HuttCity_TeAwaKairangi_BLACK_AGENDA_COVER

Policy, Finance and Strategy Committee|Komiti Ratonga Rangatōpū me te Rautaki

16 February 2021

Order Paper for the meeting to be held in the

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

on:

Tuesday 23 February 2021 commencing at 2.00pm

Membership

Cr S Edwards (Chair)

Mayor C Barry	Cr D Bassett
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 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

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 COMMITTEE’S 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.

Attachment 1

Appendix 1: Seaview Marina Limited Draft Statement of Intent - 2021/22 to 2023/24

SEAVIEW MARINA LIMITED

DRAFT STATEMENT OF INTENT

2021/22 to 2023/24

Contents

1. Mission. 3

2. Nature and Scope of Activities. 3

3. Corporate Governance Statement. 3

4. Corporate Goals. 3

5. Specific Objectives for the Year Ending 30 June 2022. 4

6. Performance Measures. 6

7. Financial Projections. 8

8. Accumulated Profits and Capital Reserves. 14

9. Share Acquisition. 14

10. Information to be Provided to Shareholders. 14

11. Pricing Policy. 14

12. Transactions with Related Parties. 15

13. Directory. 16

14. Accounting Policies. 17

1. Mission

Seaview Marina Limited’s mission is to be the centre for recreational marine activities and services in the Wellington Region.

2. Nature and Scope of Activities

Seaview Marina Limited (the Company) is responsible for the operation of the boating facilities and services, the maintenance of infrastructural assets and the development of additional facilities and services as demand dictates.

3. Corporate Governance Statement

The Company is 100% owned by Hutt City Council and accordingly is a Council Controlled Trading Organisation (CCTO) as defined by the Local Government Act 2002 (LGA). The Directors’ role is defined in Section 58 of the LGA which requires that all decisions relating to the operation of a CCTO shall be made pursuant to the authority of the directorate of the CCTO and its Statement of Intent (SOI). In addition to the obligations of the LGA, the Company is also covered by the Companies Act 1993 which places other obligations on the Directors.

The Directors are responsible for the preparation of the SOI which, along with the three-year financial plan, is provided to the Company’s Shareholder, Hutt City Council. Six monthly and annual reports of financial and operational performance are provided to the Shareholder. Financial and operational /management reports are prepared monthly for the Directors.

The Directors of the Company are responsible for the overall control of the Company but no cost-effective internal control system will permanently preclude all errors or irregularities. The control systems operating within the Company reflect the specific risks associated with the business of the company.

4. Corporate Goals

The principle goal of the Company is to operate as a successful business, achieving the objectives of its shareholder as specified in this Statement of Intent. The specific corporate goals of the Company are as follows:

General

4.1 To ensure that the Statement of Intent and operating policies for the Company are consistent with the operating policies of Hutt City Council.

4.2 To ensure that the Statement of Intent and operating strategies are adhered to.

4.3 To keep the Shareholder informed of matters of substance affecting the Company.

4.4 To perform continual reviews of the operating strategies, financial performance and service delivery of the Company.

4.5 To develop the Company into one of New Zealand’s premier marina businesses.

4.6 To further expand and diversify the Company’s marina facilities.

Economic

4.7 To maximise the financial returns achieved and the value added by the Company.

4.8 To return a minimum % return on equity (ROE) per annum as specified by the Shareholder.

4.9 To maintain the Company’s financial strength through sound and innovative financial management.

Social and Environmental

4.10 To support recreational boating activities in the Wellington Region.

4.11 To promote safe work practices.

4.12 To act as a socially responsible and environmentally aware corporate citizen and to contribute to, or assist where possible, with Hutt City Council’s community outcomes (as listed in the HCC Annual or Long Term Plan).

4.13 Move towards meeting the Hutt City Council Carbon Policy.

5. Specific Objectives for the Year Ending 30 June 2022

In pursuit of its corporate goals, the Company has the following objectives for the next 12 months:

General

5.1 To review the Statements of Intent and Strategic Plans for consistency with the objectives of Hutt City Council.

5.2 To review the operating activities of the Company for compliance with the goals and objectives stated in the Statement of Intent and Strategic Plan.

5.3 To report all matters of substance to the Shareholder.

Economic

5.4 To achieve all financial projections.

5.5 To achieve or exceed a Return on Equity (ROE) as defined by the Shareholder (See section 7 item 3).

5.6 To ensure that the reporting requirements of the Company and the Shareholder are met.

Social and Environmental

5.7 To maintain good employer status by:

(a) complying with all employment legislation;

(b) operating open and non-discriminatory employment practices.

5.8 To ensure no transgression of environmental and resource laws.

5.9 To review the activities undertaken by the Company for the purposes of being a good socially and environmentally responsible corporate citizen.

6. Shareholder Expectations

The Shareholder has provided the Company with its expectations for the business over the next three years. These expectations are laid out under the following four categories: development, return to shareholder, social and environmental and lastly health and safety. The details are outlined below:

Continue with development plans

Focus on completing the remaining in-water development as the market demands and operating cash flows permit. Any substantial variations will require engagement with the Shareholder.

Returns to Shareholder

In the medium term the Shareholder expects financial returns by way of dividends and breakwater lease payments. Breakwater lease payments commenced in 2019/20. The timing of dividend payments is dependent on completion of the in-water development programme, which is currently planned for 2023/24. The Board will develop a Dividend Policy for consideration and approval of the shareholder.

Social and environmental

Support of charitable non-profit ventures connected with the Company’s business will continue to be a focus.

The Company will take steps to respond to the potential impacts of climate change and align itself with the Council’s ‘carbon zero’ initiatives.

Health and safety

Health and safety will continue to be a top priority and embedded within all activities of the marina.

7. Performance Measures

	Key Performance Indicator	2021/22	2022/23	2023/24	Reporting Frequency
	Financial
1	Deliver annual budgeted incomes for each of the four business entities · Boat storage · Hardstand · Marine Centre · Launching ramp	Achieve 100% of budgeted incomes	Achieve 100% of budgeted incomes	Achieve 100% of budgeted incomes	Six monthly
2	Control operational expenses (1)	Operational expenses within budget	Operational expenses within budget	Operational expenses within budget	Six monthly
3	Achieve prescribed rate of return on equity (2)	4.1%	4.8%	3.4%	Annually
4	Manage Capital Expenditure (3)	Complete within capital budget and on time	Complete within capital budget and on time	Complete within capital budget and on time	Annually
	Relationship & Communication
5	Client Service	88% satisfaction in the bi-annual survey	88% satisfaction for the exit/entry survey	88% satisfaction in the bi-annual survey	Annually
6	Newsletter communications	Complete four newsletters per annum	Complete four newsletters per annum	Complete four newsletters per annum	Quarterly
7	Meet all shareholder reporting deadlines	See Section 9	See Section 9	See Section 9	Schedule in Section 9
	Risk Management and Human Resources
8	Notifiable health and safety incidents	None	None	None	Monthly to board
9	Business Continuity Plan	Run one test scenario and review	Run one test scenario and review	Run one test scenario and review	Annually
10	Staff Satisfaction	Achieve 85% staff satisfaction	Achieve 85% staff satisfaction	Achieve 85% staff satisfaction	Six Monthly
	Marketing
11	Implement marketing strategy to improve occupancy rates (additional berth development initially impacts negatively on berth occupancy rates)	Berth occupancy equal or greater than 95%	Berth occupancy equal or greater than 95%	Berth occupancy equal or greater than 95%	Monthly
12	Media and Public Relations	Six media releases or PR exercises per year	25 enquiries per month from website	30 enquiries per month from website	Annually
Non- Financial
13	To provide financial or non- financial support to at least three charitable (non-profit) ventures with a marine focus during any given financial year.	Support to at least three organisations	Support to at least three organisations	Support to at least three organisations	Annually

Notes to Financial Measures

(1) Operational expenses are defined as all expenses controllable by Seaview Management. Excludes depreciation and finance charges and losses arising from the revaluation of similar assets within an asset class.

(2) Return on equity is defined as net Surplus / (Deficit) excluding losses or gains arising from the revaluation of similar assets within an asset class divided by the opening balance of equity at the start of the year.

(3) Excludes carry forward of expenses on projects from prior years, unless specifically budgeted for (e.g. where project spans two or more fiscal periods)

8. Financial Projections

The projections have been prepared using a number of assumptions about the future as well as business trends over the previous five years. In determining these projections the Board and Management have applied their judgement to the future commercial environment in which the Company operates.

The Return on equity without the breakwater lease is:

Note 1: Ownership of infrastructural assets is retained by the Shareholder (or other clients).

Note 2: Seaview Marina has to date returned all financial benefits to its Shareholder through increasing the capital value of the marina with trading profits being retained and invested in the strategic development programme. Dividends are expected to be returned to the Shareholder after completion of the marina in-water capital development programme (i.e. 2023/24).

Equity Value of the Shareholders’ Investment

The estimated net value of the shareholders’ investment in the company at 30 June 2021 will be $10.1m and $10.4m on 30 June 22.

9. Accumulated Profits and Capital Reserves

The intention is to pay a dividend to the Shareholder commencing in 2023/24. The Company will develop a Dividend Policy upon completion of the planned in-water developments (H and I Piers).

10. Share Acquisition

There is no intention to subscribe for shares in any other company or invest in any other organisation during the period covered by this Statement of Intent. Not with standing this, the purchase of any shares requires shareholder approval.

11. Information to be provided to Shareholders

In each year the Company shall comply with the reporting requirements under the Local Government Act 2002, the Companies Act 1993, and other relevant regulations. In particular the Company will provide:

11.1 Statement of Intent

A draft Statement of Intent by 1 March of the year preceding the financial year to which it relates detailing all matters required under the Local Government Act 2002, including financial information for the next three years.

A final Statement of Intent before the commencement of the financial year to which it relates.

11.2 Half-Yearly Report

Within two months after the end of the first half of each financial year, the Company shall provide a report on the operation of SML to enable an informed assessment of its performance, including financial statements, and progress on activities and projects (in accordance with section 66 of the LGA 2002).

11.3 Annual Report

Within three months after the end of each financial year, the Company will provide an annual report which provides a comparison of its performance with the Statement of Intent, with an explanation of any material variances, audited consolidated Financial Statements for that financial year, and an Auditor’s Report (in accordance with section 67, 68 and 69 of the LGA 2002).

12. Pricing Policy

The Company operates in a competitive market competing with four other marinas within the Wellington Region and to a lesser extent with the Marlborough marinas. All marina charges, apart from the Wellington Marine Centre Leases, are reviewed on an annual basis. The review is based on a number of criteria which are listed below:

12.1 Market Trends

The Company positions it charges at the lower end of the Wellington marina market but will adjust charges according to movements in other marinas of a similar standard.

12.2 Operating Costs

Increases in operating costs related to the marina activities compared with the previous year (not CPI).

12.3 Achievement of ROE

Hutt City Council sets a minimum ROE which the Company is required to achieve each year and to achieve this rental charges are set accordingly.

13. Transactions with Related Parties

Transactions between the Company, Lower Hutt City Council and other Hutt City Council controlled enterprises will be conducted on a wholly commercial basis. Charges from Hutt City Council and its other companies will be made for services provided as part of the normal trading activities of the Company.

Related Party	Transaction
Hutt City Council Finance Department	Provision of accounting services and the consolidation of the Company’s financial accounts into the Hutt City Council’s accounts.
Hutt City Council IT Department	Provision of technical support for the Company’s computer hardware and systems.

14. Directory

Directors

Brian Walshe (Chairman)

D Hislop

Peter Steel

Chief Executive

Alan McLellan

Registered Office

100 Port Road

Seaview

Lower Hutt

New Zealand

Postal Address

Private Bag 33 230

Petone 5012

Telephone

+64 (4) 568 3736

Website

www.seaviewmairna.co.nz

Auditor

Audit New Zealand on behalf of the Auditor General

Bankers

Westpac Banking Corporation of New Zealand Limited

Lower Hutt

New Zealand

Solicitors

Thomas Dewar Sziranyi Letts

Level 2, Corner Queens Drive & Margaret Street

Lower Hutt

New Zealand

15. Accounting Policies

REPORTING ENTITY

Seaview Marina Limited (SML) is a Council Controlled Trading Organisation (CCTO), 100 per cent owned by Hutt City Council. The primary objective of SML is the operation of a marina which benefits the community of Hutt City. SML is designated a public benefit entity for financial reporting purposes.

BASIS OF PREPARATION

The financial statements have been prepared on the going concern basis, and the accounting policies have been applied consistently throughout the period.

Statement of compliance

These financial statements have been prepared in accordance with the requirements of the Local Government Act 2002, which includes the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP). They comply with IPSAS and other applicable Financial Reporting Standards, as appropriate for public benefit entities (PBE) that apply Tier 2 PBE accounting standards. As SML’s total expenses are under $30,000,000, it has elected to apply Tier 2 PBE accounting standards.

Measurement base

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

The financial statements have been prepared on a historical cost basis.

Functional and presentation currency

The financial statements are presented in New Zealand dollars and all values have been rounded to the nearest dollar. The functional currency of SML is New Zealand dollars.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

Revenue

SML derives revenue from its licensees and casual clients. The income is generated from a range of rentals for boat storage and building tenancies as well as services available through the facilities provided by SML.

Revenue is measured at the fair value of consideration received. THE FINANCIAL STATEMENTS

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.

Interest revenue is recognised using the effective interest method.

Expenses

Expenses are recognised when the goods or services have been received on an accrual basis.

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.

Trade debtors and other receivables

Trade 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.

Inventory

Inventory is recorded at cost on a first in – first out basis.

Property, plant and equipment

Land is measured at fair value, and buildings are measured at fair value less accumulated depreciation. All other asset classes are measured at cost less accumulated depreciation and impairment losses.

Additions

Expenditure of a capital nature of $500 or more is capitalised. Expenditure of less than $500 is 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 SML and the cost of the item can be measured reliably.

Labour costs relating to self-constructed assets are capitalised if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to SML and the cost of the item can be measured reliably.

Work in progress is recognised at cost less impairment and is not depreciated.

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 revenue and expense.

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 SML and the cost of the item can be measured reliably.

Revaluation

Land and buildings are reviewed each year to ensure that their carrying amount does not differ materially from fair value, and are revalued when there has been a material change. All other asset classes are carried at depreciated historical cost. Revaluation movements are accounted for on a class of asset basis.

The net revaluation results are credited or debited to other comprehensive revenue and expenses 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 revenue and expenses 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 revenue and expenses.

Depreciation

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

Property, plant and equipment consist of the following asset classes: land, buildings, leasehold improvements, furniture and office equipment and motor vehicles.

Estimated economic lives	Years	Rate
Buildings Service Centre, hardstand, travel lift	5 - 33 2 - 77	3% - 20% 1.3% - 50%
Site improvements	3 - 60	1.7% - 33.3%
Piers and marina berths	4 - 30	3.3% - 25%
Plant and equipment	1.5 - 66	1.5% - 67%
Vehicles	5	20%

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 SML, 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 revenue and expense.

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	2.5 - 33	3% - 40%

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 recoverable amount is the higher of the asset’s fair value less costs to sell and value in use. The total impairment loss is recognised in the Statement of Comprehensive revenue and expense.

Goods and services Tax

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

Employee entitlements

Short-term entitlements

Employee benefits that SML 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.

SML 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 SML anticipates it will be used by staff to cover those future absences.

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

Payables

Short term creditors and other payables are recorded at their face value.

Provisions

SML recognises a provision for future expenditure of uncertain amount or timing when there is a present obligation (either legal or constructive) as a result of a past event, it is probable that expenditures will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are not recognised for future operating losses.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense.

Borrowings

Borrowings are initially recognised at their fair value plus transaction costs. After initial recognition, all borrowings are measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless SML has an unconditional right to defer settlement of the liability for at least 12 months after balance date.

Borrowing costs

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

Income tax

Income tax expense includes components relating to both current tax and deferred tax.

Current tax is the amount of income tax payable based on the taxable profit for the current year, and any adjustments to income tax payable in respect of prior years. Current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted at balance date

Deferred tax is the amount of income tax payable or recoverable in future periods in respect of temporary differences and unused tax losses. Temporary differences are differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax is measured at tax rates that are expected to apply when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at balance date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the entity expects to recover or settle the carrying amount of its assets and liabilities.

Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences or tax losses can be utilised.

Deferred tax is not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition of an asset or liability in a transaction that is not a business combination, and at the time of the transaction, affects neither accounting profit nor taxable profit.

Current and deferred tax is recognised against the surplus or deficit for the period, except to the extent that it relates to a business combination, or to transactions recognised in other comprehensive revenue and expense or directly in equity.

Leases

Operating leases

An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset. Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term.

Finance leases

SML 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 Revenue and Expenses.

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.

Budget figures

The budget figures are those approved by the Board at the beginning of the year. The budget figures have been prepared in accordance with generally accepted accounting practice (GAAP), using accounting policies that are consistent with those adopted by the Board for the preparation of the financial statements.

Critical accounting estimates and assumptions

In preparing these financial statements SML has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the reporting period in which the revision is made and in any future periods that will be affected by those provisions.

Assumptions have been made for the useful lives of property, plant and equipment and intangible assets as noted above.

Attachment 1

Hutt City Community Facilities Trust Draft Statement of Intent 2021/22 to 2023/24

Statement of Intent

Hutt City Community Facilities Trust

2021/22 – 2023/24

Contents

Introduction. 3

Objectives. 4

Activities. 5

Governance. 5

Ratio of Consolidated Shareholders’ Funds to Total Assets. 6

Accounting Policies of the CFT. 6

Performance Targets. 8

Prospective Statement of Financial Performance. 9

Prospective Statement of Movements in Equity. 10

Prospective Statement of Financial Position. 11

Prospective Statement of Cash Flows. 12

The CFT Depreciation Policy. 13

Information to be provided to Shareholders. 13

Procedures to be followed before members acquire shares in other groups etc. 14

Activities for which the Board seeks compensation from a local authority. 14

Board estimate of the commercial value of the shareholder’s investment in the group. 14

Other Management Issues. 15

The Future of Hutt City Community Facilities Trust (CFT)

No development projects have been identified for CFT delivery over the next 10 years. Given CFT’s role has been to develop and then maintain leisure, recreation and community facilities for Lower Hutt residents and visitors, advice was sought relating to the future of CFT.

A paper was presented to Councillors in December 2020, which identified merits/demerits relating to three options.

The three options presented to Council were:

1. Retention of the current CFT structure and operating model;

2. Dissolution/disestablishment of CFT and the distribution, gifting and/or transfer of its assets/liabilities to Council; or,

3. Retention of CFT as a “non-active” trust with the distribution, gifting and/or transfer of its assets/liabilities to Council by or on 30 June 2021.

Council agreed option 3 as the “preferred option”. Accordingly, this has been included in the Council’s Draft Long Term Plan 2021-2031 for public consultation. The outcome of the consultation will be known by 30 June 2021.

Should the preferred option not proceed by 30 June 2021, this Statement of Intent for the next three years (2021/22 to 2023/24), has been based on continued maintenance of all existing facilities, with no new developments (option 1 above), and prepared in line with requirements under the Local Government Act 2002 (refer schedule 8, Part 1, clauses (2) and (3)).

Introduction

This Statement of Intent has been prepared by the Hutt City Community Facilities Trust (CFT), as required under Section 64(1) of the Local Government Act 2002 for a Council Controlled Organisation (CCO). It gives an overview of the CFT, the objectives we will work to achieve, the activities we will undertake, and how we will measure our performance. It covers the three year period to 30 June 2023.

The 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. Over the next 30 years a number of facilities in Lower Hutt will have to be upgraded or replaced. Changing preferences in the community for the way recreation, leisure, and community services are delivered led HCC to adopt an integrated facilities approach to new developments, which will allow for a range of services to be accessed in one place. The Walter Nash Centre completed by the CFT in late 2015 is a good example of an integrated community facility. The Walter Mildenhall Park Redevelopment completed in 2017 at Naenae, the Koraunui Stokes Valley Community Hub also completed in 2017 and the Ricoh Sports Centre at Fraser Park, completed in 2019, are examples of projects that also follow the integrated facilities model.

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.

Where appropriate, the CFT will assist with fundraising work to attract donations for these developments from philanthropic organisations, the corporate sector and the community. The Trust will do this by acting as a voice for community facilities in Lower Hutt, using the skills and expertise its trustees bring from valuable experience in business, asset management, and community affiliation.

The CFT will strive to have a positive and productive working relationship with Council. The Trust will contribute to Council’s community outcomes of a city that is actively engaged in community activities, and a city that promotes strong and inclusive communities. Accordingly, the CFT Board looks forward to working with Council to optimise the overall social, cultural, health and economic wellbeing of Lower Hutt.

Objectives

The objectives of the CFT will follow section 59 of the Local Government Act 2002, which outlines the principal objectives for a Council Controlled Organisation as follows:

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

(b) Be a good employer; and

(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.

In addition to the statutory objectives, the CFT Deed of Trust has a range of charitable objectives designed to promote the health and wellbeing of Lower Hutt’s communities. These objectives are to:

· Promote, operate, develop, and maintain community facilities in Lower Hutt through the management of the interests and rights relating to these facilities.

· Assist with attracting fundraising from the community and philanthropic organisations for the development of high quality community facilities.

· Provide strategic planning, in partnership with HCC, in relation to the ongoing development and administration of community facilities in Lower Hutt.

· Provide high quality amenities which attract and engage, promoting the health and well-being of residents of and visitors to Lower Hutt.

· Practise prudent commercial administration of high quality community, recreation, and leisure facilities, with a view that they will be financially sustainable.

Environmental objectives

The Board will be considering during the year what we can do effectively to support the Council’s environmental objectives. In particular we will give consideration to the potential impacts of climate change and ‘carbon zero’ initiatives, and what contribution the trust can make to this. We will work with and hold discussions with Council staff to ensure we are working on a co-ordinated basis.

Health and Safety

The Board sees the health and safety of its staff, contractors, the public and all users of its facilities as a top priority. Enhanced reporting to the Board to ensure that there is the best possible health and safety practices and culture in all its facilities is a top priority for the year.

Activities

Due to the ongoing consultation over the future of CFT the plan for the year is limited to managing the existing facilities of the Trust until Council and CFT makes its broader decisions on optimal future for CFT.

In the next three years the CFT will focus its activities in the following areas:

· In respect of Ricoh Sports Centre at Fraser Park, CFT will work with the tenant, Fraser Park Sportsville (FPS), to best optimise the use and to capture the benefits of the technologies and infrastructure imbedded in the complex.

· Continue to manage, in partnership with the tenant (FPS), the artificial turfs at Fraser Park.

· Continue to manage in partnership with the tenant (Council), the Walter Nash Centre at Taita.

· In partnership with the tenant (Council), continue to make modest improvements to the old Walter Nash Centre to bring that building up to modern standards.

· Working with the Naenae Bowls Club and the community to maximise the use of the facility and to improve its ability to fully fund all operational costs, including insurance, rates and long-term maintenance.

· Review facility related maintenance plans – for all CFT facilities – to ensure they comply with relevant legislation and are maintained to a high and safe standard.

· The development of any other community or sporting buildings which the Council has funding for and requests the CFT to project manage.

Governance

The CFT board of trustees comprises five members, one of whom is a Councillor appointed by Council. All other trustees are appointed by Council in line with its Appointment and Remuneration of Directors Policy. The Chairperson is appointed by the trustees.

The trust board meets six weekly.

The CFT adopts an approach to governance that is in accordance with the best practice statements produced by the Institute of Directors New Zealand (Incorporated

The Trustees of the CFT must act in accordance first and foremost with the charitable purposes of the Trust.

The CFT will give effect to the Hutt City Council Long Term Plan and act consistently with other Council plans, strategies and policies.

The CFT will adopt in its relationship with Council ways of working that reflect Council and CCOs as partners in the delivery of shared outcomes. This includes a commitment to the agreed Memorandum of Understanding between the Trust and Council that was signed in the 2012/13 period. This includes:

· A commitment to collaboration.

· A commitment to openness and transparency.

· Adherence to a ‘no surprises’ policy - where it is appropriate the CFT trust board will bring to Council’s attention immediately all new and significant projects, initiatives, and/or issues.

· A commitment by the CFT to the aims and objectives of the Council Long Term Integrated Community Facilities Plan.

· A commitment by Council where it sells recreation or similar land or any other identified community facility, that the profits arising from that sale shall be vested in a reserve for future investment in reserve development, which may include the development of associated community facilities by the CFT and Council. The use of the reserve will be negotiated between Council and the CFT.

The CFT Deed of Trust allows the CFT the ability to raise a loan to part fund approved CFT projects. The CFT will not however raise any significant loans without consulting the shareholder.

Office space, office equipment, IT and administrative support is provided to the CFT by Council. This is expected to continue. From 1 July 2020, the CFT will pay Council an annual fee to cover financial, HR and IT support that it receives during the year. For the 2020/21 financial year the fee has been set at $28,642. This fee will rise by 2% a year thereafter. Prior to 2020/21 no support fees had been charged.

Ratio of Consolidated Shareholders’ Funds to Total Assets

Definition of Terms

Shareholders’ Funds: Represent the net equity the shareholder has contributed to the Trust since its incorporation. This amount includes issued share capital, revaluation reserves, and retained earnings. There are currently no shareholder funds distributed to the CFT.

Total Assets: Represent the total assets both intangible and tangible of the CFT, disclosed in accordance with applicable financial reporting standards. For completeness it is noted that any tax liabilities in respect of GST and deferred tax are classified as liabilities irrespective of them being a debit or credit balance.

Accounting Policies of the CFT

Financial Statements

The Financial Statements will comply with generally accepted accounting practice in New Zealand (NZ GAAP). They will comply with NZ IFRS and other applicable Financial Reporting Standards. Financial statements will also comply with the Local Government Act 2002.

General Accounting Policies

Accounting policies adopted will be consistent with the New Zealand equivalent of International Financial Reporting Standards (NZ IFRS) issued by the XRB (External Reporting Board).

Particular Accounting Policies

Recognition of Income – Revenue will be recognised when an invoice is raised after service is provided. Other transactions that comply with the definition of "Revenue" in the Statement of Concepts issued by the XRB (External Reporting Board) will also be recognised as revenue.

Goods and Services Tax

Financial statements will be prepared on a GST exclusive basis.

Cash and Cash Equivalents

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

Accounts Receivable

Accounts receivable will be stated at net realisable value.

Investments

Investments will be stated at fair value.

Property Plant and Equipment

CFT’s buildings and site improvements are revalued every three years (or sooner if necessary) to ensure the assets carrying amount does not differ materially from fair value. All other are shown at cost, less accumulated depreciation and impairment losses.

Consolidation

The purchase method will be applied to prepare the Consolidated Financial Statements (if required).

Leases

Cost of operating leases (if any) will be recognised as expenditure over the term of the lease.

Borrowing

Borrowing is recognised in the balance sheet on a fair value basis.

Taxation

As the CFT has been established as a charitable trust, it should not be liable for income tax. If the Trust does engage in any activity making it liable for income tax, the income tax expense will be calculated after allowance for permanent differences and any group loss offsets.

Funding Commitments

Funding commitments are recognised as a liability and asset until such time that the community facility development is undertaken. At this time it will be recognised as revenue.

Performance Targets

Performance indicators for the CFT are as follows:

Indicator and measure

Target 2021/2024

Operational Management

· Operational expenditure is within budget

· All reporting requirements set by Council and the Board of CFT are met in accordance with the Local Government Act 2002, the CFT Statement of Intent and the CFT Deed of Trust

100%

Annual Report by 30/9/21, 30/9/22 and 30/9/23

SOI and six monthly report by 1/3/22, 1/3/23 and 1/3/24

Facilities Management

· All facilities maintain legal compliance, WOFs and/or certification

· All facilities have in place an agreement to lease within three months of completion

· All existing facilities detailed maintenance plans are review annually and amended as appropriate

100% Building safety upheld

100% Legal partnerships covering leases and maintenance are agreed with the principal tenants

100% Maintenance programmes are reviewed annually and amended as required to ensure facilities’ amenity values are retained and are safe for users

Environmental Objectives

· Consider how the board can effectively support the Council’s environmental objectives. In particular give consideration to potential impacts of climate change and ‘carbon zero’ initiatives, and what contribution the Trust can make to this.

Potential impact assessment and action plan report completed by 30 June 2021

Health and Safety

· Enhanced reporting to the Board to ensure best possible health and safety practices and culture are in all CFT facilities.

· All CFT construction projects have Health and Safety plans and monitoring in place.

Monitoring is in place and reporting to the Board by 30 June 2022

100% compliance

Prospective Statement of Financial Performance

Prospective Statement of Movements in Equity

Prospective Statement of Financial Position

Prospective Statement of Cash Flows

Proportion of Accumulated Profits/Capital Reserves Distributed to Shareholder

The CFT is a non-profit entity, and any accumulated profits and/or capital reserves are to be used to fulfil the Trust’s charitable objectives. There is no current requirement to distribute a proportion of these funds to Council.

The CFT Depreciation Policy

The CFT is still evolving policy with respect to the establishment of cost sharing arrangements between itself and sporting bodies and individuals who will use its facilities, buildings and artificial turfs. Wherever possible the CFT will seek to deliver to the users, debt free buildings and facilities at a price which will encourage and stimulate sporting and community participation.

The accounts published above assume that CFT will strike a facilities/building and turf rental that is designed to raise sufficient funds to maintain the asset over the next 25 years.

The CFT is however mindful that some of its assets will have a life well beyond 25 years and could still be in use in 75 years’ time. Predicting what sporting facilities a community might need in 75 years is fraught and the CFT will not attempt to do this. It has therefore resolved to not build into its rental or long-term maintenance strategy an allowance to fund the replacement of an asset older than 25 years. The financial accounts above reflect this policy. Maintenance costs for an asset life of up to 25 years are generally funded out of user charges. Major assets like roofs, lifts and turf carpets which require replacement at the end of their predictable known life, will be funded by a specific arrangement with Council, or Council, the CFT and the tenant combined.

Because the CFT is still evolving its rental and depreciation charges, negotiations to fix agreed rentals with Council and its other tenants are ongoing. Further research, designed to more accurately determine the actual depreciation and maintenance costs on the CFT’s assets and the ability of its tenants to meet those costs, may lead to a change in the above policy and associated CFT budgets for the years beyond 2021/22.

Information to be provided to Shareholders

In each year the CFT shall comply with the reporting requirements specified for Council Controlled Organisations under the Local Government Act 2002, the Companies Act 1993 and other relevant regulations.

In particular, it shall provide the following:

· Statement of Intent

A draft Statement of Intent by 1 March detailing all matters required under the Local Government Act 2002.

· Annual Report

Within three months after the end of each financial year, the CFT will provide an annual report which provides a comparison of its performance with the Statement of Intent, with an explanation of any material variances, audited consolidated financial statements for the financial year, and an auditor’s report (in accordance with sections 67, 68 and 69 of the LGA 2002).

· Half-Yearly Report

Within two months after the end of the first half of each financial year the CFT shall provide a report on the operations of the Trust to enable an informed assessment of its performance, including financial statements, and progress on activities and projects (in accordance with section 66 of the LGA 2002).

Procedures to be followed before members acquire shares in other groups etc.

Subscription for shares in any other Company or interest in any other organisation will only take place with express prior approval from Council.

Activities for which the Board seeks compensation from a local authority

It is not anticipated that the Trust will seek compensation from any local authority otherwise than in the context of the normal contractual relationship with Hutt City Council.

If the Trust 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:

· The annual report of the CFT; and

· The annual report of the Hutt City Council.

Board estimate of the commercial value of the shareholder’s investment in the group

The Board will conduct an assessment of the value of Council’s investment in the Trust. The assessment will be based on the net asset value shown in the Trust’s six-monthly report.

Following completion of the Ricoh Sports Centre at Fraser Park, the estimated replacement value of the Trust’s assets is $41 million.

Other Management Issues

Health and Safety in Employment

CFT will maintain best industry practice and ensure 100% compliance with legislated obligations for its sites and buildings.

Community Outcomes

For the past five years CFT has been in building and development mode, it will now commit more resources and work with Council officers to monitor and report on the outcomes of the new CFT facilities. The CFT facilities have had a significant positive impact on the communities that surround them; however this has not been well researched or documented.

Long Term Facility Planning

The CFT has prepared 20 year maintenance plans for all of its buildings and other sporting assets and will now work with Council officers to prepare funding plans for that work. While some of the costs will be met from tenant rentals, more significant expenditure, for example on the cost of reroofing a major building like the Walter Nash, will need to be determined and agreed with Council.

Business Continuity

CFT is refining management practices and back up plans which will become operational in the event of unforeseen circumstances and natural disasters so that any events will have a minimal impact on the future operation of its facilities and assets.

Insurances

CFT will maintain appropriate insurances and/or require its tenants to have 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

CFT will continue to develop and maintain systems and procedures to best position itself and its facilities to deal with emergency situations.

Environmental Objectives

CFT is working with Council staff and consultants to formulate an environmental strategy for CFT that could change the way CFT builds and manages its sporting infrastructure and buildings. It is probable that CFT will not in future use gas heating in its buildings and will consider changing existing gas units at the end of their working life. CFT is already working to include solar power units on its buildings and will make provision for such units on future buildings. CFT will also investigate designing future buildings under the Green Star rating system if such an approach is affordable.

93 23 February 2021

Policy, Finance and Strategy Committee

11 January 2021

File: (21/42)

Report no: PFSC2021/1/19

Wellington Regional Leadership Committee - a new Joint Committee

Purpose of Report

1. The purpose of this report is to provide you with background and recommendations on Council joining and becoming a member on a new regional Joint Committee, the Wellington Regional Leadership Committee (WRLC)^{^[1]}.

2. Pursuant to Clause 30A, Schedule 7 of the Local Government Act 2002 (LGA), this new Joint Committee would include all of the Wellington region’s local government authorities, designated iwi, the Horowhenua District Council, and central government ministerial representatives, as equal voting members.

Recommendations

That the Committee recommends that Council:

(1) receives and notes report;

(2) approves the Wellington Regional Leadership Committee Joint Committee Agreement (attached at Appendix 1 to the report) and the Council’s entry into it;

(3) authorises the Mayor to sign, on behalf of Council, the Joint Committee Agreement;

(4) note that the Joint Committee will adopt a Memorandum of Understanding which will set out the principles that guide the Joint Committee’s work and the approach that the Joint Committee will take;

(5) appoints and establish the Wellington Regional Leadership Committee as a joint committee under clause 30(1)(b) of Schedule 7 of the Local Government Act 2002 on the terms set out in the Joint Committee Agreement and with effect from the date that the Joint Committee Agreement is signed by all local authority parties;

(6) appoints the Mayor to the Joint Committee, with effect from the date that the Joint Committee is established;

(7) appoints Deputy Mayor Tui Lewis as an alternate to be a member of the Joint Committee and attend meetings in exceptional circumstances where the Mayor is unable to attend;

(8) notes that the Joint Committee is a joint committee of all of the local authorities that are parties to the Wellington Regional Leadership Committee Joint Committee Agreement and includes members representing iwi and the Crown;

(9) makes the following delegations to the Joint Committee:

(a) approval of all plans and implementation programmes necessary to fulfil the specific responsibilities of the Joint Committee, including:

1) Wellington Regional Growth Framework and the Wellington Regional Growth Framework Implementation Plan

2) Regional Economic Development Plan

3) Regional Economic Recovery Implementation Plan; and

(b) approval of all submissions and advocacy statements necessary to fulfil the specific responsibilities of the Joint Committee; and

(10) notes that the Wellington Regional Strategy Committee is likely to be disestablished in the future, with the disestablishment process to be confirmed.

For the reasons:

1. to provide a formal governance forum so that the members can work together with central government on matters that are of regional importance, cross-boundary and inter-regional

2. address regional matters across three responsibility spheres, as programme areas. They are:

· the Wellington Regional Growth Framework,

· regional economic development, and

· regional economic recovery

Background

3. Recalling that the Wellington Regional Growth Framework (WRGF) was endorsed for public consultation at Council meeting of 8 December 2020.

4. Like New Zealand’s other Regional Spatial Plans with Central and Local Government partners, and the expectations of Government’s Urban Growth Agenda, a Joint Committee, is required to activate and support the decisions and programmes of the Wellington Regional Growth Framework.

5. Spatial planning underpins economic development and recovery. To ensure regional spatial planning, economic development and recovery opportunities are cohesively addressed, the WRLC will have three spheres of responsibility.

6. The WRLC’s three sphere of responsibilities, as programme areas are: the Wellington Regional Growth Framework, regional economic development, and regional economic recovery.

7. Ministerial appointments will be confirmed after Cabinet have reviewed and endorsed the Wellington Regional Leadership Committee, Joint Committee Agreement. See the section on ‘Next Steps,’ for an indicative timeframe.

Roles & Responsibilities

8. The WRLC is designed to provide a formal governance forum so that the members can work together with central government on matters that are of regional importance, cross-boundary and inter-regional.

9. The WRLC will address regional matters across three responsibility spheres, as programme areas. They are:

· the Wellington Regional Growth Framework,

· regional economic development, and

· regional economic recovery.

Membership

10. The Membership of the WRLC, with voting rights, include:

· The Mayor of Carterton District Council

· The Chair of Greater Wellington Regional Council

· The Mayor of Horowhenua District Council

· The Mayor of Hutt City Council

· The Mayor of Kāpiti Coast District Council

· The Mayor of Masterton District Council

· The Mayor of Porirua City Council

· The Mayor of South Wairarapa District Council

· The Mayor Upper Hutt City Council

· The Mayor of Wellington City Council

· A person nominated by the Joint Committee itself, and appointed by the Administering Authority to be the Independent Chairperson of the Joint Committee

11. A member of the WRLC, with voting rights, may also include:

· Ngāti Toa Rangatira represented by Te Rūnanga o Toa Rangatira Inc.

· Taranaki Whānui represented by Port Nicholson Block Settlement Trust

· Rangitāne O Wairarapa represented by Rangitāne O Wairarapa Inc

· Ngāti Kahungunu ki Wairarapa represented by Ngāti Kahungunu ki Wairarapa Trust

· Raukawa ki Te Tonga

· Ātiwawa ki Whakarongotai represented by Āti Awa ki Whakarongotai Charitable Trust

· Muaupoko Tribal Committee representing Muaūpoko hapū

12. Central Government Representatives, with voting rights, include:

· Up to three Cabinet Ministers (specific Cabinet Ministers will be determined at a later date).

13. Voting Rights and Consensus Based Decision Making

· While each member is accorded one vote, the WRLC will utilise a consensus-based decision model. This is to ensure decisions are robustly supported and made in the best interest of members, their shared communities and futures.

14. Observers

· Central government representatives from the Ministry of Housing and Urban Development / Kainga Ora, Waka Kotahi, the Department of Internal Affairs, and the Ministry of Business, Innovation and Employment, alongside other commercial and private sector membership or representative organisations are considered observers to the WRLC, with speaking, but no voting rights.

· Invited to share and present information and insights, observer attendance is designed to be flexible, depending on the specified meeting’s subject matter, agenda and decision-making requirements.

· Observers will be approved by the Independent Chair.

15. Central Government observers would include:

· The Ministry of Business, Innovation and Employment

· Ministry of Housing and Urban Development (HUD) and/or Kainga Ora

· Waka Kotahi

· The Department of Internal Affairs

16. Interaction of Wellington Regional Leadership Committee’s Responsibility Spheres, as Programme Areas:

Supported by the Wellington Regional Leadership Committee’s Secretariat (four roles)

Figure 1: The WRLC's Three Spheres of Responsibility / Programme Areas

Supporting Resources and Operations

· The Agreement, including the Terms of Reference

· The Memorandum of Understanding

· Consensus Decision Making

· Independent Chair

· Joint Committee Secretariat

· Agenda Management

· Administering Authority

17. The Agreement, including the Terms of Reference

· A comprehensive and legally reviewed ‘Wellington Regional Leadership Committee, Joint Committee Agreement’ with accompanying Terms of Reference, details how the Wellington Regional Leadership Committee will operate and be equipped to deliver against the three responsibility spheres.

· The Agreement and Terms of Reference outlines what the Committee will do. This document is included as Appendix 1).

· The Agreement and Terms of Reference are comprehensive documents detailing the mechanisms for how the Joint Committee will function and fulfil its responsibilities.

· They do this by outlining how prospective members are committed to working together to achieve stronger, cooperative outcomes for regional spatial planning, economic development and economic recovery.

· The Agreement and accompanying Terms of Reference are written pursuant to Clause 30A, Schedule 7 of the Local Government Act, 2002.

18. Memorandum of Understanding

· To reinforce and demonstrate commitment to regional cooperation, shared opportunities and meaningful dialogue with iwi, local and central government, a draft Memorandum of Understanding has been developed.

· The Memorandum of Understanding outlines how the Committee will operate.

· The Memorandum helps to shape and promote the trusted, cooperative and partnership-based principles to guide the WRLC for the successful development and implementation of agreed decisions and strategies.

· This draft document is included as Appendix 2.

· Note that the Joint Committee itself will finalise this draft Memorandum of Understanding when it first meets.

· The draft has been provided here an example of what could be included and emphasised in how the Committee will interact and behave.

19. Independent Chairperson

· An Independent Chairperson is considered essential for the Joint Committee to operate effectively, like New Zealand’s other Joint Committees responsible for delivering growth frameworks, regional spatial planning and/or regional economic development.

· The Chairperson will guide and moderate discussions, connect and communicate with key parties in advance of meetings, support and work with the Joint Committee’s Secretariat on work programmes, while providing communication on the decisions and outcomes of the Joint Committee’s deliberations.

· An Independent Chairperson will be appointed by the WRLC following a robust recruitment process.

20. Secretariat

· To provide support, information and analysis a team of up to four positions will be appointed by the Administering Authority, in consultation with the WRLC and Independent Chair.

· These positions are (nominally and subject to approval) a Iwi Liaison Advisor, Project Director, Senior Strategic Advisor, and a Coordinator.

· The Secretariat will work closely with the Independent Chairperson, and connect with members and other observers, contributors and subject matter experts, as required.

· They will focus on supporting delivery of the work programme and supporting/reporting and reporting against the decisions and strategies set by the Joint Committee, in pursuit of realising the Wellington Region Growth Strategy, regional economic development and regional economic recovery.

· A process for finalising the roles and responsibilities for the Joint Secretariat will be determined and implemented at a later date.

21. Agenda Management

· The Joint Committee supported by the Independent Chair and Secretariat will meet to address the three spheres of responsibility.

· Effective agenda management will ensure that the appropriate members are present and prepared for the topics and decisions within each area of responsibility.

· We anticipate that when meeting, decisions and discussion against the Wellington Regional Growth Framework would be addressed first, so that the remaining members can then address the complementary economic development and recovery topics.

22. Administering Authority

· An administering authority is required for the WRLC’s operations.

· This includes utilisation of a council’s standing orders, and the provision of administrative and human resources functions for the chair and secretariat.

· A process to select and confirm the administrating authority will be determined by March 2021.

Climate Change Impact and Considerations

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

24. There are no climate change impacts.

Financial Considerations and Funding

25. The secretariat will be funded through a general rate set by Wellington Regional Council. The existing Wellington Regional Strategy targeted rate, will not continue to be struck. A new targeted rate (at a lower value) will replace this for the regional economic development activities currently funded through Wellington NZ.

26. Projects identified in the Wellington Regional Growth Framework are proposed to be co-funded by Central and Local Government. Funding indications have been provided to Local Government’s Chief Executives.

27. Final funding requirements for Wellington Regional Growth Framework projects cannot be determined until the Joint Committee meets and agrees the 1 year and 3-year work programme(s).

Implications for Mana Whenua and Māori

28. As a significant regional governance forum, membership includes designated mana whenua/iwi representatives.

29. Iwi organisations across the Wellington Region, Te Upoko o Te Ika a Maui and Horowhenua District were engaged with on the Wellington Regional Growth Framework, and will be engaged with further to become members of the WRLC.

30. The draft Memorandum of Understanding includes a section on reflecting the principles of Te Tiriti o Waitangi / The Treaty of Waitangi within the intended behaviours and approaches of the WRLC.

31. Funding has been provided for in the proposed new regional rate to provide for iwi members’ full participation in the Joint Committee

Regional Governance Options Considered

32. There were a series of discussions on a range of possible regional governance models at Wellington Region Mayoral and Chief Executive Forums.

33. Arriving at the final proposal for Joint Committee was shaped over a series of shared discussions and workshops, with the acknowledgement that a formal decision-making structure is required for implementation of the Wellington Regional Growth Framework.

34. The three structural options considered were:

· Option 1 - Utilising the existing Wellington Mayoral Forum

· Option 2 - A Council Sub-committee

· Option 3 - A new Joint Committee

35. Each option’s disadvantages and benefits and are explained in the following section.

36. Option 3, a new Joint Committee under the Local Government Act, was agreed as the most effective cross-regional governance model.

Option 1: Utilise the Mayoral Forum

37. The advantage of this model is that a pre-established structure and process is already in place for nine of the ten councils, which could be adapted to include others and a wider mandate.

38. Disadvantages include the forum’s lack of formalised decision-making powers, and it is unlikely that this option would be supported by iwi and Central Government partners.

Option 2: A Council Subcommittee

39. The advantage of this model is that it is a known and regionally utilised governance model.

40. A disadvantage is how decisions from a subcommittee may be perceived as biased towards the parent council.

41. Due to this perception, it is unlikely that this model would be supported by iwi and Central Government partners.

Option 3: Establishment of a new Joint Committee under clause 30A, Schedule 7 of the Local Government Act.

42. There are a number of shared and sustainable benefits to this model, including:

· A governance forum set up under this model, can utilise the powers and other capabilities of a Joint Committee, under the Local Government Act.

· A Joint Committee model is consistent with other spatial plan and/or economic development governance structures across the country, and it aligns to central government partnership and dialogue expectations.

· This model is likely to be seen as an equitable form of regional governance, with the advantage of including iwi and Cabinet Ministers as members, with key observers from Central Government and other regional commercial and private sector organisations.

43. For these reasons, a Joint Committee under the Local Government Act is considered the most effective and sustainable model to activate and cooperatively address the Wellington Regional Growth Framework, Regional Economic Development and Regional Economic Recovery.

Next Steps

Wellington Region Leadership Committee – Creation and Establishment Framework

January – July 2021

January – March

Wellington-Horowhenua region’s local government authorities, iwi, Central Government officials and Cabinet review and proceed to endorse the Agreement and Terms of Reference and become members of the Wellington Regional Leadership Committee.

January

Communication Released: a media release will accompany the first adoption and subsequent announcements as councils and others sign up to the WRLC.

Robust Independent Chair recruitment process commences – partners contribute names for consideration.

February-March

Administrating Authority confirmed

Joint Secretariat roles and responsibilities confirmed

Recruitment process for Secretariat initiated – continues through March/April

Greater Wellington Regional Council consults on the Joint Committee as an option for its 2021-2031 Long Term Plan. This includes the funding implications from the proposed and new Regional Rate.

April-May

Tentative first meeting of the new Joint Committee – the Wellington Regional Leadership Committee.

Independent Chair recruitment process concludes, with Chair appointed by the WRLC.

Expected Dissolution of the Wellington Regional Strategy Committee.

Recruitment commences for the Secretariat positions.

WRLC confirms Memorandum of Understanding.

June-July

Joint Committee considers and reviews proposed year 1 and 3 work programme.

Work and planning commences against the three spheres of responsibility as programme areas.

Appendices

No.	Title	Page
1 ⇩	Appendix 1: WRLC_Joint Committee Agreement and Terms of Reference	94
2 ⇩	Appendix 2- Memorandum of Understanding_DRAFT Principles and outline for Noting	115

Author: Gary Craig

Head of City Growth

Approved By: Kara Puketapu-Dentice

Director Economy and Development

130 23 February 2021

Policy, Finance and Strategy Committee

20 January 2021

File: (21/63)

Report no: PFSC2021/1/22

Urban Plus Group Six Month Report to 31 December 2020

Purpose of Report

1. To provide the Committee with an update for Urban Plus Limited Group (UPL), for the six month period to 31 December 2020.

Recommendations

That the Committee receives the half year report from Urban Plus Limited Group attached as Appendix 1 to the report.

Background

2. The Local Government Act requires Council Controlled Organisations to deliver to shareholders a half yearly report on the organisation’s operations within two months after the end of the first half of each financial year. The report should include information required to be reported as outlined in the organisation’s 2020/21 - 2022/23 Statement of Intent.

Discussion

3. The Chair and Chief Executive of UPL will be in attendance to present their report and answer any questions.

4. UPL Group achieved a Surplus before Tax of $1.987M compared to a budgeted Surplus before Tax of $3.149M resulting in an unfavourable variance of $1.162M. The unfavourable variance relates to a delay in settlements at the Central Park development. Initially, twenty four of the thirty four properties had been budgeted to settle by 31 December 2020. However, only sixteen properties were settled by this date.

5. Residential housing achieved a deficit for the first six months to 31 December 2020 of $0.074M compared to a budgeted deficit of $0.109M resulting in a favourable variance of $0.035M. Revenues are ahead of budget due to higher than predicted occupancy rates resulting in rental revenues being higher than budget YTD. Expenses are below budget due to maintenance spend tracking slightly behind budget YTD but is expected to be in line with budget by 30 June 2021.

6. Property Development achieved a Surplus for the six months ended 31 December 2020 of $2.101M compared to a budgeted Surplus of $3.259M resulting in an unfavourable variance of $1.158M. The shortfall against budget is predominantly a timing difference caused by 8 of the 24 settlements budgeted to occur before 31 December being delayed into 2021.

7. In addition to the remaining eighteen Central Park settlements, all twenty seven properties at The Lane – Waterloo development are planned to be settled (sales) in the current financial year. The UPL Group has received $8.438M in property development sales YTD from the Central Park development being roughly a quarter of total sales expected by 30 June 2021.

8. A Net Surplus before Tax of $9.094M is forecast for the full year, which is $15,000 more than budget.

9. In August 2020, UPL entered into a new partnership with Kahungunu Whānau Services, Te Rūnanga o Te Atiawa and Council which is focused on delivering more warm, safe, dry and affordable homes. The partnership is currently working on opportunities within Hutt City.

10. In September, UPL received Council’s 2020 letter of expectation which sought from UPL:

a. The delivery of wider housing outcomes,

b. Building pathways to housing permanency,

c. Provide for wider housing need

d. Implementation of HomeStar 6 Rating & Environmental Standards

e. Development of more partnerships that enable the delivery of more homes,

f. Promote Māori Outcomes

g. Support Central Government Initiatives

h. Deliver on Plan Change 43 (where Plan Change 43 applies to a development site).

11. These priorities have been expressed and provided for in the 2021/23 UPL Statement of Intent.

12. There are no significant events subsequent to the reporting period requiring additional disclosure.

Climate Change Impact and Considerations

13. The Implementation of HomeStar 6 Rating and new environmental standards for new housing developments will support Council in its objective to addressing impacts on climate change.

Consultation

14. There is no requirement for consultation.

Legal Considerations

15. The Local Government Act requires Council, as a shareholder in UPL, to publish this report on its public website within 1 month of receiving it and to maintain the report on that site for a period of no less than 7 years.

Financial Considerations

16. There are no additional financial considerations to be noted.

Appendices

No.	Title	Page
1 ⇩	Appendix 1: Urban Plus Group Six Month Report to 31 December 2020 Final	131

Author: Simon George

Senior Accountant

Author: Daniel Moriarty

Chief Executive, Urban Plus

Author: Sharon Page

Senior Management Accountant

Reviewed By: Darrin Newth

Financial Accounting Manager

Reviewed By: Jenny Livschitz

Chief Financial Officer

Approved By: Kara Puketapu-Dentice

Director Economy and Development

169 23 February 2021

Policy, Finance and Strategy Committee

26 January 2021

File: (21/80)

Report no: PFSC2021/1/23

Council performance overview for the half year ended 31 December 2020

Purpose of Report

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

Recommendations

That the Committee:

(1). notes and receives the report; and

(2). agrees to amend the operating and capital budgets as detailed in this report, mainly due to changes in timing of expenditure, refer Table 3 and Table 4 contained within 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 half year ended 31 December 2020. 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 and include:

- A significant amount of work to enable Council to consider and approve the new rubbish and recycling service and to communicate with the community. Resources were secured and a project team established to start the implementation of the new service with the preferred service provider.

- At the same time we experienced a change in Covid Alert Levels and had to adapt to this for a second time. We further developed our response plans locally, dedicated resources to assisting businesses and contributed to regional plans while progressing our Covid-19 Recovery Plan. We remain in a state of readiness for resurgence.

- A cross-organisation team is in place and working to progress the ten year plan/Long Term Plan ahead of public consultation.

- The 2019/2020 Annual Report was signed off by Council and auditors ahead of the statutory deadline.

- It has been a very busy quarter for our consenting and regulatory team reflecting increased development across our city. While the number of building consents issued for the Q2 2020 compared with Q2 2019 is less (392 vs 427), the value of multi-unit developments (i.e. 3 or more on one site) has increased. Since the start of 2018 the value of these developments has doubled to $91.2M. This indicates the confidence people have in building and investing in our city and will help to meet the housing needs of our city’s growing population.

- Resource consents in Q2 2020 have increased to 83 compared to 69 in Q2 2019. Many of these are also associated with multi-unit consents that require more technical input as they are more complex to process.

- The number of code of compliance certificates issued in Q2 2020 has seen a marked increased to 429 vs 331 in Q2 2019 indicating an appetite to complete building work in a more timely fashion so that buildings can be occupied sooner by the occupants including families, new home owners and commercial business operators.

- New food premises that were verified are up to 31 in Q2 2020 from 16 in Q2 2019 due to a concerted effort to reduce the backlog of verifications.

Performance measure results

4. The second quarter key performance indicator (KPI) results are included in this report together with broader outcome trend information. Refer to Appendix 2 for further detail information.

Financial Performance Results

5. This section provides an overview of the financial performance results for the period ended 31 December 2020. Further detailed information is available in Appendix 3.

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

7. Of particular note over the last quarter, is the Three Waters Reform Funding Agreement signed with the Crown as part of the post COVID-19 stimulus. This funding is required to be applied

o to operating and/or capital expenditure related to Three Waters infrastructure and service delivery,

o to support economic recovery through job creation

o to maintain, increase and/or accelerate investment in water infrastructure renewal and maintenance.

Council has secured $10.6M of funding and this is being applied across operational and capital expenditure in 2020/21 and 2021/22.

For more information on this refer to Council report 25 August 2020, “Three waters Reform; Memorandum of Understanding” HCC2020/5/173.

8. Overview of results: The year-to-date (YTD) net operating financial result is $16.4M (37.9%) favourable to budget. The full year (FY) forecast is $3.7M or 15.1% favourable compared to the budget mainly due to higher forecast revenue of $10M partially offset by higher forecast operating expenditure.

Table 1: Operating Results

$Millions	YTD Actual	YTD Revised Budget	Variance	FY Forecast	FY Revised Budget	Variance	FY Annual Plan
Operating revenue	35.0	26.3	8.7 33.1%	62.6	52.6	10.0 19.0%	52.2
Operating expenditure	(88.9)	(96.3)	7.4 7.7%	(196.8)	(190.4)	(6.4) (3.4%)	(188.2)
Net operating deficit before rates income	(53.9)	(70.0)	16.1 23.0%	(134.2)	(137.8)	3.6 (2.6%)	(136.0)
Rates income	113.6	113.3	0.3 0.3%	113.4	113.3	0.1 0.1%	113.3
Net operating surplus/ (deficit)	59.7	43.3	16.4 37.9%	(20.8)	(24.5)	3.7 15.1%	(22.7)
Capital contributions	5.5	5.3	0.2 3.8%	20.1	15.7	4.4 28%	13.1
Net surplus/ (deficit) before adjustments	65.2	48.6	16.6 34.2%	(0.7)	(8.8)	8.1 92%	(9.6)
Other non-operating adjustments	4.3	-	4.3	4.4	-	(4.4)	-
Net surplus/ (deficit)	69.50	48.6	20.9 43.0%	3.7	(8.8)	12.5 142%	(9.6)

9. Operating revenue: The overall result is forecast to be $10M favourable (19%) to budget. This is largely due to increased revenue across a number of areas including Three Waters Reform funding, parking infringements, landfill revenue, consenting revenue and Reserves contribution income,

10. Operating expenditure (opex): The opex budget of $190.4M for the year is forecast to be $6.4M (3.4%) unfavourable to budget. This is largely due to forecast increased Three Waters expenditure (which is funded from the Three waters Reform funding), increased development incentives costs $0.6M (delayed from prior year) and higher landfill costs $2.3M (offset by revenue).

11. Rates income: The rates income for the year of $113.3M is forecast to be $0.1M 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 $4.4M higher than budgeted largely due to the Three Waters Reform funding $2M and the Naenae pool Central Government Covid Response and Recovery Fund $2.7M (first milestone is on 30 June 2021), offset by various project timing changes affecting Waka Kotahi NZTA funding.

13. Non-operating adjustments: Gains on the fair value of derivatives was $4.3M at 31 December 2020. 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	7.2	10.0	2.8	29.5	24.4	(5.1)	24.7
Improvements	13.5	18.4	4.9	51.0	61.4	10.4	56.0
Net deficit	20.7	28.4	7.7	80.5	85.8	5.3	80.7

15. Capital expenditure delivery to-date is $20.7M or 25.7% of the full programme forecast for the year of $80.5M. Three Waters is forecast to be underspent by $3.7M at year end mainly due to the Barber Grove collector main works programme being delayed.

16. There are risks related to the delivery of the full programme for the year; for example with the unexpected closure of Petone wharf there is a need for Parks and Recreation team to reprioritise planned works and there could be delays in projects. Further updates to the forecast will be reported at the next Committee meeting.

Approval of budget changes for 2020/21, being the “Revised Budget”

17. This report seeks Council approval related to the “Revised Budget” for 2020/21 to reflect the budget updates required to improve accuracy of budgets and the associated performance reporting.

18. At the last Policy, Finance and Strategy Committee(PFS) there were budget changes approved largely in relation to the carry forward of budgets from 2019/20 to 2020/21. As part of the LTP 2021-2031 process, the Council has also approved further changes to budgets which have an impact on both 2020/21 and future years.

19. Table 3 provides details of proposed budget changes to be approved by Council.

Table 3: Summary of proposed budget approvals

$Million	2020/21
Activity	Opex	Capex	Commentary
City Environment		(5.3) Decrease	RiverLink Project timing adjustment due to project delays
Roads and Access ways	(2.6) Revenue	3.0 Increase	LED Street lighting project brought forward from 2021/22 to 2020/21 together with NZTA 85% subsidy
City Leadership	0.2 Increase	(0.2) Decrease	Digital Transformation reallocation from capital to operating expenses to reflect the underlying nature of the IT security costs to be incurred.
Total	(2.3)	(2.5)

Additionally, $0.6M of development incentives expenditure in the 2019/20 financial year is sought to be carried forward from 2019/20 to 2020/21.

20. The table that follows shows a summary of all the budget changes to-date together with the proposed changes for this most recent update.

[1] In this paper we use Joint Committee and Wellington Regional Leadership Committee (WRLC) interchangeably.

Required Content	SML Draft SOI Content
(a) the objectives of the company	The objectives of the SML are stated.
(b) a statement of the board’s approach to governance of the group	A statement is included.
(c) the nature and scope of the activities undertaken by the group	The nature and scope of activities are outlined – no significant changes.
(d) the ratio of consolidated shareholders’ funds to total assets, and the definition of those terms	Ratio provided.
(e) the accounting policies of the group	Accounting policies are outlined.
(f) the performance targets and other measures by which performance of the group may be judged in relation to its objectives	Performance targets are included.
(g) an estimate of the amount or proportion of accumulated profits and capital reserves that is intended to be distributed to the shareholders	Information provided.
(h) the kind of information to be provided to the shareholders by the group during the course of those financial years, including the information to be included in each half yearly report (and, in particular, what prospective financial information is required and how it is to be presented)	The kind of information to be provided is outlined.
(i) the procedures to be followed before any member or the group subscribes for, purchases, or otherwise acquires shares in any company or other organisation	Information on procedures is not provided but it is noted that there is no intention to subscribe or invest in any other organisation.
(j) any activities for which the board seeks compensation from any local authority (whether or not the local authority has agreed to provide the compensation)	No compensation requested.
(k) the boards estimate of the commercial value of the shareholders’ investment in the group and the manner in which and the times at which that value is to be reassessed	A statement as to the net value of shareholder’s investment is provided.
(l) any other matters that are agreed by the shareholders and the board	Some additional information is provided.

Return on Equity	2021/22 Budget	2022/23 Planned	*2023/24 Planned ()**
ROE including Breakwater Lease Payment	4.1%	4.8%	3.4%

Required Content	UPL Draft SOI Content
(a) the objectives of the company	The objectives of the UPL are stated.
(b) a statement of the board’s approach to governance of the group	A statement is included.
(c) the nature and scope of the activities undertaken by the group	The nature and scope of activities are outlined.
(d) the ratio of consolidated shareholders’ funds to total assets, and the definition of those terms	Ratio provided.
(e) the accounting policies of the group	Accounting policies are outlined.
(f) the performance targets and other measures by which performance of the group may be judged in relation to its objectives	Performance targets are included.
(g) an estimate of the amount or proportion of accumulated profits and capital reserves that is intended to be distributed to the shareholders	Information provided.
(h) the kind of information to be provided to the shareholders by the group during the course of those financial years, including the information to be included in each half yearly report (and, in particular, what prospective financial information is required and how it is to be presented)	The kind of information to be provided is outlined.
(i) the procedures to be followed before any member or the group subscribes for, purchases, or otherwise acquires shares in any company or other organisation	Information on procedures is not provided but it is noted that there is no intention to subscribe or invest in any other organisation. A further note states UPL has established a subsidiary. Established procedures are in place which require approval from the CEO of Council, who can grant authority to UPL on certain conditions.
(j) any activities for which the board seeks compensation from any local authority (whether or not the local authority has agreed to provide the compensation)	No compensation requested.
(k) the boards estimate of the commercial value of the shareholders’ investment in the group and the manner in which and the times at which that value is to be reassessed	A statement as to the net value of shareholder’s investment is provided.
(l) any other matters that are agreed by the shareholders and the board	Some additional information is provided.

Required Content	CFT Draft SOI Content
(a) the objectives of the company	The objectives of the CFT are stated.
(b) a statement of the board’s approach to governance of the group	A statement is included.
(c) the nature and scope of the activities undertaken by the group	The nature and scope of activities are outlined – no significant changes.
(d) the accounting policies of the group	Accounting policies are outlined.
(e) the performance targets and other measures by which performance of the group may be judged in relation to its objectives	Performance targets are included.
(f) an estimate of the amount or proportion of accumulated profits and capital reserves that is intended to be distributed to the shareholders	Not applicable.
(g) the kind of information to be provided to the shareholders by the group during the course of those financial years, including the information to be included in each half yearly report (and, in particular, what prospective financial information is required and how it is to be presented)	The kind of information to be provided is outlined.
(h) the procedures to be followed before any member or the group subscribes for, purchases, or otherwise acquires shares in any company or other organisation	Information on procedures is not provided but it is noted that there is no intention to subscribe or invest in any other organisation.
(i) any activities for which the board seeks compensation from any local authority (whether or not the local authority has agreed to provide the compensation)	No compensation requested.
(j) the boards estimate of the commercial value of the shareholders’ investment in the group and the manner in which and the times at which that value is to be reassessed	A statement as to the net value of shareholder’s investment is provided.
(kl) any other matters that are agreed by the shareholders and the board	Some additional information is provided.

$Million	Net deficit	Capital investment
Annual Plan 2020/21	9.7 Deficit	80.7
Council approved changes - Sept 2020 report	(1.2)	2.3
Revised Budget 2020/21 (as reported Sep 2020)	10.9 Deficit	83.0
Previously approved Council changes (as at December 2020)	(0.2)¹	5.3²
Approval required (per Table 3)	2.3	(2.5)
Revised Budget 2020/21 (as reported Dec 2020)	8.8 Deficit	85.8
Development Incentives carried forward from 2019/20 to 2020/21	(0.6)
Revised Budget 2020/21	9.4 Deficit	85.8

Measures	Policy	Actual 30 Sept 2020	Compliance
Net external debt/total revenue	Maximum 150%	95%	Yes
Net interest on external debt/total revenue	Maximum 10%	2%	Yes
Liquidity ratio	Minimum 110%	126%	Yes