AGENDA

Ordinary meeting of the

 

Governance Committee

 

Thursday 6 September 2018

Commencing at 9.00a.m.

Council Chamber

Civic House

110 Trafalgar Street, Nelson

 

Pat Dougherty

Chief Executive

 

Membership: Councillor Ian Barker (Chairperson), Her Worship the Mayor Rachel Reese, Councillors Luke Acland, Mel Courtney, Bill Dahlberg (Deputy Chairperson), Gaile Noonan, Mike Rutledge, Tim Skinner, Stuart Walker, Mr John Murray and Mr John Peters

Quorum: 6

 

Nelson City Council Disclaimer

Please note that the contents of these Council and Committee Agendas have yet to be considered by Council and officer recommendations may be altered or changed by the Council in the process of making the formal Council decision.

·      All councillors, whether or not they are members of the Committee, may attend Committee meetings

·      At the discretion of the Chair, councillors who are not Committee members may speak, or ask questions about a matter.

·      Only Committee members may vote on any matter before the Committee

It is good practice for both Committee members and non-Committee members to declare any interests in items on the agenda.  They should withdraw from the room for discussion and voting on any of these items.

 

6 September 2018

 

Page No.

 

1.       Apologies

Nil

2.       Confirmation of Order of Business

3.       Interests

3.1      Updates to the Interests Register

3.2      Identify any conflicts of interest in the agenda

4.       Public Forum

5.       Confirmation of Minutes

5.1      26 July 2018                                                                               9 - 15

Document number M3639

Recommendation

That the Governance Committee

Confirms the minutes of the meeting of the Governance Committee, held on 26 July 2018, as a true and correct record.     

6.       Forestry Advisory Group Minutes 15 March and 12 June 2018 16 - 26

Document number R9651

Recommendation

That the Governance Committee

Receives the confirmed minutes from a Forestry Advisory Group meeting held on 15 March 2018 (A1938629); and

Receives the unconfirmed minutes from a Forestry Advisory Group meeting held on 12 June 2018 (A1986426).

 

7.       Chairperson's Report                                                27 - 76

Document number R9648

Recommendation

That the Governance Committee

Receives the report Chairperson's Report (R9648) and its attachments (A2037895 and A2040163).

 

8.       Nelson Enterprise Loan Trust - rollover of loan due July 2018                                                                                77 - 89

Document number R8221

Recommendation

That the Committee

Receives the report Nelson Enterprise Loan Trust - rollover of loan due July 2018 (R8221) and its attachments (A2024109 and A2038277).

 

Recommendation to Council

That the Council

Approves rolling over the interest free loan to Nelson Enterprise Loan Trust for a further one year through to September 2019 while a sustainable business model is developed by the Board.

 

9.       Nelson Centre of Musical Arts - Funding                    90 - 96

Document number R9535

Recommendation

That the Governance Committee

Receives the report Nelson Centre of Musical Arts - Funding (R9535) and its attachment (A2037803).

 

Recommendation to Council

That the Council

Approves the allocation of $25,000 unbudgeted expenditure to increase the operational grant of the Nelson Centre of Musical Arts from $125,000 to $150,000 for financial year 2018/19.

 

10.     Consultation on International Visitor Conservation and Tourism Levy                                                          97 - 124

Document number R9559

Recommendation

That the Governance Committee

Receives the report Consultation on International Visitor Conservation and Tourism Levy (R9559) and its attachments (A2016289, A2025105 and A2037217); and

Notes the content of the submissions from Nelson Regional Development Agency, Tasman District Council, and Local Government New Zealand.

 

Recommendation to Council

That the Council

Notes the content of the submissions from Nelson Regional Development Agency, Tasman District Council, and Local Government New Zealand.

 

11.     Event Funding - Septura Residency for Brass Instrument Performers

This report was not available when the agenda went to print and will be distributed separately.  

 

Public Excluded Business

12.     Exclusion of the Public

Recommendation

That the Governance Committee Confirms, in accordance with section 48(5) of the Local Government Official Information and Meetings Act 1987, Iain Sheves of Wakatu Inc, Steve Baigent of Cephas and Patrick Shone of Crowe Horwath remain after the public has been excluded, for Item5 of the Public Excluded agenda (Strategic Property Matters), as they have knowledge that will assist the Council; and Notes, in accordance with section 48(6) of the Local Government Official Information and Meetings Act 1987, the knowledge that Iain Sheves, Steve Baigent and Patrick Shone possess relates to strategic property matters.

Recommendation

That the Governance Committee

Excludes the public from the following parts of the proceedings of this meeting.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows: 

Item	General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Particular interests protected (where applicable)
1	Governance Committee Meeting - Public Excluded Minutes -  26 July 2018	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.	The withholding of the information is necessary: ·    Section 7(2)(i)      To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)
2	The Bishop Suter Trust - reappointment of Trustees	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7	The withholding of the information is necessary: ·   Section 7(2)(a)      To protect the privacy of natural persons, including that of a deceased person
3	Nelmac Director Remuneration - 2018	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7	The withholding of the information is necessary: ·   Section 7(2)(i)      To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)
4	Nelmac Matters	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7	The withholding of the information is necessary: ·   Section 7(2)(b)(ii)      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 ·   Section 7(2)(h)      To enable the local authority to carry out, without prejudice or disadvantage, commercial activities ·   Section 7(2)(j)      To prevent the disclosure or use of official information for improper gain or improper advantage
5	Strategic Property Matters	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7	The withholding of the information is necessary: ·   Section 7(2)(h)      To enable the local authority to carry out, without prejudice or disadvantage, commercial activities ·   Section 7(2)(i)      To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)

 

Note:

·               Youth Councillors Nathanael Rais and Cassie Hagan will be in attendance at this meeting. (delete as appropriate)

 

 

  

Minutes of a meeting of the Governance Committee

Held in the Council Chamber, Civic House, 110 Trafalgar Street, Nelson

On Thursday 26 July 2018, commencing at 9.01a.m.

Present:              Councillor I Barker (Chairperson), Her Worship the Mayor R Reese, Councillors M Courtney, B Dahlberg (Deputy Chairperson), G Noonan, M Rutledge, T Skinner and S Walker

In Attendance:   Councillors Acland, Lawrey, Matheson and McGurk, Chief Executive (P Dougherty), Group Manager Environmental Management (C Barton), Group Manager Community Services (R Ball), Group Manager Strategy and Communications (N McDonald), Governance Adviser (E Stephenson) and Youth Councillors (U Cinzah and C Hagan)

 

Apologies :          Councillor Dahlberg for early departure

 

 

1.       Apologies

 

Resolved GOV/2018/040 That the Governance Committee Receives and accepts the apology from Councillor Dahlberg for early departure. Courtney/Walker                                                                        Carried

 

Attendance: Her Worship the Mayor R Reese and Councillor Skinner entered the meeting at 9.03a.m.

 

2.       Confirmation of Order of Business

There was no change to the order of business.

 

3.       Interests

There were no updates to the Interests Register, and no interests with items on the agenda were declared.

4.       Public Forum 

There was no public forum.

5.       Confirmation of Minutes

5.1      7 June 2018

Document number M3534, agenda pages 7 - 12 refer.

Resolved GOV/2018/041 That the Governance Committee Confirms the minutes of the meeting of the Governance Committee, held on 7 June 2018, as a true and correct record. Walker/Dahlberg                                                                        Carried

  

6.       Chairperson's Report 

The Chairperson subsequently provided a verbal report in the public excluded section of the meeting. It was agreed that the verbal report be stated in the open section of the minutes, for transparency.                                                              

Chairperson's Verbal Report
	The Chairperson noted that during the Long Term Plan process, a submission had been received from The New Zealand King Salmon Company Ltd. He advised the Committee that he had undertaken discussions with the Chief Executive of King Salmon Ltd to ascertain what its plans were. He noted that the potential income and return from the use of a small part of the ocean was equivalent to that from a huge area of land.
	Resolved GOV/2018/042 That the Governance Committee Receives the Chairperson’s Verbal Report . Barker/Her Worship the Mayor                                                    Carried

 

7.       Nelson Regional Development Agency - Events Contestable Fund

Document number R9391, agenda pages 13 - 21 refer.

Group Manager Environmental Management, Clare Barton, spoke to the report.

Nelson Regional Development Agency (NRDA) Chief Executive, Mark Rawson, provided context to the information contained in his email (A2002407 - Attachment 1 of the agenda report) and spoke about the NRDA Board’s disappointment in the funding over-allocation situation. Mr Rawson stressed that the NRDA was accountable, and that as soon as they were aware, that all practical steps had been taken to rectify the situation with no additional cost to Council or ratepayers. Mr Rawson said that the situation was a legacy of bringing together different systems and the resulting loss of institutional knowledge. He confirmed that that the NRDA had been through an audit and realigned and improved its processes and systems. Mr Rawson acknowledged Council staff assistance.

Mr Rawson answered questions regarding:

·         financial management

·         loss of opportunities

·         the effect on community events funding

·         activation events in Nelson City

·         alignment with Council’s Events Strategy

·         administration costs

·         confidence in the ability to deliver fully committed events

·         seasonality elements

·         future constraints

·         future large scale events such as Te Matatini

·         broader discussion regarding future needs leading into the next Long Term Plan, multiyear agreements

·         creating sustainability over time,

·         reducing public funding to create a leverage base

·         cash flow forecasting

·         increased reporting requirements

·         managing the Events Fund as a separate cost centre

·         significant event planning.

Attendance: Councillor Noonan left the meeting at 9.23a.m.

In response to a question, Ms Barton, confirmed that there was now more regular financial reporting. Ms Barton tabled a document containing Nelson City Council and NRDA events funding figures.

The motion was taken in parts

Resolved GOV/2018/043 That the Governance Committee: Receives the report Nelson Regional Development Agency - Events Contestable Fund (R9391) and its attachment (A2002407). Her Worship the Mayor/Rutledge                                                Carried

 

 

Recommendation to Council GOV/2018/044 That the Council: Approves an overdraft of the following amounts from the Events Contestable Fund by the Nelson Regional Development Agency: 2017/18    $47,296 2018/19    $206,838 2019/20    $66,467 with the result that the Events Contestable Fund reserve will be overdrawn until 2020/21; and Requires the Nelson Regional Development Agency to ensure the Events Contestable Fund is operated within the yearly allocation by 2020/21. Rutledge/Dahlberg                                                                     Carried

Mr Rawson provided background regarding the third clause of the motion concerning unbudgeted expenditure for the All Blacks game. He spoke about the inner city activation plan for the All Blacks game day, noting that there would be a series of events from 1p.m. to  5.30p.m.

Attendance: Councillor Noonan returned to the meeting at 9.55a.m.

Mr Rawson gave examples of the planned entertainment, which included street performers, a family zone and street markets. He said that a key element was the fan trail highlighting existing hospitality and noted that street closures would be required. Mr Rawson said that that the major drivers were traffic management and parking. He spoke about the numbers attending, crowd management, encouraging people to arrive early and optimising the opportunity for people to enjoy the event and to get home safely. He said that a major unbudgeted cost was free bus travel. Buses would provide extra capacity in the right places. He advised that a significant communications plan would begin in August to promote orderly flow at the venue.  Mr Rawson said that the aim was to deliver an extraordinary game day experience, a legacy investment. It was noted that the Hearings Panel – Other had approved road closures for the game, imposing a condition regarding communication to all affected people. Mr Rawson answered questions regarding commercial activities, fixed cost element, private sector investment, official ticket vendors and provision of late night buses for the event.

Resolved GOV/2018/045 That the Council Approves unbudgeted expenditure of $20,000 for the All Blacks vs Argentina Rugby Match including provision for Park and Ride associated with the Match. Her Worship the Mayor/Courtney                                                Carried

Attachments 1    A2019824 - Tabled Document - NCC Events Funding

       

8.       Exclusion of the Public

 

           A question was asked regarding why the Council Support for One Day International Cricket Games in 2019 report was in the public excluded section of the meeting. It was clarified that Council was in a bidding situation and did not want to reveal its bid, although it may later be practical to release part of the report with appropriate redactions. It was reiterated that this was a highly competitive situation and that Council could not disclose details about what was being offered and its response. 

Mark Rawson, CEO Nelson Regional Development Agency (NRDA), Rebecca Leach of NRDA and Dave Leonard, of Nelson Cricket, were in attendance for Item 2 of the Public Excluded agenda to answer questions and, accordingly, the following resolution was required to be passed:

Resolved GOV/2018/046 That the Governance Committee Confirms, in accordance with section 48(5) of the Local Government Official Information and Meetings Act 1987, Mark Rawson, CEO Nelson Regional Development Agency (NRDA), Rebecca Leach of NRDA, and Dave Leonard, of Nelson Cricket remain after the public has been excluded, for Item 2 of the Public Excluded agenda (Council Support for One Day International Cricket Games in 2019), as they have knowledge that will assist the Council; Notes, in accordance with section 48(6) of the Local Government Official Information and Meetings Act 1987, the knowledge that Mark Rawson, Rebecca Leach and Dave Leonard possess relates to the Cricket One Day International bid.   Dahlberg/Walker                                                                        Carried

 

Recommendation That the Governance Committee Excludes the public from the following parts of the proceedings of this meeting. The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

 

Item	General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Particular interests protected (where applicable)
1	Governance Committee Meeting - Public Excluded Minutes -  7 June 2018	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.	The withholding of the information is necessary: ·   Section 7(2)(a)      To protect the privacy of natural persons, including that of a deceased person ·   Section 7(2)(h)      To enable the local authority to carry out, without prejudice or disadvantage, commercial activities ·   Section 7(2)(i)      To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)
2	Council Support for One Day International Cricket Games in 2019	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7	The withholding of the information is necessary: ·   Section 7(2)(i)      To enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)

The meeting went into public excluded session at 10.16a.m. and resumed in public session at 11.23a.m. 

 

 

 

There being no further business the meeting ended at 11.23a.m.

 

Confirmed as a correct record of proceedings:

 

 

 

                                                       Chairperson                                     Date

         

 

Item 6: Forestry Advisory Group Minutes 15 March and 12 June 2018

 

Governance Committee 6 September 2018

 

REPORT R9651

Forestry Advisory Group Minutes 15 March and 12 June 2018

 

 

 

 

1.       Recommendation

That the Governance Committee Receives the confirmed minutes from a Forestry Advisory Group meeting held on 15 March 2018 (A1938629); and Receives the unconfirmed minutes from a Forestry Advisory Group meeting held on 12 June 2018 (A1986426).

 

 

 

 

Author:          Jasmin Brandt, Governance Adviser

Attachments

Attachment 1:  A1938629 Forestry Advisory Group Minutes 15Mar2018 ⇩

Attachment 2:  A1986426 Forestry Advisory Group Minutes 12Jun2018 ⇩

   

Item 6: Forestry Advisory Group Minutes 15 March and 12 June 2018: Attachment 1

 

 

 

 

Item 6: Forestry Advisory Group Minutes 15 March and 12 June 2018: Attachment 2

 

 

 

 

Item 7: Chairperson's Report

 

Governance Committee 6 September 2018

 

REPORT R9648

Chairperson's Report

1.       Purpose of Report

1.1      Council contracted Local Government New Zealand’s training provider, Equip, to provide an elected member self-assessment programme. Pamela Peters of WatsonPeters Ltd provided a professional service in governance evaluation, providing analysis on capability, strengths and group dynamics.

 

1.2      This programme had been shaped to help individual Councils get better outcomes for their communities by reviewing and enhancing their performance, as policy and decision-makers and community representatives.

 

1.3      The results of the self-evaluation process are attached (A2037895).

 

1.4      Attached is an outline of the work programme for the Governance Committee over the coming year up to the election (A2040163). I have asked staff to put this together as I think it is important that we plan ahead to manage our workload and set our expectations for staff. The Committee can discuss whether there are any additions or other changes it would like to make to the work programme

 

 

2.       Recommendation

That the Governance Committee Receives the report Chairperson's Report (R9648) and its attachments (A2037895 and A2040163).

 

Author:          Ian Barker, Chairperson

Attachments

Attachment 1:  A2037895 EquiP Nelson Governance Diagnostic Report 2018 ⇩

Attachment 2:  A2040163 Governance Committee work programme 2018-2019 ⇩

   

Item 7: Chairperson's Report: Attachment 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Item 7: Chairperson's Report: Attachment 2

Governance Committee 6 September 2018

 

REPORT R8221

Nelson Enterprise Loan Trust - rollover of loan due July 2018

 

1.       Purpose of Report

1.1      To consider whether to continue the interest free loan to the Nelson Enterprise Loan Trust.

 

 

2.       Recommendation

That the Committee Receives the report Nelson Enterprise Loan Trust - rollover of loan due July 2018 (R8221) and its attachments (A2024109 and A2038277).

Recommendation to Council

That the Council Approves rolling over the interest free loan to Nelson Enterprise Loan Trust for a further one year through to September 2019 while a sustainable business model is developed by the Board.

 

 

3.       Background

3.1      Nelson Enterprise Loan Trust (NELT) was established in 1997 and provides seed loans of up to $20,000 for start-up and small businesses in the region with the objective of promoting employment opportunities in the Nelson region.

3.2      Since it began, NELT has made 283 loans valued at $2.254 million with approximately 70% of loans being made to businesses in the Nelson area. 

3.3      Council initially lent $10,000 to NELT and advanced a further $15,000 in 2004.  During the Long Term Plan 2015-25 deliberations, the interest free loan from Council was increased to $50,000 maturing in July 2018.  NELT has written to Council seeking a three year rollover (Attachment 1).

4.       Discussion

4.1      It can be very difficult for start-up and small businesses to access loans.  NELT meets this need and works closely with the Nelson Tasman Business Trust to provide an integrated package of support which includes business planning and ongoing mentoring.

4.2      More than 80% of NELT’s administration costs are met from interest on loans and investments. The balance is met from grants and donations from individuals, community organisations, businesses and local and national government.

4.3      The Rata Foundation lent NELT $150,000 in instalments over 2005 and 2006 with interest only repayments until 2012.  Since then Rata has required repayment of the original $150,000 loan at $20,880 per annum including interest at 3%.  The current balance outstanding on the loan is $45,349 with full repayment due in 2020. The Foundation has also historically paid a donation to NELT to assist with administration costs but withdrew this funding in 2016/17 on the grounds that in its view NELT does not provide ‘purposes beneficial to the community’.

4.4      NELT is a not for profit trust but is not a registered charitable trust. NELT was a Charitable Trust until 2011 when Charities Services asked NELT to request that their registration be terminated on the grounds that because NELT makes loans to businesses that seek to make a profit, NELT were no longer eligible.

4.5      The net loss for NELT for the year ending 31 March 2018 was $20,700 ($13,734 loss in the previous year) including $10,000 bad debt write-offs.  Total loans outstanding are $265,000 at 31 March 2018 ($272,000 at 31 March 2017).  Underlying funding is $347,000 ($382,000 at 31 March 2017). 

4.6      Although the net funding position is positive (NELT have term deposit investments) officers are concerned about the ongoing sustainability of the business model. 

4.7      NELT applied to the Council Community Investment Fund for $10,000 to assist with administration support in 2018/19 but was unsuccessful as the request didn’t fit the criteria for the Fund.  It is actively pursuing other grants from local supporters to help meet administration costs and is looking at co-location options.

4.8      NELT has a part time Manager and a Board of five. Officers believe that the Trust is actively reviewing the business model as there have been discussions with both the Nelson Regional Development Agency (NRDA) and Nelson Tasman Business Trust (NTBT).

4.9      It is interesting to note that, in more recent years, repeat business accounts for between 50-60% of loans as relationships are built.

4.10    It is recommended that Council indicate to the Board that it has concerns about the sustainability of the business model and will roll the loan for a further year while this is worked through.     

5.       Options

5.1      The recommended option is Option 2.

 

Option 1: Agree to extend the interest free loan for 3 years
Advantages	·    NELT can continue to make loans to start up and small businesses with the ongoing support of Council
Risks and Disadvantages	·   Council incurs interest costs of approximately $2,500 per annum
Option 2: Agree to extend the interest free loan for a shorter period (1 year) and ask the Board to conduct a review of the business model
Advantages	·    NELT can continue to make loans to start up and small businesses with the ongoing support of Council ·    Sustainability of the NELT business model is addressed
Risks and Disadvantages	·    Creates uncertainty for NELT
Option 3: Decline to extend the interest free loan
Advantages	·    Council saves interest costs of approximately $2,500 per annum
Risks and Disadvantages	·    Creates uncertainty for NELT. ·    Reduces the amount NELT has available to lend ·    Support for start-up and small businesses is reduced

 

 

Author:          Nikki Harrison, Group Manager Corporate Services

Attachments

Attachment 1:  A2024109 - Nelson Enterprise Loan Trust letter requesting rollover - 5 July 2018 ⇩

Attachment 2:  A2038277 - Financial Statements - Nelson Enterprise Loan Trust - 31 March 2018 ⇩

 

 

Important considerations for decision making

1.   Fit with Purpose of Local Government NELT is providing a discretionary public service in the Nelson region.

2.   Consistency with Community Outcomes and Council Policy NELT contributes to the outcome ‘Our region is supported by an innovative and sustainable economy.’  Council’s investment policy allows loans to assist community groups.

3.   Risk There is limited risk to Council resulting from this recommendation, although there is some potential risk of not being repaid by NELT.

4.   Financial impact The loan balance at $50,000 is budgeted within the LTP 2018-28.

5.   Degree of significance and level of engagement This matter is of low significance as it relates to an existing loan that has been included in previous long term plans.

6.   Inclusion of Māori in the decision making process No engagement with Māori has been undertaken in preparing this report.

7.   Delegations The Governance Committee has the following delegations to consider the loan to Nelson Enterprise Loan Trust: Areas of Responsibility: ·      Business, economic development and tourism in Nelson. Powers to Decide: ·      None Powers to Recommend: ·      Any other matters within the areas of responsibility.

 

 

Item 8: Nelson Enterprise Loan Trust - rollover of loan due July 2018: Attachment 1

Item 8: Nelson Enterprise Loan Trust - rollover of loan due July 2018: Attachment 2

 

 

 

 

 

 

Item 9: Nelson Centre of Musical Arts - Funding

 

Governance Committee 6 September 2018

 

REPORT R9535

Nelson Centre of Musical Arts - Funding

 

1.       Purpose of Report

1.1      To increase the operational grant for the Nelson Centre of Musical Arts (NCMA) from $125,000 to $150,000 in the current financial year 2018/19.

 

2.       Recommendation

That the Governance Committee Receives the report Nelson Centre of Musical Arts - Funding (R9535) and its attachment (A2037803).

Recommendation to Council

That the Council Approves the allocation of $25,000 unbudgeted expenditure to increase the operational grant of the Nelson Centre of Musical Arts from $125,000 to $150,000 for financial year 2018/19.

 

 

3.       Background

3.1      The Nelson Centre of Musical Arts (NCMA), previously known as the Nelson School of Music (NSOM), was allocated funding for an operational grant of $125,000 per annum in the Long Term Plan (LTP) 2018-28.

3.2      It has since emerged that NCMA had understood that Council was to consider a grant of $150,000 per annum in the LTP.  This was on the basis of a conversation in early 2017 with the Mayor, the Chair of the Community Services Committee and officers, along with Roger Taylor and Mark Christiansen of NCMA.  An undertaking was given by Council representatives that the request for $150,000 would be included in the draft LTP discussions, and this undertaking is recorded in an email from the Chair of the Community Services Committee to Mr Taylor, dated 1 February 2017. 

3.3      It appears that it was expected that NCMA would come back to Council with some further information to support the request, but it is unclear if that happened.  As a result the inclusion of the higher figure ($150,000) in the LTP estimates did not happen.   

3.4      The NCMA did not submit to the LTP. The NCMA says this is because it was under the impression that it had already received a commitment that its request would be met.

4.       Discussion

4.1      The rationale for the additional $25,000 for NCMA was to:

4.1.1   Provide support to community performance groups, in particular the Civic Choir, Nelson Male Voice Choir and the Nelson Symphony Orchestra; and

4.1.2   Provide additional community programmes and outreach.

4.2      Following further discussion with the NCMA, Council has been provided with supporting information as to the additional activities that NCMA will provide, in return for an additional $25,000 of funding (Attachment 1).  These outcomes would be incorporated into Council’s community grant to NCMA for 2018/19.

4.3      The NCMA advises that, as it beds in the new facility, it is developing a better understanding of its expenses and operating needs.  Indications are that certain operating expenses are higher than anticipated and this has reinforced the importance to NCMA of Council’s grant.   

4.4      Representatives of the NCMA will be present at the meeting to speak to the request and answer questions. 

Financial implications

4.5      Council had approved an operational grant for the NCMA of $125,000 over the life of the LTP.  The additional $25,000 would be unbudgeted expenditure in 2018/19.

4.6      The question of increasing the operational grant in future years would need to be addressed in future Annual Plan or LTP processes.

          Options

4.7      The main options are to provide the funding; to not provide the funding; or to defer a decision. 

 

 

 

Option 1: Increase the operational grant by $25,000 in FY 2018/19
Advantages	·   Recognises that, due to an oversight, Council did not consider the request from NCMA
Risks and Disadvantages	·   This is unbudgeted expenditure
Option 2: Not increase the operational grant by $25,000 in FY 2018/19
Advantages	·    Further budget is not expended
Risks and Disadvantages	·    NCMA will feel that an undertaking to have their request considered was not followed through ·    Support for various community programmes and performance groups may not be delivered ·    NCMA’s ability to fund its operational expenses will be under increased pressure
Option 3: Defer a decision until the Annual Plan process
Advantages	·    Further budget is not expended
Risks and Disadvantages	·    NCMA will feel that an undertaking to have their request considered was not followed through in the timeframe promised ·    Uncertainty for NCMA ·    Support for various community programmes and performance groups may not be delivered ·    NCMA’s ability to fund its operational expenses will be under increased pressure

 

 

Author:          Roger Ball, Group Manager Community Services

Attachments

Attachment 1:  A2037803 - NCMA (NSOM) Request for funding 2018 ⇩

 

 

Important considerations for decision making

1.   Fit with Purpose of Local Government The provision of funding for the NCMA is a discretionary activity of Council that contributes to the provision of good quality local infrastructure and local public services.

2.   Consistency with Community Outcomes and Council Policy Support for the Nelson Centre of Musical Arts is consistent with the Regional Arts Strategy and the Arts Policy. It contributes to the community outcomes of: ·      Our communities have opportunities to celebrate and explore their heritage, identity and creativity, and; ·      Our communities have access to a range of social, educational and recreational facilities and activities.

3.   Risk There is risk in Council allocating unbudgeted expenditure, that the funds will not be available for other outcomes. There is a reputational risk for Council if it declines the request, that NCMA may consider Council representatives have not followed through on previous discussions. However, Council’s obligation through the LTP was only to consider the request which it has done through this report. Giving the request a fair hearing should discharge Council’s obligations to NCMA.  There is risk that, if Council’s grant to NCMA is less than they had planned, the NCMA’s  ability to fund its operational expenses will be under increased pressure.

4.   Financial impact This would be unbudgeted expenditure in FY 2018/19.  The question of whether there should be an increase in the operating grant in future years will need to be addressed in future Annual Plan or LTP processes.  There would be some (minimal) impact on rates from an increase to the grant.

5.   Degree of significance and level of engagement This matter is regarded as of low significance, given that the decision will have only a minor effect on Council’s service levels; will not affect debt; will have only minor impact on the level of rates; and will have limited impact on the community.  The decision relates only to the current financial year.

6.   Inclusion of Māori in the decision making process Maori have not been consulted in the preparation of this report.

7.   Delegations The Governance Committee has the following delegations to consider funding for the NCMA as follows: Areas of Responsibility: ·      Nelson City Council Controlled Organisations Powers to Recommend: ·      Any other matters within the areas of responsibility noted above

 

 

Item 9: Nelson Centre of Musical Arts - Funding: Attachment 1

 

Item 10: Consultation on International Visitor Conservation and Tourism Levy

 

Governance Committee 6 September 2018

 

REPORT R9559

Consultation on International Visitor Conservation and Tourism Levy

 

1.       Purpose of Report

1.1      To provide the Council with a copy of the submissions from Nelson Regional Development Agency (NRDA), Tasman District Council (TDC), and Local Government New Zealand (LGNZ) to the Ministry of Business, Innovation and Employment on the potential International Visitor Conservation and Tourism Levy.  These submissions are in lieu of a separate submission from Nelson City Council as they cover the matters that need to be raised.

 

 

2.       Recommendation

That the Governance Committee Receives the report Consultation on International Visitor Conservation and Tourism Levy (R9559) and its attachments (A2016289, A2025105 and A2037217); and Notes the content of the submissions from Nelson Regional Development Agency, Tasman District Council, and Local Government New Zealand.

Recommendation to Council

That the Council Notes the content of the submissions from Nelson Regional Development Agency, Tasman District Council, and Local Government New Zealand.

 

 

3.       Discussion

3.1      The Ministry of Business, Innovation and Employment invited submissions by 22 July 2018 on a proposed International Visitor Conservation and Tourism Levy. 

3.2      The Government has said it recognises the pressure on ratepayers and communities from rapid tourism growth.  The proposed levy is one means of assisting with the funding of infrastructure required for tourists.  The levy is proposed for international visitors and will be struck as they enter New Zealand.  The discussion document has raised the question of whether the levy should also apply to Australian and Pacific island nationals.

3.3      The consultation document asked a series of questions aimed at obtaining comment on:

(a)     What the current constraints are to funding tourism infrastructure and conservation;

(b)     What support there is for a targeting mechanism;

(c)     Whether certain travellers should be exempt from the levy;

(d)     How much the rate should be, ranging from $25 to $35 per visitor;

(e)     What the funding share should be between tourism infrastructure and conservation;

(f)      How to define tourism infrastructure and conservation.

3.4      Nelson Regional Development Agency lodged a submission.  A copy of that submission is attached (Attachment 1 – A2016289). 

3.5      In essence the NRDA submission:

(a)     Supports the proposed levy at a rate of $35 per person;

and argues that:

(b)     The levy should not be applied to crew of aircraft and ships and Recognised Seasonal Employee (RSE) workers;

(c)     The levy could be collected in advance of tourists visiting New Zealand to provide a chance to educate the visitor about the New Zealand environment;

(d)     A 50:50 split for spend between Central Government (for conservation) and Local Government (for infrastructure);

(e)     A straight allocation of funding be made to Local Government based on proportional visitor spend. 

3.6      Tasman District Council, rather than rely on the submission from the NRDA, has made their own submission (Attachment 2 – A2025105), and this varies from the NRDA submission as follows:

(a)     The percentage split between where the levy should be spent between tourism infrastructure and conservation.  Rather than a 50:50 split TDC proposes a 70:30 split (infrastructure: conservation).

(b)     Being explicit that the fund can be used for both capital expenditure and operational expenditure for infrastructure projects.

3.7      Local Government New Zealand lodged a submission on behalf of the sector and that submission is attached (Attachment 3 – A2037217).  The LGNZ submission raises the issue of limited local government funding mechanisms and the limitations of the existing Tourism Infrastructure Fund.  The LGNZ submission also seeks to have the proposal extend to domestic, Australian, Pacific Island and business visitors on the basis that place of origin does not lessen the infrastructural impact from tourists.

4.       Options

4.1      As Nelson City Council’s name is not on the submissions, there are no options for Council to consider other than to note the content of the three submissions.

 

Author:          Clare Barton, Group Manager Environmental Management

Attachments

Attachment 1:  A2016289 NRDA Submission - International Visitor Conservation and Tourism Levy - 18Jul2018 ⇩

Attachment 2:  A2025105 TDC Submission - International Visitor Conservation and Tourism Levy -19Jul2018 ⇩

Attachment 3:  A2037217 LGNZ Submission - International Visitor Conservation and Tourism Levy - 20Jul2018 ⇩

 

 

Item 10: Consultation on International Visitor Conservation and Tourism Levy: Attachment 1

 

 

 

 

 

 

 

Item 10: Consultation on International Visitor Conservation and Tourism Levy: Attachment 2

 

 

 

Item 10: Consultation on International Visitor Conservation and Tourism Levy: Attachment 3