Extraordinary Meeting

of Council

Open Minutes

 

Meeting Date:

Monday 2 November 2020

Time:

3.00pm-3.31pm

Venue

Large Exhibition Hall

Napier War Memorial Centre
Marine Parade
Napier

 

Livestreamed via Zoom on Council’s Facebook page

 

 

Present

Mayor Wise, Councillors Boag, Browne, Chrystal, Crown, Mawson, McGrath, Price, Simpson, Tapine, Taylor, Wright

In Attendance

Interim Chief Executive, Director Corporate Services, Director Infrastructure Services, Director City Services, Director City Strategy, Manager Communications and Marketing, Chief Financial Officer, Manager Asset Strategy, Manager Design and Projects, Senior Māori Advisor, Manager Regulatory Solutions, Corporate Accountant,

Karen Young, Audit Director - Audit New Zealand

Administration

Governance Team

 


Extraordinary Meeting of Council - 02 November 2020 - Open Minutes

Karakia

The Senior Māori Advisor opened the meeting with a Karakia.

Apologies

Council resolution

Councillors Crown / Wright

That the apology from Councillor Brosnan be accepted.

Conflicts of interest

Nil

Public forum

Nil

Announcements by the Mayor

Nil

Announcements by the management

Nil

 

 

 


Extraordinary Meeting of Council - 02 November 2020 - Open Minutes

Agenda Items

 

1.    Rating Outturn 2019/20

Type of Report:

Legal and Operational

Legal Reference:

Local Government Act 2002

Document ID:

966772

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

1.1   Purpose of Report

To report on Council’s rates position as at 30 June 2020.

 

At the Meeting

The Chief Financial Officer spoke to the report and it was noted that this agenda item reports on Council’s rates position for the year whereas the following agenda item is in relation to Council’s overall operating position, including other sources of funding in addition to rates.

A brief overview was provided and Council officers confirmed that the net rates deficit of $2.3Million was a result of the significant impacts of Covid-19 this year, and mainly due to the closure of Council’s business and tourism facilities. The report requests that Council fund the deficit from loans.

In response to questions from Councillors, the following points were clarified:

·         All rates arrears are included in this position to year end, and the year to date rates arrears figure will be included in the first quarterly report. 

·         A loan term of 25 years would result in approximately a 0.2% increase on rates. Any shorter timeframe would increase the impact on rates. Loan terms are typically delegated to Council officers.

·         The interest rate currently applied is 3%. This and interest rate assumptions going in to the Long Term Plan will be reassessed.

·         In the event of future surpluses, Council may wish to apply any surpluses against the loan.

Elected members noted that Council had anticipated a higher deficit and were happy to see the final amount is lower than initially thought. 

 

Council resolution

Councillors Taylor / Mawson

That Council:

a.     Note that lost revenue due to Covid-19 has impacted Council’s rates position for 2019/20 resulting in a rates deficit of $2,341,603

b.     Approve funding the 2019/20 net rating deficit of $2,341,603 from loans.

2.    Adoption of Annual Report 2019/20

Type of Report:

Legal

Legal Reference:

Local Government Act 2002

Document ID:

966720

Reporting Officer/s & Unit:

Caroline Thomson, Chief Financial Officer

 

2.1   Purpose of Report

To present the Napier City Council Annual Report 2019/20 for adoption by Council.

 

At the Meeting

The Mayor introduced Karen Young, Audit Director from Audit New Zealand and invited her to speak to the report alongside Council’s Chief Financial Officer. The Independent Auditor’s Report (Audit Opinion) was tabled at the meeting (refer Appendix A).

The Chief Financial Officer spoke to the report, providing a brief overview and confirming that due to the significant impacts of Covid-19, Council would be reporting its first ever operating deficit of $2Million. It was noted that the unbalanced budget has been carefully considered with the most financially prudent option being to loan fund the shortfall due to its one-off nature. Council will be working towards a balanced budget for the Long Term Plan 2021-31.

The audit opinion confirms Audit New Zealand are satisfied that the financial statements fairly reflect Council’s activities for the year and its financial position, and includes an ‘Emphasis of matter’ paragraph explaining the impact that Covid-19 has had on Council’s operations, financials and activity groups.

Three performance measures have also been identified in the audit opinion where Audit New Zealand was unable to determine that the reporting on these matters was materially correct, including the number of complaints for three-waters, mainly due to the lack of detail captured by Council’s afterhours call provider. Council officers will work with the call provider to ensure that the call data is accurately recorded moving forward and it was noted that there will be a number of other Councils receiving a qualified audit opinion for the same matter.

In response to questions from Councillors, the following points were clarified:

·         Performance measures are detailed in Council’s quarterly reports.

·         The Department of Internal Affairs mandatory performance measures in relation to complaints have been in place since 2013. The issue was initially identified last year and this year Audit New Zealand looked at this across all Councils. There are around 24 other Councils currently being audited that use the same after hours call provider. The Audit Director noted that there are similar issues with Council’s system also. 

·         The value of Council housing will be included in land and buildings.

·         In response to questions around the Resident Satisfaction Survey results, it was noted that following the adoption of the Parking Strategy, Council officers are looking at separating Napier’s short term parking from long term parking. Key land purchases have also been identified to develop parking in the longer term.

·         The six public cemeteries in Napier are Western Hills, Park Island, Wharerangi, Taradale, Napier and Eskdale.

·         Income from gaming trusts is included in the actual report itself, relating to subsidies and grants.

·         The $2Million operating deficit is Council’s overall position; the $2.3Million rates deficit forms part of Council’s overall position.

ACTION:  Councillor Boag requested that Council officers provide her with the total value of Council’s housing as well as the amount of income that came from gaming trusts.

 

Officer’s Recommendation

 

That Council:

a.     Note the 2019/20 Annual Report has been considered by the Audit and Risk Committee.

b.     Note Council did not meet the balanced budget benchmark in 2019/20 due to the impact of Covid-19 on Council’s revenues.

c.     Resolve that the operating deficit of $2.2m for 2019/20 will be funded from loans

d.     Note the Auditor’s report when available will include an emphasis of matter paragraph drawing attention to the impact of Covid-19 as set out in the notes to the financial statements and activity groups.

e.     Note Council when the audit opinion is available will receive a qualified Audit opinion on the activity group statements relating to incomplete information about the number of complaints for some services.

f.     Note that the Audit opinion will be provided at the Council meeting of 2 November 2020, with the Audit Director for Audit NZ available to talk to the opinion.

g.     Adopt the Annual Report for Napier City Council for 2019/20 subject to any grammatical and minor changes and any changes due to the requirements of the audit process.

 

Council resolution

Substitute Motion

Mayor Wise / Councillor Tapine

That Council:

a.      Note the 2019/20 Annual Report has been considered by the Audit and Risk Committee.

b.      Note Council did not meet the balanced budget benchmark in 2019/20 due to the impact of Covid-19 on Council’s revenues.

c.       Note as required under Section 80 of the Local Government Act (2002), Council considers the most financially prudent option is to fund Council’s 2019/20 net operating deficit of $2m from loans.

d.      Resolve that the operating deficit of $2m for 2019/20 will be funded from loans.

e.      Note the Auditor’s report when available will include an emphasis of matter paragraph drawing attention to the impact of Covid-19 as set out in the notes to the financial statements and activity groups.

f.        Note Council when the audit opinion is available will receive a qualified Audit opinion on the activity group statements relating to incomplete information about the number of complaints for some services.

g.      Note that the Audit opinion will be provided at the Council meeting of 2 November 2020, with the Audit Director for Audit NZ available to talk to the opinion.

h.      Adopt the Annual Report for Napier City Council for 2019/20 subject to any grammatical and minor changes and any changes due to the requirements of the audit process.


Extraordinary Meeting of Council - 02 November 2020 - Open Minutes

The Mayor thanked Councillor McGrath for arranging to have the Ranfurly Shield on display at the meeting.

 

PUBLIC EXCLUDED ITEMS

 

Council resolution

Councillors Mawson / Chrystal

That the public be excluded from the following parts of the proceedings of this meeting.

 

Agenda Items

1.         Kenny Eriksen Roundabout

 

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.

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 where the withholding of the information is necessary to:

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

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:

Agenda Items

1.  Kenny Eriksen Roundabout

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.

 

 

The meeting moved into committee at 3.31pm.

 

 

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

 

 

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

 

 

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

 


 

Appendix A