Otorohanga District Council Amended Long Term Plan 2017-25

Council-Controlled Organisations The Local Government Act 2002 requires that Council include in the Goal LTP information on those organisations in which Council is a Retention of the Airport as a major infrastructural facility, important shareholder. to the economy of the . A Statement of Intent provided by In particular, Council must include: the Airport Company (as required by Section 64 of the Local Government Act 2002) is available but does not form part of this  Its significant policies and objectives regarding ownership Plan. and control of the organisation;  The nature and the scope of the activities to be provided by Policies and Objectives the organisation; and Council intends to maintain its current shareholding for the  The key performance targets and other measures by which foreseeable future. There are no formal policies or objectives relating to ownership and control of Waikato Regional Airport. performance may be judged. Performance Targets

2015 2016 2017 Waikato Regional Airport Earnings before Waikato Regional Airport Ltd (Hamilton International Airport) is interest, taxation and $2.88m $2.21m $2.33m jointly owned by five local authorities: Hamilton City, Waikato depreciation District, Waipa District, District and Matamata / Piako Net surplus/(deficit) District Councils. $111,000 ($683,000) ($817,000) after tax Otorohanga District Council’s shareholding is 3.125% Net profit after tax to 0.00% -0.01% -0.01% Corporate Mission shareholders’ funds The mission of Waikato Regional Airport is to operate a successful Net surplus after tax to 0.00% -0.01% -0.01% commercial business providing safe, appropriate and efficient total assets services for the transportation of people and freight in and out of the port of Hamilton. Percentage of non- landing charges 64.44% 64.33% 63.93% revenue Total Liabilities / 26:74 25:75 24:76 Shareholders Funds

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Otorohanga District Council’s portion of uncalled capital amounts to  Matamata-Piako District Council; $300,000 which Council does not believe will be called in the term  Otorohanga District Council; of this plan. The value of the airport is not predicted to change  District Council; significantly over the term of the plan, as stated in the assumptions earlier in this document.  South ;  Council;

 Thames-Coromandel District Council; Local Authority Shared Service Limited  Waikato District Council; Establishment  ; and . The local authorities of the Waikato Region have worked closely  together over a number of years on mutually beneficial joint Constitution projects. These projects have demonstrated the benefits that can be gained, both in terms of outcomes achieved and reductions in The constitution of Local Authority Shared Services Limited sets out costs to the community. the principles according to which the company will be operated and governed. This includes shareholders’ rights and the appointment of Taking this a step further the local authorities have begun to directors. develop new shared service initiatives, including a valuation database to provide on-line, up-to-date, information for all Councils. The annual Statement of Intent identifies the activities and intentions of the company for the year, and the objectives to which The initiative has been formalised by the establishment of Local those activities will contribute. Authority Shared Service Limited (LASS). Company Objectives Local authorities of the Waikato Region have established LASS as a Council Controlled Organisation by way of a company, in which The company, Local Authority Shared Services Limited (LASS), each local authority will have a single share. This company will be provides Waikato Region local authorities with a vehicle to procure used as an umbrella for future development of shared services shared services and provide them to local authorities. throughout the region. The services that will be initiated under the umbrella of this Share Holders company will only be promulgated if the business case shows that they will provide benefit to the shareholders in terms of improved Local Authority Shared Service Limited is jointly owned by the 13 levels of service and/or reduced cost. All such proposals will be local authorities of the Waikato region, being: presented to the Directors for approval prior to implementation.  Waikato Regional Council (Environment Waikato); Policies and Objectives  Hamilton City Council; Council intends to maintain its current shareholding for the  ; foreseeable

Otorohanga District Council Amended Long Term Plan 2017-25

Otorohanga District Council Amended Long Term Plan 2017-25

future. There are no formal policies or objectives relating to LASS will work to improve the flow of property related data and ownership and control of Local Authority Shared Service Limited. information to its stakeholders, to the public and to the market, and, where appropriate, to cover the costs by selling the data. Nature and Scope of Activities LASS will explore opportunities to partner with other authorities The principle nature and scope of the activity for the company is to: within to deliver services effectively and efficiently. It Provide shared services to all local authorities within the Waikato is anticipated that new services, which will be operated as separate Region. LASS may also sell processes and systems, as set up business units, will be developed in the area of information under individual agreements, to local authorities outside the region. services. Pursue all opportunities to procure shared services that may benefit Performance Targets the community, either through enhanced services and/or through Performance targets relate to the level of services that are current reduced cost. or under development. It is envisaged that these targets will change Give consideration to developing shared services that a majority of as new services are developed. local authorities of the Region believe are of value. The objective is The Performance Targets are that: to provide the most effective access to Regional information that may be of value to the community, using modern technology and Positive cash flow will be maintained so that the equity ratio is processes. maintained at a minimum of 40 percent. Explore all possible avenues to provide these services itself or Customers will be surveyed annually to ensure that there is at least contract them from outside parties, each depending on a rigorous 90 percent satisfaction with the services provided. business case and risk assessment. Expenditure shall not exceed that budgeted by more than 5% Future Developments unless prior approval is obtained from the Directors. A business case will be developed for any new service that is The CEO will provide a written report on the business operations proposed. This business case will be approved by the Directors and financial position of the LASS at a minimum on a six monthly prior to any service proceeding. The investigation of any new basis. services will be fully funded by Councils that wish to promote that service. The Shared Valuation Database Service will continue to be developed to enable greater contestability in the provision of valuation services to Councils, and to provide the Regional Council, and others, with up to date and accurate valuation data.

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Directors Directors Position Councils Director The current directors of Local Authority Shared Service Limited are Represents noted below: Dave Clibbery CEO Otorohanga Otorohanga District Directors Position Councils Director District Council Council Represents Vaughan Payne CEO Waikato Regional Waikato Regional Council Council Local Government Funding Agency (LGFA) Richard Briggs CEO Hamilton City Hamilton City Council Council The Local Government Funding Agency Limited, which is a council controlled trading organization, has been established by the Local Geoff Williams CEO Rotorua District Rotorua District Government sector and the Crown to enable local authorities to Council Council borrow at lower interest margins than would otherwise be available. Gavin Ion CEO Waikato District Waikato District The Local Government Funding Agency will raise debt funding Council Council either domestically and/or offshore in either New Zealand dollars or Robert Williams CEO Thames- Thames-Coromandel foreign currency and provide debt funding to New Zealand local Coromandel District District Council authorities and may undertake any other activities considered by Council the Board of the Local Government Funding Agency to be reasonably related or incidentally to, or in connection with, that Garry Dyet CEO Waipa District Waipa District business. Council Council The Local Government Funding Agency will only lend to local Donald McLeod CEO Matamata-Piako Matamata-Piako authorities that enter into all the relevant arrangements with it and District Council District Council comply with the Local Government Funding Agency’s lending Craig Hobbs CEO South Waikato South Waikato policies. District Council District Council Policies and Objectives Langley Cavers CEO Hauraki District Hauraki District Council intends to maintain its current shareholding for the Council Council foreseeable future. There are no formal policies or objectives relating to Chris Ryan CEO Waitomo District Waitomo District ownership and control of Local Government Funding Agency. Council Council Gareth Green CEO Taupo District Taupo District Council Council

Otorohanga District Council Amended Long Term Plan 2017-25

Otorohanga District Council Amended Long Term Plan 2017-25

Nature and Scope of Activities Performance Targets The main objectives of the Local Government Funding Agency will The Local Government Funding Agency’s average cost of funds be to: relative to the average cost of funds for New Zealand Government Securities for the period to:  Achieve the objectives of the shareholders in the Local Government Funding Agency (both commercial and non-  30 June 2015 will be less than 0.50 percent higher commercial);  30 June 2016 will be less than 0.50 percent higher  Be a good employer;  30 June 2017 will be less than 0.50 percent higher  Exhibit a sense of social and environmental responsibility by having regard to the interests of the community in which it The average margin above Local Government Funding Agency’s operates and by endeavouring to accommodate or cost of funds charged to the highest rated participating local encourage these when able to do so; authorities will for the period to:  Conduct its affairs in accordance with sound business  30 June 2015 will be no more than 0.15% practice;  30 June 2016 will be no more than 0.10%  Providing estimated savings in annual interest costs for all Participating Local Authorities of at least 30 basis points,  30 June 2017 will be no more than 0.10% based on the methodology set out in LGFA’s Annual Report 2012-2013; The Local Government Funding Agency’s annual issuance and  Make longer-term borrowings available to participating Local operating expenses for the period to: Authorities; and  30 June 2015 will be less than $4.67 million  Enhancing the certainty of access to debt markets for  30 June 2016 will be less than $6.0 million Participating Local Authorities, subject always to operating  30 June 2017 will be less than $6.2 million in accordance with sound business practice.

The total lending to participating local authorities at:  30 June 2015 will be at least $4,400 million  30 June 2016 will be at least $5,400 million  30 June 2017 will be at least $6,400 million

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Minor Shareholdings Council continues to hold minor shareholdings in the following companies: King Country Energy 0.054% Balance Agrinutrients 0.0046% NZ Local Govt Insurance Corp 0.0078%

Otorohanga District Council Amended Long Term Plan 2017-25