Decision digest | Finance and Performance Committee

19 March 2015

Progress with CRL faster than anticipated

Auckland Council committee members met today to discuss the levies for the Auckland Museum and MOTAT, further financial assistance for the Retrofit Your Home Programme, and the council’s submission to the Weathertight Homes Resolution Service Amendment Bill. The committee also received a report on the Auckland Council Group half year financial results to 31 December 2014 which were publically released on 27 February 2015.

Included in the agenda was an item on bringing forward capital expenditure for the City Rail Link scheduled for the confidential agenda which the committee agreed to discuss in the public forum.

The agenda is available on Auckland Council’s website and minutes will be added once confirmed. This meeting was also webcast on the council’s website and items will be available on demand within 24 hours of the meeting.

Item C1: CRL – bringing forward capital expenditure

The committee heard a request to bring forward existing capital funding for the City Rail Link (CRL) to support faster progress with land purchases and additional investigation and design work to prepare for enabling works to begin in late 2015.

This is a procedural request for a total of $17.7 million of existing funding to be brought forward to the 2014-15 financial year. All funding is within the CRL existing budget.

The CRL is making faster progress than was anticipated at the start of the financial year with negotiations with property owners providing opportunities to purchase nine properties, obtain three lease interests and acquisition of a KiwiRail property required for the CRL in 2014/15 rather than 2015/16 as planned.

The funding will also allow for investigations, design and consenting work to support progress with enabling works due to begin in late 2015. The committee approved bringing forward capital expenditure.

Item 9: Presentations from the Auckland Regional Amenities Funding Board (ARAFB)

Presentations were provided by the Auckland Philharmonia Orchestra , Voyager Maritime Museum, Stardome Observatory, Auckland Theatre Company and Watersafe Auckland on their work programme, key achievements and aspiration for the future.

Item 10: The 2015-16 Levies for the Auckland Regional Amenities, Auckland War Memorial Museum (AWMM), and the Museum of Transport and Technology (MOTAT).

The committee received a report outlining the 2015-16 statutory levies for the Auckland War Memorial Museum (AWMM), and the Museum of Transport and Technology (MOTAT).

The committee approved the levies to MOTAT of $12.287 million, a 2.5 percent (or $300,000) increase from the current 2014-15 and to the AWMM’s of $28.971 million, a 3.5% (or $980,000) increase from the current 2014-15.

It also agreed in principle, subject to negotiations, to a three year funding arrangement being put in place with the Auckland War Memorial Museum, with the aim to provide more certainty for planning of spend and funding on a longer term basis.

Item 11: Retrofit Your Home Programme - Financial Assistance Increase 2014/2015 Financial Year

The Retrofit Your Home (RYH) programme provides financial assistance to homeowners to install clean heating and insulation to increase the sustainability and liveability of their homes.

The committee heard that this financial year (2014-2015) there has been strong public demand for the RYH programme and council has already approved $5.9 million worth of financial assistance to date from a $6 million budget approved in the current Long-term Plan (LTP).

If current uptake trends continue, up to $3 million in additional financial assistance will be needed to ensure continuity of supply to the end of the current financial year.

Council will incur no additional costs by increasing the financial assistance facility as these costs are recovered through an interest charge included in a targeted rate. Further, the additional financial assistance can be accommodated within the existing operational budget.

The committee approved increasing the financial assistance facility from $6 million to $9 million for the 2014/2015 financial year to meet demand.

Staff will also be reviewing the sizing of the programme for the Long-term Plan to identify an appropriate balance between meeting customer demand for financial assistance and the level of council debt.

Item 12: Service Property Optimisation

Auckland Council Property Limited (ACPL) provided a presentation to the committee on a service property optimisation programme. This seeks to maximise efficiencies from under-utilised service assets, and maintains levels of service whilst releasing property for sale or development which facilitates town centre regeneration or housing. The programme is self-funding and a key element is that sale proceeds will be locally reinvested to advance approved projects or activities on a cost neutral basis.

This will allow local boards to reinvest in their communities where the local board agrees that a property is being under-utilised and on how proceeds will be reinvested in local areas.

Councillors approved of amending council policy to allow for sales proceeds resulting from optimisation of service property assets to be reinvested into eligible local projects. These would be local projects contemplated in current or future years of the Long Term Plan (LTP), relevant Asset Management Plans or be consistent with strategies or plans formally adopted.

ACPL will undertake significant engagement with Local Boards on this programme.

Item 13: Submission to the Weathertight Homes Resolution Service Amendment Bill

Committee approval was sought for a draft submission on the Weathertight Homes Resolution Service Amendment Bill 2015, dealing with the proposed technical changes and policy change around eligibility to the Financial Assistance Package.

The Amendment Bill has had its first reading in the House of Representatives and has now been referred to the Local Government and Environment Committee for consultation. It is to be reported back to the House by 31st July 2015.

The Bill contains a policy change which seeks to expand the financial assistance package for a limited number of owners previously considered ineligible. Other than this proposed policy change there is no intention within the Bill to expand or change thefinancial assistance package.

The draft Auckland Council submissions on the Bill have been prepared and are attached to the report which is available online.

The committee agreed that Council submits on the Weathertight Homes Resolution Service Amendment Bill 2015.

Item 15: Auckland Council Group half year financial results to 31 December 2014

The report discloses the financial results for the Auckland Council Group for the six months to 31 December 2014.

The Auckland Council Group half year financial results were made publically available on 27 February 2015 when released to the New Zealand Stock Exchange.

The highlights of the report are a healthy surplus of $812m with $751 million invested in key assets. The actual results are in line where Auckland Council is at with their budget.

The report also highlights significant growth across the region with increases in building consents and Special Housing Area activities and increased infrastructure provision, especially in transport projects and water and wastewater.

Councillors voted to receive the report. The half year financial results report is available on the Auckland Council website.

Ends

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