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: Monday 8 March 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

8 March 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, 9 February 2021 17

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

6 Dunedin City Holdings Limited Group Companies - Interim Reports for the Six Months Ended 31 December 2020 22

7 Draft 2021/22 Statements of Intent - Dunedin City Holdings Limited Group Companies 169

8 Financial Result - Period Ended 31 January 2021 280

9 Items for Consideration by the Chair 295

Finance and Council Controlled Organisations Committee

8 March 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 Tuesday 09 February 2021, commencing at 1.00 pm

PRESENT

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

IN ATTENDANCE

Gavin Logie (Acting General Manager Finance), John Christie (Director, Enterprise Dunedin) and Richard Davey (Treasury Manager)

Governance Support Officer Wendy Collard

1 Public Forum

There was no Public Forum.

2 Apologies

There were no apologies.

3 Confirmation of agenda

Moved (Cr Mike Lord/Cr Doug Hall):

That the Committee:

Confirms the agenda without addition or alteration

Motion carried (FCCO/2021/001)

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 Barker provided an update to her register of interest.

Moved (Cr Mike Lord/Cr Doug Hall):

That the Committee:

a) Notes if necessary the Elected Members' Interest Register attached as Attachment A; and

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

Motion carried (FCCO/2021/002)

5 Confirmation of Minutes

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

Moved (Cr Mike Lord/Cr Andrew Whiley):

That the Committee:

Confirms the public part of the minutes of the Finance and Council Controlled Organisations Committee meeting held on 19 October 2020 as a correct record.

Motion carried (FCCO/2021/003)

Part A Reports

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 Rachel Elder/Cr Doug Hall):

That the Committee:

a) Notes the Finance and Council Controlled Organisations Committee forward work programme.

Motion carried (FCCO/2021/004)

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

A report from Civic provided an update on 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 Acting General Manager, Finance (Gavin Logie) spoke to the report and responded to questions.

Moved (Cr Mike Lord/Cr Steve Walker):

That the Committee:

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

Motion carried (FCCO/2021/005)

8 Financial Result - Period Ended 31 December 2020

During discussion, Cr Carmen Houlahan entered the meeting at 1.06 pm

A report from Finance provided the financial results for the six months ended 31 December 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 (Cr Doug Hall/Cr David Benson-Pope):

That the Committee:

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

Motion carried (FCCO/2021/006)

9 Waipori Fund - Quarter Ending December 2020

A report from Dunedin City Treasury Limited provided information on the results of the Waipori Fund for the quarter ended 31 December 2020.

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

Moved (Cr Steve Walker/Cr Rachel Elder):

That the Committee:

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

Motion carried (FCCO/2021/007)

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

A report from Dunedin City Holdings Limited provided 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.

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

Moved (Cr Mike Lord/Mayor Aaron Hawkins):

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.

Motion carried (FCCO/2021/008)

The meeting concluded at 1.33 pm..

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

CHAIRPERSON

Finance and Council Controlled Organisations Committee

8 March 2021

Part A Reports

Dunedin City Holdings Limited Group Companies - Interim Reports for the Six Months Ended 31 December 2020

Department: Executive Leadership Team

EXECUTIVE SUMMARY

1 Please find attached the interim reports for the six months ended 31 December 2020 for the Dunedin City Holdings Limited (DCHL) Group Companies.

RECOMMENDATIONS

That the Committee:

a) Notes the Dunedin City Holdings Limited Group Companies Interim Reports for the six months ended 31 December 2020.

BACKGROUND

2 Not applicable.

DISCUSSION

3 Not applicable.

OPTIONS

4 Not applicable.

NEXT STEPS

5 Not applicable.

Signatories

Authoriser:

Gavin Logie - Acting General Manager Finance

Attachments

	Title	Page
⇩a	DCHL Cover Report	24
⇩b	DCHL Group Interim Report	26
⇩c	Aurora Energy Interim Report	49
⇩d	City Forests Interim Report	66
⇩e	Delta Utility Services Interim Report	83
⇩f	Dunedin International Airport Limited Interim Report	98
⇩g	Dunedin City Treasury Limited Interim Report	110
⇩h	Dunedin Railways Limited Interim Report	127
⇩i	Dunedin Stadium Property Limited Interim Report	139
⇩j	Dunedin Venues Management Limited Interim Report	152

Finance and Council Controlled Organisations Committee

8 March 2021

Draft 2021/22 Statements of Intent - Dunedin City Holdings Limited Group Companies

Department: Executive Leadership Team

EXECUTIVE SUMMARY

1 This report presents the draft 2021/22 Statements of Intent of Dunedin City Holdings Group companies for Council comments and/or noting.

RECOMMENDATIONS

That the Committee:

a) Notes the draft 2021/22 Statements of Intent of Dunedin City Holdings Group companies;

BACKGOUND

2 Council Controlled Organisations (CCOs) are required to deliver draft Statements of Intent (SOIs) to Council each year.

3 The SOI demonstrates accountability to the shareholder and the public by outlining the company’s activities and intentions for the next three financial years. The SOI provides the basis for the accountability of the directors to their shareholder for the performance of their organisation.

4 Draft SOIs have been prepared to reflect the Letter of Expectation (LoE) from the Dunedin City Council dated 25 February 2021.

DISCUSSION

5 The DCHL Report that is included in the attachments identifies key considerations that are relevant when reviewing these draft SOIs.

6 Please note that due to the compliance timeframes and the length of time between preparation of these draft SOIs and the final SOIs, the financial projections contained in draft SOIs are likely to be at a variance with those presented on or before 30 June 2021.

7 As a shareholder of DCHL the Council may provide comments on the draft SOIs to the Board of DCHL, who must consider any such comments. DCHL will also co-ordinate providing any feedback to subsidiary and/or associate companies.

8 Final SOIs must then be delivered to shareholders on or before 30 June 2021. SOIs are made available publicly on the DCC website on or before 1 July 2021.

OPTIONS

9 Not applicable.

NEXT STEPS

10 Elected Members will be asked to provide email feedback to the Acting General Manager Finance by 31 March 2021. That feedback will then be collated into a report to Council on 13 April 2021 for Council to consider if it wishes to amend the SOIs. Council’s decisions at that meeting will then be provided to DCHL by the statutory deadline of 1 May 2021.

11 Financial projections will be updated prior to the completion of final SOIs in June 2021.

Signatories

Author:	Gavin Logie - Acting General Manager Finance
Authoriser:	Sandy Graham - Chief Executive Officer

Attachments

	Title	Page
⇩a	DCHL Group Cover Report	173
⇩b	Draft Statement of Intent - Dunedin City Holdings Limited	175
⇩c	Draft Statement of Intent - Aurora Energy Limited	184
⇩d	Draft Statement of Intent - City Forests Limited	199
⇩e	Draft Statement of Intent - Delta Utility Services Limited	211
⇩f	Draft Statement of Intent - Dunedin International Airport Limited	225
⇩g	Draft Statement of Intent - Dunedin Treasury Limited	243
⇩h	Draft Statement of Intent - Dunedin Railways Limited	251
⇩i	Draft Statement of Intent - Dunedin Stadium Property Limited	258
⇩j	Draft Statement of Intent - Dunedin Venues Management Limited	265

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	☐	☐	☒

All draft SOIs take Council’s Strategic Framework, and the themes of Council’s Letter of Expectation to DCHL into account.

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

The financial forecasts within the DCHL SOI (page 6) shows annual levels of interest ($5.9m) and dividend ($Nil) payable to DCC that are consistent with the DCC Long Term Plan.

Financial considerations

Refer “LTP/Annual Plan/Financial Strategy/Infrastructure Strategy” section above. Also note that final projections (including group debt) will be updated prior to finalisation of the SoIs.

Significance

This matter is considered Low in terms of Council’s Significance and Engagement Policy.

Engagement – external

There has been no external engagement outside of DCHL Group.

Engagement - internal

There has been no internal engagement to date. Feedback on the SOIs will be provided by elected members and considered by Council prior to being conveyed to 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.

Finance and Council Controlled Organisations Committee

8 March 2021

Financial Result - Period Ended 31 January 2021

Department: Finance

EXECUTIVE SUMMARY

1 This report provides the financial results for the seven months ended 31 January 2021 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 seven months 31 January 2021 and the Financial Position as at that date.

BACKGROUND

3 This report provides the financial statements for the seven months ended 31 January 2021. 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.

5 These favourable revenue variances were partially offset by lower grants funding in transport due to a lower level of subsidised capital expenditure.

6 Overall expenditure was a favourable spend of $871k. 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/savings of greenspace maintenance costs in Parks 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. Roading maintenance was also running ahead of budget due to the timing of expenditure.

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

Authoriser:

Gavin Logie - Acting General Manager Finance

Attachments

	Title	Page
⇩a	Summary Financial Information	283
⇩b	Statement of Financial Performance	284
⇩c	Statement of Financial Position	285
⇩d	Statement of Cashflows	286
⇩e	Capital Expenditure Summary	287
⇩f	Summary of Operating Variances	288
⇩g	Financial Review	289

	Title	Page
A ⇩	Minutes of Finance and Council Controlled Organisations Committee meeting held on 9 February 2021	18