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 9 February 2021

Time: 1.00 pm

Venue: Edinburgh Room, Municipal Chambers, The Octagon, Dunedin

Sandy Graham

Chief Executive Officer

Finance and Council Controlled Organisations Committee

PUBLIC AGENDA

MEMBERSHIP

Chairperson	Cr Mike Lord
Deputy Chairperson	Cr Doug Hall
Members	Cr Sophie Barker	Cr David Benson-Pope
	Cr Rachel Elder	Cr Christine Garey
	Mayor Aaron Hawkins	Cr Carmen Houlahan
	Cr Marie Laufiso	Cr Jim O'Malley
	Cr Jules Radich	Cr Chris Staynes
	Cr Lee Vandervis	Cr Steve Walker
	Cr Andrew Whiley

Senior Officer Gavin Logie, Acting General Manager Finance

Governance Support Officer Wendy Collard

Wendy Collard

Governance Support Officer

Telephone: 03 477 4000

Wendy.Collard@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

9 February 2021

ITEM TABLE OF CONTENTS PAGE

1 Public Forum 4

2 Apologies 4

3 Confirmation of Agenda 4

4 Declaration of Interest 5

5 Confirmation of Minutes 17

5.1 Finance and Council Controlled Organisations Committee meeting - 19 October 2020 17

Part A Reports (Committee has power to decide these matters)

6 Finance and Council Controlled Organisations Committee Forward Work Programme 22

7 Actions From Resolutions of Finance and Council Controlled Organisations Committee Meetings 25

8 Financial Result - Period Ended 31 December 2020 29

9 Waipori Fund - Quarter Ending December 2020 45

10 Dunedin City Holdings Limited Parent Financials - Year ended 30 June 2020 51

Finance and Council Controlled Organisations Committee

9 February 2021

Finance and Council Controlled Organisations Committee

MINUTES

Minutes of an ordinary meeting of the Finance and Council Controlled Organisations Committee held in the Edinburgh Room, Municipal Chambers, The Octagon, Dunedin on Monday 19 October 2020, commencing at 1.00 pm

PRESENT

Chairperson	Cr Mike Lord
Deputy Chairperson	Cr Doug Hall
Members	Cr Sophie Barker	Cr David Benson-Pope
	Cr Christine Garey	Mayor Aaron Hawkins
	Cr Carmen Houlahan	Cr Marie Laufiso
	Cr Jim O'Malley	Cr Jules Radich
	Cr Chris Staynes	Cr Lee Vandervis
	Cr Steve Walker	Cr Andrew Whiley

IN ATTENDANCE

Sandy Graham (Chief Executive Officer), Gavin Logie (Acting General Manager, Finance), John Christie (Director, Enterprise Dunedin) and Clare Sullivan (Team Leader, Civic)

Governance Support Officer Wendy Collard

1 Public Forum

There was no Public Forum.

2 Apologies

Moved (Cr Mike Lord/Cr Jim O'Malley):

That the Committee:

Accepts the apology from Cr Rachel Elder (for absence) and Cr Doug Hall (for lateness)

Motion carried (FCCO/2020/016)

3 Confirmation of agenda

Moved (Cr Mike Lord/Mayor Aaron Hawkins):

That the Committee:

Confirms the agenda with the following addition or alteration:

that standing order 21.4 Option C be adopted in relation to moving and seconding and speaking to amendments.

Motion carried (FCCO/2020/017)

Cr Doug Hall entered the meeting at 1.02 pm

4 Declarations of interest

Members were reminded of the need to stand aside from decision-making when a conflict arose between their role as an elected representative and any private or other external interest they might have.

Cr Vandervis provided an update to his register of interests.

Moved (Cr Mike Lord/Cr Doug Hall):

That the Committee:

a) Amends the Elected Members' Interest Register; and

b) Confirms the proposed management plan for Elected Members' Interests.

Motion carried (FCCO/2020/018)

Part A Reports

5 Financial Result - Period Ended 30 September 2020

A report from Finance provided the financial results for the period ended 30 September 2020 and the financial position as at that date.

The Acting General Manager Finance (Gavin Logie) spoke to the report and responded to questions.

Moved (Mayor Aaron Hawkins/Cr Christine Garey):

That the Committee:

Notes the Financial Performance for the period ended 30 September 2020 and the Financial Position as at that date.

Motion carried (FCCO/2020/019)

6 Finance and Council Controlled Organisations Committee Forward Work Programme

A report from Civic provided the forward work programme for the 2020-2021 year.

The Acting General Manager Finance (Gavin Logie) spoke to the report and responded to questions.

Moved (Cr Mike Lord/Cr Doug Hall):

That the Committee:

Notes the Finance and Council Controlled Organisations Committee forward work.

Motion carried (FCCO/2020/020)

7 Actions From Resolutions of Finance and Council Controlled Organisations Committee Meetings

A report from Civic detailed the open and completed actions from resolutions of Finance and Council Controlled Organisations Committee meetings from the start of the triennium in October 2019.

The Chief Executive Officer (Sandy Graham) and the Acting General Manager Finance (Gavin Logie) spoke to the report and responded to questions.

Moved (Cr Steve Walker/Cr Jim O'Malley):

That the Committee:

Notes the Open and Completed Actions from resolutions of Finance and Council Controlled Organisations Committee meetings.

Motion carried (FCCO/2020/021)

8 Items for Consideration by the Chair
	Cr Vandervis requested a report to Council regarding making Standing Order 21.4 option C the default option for the speaking/moving of motions.

The meeting concluded at 1.12 pm.

..............................................

CHAIRPERSON

Finance and Council Controlled Organisations Committee

9 February 2021

Part A Reports

Finance and Council Controlled Organisations Committee Forward Work Programme

Department: Civic

EXECUTIVE SUMMARY

1 The purpose of this report is to provide the forward work programme for the 2020-2021 year (Attachment A).

2 As this is an administrative report only, there are no options or Summary of Considerations.

RECOMMENDATIONS

That the Committee:

a) Notes the Finance and Council Controlled Organisations Committee forward work programme as shown in Attachment A.

NEXT STEPS

3 An updated report will be provided to future meetings of the Finance and Council Controlled Organisations Committee.

Signatories

Author:	Wendy Collard - Governance Support Officer
Authoriser:	Clare Sullivan - Team Leader Civic

Attachments

	Title	Page
⇩a	Finance and CCO Committee Work Programme	23

Finance and Council Controlled Organisations Committee

9 February 2021

Actions From Resolutions of Finance and Council Controlled Organisations Committee Meetings

Department: Civic

EXECUTIVE SUMMARY

1 The purpose of this report is to detail the open and completed actions from resolutions of Finance and Council Controlled Organisations Committee meetings from the start of the triennium in October 2019 (Attachment A and B).

2 As this report is an administrative report only, there are no options or Summary of Considerations.

RECOMMENDATIONS

That the Committee:

a) Notes the Open and Completed Actions from resolutions of Finance and Council Controlled Organisations Committee meetings shown in Attachment A and B.

NEXT STEPS

3 Updated actions report will be provided to future meetings of the Finance and Council Controlled Organisations Committee.

Signatories

Author:	Wendy Collard - Governance Support Officer
Authoriser:	Clare Sullivan - Team Leader Civic

Attachments

	Title	Page
⇩a	Public Open Actions	27
⇩b	Public Closed Actions	28

Finance and Council Controlled Organisations Committee

9 February 2021

Financial Result - Period Ended 31 December 2020

Department: Finance

EXECUTIVE SUMMARY

1 This report provides the financial results for the six months ended 31 December 2020 and the financial position as at that date.

2 As this is an administrative report only, there are no options or Summary of Considerations.

RECOMMENDATIONS

That Council:

a) Notes the Financial Performance for the period ended 31 December 2020 and the Financial Position as at that date.

BACKGROUND

3 This report provides the financial statements for the period ended 31 December 2020. It includes reports on: financial performance, financial position, cashflows and capital expenditure. The operating result is also shown by group, including analysis by revenue and expenditure type.

DISCUSSION

4 The year to date favourable revenue variance included increased activity at the Green Island Landfill, funding for economic development projects and higher building services activity. Aquatic services revenue was also higher due to increased gym memberships. Some of the membership revenue represents renewals deferred from last year. Grants funding for transport capital projects was lower than expected due to a lower level of associated capital expenditure.

5 Grants funding for transport capital projects was lower than expected due to a lower level of associated capital expenditure. This unfavourable variance was partially offset by grants funding provided to fund predator control and community hall maintenance.

6 Overall expenditure was a favourable spend of $768k. This was due to favourable interest costs, the timing of some grant and service level agreement payments and software licensing expenditure year to date being less than anticipated. The timing of some maintenance costs in Parks and Transportation also contributed to the favourable variance.

7 These favourable variances were partially offset by higher ETS and variable contract costs at the Green Island Landfill as a result of increased activity, and Transportation development costs relating to the major projects programme and the Shaping Future Dunedin project.

8 The Waipori Fund was favourable year to date with positive movements across all equity markets.

9 Capital expenditure across all areas was running behind budget, with the timing of some expenditure delayed while project briefs and procurement activities are completed.

NEXT STEPS

10 Financial Result Reports will continue be presented to future meetings of either the Finance and Council Controlled Organisation Committee or Council.

Signatories

Author:	Lawrie Warwood - Financial Analyst
Authoriser:	Gavin Logie - Acting General Manager Finance

Attachments

	Title	Page
⇩a	Summary Financial Information	33
⇩b	Statement of Financial Performance	34
⇩c	Statement of Financial Position	35
⇩d	Statement of Cashflows	36
⇩e	Capital Expenditure Summary	37
⇩f	Summary of Operating Variances	38
⇩g	Financial Review	39

Finance and Council Controlled Organisations Committee

9 February 2021

Waipori Fund - Quarter Ending December 2020

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 ended 31 December 2020.

RECOMMENDATIONS

That the Committee:

a) Notes the report from Dunedin City Treasury Limited on the Waipori Fund for the quarter ended 31 December 2020.

BACKGROUND

2 Not applicable.

DISCUSSION

3 Not applicable.

OPTIONS

4 Not applicable.

NEXT STEPS

5 Not applicable.

Signatories

Author:	Richard Davey - Treasury Manager
Authoriser:	Jemma Adams - General Manager, Dunedin City Holdings Ltd

Attachments

Title

Page

⇩a

Waipori Fund - December 2020 quarter

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 know implications for tangata whenua.

Sustainability

There are no known implications for sustainability.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This 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

There has been no internal engagement.

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

9 February 2021

Dunedin City Holdings Limited Parent Financials - Year ended 30 June 2020

Department: Executive Leadership Team

EXECUTIVE SUMMARY

1 This report provides the financial results for the year ended 30 June 2020 and the financial position as at that date for the Dunedin City Holdings Limited parent company.

RECOMMENDATIONS

That the Committee:

a) Notes the Financial Performance for the year ended 30 June 2020 and the Financial Position as at 30 June 2020 for Dunedin City Holdings Limited Parent Company.

BACKGROUND

2 This report provides a commentary of the financial performance of Dunedin City Holdings Limited (Parent) for the year ended 30 June 2020 and the financial position as at that date.

DISCUSSION

3 The net deficit for the year was $5.196 million or $6.724 million worse than budget.

4 Dividend income from subsidiaries was impacted by Covid-19, resulting in a lower than expected receipt from City Forests. It is anticipated that this will be recovered in the 2021 financial year. The higher than expected dividend from Dunedin International Airport Limited (DIAL) reflected the operating result for the 2019 financial year and paid prior to the impact of Covid-19.

Dunedin Railway Limited Impairment

5 Dunedin Railways entered the 2019/20 year with a focus on developing a sustainable business model. The company was forecasting ongoing losses and had signalled additional equity would be required to ensure the ongoing viability of the business. The Dunedin Railways board were focussed on preparing a business turnaround plan and developing a sustainable business model for discussion with shareholders.

6 In context of its existing challenges, Dunedin Railways was unable to weather the forecast impacts of Covid-19 on the tourism sector. In April 2020 Dunedin City Council agreed that Dunedin Railways be put into hibernation as an alternative to complete closure of the business.

7 As part of this change, the Otago Excursion Train Trust (OETT) decided to sell its 28% shareholding in Dunedin Railways to DCHL. DCHL also acquired further shares in the company during the year, allowing Dunedin Railways to repay its debts, including its term loan held with Dunedin City Treasury Ltd.

8 At balance date Dunedin City Holdings Limited reviewed the carrying amount of its investment in Dunedin Railways. Given Dunedin Railways had been put into hibernation and was no longer a going concern, indicators of impairment existed. The directors of DCHL considered it appropriate to write-down the investment in Dunedin Railways to $450,000, being the best estimate of the recoverable amount of the investment. The resulting impairment loss of $5,322,000 was immediately expensed to the Statement of Financial Performance.

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

10 Total term loans as at 30 June 2020 were $24.495 million or $3.515 million higher than budget. This variance reflected the additional investment into Dunedin Railways Limited to allow the company to repay its debts.

OPTIONS

11 Not applicable.

NEXT STEPS

12 Not applicable.

Signatories

Authoriser:

Gavin Logie - Acting General Manager Finance

Attachments

	Title	Page
⇩a	DCHL Parent Financial Statements 30 June 2020	56

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

The financial expenditure reported in this report relates to providing local infrastructure, public services, commercial activities 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

This 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 ⇩	Minutes of Finance and Council Controlled Organisations Committee meeting held on 19 October 2020	18