Agenda of Prosperous Napier Committee - Thursday, 29 August 2024

Prosperous Napier Committee - 29 August 2024 - Open Agenda

2022-2025 - TERMS OF REFERENCE - PROSPEROUS NAPIER COMMITTEE

Chairperson	Councillor Crown
Deputy Chairperson	Councillor Tayor
Membership	Mayor and Councillors (13) Ngā Mānukanuka o te Iwi representatives (2)
Quorum	8
Meeting frequency	At least 6 weekly (or as required)
Officer Responsible	Deputy Chief Executive / Executive Director Corporate Services

Purpose

To provide governance oversight to the corporate business of the Council, monitor the Council’s financial position and financial performance against the Long Term Plan and Annual Plan, and to guide and monitor Council’s interests in any Council Controlled Organisations (CCOs), Council Organisations (COs) and subsidiaries.

Delegated Powers to Act

To exercise and perform Council’s functions, powers and duties within its area of responsibility, excluding those matters reserved to Council by law or by resolution of Council, specifically including the following:

1. To monitor the overall financial position of Council and its monthly performance against the Annual Plan and Long Term Plan.

2. To adopt or amend policies or strategies related to the Committee's area of responsibility, provided the new or amended policy does not conflict with an existing policy or strategy.

3. To consider all matters relating to CCOs and COs, not reserved to Council, including to monitoring the overall performance of CCO’s.

4. Provide governance to Council’s property operations and consider related policy.

5. Consider applications for the sale of properties within the Leasehold Land Portfolio.

6. To resolve any other matters which fall outside the area of responsibility of all Standing Committees, but where the Mayor in consultation with the Chief Executive considers it desirable that the matter is considered by a Standing Committee in the first instance.

Power to Recommend

The Committee may recommend to Council and/or any standing committee as it deems appropriate.

The Committee may recommend to Council and/or the Chief Executive any changes to the funding or rating system for the City, any variation to budgets that are outside the delegated powers of officers and the approval of Statements of Intent for CCOs and COs each year.

To bring to the attention of Council and/or the Chief Executive any matters that the Committee believes are of relevance to the consideration of the financial performance or the delivery of strategic outcomes of Council.

The Committee must make a recommendation to Council or the Chief Executive if the decision considered appropriate is not consistent with, or is contrary to any policy (including the Annual Plan or Long Term Plan) established by the Council.

ORDER OF BUSINESS

Karakia

Apologies

Nil

Conflicts of interest

Public forum

Nil

Announcements by the Mayor

Announcements by the Chairperson including notification of minor matters not on the agenda

Note: re minor matters only - refer LGOIMA s46A(7A) and Standing Orders s9.13

A meeting may discuss an item that is not on the agenda only if it is a minor matter relating to the general business of the meeting and the Chairperson explains at the beginning of the public part of the meeting that the item will be discussed. However, the meeting may not make a resolution, decision or recommendation about the item, except to refer it to a subsequent meeting for further discussion.

Announcements by the management

Confirmation of minutes

That the Minutes of the Prosperous Napier Committee meeting held on Thursday, 18 July 2024 be taken as a true and accurate record of the meeting.................................................................................... 102

Agenda items

1 Verbal Update................................................................................................................. 5

2 Procurement Policy Review............................................................................................ 6

3 Ahuriri Investments Ltd................................................................................................. 22

4 Hawke's Bay Museums Trust Collection Management Agreement................................ 37

5 Submission Process..................................................................................................... 62

6 Digital Business Strategy - update................................................................................ 67

7 Emission reduction targets and plan............................................................................. 73

8 Treasury Activity and Funding Update........................................................................... 87

9 Rates Remission in Response to Significant Extraordinary Circumstances (Voluntary Buy-Out Programme) 92

Minor matters not on the agenda – discussion (if any)

Recommendation to Exclude the Public............................................................... 100

Prosperous Napier Committee - 29 August 2024 - Open Agenda Item 2

2. Procurement Policy Review

Type of Report:	Operational
Legal Reference:	N/A
Document ID:	1780529
Reporting Officer/s & Unit:	Sharon O'Toole, Procurement Manager

2.1 Purpose of Report

The current Procurement Policy was adopted 5 August 2021. The policy is required to be reviewed every three years. This report outlines the review and recommendations from the review.

Officer’s Recommendation

The Prosperous Napier Committee:

a. Approve the recommendation to retain the current Procurement Policy and revise the next review date to November 2025.

2.2 Background Summary

The current Napier City Council Procurement Policy was adopted 5th August 2021 and is due for review every three years. The current version incorporated significant changes to align with The Government Procurement Rules (Rules), these Rules are considered good practice for public sector entities. The current Procurement Policy continues to support the Rules.

The Procurement Policy also introduced a focus on public value, and broader outcomes (social, cultural, environmental, and economic benefits).

The policy takes a principles-based approach which is reflected in related documentation such as Council’s Procurement Transportation Strategy. The need for Council to have a documented Procurement Transportation Strategy is a requirement from New Zealand Transport Agency (Waka Kotahi) which requires all approved organisations to have a current Procurement Transportation Strategy, this document outlines NCC’s long term approach to the procurement of transport sector activities funded under section 25 of the Land Transport Management Act 2003. The current Procurement Transportation Strategy was approved 28 September 2023 and is due for review in 2026.

Changes to the Procurement Policy can trigger changes to the Procurement Transportation Strategy, ideally the review dates for both should be harmonised to ensure that the Procurement Policy is reviewed and updated before the Procurement Transportation Strategy is due for review.

The Procurement team currently has an extensive programme of procurement initiatives and improvements planned over the next 12 months. These include developing guidance, processes, tools, templates to improve and streamline processes to address the findings of the Contract Management Internal Audit as well as offer ways to optimise project and programme delivery through the procurement approached used (panel contract, bundling, regional agreements etc). One of the internal audit findings was around developing a framework of documents to better support the management of contracts.

2.3 Issues

Moving the Procurement Policy review date out to November 2025 will allow any future review of the Policy to consider aspects related to improvement initiatives i.e. extending the scope of the policy to include contract management. It would also allow the review to be completed in sufficient time to allow changes to be incorporated into the next iteration of Procurement Transportation Strategy.

The procurement team is a small team that is fully committed over the next twelve months to the delivery of projects and an extensive programme of improvement initiatives; these initiatives were socialised with the Prosperous Napier Committee 18 July.

A review of the Procurement Policy now would detract and possibly require reprioritisation of the work currently underway.

2.4 Significance and Engagement

N/A

2.5 Implications

Financial

The Procurement Policy outlines the expectations around financial prudence and the application of financial controls. There is an opportunity when the Procurement Policy is reviewed to extend the scope to include contract management.

Social & Policy

The current Procurement Policy includes references to broader outcomes and progressive procurement (social, cultural, environmental, and economic outcomes). There is an opportunity to make reference to more specific aspects of these broader outcomes such as Māori, mana whenua, mātaawaka.

Risk

As the current policy takes a principles-based approach there is no significant risk anticipated from a delay in the review. There is a risk that reprioritising the current delivery and improvement initiatives that the procurement team are working on may have an impact on the delivery of the capital works programme.

2.6 Options

The options available to Council are as follows:

a. Approve the current Procurement Policy and revise the next review date to November 2025.

b. Review the Procurement Policy in August and review and update the Procurement and Contract Management improvement plan to allow time to complete this.

2.7 Development of Preferred Option

The preferred option is to approve the current Procurement Policy and revise the next review date to November 2025.

2.8 Attachments

1 Procurement Policy (Doc Id 1783091)

Prosperous Napier Committee - 29 August 2024 - Open Agenda Item 3

3. Ahuriri Investments Ltd.

Type of Report:	Operational and Procedural
Legal Reference:	N/A
Document ID:	1782274
Reporting Officer/s & Unit:	Richard Munneke, Commercial Director

3.1 Purpose of Report

The purpose of this report is to clarify and resolve:

· the name of the proposed Napier City Council Controlled Trading Organisation

· the number and composition on the board including the mix of independent and Napier City Councilor directorships.

· the Investment portfolio that will be managed by the CCTO through a statement of expectation and accompanying delegations from Council.

· Protection of the intergenerational inflation proofed value of the investment as a strategic asset of Council.

· And to adopt an amended Appointment and Remuneration of Directors Policy

Officer’s Recommendation

The Prosperous Napier Committee:

a) Approve Ahuriri Investments Management Limited (AIM) as the official name of the Council Controlled Trading Organisation to manage Napier City Council’s Investments.

b) Endorse in principle the Investment Portfolio, being the investment asset classes that are suitable for the CCTO to manage to include:

i. Parklands

ii. Select surplus NCC property

iii. Leasehold land portfolio

iv. Shareholding in Hawke’s Bay Airport Limited

v. Managed Funds

c) Approve a maximum of 5 directors be appointed to the CCTO board of directors constituting:

· 3 independent Directors including the Chair.

· 2 elected members as directors only

d) Adopt the amended Appointment and Remuneration of Directors Policy (Doc Id 1786178)

3.2 Background Summary

At its meeting held on 18 July 2024 Council resolved to hold workshops discussing the function and scope and governance arrangements of a Council Controlled Trading Organisation (CCTO).

This report seeks resolution on several decisions discussed at the second workshop in particular. These decisions will enable the CCTO to be formed.

As these machinery matters are being enacted the draft Statement of Expectation based on understanding where each asset is at and how it could perform can be considered by Council while the new Board of Directors is appointed.

Although a draft Statement of Expectation is not contemplated at this stage, it would be useful for the broad scope of asset classes that are considered appropriate for management through the CCTO to be clarified. A final statement of Expectation is anticipated to be adopted by Council before the end of the year.

3.3 Issues

i. Scope

Council discussed the Investment portfolio and identified component asset classes at its workshop 1^st August 2024. It is recommended that these asset classes be approved for CCTO management in principle only. This will enable due diligence (identifying asset transactions to be delegated to the CCTO together with a reasonably targeted asset performance expectation) on each asset to be considered by council in due course, but at the same time provides high level guidance to the rate payers as to the scope of what the CCTO will manage on Councils behalf.

ii. Strategic Asset

A key deliverable for the CCTO is to create an intergenerational investment portfolio that can provide consistent improving returns to Council over time to offset rates. It is therefore Councils’ intention to protect the value of the investment portfolio that fall under the CCTO delegations. It is recommended that the CCTO have the full delegations to make strategic decisions for each asset under its management subject to Council’s delegations and any strategic asset provisions for single assets under the LGA, but that the combined value of the assets classes be identified as a strategic asset. This would mean there would need to be full public consultation should the council want to use the base capital of the assets for a specific purpose.

Whilst there is no recommendation to the committee at this stage given the CCTO is not formed and the asset classes are unspecified, it is recommended that this matter be discussed by the committee to foreshadow a future recommendation that identifies the combined value of the assets classes as a strategic asset.

iii. Appointment and Remuneration of Directors Policy

An Appointment and Remuneration of Directors Policy (the Policy) is a statutory requirement regarding the appointment and remuneration of directors to all Council organisations. Under section 57 of the Local Government Act 2002 (the LG Act), the Council must adopt a policy that sets out an objective and transparent process for:

The identification and consideration of the skills, knowledge, and experience required of directors of a council organisation and

· the appointment of directors to a council organisation; and

· the remuneration of directors of a council organisation.

The 3 year 2024-27 Plan included a revised Investment Strategy enabling Council to stand up a CCTO for the management of its commercial investments, necessitating decisions on governance representation.

The current Appointment and Remuneration of Directors Policy (Policy) was last reviewed and adopted on 12 /03 /21 and requires amendment to appropriately guide the structuring of the governance and remuneration considerations for the CCTO.

The CCTO should be governed by a blend of commercial and council affiliated directors to support integrated objective setting and strategic alignment with Council, while ensuring the perspectives and expertise of independent commercial directors complement that of councillor directors.

It is recommended there be 5 directors forming the CCTO board. 3 of those are recommended to be independent directors including the chair and 2 reserved for elected members.

The amended policy attached states a preference for the Chair of the CCTO to be an independent director.

Considering the value of the assets the CCTO is likely to manage, and the need to attract appropriately skilled applicants the amended Policy requires an independent report be commissioned to provide objective advice on the level of remuneration considered appropriate for the CCTO Board including the chair.

It is recommended the report also consider the appropriate remuneration for councillor board directors to acknowledge the additional duties and responsibilities. Remuneration criteria from the Remuneration Authority are determined within a local government pay scale which takes into account:

· the size of the governance role of each council,

· the average time required by a local government member on a council of a particular size,

Council discussed the scope of the role in its workshop 1 August 2024. Reflecting on the requirements it is recommended that the independent report authors take its guidance from the Elected Member Remuneration settings in addition to market analysis.

3.4 Significance and Engagement

The decision to stand up a CCTO has gone through a public process (LTP consultation).

No further public consultation is required. However, the discussions and decisions that lead to placing Council assets under CCTO management are considered significant but do not requiring consultation. For this reason, workshops with the elected members have been held in public where possible.

Any assets that are identified by Council, or the Local Government Act, as ‘Strategic Assets’ are subject to the same decision-making process whether managed by Council or the CCTO,

3.5 Implications

Financial

The Financial implications of the CCTO have been established at a high level through the Long Term Plan.

The financial implications of this report are remuneration decisions which sit within the overall CCTO establishment budget.

Refined (asset by asset) consideration of the financial implication will be undertaken as the CCTO is stood up.

Social & Policy

Policies relating to investment activity have previously been amended to allow the CCTO to operate.

Establishment of a CCTO was adopted after consultation for the 2024 – 27 Three Year Plan.

Risk

There are risks associated with the appointment of directors, setting the Statement of Expectation, transfer and management of assets, and initial performance of the CCTO. Risks will be assessed at each state of the establishment process.

3.6 Options

A project plan has been developed which establishes the approximate sequence and timing of the main matters that Council will need to address as it stands up the CCTO.

Key Milestones from that plan are as follows:

Objective:	Target Date:	Status:
Consultation on CCTO	Q2 2024	Complete
Draft Statement of Expectation accompanying delegations and Appointment Policy	Q3 2024	In Progress
CCTO legal establishment	Q4 2024	In Progress
Independent Director Appointment	Q4 2024	Not started
1^st tranche Commercial Asset Delegation	Q1 2025	Not started

3.7 Development of Preferred Option

N/A

3.8 Attachments

1 Amended Appointment and Remuneration of Directors Policy (Doc Id 1786178)

Prosperous Napier Committee - 29 August 2024 - Open Agenda Item 4

4. Hawke's Bay Museums Trust Collection Management Agreement

Type of Report:	Contractual
Legal Reference:	N/A
Document ID:	1784019
Reporting Officer/s & Unit:	Elizabeth Caldwell, Manager Arts, Culture and Heritage

4.1 Purpose of Report

To seek Napier City Council approval to enter into a new Management Agreement with the Hawke’s Bay Museums Trust (HBMT) for two years, expiring 30 June 2026 while the Hawke’s Bay Regional Collection Joint Working Group concludes its review of governance and operational arrangements for how the collection is to be maintained and governed.

Officer’s Recommendation

The Prosperous Napier Committee:

Approve that Napier City Council enter into a Management Agreement with the Hawke’s Bay Museums Trust for two years expiring 30 June 2026.

4.2 Background Summary

The MTG, on behalf of Napier City Council, provides for the care, protection, access, storage, and development of the Hawke’s Bay Museums Trust (HBMT) regional collection by way of a Management Agreement between the Council and the Trust. The term of the agreement is usually three years but has reverted to shorter renewal periods while a review of the governance and operational arrangements is undertaken so that any agreed changes can be accommodated in a new agreement.

A Joint Working Group (JWG) comprised of Napier City Councillors and Council Officers, Hastings District Councillors and Council Officers, and HBMT Board Members, is facilitating a review of the governance and operational arrangements for how the collection is to be maintained and governed. The JWG is focussed on three areas of work:

1. Governance – determining the most appropriate governance option for the care and protection of the regional collection and/or managing of the regional museum

2. Storage – oversight of the development of a new collection storage facility

3. Naming – identifying names fit for the redeveloped operation of the museum

4.3 Issues

The most recent management agreement with the HBMT has expired. It is proposed that an agreement is signed for a further two years to allow for the JWG to complete its work. This agreement can be amended if the work of the JWG is completed within this time and changes are wanted prior to the agreement’s expiry date.

The HBMT supports the proposal to rollover the existing management agreement for two years, “with the proviso that should any governance changes for the Trust be brought forward these will be discussed with the Trust before any decisions are taken, including regarding the management agreement.” (Dick Grant, HBMT Chair, email to Elizabeth Caldwell, Manager Arts, Culture & Heritage 26 July 2024.)

Other current documents, such as the Statement of Intent 2024-26, will also remain in place until such time as any changes to the governance arrangements generates different requirements.

4.4 Significance and Engagement

N/A

4.5 Implications

Financial

The Trust collection is currently funded by Napier City Council and Hastings District Council. The MTG is funded by Napier city Council.

There are no planned changes to this funding as a result of the extension to the contract, and budget has been provided in the Long Term Plan 2024-27. Any changes to funding arrangements that may arise from a change to the work being covered by the JWG would be agreed as part of a new agreement.

Social & Policy

N/A

Risk

There is a risk that not all parts of the work the JWG are undertaking are completed within the two years of the management agreement, at which point the agreement can again be considered for renewal.

4.6 Options

The options available to Council are as follows:

a. Approve that Napier City Council enters into a two-year Management Agreement with the Hawke’s Bay Museums Trust while the Joint Working Group continues its review of governance and operations including the new collections facility and naming work (preferred option), or

b. Not approve that Napier City Council enters into a two-year Management Agreement with the Hawke’s Bay Museums Trust while the Joint Working Group continues its review of governance and operations including the new collections facility and naming work.

4.7 Development of Preferred Option

If Council approves that Napier City Council enters into a further two-year Management Agreement with the Hawke’s Bay Museums Trust, the Joint Working Group will continue working on its priorities, anticipating completion prior to 30 June 2026.

4.8 Attachments

1 HBMT Management Agreement 2022/2023 (expired) (Doc Id 1784021)

2 Draft HBMT Management Agreement 1 July 2024 - 30 June 2026 (Doc Id 1784024)

3 HBMT Statement of Intent 2024-2026 (Doc Id 1784022)

Prosperous Napier Committee - 29 August 2024 - Open Agenda Item 5

5. Submission Process

Type of Report:	Operational
Legal Reference:	N/A
Document ID:	1783644
Reporting Officer/s & Unit:	Stephanie Murphy, Manager Strategy and Transformation Jemma McDade, Governance Advisor

5.1 Purpose of Report

This report seeks to provide information regarding the improved Council process for submitting on current initiatives open for consultation.

Officer’s Recommendation

The Prosperous Napier Committee:

a. Endorse the centralized process for monitoring and reporting submissions made by Napier City Council on initiatives that are open for consultation.

5.2 Background Summary

The Submissions process currently captures opportunities for Council officers to participate in and make submissions on current initiatives, predominantly proposed legislative updates, provided to Governance by Taituarā and Council officers.

The Governance team receive weekly updates from Taituarā detailing upcoming initiatives which affect Local Government and are open for consultation. A record is maintained by Governance, noting the actions to be taken by Council officers on reported initiatives. (Submissions spreadsheet 1 July 2024 (Doc ID 1783662)).

Initiatives are referred to the relevant Director to invite officers to submit. Officers advise Governance whether they will be submitting, or not, and the process they will be following. This may be via written submission, joint written submission, online questionnaire, or by contributing to a submission or consultation document provided by another organization or agency. This is not an exhaustive list.

Reviewing the current process, it was noted that:

· There are further opportunities to submit on a wider range of initiatives not captured by the current process.

· Submissions being made that are not captured within this process.

Move from a passive to a proactive approach

Governance is proposing a more proactive approach; expanding the source of initiatives by monitoring relevant central government agencies for updates that may impact Council.

1. Ministry of Health

2. Ministry for the Environment

3. Parliamentary Counsel office

4. Beehive – latest news

5. Parliament – Bills (proposed laws)

6. Consultation group being formed with other Councils

Initiatives include, but are not limited to; proposed legislation, proposed legislative updates and amendments, public policy direction, and feedback sought from government agencies or representative groups collecting data for joint submissions; for example Local Government New Zealand or Taituarā.

Governance is proposing a centralized, comprehensive process for monitoring, progressing and recording submissions made on behalf of Council. The process will ensure that Elected members are informed of upcoming initiatives that are open for consultation and action being taken by Council.

Governance will alert Directors of initiatives, enabling them to disperse to the relevant officers within their Directorate. Governance will confirm with the relevant officer, known as the Subject matter expert (SME), whether they are making a submission. If no submission is being made, reasons for that decision will be recorded and circulated to Elected members.

Draft submissions will be provided to Governance at least five working days prior to their due date. Governance will then circulate the draft to Elected members for comment. These comments will be returned to the SME. The final submission will be approved by the relevant Director before being submitted by the SME. Governance will be advised that the submission has been made and will be provided with a copy. Governance will store these centrally.

Governance will provide a detailed update to the Prosperous Napier Committee on a quarterly basis instead of the weekly update.

The Annual Report will include a focus on three or four significant legislative changes that have affected Council operations throughout the Financial Year.

The goals of this process are to:

· Build a wider picture of opportunities available for Council officers to contribute to the formation and development of legislation and public policy.

· Provide a comprehensive, centralized process which captures all submissions made.

· Inform Elected members about action taken.

Submissions process:

(Submissions Process Elected members (Doc ID 1783658))

5.3 Issues

There are no significant issues involved in the expansion of this process. Council is seeking to ensure that the process for submitting on initiatives is consistent and visible across the business and that Council is effectively contributing to developing initiatives that affect core Council business.

5.4 Significance and Engagement

Nil

5.5 Implications

Financial

Nil

Social & Policy

Nil

Risk

Nil

5.6 Options

The options available to Council are as follows:

a. Endorse the centralized process for monitoring and reporting submissions made by Napier City Council on initiatives that are open for consultation.

b. Do not Endorse the centralized process for monitoring and reporting submissions made by Napier City Council on initiatives that are open for consultation.

5.7 Development of Preferred Option

N/A

5.8 Attachments

1 Submission spreadsheet 1 July 2024 (Doc ID 1783662)

2 Submissions Process Elected members (Doc ID 1783658)

Prosperous Napier Committee - 29 August 2024 - Open Agenda Item 6

6. Digital Business Strategy - update

Type of Report:	Information
Legal Reference:	N/A
Document ID:	1783045
Reporting Officer/s & Unit:	Duncan Barr, Chief Information Officer

6.1 Purpose of Report

This report identifies the development and provides an update of the Digital Business Strategy.

Officer’s Recommendation

The Prosperous Napier Committee:

a. Note the actions and progress as outlined in the report “Digital Business Strategy – Update”.

6.2 Background Summary

In July 2023 key business leaders, across the business were invited, by the Executive Director Corporate Services and the Chief Information Officer, to help develop a Digital Business Strategy. The focus was to consider how we better serve citizens, enhance operational efficiency, leverage data as an asset and define a technology roadmap. By aligning business goals with digital initiatives, strong themes were developed across key focus areas.

The Digital Business Strategy was presented to Executive Leadership Team (ELT) in December 2023 for prioritisation. It was adopted by ELT in February 2024 and funding was confirmed as part of the Long Term Plan (LTP) in June 2024.

6.3 Issues

The key goals of the Digital Business Strategy address:

· Moving toward modern business systems by addressing under investment in core systems, in the past, as without doing this it can be difficult to integrate with modern applications.

· Improve business efficiency.

· Review business processes.

· Be data focused, allowing staff to make better decisions.

· Improve IT resilience.

· Supporting the council to achieve its Strategic objectives.

What we have already started:

· IT Resilience. Key aspects include:

- Investing in StarLink systems for improving corporate communications.

- Installing a power generator at Taradale Library to enable greater resilience as a secondary EOC centre.

- Investigating alternate links to our data centre in Hastings.

- Migrating from analogue radios to a new digital network.

· Sycle: Redevelopment of the project management reporting tool (Sycle) with improved workflows and reporting for CAPEX and OPEX projects.

· Learning Management System (LMS): Requirements gathering and procurement of a LMS platform.

Significant Projects for Y1 LTP:

· Asset Management System: Considering the imminent ‘Local Water Done Well’ regional changes and necessary software upgrades, review the options and impact on our current systems.

· HR System: Investigate the development of modern HR tools, systems, and processes.

Significant Projects for Y2 LTP:

· Data Platform: Focus on how we use our extensive data resources to improve reporting and decision making. Centralise and standardise processes.

· Gen AI Tools: Enable the use of Gen AI (e.g., ChatGPT) tools to support business processes, educated staff in the use of these tools and ensure we are working in a safe, secure, and ethically minded manner.

· Review Digital Business Strategy: Review on progress and develop the next 3 years.

Significant Projects for Y3 LTP:

· Review Finance and Regulatory system: Complete business needs assessment, business process improvements, review options for replacement.

· Customer Relationship Management (CRM): Review options for a contemporary citizen centric CRM for improved engagements with the community and businesses.

· Digital Communities: Focus on how our community wants to contact and connect with council, consider challenges of the Digital Divide and accessibility. Look at how we can use smart technologies to empower and improve our environment and decision making.

· Payroll system: Review options to implement a contemporary payroll, time sheeting system.

6.4 Implications

Financial

As part of the prioritisation by ELT, this led to the phasing of projects, based the business needs, the affordability, and the capacity (organisational change and staff resourcing) to deliver.

To deliver our Digital Business Strategy, the budget for the projects has been approved through the LTP and is estimated to be $16.6m over the next 6 years.

Prior to the prioritisation process, the original budget was over $20m.

Social & Policy

N/A

Risk

· Risk of not doing this: If we do not deliver these projects, we will continue to have technical debt and inefficient systems.

· Changing and competing priorities: For example, Local Water Done Well, at this stage, as we are unsure on the likely decision, the impact on our business is uncertain.

6.5 Options

The options available to Council are as follows:

a. To receive the report.

6.6 Development of Preferred Option

N/A

6.7 Attachments

1 Digital Business Strategy - Summary (Doc Id 1783643)

Prosperous Napier Committee - 29 August 2024 - Open Agenda Item 7

7. Emission reduction targets and plan

Type of Report:	Operational
Legal Reference:	Enter Legal Reference
Document ID:	1783971
Reporting Officer/s & Unit:	Michelle Duncan, Carbon Emissions Advisor

7.1 Purpose of Report

The purpose of this report is to recommend emission reduction targets for Napier City Council and share the draft Emission Reduction Plan (ERP) setting out how NCC will reduce its own emissions and facilitate a reduction in community emissions.

This follows on from the paper presented at the June Prosperous Napier Committee meeting and elected members support for planned approach. ELT has reviewed the draft emission reduction plan twice and this is our recommended approach.

Officer’s Recommendation

The Prosperous Napier Committee:

a. Receive the report titled “Emission Reduction Targets and Plan” dated 29 August 2024.

b. Approve

i. The recommended Long- term Emission Reduction Target: Net Zero by 2050

ii. The recommended Interim Emission Reduction Targets: 63% reduction by 2035

iii. The draft Emission Reduction Plan (Doc Id 1784188)

7.2 Background Summary

Why are we doing this?

Climate change is a defining issue for businesses and governments everywhere, with the impacts of significant weather events becoming more extreme and more frequent with every passing year. Hawkes Bay felt the impact of this more acutely than ever in 2023, bearing the brunt of the devasting Cyclone Gabrielle.

The science (and increasingly our own experience of severe floods, droughts, wildfires and storms) tells us that taking action on climate change is of paramount urgency and utmost importance. It is critical that the world limits warming to 1.5˚C above pre-industrial levels. Additional greenhouse gas emissions will increase warming and the impacts of climate change.

Napier City Council is at the forefront of responding to these extreme weather events, looking after its people and the community, while delivering resilient roads, three waters and other infrastructure assets. Exceeding 1.5˚C increases the risk of long-lasting or irreversible impacts such as the loss of some ecosystems and sea level rise that will put much of Napier at risk.

Our efforts to reduce council’s own emissions are an important demonstration of our leadership and role models efforts that we hope other organisations will take to reduce their carbon footprints. Our first step is to get our own house in order.

National Targets

In 2016 Aotearoa New Zealand ratified the Paris Climate Accord along with 189 other countries committing to keep global temperatures to 1.5 degrees of warming. In 2020, the Climate Change Response Act committed in legislation the following national emission reduction targets:

· net zero greenhouse gas emissions by 2050 (with the exception of biogenic methane)

· 24-47% reduction in biogenic methane by 2050 including a 10 per cent reduction below 2017 biogenic methane emissions by 2030.

In 2017 Napier City Council signed the Local Government Leaders Climate Change

Declaration declaring an urgent need for responsive leadership and a holistic response to

climate change.

In 2021 Napier City Council adopted a Climate Position Statement with one of the

objectives to commit to an emissions reduction target in its next Long-Term Plan. The

Statement also committed Napier City Council to:

· Lead urgent action to address local climate change risk

· Ensure climate solutions are equitable

· Support an evidential science-based approach

· Value mātauranga and te ao Māori in our approach

· Align with national direction and commitments

· Factor carbon footprints into its decision making

In May 2022 the Government published New Zealand’s first emissions reduction plan. This sets the direction for climate action for the next 15 years through to 2035, laying out targets and required actions for every sector of the economy. A draft second emission reduction plan is currently out for consultation and will be adopted by the end of 2024.

Council’s Greenhouse Gas Emissions

Under the Three-Year Plan (2024-27) Financially Sustainable strategic priority a comprehensive organisational greenhouse gas (GHG) inventory was prepared using 2023 data and in alignment with the ISO14064 reporting standard. This inventory was independently verified, ensuring it was accurate and included all material emission sources, and now forms Napier City Council’s baseline for reporting purposes. These results were presented to the June Prosperous Napier Committee.

Council’s activities in 2023 resulted in 36,112 tonnes of greenhouse gas emissions, approximately 8% of the total emissions across Napier.

As outlined in Figure 1, this includes the energy council uses in its facilities, buildings and streetlights, the petrol and diesel used by vehicles and equipment, wastewater treatment, farming at Lagoon Farm, waste going to landfill, emissions associated with building and maintaining infrastructure, delivering services like kerbside waste and recycling collections, staff commuting and the procurement of goods and services.

Figure 1: Napier City Council’s FY2023 greenhouse gas emissions by source

7.3 Issues

The approach to setting emission reduction targets for Napier City Council is aligned with the Science Based Targets Initiative (SBTi)^{^[1]} methodology and the ISO Net Zero Guidelines^{^[2]}. Science based targets must be measurable, actionable and time bound and set in line with the goals of the global Paris Climate Agreement limiting global warming to 1.5 degrees Celsius above pre-industrial levels.

A science-based target is also one of the key criteria for Local Government Funding Agency (LGFA) Climate Action Loans^{^[3]}. While Napier City Council does not meet the requirements for this funding yet, it is logical to make sure we set targets aligned with this future funding opportunity.

Any credible long-term net zero target must also be complemented by an interim target with a clear plan of action on how to meet those targets. Reducing gross emissions this decade is critical if we are to avoid locking in the most catastrophic impact.

Achieving a target of net zero carbon emissions requires aspirational change, and the sooner we get started, the more time we have to make the fundamental behavioural and operational changes that are needed to achieve this goal. Setting a target delivers on the commitment Council already made in the 2021 Climate Position Statement.

Recommended Emission Reduction targets:

Long Term Target

1. Reduce Napier City Council’s Scope 1+2^{^[4]} greenhouse gas emissions to net zero by 2050

2. Facilitate a reduction in Napier City’s community greenhouse gas emissions to achieve net zero by 2050

Interim Target

3. Reduce Napier City Councils Scope 1+2 emissions by 63% by 2035

4. Facilitate a reduction in Napier City Councils Scope 3 emissions by 63% by 2035

The interim target year of 2035 is recommended as it recognises Council is only just starting out on its emission reduction journey and it will take time to embed this into all of Council’s functions. It also aligns with the Government’s emission reduction plan and first three emission budget periods. A 2035 target aligns with Councils strategic planning time frames covering the current Three-Year Plan (2024-27) and the next Long-Term Plan (2027-2027).

In line with SBTi requirements, if Scope 3 emissions are 40% or more of the total emissions, they must be included in the interim science-based targets. Napier City Council’s Scope 3 emissions were calculated at 82% of the total baseline emissions.

Emission Reduction Plan

The attached draft Emission Reduction Plan (ERP) outlines 30 tangible and measurable actions that will start us on the journey to reduce NCC’s operational emissions to net zero by 2050 and facilitate a reduction in Napier City’s community emissions.

It brings together many projects we are already doing for other good reasons, actions to demonstrate leadership and embed this work as a priority across council, to scope future opportunities and deliver projects in partnership with others.

It should be recognised this is an initial plan to get us started, while we set ourselves up for success. The plan will need to be revised over the coming years, as we improve our understanding of emissions associated with the infrastructure we invest in, the services we deliver and takes account of new technologies, government initiatives and responds to community priorities.

Benchmarking

A limited review of other local authorities where data was available online, was undertaken to provide context to Elected Members as requested at the June Prosperous Napier Committee. As discussed previously making a direct comparison is not always simple as each Council has a different asset base within its inventory boundary, different emission sources within the community, in some cases applied a different consolidation approach and are at differing stages in their emission reduction journey.

Despite this, the comparison shows that most of the Council’s reviewed had set similar long-term targets of Net Zero by 2050 and interim targets ranging between 21%-50% by 2030. A 50% reduction by 2030 is comparable to a 63% reduction by 2035. This confirms Napier City Council’s community emissions profile on a per capita basis and that the recommended targets are broadly similar to other Councils.

7.4 Significance and Engagement

Through the recent Three-Year Plan community consultation there was support for Council to take more action on climate change including emission reduction. The financial impact to Council’s capital plan is considered minimal as budget for most of the actions are already included in the Three-Year Plan. Changes to strategic assets are likely to be minor, or have already been consulted on (for example, plans to transition Lagoon Farm to Ahuriri Regional Park and The Civic Precinct project).

7.5 Implications

Financial

The first three years of the emission reduction plan are in alignment with Council’s recently adopted Three-Year Plan. It brings together projects that are:

· already underway, or planned and have committed budget

· those that can be achieved internally with existing staff resource, potentially with some re-prioritisation

· or in partnership with others incurring minimal cost to Council and

· those that are in a scoping phase and will likely deliver cost and emission savings over the asset life

While there may be capital budget provisions, some teams have raised concerns that they are not appropriately resourced to take on additional work. If delivering the emission reduction actions are a Council priority, it may require reprioritisation of some other work or additional resource to achieve this work and the other commitments.

In general, emission reduction actions should lead to cost savings for Council as we focus on energy efficiency, phasing our expensive fossil fuels, transition to equipment with proven lower total costs of ownership (heat pumps, LED lighting, electric and hybrid vehicles), minimise our waste and look for opportunities to work collaboratively with our suppliers and contractors.

Social & Policy

This work aligns Napier City Council with national policy direction as set by the national emission reduction targets, emission budgets and national emission reduction plans. It also aligns with central Government’s Carbon Neutral Government programme (CNGP)^{^[5]}, which requires public entities to measure and report emissions, set targets, and develop reduction plans. Public sector entities under the CNGP are also required to purchase carbon offsets from 2025 to achieve carbon neutrality.

Risk

Climate change is a strategic risk. Reducing emissions this decade is critical if we are to play our part in avoiding the most catastrophic climate change impact.

There is reputational risk to Napier City Council in not understanding its own greenhouse gas emissions and not taking steps to reduce these. Council needs to get its own house in order before it can take a leadership position and support the community to transition to a low carbon and more resilient future.

There is operational risk in rolling out any new strategy, plan or programme of work. This must be delivered with the necessary leadership and policy commitment, staff education and change management processes, communication plan, supporting processes, systems and sufficient resourcing.

This is a step change that will need to be embedded across council operations, roles and responsibility in a similar way that health and safety is everyone’s responsibility.

7.6 Options

The options available to Council are as follows:

a. Approve the

i. The recommended Long- term Emission Reduction Target: Net Zero by 2050

ii. The recommended Interim Emission Reduction Targets: 63% reduction by 2035

iii. The draft Emission Reduction Plan

b. Do not approve the recommended targets and draft emissions reduction plan.

7.7 Development of Preferred Option

The emission reduction targets have been developed in accordance with best practice and guidance from the Science Based Targets Initiative and ISO Standards.

The draft Emission Reduction Plan has been developed via a thorough process including:

a) Calculation of the baseline GHG inventory to understand emission sources across the council.

b) Independent verification of the GHG inventory ensuring accuracy and completeness

c) Engagement with council officers to understand the emission reduction potential for each source of GHG emissions, current and future plans.

d) Research into potential actions applicable to NCC’s assets

e) Developing relationships with EECA, Meridian, Water NZ, Aotearoa Council Climate Network, LGNZ, Mott MacDonald and suppliers

f) Review of selected other council’s targets and emission reduction plans

g) Review of draft ERP sections and proposed actions by council officers and incorporating feedback

h) Cross referencing the actions with the capital budgets in the recently adopted three-year plan and 10-year infrastructure plan

i) Presentation of the draft ERP to ELT on 2/07/24 and 6/08/24

j) Incorporating ELT feedback into plan presented to Prosperous Napier

7.8 Attachments

1 Draft Emission Reduction Plan 2025-2035 (Doc Id 1784188) (Under separate cover 1)

2 Emission Reduction Plan Actions & Budget (Doc Id 1784187)

3 Benchmarking Comparison (Doc Id 1784338)

Prosperous Napier Committee - 29 August 2024 - Open Agenda Item 8

8. Treasury Activity and Funding Update

Type of Report:	Enter Significance of Report
Legal Reference:	Enter Legal Reference
Document ID:	1783721
Reporting Officer/s & Unit:	Garry Hrustinsky, Corporate Finance Manager

8.1 Purpose of Report

The purpose of this report is to update the Prosperous Napier Committee on Council’s treasury activity.

Officer’s Recommendation

The Prosperous Napier Committee:

a. Receive the report titled Treasury Activity and Funding Update dated 29 August 2024.

8.2 Background Summary

Investments

As at 7 August 2024 Council held $9m on term deposit at an average interest rate of 5.61%.

The following table reports the cash and cash equivalents on 07 August 2024:

	$000
Cash on call*	$6,604
Short term bank deposits	$9,000
Total cash and deposits	$15,604

*Includes $1.34m of retained funds.

*Includes cash held in accounts.

ANZ and ASB have been offering the best deposit rates for terms under 60 days. Due to relatively low cash and term deposit balances currently held by NCC, small deposits can result in significant changes in percentages against limit.

The primary consideration for placing deposits is timing the need for future expenditure, with returns a secondary consideration. Longer-dated investments beyond 60 days are not possible with the current cash balance.

Debt

Council’s current total external debt position as at 07 August 2024 is $20m. During April 2024 $10m was borrowed from the Local Government Funding Agency (LGFA) in two tranches at fixed interest rates. The details of Council’s external debt are as follows:

Draw date	Amount	Interest rate	Maturity date
21/06/2023	$5m	5.61%	15/04/2026
21/06/2023	$5m	5.46%	15/05/2028
30/04/2024	$5m	5.73%	20/04/2029
30/04/2024	$5m	5.79%	15/05/2030

The interest rate assumptions for internal and external borrowings in the LTP are set out in the table below:

Interest rates	24/25	25/26	26/27	27/28	28/29	29/30	30/31	31/32	32/33	33/34
External debt	6.0%	6.0%	5.8%	5.7%	5.7%	5.7%	5.8%	5.9%	6.0%	6.0%
Internal debt	6.0%	6.0%	6.0%	6.0%	6.0%	6.0%	6.0%	6.0%	6.0%	6.0%

Council’s current total internal debt position as at 1 July is $97.2m. Internal debt occurs when Council uses its own cash resources (reserves) to finance capital expenditure rather than new external borrowing.

Debt projections are based on the assumption that capital projects budgets will be completed. There is currently a gap of $65.6m between year-end budgeted and actual borrowing. It is expected that Council will need to borrow a further $10m to $20m in the next several months – information on capital project expenditure is currently being sought.

Council’s debt portfolio is managed within macro limits set out in the Treasury Policy. It is recognised that from time to time Council may fall out of policy due to timing issues. The Treasury Policy allows for officers to take the necessary steps to move Council’s funding profile back within policy in the event that a timing issue causes a breach in policy.

Council is currently compliant with its Treasury Management Policy.

The Reserve Bank of New Zealand’s (RBNZ) Official Cash Rate (OCR) is at 5.5% at its last review on t10 July 2024. The rate has held steady for several reviews. Its next review is on 14 August 2024.

As part of the media briefing the RBNZ noted that “Restrictive monetary policy has significantly reduced consumer price inflation, with the Committee expecting headline inflation to return to within the 1 to 3 percent target range in the second half of this year.

The decline in inflation reflects receding domestic pricing pressures, as well as lower inflation for goods and services imported into New Zealand. Labour market pressures have eased, reflecting cautious hiring decisions by firms and an increased supply of labour. The level of economic activity, including business and consumer investment spending and investment intentions, is consistent with the restrictive monetary stance.

The Committee agreed that monetary policy will need to remain restrictive.”

As previously noted, no further rates rises are expected this financial year.

Debt to revenue ratio headroom

This is the key measure for Councils debt profile as it is the measure used by Council’s major funders.

The closer Council gets to its limits the more likely it is that it will experience problems raising new debt. A Council with a credit rating would experience a decrease in cost of funds (lower credit rating and higher borrowing margins).

Council is currently compliant with its borrowing limits.

Officers are exploring the option around taking on a credit rating. This would unlock more competitive borrowing rates through the LGFA and could increase Council’s debt limit to 280% of its revenue/income (providing more headroom to borrow). There is a cost to maintain a credit rating and requires council’s financials to be externally audited each year. Once Council reaches approximately $100m of external borrowings the interest savings achieved from having a credit rating start to outweigh the audit cost.

8.3 Issues

No issues.

8.4 Significance and Engagement

N/A

8.5 Implications

Financial

N/A

Social & Policy

N/A

Risk

N/A

8.6 Options

The options available to Council are as follows:

a. Receive the report titled Treasury Activity and Funding Update dated 29 August 2024

b. Amend the report titled Treasury Activity and Funding Update dated 29 August 2024.

c. Reject the report titled Treasury Activity and Funding Update dated 29 August 2024.

8.7 Development of Preferred Option

N/A

8.8 Attachments

Nil

Prosperous Napier Committee - 29 August 2024 - Open Agenda Item 9

9. Rates Remission in Response to Significant Extraordinary Circumstances (Voluntary Buy-Out Programme)

Type of Report:	Legal and Operational
Legal Reference:	Local Government (Rating) Act 2002
Document ID:	1783270
Reporting Officer/s & Unit:	Garry Hrustinsky, Corporate Finance Manager

9.1 Purpose of Report

To seek approval from Prosperous Napier Committee for a rates remissions for properties involved in the Category 3 voluntary buy-out programme for the 2024/25 financial year. This is in response to Significant Extraordinary Circumstances from the impact of Cyclone Gabrielle on Tuesday 14 February 2023.

Officer’s Recommendation

The Prosperous Napier Committee:

a. Approve a remission for qualifying rating units for either the full 2024/25 year (i.e. all instalments) or if/when property buy-out occurs – whichever is earliest.

b. Approve unbudgeted funding up to $13,133 for the purpose of Rates Remission for Significant Extraordinary Circumstances (Voluntary Buy-Out Programme).

c. Note that the remission will be sourced from unbudgeted funding and will impact on Council’s year-end position.

9.2 Background Summary

On Monday 13 and Tuesday 14 February 2023, Cyclone Gabrielle moved across the east coast of the North Island. The cyclone caused significant damage to infrastructure, flooding in a number of areas, landslips, and near-complete destruction of properties in the low lying areas of Eskdale.

As part of the co-ordinated response to the event, Council approved a rates remission for properties impacted by the cyclone for the 2022/23 rating year.

A recovery programme was established, with a Category 3 voluntary buy-out programme introduced to purchase residential property deemed too dangerous to live in due to flood risk. The buy-out programme has been transferred to Hastings District Council (HDC) to manage.

In the 2023/24 financial year Council approved a remission to ensure that Napier City Council remissions policy was consistent with Hastings District Council. In this report, approval is being sought to extend that remission a further 12 months for remaining Category 3 properties engaged in the buy-out process.

9.3 Issues

HDC has a rates remission in place for properties that are red and yellow stickered. Under Remission of Rates – Dwellings and Land Affected by Natural Disaster, a remission has been applied to impacted properties within HDC boundaries for a period of up to two rating years (i.e. rating years 2022 to 2024). HDC has opted to extend the timeframe for impacted properties.

To provide consistency with HDC (who are negotiating with property owners on behalf of NCC) and certainty for impacted property owners engaged in negotiations, a remission for the earlier of either the full 2024/25 rating year, or if/when property buy-out occurs, is proposed.

9.4 Significance and Engagement

The proposed remission impacts 11 properties engaged in negotiations. Significance is considered low.

9.5 Implications

Financial

Rates on the 11 properties for 2024/25 amounts to approximately $13,133.

Please note that Council does not have any budget available to provide rates relief. Any relief package will be sourced from unbudgeted funding and will impact on Council’s year-end position. However, due to the impact of a recent registered revaluation and buy-out being completed for several properties already, the budgeted amount is not significant.

Social & Policy

Extract from the Rates Remission Policy:

“Remission of Rates in Response to Significant Extraordinary Circumstances being identified by Council.

Objective

To enable Council to provide rates remission to assist ratepayers in response to Significant Extraordinary Circumstances impacting Napier’s ratepayers.

Definitions

Financial Hardship: for the purpose of this provision is defined as the inability of a person, after seeking recourse from Government benefits or applicable relief packages, to reasonably meet the cost of goods, services and financial obligations that are considered necessary according to New Zealand standards. In the case of a ratepayer who is not a natural person, it is the inability, after seeking recourse from Government benefits or applicable relief packages, to reasonably meet the cost of goods, services and financial obligations that are considered essential to the functioning of that entity according to New Zealand standards.

Conditions and Criteria

For this policy to apply Council must first have identified that there have been Significant Extraordinary Circumstances affecting the ratepayers of Napier, that Council wishes to respond to.

Once Significant Extraordinary Circumstances have been identified by Council, the criteria and application process (including an application form, if applicable), will be made available.

For a Rating Unit to receive a remission under this policy it needs to be an “Affected Rating Unit” based on an assessment performed by officers, following guidance provided through a resolution of Council.

Council resolution will include:

1. That the resolution applies under the Rates Remission Policy; and

2. Identification of the Significant Extraordinary Circumstances triggering the policy (including both natural and man-made events); and

3. How the Significant Extraordinary Circumstances are expected to impact the community (e.g. financial hardship); and

4. The type of Rating Unit the remission will apply to; and

5. Whether individual applications are required or a broad based remission will be applied to all affected Rating Units or large groups of affected Rating Units; and

6. What rates instalment/s the remission will apply to; and

7. Whether the remission amount is either a fixed amount, percentage, and/or maximum amount to be remitted for each qualifying Rating Unit.

Explanation

The specific response and criteria will be set out by Council resolution linking the response to specific Significant Extraordinary Circumstances. The criteria may apply a remission broadly to all Rating Units or to specific groups or to Rating Units that meet specific criteria such as proven Financial Hardship, a percentage of income lost or some other criteria as determined by council and incorporated in a council resolution.

Council will indicate a budget to cover the value of remissions to be granted under this policy in any specific financial year.

The types of remission that may be applied under this policy include:

· The remission of a fixed amount per Rating Unit either across the board or targeted to specific groups such as:

· A fixed amount per residential Rating Unit

· A fixed amount per commercial Rating Unit”

Risk

This is a community support measure.

9.6 Options

The options available to Prosperous Napier Committee are as follows:

a. Approve the Rates Remission for Significant Extraordinary Circumstances (Voluntary Buy-Out Programme).

b. Do not approve the Rates Remission for Significant Extraordinary Circumstances (Voluntary Buy-Out Programme).

c. Approve unbudgeted funding of $13,133 for Remission of Rates in Response to Significant Extraordinary Circumstances (Voluntary Buy-Out Programme).

d. Approve unbudgeted funding of a different amount for Remission of Rates in Response to Significant Extraordinary Circumstances (Voluntary Buy-Out Programme).

9.7 Development of Preferred Option

The preferred option has been developed with consideration of the programme being managed by HDC, HDC’s rates remission policy, the estimated cost of providing the remission, and the timeframe required to complete property buy-outs.

9.8 Attachments

1 Request for Remission Report 2023-24 (Doc Id 1783281)

Prosperous Napier Committee - 29 August 2024 - Open Agenda

Prosperous Napier Committee

Open Minutes

Meeting Date:	Thursday 18 July 2024
Time:	9.38am – 10.05am (Open) 10.08am – 10.19am (Public Excluded)
Venue	Chapman Room Level 1, Chapman Pavilion Latham Street Napier
	Livestreamed via Council’s Facebook page

Present

Chair: Councillor Taylor

Members: Mayor Wise, Deputy Mayor Brosnan, Councillors Boag, Browne, Chrystal, Crown, Greig, Mawson, McGrath and Simpson and Tareha

In Attendance

Acting Deputy Chief Executive (Jessica Ellerm)

Executive Director City Strategies (Rachael Bailey) [via Zoom]

Executive Director Community Services (Thunes Cloete)

Procurement Manager (Sharon O’Toole)

Chief Financial Officer (Caroline Thomson)

Commercial Director (Richard Munneke)

Manager Strategy and Transformation (Stephanie Murphy)

Administration

Governance Advisors (Carolyn Hunt and Jemma McDade)

Prosperous Napier Committee – Open Minutes

Table of Contents

Order of Business Page No.

Karakia. 3

Apologies. 3

Conflicts of interest 3

Public forum.. 3

Announcements by the Mayor 3

Announcements by the Chairperson. 3

Announcements by the management 3

Confirmation of minutes. 3

Agenda Items

1. Treasury Activity and Funding Update. 4

2. Standing up a Council Controlled Trading Organisation to manage Councils investment Assets 4

3. Amendment to the 2024 Meeting Schedule. 5

4. Procurement and Contract Management Update. 6

Minor matters. 6

Resolution to Exclude the Public. 7

Order of Business

Apologies

Councillors Crown / Greig

That the apologies for absence from Councillor Price and Evelyn Ratima (Ngā Mānukanuka o te Iwi representative) be accepted.

Carried

Conflicts of interest

Nil

Public forum

Nil

Announcements by the Mayor

Nil

Announcements by the Chairperson

Tribute – Norm Hewitt – Councillor Taylor acknowledged and paid tribute to Norm Hewitt who passed away on 16 July 2024 at the age of 55 years after battling motor neurone disease. He was a local Hawke’s Bay rugby identity and captained the Hawke’s Bay Rugby team in the late 1990’s. He also played for the Māori All Blacks and All Blacks teams.

Councillor Taylor also acknowledged the contribution Norm made post-rugby having changed his life and was able to change the lives of many young people. Sincere condolences were conveyed to his whānau.

Announcements by the management

Nil

Confirmation of minutes

Councillors Chrystal / Greig

That the Minutes of the Prosperous Napier Committee meeting held on 6 June 2024 were taken as a true and accurate record of the meeting.

Carried

Agenda Items

1. Treasury Activity and Funding Update

Type of Report:	Information
Legal Reference:	N/A
Document ID:	1743051
Reporting Officer/s & Unit:	Garry Hrustinsky, Corporate Finance Manager

1.1 Purpose of Report

The purpose of this report is to update the Prosperous Napier Committee on Council’s treasury activity.

At the meeting

The Chief Financial Officer, Ms Thomson spoke to the report which provided an update on Council’s treasury activity. Due to timing requirements for future expenditure all Council’s term deposits will be maturing within the next six months.

External debt is where Council borrows from an institution such as the Local Government Funding Agency or a Bank. Internal debt is where Council uses its own cash or reserves to finance capital expenditure.

Since the report was written there has been a further OCR announcement. On 10 July the Reserve Bank left the OCR rate unchanged at 5.5% commenting that the restrictive monetary policy is impacting to the extent that they are forecasting inflation to approach the targeted range of 1-3% in the second half of the year.

The latest CPI figures released on 17 July 2024 show the annual percentage change for June is 3.3%, which is down from 4% in March.

Committee resolution

Councillor Simpson / Mayor Wise

The Prosperous Napier Committee:

a. Receive the report titled Treasury Activity and Funding Update dated 18 July 2024.

Carried

2. Standing up a Council Controlled Trading Organisation to manage Councils investment Assets

Type of Report:	Operational
Legal Reference:	Local Government Act 2002
Document ID:	1772722
Reporting Officer/s & Unit:	Richard Munneke, Commercial Director
2.1 Purpose of Report Following decisions made as part of the 3-year LTP adoption the purpose of this report is to provide elected members with a programme to stand up a Council Controlled Trading Organisation.

At the meeting

The Commercial Director, Mr Munneke spoke to the report which followed a decision by Council during the 3 Year Long Term Plan hearings for the establishment of a Council Controlled Trading Organisation (CCTO), with a view to trying to achieve an intergenerational return on its commercial assets.

Mr Munneke highlighted the need for transparency with the public in regard to the setting up of a CCTO, due to future CCTOs having delegated powers and the ability to make commercial decisions that would not be in the public arena.

In response to questions the following was clarified:

· Two public scoping workshops will be held to discuss principles and purpose in the first workshop, with the second workshop focussing on governance and operations.

· Scope of the assets to be considered for a CCTO should be conservative, in that they are assets that could be sold without going back to Council. These could be land assets in Parklands and the future stages, and the leasehold land portfolio.

· Mr Munneke advised that the workshop being held after the meeting would be in public and would be an opportunity to discuss this in more detail.

· The principles for the draft statement of expectations will be discussed at the first workshop and would be brought back to the second workshop at the end of the month. They will then be brought back to the Committee for final approval.

· Key milestones and a detailed programme will be available following the workshops when Council has determined what further work or areas of concerns officers may need to investigate.

Committee resolution

Councillors Crown / Simpson

The Prosperous Napier Committee:

a. Endorse the process and key milestones as described to stand up a Council Controlled Trading Organisation.

Councillor McGrath abstained from voting

Carried

3. Amendment to the 2024 Meeting Schedule

Type of Report:	Procedural
Legal Reference:	Local Government Act 2002
Document ID:	1774628
Reporting Officer/s & Unit:	Anna Eady, Team Leader Governance
3.1 Purpose of Report The purpose of this report is to consider an amendment to the 2024 meeting schedule, which was adopted on 12 October 2023. It is proposed that the meeting schedule be amended as outlined in the recommendation of this report.

At the meeting

The Chair introduced the procedural report. There was no discussion on this report.

Committee resolution

Councillors Chrystal / Mawson

The Prosperous Napier Committee:

a) Adopt the following amendment to the 2024 meeting schedule:

· Hearings Committee (District Plan)

New Date

18 July 20924 – 10.45am

· Council

New Date

1 August 2024 – 9.30am

· Sustainable Napier Committee

Time change

1 August 2024 following Council

Carried

4. Procurement and Contract Management Update

Type of Report:	Information
Legal Reference:	N/A
Document ID:	1773187
Reporting Officer/s & Unit:	Sharon O’Toole, Procurement Manager
4.1 Purpose of Report The purpose of this report is to outline the various improvements required to help Council develop procurement and contract management into strategic tools that will help deliver the capital programme, better manage Council assets, and address the findings and recommendations from the recent Internal Audit Report: Contract Management Report completed by Crowe April 2024.

At the meeting

The Procurement Manager, Ms O’Toole provided a brief summary of the report highlighting some of the work underway to improve and develop procurement and contract management in Council.

In response to questions the following was clarified:

· Systems, training and processes are being improved to assist with compliance and standardisation.

· Regular reporting and updates would be through the Audit and Risk Committee and it was noted that all elected members could attend those meetings.

· There is triaging that occurs on each project through Sycle which has three key areas ranging in scale from simple to complex, noting that procurement in different areas have different scales and complexities.

· Expediency may be best for a project or team, but is not always best for Council. It is not just about doing things fast, it is about doing things right.

Committee resolution

Councillors Simpson / Browne

The Prosperous Napier Committee:

a. Receive the Procurement and Contract Management update.

ACTION: Direct officers to provide a way to enable continued oversight of this work as it is integral to delivering Council’s strategic priorities.

Carried

Minor matters

There were no minor matters to discuss.

Resolution to EXCLUDE the Public

Councillors Chrystal / Tareha

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

1. 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. 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 Public Excluded at 10.08am

The meeting closed at 10.19am

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

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

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

[4] Operational Emissions = Scope 1 (from council owned assets) + Scope 2 (purchased electricity)

[5] https://environment.govt.nz/what-government-is-doing/areas-of-work/climate-change/carbon-neutral-government-programme/

Meeting Date:	Thursday 29 August 2024
Time:	Following Napier People and Places Committee
Venue:	Ocean Suite East Pier Hotel Nelson Quay Ahuriri Napier
	Livestreamed via Council’s Facebook page

Committee Members	Chair: Councillor Crown Members: Mayor Wise, Deputy Mayor Brosnan, Councillors Boag, Browne, Chrystal, Greig, Mawson, McGrath, Price, Simpson, Tareha and Taylor (Deputy Chair) Ngā Mānukanuka o te Iwi representative – Evelyn Ratima and (Vacancy)
Officer Responsible	Deputy Chief Executive / Executive Director Corporate Services
Administration	Governance Team
	Next Prosperous Napier Committee Meeting Thursday 10 October 2024