Finance Committee

Open Agenda

 

Meeting Date:

Tuesday 4 September 2018

Time:

3.00pm

Venue:

Council Chamber
Hawke’s Bay Regional Council
159 Dalton Street
Napier

 

 

Committee Members

Councillor Wise (In the Chair), Mayor Dalton, Councillors Boag, Brosnan, Dallimore, Hague, Jeffery, McGrath, Price, Tapine, Taylor, White and Wright

Officer Responsible

Director Corporate Services

Administration

Governance Team

 

Next Finance Committee Meeting

Tuesday 16 October 2018

 

 


Finance Committee - 04 September 2018 - Open Agenda

ORDER OF BUSINESS

Apologies

Councillor Taylor

Conflicts of interest

Public forum

Dorothy Pilkington – Options for consultation for War Memorial features.

Craig Morley – Memorial design; substitute option for removed annex design.

Announcements by the Mayor

Announcements by the Chairperson

Announcements by the management

Confirmation of minutes

That the Minutes of the Finance Committee meeting held on Tuesday, 24 July 2018 be taken as a true and accurate record of the meeting........................................................................................... 101

Agenda items

1      Joint Waste Management and Minimisation Plan ........................................................... 3

2      Joint Waste Futures Steering Committee Unconfirmed Minutes.................................... 47

3      Coastal Hazards Joint Committee Membership............................................................. 54

4      2018 NRB Survey......................................................................................................... 59

5      Investment Property Portfolio Policy.............................................................................. 90

6      Sale of Endowment Land.............................................................................................. 97  


Finance Committee - 04 September 2018 - Open Agenda                                                                                                                                         Item 1

Agenda Items

 

1.    Joint Waste Management and Minimisation Plan

Type of Report:

Operational and Procedural

Legal Reference:

Waste Minimisation Act 2008

Document ID:

619564

Reporting Officer/s & Unit:

Rhett van Veldhuizen, Waste Minimisation Lead

 

1.1   Purpose of Report

The purpose of this report is to obtain a decision from the Council on the adoption of the Joint Waste Management and Minimisation Plan (Plan) 2018-2024.

 

Officer’s Recommendation

The Finance Committee:

a.     Adopt  the Joint Waste Management and Minimisation Plan 2018-24 in accordance with section 43 of the Waste Minimisation Act 2008 without further amendment which revokes the previous Joint Waste Management and Minimisation Plan 2012-2018.

 

b.     Delegate to the Joint Council Waste Futures Project Steering Committee the authority to implement updates and changes that may be required due to wider environmental factors, while keeping within the intent of the strategy.

 

c.     Acknowledge the recommendation from the Joint Council Waste Futures Project Steering Committee     that additional resource is urgently required to implement the Waste Management and Minimisation Plan.

 

 

Chairperson’s Recommendation

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

1.2   Background Summary

The Council is required to give effect to the purpose of local government as prescribed by Section 10 of the Local Government Act (LGA) 2002. That purpose is to meet the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost–effective for households and businesses. Good quality means infrastructure, services and performance that are efficient and effective and appropriate to present and anticipated future circumstances.

The objective of this decision relevant to the purpose of local government is to fulfil the statutory requirements of the Waste Minimisation Act 2008 (the Act) requiring a current Plan and LGA 2002 in regard to consultation and decision making.

The Act requires territorial authorities (TA’s) to conduct a waste assessment and review their Plan every six years.

The Act enables Councils to use various tools to influence, promote and implement measures to manage and minimise waste. The Plan is intended to be the guiding document for councils to promote and achieve effective and efficient waste management and minimisation within their districts.

A Plan should contain a summary of objectives, policies and targets for waste management and minimisation. The Plan should clearly communicate how the Councils will deliver on these objectives.

A Plan must have regard to the waste hierarchy (a list of the six most effective ways to control waste in order of their environmental acceptability), the New Zealand Waste Strategy, and the joint council’s most recent Waste Assessment (WA).

Plans must be reviewed at least every six years. Not keeping to the statutory timeframe for a Plan review may result in the council’s waste levy funding payments being withheld under section 33 of the Act. The current Joint Plan was required to be reviewed by 30 June 2018.  The Ministry for the Environment have been informed of our delay as a result of the high number of submissions received from the consultation process and were understanding, however there are financial penalties (explained in paragraph 6.9) if the Plan is not adopted before 30 September 2018.  Hastings District Council received $300,777.00 broken into four quarterly payments last financial year and if the plan is not adopted prior to the next quarterly payment the Act requires the Minister to withhold payment, which has been done in other areas in the past.

The Plan is scheduled to be adopted by Hastings District Council on 30 August 2018.

The New Zealand recycling market is currently facing challenges created by China’s policy decision to stop importing plastic and paper/cardboard for recycling as they have sufficient supply within the Chinese market to meet their demands.  Local Hawke’s Bay contractors are currently experiencing difficulties in selling plastics collected for recycling. Officers are in discussions with these businesses to explore all possible options.  The Hawke’s Bay is fortunate to have a local paper/cardboard recycling company that has capacity to continue taking our material for recycling.

Council services, initiatives and education need to be developed and implemented to ensure our local recycling industry receive valuable products for recycling.

1.3   Issues

The following key points are the ‘collective’ outcome after consideration of the written, verbal and late submissions received.

·     Work collaboratively with the waste collection industry to set up an incentive scheme/s that will strongly encourage people to separate out their green waste to ensure it is composted either at home or commercially.

·     Roll out a major public engagement and education programme explaining the best ways to deal with rubbish, recycling and waste minimisation opportunities.

·     Consider a local waste levy to help pay for initiatives identified in the action plan.

·     Set up a contestable fund to provide seed support monies for waste reducing initiatives.

·     Engage closely with iwi to embed the principles of Kaitiakitanga (guardianship) throughout the Joint Plan.

·     Work with commercial, industrial and retail businesses to encourage recycling.

·     Investigate methods for better dealing with problem products.

·     Continue to lobby central government on the need for priority products and product stewardship schemes.

·     Improve data collection and provide results to the public.

·     Bylaw reviews to ensure alignment with the Joint Plan.

·     Consider forming one combined Hastings and Napier waste/waste minimisation team.

·     Provide a small (80L) general rubbish bin to every home in current council collection areas, with Hastings semi-rural (close to town), also considered for the service. Initially weekly rubbish collection with a possible move to fortnightly as people become more skilled at waste minimisation.

·     Provide recycling containers to ensure plastics, paper and glass are kept as clean as possible to enable them to be recycled; and moving Napier from a fortnightly to weekly recycling collection.

1.4   Significance and Engagement

In conjunction with Hastings District Council, Napier City Council implemented an extensive campaign to inform the Hawke’s Bay community of the opportunity to review the draft Joint Plan and to submit during the consultation via an online or written submission. The consultation was undertaken between 19 February and 23 March 2018.

The process followed for the draft Joint Plan consultation satisfies the framework in sections 82 and 83 of the LGA 2002 which provides the principles for consultation.

Four days of hearings were held the week of 18 June 2018. Submissions received were heard, or read and considered before alterations were made based on these submissions. All changes recommended at the conclusion of these hearings have been incorporated into the final version of the Joint Plan (Attachment A).

The Medical Officer of Health was specifically consulted with as part of the consultation process as required by Section 51 of the Act.  The Medical Officer of Health submission (#10083) will be included in the documentation that forms the final Joint Plan, including the waste assessment documents.

1.5   Implications

Financial

See Risk below.

Social & Policy

The Joint Plan consultation process set about obtaining community views and preferences and these were considered at the hearings meeting in June prior to the Joint Council Waste Futures Project Steering Committee (the Committee) agreeing on recommended changes to the draft Joint Plan.  More information on the Committee and the time line of work to date is shown at Attachment B.

Officers have made the changes to the Joint Plan as instructed by the Committee.

The Committee is satisfied that the Joint Plan will provide a clear direction for waste minimisation and recommends both constituent Councils adopt the Joint Plan with no changes.

Significant changes arising from this Joint Plan adoption will need to be incorporated into each Council’s LTP or Annual Plan depending on timeframes.

Risk

There is an option for Council to refer the Joint Plan 2018 – 2024 back to the Committee for further work, with clear recommendations.

However, the Council should be aware of a territorial authorities’ requirements to spend the levy to promote or achieve waste minimisation.  Plans prepared by each territorial authority set out how the levy will be used.

Section 33 of the Act states the secretary must retain levy money instead of paying territorial authority in certain situations. One situation being at the time the payment is to be made, the territorial authority has not adopted a waste management and minimisation plan; or reviewed its waste management and minimisation plan under section 50, if a review was required before the time for payment.

This decision would be vulnerable to legal challenge should the Council depart from the recommendation from the Committee, as Council was not involved in the hearings process.

1.6   Options

The options available to Council are as follows:

a.     Adopt the Joint Plan based on the recommendation from the Committee following the consideration of all submissions at the hearings meeting in June 2018. This option includes revoking the previous Joint Plan 2012 – 2018.

b.     Not adopt the new Joint Plan and send it back to the Committee.

 

Only two options are available to the Council as Council was not involved in the consultation and hearings process and are unable to set policy outside of this process.

 

The longterm plan (LTP), Annual Plans and the Waste Management and Minimisation Plan are to be aligned. The LGA 2002 requires that every LTP contain a summary of the council’s Waste Management and Minimisation Plan. The LTP contains details of funding for Council provided waste services and project, which Council is committed to provide to the community.

1.7   Development of Preferred Option

The preferred option for the Council is Option 1, to adopt the Joint Plan with no amendments as the Joint Plan has been the subject of a robust and thorough public consultation process across both communities as recommended by the Committee.

 

The Joint Waste Assessment and subsequent Joint Plan has been completed in accordance with the WMA 2008 and the Ministry for the Environment Plan guidance document.

 

The Joint Plan was peer reviewed by an independent consultant prior to consultation to ensure all requirements were met.

 

The public consultation was undertaken in line with sections 82 and 83 of the LGA 2002.

 

An annual report will be provided to inform Council on implementation progress and any adaptations.

 

1.8   Attachments

a     Waste Management and Minimisation Plan 

b     Supporting Information    


Finance Committee - 4 September 2018 - Attachments

 

Item 1

Attachments a

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Finance Committee - 4 September 2018 - Attachments

 

Item 1

Attachments b

1.                                                                                                     

Supporting information for the

Waste Management and Minimisation Plan Report,

30 August 2018

 

Waste Management and Minimisation Plans (WMMP)

Section 43 of the Waste Minimisation Act 2008 (Act) states that a WMMP must provide:

(a)       objectives and policies for achieving effective and efficient waste management and minimisation within the territorial authority’s district

(b)       methods for achieving effective and efficient waste management and minimisation within the territorial authority’s district, including -

(i)        collection, recovery, recycling, treatment, and disposal services for the district to meet its current and future waste management and minimisation needs (whether provided by the territorial authority or otherwise); and

(ii)        any waste management and minimisation facilities provided, or to be provided, by the territorial authority; and

(iii)       any waste management and minimisation activities, including any educational or public awareness activities, provided, or to be provided, by the territorial authority.

(c)       how implementing the plan is to be funded.

(d)       if the territorial authority wishes to make grants or advances of money in accordance with section 47, the framework for doing so.

1.2      Section 33 of the Act which states:

Secretary must retain levy money instead of paying territorial authority in certain situations

(1) Despite section 31, the Secretary must retain levy money payable to a territorial authority if,—

(a) at the time the payment is to be made, the territorial authority has not—

(i)      adopted a waste management and minimisation plan; or

(ii)     reviewed its waste management and minimisation plan under section 50, if a review was required before the time for payment; or

(b) the Minister has directed the Secretary to retain the payment under section 37.

(2) The Secretary must spend any money retained under subsection (1) in accordance with section 30(c).

 


 

Waste Assessment

The waste assessment plays a key role in determining the content of a WMMP. TAs are required to conduct this assessment before reviewing their WMMP and to have regard to it in the preparation of the plan.

The purpose of the waste assessment is to provide the necessary background information on waste and diverted materials that will enable a territorial authority to determine a logical set of priorities and activities.

The waste assessment establishes the planning foundations for the WMMP by describing the waste situation, setting the vision, goals objectives and targets for the district, and developing options for meeting future demand. Most of the information presented in a waste assessment will be summarised in the final WMMP.

The waste assessment provides information about the waste situation in the TA, having regard to the information considerations below. The information should include data about:

• current and future projected waste quantities

• composition

• source and destination of waste

• diverted materials.

 

Joint Council Waste Futures Joint Project Steering Committee

By agreement of the local authority members, the Joint Council Waste Futures Joint Project Steering Committee was established under clause 30A of Schedule 7 of the Local Government Act 2002. The committee comprises of three councillors from each Council.

The purpose of the joint committee is to:   

a)        Approve the content of the draft Joint WMMP for public consultation.

b)        Hear submissions and make recommendations to the constituent Councils on the draft Joint WMMP.

c)        Be responsible for overseeing, supporting, monitoring and reporting progress toward achieving the intent of Joint WMMP. As well as representing the interests of participatory Councils in the WMMP.

d)        Review the Joint WMMP at least every six years to meet the requirements of the Act.

The joint committee will have responsibility and authority to:

a)        Accept and hear submissions on the Joint WMMP, and report back to the individual councils on an as required basis.

b)        Make recommendations to each participant council on the Joint WMMP.

c)         Monitor performance and progress to give effect to the purpose of the Joint WMMP and to make recommendations to the constituent councils accordingly.

 

Joint WMMP timeline to date

The Council’s draft Joint WMMP was adopted on 20 December 2017. A comprehensive community consultation was carried out in early 2018.  A total of 6,165 submissions were received.

All submissions were considered during the four days of hearings as well as an officer’s report covering the statistical information regarding the submissions.  The hearings were held from Monday 18 to Thursday 21 June 2018.  Fifty one (51) submitters spoke to their submissions.

All WMMPs are subject to the requirements of the Local Government Act’s (LGA) special consultative procedure, a requirement also set out in the WMA Part 4, section 44 and section 50(3) which outlines consultation requirements for preparing new plans.

At the Committee meeting dated 18 June 2018 (concluding 21 June) the Committee were satisfied that all the relevant provisions contained within the Local Government and WMA regarding the preparation of the Joint WMMP were met.

The final step in the WMMP process is adoption of the new Joint WMMP by both the Hastings District Council and Napier City Council. 

Significant changes arising from the Joint WMMP review will need to be incorporated into each Council’s LTP(s) or Annual Plan depending on timeframes.

The public consultation methodology and program was co-developed by Hastings District and Napier City Council marketing and communication teams.

Key Dates

Date(s)

Activity

October 2016

Work began on collating the Joint Waste Assessment

05 July, 02 August, 14 September and 12 October 2017.

Joint Council Waste Futures Project Steering Committee meetings and workshops to draft the Joint WMMP

22 November 2017

Waste Futures Committee – recommend adoption of draft Joint WMMP

14 December 2017

HDC Council Meeting to adopt draft Joint WMMP for consultation

20 December 2017

NCC Council Meeting to adopt draft Joint WMMP for consultation

19 February to 23 March 2018

Public Consultation

22 February 2018

Joint Committee meeting with waste operators

26 March to  25 May 2018

Compilation of Submissions

18 to 21 June 2018

Hearings of Submissions

25 July 2018

Waste Futures Committee recommend adoption of final Joint WMMP

30 August 2018

HDC meeting to adopt Joint WMMP

18 September 2018

NCC meeting to adopt Joint WMMP

 


Finance Committee - 04 September 2018 - Open Agenda                                                                                                                                         Item 2

2.    Joint Waste Futures Steering Committee Unconfirmed Minutes

Type of Report:

Information

Legal Reference:

N/A

Document ID:

618626

Reporting Officer/s & Unit:

Cheree Ball, Governance Advisor

 

2.1   Purpose of Report

To present to Council the unconfirmed minutes of the Joint Council Waste Futures Project Steering Committee meeting, held on 25 July 2018.

 

Officer’s Recommendation

The Finance Committee:

a.     Receive the unconfirmed minutes of the Joint Council Waste Futures Project Steering Committee meeting from 25 July 2018.

 

Chairperson’s Recommendation

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

2.2   Background Summary

The Joint Waste Futures Project Steering Committee met on 25 July 2018, the unconfirmed minutes are shown at Attachment A.

2.3   Issues

No issues.

2.4   Significance and Engagement

N/A 

2.5   Implications

Financial

N/A

Social & Policy

N/A

Risk

N/A

2.6   Options

The receive the unconfirmed minutes as attached.

 

2.7   Attachments

a     2018-07-25 Joint Council Waste Futures Project Steering Committee - unconfirmed minutes   


Finance Committee - 4 September 2018 - Attachments

 

Item 2

Attachments a

 


 


 


 


 


Finance Committee - 04 September 2018 - Open Agenda                                                                                                                                         Item 3

3.    Coastal Hazards Joint Committee Membership

Type of Report:

Operational

Legal Reference:

N/A

Document ID:

621251

Reporting Officer/s & Unit:

Deborah Smith, Acting Team Leader Governance

 

3.1   Purpose of Report

To seek approval from Council for the nomination of a further member of the Coastal Hazards Joint Committee.

 

Officer’s Recommendation

The Finance Committee:

a.     Approve the nomination of Cr Brosnan to the Clifton to Tangoio Coastal Hazards Strategy Joint Committee.

 

 

Chairperson’s Recommendation

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

3.2   Background Summary

The Clifton to Tangoio Coastal Hazards Strategy Joint Committee (the Committee) has requested that the number of council representatives on the Committee be increased as the Strategy moves into its implementation phase (refer Attachment A).

Subsequent to receipt of the attached letter, it has been agreed with the Chair of the Committee that one further Napier City Councillor will be nominated to join the Committee.

Councillors Jeffery and Dallimore are the current appointees from Napier. The Mayor has proposed that Cr Brosnan also now be appointed.

3.3   Issues

No issues.

3.4   Significance and Engagement

N/A

3.5   Implications

Financial

N/A

Social & Policy

N/A

Risk

N/A

3.6   Options

The options available to Council are as follows:

a.     To appoint Cr Brosnan as proposed.

b.     To discuss and agree a different nominee.

3.7   Development of Preferred Option

N/A

 

3.8   Attachments

a     Letter regarding Joint Committee Appointments   


Finance Committee - 4 September 2018 - Attachments

 

Item 3

Attachments a

 


 


 


Finance Committee - 04 September 2018 - Open Agenda                                                                                                                                         Item 4

4.    2018 NRB Survey

Type of Report:

Information

Legal Reference:

N/A

Document ID:

619834

Reporting Officer/s & Unit:

Steve Gregory, Transformation Lead   

 

4.1   Purpose of Report

To advise Council on the results of the NRB survey carried out in 2018.

 

Officer’s Recommendation

The Community Services Committee:

a.     Resolve that the 2018 NRB Survey results be received.

 

 

Chairperson’s Recommendation

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

4.2   Background Summary

As part of its ongoing commitment to actively seek the opinions and involvement of citizens, Napier City Council commissions the National Research Bureau Ltd to conduct a wide ranging survey of its citizens.  This is the 26th year Council has commissioned this survey. The results of the survey are used in the Council’s planning processes and are also included in the annual report performance results for the various significant activities.

 

The NRB Communitrak Survey is a scientifically prepared service based on a random probability sample. The 2018 survey is based on a sample of 450 interviews as previous years and includes, for the first time this year, 40 face-to-face interviews targeting younger audiences.  The sample gives a margin of error of ±5%. Weightings are then applied to the data to reflect the actual male/female/age/ethnic proportions in these areas. The survey results give comparisons with New Zealand as a whole and a Peer Group Average (similarly constituted Local Authorities). The results are analysed on the basis of the four wards; Ahuriri, Onekawa-Tamatea, Nelson Park and Taradale, in line with the electoral boundaries.

1.3   Overall Results

Overall satisfaction levels with various services and facilities are comparable with those in the 2017 survey though there are several areas that are unfavourable compared to the 2017 results. Public Gardens, Street Beds and Trees, Parks and Reserves and Refuse Collection remain the top scoring activities and the lower scoring activities are Water Supply, Swimming Pools, and MTG Hawke's Bay. As in past years Napier continues to score well in comparison to the New Zealand average and the peer group comparison.

The satisfaction levels have increased for Civil Defence Organisation (up 8%), and Swimming Pools (up 5%).

Decreases in satisfaction were with the Library Service (down 24%), Water Supply (down 22%), Town Planning (down 10%), Parking in the CBD of Napier City (down 12%), Public Toilets (down 7%), Roads (down 5%) and Refuse Collection (down 5%).

The significant decrease in the Library Service is because due to potential risks of a large earthquake, the Napier City Library closed in December 2017 and moved to a temporary location, MTG Hawke’s Bay, in February 2018. The main reason residents are not very satisfied with the Library Service are:

·     Temporary closure / unsafe / moved to Museum / preferred old building,

·     Too small / not enough space / room,

·     New location unsatisfactory,

·     Poor parking.

 

The decrease in water supply satisfaction is most likely a combination of chlorination and water supply shortages in the reservoirs. Chlorination commenced on 24 May 2017 due to the results of five water supply bacteriological compliance transgressions that occurred in the network early last year.

The decrease in satisfaction for parking in the CBD of Napier City results from residents view that there is a lack of parking, parking is too expensive and that there needs to be more free parking provided.

A summary of the results with comparisons to the previous years are included below.  These graphs give a good indication of trends which are important elements to the Council’s planning and budgeting process.

Other Specific Results

Council Policy and Direction

50% of residents have in mind a recent Council action, decision or management they approve of (down from 55% in 2017).

The main actions/decisions/management mentioned are:

·     Marine Parade development / upgrade, mentioned by 16% of all residents,

·     Appearance / clean and tidy / beautification / gardens, 5%

·     Parks / reserves / playgrounds / sportsfields, 4%

·     Roading / traffic improvements / footpaths, 4%

·     Provision of services / facilities / improvements, 4%.

 

57% of Napier City residents have in mind a recent Council action, decision or management they disapprove of (47% in 2017).

The main actions/decisions/management mentioned are:

·     Water issues / chlorination / the dam, mentioned by 17% of all residents

·     War Memorial, 11%

·     Swimming pool issue, 6%

·     Roading / roadworks / road safety / footpaths / traffic, 3%

·     More facilities needed / issues with public facilities, 3%

 

 

Rates Issues

Overall, 84% of residents are satisfied with the way rates are spent on the services and facilities provided by Council, with 86% of ratepayers being satisfied.  These readings are similar to the 2017 results.

The percentage not very satisfied (10%) compares favourably with both the Peer Group and National Averages and is on par with the 2017 reading. 

Main Sources of Information about Council

The main source of information is Newspapers (45%), Council Website (19%), Newsletters (9%) and Council’s Facebook page (10%).  Newspapers are down from 49% in 2017 though the big mover is Council’s Facebook page up from 4% in 2017

Of those who say Newspapers, HB Today ranked 85%, The Courier 46% and Napier Mail 22%. Compared to 2017 the movement from HB Today (up 8%), The Courier (down 25%) and Napier Mail (down 52%).

Consultation

When asked how much consultation they would like the Mayor and Councillors to have with its citizens, 57% opted for Council consulting with people on major issues only (62% in 2017), otherwise getting on with the job they are elected to do.  This percent is the same as the Peer Group and National Averages.

21% of Napier residents want Councillors to get on with the job, but keep the public informed, whilst 21% want consultation on most issues (17% in 2017).

Local Issues

74% of residents said there is a significant project or issue they would like Council to give priority to in the next ten years (62% in 2017). The five most mentioned major concerns about the community as a whole are:

·     Water supply, 28%

·     Swimming pools, 16%

·     Waste management / recycling services, 7%

·     Housing / land for housing, 5%

·     Infrastructure / services / facilities needed / need attention, 5%

 

4.3   Significance and Engagement

This is information only.

 

4.4   Attachments

a     2018 NRB Survey Results   


Finance Committee - 4 September 2018 - Attachments

 

Item 4

Attachments a

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Finance Committee - 04 September 2018 - Open Agenda                                                                                                                                         Item 5

5.    Investment Property Portfolio Policy

Type of Report:

Operational and Procedural

Legal Reference:

Local Government Act 2002

Document ID:

622351

Reporting Officer/s & Unit:

Bryan Faulknor, Manager Property  

 

5.1   Purpose of Report

To seek Council’s approval of a Policy relating to the Investment Property Portfolio (Leasehold Land).

The resolution of Council of 1 June 2018 (as outlined below) required that a divestment, and investment policy for the sale proceeds, is established and approved by Council resolution prior to the release of any leasehold land.

The attached policy has been developed in response to the resolution. It outlines the terms and conditions on which Council may sell non-strategic land included in the portfolio. The policy also provides guidance relating to the investment of the proceeds of sale.

 

 

Officer’s Recommendation

The Finance Committee:

a)   Approve the Investment Property Portfolio Policy

 

 

Chairperson’s Recommendation

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

5.2   Background Summary

After public consultation as part of Council’s Long Term Plan 2018-2028, Council resolved on 1 June 2018 and confirmed on 29 June 2018:

That the resolutions from the Strategy and Infrastructure Committee meeting on 30 January 2018 be updated to reflect the following:

a.   To allow freeholding of non-strategic land using as a guide the June 2016 Boffa Miskell report “Napier City Investment Portfolio: Urban Landscape Strategic review” on a case by case basis.

b.   That recommendations on the freeholding of all identified non-strategic land be considered by the Audit and Risk Committee in the first instance for recommendation to Council.

c.   That the sale of leasehold land be a Decision of Council.

d.   That a divestment and investment policy for the sale proceeds is established and approved by Council resolution prior to the release of any leasehold land.

 

                                                        

For the reasons that:

1.   The current policy provides no flexibility for freeholding specific, non-strategic assets that if sold, could assist in the redevelopment of industrial and/or commercial land in Napier and stimulate private investment.

2.   Introducing some flexibility in the policy will allow Council to consider each leasehold property on its merits so that any decisions relating to such land is made with the best intentions for the future of Napier.

3.   Freeholding specific properties will enable diversification of the Council’s investment portfolio which will reduce market exposure risks.

 

Using the Boffa Miskell report as guidance to determine the strategic nature of each property and performing an investigation into sale and reinvestment opportunities on a case by case basis, gives Council the ability to adapt to current market conditions whilst also providing the ability for Council to secure better community outcomes and value from the area through project design, urban design, upzoning the land to encourage better development potential or a combination of these, whilst also ensuring maximum benefit to ratepayers.

5.3   Issues

The overriding principle of the policy is that Council’s ability to sell non-strategic land represents a discretion to be executed by Council on a case by case basis. Nothing in the Policy represents a right for any person to insist or require the Council to sell to them and the sale by Council of any land under the Policy does not create precedent or expectation that other land held by Council (whether of a similar nature or not) will be sold.

Factors which may be considered in evaluating whether land is strategic or not will not only consider strategic value in terms of urban landscape development potential, but also the land terms of a strategic financial investment.

Other important principles outlined in the policy are:

·     Sales are only to be made to the registered lessee at the time of sale

·     Land is to be sold at such price as determined by Council at its sole discretion. There is no right of appeal or arbitration.

The policy also outlines matters in relation to the reinvestment of sale proceeds. Investments will be evaluated on a case by case basis and require a resolution of Council. The underlying goal is to ensure that any investments considered continue to generate sufficient income to replace that lost by properties sold.

Consideration under the policy may be given to the purchase by Council of the Lessees interest in land held in the portfolio. This may be considered where this will result in a better outcome for the future of the property in the best interests of Council and City development.

5.4   Significance and Engagement

The matter of Leasehold Land (The Investment Property Portfolio) was a key issue in terms of public consultation relating to the Long Term Plan 2018-2028. 

5.5   Implications

Financial

The total portfolio represents significant value in terms of an Investment, currently worth approximately $40m. Current passing ground rent amounts to approximately $1.9m PA.

The historic financial performance of the portfolio has been the subject of various reports which were made available as background information during the public consultation relating to the Long Term Plan 2018-2028.

The underlying goal with regard this policy is to ensure that any re investments continue to generate sufficient income to replace that lost from properties sold.

Social & Policy

N/A

Risk

Risks with this policy relate to the possibility that reinvestment of any sale proceeds do not generate sufficient income to replace that lost from properties sold.

5.6   Options

The options available to Council are as follows:

a.     Adopt the policy as presented

b.     Decline to adopt the policy as presented and make amendments.

5.7   Development of Preferred Option

As mentioned above, the matter of Leasehold Land has been consulted on with the public as part of the Long Term Plan 2018 – 2028. Council passed a resolution on 1 June 2018 and confirmed its resolution with the adoption of the Long Term Plan on 29 June 2018. These resolutions required the adoption of a policy.

 

5.8   Attachments

a     Investment Property Portfolio Policy   


Finance Committee - 4 September 2018 - Attachments

 

Item 5

Attachments a

 


 


 


 


Finance Committee - 04 September 2018 - Open Agenda                                                                                                                                         Item 6

6.    Sale of Endowment Land

Type of Report:

Operational and Procedural

Legal Reference:

Napier Borough Endowments Act 1876, Napier Borough Endowments Amendment Act 1999, Sections 140 and 141 of the Local Government Act 2002 (LGA). Section 40 of the Public Works Act 1981 (PWA).

Document ID:

622679

Reporting Officer/s & Unit:

Bryan Faulknor, Manager Property  

 

6.1   Purpose of Report

To seek Council’s approval to sell certain land which is subject to the Napier Borough Endowments Act 1876 and is part of Council’s Investment Property Portfolio. Any sale is to be considered on a case by case basis and is subject to the terms and conditions of the Investment Property Portfolio Policy.

 

Officer’s Recommendation

The Finance Committee:

Resolve:

a.   To allow the sale, after consideration on a case by case basis, of the land included in the schedule below, being endowment land which is subject to the Napier Borough Endowments Act 1876.

b.   That considerations and process is to comply with Council’s Investment Property Portfolio Policy.

c.   To record that this decision represents a discretion to be executed by Council on a case by case basis, nothing in this decision represents a right for any person to insist or require Council to sell to them and the sale by Council of any land under this decision does not create precedence or expectation that other land held by Council (whether of a similar nature or not) will be sold.

d.   That the process requirements set out in Sections 140 and 141 of the Local Government Act 2002 are to be complied with.

e.   To record that Council has considered the issue of an offer back obligation to the Crown under Section 40 of the Public Works Act 1981. Legal advice has confirmed that in the particular circumstances surrounding the land, there are relevant exceptions to any offer back obligation based on the criteria set out in Section 40(2) and (4) of the Public Works Act 1981, and therefore there is no offer back requirement.

 

Schedule of land:

48 West Quay                                     Lot 1 DP 478612, CFR664012

40 West Quay                                     Lot 2 DP 4786142, CFR 664012

14 Bridge Street                                 Lot 2 DP 17631, CFR HBK2/1415

16 Bridge Street                                 Lot 1 DP 17631, CFR HBK2/1415

22 Bridge Street                                 Part Town Section 610 Napier, CFR HBC4/1148

9B, 9FD and 9 E Riddell Street          Lot 1-2 DP 5357, CFR HBA4/1405

160 Wellesley Road                            Town Section 569 Town of Napier CFR HB97/42

 

 

 

Chairperson’s Recommendation

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

6.2   Background Summary

Nine properties included in Council’s Investment Property Portfolio consist of endowment land which was vested in the Council from the Crown under the Napier Borough Endowment Act 1876.

The purpose of the endowment in the 1876 Act is expressed in particularly broad terms; for the “use benefit and improvement of the Borough of Napier”

Ground rental income has historically been applied as a credit against the general rating requirement of Council.

The land is subject to individual perpetually renewable ground leases.

The address and legal description of the endowment land is:

48 West Quay                                     Lot 1 DP 478612, CFR664012

40 West Quay                                     Lot 2 DP 4786142, CFR 664012

14 Bridge Street                                 Lot 2 DP 17631, CFR HBK2/1415

16 Bridge Street                                 Lot 1 DP 17631, CFR HBK2/1415

22 Bridge Street                                 Part Town Section 610 Napier, CFR HBC4/1148

9B, 9FD and 9 E Riddell Street          Lot 1-2 DP 5357, CFR HBA4/1405

160 Wellesley Road                            Town Section 569 Town of Napier CFR HB97/42

Whilst the land above forms part of the Investment Property Portfolio and is subject to the Council resolutions of 1 June and 29 June 2018 and thus the Investment Property Portfolio Policy, it is thought prudent to obtain a separate resolution of Council with regard this land.

The Investment Property Portfolio Policy only allows sales to the registered Lessee at the time of sale.

6.3   Issues

Council has sought legal advice as to whether or not it can sell the endowment land.

The legal opinion concludes that Council can sell the land provided it uses the proceeds of sale in accordance with section 141 of the Local Government Act 2002 (LGA), and otherwise complies with the requirements of section 141 of the LGA.

The 1876 Act neither specifically prohibited, nor permitted, a sale of the Endowment Land by the Council’s predecessor (the Mayor, Councillors, and Burgesses of the Borough of Napier). However there was a historic general presumption that there was no general power of sale in the 1876 Act.

There has been a significant shift in the presumption by the enactment of the LGA. The LGA now contains a power of general competence that essentially removed the historic approach of closely prescribing a local authorities powers, so that a local authority has the capacity to do anything it considers appropriate subject only to the constraints in the LGA and any other relevant law.

Further section 140 (4) (b) of the LGA (in relation to restrictions on disposal of endowment property) states:

‘unless expressly prohibited by the instrument that vested the property in the local authority, the local authority may sell or exchange the property and use the proceeds of the sale or exchange for a purpose identified by the local authority in accordance with section 141.

Section 141 of the LGA as applied to the present circumstances requires that:

(a)    any sale proceeds must be allocated to a use that is consistent with the purpose of the endowment.

The purpose of the endowment is for the ‘use benefit and improvement of the Borough of Napier’. The legal opinion states that in their view the use is broad enough to cover any of Council’s lawful activities.

(b)   As the Endowment land was vested in the Council from the Crown, the Council must notify the Minister for Land Information and the Minister in Charge of Treaty Negotiations of its proposal to sell the Endowment Land.

The notified Ministers are not obliged to take any action in relation to the proposal to sell, nor do they have any power to stop the sale, or to direct how the Council must apply the proceeds of sale.

Council has considered the issue of an offer back obligation to the Crown under Section 40 of the Public Works Act 1981. Legal advice has confirmed that in the particular circumstances surrounding the land, there are relevant exceptions to any offer back obligation based on the criteria set out in Section 40(2) and (4) of the Public Works Act 1981, and therefore there is no offer back requirement.

 

6.4   Significance and Engagement

The matter of Leasehold Land (The Investment Property Portfolio) was a key issue in terms of public consultation relating to the Long Term Plan 2018 – 2028. The nine properties subject to this report are included in the portfolio.

6.5   Implications

Financial

The underlying goal of the Investment Property Portfolio Policy is to ensure that reinvestment of any sale proceeds continue to generate sufficient income to replace that lost from properties sold.

Social & Policy

N/A

Risk

Risks relate to the possibility that reinvestment of any sale proceeds do not continue to generate sufficient income to replace that lost from properties sold.

Further risks relate to a remote possibility that Council’s ability to sell the endowment land may be legally challenged. To mitigate this risk Council has sought expert legal opinion.

6.6   Options

The options available to Council are as follows:

a.     To authorise the sale of the endowment land after consideration on a case by case basis and in compliance with Council’s Investment Property Portfolio Policy.

b.     Decline to authorise the sale of the land.

6.7   Development of Preferred Option

The matter of leasehold land has been consulted on with the public as part of the Long Term Plan 2018-2028. The endowment land as listed above is leasehold land and forms part of the Investment Property Portfolio.

It believed prudent however to obtain a specific resolution with regard authority to sell the endowment land.

Legal advice confirms that Council is able to sell the Endowment land, provided it complies with the process requirements set out in sections 140 and 141 of the Local Government Act 2002.

Council will reinvest any sale proceeds and continue to use the income in a manner that is consistent with the original purpose of the endowment.

 

6.8   Attachments

Nil      


Finance Committee - 04 September 2018 - Open Agenda

 

 

Finance Committee

Open Minutes

 

Meeting Date:

Tuesday 24 July 2018

Time:

3.00pm – 3.01pm

Venue

Council Chamber
Hawke’s Bay Regional Council
159 Dalton Street
Napier

 

 

Present

Mayor Dalton, Councillor Wise (In the Chair), Councillors  Boag, Brosnan, Dallimore, Hague, Jeffery, McGrath, Price, Tapine, White and Wright

In Attendance

Chief Executive, Director Community Services, Director Infrastructure Services, Director City Services, Director City Strategy, Chief Financial Officer, Manager Property, Strategic Planning Lead, Event Manager

Administration

Governance Team

 


 

 

Apologies

Councillors Hague / Price

That the apology from Councillor Taylor be accepted.

Carried

 

Conflicts of interest

Nil

Public forum

Nil

Announcements by the Mayor

Thanks were extended to those who were able to attend the Anderson Park Playground opening over the weekend; very positive feedback has already been received for the playground.

Announcements by the Chairperson

Nil

Announcements by the management

Nil

Confirmation of minutes

Councillors Brosnan / Hague

That the Minutes of the meeting held on 1 May 2018 were taken as a true and accurate record of the meeting.

 

Carried

 

Notification and justification of matters of extraordinary business

(Strictly for information and/or referral purposes only).  


 

 

 PUBLIC EXCLUDED ITEMS

 

Councillors Wright / Price

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

1.         Battery Road Development Options

2.         Bad Debt Write Off

 

Carried

 

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.  Battery Road Development Options

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

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.

 

The meeting moved into committee at 3.01pm

 

 

Approved and adopted as a true and accurate record of the meeting.

 

 

Chairperson .............................................................................................................................

 

 

Date of approval ......................................................................................................................