Agenda of Finance and Council Controlled Organisations Committee

Notice of Meeting:

I hereby give notice that an ordinary meeting of the Finance and Council Controlled Organisations Committee will be held on:

Date: Tuesday 21 November 2017

Time: 1.30 pm (or at the conclusion of the previous meeting, whichever is later)

Venue: Edinburgh Room, Municipal Chambers,

The Octagon, Dunedin

Sue Bidrose

Chief Executive Officer

Finance and Council Controlled Organisations Committee

PUBLIC AGENDA

MEMBERSHIP

Chairperson	Cr Mike Lord
Deputy Chairperson	Cr Doug Hall
Members	Cr David Benson-Pope	Mayor Dave Cull
	Cr Rachel Elder	Cr Christine Garey
	Cr Aaron Hawkins	Cr Marie Laufiso
	Cr Damian Newell	Cr Jim O'Malley
	Cr Chris Staynes	Cr Conrad Stedman
	Cr Lee Vandervis	Cr Andrew Whiley
	Cr Kate Wilson

Senior Officer Gavin Logie, Acting Chief Financial Officer

Governance Support Officer Jenny Lapham

Jenny Lapham

Governance Support Officer

Telephone: 03 477 4000

Jenny.Lapham@dcc.govt.nz

www.dunedin.govt.nz

Note: Reports and recommendations contained in this agenda are not to be considered as Council policy until adopted.

Finance and Council Controlled Organisations Committee

21 November 2017

Part A Reports

Waipori Fund - Quarter Ending September 2017

Department: Finance

EXECUTIVE SUMMARY

1 The attached report from Dunedin City Treasury Limited provides information on the results of the Waipori Fund for the quarter ending 30 September 2017.

RECOMMENDATIONS

That the Committee:

a) Notes the report from Dunedin City Treasury Limited on the Waipori Fund for the quarter ending 30 September 2017.

BACKGROUND

2 Not applicable.

DISCUSSION

3 Not applicable.

OPTIONS

4 Not applicable.

NEXT STEPS

5 Not applicable.

Signatories

Author:	Richard Davey - Treasury Manager
Authoriser:	Gavin Logie - Acting Chief Financial Officer

Attachments

Title

Page

Waipori Fund Report

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This report relates to providing local infrastructure, public services and regulatory functions for the community.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☐	☐	☒
Economic Development Strategy	☐	☐	☒
Environment Strategy	☐	☐	☒
Arts and Culture Strategy	☐	☐	☒
3 Waters Strategy	☐	☐	☒
Spatial Plan	☐	☐	☒
Integrated Transport Strategy	☐	☐	☒
Parks and Recreation Strategy	☐	☐	☒
Other strategic projects/policies/plans	☐	☐	☒

This report has no direct contribution to the Strategic Framework.

Māori Impact Statement

There are no known impacts on tangata whenua.

Sustainability

There are no known implications for sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The report fulfils the financial reporting requirements for Council.

Financial considerations

Not applicable – reporting only.

Significance

Not applicable – reporting only.

Engagement – external

This report has been prepared for and approved by the Board of Dunedin City Treasury Limited.

Engagement - internal

This report has been prepared for the Board of Dunedin City Treasury Limited.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

There are no known implications for Community Boards.

Finance and Council Controlled Organisations Committee

21 November 2017

Financial Result - Period Ended 30 September 2017

Department: Finance

EXECUTIVE SUMMARY

1 This report provides the financial results for the period ended 30 September 2017 and the financial position as at that date.

RECOMMENDATIONS

That the Committee:

a) Notes the Financial Performance for the period ended 30 September 2017 and the Financial Position as at 30 September 2017.

BACKGROUND

2 This report provides a commentary of the financial performance of Council for the period ended 30 September 2017 and the financial position as at that date.

DISCUSSION

3 The net deficit (including Waipori) for the three months to September 2017 was
$10.549 million or $1.748 million favourable to budget.

4 The favourable variance against budget was due to the following:

· $692k – higher than expected other operating revenue. This favourable variance was mainly due to: Waste and Environmental Solutions revenue was greater than expected with additional tonnage through the Green Island landfill being the overflow from the closure of the Fairfield Landfill; and higher than expected building consent activity in Regulatory Services.

· $679k – higher than expected grants revenue due to the timing of Transportation capital expenditure as well as increased subsidised operating expenditure in response to the July 2017 flooding event.

· $687k – Grants expenditure was lower than budgeted due to the delayed timing of Civic, Heritage Rates Relief and Major Events grants.

· $322k – favourable interest expenditure driven by the slightly lower debt level and favourable floating interest rate.

· $825k Waipori Fund resulting from unbudgeted fair value gains across a number of investment portfolios – international equities in particular driven by the weaker NZD.

5 These favourable variances were partially offset by:

· $311k higher materials, supplies & services expenditure. This included costs associated with the 2GP, flood relief expenditure and contracted services to assist in the management of the property portfolio.

· $972k higher fees & levies costs. This included consultancy costs in Property covering for vacant positions and a high volume of building survey and inspection work undertaken to inform maintenance and renewal programmes. In addition Building Services expenditure is higher than expected to ensure consenting activity meets the required statutory deadlines.

6 Capital expenditure was less than budget by $4.946 million. Project delays have arisen across a number of portfolios while project scoping and design is finalised. Expenditure by Transport has exceeded budget due to higher than budget minor improvements across the network including expenditure associated with reinstatements resulting from the July rain event.

7 Total Council debt as at 30 September 2017 was $210.631 million or $1.756 million lower than budget. This variance reflected delayed expenditure on capital projects.

OPTIONS

8 Not applicable.

NEXT STEPS

9 Not applicable.

Signatories

Author:	Lawrie Warwood - Financial Analyst
Authoriser:	Gavin Logie - Acting Chief Financial Officer

Attachments

	Title	Page
a	Summary Financial Information	26
b	Statement of Financial Performance	27
c	Statement of Financial Position	28
d	Statement of Cashflows	29
e	Capital Expenditure Summary	30
f	Borrowing and Investment Policy	31
g	Statement of Public Debt	32
h	Summary of Operating Variances	33
i	Financial Review	34

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

The financial expenditure reported in this report relates to providing local infrastructure, public services and regulatory functions for the community.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☐	☐	☒
Economic Development Strategy	☐	☐	☒
Environment Strategy	☐	☐	☒
Arts and Culture Strategy	☐	☐	☒
3 Waters Strategy	☐	☐	☒
Spatial Plan	☐	☐	☒
Integrated Transport Strategy	☐	☐	☒
Parks and Recreation Strategy	☐	☐	☒
Other strategic projects/policies/plans	☐	☐	☒

This report has no direct contribution to the Strategic Framework, although the financial expenditure reported in this report has contributed to all of the strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

There are no known implications for sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report fulfils the internal financial reporting requirements for Council.

Financial considerations

Not applicable – reporting only.

Significance

Not applicable – reporting only.

Engagement – external

There has been no external engagement.

Engagement - internal

The report is prepared as a summary for the individual department financial reports.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

There are no known implications for Community Boards.

Finance and Council Controlled Organisations Committee

21 November 2017

Dunedin City Holdings Limited Parent Financials - Year Ended 30 June 2017

Department: Finance

EXECUTIVE SUMMARY

1 This report provides the financial results for the year ended 30 June 2017 and the financial position as at that date for the Dunedin City Holdings Limited parent company accounts.

RECOMMENDATIONS

That the Committee:

a) Notes the Financial Performance for the year ended 30 June 2017 and the Financial Position as at 30 June 2017 for Dunedin City Holdings Limited Parent.

BACKGROUND

2 This report provides a commentary of the financial performance of Dunedin City Holdings Limited (Parent) for the year ended 30 June 2017 and the financial position as at that date.

DISCUSSION

3 The net surplus for the year was $2.700 million or $107k unfavourable to budget.

4 The variance against budget was due to the following:

· $840k higher than expected expenditure. This was primarily due to the budget assuming the funding provided to Council of $5.902 million was to be paid as interest $4.956 million and a dividend of $946k. In reality the full $5.902 million was paid as interest. In addition fees & levy expenditure also exceeded budget due to a number of DCHL initiated reviews (eg: Pole replacement, Group constitution refresh) in the 2016/17 financial year.

The unfavourable expenditure variance was partially offset by:

· $733k – higher than expected income due to an additional dividend from
City Forests Limited partially offset by a lower dividend from Aurora Energy resulting from the increase in network maintenance costs for that company.

5 Investment in Subsidiaries as at 30 June was represented as follows:

6 Total term loans as at 30 June 2017 was $30.000 million or $1.000 million lower than budget.

OPTIONS

7 Not applicable.

NEXT STEPS

8 Not applicable.

Signatories

Authoriser:

Gavin Logie - Acting Chief Financial Officer

Attachments

	Title	Page
a	Financial Statements 30 June 2017	47

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

The financial expenditure reported in this report relates to providing local infrastructure, public services and regulatory functions for the community.

Fit with strategic framework

	Contributes	Detracts	Not applicable
Social Wellbeing Strategy	☐	☐	☒
Economic Development Strategy	☐	☐	☒
Environment Strategy	☐	☐	☒
Arts and Culture Strategy	☐	☐	☒
3 Waters Strategy	☐	☐	☒
Spatial Plan	☐	☐	☒
Integrated Transport Strategy	☐	☐	☒
Parks and Recreation Strategy	☐	☐	☒
Other strategic projects/policies/plans	☐	☐	☒

This report has no direct contribution to the Strategic Framework, although the financial expenditure reported in this report has contributed to all of the strategies.

Māori Impact Statement

There are no known impacts for tangata whenua.

Sustainability

There are no known implications for sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report fulfils the DCHL parent company financial reporting requirements for Council.

Financial considerations

Not applicable – reporting only.

Significance

Not applicable – reporting only.

Engagement – external

There has been no external engagement.

Engagement - internal

The report is prepared based on information provided by DCHL.

Risks: Legal / Health and Safety etc.

There are no known risks.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

There are no known implications for Community Boards.

	Title	Page
a	Register of Interest	7