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 May 2023

Time: 1:30pm (or at the conclusion of the Community Services Committee)

Venue: Council Chamber, Level 2, Dunedin Public Art Gallery, The Octagon, Dunedin

Sandy Graham

Chief Executive Officer

Finance and Council Controlled Organisations Committee

PUBLIC AGENDA

MEMBERSHIP

Chairperson	Cr Lee Vandervis
Deputy Chairperson	Cr Cherry Lucas
Members	Cr Bill Acklin	Cr Sophie Barker
	Cr David Benson-Pope	Cr Christine Garey
	Cr Kevin Gilbert	Cr Carmen Houlahan
	Cr Marie Laufiso	Cr Mandy Mayhem
	Cr Jim O'Malley	Mayor Jules Radich
	Cr Steve Walker	Cr Brent Weatherall
	Cr Andrew Whiley

Senior Officer Gavin Logie, Chief Financial Officer

Governance Support Officer Lauren Riddle

Lauren Riddle

Governance Support Officer

Telephone: 03 477 4000

governance.support@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 May 2023

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 14

5.1 Finance and Council Controlled Organisations Committee meeting - 23 March 2023 14

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

6 Finance and Council Controlled Organisations Committee - Forward Work Programme 19

7 Financial Result - Period Ended 31 March 2023 23

8 Waipori Fund - Quarter Ending March 2023 41

9 Feedback for Draft Statements of Intent 47

10 Items for Consideration by the Chair 54

Finance and Council Controlled Organisations Committee

9 May 2023

Finance and Council Controlled Organisations Committee

MINUTES

Minutes of an ordinary meeting of the Finance and Council Controlled Organisations Committee held in the Council Chamber, Level 2, Dunedin Public Art Gallery, The Octagon, Dunedin on Thursday 23 March 2023, commencing at 1:05pm

PRESENT

Chairperson	Cr Lee Vandervis
Deputy Chairperson	Cr Cherry Lucas
Members	Cr Bill Acklin	Cr Sophie Barker
	Cr David Benson-Pope	Cr Christine Garey
	Cr Marie Laufiso	Cr Carmen Houlahan
	Cr Jim O'Malley	Cr Mandy Mayhem
	Cr Steve Walker	Mayor Jules Radich
	Cr Andrew Whiley

IN ATTENDANCE

Sandy Graham (Chief Executive Officer); Gavin Logie (Chief Financial Officer); Keith Cooper (Chairperson, Dunedin City Holdings Limited Group); Jemma Adams (General Manager, Dunedin City Holdings Limited Group)

Governance Support Officer Lauren Riddle

1 Public Forum

There was no Public Forum.

2 Apologies

Moved (Cr Lee Vandervis/Cr Steve Walker):

That the Committee:

Accepts the apologies from Crs Kevin Gilbert and Brent Weatherall for absence and from Cr Carmen Houlahan for lateness.

Motion carried (FCCO/2023/005)

3 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.

Moved (Cr Lee Vandervis/Cr Bill Acklin):

That the Committee:

a) Notes the Elected Members' Interest Register; and

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

Motion carried (FCCO/2023/006)

4 Confirmation of Minutes

4.1 Finance and Council Controlled Organisations Committee meeting - 14 February 2023

Moved (Cr Lee Vandervis/Cr Steve Walker):

That the Committee:

Confirms the minutes of the Finance and Council Controlled Organisations Committee meeting held on 14 February 2023 as a correct record.

Motion carried (FCCO/2023/007)

Part A Reports

5 Finance and Council Controlled Organisations Committee Forward Work Programme
	A report from Civic provided an update of the Committee’s forward work programme in regard to areas of activity, progress and expected timeframes for decision making across a range of areas of work.
	The Chief Executive Officer (Sandy Graham) and the Chief Financial Officer (Gavin Logie) and spoke to the forward work programme and responded to questions.
	Moved (Cr Lee Vandervis/Cr Steve Walker): That the Committee: Notes the Finance and Council Controlled Organisations Committee forward work programme as at March 2023. Motion carried (FCCO/2023/008)

6 Audit and Risk Subcommittee Overview
	Warren Allen, Chairperson of the Audit and Risk Subcommittee provided an overview of the Audit and Risk Subcommittee’s role and responded to questions.
	Cr Carmen Houlahan entered the meeting at 1.22pm.
	Moved (Cr Lee Vandervis/Cr Steve Walker): That the Committee: Notes the Audit and Risk Subcommittee update. Motion carried (FCCO/2023/009)

7 Financial Result - Period Ended 28 February 2023

A report from Finance provided the financial results for the period ended 28 February 2023.

The Chief Financial Officer (Gavin Logie) spoke to the report and responded to questions.

Moved (Cr Lee Vandervis/Cr Andrew Whiley):

That the Committee:

Notes the Financial Performance for the period ended 28 February 2023 and the Financial Position as at that date.

Motion carried (FCCO/2023/010)

8 Dunedin City Holdings Limited Group Update - Quarter Ending 31 December 2022

A report from the Executive Leadership Team provided a quarterly update for the period ended 31 December 2022 for the Dunedin City Holdings Limited (DCHL) Group.

The Chairperson, Dunedin City Holdings Limited (Keith Cooper) and the General Manager, Dunedin City Holdings Limited (Jemma Adams) spoke to the report and responded to questions.

Moved (Chairperson Lee Vandervis/Cr Mandy Mayhem):

That the Committee:

Notes the Dunedin City Holdings Limited Group Quarterly Update for the period ended 31 December 2022.

Motion carried (FCCO/2023/011)

9 Dunedin City Holdings Limited Group Companies - Interim Reports for the Six Months Ended 31 December 2022

A report from the Executive Leadership Team provided the interim reports for the six months ended 31 December 2022 for the Dunedin City Holdings Limited (DCHL) Group Companies.

The Chairperson, Dunedin City Holdings Limited (Keith Cooper) and the General Manager, Dunedin City Holdings Limited (Jemma Adams) spoke to the report and responded to questions

Moved (Cr Lee Vandervis/Cr Carmen Houlahan):

That the Committee:

Notes the Dunedin City Holdings Limited Group Companies Interim Reports for the six months ended 31 December 2022.

Motion carried (FCCO/2023/012)

10 Draft 2023/24 Statements of Intent - Dunedin City Holdings Limited Group Companies
	A report from the Executive Leadership Team provided the draft 2023/24 Statements of Intent of Dunedin City Holdings Group companies. The Chairperson, Dunedin City Holdings Limited (Keith Cooper) and the General Manager, Dunedin City Holdings Limited (Jemma Adams) spoke to the report and responded to questions
	Cr Carmen Houlahan left the meeting at 02:25 p.m. Cr Carmen Houlahan returned to the meeting at 02:27 p.m.
	Moved (Cr Lee Vandervis/Cr Steve Walker): That the Committee: Notes the draft 2023/24 Statements of Intent of Dunedin City Holdings Group companies. Motion carried (FCCO/2023/013)

The meeting was declared closed at 2:32pm.

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

CHAIRPERSON

Finance and Council Controlled Organisations Committee

9 May 2023

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 a regular update of the Finance and Council Controlled Organisations Committee forward work programme to show areas of activity, progress and expected timeframes for decision making across a range of areas of work. (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.

DISCUSSION

3 The forward work programme will be a regular agenda item which shows areas of activity, progress and expected timeframes for decision making across a range of areas of work.

4 As an update report, purple highlights show changes to timeframes. New items added to the schedule will be highlighted in yellow. Items that have been completed or updated are shown as bold.

Signatories

Author:	Lauren Riddle - Governance Support Officer
Authoriser:	Gavin Logie - Chief Financial Officer

Attachments

	Title	Page
⇩a	Forward Work Programme - May 2023	21

Finance and Council Controlled Organisations Committee

9 May 2023

Financial Result - Period Ended 31 March 2023

Department: Finance

EXECUTIVE SUMMARY

1 This report provides the financial results for the period ended 31 March 2023 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 the Committee:

a) Notes the Financial Performance for the period ended 31 March 2023 and the Financial Position as at that date.

BACKGROUND

3 This report provides the financial statements for the period ended 31 March 2023. 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 Revenue was $263.480 million for the period or $5.155 million greater than budget. This was primarily due to unbudgeted government grants for Economic Development, as well as increased revenue for Aquatic Services, landfill revenue, and roading maintenance and capital expenditure subsidies.

5 These favourable variances were partially offset by lower than expected revenue from parking operations, water sales and water reform project subsidy revenue.

6 Expenditure was $291.409 million for the period or $24.506 million greater than budget. Operational expenditure was greater than expected due to additional roading maintenance expenditure (see revenue above), increased waste levy costs, along with costs associated with applying to extend the Green Island landfill consents and monies spent for government funded projects in Economic Development.

7 Depreciation expenditure was also higher than expected following asset revaluations as at
30 June 2022, impacting asset replacement cost (Three Waters and Transport). The level of uplift for Three Waters reflected a change in valuation methodology away from historical indexed costs to a fairer estimate of current replacement cost.

8 Depreciation for Three Waters in the current month was adjusted to reflect the final revaluation as at 30 June 2022. This saw a decrease in the depreciable replacement cost of the assets from circa. $2.4 billion to $1.6 billion. The original valuation included a multiplier to reflect the cost of replacing pipes in hilly terrain. A recent review identified the multiplier used for some parts of the city was too high compared to other similar local authorities. The final valuation included adjustments to this multiplier where appropriate.

9 These unfavourable variances were partially offset by savings in personnel costs and delays for some project expenditure.

10 The volatility of world markets continues to impact the performance of the Waipori Fund. Overall year to date international and NZ equities have increased in fair value, with the other portfolios (Australian and Property) recording minor decreases in value.

11 Capital expenditure was $152.611 million for the period or 107.50% (Feb. 2023 109.5%) of the year-to-date budget (80.5% of the full year budget). 3 Waters renewals expenditure continues to track ahead of budget with a number of large water and sewer renewal projects underway. The level of spend in other areas of the organisation reflected delays for some projects.

12 The Council approved an increased level of debt for the 2022/2023 financial year at it’s meeting held 6 April 2023. The approved level of debt increased $35.0 million from
$445.0 million to $480.0 million.

13 Attachment H has been provided with this month’s financial report showing the historical debt trend (Group and DCC Parent) and includes forecasts based on the draft group statements of intent. It also incorporates the uplift in DCC borrowing discussed above. The final forecast numbers will be updated in June once all budgets for 2023/2024 have been completed.

NEXT STEPS

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

Signatories

Authoriser:

Gavin Logie - Chief Financial Officer

Attachments

	Title	Page
⇩a	Summary Financial Information	27
⇩b	Statement of Financial Performance	28
⇩c	Statement of Financial Position	29
⇩d	Statement of Cashflows	30
⇩e	Capital Expenditure by Activity	31
⇩f	Summary of Operating Variances	32
⇩g	Financial Review	33
⇩h	Group Debt Graph	40

Finance and Council Controlled Organisations Committee

9 May 2023

Waipori Fund - Quarter Ending March 2023

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 March 2023.

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

RECOMMENDATIONS

That the Committee:

a) Notes the report from Dunedin City Treasury Limited on the Waipori Fund for the quarter ended 31 March 2023.

BACKGROUND

3 Not applicable.

DISCUSSION

4 Not applicable.

OPTIONS

5 Not applicable.

NEXT STEPS

6 Not applicable.

Signatories

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

Attachments

	Title	Page
⇩a	Waipori Fund quarterly report to 31 March 2023	43

Finance and Council Controlled Organisations Committee

9 May 2023

Feedback for Draft Statements of Intent

Department: Civic

EXECUTIVE SUMMARY

1 The draft 2023/24 Statements of Intent (draft Statements) of the Dunedin City Holdings Ltd (DCHL) Group companies were presented to the 23 March 2023 meeting of the Finance and Council Controlled Organisations Committee (the Committee) meeting.

2 At that meeting, Councillors were invited to provide feedback on the draft Statements.

3 This report provides a summary of elected member feedback for consideration, as shown in Attachment A. The approved feedback will be provided to DCHL for its consideration in preparing the final Statements of Intent.

RECOMMENDATIONS

That the Committee:

a) Considers the feedback received and staff comments on the draft Statements of Intent at Attachment A.

BACKGROUND

4 Draft Statements were presented to the Committee at its meeting on 23 March 2023. Councillors were invited to provide feedback on the draft Statements.

DISCUSSION

5 The feedback received by elected members on the draft Statements is presented in the table at Attachment A.

6 The initial feedback received from elected members was informally provided to DCHL, to meet a statutory deadline, and on the understanding that the feedback was to be reviewed and considered at this meeting. An initial response to the feedback was received from DCHL. Staff have reviewed the feedback from both Councillors and DCHL and have made comments on proposed changes. These are detailed in the table in Attachment A.

7 Staff recommend that the following feedback is provided to DCHL for inclusion in its draft Statement:

· People and Culture, Diversity, Equity and Engagement strategies are put in place for all companies by 30 June 2024.

· All companies to report on emissions over time against baseline data by 30 June 2024.

· DCHL to develop a consistent approach to benchmark reporting across all companies.

8 Following consideration of proposed changes and approval by the Committee, formal feedback will be provided to DCHL. Final Statements will be presented to the 27 June Council meeting for approval.

OPTIONS

9 There are no options.

NEXT STEPS

10 Feedback approved by the Committee will be provided to DCHL.

11 Final Statements of Intent will be presented to the 27 June Council meeting.

Signatories

Author:	Sharon Bodeker - Manager Governance
Authoriser:	Sandy Graham - Chief Executive Officer

Attachments

	Title	Page
⇩a	Summary of feedback and staff comments	51

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities, and promotes the social, economic, environmental, and cultural well-being of communities in the present and for the future.

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 has been no engagement with Māori.

Sustainability

Feedback received from Councillors gives consideration to sustainability matters including waste reduction and reduction of carbon emissions.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The financial forecasts in the DCHL draft Statement shows annual levels of interest ($5.9m) and dividend ($11.0m) payable to DCC that are consistent with the DCC Draft Annual Plan.

Financial considerations

As above. Financial projections in the draft Statements will be updated prior to their finalisation.

Significance

This decision is considered to be low in terms of the Council’s Significance and Engagement Policy.

Engagement – external

There has been no external engagement outside of the DCHL Group.

Engagement - internal

Feedback provided by Councillors is the subject of this report.

Risks: Legal / Health and Safety etc.

There are no identified 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 23 March 2023	15