Assurance, Risk and Finance Committee Meeting Agenda

25 March 2020

ASSURANCE, 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
John Vujcich (Chair)	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
Bruce Robertson (Deputy)	No Form Received
Deputy Mayor Ann Court	Waipapa Business Association	Member		Case by case
	Warren Pattinson Limited	Shareholder	Building company. FNDC is a regulator and enforcer	Case by case
	Kerikeri Irrigation	Supplies my water		No
	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	Any proposed FNDC Capital works or policy change which may have a direct impact (positive/adverse)	Declare interest and abstain from voting.
	Flowers and gifts	Ratepayer 'Thankyou'	Bias/ Pre-determination?	Declare to Governance
	Coffee and food	Ratepayers sometimes 'shout' food and beverage	Bias or pre-determination	Case by case
	Staff	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.
	Warren Patteinson	My husband is a builder and may do work for Council staff		Case by case
Ann Court - Partner	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
	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.
Mate Radich	No form received
Kelly Stratford	KS Bookkeeping and Administration	Business Owner, provides book keeping, administration and development of environmental management plans	None perceived	Step aside from decisions that arise, that may have conflicts
	Waikare Marae Trustees	Trustee	Maybe perceived conflicts	Case by case basis
	Bay of Islands College	Parent Elected Trustee	None perceived	If there was a conflict, I will step aside from decision making
	Karetu School	Parent Elected Trustee	None perceived	If there was a conflict, I will step aside from decision making
	Maori title land – Moerewa and Waikare	Beneficiary and husband is a shareholder	None perceived	If there was a conflict, I will step aside from decision making
	Sister is employed by Far North District Council			Wil not discuss work/governance mattes that are confidential
	Gifts - food and beverages	Residents and ratepayers may ‘shout’ food and beverage	Perceived bias or predetermination	Case by case basis
Kelly Stratford - Partner	Chef and Barista	Opua Store	None perceived
Kelly Stratford - Partner	Maori title land – Moerewa	Shareholder	None perceived	If there was a conflict of interest, I would step aside from decision making
Moko Tepania	Teacher at Te Kura Kaupapa Māori o Kaikohe.	Potential Council funding that will benefit my place of employment.		Declare a perceived conflict
	Chairperson at Te Reo o Te Tai Tokerau Trust.	Potential Council funding for events that this trust runs.		Declare a perceived conflict
	Tribal Member – Te Rūnanga o Te Rarawa	As a descendent of Te Rarawa I could have a perceived conflict of interest in Te Rarawa Council relations.		Declare a perceived conflict
	Tribal Member - Te Rūnanga o Whaingaroa	As a descendent of Te Rūnanga o Whaingaroa I could have a perceived conflict of interest in Te Rūnanga o Whaingaroa Council relations.		Declare a perceived conflict
	Tribal Member – Kahukuraariki Trust Board	As a descendent of Kahukuraariki Trust Board I could have a perceived conflict of interest in Kahukuraariki Trust Board Council relations.		Declare a perceived conflict
	Tribal Member – Te Rūnanga ā-Iwi o Ngāpuhi	As a descendent of Te Rūnanga ā-Iwi o Ngāpuhi I could have a perceived conflict of interest in Te Rūnanga ā-Iwi o Ngāpuhi Council relations.		Declare a perceived conflict

Assurance, Risk and Finance Committee Meeting Agenda

25 March 2020

MINUTES OF Far North District Council
Assurance, Risk and Finance Committee Meeting
HELD AT THE Council Chamber, Memorial Avenue, Kaikohe
ON Wednesday, 12 February 2020 AT 1.00 pm

PRESENT: Cr John Vujcich, Mayor John Carter (HWTM), Member Bruce Robertson, Cr Ann Court, Cr Mate Radich, Cr Kelly Stratford, Cr Moko Tepania

1 Apologies and Declarations of Interest

Apology

Committee Resolution 2020/1

Moved: Cr Kelly Stratford

Seconded: Member Bruce Robertson

That the apology received from His Worship the Mayor and Cr Mate Radich be accepted and leave of absence granted.

Carried

2 Deputation

There were no requests for deputations for this meeting.

3 Information Reports

3.1 Audit Management Report for June 2019

Agenda item 3.1 document number A2823691, pages 10 - 38 refers.

Audit New Zealand representatives David Walker and Trevor Rusling spoke to the report.

Committee Resolution 2020/2

Moved: Cr John Vujcich

Seconded: Cr Kelly Stratford

That the Assurance, Risk and Finance Committee receive the report “Audit Management Report for June 2019”.

Carried

3.2 Revenue Recovery Report - February 2020

Agenda item 3.2 document number A2825732, pages 39 - 44 refers.

Committee Resolution 2020/3

Moved: Cr Ann Court

Seconded: Cr Kelly Stratford

That the Assurance, Risk and Finance Committee receive the report “Revenue Recovery Report - February 2020”.

Carried

3.3 Internal Audit and Assurance Report

Agenda item 3.3 document number A2826403, pages 45 - 47 refers.

Committee Resolution 2020/4

Moved: Member Bruce Robertson

Seconded: Cr John Vujcich

That the Assurance, Risk and Finance Committee receive the report Internal Audit and Assurance Report.

Carried

3.4 Risk Management Report

Agenda item 3.4 document number A2826762, pages 48 - 54 refers.

Committee Resolution 2020/5

Moved: Cr Kelly Stratford

Seconded: Cr Moko Tepania

That the Assurance, Risk and Finance Committee receive the report Risk Management Report.

Carried

3.5 Financial Report for the period ending 31 December 2019

Agenda item 3.5 document number A2827848, pages 55 - 55 refers.

Committee Resolution 2020/6

Moved: Deputy Mayor Ann Court

Seconded: Cr John Vujcich

That the Assurance, Risk and Finance Committee receive the report “Financial Report for the period ending 31 December 2019”.

Carried

The following two items were issues late under supplementary agenda. Members requested they instead be deferred to the 26 February 2020 Council meeting for consideration.

1. Level of Service KPI Quarter 1 and 2 Performance Report.

2. Building Consent Authority Accreditation.

4 Public Excluded

RESOLUTION TO EXCLUDE THE PUBLIC

Committee Resolution 2020/7

Moved: Cr John Vujcich

Seconded: Deputy Mayor Ann Court

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
4.1 - Fraud Near Miss Report	s6(a) - the making available of the information would be likely to prejudice the maintenance of the law, including the prevention, investigation, and detection of offences, and the right to a fair trial	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
4.2 - 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
4.3 - Rate Arrears - Collection Options	s7(2)(f)(i) - free and frank expression of opinions by or between or to members or officers or employees of any local authority 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

5 Meeting Close

The meeting closed at 4.17 pm.

The minutes of this meeting will be confirmed at the Assurance, Risk and Finance Committee Meeting to be held on 25 March 2020.

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CHAIRPERSON

5 Reports

5.1 Emerging Risk - Fresh Water Resilience

File Number: A2857068

Author: Tanya Reid, Manager - Transformation, Risk and Audit (Acting)

Authoriser: William J Taylor MBE, General Manager - Corporate Services

Purpose of the Report

That the Assurance, Risk and Finance Committee approves the addition of the “Fresh Water Resilience” risk onto the Organisational Top Risks Dashboard.

Executive Summary

· Fresh Water Resilience has been identified as an emerging risk for inclusion on the Organisational Top Risks Dashboard.

· Addition of this emerging risk on the Organisational Top Risks Dashboard will enable governance focus.

Recommendation

That the Assurance, Risk and Finance Committee approves the addition of the “Fresh Water Resilience” risk onto the Organisational Top Risks Dashboard.

1) Background

The Organisational Top Risks Dashboard was adopted by Council in May 2019. Good risk management practice includes the identification of emerging risks, and, based on impact and likelihood analysis, as appropriate these are escalated to the Assurance, Risk and Finance Committee for addition on the Organisational Top Risks Dashboard.

In accordance with our Risk Management Policy adopted by Council August 2019, the “Fresh Water Resilience” risk has been identified as such an emerging risk. This risk was scored and prioritised using the FNDC IDEATE methodology which assessed this risk against the defined risk categories and risk tolerances. The outcome of this analysis is to recommend the addition of this risk to the Organisational Top Risks Dashboard.

2) Discussion and Options

The Risk Management Policy requires the reporting of:

· emerging, changing and decreasing risks of potential impact to the achievement of Council objectives; and

· to escalate in a timely manner any risk management issues or concerns when they arise.

The “Fresh Water Resilience” risk has been analysed as an organisational and strategic risk. A total score of 35 or greater is considered high-risk. The Fresh Water Resilience risk score totalled 35. By risk category the impact and likelihood scores are:

1. Finance category, 9: Impact is high (≥ 0.3% rates increase); likelihood is will happen (the risk is likely to occur and there is frequent exposure to this risk)

2. FNDC Customer category, 9: Impact is high (potential loss of essential service and cost to customer); likelihood is will happen (the risk is likely to occur and there is frequent exposure to this risk)

3. Reputational category, 7: Impact is medium (loss of national trust and confidence, 1-2 years to re-establish); likelihood is will happen (the risk is likely to occur and there is frequent exposure to this risk)

4. Compliance / Legal, 3: Impact is medium (we are challenged and found to be non-compliant with fines or penalties <$500,000); Likelihood is unlikely (there is a low exposure to this risk)

5. Health & safety, 7: Impact is high (public health outcome); Likelihood is probable (risk will possibly occur)

The full Organisational Risk Impact and Likelihood Statements are provided in attachment 1.

The current drought crisis illustrates the fragility of the district’s freshwater resilience as documented in attachment 2 The Drought Issue Register.

Risk statement from IAMs Group Risk Register:

Group	Risk level	Inherent Risk Score	Risk description	Because of	There is a chance that…	leading to…


Infrastructure and Asset Management	Organisational	35	Strategic	Lack of freshwater resilience - long-term trends in rain fall coupled with changing and increasing consumer demands	Current freshwater supply systems will continue to not meet demand both now and into the future	Critical impact on our communities i.e. lengthy water restrictions; no/interrupted supply; costly economic consequences (affordability); extensive Health & Safety impacts across the district; economic and reputational risk from a failure to supply adequate potable and fresh water; negative environmental impacts.

Effective risk management decreases either the probability of risks occurring and/or the impact if the risk does occur. By developing and implementing effective treatment plans we expect to both decrease the probability and impact of these risks.

Two options are proposed

1. Maintain the status quo with the Fresh Water Resilience risk on the Infrastructure and Asset Management Group Risk Register

2. Add to the Organisational Top Risks Dashboard to ensure governance and that we address the questions – where are the gaps and what more could we be doing?

Reason for the recommendation

We recommend option two as this risk will impact two strategic risks, ARF001 Climate Change and ARF005 Affordability and provide for the following benefits:

· Governance focus to support Council achieving their objectives;

· Regular risk update reporting to the Assurance, Risk and Audit Committee with status and details of the treatment plans being implemented;

· Deep dive risk workshop(s); and

· The Strategic Leadership Team is active in overseeing these top risks and have committed to regular sessions to discuss these risks, their status and how the implementation of the treatment plans is progressing.

3) Financial Implications and Budgetary Provision

To be confirmed once detailed treatment plans have been created. The detailed treatment plans will articulate the desired treatment programme to manage the risk appropriately, which will include budgeted resources and non-budgeting resources.

Attachments

1. 2019 10 Simplified Organisational Risk Categories with Impact and Likelihood Statements - A2857911 ⇩

2. Drought Issue Register as @ 2020 02 28 - A2857074 ⇩

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	Individual treatments will be assessed for their 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.	Risk Management Policy.
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.	Individual treatments will be assessed for their level of interest to one or all Community Boards.
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.	Individual treatments will be assessed for implication(s) for Māori.
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 (for example – youth, the aged and those with disabilities.	Individual treatments will be assessed for affected parties.
State the financial implications and where budgetary provisions have been made to support this decision.	Currently unquantified. Financial implications of individual treatments will be assessed.
Chief Financial Officer review.	The Chief Financial Officer has reviewed this report.

Assurance, Risk and Finance Committee Meeting Agenda

25 March 2020

5.2 Draft Far North Holdings Limited Statement of Intent 2020 to 2023

File Number: A2859977

Author: Janice Smith, Chief Financial Officer

Authoriser: William J Taylor MBE, General Manager - Corporate Services

Purpose of the Report

This report presents the draft Statement of Intent of Far North Holdings Limited for the three years from 1 July 2020 to 30 June 2023.

Executive Summary

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

Recommendation

That the Assurance, Risk and Finance Committee:

a) review the comments from staff as identified in the report and advise which, if any they would like to address;

b) advise Far North Holdings of any amendments that are suggested by the shareholder, that are not covered in the report;

and that all amendments be notified, through the Chief Executive, to the Board of FNHL prior to 30 April 2020.

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 7 and 9 of Schedule 8 of the LGA. These clauses outline the statutory content of a SOI for a trading organisation.

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 Clauses 7 to 9. 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 Statement of Intent has been reviewed and a number of questions were identified that require a direction from the shareholder.

Page 5 – decisions for which prior Council approval is required.

There are four types of decision that require prior approval from Council. However, the most significant decision that FNHL could make is the purchase of another business and that is not included. Staff suggest that the Committee consider adding this to the decisions requiring Council approval.

Page 5/6 – work plan to deliver on Strategic Objectives.

The SOI provides information on how the workplan contributes to Strategic Objectives. It is not clear if the strategic objectives are those of FNHL alone or if they should incorporate the strategic objectives of Council, and more specifically, the four well beings now that they have been re-introduced to the Local Government Act 2002 (LGA). Staff have reviewed the table and suggest that the words currently included are descriptions of the projects but that they do not identify the strategic objective of either FNHL or FNDC that is being achieved by the project. Staff suggest that the committee consider which objectives should be responded to and advise FNHL accordingly.

Page 8 – Accounting Policies.

The SOI identifies FNHL as a Tier 2 entity in relation to the New Zealand International Financial Reporting Standards, however, it does not indicate that there are circumstances where the accounts will deviate from the International Public Sector Accounting Standards (IPSAS) under which Council, as the parent, have to report. Staff suggest that it would be helpful in the SOI to indicate that in some cases, additional disclosures are required of FNHL in order for Council to meet its own reporting disclosures.

Page 8 – Acquisition of shares.

The SOI currently states that if FNHL wishes to acquire shares in another business or company they will notify the shareholder 30 days in advance. Staff suggest that this should be reviewed to require that FNHL to seek “permission” from the shareholder at least 30 days in advance.

Page 8 – Performance outlook.

This section of the SOI indicates that Council has undertaken to develop a statement of expectations aligning with the 2021-31 LTP process. This decision has not been formally adopted by Council at this point and staff suggest that this be removed at this point to allow the Committee to review all the additional requirements that are now options within the LGA and introduce them as a set rather than one at a time, if at all.

Page 10 – current board membership.

This section of the SOI indicates that two Directors appointments will cease in June and July 2020 with the remaining three ceasing in 2021. In 2019, Council approved a final extension for two Directors being Bill Birnie to July 2021 and Ross Blackman to July 2020. Council has a policy “Appointment and Remuneration of Directors for Council Organisations (#2117)” which specifies the desirable tenure for directors. Policy states that after six years, directors can be appointed for a further three years but should not remain as directors for more than nine years. Staff suggest that the SOI outlines the potential impact of the changes that will need to occur and that any re-appointment of Directors will be in line with Council policy.

The draft SOI contains information as specified in Schedule 8, LGA.

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 review the draft SOI and recommend any amendments to the Board by 30 April 2020.

3) Financial Implications and Budgetary Provision

There are no financial implications or the need for budgetary provision

Attachments

1. FNHL Statement of Intent 2020 to 2023 - A2860794 ⇩

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.	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 (for example – youth, the aged and those with disabilities.	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 prepared this report.

Assurance, Risk and Finance Committee Meeting Agenda

25 March 2020

DRAFT Statement of Intent 2020 to 2023

Purpose of Statement of Intent

This Statement of Intent (SOI) is presented by Far North Holdings Limited (FNHL) in accordance with Section 64(1) of the Local Government Act 2002. This SOI takes Shareholder comments into consideration and represents the objectives, nature and scope of activities and performance targets by which FNHL is to be measured as the basis of accountability. This SOI relates to the period from 1 July 2020 to 30 June 2023.

Abbreviations

Abbreviation / Term	Description
BOI	Bay of Islands
CCO	Council Controlled Organisation
CruiseNZ	Cruise New Zealand
FNDC	Far North District Council
FNHL	Far North Holdings Limited
LTP	Long Term Plan
PGF	Provincial Growth Fund
SLT	Far North District Council’s Strategic Leadership Team
SOI	Statement of Intent

· Table of Contents

Purpose of Statement of Intent 1

Abbreviations. 1

About Far North Holdings Limited (FNHL) 3

Nature and Scope of Activity. 3

FNHL Strategic Direction. 4

Decision for which prior Council approval is required.. 5

FNHL Objective.. 5

Work plan to deliver on Strategic Objectives. 5

Financials. 7

Operating Profit 3-year Forecast 7

Consolidated Shareholders’ Funds and Total Assets. 7

Accounting Policies. 8

Reporting to Shareholders 8

Transactions with Far North District Council 8

Acquisition of Shares 8

Performance Outlook. 8

Performance Targets. 9

Board’s Approach to Governance.. 10

Current Board Membership.. 10

Engagement with the Shareholder 11

About Far North Holdings Limited (FNHL)

As Council’s commercial vehicle, FNHL facilitates and develops commercial and infrastructural assets, and business growth, in the Far North District. In doing so, it will:

- Operate under good governance

- Seek new business development opportunities

- Identify, collaborative or joint ventures opportunities

- Manage existing assets and bring commercial expertise in property management

- Create profits for its Shareholder and improve the Shareholder asset value.

FNHL leads the delivery of property and infrastructure assets in its ownership and under its management. These actions contribute to the development of the Far North District.

FNHL primary roles are:

- To plan, manage, operate and develop; land, maritime, aviation and public assets within its ownership, or under the terms of any management agreement entered into; and

- To plan, facilitate and secure commercial outcomes in its area of Influence that support the growth of the Far North District.

As a secondary role, FNHL may use its management skills and resources to assist both Council and third parties with consultancy services including project management, funding and business support/planning on a commercial basis.

Nature and Scope of Activity

FNHL currently owns and operates commercial and infrastructural assets in the maritime, aviation, primary and investment property sectors.

FNHL may:

- Elect to investigate and invest in any other commercial opportunities that may arise including any proposed by its Shareholder

- Carry out asset management, and may enter into management agreements for defined services on behalf of its Shareholder, or third party

- Divest any of the assets held, subject to any restrictions that may apply in specific cases (such as where the Council has the right of first refusal, council resolution or where the offer-back requirements of the Public Works Act apply).

FNHL will align itself with the Shareholder’s broader strategic objectives by leveraging off these assets to undertake the following business activities (but not limited to) by

- Developing and enhancing a maritime economy

- Attract business and investment in the maritime economy

- Continue with the BOI Marina infrastructure and land-based development

- Ensure all maritime assets owned by FNHL are cost effectively maintained through asset management plans that appropriately balance care of asset with expenditure

- Seek funding sources to further develop or upgrade such maritime assets

- Developing and enhancing property in its ownership

- Maximise the investment in the BOI Airport and reviewing options for freight, extension to the existing runway and associated airside infrastructure

- Continue to pursue the development of the Ngawha Innovation & Enterprise Park

Where agreed with the Shareholder, enter into a management contract for commercial, strategic and non-strategic property assets in order to:

- Undertake acquisitions of strategic property on behalf of Council

- Undertake disposals or re-development of non-strategic land

- Negotiate third party leases where Council is the tenant

- Undertake management of commercial leases

- Evaluate any other properties, developments, businesses and investments as to their current and future potential.

FNHL Strategic Direction

This SOI sets the strategic framework, activities, and performance measures we have set for the next three years to deliver the outcomes its Shareholder seeks.

At the time of preparation of this SOI FNHL has several projects seeking high level funding and approvals. For the moment, this SOI is based on known projects. FNHL will liaise with Council on the new projects and update the SOI reflecting any change.

FNHL is to be aware of and, where appropriate, seeks to align itself with FNDC’s vision, mission and principles statement as outlined in the 2018/28 Long Term Plan (LTP) and related Annual Plans.

For community outcomes FNHL will be guided by the 2018/28 LTP and Council’s Vision. “A District of sustainable prosperity and well-being”, its mission “creating great places, supporting our people and its values”.

Over the period of the SOI, FNDC will provide FNHL with any other documents that it should have knowledge of, whether they be in the consultation stage, or have been formally adopted, that reflect any changes to the Council’s vision or aspirations that FNHL needs to align with.

Decision for which prior Council approval is required

The following criteria are used to guide and demonstrate what types of decisions require Shareholder approval:

1. Decisions which will affect the CCO’s ability to meet any statutory responsibility

2. Decisions which will impact on any intended service levels for a CCO activity (except if the impact is minor or has been agreed by the council through the SOI process)

3. Decisions which will commit the council to future provision of funding

4. Decisions which are not based on a “full arm’s length” commercial basis requiring FNDC approval will to be shown in the accounts as such

FNHL Objective

As the FNDC’s commercial vehicle, FNHL will facilitate and create commercial and infrastructural assets in the Far North District, or if outside the Far North District, with the Shareholders approval, with the aim of creating profits for its Shareholder and creating shareholder value.

Work plan to deliver on Strategic Objectives

The table below shows the key capital projects and initiatives we plan to undertake to deliver on our strategic objectives.

Key Project / Initiative	Description	Contribution to Strategic Objectives	Delivery in 2020-23
Te Pu o Te Wheke	Assist with the proposed development and project management of Te Pu o Te Wheke	To establish a multi-use, leading edge community, cultural and tourism hub to revive Kaikohe's main centre	Ongoing
Te Hononga, Kawakawa	To provide a new interpretive Gallery co-governed by Ngati Hine / Hundertwasser Trust, relocate the FNDC library, and provide new workshops for local artists and business to use.	Redevelopment of the Kawakawa town centre, that will make Kawakawa a destination in its own right, linking; the famous toilets, twin coast cycleway and town square.	May 2020 completion. With FNHL providing ongoing promotion and support over the SOI term.
Manea Opononi	The development of an interactive theatre experience telling the story of Kupe.	The development of a tourist attraction, telling a story of national significance to Maori, will be a major tourism attraction and provide economic benefit to the Hokianga.	Anticipated completion of building is December 2020.
Bay of Islands Airport	Maximise the investment in the BOI Airport, including reviewing options for freight, the runway and associated airside infrastructure.	Reflecting the investment made by Air NZ in the apron / taxiway to accommodate larger aircraft, and more frequent flights and the PGF’s investment in the new terminal additional infrastructure is needed to accommodate business growth e.g. car hire etc	Ongoing
Ngawha Innovation and Enterprise Park	204ha Dairy Farm.	To create commercial business opportunities to grow the economic and employment opportunities in Northland.	On-going with the objective that within 12 months the necessary planning needed will have been approved and potential tenants will have been identified and secured. Such as to enable a start to be made on site before the end of 2020.
Te Waiariki Ngawha Springs	FNHL is project managing the redevelopment and enhancement of the Te Waiariki Ngawha Springs hot pool complex located near Kaikohe.	Te Waiariki has the potential to further build the Mid-North's total visitor market and provide employment for up to 30 people, while delivering benefits to the local community through enhancing an important local landmark	December 2020 open to public.

In addition to the above projects, FNHL shall continue to review, maintain and re-invest in existing assets and operations to ensure maximum benefit to the Company. FNHL will also evaluate on an ongoing basis, other investment opportunities as they arise.

Financials

Operating Profit 3-year Forecast

FNHL is forecasting an operating profit before tax for the 2020/21 year to be $2.6 million, for the 2021/22 year $2.7 million and for the 2022/23 year to be $2.8 million.

Consolidated Shareholders’ Funds and Total Assets

For the period from July 2020, the Company is forecasting continued growth in total assets and shareholder’s funds through the completion of PGF developments and asset revaluations.

FNHL has adopted an accounting policy for the government grants received through the Provisional Growth Fund. The grants received are offset against the value of the asset and the grant income will be recognised through the profit and loss through the revaluation of the asset. This will be different to the accounting treatment FNDC will incorporate into the group accounts.

Distribution Policy

Dividends

The Shareholder may require FNHL to pay a dividend of 50% of its after-tax operating profit on 28th February in the following financial year. For the following years the company will endeavour to pay the following minimum amounts:

2020/21 financial year $1,300,000

2021/22 financial year $1,350,000

2022/23 financial year $1,400,000

FNHL may from time to time present commercial proposals to the Shareholder for an alternative use of the Shareholder’s share of after-tax operating profit for its consideration.

Share Redemption

In the event that by 5 November 2021 the company has not been able to develop the Ngawha dairy farm to its potential as an innovation and enterprise park, and thus not led to the establishment of businesses or industry thereon, the company will look to dispose of the farm, and from those proceeds or other resources, will look to repay to its shareholder, over a period no longer than 4 years, the sum of $5.0 million by means of share redemption.

Accounting Policies

FNHL is a for-profit Tier 2 entity that has adopted accounting policies that are consistent with the New Zealand International Financial Reporting Standards and generally accepted accounting practice. Details of the accounting policies are set out in the notes to FNHL’s annual financial statements at 30 June 2019 published on our company website. There is no material change in accounting policies envisaged over the period covered by this SOI.

Reporting to Shareholders

FNHL will provide quarterly reports to its Shareholder in November, February, May and an Annual Report in September. FNHL will provide details of its forecasts of earnings, cash flow and balance sheet structure, if requested by its Shareholder.

In addition, representatives from FNHL will attend Community Board meetings at least once a quarter to update them on current projects and plans that affect their ward, and will include regular communication with the relevant board when physical works are to commence in the ward.

Transactions with Far North District Council

In transactions with FNDC for the provision of goods and / or services, FNHL will seek trading terms and conditions applicable to external customers.

Acquisition of Shares

If FNHL wishes to acquire shares in another company or organisation, it will notify its Shareholder at least 30 days in advance.

Performance Outlook

FNHL has an agreed set of performance measures and targets which form the basis for accountability to delivering on Council’s strategic direction, priorities and targets. These are reported on a quarterly basis, in accordance with the CCO Governance Manual. These include measures agreed as part of the 2018/28 LTP.

FNDC has undertaken to develop a Statement of Expectations aligning with the 2021/31 LTP. FNHL’s subsequent SOI’s will be driven by this Statement of Expectation.

Performance Targets

Objectives	Measure	SOI Target 2020/21	SOI Target 2021/22	SOI Target 2022/23
Engage in successful commercial transactions	Growth in Shareholder value	Shareholders’ funds increase by $1.125m, after payment of dividend	Shareholders’ funds increase by $1.125m after payment of dividend	Shareholders’ funds increase by $1.125m, after payment of dividend
Provide a commercial return to FNDC	Dividend return to FNDC	Pay minimum $1.3m	Pay minimum $1.35m	Pay minimum $1.4m
Effective Financial Management	Annual operating profit after tax to exceed $1.5m	$2.6 million	$2.7 million	$2.8 million
To achieve a return on funds invested	Return on Investment (ROI) is higher than the average cost of borrowing on its commercial assets	ROI 7% AV cost of borrowings 4.85%	ROI 7% AV cost of borrowings 4.85%	ROI 7% Av cost of borrowings 4.85%
Effective Governance and Financial Control	Clean audit sign-off each year from Audit NZ Annual Board Review with appointed Audit NZ representative To remain within Banking covenants Board Audit and Finance committee meetings to be conducted semi-annually	To achieve To be held To achieve To be held	To achieve To be held To achieve To be held	To achieve To be held To achieve To be held
Ensure that the Bay of Islands Airport operates within regulatory requirements	CAA Certification	To achieve	To achieve	To achieve
Enhancing the Far North as a visitor destination	Complete a customer and airline industry survey that demonstrates satisfaction levels with facilities and services at either BOI or Kaitaia Airports	85%	85%	85%
Enhancing and developing a maritime economy	Complete a marina user or maritime services customer satisfaction survey that demonstrates satisfaction levels with facilities and services available	95%	95%	95%
Enhancing the Far North as a destination	Research customer satisfaction via survey within the cruise ship industry that demonstrates satisfaction levels with FNHL as security authority and provider of disembarking infrastructure	85%	85%	85%

Board’s Approach to Governance

Current Board Membership

§ William Birnie CNZM (Chairman - term ends July 2021)

§ Sarah Petersen (Chair Audit & Risk – Term ends 28 February 2021)

§ Kevin Baxter (term ends 30 June 2020)

§ Hon Murray McCully CNZM (term ends 28 February 2021)

§ Ross Blackman (term ends July 2020)

In undertaking its activities, the Board of FNHL will exhibit and ensure:

1. Sound business practice in its commercial undertakings, operating as an efficient and effective business

2. Ethical and good behaviour in dealing with all parties

3. An active partnership approach with Maori, and all other people in business throughout the Far North, promoting effective communication where appropriate

4. To comply with all relevant legislative requirements including those relating to the principles of the Treaty of Waitangi

5. An open and transparent approach to decision-making with its Shareholder, while respecting the need for commercially sensitive information to be protected

6. Operate according to the best practice statements produced from time to time by the Institute of Directors in New Zealand (Incorporated)

7. That Council’s vision and aspirations are considered and that FNHL is conscious that it needs to contribute to the overall financial performance of Council

8. FNHL is a good employer in accordance with the legislation guidelines set by Government.

The Board will adopt the following approach to its fiduciary responsibilities to ensure good governance:

§ Prepare a 3-year SOI setting out its strategic goals and obtain the Shareholder’s agreement to this statement

§ Define its organisation structure and individual accountabilities by ensuring management have clearly defined job descriptions

§ Set corporate budgets for earnings and cash flow

§ Delegate both responsibility and authority to its Chief Executive

§ To hold regular board meetings to monitor progress towards the Company’s goals and objectives; and

§ Prepare Quarterly and Annual Reports to its Shareholder as required and in accordance with current business plan.

Engagement with the Shareholder

To ensure the implementation of good governance within FNHL and within the Shareholder, both parties agree to maintain a high level of communication between each other.

The Chief Executives will use their best endeavours to communicate in a timely manner and ensure that matters are raised so there will be ‘no surprises’.

FNHL’s relationship with the governing body of Council will generally be for the purposes of developing strategic direction, agreeing statements of intent, service agreements and levels of funding, and performance monitoring and reporting.

The Board believes that regular communication with the Shareholder is essential to the good governance of the business and therefore FNHL will, in addition, seek to meet informally with FNDC as required by either FNHL or its Shareholder, to deal with any other matter of mutual interest.

Processes will be established for on-going and regular contact with senior management (SLT) to share information, provide a commercial dimension when required and to ensure alignment with Council’s strategic direction.

FNHL will attend Iwi Forums, where invited, and attend Community Board meetings where appropriate or invited to if agenda items warrant their presence.

Assurance, Risk and Finance Committee Meeting Agenda

25 March 2020

Far North District Council

Council Financial Report

for the period ending 29-February-2020

Contents

Financial Overview................................................................................................................................................................ 2

Council Financial Performance – Income..................................................................................................................... 4

Council Financial Performance – Operational Expenditure.................................................................................... 5

Council Financial Performance – Capital Expenditure............................................................................................. 6

Unbudgeted Expenditure.................................................................................................................................................... 9

Budget Movements............................................................................................................................................................ 11

Treasury Report................................................................................................................................................................... 14

Treasury Compliance........................................................................................................................................................ 16

Statement of Financial Performance............................................................................................................................ 17

Statement of Capital Performance................................................................................................................................ 18

Analysis of Operational Income and Expenditure by LTP Group....................................................................... 19

Financial Overview

Key financial metrics from the Statement of Financial Performance for the Far North District Council as at 29-February-2020.

The overall performance of Council has continued with business as usual even though the drought conditions have taken precedence and will continue in the coming months.

The organisation is refocusing their priorities in order to accommodate the drought situation so expenditure will be pulled back in areas such as training, professional fees, and staff vacancies, where appropriate.

Overall, we had a Variance to Budget YTD movement from -$6.8M in December 2019 to $1.4M in February 2020 Net Operating Position mainly due to:

05 Income	06 Amount	07 Comments
08 Kerikeri Wastewater Subsidy	09 $4,914k	10 Delay in claiming subsidy due to the delay in completion of the plant. It is anticipated the current completion of WWTP construction programme is July 2020. Reticulation completion is anticipated by September 2020
11 Rawene/Omanaia Water Treatment Plant Subsidy	12 $466k	13 Project is complete however final commissioning was put on hold due to the drought crisis. Commissioning involves pumping lots of water, so the decision was made to postpone this activity, which means delay in claiming subsidy
14 Operational Expenditure	15 Amount	16 Comments
17 Refuse – Solid Waste	18 $714k	19 Contractor fees is showing savings due to lower volume of refuse and recycling received at the transfer stations
20 Strategic Policy and Planning	21 $677k	22 Budget re-forecasted as savings following restructure in the group
23 District Facilities	24 -$438k	25 Unbudgeted renewals programme being undertaken at Russell wharf which is funded from depreciation reserves.

The December 2019 Financial Report gave an overall update on the financial position of Council, for the remaining months commentary will only be by exception.

*In the tables above and throughout this report, variances +/- 5% from budget are indicated as on track / green, anything outside this is red.

Council Financial Performance – Income

Please note these figures relate to the Statement of Financial Performance controllable costs only, which excludes general rates and rates penalties.

Highlights:

Other Income

· A dividend payment to be received from Far North Holdings Limited (FNHL) has been delayed and will be received in March.

Central Government Subsidies – New Works

· Unbudgeted subsidy has been received from the NZ Transport Agency (NZTA) for the construction of approved Community Board footpaths across the three wards.

Council Financial Performance – Operational Expenditure

Please note these figures relate to the Statement of Financial Performance controllable costs only, which excludes allocations, interest costs, depreciation and other asset costs and gain/loss on disposal.

Highlights:

Staff Related Costs

· There are still a number of vacancies not yet filled across the organisation and a number of departments are yet to use their training allocation.

Contractor Fees

· Unbudgeted engagement of contracted consultants continues to meet demand for resource and building consents work. Travel and accommodation costs for Building Consent contractors are not recoverable. In the Resource Consents group, discount penalties, fee waivers and successful fee objections.

Professional Fees

· Network and asset management recorded time against various projects (operational or capital) is not recorded in a timely manner or against the correct activity. This is still being reviewed and will be corrected by the end of the financial year.

External Services

· An increased variation to the annual management fee to Far North Holdings Limited (FNHL) for the Kaitaia Airport has been applied.

· The removal of sludge is continuing, and funds are fully committed for the Kawakawa and Opononi area.

· Due to the current season, stormwater is behind budget as this activity is normally reactive, however work has commenced in drainage clearing.

Council Financial Performance – Capital Expenditure

These figures are direct from the Statement of Capital Performance.

New Works

· The construction of 24 additional kennels at Bonnets Road, Kaitaia has not yet commenced. Due to a change in the scope of works, Council is currently negotiating with one tenderer who submitted a quote to see if they are still able to deliver the building works.

· The purchase of the Melka Boarding Kennels in Kaikohe is progressing and a deposit has been paid for the sale and purchase of this property.

· The Kawakawa Library/Service Centre will be relocated to Te Hononga and has been delayed till March 2020.

· The Kerikeri Library installation of air conditioning units has been delayed. In early November there were delays due to uncertainty about insurance cover and how that would affect the project. A meeting with Council’s insurance broker explained the wording in the contract and what that meant for the project. The contract has now been awarded and work will be commencing in March 2020.

· Works on the Windsor Landing Carpark and Access has now commenced as an outcome from the Environment Court which was in our favour.

· Seal Extension unsubsidised works at Porotu Road, Puketi Road and Kumi Road has been delayed due to more design requirements under the maintenance contract for North and South. Preparatory works are now expected to commence in summer through to mid-autumn.

· Kaitaia Transfer Station weighbridge relocation works are now complete, and the balance of funds will be used to complete an extension to the transfer station.

· An external consultant was engaged in October 2019 for development of a proof of concept (miniature model) for the Information and Communications Technology (ICT) support for the Northland Transport Alliance project. This will be presented to the Northland Transport Alliance group in January 2020.

· Planned work for the Asset Management System project is in a development phase with Infor Global Solutions (NZ). System configuration is scheduled to be completed in April 2020 and the data migration by August 2020.

· Kerikeri Wastewater Treatment Plant is continuing, however, an additional $1.5M has been approved by Council to fund the balance of works as well as prior year funds being used.

· The Paihia Wastewater Treatment Plant is currently under budget and is nearing completion in April.

· Unbudgeted works is being completed for the Russell Wastewater Treatment Plant, a carry forward request was overlooked and approval for $175K has been approved.

· The final commissioning of the Rawene/Omanaia Water Treatment Plant has been delayed due to the current water crisis.

Renewals

· Work is required to respond to an appeal decision to the Environmental Court in March 2020 for the East Coast (Taipa) Wastewater Treatment Plant.

· Unbudgeted works is being carried out for the Ahipara Wastewater Treatment Plant jetty replacement. A carry forward request was overlooked and $4,549 has now been approved

· Parks and reserves are under budget; scoping works are being finalised and works anticipated to be undertaken in summer.

· Scoping is underway for public toilets in Taupo Bay and Hundertwasser for upgrade works.

· Footpath renewals are under budget due to resourcing issues with the Northern contractor; however, this work will now be delivered by the Southern contractor over summer.

· Minor Safety works are being undertaken around Kerikeri. Resilience Slip works are progressing well at West Coast Road and Broadwood Road and design works are being undertaken for various slip sites.

· Unsealed road metaling is under budget in the South due to unfavourable conditions, which are not suitable to apply materials and complete works.

· Roading and Footpaths drainage works in the north area are currently under budget due to resourcing and works being re-prioritised.

· Server renewals - Council at its meeting on 19 November 2019 approved the recommended supplier. Work is progressing to determine the project timeline and delivery is expected between Dec 2019 and Feb 2020.

· Desktop computer, computer equipment, peripheral, tablets - developing forecast for future replacement.

· Computer Systems - Programme is progressing with updates and upgrades planned for this Financial year. Current activity is within the Citrix Upgrade and Office 365. Work will continue to focus on upgrades with Objective and other core systems.

· Pool Vehicles is under budget and vehicles are renewed as required.

· Corporate Services Administration - part of the wider accommodation project with office furniture replaced as needed.

· The Paihia I-Site refurbishment project has not yet commenced. Staff are awaiting a quote to lower the desks and expects to use the budget this financial year.

· Library stocks are updated continuously throughout the year and are dependent on item deliveries and timing.

Unbudgeted Expenditure

These are additional works not included in the original budget for the current year.

Unbudgeted work greater than $100,000 must be approved by Council, anything less than that can be approved by a General Manager with appropriate financial delegation.

Unbudgeted Expenditure
*Expenditure over $100K approved by Council (in grey)

Unbudgeted Operational		Amount
Building Consents (BCA)	Contract Professional Fees	500,000
Asset Management & Infrastructure Planning	Professional Fees	250,000
Maritime Facilities	External Services	150,000
Libraries	Software Licence Fees	20,000
Libraries	Equipment Purchases (uncapitalisable)	10,000
Facilities operations - buildings	Professional Fees	5,000
		935,000

Unbudgeted Capital Works		Amount
BOI Sports Land Purchase Kerikeri	CAPEX New Works Contract Services	1,840,717
Kerikeri Wastewater Infrastructre	CAPEX New Works Contract Services	1,500,000
Bonnets Road (PGF)	External Services	1,000,000
Lake Omapere (PGF)	External Services	1,000,000
Karikari and Doubtless Bay Rangers Program	External Services	185,500
Digitisation Scanning	External Services	648,688
Stormwater Bonnett Road Kaitaia	CAPEX New Works Contract Services	99,168
9-11 Old Beach Road Stormwater Upgrade	CAPEX New Works Contract Services	56,659
Korora Park Toilet	CAPEX New Works Contract Services	49,450
Kaimaumau Public Toilet	External Services	40,000
Ahipara Toilet	External Services	36,550
Kohukohu Resource Consent	CAPEX New Works Licenses and Consents	36,500
Horeke Housing for the Elderly	CAPEX Renewal Works Contract Services	26,655
Kaikohe Memorial Park Upgrade	CAPEX New Works Contract Services	26,400
24-26 Yarborough Street New Sewer Connection	CAPEX New Works Contract Services	24,629
Mains replacement Rawene	CAPEX New Works Contract Services	24,335
Opononi STP - Fence Renewal/Upgrade	CAPEX New Works Contract Services	22,000
Kaitaia Parks & Reserves	CAPEX Renewal Works Contract Services	17,589
Waima Housing for the Elderly	CAPEX Renewal Works Contract Services	16,974
1506 Inland Road Sewer Connection	CAPEX New Works Contract Services	14,730
Kaikohe Parks & Reserves	CAPEX Renewal Works Contract Services	13,773
Ramp Road Public Toilet	External Services	13,650
Kaikohe Lions Club	CAPEX Renewal Works Contract Services	11,050
Whangaroa Hall Renewals	CAPEX Renewal Works Contract Services	8,945
Rawhiti boat ramp toilet RC	External Services	7,800
JBC Customer Services Area Minor Improvements	CAPEX New Works Contract Services	6,000
Disability Access Halls Western	CAPEX New Works Contract Services	5,400
Kaka Street Ramp	CAPEX New Works Contract Services	4,988
Kororipo Basin (Pear Tree)	CAPEX New Works Contract Services	4,318
Parks & Reserves Northern	CAPEX New Works Contract Services	3,018
Opononi STP - Fence Renewal/Upgrade	CAPEX Renewal Works Contract Services	2,252
Digitisation Scanning	Contract Professional Fees	1,313
Kaitaia Oxford St Housing for the Elderly	CAPEX Renewal Works Contract Services	1,301
Kawakawa Commercial St Car Park	CAPEX New Works Contract Services	1,139
Bonnets Road (PGF)	Other Contributions	-1,000,000
Lake Omapere (PGF)	Other Contributions	-1,000,000
		4,751,491

Unbudgeted Roading		Amount
West Coast Rd RP9563	CAPEX Renewal Works Contract Services	269,500
Diggers Valley Rd RP12722	CAPEX Renewal Works Contract Services	210,000
Fairburn Rd RP9588	CAPEX Renewal Works Contract Services	185,500
Wharekawa Rd RP3552	CAPEX Renewal Works Contract Services	178,000
Waiotehue Road Dropout RP 5400	CAPEX Renewal Works Contract Services	20,000
Waiotehue Rd RP5251	CAPEX Renewal Works Contract Services	13,000
		876,000

		6,562,491

Budget Movements

These are budgets timed in future years, brought forward into the current year (positive values) OR budgets timed in the current year to be moved out to future years (negative values).

The figures that follow exclude the $5.1M Roading budget adjustment moved out to future years to reflect the lower of FNDC or NZTA budget. Also, Operational of 6.2M includes $5.6M Water by Meter income budget, which was entered twice in error into the system.

Budget Movements

General Ledger	Comment	Amount
Resource Consents Administration	Opex Reforecast as at 31 Oct 19	346,060
Resource Consents Administration	Opex Reforecast as at 31 Oct 19	130,576
Resource Consents Administration	Opex Reforecast as at 31 Oct 19	121,385
Training	Opex Reforecast as at 31 Oct 19	22,379
Water Schemes	Opex Reforecast as at 31 Oct 19	20,000
Resource Consents Appeals	Opex Reforecast as at 31 Oct 19	10,819
Resource Consents Administration	Opex Reforecast as at 31 Oct 19	8,398
Infrastructure planning - stormwater	Opex Reforecast as at 31 Oct 19	5,000
Infrastructure planning - facilities	Opex Reforecast as at 31 Oct 19	4,204
Human Resources General	Opex Reforecast as at 31 Oct 19	3,184
Recruitment	Opex Reforecast as at 31 Oct 19	3,119
Compliance	Opex Reforecast as at 31 Oct 19	1,648
Refuse Administration	Opex Reforecast as at 31 Oct 19	1,525
Project Management Office	New FTE Contract Specialist	1,500
Compliance	Opex Reforecast as at 31 Oct 19	1,264
Compliance	Opex Reforecast as at 31 Oct 19	1,062
Project Management Office	New FTE Contract Specialist	750
Electronic Property Management	Do not think full budget will be spent this year	-1,000
Legalisation	Expenditure is running at a lower rate than expected	-5,000
Legal Services	Anticipated costs award Supreme Court Case	-33,000
Resource Consents Administration	Opex Reforecast as at 31 Oct 19	-96,189
		547,684

Project Ledger	Comment	Amount
Kaitaia New Source (Sweetwater)	Kaitaia New Water Source Sweetwater Bore & Pipeline	499,000
IT Servers & Storage	Server and Network Renewal Project reforecast from 2020/21	178,708
Tech One	TechOne HRP Renewals budget transfer from 20/21 FY	95,000
Mission Road-Kerikeri	Transfer from holding code to individual project codes and retiming	85,190
Te Haumi Seawall	Te Haumi Seawall & Carpark remediation & renewal works reforecast from 2024/25	85,000
Kaikohe Hone Heke Reserve	Kaikohe Hone Heke Reserve Repair retaining Wall	73,123
Horeke Hall	Horeke Hall Wastewater Treatment System septic tank replacement	70,976
North Park Drive to Whangatane Drive-Kaitaia	Transfer from holding code to individual project codes and retiming	68,625
Computer Equipment	Server and Network Renewal Project reforecast from 2020/21	42,533
Northland college to Saleyards-Kaikohe Footpath	Transfer from holding code to individual project codes and retiming	34,980
Disability Access Halls Western	Disability Halls Access Western Budget Movements new works from 2020-21	28,879
Footpaths Western Ward	Transfer from holding code to individual project codes and retiming	27,152
Waianga Place-Opononi Footpath	Transfer from holding code to individual project codes and retiming	26,840
SH1 Matthews Avenue-Kaitaia	Transfer from holding code to individual project codes and retiming	20,460
Northern Bin Benches Bollards Signs Tables	Northern Bins Bollards Benches $20,000 reinstated back to this year	20,000
Western Bin Benches Bollards Signs Tables	Western Bins Bollards Benches $20,000 reinstated back to this year	20,000
Kaikohe Lions Club	Kaikohe Lions Club Budget Movements renewals from 2034	15,900
Long Beach Road footpath corner to carpark-Russell	Transfer from holding code to individual project codes and retiming	13,810
Mains replacement Rawene	Rawene Cemetery Water Main Approved by Will Taylor	13,415
Whangaroa Hall Renewals	Whangaroa Hall - Exterior Upgrade to address weather tightness issues	12,000
Rangihamama Road to Taheke Road SH12-Footpath Kaikohe	Transfer from holding code to individual project codes and retiming	10,028
Dominion Road-Kaitaia	Transfer from holding code to individual project codes and retiming	9,916
9B Hone Heke Road Kerikeri SW Pipeline Upgrade	Tfr of Renewal Budget Approved by: W Taylor	9,664
Opononi/Omapere Stormwater Imps	40 Fairlie Cresc SW Imps Approved by: W Taylor	9,190
Rawene Old Courthouse	Rawene Community Library Renewals reactive	7,202
Russell Robertson St Stormwater Lines	Tfr Future Renewal Budget Russell Robertson Street	5,287
Kaitaia Oxford St Housing for the Elderly	HFTE Oxford St & Puckey Ave mailbox renewal	4,241
Jaycee Park/Centennial Park	Cent Park historic train repairs Renewal heritage asset	3,200
Kaitaia Swimming Pools	Kaitaia Swimming Pool Dive Board Retiming for this year	2,369
1506 Inland Road Sewer Connection	1506 Inland Rd Sewer Connection Renewal Asset 301462	2,070
Landfill Russell	Russell Landfill Leachate pump Renewal from 2021-22	1,900
Kawakawa WWTP RMU	To be removed - allowed for in 551134 Capex Reforecast	-2,535
Horeke Housing for the Elderly	Re-forecast to FY21/22 Capex Reforecast	-2,613
Kawakawa WWTP RMU	To be removed - allowed for in 551134 Capex Reforecast	-5,641
Parks & Reserves Western	Re-forecast out to FY21/22 Capex Reforecast	-6,065
Kohukohu Housing for the Elderly	Re-forecast to FY21/22 Capex Reforecast	-7,130
Rawene Grundy Street Reticulation	Needs to be removed-Project completed Capex Reforecast	-7,665
Ahipara Parks & Reserves	Funding to be removed saving frm FY18/19 no works required - Capex Reforecast	-9,308
District Wide Treatment Plant Instrumentation Upgrade	To be removed - allowed for in 551134 Capex Reforecast	-12,877
Whangaroa Parks and Reserves	Re-Forecast to FY21/22 Capex Reforecast	-14,367
Proctor Library HVAC	Budget savings Proctor Library HVAC system	-20,627
Ahipara Parks & Reserves	Korora Park Carpark Apron replacement Renewal from 2023-24 and 2024-25	-22,618
Paihia Parks & Reserves	Re-forecast to FY21/22 Capex Reforecast	-24,181
Parks & Reserves Eastern	KK Doves Bay; Paihia Lily Pond Carpark Russell Strand; Russell Tapeka -FY22/23	-24,658
Taupo Bay Toilet	Re-forecast to FY23/24 Capex Reforecast	-25,721
Paihia Specified Works	Paihia Specified Works Capex reforecast to 20/21	-35,259
Ward Wide Town Beautification / Improvements Western	Re-Forecast to FY21/22 Capex Reforecast	-51,100
Kaikohe Streetscape UpGrade	Re-Forecast to FY21/22. Budget to be renamed to Urban Streetscapes	-54,867
Rawene Grundy Street Reticulation	Needs to be removed-Project completed Capex Reforecast	-68,985
Kerikeri Domain Playground	Re-Forecast to FY21/22 Capex Reforecast	-81,249
Kerikeri PS9	Needs to be moved out to 2020-2021 and is meant to be PS3 Bill to investigate	-81,760
Russell Parks & Reserves Renewals	Russell Parks & Reserves Capex reforecast to 21/22	-84,530
Wastewater Telemetry	Wastewater Telemetry Capex reforecast to 21/22 & 22/23	-90,754
Kaikohe Training Yard	Reforecast out to YR1 next LTP FY22/23 Capex Reforecast	-99,988
Lindvart Park Pavillion	Re-forecast to FY21/22 Capex Reforecast	-100,196
Kerikeri Backwash Tank	Kerikeri Backwash Tank Approved by T Proctor	-102,200
Opononi Housing for the Elderly	Re-forecast to FY21/22 Capex Reforecast	-108,406
Kerikeri WTP Structural Work on Clarifier	Kerikeri WTP Structural Work Approved by T Proctor	-110,008
Hihi WWTP Construction	To be moved out to 2020-2021 Capex Reforecast	-112,420
District Wide Reservoirs Structural Works	Reforecast to FY20/21 Capex Reforecast	-140,754
Rawene Housing for the Elderly	Re-forecast to FY21/22 Capex Reforecast	-144,404
Community Hub Kaikohe	Kaikohe Hub Capex reforecast to 20/21	-200,000
Kerikeri Rugby Pavilion	Kerikeri Rugby Pavilion Capex reforecast to 20/21	-306,600
Waipapa Roundabout Disposal Field	Will not be delivered. Needs to be removed from LTP. Should not be SW proj	-306,600
Wastewater Telemetry	Wastewater Telemetry Capex reforecast 21/22 & 22/23	-352,130
Hihi WWTP Construction	To be moved out to 2020-2021 Capex Reforecast	-398,580
Community Hub Kaikohe	Kaikohe Hub Capex reforecast to 20/21	-3,800,000
		-5,520,139

		-4,972,455

Note that $648,688 Digitising Scanning will be recovered overtime as agreed by Council and Building Consents (BCA) professional fees of $500,00 can be largely recovered from fees and charges.

Treasury Report

Note – Of the $85.5M total borrowing, $30M is Short Term:

$10M repayable in March 2020

$20M repayable in June 2020

Treasury Compliance

Audit Name	Total Number of Recommendations	Recommendations Completed	Recommendations Underway
External Audit - KPMG - Procurement 2017	34	30	4
External Audit - Audit NZ - Annual Management Report - Interim 2017	18	17	1
Internal Audit - Information Security 2018	15	12	3
Internal Audit - Contract Management Review 2018	4	3	1
External Audit - Audit NZ - Annual Management Report - Final 2018	5	4	1
External Audit - Audit NZ - Annual Management Report - Final 2019	6	4	2
External Audit - Three Waters Interim Alliance Agreement Review	6	4	2
External Audit - LGOIMA Compliance and Practice Report - 2019	30	21	9
External Audit - IANZ – Building Consent Authority Accreditation Assessment Report 2019	11	11	N/A