HuttCity_TeAwaKairangi_BLACK_AGENDA_COVER

 

 

KOMITI RATONGA RANGATŌPŪ ME TE RAUTAKI
Policy, Finance and Strategy Committee

 

 

30 August 2022

 

 

Order Paper for the meeting to be held in the

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

on:

 

 

 

Tuesday 6 September 2022 commencing at 3.15pm

 

The meeting will be livestreamed on Council’s Facebook page.
Members of the public wishing to speak to an item on the agenda are asked to contact
democraticservicesteam@huttcity.govt.nz

 

 

Membership

 

Cr S Edwards (Chair)

Mayor C Barry

Cr G Barratt

Cr J Briggs

Cr K Brown (Deputy Chair)

Cr B Dyer

Cr D Hislop

Deputy Mayor T Lewis

Cr C Milne

Cr A Mitchell

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

 


POLICY, FINANCE & STRATEGY COMMITTEE
Membership:		13
Meeting Cycle:		Meets on an eight weekly basis, as required or at the requisition of the Chair
Quorum:		Half of the members
Membership RMA Hearings:	An independent Commissioner plus a minimum of either 3 or 4 elected members (including the Chair) and alternates who have current certification under the Making Good Decisions Training, Assessment and Certification Programme for RMA Decision-Makers. 
Reports to:		Council

HuttCity_TeAwaKairangi_SCREEN_MEDRES

 

OVERVIEW:

This Committee assists Council in setting the broad direction of the city, discharging statutory functions, and overseeing organisational performance.

The Committee is aligned with the Transformation & Resources, and Strategy & Engagement, Directorates.

Its areas of focus are:

§   Long term/high level strategic focus

§   Long Term Plan/Annual Plan oversight

§   District Plan oversight

§   Housing/homelessness

§   City growth/economic development

§   Financial and non-financial performance reporting

§   Oversight of Property Working Group

§   Oversight of strategies and policies

§   Bylaw development

§   Oversight of CCOs/approval of SOIs

 

PURPOSE:

To assist the Council in setting the broad vision and direction of the city in order to promote the social, economic, environmental and cultural wellbeing of the city’s communities in the present and for the future. This involves determining specific outcomes that need to be met to deliver on the vision for the city, and overseeing the development of strategies, policies, bylaws and work programmes to achieve those goals. This committee is also responsible for monitoring the overall financial management and performance of the Council Group.

 

DELEGATIONS FOR THE COMMITTEES AREAS OF FOCUS:

§  All powers necessary to perform the Committee’s responsibilities including the activities outlined below.

§  Develop required strategies and policies. Recommend draft and final versions to Council for adoption where they have a city-wide or strategic focus.

§  Implement, monitor and review strategies and policies.

§  Oversee the implementation of major projects provided for in the LTP or Annual Plan.

§  Oversee budgetary decisions provided for in the LTP or Annual Plan.

§  Recommend to Council the approval of any financial decisions required outside of the annual budgeting process.

§  Maintain an overview of work programmes carried out by the Council’s Transformation & Resources, and Strategy & Engagement, Directorates.

§  Conduct any consultation processes required on issues before the Committee.

§  Approval and forwarding of submissions.

§  Any other matters delegated to the Committee by Council in accordance with approved policies and bylaws.

§  The committee has the powers to perform the responsibilities of another committee where it is necessary to make a decision prior to the next meeting of that other committee. When exercised, the report/minutes of the meeting require a resolution noting that the committee has performed the responsibilities of another committee and the reason/s.

§  If a policy or project relates primarily to the responsibilities of the Policy, Finance & Strategy Committee, but aspects require additional decisions by the Communities Committee, Infrastructure & Regulatory Committee and/or Climate Change & Sustainability Committee, then the Policy, Finance & Strategy Committee has the powers to make associated decisions on behalf of those other committees. For the avoidance of doubt, this means that matters do not need to be taken to more than one of those committees for decisions.

District Plan Delegations:

§  Undertake a full review of the City of Lower Hutt District Plan, including oversight of the District Plan Review Subcommittee in establishing a District Plan work programme and monitoring its implementation.

§  Consideration of matters related to the preparation and ongoing monitoring of the City of Lower Hutt District Plan.

§  Preparation of required Changes and Variations to the City of Lower Hutt District Plan for Council approval to call for submissions.

§  Make recommendations to Council on private District Plan Change requests for Council to accept, adopt or reject.

§  The Chair of the Policy, Finance & Strategy Committee, in conjunction with the Chief Executive, is authorised to appoint a District Plan Hearings Subcommittee of suitably qualified persons to conduct hearings on behalf of the Committee.

Bylaw Delegations:

§  Develop and agree the Statement of Proposal for new or amended bylaws for consultation.

§  Recommend to Council the approval of draft bylaws prior to consultation.

§  The Chair of the Policy, Finance & Strategy Committee, in conjunction with the Chief Executive, is authorised to appoint a Subcommittee of suitably qualified persons to conduct hearings on draft bylaws on behalf of the Committee.

§  Recommend to Council new or amended bylaws for adoption.

Financial, Project and Performance Reporting Delegations:

§  Recommend to Council the budgetary parameters for preparation of the Council’s Long Term Plans (LTP) and Annual Plans.

§  Monitor progress towards achievement of budgets and objectives for the Council Group as set out in the LTP and Annual Plans, including associated matters around the scope, funding, prioritising and timing of projects.

§  Monitoring and oversight of significant city-wide or strategic projects including operational contracts, agreements, grants and funding, except where these are the responsibility of another standing committee.

§  Monitor progress towards achievement of the Council’s outcomes as set out in its overarching strategies for the city and their associated plans.

§  Oversee the activities of the Property Working Group in its implementation of the Purchase and Sale of Property for Advancing Strategic Projects Policy.

§  Oversee the acquisition and disposal of property in accordance with the LTP.

§  Monitor the integrity of reported performance information at the completion of Council’s Annual Report process.

§  Review and recommend to Council the adoption of the Annual Report.

§  Recommend to Council the approval of annual Statements of Corporate Intent for Council Controlled Organisations and Council Controlled Trading Organisations and granting shareholder approval of major transactions.

§  Monitor progress against the CCO and CCTO Statements of Intent and make recommendations to Council in the exercising of Council powers, as the shareholder, in relation to Council Controlled Organisations/Council Controlled Trading Organisations under sections 65 to 72 of the Local Government Act.

§  Oversee compliance with Council’s Treasury Risk Management Policy.

§  Consider and determine requests for rates remissions.

§  Consider and determine requests for loan guarantees from qualifying community organisations where the applications are within the approved guidelines and policy limits.

 

 

NOTE:

 

The Ministry for the Environment advocates that Councils offer specialist RMA training in areas of law which are difficult to grasp or where mistakes are commonly made. This is to complement the Good Decision Making RMA training that they run (which is an overview and basic summary of decision making, rather than an in-depth training in specific areas of the RMA). Therefore in order to facilitate this, the RMA training run for councillors that wish to be hearings commissioners is mandatory.

 

Reasons for the importance of the training:

1.   Hearings commissioners are kept abreast of developments in the legislation.

2.   Legal and technical errors that have been made previously are avoided (many of which have resulted in Environment Court action which is costly, time consuming and often creates unrealistic expectations for the community).

3.   The reputation of Council as good and fair decision makers or judges (rather than legislators) is upheld.

 

    


                         1                                                       06 September 2022

HUTT CITY COUNCIL

 

Komiti Ratonga Rangatōpū me te Rautaki

Policy, Finance and Strategy Committee

 

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

 Tuesday 6 September 2022 commencing at 3.15pm.

 

ORDER PAPER

 

Public Business

 

1.       Opening formalities - Karakia Timatanga (22/2096)

Whakataka te hau ki te uru

Whakataka te hau ki te tonga

Kia mākinakina ki uta

Kia mātaratara ki tai

E hī ake ana te atakura

He tio, he huka, he hau hū

Tīhei mauri ora.

Cease the winds from the west
Cease the winds from the south
Let the breeze blow over the land
Let the breeze blow over the ocean
Let the red-tipped dawn come with a sharpened air. 
A touch of frost, a promise of a glorious day.

 

2.       APOLOGIES

Cr Deborah Hislop

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.       Hutt Valley Chamber of Commerce 12 Monthly Report to 30 June 2022 (22/1940)

Report No. PFSC2022/4/173 by the Head of Business and Economy                    9

Chair’s Recommendation:

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

 

6.       Sale and supply of alcohol (fees) regulations 2013 - Regulation 19(1) - reporting by territorial authorities (22/2093)

Report No. PFSC2022/4/175 by the Environmental Health Manager                  32

Chair’s Recommendation:

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

 

7.       Policy, Finance and Strategy Committee Forward Programme 2022 (22/2098)

Report No. PFSC2022/4/154 by the Democracy Advisor                                     35

Chair’s Recommendation:

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

8.       2022 Standard and Poor's Credit Rating (22/2149)

Report No. PFSC2022/4/186 by the Group Chief Financial Officer                      39

Chair’s Recommendation:

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

9.       Interim unaudited quarter four and annual performance results for the period ended 30 June 2022 (22/1851)

Report No. PFSC2022/4/174 by the Head of Enterprise Portfolio Management Office        51

Chair’s Recommendation:

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

 

10.     Three Waters Reform Update (22/2092)

Report No. PFSC2022/4/153 by the Strategic Advisor                                        122

Chair’s Recommendation:

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

11.     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.

12.     EXCLUSION OF THE PUBLIC

CHAIR'S RECOMMENDATION:

 

“That the public be excluded from the following parts of the proceedings of this meeting, namely:

13.     Valley Floor Growth Infrastructure - Infrastructure Acceleration Fund Negotiation Phase (22/1793)

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

 

(A)

(B)

(C)

 

 

 

General subject of the matter to be considered.

Reason for passing this resolution in relation to each matter.

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

 

 

 

 

 

 

Valley Floor Growth Infrastructure - Infrastructure Acceleration Fund Negotiation Phase.

The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) (s7(2)(i)).

That the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding exist.

 

 

This resolution is made in reliance on section 48(1) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as specified in Column (B) above.”

Judy Randall
DEMOCRATIC SERVICES

 

 


                                                                                       1                                                06 September 2022

 

 

 

A black and white sign

Description automatically generated with medium confidencePolicy, Finance and Strategy Committee

02 August 2022

 

 

 

File: (22/1940)

 

 

 

 

Report no: PFSC2022/4/173

 

Hutt Valley Chamber of Commerce 12 Monthly Report to 30 June 2022

 

Purpose of Report

1.    The report summarises the Hutt Valley Chamber of Commerce (HVCC) performance against agreed performance measures for the 12 months to
30 June 2022.

2.    The report has been prepared on the basis of information provided by HVCC and officer input.

3.    Representatives of HVCC will be in attendance to speak to their report.

Recommendation

That the Committee notes and receives the report.

For the reason, the Hutt Valley Chamber of Commerce is required to regularly report to the Committee on performance against agreed performance measures.

 

Background

4.    Council contracts HVCC and allocates funding for specific direct services to complement and support Council’s work programmes and strategies.

5.    In Financial Year (FY) 2021/2022 funding for services is $125,000 in total and is allocated in the 2021/31 Long Term Plan for economic development activities.

6.    A strong constructive relationship with HVCC has beneficial outcomes for both working with businesses and encouraging business activity in Lower Hutt.

Discussion

7.    HVCC reporting for the 12 months to 30 June 2022 is attached as Appendix 1 to the report.

8.    Highlights for the period include:

·    The new Chief Executive, Patrick McKibben has visited or contacted over 300 business leaders since his appointment in October 2021.

·    Leading a coordinated response to the business community during COVID-19 lockdown in August 2021, including Hutt City and Upper Hutt City Councils and other business agencies in both Lower and Upper Hutt cities and subsequent updates on changes impacting the business community.

·    Continuation of the work under contracts with Government agencies including another successful tender for funding for events to encourage young people into trades from Ministry of Education.  A recent Jobs expo focused on Infrastructure and Construction in Lower Hutt attracted over 700 senior students.

·    Connection of business sector with local high schools to develop specific pathways to employment in key sectors.

·    Development of a business case with councils and local infrastructure agencies for a government funded Jobs and Skills hub, still under consideration by central government. 

·    Providing a range of Council teams with opportunities to engage with the business community eg Sustainability - Climate change; Transport - cycle ways; Business & Economy – technology business visit programme; and RiverLink project. 

9.    Council agreed to contract HVCC for specific direct services in FY2021/22 in support of Council’s work programmes and strategies. A Contract Services Delivery Schedule forms the basis of the contracted services and is the basis for the attached progress report to this Committee.

10.  Despite this being a period of change for the Chamber there has been a notable increase in the level of activity between the Chamber and Council.  

Consultation

11.  HVCC has submitted its report for the 12 months to 30 June 2022 for the Committee’s consideration and it is attached as Appendix 1 to the report.  Representatives of HVCC will be in attendance to speak to their report.

12.  It should be noted that the contract requirements were met in addition to the business response to COVID-19 that the Chamber led during this period.

Climate Change Impact and Considerations

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

14.  There are no climate change considerations.

Legal Considerations

15.  There are no legal considerations.

Financial Considerations

16.  HVCC is contracted to provide services to Council until 30 June 2024 with the Contract Services Delivery Schedule reviewed and agreed every 12 months.

Appendices

No.

Title

Page

1

Appendix 1: Hutt Valley Chamber of Commerce Report 12 Month to 30 June 2022

12

    

 

 

 

 

 

Author: Gary Craig

Head of Business and Economy

 

 

 

 

 

 

Approved By: Kara Puketapu-Dentice

Director Economy and Development

 


Attachment 1

Appendix 1: Hutt Valley Chamber of Commerce Report 12 Month to 30 June 2022

 

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                                                                                       1                                                06 September 2022

A black and white sign

Description automatically generated with medium confidencePolicy, Finance and Strategy Committee

18 August 2022

 

 

 

File: (22/2093)

 

 

Report no: PFSC2022/4/175

 

Sale and supply of alcohol (fees) regulations 2013 - Regulation 19(1) - reporting by territorial authorities

 

Purpose of Report

1.    To advise the Committee on Council’s responsibilities to annually prepare and make publicly available a report showing all income from fees payable in relation to, and costs incurred for all, activities related to alcohol licensing and enforcement under the Sale and Supply of Alcohol Act 2012.

Recommendation

That the Committee approves the publication of a ‘table of income versus expenditure’ on Council’s website showing the alcohol licensing income received from fees payable in relation to, and costs incurred, in:

(a)   the performance of the functions of Council’s District Licensing Committee under the Sale and Supply of Alcohol Act 2012 (the Act);

(b)   the performance of the functions of Council’s Inspectors under the Act; and

(c)   undertaking of enforcement activities under the Act.

For the reasons outlined in the report.

 

Background

2.    The Sale and Supply of Alcohol Act 2012 (the ‘Act’) came into force on 18 December 2012 and became effective in December 2013. 

3.    The Act’s focus is on alcohol harm reduction, requiring that Licensing Inspectors enquire into and report on applications, and also monitor the performance of licensees. The team works in collaboration with the New Zealand Police and the Medical Officer of Health. 

4.    The Act requires Territorial Authorities to report annually as follows:

Regulation 19(1) Reporting by territorial authorities

(1)    Every territorial authority must, each year, prepare and make publicly available a report showing its income from fees payable in relation to, and its costs incurred in:

(a)    the performance of the functions of its licensing committee under the Act; and

(b)    the performance of the functions of its inspectors under the Act; and

(c)    undertaking enforcement activities under the Act.

5.    Council approved the Alcohol Fees Bylaw (the bylaw) on 17 September 2019. Both the application and annual fees are to be increased over three years starting 1 January 2020, with the aim of recovering 90% of the costs of alcohol related work. As fee increases occur halfway through each financial year the full effect of the fee increases will not be realised until the 2022/23 financial year.

6.    The percentage of costs Council has recovered from fees for carrying out its functions under the Sale and Supply of Alcohol Act 2012 for the 2021/22 financial period is 61%.

7.    The reason for the percentage shortfall is that the original expenditure against which the 90% was measured ($464k) had not sufficiently taken into account the increase in the cost of the function over this time.

8.    As per the table below, total revenue has increased from last year by $56k (18%). The cost of licensing inspectors’ functions has increased $16k (5%) due to salary increases within the team and operating and support costs have increased but only very slightly.

TABLE OF INCOME VS EXPENDITURE (GST EXCLUSIVE)

Required under Regulation 19 (1) of the Sale and Supply of Alcohol (Fees) Regulations 2013

Revenue

2021/22

 

2020/21

2019/2020

-        Fees

$372,543

 

$316,638

$244,516

 

Expenses

 

-        Alcohol Regulatory Licensing Authority (ARLA) Fees

$18,980

 

$17,684

$15,440

-        District Licensing Committee Functions

$25,762

 

$26,132

$27,433

-        Licensing Inspectors Functions

$348,229

 

$332,205

$311,988

-        Licensing Inspectors Operating & Support Costs

$161,484

 

$159,315

$191,100

-        Administration and Sundry

$59,354

 

$57,626

$56,775

Total Expenses

$613,808

 

$592,962

$602,736

Surplus/Deficit

($241,265)

 

($276,324)

($358,220)

Cost Recovery Rate

61%

 

53%

41%

 

Climate Change Impact and Considerations

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

Consultation

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

Legal Considerations

11.  This report is prepared in accordance with the Sale and Supply of Alcohol Act 2012.

Financial Considerations

12.  This report is based on revenue and expenses for the 2021/22 financial year.

Appendices

There are no appendices for this report.    

 

 

 

 

 

Author: Dean Bentley

Environmental Health Manager

 

 

 

Author: Karl Eagle

Senior Management Accountant

 

 

 

 

 

 

Reviewed By: Derek Kerite

Head of Regulatory Services

 

 

 

Approved By: Alison Geddes

Acting Director Environment and Sustainability

 


                                                                                       1                                                06 September 2022

A black and white sign

Description automatically generated with medium confidencePolicy, Finance and Strategy Committee

18 August 2022

 

 

 

File: (22/2098)

 

 

 

 

Report no: PFSC2022/4/154

 

Policy, Finance and Strategy Committee Forward Programme 2022

 

 

 

 

Purpose of Memorandum

1.       To provide the Committee with a Forward Programme of work planned for the Committee for 2022.

Recommendation

That the Committee receives and notes the Forward Programme for 2022 attached as Appendix 1 to the report.

 

Background

2.           The Terms of Reference for the Committee requires the Committee to assist Council in setting the broad direction of the city, discharging statutory functions and overseeing organisational performance.

3.           The Forward Programme provides a planning tool for both members and officers to co-ordinate programmes of work for future meetings.  The Forward Programme is attached as Appendix 1 to the report.

Forward Programme

 

4.           The Forward Programme is a working document and is subject to change on a regular basis.

 

 

Appendices

No.

Title

Page

1

Appendix 1: Forward Programme 2022-2023

37

    

 

 

 

 

Author: Judy Randall

Democracy Advisor

 

 

 

 

 

 

Reviewed By: Kate Glanville

Senior Democracy Advisor

 

 

 

Approved By: Kathryn Stannard

Head of Democratic Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Attachment 1

Appendix 1: Forward Programme 2022-2023

 

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                                                                                       1                                                06 September 2022

A black and white sign

Description automatically generated with medium confidencePolicy, Finance and Strategy Committee

25 August 2022

 

 

 

File: (22/2149)

 

 

Report no: PFSC2022/4/186

 

2022 Standard and Poor's Credit Rating

 

Purpose of Report

1.    The purpose of this report is to inform the Committee that on 29 August 2022, Standard and Poor’s (S&P) Global Ratings affirmed Council’s credit rating as AA long term with ‘stable’ outlook, and A-1+ short term.

2.    The overall credit rating assessment was unchanged from 2021, with the underlying detailed scoring showing no change.

Recommendation

That the Committee notes and receives the report.

 

Background

3.    There is no legislative requirement for council to have a credit rating, likewise council’s Treasury Risk Management Policy does not require a rating.

4.    Across New Zealand there are currently 32 councils that have a credit rating. This includes for example, Wellington City Council, Greater Wellington Regional Council, Porirua City Council, Tauranga City Council and Auckland Council. The credit rating is essentially a ‘signal’ to lenders that council can fully meet its borrowing obligations.

5.    The credit rating enables Council to access multiple debt markets (Local Government Funding Agency, banking institutions, private placements), at a lower cost due to the perceived risk.

6.    The table that follows shows how the Local Government Funding Agency (LGFA) provides lending at a range of margins dependent on Councils’ credit rating. 

Table 1: LGFA lending margins


Credit Rating

Additional Lending Margin

AA & AA+

0.20%

AA-

0.25%

A+

0.30%

Unrated Guarantor

0.40%

Unrated Non-Guarantor

0.50%

 

7.    Hutt City Council has an AA credit rating which reduces the cost of borrowings by up to 0.30% compared to other borrowers. When compared to a local authority with an A+ credit rating, Council’s annual cost of borrowings is $50,000 less for every $50M borrowed.

Outcome of the most recent credit rating review

8.    S&P annually review Council’s credit rating. The most recent review was completed in early August 2021. The outcome of the review was made publicly available on 29 August 2022.

9.    The S&P rating affirmed Council’s credit rating as AA long term with ‘stable’ outlook, and A-1+ short term. This is unchanged from the previous year.

10.  The S&P detailed review is attached as Appendix 1 to the report. This includes a summary rating score snapshot which is summarised in Table 2. A five-point scale is used for all the rating factors except for the ‘institutional framework’ where a six-point scale is used. One is the strongest score that can be achieved. 

Table 2: Rating score snapshot results

Key rating factor

2022

2021

2020

2019

Institutional framework

1

1

1

1

Economy

2

2

2

2

Financial management

2

2

2

2

Budgetary performance

3

3

3

4

Liquidity

2

2

1

2

Debt burden

4

4

4

4

 

 

11.  Key messages included in the report to explain the rating outcome:

Overview of key points:

-     ‘The council's economic profile, the council's experienced management, and New Zealand institutional settings underpin our ratings.

-     Hutt City Council’s (Hutt) financial position is weakening as it delivers a historically large capital program, which will lead to rising debt levels and drive the council’s budget into a large deficit, despite reasonably high property rate increases.

-     The stable outlook reflects our expectation that Hutt will increase its revenues to help fund its large capital expenditure and continue to pre-fund upcoming debt maturities to maintain ample liquidity coverage.’

Further details:

a.    ‘The institutional framework within which New Zealand local governments operate is a key strength supporting Hutt's credit profile. We believe the framework is one of the strongest and most predictable globally. The New Zealand local government system also promotes a strong management culture, fiscal discipline, and high levels of financial disclosure among local councils. The system allows Hutt to support higher debt levels than some of its international peers can tolerate at its current rating.

b.    Hutt's financial management is experienced and relatively conservative. The council adopts budgets and long-term plans without delays, and it remains focused on being financially disciplined in its approach to borrowings and insurance policies. We consider its debt and liquidity policies to be prudent.

c.     The council’s large capital pipeline reflects its decisions to address previous backlogs and underspending on essential infrastructure, as well as rebuild Naenae pool… and the delivery of RiverLink. In our view, the council’s decisions to increase rates and contributions from developers support financial sustainability. This indicates the council is aware of the financial pressures its large capital program will bring.

d.    We consider that access to the New Zealand Local Government Funding Agency (LGFA) provides Hutt, along with most of its New Zealand peers, with strong access to a well-established source of external liquidity.’

Climate Change Impact and Considerations

12.  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 climate change impacts or considerations arising from this report.

Consultation

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

Legal Considerations

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

Financial Considerations

15.  There are no further financial considerations apart from those noted in the report.

Appendices

No.

Title

Page

1

S&P Global Rating report issued 22 August 2022

43

    

 

 

 

 

 

Author: Jenny Livschitz

Group Chief Financial Officer

 

 

 

 

 

 

Approved By: Jo Miller

Chief Executive

 


Attachment 1

S&P Global Rating report issued 22 August 2022

 

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                                                                                       1                                                06 September 2022

A black and white sign

Description automatically generated with medium confidencePolicy, Finance and Strategy Committee

20 July 2022

 

 

 

File: (22/1851)

 

 

Report no: PFSC2022/4/174

 

Interim unaudited quarter four and annual performance results for the period ended
30 June 2022

 

Purpose of Report

1.    The report provides an overview of the Council performance results for the period 1 April 2022 to 30 June 2022.

Recommendation

That the Committee 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.  

 

3.    These are unaudited interim results for the period ended 30 June 2022. An external audit by Audit New Zealand will be completed as part of the process to prepare the Group Annual Report 2021/22. The draft unaudited Group Annual Report 2021/22 will be presented to the Audit and Risk Subcommittee 28 September 2022. The new incoming Council, post the October 2022 elections, will determine the approach and timing of the adoption of the Group Annual Report 2021/22.

Discussion

Quarterly highlights and achievements

Appendix 1 to this report provides details on the highlights and achievements over the quarter.Highlights and achievements are outlined below.

4.    Annual Plan 2022-2023: The plan was successfully adopted, confirming our direction for the year, to advance the priorities and projects set out in the Long Term Plan 2021-2031. The plan is well designed, fresh and modern. 

5.    Pre-Election Report: The report was published on 14 July 2022, to promote public discussion and awareness of the story of our city alongside the challenges facing Council.

6.    Pre-election information packs and protocols: These were issued to elected members and staff in advance of candidate nominations opening on 15 July for the 2022 Triennial Local Government Elections.

7.    Te Awa Kairangi Kai Collective: The collective was awarded the 2022 Local Government New Zealand EXCELLENCE Award. This community-led initiative includes Council, Common Unity, Kokiri Marae, Lower Hutt Foodbank, Salvation Army Lower Hutt, Stokes Valley Foodbank and Te Aroha Kai. 

8.    Matariki: Council marked the first Matariki public holiday in Aotearoa by taking a coordinated approach to celebrations, developing a Puanga ki Matariki 2022 events programme of activities across our facilities to both educate people on the event and celebrate Māori culture. This culminated in a one-day Matariki celebration at the Town Hall and Events Centre attended by an estimated 2,500-3,000 people.

9.    Whakatupu Ngaengae: A dawn blessing was held in June 2022 on the site for Whakatupu Ngaengae, the new Naenae Pool and Fitness Centre, attended by Mana Whenua, key stakeholders and the community. A community celebration to mark the milestone on 16 July 2022 coincided with the re-opening of the Naenae Library after a two-month closure for maintenance and repair. There is a focus on encouraging people back into our facilities and out into their communities.

10.  The Whakatupu Ngaengae / Naenae Pool and Fitness Centre project’s application for a Green Loan from the Local Government Funding Agency was successful for $41M, which is the balance of co-funding for the project. The remaining $27M is from the government’s COVID-19 Response and Recovery Fund. 

11.  Our application to the Infrastructure Acceleration Fund (IAF) has also successfully gone through to the final stage. Negotiations are underway to secure this funding to assist with infrastructure challenges in the city centre and valley floor. Final Ministerial funding decisions will be notified next quarter.

12.  Takai Here Tāngata in Taita: This innovative housing development to build 19 new houses for whānau who are in housing stress, will be completed next quarter. This is a partnership between Te Rūnanganui o Te Āti Awa, Kahungunu Whānau Services, Council, and Council-controlled organisation Urban Plus Limited.

13.  Petone Library: The first stage of community engagement for the Petone Library refurbishment project was completed. This included a workshop and drop-in session, online engagement through ‘Have your Say’ and 1:1 empathy conversations with members of the public. This built on broader engagement done as part of the Petone 2040 project.

14.  Matua body: This was set up for District Plan Subcommittee members seeking Mana Whenua engagement and feedback and is an approach that may also be used for the City Strategy and Te Hahere Tupu.

15.  Natural gas: This continues to be phased out of Council facilities, with Eastbourne Pool upgrades completed this quarter and Huia Pool upgrade underway. 

16.  Food waste management: We commenced work on options for managing food waste in the future. The project will enable Council to have a clear assessment of the different options for collecting and processing this waste from businesses and households. We are collaborating with Porirua City Council on this project.

17.  Rubbish and recycling: During this quarter the service was extended to organisations in other non-commercial rating categories, and this was well received.

18.  Finance system refresh: As part of the Go Digital programme this project to increase our financial management capability, went live on 1 July 2022.

19.  Business planning: CLT commenced its business planning for 2022-2023 using a refined and simplified process facilitated by the Enterprise Portfolio Management Office.

20.  Business Flow Calendar: We established the Business Flow Calendar which sets out recurring activities and events across Council, providing the Corporate Leadership Team (CLT) with a holistic view of our work and offering a means for collaboration and awareness – especially around potential pinch points and future priorities.

21.  Local Community Projects Fund: Criteria for assessing fund applications were updated, enabling funds to be fully allocated by Community Funding Panels, following a council decision in May 2022.

22.  Information Obligations: Training of all staff was completed this quarter with new staff required to undertake this training in the induction process, and refresher courses completed by all staff.

Health, safety and wellbeing remain a key priority at council.

23.  Health and Safety Policy: An improved policy was launched to support a safety culture based on continuous improvement.

24.  Assura upgrade: The upgrade of our health and safety reporting system Assura went live on 1 July 2022. This will improve user experience and capture relevant data providing visibility of risks and insights and ensuring continuous improvement.

25.  Diversity and inclusion: As part of our participation in Pink Shirt Day, we launched belonging badges, to explore who we are and visually demonstrate the great diversity of our people.

Quarterly challenges

Appendix 1 to this report includes the following challenges Council is addressing:

COVID-19 has continued to impact services, facilities, staffing and contractors.

26.  Financial impacts: Due to the ongoing financial impacts of COVID-19 there was a loss of revenue for the financial year of $1.5M mainly due to closures and restrictions, impacting pools by $0.7M and other community spaces by $0.4M, as well as $0.4M from the parking and enforcement fees in the transport area.

27.  Capex programme: There have been some delays due to COVID-19 and this has been reported separately with carry-overs to 2022-2023 agreed by council.

28.  Long Term Plan Key Performance Indicators: Results provide anecdotal information that residents did not feel confident returning to spaces with larger gatherings of people and some were also deterred by the requirement to wear masks.COVID-19 restrictions and positive cases/isolation meant residents changed their behaviour according to their circumstances and this resulted in fewer numbers at community centres.

29.  Business support: In response to the impacts of COVID-19, during this quarter we implemented targeted initiatives to support business sectors significantly affected by COVID-19, such as waiving of pavement encroachment fees / food plans fees / road closure charges for certain events, and a campaign to bolster communications to encourage people back to hospitality businesses.

30.  Workforce: 35% of our permanent workforce had contracted COVID-19 by 30 June 2022 and there were 10 exposure events across our sites in this quarter. This relatively low rate highlights the effectiveness of our health and safety ‘golden rules’. We are now seeing an upsurge in flus and colds, and many staff took up the free annual flu vaccination. Contractors also reported high levels of staff absence due to COVID-19 and this impacted delivery of our capital programme and some services (including consenting).

Consents continue to be a key focus area.

31.  Internal Improvement Board: Has been established to respond to an upswing in demand for consents following changes in the development contributions policy effective 1 July 2021, accompanied by staffing challenges exacerbated by COVID-19. The Board and staff are focusing on delivering improvements to resource consent statutory timeframes and the associated business processes and practices. The board had its first meeting in June 2022.

32.  Non-notified resource consents: 26% total average were issued on time in Q4 (Q3 was 42%) and building consents issued on time in Q4 was 56% total average (Q3 was 59%).

Performance measure results

Appendix 2 to this report includes information on the quarter 4 year-end Key Performance Indicator (KPI) results. 

The reporting includes historic comparison information and variance explanations for measures where they have not met targets. The targets were set in the 2021-2031 Long Term Plan (LTP). We are looking into how to make the KPI data easier to understand and able to produce greater insights from the results.

33.  Table 1: Provides a high-level overview of Council’s performance against non-financial key performance indicators. 

Table 1: Summary of performance against non-financial key performance indicators 

Achieved targets 

32

Below target 

45

New LTP measures, therefore baseline data collected 

6 

Not reported due to data collection /extraction issues 

4

TOTAL 

87 

   

The following are themes noted in the reporting of these results: 

34.  COVID-19: Impact on facilities, staff and the community were key contributors to some KPIs not meeting their targets, particularly for our community facilities as outlined in items 27-32. 

35.  Rubbish and recycling: Some KPI measures reflect the bedding-in issues associated with the introduction of rubbish and recycling changes at the start of the year, such as residents’ satisfaction with rubbish, recycling and collection services and the amount of contaminated recycling diverted to landfill.

36.  Wellington Water: Issues with aging infrastructure have impacted Three Waters’ KPIs. Our residents are increasingly affected by failing infrastructure or infrastructure at capacity limits and are reporting issues and leaks at a higher rate. The increase in requests for service has meant Wellington Water has taken longer to respond to and resolve issues than the time specified in targets.

 

37.  Residents Satisfaction Survey (RSS): Results show a general downward trend compared to earlier results from the previous survey provider.

 38. The survey is conducted using a panel system, where the same group of people receive surveys to provide feedback on the city. As such, measures from the RSS may be more indicative of limitations of the research method rather than being a true reflection of people's attitudes and perspectives in the city.

 

39.  A review of current KPI measures is being undertaken ahead of the development of the next Annual Plan/LTP amendment, and this will be considered by the incoming Council.

People and capability

40.  The quarterly results for health, safety and wellbeing are included in Appendix 1 to the report.

Background around Annual Plans compared to Revised Budget 

41.  Long Term Plan 2021-2031: This was approved on 30 June 2021. The budgets included in the plan for 2021/22 were based on the latest financial information and estimates available at the time of preparation of the plan.

42.  Revised budget for 2021/22: Was created to reflect the budget updates required to improve the accuracy of budgets and the associated reporting of variances. Similar to 2020/21, the focus of performance monitoring is on financial results compared to the revised budget, as this is the most meaningful from a performance perspective. 

43.  Table 2: Provides a summary view of the budget changes made.  

Table2: Changes captured by the revised budget 

$Million

Net surplus 2021/22

Capital investment  2021/22

Annual Plan 2021/22

0.5

103.5

Surplus

Operating and capital project budgets and subsidies carried forward from 2020/21

(2.2)

5.6

Rephasing of budgets from 2021/22 to future financial years as approved at the LTP/AP Subcommittee meeting on 16 December 2021

3.3

(7.1)

Reclassify capital budget to operating to reflect the use of Software as a Service in Information Systems programme delivery(accounting standard requirement)

(0.3)

(0.3)

Go Digital - Reclassify capital budget to operating to reflect the use of Software as a Service in Information Systems programme delivery

(3.3)

(3.3)

Increase Traffic budget to address storm damage and repair as approved in the LTP/AP Subcommittee meeting on 28 Feb 2022

(0.4)

0

Carry forward of budgets from 2021/22 to future financial years as approved at the LTP/AP Subcommittee meeting on 28 Feb 2022

0.9

(4.9)

Further carry forward of budgets from 2021/22 to future financial years as approved at the LTP/AP Subcommittee meeting on 18 May 2022

1.3

(12.5)

Further carry forward of budgets from 2021/22 to future financial years as approved at the LTP/AP Subcommittee meeting on 7 June 2022

(2.7)

(4.8)

Revised Budget 2021/22 as at 30 June 2022

(2.9)

Deficit

76.2

Financial Performance Results

Overview of Financial Performance: This section provides an overview of the financial performance results for the year ended 30 June 2022.

Appendix 3 to this report provides further detailed information.

44.  Financial performance results: Provide an indication on how Council performed against the revised budget, and the associated financial risks.

45.  The full year (FY) net operating financial result: Is a deficit of $18.4M, $2.9M (13.6%) favourable to the revised budget deficit of $21.3M, mainly due to higher operating revenue of $5.4M and rates of $1.4M, partially offset by higher operating expenditure of $3.9M as detailed below. 

Table3: Operating Results 

$Millions 

Actual

Revised Budget

Variance

Annual Plan

Operating revenue 

66.6

61.2

5.4

61.3

8.8%

Operating expenditure 

(215.9)

(212)

(3.9)

(212.5)

(1.8%)

Net operating deficit before rates income 

(149.3)

(150.8)

1.5

(151.2)

1.0%

Rates income 

130.9

129.5

1.4

129.5

1.1%

Net operating deficit 

(18.4)

(21.3)

2.9

(21.7)

13.6%

Capital contributions 

22.9

17.4

5.5

22.2

Net surplus/ (deficit) before adjustments 

4.5

(3.9)

8.4

0.5

Other non-operating adjustments 

201.8

1.0

200.8

-

Net surplus/ (deficit) 

206.3

(2.9)

209.2

0.5

 46. Operating revenue: The operating revenue for the year is $5.4M favourable (8.8%) to the revised budget of $61.2M. This is largely due to increased operating Three Waters stimulus funding $4.8M.

 

47.  Operating expenditure: The operating expenditure for the year is $3.9M (1.8%) unfavourable to the revised budget of $212M. This is largely due to an increase in contractor costs in the building and resource consent teams’ $2M, increase in the landfill aftercare provision $1.8M, and Go Digital capital costs recognised as operating expenditure $1.2M.

48.  Rates income: The rates income for the year is $1.4M higher (1.1%) to the revised budget of $129.5M mainly due to additional growth in the rating base, database maintenance updates and other minor variances.

49.  Capital contributions: Capital contributions are $5.5M favourable to the revised budget of $17.4M mainly due to increased reserves contributions received $4M, development contributions received $2.6M and vested assets income $2.8M offset by Three Waters stimulus funding applied to operating revenue $2.6M and reduced capital subsidies received as a result of project delays $1.4M.

50.  Non-operating adjustments: Gains on the revaluation of assets was $180M and gains on the fair value of derivatives was $20.4M as at 30 June 2022. These are accounting (non-cash) adjustments related to fair value and reflect the market at the time.

51.  Balanced Budget: The balanced budget results are to be reported in the Annual Report 2021/22. The draft unaudited Annual Report results will be presented to the Audit and Risk Subcommittee 28 September 2022. The Long Term Plan 2021-2031 included a definition for the balanced budget assessment. The balanced budget result in the draft Annual Report is a $14.2M deficit compared to a budgeted deficit of $14.7M. The balanced budget result differs from the net operating result presented in paragraph 44. The difference is that government subsidies for capital renewals expenditure is included as a revenue source in the balanced budget calculation, as is the gain on the sale of assets. Performance reporting in 2022/23 will simplify the approach and report against the balanced budget definition as this is the key financial performance metric in our financial strategy.

Capital Investment

Table 4: Capital expenditure results

$Millions

Actual

Revised Budget

Variance

Annual Plan

Replacements

31.3

33.6

2.3

52.1

Improvements

31.3

40.2

8.9

48.1

Growth

 

3.0

2.4

(0.6)

3.3

Total

65.6

76.2

10.6

103.5

52.  Capital expenditure delivery: At year end this is $65.6M or 86% of the revised budget for the year of $76.2M. The underspend of $10.6M is mainly driven by delays across a number of projects largely as a result of COVID-19 related resourcing issues, vacancies across a few key roles required to progress projects and accounting adjustments.

Project delivery performance

Appendix 4 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.

53.  Projects: Included in the report are Tupua Horo Nuku / Eastern Bays Shared Path, Go Digital, Whakatupu Ngaengae / Naenae Pool and Fitness Centre, Naenae Town Development, Petone Wharf Refurbishment, RiverLink, Wainuiomata Streetscape, and Wellington Water Programme.

54.  Risks: There are a range of risks and issues being managed, with more detailed reporting and briefings provided to relevant committees. Council officers will attend the meeting to provide further updates and respond to queries. 

Table 5: Project status summary

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Treasury Compliance

55.  Council has been fully compliant with Financial Strategy borrowing limits.

 

Table 6:  Financial Strategy limits

Measures

Policy

Actual
31 Mar 2022

Compliant

Net external debt/total revenue

Maximum 250%

107%

Yes

Net interest on external debt/total revenue

Maximum 10%

3%

Yes

Net interest to annual rates income

Maximum 20%

5%

Yes

Liquidity ratio

Minimum 110%

123%

Yes

56.  An average cost of funds of 2.93% was achieved over the financial year, which is 0.43% higher than budgeted, primarily due to market driven changes.
 

57.  Interest costs are higher than budget by $1.239M, mainly due to higher debt levels than budgeted and increased cost of funds due to market driven changes. 

58.  Interest earned on cash holdings is ahead of budget by $0.2M, primarily due to higher cash holdings, higher interest rates and pre-funding activities for debt maturing prior to 30 June 2022.

Appendix 5 to this report provides details around Treasury Compliance. 

Hutt City economic data 

59.  Infometrics economic data for the quarter January to March 2022 is contained in Appendix 1 to the report which was provided to elected members in the Chief Executive’s Employment Subcommitttee on 15 August 2022.

 

60.  On 18 August 2022 we received the latest Infometrics figures for the April to June 2022 quarter and have included highlights in this report as an update to the information in Appendix 1 to the report.

 

61.  The Infometrics figures for the June quarter paint the picture of an economy performing above the national level on many indicators with the report opening stating “Lower Hutt remains resilient in the face of considerable economic headwinds.”

62.  GDP remains positive across the region at 3.3% growth compared to 0.9% nationwide. This is down from 6.3% and 5.1% respectively last quarter. Lower Hutt’s GDP in the June 2022 quarter was 1.4%pa higher than the June 2021 quarter despite the economic headwinds of rising interest rates, an inflationary squeeze on household budgets, supply chain disruptions, and worker shortages. Consumer spending saw a 2.5% increase locally, compared to no change nationally.

63.  Unemployment is sitting at 2.6% compared to 3.3% nationally, and employment of Lower Hutt residents grew 2.5% in the June 2022 year with job gains across public administration, construction, professional services, healthcare, and financial services easily offsetting a decline in information media and telecommunications.

64.  Tourism expenditure in Lower Hutt is exceeding the national level, with 4.9% growth over a 6.6% drop nationally. 

65.  Residential building consents are still up 40.2% compared to 14.4% nationally and house sales have dropped 26.6% which mirrors the national trend of 26%. Commercial vehicle registrations are up 15.7% compared to 6.9% nationally.

 

Table7: Economic data 

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66.  Not applicable.

Climate Change Impact and Considerations

67.  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 climate change impacts or considerations arising from this report.

Consultation

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

Legal Considerations

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

Financial Considerations

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

 

Appendices

No.

Title

Page

1

Appendix 1 - Quarterly Performance 1 April to 30 June 2022

63

2

Appendix 2 - Non-financial KPI results for the year to 30 June 2022

84

3

Appendix 3 - Financial Performance Results 1 April to 30 June 2022

99

4

Appendix 4 - Project Performance Overview 1 April to 30 June 2022

109

5

Appendix 5 - Treasury Report for the period ended 30 June 2022

119

    

 

 

Author: Michelle Palmer

Head of Enterprise Portfolio Management Office

 

Author: Karl Eagle

Senior Management Accountant

 

Author: Sandra Beckett

Advisor - Enterprise Portfolio Management Office

 

 

Reviewed By: Jarred Griffiths

Director Strategy and Engagement

 

Approved By: Jo Miller

Chief Executive


Attachment 1

Appendix 1 - Quarterly Performance 1 April to 30 June 2022

 

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Attachment 2

Appendix 2 - Non-financial KPI results for the year to 30 June 2022

 

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Attachment 3

Appendix 3 - Financial Performance Results 1 April to 30 June 2022

 

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Attachment 4

Appendix 4 - Project Performance Overview 1 April to 30 June 2022

 

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Attachment 5

Appendix 5 - Treasury Report for the period ended 30 June 2022

 

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                                                                                       1                                                06 September 2022

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Description automatically generated with medium confidencePolicy, Finance and Strategy Committee

18 August 2022

 

 

 

File: (22/2092)

 

 

 

 

Report no: PFSC2022/4/153

 

Three Waters Reform Update

 

 

 

 

1.    This report provides a brief update of progress on the government’s Three Waters reform programme

 

Recommendation

That the report be noted and received.

 

Water Services Entities Bill.

2.    Council’s submission on the Water Services Entities Bill is one of over 88,000 submissions received, which the Financial and Expenditure Select Committee will be considering over the next few months, with the Committee’s report due on 11 November 2022.

 

3.    The Committee has made decisions about which submitters to invite to make an oral submission, with a focus on hearing from a range of:

·      Territorial authorities

·      Mana whenua

·      Rural water entities

·      Water sector stakeholders

·      Employment representative groups

·      Environmental representative groups

·      Financial representative groups

·      Submitters who have made specific recommendations for improving the bill.

4.    The Committee has appointed two subcommittees to hold hearings around the country.

5.    The second proposed bill for water reform, the Water Services Entities (Implementation) Bill, is expected to be introduced to Parliament for a first reading in late 2022.  The Implementation Bill will incorporate many of the functional details of how the new entities will operate.

 

6.    The Economic Regulations (Water Services) Bill is expected sometime in 2023.

Better Off Funding Application.

7.    Officers have prepared information on three separate projects to be included in the application for Better Off Funding.  These are being discussed with our iwi partners before being finalised for sign off from the Mayor and Chairs.  The closing date for submissions is 30 September 2022.

Transitional Funding Package

8.    On 19 July 2022, the government announced the details of the much-awaited funding package to assist local authorities in offsetting transitional costs associated with three waters reform.

 

9.    For this current financial year 2022/23, the government has made available a first tranche total of $43.3M of which Hutt City Council is eligible to receive $844,000. The funding will be used to provide information and resources either internally or through Wellington Water, (or consultants working for us), in support of Council’s preparation for transition. Some of this funding will be pooled with other Wellington Water shareholder councils to pay for the central support provided by Dougal List and his team (Programme Director Three Waters Reform Wellington Water councils). The details of this are currently being worked through.

 

10.  Council has signed a formal Funding Agreement with the Department of Internal Affairs which requires quarterly reports on how the funding has been used.

 

11.  A second tranche of funding of up to $41.4M has been indicated but is not part of the initial agreement.

Transitional Matters

12.  The Three Waters National Transition Unit (NTU) established within the Department of Internal Affairs is the body with overall responsibility for the transition.

 

13.  The NTU has been working on an overall transition roadmap in order to achieve proposed day one outcomes. These will be presented to Chief Executives in early September 2022.

 

14.  The NTU has commenced the process of recruiting the Chief Executives of the four new water entities.  

 

15.  The NTU has seven main workstreams as shown in the following diagram and has been meeting weekly with Entity C representatives to outline and discuss aspects of them.

 

 

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16.  Within the People and Workforce stream, Staff Transition Guidelines have been produced and consulted on. These guidelines cover protocols and processes beyond the legislation for the transfer of Three Waters staff.  They will be finalised shortly.  All staff, other than senior management, are guaranteed a role in the new entities.

 

17.  The Asset Management Planning process has commenced with a short timeframe for completing the initial draft based on Councils’ current plans. The diagram below outlines the different stages of this iterative process.  We will be looking to ensure that the investment advice from the recent growth study is incorporated into this plan.

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18.  Finance and Corporate Workstream- Three Waters Debt: On the 26 July 2022 the NTU published an outline of the approach to be taken regarding the Three Waters Debt. They acknowledged that many councils were seeking clarity and visibility on the nature and quantum of the payment that can be expected on the transfer of assets to the Water Service Entities, so that this can be incorporated into forward-looking plans. Extract from the NTU:

Councils should continue to manage their financial and treasury position as they usually would, with the expectation of receiving cash payments on or about 1 July 2024. Councils should also expect that specific debt instruments will be retained by councils. The NTU is aware of the potential for issues regarding the receipt of large payments and the ability of councils to apply payments they receive to retire debt they currently hold. The NTU is considering options to allow flexibility around the timing and phasing of payments to ensure these can be managed efficiently by councils and is exploring options with LGFA as to the role they can play.

19.  In late September 2022 the NTU will be requiring a range of financial information from Councils. This will then inform a process to agree and confirm the 30 June 2022 three waters debt levels with Councils. There will be an opportunity to review the debt calculation methodology with the NTU. The next stage will then be working through the forecast debt for the period up to transition. The final three waters debt positions as at 30 June 2024 will be confirmed after the audited financial statements are available in late 2024. 

20.  The Wellington Councils are working together to prepare for this NTU process and have engaged specialist support.

 

Appendices

There are no appendices for this report.   

 

 

 

 

 

 

 

Author: Bruce Hodgins

Strategic Advisor

 

 

 

Author: Jenny Livschitz

Group Chief Financial Officer

 

 

 

 

 

 

Approved By: Jo Miller

Chief Executive