Agenda of Ordinary Te Miromiro - Assurance, Risk and Finance Committee Meeting

Ordinary Te Miromiro - Assurance, Risk and Finance Committee Meeting Agenda

2 May 2023

5.1 Confirmation of Previous Minutes

File Number: A4167466

Author: Joshna Panday, Democracy Advisor

Authoriser: Aisha Huriwai, Team Leader Democracy Services

Purpose of the Report

The minutes are attached to allow the Committee to confirm that the minutes are a true and correct record of previous meetings.

Recommendation

That Te Miromiro - Assurance, Risk and Finance Committee confirm the minutes of the meeting held 22 February 2023 are true and correct.

1) Background

Local Government Act 2002 Schedule 7 Section 28 states that a local authority must keep minutes of its proceedings. The minutes of these proceedings duly entered and authenticated as prescribed by a local authority are prima facie evidence of those meetings.

2) Discussion and Options

The minutes of the meetings are attached.

Far North District Council Standing Orders Section 27.3 states that no discussion shall arise on the substance of the minutes in any succeeding meeting, except as to their correctness.

Reason for the recommendation

The reason for the recommendation is to confirm the minutes are a true and correct record of the previous meetings.

3) Financial Implications and Budgetary Provision

There are no financial implications or the need for budgetary provision as a result of this report.

Attachments

1. 2023-02-22 Te Miromiro - Assurance, Risk and Finance Committee Minutes - A4093408 ⇩

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	This is a matter of low significance.
State the relevant Council policies (external or internal), legislation, and/or community outcomes (as stated in the LTP) that relate to this decision.	This report complies with the Local Government Act 2002 Schedule 7 Section 28.
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.	It is the responsibility of each meeting to confirm their minutes therefore the views of another meeting are not relevant.
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.	There are no implications for Māori in confirming minutes from a previous meeting. Any implications on Māori arising from matters included in meeting minutes should be considered as part of the relevant report.
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).	This report is asking for minutes to be confirmed as true and correct record, any interests that affect other people should be considered as part of the individual reports.
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 not reviewed this report.

Ordinary Te Miromiro - Assurance, Risk and Finance Committee Meeting Agenda

2 May 2023

6 Reports

6.1 Management response to internal control findings from Deloitte for Annual Report 2021-22

File Number: A4159913

Author: Julia Lee, Senior Financial Accountant

Authoriser: Margriet Veenstra, Manager – Property Data and Business Compliance

Take Pūrongo / Purpose of the Report

To provide a more detailed response to the internal control findings identified by Deloitte during their audit for the Annual Report 2021-22.

WhakarĀpopoto matua / Executive Summary

· The management report from Deloitte reports on the results and insights that arose from the audit of the Annual Report 2021-22, and also includes the recommendations suggested by Audit New Zealand, our previous auditors, for audits up to and including 2020-21.

tŪtohunga / Recommendation

That ARF Committee accept the management response to the findings identified by Deloitte.

1) TĀhuhu kŌrero / Background

Our auditors, Deloitte Limited, are required to report on the audit and identify internal control issues that they feel require improvement. The report was discussed during the Council meeting held on 23^rd March when the Annual Report 2021-22 was adopted, and the discussion with the Elected Members resulted in further discussion required with ARF Committee at the next meeting.

2) matapaki me NgĀ KŌwhiringa / Discussion and Options

The original report with the management response is attached which was discussed at the adoption Council meeting, together with a more detailed response. Both documents need to be read in conjunction with each other, to understand management’s position.

TAKE TŪTOHUNGA / REASON FOR THE RECOMMENDATION

This report is for information only.

3) PĀnga PŪtea me ngĀ wĀhanga tahua / Financial Implications and Budgetary Provision

There are no financial implications arising from this report.

Āpitihanga / Attachments

1. Management response to TCWG 12.04.2023 - A4180984 ⇩

2. FNDC Final report to those charged with governance June 2022 - A4171117 ⇩

Hōtaka Take Ōkawa / 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.

He Take Ōkawa / Compliance Requirement	Aromatawai Kaimahi / 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.	Local Government Act 2002 part 6, sub part 2, clause 99
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.	Not applicable
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. State the possible implications and how this report aligns with Te Tiriti o Waitangi / The Treaty of Waitangi.	Not applicable
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.	None
Chief Financial Officer review.	The Chief Financial Officer has reviewed this report.

Ordinary Te Miromiro - Assurance, Risk and Finance Committee Meeting Agenda

2 May 2023

6.2 Council financial report for the period ending 31 March 2023

File Number: A4159987

Author: Julia Lee, Senior Financial Accountant

Authoriser: Margriet Veenstra, Manager – Property Data and Business Compliance

Take Pūrongo / Purpose of the Report

To provide an overview and information on the current financial position and performance of the Far North District Council as at 31 March 2023.

WhakarĀpopoto matua / Executive Summary

· This report provides a summary overview, Statement of Financial Performance, Capital Performance and Borrowing & Investment reports.

tŪtohunga / Recommendation

That the Te Miromiro – Assurance Risk and Finance Committee:

a) Receive the Council Financial Report for the period ending 31 March 2023.

1) TĀhuhu kŌrero / Background

This report provides financial information as at quarter ending 31 March 2023.

2) matapaki me NgĀ KŌwhiringa / Discussion and Options

This report is for information only.

TAKE TŪTOHUNGA / REASON FOR THE RECOMMENDATION

Accept the commentary for the month ending 31 March 2023.

3) PĀnga PŪtea me ngĀ wĀhanga tahua / Financial Implications and Budgetary Provision

There are no financial implications or budgetary provisions required as a result of this report.

Āpitihanga / Attachments

1. Council Financial Report Mar 2023 (Pd9) - A4178044 ⇩

Hōtaka Take Ōkawa / 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.

He Take Ōkawa / Compliance Requirement	Aromatawai Kaimahi / 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.	Local Government Act 2002, Part 6, Subpart 3, Section 101
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.	Type here
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. State the possible implications and how this report aligns with Te Tiriti o Waitangi / The Treaty of Waitangi.	Not applicable
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.	None
Chief Financial Officer review.	The Chief Financial Officer has reviewed this report.

Ordinary Te Miromiro - Assurance, Risk and Finance Committee Meeting Agenda

2 May 2023

6.3 FNHL 3rd quarter financial report 2022-23

File Number: A4163324

Author: Julia Lee, Senior Financial Accountant

Authoriser: Margriet Veenstra, Manager – Property Data and Business Compliance

Take Pūrongo / Purpose of the Report

To present the Far North Holdings Limited (FNHL) third quarter financial report.

WhakarĀpopoto matua / Executive Summary

· This is the third quarter financial for the financial year 2022-23.

tŪtohunga / Recommendation

That the Te Miromiro – Assurance, Risk and Finance Committee:

a) Receive the FNHL third quarter financial report for 2022-23.

1) TĀhuhu kŌrero / Background

FNHL are required to report their quarterly results to Council, as stated in the Statement of Intent 2022-25.

Staff have completed their review and have prepared commentary on the results.

2) matapaki me NgĀ KŌwhiringa / Discussion and Options

Commentary on FNHL 3^rd quarter report to 31 March 2023

· FNHL’s financial performance is ahead of budget despite current global uncertainty and the economic outlook.

· Ngawha Innovation and Enterprise Park:

· The entrance to the Park has now been installed following resolution with Ngāti Rangi. The work was overseen by several hapu members led by Kaumatua Albert and Kaumatua Ivan.

· Both compound buildings of the Corrections project have progressed and are now fully enclosed (roof and cladding) and with the windows and doors now on-site, the buildings will be watertight allowing internal work to continue unabated during wet weather.

· Earthworks on the adjoining housing construction compounds have progressed well during February and March, as a result of the good weather we experienced.

· Overall, the project is still on target for an end of October completion date, although weather is still the greatest risk for any potential delays.

· Community Housing Projects:

· Kaikohe – this development is being conducted in partnership with Te Hau Ora o Ngaphuhi (THOON) at 52-56 Tawanui Road, Kaikohe, and will provide 60 new homes.

§ Cyclone Gabrielle affected the progress of site works and transport of buildings from Auckland with the Brynderwyn’s closed to oversize traffic, however overall site building works are back on track.

§ Construction is well underway, Stages 1 and 2 are well underway, out of the 4 stages of construction.

§ Block I – Te Hau Ora o Ngāpuhi 6x 2 and 3-bedroom houses have been transported to site over the last month and have been lifted into place.

§ Block A – FNHL 1x 1-bedroom homes are all in place and being finished, and are expected to be handed over for occupation in October 2023.

· Dargaville – this development at Ranfurly Street will provide for 46 new homes.

§ These homes will be a mix of one-, two-, three-bedroom houses.

§ Resource consent application has been lodged.

· General projects:

· The new hangar facility has been formally handed over to Merlin Labs.

· The potential impact this may have on the further growth of the airport in attracting similar companies is exciting.

· Operating profit is 75% more than what was originally budgeted for, with $763k profit reported as actual versus $435k budget. This is due to:

· Decrease in Goods Sold, $2,061k actual versus $2,241k budget, a decrease of 8% - lower-than-expected fuel sales due to unfavourable weather conditions and an outage of the outdoor payment system for 10 days in February attributed to the below budget performance.

· Services has performed well against budget, $7,877k actual versus $7,540k budget, an increase of approximately 5% - reflects the high occupancy of the marina and demand for boatyard services coupled with a price increase in both sectors.

· Rental income continues to perform well against budget, $3,148k actual versus $2,912k budget, 8% increase – due to high proportion of fully-tenanted buildings in conjunction with CPI increases.

· Other has increase against budget, $198k actual versus $66k budget, 200% increase or $132k – $92k for gain on sale of Kamo Road housing development in Whangarei which was finalised in January 2023, $12k for introduction of a credit card surcharge, $14k for project management fees and $15k dividend on Fonterra shares.

· Employee benefit expenses are down against budget, $3,181k actual versus $3,676k budget, 13% - due to capitalisation of project management salaries

· Other operating expenses increased by 34%, $2,997k versus $2,235k – costs have increased significantly as a result of inflationary pressure being realised as a result of the current global economic environment, as well as increased organisation-wide training in line with health and safety policy and ongoing training for the BOI Airport Fire Rescue crew.

· Direct expenses from investment property have increased by 15%, $1,368k versus $1,193k – largely due to works carried out on Star Hotel in Kawakawa for general repairs and bringing the sprinkler/fire systems up to code, repairs to Quantum and rental car buildings at BOI Airport.

· Depreciation has increased 27%, $762k versus $597k, due to upgrades at Opua boatyard and building improvements.

· Finance expenses, $1,840k versus $2,228k, 17% decrease – reflects capitalisation of interest costs related to the various development projects, however they are higher than prior year by 85% due to higher interest rates and overall debt.

TAKE TŪTOHUNGA / REASON FOR THE RECOMMENDATION

Accept the commentary for the third quarter.

3) PĀnga PŪtea me ngĀ wĀhanga tahua / Financial Implications and Budgetary Provision

There are no financial implications arising from this report.

Āpitihanga / Attachments

1. FNHL Third Quarter Report 31.3.2023 - A4182141 ⇩

Hōtaka Take Ōkawa / 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.

He Take Ōkawa / Compliance Requirement	Aromatawai Kaimahi / 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.	Local Government Act 2002 part 5, sub part s66
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.	Not applicable
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. State the possible implications and how this report aligns with Te Tiriti o Waitangi / The Treaty of Waitangi.	Not applicable
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.	None
Chief Financial Officer review.	The Group Manager Corporate Services has reviewed this report.

Ordinary Te Miromiro - Assurance, Risk and Finance Committee Meeting Agenda

2 May 2023

7 Information Reports

7.1 Mayoral Discretionary Fund

File Number: A4157703

Author: Taniora Herewini, Pouāwhina Manukura – Executive Assistant to the Mayor & Deputy Mayor

Authoriser: Jacine Warmington, Group Manager - Strategic Relationships

TAKE PŪRONGO / Purpose of the Report

For Te Miromiro - Assurance, Risk and Finance Committee to note the quarterly expenditure from the Mayoral Discretionary Fund.

WHAKARĀPOPOTO MATUA / Executive SummarY

Council policy requires the reporting from the Mayoral Discretionary Fund to the Committee. This report covers the quarterly period of 1 January to 31 March 2023.

TŪTOHUNGA / Recommendation

That the Te Miromiro - Assurance, Risk and Finance Committee receive the report Mayoral Discretionary Fund.

tĀHUHU KŌRERO / Background

The Mayoral Discretionary Fund was established as a response to ongoing requests for financial assistance that are not eligible under existing funding avenues within Council, or are of an emergency assistance nature.

All decisions on funding are at the discretion of the Mayor.

In the interests of transparency for ratepayers, Council policy requires that the grants made are reported publicly.

MATAPAKI ME NGĀ KŌWHIRINGA / Discussion and Next Steps

This report is for information only.

PĀNGA PŪTEA ME NGĀ WĀHANGA TAHUA / Financial Implications and Budgetary Provision

The total fund is in the amount of $20,000 excluding GST. The fund is to be included as a recurrent item in Council’s annual operational budget.

Āpitihanga / Attachments

Nil

Organisation	Purpose of funding	Amount Approved
Removed due to privacy	Koha towards Māori wardens for the event	$ 1,000.00
Removed due to privacy	Monetary support for transportation costs. Travelling by bus to Hamilton on 10/03/23 - The cost of the bus is $4,169.00	$ 2,000.00
Removed due to privacy	Fuel Vouchers - $3000, FNDC Ferry Vouchers - $1,500 - Travel for their players	$ 2,000.00
Removed due to privacy	To assist with emergency funding for housing for homeless whānau. Request of Transportation of Materials - $3k, Kai for Volunteers - $2k, Accommodation for volunteers and assisting in the demo $4k, tools and supplies - $2k	$ 2,000.00
	TOTAL FUNDS PAID	$ 7,000.00

Mayoral Discretionary Fund 01 January – 31 March 2023

Ordinary Te Miromiro - Assurance, Risk and Finance Committee Meeting Agenda

2 May 2023

7.2 Revenue Recovery report as at 31 March 2023

File Number: A4163381

Author: Margriet Veenstra, Manager - Transaction Services

Authoriser: Janice Smith, Group Manager - Corporate Services

TAKE PŪRONGO / Purpose of the Report

The purpose of this report is to provide quarterly reporting to the Far North District Council Assurance, Risk, and Finance Committee.

WHAKARĀPOPOTO MATUA / Executive SummarY

This is the second report for the financial year 2022-23 and provides information on action taken to collect the arrears balances for rates, water and sundry debt this year, and to provide information on how collection is tracking against targets.

TŪTOHUNGA / Recommendation

That the Te Miromiro - Assurance, Risk and Finance Committee receive the report Revenue Recovery report as at 31 March 2023.

tĀHUHU KŌRERO / Background

This document has been prepared to outline the arrears balances for rates, water, and Sundry debt as of 31 March 2023 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.

MATAPAKI ME NGĀ KŌWHIRINGA / Discussion and Next Steps

Background

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

Discussion and Next Steps

The data provided is for General Title and Māori Freehold Land rates and water accounts with sundry debtors shown in a separate table. Since the 1^st of July 2022, the General Title rates total arrears balance has been reduced by 27% and water rates by 46%.

General Title rates and water debt

Key actions since the last report:

· Legal services team are in the process of issuing further statutory demand against several properties.

· Mortgage demand calling was completed, and mortgage demand was issued against several financial institutions and banks during the months of January and February. Several property owners have contacted the team since then, and 54 accounts now have a payment arrangement set up and some have paid the arrears.

· Recruitment to replace two revenue recovery officers was completed. A new officer started in January and the second new officer started on the 3^rd of April.

Next actions:

· Final demand to be issued at the end of April, beginning of May for those accounts where no payment arrangement has been set up and arrears have not been made.

· Issue statutory demand against the properties owned by organisations.

For the total number of General Title rates accounts marked as ‘Debt recovery action to commence’:

· These are properties where there is no mortgage, and we do not have a payment arrangement or direct debit set up on the account.

· 32% of properties only have last year’s rates in arrears and 15% have 2 years of arrears. Debt management will be contacting these owners by phone, email, or letter. Any water arrears will be picked up at the same time.

· 29% of these accounts have arrears of 3 or more rating years. Debt management will start the final demand process for these which can result in referral to Council’s legal services team to commence legal proceedings.

Maori Freehold Land rates and water debt

The rates debt has reduced by 3.93% since the start of the year of which 61% was for write-offs for properties which are non-rateable since the introduction of the Whenua Māori rating amendment law came in to affect. The water rates were reduced by 3.79% since the start of the year.

Sundry debtors debt

The total sundry debtors aged debt balance has reduced again since the start of the year.

Both the resource consent and building debt have increased. The revenue recovery team continue to work with both teams to reduce this.

PĀNGA PŪTEA ME NGĀ WĀHANGA TAHUA / 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.

Āpitihanga / Attachments

1. 31 March 2023 ARF Revenue recovery Report attachment - A4163353 ⇩