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Finance Subcommittee MEETING AGENDA FINANCE SUBCOMMITTEE Friday 5 December 2014 at 2pm Council Chamber Chairperson Cr Richard Handley Members: Cr Keith Allum Cr Colin Johnston Cr Craig McFarlane Cr Marie Pearce Mayor Andrew Judd FINANCE SUBCOMMITTEE FRIDAY 5 DECEMBER 2014 Addressing the subcommittee Members of the public have an opportunity to address subcommittees during the public forum section or as a deputation. A public forum section of up to 30 minutes precedes all subcommittee meetings. Each speaker during the public forum section of a meeting may speak for up to 10 minutes. In the case of a group a maximum of 20 minutes will be allowed. A request to make a deputation should be made to the secretariat within two working days before the meeting. The chairperson will decide whether your deputation is accepted. The chairperson may approve a shorter notice period. No more than four members of a deputation may address a meeting. A limit of 10 minutes is placed on a speaker making a presentation. In the case of a group a maximum of 20 minutes will be allowed. Purpose of Local Government The reports contained in this agenda address the requirements of the Local Government Act 2002 in relation to decision making. Unless otherwise stated, the recommended option outlined in each report meets the purpose of local government and: • Will help meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses; • Would not alter significantly the intended level of service provision for any significant activity undertaken by or on behalf of the Council, or transfer the ownership or control of a strategic asset to or from the Council. Finance Subcommittee Friday 5 December 2014 FINANCE SUBCOMMITTEE FRIDAY 5 DECEMBER 2014 APOLOGIES None advised. PUBLIC FORUM None advised. DEPUTATIONS None advised. MINUTES RECOMMENDATION That the minutes of the Finance Subcommittee (Wednesday 8 October 2014), and the proceedings of the said meeting, as previously circulated, be taken as read and confirmed as a true and correct record. B ITEMS FOR RECOMMENDATION TO COUNCIL B1 FINANCIAL UPDATE REPORT SEPTEMBER 2014 The purpose of this report is to present the financial results of the Council for the period to the end of September 2014. B2 TREASURY MANAGEMENT POLICY (TMP) REVIEW DECEMBER 2014 The matter for consideration by the Council is the approval of the proposed amendments to the Treasury Management Policy (TMP) which is one of the key policies in the development of the Long Term Plan 2015-2025 (LTP). Finance Subcommittee Friday 5 December 2014 FINANCE SUBCOMMITTEE FRIDAY 5 DECEMBER 2014 Finance Subcommittee Friday 5 December 2014 1 ITEM FOR RECOMMENDATION ITEM B1 FINANCIAL UPDATE REPORT SEPTEMBER 2014 PREPARED BY: Phil Armstrong (Acting General Manager Business Services) TEAM: Finance APPROVED BY: Barbara McKerrow (Chief Executive) WARD/COMMUNITY: District Wide DATE: 19 November 2014 FILE REFERENCE: DM 6093787 PURPOSE The purpose of this report is to present the financial results of the Council for the period to the end of September 2014. RECOMMENDATION That, having considered all matters raised in the report, the report be noted. SIGNIFICANCE This report is provided for information purposes only, and has been assessed as being of some importance. DISCUSSION The Financial reporting pack is a monthly high level financial report, highlighting the performance and forecast of the Council’s finances. The report covers operational expenditure and revenue, capital expenditure, treasury and debt management of the Council. Reporting of the PIF (Perpetual Investment Fund) will be provided separately by TIML. FINANCIAL AND RESOURCING IMPLICATIONS This report is produced monthly within existing resources and budgets. IMPLICATIONS ASSESSMENT This report confirms that the matter concerned has no particular implications and has been dealt with in accordance with the Local Government Act 2002. Specifically: • Council staff have delegated authority for any decisions made; • Council staff have identified and assessed all reasonably practicable options for addressing the matter and considered the views and preferences of any interested or affected persons (including Māori), in proportion to the significance of the matter; • Any decisions made will help meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses; Finance Subcommittee Friday 5 December 2014 2 ITEM B1 ITEM FOR RECOMMENDATION • Unless stated above, any decisions made can be addressed through current funding under the Long-Term Plan and Annual Plan; • Any decisions made are consistent with the Council's plans and policies; and • No decisions have been made that would alter significantly the intended level of service provision for any significant activity undertaken by or on behalf of the Council, or would transfer the ownership or control of a strategic asset to or from the Council. APPENDICES Financial Reporting Pack attached. Finance Subcommittee Friday 5 December 2014 NPDC Finance Committee Financial Performance Report September 2014 Contents Page # • Monthly Overview 1 • Operating Summary 3 • Balance Sheet 7 • Capital summary 9 • Treasury Report 10 • Rating and Debtors 13 Monthly overview and outlook September 2014 •From a total organisation perspective total operating costs ytd at $28.4million are tracking slightly lower than 2013/14 ($30.6M) and are $4.5 million less than budget due primarily to timing of expenditure and the phasing of budgets. •The full year operating forecast is in line with budget. Revenue is down by approximately $1.8 million. This has resulted from the decision to defer the logging of the Moller forestry JV due to log prices being 30% off their peak. Harvest will now be in the summer of 2015/16. The reduction in revenue is offset by the corresponding reduction in harvest cost of approximately $1.4 million. Operating cost are also down as interest expense is forecast to be lower by approximately $500k due to fewer projects carried forward at year end than originally planned •Total borrowing is likely to be lower than budget as the detailed review of year end budget carryovers identified a number of projects that could be pushed out to the 2015/25LTP. In a particular the Bell Block growth projects and the sewerage upgrade sludge treatment solution. 1 Financial Performance Highlights •Operational performance forecasted to be inline with budget. •Capital projects tracking to budget •Borrowing and Treasury limits within policy. •Rating and debt collection on target to meet internal KPI’s. 2 Operating Summary full year forecast Expenditure Description Annual Plan Projected Variance Variance Commentary Revised Year End $ % (exceptions/variance only) Outcome EXPENDITURE Puke Ariki 11,733,500 11,733,500 0 0% Govett Brew ster Art Gallery 3,728,000 3,621,300 106,700 3% Community Development 5,205,620 5,205,620 0 0% Recreation & Event Venues 9,857,400 10,376,400 (519,000) -5% Increase in business activity, largely associated with additional events at the TSB bowl of Brooklands, offset with additional revenue. Par ks 15,865,300 15,788,600 76,700 0% Roads 22,048,100 22,120,700 (72,600) 0% Solid Waste Management 4,052,500 4,052,500 0 0% Storm Water 2,809,100 2,809,100 0 0% Flood Control and Protection 277,500 277,500 0 0% Water 11,023,100 11,023,100 0 0% Wastew ater 16,134,700 16,134,700 0 0% Regulatory Services 11,289,300 11,341,900 (52,600) 0% Emergency Management 482,400 482,400 0 0% Economic Grow th 2,757,300 2,757,300 0 0% Civic & Democracy 5,959,500 5,959,500 0 0% Management of Investments 6,056,800 4,121,000 1,935,800 32% A reduction of $1.4 M of harvest cost as the harvest of the Moller JV has been deferred until 2015/16 due to significant reduction in log prices. Interest cost reduced by $500k as fewer capital projects carried forward from 2013/14 TOTAL EXPENDITURE 129,280,120 127,805,120 1,475,000 1% 3 Operating Summary full year forecast Revenue Description Annual Plan Projected Variance Variance Commentary Revised Year End $ % (exceptions/variance only) Outcome REV ENUE Puke Ariki 992,800 992,800 0 0% Govett Brew ster Art Gallery 3,887,700 3,815,500 (72,200) -2% Community Development 963,700 963,700 0 0% Recreation & Event Venues 2,995,300 3,522,900 527,600 18% Reflects increased business activity specifically around a full summer program at the Bowl Par ks 1,881,600 1,881,600 0 0% Roads 10,253,400 10,253,400 0 0% Solid Waste Management 4,329,700 4,329,700 0 0% Storm Water 13,400 13,400 0 0% Water 3,950,600 3,950,600 0 0% Wastew ater 2,144,000 2,144,000 0 0% Regulatory Services 9,541,100 9,784,300 243,200 3% A result of increase in building activity Emergency Management 900 900 0 0% Civic & Democracy 3,400 3,400 0 0% Management of Investments 15,635,400 13,507,600 (2,127,800) -14% Reflects the decision not to harvest the Moller JV forestry due to a 30% decrease in log prices. The harvest will be pushed out to 2015/16. Offset with reduction harvest cost and reduction in overall interest expense TOTAL REV ENUE 56,593,000 55,163,800 - 1,429,200 -3% 4 Operating Summary full year forecast Net cost of Service Description Annual Plan Projected Variance Variance Commentary Revised Year End $ % (exceptions/variance only) Outcome Net Cost of Activity Puke Ariki 10,740,700 10,740,700 0 0% Govett Brew ster
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