Agenda of Finance and Performance Committee

Finance and Performance Committee

27 August 2026

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Finance and Performance Committee

MINUTES

Minutes of an ordinary meeting of the Finance and Performance Committee held in the Council Chamber, Level 2, Dunedin Public Art Gallery, The Octagon, Dunedin on Thursday 21 May 2026, commencing at 09:00 a.m.

PRESENT

Chairperson	Cr Cherry Lucas
	Cr Lee Vandervis
Members	Mayor Sophie Barker	Cr John Chambers
	Cr Russell Lund	Cr Doug Hall
	Cr Jo Galer	Cr Mandy Mayhem
	Cr Mickey Treadwell	Cr Andrew Simms
	Cr Brent Weatherall	Cr Steve Walker
	Cr Russell Lund

IN ATTENDANCE

Sandy Graham (Chief Executive), Carolyn Allan (Chief Financial Officer), Scott MacLean (General Manager City Services), Nicola Morand (Manahautū - General Manager Community and Strategy), Mike Costelloe (General Manager, Arts, Culture and Economic Development), David Ward (General Manager 3 Waters, Property and Urban Development), Tim Loan (Chairperson, DCHL Group Ltd), Peter Hocking (General Manager DCHL), Richard Davey (Dunedin City Treasurer), Hayden McAuliffe (Financial Services Manager), Tony Nelmes (Project Accountant), Anna Nilsen (Group Manager Property)

Governance Support Officer Lauren Riddle

Cr Cherry Lucas opened the meeting and welcomed attendees.

1 Public Forum

There was no Public Forum.

2 Apologies

Moved (Cr Cherry Lucas/Cr Mandy Mayhem):

That the Committee:

Accepts the apologies from Cr Christine Garey, Cr Marie Laufiso, Mr Jeffrey Broughton and Mr Hoani Langsbury for absence.

Motion carried (FAPCC/2026/002)

3 Confirmation of agenda

A request was made for Item 9 - DCHL Group Update for the quarter ending 31 March 2026 to be taken ahead of Item 6 – Overview of Dunedin City Treasury Limited.

Moved (Cr Cherry Lucas/Cr Lee Vandervis):

That the Committee:

Confirms the agenda with the following alteration that Item 9 - DCHL Group Update for the quarter ending 31 March 2026 be taken ahead of Item 6 – Overview of Dunedin City Treasury Limited.

Motion carried

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 Mandy Mayhem requested her removal from FENZ Local Advisory Committee for Otago, as her 5 year appointment has been completed.

· Cr Jo Galer was requested to provide her register of interests ahead of the next Council meeting.

Moved (Cr Cherry Lucas/Cr Lee Vandervis):

That the Committee:

a) Amends the Elected Members' Interest Register, and

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

c) Notes the proposed management plan for the Executive Leadership Team’s Interests.

Motion carried

5 Confirmation of Minutes

5.1 Finance and Performance Committee meeting - 19 March 2026

Moved (Cr Cherry Lucas/Cr Lee Vandervis):

That the Committee:

a) Confirms the public part of the minutes of the Finance and Performance Committee meeting held on 19 March 2026 as a correct record.

Motion carried (FAPCC/2026/003)

Part A Reports

9 Dunedin City Holdings Limited Group Update - Quarter Ending 31 March 2026
	The report provided a quarterly update for the period ended 31 March 2026 for the Dunedin City Holdings Limited (DCHL) Group.
	Tim Loan (Chairperson, DCHL Group) and Peter Hocking (General Manager DCHL) spoke to the report and responded to questions.
	Moved (Cr Cherry Lucas/Cr Mandy Mayhem): That the Committee: a) Notes the Dunedin City Holdings Limited Group Quarterly Update for the period ended 31 March 2026. Motion carried (FAPCC/2026/004)
6 Overview of Dunedin City Treasury Limited and Treasury Risk Management Policy
	Richard Davey, Treasurer, Dunedin City Treasury Limited spoke to a presentation on Dunedin City Treasury Limited including the Treasury Risk Management Policy and responded to questions.
Cr Doug Hall left the meeting at 09:49 a.m. and returned to the meeting at 09:52 a.m.
	Moved (Cr Cherry Lucas/Cr Lee Vandervis): That the Committee: a) Notes the Overview of Dunedin City Treasury Limited and the Treasury Risk Management Policy. Motion carried (FAPCC/2026/005)

7 Local Government Funding Agency Covenant
	The report sought Committee approval to request the Local Government Funding Agency (LGFA) remove one of the four Covenants as per the Dunedin City Treasury Limited (DCTL) outline of the rationale and approach.
	Carolyn Allan (Chief Financial Officer) and Richard Davey (Treasurer, Dunedin City Treasury Ltd) spoke to the report and responded to questions.
Cr Jo Galer left the meeting at 10:18 a.m. and returned at 10:20 a.m.
	Moved (Cr Cherry Lucas/Cr Brent Weatherall): That the Committee: a) Notes the Local Government Funding Agency Covenant report. b) Approves the approach outlined in the report, that DCTL/DCC write to LGFA requesting that they consider extinguishing the Net Interest/Annual Rates Income Covenant. The Committee voted by division For: Crs Mayor Sophie Barker, John Chambers, Doug Hall, Mandy Mayhem, Mickey Treadwell, Steve Walker, Brent Weatherall and Cherry Lucas (8). Against: Crs Jo Galer, Russell Lund, Andrew Simms and Lee Vandervis (4). Abstained: Nil The division was declared CARRIED by 8 votes to 4 Motion carried (FAPCC/2026/006)

8 Waipori Fund - Quarter Ending 31 March 2026
	The Dunedin City Treasury Limited report provided information on the results of the Waipori Fund for the quarter ended 31 March 2026.
	Carolyn Allan (Chief Financial Officer) and Richard Davey (Treasurer, Dunedin Treasury Ltd) spoke to the report and responded to questions.
	Moved (Cr Steve Walker/Cr Cherry Lucas): That the Committee: a) Notes the report from Dunedin City Treasury Limited on the Waipori Fund for the quarter ended 31 March 2026. Motion carried (FAPCC/2026/007)
	Moved (Cr Cherry Lucas/Cr Steve Walker): That the Committee: Adjourn the meeting for 15 minutes. Motion carried (FAPCC/2026/008)
	The meeting adjourned at 10:46 a.m. and resumed at 11:00am

10 Financial Strategy Compliance
	The report provided a summary of rate and debt limits, including group debt limits and the monitoring of compliance against these limits.
	Carolyn Allan (Chief Financial Officer) and Tony Nelmes (Project Accountant) spoke to the report and responded to questions,
	Moved (Cr Cherry Lucas/Cr Lee Vandervis): That the Committee: a) Notes the Financial Strategy Compliance report. Motion carried (FAPCC/2026/009)

11 Debt Repayment Policy Update
	The report provided an update on the development of a Debt Repayment Policy (Policy).
	Sandy Graham (Chief Executive), Carolyn Allan (Chief Financial Officer), Tony Nelmes (Project Accountant), and Hayden McAuliffe (Financial Services Manager) spoke to the report and responded to questions. Carolyn Allan (Chief Financial Officer) advised that the report was a first draft of a Debt Repayment Policy and that councillor workshops would be held as the policy developed.
	Moved (Cr Cherry Lucas/Cr Brent Weatherall): That the Committee: a) Notes the draft Debt Repayment Policy. Motion carried (FAPCC/2026/010)

12 Financial Report - Period ended 31 March 2026
	The report provided the financial results for the period ended 31 March 2026 and the financial position as at that date.
	Carolyn Allan Chief Financial Officer) and Hayden McAuliffe (Financial Services Manager) spoke to the report and responded to questions.
	Moved (Cr Cherry Lucas/Cr Lee Vandervis): That the Committee: a) Notes the Financial Performance for the period ended 31 March 2026 and the Financial Position as at that date. .Motion carried (FAPCC/2026/011)

13 Items for Consideration by the Chair
	There we no items of consideration by the Chair.

Resolution to Exclude the Public

Moved (Cr Cherry Lucas/Cr Mandy Mayhem):

That the Committee:

Pursuant to the provisions of the Local Government Official Information and Meetings Act 1987, exclude the public from the following part of the proceedings of this meeting namely:

General subject of the matter to be considered

C1 Investment Property Portfolio – Quarter ending 31 March 2026

Reasons for passing this resolution in relation to each matter

S7(2)(b)(ii)- The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.

Ground(s) under section 48(1) for the passing of this resolution

Reason for Confidentiality

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987, and the particular interest or interests protected by Section 6 or Section 7 of that Act, or Section 6 or Section 7 or Section 9 of the Official Information Act 1982, as the case may require, which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as shown above after each item, and;

Adjourn the meeting for five minutes.

Motion carried (FAPCC/2026/012)

The meeting adjourned at 12:03pm and moved into Public Excluded and 12:08 p.m.

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

CHAIRPERSON

Finance and Performance Committee

27 August 2026

Investment Framework

Department: Finance

EXECUTIVE SUMMARY

1 The purpose of this report is to consider a draft Investment Framework prepared by Dunedin City Holdings Limited (DCHL).

2 The Investment Framework sets out how the Council defines, governs and manages its investment portfolio, and what it expects those investments to deliver over time.

RECOMMENDATIONS

That the Committee:

a) Notes the Investment Framework report.

b) Considers the Investment Framework for endorsement.

BACKGROUND

3 In the December 2024 Letter of Expectation to DCHL, Council requested that DCHL undertake a review of the draft Investment Plan. The DCHL Board was asked to present options to the DCC on how its investments, including the DCHL trading companies, the Waipori Fund and the Council’s investment property portfolio are managed and reported on.

4 In its December 2025 Letter of Expectation to DCHL, Council requested that DCHL and Council continue to work on the Investment Framework.

5 The current investment structure comprises:

· The Waipori Fund which is owned directly by Council, with management and reporting of the Fund undertaken by Dunedin City Treasury Limited.

· The investment property portfolio which is owned directly by Council and is part of Council’s total property portfolio.

· DCHL is wholly owned by Council. DCHL owns, on behalf of Council, the following companies:

i) Aurora Energy Limited

ii) City Forests Limited

iii) Delta Utility Services Limited

iv) Dunedin Stadium Property Limited

v) Dunedin Venues Management Limited

vi) Dunedin Airport Limited (50%)

vii) Dunedin Railways Limited

6 DCHL provided a confidential report on the Investment Framework to a Council meeting on 25 March 2026. The report sought Council endorsement of the revised Investment Framework and recommended further engagement.

7 Council noted that an Investment Framework will be presented to a future Council meeting where endorsement of the framework will be sought.

DISCUSSION

8 The draft Investment Framework is provided at Attachment A.

OPTIONS

Option One – Recommended Option

9 That Council endorses the Investment Framework as presented.

Advantages

· It provides a framework for how Council defines, governs and manages its investment portfolio.

· The investment framework provides a one portfolio approach for the management and strategic oversight of Council’s investments.

· Provides a consistent view of risk and diversification.

· Provides clear investment objectives – to protect the real value of capital for future generations and to provide strong, consistent and sustainable distributions to Council.

· Optimises total returns and cash distributions over the long term.

· Establishes a distribution model which should result in a higher, predictable, consistent and sustainable dividends.

Disadvantages

· No disadvantages have been identified.

Option Two

10 Council does not approve the Investment Framework.

Advantages

· No advantages have been identified.

Disadvantages

· The advantages in option one will not be realised.

NEXT STEPS

11 DCHL are developing an implementation plan. An update will be provided to a Council meeting in November.

Signatories

Authoriser:

Carolyn Allan - Chief Financial Officer

Attachments

	Title	Page
⇩a	Draft Investment Framework	40

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities.

Fit with strategic framework

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

The Investment Framework is intended to support the Financial Strategy and all the work of Council through the protection of its investments, and through the future distribution of sustainable investment returns.

Māori Impact Statement

There are no known impacts for Māori.

Sustainability

The Investment Framework considers the matter of sustainability and financial resilience.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The Investment Framework supports the Council’s Financial Strategy.

Financial considerations

Financial considerations are discussed in the draft Investment Framework.

Significance

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

Engagement – external

There has been engagement with Dunedin City Holdings Ltd.

Engagement - internal

There has been no internal engagement.

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.

Finance and Performance Committee

27 August 2026

Waipori Fund SIPO Review

Department: Finance

EXECUTIVE SUMMARY

1 The Waipori Fund (the Fund) has a Statement of Investment Policy and Objectives (SIPO) that sets out the framework for governing the investment of the Fund.

2 Dunedin City Holdings Ltd (DCHL) has undertaken a review of the SIPO, and a report on the review along with a proposed revised SIPO and proposed Governance Agreement for the Fund, is at Attachment A.

3 This report proposes that the Committee make a decision on the proposed SIPO and Governance Agreement.

4 The most significant change proposed in the SIPO relates to strategic asset allocation. DCHL recommends that this is changed from the current balanced income approach comprising circa 45% growth assets and 55% income assets to a growth-oriented portfolio comprising 80% growth assets and 20% income assets. DCHL considers that this allocation represents the best balance between return and risk.

5 This change requires Council to accept that the return objective is a long term one that may not be achieved in every measurement period. Short-term volatility must be expected and managed. Evidence suggests that growth-oriented portfolios spend more years ahead than behind, but they require investors to tolerate larger fluctuations in value along the way.

6 Other proposed changes to the SIPO include an asset-based distribution model incorporating a smoothing mechanism and a transition period, to create a buffer. It provides clearer governance arrangements and clarifies the socially responsible investment provisions.

7 In the medium to long term, these changes could result in consistently higher distributions.

8 The purpose of the proposed Governance Agreement is to formalise the relationship that Council has with DCHL in its management of the Waipori Fund. It sets out the terms under which DCHL is to manage the fund, documenting what is primarily current practice.

RECOMMENDATIONS

That the Committee:

a) Notes the Waipori Fund SIPO Review.

b) Approves an option for updating the Waipori Fund Statement of Investment Policy Objectives.

c) Approves the draft Governance Agreement between DCC and DCHL.

BACKGROUND

9 The Waipori Fund (the Fund) was established in 1998 following the sale of the Waipori Power Generation Limited and its holding in United Electricity Limited. The value of the Fund when established was $56 million. At 30 June 2026, the value of the Fund is $117.7 million.

10 A Statement of Investment Policy and Objectives (SIPO) provides all parties involved in the investment management of the Fund with clear guidance on how the assets of the Fund are to be managed.

11 The SIPO was last updated, with minor changes for clarification, in January 2025. The current SIPO is provided at Attachment B. At that time, Council was in the process of developing an Investment Plan. In its December 2024 Letter of Expectation to DCHL, Council requested that DCHL undertake a review of the draft Investment Plan. The DCHL Board was asked to present options to the DCC on how its investments, including the DCHL trading companies, the Waipori Fund and the Council’s investment property portfolio are managed and reported on.

12 At the time, it was agreed by Council that until the Investment Plan is completed and approved by Council, it is recommended that the current asset allocation included in the SIPO be unchanged.

13 It was also noted that there is currently no specific management agreement in place for the Waipori Fund. It was recommended that a formal agreement be developed between DCC and DCHL, the Fund Manager. This work has been undertaken, and the proposed Governance Agreement is at Attachment A.

14 Work by DCHL to develop an Investment Framework for the DCC in ongoing. An update on this process is provided in a separate report on this agenda. However, in the December 2025 Letter of Expectation to DCHL, Council requested that DCHL:

“Review the Waipori Fund Statement of Investment Policy and Objectives (SIPO), and present options to Council for consideration, with different risk appetites along with expected returns, with a view to maximising return on investment.”

DISCUSSION

15 DCHL has completed its review of the Waipori Fund SIPO. DCHL’s report is at Attachment A. Appended to its report are:

a) A proposed SIPO, and

b) A draft Governance Agreement between DCC and DCHL.

SIPO review

16 In response to Councils request, DCHL has completed a comprehensive review of the current SIPO. It has undertaken its review in the context of:

a) Council’s expectation to seek increased returns from investments to mitigate pressure on ratepayers, and

b) DCHL’s broader Investment Framework work. A central principle of this work is the ‘one portfolio’ approach, which recognises that the Fund should not be considered in isolation to the wider investment portfolio of Council.

17 DHCL concluded that:

a) the Fund remains fundamentally sound and has achieved its core objectives with the real value of the original capital based being maintained, while the fund has distributed more than $80 million to Council, and

b) the current asset allocation of the Fund is relatively conservative for a perpetual, intergenerational investment fund, and this limits the Fund’s ability to generate stronger long-term returns and distributions.

18 DCHL recommends that Council retain but clarify the Fund’s core purpose by adopting four investment objectives to balance the interests of current and future ratepayers and guide investment decisions. The objectives are:

i) Provide a strong, consistent and sustainable distribution to Council;

ii) Maintain the capital base of the Fund in real terms;

iii) Maximise the real rate of return subject to the selected asset allocation; and

iv) Maintain sufficient liquidity to meet the Fund’s distribution requirements.

19 DCHL proposes a revised SIPO that it believes provides a modern and fit-for-purpose framework for the Fund. The key changes are:

a) Strategic Asset Allocation – this is the most significant change from the current balanced income approach comprising circa 45% growth assets and 55% income assets to a growth-oriented portfolio comprising 80% growth assets and 20% income assets. DCHL considers that this allocation represents the best balance between return and risk.

b) Distribution Model - the current model, where the annual distribution is heavily influenced by the market value of the Fund at a single point in time, is replaced with an asset-based distribution model that incorporates a smoothing mechanism. It sets a multi-year average of the Fund values which reduces sensitivity to short-term market movements and supports a more predictable and sustainable distribution. Based on current assumptions, expected annual distributions would increase by approximately $0.8 million in today’s terms.

i) DCHL recommends a transition period before the full distribution methodology is applied. This would enable the establishment of a buffer to support higher returns during periods of short-term volatility. It will take three to seven years, during which time, DCHL will apply professional judgement when recommending the annual distribution rate.

c) Governance Model – clearer governance arrangements with no change to ownership or legal structure. Council will continue to own the Fund, approve the SIPO and annual distributions. DCHL will have responsibility for oversight of the investment strategy, appointing and monitoring investment managers, reviewing the SIPO and recommending distributions.

d) Socially Responsible Investment – the proposed SIPO retains the exclusion-based approach to socially responsible investment, with refinements to improve clarity and consistency.

Risk

20 At a recent risk workshop including elected members and management, an indicative risk appetite for financial sustainability, using the table below, was identified as conservative to balanced.

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21 Council's current SIPO adopts a relatively low risk/return profile, with a maximum allocation of 60% to equities. This is considered consistent with the conservative financial sustainability risk appetite.

22 The proposed increase to a maximum of 80% equities would result in a higher risk/return profile. While this would move beyond a conservative investment approach, it remains consistent with a balanced risk appetite, reflecting a greater willingness to accept investment market volatility in return for higher long-term returns.

23 DCHL also assessed the Council’s risk profile by determining risk need, risk taking ability and behavioural risk tolerance. DCHL concluded that a growth-orientated risk profile is deemed to be appropriate for the Fund.

24 Higher returns require a higher exposure to assets that can grow in value over time. The trade-off is that a growth-oriented portfolio will experience greater volatility.

25 The DCHL report states that evidence suggests growth-oriented portfolios spend more years ahead than behind, but they require investors to tolerate larger fluctuations in value along the way.

Mitigations and controls

26 The proposed SIPO provides that the return objective is a long term one that may not be achieved in every measurement period. Short-term volatility must be expected and managed. Decisions would be made with a long-term perspective.

27 The proposed SIPO provides a summary table of risks and mitigation measures that will be taken by the Board of DCHL and Investment Managers. Along with these, there are additional measures, some of which are highlighted in the paragraphs below.

28 The proposed transition period, which creates a buffer, lets the Fund grow to build in the buffer.

29 The proposed distribution model uses a rolling three year average period which provides a smoothing effect against the increased volatility in the Fund.

30 Appropriate diversifications across sectors of the portfolio are clearly identified in the proposed SIPO. This includes alignment with the United Nations Global Compact, which provides a widely recognised and objective framework for assessing environmental, social and governance issues.

31 Holding limit percentages and exposure limits would apply across the total portfolio.

32 Performance is measured and reviewed. The DCHL Board will monitor performance on a regular basis, and Council would continue to receive regular reporting on Fund performance and how the Fund is being managed to achieve its objectives.

33 The fixed interest portfolio will have a laddered maturity profile, i.e., a spread of maturity dates.

Governance Agreement

34 DCHL has drafted a proposed Governance Agreement. This agreement formalises the relationship that Council has with DCHL in its management of the Waipori Fund. It includes the following:

a) Roles, duties, and powers of DCHL – ensure the fund is managed in a prudent, commercial manner.

b) Delegations – ability to appoint, engage, replace, or remove one or more Investment Managers, and any other advisors and consultants etc.

c) Remuneration and reimbursement – a management fee would be payable at the rate of 0.2% per annum of the Net Asset Value of the Fund.

d) Limitation of liability – DCHL will have no liability for investment losses in value of the Fund for any act or omission in connection with the Fund, unless attributable to fraud, wilful misconduct or wilful breach of the agreement, or gross negligence.

e) Conflicts of interest – DCHL to maintain policies and procedures for identification, disclosure, and management of conflicts of interest.

f) Reporting – to provide quarterly reports to Council, and any additional reporting as agreed.

Other matters

35 Section 29.1 of Standing Orders provides that the DCC may only divest all or any part of the Waipori Fund by a three-quarters majority of the members present and voting.

36 Divest means converting, in any way whatsoever, the Waipori Fund for a use other than as set out in the SIPO.

37 Any recommendations made by DCHL for a distribution of the Fund will also be assessed under this Standing Order.

38 Further to a Councillor request regarding the use of the anglicised spelling of Waipori, we will engage with Mana Whenua to seek their views on the potential use of Waipōuri as an alternative spelling for the Waipori Fund.

OPTIONS

39 The Committee is asked to consider three options relating to the Fund SIPO discussed below.

Option One – Approve the proposed SIPO

40 This option would approve the proposed SIPO prepared by DCHL and provided in Attachment A.

Advantages

· Supports the Council’s desire for higher and more reliable distributions over the medium to long-term.

· Larger exposure to equities should deliver higher growth over the long term. This should translate into the ability to pay out more in distributions over the long run.

· In the medium to long term, consistently higher distributions. Based on current assumptions, an increase in annual distributions of approximately $0.8 million in today’s terms is expected.

· A larger exposure to equities (growth assets) is a better hedge against inflation. The higher the risk the higher the return.

· The revised distribution policy, including a smoothing mechanism, provides more certainty, transparency, and consistency.

· A transition period of three to seven years will maintain the current level of distribution, with the aim of developing a “buffer” over the inflation-adjusted capital base. This will result in the Fund being better placed to withstand variation in market returns and inflation and consistently provide higher distributions.

· Environmental, social and governance settings are clarified.

Disadvantages

· The principal effect of adopting a higher-growth asset allocation is an increase in the variability of returns from year to year. More volatility and, in some years, the return on the Fund may be negative. Growth-oriented portfolios show higher short-term volatility, but the amount of variation diminishes over longer-term horizons.

· Despite a larger exposure to equities (more risk), and increased volatility in the Fund, the amount of distribution won’t increase in the near term. This means that returns would favour future ratepayers over todays.

Option Two – Approve the proposed SIPO in principle, but with further matters to be considered

41 Under this option, the Committee would approve the SIPO as proposed in principle, but Councillors may identify further matters that they would like to be considered for inclusion or removal from the proposed SIPO.

Advantages

· As per Option One.

· Provides an avenue for amending the proposed SIPO for any identified matters for consideration.

Disadvantages

· As per Option One.

· Further work would be required, and there would be a delay in approving a new SIPO for the Waipori Fund.

Option Three – Do not approve the proposed SIPO

42 Under this option, the Committee would not approve the proposed SIPO, but ask DCHL to start the process again using different parameters, as directed by the Committee.

Advantages

· A SIPO would be developed that incorporates the requirements of the Committee.

Disadvantages

· Further work would be required, and there would be a delay in approving a new SIPO for the Waipori Fund.

NEXT STEPS

43 DCHL will be notified of the decision made by Council with respect to the proposed SIPO and Governance Agreement.

44 If required, any amendments made to the SIPO will be presented to this Committee and/or Council at a later date for approval.

45 If approved, the Governance Agreement, subject to a legal review, will be entered into.

Signatories

Authoriser:

Carolyn Allan - Chief Financial Officer

Attachments

	Title	Page
⇩a	Review Report, Proposed SIPO, Governance Agreement	61
⇩b	Waipori Fund SIPO approved January 2025	125

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of communities.

Fit with strategic framework

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

There are no direct contributions to the Strategic Framework.

Māori Impact Statement

Council budgets and how they are funded impact broadly across all Dunedin communities including Māori. The adoption of Te Taki Haruru – Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi.

Sustainability

Sustainability is an underlying principle of the DCC’s strategic framework. The proposed SIPO addresses financial sustainability in terms of sustainable long term distributions and socially responsible investment.

Zero carbon

The proposed SIPO for the Waipori Fund have no expected implications for city and DCC emissions. The Waipori Fund SIPO notes that the fund seeks to avoid direct investment in companies that have a significant involvement in a range of activities deemed to be inconsistent with the Council’s ethical position, including fossil fuel extraction. This aligns with the Zero Carbon Policy, by minimising the emissions impact of DCC’s activities.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

Summary information on the Waipori Fund is included within the Financial Strategy. The development of the Financial Strategy for the 2027-37 Long Term Plan will incorporate the revised assumptions that would result from the proposed SIPO.

Financial considerations

The proposed SIPO sets out how the assets of the Waipori Fund are to be managed. The financial impacts of the proposed SIPO, including the increased variability in financial results are discussed in detail in the report.

Significance

The decision to move from a conservative to balanced management Fund is considered to be of low significance in terms of the Council’s Significance and Engagement Policy.

Engagement – external

The proposed SIPO and draft governance agreement have been prepared by DCHL.

Engagement - internal

The proposed SIPO and draft governance agreement have been discussed with management.

Risks: Legal / Health and Safety etc.

Risks are considered in the body of the report.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

There are no known implications for the Community Boards.

Finance and Performance Committee

27 August 2026

Waipori Fund - Quarter Ending 30 June 2026

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 30 June 2026.

RECOMMENDATIONS

That the Committee:

a) Notes the report from Dunedin City Treasury Limited on the Waipori Fund for the quarter ended 30 June 2026.

DISCUSSION

2 The Waipori Fund Statement of Investment Policy and Objectives (SIPO) requires quarterly reporting on the performance and financial position of the fund.

3 Dunedin City Treasury Limited has provided the Waipori Fund report for the June 2026 quarter. The report is provided as Attachment A.

OPTIONS

4 As this is a noting report, no options are provided.

NEXT STEPS

5 Quarterly reporting on the performance and financial position of the fund will be provided to future meetings of either the Finance and Performance Committee or Council.

Signatories

Authoriser:

Carolyn Allan - Chief Financial Officer

Attachments

	Title	Page
⇩a	Waipori Fund Quarterly Report - 30 June 2026	141

SUMMARY OF CONSIDERATIONS

Fit with purpose of Local Government

This decision enables democratic local decision making and action by, and on behalf of, communities.

Fit with strategic framework

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

Reporting on the performance of the Waipori Fund does not contribute directly to the Strategic Framework.

Māori Impact Statement

Investment returns from the Waipori Fund impact on the level of rates payable and therefore impact across all Dunedin communities including Māori.

Sustainability

There are no impacts for sustainability.

Zero carbon

There are no impacts for zero carbon.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

There are no implications for LTP / Annual Plan / Financial Strategy / Infrastructure Strategy.

Financial considerations

Financial considerations are presented in the Waipori Fund report for the June 2026 quarter.

Significance

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

Engagement – external

There has been no external engagement.

Engagement - internal

There has been no internal engagement.

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 implications for Community Boards.

Finance and Performance Committee

27 August 2026

Significant Forecasting Assumptions - 10 Year Plan and Water Services Strategy 2027-37

Department: Corporate Policy and Civic

EXECUTIVE SUMMARY

1 The purpose of this report is to seek the Council’s approval of the draft Significant Forecasting Assumptions (SFAs) that are to be used in development of the 10 Year Plan 2027-37 (10 Year Plan) and the Water Services Strategy 2027-37 (Water Services Strategy).

2 The draft SFAs are at Attachment A.

3 The supporting information and data for the SFAs are based on the best available information at time of preparing this report, with potential for material variation.

RECOMMENDATIONS

That the Committee:

a) Approves the draft significant forecasting assumptions at Attachment A for the purposes of developing the 10-Year Plan 2027-37 and consulting with the community.

b) Notes that the information and data supporting these assumptions is interim and that Council will be updated if further information or updated data becomes available.

BACKGROUND

Significant forecasting assumptions are a legislative requirement for Long Term Plans and Water Services Strategies.

4 The Council is required to adopt a 10 Year Plan and Water Services Strategy every three years, under the Local Government Act 2002 (LGA) and Local Government (Water Services) Act 2025 (LGWSA) respectively.

5 Schedule 10, clause 17 of the LGA, and schedule 3, clause 8 of the LGWSA, require identification of all SFAs and risks underlying the financial estimates.

6 Without limiting the generality of the above, the financial estimates are based on the following assumptions:

a) How long the Council expects its significant assets to remain in service before they need to be replaced or renewed; and

b) How the Council expects to fund the future replacement or renewal of those significant assets.

7 Where a SFA involves a high level of uncertainty, the long-term plan must identify the fact of that uncertainty and an estimate of the potential effects of that uncertainty on the financial estimates.

DISCUSSION

Why do the Long Term Plan and Water Services Strategy include SFAs?

8 The SFAs provide Council and the community with an agreed basis for making 10 year forecasts when the future is uncertain.

9 Using consistent significant forecasting assumptions:

a) provides a common planning basis for activities, budgets, asset plans, infrastructure planning, and financial forecasting;

b) explicitly identifies any uncertainties;

c) supports informed decision-making;

d) provides transparency to the community to better understand choices and trade-offs in the Plan;

e) supports audit assurance by presenting supportable and realistic SFAs.

What are the main SFAs that other councils have used in their most recent Plans?

10 A number of assumptions were common amongst the 2024-34 Plans for other metropolitan councils, neighbouring provincial councils, and Auckland Council:

a) Population growth and demographic change assumptions, underpinning demand for services and infrastructure (including water services);

b) Climate change and its impacts, including flooding, severe weather and resilience requirements;

c) Legislative reform uncertainty was assumed to continue;

d) Natural hazards and environmental risks were assumed to influence infrastructure planning for some councils, or recovery needs for others;

e) Specific to some councils, like Queenstown-Lakes District Council, tourism-driven seasonal peaks and rapid urban development and housing demands were assumed.

What are the main SFAs to be used for Council’s 10 Year Plan and Water Services Strategy 2027-37?

11 The main significant forecasting assumptions to be included are:

a) Legislative and regulatory changes

b) Economic change (including the city’s economic profile and trends)

c) Demographic changes (total population, ethnic makeup, and age shifts)

d) Growth and Urban Development changes (households, dwellings, rating-units, land-use and development patterns)

e) Natural hazards (resilience and civil defence)

f) Climate change (climate predictions, mitigation, adaptation, and resilience)

g) Water Services (in brief)

h) Service levels

i) Infrastructure condition and renewals (as infrastructure planning drivers)

j) Deliverability

k) Financial assumptions

12 Legislative and regulatory changes are a key source of uncertainty for long term planning.

13 Dunedin City Council and Queenstown-Lakes District Council submitted a joint Head Start proposal in August 2026. A decision as to whether the proposal will proceed to detailed development is expected from the government September 2026, with final approvals expected in Q2 2027. For any Head Start proposal that is approved, implementation is expected to begin in mid-2028.

14 A recent presentation from the Audit Office recommended a ‘business as usual’ assumption with high uncertainty in situations where decisions have not yet been made. This type of assumption should be accompanied with a disclosure to provide context around the uncertainty.

15 It is likely that some assumptions, including those relating to legislative and regulatory change, will need to be updated during the development of the 10 Year Plan and Water Services Strategy; where this occurs, an update will be brought back to Council for consideration.

16 The majority of SFAs have been included at Attachment A. However, some additional assumptions will be included in a future update to Council, including additional financial assumptions, and those for the Waste activity and infrastructure valuations.

17 The SFAs will inform the key drivers, challenges and opportunities that the DCC faces in the period covered by the 10 Year Plan and Water Services Strategy. Examples include meeting changing needs, such as building resilience to natural hazards, increases or decreases to levels of service, or delivering on the city-wide and DCC emission reduction targets.

18 The financial assumptions included at Attachment A include interest rates, inflation rates, and NZ Transport Agency Waka Kotahi (NZTA) funding assistance rate assumptions to be used over the 10 year period.

19 Where possible, external advice has been used to support the assumptions made. For example, the interest rate assumptions have been provided by Dunedin City Treasury Limited (DCTL), and BERL has provided interim inflation rates (Attachment B).

20 It is assumed that the applicable standard funding assistance rate will be 51% throughout the 10 year period.

21 The table below presents the interest rate assumptions from the June 2026 Treasury Report provided by DCTL. The full report is available at Attachment C. These assumptions will be used in developing the financial forecasts for the 10 Year Plan and the Water Services Strategy.

Financial Year	Expected Interest Rate
2027/28	4.43%
2028/29	4.58%
2029/30	4.87%
2030/31	4.98%
2031/32	5.25%
2032/33	5.41%
2033/34	5.54%
2034/35	5.66%
2035/36	5.82%
2036/37	*

22 Note that the assumption for 2036/37 (i.e., year 10) has not yet been forecast by DCTL. The interest rate for this year will be assumed as 5.82% until an updated forecast is available later in 2026.

OPTIONS

23 The LGA requires that Council’s 10 Year Plan and Water Services Strategy rely on significant forecasting assumptions. Options have not been presented but Council may decide to modify the significant forecasting assumptions.

NEXT STEPS

24 Staff will use the agreed interim SFAs for the development of the 10 Year Plan and Water Services Strategy.

25 The Significant Forecasting Assumptions will be reviewed in late 2026 when updated information is expected to become available, and again in early 2027. This will help to ensure that the 10 Year Plan and Water Services Strategy are developed using the best available information.

26 Staff will periodically bring updates to the Council as forecasting information becomes available or changes.

Signatories

Author:

Rula Abu-Safieh Talahma - Senior Policy Analyst

Janet Fraser - Corporate Planner

Authoriser:

Carolyn Allan - Chief Financial Officer

Attachments

	Title	Page
⇩a	Draft interim Significant Forecasting Assumptions - 10 Year Plan and Water Services Strategy 2027-37	153
⇩b	Draft DCTL Treasury Report - June 2026	171
⇩c	BERL interim cost adjustors	173

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 wellbeing of the Dunedin 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	✔	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	✔	☐	☐
Parks and Recreation Strategy	✔	☐	☐
Other strategic projects/policies/plans	✔	☐	☐

The 10 Year Plan contributes to all of the objectives and priorities of the strategic framework as it describes the Council’s activities, the community outcomes, and provides a long term focus for decision making and coordination of the Council’s resources, as well as a basis for community accountability.

Māori Impact Statement

Council budgets impact broadly across all Dunedin communities including Māori. The adoption of Te Taki Haruru – Māori Strategic Framework signals Council’s commitment to mana whenua and to its obligations under the Treaty of Waitangi. Mana whenua and mātāwaka will have an opportunity to engage in the 10 Year Plan 2027-37 consultation process.

Sustainability

Sustainability is an underlying principle of the DCC’s strategic framework. Significant forecasting assumptions support sustainability through ensuring that the 10 Year Plan 2027-37 is developed with the best available information about what the Council and the community can expect in the future.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

This report provides details of the assumptions being made to assist the development of the 10 Year Plan.

Financial considerations

Financial forecasting assumptions are outlined in the report and its attachment.

Significance

The 10 Year Plan is significant and will be consulted on using the Special Consultative Procedure.

Engagement – external

There has been no external engagement in the preparation of the draft interim assumptions. However, information from BERL and DCTL has been used to inform some of the assumptions.

Engagement - internal

Relevant staff from across Council have been involved in the development of the draft interim assumptions.

Risks: Legal / Health and Safety etc.

The level of uncertainty for each of the assumptions made, and the effect of the uncertainty is included in the report.

Conflict of Interest

There are no known conflicts of interest.

Community Boards

This report has no specific implications for Community Boards. Community Boards will be consulted with as part of the 10 Year Plan 2027-37 process.

Finance and Performance Committee

27 August 2026

Rating method and financial policies review - 10 Year Plan 2027-37

Department: Civic, Finance and Corporate Policy

EXECUTIVE SUMMARY

1 This report seeks the Committee’s direction on a range of matters following a Rating and Financial Policy Review workshop on 15 July 2026.

2 The review provides an opportunity to assess whether existing rating and financial policies remain appropriate, equitable, transparent, and aligned with Council's strategic objectives.

3 Through the recent workshop, several areas were identified that the Committee may wish staff to investigate further. Direction is sought on which matters should proceed to detailed investigation and option development as part of the 10 Year Plan 2027-37 (10 Year Plan).

RECOMMENDATIONS

That the Committee:

a) Notes the Rating and Financial Policy Review report.

b) Provides direction on which matter(s) should be investigated further and reported back to Council for consideration, which may include those listed below and/or any other matter(s) raised by the Committee:

i) Rating treatment of Forsyth Barr Stadium.

ii) Funding and rating treatment of the Tertiary Area.

iii) Rating options for heritage buildings.

iv) Rating options for vacant buildings and/or abandoned land.

v) Development of affordability measures for inclusion in the Financial Strategy of the 10 Year Plan 2027-37.

vi) Review of rates remission and postponement policy.

c) Notes that the Revenue and Financing Policy will be reviewed as part of the development of the 10 Year Plan 2027-37.

BACKGROUND

Rating

4 The purpose of the Local Government (Rating) Act 2002 (Rating Act) is to provide local authorities with the legal framework to set, assess, collect, and recover rates to fund local government activities. The Act also aims to ensure that rating decisions are made transparently and through appropriate consultation processes, and that ratepayers can understand how their rates have been determined.

5 Under the Rating Act, councils are required to:

a) Set and assess rates in accordance with the rating powers and methodologies specified in the Act.

b) Ensure rates are set through transparent decision-making processes that align with the requirements of the Local Government Act 2002.

c) Maintain a Rating Information Database and rates records for all rating units within their district.

d) Issue rates assessments and invoices that accurately reflect a ratepayer's liability.

e) Apply rates consistently and in accordance with statutory provisions relating to rateable and non-rateable land.

f) Adopt policies for the remission and postponement of rates where required by legislation.

g) Comply with specific legislative requirements relating to certain land uses, including educational establishments, Māori freehold land, and other categories of land addressed by the Act.

6 Properties that are ‘non-rateable’ under the Act are exempt from general rates but are still liable for water supply, refuse disposal or sewage disposal targeted rates, where applicable. Examples of non-rateable properties include schools and universities, public hospitals and churches.

7 Dunedin City Council (DCC) currently charges general and targeted rates to ratepayers.

a) General rates are based on a property’s capital value (CV) and apply to all rateable properties. DCC currently has seven general rate differential categories based on land use:

i) Residential

ii) Lifestyle

iii) Commercial

iv) Farmland

v) Residential Heritage B&B

vi) Water Services Utilities

vii) Stadium: 10,000+ Seat Capacity

b) Targeted rates are charged to identifiable groups of ratepayers to fund particular services or activities.

8 The Rating Act provides the ability for councils to charge Uniform Annual General Charges (UAGC); this is a fixed, flat fee on every rateable property, regardless of CV. DCC does not currently charge a UAGC.

9 At its meeting on 4 March 2026, Council considered items relating to the draft Annual Plan 2026/27, including the rating method and the addition of a new general rate differential for water services utilities. Council resolved:

Moved (Cr Cherry Lucas/Mayor Sophie Barker):

That the Council:

a) Approves an increase in the Community Services targeted rate for the 2026/27 year of $3.30, taking the rate to $124.30 including GST.

b) Approves an increase in the Stadium 10,000 plus seat differentiated rates for the 2026/27 year based on the June 2025 Local Government Cost Index of 2.7%.

c) Approves the creation of a new general rate differential for water services utilities of 1.34

d) Approves the current rating method for the setting of all other rates for the 2026/27 year.

e) Notes that a full review of the general rate differential will be completed as part of the 10 Year Plan 2027-37.

Motion carried (CNL/2026/062)

10 The Annual Plan 2026/27 rating method is at Attachment A.

11 Other changes previously made to the way DCC rates include:

a) Reduction in the general rate differential factor for commercial properties from 3.09 to 2.5 (completed in 2015/16);

b) Reduction in the general rate differential factor for farmland from 0.9 to 0.8 (completed in 2015/16); and

c) Increase in the general rate differential factor for commercial properties in Strath Taieri from 1.0 to 2.5 (completed in 2017/18).

Financial Policies

12 Under the Local Government Act (LGA), DCC is required to include a Revenue and Financing Policy in its 10 Year Plan 2027-37.

13 The current Revenue and Financing Policy, which is part of the 9 Year Plan 2025-34, is at Attachment B.

14 The Revenue and Financing Policy must state funding sources of operating and capital expenditure, including but not limited to general and targeted rates, fees and charges, borrowing, proceeds from asset sales and development contributions.

15 The policy identifies the proportion of expected funding from rates and other sources for each of the main activities of DCC, with an acceptable variance of +/- 5%.

16 DCC has included a Rates Remission and Postponement Policy in previous Long Term Plans. The current Policy, which is part of the 9 Year Plan 2025-34, is at Attachment C.

17 A Rates Remission and Postponement Policy is not strictly required under the legislation; however, the Rating Act requires a policy covering remission and postponement of rates on Māori freehold land at a minimum.

18 DCC’s current Rates Remission and Postponement Policy covers instances where DCC may remit or postpone rates, including situations relating to hardship, natural disasters and Māori freehold land.

DISCUSSION

19 The Rating and Financial Policy Review provides an opportunity to consider whether current funding arrangements remain fair, transparent, and fit for purpose.

20 Affordability of rates has been a topic of increased focus and discussion in recent years, including from central government and the community. This has been driven at least in part by cost of living pressures, recent rate increases around the country and historical underinvestment in infrastructure, with efforts now being made to correct this.

21 Related to affordability, central government is proposing a rate cap for local government; legislation relating to this proposal has not yet been introduced at the time of writing this report. Regardless of the outcome of this proposal, affordability to ratepayers remains a consideration.

22 Changes to the way that DCC rates does not change the amount of rates revenue received; instead, it changes the allocation of the rates burden across ratepayers.

23 Initial review work has identified several topics that may warrant further investigation. The Committee is asked to decide which matters should be investigated further and reported back with options for consideration.

24 Any future policy changes would be subject to Council decision-making processes and, where required, consultation through the 10 Year Plan 2027-37 process.

25 Some queries from the workshop have been addressed in other ways and consequently are not included in the options for further work in this report:

a) University Halls of Residence

The Local Government (Rating) Act 2002 prescribes how properties used for educational purposes are to be rated, this includes the Halls of Residence. As a result, councils have limited discretion in determining how rates are assessed and charged for these properties.

A breakdown of the current rates on University of Otago properties is at Attachment D.

b) Rates Rebates

Rates rebates are provided through a central government scheme that is administered by local authorities. The scheme provides partial payment for eligible ratepayers with low incomes and/or with a Super Gold card. Attachment E shows the numbers of rates rebates that were provided during the 2025/26 rating year by local authority. A comparison has been made against the total number of dwellings per area from the 2023 census data.

The DCC has increased the advertising of the rates rebates scheme and provided an online application form to encourage more applications.

c) Rates Arrears for 2025/26

As at 30 June 2026, there was a total of 2,588 residential properties that were in rates arrears to a total of $5,425,995. Of that total, 1,492 properties have arrears exceeding $500. Properties that have a mortgage will enter into a 90-day bank warning process. During this process, staff offer support to enter affected ratepayers into a payment plan.

d) Water Services Rates

A review of how the DCC rates for water services is commencing soon. This is a significant piece of work and is expected to be ready for the Council’s consideration at the time of the Annual Plan 2028/29.

OPTIONS

26 Following the workshop held in July, direction is sought on the following matters. For areas where the Committee gives direction to continue work, options will be presented for consideration at a later date as a part of the current 10 year plan process.

Rating treatment of Forsyth Barr Stadium

27 Forsyth Barr Stadium is rated under a specific differential for both general and targeted rates. For the 2026/27 rating year, rates revenue from the Stadium equates to approximately $219,648.

28 The creation of the differential was a historical decision by Council to collect a quantum of rates based on an estimate of the rates collected on the stadium site prior to development.

29 It has been suggested that the rating treatment of the Stadium is not easily understood and that DCC could provide greater transparency on the cost to ratepayers. There are different options that could be explored to achieve this.

30 The Finance and Performance Committee is asked to provide direction on whether options should be investigated to provide greater transparency with regard to Forsyth Barr Stadium.

Funding and rating treatment of the Tertiary Area

31 The properties in the ‘Tertiary Area’ (Attachment F) have access to an enhanced kerbside service.

32 This kerbside service is for a weekly collection of all bins (green, red, yellow, and blue), as opposed to the standard residential collection of a weekly green bin service and alternating fortnightly collections of the red, yellow, and blue bin.

33 Currently the cost for all residential kerbside collection services (both enhanced and standard) is equally spread through the residential kerbside targeted rate. For the 2026/27 rating year, this is $349.20 per rating unit.

34 There are two options that could be taken on this matter:

a) Investigate implementing two different targeted rates based on the level of service provided, or

b) Keep the status quo of one targeted rate.

35 The Finance and Performance Committee is asked to provide direction on which option(s) require further investigation, if any.

36 In addition to kerbside collection, there are other costs incurred in the Tertiary Area, which are paid for by ratepayers. Examples include repairing damage to roads and street sweeping to manage higher levels of litter and debris. There are a number of options that could be taken on this matter:

a) Investigate implementing a special rating area for the Tertiary Area;

b) Investigate fees and charges to recover the costs incurred; or

c) Keep the status quo.

37 The Finance and Performance Committee is asked to provide direction on which option(s) require further investigation, if any.

Rating options for Heritage Buildings

38 The 2GP District Plan identifies the following (collectively referred to as ‘protected heritage buildings’):

a) 915 Scheduled Heritage Buildings

b) 902 Character Contributing Buildings in heritage precincts

c) 50 Heritage Structures (mostly non-habitable)

39 The DCC adopted the Heritage Action Plan (HAP) in November 2023 and noted the associated HAP Implementation Plan (HIP). The primary outcome of the HAP is to encourage investment in heritage buildings.

40 The DCC currently administers the Dunedin Heritage Fund which distributes an annual grant from the Council of $680,700. This fund supports the redevelopment, restoration, and strengthening of heritage buildings with a focus on supporting positive conservation outcomes.

41 If further support mechanisms are to be explored, there are a few rating-related options that may be considered. However, further investigation would need to be carried out to understand the viability of each option. High-level options identified are:

a) Discouraging vacant/derelict heritage buildings by implementing a higher general rate differential on those buildings. This would be a similar approach to Wellington City Council;

b) Encouraging the redevelopment of heritage buildings by delaying/postponing the rates increase that occurs after an increase in capital value from redevelopment; and/or

c) Providing rates relief for protected heritage places by implementing a new, lower general rate differential.

42 The Finance and Performance Committee is asked to provide direction on which option(s) require further investigation, if any.

Rating options for vacant buildings and/or abandoned land.

43 If the Committee wished to explore a different rating treatment for vacant buildings, this would require investigation as to possible mechanisms, including how other councils rate. Any options are likely to apply to a specific geographic area, or to a type of building, for simplicity of administration.

44 The Finance and Performance Committee is asked to provide direction for investigating a vacant building rating treatment, and if so, are there any specific criteria to be explored.

Abandoned land remission policy

45 Following the July workshop, it was identified that an Abandoned Land Remission Policy could provide greater transparency with regards to uncollected rates revenue from abandoned land.

46 Initial investigations have identified 86 rateable assessments that are general freehold land that are believed to be abandoned, equating to an outstanding rates balance of $212,579.21.

47 Some of the rateable assessments are of sufficient size to warrant exploring whether they are declared legally abandoned. However, some are small parcels of land that have had outstanding rates written off.

48 One option is to consider adopting an ‘abandoned land’ remission as a part of the Rates Remission and Postponement Policy and recognising the cumulative written off rates in a budget line. This is a mechanism used by some other councils.

49 The Finance and Performance Committee is asked to provide direction on implementing an abandoned land remission policy, if any.

Affordability measures for inclusion in the Financial Strategy

50 The statutory context is that the Financial Strategy is intended to make transparent the effects of Council proposals on services, rates, debt, and investments, and to provide a guide for prudent financial management.

51 The Financial Strategy in the 9 year plan includes a number of financial management tools. There is an opportunity to include an additional metric relating to affordability for ratepayers.

52 Major takeaways from the environmental scan of rates affordability across a number of councils include:

a) Affordability is not defined through a single formula. Most councils treated it as a balancing judgement across rates increases, debt, capital investment, levels of services, and intergenerational equity.

b) Rates affordability is the most common lens. Council’s financial strategy considers affordability for ratepayers and the DCC as a whole.

c) Debt and balanced-budget settings are used as affordability controls. Debt limits [net debt to revenue] are not the definition of affordability itself but are used as an affordability guardrail.

d) Infrastructure pressures are the main driver of Council affordability concerns.

e) Affordability involves trade-offs between core infrastructure and levels of service. Council decides on funding now, deferring, removing low priority projects, impact on services, and what to defer to future ratepayers.

f) Using direct affordability relief mechanisms as part of Council’s affordability response. Rates Rebate Scheme is the most common household affordability tool. Council’s rates remissions, postponements, rebates, hardship policies are part of the affordability response.

53 The Finance and Performance Committee is asked to provide direction on whether an affordability metric for ratepayers is developed for inclusion in the Financial Strategy.

Rates Remission and Postponement Policy

54 The Rates Remission and Postponement Policy will be reviewed and updated as a part of the 10 year plan process. This report seeks direction on the following matters:

a) Rates Remission for Hardship: whether to review the current criteria and suggest how the policy could be made more accessible to those experiencing hardship.

b) Natural Disaster: whether to remove the criteria of ‘Government funds that rates relief’ to allow the decision to be made by DCC.

c) Unexpected Events: whether to replace with ‘Other remissions deemed fair and equitable’ to recognise that not all possible scenarios can be covered, but allowing some flexibility to apply remissions where it is fair and equitable to do so.

d) Other remission areas: as stated earlier in this report, there are options to consider other areas in the remission policy (e.g., heritage, abandoned land etc.)

55 The Finance and Performance Committee is asked to provide direction on which option(s) require further investigation.

Review of Revenue and Financing Policy

56 The LGA requires that the Revenue and Financing Policy is reviewed and included as part of any Long Term Plan.

57 Specific revenue and funding policies relating to the main activities of Council will all be reviewed as part of the development of the 10 Year Plan 2027-37. This review will address changes in context and settings over time.

58 For example, during the Annual Plan 2026/27 process, Community Housing was identified as an activity that was non-compliant with the current Revenue and Financing Policy. As part of the Policy review, staff will do work in this area before coming back to the Council with options to ensure future compliance.

59 Another example of where context has changed is in city tourism and visitor numbers, which were impacted by the Covid-19 pandemic and have since experienced a period of recovery. This lens will be applied during the review of the policies for DCC’s cultural attractions and isite Visitor’s Centre.

NEXT STEPS

60 Staff will incorporate the Committee’s direction into the Rating and Financial Policy Review work programme.

61 Staff will review the Revenue and Financing Policy as part of the development of the 10 Year Plan 2027-37, with particular regard to where context and settings have changed.

62 Detailed analysis and options papers will be prepared on any matters selected by the Committee for further investigation.

63 Any proposed policy changes will be reported back to Council for consideration and, where required, will form part of future consultation processes associated with the 10 Year Plan 2027-37.

Signatories

Author:

Janet Fraser - Corporate Planner

Hayley Knight - Assurance Manager

Rula Abu-Safieh Talahma - Senior Policy Analyst

Authoriser:

Carolyn Allan - Chief Financial Officer

Attachments

	Title	Page
⇩a	Rating Information - extract from Annual Plan 2026/27	245
⇩b	Revenue and Financing Policy - extract from 9 Year Plan 2025-34	268
⇩c	Rates Remission and Postponement Policy - extract from 9 Year Plan 2025-34	282
⇩d	University of Otago rates breakdown - July 2026	289
⇩e	Rates Rebates by Area 2025/26	293
⇩f	Kerbside Tertiary Area Map	295

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 wellbeing 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	✔	☐	☐
Future Development Strategy	✔	☐	☐
Integrated Transport Strategy	✔	☐	☐
Parks and Recreation Strategy	✔	☐	☐
Other strategic projects/policies/plans	✔	☐	☐

Rating and financial policies of the 10 Year Plan 2027-37 contribute to objectives across the strategic framework, as they relate to all of the Council’s activities, which are aligned to community outcomes.

Māori Impact Statement

Sustainability

Sustainability is an underlying principle of the DCC’s strategic framework. The Rating and financial policies of the 10 Year Plan 2027-37 support financial sustainability for activities of Council and for its ratepayers.

LTP/Annual Plan / Financial Strategy /Infrastructure Strategy

The rating method, Financial Strategy, Revenue and Financing Policy, and Rates Remission and Postponement Policy will be included in the 10 Year Plan 2027-37.

Financial considerations

The Council may direct staff to do further investigation / analysis on areas of interest. This analysis, including financial considerations, will be brought back to Council for consideration and decision making as part of the 10 Year Plan 2027-37 process.

Significance

This report is considered to be low significance under Council’s Significance and Engagement Policy.

Engagement – external

Any proposed changes to rating or financial policies would be consulted on using the Special Consultative Procedure as part of the 10 Year Plan 2027-37 process.

Engagement - internal

Relevant staff from across the organisation would be involved in any investigation / analysis as directed by the Council.

Risks: Legal / Health and Safety etc.

There are no identified risks.

Conflict of Interest

There are no identified conflicts of interest.

Community Boards

There are no implications for Community Boards.

	Title	Page
⇩a	Financial Update	299
⇩b	Statement of Financial Performance	314
⇩c	Statement of Financial Position	315
⇩d	Statement of Cashflows	316
⇩e	Capital Expenditure Summary	317
⇩f	Capital Expenditure Detailed	319
⇩g	Statement of Operating Variances	326
⇩h	Debt Graph	327

General subject of the matter to be considered	Reasons for passing this resolution in relation to each matter	Ground(s) under section 48(1) for the passing of this resolution	Reason for Confidentiality
C1 Confirmation of the Confidential Minutes of Finance and Performance Committee meeting - 21 May 2026 - Public Excluded	S7(2)(b)(ii) The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.	.
C2 Directors Remuneration - Dunedin City Holdings Limited	S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.	The information in this report remains confidential until Council has determined the level of fees and advised Dunedin City Holdings Limited of the outcome, at which time the information can be made public..
C3 Director Vacancy in Dunedin City Holdings Limited	S7(2)(a) The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.
C4 Investment Property Portfolio - Quarter ending 30 June 2026	S7(2)(b)(ii) The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.	S48(1)(a) The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

Co - Chairs	Cr Lee Vandervis	Cr Cherry Lucas

Members	Mayor Sophie Barker	Mr Jeffrey Broughton
	Cr John Chambers	Cr Jo Galer
	Cr Christine Garey	Cr Doug Hall
	Mr Hoani Langsbury	Cr Marie Laufiso
	Cr Russell Lund	Cr Mandy Mayhem
	Cr Andrew Simms	Cr Mickey Treadwell
	Cr Steve Walker	Cr Brent Weatherall

	Title	Page
A ⇩	Minutes of Finance and Performance Committee meeting held on 21 May 2026	15