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 15 August 2023

Time: 1:00pm

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

15 August 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 - 20 June 2023 14

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

6 Finance and Council Controlled Organisations Committee - Forward Work Programme 18

7 Financial Result - Year Ended 30 June 2023 23

8 Waipori Fund - Quarter Ending June 2023 42

9 Items for Consideration by the Chair 47

Finance and Council Controlled Organisations Committee

15 August 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 Tuesday 20 June 2023, commencing at 1:00pm.

PRESENT

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

IN ATTENDANCE

Sandy Graham (Chief Executive Officer); Gavin Logie (Chief Financial Officer; Keith Cooper (Chairperson, Dunedin City Holdings Ltd)

Governance Support Officer Lauren Riddle

1 Public Forum

There was no Public Forum.

2 Apologies

Moved (Cr Cherry Lucas/Cr Mandy Mayhem):

That the Committee:

Accepts the apology from Cr Lee Vandervis and from Cr Christine Garey for early departure from the meeting.

Motion carried (FCCO/2023/019)

3 Confirmation of agenda

Moved (Cr Cherry Lucas/Cr Sophie Barker):

That the Committee:

Confirms the agenda without addition or alteration.

Motion carried (FCCO/2023/020)

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 Bill Acklin reaffirmed his update to the Declaration of Interest as a casual employee of Insulmax.

Moved (Cr Cherry Lucas/Cr Sophie Barker):

That the Committee:

a) Amends the Elected Members' Interest Register; and

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

Motion carried (FCCO/2023/021)

5 Confirmation of Minutes

5.1 Finance and Council Controlled Organisations Committee meeting –

9 May 2023

Moved (Cr Cherry Lucas/Cr Mandy Mayhem):

That the Committee:

Confirms the minutes of the Finance and Council Controlled Organisations Committee meeting held on 09 May 2023 as a correct record.

Motion carried (FCCO/2023/022)

Part A Reports

6 Finance and Council Controlled Organisations Committee - Forward Work Programme

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

Moved (Cr Cherry Lucas/Cr Kevin Gilbert):

That the Committee:

Notes the Finance and Council Controlled Organisations Committee forward work programme for June 2023.

Motion carried (FCCO/2023/023)

7 Financial Result - Period Ended 31 May 2023

The report from Finance provided the financial results for the period ended 31 May 2023 and the financial position as at that date.

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

Moved (Cr Cherry Lucas/Cr Steve Walker):

That the Committee:

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

Motion carried (FCCO/2023/024)

8 Dunedin City Holdings Limited Group Update - Quarter Ending 31 March 2023

The report from the Executive Leadership Committee provided a quarterly update for the period ended 31 March 2023 for the Dunedin City Holdings Limited (DCHL) Group.

The Chair of the Dunedin City Holdings Limited (DCHL) Group (Keith Cooper) spoke to the report and responded to questions.

Moved (Cr Cherry Lucas/Mayor Jules Radich):

That the Committee:

Notes the Dunedin City Holdings Limited Group Quarterly Update for the period ended 31 March 2023.

Motion carried (FCCO/2023/025)

9 Items for Consideration by the Chair

There were no items for consideration.

The meeting concluded at 1:16pm.

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

CHAIRPERSON

Finance and Council Controlled Organisations Committee

15 August 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 for August 2023.

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	Finance CCO Committee - forward work programme August 2023	21

Finance and Council Controlled Organisations Committee

15 August 2023

Financial Result - Year Ended 30 June 2023

Department: Finance

EXECUTIVE SUMMARY

1 This report provides the financial results for the year ended 30 June 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 year ended 30 June 2023 and the Financial Position as at that date.

b) Notes that the year end result is subject to final adjustments and external audit by Audit New Zealand.

BACKGROUND

3 This report provides the financial statements for the year ended 30 June 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 $360.387 million for the year or $3.169 million greater than budget.

5 External revenue was unfavourable $837k to budget due to lower than expected revenue from parking operations, and Building Services activity. These unfavourable variances were partially offset by increased revenue in Aquatic Services, landfill activity and Councils tourism related operations (Lan Yuan, Olveston and Visitors Centre).

6 Grants revenue was favourable $6.164 million due to:

· $2.494 million of unbudgeted funding in Economic Development;

· $5.282 million of additional roading funding reflecting a higher level of maintenance and capital delivery;

· $1.232 million unbudgeted income relating to hosting the recent FIFA World Cup event;

· $2.270 million delayed funding for Waste Futures projects;

· $1.035 million delayed reform funding in Three Waters.

7 The budget for contributions revenue included $3.000 million for the non-cash vesting of development assets. As noted below the entry for this vesting has not been finalised.

8 Expenditure was $391.661 million for the year or $39.746 million greater than budget. Operational expenditure was greater than expected due to additional roading and three waters maintenance expenditure, along with costs associated with applying to extend the Green Island landfill consents and monies spent for government funded projects in Economic Development (see Grants revenue above).

9 Depreciation expenditure was 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.

10 Interest costs were also higher due to a higher debt level required to fund the increased capital expenditure along with a higher than budgeted interest rate for the second half of the financial year.

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

12 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 decreases in value.

13 Capital expenditure for the year was $208.326 million or 110.0% of budget. As previously reported 3 Waters renewals expenditure was ahead of budget with a number of large water and sewer renewal projects underway. Expenditure on the retail Quarter Upgrade was also ahead of budget reflecting the project being ahead of the original programme for both the central carriageway and enabling works.

14 The level of capital spend in other areas of the organisation reflected delays for some projects.

15 Final adjustments will include but not be limited to:

· Recording of vested assets (non-cash),

· Revaluation adjustment investment property portfolio (non-cash),

· Adjustment to the GI Landfill aftercare provision (non-cash).

NEXT STEPS

16 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 Summary by Activity	31
⇩f	Summary of Operating Variances	32
⇩g	Financial Review	33