MASTERTON DISTRICT COUNCIL

AGENDA

AUDIT AND RISK COMMITTEE

WEDNESDAY 7 FEBRUARY 2018 AT 2.00PM

MEMBERSHIP OF THE COMMITTEE

Philip Jones (Chairperson)

Her Worship the Mayor Cr D Davidson Cr J Dalziell Cr B Goodwin Cr G McClymont Cr C Peterson

Quorum: Four

Notice is given that the meeting of the Masterton District Council Audit and Risk Committee will be held on 7 February 2018 at the Wairarapa Community Centre, 41 Perry St, Masterton commencing at 2.00pm.

RECOMMENDATIONS IN REPORTS ARE NOT TO BE CONSTRUED AS COUNCIL POLICY UNTIL ADOPTED

1 February 2018 1

AGENDA ITEMS

1. CONFLICTS OF INTEREST (Members to declare conflicts, if any)

2. APOLOGIES

3. PUBLIC FORUM

4. LATE ITEMS

5. MINUTES OF PREVIOUS MEETING TO BE RECEIVED (248/17) Pages 401-404

6. SECOND QUARTER AND SIX MONTHLY REPORTS (003/18) Pages 411-413 a) Destination Wairarapa – Second Quarter Report Pages 414-433 b) Connecting Communities Wairarapa – Six Monthly Report Pages 434-443 c) Sport Wellington Wairarapa – Six Monthly Report Pages 444-452 d) Aratoi Regional Trust – Second Quarter Report Pages 453-459

7. SIX MONTHS TO DATE FINANCIAL REPORT AND COMMENTARY (001/18) Pages 460-482

8. SECOND QUARTER NON-FINANCIAL REPORT (002/18) Pages 483-493 2

MATTERS TO BE TAKEN WITH THE PUBLIC EXCLUDED

MOVED BY SECONDED BY Under Section 48 (1) of the Local Government Official Information and Meetings Act 1987 the following matters will be taken with the public excluded :-

 Minutes of the Previous meeting held 22 November 2017

The general subject of the matters to be considered while the public is excluded, the reason for passing this resolution in relation to the matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution is as follows:-

General subject of Reason for passing Ground(s) under each matter to be this resolution in section 48(1) for considered relation to each the passing of this matter resolution ______

Minutes of the meeting held See page 404 s48(1)(d) 22 November 2017 That the exclusion of the public from the whole or the relevant part of the proceedings of the meeting is necessary to enable the local authority to deliberate in private on its decision or recommendation in any proceeding to which this paragraph applies 401

248/17 REPORT OF THE AUDIT & RISK COMMITTEE MEETING HELD AT THE WAIRARAPA COMMUNITY CENTRE, 41 PERRY ST, MASTERTON ON WEDNESDAY 22 NOVEMBER 2017 AT 3.00PM

PRESENT

Philip Jones (Chair), Mayor L Patterson, Councillors D Davidson, J Dalziell, B Goodwin, G McClymont and C Peterson.

IN ATTENDANCE

Chief Executive, Manager Finance, Manager Assets and Operations, Manager Community Facilities and Activities, Manager Strategic Planning, one media representative, one member of the public and Governance Advisor.

CONFLICT OF INTEREST

No conflicts of interest were declared.

LATE ITEMS

There were no late items.

APOLOGIES

There were no apologies.

MINUTES OF PREVIOUS MEETING TO BE RECEIVED (171/17)

The Manager Finance will follow up providing the ASB ethical investment policy to elected members.

Moved by Mayor L Patterson that the notes of the Audit and Risk Committee meeting held 6 September 2017 be received. Seconded by Councillor C Peterson and CARRIED.

As the Manager Destination Wairarapa was in attendance the agenda item on the First Quarter Reports was taken before the item on the Treasury Management Policy.

FIRST QUARTER REPORTS (168/17)

In response to questions raised the Manager Destination Wairarapa advised:

• The $30,000 income from the RCT project related to funding reallocated to the Rimutaka Cycle Trail. Once that money was spent it would appear on the next report. • Re the decrease in funding from Trust House in 15/16 it was noted that the balance sheet showed that the organisation had the ability to absorb that deficit. A grant of $29,586 had subsequently been received and shows as a variance in the current year. • In relation to the international marketing alliance funding the budget was $50,000 but the Wairarapa contribution to this WREDA initiative was currently under discussion. 402

A question was asked about the decrease in i-Site income. It was advised that decreasing revenue for i-Sites was a trend across the country and many were closing but that Destination Wairarapa were looking at ways to improve its performance.

A request was made for Destination Wairarapa to provide the full year budget with the profit and loss and for the balance sheet to be provided every quarter as well.

Moved by Mayor L Patterson That Council receives the quarterly reports and financial statements as at 30 September 2017 from Destination Wairarapa and Aratoi Regional Trust. Seconded by Councillor G McClymont and CARRIED

FOR RECOMMENDATION

TREASURY MANAGEMENT POLICY (241/17)

The Manager Finance presented the report providing the Committee with a revised Treasury Management Policy and recommending its adoption by Council.

Brett Johanson of PwC attended the meeting and gave a presentation on the role of governance in treasury risk management and also provided clarification on the Interest Rate Risk Position graph from the September Treasury Management report to the Committee. The reasons for inclusion of policy limits was explained and comparisons to other councils’ limits were given.

In relation to the Treasury Management Policy a request was made to include a definition for financial investments.

Principles for ethical investment were discussed and it was agreed that the policy should make reference to ethical investment, although it would need to be defined. An amendment to the recommendation was proposed to that effect. Staff would look at what other councils were doing in that area (e.g. Palmerston North City Council).

Moved by Mayor L Patterson That the Audit and Risk Committee (i) receives the information in Report 241/17 and (ii) recommends that Council adopt the Treasury Management Policy, amended to include a consideration of ethical investment. Seconded by Councillor J Dalziell and CARRIED

[Note to minutes: the final version of the Treasury Management Policy incorporating amendments requested is attached to this report (Minutes Attachment 1)]

FOR INFORMATION

PROGRESS REPORT: MONITORING OF POLICIES (243/17)

The report providing an update on the key policies monitored by the Audit and Risk Committee was taken as read. 403

Moved by Councillor G McClymont That the Audit and Risk Committee receives the Progress Report: Monitoring of Policies. Seconded by Philip Jones and CARRIED

FIRST QUARTER NON-FINANCIAL REPORT (244/17)

The report advising the Committee of performance against non-financial measures was taken as read.

The non-compliance result for stormwater was discussed. It was advised that there had been a 1:10 year event which had generated complaints about surface flooding. It was noted that although there was surface flooding there had been no houses flooded.

Moved by Councillor G McClymont That the Audit and Risk Committee receives the Quarter 1 non-financial performance report for the 2017/18 financial year. Seconded by Councillor D Davidson and CARRIED

FIRST QUARTER COMMENTARY AND FINANCIAL STATEMENTS (242/17)

The report providing the Committee with the financial report for the three months to 30 September 2017 was taken as read.

A question was asked about the rise in Rates Remissions. It was advised that this was due to more properties qualifying for a remission under the community care category.

(Councillor G McClymont left the meeting at 4.43pm)

A request was made for some communication to go out to allay ratepayers’ concerns over the impact of any potential increase in valuations on rates.

Moved by Philip Jones That Audit & Risk Committee receives the 3 months to date financial report and commentary, including Operating and Capital Expenditure Statements. Seconded by Mayor L Patterson and CARRIED

NZ LOCAL GOVERNMENT FUNDING AGENCY UPDATE (246/17)

The Manager Finance presented the report providing an update on the Local Government Funding Agency (LGFA).

It was advised that, contrary to recent public information suggesting otherwise, the risk of any council defaulting on its debt was exceedingly low and the risk associated with Masterton District Council’s guarantee of the LGFA was also exceedingly low. If a council 404 did default then the first call would be on its ratepayers and if the LGFA had to write off some of that loan Masterton District Council would only be liable for 0.6% of the amount.

Moved by Mayor L Patterson That the Committee receives the information in Report 246/17. Seconded by Councillor B Goodwin and CARRIED

MATTERS TO BE TAKEN WITH THE PUBLIC EXCLUDED

Moved by Councillor C Peterson – That the public be excluded from the following parts of the proceedings of the meeting of the Masterton District Council:-

• Minutes of the previous meeting held 6 September 2017 • Audit Management Report

The general subject of the matters to be considered while the public is excluded, the reason for passing this resolution in relation to the matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution is as follows:-

General subject of Reason for passing Ground(s) under each matter to be this resolution in section 48(1) for considered relation to each the passing of this matter resolution ______Minutes of Previous Meeting See page 405-406 s48(1)(d) That the exclusion held 6 September 2017 of the public from the whole or the relevant part of the proceedings of the meeting is necessary to enable the local authority to deliberate in private on its decision or recommendation in any proceeding to which this paragraph applies Audit Management Report 7(2)(f)(ii) The withholding of s48(1)(d) the information is necessary That the exclusion of the public to maintain the effective from the whole or the relevant conduct of public affairs part of the proceedings of the through the protection of meeting is necessary to enable such members, officers, the local authority to deliberate employees, and persons in private on its decision or from improper pressure or recommendation in any harassment proceeding to which this paragraph applies Seconded by Councillor B Goodwin and CARRIED.

The public was excluded at 4.54 pm

The meeting returned to open session at 5.11 pm

The meeting concluded at 5.11 pm ATTACHMENT 1

Treasury Management Policy

Including Liability Management Policy & Investment Policy

[13 December 2017 CONTENTS

1 PURPOSE ...... 4 2 Scope ...... 4 3 Principles of Treasury Activity ...... 4 4 Delegation of Authority ...... 4 5 Liability Management Policy ...... 5 5.1 Borrowing Limits ...... 5 5.2 Borrowing Mechanisms ...... 5 5.3 Security ...... 6 5.4 Debt Repayment ...... 6 5.5 Guarantees, Contingent Liabilities and Other Financial Arrangements ...... 6 5.6 Internal Borrowing...... 6 5.7 New Zealand Local Government Funding Agency (LGFA) Limited ...... 6 6 Investment Policy ...... 7 6.1 Acquisition of New Investments ...... 7 6.2 Equity Investments ...... 7 6.3 Property Investment ...... 8 6.4 Financial Investments ...... 8 6.5 Internal Loans/Investments ...... 9 6.6 Investment Management and Reporting Procedures ...... 9 7 Risk Recognition/Identification Management ...... 10 7.1 Liquidity and Funding Risk ...... 10 7.2 Interest Rate Risk on External Borrowing ...... 10 7.3 Financial Investment Interest Rate/Maturity limits ...... 11 7.4 Counterparty Credit Risk ...... 11 7.5 Financial Instruments ...... 12 8 Other ...... 12 8.1 Foreign Currency ...... 12 8.2 Operational Risk ...... 12 8.3 Legal Risk ...... 12 9 Measuring Treasury Performance ...... 13 10 Exceptions ...... 13 11 Review of Policy ...... 13 12 Reporting ...... 13 13 Definitions ...... 13 14 Related Documents ...... 14 15 Version Control ...... 14

Appendix 1: Approved Financial Instruments Appendix 2: Investment Counterparty Limits Adopted by: Full Council as recommended by the Audit & Risk Committee. Date of Approval: 13 December 2017 Policy Number: MDC[insert three digits] Review Date: xx/xx/xx 1 PURPOSE The purpose of the Treasury Management Policy is to ensure Masterton District Council (MDC) undertakes its borrowing and investment activities, prudently, efficiently and in accordance with the requirements of the:  Local Government Act 2002 (LGA);  Local Government (Financial Reporting and Prudence) Regulations 2014;  Trustee Act 1956; and  Liability Management Policy and Investment Policy as outlined within this document.

2 SCOPE This policy applies to all MDC borrowing and investment activity (referred to as treasury activity). This policy does not apply to other aspects of MDC’s financial operations.

3 PRINCIPLES OF TREASURY ACTIVITY MDC will undertake all treasury activities in accordance with the LGA and the following principles:  To prudently manage MDC’s Treasury liability and investment policies, and all identified treasury risks within policy limits and parameters.  Minimise costs and risks in the management of MDC’s borrowing through flexibility and spread of debt maturities.  Manage investments to optimise returns in the long term whilst balancing risk and return considerations.  Safeguard MDC's financial assets and investment capital.  Maintain appropriate liquidity levels and manage MDC’s cash flows to meet known and predictable funding requirements.  To minimise exposure to credit risk by dealing with and investing in credit worthy counterparties.  Ensure that financial planning will not impose an unequitable spread of costs/benefits over current and future ratepayers.  To ensure adequate internal controls exist to protect MDC’s financial assets and to prevent unauthorised transactions.  Ensure compliance with all risk control limits, financial ratios, and external lender requirements.  Develop and maintain relationships with financial institutions, LGFA, investors and investment counterparties. MDC is risk averse and will not seek risk in its treasury management activities. MDC seeks to manage, not capitalise on, any risk associated with interest rates, liquidity, funding, default or credit, and operations. Any activity which may be construed as speculative in nature is not permitted under this policy.

4 DELEGATION OF AUTHORITY MDC will ensure effective controls over treasury management and segregation of duties controls are in place. All treasury activities will be undertaken in accordance with the authority limits set out in the Governance Delegations Manual and the Chief Executive and Staff Delegations Manual.

Last Updated: xx Page 4 of 17 5 LIABILITY MANAGEMENT POLICY MDC may borrow in order to:  raise specific debt associated with projects and capital expenditure;  fund the balance sheet as a whole, including working capital requirements; or  fund assets whose useful lives extend over several generations of ratepayers

Borrowing provides a basis to achieve inter‐generational equity by aligning long‐term assets with long‐term funding sources, ensuring that costs are met by those ratepayers benefiting from the investment.

5.1 Borrowing Limits MDC will manage external borrowing within the limits detailed in the table below.

Item Borrowing Limit Net External Debt/Total Revenue <150% Net Interest on External Debt/Total Revenue <10% Net Interest on External Debt/Annual Rates Income <15% Net Interest on Internal and External Debt/Annual Rates Income <20% Liquidity (External term debt + committed loan facilities / >110% External term debt)

Borrowing limit definitions are outlined within the Appendices. Financial covenants are measured on MDC only, there is no consolidated group. Disaster recovery requirements will be met through the liquidity ratio and special reserve funds that held as term investments. Net External Debt is defined as Total External Borrowing less all Financial Assets (as listed in the Statement of Financial Position) and is consistent with the LGFA’s definition. Approval of Borrowing New debt and the debt repayment programme is approved at the time of adopting the Long Term Plan (LTP) or Annual Plan. MDC’s Financial Strategy (as included in the LTP) depicts the impact of the changing levels of debt and investments over the future ten year period. All projected external borrowing is approved in advance by the Council as part of the Annual Plan or LTP process, or by resolution of the Council.

5.2 Borrowing Mechanisms MDC will use the most appropriate and cost effective borrowing method available. Approved borrowing mechanisms include:  issuing stock/bonds;  commercial paper (CP) and debentures;  direct bank borrowing;  bonds issued by New Zealand Local Government Funding Agency (LGFA);  accessing the short and long‐term wholesale/retail debt capital markets directly or indirectly (including LGFA bespoke and short‐term lending); and  internal borrowing – offset by cash holdings of reserves and special funds.

Last Updated: xx Page 5 of 17 5.3 Security MDC’s security is provided by a charge over rates revenue, offered through a Debenture Trust Deed. Under the Debenture Trust Deed, MDC’s borrowing is secured by a floating charge over all MDC rates levied under the Local Government (Rating) Act 2002. The security offered by MDC ranks equally with other lenders. With Council approval, security may be offered by providing a charge over one or more of MDC’s assets. Physical assets will be charged only where:  there is a direct relationship between the debt and the purchase or construction of the asset, which it funds (e.g. project finance); or  Council considers a charge over physical assets to be appropriate. Any pledging of physical assets must comply with the terms and conditions contained within the security arrangement.

5.4 Debt Repayment All portions of debt will be progressively repaid or refinanced as it falls due, in accordance with the applicable borrowing mechanism. Subject to the appropriate approval and debt limits, a loan may be rolled over or re‐negotiated as and when appropriate.

5.5 Guarantees, Contingent Liabilities and Other Financial Arrangements MDC may act as guarantor to financial institutions on loans or enter into incidental arrangements for organisations, clubs, Trusts, or business units, if the purposes of the loan are in line with MDC’s strategic objectives. MDC will not guarantee loans to Council‐Controlled Trading Organisations, in accordance with the LGA (s.62). MDC will ensure that sufficient funds or lines of credit exist to meet amounts guaranteed. Guarantees given will not exceed any amount agreed by Council or Council committee. The Manager Finance will monitor guarantees and report annually to Council. Conditions to financial arrangements, such as loan advances, are detailed later in this document.

5.6 Internal Borrowing Internal loans are sourced from MDC’s cash investments and are recognised as a valid means of funding projects, minimising the cost of borrowing while providing a market return on investment funds.

5.7 New Zealand Local Government Funding Agency (LGFA) Limited Regardless of any other provision in this policy, MDC may borrow from the LGFA and, in connection with that borrowing, may enter into the following related transactions to the extent it considers appropriate:  contribute a portion of its borrowing back to the LGFA as an equity contribution to the LGFA e.g. borrower notes;  provide a guarantee over the indebtedness of the LGFA and to the extent of the MDC’s shareholding percentage in the LGFA itself;  commit to contributing additional equity (or subordinated debt) to the LGFA if required;  secure its borrowing from the LGFA and the performance of other obligations to the LGFA or its creditors with a charge over MDC's rates and rates revenue (using a Debenture Trust Deed), or  subscribe for shares and uncalled capital in the LGFA. Last Updated: xx Page 6 of 17

6 INVESTMENT POLICY MDC may hold financial, property, forestry, and equity investments if there is strategic, commercial, economic or other valid reason (e.g. where it is the most appropriate way to deliver or administer a Council function). Generating a commercial return on strategic investments is a secondary objective. MDC’s primary objective is to protect its investment capital and ensure that a prudent approach to risk/return is applied, in accordance with this policy. MDC will act effectively and appropriately to:  protect MDC’s capital;  ensure investments benefit MDC’s ratepayers;  ensure ethical investing principals are followed, where they may be applicable to an investment decision;  maintain a prudent level of liquidity and flexibility to meet both planned and unforeseen cash requirements; and  use investment funds to repay debt. MDC is a net borrower, meaning external debt is more than financial assets. There are strategic reasons to hold investments while also holding debt. However MDC recognises that holding too much in financial assets, which generally earn less than the cost of the debt, is not prudent. A prudent maximum level of financial assets is regarded as between $14m and $16m and a medium term target level is reducing it to $12m. These totals exclude short term cash and deposits held for working cashflow purposes and any funds held and invested on behalf of related entities. Investment reductions can see funds used to repay debt early and that debt/investment will be tracked using internal loans/investments. MDC will regularly review its approach to all major investments and the credit rating of approved financial institutions.

6.1 Acquisition of New Investments With the exception of financial investments, new investments are acquired if an opportunity arises and approval is given by the Council, based on advice and recommendations from MDC staff. Before approving any new investments, due consideration will be given to the contribution the investment will make in fulfilling MDC’s strategic objectives, and the financial risks of owning the investment. The authority to acquire financial investments is delegated to the Chief Executive and Manager Finance. Financial investments are reported to Council annually. Refer to the Treasury Management Procedures.

6.2 Equity Investments Equity investments, includes investments held in CCO/CCTO and other shareholdings. Equity investments may be held where MDC considers there to be strategic community value. MDC may also acquire shares that are gifted or are a result of restructuring. MDC seeks to achieve an acceptable rate of return on all its equity investments consistent with the nature of the investment. Any purchase or disposal of equity investments requires Council approval. Unless otherwise directed by the Council, the proceeds from the disposal of equity investments will be used firstly to repay any debt relating to the investment and then utilised to reduce other MDC debt. MDC recognises that there are risks associated with holding equity investments and to minimise these risks Council, through the relevant committee, monitors the performance of its equity

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investments on a twice yearly basis to ensure that the stated objectives are being achieved. MDC seeks professional advice regarding its equity investments when appropriate. New Zealand Local Government Funding Agency Limited Despite any other clause in this policy, MDC may invest in shares and other financial instruments of the New Zealand Local Government Funding Agency Limited (LGFA), and may borrow to fund that investment. MDC’s objective in making any such investment will be to:  obtain a return on the investment; and  ensure that the LGFA has sufficient capital to remain viable, meaning that it continues as a source of debt funding for MDC. MDC may invest in LGFA bonds and commercial paper as part of its financial investment portfolio. As a borrower, MDC’s investment is recognised through shares and borrower notes. As an investor in LGFA shares and as a Guarantor, MDC subscribes for uncalled capital in the LGFA.

6.3 Property Investment Property disposals are managed to ensure compliance with statutory requirements and, where appropriate, consultation with local communities. MDC’s property holdings for the provision of services such as Senior Housing, the district building and housing of community groups are not considered property investments under this policy. MDC may acquire property related to the provision or expansion of a service i.e. sewage treatment land or a commercially leased portion of a MDC facility. Again, these will not be considered as property investments. Council may undertake property development initiatives and hold strategic property assets as it thinks appropriate within the local economy.

6.4 Financial Investments MDC’s may only invest in approved creditworthy counterparties. Credit ratings are monitored and reported quarterly to Council. MDC may invest in approved financial instruments as set out in Appendix 1. These investments are aligned with MDC’s objective of investing in high credit quality and highly liquid assets. MDC’s investment portfolio will be arranged to provide sufficient funds for planned expenditure and allow for the payment of obligations as they fall due. MDC prudently manages liquid financial investments as follows:  Any liquid investments must be restricted to a term that meets future cash flow and capital expenditure projections.  MDC may choose to hold specific reserves in cash and direct what happens to that investment income.  Internal investments/borrowing can be used as an alternative to external borrowing.  Financial investments do not include shares. Special Funds and Reserve Funds Liquid assets are not required to be held against all special funds and reserve funds. MDC may internally borrow or utilise these funds where possible. Trust Funds Where MDC holds funds as a trustee, or manages funds for a Trust, then such funds must be invested on the terms provided within the Trust. If the Trust’s Investment Policy is not specified then this policy will apply. Last Updated: xx Page 8 of 17

Loan Advances MDC may provide advances to CCOs, CCTOs, charitable trusts and community organisations for strategic and commercial purposes. New loan advances are by Council resolution only. MDC does not lend money, or provide any other financial accommodation, to a CCO or CCTO on terms and conditions that are more favourable than those that would apply if MDC were borrowing the money or obtaining the financial accommodation. MDC does not lend to CCTOs on more favourable terms than what it can achieve itself, without charging any rate or rate revenue as security. MDC will not guarantee loans to CCTOs in accordance with the LGA (s.62). MDC reviews performance of its loan advances on a regular basis to ensure strategic and economic objectives are being achieved. The Manager Finance monitors loan advances and reports to Council annually. External Funds Management Investments made through external fund managers will be to a maximum of $12 million. Investments must be limited to fixed income and cash/cash equivalent securities only. The current mandate is as follows:

Asset Allocation Credit Range ANZ Wholesale Sovereign Bond Fund 45% ‐ 55% AA to AAA ANZ Wholesale High Grade Bond Fund 45% ‐ 55% A‐ to AAA

The credit restrictions for funds placed with any one institution (per Appendix 2) do not apply to externally managed funds as the portfolio is held in wholesale bond fund products via a trustee. This policy allows the addition of other investment management products and fund managers to compliment or replace the ANZ bond funds. Monthly and Quarterly Investment Reports provide a performance summary to ensure the investment guidelines are being adhered to. Interest Rate Risk Management This section refers to the externally managed investment portfolio which has a direct exposure to a change in interest rates, impacting the return and capital value of its fixed rate investments. Management of the bond fund products by the external fund managers assumes the use of interest rate risk management strategies as part of the day‐to‐day management of the bond fund portfolios.

6.5 Internal Loans/Investments Investment funds held by MDC may be invested in Council capital projects, subject to Council’s selection of debt funding for those projects, via the annual planning or LTP cycle. As a principle, no more than half of the value of special funds and reserves balances is available for internal borrowing/investment. Generally, smaller projects will be funded by way of internal loans.

6.6 Investment Management and Reporting Procedures Investments and associated risks are monitored and managed, and regularly reported to Council. Investments that are managed directly by MDC are a mix of term and current fixed interest investments, with sufficient minimum immediate cash reserves and a cash buffer maintained. The performance of investments is regularly reviewed to ensure MDC’s strategic objectives are being met. Both performance and policy compliance are reviewed through regular reporting.

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7 RISK RECOGNITION/IDENTIFICATION MANAGEMENT The definition and recognition of liquidity, funding, interest rate, counterparty credit, operational and legal risk of Council is detailed below and applies to both the Liability Management Policy and Investment Policy. The following section excludes investment funds under external management outlined in section 6.5

7.1 Liquidity and Funding Risk Risk Recognition Liquidity risk management focuses on the ability to access committed funding at that future time to fund the gaps. Funding risk management centres on the ability to re‐finance or raise new debt at a future time at acceptable pricing (fees and borrowing margins) and maturity terms of existing loans and facilities. Liquidity/Funding Risk Control Limits To ensure funds are available when needed MDC ensures that:  There is sufficient available operating cash flow, liquid investments and committed bank facilities to meet cash flow requirements between rates instalments as determined by the Manager Finance.  External term loans and committed debt facilities together with available unencumbered cash/cash equivalents investments must be maintained at an amount of 110% over existing external debt. The liquidity ratio excludes externally managed funds.  MDC has the ability to pre‐fund up to 12 months forecast debt requirements including re‐ financings. Re‐financings that have been pre‐funded, will remain included within the funding maturity profile until their maturity date.  The maturity profile of the total committed funding in respect to all external debt/loans and committed debt facilities, is to be controlled by the following system: Period Minimum % Maximum % 0 to 3 years 15% 60% 3 to 5 years 15% 60% 5 years plus 10% 60%

 A funding maturity profile that is outside the above limits, but self corrects within 90‐days is not in breach of this policy. However, maintaining a maturity profile beyond 90‐days requires specific approval by Council.  To minimise concentration risk the LGFA require that no more than the greater of NZD 100 million or 33% of a MDC’s borrowings from the LGFA will mature in any 12‐month period.

7.2 Interest Rate Risk on External Borrowing Risk Recognition Interest rate risk is the risk that funding costs will materially impact projections included in the LTP or Annual Plan. This would adversely impact revenue projections, cost control, and capital investment decisions, returns and feasibilities. The primary objective of interest rate risk management is to reduce uncertainty relating to interest rate movements through fixing/hedging of interest costs. Certainty around interest costs will be achieved through active management of underlying interest rate exposures.

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Interest Rate Risk Control Limits Exposure to interest rate risk is managed and mitigated through the risk control limits defined in the tables below. The percentages are calculated on the rolling 12‐month projected gross debt level calculated and approved by management.

Master Fixed/Floating Risk Control Limits Minimum Fixed Rate Maximum Fixed Rate 55% 90%

The fixed‐rate amount at any point in time must be within the following maturity bands:

Fixed Rate Maturity Profile Limit Period Minimum Hedge % Maximum Hedge % 1 to 3 years 15% 60% 3 to 5 years 15% 60% 5 years plus 15% 60%

A fixed‐rate maturity profile that is outside the above limits, but self corrects within 90‐days is not considered to be a breach of this policy. Maintaining a maturity profile beyond 90‐days requires specific approval by Council. Any fixed rate hedge with a maturity beyond 15 years must be approved by Council. The exception to this will be if MDC raises LGFA funding as fixed rate or swapped floating rate and this maturity is beyond 15 years. Hedging outside the above risk parameters must be approved by Council.

7.3 Financial Investment Interest Rate/Maturity limits The following control limits are designed to manage interest rate and maturity risk on the financial investment portfolio managed internally by MDC (i.e. excludes externally managed funds). The portfolio comprises treasury financial investments. An important objective of the financial investment portfolio is to match the portfolio’s maturity term to planned expenditure thereby ensuring that investments are available when required. Financial investments should be restricted to a term that meets future cash flow projections and be mindful of forecast debt associated with future capital expenditure programmes as outlined within the LTP.

Period Minimum % Maximum % 0 to 6 months 30% 80% 6 to 12 months 20% 70% 1 to 3 years 0% 50% 3 years plus 0% 20%

The repricing/maturity mix can be changed, within the above limits through sale/purchase of financial investments.

7.4 Counterparty Credit Risk Counterparty credit risk is the risk of losses (realised or unrealised) arising from a counterparty defaulting on a financial instrument where MDC is a party. The credit risk to MDC in a default event will be weighted differently depending on the type of instrument entered into. MDC will only borrow from strongly rated banks with a minimum long‐term credit rating of at least “A” (S&P, or equivalent Fitch or Moody’s rating).

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Treasury related transactions will only be entered into with organisations specifically approved by the Council. Entities and financial instruments are outlined within the Appendices. Counterparties and limits are only approved on the basis of Standard & Poor’s (S&P, or equivalent Fitch or Moody’s rating) long and short‐term credit ratings matrix provided within the Appendices.

7.5 Financial Instruments Approved financial instruments for cash management and borrowing, investments, interest rate and foreign exchange risk management are outlined in Appendix 1.

8 OTHER

8.1 Foreign Currency MDC has minor foreign exchange exposure through the occasional purchase of foreign exchange denominated services, plant and equipment. Generally, all individual commitments over NZ$100,000 equivalent are hedged using forward foreign exchange contracts, once expenditure is approved, legal commitment occurs and the purchase order is placed, exact timing, currency type and amount are known. Per the LGA, MDC will not borrow or enter into incidental arrangements, within or outside New Zealand, in currency other than New Zealand currency. MDC does not hold investments denominated in foreign currency.

8.2 Operational Risk Operational risk is the risk of loss as a result of human error (or fraud), system failures and inadequate procedures and controls. Refer to the Treasury Management Procedures.

8.3 Legal Risk Legal risks relate to the unenforceability of a transaction due to an organisation not having the legal capacity or power to enter into the transaction usually because of prohibitions contained in legislation. While legal risks are more relevant for banks, MDC may be exposed to such risks. MDC will seek to minimise this risk by the:  use of standing dealing and settlement instructions (including bank accounts, authorised persons, standard deal confirmations, contacts for disputed transactions) to be sent to counterparties;  matching of third party confirmations and the immediate follow‐up of anomalies; and  use of expert advice.

Agreements Financial instruments can only be entered into with banks that have in place an executed ISDA Master Agreement with MDC. All ISDA Master Agreements for financial instruments must be signed under seal by the Council. MDC’s CE and/or internal/appointed legal counsel must sign under seal all documentation for new loan borrowings, re‐financings and investment structures. Financial Covenants and Other Obligations MDC will not enter into any transactions where it would cause a breach of financial covenants under existing contractual arrangements. MDC must comply with all obligations and reporting requirements under existing funding facilities and legislative requirements.

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9 MEASURING TREASURY PERFORMANCE Measuring the effectiveness of MDC's treasury activities is achieved through a mixture of subjective and objective measures. The predominant subjective measure is the overall quality of treasury management information. The Chief Executive has primary responsibility for determining this overall quality.

10 EXCEPTIONS Exceptions to this policy are permitted if it would advance MDC’s broader social or other policy objectives. Any resolution authorising an investment under this provision shall note that it departs from MDC’s ordinary policy and the reasons justifying that departure.

11 REVIEW OF POLICY The policy is to be formally reviewed every three years, and annually for internal purposes. The Manger Finance has the responsibility to prepare the annual review report (following the preparation of annual financial statements) that is presented to the Chief Executive. The report will include:  a recommendation as to changes, deletions and additions to the policy;  an overview of the treasury function in achieving the stated treasury objectives and performance benchmarks; and  a summary of breaches of policy and one‐off approvals outside policy. The Council receives the report, approves policy changes and/or rejects recommendations for policy changes. The policy review should be completed and presented to the Council within five months of the financial year‐end.

12 REPORTING Council and management reporting on treasury activities is based on comprehensive and regular communication of the following areas to ensure high standards of governance and control:  Policy compliance  Risk/exposure position  Performance Council ensures reporting of the Liability and Investment Management Policies is consistent with the requirements of the LGA.

13 DEFINITIONS Net External Debt: is net of all cash and financial investments held by the Council. Annual Rates Income: The amount equal to the total revenue from any funding mechanism authorised by the Local Government (Rating) Act 2002 (including volumetric water charges levied) together with any revenue received from other local authorities for services provided (and for which the other local authorities rate). Cash/cash equivalents: Assets defined as being:  overnight cash deposits;  wholesale/retail bank term deposits no greater than 30‐days; or  RCDs less than 181 days.

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Core External Gross Debt: The total external debt maturing beyond 12 months. Equity Investment: Fixed Rate: An interest rate with a repricing date beyond 12 months forward on a continuous rolling basis. Floating Rate: An interest rate with repricing within 12 months. Investment Property: Properties owned by MDC which MDC is actively seeking to sell/dispose or properties held for strategic purposes but are not part of MDC’s current service delivery needs. Liquidity Ratio: External term debt plus committed bank facilities, less cash/cash equivalents, divided by current external debt. Net Debt: Total consolidated debt less cash/cash equivalents and financial investments. Net Interest on External Debt: The amount equal to all interest and financing costs (on external debt) less interest income for the relevant period (and includes interest from MDC’s externally managed investment funds). Total Revenue: Cash earnings from rates, government capital grants and subsidies, user charges, interest, dividends, financial and other revenue and excludes non‐government capital contributions (e.g. developer contributions and vested assets).

14 RELATED DOCUMENTS Governance Delegations Manual CE and Staff Delegations Manuals Corporate Risk Management Policy Treasury Procedures and Process Manual

15 VERSION CONTROL Date Summary of Amendments Approved By

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Appendix 1: Approved Financial Instruments Approved financial instruments (which do not include shares or equities) are as follows: Category Instrument Cash management and borrowing  Bank overdraft  Committed cash advance and bank accepted bill facilities (short term and long term loan facilities)  Loan stock /bond issuance  Floating Rate Note (FRN)  Fixed Rate Note (Medium Term Note/Bond)  Commercial paper (CP)/Promissory notes Investments  Bank call/term deposits  Bank registered certificates of deposit (RCDs)  Treasury bills  LGFA FRNs/bonds/CP/borrower notes  Local Authority/State Owned Enterprise (SOE) Medium Term Notes (MTNs)/CP/bonds and FRNs (senior)  Corporate CP/MTNs/FRNs bonds (senior)  Building societies short term deposits (up to three months) Interest rate risk management  Forward rate agreements (FRAs) on bank bills  Interest rate swaps including: ‐ Forward start swaps/collars. Start date <24 months, unless linked to existing maturing swaps/collars ‐ Swap extensions and shortenings  Interest rate options on: ‐ Bank bills (purchased caps and one for one collars) ‐ Interest rate swaptions (purchased swaptions and one for one collars only) Foreign exchange management  Spot foreign exchange  Forward exchange contracts (including par forwards)  Purchased options and collars (1:1 only)

Any other financial instrument must be specifically approved by the Council on a case‐by‐case basis. All unsecured investment securities must be senior in ranking. The following types of investment instruments are expressly excluded;  Structured debt where issuing entities are not a primary borrower/ issuer.  Subordinated debt (other than Borrower Notes subscribed from the LGFA), junior debt, perpetual notes and debt/equity hybrid notes such as convertibles.

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Appendix 2: Investment Counterparty Limits Counterparty /Issuer Minimum S&P long Investments maximum Risk management Total maximum Maximum investment term/short term per counterparty instruments maximum per counterparty portfolio percentage credit rating per counterparty ($m) ($m) ($m)

NZ Government N/A Unlimited None Unlimited Unlimited Local Government Funding AA‐/A‐1 10.0 None 10.0 < 35% Agency (LGFA) NZ Registered Bank (minimum A /A‐1 6.0 10.0 20.0 100% rating) (with the exception of Council’s transactional banker1 which may exceed this for up to 5 working days and when funds are held as pre‐funding to match loan maturities) Local authorities A /A‐1 1.5 None 1.5 < 35% SOEs and Corporates BBB /A‐2 No more than $0.5m None 1.5 <35% exposed to with any single SOEs/ corporates issuer with BBB < 10% exposed to BBB credit rating. credit ratings. Building Societies, incl BB+ 2.0 None 2.0 < 15% 2 Wairarapa Building Society (long term)

Note 1: Limit for Council’s principal banker excludes balances in current and call accounts designated as working funds required for operational cash management purposes and deposits held as pre‐funding of an up‐coming loan maturity. Note 2: Limit excludes funds held and invested on behalf of other entities.

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In determining the usage of the above gross limits, the following product weightings will be used:  Investments (e.g. Bank Deposits) – Transaction Principal Weighting 100% (unless a legal right of set‐off exists).  Interest Rate Risk Management (e.g. swaps, FRAs) – Transaction Notional Maturity (years) 3%.  Foreign Exchange ‐ Transactional face value amount x (the square root of the Maturity (years) x 15%).

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003/18 To: Audit and Risk Committee

From: Andrea Jackson, Manager Community Facilities and Activities

Endorsed by: Pim Borren, Chief Executive

Date: 7 February 2018

Subject: Second Quarter Reports

FOR INFORMATION

Recommendation: That Council receives: (a) the quarterly report and financial statement as at 31 December 2017 from Destination Wairarapa; (b) the six monthly report and financial statement as at 31 December 2017 from Connecting Communities Wairarapa; (c) the six monthly report ended 31 December 2017 from Sport Wellington Wairarapa; and (d) the quarterly report and financial statement as at 31 December 2017 from Aratoi Regional Trust.

Purpose The purpose of this report is to provide the committee with the quarterly reports and financial statements from Aratoi Regional Trust and Destination Wairarapa and the six monthly report and financial statements from Connecting Communities Wairarapa and Sport Wellington Wairarapa.

Executive Summary Aratoi Regional Trust provides community infrastructure and a community service, while Destination Wairarapa provides a community public service.

Destination Wairarapa contributes to a Strong, Resilient Economy while Aratoi Regional Trust contributes to the arts economy.

Connecting Communities Wairarapa and Sport Wellington Wairarapa contributes to an Active, Involved, Caring Community.

Destination Wairarapa (DW) Destination Wairarapa deliverables are: (i) To increase the number of visitors to the Wairarapa, the length of time they stay in the region and the amount they spend. Specifically, DW are tasked with delivering 3% growth in tourism GDP per annum for each territory (Masterton, Carterton and South Wairarapa), with statistics sourced from infometrics. This information to be reported as Wairarapa-wide and by each territory.  Achieved : DW General Manager’s and Marketing Manager’s Report 12 January 2018, Pages 1-4, Attachment 1 412

(ii) That the percentage growth to tourism is comparable to Wellington and Taupo.  Achieved : DW General Manager’s and Marketing Manager’s Report 12 January 2018, Pages 1-2, Attachment 1

(iii) To provide a balanced budget  Achieved : DW Profit & Loss Report, Pages 1-5, Balance Sheet , Pages 1-2 and 2017-218 Budget, Attachments 2, 3 and 4 . Surplus for 6 months to 31 December is $36,548

(iv) To provide an online Wairarapa events calendar  Achieved : DW General Manager’s and Marketing Manager’s Report 12 January 2018, Page 5, Attachment 1

(v) To report quarterly to the council, including attending council meetings  Achieved : DW General Manager’s and Marketing Manager’s Report 12 January 2018, Pages 1-11, Attachment 1 . Council meeting’s 22 November 2017 and 7 February 2018

(vi) To have a joint partnership with Tourism New Zealand’s Business Events Team for at least one funded pitch per annum  Achieved : DW General Manager’s and Marketing Manager’s Report 12 January 2018, Page 6, Attachment 1

(vii) To provide a clear marketing strategy including at least six workshops and/or networking events per annum  Achieved : DW General Manager’s and Marketing Manager’s Report 12 January 2018, Page 7, Attachment 1

Connecting Communities Wairarapa (CCW) Connecting Communities Wairarapa reports on: • Proposals for addressing issues through the Community Development Task Group. o Neighbourhood support participation increased by 20% for 2017.  Achieved : CCW Bi-Annual Report July-December 2017, Page 4, Attachment 5 . January – June 2017 = 16.5% . July – December 2017 = 4.2% Total 20.7%

o At least six youth-driven events per annum  Achieved : CCW B-Annual Report July-December 2017, Page 2, Attachment 5

o Two large community events attracting at least 500 people each  Achieved : CCW Bi-Annual Report, July-December 2017, Pages 2-3, Attachment 5 . January – June 2017 was Family/Whanau Day . July – December 2017 was Christmas on Queen

o Three holiday programmes attracting at least 10 students each  Achieved : CCW Bi-Annual Report July-December 2017, Page 3, Attachment 5 . Two programmes held July and October, final programme being held in January 2018 413

• Balanced budget and half-yearly reports  Achieved : CCW Profit & Loss Report 1 July to 31 December 2017, Pages 1-4, Attachment 6 and CCW Bi-Annual Report July-December 2017, Pages 1-6, Attachment 5

• Community House programme improvements (i.e. at least eight successful programs, approved policies, at least three East-side projects initiated)  Achieved : CCW Bi-Annual Report July-December 2017, Page 3, Attachment 5

• At least two neighbourhood plans written  Not Achieved : CCW Bi-Annual Report July-December 2017, Page 3, Attachment 5 . Masterton East received . Lansdowne and Solway - draft

Sport Wellington Wairarapa (SWW) Sport Wellington Wairarapa is funded by the Council to:

• Respond to the needs of Wairarapa Regional Sports Organisations (RSOs)  Achieved : SWW July – December 2017 Report, Pages 2-4, Attachment 7

• Monitor membership trends and report on numbers of junior and senior members at targeted clubs  Achieved : SWW July – December 2017 Report, Pages 1-2, Attachment 7

• Develop three volunteer plans at local targeted organisations and deliver three workshops to develop local clubs and associations  Achieved : SWW July – December 2017 Report, Pages 3-4, Attachment 7

• Advise Council on the sport and recreation sector  Achieved : SWW July – December 2017 Report, Pages 5-8, Attachment 7

Aratoi Regional Trust The Regional Trust reports on: • No significant deviation from the exhibitions delivered as planned  Achieved: Report Q2 2017-18, Page 5, Attachment 8 • Measure visitor numbers and establish a baseline. 80% visitor satisfaction achieved  Achieved: Report Q2 2017-18, Page 7, Attachment 8 . 93% • Develop museum and historical collections and provide reports on cultural and/or significant objects  Achieved: Report Q2 2017-18, Pages 4-5, Attachment 8

• Balanced budget and at least 20% from external sources  Achieved: Report Q2 2017-18, Pages 3-4, Attachment 8

• Achieve over 2000 hours of volunteer labour  Achieved: Report Q2 2017-18, Page 7, Attachment 8 414 ATTACHMENT 1

Destination Wairarapa 12 January 2018 General Manager’s and Marketing Manager’s Report

More Visitors, Staying Longer & Spending More Overview Visitor Arrivals International visitor guest nights are holding at around the 20% share of Wairarapa’s total guest nights which continues to increase. YTD October 2017 we have 18.8% international guest nights. This compares to 15.6% and 12.3% over the past two years.

Commercial Accommodation Monitor Statistics New Zealand October 2017

Greater Hawkes Wairarapa Wellington Bay Taupo National Guest Arrivals 2017 10,906 109,265 44,259 51,447 1,601,968 2016 10,231 105,672 40,408 49,306 1,516,027 Variance 6.6% 3.4% 9.5% 4.3% 5.7% Guest Nights 2017 18,780 236,664 99,715 93,726 3,146,797 2016 17,478 238,298 87,399 90,810 3,004,062 Variance 7.4% -0.7% 14.1% 3.2% 4.8% Occupancy 2017 23.8% 60.6% 44.1% 38.8% 41.8% 2016 22.3% 68.6% 40.7% 40.2% 40.9% Variance 1.5 -8.0 3.4 -1.4 0.9 Length of Stay 2017 1.72 2.17 2.25 1.82 1.96 2016 1.71 2.26 2.16 1.84 1.98

Note: Greater Wellington excludes Wellington City

Wairarapa continues to perform well against destinations in the competitor set and against national results. 415

Commercial Accommodation Monitor Statistics New Zealand 12 Months Ending October 2016 v 2017

Greater Hawkes Wairarapa Wellington Bay Taupo National Guest Arrivals 2017 130,428 1,233,269 550,533 626,879 19,691,398 2016 124,505 1,244,397 505,385 584,349 19,192,131 Variance 4.8% -0.9% 8.9% 7.3% 2.6% Guest Nights 2017 241,999 2,672,821 1,238,244 1,119,876 39,165,490 2016 225,680 2,693,971 1,124,033 1,068,418 38,211,322 Variance 7.2% -0.8% 10.2% 4.8% 2.5% Occupancy 2017 26.7% 45.8% 36.1% 45.0% 39.3% 2016 25.7% 46.0% 32.0% 41.6% 38.0% Variance 1.0 -0.2 4.1 3.4 1.3 Length of Stay 2017 1.86 2.17 2.25 1.79 1.99 2016 1.81 2.16 2.22 1.83 1.99

Note: Greater Wellington excludes Wellington City

Carterton and South Wairarapa statistics are grouped together so the following table for Masterton is not available for the other two TLAs.

Commercial Accommodation Monitor Statistics New Zealand 12 Months Ending October 2016 v 2017 Wairarapa Masterton National Guest Arrivals 2017 130,428 75,048 19,691,398 2016 124,505 69,770 19,192,131 Variance 4.8% 7.6% 2.6% Guest Nights 2017 241,999 146,151 39,165,490 2016 225,680 137,061 38,211,322 Variance 7.2% 6.6% 2.5% Occupancy 2017 26.7% 30.4% 39.3% 2016 25.7% 28.0% 38.0% Variance 1.0 2.4 1.3 Length of Stay 2017 1.86 1.95 1.99 2016 1.81 1.96 1.99 416

Visitor Spend This series of graphs is an aggregated view of spend but still shows growth for all visitors at YE October 2017. $174.54 million for the year is the new benchmark for tourist spend in the Wairarapa, increasing by $1.52 million from the September results.

Revenue Spend by Major Market YE October 2017 (millions)

UK, $6.47, 5% USA, $6.48, 5%

Bay of Plenty, $4.72, 3%

Waikato, $6.29, 4% Wellington, $62.60, 44%

Canterbury, $5.92, 4%

Hawkes Bay, $7.42, 5%

Auckland, $11.77, 8%

Australia, $12.38, 9% Manawatu, $17.91, 13%

A reminder that the 2025 goal is for Wairarapa tourism to be generating $212million dollars a year to the local economy. YE October 2017 and the industry is generating $174.54 million which is average annual growth of 11.5% from the $134million benchmark in 2014. This is considerably better than the 5% average required per year.

For the YE October 2017 we can see the breakdown of visitor spend by TLA. Masterton and South Wairarapa spend has grown 3% since July 2017. While Carterton has grown 7%, off a lower base, in the same period. 417

The continued shallowing of the season in terms of spend is excellent and currently shows no signs of slowing. 418

Bookit Bookit is the online booking engine on the Destination Wairarapa website. Bookit continues to show some decline in bookings however the volume of decline appears to have stabilised. More emphasis is being put on promotion of the booking engine and work is being done to make booking on the mobile version easier and more appealing.

Fourth Quarter 2017 Bookit Revenue $25,000

$20,000

$15,000

$10,000

$5,000

$0

Oct-16 Oct-17 Nov-16 Nov-17 Dec-16 Dec-17

Bookit Bookings 140

120

100

80

60

40

20

0 Jul-16 Jul-17 Jan-16 Jan-17 Jun-16 Jun-17 Oct-16 Oct-17 Apr-16 Apr-17 Feb-16 Sep-16 Feb-17 Sep-17 Dec-16 Dec-17 Aug-16 Aug-17 Nov-16 Nov-17 Mar-16 Mar-17 May-16 May-17 419

Winning Business Events The first of the 2018 business events trade shows is Show Me Wellington in February. We have four partners coming with us to this first show.

Subsequent shows will be: Convene – April in Auckland Meetings – May in Auckland i-SITE Visitor Centres Highlights:  Door counts at the i-SITE Visitor Centres for the YE December 2017 (38,696) are down 3,042 (7.3%) on the previous year. o Masterton volumes of 9,761 are down 1,718 (15.0%) o Martinborough volumes of 28,935 are down 1,324 (4.4%)  While door counts have been down 7.3% on 2016, revenue is down 12.6% to $439,588. o This is a reflection of online bookings taking revenue from i-SITE Visitor Centres and a trend that’s being seen in much of New Zealand.

i-SITE REVENUE $90,000

$80,000

$70,000

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2016 2017 420

Product Development  Working with Booktown on marketing  Working with Golden Shears on marketing  Working with Vintage Harvest Festival on marketing  Working with Masterton Airport to get a collective approach from operators  Working with Transdev and Greater Wellington Regional Council on tourist train product  Working with an existing farm to develop tourism opportunities  Assisting Paraparaumu with their Air NZ relationship development  Assisting local school with marketing plan development  Presented at Wine Growers workshop in Martinborough  Participated in cellar door conversation on product development with licensing  Contribution to Dark Skies plan  Participating in Baker Ag food cluster  Coordinated meeting with Western Lake Road operators and SWDC regarding safety  Development of business events offering with a new operator  Working with a new campervan operator  Completed development of Rimutaka Cycle Trail off-road track between Western Lake Road laybys

Operator Development  Annual General Meeting 421

Destination Wairarapa Board Oct - Dec 2017 Marketing Manager’s Report

Marketing to Arriving Travelers:

Established Products and Markets Classic New Zealand Wine Trail (CNZWT) & Australia: Emerging: Singapore/ Capital Express Wreda developed an activation event in Canberra in October: https://www.wellingtonnz.com/australia/capital-collab/ David along with Escarpment Vineyard from Martinborough attended to represent the region and to demonstrate regional commitment to the Capital Express service. David was struck by the high percentage of people who attended who had already used the service to come to Wgtn. At this event and through other promotional channels WREDA featured a prize package for a trip to Wgtn, flights, accom and transfer to and tickets for Toast Martinborough:

This package was developed by Destination Wairarapa and Toast for sale to consumers through a travel trade partner in Australia. Sales were low volume but us 422

cracking the partner hotel/ the tour experiences/ and the flights /trade package was very well received by WREDA and has developed a template for future event linked packages.

Domestic Marketing Projects Included email database /social media campaigns and web content supporting:

 Toast Martinborough  Pukaha Mt Bruce Garden Tour  Kokomai/Labour Weekend  Castlepoint Lighthouse nightly light show  Masterton Motorplex season  Girl’s weekends  All major summer events

After Masterton and Greytown were successful in receiving ‘beautiful’ awards we worked to maximize this useful promotional win.

Among the new members/product we assisted during this period were the Screening Room in Masterton and Palliser Ridge Farm Experiences.

The 2018 Wine Map and visitor guide was developed very ably by Claire: http://wairarapanz.com/wine-map-visitor-guide. We co-ordinated a number of wine and food partners and attended the Central Districts Wine and Food show in Palmerston North with them.

Online We’ve had good steady growth with our email database and continue to improve our effectiveness of Facebook boosted ads. We’re increasing our activity on Instagram including some boosting. 423

Claire managed Toast Martinborough’s social media channels in the lead up to the event which gave us some valuable learnings including running Snapchat and gave her a new challenge. We charged a fee for this.

The redevelopment of the website site for a new mobile version was briefed to our supplier.

We’ve got a good understanding of how vital it is to claim a Google Business listing and have worked directly with two members to understand how to go about it. The growing influence and domination of Google in mobile content delivery including verbal search e.g. asking your phone ‘restaurants near me now’ have been factored into the way our new mobile site will work.

Trade We’ve had some excellent trade through the region in this period:  Anna Black from General Travel - a key Auckland inbounder with real strength in South-east Asian markets  Ena from Moatrek who bring tours of older NZers to the region.  An Anzcro staff famil ex Australia.

We also undertook two days of China trade sales calls in Auckland with some famils to the region to follow in 2018. We’re using both Len Yu from WREDA and Flora Lu from MCK to help with this activity.

Brand/ Imagery During this period we’ve had two really rich opportunities to refresh and enrich our image library:  Co-opted with Greytown village to develop new summery imagery of women shopping. Buildings, women with bikes etc  Claire identified an opportunity to host an Instagram photographer and to use him to capture images of Waiohine Gorge and Fensham Reserve. We are also able to connect him with Tui and Pukaha who both commissioned images from him. 424

We worked with Air NZ on their 2018 regional brand toolkit.

Media Wairarapa Lifestyle magazine has a new owner and we’ve worked closely with her on angles and Katie has written content.

We hosted Liz Light a freelance writer and photographer who we’ve worked with before with great effect. She will produce stories for a range of publications including a key one on the Saddle Road/Northern route to Wairarapa.

One of largest ever hosted group came to the region in late November – 8 social media influencers included well known lifestyle/heath/wellness personality Makaia Carr came for a weekend. Between them their combined social media following was over 500,000 people in NZ. They were completely blown away by the region: it’s almost impossible to measure the reach and recognition of these new wave of publishers. It was a great success with many learnings for us also. One outcome was this video: https://www.youtube.com/watch?v=ZgKt2wvkupA which was widely posted by several of the group on their Facebook pages.

Barb Hyde Marketing Manager 425 ATTACHMENT 2 Profit & Loss

Destination Wairarapa Inc. For the month ended 31 December 2017

Actual Budget Var NZD Var % YTD Actual YTD Budget Var NZD Var %

Income Accommodation Commission 782 3,050 (2,268) -74.3% 3,758 7,300 (3,542) -48.5% Bookit 485 1,000 (515) -51.5% 2,576 3,600 (1,024) -28.4% Donation - Trust House - - - 0.0% 29,586 - 29,586 0.0% Gain on Sale - - - 0.0% 6,817 - 6,817 0.0% Interest Received 11 10 1 5.6% 858 870 (12) -1.4% Membership 69,477 38,000 31,477 82.8% 71,745 41,000 30,745 75.0% Other Revenue 200 - 200 0.0% 6,287 11,500 (5,213) -45.3% RCT Project - Reserves Funding - - - 0.0% 20,000 - 20,000 0.0% RCT Project - Revenue 16,688 - 16,688 0.0% 26,708 - 26,708 0.0% Ticket Commission 67 190 (123) -64.8% 1,361 1,240 121 9.7% Tourism Products 269 100 169 169.1% 966 860 106 12.4% Travel Sales 520 200 320 160.1% 2,146 1,350 796 58.9% Wairarapa Visitor Guide 435 - 435 0.0% 29,336 27,000 2,336 8.7%

Council Grants Grants - CDC 4,500 4,500 - 0.0% 33,896 27,000 6,896 25.5% Grants - MDC - - - 0.0% 135,367 139,000 (3,634) -2.6% Grants - SWDC - - - 0.0% 65,000 65,000 - 0.0% Total Council Grants 4,500 4,500 - 0.0% 234,263 231,000 3,263 1.4%

Retail Sales

Profit & Loss | Destination Wairarapa Inc. | 28 January 2018 Page 1 of 5 426 Profit & Loss

Actual Budget Var NZD Var % YTD Actual YTD Budget Var NZD Var % Retail Sales 659 750 (91) -12.1% 3,271 3,500 (229) -6.5% Less Cost of Sales 49 - 49 0.0% (832) (1,500) 668 44.6% Total Retail Sales 708 750 (42) -5.6% 2,439 2,000 439 22.0% Total Income 94,142 47,800 46,342 96.9% 438,846 327,720 111,126 33.9%

Gross Profit 94,142 47,800 46,342 97.0% 438,846 327,720 111,126 34.0%

Less Operating Expenses Domestic Campaign Not Far - 2,000 (2,000) -100.0% - 2,000 (2,000) -100.0% Domestic Campaign Service - - - 0.0% - 2,500 (2,500) -100.0% RCT Project - Expenses 1,780 - 1,780 0.0% 26,530 - 26,530 0.0%

Corporate Support Expenses ACC Levies - - - 0.0% 556 - 556 0.0% Accounting Fees 1,200 1,200 - 0.0% 7,200 7,200 - 0.0% Audit Fees - - - 0.0% 7,900 7,900 - 0.0% Bad Debts - 500 (500) -100.0% - 500 (500) -100.0% Bank Fees - ANZ 51 57 (6) -10.4% 424 342 82 24.0% Board Fees - 5,903 (5,903) -100.0% 36 11,806 (11,770) -99.7% Board Members Expenses - - - 0.0% 77 190 (113) -59.5% Electricity Corporate 88 90 (2) -2.6% 193 760 (567) -74.7% Entertainment - - - 0.0% - 700 (700) -100.0% Equipment Rental 91 100 (9) -9.2% 545 600 (55) -9.2% Fringe Benefit Tax - - - 0.0% 2,050 2,840 (790) -27.8% Information Technology 607 592 15 2.5% 2,806 3,552 (746) -21.0% Insurance 454 408 46 11.2% 2,403 2,451 (48) -2.0%

Profit & Loss | Destination Wairarapa Inc. | 28 January 2018 Page 2 of 5 427 Profit & Loss

Actual Budget Var NZD Var % YTD Actual YTD Budget Var NZD Var % Interest Expense 112 488 (376) -77.0% 1,145 2,692 (1,547) -57.5% Kitchen Supplies Corporate 28 13 15 114.6% 334 78 256 328.7% KiwiSaver Employer Contributions - 960 (960) -100.0% 3,175 6,060 (2,885) -47.6% Membership Expenses - - - 0.0% 407 600 (193) -32.2% Merchant & BNZ Bank Fees 355 280 75 26.7% 1,140 1,250 (110) -8.8% Office Supplies & Photocopying Corporate 490 350 140 40.0% 3,693 3,400 293 8.6% Personnel incl. Training Corporate 193 - 193 0.0% 2,740 1,400 1,340 95.7% Rent & Rates Corporate 1,156 1,156 - 0.0% 7,500 6,936 564 8.1% Salaries 19,077 21,000 (1,923) -9.2% 144,098 140,500 3,598 2.6% Subscriptions & Membership 85 80 5 6.0% 7,326 10,790 (3,464) -32.1% Telecom incl Mobiles Corporate 829 825 4 0.5% 4,357 4,950 (593) -12.0% Vehicle Leases 512 544 (32) -5.8% 2,170 3,264 (1,094) -33.5% Vehicle Operating Costs 1,312 500 812 162.3% 8,157 5,000 3,157 63.1% Total Corporate Support Expenses 26,638 35,046 (8,408) -24.0% 210,431 225,761 (15,330) -6.8%

Total I-Site Expenses Electricity i-SITEs - 160 (160) -100.0% 1,897 2,120 (223) -10.5% Kitchen Supplies i-SITEs 28 25 3 12.4% 206 150 56 37.6% Office Supplies i-SITEs 85 33 52 158.2% 328 198 130 65.4% Personnel incl Training & Conferences i-SITEs - - - 0.0% 1,432 2,000 (568) -28.4% Photocopier i-SITEs - 160 (160) -100.0% 462 840 (378) -45.0% Rent & Rates i-SITEs 2,456 2,083 373 17.9% 12,609 12,502 107 0.9% Repairs & Maintenance i-SITEs - - - 0.0% 70 50 20 39.8% Telecom i-SITEs 371 430 (59) -13.6% 2,201 2,360 (159) -6.7% Wages 13,088 13,000 88 0.7% 79,678 83,700 (4,022) -4.8% Total Total I-Site Expenses 16,029 15,891 138 0.9% 98,883 103,920 (5,037) -4.8%

Profit & Loss | Destination Wairarapa Inc. | 28 January 2018 Page 3 of 5 428 Profit & Loss

Actual Budget Var NZD Var % YTD Actual YTD Budget Var NZD Var %

Total Marketing Expenses Advertising - 200 (200) -100.0% - 200 (200) -100.0% Business Events Marketing - - - 0.0% 8,410 - 8,410 0.0% CNZWT Marketing - - - 0.0% 2,500 2,500 - 0.0% Distribution 1,153 820 333 40.6% 5,475 5,500 (25) -0.5% Domestic Marketing - 400 (400) -100.0% 3,361 2,400 961 40.1% Domestic Marketing Email Distribution 703 300 403 134.2% 2,505 2,405 100 4.2% Domestic Marketing Facebook - 200 (200) -100.0% 171 1,050 (879) -83.7% Domestic Marketing Spring Campaign - - - 0.0% - 7,000 (7,000) -100.0% Domestic Marketing Winter Campaign - - - 0.0% 828 4,000 (3,172) -79.3% Domstic Marketing Consumer Expos - - - 0.0% 1,849 1,285 564 43.9% Imagery - - - 0.0% 2,610 2,000 610 30.5% International Marketing Alliance 522 - 522 0.0% 1,749 25,500 (23,751) -93.1% Media Hosting 98 300 (202) -67.2% 3,694 5,500 (1,806) -32.8% Relationship Marketing 33 80 (47) -59.1% 225 480 (255) -53.1% Trade Events & Training - 500 (500) -100.0% 7,259 9,350 (2,091) -22.4% Trade Famils - - - 0.0% 1,828 300 1,528 509.5% Visitor Guide - - - 0.0% 17,107 17,500 (393) -2.2% Website 2,135 1,367 768 56.2% 4,562 8,202 (3,640) -44.4% Total Total Marketing Expenses 4,644 4,167 477 11.4% 64,134 95,172 (31,038) -32.6%

Total Projects Expenses Rimutaka Cycle Trail - - - 0.0% - 5,000 (5,000) -100.0% Total Total Projects Expenses - - - 0.0% - 5,000 (5,000) -100.0% Total Operating Expenses 49,090 57,104 (8,014) -14.0% 399,978 434,353 (34,375) -7.9%

Profit & Loss | Destination Wairarapa Inc. | 28 January 2018 Page 4 of 5 429 Profit & Loss

Actual Budget Var NZD Var % YTD Actual YTD Budget Var NZD Var % Operating Profit 45,052 (9,304) 54,356 584.0% 38,868 (106,633) 145,501 136.0%

Non-operating Expenses Entertainment - Non deductible 197 - 197 0.0% 2,320 500 1,820 364.0% Total Non-operating Expenses 197 - 197 0.0% 2,320 500 1,820 364.0%

Net Profit 44,855 (9,304) 54,159 582.0% 36,548 (107,133) 143,681 134.0%

Profit & Loss | Destination Wairarapa Inc. | 28 January 2018 Page 5 of 5 430 ATTACHMENT 3 Balance Sheet

Destination Wairarapa Inc. As at 31 December 2017

31 Dec 2017 31 Dec 2016 Assets

Bank ANZ - Operational (00) 85,920 116,065 ANZ - RCT Project start 1/6/17 13,486 242 ANZ - Reserves (012) 68,977 20,768 BNZ Account 27,428 30,714 Total Bank 195,811 167,789

Current Assets Accounts Receivable 82,547 80,333 Inventory - I Sites 3,003 2,462 Petty Cash - Martinborough 215 472 Petty Cash - Masterton 97 822 Total Current Assets 85,862 84,088

Fixed Assets Furniture & Equipment 89,965 89,965 Less Accumulated Depreciation on Furniture & Equipment (73,336) (70,727) Motor Vehicle 18,252 49,351 Less Accumulated Depreciation on Motor Vehicles - (26,594) Total Fixed Assets 34,881 41,995 Total Assets 316,554 293,872

Liabilities

Current Liabilities Accounts Payable 20,352 29,727 Accounts Payable. 104 104 ANZ Credit Card - B Hyde 592 837 ANZ Credit Card - D Hancock 1,000 884 Audit Provision 9,085 - GST 15,205 16,427 Suspense 2,300 -

Held on Behalf Held in Trust 22,668 27,640 Total Held on Behalf 22,668 27,640

Payroll Holiday Pay Liability 32,262 34,322 PAYE Payable 16,604 - Total Payroll 48,866 34,322 Total Current Liabilities 120,172 109,941

Non-Current Liabilities Toyota Finance Loan 4 - 18,672

Balance Sheet | Destination Wairarapa Inc. | 28 January 2018 Page 1 of 2 431 Balance Sheet

31 Dec 2017 31 Dec 2016 Toyota Finance Loan 5 - 18,316 Toyota Finance Loan 6 20,165 - Total Non-Current Liabilities 20,165 36,988 Total Liabilities 140,337 146,929

Net Assets 176,217 146,943

Equity Asset Replacement Reserve 40,000 40,000 Contingency Reserve 50,000 70,000 Current Year Earnings 36,548 (81,657) Retained Earnings 49,669 118,600 Total Equity 176,217 146,943

Balance Sheet | Destination Wairarapa Inc. | 28 January 2018 Page 2 of 2 432 ATTACHMENT 4 433 434 ATTACHMENT 5

To Masterton District Council, Audit and Risk Committee From Gretchen Saulbrey, GM, Connecting Communities Wairarapa

Date 19 January 2018 Subject Bi-Annual report, July 2017 – December 2017 Summary • Youth Development • Community Development • Masterton Neighbourhood Support • Budget and Reporting • Connecting Communities Wairarapa – all services update

Background Masterton District Council have an Agreement for the Provision of Services to be carried out by Connecting Communities Wairarapa. This report outlines the performance of Connecting Communities Wairarapa against the Key Result Areas contained in this Agreement.

Key Result Areas

Youth Development

I. Wairarapa Rangatahi Development Strategy Participate and complete actions to support the strategy

• The Youth Development Coordinator and General Manager have attended meetings with Masterton District Council and Carterton District Council and undertaken tasks required in the strategy • The WRDS action plan has been reviewed and further actions have been completed

II. Youth Council Facilitate and support maintenance of the Youth Council and enable their engagement with MDC.

• The Youth Council have met fortnightly during term times, supported and facilitated by the Youth Development Coordinator 435

• The Youth Council have met with MDC and CDC to discuss the district Long Term Plan and have submitted to annual plan for Masterton District Council and Carterton District Council

III. Youth Events Deliver youth driven events as identified through the Youth Council and/or Wairarapa Rangatahi Strategy

Six youth events have been organised and delivered in the reporting period: 1. Money Mates budgeting workshops, September 28th – 29th – The Youth Development Coordinator alongside the Building Financial Capability Coordinator delivered a 2 day workshop to Youth Services clients aged between 15-20yrs. This workshop educated the group around budgeting, finances and awareness of debt 2. National Commemoration to mark the centenary of the Battle of Passchendaele, October 12th – Youth Council members attended 3. Foodbank appeal, November 15th – Youth Council members supported the event 4. Christmas on Queen, December 2nd – supported by the Youth Development Co- ordinator and Youth Council 5. McJorrow Park Celebration, December 9th – supported by the Youth Development Co-ordinator and Youth Council 6. Colour Run, January 19th 2018 – Youth Council activity in partnership with Rangatahi to Rangatira

IV. Youth Groups Enable the establishment and development of Youth Groups in Masterton District from a community development perspective, eg Te Awhina Youth Group (TAYG)

• Weekly youth group meetings - TAYG meet weekly during school time, supported and facilitated by the Youth Development Coordinator. The focus for these meetings is on embedding basic life skills, team building, engaging with youth and their whanau and having fun in a safe and supportive environment. • End of year trip - TAYG members were taken on a sight-seeing trip to Lake ferry, dined at the local restaurant, travelled to Cape Palliser and walked up to the lighthouse. This was a new experience for many of the members. • Christmas Feast - TAYG hosted a Community Christmas Feast at Te Awhina Cameron Community House. It was a very successful day with attendance from whanau, community and youth group members. The feast was prepared by the young people and fed just over 20 people and all the left-over food was sent home with whanau. After the meal, Christmas themed games were played and goodie bags were given to TAYG members with items such as TAYG hoodies, deodorant, lip balm, toothbrushes and toothpaste etc. Most of the items were donated from local businesses and organisations.

Community Development**

I. Community Events As determined by MDC to facilitate up to two large community events attracting up to 500 people 436

• Christmas on Queen, December 2nd - Collaborated with MDC and Masterton Library to deliver Christmas on Queen. CCW was involved in the management and co- ordination of the event and ran the entertainment in Library Square, including music performances, Santa’s Grotto and Gingerbread decorating.

II. School Holiday Programmes Hold three programmes, demonstrating delivery of activities that enable more vulnerable students to engage in pro-social, self-esteem building activities.

• Two School Holiday programmes were held in July and October (73 registered). The programmes were sports based and run in conjunction with Wairarapa Bush Rugby. Registration forms were sent to all Masterton primary schools and MIS to go home with each family. • The next School Holiday programme to be run in January has been revised to run from 9am-3pm (extending the hours), take online registrations to increase accessibility and will run a wider range of activities.

III. Neighbourhood Plans Provide facilitation and support a minimum of two communities to develop and progress action plans for community development initiatives. Work with the communities and MDC to produce Neighbourhood Plan reports.

• Regular meetings held with Lansdowne and Solway to develop plans for their own communities. • Lansdowne continuing to be supported to form their own legal entity and plans focused on Burling Park revitalisation • Solway planning focused on beautification and roading. • CCW and MDC meet fortnightly to promote collaborative working and community led planning.

IV. East Side Projects Work with MDC to deliver up to three projects aimed at supporting neighbourhood regeneration.

• Supported ongoing development of the East Side Working Group • Continued to work with MDC on a model of collaborative working between East Side Working Group, MDC and CCW • McJorrow Park project progressed and completed

** Please note our Community Development officer has been on unexpected sick leave since late November, therefore the information provided for Community Development has been compiled without the direct input from the officer and subsequently may not be a complete summary of the work done. 437

Masterton Neighbourhood Support

I. Group Numbers Increase groups by 10% in F2018.

• There has been a 4.2% household increase in group numbers to date.

II. Group Maintenance Implement group support strategy that ensures continuing group engagement.

• Regular posting on NS Facebook Page has increased activity and members • Regular refresher groups held for NS Groups • Weekly ‘Heads Up’ newsletter emailed to all groups

III. Special Programmes Support groups to target initiatives aimed at increasing community resilience, eg civil defence awareness, Junior Neighbourhood Support.

• Civil Defence o Collaborated with Civil Defence for ‘Get Ready Week’, October 9-13. Visited Masterton Railway Station with Civil Defence to talk to commuters and held a stall outside Pak n Save

• Junior Neighbourhood Support o Ambassadors for JNS from Fernridge School helped restock Masterton’s Little Libraries and helped fundraise for Masterton Food Bank o Sparky, the JNS mascot, made an appearance at both the Masterton and Carterton School Holiday Programmes

• Other o Participated in the planting of new trees in the Lansdowne trail o Attended the Neighbourhood Planning meetings in both Lansdowne and Solway o Participated in the Cole Street Neighbourhood Support group cleaning of The Crossing o Attended and manned a stall at the Ageing with Attitude Expo

Budget & Reporting Ensure balanced budgets and provide six-monthly reports.

Appended to this report is a Profit and Loss report for the reporting period 1 July – 31 December. 438

Connecting Communities – all services update

Connecting Communities Wairarapa continues to operate from a truly integrated platform, where no one part of our organisation works alone. This means our teams can gain a big picture understanding of the people and communities we help and enables us to come together to support and help each other with events and programmes when needed.

We have recently launched a new website to help create a clear message to the community and funders alike of the services we provide and the way we work to help our communities thrive. Please take a look at connectingcommunities.org.nz – the site is a work in progress so there is more content to be added and work to be done.

Social Services Team Our Social Services Team, consisting of Building Financial Capabilities, Life Skills (SuperGrans) and Strengthening Families have worked with over 200 clients over the past 6 months and are continuing to see positive results in empowering those in hardship to make long-term sustainable gains.

Te Awhina Cameron Community House and Masterton East Te Awhina Cameron Community House have been seeing over 200 people a week through their doors to engage in workshops, seek assistance or simply connect with their community.

Our Masterton East Co-ordinator has played an integral part in the completion of McJorrow Park and enabling the Eastside Community Group to produce a 5 year strategic plan.

Collaboration in action Below are just three examples (of many) where we have offered an integrated approach across different areas of our organisation to serve our community.

1. Supporting a family in need Wrap-around support was offered to a family experiencing serious hardship and causing trouble in Masterton East. Our TACCH co-ordinator took food to the family and spent time creating a relationship with them, the family was then referred to the Building Financial Capabilities service and our Youth Development Co-ordinator worked with a young person in the family to engage them in the Te Awhina Youth Group and the local boxing academy.

2. School Holiday Programme With our re-vamped School Holiday Programme we have been able to engage all staff to contribute to the running of the programme. Our Masterton East Co-ordinator has stepped in to co-ordinate the programme while our Community Development Co-ordinator is on sick leave, our Life Skills Co-ordinator is baking muffins for the children to eat and running food workshops with some of the older children, our Youth Development Co-ordinator will be running activities throughout the programme and our TACCH Co-ordinator is running craft activities along with a member of the Masterton East community. By working together, we are also able to identify vulnerable families with referrals for the programme coming from our Social Services Team and TACCH Co-ordinator.

3. Money Mates Workshops The Youth Development Coordinator alongside the Building Financial Capability Co-ordinator specifically designed and delivered a two day workshop to youth aged between 15-20yrs. These youth were referred directly from Youth Services and the workshops educated the 439

group around budgeting, finances and awareness of debt. As a result of the development of these workshops, the Social Services Team will now be running term-long workshops to students at Makoura College and have worked with the Teen Parent Unit. 440 ATTACHMENT 6 Profit & Loss

Connecting Communities Wairarapa Inc. For the 6 months ended 31 December 2017

Actual Budget Var NZD Var % YTD Actual YTD Budget Var NZD Var %

Income Carterton District Council 3,000 3,000 - 0.0% 3,000 3,000 - 0.0% COGS 1,500 1,500 - 0.0% 1,500 1,500 - 0.0% Compass Health - Youth Kinex recovery 6,759 6,900 (141) -2.0% 6,759 6,900 (141) -2.0% DIA Community development scheme 80,000 80,000 - 0.0% 80,000 80,000 - 0.0% Eastern & Central Community Trust - 4,000 (4,000) -100.0% - 4,000 (4,000) -100.0% Housing Research Project (4,000) - (4,000) 0.0% (4,000) - (4,000) 0.0% MDC Youth Council Resources (376) - (376) 0.0% (376) - (376) 0.0% Ministry of Social Development (161) 78,679 (78,840) -100.2% (161) 78,679 (78,840) -100.2% MSD Building Financial Capability 60,158 60,357 (199) -0.3% 60,158 60,357 (199) -0.3% MVCOT 78,679 3,000 75,679 2522.6% 78,679 3,000 75,679 2522.6% Neighbourhood Support New Zealand - 2,850 (2,850) -100.0% - 2,850 (2,850) -100.0% NZ Lotteries (12,000) 42,181 (54,181) -128.4% (12,000) 42,181 (54,181) -128.4% Public Trust - 4,000 (4,000) -100.0% - 4,000 (4,000) -100.0% South Wairarapa DC 14,000 7,000 7,000 100.0% 14,000 7,000 7,000 100.0% Strengthening Families (517) 1,820 (2,337) -128.4% (517) 1,820 (2,337) -128.4% SuperGrans recoveries 34,975 26,268 8,707 33.1% 34,975 26,268 8,707 33.1% TACCH recoveries 19,765 18,000 1,765 9.8% 19,765 18,000 1,765 9.8% Tindall Foundation - 3,744 (3,744) -100.0% - 3,744 (3,744) -100.0%

Masterton District Council Grant Income

Profit & Loss | Connecting Communities Wairarapa Inc. | 29 January 2018 Page 1 of 4 441 Profit & Loss

Actual Budget Var NZD Var % YTD Actual YTD Budget Var NZD Var % Masterton District Council 98,974 93,350 5,624 6.0% 98,974 93,350 5,624 6.0% MDC Creative Communities Scheme 1,400 - 1,400 0.0% 1,400 - 1,400 0.0% Total Masterton District Council Grant Income 100,374 93,350 7,024 7.5% 100,374 93,350 7,024 7.5% Total Income 382,154 436,649 (54,495) -12.5% 382,154 436,649 (54,495) -12.5%

Less Cost of Sales Cost of Goods Sold (7) - (7) 0.0% (7) - (7) 0.0% Total Cost of Sales (7) - (7) 0.0% (7) - (7) 0.0%

Gross Profit 382,161 436,649 (54,488) -12.0% 382,161 436,649 (54,488) -12.0%

Plus Other Income Civic Awards - 2,000 (2,000) -100.0% - 2,000 (2,000) -100.0% Interest Income 22 - 22 0.0% 22 - 22 0.0% Total Other Income 22 2,000 (1,978) -98.9% 22 2,000 (1,978) -98.9%

Less Operating Expenses Consulting Expenses 1,275 - 1,275 0.0% 1,275 - 1,275 0.0% Legal fees 1,035 - 1,035 0.0% 1,035 - 1,035 0.0% Little free library 12 - 12 0.0% 12 - 12 0.0% NSNZ Project 71 1,400 (1,329) -94.9% 71 1,400 (1,329) -94.9% Repairs and Maintenance 245 - 245 0.0% 245 - 245 0.0%

Expenses related to project activities 12 Nights of Christmas - 1,000 (1,000) -100.0% - 1,000 (1,000) -100.0% Community Network Expenses 4 - 4 0.0% 4 - 4 0.0% Discretionary Fund 430 1,500 (1,070) -71.3% 430 1,500 (1,070) -71.3% Eastside Project 5,217 - 5,217 0.0% 5,217 - 5,217 0.0%

Profit & Loss | Connecting Communities Wairarapa Inc. | 29 January 2018 Page 2 of 4 442 Profit & Loss

Actual Budget Var NZD Var % YTD Actual YTD Budget Var NZD Var % Fundraising/Communications - 300 (300) -100.0% - 300 (300) -100.0% Junior Neighbourhood Support 123 150 (27) -17.7% 123 150 (27) -17.7% Masterton East CD (1,759) 228 (1,987) -871.5% (1,759) 228 (1,987) -871.5% MDC Com Development 3,749 750 2,999 399.9% 3,749 750 2,999 399.9% Mstn East Youth project 3,062 2,400 662 27.6% 3,062 2,400 662 27.6% School Holiday Programme Project - SHP (5,242) 2,000 (7,242) -362.1% (5,242) 2,000 (7,242) -362.1% Tindall Foundation Grant expenditure 1,687 3,740 (2,053) -54.9% 1,687 3,740 (2,053) -54.9% Youth Council Resources 3,219 2,748 471 17.1% 3,219 2,748 471 17.1% Youth Development Activities 896 2,250 (1,354) -60.2% 896 2,250 (1,354) -60.2% Youth Kinex Expenses 6,908 6,900 8 0.1% 6,908 6,900 8 0.1% Total Expenses related to project activities 18,296 23,966 (5,670) -23.7% 18,296 23,966 (5,670) -23.7%

Other Expenses Administration / Office Expenses 70,427 62,096 8,331 13.4% 70,427 62,096 8,331 13.4% Total Other Expenses 70,427 62,096 8,331 13.4% 70,427 62,096 8,331 13.4%

Volunteer and Employee Related Costs ACC Levy 2,004 2,600 (596) -22.9% 2,004 2,600 (596) -22.9% KiwiSaver 5,713 6,600 (887) -13.4% 5,713 6,600 (887) -13.4% Staff Supplies 1,051 60 991 1651.5% 1,051 60 991 1651.5% Staff Welfare - 300 (300) -100.0% - 300 (300) -100.0% Supervision - 720 (720) -100.0% - 720 (720) -100.0% Training 31 510 (479) -93.9% 31 510 (479) -93.9% Volunteer Expenses 125 270 (145) -53.6% 125 270 (145) -53.6% Wages 213,023 219,821 (6,798) -3.1% 213,023 219,821 (6,798) -3.1% Total Volunteer and Employee Related Costs 221,947 230,881 (8,934) -3.9% 221,947 230,881 (8,934) -3.9%

Profit & Loss | Connecting Communities Wairarapa Inc. | 29 January 2018 Page 3 of 4 443 Profit & Loss

Actual Budget Var NZD Var % YTD Actual YTD Budget Var NZD Var % Total Operating Expenses 313,308 318,343 (5,035) -1.6% 313,308 318,343 (5,035) -1.6%

Net Profit 68,875 120,306 (51,431) -43.0% 68,875 120,306 (51,431) -43.0%

Profit & Loss | Connecting Communities Wairarapa Inc. | 29 January 2018 Page 4 of 4 444 ATTACHMENT 7

6 month report to SPORT WELLINGTON WAIRARAPA Masterton District Council

July 2017 – December 2017 445

PARTICIPATION OPPORTUNITIES

TRENDS IN SPORT PARTICIPATION

Data from Sport New Zealand; Sport and Active Recreation Survey 2014 shows Adult participation has declined by 7.7 percent between 1998 and 2014, and club membership had decreased by 11.1 percent which is not the case with Wairarapa RSOs.

Research from Sport New Zealand 2011 Young Peoples Survey show Sports/activities that had relatively high participation rates in both the school setting and with clubs which is relevant to trends in the Wairarapa. Junior club membership is increasing and we continue to have one of the highest secondary school participations rates in the country. The infographic shows the breakdown of membership groups which was collected from Wairarapa Tennis, Wairarapa Cricket, Hockey Wairarapa, Netball Wairarapa & Wairarapa Bush Rugby Union

MEMBERSHIP

Tracking of membership allows for a better understanding of regional data against national trends. It is also capturing the use of casual offerings to meet the needs of recreational & social users of sport and new opportunities targeting specific population groups ie. Younger age groups and in school opportunities verses after school & weekend traditional sport

Local membership trends 2016 2017

Wairarapa Tennis membership trends show a decline in both Junior 596 and Senior membership numbers for the 2017 season. 372

Wairarapa Cricket membership trends show a significant increase in junior membership and a slight increase in senior membership 974 1104 number Including 14 senior girls up from 0 in 2015/16

Hockey Wairarapa membership trends show that junior and senior 1401 membership numbers have increased slightly over the 2017 season. 1458

Netball Wairarapa membership trends show a spike in junior membership in 2017 and a slight increase in senior membership 1291 1374 number.

Wairarapa Bush Rugby membership trends show a significant growth in junior membership numbers and a small decline in senior 2541 2595 membership numbers. 446

Wairarapa secondary schools continue to have the highest participation rates in the country. NZSSSC national data shows that (2016) 71% of secondary school students in the Wairarapa play sport for their school.

Anecdotally Wairarapa primary schools tell us that 90%, if not more, primary age children play sport for either a club or school. In order to sustain participation at this level, sport requires more volunteers and more coaches.

HEALTHY LIFESTYLES – HEALTHY PEOPLE CONNECTING FOR HEALTHY COMMUNITIES

Being part of a person’s journey towards lifestyle changes and improving health, is an experience that is rewarding for both the participant and our Healthy lifestyles team.

Our impact on life-long involvement with physical activity has been extended through a contractual partnership with the Wairarapa District Health Board. The Green Prescription (GRx) programmes have been extremely well received.

In the past six months 141 adults have been supported through Adult GRx, 19 children have engaged in Active Families and 13 mums and babies have benefited through Maternal GRx.

The GRx programmes reach our most vulnerable people with health related problems and our community run Healthy Lifestyle Programmes reach into our low socio-economic areas of our region.

WORKFORCE EXCELLENCE WHAT’S HAPPENING IN THE COMMUNITY?

The past 12 months we have placed a lot of emphasis on strengthening our relationships with sporting organisations and key stakeholders, in order to have greater influence on decision making for grass roots sport. 447

In the past Regional Sport Organisations (RSOs) would focus on delivering competitions and representative programs, leaving their membership clubs to fend for themselves.

We needed to do more to understand;

 RSO/Club relationships  Barriers to engaging sport volunteers to achieve success

RSOs have identified that they have little capability or capacity to drive club development. We continue to see volunteers and finance as the main issues facing clubs with few strategies or little planning involved helping to improve these issues. These issues are what we are looking at improving with the clubs we are currently working with, progress has been steady but we are making progress.

We hosted a Regional Sport Leaders’ Summit where five RSOs indicated a commitment to work together to address three key focus;

 Trends in participation  Valuing volunteers  Club membership 6 52 520 RSOs CLUBS VOLUNTEERS Club and volunteer numbers are estimates, and do not includes coaches and managers. We hope to have more accurate data for our 12 month report. RSOs include: Wairarapa Cricket, Wairarapa Tennis, Hockey Wairarapa, Netball Wairarapa, Wairarapa Bush Rugby Union & Capital Football

VALUING VOLUNTEERS

Wairarapa Cricket and Netball Wairarapa have developed a Volunteer Plan and are implementing several components. Tracking their volunteers has enabled sport to identify their volunteers, their role and record any training. This data will also enable the RSOs to make better informed decisions regarding the gaps in their volunteer requirements.

o Wairarapa Cricket – Baseline volunteer numbers for 2015/2016 season are 88; 2016/2017 numbers are 139. o Netball Wairarapa – Baseline collected end of 2016 – 190; 2017 - 242 o Hockey Wairarapa – we have been working with hockey to understand what data they collect and how we can simplify their database. baseline numbers have not been collected yet

Throughout 2017 we have made a number of changes to the way we work, which has resulted in the following learnings;

INFLUENCING OUR KEY STAKEHOLDERS BY ROLE MODELLING GOOD BEHAVIOUR

 Creating accountability – set desired outcomes and measures. Know your stakeholder; mitigate any dynamitic unhelpful behaviour.  Self-evaluate after key engagements to capture key information, reflect on how it went and innovate.  Engage subject experts to deliver the content it supplements the messages we are constantly telling and sharing with our stakeholders

PREPARE YOUR AUDIENCE FOR FULL PARTICIPATION

 Sending out pre-read information before workshop or key meetings to ensure our attendees have some time to read and understand key messages we want them to take away. 448

 Providing RSOs and clubs with trends and insights to reinforce key messages.  Format – make the engagement as interactive as possible. Everyone likes to share their successes.  Evaluate the key points throughout the session; don’t leave it until the end when everyone’s in a hurry to get home.  Monitor Impact – ask participant to identify two or three things they will take away and work on.  Follow up – always follow up with your attendees on their identified work-ons and any specific comments in the evaluations. Face-to-face is best.

We also know that there are a number of gaps and challenges we want to influence, they are;

 We still know there is a lack of customer focus and understanding the true value of surveys.

Many organisations don’t refer to their plans and potentially this is because they were not ready for these to be implemented. Something we will look to address

COACHING HUB

The Coaching Hub consists of six RSOs and seven colleges and focuses on developing systems and processes that target youth as entry level foundation coaches for sport through shared responsibilities that nurture and build confidence to continue along a coaching pathway

Our work in the secondary school space, has allowed us to leverage off this relationship and those with our RSOs to target college settings specifically college students to enter onto the coaching pathway.

Regional coaching (secondary schools) baseline data has been captured for 6 sports (hockey, netball, cricket, rugby, football and basketball) as part of the new Coaching Hub. These figures show that Wairarapa has the following coaches in these sports contributing to secondary school sport:

 Secondary School Coaches – TOTAL= 150 o 47 student coaches each receiving a minimum of 5x sport interventions o 103 development coaches

A key outcome from this work is to ensure ongoing support and learning is provided to student & foundation coaches as research tells us that coaching is a journey and longevity in the crafting of ones coaching skills and philosophies cobbled with a quality experience will see a lifetime contribution to sport and community. Therefore we have started to monitor number of interventions and Voice of the Participant surveys to assist with our insights.

.

SPORT/SCHOOL FORUM Two sport coordinator and sport development officer meetings were held in the past 6 months (Aug & Nov). Topics included co planning for 2017/2018, and evaluating shared projects.

Bringing schools and sport together is a good opportunity for collaboration and planning has been positive. It gives both parties the opportunity outline what it is they do and how they can support each other moving forward. The relationship has seen an improved level of planning by sport to coincide with the calendar restrictions.

However there is still a lot of finger pointing going on and not knowing what each other does which is something we are trying to change.

Gap – sport could provide further support for student coaches and understand who they are and what they require to progress as coaches. It was assumed that a signed Charter between RSOs and colleges to the Coaching Hub would be a fairly easy step however we have found that getting the commitment from the sport has proven to be very difficult. We are not certain why this is but continue to work alongside our partners to overcome this. 449

STRATEGIC INVESTIMENT

WHAT’S HAPPENING IN THE COMMUNITY? REGIONAL STRATEGY FRAMEWORK

6 of the 8 TAs have formally endorsed Living Well as have 11 RSOs from the Wellington region. (Endorsement means support for the vision and direction and a willingness to work with others on projects of regional significance). We are continuing to work with other stakeholders around endorsement.

Regional Approach for Community Spaces and Places Planning – Key messages A Regional Spaces and Plan project is underway which will provide a high-level strategic framework for informing planning and decision making about spaces and places (facilities) in the region. The primary driver for this work is to grow participation - ensuring sport and active recreation is accessible to everyone. Other drivers for a regional plan include: a. Informing the long term decision making of key organisations including councils and other funders b. Ensuring our region can retain and develop future champions (individuals and teams) c. Ensuring our region is well placed to attract significant local, regional, national and international events that drive both social and economic benefit d. Ensuring value for money - guidelines and principles are adopted that ensure public spend is targeted and that facilities are able to be maintained and cared for. The ‘Plan’ will take account of known priority projects already in train across the region given the timing of its development in relation to councils’ current long-term planning timetables. While Sport NZ is supporting Sport Wellington to lead this work, the project is being overseen by a project steering group comprising representatives from local authorities, sporting organisations and funders.

KIWISPORT INVESTMENT IN WAIRARAPA (JULY – DECEMBER 2017) KiwiSport is a government funded initiative administered at Sport Wellington on behalf of Sport New Zealand with the aim to engage school-aged children in quality sport opportunities. From the beginning (January 2010), Sport Wellington have invested nearly $7 million dollars in community programmes that increase the availability and accessibility of sport opportunities for young people.

Sport Wellington has $858,052 invested in the ten current projects that are delivered in the Wairarapa where children are involved in meaningful experiences that focus on our priority areas: o Females (10-18 years), o Quality intra and inter-school sport o Confidence and skill development o Family and community engagement o Coaching

As a result of this investment, from July – December 2017, a total of 4726 primary- aged children and 4125 secondary school students have had over 385 opportunities to participate in sport or sport-related programmes where 162 coaches and 692 volunteers were involved. 450

KiwiSport Lead Organisation Project Name amount Delivery data invested Douglas Park School Primary Sport Wellington $ 65,000.00 Term 3 2017: 1543 participants, 16 (Masterton Cluster) Expansion schools, 17 opportunities, 230 volunteers Term 4 2017: 1746 participants, 12 schools, 4 opportunities, 129 volunteers Wairarapa Cricket Backyard Cricket $ 23,861.00 Term 4 2017: 854 participants, 4 (Colleges) colleges, 108 opportunities, 4 coaches, 16 volunteers Sport Wellington College Coaching Hub $ 48,990.00 Term 3 & 4 2017: 47 student Project coaches each receiving 5 interventions & 103 development coaches 7x colleges 2,922 participants impacted. Greytown Sport and Primary Sport Wellington $ 22,074.00 Term 3 2017: 549 participants, 10 Leisure (South Expansion schools, 4 opportunities, 80 Wairarapa Cluster) volunteers Term 4 2017: 563 participants, 12 schools, 4 opportunities, 129 volunteers Netball Wairarapa Junior Netball Programme $ 7,000.00 Term 3 2017: 24 students, 7 schools, 6 opportunities, 3 coaches, 7 volunteers Wairarapa Cricket Female Cricket $ 37,466.00 Term 4 2017: 301 primary school Development Officer participants, 6 primary schools, 349 secondary school participants, 2 colleges, 101 opportunities, 5 coaches, 28 volunteers Hutt City Council Fundamental Skills $ 453,451.00 Project Sport Wellington Getting Started in $ 61,615.00 No delivery in this timeframe Coaching Course Capital Zone Basketball Kiwi Hoops Programme $ 78,050.00 No delivery in this timeframe Parafed Wellington Youth Group Programme $ 10,000.00 No delivery in this timeframe

KiwiSport projects currently funded to deliver in the Wairarapa:

Sport Wellington works with each KiwiSport project to provide further guidance around physical literacy, coach development and quality delivery, ensuring each sport or sport-related experience children are having is of high quality and focuses on their individual needs.

Over the second half of 2017 a range of successes have been captured, to name just a few: Wairarapa Cricket (Backyard Cricket) had Rathkeale College take part in their sessions for the first time, resulting in all 7 secondary schools being involved in the Wairarapa Region. Over this period 22 PE classes received 3 sessions each. From observations student growth and confidence across the 3 sessions was significant and teacher feedback was “excellent.” Feedback from the school sports coordinator St Matthews in particular emphasised the role the sessions had played in increasing team participation as the school look to increase their numbers in 2018, with the potential of an additional one or two traditional teams in WCA competitions. 451

Wairarapa Cricket Association (Female Development Officer) have been working closely with Wairarapa Netball through the Coaching hub to align their work they are doing with females, especially coaches. The flow on effect of the Getting Started in Coaching courses that some female cricket coaches completed has seen them coaching school teams and helping to coach on club game days. “Katherine has developed her coaching skills and confidence extensively over the course of the recently completed season. As our Female Development Officer she now has the capability of delivering sessions at a number of different levels. Katherine led a full female coaching team to deliver the first ever mother-daughter sessions held in Wairarapa and feedback from this was fantastic.”

In December 2017 the second women’s forum was held with a focus on female engagement and developing pathways – Wairarapa Cricket Association now has a female representative on their board and Carterton junior cricket’s board are all female.

The ANZ futureFERNS is a national netball programme that focuses on developing fundamental skills at primary school level. Sandy Biel, Netball Wairarapa's Centre Manager, said "Previously our competition started at year 5 but this was an opportunity to introduce the sport to children from year 1 in a safe and fun environment." She adds, “The junior programme has breathed new life into netball. It’s boosted the numbers and parents want to be involved.”

SPORT AND ACTIVE RECREATION ORGANISATIONS SURVEY (SARO) The purpose of the survey is to collect data and intelligence annually from as many sport and active recreation organisations (SAROs) in the Wellington region as possible, so that it can be used (1) to analyse trends and monitor performance of SAROs, (2) to assess the impact and expectations of SW in the sector, and (3) to offer an opportunity to SAROs not currently engaged with SW to inform its strategic direction, efforts and allocation of resources.

This is a reviewed and updated survey from our previous RSO survey that we undertook annually. Key results are: o 61% of respondents think that the facilities they have access to meet their current needs and 45% do not think that the growth of their sport/activity will be limited in the next 5 years due to issues with facilities. However, 39% of respondents have current issues in accessing facilities that prevent the optimum delivery of their sport/activity. Most report inadequate or unavailable facilities (due to them being used by other groups) and high hiring costs. More than half of the respondents (55%) forecast that access to suitable facilities will be a limiting factor for the growth of their sport/activity in the next 5 years. o 82% of the respondents have at least one plan guiding their organisation. The most popular tool used by organisations was a Strategic Plan, far ahead of any other. Less than half of the respondents have a Business or Annual Plan, a Communication Plan or a Stakeholder Management Plan. Only 11% of the respondents had a Volunteer Management Plan. Local clubs were more likely to not have any plans in place (36% vs. 12% for regional and national organisations) and only 45% had a strategic plan. o When asked about current significant concerns, 29% of the issues identified related to funding and finances: o “Funding to be able to offer the range of programmes that we consider necessary to keep the sport relevant and attractive to participants.” (Athletics Wellington) o The sport and active recreation sector traditionally relies on volunteers to operate. This is true among the respondents with 75% of the various roles and responsibilities we listed being filled and held by volunteers. In local clubs the proportion increases to 95%. (In some instances, roles and responsibilities listed were shared between individuals, including being shared between paid and volunteer staff.) When asked about their current concerns, 30% of the issues related to volunteer management – more than any other topic. In addition, a 452

large number of comments throughout the survey indicated serious concerns and issues related to lack of volunteers which impacts the ability of SAROs to deliver their sport or activity.

Concise key messages will be shared with sport and active recreation organisations (and other RSTs) in September.

RSO LEADER’S SUMMIT Sport Wellington Wairarapa hosted the very first RSO Leader’s Summit where five RSOs were invited to discuss the “Future of Sport.” Both national and international insights were shared including Sport NZ’s Voice of the Participant & Future of Sport research and local knowledge. Subsequent forums from the summit has laid the foundation for RSOs to work together to address participation, volunteerism and club membership in Wairarapa and are actively working together to identify their Volunteer Value i.e. No’ volunteers, role and time, as well as mobilizing sports resources to support club volunteers.

WAIRARAPA FUNDERS FORUM Sport Wellington has been a regular attendee of this forum and has seen a lot of value in networking and sharing updates on projects. It is also a good platform to find out who is applying for what and potentially how Sport Wellington can support that organisation.

The intention of the forum is: o Strengthen relationships and communication between charitable funders and other parties involved in the sector. o Provide an opportunity to discuss developments in the sector at strategic and operational levels. o Advice on policy changes to individual funders. o Provide an opportunity to discuss significant community projects in the Wairarapa, enabling forum members (individually or jointly) to be proactive if considered appropriate. o Allow forum members to identify and discuss key regional issues and trends.

MOU WITH DISTRICT COUNCILS We are in the process of signing off on an MOU with Masterton District Council. The MOU priorities align with the “Living Well” regional framework priority areas. 453 ATTACHMENT 8

Aratoi Regional Trust - Report Q2 2017-18

Introduction The Financial Statements for the period ended 1 July 2017 – 31 December 2017 shows a YTD surplus of $1,970 compared to a budgeted deficit, as per the Annual Plan of $(20,011). The second quarter period of 1 October 2017 – 31 December 2017 shows a deficit of $(11,096) compared to a budget of $(13,833).

The financial statements and accompanying variance narrative for the period follow below.

Financial Reports - Variances to Budget for the 2nd quarter October to December and YTD 2017 1) YTD revenues are ahead of budget for the 2017/18 year by 9% compared to the set budget.  Local council funding received from MDC and CDC was greater than the budget due to an increase in their respective annual funding amounts subsequent to publishing the 2017/18 Annual Plan.  The Lands Trust Masterton (LTM) Building Grant continued to be received monthly and then paid back to them as building rental expense each month as per the budget.  Major Exhibition funding income (from funding already received and accounted for on the Balance Sheet) is matched to expenditure as it is made. Where there is a difference, it is because the current major exhibition, Elizabeth Thomson, has received no specific funding from external sources and has been produced from the annual Aratoi exhibition funding.  Major donations are down as the annual bequest income received has not realised as much income as expected due to lower investment and interest rates etc, beyond Aratoi’s control.  Self-generated income streams are ahead budget for the quarter. Koha and other donations towards costs continue to be generously received and cannot be budgeted for.  The Front of House Retail space has maintained a positive variance of sales to budget. Retail sales were 38% up on budget for the quarter. Numerous exhibition works were sold during the quarter leading to enhanced commission income for Aratoi. The Christmas retail sales were extremely high and well past expectations. The Aratoi retail space continues to excel.

2) For the 2nd quarter, October to December 2017, 27% of Aratoi’s revenue (excluding the grant from LTM re building rental) was from sources other than MDC and on a YTD basis, 31%.

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3) Major exhibition costs are over budget for the quarter as this is when the next major exhibition, Elizabeth Thomson - Cellular Memory, began. There was no specific funding received from external sources and so the exhibition is funded from the annual exhibitions budget. The publication associated with this exhibition has had costs to date matched with funding received for that purpose.

4) Advertising expenses are in line with budget for the quarter.

5) Collection expenses incurred a major cost of restoration/conservation work on a collection item that was included in the exhibition – Gifted.

6) Property expenses show a positive variance for the quarter as some budgeted expenditure did not occur.

7) Employment expenses continue to have a positive variance, 9.6% for this quarter. Whereas some budgeted wage costs have previously been recoded to the exhibitions line, this quarter included the cost of some staff annual leave being taken.

8) General Operation costs are in line with budget for the quarter.

Risk Management and Internal Control 1) Working capital (current assets less current liabilities) was $37,732 at 31 December 2017. ART is able to meet its financial commitments as they fall due.

2) Insurance coverage is in place until 31/03/2018. Copies of all insurance policies are on file in the Director’s office. Management is confident that there are sufficient insurances in place to cover the Collection, works on loan and visiting works.

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KEY RESULT AREAS

SERVICE ONE – COLLECTIONS We will care for our collections. We will research our collections. We will share our collections with communities. We will strategically develop our collections.

 Gifted, a selection of acquisitions from the last 5 years, opened in the main gallery late September. The exhibition closed with a high tea and a tour of the exhibition for donors of featured objects.  Remaining work from the Rutherford Trust Collection was packed and returned to the James Wallace Trust, who now owns the collection.  Preparation continued for charged Back-of-House tours for tourist market to be offered by Destination Wairarapa, Trip Advisor etc.; anticipated launch early 2018.  Two exhibitions of works and objects from the collection are under preparation: Māori textiles and Portraits from the collection.  John Elder Moultray (1865–1922), Otira Gorge – received conservation treatment and was included in the Gifted exhibition.  Collection tours held for Victoria University lecturers and students, Aratoi volunteers

Outward Loans  All outward loans to Aigantighe, Timaru (Jack Dunn medals); the City Gallery Wellington (Colin McCahon, A Poster for the Urewera No 2) and NZ Portrait Gallery, Wellington and Pah Homestead, Auckland (Colin McCahon, Portrait of Anne) were returned.

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New acquisitions The following items were acquired for the collection:  Historic textile items from the Wairarapa were passed on by Te Manawa in Palmerston North  A Joseph Dixon glass marble bottle and a ceramic chemist’s bottle  Textile items donated by a Burton family descendant  Stephen Allwood, Glasses (2017) was purchased for the collection

SERVICE TWO – EXHIBITIONS We will tell our history and stories and connect with our communities. We will be a community forum for learning, understanding and participation in art, history and culture.

Date Exhibition Classification 9/9 – 8/10/17 Breadcraft Wairarapa Schools Art Outreach (Youth) 9/9 – 8/10/17 Hélène Carroll – This is not a Pyjama Party Art/Social History (local) 16/9 – 26/11/17 Boundless: Printmaking Beyond the Frame Art (national) 23/9 – 26/11/17 Gifted: Recent Acquisitions Collection (Social History & Art) 30/9 – 26/11/17 An Ornament to the Town: The Band Rotunda in Touring (Social New Zealand History) 30/9 -15/10/17 Lions International Peace Poster Contest 2017 - Outreach (Youth) 18 13/10 – 19/11/17 Tina Finn – The Uses of Enchantment Art (local) 13 – 22/10 Kokomai – Wairarapa Creative Festival Outreach (Performance) 28/10 – 12/11/17 Wairarapa Embroiderers Guild exhibition Craft 3 – 26/11/17 Trust Youth: Recent Works by Selected Year 10 Outreach (Youth) Wairarapa Students 18/11 - 10/12/17 King Street Artworks 20th Annual Exhibition: We Community/Art (local) Made It 25/11 – 28/1/18 Stephen Allwood – Darkness and Delight – New Art (local/national) Still Lifes 9/12 – 2/4/18 Elizabeth Thomson – Cellular Memory Art (national/international) 16/12 – 18/2/18 Wairarapa Arts Review Art (local)

Exhibition support programmes  Tina Finn The Uses of Enchantment storytelling. Every Saturday during the exhibition  Kokomai events 13-22 October  Free printmaking workshops: 16 September, 21 October and 4 November  Museum Café: 21 October, 3 December  Block Party, 21 October. A neighbourhood community festival organized by Aratoi in conjunction with Our Future Masterton. http://www.aratoi.org.nz/event/2017/10/block-party-masterton  Elizabeth Thomson Cellular Memory artist and curator talk, 9 December. Attended by 64+

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SERVICE THREE – ACCESS & ENGAGEMENT We will partner and engage with Wairarapa communities. We will be a valued community resource. We will encourage dialogue and interaction onsite, offsite and online.

 Iwi education programme developed in partnership with iwi and with financial assistance from a MTLT education grant. A total of 2848 Wairarapa school children participated.  Te Kura Kaupapa Māori o Wairarapa poroporoaki and hangi to thank Aratoi staff for hosting the iwi exhibition Te Marae o Rongotaketake and running the education programme.  Organising and facilitating the inaugural Block Party on 21 October; a fun neighbourhood and community engagement event attracting large crowds.  A sell-out Friends of Aratoi Fashion Showcase held 26 October  Professional links with the following museums and cultural institutions: Museum of New Zealand Te Papa Tongarewa, Auckland Art Gallery Toi o Tāmaki, Tāmaki Paenga Hira Auckland Museum, MTG Hawke’s Bay, Hastings City Art Gallery, Expressions Whirinaki Arts & Entertainment Centre, Te Manawa, Whanganui Regional Museum, Puke Ariki, NZ Portrait Gallery, Alexander Turnbull Library, Parliamentary Collection, CIRCUIT Artist Film and Video Aotearoa NZ, The Suter Art Gallery, Dunedin Public Art Gallery, Fowler Museum at UCLA, Featherston Heritage Museum.  Two 3-day School Holiday Programmes in collaboration with Fab Lab Masterton – October and December. The programme includes two to three spaces funded through the Creative Communities scheme to increase access.  Judging and supporting Lions International Peace Poster Contest 2017-18 with a display of selected submissions in the Foyer.

Visitor count analysis Q2 Active engagement = level of engagement with Aratoi staff, retail area and/or exhibitions and displays. Included in the numbers are exhibition openings, events, school visitations and workshops.

11,986 Facility total 9,470 Exhibition galleries, programmes and engagement

Outreach (estimated visitation) 130 Friends Fashion Showcase 2420+ Featherston population plus visitors to the Featherston Heritage Museum to view Featherston Camp exhibition panels, props, ephemera etc.

Month Active Engagement Less Rentals Net Engagement Total Engagement 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 July 2,572 73 2,499 3,673 August 4,019 85 3,934 4,880 September 3,321 54 3,267 4,143

TOTAL Q1 9,912 6,454 212 80 9,700 6,374 12,696 9,253

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October 3,548 17 3,531 4,413 November 2,734 20 2,714 3,568 December 3,188 0 3,188 4,005 TOTAL Q2 9,470 6,001 37 118 9,433 5,883 11,986 8,718 YTD 19,382 12,455 198 12,257 24,682 17,971

Overall, 79% of the total visitors to the facility during Q2 were actively engaged with the exhibitions, events and activities.

Quarter Active Engagement Days Open in Average / day Quarter 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 Jul-Sep 9,912 6,454 92 92 108 70 Oct-Dec 9,470 6,001 90 87 105 69 Jan-Mar 5,452 79 69 Apr-Jun 6,724 91 74 24,631 349 70

Facebook Reach: Monthly reach about 8,000-10,000 people People who like us: 1,355 (up 49% since Jan 2017) Most viewed posts: Wairarapa Art Review Opening 2,300 views Masterton’s Art/Cultural Block 3,200 views Cellular Memory 3,300+ views

Most recent MDC council visitor satisfaction survey reports 93% of those who had personally visited in last 12 months were very satisfied or satisfied. [Source: Masterton District Council/National Research Bureau Communitrak Survey: Feb/March 2014, p. 97, ii.]

Volunteer hours Total of 1,000+ volunteer hours for Q2 to Aratoi; 850+ hours Friends and Volunteers; 150+ hours Trust Board.

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001/18 To: Audit & Risk Committee

From: David Paris, Manager Finance

Endorsed by: Pim Borren, Chief Executive

Date: 7 February 2018

Subject: 2017/18 Six Months to Date Financial Report

FOR INFORMATION Recommendation: That the Audit & Risk Committee receives the 6 months to date financial report and commentary, including Operating and Capital Expenditure Statements.

Purpose The purpose of this report is to provide the Audit and Risk Committee with the financial report and operating statements for the six months to 31 December 2017.

Executive Summary The Rates Requirement Summary to 31 December 2017 shows the Council’s net spending of rates funding at $15.18m, 1.9% less than the year to date budget. Significant under and over budget variances are explained in the commentary below. Overall the Council’s net spending on rates‐funded activities is on‐ track after 6 months of the financial year.

The Statement of Revenue & Expenditure shows a YTD deficit of $503,832. This is $830,000 better than the planned YTD deficit of $1.33 million. This is largely due to Operating Revenue being 4.6% more than planned (see commentary below). Operating Expenditure overall is close to the plan. The accounting deficit at 6 months into the year arises because the NZTA subsidy income on the majority of renewals expenditure has yet to be claimed.

The Summary Statement of Capital Expenditure for the second quarter shows $3.8 million spent, which is 18% of the full year capital budget. Commentary against individual line items on the last five pages of this report explains the progress against the major items.

Commentary on Operating/Funding Statements This commentary should be read in conjunction with the Operating/Funding Statements for the 6 months to 31 December 2017 for each of the Council’s operating areas, as listed on the following pages.

The variances shown may not translate to the full year result, but the Plan figures for six months to date have been adjusted to match expected timing of income and expenditure, where known.

Roading ‐ rates required 1.9% less than plan YTD

The subsidised road maintenance spend is 12.7% more than the plan level due to storm damage cleanup work from the heavy rains in mid July. This largely offset by the flood damage provision underspent (the work to date does not qualify as flood damage under new NZTA rules). Further remedial work has been programmed on a number of drop‐outs. 461

Only 17% of the budgeted subsidised renewals programme had been spent as at 31 December. The renewal contracts have been let, with all work expected to be completed by the end of May 2018. Other income is above Plan due to higher levels of roading contributions from developers.

Water Supplies ‐ Urban 1.5% less than plan YTD

Urban water supply costs overall are 2.2% less than planned for the 6 months year to date due to treatment plant maintenance and chemical costs being below the planned level. Higher than planned water reticulation connections (tobies) maintenance spending YTD offsets this to some extent.

Sewerage Services ‐ Urban 2.4% less than plan YTD

Income to this activity is above the planned level due to the sales of the remainder of last season’s baleage. The value of this baleage was carried as stock at last year end and there is a corresponding increase in expenses from the write off of the stock value as ‘çost of goods sold’.

Wastewater treatment costs also reflect interest savings that more than offset the baleage cost of goods sold.

Stormwater 1.6% less than plan

Solid Waste Services 0.2% more than plan rates required

Income from sale of official bags is below plan by 8.1% while costs of this service are also down 8.1%. Gate fee income at Nursery Road is 1.8% below plan as waste volumes in the first six months have been slightly below the amount budgeted. The disposal costs of that waste (to Bonny Glen) are also below plan, but this is offset by one‐off costs incurred in establishment of the new operations contract. Although effectively spread over the term of the contract (5 years), these costs will have to be expensed this year.

Recycling and composting operating costs are very close to planned levels for the period.

Community Facilities and Activities

Parks, reserves and sportsfields overall are below plan by 3.5% largely due to a range of ordered works budgets underspent YTD.

The Recreation Centre net rates required are 4.1% less than plan as the new maintenance regime has yet to be fully implemented.

District Building operating costs (including external rent of other office space) are running below the plan, with depreciation expense less than planned following the write‐down of the building’s value.

Other property rates required for the 6 months is 6.2% less the planned levels. The largest contributor is Mawley Park’s income being ahead of planned YTD. Rural Halls & Fire Station costs are above planned due to the unplanned additional contribution to the Tinui fire station. Forestry costs include a loss incurred on the removal of a small roadside block of trees – this has been on‐charged to non‐subsidised roading.

The library’s operating income includes an unplanned grant for the programme “Unlocking Curious Minds”. The Archive operating costs reflect a period where staffing was down.

Community Development income reflects a grant from the Ministry of Social Development (Youth Development) that was not budgeted. 462

Economic Development & Promotion expenditure is 1.1% above planned levels for the six months and includes expenditure on an additional My Masterton supplement.

Regulatory Services Resource Management and Planning rates requirement is 8.8% less than planned levels. Financial contributions year to date are 315% of the plan due to the high level of subdivision activity the district is experiencing. There is no change in the rate requirement as all financial contributions are transferred to reserves. Other consent fee income at 179% of the plan level reflects the increased activity in this area.

Building consent income is up 46.1% on what was planned and are 24% ahead of last year. However, operating costs have run 12.5% above plan. This has largely been the cost of using external contractors to process consents through a very busy period.

Parking Control revenue is running below the planned levels YTD while costs are slightly above the Plan.

Governance & Internal Functions Representation costs reflect paying Masterton’s share of the costs of running the amalgamation poll ($64,000). This cost was not included in the budget as, at the time, there was no certainty that the poll would be required.

In the Corporate Services area interest income is close to planned. Additional costs in Finance reflect investment in statistical and demographic information to inform and support the Council’s LTP assumptions. Costs have been over budget in the Communications area due in part to the costs of Keep NZ Beautiful submission and subsequent promotion.

Rates Receivable The graph below provides a picture of the changes in the value of rates receivable by quarter. Rate arrears remains below 1.5% of the value of rates levied (including GST and GWRC rates).

Quarterly Rates Receivable Movements Current Year Prior Years Arrears 1,000,000 900,000 Total Rates 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 -

At the end of December 2017, the rates arrears from the prior year were $147,751 which is 28.7% of the balance of all arrears at 30 June 2017. This compares to $199,861 and 37.5% at 31 Dec 2016.

Current year rates unpaid at 31 December 2017 were $513,697 compared to $543,516 at 31 Dec 2016. 463

Debt & Investments At 31 December 2017 External Debt was $52 million (30 June 2017 $59.1m). 76% of the debt has interest rates fixed. The average duration of the fixed rates is 5 years and average interest rate on all debt is 4.53%.

At 31 December 2017 Financial Assets value was $19.9 million so Net Debt was $32.1 million (30 June 2017 Net Debt was $32.9 million).

Statement of Revenue & Expenditure 6 Months Year to Date to 31 December 2017 6 months 6 months 2017/18 Full Year Revenue Actual 2017/18 Plan Variance 2017/18 Rates Revenue* 13,638,994 13,656,691 (17,698) ‐0.1% 27,832,383 Interest Received (external) 417,616 389,900 27,716 7.1% 773,800 NZTA Roading Subsidies 1,524,833 1,564,346 (39,513) ‐2.5% 4,813,291 Financial Contributions 803,002 222,897 580,105 260.3% 549,000 Fees, Charges & Other Revenue 4,291,451 3,938,741 352,710 9.0% 7,898,552 Total Operating Revenue 20,675,895 19,772,575 903,320 4.6% 41,867,026 Expenditure Personnel Costs 4,173,189 3,988,616 (184,573) ‐4.6% 8,007,303 Other Operating Expenditure 9,973,410 9,968,946 (4,464) 0.0% 19,226,761 Interest Expense 1,317,205 1,444,846 127,641 8.8% 2,878,945 Depreciation & amortisation 5,715,922 5,703,461 (12,461) 11,406,816 Total Operating Expenditure 21,179,727 21,105,869 (73,858) ‐0.3% 41,519,825

Operating Surplus/(Deficit) ($503,832) ($1,333,294) $829,462 $347,201

*Rates on Council Properties excluded 598,244 559,000 (39,244) 559,000

Summary Statement of Capital Expenditure YTD Plan YTD Full Year 31 Dec 17 31 Dec 17 2017/18 $ $ $ Roading Renewals 877,309 914,698 5,620,100 Water Services 541,428 609,002 2,839,000 Sewerage Services 807,839 673,802 1,598,800 Stormwater Services 83,492 100,002 200,000 Solid Waste Services 0 0 640,000 Parks, Reserves & Sportsfields 736,864 698,794 3,295,638 Community Facilities 48,946 50,002 117,000 Other Property (includes District Building, rental housing, conveniences) 502,564 591,294 4,925,750 Recreation Centre 39,762 56,298 112,600 Housing for the Elderly 34,665 40,000 150,000 Library & Archive 106,875 123,002 641,000 Airport 0 0 340,000 Regulatory Services 3,196 5,748 181,700 Corporate Services 31,540 40,000 124,000 TOTAL COUNCIL $ 3,814,479 $ 3,902,642 $ 20,785,588 18% 464

2017/18 6 Months to 31 December 2017

6 mths Rates Requirement Summary 2017/18 2017/18 Variance 2017/18 2016/17 6 Months YTD Plan Full Year Plan $ RATES REQUIRED BY ACTIVITY $ $ $ % $ Transport 2,422,564 Roading 2,445,882 2,494,329 48,447 5,856,516 Water Services 1,582,652 Urban Water supply 1,605,253 1,630,322 25,069 2,996,076 (29,086) Rural Water supplies & races 46,371 44,477 (1,894) 93,115 Sewerage Services 3,193,277 Urban Sewerage system 3,908,515 4,003,339 94,824 6,434,484 178,872 Rural Sewerage systems 265,064 280,042 14,978 305,984 Stormwater Services 214,375 Stormwater 310,457 315,395 4,938 500,279 Solid Waste Services 96,837 Solid Waste Services 414,581 390,380 (24,202) 690,953 309,285 Waste Minimisation Services 156,765 179,968 23,203 314,543 Community Facilities/Activities 1,077,308 Parks, Reserves & Sportsfields 1,243,590 1,288,426 44,836 2,338,436 655,666 Trust House Recreation Centre 453,182 472,630 19,449 931,778 24,989 Cemeteries 21,599 26,103 4,504 72,492 43,369 Internal vehicle fleet costs 19,129 9,808 (9,321) 19,638 864,442 Library & Archive 886,604 859,170 (27,434) 1,878,415 339,706 District Building 243,838 282,248 38,410 456,861 47,238 Housing for Elderly 71,748 68,863 (2,885) 28,809 293,050 Other Property 434,042 459,821 25,779 722,665 38,889 Hood Airport 61,556 60,060 (1,496) 169,957 84,958 Mawley Holiday Park 79,986 87,158 7,172 124,548 Community Services 619,233 Community Development 558,508 584,085 25,577 927,539 196,770 Arts & Culture 226,322 233,367 7,045 432,901 404,757 Economic Development 479,052 473,893 (5,159) 862,434 Planning & Regulatory Services 361,144 Resource Mgmt & Planning 359,920 394,663 34,743 750,469 200,912 Building Control 46,120 159,215 113,095 327,397 156,247 Environmental Health 204,341 184,091 (20,250) 373,146 (25,063) Parking Control (23,941) (37,110) (13,169) (74,231) 20,512 Dog Control 9,039 18,689 9,650 37,385 143,947 Rural Fire ‐ ‐ ‐ 0 87,767 Emergency Management 92,216 88,999 (3,217) 184,569 Governance 326,582 Representation 364,786 320,860 (43,926) 634,222 199,068 Internal Functions (net) 193,384 98,756 (94,628) ‐ $ 14,130,269 Total Rates Requirement $ 15,177,905 $ 15,472,047 $ 294,142 1.9% $ 28,391,383 RATES INCOME 13,765,173 Masterton District Council rates* 14,197,253 14,155,691 41,562 28,311,383 129,207 Penalty Income 120,976 120,000 976 200,000 (71,604) Rates Remissions (80,992) (60,000) (20,992) (120,000)

$ 13,822,776 Net Rates Income $ 14,237,238 $ 14,215,691 $ 21,546 0.1% $ 28,391,383 ($307,493) Surplus/(Deficit) of Rates Income ($940,667) ($1,256,355) $ 315,688 2.0% $ 0 465

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance % Full Year Plan Roading ROADS, STREETS, FOOTPATHS & PARKING AREAS 1,601,840 Income: NZTA subsidies 1,524,833 1,564,346 (39,513) 4,813,291 147,884 Petrol Tax & Other Income 378,593 151,998 226,595 350,247 520,852 Transfers from Reserves 118,500 85,500 33,000 900,420 2,270,576 Sub Total 2,021,926 1,801,844 220,082 12.2% 6,063,958

1,974,229 Expenses: Subsidised Maintenance 2,210,146 1,961,396 (248,750) ‐12.7% 4,106,435 1,054,238 Subsidised Renewals 777,993 787,332 9,339 4,466,000 0 Flood Damage 0 263,501 263,501 527,000 0 Construction (streetlights) 1,345 5,000 3,656 0 101,688 Non‐Subsidised ‐ Rural 143,462 134,105 (9,357) 227,466 1,025,110 Non‐Subsidised ‐ Urban Maintenance 610,967 579,986 (30,981) 978,041 Non‐Subsidised ‐ Urban Renewals 38,762 33,684 (5,078) 561,100 2,312,178 Depreciation 2,437,233 2,437,242 9 4,874,465 51,615 less Transfer to Reserves 198,167 40,000 (158,167) 80,000 6,519,059 Sub Total 6,418,075 6,242,246 (175,829) ‐2.8% 15,820,507

(1,838,497) less Depn not rated (1,967,680) (1,967,682) (2) (3,935,360) 12,578 plus Loan Repaymt 17,413 21,609 4,196 35,327 plus Capex funded from rates 0

$2,422,564 Net Cost ‐ Rates Required $2,445,882 $2,494,329 48,447 1.9% $5,856,516 466

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan

Water Supplies URBAN WATER SUPPLY 77,250 Income: Metered water charges 146,692 162,802 (16,110) 325,600 77,250 sub total 146,692 162,802 (16,110) 325,600

444,394 Expenses: Water reticulation costs 488,844 473,463 (15,381) 799,637 554,017 Water treatment costs 559,477 620,371 60,894 9.8% 1,201,883 601,885 Depreciation 645,020 636,858 (8,162) 1,273,717 1,600,297 sub total 1,693,342 1,730,692 37,350 2.2% 3,275,237 (81,981) less Depn not rated (16,872) (16,878) (6) (33,745) 141,586 plus Loan Repaymt 75,476 79,318 3,842 80,184

$1,582,652 Net Cost ‐ Rates Required $1,605,253 $1,630,330 25,077 1.5% $2,996,076

RURAL WATER SUPPLIES & RACES 205,789 Income: User charges 178,746 182,846 (4,100) 196,400 0 Transfers from Reserves 0 0 ‐ 0 205,789 sub total 178,746 182,846 (4,100) 196,400 116,533 Expenses: Rural water supplies 108,104 109,341 1,237 1.1% 224,315 28,451 Depreciation 31,337 30,312 (1,025) 60,623 30,000 less Transfer to Reserves 83,498 85,167 1,669 8,629 (30,805) Operating (Surplus)/Deficit 44,193 41,974 (2,219) 88,538 ‐ less Depn not rated ‐ ‐ ‐ ‐ 1,719 plus Loan Repaymt 2,178 2,503 325 4,578 ($29,086) Net Cost ‐ Rates Required $46,371 $44,477 (1,894) ‐4.3% $93,116 467

31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan Sewerage Services URBAN SEWERAGE SYSTEM 205,676 Income: External income 208,281 129,000 79,281 38.1% 398,000 85,000 Transfers from Reserves 65,486 65,000 486 130,000 290,676 sub total 273,767 194,000 79,767 528,000

617,856 Expenses: Sewerage reticulation 655,499 669,351 13,852 1,214,799 1,677,657 Wastewater treatment 1,675,965 1,687,037 11,072 0.7% 3,281,286 1,052,251 Depreciation 1,119,334 1,113,240 (6,094) 2,226,481 less Transfer to Reserves 0 3,347,764 sub total 3,450,798 3,469,628 18,830 0.5% 6,722,566 (569,515) less Depn not rated (593,110) (593,106) 4 (1,186,220) 705,704 plus Loan Repaymt 1,324,593 1,320,823 (3,770) 1,426,139 $3,193,277 Net Cost ‐ Rates Required $3,908,515 $4,003,345 $94,830 2.4% $6,434,485

RURAL SEWERAGE SCHEMES 150 Income: User charges 2,150 4,150 (2,000) 8,150 72,321 Riversdale Beach cap. contributions 12,225 0 12,225 100,000 15,000 Transfers from Reserves 22,500 22,500 ‐ 45,000 87,471 sub total 36,875 26,650 10,225 153,150

38,738 Expenses: Castlepoint sewerage scheme 31,372 34,638 3,266 9% 61,625 112,968 Riversdale sewerage scheme 109,147 111,034 1,887 2% 214,539 6,466 Tinui sewerage scheme 5,937 6,456 519 12,985 127,539 Depreciation 135,760 135,762 2 271,504 285,712 sub total 282,216 287,890 5,674 2.0% 560,653 (115,694) less Depn not rated (131,767) (131,766) 1 (263,534) 96,325 plus Loan Repaymt 151,490 150,575 (915) 162,014 ‐ $178,872 Net Cost ‐ Rates Required $265,064 $280,049 14,985 $305,983 468

31 Dec 2016 MASTERTON DISTRICT COUNCIL Actual Operating/Funding Statements 2017/18 Plan 2017/18 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan Stormwater STORMWATER 0 Income: Miscellaneous income 0 0 ‐ 0 67,500 Transfers from Reserves 67,500 67,500 ‐ 135,000 67,500 sub total 67,500 67,500 ‐ 135,000

145,255 Expenses: Stormwater maintenance 156,540 161,471 4,931 343,418 136,620 Depreciation 145,931 145,932 2 291,861 281,875 sub total 302,470 307,403 4,933 635,279 (70,651) less Depn not rated (75,489) (75,486) 3 (150,977) 70,651 plus Loan Repaymt 150,975 150,977 2 150,977 $214,375 Net Cost ‐ Rates Required $310,457 $315,394 4,937 1.6% $500,279

Solid Waste SOLID WASTE MANAGEMENT 178,732 Income: Refuse bag recoveries 174,993 190,398 (15,405) ‐8.1% 380,800 1,245,670 Transfer station gate fees 1,295,094 1,319,380 (24,286) ‐1.8% 2,647,280 45,743 Waste levy recovery 46,498 47,500 (1,002) 70,000 5,000 Transfers from Reserves 0 0 ‐ 20,000 1,475,145 sub total 1,516,585 1,557,278 (40,693) ‐2.6% 3,118,080

191,460 Expenses: Refuse Collection 194,750 211,986 17,236 8.1% 423,955 1,077,783 Waste transfer & disposal 1,193,389 1,212,297 18,908 1.6% 2,334,214 490,036 Recycling & Composting 542,934 542,725 (209) 0.0% 1,109,802 110,511 Rural Landfills 115,909 120,287 4,378 237,661 1,869,789 sub total 2,046,981 2,087,295 40,314 1.9% 4,105,632 0 less Transfer to Reserves 0 0 ‐ 0 (34,061) less Depn not rated (39,457) (39,456) 1 (78,914) 45,540 plus Loan Repaymt 80,406 79,782 (624) 96,858 $406,122 Net Cost ‐ Rates Required $571,346 $570,343 (1,003) ‐0.2% $1,005,496 469

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan Community Facilities & Activities PARKS, RESERVES & SPORTSFIELDS 14,984 Income: Parks & reserves 14,422 21,450 (7,028) 42,900 9,639 Sports fields 9,651 9,702 (51) 26,340 60,000 Transfers from Reserves 61,759 73,000 (11,241) 181,000 84,623 Sub Total 85,833 104,152 (18,319) 250,240

695,716 Expenses: Parks & reserves 805,227 851,040 45,812 1,609,837 216,910 Sportsfields 259,126 267,977 8,851 500,804 235,406 Depreciation 219,399 227,910 8,511 455,806 (18,597) less Depn not rated (24,157) (24,156) 1 (48,314) 32,495 plus Loan Repaymt 69,827 69,808 (19) 70,541 1,161,930 Sub Total 1,329,422 1,392,579 63,156 2,588,674

$1,077,308 Net Cost ‐ Rates Required $1,243,590 $1,288,427 44,837 3.5% $2,338,434

TRUST HOUSE RECREATION CENTRE 29,400 Income: Lease & other income 51,859 50,000 1,859 300,000 0 Transfers from Reserves 0 0 ‐ 0 29,400 sub total 51,859 50,000 1,859 300,000

521,821 Expenses: Recreation Centre 351,981 367,167 15,187 920,500 248,245 Depreciation 235,734 238,139 2,405 476,279 770,066 sub total 587,715 605,306 17,592 1,396,779 (95,265) less Depn not rated (93,443) (93,444) (2) (186,885) 10,265 plus Loan Repaymt 10,769 10,769 0 21,885 $655,666 Net Cost ‐ Rates Required 453,182 472,631 19,450 4.1% $931,779 CEMETERIES 41,813 Income: Burial Fees & Sale of Plots 38,376 44,672 (6,296) 84,050 0 Transfers from Reserves 0 3,500 (3,500) 7,000 41,813 sub total 38,376 48,172 (9,796) ‐20.3% 91,050

66,801 Expenses: Operating costs 59,974 74,275 14,301 163,542 $24,989 Net Cost ‐ Rates Required 21,599 26,103 4,504 17.3% $72,492 470

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan

DISTRICT BUILDING 91,296 Income: Rental ‐ District Building 179,850 180,552 (702) 361,100 0 Transfers from Reserves 0 0 ‐ 0 91,296 sub total 179,850 180,552 (702) 361,100

339,869 Expenses: Operating & maintenance 227,059 248,650 21,591 8.7% 391,537 Ext rent & office costs 133,398 118,500 (14,898) 237,000 90,255 Depreciation 61,369 93,786 32,417 187,563 430,123 sub total 421,826 460,936 39,110 816,100 ‐ less Depn not rated ‐ ‐ ‐ ‐ 879 plus Loan Repaymt 1,862 1,862 (0) 1,862 $339,706 Net Cost ‐ Rates Required $243,838 $282,246 $38,408 13.6% $456,862

HOUSING FOR THE ELDERLY 199,488 Income: Rental income 194,598 203,602 (9,004) 406,200 0 Transfers from Reserves 7,800 5,000 2,800 10,000 199,488 sub total 202,398 208,602 (6,204) 416,200

187,019 Expenses: Housing for the Elderly 228,582 231,922 3,340 353,928 159,707 Depreciation 161,564 128,040 (33,524) 256,081 346,726 sub total 390,146 359,962 (30,184) ‐8% 610,009 (100,000) less Depn not rated (116,000) (82,500) 33,500 (165,000) ‐ plus Loan Repaymt 0 0 ‐ 0 $47,238 Net Cost ‐ Rates Required 71,748 68,860 ($2,888) $28,809 471

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan

OTHER PROPERTY 80,087 Income: Rental ‐ Other Properties 139,121 140,900 (1,779) ‐1.3% 256,808 162,038 Mawley Holiday Park 202,240 166,828 35,412 21.2% 373,500 34,002 Forestry recoveries (net) 45,000 25,002 19,998 50,000 12,500 Transfers from Reserves 5,000 12,500 (7,500) 25,000 288,628 sub total 391,362 345,230 46,132 13.4% 705,308 81,247 Expenses: Other Property maintenance 113,717 116,367 2,650 186,887 139,431 Public Conveniences 129,230 140,377 11,146 269,345 37,137 Rural Halls & Fire Stations 66,949 58,305 (8,644) 92,317 25,373 Property Development 124,858 131,060 6,201 234,486 216,735 Mawley Park 226,925 222,954 (3,971) 423,829 50,591 Forestry 70,136 46,899 (23,237) 72,265 148,621 Depreciation 130,206 134,586 4,380 269,161 699,137 sub total 862,022 850,548 (11,474) ‐1.3% 1,548,290 (57,128) less Depn not rated (55,230) (55,236) (6) (110,460) 24,628 plus Loan Repaymt 98,597 96,895 (1,702) 114,690 $378,009 Net Cost ‐ Rates Required 514,028 546,977 $32,949 6.0% $847,212 AIRPORT 145,924 Income: Operating Income 161,269 158,353 2,916 209,599 5,000 Transfers from Reserves 5,000 11,000 (6,000) 22,000 150,924 166,269 169,353 (3,084) 231,599

121,130 Expenses: Operating Costs 151,551 152,478 927 1% 275,903 38,729 Depreciation 39,946 40,650 704 81,297 0 less Transfer to Reserves 0 0 ‐ 0 8,934 Operating (Surplus)/Deficit 25,228 23,775 (1,453) 125,601 (12,000) less Depn not rated (25,000) (25,002) (2) (50,000) 41,955 plus Loan Repaymt 61,328 61,287 (41) 94,356 $38,889 Net Cost ‐ Rates Required $61,556 $60,060 ($1,496) $169,957 472

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan LIBRARY & ARCHIVE 0 Income: Donations Income 21,756 24,946 (3,190) 24,946 77,934 Operating Income 62,883 42,704 20,179 81,054 0 Transfers from Reserves 0 0 ‐ 0 77,934 Sub Total 84,639 67,650 16,989 106,000 68,226 Expenses: Book purchases 54,665 54,999 334 190,000 662,829 Library operating costs 720,074 654,947 (65,127) 1,361,196 170,674 Archive operating costs 147,639 170,704 23,065 340,870 140,647 Depreciation 157,861 155,172 (2,689) 310,348 1,042,376 1,080,239 1,035,822 (44,417) 2,202,414 (100,000) less Depn not rated (13,998) (13,998) ‐ (28,000) capex transfers (94,998) (94,998) ‐ ‐190000 $864,442 Net Cost ‐ Rates Required $886,604 $859,176 ($27,428) ‐3.2% $1,878,414 COMMUNITY DEVELOPMENT 6,372 Income: Misc. & Grant Income 26,650 200 26,450 400 64,166 Internal Recoveries 12,500 12,498 2 25,000 70,538 Transfers from Reserves 257,137 284,498 (27,361) 569,000 141,076 Sub Total 296,287 297,196 (909) 594,400 689,771 Expenses: Com devlpmt grants & project costs 854,795 881,277 26,482 1,521,939 0 less Transfer to Reserves 0 0 ‐ 0 $619,233 Net Cost ‐ Rates Required $558,508 $584,081 25,573 4.4% $927,539

ARTS & CULTURE 11,173 Income: Misc. & Grant Income 11,174 11,000 174 22,000 0 Transfers from Reserves 0 0 ‐ 0 11,173 Sub Total 11,174 11,000 174 22,000 207,943 Expenses: Arts & Culture 237,495 244,367 6,872 454,901 $196,770 Net Cost ‐ Rates Required $226,322 $233,367 7,045 3.0% $432,901 473

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan

ECONOMIC DEVELOPMENT & PROMOTION 4,078 Income: Misc. & Grant Income 3,795 1,000 2,795 2,000 20,000 Transfers from Reserves 16,250 32,500 (16,250) 65,000 24,078 Sub Total 20,045 33,500 (13,455) 67,000

386,367 Expenses: Econ. devlpmt projects 248,378 257,942 9,564 427,276 1,046 Destination Wairarapa 141,367 137,500 (3,867) 275,000 682 Events grants 80,616 80,822 207 133,000 39,112 CBD Amenities costs 27,422 29,567 2,145 91,029 0 Regional Amenities grant 0 0 ‐ 0 427,208 497,781 505,831 8,050 1.6% 926,305 (6,144) less Depn not rated (6,690) (6,690) ‐ (13,380) 7,771 plus Loan Repaymt 8,006 8,253 247 16,509 0 less Transfer to Reserves ‐ ‐ ‐ ‐ 428,835 Sub Total 499,097 507,394 8,297 929,434

$404,757 Net Cost ‐ Rates Required $479,052 $473,894 (5,158) ‐1.1% $862,434 474

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan Regulatory Services RESOURCE MANAGEMENT & PLANNING 38,037 Income: Consent Fees & Other Income 73,082 40,854 32,228 82,700 120,016 Financial Contributions 565,861 179,403 386,458 362,000 20,502 Internal Recoveries 0 0 ‐ 0 0 Transfers from Reserves 0 750 (750) 21,500 178,555 Sub Total 638,943 221,007 417,936 466,200

219,668 Expenses: Operating costs 238,116 238,984 868 0.4% 621,793 143,016 River scheme contrib. (GWRC) 144,886 145,690 804 132,877 177,015 less Transfer to Reserves 615,861 231,000 (384,861) 462,000 539,698 Sub Total 998,863 615,674 (383,189) 1,216,670

$361,144 Net Costs ‐ Regulatory Services $359,920 $394,667 34,747 8.8% $750,470

ENVIRONMENTAL HEALTH 57,974 Income: Fees & Licences 56,783 66,803 (10,020) 155,345 91,317 Internal Recoveries 122,908 124,392 (1,484) 248,788 149,291 Sub Total 179,691 191,195 (11,504) 404,133

305,538 Expenses: Operating costs 384,032 375,285 (8,747) ‐2.3% 777,279 305,538 Sub Total 384,032 375,285 (8,747) 777,279

$156,247 Net Cost ‐ Rates Required $204,341 $184,090 (20,251) ‐11.0% $373,146 475

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements 2017/18 Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan BUILDING CONTROL 467,141 Income: Consent fees & charges 577,499 395,168 182,331 46.1% 790,326 0 Transfers from Reserves 0 0 ‐ 0 467,141 Sub Total 577,499 395,168 182,331 790,326 ‐ 668,053 Expenses: Operating costs 623,619 554,393 (69,226) ‐12.5% 1,117,724 0 less Transfer to Reserves 0 0 ‐ 0 668,053 Sub Total 623,619 554,393 (69,226) 1,117,724 $200,912 Net Cost ‐ Rates Required $46,120 $159,225 113,105 $327,398

PARKING CONTROL 120,526 Income: Meters & Fines 114,169 122,748 (8,579) ‐7.0% 245,500

95,463 Expenses: Operating Costs 90,228 85,638 (4,590) ‐5.4% 171,269 0 Tsf to reserves 0 0 ‐ 0 95,463 Sub Total 90,228 85,638 (4,590) 171,269 (25,063) Operating (Surplus)/Deficit (23,941) (37,110) 13,169 (74,231) 0 Loan Repaymt (net) 0 0 ‐ 0

($25,063) Net Cost ‐ Rates Required ( ) = surplus ($23,941) ($37,110) (13,169) ($74,231)

DOG CONTROL 334,255 Income: Dog registrations & Pound fees 342,036 337,720 4,316 1.3% 346,450 0Grant Income 1,672 0 1,672 0 0 Transfers from Reserves 0 0 ‐ 0 334,255 Sub Total 343,708 337,720 5,988 346,450 ‐ 187,065 Expenses: Operating costs 191,993 196,316 4,323 2.2% 385,068 (585) less Depn not rated (616) (618) (2) (1,232) 168,287 less Transfer to Reserves 161,370 160,713 (657) 0 $20,512 Net Cost ‐ Rates Required $9,039 $18,691 $9,652 $37,386 476

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements Plan Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan EMERGENCY MANAGEMENT 3,400 Income: Recoveries CDC & SWDC 6,076 7,550 (1,474) 15,099 0 Transfers from Reserves 0 0 ‐ 30,000 3,400 Sub Total 6,076 7,550 (1,474) 45,099 ‐ 86,167 Expenses: Operating costs 98,292 94,049 (4,243) 224,668 5,000 less Transfer to Reserves 0 2,500 2,500 5,000 91,167 Sub Total 98,292 96,549 (1,743) 229,668 $87,767 Net Cost ‐ Rates Required $92,216 $88,999 ($3,217) ‐3.6% $184,569 Governance REPRESENTATION 204,498 Income: Internal Allocation 211,407 211,410 (3) 422,815 87,009 Recoveries ‐ election & governance 0 0 ‐ 0 16,125 Transfers from Reserves 0 0 ‐ 0 307,632 Sub Total 211,407 211,410 (3) 422,815

193,591 Expenses: Councillors costs 196,310 200,923 4,613 402,340 148,092 Election costs 64,003 0 (64,003) 0 17,439 Consultation & publications 4,178 2,500 (1,678) 45,000 275,091 Other support costs 299,202 316,350 17,148 584,697 0 less Transfer to Reserves 12,500 12,500 ‐ 25,000 634,214 Sub Total 576,193 532,273 (43,920) 1,057,037 $326,582 Net Cost ‐ Representation $364,786 $320,863 (43,923) ‐13.7% $634,222 Internal Functions ENGINEERING CONSULTANCY 249,687 Income: Internal recoveries 320,245 272,748 47,497 545,490 21,580 External recoveries 19,608 27,000 (7,392) 54,000 0 Transfers from Reserves 0 0 ‐ 0 271,268 Sub Total 339,853 299,748 40,105 599,490

272,812 Expenses: Operating costs 346,552 298,890 (47,662) 594,490 0 less Transfer to Reserves 0 2,500 2,500 5,000 $1,544 Net Cost ‐ Rates Required $6,699 $1,642 (5,057) $0 477

MASTERTON DISTRICT COUNCIL 31 Dec 2016 Operating/Funding Statements Plan Plan 2017/18 Actual 2017/18 6 months YTD 6 months 6 months Variance Full Year Plan

ASSET & PROJECT MANAGEMENT 384,709 Income: Corporate Services Apportionment 608,856 608,856 (0) 1,217,711 Other internal recoveries 65,407 65,406 1 130,814 7,569 External recoveries 14,999 10,800 4,199 21,600 392,278 Sub Total 689,261 685,062 4,199 1,370,125

396,389 Expenses: Staff & other costs 720,435 693,785 (26,650) 1,370,125 $4,111 Net Cost ‐ Rates Required $31,174 $8,723 (22,452) $0

CORPORATE SERVICES 110,281 Income: Misc Income 126,411 105,438 20,973 208,837 481,074 Interest Income 524,475 529,004 (4,529) (0.9%) 1,052,000 20,000 Transfers from Reserves 10,482 15,000 (4,518) 50,000 611,355 661,368 649,442 11,926 1,310,837

428,721 Expenses: Administration 456,385 449,170 (7,215) (1.6%) 857,521 640,639 Finance 721,910 689,737 (32,173) (4.7%) 1,374,417 297,882 Information Services 320,474 356,726 36,252 10.2% 596,764 0 Strategic Planning 229,801 227,433 (2,368) (1.0%) 452,856 454,883 CE's Office 233,775 235,204 1,429 0.6% 476,960 232,835 Communications & Promotion 263,995 194,803 (69,192) (35.5%) 399,192 172,745 Human Resources 200,944 192,084 (8,860) (4.6%) 367,775 352,672 Transfers to Reserves (interest) 336,919 340,000 3,081 680,000 (1,775,610) Corporate Services Apportionment (1,947,324) (1,947,324) 0 (3,894,648) 804,767 816,879 737,833 (79,046) 1,310,837

$193,413 Net Cost ‐ Rates Required $155,511 $88,391 ($67,120) $0 478

CAPITAL EXPENDTIURE STATEMENTS

CAPITAL EXPENDITURE YTD Budget YTD YTD Variance Full Year 6 Months Year to Date $$ Department / Project Funding 31 Dec 17 31 Dec 17 2017/18 Commentary Roading Subsidised Roading 2 x pavement rehabilitation contracts have been let, work expected by end of March. Further work currently in design Roading renewals - rural Rates & subsidy 630,098 635,926 5,828 2,472,000 stages. Reseal contract has been let, work expected by the end of Roading renewals - urban Rates & subsidy 52,038 57,155 5,118 755,000 March 2018. Land purchase for roading strip Rates & subsidy 4,500 0 (4,500) Roading strip Te Whiti Road Rural/Urban minor improvements Rates & subsidy 95,858 94,249 (1,609) 390,000 Progressed as projects identified Cycleways Rates & subsidy 00 - 125,000 Consultation is underway on Dixon Street proposal Non- Subsidised Roading Neighbourhood Planning - provision Rates & c/fwd 0 28,684 28,684 172,100 C/fwd includes traffic calming at in east side streets Urban footpath renewals Depn reserves 38,424 33,684 (4,740) 309,000 Major part of work programme yet to commence. Procurement work underway (in‐house), NZTA subsidy has LED streetlighting upgrade Depn & subsidy 2,286 5,000 2,714 724,000 increased, project being done across the Wairarapa. Car park seal renewals Depn reserves 539 0 (539) 80,000 Work specified within reseal contract Project work includes consultation process. Boffa Miskell Queen Street - CBD Rejuvenation Dev Contribtn & Loan 53,568 60,000 6,432 593,000 concept design contract just commenced. 877,309 914,698 37,388 5,620,100 479

CAPITAL EXPENDITURE YTD Budget YTD YTD Variance Full Year 6 Months Year to Date $$ Department / Project Funding 31 Dec 17 31 Dec 17 2017/18 Commentary

Water Services Water reticulation renewals Loan/Depn Reserve 396,739 424,998 28,259 850,000 Renewal programme is on‐going Water connection replacements Depn Reserve 80,196 100,002 19,806 200,000 Renewal programme is on‐going 450mm trunk main replacement Loan/Depn Reserve 00 - 1,450,000 Work is on hold as options are assessed WTP equipment renewals Depn Reserve 8,443 40,000 31,557 134,000 Reroof water treatment plant Depn Reserve 00 - 30,000 Wainuioru Water supply Depn Reserve 2,931 10,002 7,071 20,000 Tauweru Water supply renewals 3,578 0 (3,578) 0 Tinui equipment renewals and bore Loan/Depn Reserve 7,712 9,500 1,788 19,000 WTP - plant items Depn Reserve 37,542 22,500 (15,042) 39,000 Castlepoint water supply upgrades Depn Reserve 1,156 2,000 844 33,500 Scheduled is $20K cabinet upgrade & $13.5K Bore Opaki water race equipment Loan 00 - 3,500 Opaki Race consent renewal Loan 631 0 (631) 60,000 541,428 609,002 67,574 2,839,000 Sewerage Services Urban/Rural Sewerage Sewer Renewals Loan/Depn Reserve 682,675 550,002 (132,673) 1,100,000 Renewal programme is on‐going WWTP equipment Depn Reserve 39,910 40,000 90 40,000 Various plant & equipment Homebush - extend disposal area Loan/Depn Reserve 61,029 75,000 13,971 250,000 Consultation & consent in progress New lateral connection Riversdale Rd, 4 replacement Riversdale Sewerage System Upgrade Loan/Depn Reserve 24,226 8,800 (15,426) 8,800 pumps Homebush contract completion Depn Reserve 00 - 200,000 Combined with disposal area extension above Total Sewerage Services 807,839 673,802 (134,037) 1,598,800

Stormwater Services Stormwater renewals Depn Reserve 83,492 100,002 16,510 200,000 Renewals work to date ‐ Jones Place, Makora Rd 83,492 100,002 16,510 200,000 Solid Waste Services Reuse recovery store Depn Reserve 00 - 240,000 Landfill capping Depn Reserve 00 - 200,000 Progressive work using cleanfill is not capitalised Roof over transfer station Loan 00 - 200,000 00 - 640,000 480

CAPITAL EXPENDITURE YTD Budget YTD YTD Variance Full Year 6 Months Year to Date $$ Department / Project Funding 31 Dec 17 31 Dec 17 2017/18 Commentary Community Facilities/Activities Parks, Reserves & Sports fields Q E Park - renewal project Res Contrib/Loans 27,150 30,000 2,850 619,050 Design stages complete, project tendering underway QE Park - Island project Reserves 1,048 0 (1,048) 0 Upgrade structures/fac incl playgrounds Depn Reserve 991 0 (991) 28,000 Henley Lake - toilets renewal Depn Reserve 122 0 (122) 125,000 Toilet upgrade project being scoped Riversdale Beach - Nthn Reserve 5,548 0 (5,548) 0 Bridge upgrade done in July trails Contributions/Loans 2,484 5,000 2,516 265,000 Consultation closed Sept, proposals being developed Castlepoint furniture renewals Depn Reserve 00 - 10,000 Parks & Open spaces - signage Depn Reserve 04,998 4,998 10,000 Henley Lake - intake Loan 9,806 10,000 194 480,000 Awaiting GWRC consent Chinese Pagoda General Capital 00 - 30,000 Street trees additions & replacements Reserves 5,841 8,796 2,955 17,588 extension Contributions/Loans 00 - 52,000 QE Park Lake Desludge Depn Reserve 00 - 30,000 Weed cutting being done in‐house McJorrow Park upgrade 37,576 0 (37,576) 0 Funding ex Masterton East Project budget Urgent work now due following grandstand EQ status, costs Memorial Park upgrades Depn Reserve 10,270 10,000 (270) 65,000 likely to exceed budget Sports facilities building Depn Reserve 16,117 0 (16,117) 218,000 Gathering quotes for work Cricket Facility - Grandstand upgrade Reserves / Grants 0 10,000 10,000 385,000 Project scale has been re‐drawn, ready to go to tender Cricket Facility - replace artificial turf 6,471 0 (6,471) 0 Renewal completed October'17 Sport - Netball facility upgrade Depn /Gen Capital 610,870 600,000 (10,870) 800,000 Project underway, funding paid over as needed Sports facilities upgrading - provision Parks Depn Fund 2,569 20,000 17,431 155,000 Douglas Villa & ACM building projects awaiting quotes South Park Sports Facilities Provision Depn Reserve 00 - 6,000 736,864 698,794 (38,070) 3,295,638 Community Facilities, Economic Development Christmas decorations Reserves 42,085 40,000 (2,085) 40,000 Additional decorations installed in Nov Security camera renewals & upgrades Loan/Reserves 6,861 10,002 3,141 20,000 New camera in grandstand Town square - irrigation & trees Depn Reserve 00 - 25,000 on hold Street History Signage Reserves 00 - 32,000 48,946 50,002 1,056 117,000 Conveniences Public conveniences - misc items Depn Reserve 6,381 3,000 (3,381) 3,000 Castlepoint Toilet Upgrade Depn Reserve 00 - 120,000 MBIE funding aprroved, design work underway 12,146 8,765 (3,381) 123,000 481

CAPITAL EXPENDITURE YTD Budget YTD YTD Variance Full Year 6 Months Year to Date $$ Department / Project Funding 31 Dec 17 31 Dec 17 2017/18 Commentary Recreation Centre Outdoor pools upgrade Depn Reserve 06,300 6,300 12,600 Awaiting pools closure Other plant & equipment Depn Reserve 39,762 49,998 10,236 100,000 Initial work completed. Remainder awaits pool closure. 39,762 56,298 16,536 112,600 Cemeteries Cemetery facilities Reserves 00 - 23,000 00 - 23,000 District Building Renew building equipment & systems Depn Reserve/Loan 6,699 10,002 3,303 20,000 Minimal work as required Waiata House - misc furnishings 7,527 7,527 - 0 Blinds from prior tenants 14,226 17,529 3,303 20,000 Housing for the Elderly Renewals - flooring Depn Reserve 2,100 2,500 400 25,000 progressing Insulation upgrades Depn Reserve 9,808 10,002 194 20,000 all completed Replace/renew roofs Panama Depn Reserve 00 - 50,000 awaiting two quotes Homestead Depn Reserve 22,757 27,498 4,741 55,000 Balance of budget to rolled to next year 34,665 40,000 5,335 150,000 Other Properties Wood burner Manaia Road, insulation x2 & replacement Rental Property upgrades Depn Reserve 26,752 40,000 13,248 114,000 Lake House awning. Replant Kaituna Forest General Capital 26,777 0 (26,777) 0 Was planned in 2016/17, carried forward. Rural halls upgrades Depn Reserve 00 - 15,750 Provision, yet to be spent Rural halls - relocation & demolition Loan/Depn Reserve/Ex 00 - 30,000 Provision, yet to be spent Earthquake strengthening Loan/Depn Reserve 400,000 500,000 100,000 4,500,000 Cost to date is deposit on Waiata House Mawley Park - upgrades Loan/Depn Reserve 22,663 25,000 2,337 100,000 Kitchen lino, barrier arm, lighting upgrades 476,192 565,000 88,808 4,759,750 482

CAPITAL EXPENDITURE YTD Budget YTD YTD Variance Full Year 6 Months Year to Date $$ Department / Project Funding 31 Dec 17 31 Dec 17 2017/18 Commentary Library & Archive Library book purchases Depn Reserve 95,000 94,998 (2) 190,000 Library computer & equipment upgrades Depn Reserve 7,346 17,502 10,156 35,000 Library building & furniture upgrades Depn Reserve 05,502 5,502 11,000 Grant application to TH successful, project planning is Library Learning Centre Loan 00 - 180,000 underway Library Roof replacement Depn Reserve 4,529 5,000 471 100,000 Assessment by Water Mart prior to specifying work Budget for shelving & air conditioning on hold pending re‐ assessment of storage needs for Council records and future Archive renewals Loan/Reserves 00 - 125,000 library redevelopment 106,875 123,002 16,127 641,000 Airport Airport runway light replacement Depn Reserve 00 - 150,000 On hold pending air service Airport - runway seal & remarking Depn Reserve 00 - 160,000 Asset condition confirms not required this year Airport regulatory (fencing misc.) Depn Reserve/Loan 00 - 30,000 On hold pending air service 00 - 340,000

TOTAL Community Facilities/Activities 1,469,675 1,559,390 89,714 9,581,988 Regulatory Services Council vehicle fleet replacements Depn Reserve 00 - 80,000 Replacements ordered in January'18 Animal Control - equipment Depn Reserve 3,196 5,748 2,553 11,500 Various equipemnt include new poo bins Animal Control - Animal Pound upgrade Reserves /Loan 0 0 - 45,000 Has been on hold pending joint Council pound Emergency welfare centres Water/Sewerage Facilities Depn Reserve 00 - 35,000 Investigations of options on‐going Environmental Health equipment Depn Reserve 00 - 10,200 3,196 5,748 2,553 181,700 Corporate Services Computer and office equipment upgradesEquipment Fund 26,223 40,000 13,777 89,000 Council Meeting info systems Depn Reserve 00 - 35,000 Website upgrade Special Funds 5,317 0 (5,317) 0 Project cfwd from 2016/17

31,540 40,000 8,460 124,000

Total $3,814,479 $3,902,642 88,162 $20,785,588 483

002/18 To: Audit and Risk Committee

From: Tania Madden, Manager Strategic Planning

Endorsed by: Pim Borren, Chief Executive

Date: 7 February 2018

Subject Non‐Financial Performance 2017/18 Second Quarterly Report

INFORMATION Recommendation: That the Audit and Risk Committee receives the Quarter 2 non‐financial performance report for the 2017/18 financial year.

Purpose The purpose of this report is to advise Council of performance against non‐financial measures that are reported every six months. The figures in this report are for the period from 1 July to 31 December 2017.

Executive Summary Results against performance measures across all eight activity areas are reported in this second quarterly report. The activity areas are:  Roading;  Water Supply;  Wastewater;  Stormwater;  Solid Waste;  Community Facilities and Activities;  Regulatory Services; and  Governance and Corporate.

Council has a total of 116 performance measures. Of the 58 performance measures reported this quarter, 39 (67%) have been achieved as at 31 December 2017. Twelve (21%) have not been achieved as at 31 December 2017. Measures that haven’t been achieved are under Roading, Stormwater, Community Facilities and Activities and Regulatory Services. The remaining seven (12%) have reported a variance. Further information is provided below. 484

The graph below shows the percentage of measures against each activity area that:  have been achieved as at 31 December 2017;  have not been achieved as at 31 December 2017;  reporting a variance; or  are not measured at six months. 485

Q2 YTD Status at Measure 2017/18 Annual Target Commentary Result 31/12/17 Roading (Roads, Streets, Footpaths and Parking) Percentage of urgent customer service requests responded to within 2 days 95% 99% Achieved Percentage of non‐urgent customer service Service request numbers are up 167% requests acknowledged within 10 days and Not compared to 2016‐17 Quarter 2. The 95% 83% placed on appropriate maintenance programme Achieved complaints were analysed but no trend explaining the increase was identified.

Water Supplies (Urban and Rural) Total number of complaints received about: a) drinking water clarity; b) drinking water taste; c) drinking water odour; Less than or equal to 4.57/1000 2/1000 Achieved Actual complaints: 18. d) drinking water pressure or flow; e) continuity of supply; and f) MDC's response to any of these issues Expressed per 1000 connections to council's networked reticulation system.

Median response time to call outs for faults or unplanned interruptions to the networked reticulation system: attendance at urgent call outs (from notification to arrival on site) Less than or equal to 60 minutes 52 Minutes Achieved resolution of urgent call outs (from notification Less than or equal to 480 154 Minutes Achieved to confirmation of resolution) minutes attendance at non‐urgent call outs (from notification to arrival on site) Less than or equal to 7 days 3 Days Achieved resolution of non‐urgent call outs (from notification to confirmation of resolution) Less than or equal to 3 months 5 Days Achieved Alternative water supply is provided when shutdown exceeds 24 hours 100% 100% Achieved No shutdown exceeded 24 hours. 486

Q2 YTD Status at Measure 2017/18 Annual Target Commentary Result 31/12/17 Wastewater (Including Treatment and Disposal of Sewerage) Total number of complaints received about: a) sewerage odour; b) sewerage system faults; Less than or equal to 6.88/1000 6.44/1000 Achieved Actual complaints: 58. c) sewerage system blockages; and d) MDC's response to issues with its sewerage system Expressed per 1000 connections to council's sewerage system.

Median response time to sewerage overflows resulting from a blockage or other fault to Council's sewerage system: attendance (from time of notification to the time service personnel arrive onsite) Less than or equal to 6 hours 38 Minutes Achieved resolution (from time of notification to the time service personnel confirm resolution) Less than or equal to 12 hours 93 Minutes Achieved Alternative system provided where loss of No loss of service exceeded 24 hours. service exceeds 24 hours 100% of occasions 100% Achieved Number of dry weather sewerage overflows from Council's sewerage system (expressed per Less than or equal to 2/1000 0.2/1000 Achieved 1000 connections to the system) Percentage of time that treated effluent is not Winter ‐ greater than 50% Winter 70% discharged to the river Summer ‐ greater than 75% Summer 99% Achieved 487

Q2 YTD Status at Measure 2017/18 Annual Target Commentary Result 31/12/17 Stormwater Number of complaints received about the Actual complaints: 30. Non‐achievement performance of Council's stormwater system is attributed to a variety of factors (expressed per 1000 connections to Council's including a significant flooding event in stormwater system) Less than or equal to 2/1000 3.3/1000 Not Achieved July 2017, 129mm of rain in July compared to an average 102mm, and poor maintenance of streams/drains on private property. Number of flooding events that occur in the district Less than or equal to 98 events 1 Event Achieved For each flooding event, the number of habitable floors affected (expressed per 1000 1/1000 Nil Achieved connections to Council's stormwater system) Median response time to attend a flooding event (from time of notification to the time Less than or equal to 60 minutes 23 minutes Achieved service personnel arrive onsite)

Solid Waste Number of call backs due to non‐collection of No more than 1/200 urban Total callbacks for the 6‐month period is 0.1/200 Achieved official rubbish bag in each weekly collection households 5.

Community Services Destination Wairarapa reports tourism Quarter 2 Report from Destination Report promotional activities and visitor numbers Quarterly Report Achieved Wairarapa will be presented to the Audit Received & Risk Committee meeting on 7/2/2018. The Wairarapa Arts, Culture and Heritage Measure is no longer applicable as MDC Toi Wairarapa reports six‐ Strategy is progressively implemented Variance ceased funding Toi Wairarapa from monthly on progress January 2016. Sport Wellington Wairarapa reports 6‐monthly The six monthly report July ‐ December Sport Wellington Wairarapa against performance targets on its support for Report 2017 from Sport Wellington Wairarapa meets annual performance Achieved involvement in sport Received will be presented to the Audit & Risk targets. Committee meeting on 7/2/2018. 488

Q2 YTD Status at Measure 2017/18 Annual Target Commentary Result 31/12/17 Library and Archive New books and other items added to the library 10% of collection is less than 1 Total items held: 64,202. Items added in 11% Achieved collection annually year old the last 12 months: 7,111. Number of resources (books, DVDs etc) in the Total items held: 64,202. Estimated 2.55 collection Masterton population as at 30/6/2017: 2.7 resources per resident resources per Not Achieved 25,200. Library space and shelving for resident resources at full capacity. Archived material is available to the public from 20 hours per 20 hours per week Achieved the archives for 20 hours per week week Number of items available online increases 750 additional items available 1,032 records Achieved annually online each year added History articles published in local media 19 articles 6+ articles per year Achieved published

Property Monthly inspections of municipal building and Bannister Street toilets have achieved public toilets meet cleanliness and safety standards. Both Exeloos have standards experienced some issues with blocked drains which has meant they have not 95% achieved standards. 95% compliance Not Achieved availability Note: Municipal building has been closed due to being earthquake prone. Note: A new process for reporting this measure has been developed for future reporting. Town hall facilities are operational for all Town hall remains closed due to seismic 100% Variance bookings issues. Occupancy of Mawley Park Camping Ground 10,837 visitors in Q2 YTD, compared 5% increase on 2016‐17 (9,787) 11% increase Achieved with 9,787 in the same period last year. All elderly units are fully occupied (averaged over all complexes, excluding refurbishment Minimum annual occupancy 95% 99% Achieved 2 unoccupied. periods) 489

Q2 YTD Status at Measure 2017/18 Annual Target Commentary Result 31/12/17 Parks, Reserves and Sports Fields Number of sports field closures per season Less than 5% Nil Achieved All playgrounds meet safety standards Independent playground audit has been completed. This identified works to be 100% 78% Not Achieved carried out for compliance against NZS 5828.

Recreation Centre Temperature and water treatment within Temperature standards for the learner 85% average of test results specification and agreed standards 83% Not Achieved pool were not met October‐December within agreed range (pool was empty in December).

Cemeteries Accurate online access to burial records 100% of burials loaded by the 100% Achieved Data entered by 15th of each month. 15th of the following month Historical errors corrected within Errors fixed as soon as notified or 100% Achieved 30 days of being reported updated every two weeks.

Masterton Airport (Hood Aerodrome) Annual usage levels 510 more 4884 aircraft movements for Q2 YTD, No less than 2016‐17 (4,374 in aircraft Achieved compared with 4,374 in the same period Q2) movements last year. 490

Q2 YTD Status at Measure 2017/18 Annual Target Commentary Result 31/12/17 Resource Management and Planning Resource consents processed within the 56 resource consents processed in total, requirements of the Resource Management Act 100% 93% Not Achieved with 4 exceeding the 20 working day statutory timeframe. LIMs processed within the requirements of the Resource Management Act 100% 100% Achieved PIMs processed within the requirements of the Resource Management Act 100% 100% Achieved Building consents checked for planning 100% 100% Achieved implications No loss of agreed protected areas 100% 100% Achieved Building Control Proportion of building consents processed 330 consents processed in total, with 6 within 20 working days (excluding days consent 100% 98% Not Achieved exceeding the 20 working day statutory is on hold awaiting additional information) timeframe. Average processing days 14. Proportion of current Code of Compliance 281 certificates issued. Average Certificates issued within 20 working days 100% 100.0% Achieved processing time: 2 days. Proportion of known swimming pools complying Since November 2017, 226 pools have with requirements (drained if non‐compliant) been inspected. Of these pools, 57% passed and 11% are empty. A further 100% 68% Not Achieved 32% failed and required re‐inspection. The total number of pools is approx. 800 and inspections will be ongoing. Progress on addressing earthquake risk 100% of earthquake‐risk Target is no longer relevant following buildings buildings assessed and reports legislative changes under the Building Variance received, follow‐up action (Earthquake‐prone Buildings) reviewed with owner Amendment Act 2016. Proportion of Building Warrants of Fitness There are 356 buildings that should have (BWOF) audited per annum compliance schedules. 175 of those 75% 82% Achieved were due and we have received 144, which have been audited and are correct. 491

Q2 YTD Status at Measure 2017/18 Annual Target Commentary Result 31/12/17 Environmental Health, Alcohol Licensing and General Inspection All registered premises comply with public Progress towards annual target: safety requirements as evidenced by annual 59 of the 146 annual inspections inspections and followed up with further visits required annually have been completed for enforcement if necessary to date, resulting in 28 Variance 100% 40% reinspections/follow ups. 19 of the 64 (In progress) annual health licence inspections have been carried out, with 8 requiring reinspection. The remaining inspections are expected to be completed by year end. Percentage of alcohol licences inspected for Progress towards annual target: compliance with statutory requirements Half (38) of the 76 alcohol licences are annually scheduled to be inspected this year, 21 have been inspected to date. The Variance 50% 28% remaining inspections are expected to (In progress) be completed by year‐end. In addition, 29 inspections/controlled purchase operations were completed and 5 inspections were carried out as special events. Proportion of noise and other urgent complaints Of the 279 noise complaints received, responded to within 1 hour 96% Noise 268 were responded to within 1 hour. All 90% Achieved 100% Other 60 other urgent complaints were responded to within 1 hour. Proportion of other 'general' complaints Of the 434 non‐urgent requests for responded to within 5 working days of 100% 97% Not Achieved service, 419 were responded to within 5 notification working days. 492

Q2 YTD Status at Measure 2017/18 Annual Target Commentary Result 31/12/17 Animal Control Proportion of urgent complaints responded to Of the 76 urgent complaints received, 74 within one hour (dog attacking people or 100% 97% Not Achieved were responded to within one hour. animals) Proportion of non‐urgent complaints responded Of the 568 non‐urgent complaints, 540 to within 24 hours of notification (dog barking 100% 95% Not Achieved or wandering animals) were responded to within 24 hours. Undertake public education, school and Three education centre visits. Two community visits to promote safe behaviour events with SPCA (helping with their around dogs and/or responsible dog ownership collection day and a microchipping event 6+ visits 11 Achieved at the centre when it reopened). Two microchipping events at the local pig hunting club and four community engagement events around town. 493

Q2 YTD Status at Measure 2017/18 Annual Target Commentary Result 31/12/17 Governance and Corporate Services Annual Report adopted Report adopted by 30th October Adopted Achieved Report adopted 25 October 2017.

Iwi Governance Forum meets regularly on The practice of holding Iwi Governance Marae in the district At least 4 times annually Nil Variance Forum meetings at Marae has been discontinued. Council provides opportunities for Māori to be Report on Māori involvement in See Iwi representatives attend Council and involved in decision making decision making/consultation commentary Committee meetings. processes In November/December 2017, Māori organisations and community groups were consulted on the draft My Masterton: Our People, Our Land Achieved Strategy. The Road and Street Naming Policy adopted by Council in December 2017 includes a requirement to consult with local iwi on proposed Māori road names and all road names in areas of significance to tangata whenua. Iwi advice is sought on relevant resource No resource management issues Iwi advice reported Nil Variance management issues required iwi advice.