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.
Governance
and Finance Committee - Delegations
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
27
February 2020
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 5
December 2019 6 - 14
Document number M6602
Recommendation
|
That the Governance and Finance Committee
1. Confirms the minutes of the meeting
of the Governance and Finance Committee, held on 5 December 2019, as a true
and correct record.
|
6. Chairperson's Report
7. Nelson Centre of
Musical Arts - Letter of Expectation 2020/21 15 - 21
Document number R13712
Recommendation
|
That
the Governance and Finance Committee
1. Receives
the report Nelson Centre of Musical Arts - Letter of Expectation 2020/21
(R13712); and
2. Approves the general matters to be
included in the Nelson Centre of Musical Arts Letter of Expectation 2019/20
letter as those identified in paragraphs 4.3 to 4.16 of report R13712; and
3. Approves
the following specific matters to be included in the Nelson Centre of Musical
Arts Letter of Expectation:
a) Governance succession plan; and
b) Resilience; and
c) Good employer obligations; and
d) Improving
performance reporting by the inclusion of quantifiable performance measures
and SMART targets.
|
8. Quarterly Report to
Governance and Finance Committee 1 October - 31 December 2019 22 - 51
Document number R13735
Recommendation
|
That the Governance
and Finance Committee
1. Receives the report Quarterly Report to
Governance and Finance Committee 1 October - 31 December 2019 (R13735) and
its attachments (A2332426, A2334191, A2341521 and A2338769).
|
confidential Business
9. Exclusion of the Public
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
|
Governance and Finance Committee Meeting - Public
Excluded Minutes - 5 December 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)(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
|
Reappointment of Trustees to the City of Nelson
Civic Trust
|
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
|
Governance and Finance Committee
Minutes - 5 December 2019
Present: Councillor
R Sanson (Chairperson), Councillors Y Bowater, T Brand, M Courtney, J Edgar, K
Fulton, M Lawrey, B McGurk, G Noonan, R O'Neill-Stevens, P Rainey, T Skinner,
and Mr J Murray and Mr J Peters
In
Attendance: Chief Executive (P Dougherty), Group Manager Community
Services (R Ball), Group Manager Strategy and Communications (N McDonald), Team
Leader Governance (R Byrne), Governance Adviser (E-J Ruthven), and Youth
Councillor R Martyn
Apology: Her
Worship the Mayor R Reese
1. Apologies
|
Resolved GF/2019/091
|
|
|
That the Governance and Finance Committee
1. Receives
and accepts an apology from Her Worship the Mayor R Reese.
|
|
Brand/Fulton Carried
|
2. Confirmation of
Order of Business
The Chairperson advised that
items may be taken in a different order, to accommodate presentations from
representatives of external organisations.
3. Interests
There were no updates to the
Interests Register.
Councillor Rainey noted that he
had an interest in item 2 of the Confidential Agenda (Nelson Centre of Musical
Arts – External Review of Business Model).
4. Public Forum
4.1 Nelson
Tasman Business Trust - Annual Report 2019
|
Sarah Holmes,
Manager, and Ian Kearney, Trust Chair, tabled a document (A2311552) and gave
a power point presentation (A2311559).
Ms Holmes
outlined the services provided by the Trust, including numbers of clients and
attendees, and developments over the past 12 months. She emphasised the
importance of collaboration and the business mentoring network, and
identified additional sources of funding alongside support received from
Nelson City and Tasman District Councils.
Ms Holmes and Mr
Kearney answered questions regarding funding of and constraints on the Trust,
and future opportunities relating to sustainable business opportunities and
zero carbon organisations.
|
|
Attachments
1 A2311552 - Nelson
Tasman Business Trust - Tabled document
2 A2311559 - Nelson
Tasman Business Trust - Power Point presentation
|
4.2 Nelson
Centre of Musical Arts - Celebration of the 2019 UNESCO Asia Pacific Cultural
Heritage Conservation Award
|
James Donaldson,
Director of the Nelson Centre of Musical Arts, gave a power point
presentation (A2311618). He spoke about the Nelson Centre of Musical
Arts redevelopment project, and noted it was one of three projects to win an
award of distinction in the 2019 UNESCO Asia Pacific Cultural Heritage
Conservation Awards.
Mr Donaldson
outlined the intricacies of the project and noted feedback from the Awards
judging panel. He answered questions regarding use of the facility and
the ability of members of the public to tour the facility.
|
|
Attachments
1 A2311618 - Nelson
Centre of Musical Arts - Power Point Presentation
|
5. Chairperson's Report
Document number R13604, agenda pages
8 - 9 refer.
|
Resolved GF/2019/092
|
|
|
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
|
|
|
O'Neill-Stevens/Brand Carried
|
6 Bishop Suter
Trust - strategic presentation
|
Director, Julie Catchpole,
and Trustees, Craig Potton and Rebecca Mason, gave a power point presentation
on the strategic direction of the Bishop Suter Trust (A2333926).
They answered questions regarding challenges relating to
the expansion of education programmes, how activities aligned with relevant
Council arts policies or strategies, the ability to track more detailed
information regarding visitor numbers, further income-generating activities
and the ability to draw further revenue from grants and sponsorship.
|
|
Attachments
1 A2333926 - Bishop
Suter Trust - Power Point Presentation
|
7. Bishop Suter Trust -
Statement of Expectation 2020/21
Document number R12557, agenda
pages 10 - 49 refer.
Manager Community Partnerships,
Mark Preston-Thomas presented the report. Along with Group manager
Community Services, Roger Ball, he answered questions regarding incorporating
SMART objectives into the Statement of Intent, measures relating to increasing
Tasman District Council support, good employer relations, climate change and
resilience, and the analysis of visitor numbers.
|
Resolved GF/2019/093
|
|
|
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 2020/21 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; and
f) Improving
performance reporting by the inclusion of quantifiable measures and SMART
targets.
|
|
Fulton/Edgar Carried
|
The meeting adjourned from 10.41a.m.
to 10.57a.m.
8. Events Strategy -
implementation update
Document number R10110, agenda
pages 50 - 59 refer.
Manager Strategy, Mark Tregurtha,
presented the report. He answered questions regarding the community and
economic objectives for the fund, the return of post-event reports, the spread
of community events across the community sector, the effect that the overdraft
on the Events Fund had on the number of events able to be supported, the
targeted economic outcome for economic events, and how Council could support
events towards being zero waste.
|
Resolved GF/2019/094
|
|
|
That
the Governance and Finance Committee
1. Receives
the Events Strategy - implementation update (R10110) and its attachments (A2256992 and A2280154).
|
|
Noonan/Fulton Carried
|
9. Quarterly Report to
Governance and Finance Committee 1 July - 30 September 2019
Document number R12561, agenda
pages 60 - 88 refer.
Manager Strategy, Mark Tregurtha,
Management Accountant, Laura Papp, and Financial Accountant, Margie French,
presented the report. Mr Tregurtha explained that the information from
Infometrics, referred to in paragraph 4.44 of the report, had been received too
late to present at the meeting.
Mr Tregurtha and Ms Papp answered
questions regarding the budget in relation to staff costs for administration
and meeting support, forestry income and expenditure, expenditure in relation
to landfill gas, depreciation in relation to staff costs, programmed
maintenance and depreciation, and capital spend on projects in this area to
date.
|
Resolved GF/2019/095
|
|
|
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).
|
|
Murray/Peters Carried
|
9. Exclusion
of the Public
A question was raised as to whether
aspects of item 2 of the Confidential Agenda (Nelson Centre of Musical Arts
– External Review of Business Model) should be considered in the
confidential part of the meeting. Group Manager Community Services, Roger
Ball, explained that initial discussions should take place during the
confidential part of the meeting but it was envisaged that decisions would be
released publically.
The Chairperson explained that,
as representatives of Nelmac Limited would attend for item 1 of the
confidential agenda (Nelmac Limited – Statement of Expectation 2020/21);
and representatives of the Nelson Centre of Musical Arts, including Councillor
Rainey in his personal capacity as a trustee of the Nelson Centre of Musical
Arts, would remain for item 2 of the confidential agenda (Nelson Centre of
Musical Arts – External Review of Business Model), a procedural
resolution to allow them to remain in the meeting after the public had been
excluded was required.
|
Resolved GF/2019/096
|
|
|
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:
· Rob Gunn, Jane Sheard and Lindsay Coll remain after the public has
been excluded, for Item 1 of the Public Excluded agenda (Nelmac Limited
– Statement of Expectation 2020/21), as they have knowledge relating to
Nelmac Limited that will assist the meeting; and
· Roger
Taylor, James Donaldson, Mark Christiansen, Jan Trayes and Pete Rainey 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.
|
|
Fulton/McGurk Carried
|
|
Resolved GF/2019/097
|
|
|
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:
|
|
Fulton/McGurk Carried
|
|
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)
|
The meeting went into public excluded session at 11.36a.m.
and resumed in public session at 4.48p.m.
Restatements
It was resolved while the public was
excluded:
|
1
|
PUBLIC EXCLUDED: Nelmac
Limited - Statement of Expectation 2020/21
|
|
|
That
the Governance and Finance Committee
4. Agrees
that Report (R12567) and the decision be made publicly available once the
completed Statement of Expectations is made available on the Nelson City
Council website approximately 30 days after they are received by the CCTO.
|
|
2
|
PUBLIC EXCLUDED: Nelson Centre
of Musical Arts - External Review of Business Model
|
|
|
That
the Governance and Finance Committee
7. Agrees
that the decision be released from public excluded business following the
related Council decisions.
|
|
3
|
PUBLIC EXCLUDED: Nelson
Municipal Band Trust: Reappointment of Trustee
|
|
|
That the Governance and Finance Committee
3. Agrees
that the decision only be released from public excluded business, once the
appointment is finalised.
|
|
4
|
PUBLIC EXCLUDED: i-SITE
Lease at Millers Acre
|
|
|
That the Governance and Finance Committee
4. Agrees
that Report (R10344), Attachments (R10344, A2307707 and A2297401) and the
decision be excluded from public release at this time.
|
|
5
|
PUBLIC EXCLUDED:
Governance and Finance Committee Confidential Status Report
|
|
|
That the Governance and Finance Committee
2. Agrees
that the Report (R3646) and its attachment (A1401390) be excluded from public
release at this time.
|
There being no further business the meeting ended at 4.48p.m.
Confirmed as a correct record of proceedings:
Chairperson
Date
Item 7: Nelson Centre of Musical
Arts – Letter of Expectation 2020/21
|
|
Governance and Finance Committee
27 February 2020
|
REPORT R13712
Nelson
Centre of Musical Arts - Letter of Expectation 2020/21
1.
Purpose of Report
1.1 To
confirm Council's expectations for the Nelson Centre of Musical Arts (NCMA)
2020/21 Letter of Expectation (LOE).
2. Recommendation
|
That the Governance and Finance Committee
1. Receives
the report Nelson Centre of Musical Arts - Letter of Expectation 2020/21
(R13712); and
2. Approves the general matters to be
included in the Nelson Centre of Musical Arts Letter of Expectation 2019/20
letter as those identified in paragraphs 4.3 to 4.16 of report R13712; and
3. Approves
the following specific matters to be included in the Nelson Centre of Musical
Arts Letter of Expectation:
a) Governance succession plan; and
b) Resilience; and
c) Good employer obligations; and
d) Improving performance reporting by the inclusion of
quantifiable performance measures and SMART targets.
|
3. Background
3.1 Council
commissioned RB Robertson Ltd (Bruce Robertson) to undertake an independent
review of the NCMA’s business model at the end of last year.
3.2 The review was reported to the
Governance and Finance Committee on 5 December 2019 (R13615). The review
recommended two core issues to address:
3.2.1 The
relationship between Council and the NCMA. The review suggested that there
would be benefit in strengthening the relationship between Council and the NCMA
Trust Board.
3.2.2 The
financial positon of the Trust Board and the need for certainty over the level
of funding.
3.3 Although
the NCMA is not a Council Controlled Organisation (CCO), the review proposed
that the disciplines in the CCO model provide a good model for clarifying
expectations and improving the relationship. One of the recommendations was to
adopt a Letter of Expectation on an annual basis, setting out mutually agreed
expectations.
3.4 Previous funding to NCMA was via a
grant agreement that specified a range of performance expectations and
reporting via an annual accountability report. This arrangement did not
facilitate a direct relationship with the Community Services Committee.
3.5 At the Governance and Finance
Committee on 5 December 2019, it was resolved that the Committee:
Endorses
the review recommendation to establish a closer relationship with Nelson Centre
of Musical Arts including a Statement of Expectation.
3.6 Officers
have met with the Chair of the NCMA Board, Roger Taylor, and the NCMA’s
Director, James Donaldson, to follow up the decisions of the Committee and
Council regarding the outcomes of the independent review. This was a
positive meeting, and NCMA confirmed its readiness to work with Council towards
a SOI to replace the current grant agreement. Other actions falling out of
Council’s decisions on the review are also underway.
3.7 Separately,
and in order to keep the Committee informed, a process to recruit two new
Trustees for the NCMA, representing Council, has commenced. Council is
currently represented on the NCMA Board by Roger Taylor and Mark
Christiansen. The aim is to have appointees in place for the NCMA’s
Annual General Meeting in
June.
4. Discussion
4.1 The former grant agreement
arrangement does not easily facilitate the building of a strong and robust
relationship between Council and the Trust Board as recommended in the
Robertson review. A Letter of Expectation (LOE) / Statement of Intent (SOI)
process is welcomed by the Trust Board and will support the strengthening of
the governance relationship.
4.2 Although NCMA does not have the CCO
/ CCTO requirements regarding compliance with the Local Government Act the
expectations and process will largely mirror that of a CCO / CCTO. This will
include alignment with recent changes to the Local Government Act reflecting
CCOs, such as placing the LOE on the Council website.
General expectations to be
included in the LOE
4.3 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.
4.4 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).
4.5 Compliance with legislation and
reporting on Health and Safety matters must be given due emphasis.
4.6 Where the Council makes a financial
contribution to the operational costs of the organisation, the NCMA should show
how it intends to increase non-council revenue streams.
4.7 Capital expenditure and asset
management intentions should be included.
4.8 The NCMA 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.
4.9 SOIs and other reports should be in
a plain style, concise, relevant, accessible and focused on meeting the needs
of the Council 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).
4.10 To be effective, the SOI must disclose the
performance story for the NCMA, providing a clear and succinct understanding of
its purpose, the goods and services it delivers and what success looks like.
Providing a clear message to the Board on these requirements and other
expectations will assist in ongoing improvements in the SOI and reporting.
4.11 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
4.12 Risk management: The SOI should set out
clearly how the Board is considering and managing risks, including natural
hazards and cyberattacks.
4.13 Climate change responsiveness including risk
resilience, mitigation and adaption. Describe in the SOI how the Trustees
intend reducing emissions, waste and responding to climate change events.
4.14 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 at the NCMA.
4.14.1 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.
4.15 Governance performance: The Board should
undertake regular evaluation of its own performance.
4.15.1 Council
expects this review to be carried out at least once every eighteen months.
4.15.2 The
Chair of the Board should reference this evaluation when making recommendations
on the re-appointment or recruitment of board members. In addition, Trustee
recruitment should ensure that when identifying the skills, knowledge and
experience required of Trustees consideration is given to whether knowledge of
tikanga Māori may be relevant.
Specific expectations to be
included in the Letter of Expectation
4.16 It
is proposed that the following specific expectations be set out in the Letter
of Expectation to the Trust Board.
4.16.1 Governance:
Include in the SOI a governance succession plan that details how the board will
identify and mentor a future chair of the trust.
4.16.2 Resilience:
Include in the SOI a risk management plan that details risks / hazards,
mitigation strategies, response and recovery plans in relation to cyber attacks
and natural hazards.
4.16.3 Good
employer obligations: Detail in the SOI how the Trust meets its good employer
obligations particularly in relation to fair pay and equal employment
opportunities.
4.16.4 Quantifiable
performance measures and SMART targets: Identify annual performance measures
and targets to include levels of attendance, participation and leadership.
5. Options
|
Option 1: Accept the matters
to be included in the Letter of Expectation
|
|
Advantages
|
· Provides
clear and early direction to the Trust Board to assist with the preparation
of the 2020/21 Statement of Intent.
· Consistency
with other LOEs.
|
|
Risks and Disadvantages
|
· None
|
|
Option 2: Amend the matters to
be included in the Letter of Expectation
|
|
Advantages
|
· Provides
clear direction to the Trust Board to assist with the preparation of the
2020/21 Statement of Intent.
· The
LOE reflects the views expressed by Councillors.
|
|
Risks and Disadvantages
|
· Potential
for LOE to be delayed which could delay implementation of the SOI.
· Could
be significantly different from other LOEs.
|
6. Conclusion
6.1 Although
the NCMA is not a CCO or CCTO, transitioning from a grant agreement to an LOE /
SOI arrangement provides an opportunity to strengthen the relationship between
the Trust Board and Council.
Author: Mark
Preston-Thomas, Manager Community Partnerships
Attachments
Nil
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Important considerations for decision making
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1. Fit
with Purpose of Local Government
This report discusses matters which seek to promote
the social, economic and cultural well-being of the community in the present
and in the future.
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2. Consistency
with Community Outcomes and Council Policy
The decisions on this report support our Community
Outcomes as follows:
“Our communities have opportunities to
celebrate and explore their heritage, identity and creativity”; and
“Our communities to have access to a range of
social, educational and recreational facilities and activities”.
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3. Risk
Providing a
Letter of Expectation mitigates the low risk that the NCMA develops a Statement
of Intent which is not aligned with Council’s expectations.
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4. Financial
impact
None.
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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 Board but
is not required with the wider community.
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6. Climate
Impact
Climate change responsiveness has been identified by
Council as a specific matter of interest in the Letter of Expectation.
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7. Inclusion
of Māori in the decision making process
No engagement with Māori has been undertaken in
preparing this report.
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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.
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Item 8: Quarterly
Report to Governance and Finance Committee 1 October - 31 December 2019:
Attachment 1
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Governance and Finance Committee
27 February 2020
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REPORT R13735
Quarterly Report to Governance and Finance Committee 1
October - 31 December 2019
1. Purpose
of Report
1.1 To inform the Committee of the financial and
non-financial results for the second 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 October - 31 December 2019 (R13735) and
its attachments (A2332426, A2334191, A2341521 and A2338769).
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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 six month performance to 31 December 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 This Committee is
responsible for 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
Key
Developments
4.1 Council’s results from the
New Zealand Institute of Economic Research (NZIER)’s Assessment of
Council Reports 2019 were received in this quarter, and were very positive. As
part of its focus on improving Council performance, staff annually send a
selection of Council reports to be independently assessed. Results showed that
the average report score has risen from 6.9 in 2018 to 7.36 in 2019, (see
Council’s progress in graph 4.2.1). Of note, 91% of the 11 reports
submitted scored a 7 or above, meeting the NZIER quality standard. The 2019
benchmarking against other councils is not available until early 2020, however
NZIER has indicated that Council is at an equivalent level to the best of the
other councils they review. Three focus areas were recommended to improve
reports, which will be incorporated into future report writer training.
4.1.1 An average of Council’s NZIER report
scores 2014-2019
4.2 The Anchor Building veranda
renewal was completed in November 2019.
Tenders
Awarded
4.3 Tenders awarded under delegated
authority in this quarter are listed below:
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Tender
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Awarded to
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Tender Price
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Electricity supply for Council and joint business units
(NRSBU and NTRLBU)
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Genesis Energy
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$2.5m p.a (two year contract)
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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
Staff Costs
4.8 Staff
costs are overall behind of budget by $2,000 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 not consistent with the trend across
council for the second quarter, in which staff costs are to date ahead of
budget by $84,000, a reduction from $353,000 in the first quarter. This
mismatch is a result of a difference between where staff costs were budgeted
and where the actuals are recorded.
4.10 Major
variances in staff expenditure across council include wages ($55,000 under
budget), temporary staff ($45,000 over budget), contractors ($117,000 over
budget), and depreciation ($78,000 under budget). These under and overspends
total $29,000 over budget for the quarter.
4.11 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).
4.12 Administration
and Meeting Support expenditure is greater than budget
by $188,000. Staff costs are ahead of budget by $197,000, this is a
reduction from $546,000 in Quarter 1 after the review of the staff cost
allocation model. Staff costs are discussed in detail above.
4.13 Council
Publicity expenditure is less than budget by
$66,000. Staff costs are behind
budget by $55,000. Website support is behind budget by $11,000.
4.14 Investment
Management income is greater than budget by
$316,000. A special dividend of $400,000 was received in September
2019 from Port Nelson. External interest is ahead of budget by $76,000 and is
offset by expenditure. Investment Management expenditure is greater than budget by $152,000. External interest
expense is ahead of budget due to the pre-funding of debt, and is partially
offset by income.
4.15 Forestry
income is greater than budget by $508,000. This
variance relates to timing of the Maitai Forest harvest and is partially offset
in expenditure. Forestry expenditure is greater than
budget by $88,000. Maitai Forest harvest costs are ahead of budget
by $133,000 due to timing. Forestry management for the Maitai is $49,000 behind
budget, general forestry management $37,000 behind budget and Roding forestry
management is $32,000 ahead of budget.
4.16 Policy
expenditure is less than budget by $317,000. Staff
costs are behind budget by $298,000. This provides an offset to staff costs
recorded in Admin and Meeting Support.
4.17 Economic
Development income is greater than budget by
$150,000. This is a timing
variance relating to Tasman District Council’s contribution for the
Nelson Regional Development Agency. Economic Development expenditure is greater than budget by
$14,000. Staff costs are ahead of
budget by $85,000, this relates to staff time for the Bay Dreams festival.
Various items are behind budget due to timing, including regional promotion
($51,000), events contestable fund ($46,000), and special economic projects
($27,000). The beach bus subsidy is ahead of budget by $15,000 due to timing.
Items over budget include $30,000 for the Vodafone NZ – Smart Little City
contract, and $27,000 for the Nelson Regional Development Agency Review.
4.18 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.
4.19 Capital
Expenditure (including staff time, excluding vested assets)
4.20 All capital projects, within
the Governance delegation, with a budget greater than $250,000 in this
financial year have a project sheet in Attachment 1 of this report.
Commentary
on Capital Projects
4.21 There are seven capital
projects within the Governance delegation, which have been included as part of
the quarterly reporting. All have a budget over $250,000 for 2019/20. They are
the Haven Precinct, CBD Enhancements, and four projects relating to Civic
House. Summaries are included in Attachment One.
4.22 An additional project
‘Christmas Decorations CBD’ is under $250,000, but has been
included due to interest in the project. Approximately 71% of actual spend to
date on ‘Christmas Decorations CBD’ has been capex.
4.23 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.
Project
Reports – Operational
4.24 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.
Key
Performance Measures
4.25 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.
4.26 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.
4.27 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
4.28 Attachment 2 lists all
performance measures within the Governance delegation, their status, and
commentary for the quarter.
Quarterly
Review of Performance Measures
Status of Governance
Performance measures, quarter two 2019/20
4.29 Of the ten Governance performance measures,
three measures cannot yet be reported on and the results are listed as
‘not measured yet’. Two Economic measures concern the return on our
events investment based on the number of out of town visitors attending major
events, and the distribution of these visits throughout the year – this
data is calculated annually so is not yet available. Corporate measure
‘Council satisfaction with attainment of six monthly Council Controlled
Organisation (CCO) targets for all Statements of Intent’ cannot yet be
reported on, as the six-monthly reports for CCOs are due at the end of
February.
4.30 Three measures are ‘on track’ to
achieve: annual improvement in resident satisfaction with opportunities to
provide feedback to Council, the establishment and operation of the iwi-Council
strategic framework, and the Emergency Operations Centre meeting its monitoring
and evaluation requirements.
4.31 Four measures are ‘not on track’
to achieve for the year. Three measures are in the Economic activity area,
based on newly acquired data from quarter one (this information was not
available for quarter one reporting). They concern Nelson’s GDP increase,
tourism spend, and retail spend in the city centre – see Attachment Two
for details. Council’s actions to significantly change the results of
these measures is limited, and accordingly it is unlikely that these measures
will be included in the next LTP. However, they may be included as part
of any reporting on community outcomes.
5. Status
Report Updates
5.1 Haven Precinct Project
Progress Report - An update on this project will be provided in a report to
Council on 26 March 2020.
5.2 Revised International
Relationships Policy - Officers are currently in the process of undertaking consultation
with iwi. The responsibility for this under the new delegations register is
with Community Services and this action will be transferred to that
committee’s report.
6. Financial
Performance – Whole of Council
6.1 Profit and Loss
6.2 For the six months ending 31 December 2019, the activity
surplus/deficits are $1.9m favourable to budget.
6.3 The most
significant variances to budget are set out below. These will be reported
to the relevant Committees.
6.4 Income
6.4.1 Forestry harvesting income ahead of
budget $508,000 due to timing of the Maitai Forest harvest.
6.4.2 Dividends are ahead of budget by
$410,000 reflecting the unbudgeted special dividend of $400,000 declared by
Port Nelson Limited in September 2019.
6.4.3 Grant income from the Ministry for
Primary Industries is $310,000 behind budget due to the timing of completing
milestones, income now not expected until June 2020.
6.4.4 NZTA income is $165,000 behind
budget within the subsidised roading activity. Income is linked to expenditure
which is also behind budget year to date.
6.4.5 Tasman District Council’s
contribution to economic development is $150,000 ahead of budget due to timing.
6.5 Expenses
6.5.1 There are numerous variances in staff
operating expenditure in the activities:
· Total staff operating costs are over budget by $84,000, Opex staff
and overhead costs are over budget by $283,000 and capex staff and overheads
are under budget by $199,000.
6.5.2 Unprogrammed expenditure is
greater than budget by $417,000. Items include:
· Wastewater reticulation reactive maintenance is over budget by
$112,000 due to the cost of reactive maintenance including; Paru Paru failures,
Nile Street gravity system blockages, and Atawhai Rising Main break in
September.
· Venue hire expenditure of $92,000 against a nil budget recovered
through income.
· Water reticulation reactive maintenance ahead of budget $62,000 due
phasing of the budget (47% of budget phased in first 6 months of the year,
however 50% spent), expenditure is expected to stay within full year budget.
6.5.3 Programmed expenditure is
behind budget $1.6 million, items include:
· Grant expenditure for Nelson City Council’s contribution to
the Champion Road roundabout is behind budget $235,000. This is not expected to
be paid this financial year, and anticipated to be at the reduced amount of
$150,000 in 2020/21.
· Grant funding towards the Maitai area mountain bike trail $187,000
behind budget. Funding will be paid on completion of outcomes.
6.5.4 Council’s overall depreciation
is behind budget $432,000. Administration depreciation is $135,000 under budget
and this will continue to increase for the remainder of the financial year.
Community Housing depreciation is $87,000 behind budget and relates to the
status of being ‘held for sale’.
6.6 Latest forecast
6.7 Other
Income $2.7m less than operating budget - Estimated forestry income is now
forecast to be $560,000, this is a reduction of $2.1 million.
6.8 Base
Expenditure $941,000 less than operating budget - Estimated Forestry
expenditure is now $1.6 million less than operating budget. A full year
overspend of $250,000 is currently forecast for the Nelson Plan, due both to
the use of consultants and to bringing the engagement phase forward to this
financial year. Resource Consent consultant costs forecast to be $40,000 more
than budget, and external expert services $150,000 more than budget.
6.9 Capital Expenditure (including
staff time, excluding vested assets)
6.10 Financial information
provided in Attachment 3 includes:
6.10.1 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).
6.10.2 Operating income and
expenditure displayed against budget by category.
6.10.3 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.
6.10.4 High level balance
sheet. The current year balance sheets do not include consolidations.
6.10.5 A debtor analysis
graph over 13 months, showing outstanding debt levels and patterns for major
debt types.
6.11 Capital expenditure is $4.9 million under
approved budget for the year to date.
Author: Mark
Tregurtha, Manager Strategy
Attachments
Attachment 1: A2332426
- Governance Project Sheets Quarter Two 2019/20 ⇩
Attachment 2: A2334191 - Governance Performance Measure
Summary Quarter Two 2019/20 ⇩
Attachment 3: A2341521 - Finance Dashboards and Charts ⇩
Attachment 4: A2338769 - All of Council project health
summaries ⇩
Item 8: Quarterly
Report to Governance and Finance Committee 1 October - 31 December 2019:
Attachment 2
Item 8: Quarterly
Report to Governance and Finance Committee 1 October - 31 December 2019:
Attachment 3
Item 8: Quarterly
Report to Governance and Finance Committee 1 October - 31 December 2019:
Attachment 4
