

Board of Directors

The Board of Directors consists of up to six members, with the Shareholder appointing Council representation as Director(s) and Independent Directors.  Directors generally serve three-year terms. 

 

The Board is responsible for the proper direction, governance and control of UPL.

 

Unanimous approval of the Board is required for:

1.1       Employment of staff and creation of new permanent positions outside of resolved budget limits;

1.2       Extraordinary transactions (entering into any contract or transaction except in the ordinary course of business);

1.3       Delegation of Directors’ powers to any person;

1.4       Major transactions (entering into any major transaction);

1.5       Disputes (commencing or settling any litigation, arbitration or other proceedings which are significant or material to the Company’s business);

1.6       Borrowings in a manner that materially alters the Company’s banking arrangements, advancing of credit (other than normal trade credit) exceeding $5,000 to any person except for making deposits with bankers, or giving of guarantees or indemnities to secure any person’s liabilities or obligations;

1.7       Sale of assets (sell or dispose of fixed assets for a total price per transaction exceeding $100,000 or a series of transactions aggregated exceeds $300,000); and

1.8       Capital expenditure (other than in the ordinary course of doing business) at a total cost to the Company, per transaction, exceeding $100,000 or a series of transactions aggregated exceeds $300,000. However, the UPL Chief Executive has delegated authority to approve individual, project-specific capital expenditure invoices up to $300,000 + GST if the Board has unanimously approved the budget for that project.

The Board will require the agreement of the Shareholder for:

1.1       Any changes to the Constitution;

1.2       Any increases in capital and the issue of further securities, share buybacks and financial assistance;

1.3       Any alteration of rights attaching to shares;

1.4       Any arrangement, dissolution, reorganisation, liquidation, merger or amalgamation of the Company; and

1.5       Any ‘major transactions’ as that term is defined in the Companies Act 1993.

Ratio of consolidated Shareholders’ funds to total assets

The target ratio for consolidated Shareholders' funds to total assets is at least 50%.  Consolidated Shareholders' funds comprise share capital and accumulated reserves.  Total assets comprise all tangible assets of the Company, the main component being housing and undeveloped land.  The forecast consolidated Shareholders funds as at June 2021 is 74%.  The share capital of $15.3 million consists of 27,000,001 ordinary shares on issue, of which 12,000,001 are fully paid and 15,000,000 are issued but uncalled.

Accumulated profits and capital reserves

There is no intention to pay a dividend in the 2020/21 financial year or succeeding years.

Information to be provided to Shareholders

In each year UPL shall comply with the reporting requirements specified for CCO’s under the Local Government Act 2002 and the Companies Act 1993 regulations.

In particular, it shall provide:

Annually

1.         Annually report, within two months after the end of each financial year, which will include:

2.         A Statement of Intent detailing all matters required under the Local Government Act 2002;

3.         An annual budget for the coming financial year, broken out by the two major areas of operation; Rental Housing and Land Development, including the assets employed and debt attributable to each area;

4.         A written report on the financial operations of the Company to enable an informed assessment of its performance including a comparison against budget and the Statement of Intent, the Return on Equity and Return on Assets for the Period;

5.         Financial statements comprising the Statement of Financial Position, Statement of Comprehensive Revenue and Expenses and Statement of Cash Flows;

6.         A business plan indicating the nature of property development it proposes to undertake and the range of investment and estimated return it proposes to achieve;

7.         An assessment of the current market for rental housings and the appropriateness of the current housing portfolio to meet the needs of the low-income elderly.

Half Yearly

8.         Six-monthly, within two-months of the end of the six month reporting period.

9.         A written report on the operations of the Company by the two major areas of operation to enable an informed assessment of its performance including a financial comparison against budget and the Statement of Intent, the Return on Equity and Return on Assets for the Period.

10.       Financial statements comprising the Statement of Financial Position, Statement of Comprehensive Revenue and Expenses and Statement of Cash Flows.

11.       Progress on activities outlined in the agreed business plan.

Share acquisition

There is no intention to subscribe for shares in any other company or invest in any other organisation. 

(NOTE: UPL has a subsidiary company UPL Developments Limited).

Compensation from Local Authority

It is not anticipated that the company will seek compensation from any local authority other than in the context of normal commercial contractual relationships.

NB: if a CCO has undertaken to obtain or has obtained compensation from its Shareholders in respect of any activity, this undertaking or the amount of compensation obtained will be recorded in:

1.         The annual report of the Council-Controlled Organisation; and

2.         The annual report of the local authority.

Equity value of the Shareholder’s investment

For the year ended 30 June 2022, the estimated net value of the Shareholder’s investment in Urban Plus Group will be $49.448 million.


 

Financial Forecasts

Planning and programming for development projects will be based on exceeding the agreed minimum financial performance thresholds as set out in the Performance Measures section for each commercial, residential portfolio, affordable housing and long term market rental development project.  Each development project will require the approval of the Board to ensure strategic fit and achievement of the minimum rate of return.

 

The current volatility of the property market and anticipated future interest rate increases has resulted in considerable uncertainty in terms of what projects will become available, and what sales might result from those projects. Details of potential development projects will be included in the regular reporting to the Board and Shareholder.

 

The company’s most recent development projects, both completed in the 2020/21 financial year, were Central Park on Copeland and The Lane, Waterloo.  The first mentioned was a thirty-four townhouse development on part of the former Copeland Street Reserve land in Epuni which achieved its financial targets.  The latter development was a twenty-seven townhouse development in Waterloo – on land owned by UPL which also met its financial targets. All sixty-one townhouses were unconditionally sold well before construction commenced at either site, and achieved sales levels higher than the Board-approved business case figures.

 

The success of these developments has enabled UPL to not only strengthen its financial position, but also to reinvest the profits of the development to achieve the wider outcomes set out in the Objectives (above) in this Statement of Intent.

 

These two commercial development projects were managed by UPL Developments Limited – a wholly owned subsidiary of UPL providing property development  management services – through UPL Limited Partnership -  a partnership between UPL Limited Partnership (as General Partner) and UPL (as Limited Partner).

 

The original target date for UPL to achieve 220 rental units was 30 June 2020.  This target date will not be achieved based on the current development programme with only 189 units projected as at 30 June 2020, and the wider mandate now provided by the Shareholder.  The target of 220 units is now expected to be achieved by December 2023.  Between 2018 and 2021, UPL has developed and sold to the private market, 105 houses, the profits from which will fund the growth in UPL’s rental portfolio without requiring ratepayer assistance.

 

The Shareholder has provided a mandate far wider than previous years’ focus on ‘for-profit’ commercial projects and growing the residential portfolio.  Accordingly, there has been a recalibration of targets to grow the portfolio due to the revised Shareholder direction and aspiration of wider outcomes.  Future focus is toward the development and on-selling of property to (but not limited to) Community Housing Providers, release of affordable housing, and long term market rentals, production of housing for rent-to-own and shared equity schemes; rather than the primary focus on UPL’s residential portfolio growth.

 

 


 

Consolidated Statement of Financial Performance

 

Consolidated Statement of Changes in Equity

 


Consolidated Statement of Financial Position

 


 

Consolidated Statement of Cash Flows

 


 

Statement of Accounting Policies

UPL will apply the following accounting policies consistently during the year and apply these policies to the Statement of Intent. In accordance with the New Zealand Institute of Chartered Accountants Financial Reporting Standard 42 (FRS 42), the following information is provided in respect of the Statement of Intent.

Nature of prospective information

The financial information presented consists of forecasts that have been prepared on the basis of best estimates and assumptions on future events that UPL expects to take place.

Statement of compliance with International Financial Reporting Standard

The financial statements have been prepared in accordance with New Zealand generally accepted accounting practice. They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other applicable financial reporting standards, as appropriate for public benefit entities.

Reporting entity

UPL is a company registered under the Companies Act 1993 and a Council-Controlled Trading Organisation as defined by Section 6 of the Local Government Act 2002. Hutt City Council is the only shareholder. The company was incorporated in New Zealand in 13 December 1996 as De Luien Developments Limited, changed its name to Centre City Plaza Limited on 27 June 1997, changed its name to Hutt Holdings Limited on 20 January 2003 and finally changed its name to Urban Plus Limited on 25 May 2007.

 

The financial statements have been prepared in accordance with the requirements of the Companies Act 1993, the Financial Reporting Act 1993 and the Local Government Act 2002.

 

For purposes of financial reporting, UPL is a public benefit entity.

Reporting period

The reporting period covers the 12 months from 1 July 2021 to 30 June 2022.  Comparative projected figures for the year ended 30 June 2023 and 30 June 2024 are provided.

Specific accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

 

The measurement basis applied is historical cost.

 

The accrual basis of accounting has been used unless otherwise stated.  These financial statements are presented in New Zealand dollars rounded to the nearest thousand, unless otherwise stated.

Judgements and estimations

Preparing financial statements in conformity with NZ IFRS requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses.  Where material, information on the major assumptions is provided in the relevant accounting policy or will be provided in the relevant note to the financial statements.

 

The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

 

Judgements that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in the relevant notes.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and bank overdrafts.

Debtors and other receivables

Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment.

Revenue

Revenue is measured at the fair value of consideration received.

 

Revenue from the rendering of services is recognised by reference to the stage of completion of the transaction at balance date, based on the actual service provided as a percentage of the total services to be provided.

 

Sales of goods are recognised when a product is sold to the customer.  The recorded revenue is the gross amount of the sale, including credit card fees payable for the transaction.  Such fees are included in other expenses.

 

Property sales are recognised on settlement date, along with the related expenses.  Interest income is recognised using the effective interest method.

Property, plant and equipment

On transition to NZ IFRS assets were recorded at cost less accumulated depreciation and impairment losses.

Revaluation

Land and buildings are revalued with sufficient regularity to ensure that their carrying amount does not differ materially from fair value and at least every three years.  All other asset classes are carried at depreciated historical cost.  The carrying values of revalued assets are assessed annually to ensure that they do not differ materially from the assets’ fair values.  If there is a material difference, then the off-cycle asset classes are revalued.

 

Revaluations of property, plant, and equipment are accounted for on a class-of-asset basis.  The net revaluation results are credited or debited to other comprehensive income and are accumulated to an asset revaluation reserve in equity for that class of asset.  Where this would result in a debit balance in the asset revaluation reserve, this balance is not recognised in other comprehensive income but is recognised in the surplus or deficit.  Any subsequent increase on revaluation that reverses a previous decrease in value recognised in the surplus or deficit will be recognised first in the surplus or deficit up to the amount previously expensed, and then recognised in other comprehensive income.

Additions

Expenditure of a capital nature of $500 or more has been capitalised.  Expenditure of less than $500 has been charged to operating expenditure. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to UPL and the cost of the item can be measured reliably.


 

Disposals

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset.  Gains and losses on disposals are recognised in the Statement of Comprehensive Income.

Subsequent costs

Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to UPL and the cost of the item can be measured reliably.

Depreciation

Depreciation is provided on a straight line basis on all property, plant and equipment at rates that will write off the cost (valuation) of the assets to their estimated residual values over their useful lives.  The straight line depreciation rates are as follows:

 

Estimated economic lives

Years

Rate

Buildings

5 - 69

1.45% - 50.00%

Plant and equipment

8 - 13

7.69% - 12.00%

 

The residual value and useful life of an asset is reviewed and adjusted if applicable at each financial year end.

Intangible assets

Software acquisition and development

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software.  Costs associated with maintaining computer software are recognised as an expense when incurred.  Costs that are directly associated with the development of software for internal use by UPL, are recognised as an intangible asset.

Amortisation

The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life.  Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised.  The amortisation charge for each period is recognised in the Statement of Comprehensive Income.

 

The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows:

 

Estimated economic lives

Years

Rate

Computer software

2.8         

36%

 

Impairment of non-financial assets

Assets with a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  If an asset’s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written down to the recoverable amount.  The total impairment loss is recognised in the Statement of Comprehensive Income.


 

Goods and services tax

All items in the financial statements are stated exclusive of GST, except for receivables and payables.  Where GST is not recoverable as input tax then it is recognised as part of the related asset or expense.

The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivables or payables in the Statement of Financial Position.

Commitments and contingencies are disclosed exclusive of GST.

Employee entitlements

Short-term entitlements

Employee benefits that UPL expects to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay.  These include salaries and wages accrued up to balance date, annual leave earned to, but not yet taken at balance date, retiring and long service leave entitlements expected to be settled within 12 months, and sick leave.

UPL recognises a liability for sick leave to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year.  The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that UPL anticipates it will be used by staff to cover those future absences.

UPL recognises a liability and an expense for bonuses where contractually obliged or where there is a past practice that has created a constructive obligation.

Borrowings

Borrowings are initially recognised at their fair value.  After initial recognition, all borrowings are measured at amortised cost using the effective interest method.

Borrowing costs

Borrowing costs are recognised as an expense in the period in which they are incurred.

Creditors and other payables

Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method.

Income tax

Income tax for the period is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period.  It is calculated using tax rates and tax laws that have been enacted or substantively enacted by the reporting date.  Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Property intended for sale

Property previously held but now being sold as it is no longer required is classified as a property held for sale.

This classification is used where the carrying amount of the property will be recovered through sale, the property is available for immediate sale in its present condition and sale is highly probable.

Property held for sale is recorded at the lower of the carrying amount and fair value less costs to sell.  From the time a property is classified as held for sale, depreciation is no longer charged on the improvements.

Where property is held for sale or for development for sale, in the ordinary course of business, it is classified as inventory.  Such property is recorded at the lower of cost and net realisable value (selling price less costs to complete and sale costs).  Any write-downs to net realisable value are expensed in the net surplus/(deficit) for the year.


 

Leased assets

Operating Leases

Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased items are classified as operating leases.  Payments made under these leases are expensed in the Statement of Comprehensive Income on a straight-line basis over the term of the lease.  Lease incentives received are recognised in the Statement of Comprehensive Income as an integral part of the total lease payment.

Finance Leases

The Company has not entered into any material finance leases.

Financial instruments

The Company is party to financial instrument arrangements as part of its normal operation.  Revenue and expenses in relation to all financial instruments are recognised in the Statement of Comprehensive Income.

All financial instruments are recognised in the Statement of Financial Position on the basis of the Company’s accounting policies.  All financial instruments disclosed on the Statement of Financial Position are recorded at fair value other than those specifically identified in the Notes to the financial statements.

 


                                                                                     155                                                           24 May 2021

Long Term Plan/Annual Plan Subcommittee

09 May 2021

 

 

 

File: (21/706)

 

 

 

 

Report no: LTPAP2021/2/122

 

Three Waters Investment Advice

 

Purpose of Report

1.    This report summarises and comments on advice from Wellington Water Limited (WWL) regarding three waters investment within the draft 2021-2031 Long Term Plan (draft LTP).

Recommendations

That the Subcommittee recommends that Council:

(1)   notes the advice from Wellington Water Limited and in particular the increase in the estimated cost for both the Seaview Wastewater Outfall Overflow and Storage Tank Project (+$10 to $14M) and the Barber Grove to Seaview Trunk Main Duplication Projects (+$6.9M);

(2)   agrees to include an additional $6.9M in capital expenditure, partly offset by revenue of $2.1M from Upper Hutt City Council for its share, in the 2021-2031 Long Term Plan for the Barber Grove to Seaview Trunk Main Duplication Project due to the project’s criticality;

(3)   agrees to accommodate this increase by pushing out the proposed capital expenditure programme over the next ten years, noting that historically the capital works programme has not been able to be fully delivered each year;

(4)   agrees to not include any additional funding in the 2021-2031 Long Term Plan for the Seaview Wastewater Outfall Overflow and Storage Tank Project and asks officers to undertake further iwi and community consultation to consider the relative merits of this project against other projects, which may need to be deferred as a result of this substantial increase;

(5)   notes the current timing in the Long Term Plan of other key projects; and

(6)   notes the remaining risks that have been identified despite the significant increase in investment proposed within the next ten years on three waters infrastructure.

 

Background

2.    WWL is providing each of its shareholder Councils with a final brief report on three waters investment in the draft LTP.

3.    The report, which is attached as Appendix 1, covers;

·   the strategic nature of the approach taken by Hutt City Council with its proposed investment plan;

·   the level of investment being made;

·   five key projects and their timing;

·   known cost increases since the draft plan was considered; and

·   a summary of remaining risks.

 

4.    WWL has also included a copy of the working draft of the Council’s investment plan, Part 3 of the Regional Service Plan for Hutt City.  This plan will be finalised once the Council has adopted its LTP. This document is part of the suite of documents that form the asset management plan which Audit NZ has made comments regarding its availability prior to the draft LTP being finalised.

Discussion

5.    The key matters for Council consideration from the latest WWL advice relate to key project timings and costs and the impact of these on the proposed investment plan and its effect on rates, along with the identified risks which will remain, despite the uplift in investment.

Key Projects

6.    WWL has highlighted five key projects that in total amount to almost $140M in investment.  Two of these projects have recently had revised increased estimates, which are not currently in the draft LTP.  These are:

·   Barber Grove to Seaview, Trunk Main Duplication – increase of $6.9M, noting that 30% of this ($2.1M) is recovered from Upper Hutt City Council (UHCC) as its share of the cost.

·   Seaview Wastewater Outfall Overflow and Storage Tank –increase of $10.6M again for which 30% ($3.18M) is recovered from UHCC.

7.    The Barber Grove to Seaview, Trunk Main Duplication project is scheduled to commence construction within the 2021/22 financial year. WWL has been working with the appointed contractor, McConnell Dowell, in assessing in detail the construction methodology.  The complexity of this project as to its location in the centre of a major road and the depth that the new pipe will need to be laid has largely contributed to this increase.  There is a $2.2M contingency within this latest estimate.

8.    As well as the cost increase the project spread has changed with the physical works programmed to commence in December 2021 and conclude twelve months later.

9.    As this project is of critical importance, due to the size and vulnerability of this section of pipeline, deferral is not recommended.  Council could decide to either include the additional cost as a variance and a consequent increase in rates or decide to defer other works to this value to offset the increase. Given that historically the three waters capital works programme has not been able to be fully delivered each year deferring other works is proposed. 

10.  The Seaview Wastewater Outfall Overflow and Storage Tank project has increased in estimate as the design of the project has progressed. WWL advice is that the project could be as high as $40M. Given the level of this increase in cost ($10-14M), it is proposed that Council put this project on hold and seek further iwi and community input before making a decision to proceed.  The main reason for doing this is to weigh up the relative merits of this project, versus other projects that are likely to have better environmental outcomes but would likely be deferred to offset the increase.

11.  WWL has also provided information on three other key projects and their timing within the draft LTP, proposing that for two of the three projects Council may want to consider bringing works forward. The two projects are Universal Water Metering and the Petone Collecting Sewer Renewal.

12.  The Petone Collecting Sewer is currently programmed to be renewed in the early 2030’s, outside the ten year period, though WWL has already commenced investigations into the options.  WWL is proposing that this project be brought forward in the ten year plan due to the sewer’s relative criticality.  The high-level estimate is $24M. With WWL undertaking condition assessments of critical assets over the next six months, it is proposed that this project be reviewed for possible reprioritisation in next year’s annual plan.

13.  Universal water metering is currently planned to be delivered in years 5-8 of the draft LTP. Investment in water metering fits with the conservation strategy to better manage and reduce water usage in order to defer the need for a new regional water source. There is some risk around the timing of the project given new demand from growth and a possible reduction in existing water take.  To obtain maximum benefit the introduction of water metering requires a regional approach, so leaving the programmed timing as is currently shown is recommended.

Remaining Identified Risks

14.  WWL has identified seven significant remaining risks, despite the increase in investment which Council has proposed.  These risks need to be considered alongside other important factors such as affordability and deliverability.

15.  With other Councils in the region all increasing investment in three waters infrastructure, deliverability of a much uplifted work programme will be challenging.  WWL has commissioned an independent audit of regional resources which indicates a current substantial shortfall in resources.

Climate Change Impact and Considerations

16.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.

17.  Council has agreed that reducing carbon emissions is one of its five key priorities in its three waters investment plan for the LTP.  Funding for carbon emissions reduction (priority 5) has been set at a medium level, compared to a more comprehensive investment in network renewals (priority 1) and reducing water consumption (priority 3).

18.  The following specific activities are proposed to reduce carbon  emissions for three waters:

·    Increasing the amount of renewals using trenchless technology;

·    Investigating opportunities to invest in new sludge treatment facilities including replacing gas dryer;

·    Investing in more energy efficient pumps.

Consultation

19.  Council’s proposed increase in three waters investment was largely supported by submitters to the draft LTP, with 78% agreeing with the significant increased investment.

Legal Considerations

20.  Meeting regional consent requirements will need to be considered with the timing of the Seaview Wastewater Outfall Overflow and Storage Tank project.

Financial Considerations

21.  Financial considerations are covered within earlier sections of the report.  Essentially there would be no overall increase to the capital works programme over the ten year period if the recommendations in this report are adopted.

Appendices

No.

Title

Page

1

WWL Report on Draft LTP Three Waters Investment Plan

164

2

Regional Service Plan - HCC

173

 

Author: Bruce Hodgins

Strategic Advisor

 

Author: Jenny Livschitz

Group Chief Financial Officer

 

Reviewed By: Helen Oram

Director Environment and Sustainability

 

Approved By: Jo Miller

Chief Executive

 


Attachment 1

WWL Report on Draft LTP Three Waters Investment Plan

 


 


 


 


 


 


 


 


 


Attachment 2

Regional Service Plan - HCC

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Attachment 2

Regional Service Plan - HCC

 


Attachment 2

Regional Service Plan - HCC

 





                                                                                     215                                                           24 May 2021

Long Term Plan/Annual Plan Subcommittee

13 May 2021

 

 

 

File: (21/762)

 

 

 

 

Report no: LTPAP2021/2/127

 

RiverLink Project Budget

 

Purpose of Report

1.        To seek Council endorsement for the revised RiverLink Budget.

Recommendations

That the Subcommittee recommends that Council:

(1)     notes the updated project scope has been costed by an independent quantity surveyor and become available since the draft Long Tern Plan 2021-2031 was prepared;

(2)        approves the revised RiverLink Project capital budget of $138.4M;

(3)        approves the revised RiverLink Project revenue budget of $43.5M;

(4)        notes the net $94.9M cost of the RiverLink Project; and

(5)        notes that the net $94.9M cost of the RiverLink Project as consulted on in           the draft Long Term Plan 2021-2031 has not changed, although the       phasing and nature of works funded has been updated.

Outline the reasons for the officer’s recommendations

For the reason that the proposed budgets will achieve the objectives for the project.

 

Background

2.    RiverLink is a transformational project for Lower Hutt City that seeks to improve its resilience, connectivity, enable growth and address the ecological and wellbeing issues facing the city. It is a project that embraces and celebrates the spirit of our taonga (treasure), Te Awa Kairangi / Hutt River.

3.    RiverLink is a partnership project between Hutt City Council (HCC), Greater Wellington Regional Council (GWRC), Waka Kotahi, Taranaki Whānui ki te Upoko o te Ika (Port Nicholson Block Settlement Trust) and Ngāti Toa Rangitira.

4.    The overall project objective is for the integration of flood protection, transport and urban regeneration works between Ewen Bridge and Kennedy Good Bridge, including:

·    Enhanced flood protection for Lower Hutt's city centre and adjacent residential areas;

·    Enhanced connections on SH2 at Melling and linkages to local transport connections;

·    Enhanced amenity and connections so that Te Awa Kairangi becomes the centre piece of the city; and

·    The identity of Te Awa Kairangi and mana whenua within the project area is enhanced through design and the practice of kaitiakitanga.

5.    The project objectives for Greater Wellington Regional Council are to increase the level of flood protection to 2,800 cumecs above Ewen Bridge to Kennedy Good Bridge: 

·    Increased stopbank height; 

·    Providing a wider river corridor and

·    Improved channel and stopbank resilience.

6.    The draft project objectives for Waka Kotahi are enhanced connections on SH2 at Melling and local transport connections through:

·    Enhanced modal accessibility at Melling, and with local transport connections;

·    Enhanced safety and resilience at Melling, and with local transport connections; and

·    Improved travel time reliability and connections along SH2 and from SH2 to the Hutt city centre and the Western Hills.

7.    The draft project objectives for HCC are that Te Awa Kairangi between Ewen Bridge and Kennedy Good Bridge becomes the centre piece of the city by:

·    Turning our city around to face and embrace Te Awa Kairangi;

·    Pedestrian cycle bridge linking new Melling station to Lower Hutt City Centre;

·    Revitalised open space alongside the river to provide various features for rest and play; and

·    Engaging with the private sector to redevelop key sites along the river corridor for residential and leisure use.

8.    What this means more specifically for HCC is an investment in key projects which include:

·    Intersections within the Hutt CBD;

·    Streetscape improvements;

·    A pedestrian cycle bridge;

·    A riverbank park; 

·    A riverbank carpark; and

·    Strategic property purchases to enable future development.

9.    The project is to be completed in the following three phases:

·    Phase 1 - (the current phase), is the planning, design and consenting phase of the project, and includes all works required to acquire the necessary environmental approvals for the project. It is anticipated to run through to 2021;

·    Phase 2 - is the delivery of the capital project, including the detailed design and construction stages and is anticipated to run through 2022-2028, and

·    Phase 3 - is the phase of the project following the conclusion of construction under phase 2, which focusses on urban renewal of the Hutt City riverside and CBD, including the implementation of the post-construction goals.

10.  The overall RiverLink budget as of 2018 was $435M of which $57M (all HCC budget numbers are inflated) comprised of HCC funding for its objectives as noted above.

11.  As a part of the Draft Long Term Plan 2021-31 Council consulted on the RiverLink project. Feedback was sought on two options:

·    Option 1 - Increase the total RiverLink budget to $121.5M (preferred option),

·    Option 2 - Leave the RiverLink budget as it currently stands; $57M. (alternative option).

12.  The proposed budget for RiverLink as presented in the Draft Long Term Plan is provided below:

 

 

 


 

Expenditure

 

 

$M

RiverLink - Replacement riverbank car parking

0.8

RiverLink - East Access Route (Subsidy 51%)

3.9

RiverLink - contribution to Melling Bridge Renewal

7.3

RiverLink - Promenade & Urban Improvements

50.0

RiverLink Footbridge (Subsidy 51%)

9.7

Strategic Property Purchases

49.8

GRAND TOTAL

121.5

 

Operational expenditure

 

 

$M

Other specialist services

0.6

GRAND TOTAL

0.6

 

Revenue

 

 

$M

Waka Kotahi (NZTA) subsidy

7

Property sales

20.2

GRAND TOTAL

27.2

Net = $94.9M

13.  The Gross budget for RiverLink as consulted on in the LTP was $121.5M (excl. operational expenditure) with revenue of $27.2M. Taking into account operational expenditure, this takes the total net budget (total budget minus revenue) to $94.9M.  

14.  A high level summary of the responses from the community on the RiverLink options in the Draft LTP is provided below:

https://lh6.googleusercontent.com/L78Yu6bFv7fdsolrw9OaBILWMDWqhnAox2ESk171UfGLAaVONqO56uyAXd3dOHx7xNnfxmH2uWYMVvVvemGq_Ic_ls7u1gIvjkXg0yufjFdPAv4vGZSd0cH8SNS83jU0JO9FmWa-


 

Public feedback from the consultation 

 

15.  A summary of the feedback is provided below:

·    Respondents are largely in favour of improving the transport infrastructure

·    Improved and safe accessibility to active transport and micromobility

·    Better connectivity to public transport

·    Melling interchange was mentioned as a desirable and positive investment

·    Of paramount concern is flood protection and resilience.

Preference for option two

 

16.  The analysis of those who prefer Option Two suggest that there is support for an increase in the three waters and transport investment but are looking for savings elsewhere (RiverLink) in order to achieve a lower rates rise. 

Discussion

 

17.  Before and during the consultation period of the Draft LTP the RiverLink project team have been going through a process of refining the design based on community feedback for the wider RiverLink project. An independent Quantity Surveyor then produced cost estimates and worked with the project partners to define cost allocations to each organisation. These cost estimates were unavailable at the time of release of the Draft LTP for consultation. Following receipt of the cost estimates HCC has been able to further refine the scope of the RiverLink project and adjust the budgets of each of the key components needed to deliver the HCC project outcomes.

18.  Appendix 1 provides images to explain the proposed scope of work based on the indicative design the consultant team have produced. The key scope changes are explained as follows:

·    Increase in expenditure on Riverbank parking area

·    Increase in expenditure on intersection improvements in the vicinity of the project, including mitigation for the impacts of the stop-bank works and relocation of Melling Bridge

·    Removal of contribution to Melling Bridge. The new bridge is funded through the NZ Upgrade Programme. HCC funding is proposed for intersections in the vicinity of the new Melling Bridge.

·    Increase in expenditure for promenade and urban improvements. Funding has been allocated for central city streetscape improvements to improve the look and feel of the central city and integrate with the Riverbank Park.

·    Funding has also been increased for the Riverbank Park in the zone between Melling Bridge and Ewen Bridge. This will be key for achieving the vision of RiverLink and the integration of private sector developments into the stop-bank.

·    Increase in expenditure for the pedestrian cycle bridge. This is a key component of the scheme that will provide a direct, quick access between the central city and the replacement Melling Station. This structure will be visible from SH2 and architecturally will express the cultural significance of the river corridor.

·    Reduction in expenditure on strategic property purchases to prioritise the capital cost items explained above. Key strategic properties are set to be purchased by project partners to enable the construction of the infrastructure works. Residual land, in its majority, will be developed by the private sector and designed in a way that is consistent with Council’s planning and design frameworks. Demolition of North Daly Street properties included in Operational Expenditure.

·    Increase in revenue from Waka Kotahi subsidies for the increased scope of intersection improvement works.  

·    Reduction in projected revenue from property sales (conservative assumption).

19.  This process has seen an increase in both expenditure of $138.4M and revenue of $43.5M. This takes the total net budget (total budget minus revenue) to $94.9M which is unchanged from what was consulted on in the draft LTP. 

20.  In summary, the increase in expenditure is largely due to an increase in funding allocation for activities (RiverLink - East Access Route and RiverLink Footbridge) which attract 51% subsidy from Waka Kotahi. The effect of this is that the overall budget and revenue are both increased, which offsets the total expenditure. 

21.  The timing of HCC’s expenditure has also been revised to align with the overall project programme of works, with completion scheduled for 2026.

22.  A breakdown of the proposed budget is provided below, with the Draft LTP numbers included for comparison purposes.

 

 

 

 

 

 

 

 

 

 

Draft LTP

$M

Final LTP

$M

RiverLink - Replacement riverbank car parking

0.8

2.6

RiverLink - East Access Route (Subsidy 51%)

3.9

25.5

RiverLink - contribution to Melling Bridge Renewal

7.3

0

RiverLink - Promenade & Urban Improvements

50.0

71.8

RiverLink Footbridge (Subsidy 51%)

9.7

24.5

Strategic Property Purchases

49.8

10.3

GRAND TOTAL

121.5

134.7

Capital Expenditure

 

 

 

 

 

 

 

Operational Expenditure

 

Draft LTP

$M

Final LTP

$M

Demolition

0

3.1

Other specialist services

0.6

0.6

GRAND TOTAL

0.6

3.7

 

 

 

 

 

 

 

 

Revenue

 

Draft LTP

$M

Final LTP

$M

Waka Kotahi (NZTA) subsidy

7

25.5

Property sales

20.2

18.0

GRAND TOTAL

27.2

43.5

 

 

 

 

Net = $94.9M (Net cost unchanged from Draft LTP, however changes to timing included as well as nature of some of the expenditure)

 


 

Comparison of Draft and Final LTP Budgets

Options

 

Option 1 (recommended)

23.  Approves the revised RiverLink budget of $138.4M.

24.  Notes revenue of $43.5M for the RiverLink project.

25.  Notes the net $94.9M cost of the RiverLink Project. 

26.  The table that follows shows a comparison of the Draft LTP budgets together with a comparison to the proposed updated budgets to be included in the final Final LTP.

27.  Notes that the net $94.9M cost of the RiverLink Project as consulted on in the draft Long Term Plan has not changed. There is however changes to the timing of expenditure as well as the nature of expenditure. The operational expenditure has increased mainly due to the demolition costs which will be incurred. The timing of the expenditure has also changed which will have flow on impacts for depreciation and the interest costs.  Increased revenue is largely due to assumed Waka Kotahi assumed funding for the roading and pedestrian bridge components.

Option 2

28.  Retain the RiverLink budget of $57M as agreed in the 2018-2028 Long Term Plan.

29.  Note that the RiverLink project would require re-scoping.

30.  Note that the delivery of key elements such as the transport upgrades, pedestrian bridge and river edge enhancements may not be possible.

31.  Note that a revised scope in the RiverLink project may compromise components being delivered by both Waka Kotahi and GWRC.

32.  Note that a descaled scope would likely not achieve the transformation of the Hutt City centre, and the economic growth potential of the project will reduce.

Impact on balanced budget target

33.  A report in this agenda entitled “Progressing final decisions for the LTP 2021-2031- Financial aspects” includes a proposed range of budget decisions for Council consideration. The changes to the RiverLink project as detailed in this report are not included in that report as the information for RiverLink was not available at the time of preparing the report. The proposed changes for RiverLink budgets included in this report will result in higher depreciation and interest costs which will in turn impact on the balanced budget position. The impact on the balanced budget position and in turn rates increases in the ten years of the plan is yet to be determined and will be reported to the 9 June 2021 LTP Subcommittee meeting. 

Climate Change Impact and Considerations

34.  The matters addressed in this report have been considered in accordance with the process set out in Council’s Climate Change Considerations Guide.

35.  The design of the RiverLink project takes into account climate change projections and is partly premised on increasing Lower Hutt City’s resilience to effects of climate change. 

36.  Climate change has been at the centre of all planning and design of RiverLink as we work to achieve carbon zero by 2050, and make our operations more sustainable and climate friendly. For example, the project team are looking at using the Infrastructure Sustainability Rating tool for RiverLink to ensure the infrastructure meets our sustainability objectives.

37.  All three partners are passionate about providing integrated sustainable transport solutions and RiverLink will deliver a step change in this regard. Access from the city to the replacement Melling Station across the new pedestrian cycle bridge will be a major improvement, as well as our proposed high quality cycleways linking with other upcoming projects like the Te Ara Tupua cycleway, the Eastern Bays Shared Path and routes to Hutt CBD.

38.  The flood defence elements consider the effects of climate change with rising sea levels and changes in rainfall patterns both an integral part of the design.

Consultation

39.  Consultation and engagement has been embedded within the RiverLink programme and has included open days, surveys and other engagement activities and events. 

Legal Considerations

40.  There are no legal considerations at this stage. 

Financial Considerations

41.  The report details proposed changes to the budgets for RiverLink to be included in the final LTP 2021-2031. There are no further financial consideration apart from those included in the report.

Appendices

No.

Title

Page

1

EXPLANATION OF HCC SCOPE OF WORKS AND CHANGES BETWEEN DRAFT LTP AND FINAL LTP

231

    

 

 

 

 

 

Author: Tom Biggin

Project Manager Riverlink

 

 

 

 

 

 

Reviewed By: Kara Puketapu-Dentice

Director Economy and Development

 

 

 

Approved By: Jenny Livschitz

Group Chief Financial Officer

 


Attachment 1

EXPLANATION OF HCC SCOPE OF WORKS AND CHANGES BETWEEN DRAFT LTP AND FINAL LTP

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


                                                                                     250                                                           24 May 2021

Long Term Plan/Annual Plan Subcommittee

29 April 2021

 

 

 

File: (21/677)

 

 

 

 

Report no: LTPAP2021/2/123

 

Development and Financial Contributions Policy 2021-2024