Notice of the ordinary meeting of the
Governance and Finance Committee
Kōmiti Mana Ārahi, Ahumoni Hoki
Agenda
Rārangi take
Chair Cr Rachel Sanson
Deputy Chair Cr Gaile Noonan
Members Her Worship the Mayor Rachel Reese
Cr Yvonne Bowater
Cr
Trudie Brand
Cr
Mel Courtney
Cr
Kate Fulton
Cr
Judene Edgar
Cr Matt Lawrey
Cr Brian McGurk
Cr Rohan
O’Neill-Stevens
Cr
Pete Rainey
Cr
Tim Skinner
John Murray
John Peters
Pat
Dougherty
Chief
Executive
Quorum: 8
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.
Areas of Responsibility:
·
Business, economic
development and tourism in Nelson
·
Bylaws, within the
areas of responsibility
·
Communications and
Engagement Strategy
·
Events Strategy
·
Oversight of
Forestry matters
·
Governance of
Nelson City Council Controlled Organisations, Nelson City Council Controlled
Trading Organisations, and Council Organisations
·
Council’s
financial performance
·
Oversight of Audit
and Risk Subcommittee matters
·
Property matters,
including the management, monitoring of and maximisation of Council’s
property portfolio
·
Rating systems and
policies
·
Residents’
Survey
Delegations:
The committee has all of the responsibilities, powers,
functions and duties of Council in relation to governance matters within its
areas of responsibility, except where they have been retained by Council, or
have been referred to other committees, subcommittees or subordinate
decision-making bodies.
The exercise of Council’s responsibilities, powers,
functions and duties in relation to governance matters includes (but is not
limited to):
·
Monitoring
Council’s performance for the committee’s areas of responsibility,
including legislative responsibilities and compliance requirements
·
Developing,
approving, monitoring and reviewing policies and plans, including activity
management plans and the Financial Strategy
·
Reviewing and
determining whether a bylaw or amendment, revocation or replacement of a bylaw
is appropriate
·
Undertaking
community engagement, including all steps relating to Special Consultative
Procedures or other formal consultation processes
·
Approving
submissions to external bodies or organisations, and on legislation and
regulatory proposals
Powers to Recommend to Council:
In the
following situations the committee may consider matters within the areas of
responsibility but make recommendations to Council only (in accordance with
sections 5.1.3 - 5.1.5 of the Delegations Register):
·
Matters that,
under the Local Government Act 2002, the operation of law or other legislation,
Council is unable to delegate
·
The purchase or
disposal of land or property relating to the areas of responsibility, other
than in accordance with the Long Term Plan or Annual Plan
·
Unbudgeted
expenditure relating to the areas of responsibility, not included in the Long
Term Plan or Annual Plan
·
Decisions
regarding significant assets
Governance and Finance Committee
5
December 2019
Page
No.
1. Apologies
1.1 An
apology has been received from Her Worship the Mayor
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
4.1 Nelson Tasman Business
Trust - Annual Report 2019
5. Chairperson's Report 8 - 9
Document number R13604
Recommendation
|
That
the Governance and Finance Committee
1. Receives
the report Chairperson's Report (R13604);
and
2. Appoints the following Elected Member to a
liaison role as follows:
|
Organisation/Group
|
Liaison
|
|
Nelson
Tasman Business Trust
|
Judene Edgar
|
|
6. Bishop Suter Trust -
strategic presentation
Julie Catchpole, Suter Director,
Craig Potton, Chair and Margaret Soderberg, Trustee, will give a strategic
presentation on the Bishop Suter Trust.
7. Bishop Suter Trust -
Statement of Expectation 2020/21 10 - 49
Document number R12557
Recommendation
|
That
the Governance and Finance Committee
1. Receives
the report Bishop Suter Trust - Statement of Expectation 2020/21 (R12557) and its attachment (A2147853); and
2. Approves the general matters to be
included in the Bishop Suter Trust Statement of Expectation 2019/20 letter as
those identified in paragraphs 4.1 to 4.14 of report R9824 and its attachment
(A2147853); and
3. Approves
the following specific matters to be included in the Bishop Suter Trust
Statement of Expectation letter:
a) Governance succession plan; and
b) Resilience; and
c) Good employer obligations; and
d) Climate Change responsiveness
including risk resilience, mitigation and adaption; and
e) Continued development of
the relationship with Tasman District Council with a view to increasing
funding from that source.
|
8. Events Strategy -
implementation update 50 - 59
Document number R10110
Recommendation
|
That
the Governance and Finance Committee
1. Receives
the Events Strategy - implementation update (R10110) and its attachments (A2256992 and A2280154).
|
9. Quarterly Report to
Governance and Finance Committee 1 July - 30 September 2019 60 - 88
Document number R12561
Recommendation
|
That the Governance
and Finance Committee
1. Receives the report Quarterly Report to
Governance and Finance Committee 1 July - 30 September 2019 (R12561) and its
attachments (A2291818, A2294518, A2285110 and A1160658).
|
Confidential Business
10. Exclusion
of the Public
Recommendation
|
That
the Governance and Finance Committee
1.
Confirms, in
accordance with sections 48(5) and 48(6) of the Local Government Official
Information and Meetings Act 1987, that Roger Taylor and James Donaldson
remain after the public has been excluded, for Item 2 of the Public Excluded
agenda (Nelson Centre of Musical Arts – External Review of Business
Model), as they have knowledge relating to the Nelson Centre of Musical Arts that
will assist the meeting.
|
Recommendation
That the Governance
and Finance Committee
1.
Excludes the
public from the following parts of the proceedings of this meeting.
2.
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
|
Nelmac Limited - Statement of Expectation 2020/21
|
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)
|
|
2
|
Nelson Centre of Musical Arts - External Review of
Business Model
|
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)
|
|
3
|
Nelson Municipal Band Trust: Reappointment of
Trustee
|
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
|
|
4
|
i-SITE Lease at Millers Acre
|
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)
|
|
5
|
Governance and Finance Committee Confidential Status
Report
|
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:
·
Lunch will be provided. (delete as appropriate)
·
Youth Councillor Ryan Martyn will be in attendance at this
meeting. (delete as
appropriate)
Item 5: Chairperson's
Report
|
|
Governance and Finance Committee
5 December 2019
|
REPORT R13604
Chairperson's
Report
1. Purpose
of Report
1.1 To
provide updates to committee members, and to appoint an elected member to a
liaison role.
2. Recommendation
|
That the Governance and Finance Committee
1. Receives
the report Chairperson's Report (R13604);
and
2. Appoints the following Elected Member to a
liaison role as follows:
|
Organisation/Group
|
Liaison
|
|
Nelson
Tasman Business Trust
|
Judene Edgar
|
|
2. Discussion
2.1 Welcome
to the first Governance and Finance Committee meeting of the 2019-2022
triennium. A special welcome to our external appointees, John Murray and
John Peters – we’re really looking forward to working with you both,
and appreciate you sharing your valuable perspective and experience with
us. A special welcome also to Youth Councillor Ryan Martyn, joining us
today.
2.2 As
a community and Council, we are facing significant challenges – including
housing, climate change, biodiversity, wellbeing, prosperity, and movement
across our city and region. As a committee, decisions impacting many of
these issues will come across our table. We have an opportunity to lead
broad positive outcomes for our community. I am confident that we have
great people around the table and the strategic focus to do this.
2.3 Early
in 2020 we will be reviewing our expectations with the Nelson Regional
Development Agency (NRDA). We would normally be receiving the Statement
of Expectation this year, but have delayed this until next year, to be informed
by a review. Background to this review follows.
2.4 At
the Council 2019/20 Annual Plan Deliberations meeting, Council approved a
review of the services purchased from the NRDA. The review will be used
to inform the next Statement of Expectation and Statement of Intent. The
reason for the review is that the 2019/20 Statement of Intent identified that
the financial position of the NRDA may not be sustainable in the medium to long
term. In November, Council engaged consultants to undertake the requested
review and the findings will be reported to the first Governance and Finance
Committee meeting in 2020, along with a proposed Statement of Expectation for
2021.
Appointment to Liaison Role
2.5 At
its meeting on 14 November 2019, Council delegated responsibility the
appropriate Committees of Council, to determine Councillor Liaison appointments
to external organisations and groups that are within the committees’
areas of responsibility, for this triennium.
2.6 The
Governance and Finance Committee has responsibility for the following
appointments:
2.6.1
Nelson Tasman Business Trust
Author: Rachel
Sanson, Chairperson
Attachments
Nil
Item 7: Bishop Suter
Trust - Statement of Expectation 2020/21
|
|
Governance and Finance Committee
5 December 2019
|
REPORT R12557
Bishop
Suter Trust - Statement of Expectation 2020/21
1. Purpose
of Report
1.1 To
confirm Council's expectations for the Bishop Suter Trust (Trust) for the 2020/21
Statement of Intent.
2. Recommendation
|
That the Governance and Finance Committee
Receives the report Bishop Suter Trust -
Statement of Expectation 2020/21 (R12557)
and its attachment (A2147853); and
Approves the
general matters to be included in the Bishop Suter Trust Statement of
Expectation 2019/20 letter as those identified in paragraphs 4.1 to 4.14 of
report R9824 and its attachment (A2147853); and
Approves the
following specific matters to be included in the Bishop Suter Trust Statement
of Expectation letter:
1. Governance succession plan; and
2. Resilience; and
3. Good employer obligations;
and
4. Climate Change responsiveness including
risk resilience, mitigation and adaption; and
5. Continued development of the relationship
with Tasman District Council with a view to increasing funding from that
source.
|
3. Background
3.1 The preparation of Statements of
Expectation is not required under the Local Government Act. However, it
is best practice for the Council to signal to Council Controlled Organisations
(CCOs) its expectations for each organisation in the 2020/21 financial year.
These expectations can then be considered by the entities to guide their
strategic direction and to assist in the development of the Statement of Intent
(SOI) for that financial year.
3.2 This also means that Council
engages with CCOs early and any difference in expectations can be addressed
early in the process.
3.3 Council
officers maintain good relationships with their colleagues at each of these
organisations and are ready to assist them in the interpretation of Local
Government Act requirements and the preparation of their respective SOIs.
3.4 To
assist the Committee, the Trust’s SOI 2019 is included as attachment 1.
4. Discussion
General expectations to be
included in SOIs
4.1 SOIs must include a complete set of
summary prospective financial statements for at least three years (preferably
five years) i.e. Statement of Comprehensive Income, Statement of Financial
Position and cash flow statement.
4.2 SOIs should disclose measures like
earnings before interest and tax (EBIT) and earnings before interest, tax,
depreciation and amortisation (EBITDA) and balance sheet ratios where
applicable i.e. Council Controlled Trading Organisations (CCTOs).
4.3 SOIs must fully comply with
Schedule 8 of the Local Government Act.
4.4 Compliance with legislation and
reporting on Health and Safety matters must be given due emphasis.
4.5 Where the Council makes a financial
contribution to the operational costs of the organisation, the CCO should show
how it intends to increase non-council revenue streams.
4.6 Capital expenditure and asset
management intentions should be included.
4.7 CCOs should use the same
information for both managing the business and reporting through to the Council
i.e. the information used for setting targets and reporting against them for
the SOI should overlap and be a subset of the information used for internal
reporting.
4.8 SOIs and other CCO reports should
be in a plain style, concise, relevant, accessible and focused on meeting the
needs of the shareholding councils and the public they represent. The use of
graphs, tables and charts is expected to convey both financial and
non-financial information along with trends (past, current and future numbers).
4.9 To be effective, the SOI must
disclose the performance story for the CCO, providing a clear and succinct
understanding of the CCO purpose, the goods and services it delivers and what
success looks like. Providing a clear message to the boards on these
requirements and other expectations will assist in ongoing improvements in the
SOI and reporting.
4.10 The main aspects of the SOI performance story
are:
· Strategic
context
· Specifying
and presentation of the outcomes framework
· Main
measures and targets, outcomes and objectives
· Linking
the strategy outputs performance together
4.11 Risk management: The SOI should set out
clearly how the board is considering and managing risks, including natural
hazards and cyberattacks.
4.12 Sustainability: The SOI should provide detail
how environmental impacts, climate change mitigation and adaption, and outcomes
are taken into account in the operation of the CCO.
4.13 Health and Safety: Given the requirements of
the Health and Safety at Work Act 2015 (the Act), it is appropriate for Council
to set out its expectations in relation to Health and Safety in the CCOs/CCTOs.
4.13.1 Under section 44(3) of the Act elected members do not have a
duty to exercise due diligence to ensure that any council-controlled
organisation complies with its duties or obligations under the Act unless that
member is also an officer of that council-controlled organisation.
4.13.2 However, as a key funder it is still appropriate to set out
expectations of Health and Safety management in CCOs/CCTOs.
4.13.3 The Council expects the board to set appropriate Health and
Safety strategy and policy, understand the nature of risks/hazards within the
business, monitor performance and activities to ensure risk is being managed
and review Health and Safety systems and performance.
4.14 Governance performance: In order to aid
Council when making decisions on director/trustee remuneration and
appointments, the board should undertake regular evaluation of its own
performance.
4.14.1 Council expects this review to be carried out at least once
every eighteen months.
4.14.2 The
Chair of the Board should reference this evaluation when making recommendations
on the re-appointment or recruitment of board members.
Specific expectations to be
included in the Bishop Suter Trust Statement of Expectation letter
4.15 It
is proposed that the following specific expectations be set out in the
Statement of Expectation letter to the Trust. It is noted that these are
similar to 2019/20, reflecting continuity by Council in the priority it
attaches to the following matters:
4.15.1 Governance: Include in the SOI a governance succession plan
which details how the board will identify and mentor a future Chair of the
Trust.
4.15.2 Resilience: Include in the SOI a risk management plan which
details risks/hazards, mitigation strategies, response and recovery plans including
in relation to cyber-attacks and natural hazards.
4.15.3 Good employer obligations: Detail in the SOI how the Trust
meets its good employer obligations under the Local Government Act,
particularly in relation to fair pay and equal employment opportunities.
4.15.4 Climate change responsiveness including risk resilience,
mitigation and adaption. Describe in the SOI how the Trust intends reducing
emissions, minimising waste and responding to climate change events.
4.15.5 Development of the relationship with Tasman District Council
with a view to increasing funding from that source. Describe work to be
undertaken to strengthen the relationship and financial support provided by the
Tasman District Council.
5. Options
5.1
|
Option 1: Accept the matters
to be included in the Statement of Expectation
|
|
Advantages
|
· Provides
clear and early direction to the board to assist with the preparation of the
2020/21 Statement of Intent
|
|
Risks and Disadvantages
|
· None
|
|
Option 2: Amend the matters to
be included in the Statement of Expectation
|
|
Advantages
|
· Provides
clear and early direction to the board to assist with the preparation of the
2020/21 Statement of Intent
|
|
Risks and Disadvantages
|
· None
|
Author: Mark
Preston-Thomas, Manager Community Partnerships
Attachments
Attachment 1: A2147853
- Bishop Suter Trust - Statement of Intent 2019 - 2024 ⇩
|
Important considerations for decision making
|
|
1. Fit
with Purpose of Local Government
The Bishop Suter Trust delivers public cultural
services to our community. Although not required by the Local Government Act,
preparation of Statements of Expectation prior to the SOI/SOCI process is
best practice.
|
|
2. Consistency
with Community Outcomes and Council Policy
The decision aligns with the following outcomes:
· Our
Council provides leadership and fosters partnerships, a regional perspective,
and community engagement
· Our
communities have access to a range of social, educational and recreational
facilities and activities
Our communities have opportunities to celebrate and
explore their heritage, identity and creativity.
|
|
3. Risk
Providing a
Statement of Expectation mitigates the low risk that the CCO develops a
Statement of Intent which is not aligned with Council’s expectations.
|
|
4. Financial
impact
None
|
|
5. Degree
of significance and level of engagement
This matter is of low significance because this
decision is about setting expectations early in the SOI process and there are
other decision points along the way. Engagement will occur with the
Trust but is not required with the wider community.
|
|
6. Climate
Impact
A2270372 Climate change responsiveness has been
identified by Council as a specific matter of interest in the Statement of
Expectation letter.
|
|
7. Inclusion
of Māori in the decision making process
No engagement with Māori has been undertaken in
preparing this report.
|
|
8. Delegations
The Governance and Finance Committee has the
following delegations to consider the content of the Statement of Expectation:
Area of Responsibility:
Governance
of Nelson City Council Controlled Organisations, Nelson City Council
Controlled Trading Organisations, and Council Organisations
Delegations:
The
committee has all of the responsibilities, powers, functions and duties of
Council in relation to governance matters within its areas of responsibility,
except where they have been retained by Council, or have been referred to
other committees, subcommittees or subordinate decision-making bodies.
|
Item 7: Bishop Suter Trust - Statement of Expectation 2020/21:
Attachment 1
Item 8: Events Strategy
- implementation update
|
|
Governance and Finance Committee
5 December 2019
|
REPORT R10110
Events
Strategy - implementation update
1. Purpose
of Report
1.1 To
provide an update on the implementation of the Events Strategy and event
funding for the period 1 July 2018 to 30 June 2019 and, to provide an overview
of other events funded or supported by Council.
2. Recommendation
|
That the Governance and Finance Committee
1. Receives
the Events Strategy - implementation update (R10110) and its attachments (A2256992 and A2280154).
|
3. Discussion
3.1 Council adopted the Events Strategy
in May 2018. The vision set out in the Strategy is “Events that
strengthen the region and its identity, stimulate a prosperous, vibrant and
engaged community and deliver value at the right time.”
3.2 The Strategy requires officers to
report to Council twice a year on the implementation of the Strategy including
event funding, event evaluation and opportunities to improve the clarity and
value of Council services to events. This is the first report and covers
the period 1 July 2018 to 30 June 2019. The report due earlier this
calendar year was not completed due to staff changes on the Events Development
Committee (EDC) and has been rolled into this 12 month report.
Implementation of the
Strategy
3.3 Since the adoption of the Strategy,
the Community Events Advisory Group consisting of the Chairs of the Community
Services and Sports and Recreation Committees has been established.
The Group provides input as required to the EDC to ensure the wider Council
work programme and knowledge about community views are understood and taken
into account in funding decisions on community events. The Group has met
twice since the Strategy was adopted.
3.4 The Events Fund is managed by the
Nelson Regional Development Agency with input from Council through the Events
Development Committee. The Events Development Committee, which comprises
Council officers and NRDA staff, meets monthly to evaluate and if appropriate,
approve applications and make decisions on funding.
3.5 The NRDA provides an event
coordination and development role, including providing a single point of
contact for all event funding applications and enquiries, event coordination,
development and marketing. In relation to areas of Council
responsibility, event organisers are directed to Council’s Events Team
which assists with consenting, traffic plans etc.
3.6 Since adoption of the Strategy, the
application process has been streamlined and simplified through the creation of
a suite of documentation and guidance which is available on the NRDA’s
website.
Funding
3.7 The Events Fund is a contestable
fund with two components, one to support events which grow Nelson’s
economy (economic events) and one for events that foster community wellbeing
and social outcomes (community events).
3.8 The total 2018/19 Council budget
for event funding was $398,211. This was made up of $348,211 for economic events
and $50,000 for community events. Every second year the fund reduces by
$50,000, to fund the larger Light Nelson festival (funding is $50,000 and
$100,000 in alternate years).
3.9 During 2018/19, $178,650 of funding
was committed for a total of 19 events (10 economic and 9 community), of this
$127,750 was approved for economic events and $50,900 for community
events.
3.10 The total amounts spent during the same period
(which include multi-year funding commitments) are $424,991 on economic events and
$46,500 on community events.
3.11 The closing balance of the Events Funds at 30
June 2019 was $109,509 overdrawn (economic), compared to an expected overdraft
of $206,838 The Community Fund underspent by $1,650 in its first year.
Community Fund underspends are not carried forward.
3.12 The Events Fund (economic) is expected to
remain overdrawn for the next two financial years. The balance was previously
expected to return to a positive balance in 2020/21. However, as part of
the Annual Plan process Council approved an overdraft limit of up to $150,000
(at 30 June 2021) to allow underwriting for the Enduro World Series. The
overdraft is now proposed to be repaid by 30 June 2022.
Achievement
against Strategy objectives
3.13 The objectives of the Strategy are:
3.13.1 Measurable economic outcomes for Nelson City
3.13.2 Promotion of wellbeing and cohesion of the local community
3.13.3 A rich events calendar which maximises opportunities
throughout the year
3.13.4 An events programme that attracts visitors to Nelson and gives
the local community a sense of pride in being ‘Nelsonian’
3.13.5 A healthy partnership between the events sector, the community
and Nelson City Council
3.14 There has been good achievement of economic
outcomes from the year’s activity. Of the economic events funded in
2018/19, the economic impact assessments ranged from 8:1 – 276:1. This
provided an average return on investment in excess of 20:1. The Strategy set a
target rate of return from the economic part of the Events Fund of 10:1, which
looks rather conservative in light of these results. However, as this is the
first year of the new Strategy it is recommended that performance is tracked
over 2019/20 before considering any change to the target.
3.15 The community portion of the fund was fully subscribed in 2018/19
at the initial level of funding of $50,000 with funding for 9 events approved.
In the 2019/20 year that funding has increased to $75,000. Given that funding
for community events was uncertain in the period following the Long Term Plan
2015/25 (when the Community Assistance Fund was modified to only accept
community development projects) officers believe it is worth doing some work to
publicise the new funding opportunity through existing networks.
3.16 The period 2018/19 saw many successful
community events supported by the fund such as Race Unity Day, Isel Twilight
Market, Santa comes to Nelson and Fashion Revolution Day – Swap
‘til You Drop.
These events have brought the community together to celebrate and foster connection.
Race Unity Day, following so soon after the Christchurch shootings, was notable
for the opportunity it provided residents to show their support for an
inclusive community that welcomed and supported people of all backgrounds and
religions.
3.17 Attachment 1 shows the events calendar is delivering a reasonably
varied offering with a predominance of sports and music/arts events. It is
likely that some sectors of the community are more aware of the Fund and the
support available. Again, publicising the opportunity through community
networks may see a greater diversity of events coming forward.
3.18 In order to maximise opportunities throughout the year, events that are scheduled
during the off-peak season are encouraged. Seasonality and timing of events
is one of the criteria against which applications for funding are
assessed. Events primarily delivering economic benefit should
increase the number of visitors attracted to Nelson during the ‘off
season’ period from 1 March to 30 November. Community events can
receive support during any period but preference is given to events that add
vitality and interest to the city during the ‘off season’. It is
expected that community events timed during Nelson’s high season will
have larger audiences available and more opportunities to be self-sufficient,
and therefore ratepayer support is less necessary.
3.19 All events are also assessed for their strategic alignment with
the regional identity framework and with relevant Council policy. It was
pleasing to see some real efforts to comply with this. The Isel Twilight Market
has developed a reusable plate station to cut down on waste. Race Unity Day
partnered with Zero Waste and with the help of volunteers managed to divert 76%
percent of its waste away from landfill by encouraging recycling and a BYO
system for plates, cutlery and cups.
3.20 The streamlined application process, the single point of contact
and the clear working relationship between NRDA and Council, have been
improvements resulting from the new Events Strategy. There has been an effort
to provide certainty to events with a number of multi-year funding arrangements
entered into.
Event
evaluation
3.21 Event evaluation is
undertaken using information provided in the organiser’s post-event
reports to the NRDA. This is used to assess the success of the events and is
taken into account in any future funding applications.
3.22 The NRDA noted in early January 2019 that
there was a low return rate for post-event reports. Subsequently a
post-event report template has been developed and provided to all event
organisers, including for 2018/19 events. The development of the template and
follow-up with organisers has resulted in only two post-events returns not
being completed. These related to two community events that were held
before the template was developed. The public attendance for both of
these were difficult to measure. Consideration of future applications will
consider the timely lodging of previous post-event reports.
Sponsor
acknowledgement
3.23 Another area that could be improved is the
visibility of Council sponsorship at events and in marketing material so that
it is clear to the community which events are supported by Council. Firming up
requirements in funding agreements with event organisers should improve the
consistency of acknowledgement.
4. Events
supported by Council, but not through the Events Fund
4.1 This report is predominantly
focused on the Events Fund activities. However, Council also supports a wide
range of events outside of this Fund, both financially and, through staff and
elected members’ time. These events include environmental, youth,
sporting and cultural events.
4.2 Attachment two includes a list of
events supported directly by Council, and is attached to demonstrate the wide
range of events which contribute towards Council’s Community
Outcomes. The more significant events supported by Council in 2018/19
included:
4.2.1 Nelson
Arts Festival (note the majority of the work for this festival is now
undertaken by a trust with Council providing some staff time and funding)
4.2.2 The
Summer Festival
4.2.3 The
Heritage Festival
4.2.4 Baydreams
concert
4.2.5 Sporting
Events, including One Day International Cricket and Netball
4.2.6 Environmental
workshops and community plantings
4.2.7 ANZAC
Day
4.2.8 Various
Youth Events throughout the city
Council’s cash
contribution towards these events was approximately $1 million in 2018/19, with
$570,000 of this the Nelson Arts Festival. The Nelson Arts Festival
services are reviewed as part of the annual Statement of Intent process for the
Nelson Festivals Trust.
Conclusion
The 2018/19
year has been a very successful one for the new Events Strategy with excellent
returns for investment in economic events and an almost fully spent community
events budget. As is to be expected in the first year of implementation there
are a number of areas where improvements are needed and these are in hand.
Future updates to Council should be able to provide a more detailed analysis as
improved post-event reporting is embedded.
Author: Mark
Tregurtha, Manager Strategy
Attachments
Attachment 1: A2256992 - Schedule of
event funding approved and spent in 2018/19 ⇩
Attachment 2: A2280154
- List of events 2018/19 - excluding the events fund ⇩
Item 8: Events Strategy - implementation update: Attachment 1
Item 8: Events Strategy
- implementation update: Attachment 2
Item 9: Quarterly
Report to Governance and Finance Committee 1 July - 30 September 2019
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Governance and Finance Committee
5 December 2019
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REPORT R12561
Quarterly Report to Governance and Finance Committee 1
July - 30 September 2019
1. Purpose
of Report
1.1 To inform the Committee of the financial and
non-financial results for the first quarter for the activities under its
delegated authority.
1.2 To highlight any material variations.
2. Recommendation
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That the Governance and Finance Committee
1. Receives the report Quarterly Report to
Governance and Finance Committee 1 July - 30 September 2019 (R12561) and its
attachments (A2291818, A2294518, A2285110 and A1160658).
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3. Background
3.1 Quarterly reports on performance
are being provided to each Committee on the performance and delivery of
projects and areas within their responsibility.
3.2 The
financial reporting focuses on the three month performance (1 July to 30
September 2019) compared with the year-to-date (YTD) approved capital and
operating budgets.
3.3 Unless otherwise indicated, all
information is against approved operating budgets, which is 2019/20 Annual
Plan, plus any carry forwards, plus or minus any other additions or changes as
approved by the Committee or Council.
3.4 Due to changes to
the structure of committees made at the start of the 2019 triennium, this
Committee has taken on the majority of the financial delegation of the former
Audit Risk and Finance Subcommittee.
3.5 The body of this
report is split into two sections to reflect this. The first section (section
4) will report on Council activities within the Committee’s delegations
for the quarter, and the second section (section 5) covers Council’s
overall financial performance. The whole of Council project health
summary reporting falls under the ‘risk’ category and goes to the
Audit and Risk Sub-committee.
4. Governance
Activities
4.1 Key developments for the three
months to 30 September 2019
4.2 At the 4 June 2019
Annual Plan 2019/20 Deliberations meeting Council resolved to undertake a
review of the Nelson Regional Development Agency services be undertaken prior
to the next Statement of Expectation. This review is underway and will be
reported to the next Governance Committee meeting.
4.3 Financial Results
4.4 Financial information is shown in
the charts below, with an explanation following.
4.5 Profit and Loss by Activity
4.5.1 Notes to Profit and Loss by Activity:
· The “Total Operating Budget” differs from the
“Total Annual Plan Budget” in that it includes carry forwards and
reallocations made after the final approval of the Annual Plan.
· Base Expenditure is expenditure that happens year after year, for
example yearly contracts or operating expenses.
· Programmed Expenditure is planned, or there is a specific programme
of works. For example, painting a building.
· Unprogrammed Expenditure is reactive or unplanned in nature, for
example responding to a weather event. Budgets are included as provisions for
these expenses which are unknown.
4.6 Other Operating Revenue
(excluding rates income)
4.7 Operating Expenditure
4.8 Staff costs are overall ahead of
budget by $351,000 across Governance. Staff costs include all expenditure
relating directly to the employment of staff, as well as some overheads which
are allocated to cost centres on the same basis as staff time.
4.9 The staff cost
variance in Governance is driving the trend across council for the first
quarter. For all of council, staff costs are to date ahead of budget by $353,000.
This includes operating staff costs ahead by $509,000 and capital staff costs
behind by $156,000. It is noted that operating staff cost overspends are
largely allocated to Governance cost centres.
4.10 Major variances in staff
expenditure across council include wages ($70,000 over budget), temporary staff
($67,000 over budget), contractors ($83,000 over budget) and depreciation
($78,000 under budget). These overspends total $142,000 for the quarter.
4.11 Other staff expenditure
variances relate to the timing of the actual expenditure not aligning with the
budget. This includes insurance ($101,000 ahead of budget), ACC ($32,000 ahead
of budget), computer software ($95,000 ahead of budget) and professional advice
($40,000 ahead of budget). These timing variances total $230,000, and are
expected to reduce as the year progresses.
4.12 Individual variances in the
cost centres are noted below where significant. In each case, these variances
may be the result of actuals occurring in a different cost centre than
budgeted, timing, or cost variances (overspends or underspends).
4.13 Cost of Democracy income
is less than budget by $14,000. Petroleum
tax and penalty on rates receipts are behind budget by $11,000 and $3,000
respectively.
4.14 Administration and Meeting
Support expenditure is greater than budget by $547,000.
Staff costs are ahead of budget by $546,000. Staff costs are
discussed in detail above. However it is noted that staff cost overspends are
largely being allocated to this cost centre. The staff allocation model is
currently being reviewed.
4.15 Council Publicity
expenditure is less than budget by $11,000. Staff costs are behind budget by $11,000.
4.16 Members’ Expenses
are greater than budget by $13,000. Staff
costs are ahead of budget by $6,000. Members’ fees are ahead of budget by
$5,000.
4.17 Election Expense income is
less than budget by $18,000. This is due to timing.
4.18 Election Expense
expenditure is less than budget by $144,000. The
cost of providing election services is less than budget by $142,000 due to
timing.
4.19 Civic Expenses are greater than budget by $15,000. This is the result
of various timing differences, including Nelson City Brass ($8,000 ahead), ANZAC
Day commemorations ($12,000 ahead) and Santa Parade ($5,000 behind).
4.20 Investment Management
income is greater than budget by $374,000. A
special dividend of $400,000 was received in September from Port Nelson.
Council policy is to use special dividends to repay debt. External interest is
ahead of budget by $41,000 and is offset by expenditure. Investment
Management expenditure is greater than budget by
$90,000. External interest expense is ahead of budget due to the
pre-funding of debt, and is partially offset by income.
4.21 Civic House expenditure is
less than budget by $24,000. Depreciation
is under budget by $28,000. Reactive maintenance is over budget by $4,000. It
is anticipated that this item will be overspent for the full year, as
insufficient funds have been budgeted to cover reactive works.
4.22 Rental Property
expenditure is greater than budget by $18,000. Unbudgeted
expenditure of $28,000 has been incurred for the Neale Park landfill gas issue.
Asbestos testing and assessment costs are behind budget by $8,000 due to
timing.
4.23 Forestry income is less than budget by $402,000. This variance
relates to timing of the Maitai Forest harvest and is partially offset in
expenditure. Forestry expenditure is less than
budget by $330,000. Maitai Forest harvest costs are behind budget by
$330,000 as the harvest has not yet started.
4.24 Policy expenditure is less than budget by $193,000. Staff costs are
behind budget by $189,000. This provides a partial offset to staff costs
recorded in Admin and Meeting Support.
4.25 Emergency Response Fund
income is less than budget by $36,000. The insurance activity contribution is under budget.
4.26 Sister City Links
expenditure is greater than budget by $7,000. Each
city link is ahead of budget, including Miyazu ($2,000), Huangshi ($2,000) and
Yang Jiang ($3,000).
4.27 Economic Development
income is less than budget by $75,000. This
is a timing variance relating to Tasman District Council contribution to the
Nelson Economic Development Agency. Economic Development expenditure is less than budget by $186,000. Staff costs are
ahead of budget by $14,000. Various items are behind budget due to timing,
including regional promotion ($25,000), events contestable fund ($167,000), and
special economic projects ($15,000).
4.28 Terms used: Ahead/behind
– this indicates that the variance is due to timing, or that it is not
yet known whether the variance will continue for the full year. Over/under
– this indicates that a budget has been overspent or underspent, and that
it is likely there is an actual cost saving or overrun. These should be made
clear by the commentary. Less/greater – these header terms are
used to describe the total variance to budget for a cost centre and account
type.
4.29 Capital
Expenditure (including staff time, excluding vested assets)
4.30 All capital projects, within
the Governance delegation, with a budget greater than $250k in this financial
year have a project sheet in Attachment 1 of this report.
4.31 Commentary on Capital Projects
4.32 There are three capital
projects, within the Governance delegation, that are included as part of the
quarterly reporting. All of these are have a budget over $250k for 2019/20.
4.33 Project status is analysed
based on three factors; quality, time, and budget. From the consideration of
these three factors the project is summarised as being on track (green), some
issues/risks (yellow), or major issues/risks (red). Projects that are within 5%
of their budget are considered to be on track in regards to the budget factor.
4.34 Of those capital projects
attached, all are related to Civic House improvements and are red as they are
on hold.
4.35 Project Reports – Operational
4.36 There is one non-capital
project within the Governance delegation that is included as part of the
quarterly reporting. This project, the 2020/21 Annual Plan, has been selected
for quarterly reporting as it makes an important contribution to Council’s
work programme. The summary is included in Attachment 1.
4.37 Key Performance Measures
4.38 As part of the development of
the Long Term Plan 2018-28, Council approved levels of service, performance
measures and targets for each activity. There are ten performance measures
within the Governance Committee’s delegations.
4.39 Final results for each
measure will be reported on through the Annual Report 2019/20, however this
report includes an indication of progress for those measures where an
assessment of current performance is available at this stage.
4.40 A number of performance
measures cannot be reported on until the end of the financial year, accordingly
the scale to report on the performance measures is as follows:
· On track
· Not on track
· Achieved
· Not achieved
· Not measured yet
4.41 Attachment 2 lists all
performance measures within the Governance delegation, their status, and
commentary for the quarter.
4.42 Quarterly Review of Performance Measures
4.43 Of the ten Governance
performance measures, three were ‘on track’ and one ‘not on
track’ at the close of quarter one 2019/20. The measure that is
‘not on track’ concerns staffing of Emergency Operations Centre
management and group roles (see Attachment 2).
4.44 Six measures cannot yet be
reported on and the results are listed as ‘not measured yet’. Five
measures that relate to economic performance have this status, as the report
from contractor Infometrics containing the relevant data for that period is due
on 22 November 2019, after the writing of this quarterly report. The sixth
measure is waiting on the delivery of the six-monthly Council Controlled
Organisation reports, which are due in December 2019.
5. Financial
Performance – Whole of Council
5.1 Profit and Loss
5.2 For the three months ending 30 September 2019, the activity
surplus/deficits are $961,000 favourable to budget.
5.3 The most
significant variances to budget are set out below. These will be reported
to the relevant Committees.
5.4 Income
5.4.1 Dividends
are ahead of budget by $410,000 reflecting the unbudgeted special dividend of
$400,000 declared by Port Nelson Limited in September 2019.
5.4.2 Forestry harvesting income is
behind budget by $402,000 due to delayed harvesting in the Maitai Forest.
Expenditure is also behind budget ($330,000) largely for the same reason.
5.4.3 Unbudgeted
income of $100,000 has been received from the Ministry of Business, Innovation
and Employment (MBIE) for responsible camping initiatives.
5.4.4 Commercial
water income is greater than budget by $69,000 based on usage.
5.4.5 Saxton Field income is greater than
budget by $113,000. Tasman District Council recoveries are ahead due to timing;
income was received earlier than budgeted.
5.5 Expenses
5.5.1 There are numerous variances in staff
operating expenditure in the activities:
· Total staff operating costs are over budget by $353,000, Opex staff
and overhead costs are over budget by $509,000 and capex staff and overheads
are under budget by $156,000.
· Major variances in staff expenditure across council include wages
($70,000 over budget), temporary staff ($67,000 over budget), contractors
($83,000 over budget) and depreciation ($78,000 under budget). These overspends
total $142,000 for the quarter.
· Other staff expenditure variances relate to the timing of the actual
expenditure not aligning with the budget. This includes insurance ($101,000
ahead of budget), ACC ($32,000 ahead of budget), computer software ($95,000
ahead of budget) and professional advice ($40,000 ahead of budget). These
timing variances total $230,000, and are expected to reduce as the year
progresses.
5.5.2 Unprogrammed expenditure is
greater than budget by $132,000. Wastewater reticulation reactive maintenance
is over budget by $83,000 due to the cost of reactive works, including Paru
Paru pump failures, Nile Street gravity system blockages, and Atawhai Rising
Main break in September.
5.5.3 Programmed expenditure is
less than budget by $756,000 including forestry expenditure of $330,000 (refer
5.4.2), economic development $203,000, and environment activities $151,000.
5.5.4 Council’s overall depreciation
charge is less than budget by $372,000 mainly in Administration $225,000. Of
this, $160,000 was the result of an error which will be fixed in the next
quarter, and $80,000 is an underspend which is expected to increase as the year
progresses.
5.6 Capital Expenditure (including
staff time, excluding vested assets)
5.7 Financial
information provided in Attachment 3 includes:
5.7.1 A financial
measures dashboard with information on rates revenue, operating revenue and
expenditure, and capital revenue and expenditure. The arrow icon in each
applicable measure indicates whether the variance is increasing or decreasing,
and whether that trend is favourable or unfavourable (green or red).
5.7.2 Operating
income and expenditure displayed against budget for both committee and
category. Significant variances are noted against committees. Each committee
will receive a more detailed analysis of variances by cost centre.
5.7.3 A summary
profit and loss statement also including the latest forecast position.
5.7.4 A treasury
measures dashboard with a compliance table (green signifying
‘compliant’), a forecast of the debt/revenue ratio for the year
where available, and a graph showing debt levels over a rolling 13 month
period.
5.7.5 High level
balance sheet. The current year balance sheets do not include consolidations.
5.7.6 A debtor
analysis graph over 13 months, showing outstanding debt levels and patterns for
major debt types.
5.7.7 Two capital
expenditure graphs; the line graph records actual expenditure against approved
budget, and the quarter two forecast (current understanding of most likely
outcome). The bar graph records year to date expenditure against approved
budget by committee.
5.8 Capital expenditure is $1.4
million under approved budget for the year to date.
6. Status
Reports
6.1 The updated status report is
included as Attachment 4 (A1160658). A Confidential Status Report has
been included in the Confidential Agenda.
7. Conclusion
7.1 The review of
performance for the first quarter for the Governance and Finance Committee is
included in this report, with project reports and performance measure updates
attached.
Author: Mark
Tregurtha, Manager Strategy
Attachments
Attachment 1: A2291818
Governance Project Sheets Quarter One 2019/20 ⇩
Attachment 2: A2294518 Governance Performance Measure Summary
Quarter One 2019/20 ⇩
Attachment 3: A2285110 Finance Dashboards and Charts ⇩
Attachment 4: A1160658 - Governance and Finance Committee
Status Report 5 December 2019 ⇩
Item 9: Quarterly Report to Governance and Finance Committee 1 July
- 30 September 2019: Attachment 1
Item 9: Quarterly
Report to Governance and Finance Committee 1 July - 30 September 2019:
Attachment 2
Item 9: Quarterly
Report to Governance and Finance Committee 1 July - 30 September 2019:
Attachment 3
Item 9: Quarterly
Report to Governance and Finance Committee 1 July - 30 September 2019:
Attachment 4
