Agenda of Finance Committee

Finance Committee – 14 June 2017 – Open Agenda

Agenda Items

1. Funding Applications

*Type of Report:*	Operational
*Legal Reference:*	Local Government Act 2002
*Document ID:*	351363
*Reporting Officer/s & Unit:*	Belinda McLeod, Community Funding Advisor

1.1 Purpose of Report

To seek approval to apply for external funding to purchase two all-terrain wheelchairs for community use on the foreshore and inline hockey rink boards for Bay Skate.

Officer’s Recommendation

That Council:

a. Approve that applications for external funding are made to purchase of two all-terrain wheelchairs.

b. Approve that applications for external funding are made to purchase inline hockey rink boards for Bay Skate.

CHAIRPERSON’S RECOMMENDATION

a) That Council adopt the officer’s recommendation.

1.2 Issues

There are two projects that are seeking external funding.

All-Terrain Wheelchairs

Officers were approached by the Halberg Disability Sport Foundation to consider providing all-terrain wheelchairs, so that physically disabled local children and adults can have access to recreational activities with their families particularly at the beach. All-terrain wheelchairs move easily over any surface, including soft sand and can float in the water, allowing transfer into a boat, surfing and swimming. With the off-road wheels the chair can be used on wet surfaces, mud, stones, pebbles and dusty surfaces, so people could access our pathways, beaches and bush walks.

It is proposed to have one wheelchair based at the Napier Aquatic Centre (Pandora Pond in the summer) and one at the Pettigrew Arena, which would give community members easy access to the chairs. This would give people with disabilities opportunities to participate in recreational outdoor activities with their family and friends. Council would provide a booking system and be responsible for the maintenance of the chairs.

The costs for the two all-terrain wheel chairs is $15,000. The purchase of these chairs supports the Disability Strategy currently in development.

Inline Hockey Rink Boards

Rink boards will enable the skating rink to be more versatile, and provide important separation between the other skating areas. The rink boards will provide the required infrastructure to support training, competitive games and events for both inline hockey and roller hockey. The cost for the rink boards is $60,000.

The Rink Boards were not included in the original design of Bay Skate as more detail about the needs of roller hockey was required and there was no budget allocation for it at that time. The original focus for Bay Skate was on a functional park with basic provisions, and it was always the intention to add more features. For any new additional features, the Council will explore external funding where possible or use the capital expenditure budget.

1.3 Significance and Consultation

N/A

1.4 Implications

Financial

By presenting funding applications to a number of providers both these items could be fully funded externally.

Rink Boards - If external funding is unsuccessful, or not fully funded, then funding will be sought from sponsorship (approaches are currently being made). There is funding available from the 2017/18 Bay Skate capital budget, however, the priority for this funding is the purchase of ramps.

Social & Policy

N/A

Risk

N/A

1.5 Options

The options available to Council are as follows:

1. Apply for external funding and/or sponsorship for the projects.

2. Council could fund the projects through 2017/18 budgets. However, the rink boards are not as high a priority as ramps, and would be unlikely to proceed in 2017/18.

1.6 Development of Preferred Option

The preferred option is to apply for funding for the two projects as follows:

a) All-Terrain Wheelchairs

Funder	Apply Up To
Pub Charity	15000
Youth Town	7000
North & South Trust	7000
Napier RSA	5000
Taradale RSA	5000
Total:	$39,000

b) Rink Boards

Funder	Apply Up To
New Zealand Community Trust	15000
North & South Trust	15000
Infinity Foundation	15000
Grassroots Trust Ltd	15000
Total:	$60,000

Funders have been selected in line with their criteria/timing, and other Council project funding requirements. This does not preclude other applications for projects being made to the funders identified.

1.7 Attachments

Nil

Finance Committee – 14 June 2017 – Open Agenda

3. Section 17A Review Work Programme Plan

*Type of Report:*	Legal and Operational
*Legal Reference:*	Local Government Act 2002
*Document ID:*	356245
*Reporting Officer/s & Unit:*	Rachael Horton, Manager Business Excellence & Transformation

3.1 Purpose of Report

The purpose of this paper provide Council with an update on the progress of the Local Government Act (2002) Section 17A service delivery reviews

Officer’s Recommendation

That Council

a. Note that Local Government Act Section (2002) 17A of the Local Government Act places an obligation on local authorities to routinely review their services for cost effectiveness.

b. Note the timeframe for the reviews Napier City Council will undertake.

c. Endorse the proposed schedule of Section 17A reviews.

MAYOR’S/CHAIRPERSON’S RECOMMENDATION

That the Council resolve that the officer’s recommendation be adopted.

3.2 Summary

In 2014 changes to legislation were made with the introduction of section 17A of the Local Government Act (‘LGA’) which placed an obligation on local authorities to routinely review their services for cost effectiveness.

Clause 1A of the schedule requires councils to complete reviews of all functions other than those covered by the exceptions within 3 years of the enactment of the Local Government Act (by 8 August 2017). The section provides for exceptions including being satisfied that the potential benefits do not justify the cost of the review.

All NCC activities were assessed for review. Out of 71 activities, 27 aggregated services are required to be reviewed under section 17A.

Each review was prioritised against a set criteria to ensure those services with the greatest opportunity for improvement were reviewed first, and that resources are managed across all work programmes. Reviews are scaled to match the size of the service, the issues and anticipated benefits.

3.3 What are 17A reviews?

Early in 2012, government announced a programme of local government reform entitled Better Local Government. A number of amendments to the legislative framework for councils were made, including, in 2014, the introduction of section 17A of the LGA.

Section 17A places an obligation on councils:

· to review the cost effectiveness^{^[1]} of current arrangements for providing local infrastructure, services and regulatory functions at regular intervals. Reviews must be undertaken when services levels are significantly changed, before current contracts expire, and in any case not more than 6 years after the last review. The LGA has a transitional provision that requires all services to be reviewed by 8 August 2017; and

· to ensure that there is a binding contract or agreement where delivery of infrastructure, services, or regulatory functions is to be undertaken by a different entity than the entity responsible for the governance of those things. The contract/agreement must cover key matters such as service levels, performance assessment and reporting, risk management and accountability.

A review should consider three elements: how a service is governed, how it is funded, and how it is delivered. The intent of the legislation is to encourage efficiencies as well as collaboration between councils. Reviews provide an opportunity to improve the delivery of services to our residents, ratepayers and visitors.

3.4 NCC’s approach to 17A reviews

The LGA Section 17A was enacted 8 August 2014, with a period of three years to complete the first set of reviews.

During September 2015, Hawkes Bay underwent an Amalgamation Poll where the proposal was to amalgamate all five Councils in the Region. The turnout rate for this Poll was high with approximately 80% of Napier residents voting against amalgamation. Overall the proposal was defeated, ratepayers had shown they were satisfied with the current service provision of NCC.

As a result, any significant progression within NCC was put on hold, including the 17A programme. It was determined that there was no cost benefit in undertaking reviews during this time given the significant change being proposed.

Following the poll, the next stage was to review the organisation structure to ensure it was appropriate for the delivery of current and future services.

This review was, in effect, the start of the 17A work programme. Without a clear structure in place the effectiveness of further 17A review work would be undermined.

The review followed a logical and structured approach and resulted in the implementation of a new management structure and leadership framework to deliver our services.

The new structure has strengthened NCC’s approach to service delivery within each Directorate:

· The City Strategy Directorate is leading, coordinating and integrating strategies across NCC, looking ahead for the City and bringing together all related thinking and planning.

· Community Services Directorate is bringing a coordinated approach to community strategies and programmes, business operations, and the use of associated facilities to improve service to customers.

· The Infrastructure Directorate is strengthening strategic decision making around assets, and the delivery of related activities, and reinforced NCC’s commitment to environmental sustainability. A Project Management Office was established to deliver the capital programme.

· The Corporate Services Directorate established the Business Excellence and Transformation team, with the primary focus of leading and supporting best practice within Council. This team will continue the 17A work with a programme of reviews over the next three years, and on a six year cycle.

In addition to the review of NCC’s management structure, we have also completed the following reviews:

· Waste Futures – joint project with Hastings regarding the options on the treatment of waste in the region

· Internal Audit Services – regional collaboration for procurement of services

· Lagoon Farm – review of service delivery model

· Cleaning services – consolidation of council services

· After Hours Call Services – review of service delivery, resulting in a contract to Palmerston North City Council for service provision

· Shared web services provided by Napier for 4 councils with approval for last Council to begin services shortly

· Provision of shared HR services to Wairoa Council

· Provision of shared Economic Development resourcing with Central Hawkes Bay

· Bay Skate service provision bought in house

· Review of service provision for Faraday Centre

3.5 The 17A work programme going forward

Following the establishment of the Business Excellence and Transformation team, we are in a position to continue our 17A reviews under a more formal work programme.

Over the next three years, we are proposing a common sense approach that balances the need to comply with legislation with the need to carefully manage NCC’s operational resources. This approach would ensure a focus on reviewing services with the most significant opportunities for improvement first.

At the scoping phase, the review will be scaled to match the size of the service and the issues and opportunities presented by the review. Elected members will be asked to provide political direction early to individual reviews as appropriate.

NCC’s approach to 17A reviews is based on the following objectives:

· To maximise opportunities to improve the delivery of services to our residents, ratepayers and visitors (including considering shared service opportunities with other councils).

· To prioritise NCC resources to reviewing services and contracts with the greatest potential for cost effectiveness gains.

· To scale the scope of the review to match the size of the service and the issues and anticipated benefits.

· To ensure compliance with the legislation.

· To keep excellent records of the decisions made and reviews undertaken to support the ongoing life of the programme.

We will optimise and collaborate with the reviews being undertaken by other Councils in the region where possible, and we will be cognisant of central government lead legislation changes eg Havelock Water Inquiry and potential impacts to the way in which we deliver services. We will continue to work as a region through initiatives identified through the Hawkes Bay Shared Services work programme.

3.5 What needs to be reviewed?

Section 17A uses the same terminology as section 10 in the LGA, that is to say it refers to the local infrastructure, local public services, and the performance of regulatory functions. The focus is therefore on public-facing services.

Back-office services, such as IT, debt collection (or other more transactional elements of the finance function) will be addressed through internal business excellence initiatives and therefore do not need to be considered within the 17A review programme.

There are two exceptions to reviews under the legislation:

· Delivery arrangements that are bound by legislation, contract or binding agreement so that they cannot be changed within the next two years.

· If the local authority is satisfied that the potential benefits do not justify the cost of the review.

In determining whether the potential benefits justify the cost of the review, Officers have undertaken some analysis in order to identify an appropriate point at which Council could consider not undertaking reviews. We are of the view that that any service, contract, or other agreement that has a total value of $500,000 or less (total budgeted operational and capital expenditure) should not be reviewed. In the absence of other factors (e.g. high probability of significant savings, high public interest in the service), it will be assumed that reviewing a service below this size is unlikely to generate savings that outweigh the costs.

Once conducted a section 17A review has a statutory life of up to six years. This means that each service must be reviewed at least once every six years – unless one of the other events that trigger a review comes into effect.

There are two statutory triggers for a review under the legislation:

· When a local authority is considering a significant change to a level of service^{^[2]}.

· When a contract or other binding agreement is within two years of expiration.

Decision to review

To determine which services require a review, each service was assessed using the following criteria:

· Was the last service review more than six years ago?

· Does the contract expire in the next two years?

· Is a change in level of service proposed?

· Does the potential benefit of the review justify the cost of the review (total value <$500,000)?

· Can the contract (or other agreement) be changed in the next six years?

· Is there any other reason why the service review should not be undertaken?

NCC has approximately 72 activities. Applying the above criteria, 30 services fall within the scope of the legislation. Some services have been combined for the purposes of review, reducing the aggregated number of reviews to be undertaken to 27. Please see Attachment 1 for a list of the 27 reviews to be undertaken.

3.6 What are the priorities for review?

It is necessary to prioritise each review in order to manage NCC’s limited resources and to ensure those reviews with the greatest potential for improvement are reviewed first.

Reviews need to be decided and prioritised on a six year cycle. However, it is likely that within that time priorities will change as either triggers or exceptions to the legislation come into effect arising from decisions of council, and/or operational management of capital, assets and services. Therefore NCC will review the work programme annually.

Regional collaboration is an opportunity that may present itself as the individual reviews are undertaken, but as each council has their own priorities and timeframes, it is not a driver for prioritising reviews. Options for shared services will be included as part of each review process.

Prioritisation of service delivery reviews

To determine the priority of reviews, each service was assessed using the following criteria:

· What issues or opportunities have been identified (including opportunities for significant savings, for shared reviews or shared services)?

· What is the impact of the service?

· Is the service achieving set or expected levels of service?

· What is the cost of the service (operating and capital expenditure)?

· Are alternative methods for service delivery possible?

· What is the level of public interest in the service?

The scores and weightings of each criteria determined the priority of each review. As a result, five services were rated high priority, 15 services rated medium priority and seven services rated low priority.

Scheduling of reviews will take into account the priority, as well as other factors, including opportunities for shared reviews and/or services with other councils, resourcing and capability considerations. The Senior Leadership Team (‘SLT’) have proposed a timetable of reviews for 2017 to 2020. See Attachment 1 for the schedule of reviews.

3.7 How will reviews be resourced?

The resourcing of any review will be a decision for the responsible Director in consultation with SLT and the Chief Executive. Resourcing could be as small as a single person (such as a service manager) or as large as a multidisciplinary team. Where possible, internal resources will be used, however, NCC does not have the capacity to undertake all of the required section 17A work. There may also be further benefits to be gained from the use of appropriately qualified external advisory resources. Use of internal staff or external services will be dependent on the scale and complexity of the review.

Scaling

NCC will take a scaled approach to section 17A reviews as follows:

· Level 1 – a minimal review is carried out focusing on easy implementation and quick wins. This will most likely be small in scale and conducted using in-house resources. An example of level 1 is a contract review.

· Level 2 – a medium sized review is carried out. This review may involve more complex efficiency gains and may involve some change in delivery mechanism, governance or funding.

· Level 3 – a significant review is carried out. It is likely to be a complex, multi-party review and may result in substantive governance and/or funding changes.

3.8 What should reviews focus on?

Section 17A requires consideration of the following options:

· Funding, governance and delivery by NCC;

· Responsibility for funding and governance is undertaken by NCC and delivery is undertaken by another local authority;

· Responsibility for funding and governance is undertaken by NCC and delivery is undertaken by a CCO wholly owned by NCC;

· Responsibility for funding and governance is undertaken by NCC and delivery is undertaken by a CCO, where NCC is a part owner (the other owner or owners might be a local authority or other organisation);

· Responsibility for funding and governance is undertaken by NCC and delivery is undertaken by some other person or agency (such as a private or community sector agency);

· Responsibility for funding and governance is delegated to a joint committee or other shared governance arrangement and delivery is undertaken by some other person or agency; and

· Any other reasonably practicable option for funding, governance and delivery.

Opportunities for improving performance

17A reviews should consider and report on options for generating efficiency gains or improving our performance even if no change in funding, governance and delivery is proposed. This is consistent with NCC’s focus on business excellence. It ensures efficiency across the 17A and business excellence work programmes. It also minimises the disruption of too frequent reviews, which can unsettle teams.

3.9 Significance and Consultation

While local authorities are not required to engage with the community when undertaking 17A reviews, obligations to engage may exist where levels of service are being changed, or should options such as establishment of a CCO be mooted. The Significance and Engagement Policy provides guidance on consultation requirements.

Regardless of any obligations to engage, NCC considers that it would be beneficial to the reviews to convene a community focus group to consult with when developing options for service funding, delivery or governance. The use of a focus group or any other form of consultation should be identified at the scoping stage of a review and utilised where appropriate

Any government led legislation/governance changes may not be subject to our normal consultation processes.

2.0 Implications

Financial

There will be direct financial costs associated with the undertaking of section 17A review work. NCC has conservatively budgeted $250,000 over three years, with some ongoing provision in order to undertake the work.

It is noted that, depending on what the analysis finds, and what decision are made by NCC, the work proposed should lead to savings in costs to Council or ratepayers/service users and/or gains in service quality and consistency.

Social & Policy

None

Risk

None

2.1 Options

Council is required to undertake the work specified in section 17A LGA. To that extent, there are no substantive options with regard to undertaking these reviews.

Council can vary the priorities for the work, but based on discussions between the Senior Leadership Team, the timeline for reviews set out in Attachment 1 is recommended.

2.2 Development of Preferred Option

N/A

3.6 Attachments

a Attachment 1: Timeline for 17A reviews ⇩

Finance Committee – 14 June 2017 – Open Agenda

Hawke’s Bay Airport Limited

Statement of Intent

For the year ended 30 June 2018 and the two following years.

1.0 Governance

Governance sits with the Board of Directors of Hawke’s Bay Airport Limited, which is responsible for the strategic and overall direction of the organisation. Directors are appointed by the company’s shareholders; the Napier City Council (26%), Hastings District Council (24%) and the Crown (50%).

The Board has four Directors, two of whom are appointed by the Napier City Council and the Hastings District Council and two whom are appointed by the Crown. The Board meets regularly with Management to review the company’s performance and provides quarterly, half yearly and annual business performance reports to shareholders.

2.0 Nature and Scope of Activities

2.1 Mission Statement

The mission of Hawke’s Bay Airport Limited is: -

· to provide convenient, safe and sustainable services and facilities for airlines, air travellers, employees, our community of tenants, contractors and all other visitors to the airport

· to support regional economic development through the provision of strategic infrastructure

· to generate appropriate returns on assets employed and shareholder’s equity

· to position the business for growth and embrace collaboration and strategic alliances with others

2.2 Vision Statement

· Our vision is to be a welcoming gateway to Hawke’s Bay and to be recognised as a major contributor to the economic development and wellbeing of the Hawke’s Bay community.

2.3 Values

· We are customer focused

· We are commercially driven

· We are committed to safety and security

· We think strategically and plan for the long term

· We work as a team

· We act with integrity

2.4 Strategy

Our Strategic Imperative: To maintain operational capability in an efficient, safe and sustainable manner, position the business for the future, achieve growth across all revenue streams and manage risk.

Our Strategic Objectives:

1. Operate an airport that is fit for purpose.

2. Preserve the Airport’s ability to operate and maintain a high level of security consciousness and awareness across the Airport community.

3. Operate HBAL as a successful business, growing revenue, profitability and shareholder value on an annual basis.

4. Generate additional revenue from non-aeronautical activities.

5. Proactively manage health and safety risks and provide a safe, healthy and thriving environment through consultation, co-operation and co-ordination between persons conducting a business or undertaking (PCBU) within the Airport community.

6. Operate the Airport in a socially and environmentally sustainable manner.

7. Maintain and enhance business-critical infrastructure, services and facilities for all users of the Airport.

8. Realise the long-term value of the business park.

HBAL will pursue the following strategy:

1. Redevelop and construct an efficient and fit for purpose terminal building and Airport Rescue Fire Service Building.

2. Maintain operational capability with minimal disruption throughout the terminal development project.

3. Rezone and freehold the Business Park land and minimise the land development costs.

4. Continue to strengthen our relationships with all operators of air services and with all tenants and prospects.

5. Improve the security culture and consciousness at the Airport

6. Improve the customer experience at the Airport for all travellers, meeters and greeters.

7. Maintain active membership and contribution to New Zealand Airports Association.

8. Maintain effective engagement and relationships with key stakeholders and the wider stakeholder community.

9. Form strategic alliances and collaborate with other airports.

10. Investigate potential for JV partnerships to develop the airport land.

3.0 Key Objectives: Business Plan FY 2017/18

ACTIVITY	OUTCOME	TARGET DATE
Operate a successful business	Achieve Financial Targets	30/06/18
Appropriate Infrastructure	Effect CAPEX Investments	30/06/18
Health & Safety focus	Continue to work toward zero harm	ongoing
Progress Terminal Redevelopment	Project complete	30/06/19
Strengthen Rescue Fire Station	Project complete	30/06/18
New Airport Entranceway	Project complete	30/06/18
Business Park rezoned	Project complete	30/06/18
Key Customer Relationships	Meetings with key customers	Ongoing
Consolidate waste and recycling management	Bi-annual audit of consumption	June, December
Review Strategic Plan	Current, Refreshed Strategic Plan	30/06/18

3.1 Financial Performance Targets

The performance targets include continued growth in passenger numbers and increases in landing charges, rental and concession income. Significant further capital expenditure is proposed which will increase interest and depreciation expenses and the gearing ratio over the next 3 financial years.

Note 1: Airside Revenue includes aircraft landing and parking charges

Note 2: Landside Revenue includes car parking, rents, concessions, advertising and other income Note 3: Total Assets is the total of all current and non-current assets

Note 4: Shareholders Funds is the total of share capital and retained earnings

3.2 Capital Expenditure

4.0 Accounting Policies

The accounting policies adopted by HBAL are consistent with New Zealand’s International Financial Reporting Standards and generally accepted New Zealand accounting practices. The policies are included within HBAL’s Annual Report that is available on the Company’s website; www.hawkesbay-airport.co.nz/about/company/annual report

5.0 Distributions

The Board has considered an alternative dividend policy based on an agreed proportion of free cash flow measure, rather than net profit after tax (NPAT). However, the Board has decided to retain its current dividend policy of 40% NPAT. Had the proportion of free cash flow measure been adopted as policy, no free cash would have been available for distribution to Shareholders during the period of significant capital expenditure in our infrastructure. Retention of the current dividend policy (40% NPAT) will enable annual dividends to be paid to shareholders throughout the capital expenditure programme.

6.0 Information to be provided to Shareholders

Shareholders will receive:

· An annual report including audited financial statements within 3 months of balance date.

· A 6-monthly report including non-audited financial statements within 2 months of balance date.

· A Quarterly Report within 2 months of the end of each quarter.

· A Statement of Intent submitted for shareholders’ consideration in accordance with the Local Government Act 2002

· Other interim financial reports as agreed with the shareholders

· Reports on matters of material interest to shareholders. Shareholders will continue to be kept informed of key developments, consistent with the Crown’s ‘No Surprises’ policy.

7.0 Acquisition Procedures

The acquisition of any interest in a company or organisation will only be considered when it is consistent with the long-term commercial objectives of the company. Any material acquisition will be the subject of consultation with shareholders.

Major transactions as defined by the Companies Act 1993 will require shareholder approval.

8.0 Compensation Sought from Local Body Shareholders

At the request of the shareholders the company may undertake activities that are not consistent with normal commercial objectives.

The company may seek, in these circumstances, a specific subsidy to meet the full commercial cost of providing such activities, however none are contemplated in the planning period.

9.0 Estimate of Commercial Value

The net book value of Shareholders investment in the company as at 31 December 2016 is $28,466,588.

The non-current assets owned by HBAL were revalued at 30 June 2015 to their current market value resulting in an uplift in value of $9.5 million (net of the deferred tax impact). The individual assets and liabilities included on the balance sheet at 30 June 2016 are therefore not considered by the Directors or Management to be materially different from the current market value.

HBAL will continue to undertake a revaluation approach to its assets on a regular cycle of every 3 years or when there has been a significant change in the market, to consider the gap between current book values of the assets and liabilities versus the commercial value of the business.

Tony M Porter

Chairman

Hawke’s Bay Airport Limited

2 June, 2017

PUBLIC EXCLUDED ITEMS

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

AGENDA ITEMS

1. Hawke's Bay Airport Limited - Report to Shareholders

2. Bad Debt Write Off

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

GENERAL SUBJECT OF

EACH MATTER TO BE CONSIDERED

REASON FOR PASSING THIS RESOLUTION IN RELATION TO EACH MATTER

GROUND(S) UNDER SECTION 48(1) TO THE PASSING OF THIS RESOLUTION

1. Hawke's Bay Airport Limited - Report to Shareholders

7(2)(h) Enable the local authority to carry out, without prejudice or disadvantage, commercial activities

48(1)A That the public conduct of the whole or the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist:
(i) Where the local authority is named or specified in Schedule 1 of this Act, under Section 6 or 7 (except 7(2)(f)(i)) of the Local Government Official Information and Meetings Act 1987.

2. Bad Debt Write Off

7(2)(a) Protect the privacy of natural persons, including that of a deceased person

7(2)(h) Enable the local authority to carry out, without prejudice or disadvantage, commercial activities

NAPIER CITY COUNCIL

Civic Building

231 Hastings Street, Napier

Phone: (06) 835 7579

www.napier.govt.nz

Finance Committee

Open

MINUTES

Meeting Date:	Wednesday 3 May 2017
Time:	3pm-3.20pm
Venue:	Main Committee Room 3rd floor Civic Building 231 Hastings Street Napier

Present:	Councillor Wise (In the Chair), Mayor Dalton, Councillor Boag, Dallimore, Hague, Jeffery, McGrath, Price, Tapine, Taylor, White, and Wright
In Attendance:	Chief Executive, Director Corporate Services, Director Infrastructure Services, Director Community Services, Director City Strategy, Manager Communications
Administration:	Governance Team

Finance Committee – 14 June 2017 – Open Agenda

Apologies

Apologies

Committee's Recommendation

Councillors Price / Wright

That the apology from Councillor Brosnan be accepted.

CARRIED

CONFLICTS OF INTEREST

Nil

Public forum

Nil

Announcements by the Mayor

Nil

Announcements by the Chairperson

Nil

Announcements by the Management

Nil

Confirmation of Minutes

Councillors Taylor / Wright

That the Minutes of the meeting held on 22 March 2017 were taken as a true and accurate record of the meeting.

CARRIED

Councillors Price / McGrath

That the Minutes of the meeting held on 29 March 2017 were taken as a true and accurate record of the meeting.

CARRIED

Agenda Items

1. HB LASS Limited - Draft Statement of Intent

*Type of Report:*	Operational and Procedural
*Legal Reference:*	Local Government Act 2002
*Reporting Officer/s & Unit:*	Adele Henderson, Director Corporate Services

11.1 Purpose of Report

To provide the draft Statement of Intent 2017/18 for Hawke’s Bay Local Authority Shared Services Limited (HB LASS Ltd) to Council for its consideration as part of the reporting requirements for council-controlled organisations.

At the Meeting

In response to queries from Councillors, it was clarified that:

· The HB LASS consists of Chief Executives and an external Chair.

· The HB LASS can bring in outside expertise as it considers appropriate.

· Outside expertise may be called on during the discussions on Section 17A review requirements, in particular on asset management and infrastructure matters.

· Section 17A reviews are a requirement under the Local Government Act and require local authorities to assess their current service provisions, and opportunities for finding efficiencies.

· There are a number of informal and other shared services which are not specifically touched on within the statement of intent document, but are which are captured in council’s annual report.

· Hastings District Council, Hawke’s Bay Regional Council and Wairoa District Council have all approved the HB LASS statement of intent without amendments.

Committee's Recommendation

Councillor Hague / Councillor Jeffery

That Council:

a. Receive the Draft Statement of Intent for 2017/18 for HB LASS Limited (HB LASS Ltd) and provide any feedback to the HB LASS board by 31 May 2017.

CARRIED

2. Quarterly Report to 31 March 2017

*Type of Report:*	Operational
*Legal Reference:*	Local Government Act 2002
*Document ID:*	347953
*Reporting Officer/s & Unit:*	Mary Quinn, Senior Management Accountant Caroline Thomson, Chief Financial Officer

2.1 Purpose of Report

To consider the Quarterly Report on performance by Activity Group for the period 1 January 2017 to 31 March 2017 and the Health and Safety Report to March 2017.

At the Meeting

The Director Corporate Services gave a brief overview of the key highlights of the third quarter including that:

· The Seawall project has been completed and well received.

· The Napier Conference Centre was completed and successfully relaunched as an events venue.

· Online building consents are now available.

· Council’s free Wi-Fi offering was extended into new areas.

· Earthquake strengthening of the Ivan Wilson pool has been completed.

· Marine Parade development continued.

· Tourism areas performed better than expected so income from the quarter was higher than forecast.

In response to a questions from Councillors, it was clarified that:

· The Infrastructure Services group are working closely with contractors on the Marine Parade development to re-establish a new timeframe for completion of the works.

· Improvements have already been made to the structure of our contract template, and procurement process to ensure that council have the ability to enact greater penalties for breach of contract.

· The Infrastructure Services group are working with the contractor of the Embankment Bridge project to clarify the scope and specifications of the work.

· Local Marae are included in Civil Defence and emergency management planning including community resilience considerations.

· While the audit of council’s building warrants of fitness has been behind schedule in the third quarter, it is still anticipated that this work will be completed by the end of the financial year.

· Action required: Director Corporate Services to provide Councillors financial savings as a result of the decision not to consult on council’s annual plan.

Committee's Recommendation

Councillor Taylor / Councillor Hague

That Council:

a. Receive the Quarterly Report for the period 1 January 2017 to 31 March 2017.

b. Receive the Health and Safety Report to March 2017.

CARRIED

3. Joint Waste Futures Project Committee - Terms of Reference

*Type of Report:*	Procedural
*Legal Reference:*	Local Government Act 2002
*Document ID:*	349973
*Reporting Officer/s & Unit:*	Deborah Smith, Governance Advisor

3.1 Purpose of Report

The purpose of this report is to obtain approval from Council for the amended Terms of Reference (ToR) for the Joint Waste Futures Project Steering Committee.

At the Meeting

In response to a question on what the key changes are between the revised TOR and the previous version, it was noted that the proposed changes are outlined in the report.

Committee's Recommendation

Councillors Dallimore / Tapine

That Council

a. Approve the updated Terms of Reference for the Joint Waste Futures Project Steering Committee.

b. Appoint Cr Brosnan as the third Napier City Council representative to the Committee.

CARRIED

4. Hawke's Bay Crematorium Committee - Minutes of Meeting 10 April 2017

*Type of Report:*	Information
*Legal Reference:*	Local Government Act 2002
*Document ID:*	350013
*Reporting Officer/s & Unit:*	Deborah Smith, Governance Advisor

4.1 Purpose of Report

To provide the minutes from the Hawke’s Bay Crematorium Committee to Council.

At the Meeting

No discussion was held.

Committee's Recommendation

Councillors Taylor / McGrath

That Council

a. Receive the draft minutes of the Hawke’s Bay Crematorium Committee from the meeting on 10 April 2017

CARRIED

5. Coastal Hazards Joint Committee - draft minutes 28 February 2017

*Type of Report:*	Procedural
*Legal Reference:*	Local Government Act 2002
*Document ID:*	350014
*Reporting Officer/s & Unit:*	Deborah Smith, Governance Advisor

5.1 Purpose of Report

To provide Council with the draft minutes from the meeting of the Coastal Hazards Joint committee on 28 February 2017.

At the Meeting

No discussion was held.

Committee's Recommendation

Councillors Dallimore / Jeffery

That Council

a. Receive the draft minutes from the Coastal Hazards Joint Committee meeting held on 28 February 2017.

CARRIED

PUBLIC EXCLUDED ITEMS

Councillor Wright / Councillor Hague

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

1. Risk Update

CARRIED

GENERAL SUBJECT OF

EACH MATTER TO BE CONSIDERED

REASON FOR PASSING THIS RESOLUTION IN RELATION TO EACH MATTER

GROUND(S) UNDER SECTION 48(1) TO THE PASSING OF THIS RESOLUTION

1. Risk Update

7(2)(f)(ii) Maintain the effective conduct of public affairs through the protection of such members, officers, employees and persons from improper pressure or harassment

The meeting concluded at 3.20pm.

APPROVED AND ADOPTED AS A TRUE AND ACCURATE RECORD OF THE MEETING

CHAIRPERSON:_____________________________

DATE OF APPROVAL:____________________

[1] Cost-effectiveness can be defined as the lowest cost consistent with the achievement of the objectives for providing the service. Cost effectiveness is different from least cost. Cost considerations should include cost savings (i.e. financial savings), improved resource usage (i.e. efficiency gains), and increased revenues.

[2] A significant change to levels of service includes starting a new service, as well as a significant decrease or increase in levels of service. External factors, such as development in the legislative or policy environment, might also significantly impact on levels of services (e.g. new regulation on water quality). Refer to the Significance and Engagement Policy for further guidance.

Council Members	Councillor Wise (In the Chair), Mayor, Councillors Boag, Brosnan, Dallimore, Hague, Jeffery, McGrath, Price, Tapine, Taylor, White and Wright
Officer Responsible	Director Corporate Services, Adele Henderson
Administrator	Governance Team

Meeting Date:	Wednesday 14 June 2017
Time:	3pm
Venue:	Main Committee Room 3rd floor Civic Building 231 Hastings Street Napier

*Type of Report:*	Legal
*Legal Reference:*	Local Government Act 2002
*Document ID:*	358905
*Reporting Officer/s & Unit:*	Adele Henderson, Director Corporate Services