Agenda of Audit, Risk, and Finance Committee Meeting

Audit, Risk, and Finance Committee Meeting Agenda

28 March 2019

AUDIT, RISK AND FINANCE COMMITTEE - MEMBERS REGISTER OF INTERESTS

Name	Responsibility (i.e. Chairperson etc)	Declaration of Interests	Nature of Potential Interest	Member's Proposed Management Plan
Hon John Carter QSO	Board Member of the Local Government Protection Programme	Board Member of the Local Government Protection Program
Hon John Carter QSO	Carter Family Trust
Felicity Foy	Director - Northland Planning & Development	I am the director of a planning and development consultancy that is based in the Far North and have two employees.		I will abstain from any debate and voting on proposed plan change items for the Far North District Plan.
				I will declare a conflict of interest with any planning matters that relate to resource consent processing, and the management of the resource consents planning team.
				I will not enter into any contracts with Council for over $25,000 per year. I have previously contracted to Council to process resource consents as consultant planner.
	Flick Trustee Ltd	I am the director of this company that is the company trustee of Flick Family Trust that owns properties on Weber Place, Seaview Road, and Allen Bell Drive.
	Elbury Holdings Limited	This company is directed by my parents Fiona and Kevin King.	This company owns several dairy and beef farms, and also dwellings on these farms. The Farms and dwellings are located in the Far North at Kaimaumau, Bird Road/Sandhills Rd, Wireless Road/ Puckey Road/Bell Road, the Awanui Straight and Allen Bell Drive.
	Foy Farms partnership	Owner and partner in Foy Farms - a farm in three titles on Church Road, Kaingaroa
	Foy Farms Rentals	Owner and rental manager of Foy Farms Rentals for 6 dwellings on Church Road, Kaingaroa and 1 dwelling on Allen Bell Drive, Kaitaia
	King Family Trust	This trust owns several titles/properties at Cable Bay, Seaview Rd/State Highway 10 and Ahipara - Panorama Lane.	These trusts own properties in the Far North.
	Previous employment at FNDC 2007-16	I consider the staff members at FNDC to be my friends
Partner Felicity Foy	Employed by Justaplumber Taipa
Partner Felicity Foy	Friends with some FNDC employees
Colin Kitchen	No form received
Tania McInnes	Director – GBT Ventures Ltd	Company not currently operational		Will notify Council if company becomes operational.
	Member of Northland Conservation Board		Conservation matters not aligned with Council policy.	Will notify Council should a perceived conflict arise.
	Trustee – Northland Youth Education Trust		No perceived conflicts	Will notify Council should a perceived conflict arise.
	Founder – Bay of Islands Women’s Nexus	No perceived conflicts. An informal organisation
	Own a section on Seaview Road, Paihia 0200
	Having worked within the organisation in the early 2000’s, I know a number of staff, none of which I am close with.
John Vujcich	Board Member	Ngati Hine Health Trust	Matters pertaining to property or decisions that may impact of their health services	Declare interest and abstain
	Board Member	Pioneer Village	Matters relating to funding and assets	Declare interest and abstain
	Director	Waitukupata Forest Ltd	Potential for council activity to directly affect its assets	Declare interest and abstain
	Director	Rural Service Solutions Ltd	Matters where council regulatory function impact of company services	Declare interest and abstain
	Director	Kaikohe (Rau Marama) Community Trust	Potential funder	Declare interest and abstain
	Partner	MJ & EMJ Vujcich	Matters where council regulatory function impacts on partnership owned assets	Declare interest and abstain
	Member	Kaikohe Rotary Club	Potential funder, or impact on Rotary projects	Declare interest and abstain
	Member	New Zealand Institute of Directors	Potential provider of training to Council	Declare a Conflict of Interest
	Member	Institute of IT Professionals	Unlikely, but possible provider of services to Council	Declare a Conflict of Interest
	Member	Kaikohe Business Association	Possible funding provider	Declare a Conflict of Interest
Ann Court	Waipapa Business Association	Member
	Warren Pattinson Limited	Shareholder	Building company. FNDC is a regulator and enforcer	No FNDC Controls
	Kerikeri Irrigation	Supplies my water		No EM intervention in disputes
	Top Energy	Supplies my power		No other interest greater than the publics
	District Licensing	N/A	N/A	N/A
	Top Energy Consumer Trust	Trustee	Crossover in regulatory functions, consenting economic development and contracts such as street lighting.	Declare interest and abstain from voting.
	Ann Court Trust	Private	Private	N/A
	Waipapa Rotary	Honorary member	Potential community funding submitter	Declare interest and abstain from voting.
	Properties on Onekura Road, Waipapa	Owner Shareholder	Any proposed FNDC Capital works or policy change which may have a direct impact (positive/adverse)	Declare interest and abstain from voting.
	Property on Daroux Dr, Waipapa	Financial interest
	Flowers (I get flowers occasionally)	Ratepayer 'Thankyou'	Bias/ Pre-determination?	Declare to Governance
	Coffee and food	Ratepayers sometimes 'shout' food and beverage	Bias or pre-determination	Case by case
	Consider all staff my friends	N/A	Suggestion of not being impartial or pre-determined!	Be professional, due diligence, weigh the evidence. Be thorough, thoughtful, considered impartial and balanced. Be fair.
		My husband is a builder and may do work for Council staff
Warren Pattinson (Husband)	Warren Pattinson Limited	Director	Building Company. FNDC is a regulator	Remain at arm’s length
	Air NZ	shareholder	None	None
	Warren Pattinson Limited	Builder	FNDC is the consent authority, regulator and enforcer.	Apply arm’s length rules
	Kurbside Rod and Custom Club (unlikely)	President NZ Hot Rod Association	Potential to be linked to a funding applicant and my wife is on the decision making committee.	unlikely to materialise but would absent myself from any process as would Ann.
	Property on Onekura Road, Waipapa	Owner	Any proposed FNDC capital work in the vicinity or rural plan change. Maybe a link to policy development.	Would not submit. Rest on a case by case basis.
Sally Macauley	Chairman	Northland District Health Board	Matters pertaining to health issues re Fluoride and freshwater as an example.	Declare a perceived conflict.
	Chairman	Oranga Tamaraki - Ministry of Vulnerable Children- Northland Community Response Forum	Matters pertaining to this ministry	Declare a perceived conflict.
	Judicial Justice of the Peace	Visitations to Ngawha Prison	Matters pertaining to Judicial Issues re Ngawha Prison	Declare a perceived Interest
	The Turner Centre	FNDC Representative	Observer, acknowledging FNDC financial contribution.	Note FNDC partnership
	Trustee	Kaikohe Education Trust	Providing students laptops - possible request for written support to funders	Declare a conflict
	Executive member	Kaikohe Business Association	Matters pertaining to request for written support to funders.
	Chairman	Bay of Islands Arts Festival Trust	Issues pertaining to the application of support funds	Declare a conflict of interests
	Trustee	Bay of Islands Radio Marine	Issues pertaining to the application of support funds	Declare a conflict of interests
	Secretary/Trustee	Kerikeri International Piano Competition	Issues pertaining to the application of support funds	Declare a conflict of interests
	Trustee/Director	Kaikohe Community and Youth Trust	Possible application of support funding	Declare a conflict of interests
	Commercial	Palmer Macauley Offices- Kerikeri and Kaikohe	Infrastructural matters with FNDC	Declare a conflict
	Private property of which there would not be any conflict.
	Paihia, Kerikeri, Kaikohe
Peter Macauley (Husband)	Senior Partner	Palmer Macauley
	Peter Macualey	Barristers and Solicitors- Kerikeri, Kaikohe and Mangonui	Legal matters with FNDC
	Director/Trustee
	St John NZ Priory Chapter	St John Priory Chapter	Legal matters with FNDC	Declare a conflict
	Senior Partner	Peter Macauley- Palmer Macauley Barristers and Solicitors Kaikohe, Kerikeri AND Mangonui	Legal matters with FNDC	Declare a conflict
	St John NZ	Priory Trust Board	Writing of policies and legal matters as an example	Note Interests
	Lions Club of Kaikohe	Director	Legal matters etc	Note Interests
	Kaikohe Rugby Club	Patron	Legal Matters
	Viking Rugby Club, Whangarei	Life Member	Legal Matters
	Private Property
	Kerikeri, Paihia - no contents.
Bruce Robertson	No interests to declare
Mike Edmonds	Chair	Kaikohe Mechanical and Historic Trust	Council Funding	Decide at the time
Mike Edmonds	Committee member	Kaikohe Rugby Football and Sports Club	Council Funding	Withdraw and abstain
Adele Gardner	N/A - FNDC Honorarium
	The Far North 20/20, ICT Trust	Trustee
	Te Ahu Charitable Trust	Trustee
	ST Johns Kaitaia Branch	Trustee/ Committee Member
	I know many FNDC staff members as I was an FNDC staff member from 1994-2008.
Partner of Adele Gardner	N/A as Retired
Terry Greening	Greening Family Trust	Beneficiary		Highly unlikely to interface with FNDC
	Bay of Islands Walking Weekend Trust		Potential of seeking funds	Step aside from any requests or decisions regarding requests
	Russell 2000 Trust (Chairman)			Trust is about to wind up.
	Russell Centennial Trust (Chairman)	Manages Russell Museum	Seeks funds from council	Step aside from any requests or decisions regarding requests
	Residence at Kaha Place, Russell	Nil	Nil	N/A
Terry Greening (Wife)	Greening Family Trust	Beneficiary	N/A	N/A
Terry Greening (Wife)	Residence at Kaha Place, Russell
Cr Kelly Stratford	Office manager at Kinghans.
	Denture assistant at Kawakawa denture Services self-employed as book keeper Kelly@ksbookkeeoing.net	None	None
	KS Bookkeeping and Administration	Business owner, bookkeeping and development of environment management plans for clients.	None perceived	I’d step aside from decisions that arise, that may have conflicts.
	Kinghans Accounting	Office Administration	None perceived	Step aside from decisions that arise, that may have conflicts.
	Waikare Marae Trustees	Trustee	May be perceived conflicts	Case by case basis
	Kawakawa Business & Community Association	Committee member/newsletter editor and printer	None perceived	If there was a perceived conflict, I will step aside from decision making
	Bay of Islands College	Parent elected trustee	None perceived	If there was a perceived conflict, I will step aside from decision making
	Karetu School Bay Cosmos Soccer	Parent elected trustee. Committee member and coach	None perceived	If there was a perceived conflict, I will step aside from decision making
	Property in Waikare and Moerewa			If there was a perceived conflict, I will step aside from decision making
	Coffee and food	Ratepayers sometimes 'shout' food and beverage	Bias or pre-determination	Case by case
Kelly Stratford (Husband)	Puketona Junction Café 39 Gillies Café	Barista & Chef Barista	N/A	N/A
	Property in Moerewa		N/A	N/A

Audit, Risk, and Finance Committee Meeting Agenda

28 March 2019

MINUTES OF Far North District Council
Audit, Risk, and Finance Committee Meeting
HELD AT THE Council Chamber, Memorial Avenue, Kaikohe
ON Thursday, 29 November 2018 AT 10:00 am

PRESENT: Cr John Vujcich, Mayor John Carter (HWTM), Cr Tania McInnes (Deputy Mayor), Cr Ann Court, Cr Colin (Toss) Kitchen, Cr Sally Macauley, Cr Kelly Stratford, Member Bruce Robertson, Member Adele Gardner, Member Mike Edmonds, Member Terry Greening

APOLOGIES: Cr Felicity Foy

IN ATTENDANCE: Shaun Reilly – Kaikohe-Hokianga Community Board Member

STAFF PRESENT: Shaun Clarke - Chief Executive Officer, Samantha Edmonds - General Manager Corporate Services, Andy Finch - General Manager Infrastructure & Asset Management, Darrell Sargent - General Manager Strategic Planning & Policy, Jaime Dyhrberg - Executive Officer, Janice Smith - Chief Financial Officer, George Swanepoel - In-House Counsel, Matt Bell - Manger Risk & Improvement, Glenn Rainham - Manager Alliances, Tanya Reid - Business Improvement Advisor, Leanna Ransom - Internal Auditor, Tanya Nowell - Team Leader Infrastructure Programmes, Alastair Wiseman - Manager Health Safety & Wellbeing

1 Apologies and Declarations of Interest

Apology

Committee Resolution 2018/7

Moved: Cr Kelly Stratford

Seconded: Cr Ann Court

That the apology received from Cr Foy be accepted and leave of absence granted.

Carried

3 Corporate Services Group

3.1 Confirmation of Previous Minutes

Committee Resolution 2018/8

Moved: Member Adele Gardner

Seconded: Member Terry Greening

That the Audit, Risk, and Finance Committee confirm that the minutes of the meeting of the Committee held 27 September 2018 are a true and correct record.

Carried

3.2A Deputation

Matthew Wilson from Aon New Zealand (Insurance Company)

Deputy Mayor McInnes left the meeting at 10:25 am and rejoined the meeting at 10:57 am.

Mayor Carter left the meeting at 10:30 am and rejoined the meeting at 10:31 am

Councillor Kitchen left the meeting at 10:37 am and rejoined the meeting at 10:39 am

3.2 Insurance renewal considerations

Committee Resolution 2018/9

Moved: Cr Kelly Stratford

Seconded: Member Bruce Robertson

That the Audit, Risk, and Finance Committee

a) approve the additional funding required in future years to provide for public liability and professional indemnity insurance quoted by Aon Insurance of $115,000

CARRIED

b) approve the additional funding required in 2019/20 and 2022/23 for the Riskpool additional calls of approximately $104,000 in each year

CARRIED

c) consider the requirement for insurance cover for underground assets based on the possible loss information provided and if necessary, approve an additional $65,000 in the budget from 2019/20 onwards

Amendment

Moved: Member Bruce Robertson

Seconded: Mayor John Carter

c) Confirms that Council do not insure underground assets, for 2019/20, but consider the impacts on the financial strategy with respect to self-funding and asset management.

Carried

Councillor Stratford requested a vote by division

For	Against
Mayor Carter	Cr Stratford
Cr Macauley	Member Greening
Member Robertson	Member Gardner
Cr Court	Member Edmonds
Cr Kitchen
Deputy Mayor McInnes
Cr Vujcich

The amendment became the substantive motion

That the Audit, Risk, and Finance Committee

a) approve the additional funding required in future years to provide for public liability and professional indemnity insurance quoted by Aon Insurance of $115,000

b) approve the additional funding required in 2019/20 and 2022/23 for the Riskpool additional calls of approximately $104,000 in each year

c) Confirms that Council do not insure underground assets, for 2019/20, but consider the impacts on the financial strategy with respect to self-funding and asset management.

Carried

Councillor Stratford abstained from voting

3.3 Council Financial Report October 2018

Committee Resolution 2018/10

Moved: Cr Ann Court

Seconded: Member Adele Gardner

That the Audit, Risk, and Finance Committee receive the report entitled “Council Financial Report 31 October 2018”

Carried

4 Information Reports

4.1 Level of Service KPI Performance Report - Quarter 1

Committee Resolution 2018/11

Moved: Cr Colin (Toss) Kitchen

Seconded: Mayor John Carter

That the Audit, Risk, and Finance Committee receive the report ”Level of Service KPI Performance Report - Quarter 1.”

Carried

5 Public Excluded

RESOLUTION TO EXCLUDE THE PUBLIC

Committee Resolution 2018/12

Moved: Cr Tania McInnes

Seconded: Cr Kelly Stratford

That the public be excluded from the following parts of the proceedings of this meeting.

The general subject matter 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 of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Ground(s) under section 48 for the passing of this resolution
5.1 - Confirmation of Previous Minutes (Public Excluded)	s7(2)(b)(ii) - the withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information s7(2)(c)(i) - the withholding of the information is necessary to protect information which is subject to an obligation of confidence or which any person has been or could be compelled to provide under the authority of any enactment, where the making available of the information would be likely to prejudice the supply of similar information, or information from the same source, and it is in the public interest that such information should continue to be supplied s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege s7(2)(h) - the withholding of the information is necessary to enable Council to carry out, without prejudice or disadvantage, commercial activities	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
5.2 - Internal Audit Update - November	s7(2)(b)(ii) - the withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
5.3 - FNDC Current Legal Action Potential Liability Claims	s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7

Carried

6 CONFIRMATION OF INFORMATION AND DECISIONS IN OPEN MEETING

Committee Resolution 2018/13

Moved: Cr Tania McInnes

Seconded: Cr Kelly Stratford

That the Audit, Risk, and Finance Committee confirms that the information and decisions contained in the part of the meeting held with the public excluded are not to be restated in public meeting.

Carried

6 Meeting Close

The Meeting closed at 11:56 am.

The minutes of this meeting will be confirmed at the Audit, Risk, and Finance Committee Meeting held on 28 March 2019

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

CHAIRPERSON

Audit, Risk, and Finance Committee Meeting Agenda

28 March 2019

4 Strategic Planning and Policy Group

4.1 Draft Far North Holdings Limited Statement of Intent 2019-2022

File Number: A2395737

Author: Sheryl Gavin, General Manager Corporate Services (Acting)

Authoriser: Shaun Clarke, Chief Executive Officer

Purpose of the Report

This report presents the draft Statement of Intent of Far North Holdings Limited for the three years from 1 July 2018 to 30 June 2021.

Executive Summary

· The Statement of Intent presented complies with the requirements of the Local Government Act.

· This report was submitted via email to Shaun Clarke, Chief Executive Officer, Sheryl Gavin, General Manager Corporate Services (Acting) and Janice Smith, Chief Financial Officer on 28 February 2018.

Recommendation

That the Audit, Risk, and Finance Committee recommend Council confirm the Far North Holdings Statement of Intent 2019-2022.

1) Background

The requirements for the governance and accountability of council-controlled organisations (CCO) and council organisations are set out in Part 5, Sections 55-74, of the Local Government Act 2002 (LGA) and Schedule 8, Clauses 1-10, of the LGA sets out specific provisions regarding Statements of Intent (SOI).

The purposes of a SOI are to:

a. Provide transparency to the community about the proposed activities and intentions of the CCO for the forthcoming year

b. Enable Council, as the shareholder in the CCO to influence the direction of the company

c. Create a basis for accountability of the Directors of the CCO to Council as the shareholder.

Section 64, LGA requires every CCO to have a SOI that complies with clauses 9 and 10 of Schedule 8 of the LGA. These clauses outline the statutory content of a SOI.

The statutory provisions of Schedule 8 require the Board to deliver to its shareholders a draft SOI on or before 1 March each year then consider any comments on the draft SOI made to it within 2 months of 1 March before delivering the completed SOI on or before 30 June each year.

The shareholder, Council, can either agree with the draft SOI or require the Board to modify the SOI on any matter included in Clause 9 (1)( a) to (i). Modification must be by way of resolution and the shareholder is first required to consult the Board as to the matters to be modified.

The effect of the timing provisions is that the shareholder, Council, has until 30 April to make any comments back to the company on changes it would like to see made to the draft SOI. The CCO must then consider these comments and submit its final SOI to the shareholder by 30 June.

Far North Holdings Limited (FNHL) has met its statutory obligations by submitting a draft SOI by the statutory deadline. A copy of the draft SOI is attached.

2) Discussion and Options

The draft SOI contains information specified in Clause 9, Schedule 8, LGA. The SOI is consistent with previous SOIs that have been submitted by FNHL.

Reason for the recommendation

The receipt of the draft Statement of Intent from the Council CCTO, Far North Holdings Limited, is part of the compliance requirements of a statutory process. The reason for the recommendation is to confirm the draft SOI and recommend the report be received by Council at a meeting prior to 30 June 2019.

3) Financial Implications and Budgetary Provision

There are no financial implications or the need for budgetary provision.

Attachments

1. DRAFT Statement of Intent 2019 to 2022 - A2400587 ⇩

Compliance schedule:

Full consideration has been given to the provisions of the Local Government Act 2002 S77 in relation to decision making, in particular:

1. A Local authority must, in the course of the decision-making process,

a) Seek to identify all reasonably practicable options for the achievement of the objective of a decision; and

b) Assess the options in terms of their advantages and disadvantages; and

c) If any of the options identified under paragraph (a) involves a significant decision in relation to land or a body of water, take into account the relationship of Māori and their culture and traditions with their ancestral land, water sites, waahi tapu, valued flora and fauna and other taonga.

2. This section is subject to Section 79 - Compliance with procedures in relation to decisions.

Compliance requirement	Staff assessment
State the level of significance (high or low) of the issue or proposal as determined by the Council’s Significance and Engagement Policy	As this is a report for Audit, Risk & Finance Committee to recommend to Council and requires no decisions to be made by the Audit, Risk, and Finance Committee it is deemed to have a low to medium level of significance.
State the relevant Council policies (external or internal), legislation, and/or community outcomes (as stated in the LTP) that relate to this decision.	Part 5, Sections 55-74, of the Local Government Act 2002 (LGA) Schedule 8, Clauses 1-10, of the Local Government Act 2002 (LGA)
State whether this issue or proposal has a District wide relevance and, if not, the ways in which the appropriate Community Board’s views have been sought.	The matter has District wide relevance.
State the possible implications for Māori and how Māori have been provided with an opportunity to contribute to decision making if this decision is significant and relates to land and/or any body of water.	Considered in relation to proposed performance objectives of FNHL.
Identify persons likely to be affected by or have an interest in the matter, and how you have given consideration to their views or preferences.	Not applicable.
State the financial implications and where budgetary provisions have been made to support this decision.	There are no financial implications or the need for budgetary provision arising from this report.
Chief Financial Officer review.	The Chief Financial Officer has reviewed this report

Audit, Risk, and Finance Committee Meeting Agenda

28 March 2019

5 Corporate Services Group

5.1 Amendments to Rating Relief Policies

File Number: A2386461

Author: Janice Smith, Chief Financial Officer

Authoriser: Sheryl Gavin, General Manager Corporate Services (Acting)

Purpose of the Report

To seek a recommendation to amend the rating relief polices adopted as part of the 2018/28 LTP process where issues around interpretation and application have been identified.

Executive Summary

· The document Rating Relief Policies was adopted by Council in June 2018 as part of the 2018/28 LTP process.

· Staff have been working with the revised polices and have identified some minor issues that need to be amended to allow the policies to be applied as intended.

· Once the amendments have been approved it will be necessary to conduct a short consultation with the public.

Recommendation

That the Audit, Risk, and Finance Committee recommend to Council that the following amendments to the Rating Relief Polices are approved prior to consultation:

i) The Transitional Farmland policy is re-instated

ii) The Treaty Settlement Lands policy is amended to include settlements approved prior to 1 July 2018

iii) The Common Use Properties policy is amended to include commercial enterprises and residential properties

iv) The Landlocked Land policy is amended to refer Maori land issues to the Maori Land Court for decision

v) The Land Subject to Protection for Outstanding Natural Landscape, Cultural, Historic or Ecological Purposes policy is amended to include covenants approved under the Heritage New Zealand Pouhere Taonga Act 2014 (or Historic Places Act 1993)

vi) The Residential Rates for Senior Citizens policy is amended to provide clarity for conditions 1 and 4 to allow staff to apply the conditions fairly to all applicants.

1) Background

As part of the 2018/28 LTP process the Rating Relief Policies were re-drafted into plain English and those thought to no longer be necessary were rescinded.

Since adoption of the revised policies, staff have identified some issues of interpretation that appear to be at odds with the intention of the policies.

Approval is now sought to make some small amendments to these policies so that they can be effectively applied in a consistent manner.

2) Discussion and Options

Since 1 July 2018, staff have been working with the revised Rating Relief Policies and have noted that the following issues require amendment:

a) Transitional Farmland Policy

This policy was always intended to be a transitional policy and stated that:

“This policy is a transitional policy which will remain in force until council so decides or until the last affected property no longer qualifies, whichever is the sooner. No further applications will be considered under this policy”

There are 11 active postponements under this policy and when Council made the decision to rescind the policy, technically the postponement on all 11 accounts ceased. Staff do not think that this was the intention and permission is sought to re-instate the policy with the same clause as stated above.

b) Treaty Settlement Lands

This policy was introduced to provide some relief where lands were returned under treaty settlements as General Title Land and therefore not eligible for relief under the Maori Freehold Land policies.

The policy became effective from 1 July 2018 but did not provide for the conditions and criteria to apply to lands that had settled prior to that date

It is recommended that the policy be applied retrospectively to any lands settled prior to 1 July 2018 under the Treaty of Waitangi settlement processes.

c) Common Use Properties

This policy is intended to provide some relief to owners that do not strictly meet the requirements of S20 of the Local Government (Rating) Act 2002 for contiguous properties. It would typically be applied to farms, commercial enterprises and residential properties which span more than one rating unit.

The policy as currently written can only be applied to farm land or commercial developments which are vacant.

When the policy was re-written it was not the intention to create the above limitation and it is recommended that the following amendments be included:

Condition and criteria 4.

That this should be amended to include “or commercial enterprise” after the word “farm”

Condition and criteria 5.

A new condition is included as follows:

In the case of residential rating units where two or more separately owned rating units are owned by an individual and/or trust and are contiguous but the ownership is not an exact match, the rating units will be considered as one. For this to apply one unit must have a dwelling and the other unit(s) considerable development which proves that the rating units are being used as one. E.g. House/dwelling on one rating unit and or garden and garage on the other rating unit.

Existing conditions and criteria 5 and 6 be re-numbered 6 and 7

d) Land Locked Land

This policy applies to both General Title and Maori Freehold Land.

However, the policy requires the applicant to apply to the High Court under the Property Law Act 2007 to have the land declared “land locked”.

A legal opinion has been received that advises that only the Maori Land Court can make this declaration in relation to Maori Freehold Land.

It is therefore recommended that condition and criteria 1 be amended to add

“or, in the case of Maori Freehold Land, as determined by the Maori Land Court”.

e) Land Subject to Protection for Outstanding Natural Landscape, Cultural, Historic or Ecological Purposes

Under condition 2 of this policy a series of sections of relevant Acts are referred to under which this policy can be applied.

It has been identified that there are some covenants that are legally applied under the Heritage New Zealand Pouhere Taonga Act 2014 (or Historic Places Act 1993) and that this reference has been omitted.

Whilst it can be assumed that it would be Council’s intent to include such covenants, they cannot be included without the specific Act being added to the policy

It is recommended that the Heritage New Zealand Pouhere Taonga Act 2014 (or Historic Places Act 1993) be added to condition 2.

f) Residential Rates for Senior Citizens

There are 2 conditions within this policy that are not clear or easy to apply.

Condition and criteria 1 (b) refers to an applicant being “on a fixed income” but does not include a definition of what this might mean. It is recommended that the following definition be added:

“an income from a pension or investment that is set at a particular figure and does not vary like a dividend or rise with the rate of inflation”

Condition and criteria 4 requires staff to make an assessment of an applicant’s income in order to determine if they have insufficient funds remaining to pay their rates. Staff are not trained to make such assessments therefore it is suggested that the following be added:

“if the applicant qualified for the Rates Rebate then their income has already been tested and they therefore qualify for the Rates Postponement”.

All amendments to the policies are identified in green in the attached document.

Legislative process to amend remission and postponement policies

Remission and postponement policies are made under section 102(2)(e) of the Local Government Act (LGA). Amendments to these policies are subject to consultation that gives effect to section 82 of the LGA. In practical terms, this means that those who are affected by the amendments must be consulted in any way Council sees fit as long as the requirements of section 82 are fulfilled and consultation is aligned with Council’s policy on Significance and Engagement. Note that the required consultation is not a Special Consultative Procedure, and therefore does not require notification, a statement of proposal or formal hearings.

Following adoption of the draft amendments by Council an appropriate consultation period will take place, followed by formal adoption prior to the end of June 2019. A consultation plan will be developed should this Committee recommend approval of the proposed amendments to Council.

Reason for the recommendation

The above anomalies have been identified in the Rating Relief Policies and staff are recommending amendments so that the policies can be effectively and fairly applied.

3) Financial Implications and Budgetary Provision

There are no financial implications arising from this report

Attachments

1. Rating Relief Policies - A2391572 ⇩

2. Transitional policy for the postponement of rates on farmland - A2391574 ⇩

Compliance schedule:

Full consideration has been given to the provisions of the Local Government Act 2002 S77 in relation to decision making, in particular:

1. A Local authority must, in the course of the decision-making process,

a) Seek to identify all reasonably practicable options for the achievement of the objective of a decision; and

b) Assess the options in terms of their advantages and disadvantages; and

2. This section is subject to Section 79 - Compliance with procedures in relation to decisions.

Compliance requirement	Staff assessment
State the level of significance (high or low) of the issue or proposal as determined by the Council’s Significance and Engagement Policy	Low
State the relevant Council policies (external or internal), legislation, and/or community outcomes (as stated in the LTP) that relate to this decision.	This is an amendment to existing Council Rating Relief Policies
State whether this issue or proposal has a District wide relevance and, if not, the ways in which the appropriate Community Board’s views have been sought.	N/A
State the possible implications for Māori and how Māori have been provided with an opportunity to contribute to decision making if this decision is significant and relates to land and/or any body of water.	N/A
Identify persons likely to be affected by or have an interest in the matter, and how you have given consideration to their views or preferences.	N/A
State the financial implications and where budgetary provisions have been made to support this decision.	None
Chief Financial Officer review.	The Chief Financial Officer prepared this report

Table of Contents

Introduction. 1

Making an application? This is what you need to know: 1

Table of Contents. 3

Definitions. 4

Common-Use Properties. 5

Community, Sports and Not-for-profit Organisations. 6

Excess Water Charges. 7

Incentivising Māori Economic Development 8

Landlocked Land. 9

Land Subject to Protection for Outstanding Natural Landscape, Cultural, Historic or Ecological Purposes. 10

Māori Freehold Land Not Used. 12

New Users of Māori Freehold Land. 13

Papakāinga on Māori Freehold Land. 14

Penalties. 15

Properties Spanning Multiple Districts. 16

Residential Rates for Senior Citizens. 17

School Sewerage Charges. 19

Treaty Settlement Lands. 20

Unusable Land. 21

Wastewater Charges on Government Funded Subsidy Schemes. 22

Proposed Policies for Revocation. 23

Definitions

For the purpose of these policies, words used in the singular include the plural, and words used in the plural include the singular.

ARREAR means unpaid rates as at 30 June of the rating year prior to application.

COUNCIL means the Far North District Council and includes any person or agent authorised by the Far North District Council.

LANDLOCKED has the same meaning as defined in the Property Law Act 2007.

MĀORI FREEHOLD LAND has the same meaning as defined in Te Ture Whenua Māori Act 1993 Part VI section 129(2)(a).

NATURAL DISASTER has the same meaning as in the Earthquake Commission Act 1993.

NEW USER is a person that has not been previously identified in Council’s Rates Information Database as being responsible for the rates on the land.

OCCUPIED means a formal right by occupation order or informal right by licence to occupy Māori Freehold Land, or other arrangements are in place and are exercised.

OCCUPIER means a person, persons, organisation, or business entity that is using a rating unit or portion of a rating unit under a lease, license or other formal agreement for a specified period of time.

OUTSTANDING NATURAL LANDSCAPE refers to any largely unmodified landscape with characteristics and qualities that amount to being conspicuous, eminent or remarkable. These landscapes are afforded protection through the Resource Management Act 1991 as a matter of national importance.

PAPAKĀINGA has the same meaning as in the operative version of the Far North District Plan.

POSTPONEMENT means an agreed delay in the payment of rates for a certain time, or until certain defined events occur.

RATEPAYER includes, under the Local Government (Rating) Act 2002, either the owner of the rating unit or a lessee under a registered lease of not less than 10 years, which provides that the lessee is required to be entered into the Rating Information Database as the ratepayer.

REASONABLE ACCESS has the same meaning as the Property Law Act 2007.

REMISSION means that the requirement to pay the rate levied for a particular financial year is forgiven in whole or in part.

STATUTORY LAND CHARGE means a charge registered against a Certificate of Title of a property by someone who has a financial interest in the property, such as debt or part ownership.

TREATY SETTLEMENT LANDS means any land which has been returned to Māori ownership in a Treaty Claims Settlement, or land which may have been purchased from Treaty settlement monies to replace land which could not be returned because it is in private ownership.

UNIFORM ANNUAL GENERAL CHARGE (UAGC) is a type of rate levied by Council. It is a fixed charge, or an amount that stays the same regardless of the value of the property. The UAGC is the same amount for all ratepayers across the District.

USED includes use for the purposes of any residential occupation of the land, or any activity for business or commercial purposes, including lease agreements, or storage of equipment, stock or livestock.

Common-Use Properties

Background

Section 20 of the LGRA 02 requires that multiple rating units be treated as one rating unit if they are:

1. Owned by the same person or persons; and,

2. Used jointly as a single unit; and,

3. Contiguous or separated only by a road, railway, drain, water race, river or stream.

This policy expands on the provisions of the Act, and provides for commercial operations to be treated as one rating unit to assist economic development in the district.

Audit, Risk, and Finance Committee Meeting Agenda

28 March 2019

5.4 Revenue Recovery Report

File Number: A2395747

Author: Margriet Veenstra, Manager - Transaction Services

Authoriser: Sheryl Gavin, General Manager Corporate Services (Acting)

Purpose of the Report

The purpose of this report is to provide quarterly reporting of revenue recovery to the Audit, Risk, and Finance Committee.

Executive Summary

This is the second report for the 2018/19 financial year providing information on action taken to collect current and arrears balances for rates, water and sundry debt, and to provide information on how collection is tracking against targets.

Recommendation

That the Audit, Risk, and Finance Committee receive the report “Revenue Recovery Report”.

Background

This document has been prepared to outline current and arrears balances for rates, water and sundry debt as at 3 January 2019 and the actions taken by the Debt Management Team for the collection of the General Title rates and water and sundry debt.

This information is part of the standing items reported to the Committee on a regular basis.

Discussion and Next Steps

The information has been identified for General Title rate and water accounts as well as Maori Freehold Land rates and water accounts. Sundry debtors, which are other fee generating areas of council, are shown in a separate table.

A Statute Barred Write-off process was completed in August 2018, and this totalled $953,641.17 for General Title rates and $6,130,978.94 for MFL rates.

Taking into account the Statute Barred Write-Off, the General Title 2016+ rates arrears balance has been reduced by $604,167 since June 2018 and the 2016+ water arrears have been reduced by $98,281. For MFL the 2014+ rates arrears have reduced by $689,700 and the 2014+ water arrears have been reduced by $15,506.

Below are the actions and focus areas for the third quarter, by the Debt Management Team for the collection of the General Title rates and water and Sundry Debt.

· Urgent Demand process commenced in September 2018.

o Focus on 180 highest arrears General Title properties without a mortgage. Three letters were created to support the process: Urgent Demand, Final Urgent Demand and Legal proceedings to commence.

o Audit of all accounts has been completed

§ 75% of customers have received both urgent demand letters, of which 85% are due to move to legal proceedings.

§ 3% of customers paid their arrears in full

§ 11% are now on a payment plan.

§ 12% are either deceased rate payers or abandoned land

§ 10% of customers require further investigation

o External legal provider recommendation as to approach for subsequent legal proceedings.

o Next steps: Analysis of all accounts currently classified as abandoned land and deceased rate payer to confirm status and identify a select number of properties to commence court proceedings through external legal provider.

· A review commenced in November of all accounts referred to the external collection agency with the view of taking back all accounts to Councils Debt Management Team. As a result:

o 47% of accounts have been taken back to Council

o Of those taken back, 47% have received first and/or second letters as part of the Urgent Demand process.

o 37% have either returned mail and/or need further investigation.

o 6% accounts are now paid and/or have a payment plan in place.

o 10% are abandoned land or deceased rate payer.

· Audit is taking place of all fixed Direct Debits currently in place with Council. So far, 80% of customers have now been switched to variable Direct Debit or have a new fixed Direct Debit within minimum Rates Easy Pay requirement.

· Continuous audit of existing Arrangements to Pay to ensure the agreements are being met. Contacting the customer where this is not the case and either reschedule the agreement or cancel and move to next recovery step.

· A review of all procedures is being undertaken as part of the Continuous Improvement initiative to ensure adequate monitoring and actions are proceeding in a timely manner.

· The ongoing promotion of the Internal Affairs Rates Rebates Scheme in day to day communications with Ratepayers and regular meetings with relevant community organisations is another key focus.

Additional focus areas quarter three:

· Sundry Debtors review

o Small Bad Debt and Credit Write-off journals preparation and approval

o Initial contact with all customers by email, mail and/or telephone

o Facilitation of issue resolution with other council departments to ensure debt is cleared.

o Review of processes.

o Process change for licence renewals.

Financial Implications and Budgetary Provision

Provision is made annually for doubtful debts in relation to the arrears owed to council. A higher provision for Maori Freehold land rates and water is made in comparison to General Title rates and water due to the difference in collection options available to Council.

Attachments

1. ARF Revenue Recovery Report - 28 March 2019 - A2396777 ⇩

Relationship with existing policies and Community outcomes.	Remission polices apply to qualifying ratepayers
Possible implications for the relationship of Māori and their culture and traditions with their ancestral land, water, site, waahi tapu, valued flora and fauna, and other taonga.	Remission of rates is available to qualifying ratepayers under the various remission and postponement policies adopted by Council
Views or preferences of persons likely to be affected by, or to have an interest in the matter, including persons with disabilities, children and older persons.	N/A
Does the issue, proposal, decision or other matter have a high degree of significance or engagement as determined under the Council's Policy #2124?	N/A
If the matter has a Community rather than a District wide relevance has the Community Board's views been sought?	N/A
Financial Implications and Budgetary Provision.	These are noted in the report.
Chief Financial Officer review.	The Chief Financial Officer is the report writer