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Notice is hereby given that an Ordinary Meeting of Southland District Council will be held on:

 

Date:                      

Time:

Meeting Room:

Venue:

 

Wednesday, 27 September 2017

2pm

Council Chambers
15 Forth Street
Invercargill

 

Council Agenda

 

OPEN

 

 

MEMBERSHIP

 

Mayor

Mayor Gary Tong

 

Deputy Mayor

Paul Duffy

 

Councillors

Stuart Baird

 

 

Brian Dillon

 

 

John Douglas

 

 

Bruce Ford

 

 

Darren Frazer

 

 

George Harpur

 

 

Julie Keast

 

 

Ebel Kremer

 

 

Gavin Macpherson

 

 

Neil Paterson

 

 

Nick Perham

 

 

IN ATTENDANCE

 

Chief Executive

Steve Ruru

 

Committee Advisor

Fiona Dunlop

 

 

 

 

Contact Telephone: 0800 732 732

Postal Address: PO Box 903, Invercargill 9840

Email: emailsdc@southlanddc.govt.nz

Website: www.southlanddc.govt.nz

 

Full agendas are available on Council’s Website

www.southlanddc.govt.nz

 

 

 


 


Council

27 September 2017

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TABLE OF CONTENTS

ITEM                                                                                                                                   PAGE

Procedural

1          Apologies                                                                                                                        5

2          Leave of absence                                                                                                           5

3          Conflict of Interest                                                                                                         5

4          Public Forum                                                                                                                  5

5          Extraordinary/Urgent Items                                                                                          5

6          Confirmation of Council Minutes                                                                                5

Reports - Policy and Strategy

7.1       Adoption of Annual Report 2016/2017                                                                        7

7.2       Fraud Policy 2017                                                                                                      195

7.3       Proposed Amendment to Dog Control Rules in Otautau                                     207

7.4       Remission and Postponement of Rates Policy                                                      271

7.5       Investment and Liability Management Policy                                                         291

7.6       Hearings on Proposed Amendment to the Freedom Camping Bylaw for Lumsden                                                                                                                                     317

Reports - Operational Matters

8.1       Delegation to Approve Lease of Council Land - 48 York Road, Riversdale       341

8.2       Southland Museum and Art Gallery Fourth Quarter Report for the 2016/2017 Financial Year                                                                                                             347

8.3       Tokanui Rising Wastewater Main Renewal                                                            351

8.4       Te Anau Wastewater Business Case Development                                              361

8.5       Priority Improvement Projects- Around the Mountains Cycle Trail                    391

Reports - Governance

9.1       Resource Management Act 1991 - Amendments to Instrument of Delegation  411

9.2       Southland Land Drainage Act 1935 Delegation                                                     421

9.3       Milford Opportunities Project - Unbudgeted Expenditure                                   423

9.4       Minutes of the Finance and Audit Committee Meeting dated 7 June 2017        427

9.5       Minutes of the Services and Assets Committee Meeting dated 5 April 2017     429

9.6       Minutes of the Services and Assets Committee Meeting dated 21 June 2017   431

9.7       Minutes of the Finance and Audit Committee Meeting dated 19 July 2017        433

9.8       Minutes of the Ohai Railway Fund Subcommittee Meeting dated 2 December 2016                                                                                                                                     435

9.9       Minutes of the Ohai Railway Fund Subcommittee Meeting dated 12 August 2016 437

9.10     Minutes of the Ohai Railway Fund Subcommittee Meeting dated 5 April 2017 439

9.11     Minutes Northern Southland Development Fund working Group 13 December 2016                                                                                                                                     441

9.12     Minutes of the Manapouri Community Development Area Subcommittee Meeting dated 23 May 2017                                                                                                     447   

Public Excluded

Procedural motion to exclude the public                                                                            448

C10.1  Chief Executive Report

C10.2  South Catlins Charitable Trust Contract Works

C10.3  Public Excluded Minutes of the Finance and Audit Committee Meeting dated 7 June 2017

C10.4  Public Excluded Minutes of the Finance and Audit Committee Meeting dated 19 July 2017

C10.5  Public Excluded Minutes of the Services and Assets Committee Meeting dated 21 June 2017

 


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27 September 2017

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1          Apologies

 

At the close of the agenda no apologies had been received.

 

2          Leave of absence

 

At the close of the agenda no requests for leave of absence had been received.

 

3          Conflict of Interest

 

Councillors are reminded of the need to be vigilant to stand aside from decision-making when a conflict arises between their role as a councillor and any private or other external interest they might have.

 

4          Public Forum

 

Notification to speak is required by 5pm at least two days before the meeting. Further information is available on www.southlanddc.govt.nz or phoning 0800 732 732.

 

5          Extraordinary/Urgent Items

To consider, and if thought fit, to pass a resolution to permit the Council to consider any further items which do not appear on the Agenda of this meeting and/or the meeting to be held with the public excluded.

Such resolution is required to be made pursuant to Section 46A(7) of the Local Government Official Information and Meetings Act 1987, and the Chairperson must advise:

(i)      The reason why the item was not on the Agenda, and

(ii)     The reason why the discussion of this item cannot be delayed until a subsequent meeting.

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

“Where an item is not on the agenda for a meeting,-

(a)     that item may be discussed at that meeting if-

(i)      that item is a minor matter relating to the general business of the local authority; and

(ii)      the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

(b)     no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

 

6          Confirmation of Council Minutes

6.1         Meeting minutes of Council, 06 September 2017


Council

27 September 2017

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Adoption of Annual Report 2016/2017

Record No:        R/17/9/21043

Author:                 Nicole Taylor, Project Co-ordinator Corporate Planning

Approved by:       Rex Capil, Group Manager Community and Futures

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        Adoption of the Annual Report is required under the Local Government Act 2002.

2        The Annual Report is a means for Council to account and report to the community on its performance for the preceding financial year.  It reports on outcomes, performance measures, both financial and non-financial and provides the actual results against budgeted results.  This Annual Report reports against the second year of the Council’s 10 Year Plan 2015-2025 and the Annual Plan 2016/2017.

Executive Summary

3        Council is required to adopt an Annual Report within four months of the end of a financial year.

4        Council officers have compiled the Annual Report which has been reviewed by members of the Executive Leadership Team and the Council’s Finance and Audit Committee prior to being audited by Audit New Zealand.  Changes required from these processes have been incorporated into the document.

5        The updated Annual Report is attached to this report (Attachment B) and includes the draft audit opiniosn on page 21.  A copy of the draft representation letter is also attached as Attachment A.  The draft audit management report is expected to be provided on 25 September 2017 and will be tabled at the meeting.

6        Officers have also prepared the draft unaudited Summary Annual Report (Attachment C). This document will be audited separately in early October.  Once the audit is complete and any changes are made, a separate audit opinion will be received and the Summary will be approved by the Mayor and Chief Executive for distribution.

 

Recommendation

That the Council:

a)         Receives the report titled “Adoption of Annual Report 2016/2017” dated 21 September 2017.

b)         Determines that this matter or decision be recognised as significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Adopts the Annual Report for the year ended 30 June 2017.

e)         Delegates authority to the Chief Executive to approve any minor amendments needed to the Annual Report subsequent to this meeting.

f)          Delegates authority to the Chief Executive and Mayor to sign the Annual Report letter of representation to Audit New Zealand on behalf of Council.

g)         Endorses the draft Summary Annual Report for the year ended 30 June 2017 for audit.

h)         Delegates authority to the Chief Executive and Mayor to approve any audit/officer changes to the Summary Annual Report.

i)          Delegates authority to the Chief Executive and Mayor to sign the Summary Annual Report letter of representation to Audit New Zealand on behalf of Council.

j)          Notes that the Summary Annual Report will be released to the public once approved by the Chief Executive and Mayor.

k)         Receives the Management Report from Audit New Zealand for the year ended 30 June 2017.

 

 


 

Content

Background

7        The Local Government Act 2002 requires Council to prepare and adopt an Annual Report within four months of the end of each financial year.  This is the second year that Council has adopted its Annual Report within three months.

8        An Annual Report is intended to outline Council’s actual performance in comparison with its intended performance as outlined in its Annual or Long Term Plan.

9        The Annual Report details the operating activities of the Council and includes financial statements for the Council. The Report and financial statements have been audited by Audit New Zealand on behalf of the Auditor-General.

10      The Report and Summary (once confirmed) will be made available to the public via Council’s website, by placing printed copies in libraries and service centres and having printed copies available for distribution on request.  Availability of the Report will be advertised.  Printed copies of the Report and Summary will also be sent to those on Council’s mailing list.

11      A draft of the unaudited Annual Report was presented to the Finance and Audit Committee on 6 September 2017.  The Committee recommended that Council adopt the Report and delegated authority to the chair of the Finance and Audit Committee to reconfirm this following any changes made from either audit or officer review, ahead of the Council meeting on 27 September 2017.  A table outlining the key changes that have occurred since review by the Finance and Audit Committee and approved by the Chair, are attached as Appendix 1.

12      The audit by Audit New Zealand has been completed and a number of adjustments have been made to the document following audit and officer review.  An updated copy of the document has since been circulated to the chair of the Finance and Audit Committee outlining the material changes made.  On behalf of the Finance and Audit Committee, the chair has also confirmed that the Annual Report, incorporating these changes, be recommended to Council for adoption.

13      The Summary Annual Report is not required to be adopted by the Council. The Summary will be released once the audit of the document has been completed and the Summary has been approved by the Mayor and Chief Executive.

Status of the Report

14      At the date of this report the Report and Summary are substantially complete.  The principal matters outstanding include audit and design of the Summary document, and any final changes as a result of the final audit review processes.  Any material changes made to the Report will be outlined at the meeting.

15      At the time of writing this report, Audit New Zealand have completed the majority of their audit fieldwork and review of the Annual Report, however are not in a position to be able to provide audit clearance.  Verbal audit clearance is expected to be received on Monday 25 September 2017.

16      Audit New Zealand has provided Council with the draft audit opinion (included on page 21 of the annual report) and the draft representation letter (Attachment A).  The letter of representation is required to be signed by the Mayor and Chief Executive.  The management report will be provided to Council on 25 September and will be tabled at the meeting. 

17      Ian Lothian, Director of Audit New Zealand will be in attendance at the meeting to present the audit opinion and answer any questions regarding the annual report, audit opinion or the representations required.

Issues

Organisational Performance

18      The Annual Report 2016/2017 details performance of the organisation against the key performance targets that were specified in 10 Year Plan.  Of the 103 service performance targets, 61 (59%) were achieved, 32 (31%) were not achieved and 10 (10%) were not measured.  There were a variety of reasons why target Key Performance Indicators (KPI) were not met and these are outlined in more detail in the various activity sections of the Annual Report.

19      A small number of performance measures have had their results changed as a result of both internal and Audit New Zealand reviews since the Finance and Audit Committee meeting. Details of the key changes are included in the appendix.

 

Statement of Compliance (page 20)

20      Clause 34 of Schedule 10 of the Local Government Act 2002 requires that a Statement of Compliance be included in the Annual Report indicating whether the statutory requirements in relation to preparation of the Annual Report have been met. The Statement is required to be signed by the Chief Executive and Mayor.

21      The main statutory requirements relating to preparation of the Annual Report are outlined in the Act under Part 6, Section 98 and Part 3 of Schedule 10. These sections largely require that the statements be prepared in accordance with Generally Accepted Accounting Practice (GAAP) and that certain information be disclosed in the Annual Report. Hence, in essence, the Statement of Compliance is confirming that the information that is required to be included in an Annual Report has been included and whether the Report itself has been adopted within the four month timeframe and that it has been audited. The representations required in the Statement do not extend to confirming, for example, that Council has met all of its statutory responsibilities during previous decision-making processes.

Financial Results

22      These financial statements have been prepared in accordance with Tier 1 PBE accounting standards.  Explanations of the variance between actual results and budgeted results for 2016/2017 year can be found in note 33 of the Annual Report (page 133).

23     A summary of key financial information is set out below.

Statement of Comprehensive Revenue and Expense (page 94)

24      The Statement of Revenue and Expense records the revenue received and the expenditure incurred by Council. It also records changes in the value of Council’s assets.  In summary, Council’s financial performance was as follows:

 

Actual 16/17

Budget 16/17

Actual 15/16

Total Revenue

$72.1M

$68.4M

$67.2M

Total Expenditure

($72.0M)

($69.3M)

($65.8M)

Operating Surplus/(Deficit)

$0.1M

($0.9M)

$1.4M

Gains on Assets at fair value

($0.1M)

-

$1.3M

Gains on Assets

$95.4M

$21.7M

$0.4M

Total Comprehensive Revenue and Expense

$95.5M

$20.8M

$3.1M

25      Total revenue was $3.7M over budget primarily as a result of forestry sales being significantly higher than forecast ($3.9M) as well as an increase in the forestry valuation of $0.8M.  This was offset by a decrease in NZTA funding of $1.9M as a result of a delay in the tendering of the Alternative Coastal Route project and several bridge replacement projects; as well as reduced grants and subsidies income of $1.2M, predominantly associated with the Around the Mountains Cycle Trail.

26      Total expenditure was $2.7m above budget predominantly due to costs associated with the increased forestry harvesting ($1.9M) and costs associated with stage 8 and 9 of the Around the Mountain Cycle Trail being expensed. 

27      Gains on Assets was $73.7M greater than budget due to a significant increase in the roading revaluation as a result of current market conditions as well as more accurate costing information being available as a result of the Alternative Costal Route project tender being awarded recently.

Statement of Financial Position (page 96)

28     The Statement of Financial Position (also referred to as the Balance Sheet) records the assets Council owns, and how those assets are financed.  Total Assets is what the council owns for example infrastructure assets, Total Liabilities are finance from third parties, for example accounts payable; and Total Equity is the net community assets (Total Assets less Total Liabilities).  Key items in the Statement of Financial Position are:

 

Actual 16/17

Budget 16/17

Actual 15/16

Total Assets

$1,496M

$1,437M

$1,400M

Total Liabilities

$11.1M

$13.9M

$11.0M

Total Equity

$1,485M

$1,423M

$1,389M

29      Total Assets are over budget primarily due to property, plant and equipment and investments being significantly more than budgeted by ($37.0M and $21.5M respectively).  This is primarily as a result of the higher than budgeted revaluation of infrastructural assets offset by less capital works being completed than anticipated, and consequently more funds being retained in investments.

Statement of Cash Flows (page 97)

30      The Statement of Cash Flows records the cash that Council received and disbursed.  Broadly cash, under financial reporting rules is recorded in three separate categories:

•        Operating cash flows - the cash flow related to day-to-day operating activities.

•        Investing cash flows - the cash flow received from sale of assets and cash spent on capital assets.

•        Financing cash flows - the cash flow received from any borrowings and the cash flow disbursed in repaying borrowings.

31     Overall, Council’s cash position increased from June 2016 by $4.0M (rounded).  In summary, the cash flows recorded within these categories are as follows:

Operating cash flows

Actual 16/17

Budget 16/17

Actual 15/16

Cash surplus/(deficit)

$21.1M

$22.2M

$23.2M

 

Investing cash flows

Actual 16/17

Budget 16/17

Actual 15/16

Cash surplus/(deficit)

($17.1M)

($35.7M)

($27.1M)

 

Financing cash flows

Actual 16/17

Budget 16/17

Actual 15/16

Cash surplus/(deficit)

-

($0.9M)

($0.01M)

32      Net operating cashflows were lower than budgeted.  Payments to supplier and employees were $1.7M above budget primarily due to harvesting costs associated with increased forestry harvesting undertaken.

Factors to Consider

Legal and Statutory Requirements

33      Section 98 of the Local Government Act 2002 requires the Council to prepare and adopt an Annual Report within four months of the end of the financial year.

34      The Act also requires that Council make available the Annual Report within one month after adoption and publish a Summary of the Annual Report within one month of the Annual Report being adopted.  Officers are finalising the Summary document (Attachment 2) which will be released in mid-October following audit and graphic design.

35      Part 3 of Schedule 10 also outlines a number of disclosures that are required to be included in the Annual Report.

Community Views

36      The community expects Council to adopt an Annual Report in accordance with the requirements of the Local Government Act 2002.  The Report is an important accountability document in terms of explaining the actual performance of the organisation relative to the objectives that were set via the Long Term Plan and Annual Plan.

37      The Report and Summary (once confirmed) will be made available to the public via Council’s website, by placing printed copies in libraries and service centres and having printed copies available for distribution on request.  Availability of the Report will be advertised.  Printed copies of the Report and Summary will also be sent to those on Council’s mailing list.

Costs and Funding

38      The audit fee for the Annual Report is $115,440 (excluding GST) plus associated disbursements ($2,183 or 1.9% increase on the 2015/2016 fee).

39      There are no additional financial considerations associated with making a decision on whether to adopt the Annual Report.

Policy Implications

40      Council’s policies relating to the basis upon which the Annual Report is prepared are outlined in the Statement of Accounting Policies contained in the Report itself.

Analysis

Options Considered

41      Under the Local Government Act 2002, the Council must prepare and adopt an
Annual Report in respect of each financial year, no other options are available. 

Analysis of Options

Option 1 – Adopt the Annual Report 2016/2017

Advantages

Disadvantages

·        Compliance with Council’s legislative requirements.

·        The document provides information to the public on the performance to budget and against key performance indicators.

·        There are no disadvantages.

 

Option 2 – Do not adopt the Annual Report 2016/2017

Advantages

Disadvantages

·        There are no advantages of this option.

·        Council will not be compliant with the legislation.

 

Assessment of Significance

42      The Annual Report 2016/2017 is considered significant under Council’s significance and engagement policy because the performance of Council is of wide community interest.

43      It is important to the public that Council meets both its financial and non-financial commitments to ensure it delivers its services efficiently and effectively.  To do this the public relies on the information provided in the Annual Report to give it assurance that Council is undertaking its responsibilities and how well it is performing these.

44      Along with the processes and procedures Council undertakes to track and record the information provided in the Annual Report, to ensure that the public can rely on the information provided an independent review is undertaken by auditors (Audit New Zealand).  In general the Audit New Zealand provides an opinion as to whether Council has complied with Generally Accepted Accounting Practice (GAAP) and that the annual report fairly reflects council’s financial position, results of operations and cashflows, and levels of service and reasons for any variance.

Recommended Option

45      The recommended option is Option 1 – Adopt the Annual Report 2016/2017.

Next Steps

46      Once the Annual Report is adopted, and the signed representation letter has been provided to Audit NZ, the final audit opinion will be issued to Council.  The audit opinion will be finalised in the Annual Report and an online and printed version of the Annual Report will be made available to the public.

47      The Summary Annual Report will be graphically designed and will be audited separately in early October.  Once the audit is complete and any changes are made, the Summary will be approved by the Mayor and Chief Executive and will also be made available to the public.


 

Appendices

Appendix 1 – Key Changes to the Annual Report since 1 September 2017

Change

Updated Page

Original Page

Some measures have had wording changes for consistency and changes to explanatory reasons and some have had the prior year result added again for consistency

Throughout

Activity Report - Total number of KPI’s achieved increased from 58 to 61, not achieved decreased from 34 to 32 and not measured increased from 7 to 10. The reasons for this change are:

7

7

·    Resource Management KPIs – Correction to the number of KPIs.

46

48

·    Roading and Footpaths KPI (Road Safety) – Updated information from the roading team provided during the audit meant that the number of crashes/fatalities was 16 rather than 15. As this was the same number as the prior year the result was updated to “No Change” which was “Not Achieved” (from Achieved).

54 + 56

56 + 58

·    Stormwater KPI (Management of Environmental Impacts) – The auditors requested that the various components of the measure (a) through to (d) be reported separately so that each of these were reported as “Not Measured”. As a result the number of KPI’s not measured increased from 1 to 4.

63 + 64

65 + 66

·    Stormwater KPI (Customer Satisfaction) – The result changed from 18 to 10 which means it is now achieved. The change related to rural properties being incorrectly included in the calculation. The mandatory measure only refers to urban properties.

63 + 65

66

·    Wastewater KPI (Discharge compliance) – The auditors requested that the various components of the measure (a) through to (d) be reported separately so that each of these were reported as “Achieved”. As a result the number of KPI’s achieved increased from 5 to 8.

67 + 68

69 + 70

·    Water Supply KPI (Quality/Consumption) – The result changed to 790 litres which means it is now achieved against the restated target of 845 litres. The change related to the fact that the target was calculated differently than the mandatory measure requirements so this has been restated to enable comparison.

75

76

Changes to KPI results

 

 

·    Community Assistance (Annual Outcomes Report) from 3 to 4

28

31

·    Community Development (GDP) from 5.1 to -1%

38

40

·    Community Development (Occupancy Rates) from 12.2% to 11.4%

40

41

·    Wastewater (Customer Satisfaction) splitting out results for components (a) to (d) and adding prior year comparatives for each component.

69

71

·    Water Supply (Customer Satisfaction) splitting out results for components (a) to (f) and adding prior year comparatives for each component.

74

76

$285K increase in the water asset valuation for year ended 30 June 2017.  This matter was identified by our valuer (Waugh) when they were uploading the assets into the asset database and a number of water assets did not have an installation date included, and therefore the Depreciated Replacement Cost was calculated incorrectly.

Throughout

Correct forestry income receipted 1 July 2017, however invoice was dated pre 30 June, therefore increase bank account by $934K (net amount), reduce accrued expenses by $475K and reduce accrued income by $1,409K.

Throughout

Correct Stewart Island Visitor Levy grants – re-accrue $50K for Regional Heritage Trust awarded in 15/16 year and remove accrual for $42K to Stewart Island Jetties due to insufficient funds being available at 30 June 2017.

Throughout

$120K increase in expenditure accruals associated with roading.

Throughout

Updates to accounting policies as requested by Audit NZ.

84-93

86-96

Inclusion of going concern wording in relation to Venture Southland.

124

127

Update of the net asset value of Southland Regional Heritage Committee based on the final audited accounts.

124

127

Correction to events after balance date disclosure in relation to legal proceedings, as no case management meeting was required.

129

132

Update value of contingent liabilities for Building Act claims.

129 + 130

132 + 133

 

 

Attachments

a         Draft Letter of Representation for the year ended 30 June 2017 to Audit New Zealand

b         Full Annual Report 2016/2017

c         Draft Unaudited Summary Annual Report 2016/2017 (Text Version)    

 


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Council

27 September 2017

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Fraud Policy 2017

Record No:        R/17/9/21842

Author:                 Rebecca McElrea, Policy and Planning Consultant

Approved by:       Anne Robson, Chief Financial Officer

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        The purpose of this report is to present the Southland District Council Fraud Policy 2017 to Council for adoption.

 

Executive Summary

2        The current Fraud Policy was reviewed in 2005 and is therefore overdue for a review.  In undertaking this review, Council have incorporated a number of recommendations from the Shared Service Business Process review undertaken by Deloitte in 2016.

 

3        The draft policy was presented to the Finance and Audit Committee on 6 September 2017. The Committee endorsed the policy and recommended that Council adopt it.

4        In addition, a fraud response plan is also being developed to compliment this policy.

5        In the next 6 months Council will be undertaking a fraud risk assessment process.  As part of this and the resulting gap analysis undertaken, further changes to this policy may occur within the coming 12 months.

 

Recommendation

That the Council:

a)         Receives the report titled “Fraud Policy 2017” dated 17 September 2017.

b)         Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Adopts the Southland District Council Fraud Policy 2017.

 


 

Content

Background

6        In 2016, Deloitte undertook a Shared Service Business Process review of which 11
South Island local authorities took part including Southland District Council (SDC). 
The purpose of the review was to provide an affordable and efficient programme where councils are able to learn from each other.  In undertaking this work, Deloitte reviewed policies and processes in respect of Fraud, Conflicts of Interest and Sensitive Expenditure.

7        Deloitte provided recommendations to Southland District Council (SDC) in relation to Southland District Council’s Fraud Policy (2005) as part of their Shared Service Business Process review.

8        In reviewing the current Fraud Policy, these recommendations have been incorporated into the Fraud Policy (2017).  A Fraud Response Plan is also being developed.  This is an internal document outlining Council’s process and guidelines for dealing with suspected fraud and will compliment this policy.

 

Deloitte strongly recommended the following changes to the Fraud Policy

·              Fraud Control Officer

Deloitte strongly recommended that SDC appoint a Fraud Control Officer.  This is to be a member of staff who will be fully trained in fraud awareness and understand the requirements of initial response.

·              Fraud Response Plan (2017)

Deloitte strongly recommended that SDC modify its procedures for dealing with Fraud to fully explain the initial response responsibilities and to ensure a coordinated and effective response.

Council staff are currently developing a Fraud Response Plan that will ensure Council has a documented process for explaining the steps to be taken in the event fraud is suspected, and who is responsible for taking those actions. The Fraud Response Plan will be separate from the Policy, however available to all staff and elected members.

·              Communication of Policy

Deloitte strongly recommended that the Fraud Policy is fully communicated to all staff and elected members. SDC should also request staff to undertake an annual declaration of their understanding of the policy and the policy also needs to be added to the intranet.

 

Deloitte recommended the following changes to the Fraud Policy

·              Fraudulent activities by the CEO

Deloitte recommended that there be a back-up person for fraud reporting in case of suspected fraudulent activities by the CEO.  The Mayor was suggested for this role.

·              Whistle Blower Section

Deloitte recommended the addition of a whistle blower section to the policy to strengthen the protection provided to the whistle blower.  This is to ensure staff feel safe about coming forward with a suspected fraud case.  Reference to the Protected Disclosure Act gives employees legal reference for procedures and protection in place when coming forward with a suspected fraud.

·              Fraud awareness training for staff

Deloitte recommended that SDC should consider fraud awareness training for all staff as all staff have a role to play in the prevention and detection of fraudulent activities.

Deloitte suggested the following changes to the Fraud Policy

·              Definition of fraudulent activities

Deloitte suggested that SDC include further definitions within the Fraud Policy to ensure there are no grey areas with regards to what is and what is not acceptable.

·              Councillors role

Deloitte suggested that the policy include the addition of explaining Councillor’s role in the detection and prevention of fraud.

·              Zero Tolerance

Deloitte suggested that SDC make a more firm and direct statement that it is their intent to prosecute and have a zero tolerance stance.  This demonstrates that Council will progress matters as far as possible and deter any fraudulent activities.

 

9        The draft policy was circulated to staff for feedback/comment on 21 August.  Five responses were received and these were reviewed by ELT and a couple of minor amendments were made to the policy as a result. 

10      The draft policy was also presented to the Finance and Audit Committee on 6 September 2017. The committee endorsed the policy and recommended that Council adopt the policy.

11      Council staff are also currently seeking proposals from a number of independent experts to undertake a fraud risk assessment exercise. As part of this process they will undertake a gap assessment to understand what systems and processes Council currently has in place to prevent and detect fraud and identify the areas where further improvement is required.  As part of this process they will review Council’s fraud policy and associated processes (fraud response plan), and as a result these documents may end up being re-reviewed again in the next 12 months if further amendments are recommended.

Factors to Consider

Legal and Statutory Requirements

12      This policy supports Council’s Strategic Framework, which has a vision of having thriving, healthy, Southland communities.  A desired outcome in the strategic framework is being an effective Council by being prudent and innovative.  This policy is prudent as it focuses on the definition of fraud, outlines prevention mechanisms and sets out responsibilities for the detection of fraud.  The Fraud Response Plan will set out the process and responsibilities if fraud is suspected.

13      This policy also aligns with the following associated documents:

·    Local Authorities (Members’ Interests) Act 1968.

·    The Secret Commissions Act 1910.

·    Sections 99, 105, 105A of the Crimes Act 1961.

·    Protected Disclosures Act 2000.

·    Delegation Manual.

·    Personnel Manual.

·    Policy on electronic communications (including the internet).

·    Credit Card Policy

·    Code of Conduct

·    Sensitive Expenditure Policy

·    Employment Relations Act 2000

·    Privacy Act 1993

·    Vehicle Policy

 

It is the intention that the Fraud Policy 2017 will be supported by the Fraud Response Plan, which is currently being developed.

 

Costs and Funding

14      There will be cost associated with Fraud Training for the Fraud Control Officer, as well as Fraud Awareness Training for all staff, however it is not expected to be significant.

Analysis

Options Considered

15      The two options for Council are to:

·    Adopt the Fraud Policy 2017 (with any amendments made at this meeting)

·    That the current Fraud Policy (2005) remains as it is currently.

Analysis of Options

Option 1 – Adopt the Fraud Policy 2017 (with any amendments made at this meeting)

Advantages

Disadvantages

·        Create a more robust policy and system for the detection and reporting of suspected fraudulent activities.

·        Addresses recommendations from the Deloitte shared service business process review.

·        No obvious disadvantages

 

Option 2 – That the current Fraud Policy 2005 remains as it is currently

Advantages

Disadvantages

·        No advantages

·        This option would mean that the Fraud Policy and response plan for Southland District Council is not as strong as it needs to be should any fraudulent activities occur.

 

Assessment of Significance

16      This decision is not deemed as significant in terms of Council’s Significance and Engagement policy.

Recommended Option

17      It is recommended that Council adopt the Fraud Policy 2017.

Next Steps

18     Once Council have adopted the final Fraud Policy, it will be circulated to all staff and elected members.

19     Staff will finalise the Fraud Response Plan, and present this to ELT for approval.

20     The Executive Leadership Team need to appoint a Fraud Control Officer. 

21     The policy will be uploaded to Council’s intranet.

22     Training for the Fraud Control Officer will need to be set up.  A separate email address (fraudcontrolofficer@southlanddc.govt.nz) will also need to be established. 

 

Attachments

a         Southland District Council Fraud Policy September 2017    

 


Council

27 September 2017

 

 

SOUTHLAND DISTRICT COUNCIL

FRAUD POLICY

 

DOCUMENT CONTROL

 

Policy owner:

Financial Services

TRIM reference number:

r/17/8/18483

Effective date:

 

Approved by:

Council

Date approved:

 

Next review date:

September 2020

 

 

1.    INTRODUCTION

           

1.1       Policy Objectives

 

The purpose of this policy is to define fraud, outline prevention mechanisms, set out responsibilities for the detection of fraud, provide clarity about what to do if you suspect fraud and set out the action that will be taken if a fraud is discovered.

 

1.2       Guiding Principles

 

·                      The Southland District Council (SDC) regards fraud as totally unacceptable, and will apply a 'Zero Tolerance' approach to fraudulent behaviour with intent to prosecute.

·                      All employees are required to act honestly and with integrity and to safeguard the public resources for which the SDC is responsible at all times. Employees who suspect fraud must report fraud in accordance with Council’s documented process for responding to suspected fraud (Fraud Response Plan).

·                      All suspected fraud will be investigated and a summary of findings will be reported to Finance and Audit Committee.  Dependent on the outcome of the investigation, employees may be subject to the SDC disciplinary procedures.

·                      Fraud is a criminal offence and will generally constitute serious misconduct.

·                      Incidences of significant suspected fraud will be reported by the Fraud Control Officer or such other alternate as is appropriate, to the NZ Police, the Chair of the Finance and Audit Committee and the Mayor as set out in Council’s documented process (Fraud Response Plan).

·                      Fraud is a dishonest act that involves deception to obtain an advantage.
A significant fraud will usually involve the theft or misuse of Council assets or be of a nature that has the potential to impact on the reputation of the SDC.

1.3       Scope

 

This policy applies to Elected Members, appointed Committee Members, employees and contractors of the SDC.

 

1.4       Strategic Alignment

 

This policy supports Council’s Strategic Framework, which has a vision of having thriving, healthy, Southland communities.  A desired outcome in the strategic framework is being an effective Council by being prudent and innovative.  This policy is prudent as it focuses on the definition of fraud, outlines prevention mechanisms, sets out responsibilities for the detection of fraud, provides clarity about what to do if you suspect fraud and sets out the actions that will be taken if a fraud is discovered.

 

This policy also aligns with the following associated documents:

·                      Local Authorities (Members’ Interests) Act 1968.

·                      The Secret Commissions Act 1910.

·                      Sections 99, 105, 105A of the Crimes Act 1961.

·                      Protected Disclosures Act 2000.

·                      Delegation Manual.

·                      Staff Handbook.

·                      Policy on electronic communications (including the internet).

·                      Credit Card Policy

·                      Code of Conduct

·                      Sensitive Expenditure Policy

·                      Employment Relations Act 2000

·                      Privacy Act 1993

·          Vehicle Policy

 

The Fraud Policy is supported by Council’s documented process for responding to suspected fraud (Fraud Response Plan).

 

2.         DEFINITIONS

 

For the purposes of this policy, "fraud" shall include all acts of deception, misrepresentation or omission committed with the intention of gaining an unjust or illegal financial advantage or to cause an unjust or illegal loss or disadvantage.
Such behaviour includes, but is not limited to:

·                      Forgery or alteration of documents or accounts belonging to SDC.

·                      Unauthorised possession of Council property.

·                      Failing to record leave taken, or any other employee theft of time.

·                      Disclosing confidential or proprietorial information to third parties.

·                      Any misappropriation of funds, securities, supplies or any other assets.

·                      Any irregularities of funds, securities, supplies or any other asset.

·                      Any irregularity in handling or reporting of money transactions.

·                      Misappropriation of furniture, fixtures and equipment.

·                      Accepting or seeking anything of material value from contractors or persons, including before, during and after, any procurement processes.

·                      Bribery, corruption or abuse of office.

·                      Unauthorised or inappropriate use of SDC property, vehicles, equipment, materials, furniture, fixtures, and equipment or records.

·                      Any computer-related activity involving the alteration, destruction, forgery, or manipulation of data for fraudulent purposes - or the misappropriation of SDC-owned software.

·                      Manipulating reporting to obscure impropriety.

·                      Obtaining funds or any other benefit through misleading claims, representations or by false pretences.

·                      Causing a loss, or avoiding or creating a liability by deception.

·                      Any claim for reimbursement of expenses that are not made for the exclusive benefit of the SDC.

·                      Profiteering for personal or another person or entities gain as a result of insider knowledge of SDC's activities.

·                      Unapproved destruction or removal of records.

·                      Use of the Southland District Council's credit card for personal gain.

·                      Inappropriate payments to third parties.

·                      Presenting false credentials or qualifications.

·                      Supporting others in, or in any way being party to, fraud or not reporting fraud.

·                      Any of the above for personal gratification and/or edification, whether or not there is pecuniary gain.

 

3.         BACKGROUND

 

The SDC is committed to protecting its revenue, property, information, and other assets from any attempt (by members of the public, contractors, subcontractors, agents, intermediaries, or its own employees) to gain financial or other benefits from it by deceit.

 

This policy sets out specific guidelines and responsibilities regarding appropriate actions that must be followed for the investigation of fraud and other similar irregularities.

 

In addition to this policy some Council employees belong to professional bodies, such as the Institute of Professional Engineers and also the Institute of Chartered Accountants of Australia and New Zealand, both of which bind their members to their professions individual code of ethics concerning professional behaviour.

 


 

4.         POLICY STATEMENTS

 

4.1       Prevention

 

SDC will not tolerate any fraudulent behaviour and will investigate all instances of suspected fraud.

 

SDC will proactively take all reasonable steps to prevent fraud by developing and maintaining a policy framework that sets out clearly procedures, processes and expectations of behaviour and promotes robust internal controls for all aspects of the protection of assets, procurement, purchasing, payroll, treasury and cash management. This will include but is not limited to:

 

·                      A clear, visible code of conduct that sets out the expectations for employee behaviour.

·                      Pre-employment screening that includes checking for criminal convictions for appropriate staff (for example ELT, Finance Team and any other staff member who has financial delegation).

·                      Assuring that staff appointed to positions of responsibility are appropriately qualified, experienced and aware of their obligations in regard to fraud and the protection of assets of the Council.

·                      Induction processes for new staff that include fraud awareness and code of conduct training.

·                      Regular fraud awareness training for all staff.

·                      Segregation of duties in accordance with best practice.

·                      Appropriately robust monthly financial reporting that provides information about results against budget, benchmarks and expected key performance indicators.

·                      Robust confirmation of new suppliers.

·                      Centralised Contract Register.

·                      An Internal Audit Policy, Plan and Programme of work carried out by external parties.

·                      Regular Fraud Risk Assessments by external parties.

·                      Regular suspicious transaction analysis; and

·                      A safe, documented and widely available process for employees to report suspected fraud.

4.2       Reporting

 

SDC has a documented process for responding to suspected fraud (Fraud Response Plan).

 

SDC also has a Fraud Control Officer.  The Fraud Control Officer is the [add position title].  Staff can report fraud in person, by phone, or by email.  The contact details for reporting suspected fraud to the Fraud Control Officer are:

 

Email: fraudofficer@southlanddc.govt.nz, phone: (03)

           


 

Staff are required to report all instances of suspected fraud to their Manager, or, if this is not appropriate, to:

 

·              The Fraud Control Officer.

·              The Chief Financial Officer.

·              The Chief Executive.

·              The People and Capability Manager.

·              The Chair of the Finance and Audit Committee.

·              The independent member of the Finance and Audit committee; or

·              The Mayor.

Staff reporting suspected fraud are covered the Whistle Blower Protection section of this policy.

 

4.3       Whistle Blower Protection Responsibilities

           

SDC is committed to protecting individuals who report suspected serious wrong doing.  The responsibility for ensuring confidentiality and overall protection of the individual(s) making disclosures rests with the Chief Executive.  Protection is provided under the Protected Disclosures Act 2000.

 

In their absence, Council Personnel may contact the Fraud Control Officer, the
Chief Financial Officer, or Mayor where appropriate or they may prefer to make a disclosure to their Manager.

           

The Protected Disclosures Act 2000 offers Whistle Blower protection.  Section 19 covers the Confidentiality of a Protected Disclosure.  Section 7 of the Act specifies that employees shall follow internal procedures for disclosing serious wrongdoing.  Sections 8, 9 and 10 of that Act outline the specific circumstances in which a disclosure of serious wrongdoing may be made to designated officials.

 

 

5.         IMPLEMENTATION

 

The policy was reviewed by ELT prior to being circulated to staff for consultation.  Staff feedback has been considered and incorporated into the policy where appropriate prior to endorsement by the Finance and Audit Committee and final approval by Council.  The approved policy will be circulated to all staff and elected members.

 

 

6.         TRANSITIONAL ARRANGEMENTS

 

This policy will become effective immediately upon approval by the Finance and Audit Committee.  Staff and elected members will be required to acknowledge they have read and accepted the terms of the policy within four weeks of the policy adoption. 

 

 

7.         MONITORING, EVALUATION AND POLICY REVIEW

 

Informal feedback can be provided at any time to the Fraud Control Officer on the effectiveness and appropriateness of this policy.

 

A formal review of this policy will be undertaken within three years of it being implemented / reviewed.

 

8.         RESPONSIBILITIES

 

Role

Responsibilities

Management Responsibility

The day to day responsibility for the prevention and detection of fraud, misappropriation and other inappropriate conduct rests with Managers. 

 

Managers are responsible for:

·          Demonstrating the highest standards of ethical behaviour.

·          Identifying the risks to which systems, operations and procedures are exposed.

·          Developing and maintaining effective internal controls to ensure effective stewardship of funds and to prevent and detect fraud.

·          Ensuring these internal controls are being complied with.

·          Strictly adhering to delegations of authority.

·          Ensuring compliance with all corporate and network policies, procedures and guidelines; and

·          An awareness and sense of responsibility for the types of impropriety that may occur within their respective areas and being alert for any indication of irregularity.

Employees Responsibility

All employees, including Managers, are responsible for:

 

·          Being scrupulously fair and honest in their dealings with contractors, suppliers or customers;

·          Taking reasonable steps to safeguard SDC funds and assets against fraud, theft, unauthorised use and misappropriation;

·          Strictly adhering to all system security measures, segregation of duties and delegations;

·          Reporting immediately to the Fraud Control Officer, Chief Financial Officer or Chief Executive if they suspect or believe that there is evidence of irregular or improper behaviour or that a fraud may have been committed.

·          Reporting immediately to the Mayor, Chair of the Finance and Audit Committee or the independent member of the Finance and Audit committee if they suspect or believe that there is evidence of irregular or improper behaviour or that a fraud may have been committed by the Chief Executive.

Elected Members Responsibility

 

Each elected member is responsible for:

 

·    Being scrupulously fair and honest in their dealings with contractors, suppliers or customers;

·    Reporting immediately to the Fraud Control Officer, Chief Financial Officer or Chief Executive if they suspect or believe that there is evidence of irregular or improper behaviour or that a fraud may have been committed.

·    Reporting immediately to the Mayor, Chair of the Finance and Audit Committee or the independent member of the Finance and Audit committee if they suspect or believe that there is evidence of irregular or improper behaviour or that a fraud may have been committed by the Chief Executive.

·    Strictly adhering to all system security measures, segregation of duties and delegations

·    Maintaining a climate of risk awareness by providing firm and visible support for fraud and corruption control management.

Chief Financial Officer

·          Development, maintenance and implementation of the Fraud Policy.

·          Developing and maintaining the governance and strategy aspects of this policy.

Chief Executive/ELT

·          Responsible and accountable for the overall ownership and administration of this policy.

 

 

9.         REVISION RECORD

 

Date

Version

Revision Description

10 August 2017

V1

First draft for ELT

28 August 2017

V2

Amended version with ELT and staff amendments

6 September 2017

 

Amended version endorsed by Finance & Audit Committee

26 September 2017

 

Final version approved by Council

 

 

 


Council

27 September 2017

sdclogo

 

Proposed Amendment to Dog Control Rules in Otautau

Record No:        R/17/9/21116

Author:                 Robyn Rout, Policy Analyst

Approved by:       Bruce Halligan, Group Manager Environmental Services

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        The purpose of this report is to inform Council about the results of a consultation process on a proposed amendment to the Dog Control Policy 2015 (the Policy) and Dog Control Bylaw 2015 (the Bylaw) for Otautau, and to present options on how to proceed.

Executive Summary

2        In February the Otautau Community Board (the Board) requested that a change be made to the dog control rules in Otautau, making the west part of the Alex McKenzie Memorial Arboretum an off-leash area instead of on-leash area. In July this year, the Regulatory and Consents Committee considered and endorsed the Board’s proposal (see the Statement of Proposal included as Attachment A), and put it out for consultation.

3        Twenty five submissions were received on the proposed amendment, and over two thirds of the submissions received were in support.

4        However, in light of the feedback that was received from the Alex McKenzie Memorial Arboretum Charitable Trust (the Trust), officers are recommending that the Committee withdraw the Statement of Proposal, and report back to the Board. Council would then liaise with the Board regarding whether they want to investigate other areas to designate as off-leash.

 

Recommendation

That the Council:

a)         Receives the report titled “Proposed Amendment to Dog Control Rules in Otautau” dated 21 September 2017.

b)         Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Determines that the Statement of Proposal should be withdrawn.

e)         Requests that staff report back to the Otautau Community Board on the outcome of the proposed amendment.  

 

Content

Background

5       The current dog control rules for Otautau were established in 2015 with the adoption of the Policy and the Bylaw. The Otautau Community Board (the Board) provided input into the Policy and Bylaw when they were being established. The Policy and Bylaw currently outline that in the Alex McKenzie Memorial Arboretum, dogs are required to be on-leash. The current dog control rules for Otautau (as depicted in the Bylaw and Policy), are outlined in Attachment B.

6       At a meeting in February this year, the Board reconsidered the dog control rules in Otautau and requested a change. In particular, the Board requested that the west area across the bridge at the Arboretum be designated as a dog exercise area. The land on the east side of the Arboretum was proposed to remain designated as on-leash. The division between the two areas was proposed to be the creek that flows through the Arboretum.

Issues

Alex McKenzie Memorial Arboretum Charitable Trust

7        During the consultation period, Council staff received correspondence from the Board of the Alex McKenzie Memorial Arboretum Charitable Trust (the Trust). The Trust holds a 20 year lease of the Arboretum, which commenced in 2007. Council staff involved in progressing the amendment were not aware of the lease. Staff have communicated with the Trust and have apologised for not engaging with them when the amendment was being developed.

8        The Trust state that what is outlined in the Statement of Proposal would infringe on their rights under the lease to quietly enjoy the property, and the Statement of Proposal would jeopardise their standing as a charity (as the Trust’s status states that it is an Arboretum for children, the elderly and for the general public to enjoy). The Trust is also concerned that having an off-leash area in the Arboretum would damage the work it has done developing the property, affect the tranquillity, and that off-leash dogs may not be well managed or cleaned up after. The Trust have also asked Council to give them confirmation that the Statement of Proposal will be withdrawn.

9        Legal advice sought by the Council indicates that Council would need the Trust’s consent to proceed with the Statement of Proposal. The Trust have indicated that they are not willing to give consent. Staff have also approached the Trust and asked if it would give consent if Council committed to a number of factors, such as providing clear signage, patrols, bag dispensers, or improved fencing at the Arboretum. The Trust was still not willing to give consent.

Submissions Received

10      During the consultation period, Council staff received 25 submissions on the proposed amendment (see Attachment C). Seventeen of the submissions supported the proposal and eight were opposed.

11      The people who supported the submission gave a number of reasons for their support, including:

·    There is no other appropriate place to let a dog safety run free in Otautau, and that the Arboretum would be a nice safe place

·    That the proposal would allow for people to exercise their dogs, while still leaving space in the eastern side of the Arboretum for other people to use, without being subject to free-roaming dogs

·    That there are plenty of other places around Otautau where people can avoid dogs

·    That older people find it difficult to properly exercise their dog when it is on a leash, so a suitable off-leash area would be appreciated.

12      There were also a number of reasons raised as to why people did not support the proposed amendment, including:

·    That the Arboretum should remain a quiet and peaceful place to be enjoyed by all

·    That not all people like to be around dogs

·    That it would be more appropriate to have an off-leash area closer to the actual town

·    Concerns about dogs toileting in the Arboretum, and it not being cleaned up

·    That making part of the Arboretum an off-leash area may mean there is more of a threat to stock, through dog attacks or the spread of disease

·    That making part of the Arboretum off-leash area is not appropriate as it is a memorial

·    That it would be safer for the users of the Arboretum if dogs are on-leash

·    That a change to the dog control rules may negate all the positive work that has been done by the Trust

·    That other areas could be used instead.

 

Factors to Consider

Legal and Statutory Requirements

13      If Council was to proceed with the Statement of Proposal, there would be legal ramifications under Council’s lease agreement with the Trust, and potentially also under statutory provisions.

14      An objective of the Dog Control Act 1996 is to impose on the owners of dogs, obligations designed to ensure that dogs do not cause a nuisance to any person and do not injure, endanger, or cause distress to any person. It is also an objective to ensure dogs do not injure, endanger, or cause distress to any stock, poultry, domestic animal, or protected wildlife.

15      When adopting a dog control policy Council must have regard to:

·    the need to minimise danger, distress, and nuisance to the community generally; and

·    the need to avoid the inherent danger in allowing dogs to have uncontrolled access to public places that are frequented by children, whether or not the children are accompanied by adults; and

·    the importance of enabling, to the extent that is practicable, the public (including families) to use streets and public amenities without fear of attack or intimidation by dogs; and

·    the exercise and recreational needs of dogs and their owners.

 

Community Views

16      The consultation process has been helpful in identifying community views on this matter. Council had previously received correspondence that there were not enough dog exercise areas in the town, and this has been re-iterated through the consultation process. The consultation process has also clearly identified that there is support for establishing a safe, dog off-leash area in Otautau, particularly in the actual township. A number of submitters for and against the proposal have stressed that it is important off-leash dogs are kept under control, that dogs are cleaned up after, and that dangerous dogs are managed appropriately.

Costs and Funding

17      If Council does end up proposing another amendment to the Bylaw and Policy, suggesting that a different area be designated as off-leash in Otautau, there may be some additional costs. This would include costs associated with staff time, consultation and signage.

Policy Implications

18      If Council proceeds with either of the proposed options, in the meantime, the current dog control Policy and Bylaw would be operational in Otautau. It is possible these rules are not fulfilling the exercise and recreational needs of dogs and their owners.

Analysis

Options Considered

19      A number of options were considered regarding how to proceed to ensure Council operates according to its existing agreements and obligations. These included:

·    Option 1 - That Council resolves to withdrawal the Statement of Proposal and staff report back to the Board on the outcome of the proposed amendment (Council could then liaise with the Board regarding whether it wants to investigate other areas to designate as off-leash).

·    Option 2 - That Council resolves to withdrawal the Statement of Proposal, and continue with the existing dog control rules in Otautau.

Analysis of Options

Option 1 – That Council resolves to withdrawal the Statement of Proposal and staff report back to the Board on the outcome of the proposed amendment

Advantages

Disadvantages

·        There might be a potential off-leash site within the township, or closer to the township, making it easier for people to access

·        It would ensure the environment in the Arboretum would not change

·        People visiting the Arboretum would not encounter off-leash dogs, which may be safer

·      There would be less threat to stock around the Arboretum, through dog attacks or the spread of disease

·        It may show more respect as the Arboretum is a memorial site

·        Complies with Council’s obligations to the Trust.

·        Having an off-leash area in the Arboretum was supported by a number of submitters, so some submitters may be disappointed if the Statement of Proposal is not proceeded with

·        It is not clear at this stage, if there is another appropriate site where dogs could be allowed off-leash

·        There may be an adverse public reaction to withdrawing the Statement of Proposal

·        Dog control rules are a polarising issue, and revisiting this topic again may upset some people

·        Revisiting this issue again may cause ‘over-consulting’ in Otautau, resulting in people being reluctant to engage.

 

Option 2 – That Council resolves to withdrawal the Statement of Proposal, and continue with the existing dog control rules in Otautau

Advantages

Disadvantages

·        It would ensure the environment in the Arboretum would not change

·        People visiting the Arboretum may not encounter off-leash dogs, which may be safer

·      There may be less threat to stock around the Arboretum, through dog attacks or the spread of disease

·        It may show more respect as the Arboretum is a memorial site

·        Complies with Council’s obligations to the Trust

·        Council will not incur any more cost on this issue

·        Dog control rules are a polarising issue, and so opting back to the current rules may prevent some people from becoming upset.

·        Having an off-leash area in the Arboretum was supported by over two thirds of the submitters, so some submitters may be disappointed if the Statement of Proposal is not proceeded with

·        Dog owners have said there is not a safe place where they can have their dog off-leash in Otautau, so this option would not take steps to resolve this issue

·        There may be an adverse public reaction to withdrawing the Statement of Proposal.

 

 

Assessment of Significance

20      This matter has been assessed as having a lower level of significance in accordance with Council Significance and Engagement Policy, and the Local Government Act 2002.

Recommended Option

21      It is recommended that Council proceeds with Option 1, and resolves to withdrawal the Statement of Proposal and staff report back to the Board on the outcome of the proposed amendment.

Next Steps

22      If Council proceeds with Option 1, staff would take steps with withdrawal the Statement of Proposal, and write a report to the Board, advising them of the outcome of the proposed amendment.

 

Attachments

a         Statement of Proposal

b         Current Dog Control Rules in Otautau

c         Submissions Recieved on the Proposed Amendment to the Dog Control Rules    

 


Council

27 September 2017

 

STATEMENT OF PROPOSAL – Amending the Dog Control Bylaw and Dog Control Policy in relation to the Alex McKenzie Arboretum in Otautau

 

Proposed Amendments

Council is proposing an amendment to both the Dog Control Policy 2015 and the Dog Control Bylaw 2015. The proposed amendment is that the west area across the bridge at the Alex McKenzie Memorial Arboretum be designated as a dog exercise area (instead of an on-leash area as it is currently). The east part of the Arboretum, beside the Highway, will remain designated as on-leash. The delineation line between the two areas would follow the creek. The current and proposed dog control rules in Otautau are outlined in Appendix A and B.

 

Council is considering making this amendment as the Otautau Community Board has requested that Council make the change. Feedback has been received that there are not enough suitable areas to exercise dogs in Otautau.

 

Making a Submission

Submissions are invited on the draft Dog Control Bylaw and Dog Control Policy from 8 July 2017, and submissions must be received by 8.00 pm on 8 August 2017. Submissions can be made:

 

·           through the Council’s website (https://consult.southlanddc.govt.nz)

·           via post (Southland District Council, Submissions, PO Box 903, Invercargill 9840)

·           in writing at your local Southland District Council office.

 

Written submissions must state that the submission relates to Otautau’s dog control rules, and give the submitter’s name and contact details.

 

Submitters who make a written submission can also elect to make an oral submission to the Regulatory and Consents Committee. This can be indicated through the online submission process, or by the submitter raising that they would like to make an oral submission, in their written submission. Oral submissions are likely to be heard on the morning of the 28th of September. Council staff will be in touch to confirm a time.

 

All submissions received by Southland District Council will be made available to the public.

 

Options

For this decision, Council has identified all reasonably practicable options to try and achieve the objective of dogs not causing a nuisance, injuring, endangering, or cause distress in Otautau, while still trying to meeting the needs of dog owners and their dogs. The options and analysis are presented below.

 

Option 1 – Not amending the Bylaw or Policy (the documents could be reviewed when they are legally required to be reviewed in 2025 or when another more substantial change is required).

Advantages

Disadvantages

·        The members of the public who prefer not to be around dogs or who fear dog attacks, would prefer this option.

·        The people who own property and have livestock adjacent to the Arboretum, would support not making the amendment.

 

·        There is less risk of dogs being a nuisance or injuring, endangering, or causing distress to people (including in relation to people who are in the east side of the Arboretum or in the freedom camping area) if the amendment is not made.

·        There is less risk of dogs injuring, endangering, or causing distress to livestock and other animals if the amendment is not made.

·        It is likely there would not be a review or consultation process before they are legally required. This would prevent Council incurring the costs associated with reviewing and consulting on the dog control rules at this time.

·        The Otautau Community Board have expressed a desire for the dog access rules to be changed in the Arboretum and this option would not be in accordance with their wishes.

 

 

 

·        Feedback has been received that dog owners in Otautau are not happy with the current dog control rules and this option would not address their concerns.

 

Option 2 – Endorsing the draft Bylaw and Policy and undertaking a consultation process on the proposed amendment

Advantages

Disadvantages

Adopting amendment without consultation

·        This would be a cheaper option as it would take up less staff time and there would not be as much advertising expense.

Consulting

·        People in Otautau are likely to be happier with the process if Council consults.

·        Council are likely to learn more about community views on this matter if it consults.

General

·        This would help address the concerns of the dog owners in Otautau, by providing another area where people can exercise their dogs.

·        There seems to be a lack of safe and suitable dog exercise areas in Otautau, so the amendment would help fulfil the needs of dog owners and their dogs. 

·        Changing the west part of the Arboretum to a dog exercise area (and not the east side), reduces the risk of dogs being a nuisance or injuring, endangering, or causing distress to any person (as this area of the Arboretum is not close to the main road or the freedom camping area).

·        Changing the west part of the Arboretum to a dog exercise area may bring more people into the park, promoting vibrant communities.

·        There are other areas in Otautau where people can avoid dogs.

Adopting amendment without consultation

·        It is likely that people in Otautau would prefer a consultation process, and there may be negative feedback if the change is made without consultation.

·        By not consulting on the proposed amendment, Council may not have sufficient information to fully understand community views.

·        Consulting

·        Undertaking a consultation process takes up staff time and has costs associated with it.

·        If feedback is sought on this amendment to the dog control rules, submissions may relate to other parts of the rules.

General

·        The members of the public who would prefer not to be around dogs or who fear dog attacks, would not support the amendment.

·        The people who own property and have livestock adjacent to the Arboretum, would not support the amendment.

·        There is an increased risk of dogs being a nuisance or injuring endangering, or causing distress to people (including in relation to people who are in the east side of the Arboretum or in the freedom camping area) if the amendment is made.

·        There is an increased risk of dogs injuring endangering, or causing distress to livestock and other animals if the amendment is made.

·        Creating a dog off-leash area may deter some people from visiting the Arboretum.

 

Option 3 – Making a different change to the Bylaw (a different change could be made to the dog access rules in Otautau, designating an alternative area where dog owners can exercise their dogs).

Advantages

Disadvantages

·        This would help address the concerns of the dog owners in Otautau, by providing another area where people can exercise their dogs.

·        There seems to be a lack of safe and suitable dog exercise areas in Otautau, so an amendment would help fulfil the needs of dog owners.

 

·        Undertaking a consultation process takes up staff time and has costs associated with it.

·        If feedback is only sought on one part of the dog control rules, submissions may relate to other parts of the rules.

·        The Otautau Community Board have expressed a desire for the dog access rules to be changed in the Arboretum and this option would not be in accordance with their wishes.

·        Members of the public who prefer not to be around dogs or who fear dog attacks, may not support any proposed dog exercise area.

·        Members of the public who may have property with livestock near a proposed dog exercise area, are unlikely to support the proposed dog exercise area.

·        There is likely to be an increased risk of dogs injuring endangering, or causing distress to livestock and other animals if a new dog exercise area is designated.

·        There is likely to be an increased risk of dogs being a nuisance or injuring, endangering, or causing distress to people if a new dog exercise area is designated.

 


Relevant Determinations

Under Section 155 of the Local Government Act, Council has determined that the proposed Bylaw is the most appropriate way to address the perceived problem and the most appropriate form of Bylaw. Bylaws have been a traditional method of addressing issues associated with Dog Control to protect and enhance the safety of the public, while providing dogs and their owners with the ability to satisfy their recreational needs. The Dog Control Act 1996 states that any territorial authority may, in accordance with the Local Government Act 2002, make bylaws for an extensive list of dog issues.

In relation to amending the Bylaw, Council has also considered any implications under the New Zealand Bill of Rights Act 1990. The New Zealand Bill of Rights Act 1990 confers certain civil and political rights to people in New Zealand. Council needs to be satisfied that the proposed Bylaw will not be inconsistent with the Act, that is, it imposes reasonable limits that can be reasonably justified in a free and democratic society. Case law suggests that permanent prohibition of certain activities that the community may wish to undertake may impose unreasonable limits, for example prohibiting dogs from all open spaces in the District. Being able to regulate allows Council to make rules which have the intention of preventing or reducing the harm to both animals and members of the public.


 

Appendices

 

Appendix A – Current Dog Control Rules in Otautau

 

 


 

Appendix B – Proposed Amendment to the Dog Access Rules in Otautau

 


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27 September 2017

 

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27 September 2017

 

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Council

27 September 2017

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Remission and Postponement of Rates Policy

Record No:        R/17/9/21874

Author:                 Robyn Rout, Policy Analyst

Approved by:       Anne Robson, Chief Financial Officer

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        The purpose of this report is to present the Remission and Postponement of Rates Policy to Council for adoption.

 

Executive Summary

The Remission and Postponement of Rates Policy specifies the circumstances where the Council will consider remitting or postponing rates.  The Policy aims to:·   provide financial assistance and support to ratepayers where it is reasonable;

·              address possible rating anomalies; and

·              provide Council with the ability to act reasonably in administering its rating powers and policies.

3        In March this year the Finance & Audit Committee endorsed the draft Policy and it was put out for consultation. No submissions were received.

 

4        Some minor changes were made to the Policy before it went out for consultation. The remission of rates for natural disasters and emergencies has been included, and the remission of rates in exceptional circumstances now has a clause including individual rating units which have been subject to fire. There has been clarification of the supporting documentation required and the applicable remission periods for each of the remission and postponement categories. The responsibilities and financial limits in the roles and responsibilities schedule have also been clarified.  

 

5        The draft Policy was presented to the Finance and Audit Committee on 6 September 2017.  The Committee endorsed the draft Policy and recommended that Council adopt the Policy.

 

6        This report recommends that Council adopt the policy (including any amendments agreed at this meeting). This report also recommends that Council adopt the minor changes to delegations that are outlined in Part 6 of the draft Policy (see Attachment A).

 

Recommendation

That the Council:

a)         Receives the report titled “Remission and Postponement of Rates Policy” dated 17 September 2017.

b)         Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Adopts the draft Remission and Postponement of Rates Policy (including any amendments agreed at this meeting).

e)         Adopts the changes to delegations that are outlined in the draft Remission and Postponement of Rates Policy.

 

 

Content

Background

7       The Remission and Postponement of Rates Policy is in the process of being reviewed in preparation for the Long Term Plan 2018-28. The Policy outlines several categories where Council may grant remission or postponement of rates, and it gives detail on the conditions and criteria under which applications will be considered. 

8        The draft Policy was presented to the Finance and Audit Committee in March this year. At that time the Committee endorsed the draft Policy and recommended that it be released for public consultation. The endorsed draft Policy included a number of minor amendments to the previous policy, including:

·    Introducing an additional category allowing the remission of rates for natural disasters and emergencies

·    Amending the Remission of Rates in exceptional circumstances to include a specific clause in relation to individual rating units which are subject to a fire (when it limits the rating unit’s ability to be occupied or used for an extended period)

·    Minor changes to clarify the content of the Policy

·    Aligning the Policy with the current roles and processes within Council

·    Changes to application process, including clarify the supporting documentation required as well as specifying the period of remission or postponement

·    Updating the delegations part of the draft Policy. This includes updating the roles and responsibilities, and adding financial limits for Council staff to remit rates and penalties. The Finance Manager has been given delegated authority to set remission guidelines for finance officers to apply.

9        The draft Policy was presented to the Finance and Audit Committee on 6 September 2017.  The Committee endorsed the draft Policy and recommended that Council adopt the Policy.

 

Issues

10      No submissions were received on the draft Policy, so officers are not aware of any concerns or further changes that need to be made.

11      If adopted, the draft Policy would make minor changes to the delegations to remit or postpone rates. As is stated above, financial limits for Council staff to remit rates and penalties have been included in Part 6 of the draft Policy. The Finance Manager has also been given delegated authority to set remission guidelines for finance officers to apply. This report recommends that Council adopt the delegations outlined in the Policy.

Factors to Consider

Legal and Statutory Requirements

12      If Council wishes to provide remissions or postponements to ratepayers, a policy of this nature is required under the Local Government (Rating) Act 2002 and the Local Government Act (2002).

13      The Local Government (Rating) Act 2002 (Section 85) states:

(1)        A local authority may remit all or part of the rates on a rating unit (including penalties for unpaid rates) if—

(a)   the local authority has adopted a rates remission policy under section 109 of the Local Government Act 2002; and

(b)   the local authority is satisfied that the conditions and criteria in the policy are met.

14      The Local Government Rating Act 2002 (Section 87) states:

(1)        A local authority must postpone the requirement to pay all or part of the rates on a rating unit (including penalties for unpaid rates) if—

(a) the local authority has adopted a rates postponement policy under section 110 of    the Local Government Act 2002; and

(b) the ratepayer has applied in writing for a postponement; and

(c) the local authority is satisfied that the conditions and criteria in the policy are met.

15      For this reason, it is essential that Council’s Remission and Postponement of Rates Policy contains conditions and criteria for each remission and postponement category.

16      This Policy is being reviewed as a result of a requirement in the Local Government Act 2002 (section 109 and 110) which states that the Policy must be reviewed at least once every six years using a consultation process.

17      Council has discretion to grant a remission or postponement of all or part of a ratepayer’s rates under the Local Government (Rating) Act 2002 provided it is allowed for in its Policy. The draft Policy complies with the requirements of the Act.

 

Community Views

18      People in the District have had an opportunity to present their views through the consultation process that was run through March and April this year. No submissions were received.

19      When the current Remission and Postponement of Rates Policy was put out for consultation in 2015, two submissions supported having a clear Policy and one submission thought Council should not allow rates to be remitted or postponed. The submissions received through the last consultation round were not very detailed as they were received online in conjunction with other comments on the Long Term Plan 2015-2025.

20        This Policy does not need to be included in the Long Term Plan 2018-2028, and will not be included in the consultation document for the Long Term Plan.

Costs and Funding

21      There are no direct costs associated with implementing the draft Policy.

22      For the 2017/2018 financial year, the value of remitted rates is $400,627 across 521 assessments.  This represents 0.77% of the total rates struck for the year ($51,982,369 incl GST) on 2.7% of the total number of assessments (19,090).  No postponement of rates have been requested for a number of years. 

23      If the draft Policy is adopted, the financial impact of the changes of the revised policy are not likely to be significant.

 

Policy Implications

24      If adopted, the draft Policy will not bring about any significant changes to the rates remission and postponement process. Council will now be able to remit rates if there is a natural disaster or emergency, and if rating unit cannot be used/occupied because of fire.

Analysis

Options Considered

25      The following options have been identified. Council could:

26      Option 1:   Endorse the draft Policy (with any desired changes); or

27      Option 2:   Continue with the existing Policy.

 

Analysis of Options

Option 1 – Endorse the draft Policy (with any other desired changes)

Advantages

Disadvantages

·        Achieves legislative compliance;

·        Informs ratepayers of when applications may be granted;

·        Provides a decision making framework for staff;

·        Ensures consistency in Council’s approach to applying remissions and postponements;

·        Increases the alignment of Southland District Council’s practices with those of other local authorities throughout New Zealand; and

·        Limits opportunities for complaints or appeals by limiting staff discretion in granting or declining applications.

·        There are no disadvantages to this option as there is no cost involved and no categories of postponement or remission have been removed.

 

Option 2 – Continue with the existing Policy

Advantages

Disadvantages

·        Achieves legislative compliance;

·        Informs ratepayers of when applications may be granted;

·        Provides a decision making framework for staff.

·        The Policy seems to have been operating effectively and is likely to continue operating well.

·        Does not include allowance for remission of rates for natural disasters or emergencies.

·        The delegations are out of date.

·        The roles and processes are out of date.

·        The existing Policy may give rise to opportunities for complaints or appeals as some conditions and criteria and remission periods are not stipulated.

·        The existing Policy may be less user friendly, as it gives less guidance on the required supporting documentation and the application process.

 

 

Assessment of Significance

28      This issue has not been assessed as significant in terms of Councils Significance and Engagement Policy.

Recommended Option

29      It is recommended that the Council proceed with Option 1, and endorse the draft Policy (with any other desired changes).

Next Steps

30      Once Council have adopted the Policy it will be circulated to staff and elected members and also made available to the public on Council’s website.

 

Attachments

a         Draft Remission and Postponement of Rates Policy    

 


Council

27 September 2017

 

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Council

27 September 2017

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Investment and Liability Management Policy

Record No:        R/17/9/21875

Author:                 Robyn Rout, Policy Analyst

Approved by:       Anne Robson, Chief Financial Officer

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        The purpose of this report is to present the Investment and Liability Management Policy to Council for its consideration and adoption. 

Executive Summary

2        The Investment and Liability Management Policy outlines how Council will manage its investments, including what Council will invest in, and how investment risk will be assessed and managed.  The Policy also outlines how Council will manage borrowings.

3        The Finance and Audit Committee endorsed a draft Policy in March this year and recommended that it be released for public consultation. The draft Policy incorporated some minor changes to the current policy, including clarity around the intent of Council in the setting of interest on internal loans, and changes to roles and responsibilities. 

4        Although no feedback was received, Council staff have subsequently noted that the current Investment and Liability policy was out of alignment with the 2015-2025 Long Term Plan (LTP).  The LTP allowed for Council to borrow up to 100% of total revenue, the current Investment and Liability policy allowed for 150% of total revenue.  Given Councils discussion at the time of approving the LTP, the attached draft Investment and Liability Policy has been changed from 150% to 100% of total revenue.  In addition the investment criteria table was amended to include the correct short-term Standard and Poor’s rating classification.

5        The draft Policy was presented to the Finance and Audit Committee on 6 September 2017.  The Committee endorsed the Policy and recommended that Council adopt the policy.

 

6        This report recommends that Council adopt the Policy (including any amendments agreed at this meeting). This report also recommends that Council adopt the delegations outline in the Policy.

 

Recommendation

That the Council:

a)         Receives the report titled “Investment and Liability Management Policy” dated 17 September 2017.

b)         Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Adopts the draft Investment and Liability Management Policy (including any amendments agreed at this meeting).

e)         Adopts the delegations that are outlined in the draft Investment and Liability Management Policy.

 

Content

Background

7          Under Section 102 of the Local Government Act 2002 (LGA 2002), Council is required to have both an Investment Policy and a Liability Management Policy. These policies have been merged into one document (the Policy) due to their similar nature.

Changes to the draft policy

8          This Policy was last revised and consulted on as part of the 2013/14 Annual Plan.  At that time, Bancorp was engaged to review sections of the Policy. In particular, Bancorp:

·                        reviewed sections relating to financial market investments,

·                        made recommendations to enable the treasury activities of SDC to be carried out under a set of market best practice standards, and

·                        reviewed sections relating to the Local Government Funding Agency.

9          As a thorough review of this Policy was undertaken in 2013, the draft Policy that was put out for consultation in March, did not include any substantial changes. The changes that were made clarified aspects of the policy and were updates to the roles and responsibilities of staff.

What is in the draft Policy

10        The investment part of the policy is designed to ensure that the financial resources of the Council are managed in an efficient and effective way. It sets out why Council holds investments, its strategy towards risk, the mix of investments it has and how it will distribute any return on investments.

11        The key aspects of the Investment Policy are:

·              Outlining Council’s risk profile, which is that Council is a risk adverse entity and does not wish to incur additional risk from its treasury operations.  As such, the types of treasury investments that Council allows investment in is limited to a Standard and Poors rating of A- or above. This currently excludes investment in SBS who has a rating of BBB.  Currently, Council only invests in New Zealand Registered Banks where investment is limited to $10M if the bank has a rating of A1 or better.

·              Council’s ability to invest internally through Internal Loans - Council has $20M of internal loans at 30 June 2016. These loans are to facilitate the development of Council projects and the funding of these to date has been from funds held (generally reserve funds held by Council or committees of Council) rather than borrowings.

·              The ability for Council to invest in the Local Government Funding Agency Limited (LGFA) - The LGFA was established to enable Local Government to borrow at lower margins than would be available otherwise. All borrowers are required to contribute 1.6% of the total amount borrowed as capital. The Policy allows for Council to invest in the LGFA if circumstances are beneficial to Council.

12        The liability management part of the Policy is designed to provide a framework for prudent debt management. It sets out how Council may wish to use debt as a funding mechanism, along with limits to borrowing and how Council will handle risk.

13        The key aspects of the proposed Liability Management Policy are:

·                      That borrowing limits of Council remain unaltered.  Council has set the limit at 100% of total revenue, based on the 2015/16 Annual Report this would be around $67M.

·                      How Council will handle risk - This includes hedging, to manage the impact that movements in interest rates can have.  Table 4 in the policy outlines the policy around this.

·                      That security for borrowing will usually be way of a charge over rates.  However an option exists to offer security over other assets of Council where Council considers doing so would help further its community goals or objectives.

·                      That Council can borrow from the Local Government Funding Authority.

·                      That Council can advance Internal Loans for the purpose of capital or one-off activities.  Council investments may be used as a source of the funding of these loans.  Currently $20M of loans exist.

14      The policy also outlines the structure of responsibilities and reporting lines within Council. These ensure appropriate management and accountability of liability and investment activities.

15      Please note the borrowing limit has reduced from 150% of total revenue as per the draft policy to 100% in the final draft policy.  This has occurred as a result of aligning it with the 2015-2025 Long Term Plan, which was inconsistent with the previous Investment and Liability Management Policy.  The direction from Council as part of finalising the 2015-2025 Long Term Plan was to reduce the limit from 150% to 100% as they considered it artificially high.  The intent for the 2018-2028 LTP is that it will remain at 100% of total revenue.  

16      The draft policy was presented to the Finance and Audit Committee on 6 September 2017.  The Committee endorsed the policy and recommended that Council adopt the policy.

Issues

17      No submissions were made on the draft Policy, so officers are not aware of any concerns or further changes that need to be made.

18      If adopted, the draft Policy would make minor changes to delegations relating to investments (see paragraph 3.75). Pursuant to Clause 32(2), Schedule 7, of the Local Government Act 2002, the Council may make delegations to officers of the Council to allow for the efficient conduct of Council business.  Clause 32(3), Schedule 7 of the Act also allows officers to delegate those powers to other offices.

19      The power to borrow money, or purchase or dispose of assets, other than in accordance with the Long Term Plan remains the sole responsibility of the Council (Clause 32(1)(c), Schedule 7). This responsibility cannot be delegated.

20      This report recommends that Council adopt the delegations outlined in the Policy.

Factors to Consider

Legal and Statutory Requirements

21      As has been stated above, under the Act, Council is required to have both an Investment Policy and a Liability Management Policy. Council must state its policies in respect of investments, including:

·              The mix of investments;

·              Acquire new investments;

·              An outline of the procedures by which investments are managed and reported on to the local authority; and

·              An outline of how risks associated with investments are assessed and managed.

 

22      The Act also requires Council to state its policy in respect to both borrowing and other liabilities, including:

·              Interest rate exposure;

·              Liquidity;

·              Credit exposure;

·              Debt repayment.

23        Under Section 102 of the Act, amendments to the Policy can be made by a resolution of Council.  There is no legal requirement to consult.  By seeking community views on this draft Policy, Council has complied with its Significance and Engagement Policy. Council is also required to consider the views and preferences of persons likely to be affected by, or interested in, the matter (in accordance with Section 78).

Community Views

24        People in the Southland district had an opportunity to give their views on this Policy, however no submissions were received. No public feedback was received either, when this policy was consulted on as part of the 2013/14 Annual Plan.

25        In relation to investments, it is likely that the public would support prudent and effective management, a balanced investment/risk profile, and to maintain appropriate procedures, controls and reporting. In relation to liability management it is likely the public would support there being set limits on borrowing, compliance with any financing/borrowing covenants and ratios, and maintaining adequate internal controls to mitigate operational risks.

26        This Policy does not need to be included in the Long Term Plan 2018-2028, and will not be included in the consultation document for the Long Term Plan.

Costs and Funding

27        There are no costs associated with implementing a new Policy, aside from the minor costs associated with staff time.

Policy Implications

28        Changes to the Policy will not substantially alter how Council currently operates its investments and potential borrowings. It hopefully will clarify and confirm Council’s policy on these matters. 

Analysis

Options Considered

29        Council is required to adopt an Investment and Liability Management Policy. On this basis, Council has the option of adopting the draft Policy, or making further changes to the Policy.

Analysis of Options

30        Option 1 – Adopt the draft Policy (including any amendments agreed at this meeting)

Advantages

Disadvantages

·        Gives a clear outline of how Council will manage its investments and liabilities.

·        Complies with legislation.

·        Meets best practice guidelines.

·        Documents current practice and the rationale for future reference.

·        Ensures appropriate management and accountability of liability and investment activities.

·        There are no known disadvantages.

 

31        Option 2 – Making further changes to the draft Policy

Advantages

Disadvantages

·        Further clarifies Council’s thinking on investments and borrowings.

·        This option may mean the policy is adopted later, however, there is still the capacity to meet legislative requirements.

 

Assessment of Significance

32        This Policy has been assessed as not being significant in relation to the Council’s Significance and Engagement Policy.

Recommended Option

33        It is recommended that Council adopt the draft Investment and Liability Management Policy (Option 1).

Next Steps

34        Once Council have adopted the Policy it will be circulated to relevant staff and delegations in relation to investment reviewed and amended as necessary.

 

Attachments

a         Draft Investment and Liability Management Policy    

 


Council

27 September 2017

 

 

SOUTHLAND DISTRICT COUNCIL

INVESTMENT POLICY AND LIABILITY MANAGEMENT POLICY

 

 

This policy applies to: The Southland District Council

 

DOCUMENT CONTROL

 

Policy owner:

Chief Financial Officer

TRIM reference number:

r/17/3/4252

Effective date:

Approved by:

 

Date approved:

 

Next review date:

2020

 

  Operational policy

  Council policy

 

 

CONTENTS

 

1            OVERVIEW... 2

2.           STRUCTURE.. 2

3.           INVESTMENT.. 4

4.           LIABILITY MANAGEMENT.. 14

 

 

 

 

 


Council

27 September 2017

 

INVESTMENT POLICY AND LIABILITY MANAGEMENT POLICY

 

 

1          OVERVIEW

 

1.1       The Local Government Act 2002 requires local authorities to adopt an Investment Policy and a Liability Management Policy. 

 

1.2       The Investment Policy is designed to ensure that the financial resources of the Council are managed in an efficient and effective way.  It sets out how Council can utilise funds from the sale of assets, what should be done with the investment income and so on.

 

1.3       The Liability Management Policy is designed to provide a framework for prudent debt management and sets out how Council may wish to use debt as a funding mechanism.

 

1.4       Council has a structure of responsibilities and reporting lines to ensure the appropriate management and accountability of the liability and investing activities.

 

 

2.       STRUCTURE

 

            Organisational Structure

 

2.1       The organisation chart for the finance activity is as follows:

 


            Responsibilities

 

2.2       The key responsibilities of the above positions are as follows:

 

            Council

•           Approve and adopt the Policies.

•           Review at least on a three yearly basis the Policies and approve any revisions or amendments as required.

•           Approve by resolution all external Council borrowing.

•           Responsible for the appointment of any fund managers.

 

CEO

·                       Ultimately responsible for ensuring the Policies adopted by Council are implemented by officers of Council and administered in accordance with their terms.

 

Chief Financial Officer (CFO)

·                       Responsible for recommending investment, borrowing and risk management strategy in conjunction with the Senior Financial Accountant and the Policy and Planning Manager. 

·             Ensure compliance with the Risk Management Strategy.

·                       Responsible for determining the level of cash available for investment and that held for working capital purposes.

·             Approve amounts to be placed with a fund manager for      investment purposes.

·                       Recommend to Council amendments to the Policies as required.

·                       Recommend to Council the most appropriate source and terms for borrowing as and when required.

·                       Review internal audit reports and approve as appropriate any recommendations made.

·                       Approve new investments ensuring the proposed investment complies with these policy documents.

 

Finance Manager

·                      Responsible for confirming adherence to the Policies, through internal reviews, to be performed on a regular basis.

·                      Negotiate investment and borrowing transactions.

·                      Reports findings to the CFO.

·                      Assist in identifying amendments to the investment, borrowing and risk management strategy, which may require amendment of the Policies.

·                      Responsible for all activities relating to the daily implementation and maintenance of the Policies.

·                      Assist in determining the most appropriate sources and terms for borrowing and investing.

·                      Negotiate investment and borrowing transactions.

·                      Responsible for keeping the CFO informed of significant activity and market trends.

·                      Responsible for reviewing/approving the weekly cashflow and cash management transaction requirements completed by the Senior Accounts Payable Officer (or equivalent).

 

Finance Officer/Senior Accounts Payable Officer/Debtor Officer (or equivalent)

·                      Prepare and manage Council’s cashflow and cash requirements.

·                      Report to the Finance Manager on the weekly cashflow position and resulting cash management transactions required.

 

3.       INVESTMENT

          Introduction

3.1       This Investment Policy has been prepared pursuant to Section 102(1) of the Local Government Act 2002 (the “Act”), which requires the Council to adopt an Investment Policy and a Liability Management Policy.  Section 105 of the Act sets out what must be included in an Investment Policy. 

 

3.2       Council generally holds investments for strategic reasons where there is some community, social, physical or economic benefit accruing from the investment activity.

 

Council’s rationale for retaining investments is:

·                      Strategic assets are to be held by the Council, for public good.

·                      To earn from strategic investments a cash flow for investment in community wellbeing.

·                      To prudently manage cash flows within annual budget parameters.

 

3.3       Council is a risk adverse entity and does not wish to incur additional risk from its treasury activities.  Accordingly, Council’s primary objective when investing is the protection of its initial investment and generating a commercial return on strategic investments is considered a secondary objective. 

 

          Objectives

3.4       The key investment policy objectives are to:

·                      Provide a framework for the prudent and effective management of investments.

·                      Ensure that investments are managed in accordance with current governing legislation and Council's strategic and commercial objectives.

·                      Manage investments in a sustainable and equitable way, having regard to current and future generations.

·                      Recognise the community ownership of these assets and the need for a balanced investment/risk profile.

·                      Ensure Council assets are managed prudently and adequately safeguarded.

·                      Safeguard Council’s financial market investments by establishing and regularly reviewing investment parameters and ensuring all investment activities are carried out within these parameters.

·                      Maximise interest income, within a prudent level of investment risk.  Council recognises that as a responsible public authority any investments that it does hold should be of relatively low risk.  It also recognises that lower risk generally means lower returns.

·                      Ensure funds are available to meet Council’s needs.

·                      Maintain professional relationships with the Council's bankers, financial market participants and other stakeholders.

·                      Regularly review the performance and credit-worthiness of all investments.

·                      Maintain procedures and controls and provide timely and accurate financial and management information.

 

3.5       These objectives will be achieved by having regard to:

·                      The mix of investments that Council will utilise.

·                      The process for the acquisition of new investments.

·                      The management and assessment of risk.

·                      The need for appropriate management and reporting procedures.

 

           Investment Mix

3.6      Council has a portfolio of investments, at any time these could comprise:

·             Treasury, including investments in banks, local government

and government stock.

·             Stocks, bonds, debentures and notes.

·             Equity investments.

·             Property.

·             Other property investments – Community Housing.

·             Forestry.

·                      Loans, advances for community development purposes.

·                      Internal Loans

·             Shares (if market conditions are favourable).

 

3.7       The decision on which mix of investments Council will hold at any time will be based on the purpose for which the funds were acquired and the market conditions at the time.

 

           Acquisition of New Investments

3.8       With the exception of treasury investments, new investments are acquired if an opportunity arises and approved by Council resolution, based on advice and recommendations from Management.  Before approving any new investments, Council gives due consideration to the contribution the investment will make in fulfilling Council’s strategic objectives and the financial risks of owning the investment.

 

3.9       The authority to acquire treasury investments is delegated to the Chief Financial Officer.

 

Application of Returns from Investments

3.10     Some returns are earmarked for specific purposes, but generally returns on Council investments are applied to give equal benefit to the District ratepayers by application in a pro-rata basis to offset the costs of District services.

 

Equity Investments

 

Nature of Investment

3.11     Equity investments are held for strategic purposes only and include interests in:

·                   Civic Assurance Corporation (13,715 shares).

Civic Assurance is a specialist Local Government insurance company.

·                   Milford Sound Tourism Limited (2,000 shares).  The role of Council is to facilitate and co-ordinate development and operations at Milford Sound/Piopiotahi and Council’s intention is to retain its shareholding in the company.

 

Rationale for Holding Investment

3.12     The Council may hold equity for non-investment purposes, provided that the holding is in furtherance of its purpose under the Local Government Act 2002. 

 

3.13   To have the ability to utilise equity investments where necessary to:

·                      Achieve the desired level of returns; and/or

·                      To provide a diversified investment portfolio.

Disposition of Revenue

3.14     These investments are held for strategic reasons only and not for investment purposes.
As such these investments do not derive revenue.  If they do, revenue will be used to offset general rates.

 

Risk Management

3.15     Investments in the Civic Assurance Corporation and the Milford Sound Tourism Limited are held for strategic purposes. For any other equity investments, Council reviews the performance of the trading enterprises at least annually to ensure that strategic and financial objectives are being achieved.

 

3.16   Dispositions and acquisitions require Council approval.

 

Property

 

Nature of Investment

3.17     The Council's first objective is to only own property that is strategically necessary for the economic, physical and social development of the Southland District and secondly, to achieve an acceptable rate of return.  Investment property holdings are being leased out based on market rents or lease conditions.  Property investments do not include properties for operational purposes.

 

Rationale for Holding Investment

3.18     Council holds investment properties in order to generate income to offset general rates.

 

3.19     The Council reviews the performance of its property investments on an annual basis and ensures that the benefits of continued ownership are consistent with its stated objectives.  Any disposition of these investments requires the Council's approval.

 

Disposition of Revenue

3.20     Income generated is used to offset operational expenditure and reduce the overall rates levied.

 

Risk Management

3.21     The risk in respect of holding investment property is evaluated as low given the location of the properties and their current and long term use.

 

3.22     Rental income is considered low risk, due to the fixed and long term nature of the lease agreements.  Lease rental is negotiated at the time the lease expires.

 

Other Property Investments - Community Housing

 

Nature of Investment

3.23     Council currently has 69 community house units available for rental, generally to elderly or disabled persons.  These houses are located in various townships across the Southland District.

 

Rationale for Holding Investment

3.24     Council retains community housing to allow people to continue to live in its local community.  These people are primarily the elderly or people with disabilities.

 

3.25     Council’s philosophies include ensuring that rental charges cover cost (excluding depreciation) and to continue to maintain the housing at its current high standard.  There is no required rate of return on this investment.

 

 

Disposition of Revenue

3.26     Revenue earned from the investment in community housing is retained in the community housing investment.

 

Risk Management

3.27     The risk in respect of holding investment property is evaluated as low given the location of the properties and their current and long term use.

 

3.28     Council’s community housing activities are managed by staff in the Property Department.  They regularly review Council’s involvement in community housing, including assessment of the need for this asset within the community.

 

Forestry

 

Nature of Investment

3.29     The Council and its predecessor organisations have been involved in forestry for many years. Council’s current forestry policy is that it will operate and maintain up to 3,000 planted hectares. The Council currently maintains 1,800 hectares of land.

 

Rationale for Holding Investment

3.30     The overall investment policy of the Council with regard to forestry is to maximise profit, with harvesting on a sustainable yield basis and without any demand on rates.

 

Disposition of Revenue

3.31     Any surplus revenue is used to offset rates.  The revenue used to offset rates in any year may be the smoothed revenue calculated over a number of years. Approximately $100,000 is retained for operating working capital at any time.

 

Risk Management

3.32     Forests are currently managed by a specialist external party. Forestry activities are reviewed by the Services and Assets Committee. 

 

            Significant risk management strategies include diversity of forest age classes, insurance against fire and access to a rural fire fighting force, a mix of species, geographic spread of forests and controlled access.  Retention of the forest is reviewed periodically.

 

Loans and Advances for community development purposes

 

Nature of Investment

3.33     The Council is not a lender and therefore is not generally involved in providing loans or advances.

 

Rationale for Holding Investment

3.34     Council provides loans for community development purposes. From time to time, Council has provided a loan or advance to a community organisation to facilitate the ongoing provision of community services or recreational opportunities.  The loans/investments are not made for financial investment purposes.

 

3.35     Council sets the terms and conditions for any loans or advances as they are granted. Council will require security as deemed appropriate for each loan or advance.  The security will be the assets or revenue of the organisation.


 

 

Disposition of Revenue

3.36     Generally these loans are to the benefit the local community and not for financial investment purposes.  Interest will be charged at a rate that is consistent with Council’s interest rate on internal loans.  Any revenue would be applied to reserves, reduce external debt or offsetting general rates.

         

          Risk Management

3.37     Council reviews the performance of its loan advances on a regular basis to ensure strategic and economic objectives are being achieved.

 

3.38     Council monitors the compliance of the borrower with the terms and conditions agreed upon.

 

3.39     All loans and advances documentation is subject to independent legal review prior to finalisation.

 

          Internal Loans

 

Nature of Investment

3.40     Council may utilise surplus funds for the purposes of internal borrowing.  Internal borrowing forms a part of the overall mix of Council investments.

 

Rationale for Holding Investment

3.41     To facilitate the development of Council activities within Council and the community to minimise the costs associated with borrowing externally.

 

Disposition of Revenue

3.42     Income derived from internal loans is generally used to fund the interest liability on reserves. Any surplus income is used to reduce external debt or offset against general rates.

 

Risk Management

3.43     Internal loans shall be managed as a treasury investment.  Interest rates will be set having regard for Council’s opportunity cost forgone by not investing externally. 

 

3.44     Council may not achieve the opportunity cost due to actual external interest rates being different to the interest rate set for any given year as part of the LTP/Annual Plan process.  In this case the return to Council may be more or less and will impact on the return to reserves.

 

Treasury Investments

 

Nature of Investment

3.45     To provide the ability to utilise a range of financial investments not already specified in this policy.

 

Rationale for Holding Investment

3.46   The Council maintains financial investments to:

·                      Invest surplus cash and working capital funds.

·                      Achieve the desired level of returns within acceptable risk parameters.

·                      Invest amounts allocated to trust funds and special funds.

 

 

 

 

Disposition of Revenue

3.47     Income derived from Council’s treasury activities will be used to fund Council activities including interest on reserves and offsetting rates and external debt.

 

Risk Assessment and Management

3.48     Council’s philosophy in the management of treasury investments is to optimise its capital protection and liquidity objectives while balancing risk and return considerations.  Council recognises that as a responsible public authority any investments that it does hold should be low risk.  It also recognises that lower risk generally means lower returns.

 

3.49     To provide the greatest benefit, Council utilises its surplus internal funds for internal borrowing to reduce external debt, thus effectively reducing net interest costs. 

 

3.50     Council's primary objective when investing is the protection and liquidity of its investment.  Accordingly, only credit-worthy counterparties are acceptable.  Credit-worthy counterparties are selected on the basis of their current Standard and Poor’s (S&P) or equivalent rating, which must be strong or better. 

 

3.51     To avoid undue concentration of exposures, treasury investments/financial instruments should be used with as wide a range of counterparties as practicable.  Transaction notional and principal sizes and maturities should be well spread where possible.

 

3.52     Within the above credit constraints, Council also seeks to:

·             Ensure investments are liquid.

·             Maximise investment return.

·                       Manage potential capital losses due to interest rate movements.

 

3.53     The above objectives are captured in the following investment framework Interest Rate Risk Management.

 

          Credit Risk Management

3.54     Credit risk is minimised by placing maximum limits for each broad class of non-Government issuer and by limiting investments to registered banks, bonds issued by institutions with appropriate investment grade from a recognised rating agency, local authority bonds, and other financial institutions which are within prescribed limits.

 

Liquidity Risk Management

3.55     Liquidity risk is minimised by ensuring that all investments must be capable of being liquidated in a readily available secondary market.

 

Interest Rate Risk Management

3.56     Council aims to minimise the risk of default and variability of interest rates.  It does this by:

·                      Ensuring that investments are made with entities that have at least a strong capacity (Long Term A- or Short Term A-1) rating from Standard and Poor’s (S&P) or equivalent rating in Fitch or Moodys.

·                      Limiting total exposure to prescribed amounts.

·                      Monitoring compliance against set limits.

 

3.57     Based on Standard and Poor’s rating, investments are to be spread as follows:

 

 

 

 


 

TABLE 1 - How the Southland District Council will Spread its Investments

Authorised Asset Classes

Overall Portfolio Limit as a Percentage of the Total Portfolio

Approved Financial Market Investment Instruments (must be denominated in NZ dollars)

Credit Rating Criteria - Standard and Poor’s (S&P), or Moody’s/Fitch equivalents

Limit for each issuer subject to overall portfolio limit for issuer class

$

New Zealand Government  

100%

·        Government Stock

Not Applicable

Unlimited

·        Treasury Bills

Not Applicable

Unlimited

Rated Local Authorities

70%

·        Commercial Paper

 

S&P short term rating of A-1 or better

3.0M

·        Bonds/Medium Term Notes (MTN)/Floating Rate Notes (FRN)

S&P long term rating of A- or better

S&P long term rating of A+ or better

S&P long term rating of AA or better

2.0M

 

3.0M

 

5.0M

Unrated Local Authorities

50%

·        Commercial Paper

Not Applicable

2.0M

·        Bonds/MTNs/FRNs

Not Applicable

2.0M

New Zealand Registered Banks

100%

·        Call/Term Deposits/Bank Bills/Commercial Paper

S&P short term rating of A-1 or better

10.0M

·        Bonds/MTNs/FRNs

S&P long term rating of A- or better

S&P long term rating of A+ or better

3.0M

 

5.0M

State Owned Enterprises

 

50%

·        Commercial Paper

S&P short term rating of A-1 or better

3.0M

 

·        Bonds/MTNs/FRNs

S&P long term rating of BBB+ or better

S&P long term rating of A+ or better

1.0M

 

3.0M

Corporates 

50%

·        Commercial Paper

S&P short term rating of A-1 or better

2.0M

·        Bonds/MTNs/FRNs

S&P long term rating of A- or better

S&P long term rating of A+ or better

S&P long term rating of AA or better

1.0M

 

2.0M

 

3.0M

Financials[1]

30%

·        Commercial Paper

S & P short term rating of A-1 or better

2.0M

·        Bonds/MTNs/FRNs

 

S&P long term rating of A- or better

S&P long term rating of A+ or better

S&P Long term rating of AA or better

1.0M

 

2.0M

 

3.0M

Building Societies

20%

·   Call and Term Deposits

To be individually approved by Council

3.0M


Council

27 September 2017

 

3.58     Credit ratings are as determined by Standard and Poor’s, or equivalent rating.  If any counterparty’s credit rating falls below the minimum specified in the above table, then all practical steps are taken to eliminate the credit exposure to that counterparty as soon as practicable.

 

3.59     Short term investments (less than six months at the time of inception) shall be benchmarked against the ANZ 90 day bank bill index and that the comparison should be done on a quarterly basis.  Long term investments (more than six months at the time of inception) shall be benchmarked against the ANZ A Grade Corporate Bond Index and the comparison shall be done on a quarterly basis.  Compliance with the benchmarking standard is not required if the nominal value of either short term investments is less than $5M or long term investments is less than $5M.

 

          Foreign Exchange

3.60     Council has foreign exchange exposure through the occasional foreign exchange transactions that Council may undertake such as plant and equipment.

 

3.61     Significant commitments for foreign exchange can be hedged using foreign exchange contracts, once expenditure is approved.  Forward exchange contracts can be used by the Council.  The majority of these transactions would be small and would carry no significant foreign exchange risk.

 

3.62     Council does not borrow or enter into incidental arrangements within or outside New Zealand in currency other than New Zealand currency.

 

Procedures for Management and Reporting

 

Cash Management

3.63     The finance function is responsible for managing the Council’s cash surpluses and/or deficits.

 

3.64     The Council maintains rolling daily, monthly and annual cash flow projections which form the basis of its cash management activity.  The Council maintains one main bank account for its operating cash flows as well as other bank accounts for specialist activities such as investment and borrowing requirements.  Individual business units within the Council do not maintain separate bank accounts. 

 

3.65     The Council manages its working capital balances by matching expenditure closely to its revenue streams and managing cash flow timing differences to its favour.  Daily bank balances are extracted by the Senior Accounts Payable Officer and the Debtors’ Officer.

 

3.66     Generally cash flow surpluses from timing differences are available for periods less than 90 days.

 

3.67     Cash management activities must be undertaken within the following parameters:

·                      An optimal daily range of $10,000 is targeted for in the Council's main bank account, with investments adjusted to balance the current account if required.

·                      Cash flow surpluses are placed in call deposits, term deposits, registered certificates of deposits and promissory notes.

·                      Amounts invested must be within limits specified in Table 1.

·                      The Council has a committed bank overdraft facility with a limit of $5,000,000 for working capital purposes which is used on an operational basis.

·                      Council also has the option of raising finance by issuing debentures pursuant to a Debenture Trust Deed entered into by a corporate trustee, should this provide a more attractive financing option than bank funding.

·                      The use of interest rate risk management on cash management balances is not permitted.

 

Internal Controls

3.68     The Council's systems of internal controls over cash management includes adequate segregation of duties among the core investment functions of deal execution, confirmation, settling and accounting/reporting. 

 

3.69     Key internal cash management controls are as follows:

·                      Cheque/Electronic Banking Signatories - dual signatures are required for all cheques and electronic transfers.

·                      Authorised Personnel - all counterparties are provided with a list of personnel approved to undertake transactions, standard settlement instructions and details of personnel able to receive confirmations.

·                      Reconciliations - general bank reconciliation is performed daily and monthly by the Debtors Officer (or equivalent) and reviewed by a senior finance staff member.

 

3.70     There are a small number of people involved in investment activity.  Accordingly strict segregation of duties is not always achievable.  The risk from this is minimised by the following processes:

 

·             A documented discretionary approval process for investment activity.

·             Regular management reporting.

·             Operational risk control reviews will be undertaken periodically.

·                      Appropriate organisational, systems, procedural and reconciliation controls exist to ensure:

(a) all investment activity is bona fide and properly authorised;

(b)       checks are in place to ensure the Council's accounts and records are updated promptly, accurately and completely.

 

Reports

3.71     The following reports are produced to monitor cash management and investment activity:

 

Table 2 - Reports Produced to Monitor Case Management and Investment Activity

Report

Frequency

Prepared By

Recipient

Cashflow

Daily

Senior Accounts Payable Officer or equivalent

Senior Finance staff member

Renewal Investment

Monthly

Senior Accounts Payable Officer or equivalent

Senior Finance staff member

Operating Investment

Monthly

Senior Accounts Payable Officer or equivalent

Senior Finance staff member

 


 

3.72     Additionally, a quarterly report to the Finance and Audit Committee containing the following key details of both short term and long term investments. 

·            Total nominal value of portfolio.

·            Weighted average interest rate.

·            Asset class profile (if there are multiple classes).

·            Credit profile.

·            Maturity profile.

·            Duration measurement.

·            A statement of policy compliance.

·            Details of any exceptions.

 

            Delegated Authorities

3.73     Pursuant to Clause 32 (2), Schedule 7, of the Local Government Act 2002, the Council may make delegations to officers of the Council to allow for the efficient conduct of Council business.  Clause 32 (3), Schedule 7 of this Act allows officers to delegate those powers to other officers.

 

3.74     Notwithstanding Clause 32 (1) (c), Schedule 7 the power to borrow money, or purchase or dispose of assets, other than in accordance with  the Long Term Plan remains the sole responsibility of the Council. This responsibility cannot be delegated.

 

3.75     The Investment Policy related delegations are below.

 

            Table 3 - Investment Policy Related Delegations

 

Activity

Delegated to

Limits

Approve and amend policy document

Council

Unlimited

Open/close bank accounts

Chief Financial Officer with advice given to Chief Executive

Unlimited

Approve signatories to Council’s Bank Accounts

Chief Executive and Chief Financial Officer

Unlimited

Approve electronic banking amendment

Chief Financial Officer and Finance Manager

 

Investment management

Chief Executive, Chief Financial Officer and Finance Manager

Subject to policy

Interest rate management

Chief Executive and Chief Financial Officer

Subject to policy

Cash management

Chief Executive, Chief Financial Officer, Finance Manager

Subject to policy

Approving transactions outside policy

Council

Unlimited

Approving allowable risk management instruments

Finance and Audit Committee

Unlimited subject to legislative limitations

Maximum daily transaction amount (approved investment, cash management, interest rate risk management)

Council, Chief Executive, Chief Financial Officer

Unlimited

Ensuring compliance with policy

Chief Financial Officer

N/A

 

           

            Local Government Funding Agency Limited (LGFA)

3.76     Despite anything earlier in this Investment Policy, Council may invest in shares and other financial instruments of the New Zealand LGFA and may borrow to fund that investment.  The Council’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 become and remain viable, meaning that it continues as a source of debt funding for the Council.

3.77     Because of this dual objective, Council may invest in LGFA shares in circumstances in which the return on that investment is potentially lower than the return it could achieve with alternative investments.

 

3.78     If required in connection with the investment, Council may also subscribe for uncalled capital in the LGFA.

 

4.       LIABILITY MANAGEMENT

          Introduction

4.1       This Liability Management Policy has been prepared pursuant to the
Local Government Act 2002; section 102(1) which requires the Council to adopt a Liability Management Policy and section 104 which outlines the contents of the policy. 

 

4.2      Generally Council borrows to provide funding for the following activities:

·             Fund Council capital expenditure requirements.

·                      Manage timing differences between cash inflows and outflows.

·                      Cover special ‘one-off’ projects.

·             Fund assets with intergenerational qualities.

 

4.3       Total debt levels are determined through Council’s Long Term Plan (LTP) and Annual Plans. Council approves this borrowing requirement for each financial year in the Annual Plan or LTP or by later resolution during the year.

 

            Objectives

·              Ensure Council has appropriate working capital funds available to carry out its plans as outlined in its LTP and Annual Plan.

·              Ensure that Council has an on-going ability to meet its debts in an orderly manner as and when they fall due in both the short and long term, through appropriate liquidity and funding risk management.

·              Arrange appropriate funding facilities for Council, ensuring they are at market related margins utilising bank debt facilities and/or capital markets as appropriate. 

·              Maintain lender relationships and Council general borrowing profile in the local debt and, if applicable, capital markets, so that Council is able to fund its activities appropriately at all times. 

·              Control Council cost of borrowing through the effective management of its interest rate risks, within the interest rate risk management limits established by this policy.

·              Ensure compliance with any financing/borrowing covenants and ratios.

·              Maintain adequate internal controls to mitigate operational risks.

·              Produce accurate and timely reports that can be relied on by senior management and Council for control and exposure monitoring purposes in relation to the debt raising activities of Council.

 


 

4.4       Council will manage its borrowing activities prudently to ensure the best interests of the District are maintained.  To undertake this, the following will be considered in conjunction with every transaction undertaken:

·              Cost minimisation

·              Cost stabilisation/risk management

 

          Specific Borrowing Limits

4.5     Council’s borrowing limits are:

·                      Net external debt not to exceed 100% of total revenue.

 

Interest Rate Exposure

4.6       Interest rate risk management refers to managing the impact that movements in interest rates can have on Council’s cash flows.  This can have both a positive and/or negative impact

 

4.7       The interest rate exposures of Council shall be managed according to the parameters detailed in the following table and shall apply to the projected core debt of Council.  Core debt is defined as that contained in the LTP or Annual Plan or as otherwise determined by the Chief Financial Officer.

           

Table 4 - Fixed Rate Hedging Percentages

Term

Minimum

Fixed Rate Amount

Maximum

Fixed Rate Amount

0 -2 years

50%

100%

2 - 5 years

25%

80%

5 - 10 years

0%

60%

 

4.8       ‘Fixed rate’ is defined as any debt that has an interest rate reset beyond three months.

 

Interest Rate Risk Management

4.9       To manage the interest rate risk associated with its debt Council may use the following interest rate risk management instruments. 

·            Interest rate swaps. 

·            Swap options.

·            Interest rate options.

·            Interest rate collar structures but only in a ratio of 1:1.

·             Forward rate agreements. 

 

4.10     Any other financial instrument must be specifically approved by the Chief Executive and Chief Financial Officer on a case-by-case basis and only be applied to the one singular transaction being approved. Credit exposure on these financial instruments is restricted by specified counterparty credit limits.

 

4.11     Prudent selection of funding instruments and mix will help the Council achieve its low debt servicing costs and risk minimisation objectives. 

 

4.12     Selling interest rate options for the primary purpose of generating premium income is not permitted because of its speculative nature.

 

          Liquidity and Funding Risk Management

4.13     Liquidity management refers to the timely availability of funds to Council when needed, without incurring penalty costs.  This takes into account the ability to refinance or raise new debt at a future time at the same or more favourable pricing and terms of existing facilities.

 

4.14     The Council will strive to ensure the timely availability of funds to meet the Council’s various expenditure needs, preferably without incurring penalties or holding unnecessary cash reserves. 

 

4.15     To avoid a concentration of debt maturity dates Council will, where practicable, aim to have no more than 50% of debt subject to refinancing in any 12 month period.

4.16     The Council shall aim to maintain committed funding lines of not less than 105% of projected core debt.

 

          Credit Exposure

4.17     The Council may only enter into interest rate risk management transactions with
New Zealand Registered Banks.

 

Debt Funding

4.18     The Council may obtain funding utilising the following methods:

·                       Bank debt from New Zealand Registered Banks.

·                       Capital markets issuance comprising Commercial Paper, Fixed Rate Bonds, Medium Term Notes and Floating Rate Notes. 

·                       From the Local Government Funding Agency.

 

4.19     The Council’s ability to readily attract cost effective borrowing is largely driven by its ability to rate, maintain a strong credit rating and manage its relationships with its investors and financial institutions.  To this end it is the Council’s intention to seek and maintain a strong balance sheet position.

 

4.20     The Council may use a mixture of short term facilities (which generally have lower credit margins) as well as longer term facilities to achieve an effective borrowing mix, balancing the requirements of liquidity and cost. 

 

Debt Repayment

4.21     Total debt levels are indicated through Council’s LTP or Annual Plans.  Council’s Annual Report will contain information to allow actual debt levels to be compared with those forecasted.

 

4.22     Loans raised for specific projects will generally be repaid through user charges or rates.  Loans raised for local purposes will generally be repaid by the ratepayers in the relevant local area.  Surplus Council funds and proceeds from the sale of investments and assets will be reviewed periodically by Council with a view to repaying debt, or for funding capital projects.

 

4.23     The Council may repay debt before maturity in special cases where the circumstances suggest that this would be in the best interests of the District.

 

Security

4.24     It is Council’s general policy to offer security for its borrowing by way of negative pledge or a charge over its rates.

 

4.25     In the normal course, the Council’s policy is not to offer a guarantee or security over any of the other assets of the Council.  However the Council may decide to offer security over the asset:

·                      where borrowing is by way of finance lease, or some other form of trade credit under which it is normal practice to provide security over the asset concerned, or

·                      where the Council considers doing so would help further its community goals and objectives.

 

Benchmarking

4.26     That for performance measurement purposes the actual borrowing performance of the Council shall be compared with the following external benchmark which is predicated off the midpoints of the risk control bands contained in Table 4.

·            25.0%         Average 90 day bank bill rate for the reporting month.

·            12.5%         Average one year swap rate for the reporting month.

·            12.5%         Average one year swap rate for the reporting month,
              one year ago.

·            12.5%         Average three year swap rate for the reporting month.

·            12.5%         Average three year swap rate for the reporting month,
              three years ago.

·            12.5%         Average seven year swap rate for the reporting month.

·            12.5%         Average seven year swap rate for the reporting month,
              seven years ago.

4.27     Compliance with the benchmarking standard is not required if Council’s nominal debt levels are less than $10M. 

 

Reporting

4.28     A quarterly report to the Finance and Audit Committee is compiled which contains the following key details of Council’s debt and hedging profile:

·                      Total debt facility utilisation, including bank sourced debt, capital markets issuance and LGFA funding.

·                      Interest rate hedging profile against percentage hedging limits.

·                      New interest rate hedging transactions completed.

·                      Weighted average cost of funds.

·                      Performance measurement.

·                      A statement of policy compliance.

4.29     The details of any exceptions, including remedial action taken or intended to be taken.

 

LGFA

4.30     Despite anything earlier in this Liability Management Policy, Council may borrow from LGFA and, in connection with that borrowing, may enter into the following related transactions to the extent it considers necessary or desirable:

·                       Contribute a portion of its borrowing back to the LGFA as an equity contribution to the LGFA.

·                       Provide guarantees of the indebtedness of other local authorities to the LGFA and of the indebtedness of the LGFA itself.

·                       Commit to contributing additional equity (or subordinated debt) to the LGFA if required.

·                       Subscribe for shares and uncalled capital in the LGFA.

·                       Secure its borrowing from the LGFA and the performance of other obligations to the LGFA or its creditors with a charge over the Council’s rates and rates revenue.

 

 

Internal Loans

4.31     All Council investments may be used as a source for internal loans in relation to expenditure of a capital (or one off) nature related to any activity that would otherwise be funded by external loan.

 

4.32     The term of any internal loan shall not be more than 30 years and will be set after taking into account the ability of ratepayers affected to pay, alternative uses of the funds and the life of the assets to be funded.  The term set will be subject to review during the course of the loan.

 

4.33     The interest rate to be applied to internal loans for any given year will be developed as part of Council’s Long Term Plan or Annual Plan.  To remove any doubt, the interest rate calculated will be the interest rate used for that year for budgeting and end of year actual results.

 

4.34     The method of calculation and the resulting interest rate will be resolved by Council as part of this annual process.  In developing the method of calculation, Council will consider its investment policy objective, which is to obtain the net opportunity cost of not having the funds invested externally.  Council will also consider its present and future financial position as well as market conditions. 

 

4.35     After taking into account fairness and equity, Council can resolve to apply a lesser interest rate than the interest rate calculated where it agrees the circumstances are such that it is warranted.   


Council

27 September 2017

sdclogo

 

Hearings on Proposed Amendment to the Freedom Camping Bylaw for Lumsden

Record No:        R/17/9/21651

Author:                 Robyn Rout, Policy Analyst

Approved by:       Bruce Halligan, Group Manager Environmental Services

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        This report gives Councillors information on the feedback that was received through submissions on the proposed amendment to the Freedom Camping Bylaw 2015 (the Bylaw) for Lumsden. This report also outlines the speakers that have requested to be heard.

Executive Summary

2        In June this year, a draft amendment to the Bylaw for Lumsden was endorsed and put out for consultation. This report contains an overview of the current freedom camping rules for Lumsden, and also an overview of the proposed amendment.

3        Submissions have now closed and Council received 150 submissions on the proposed amendment. There is not a clear consensus on the proposal. Submitters are quite evenly divided on whether or not they support having a designated tent site, and whether or not to have more areas where self-contained and non-self-contained vehicles would be permitted to stay for up to 7 nights around the railway station. Generally, people who lived in Lumsden or in the surrounding towns, are less in favour of both the tent site, and having the additional areas for vehicles, than submitters from other regions. This report gives an overview of points that were raised by submitters.        

4        This report also informs Council of the submitters who would like to be heard on this matter, and it outlines the schedule for the hearing.

 

Recommendation

That the Council:

a)      Receives the report titled “Hearings on Proposed Amendment to the Freedom Camping Bylaw for Lumsden” dated 19 September 2017.

b)      Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)      Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)      Endorses the proposed amendment to the Bylaw that was released for consultation (see the Statement of Proposal included as Attachment A).

e)      Endorses the decision to release the proposed amendment to the Bylaw for consultation.

f)       Accepts the submission that was received after the consultation period had ended.

g)      Hears and considers the oral submissions from those submitters who wish to speak to their submission.

 

Content

Background

Current Rules

5       In Lumsden, the current Bylaw allows self-contained camping anywhere within the town boundary (on Council controlled land), for a maximum of 3 days in any 30 day period.  In the Bylaw, a vehicle is classified as being ‘self-contained’ if it has the capability of meeting the ablutionary and sanitary needs of its occupants.  The current rules permit both self-contained and non-self-contained camping in two designated areas around the railway station for 7 nights in any 30 day period.  There is currently no differentiation between vehicles and tents.  The current Bylaw for Lumsden is included as Attachment B. Staff have been informed that the Bylaw does not reflect how the site is currently being used. 

Previous investigations/discussions

6       The Lumsden Community Development Area Subcommittee (CDA) has undertaken steps to ascertain community views on Freedom Camping in Lumsden. In 2016, it completed a survey and received 46 responses. Thirty two of the responses supported freedom camping, 10 were against and 4 were undecided. In December 2016, the Lumsden CDA notified the public that the end of the freedom camping trial was approaching, and that Council wanted to ensure the Bylaw accurately reflects what the Lumsden community wants for the 2017/2018 summer season, onwards.

7       The CDA discussed the issues relating to freedom camping in April 2017 and indicated a desire to look at progressing an amendment to the Bylaw to reflect current practice. In May 2017, Council carried out a community conversation session at Lumsden. Freedom camping dominated the meeting with a small number of locals expressing concerns. In June, the CDA resolved to make a recommendation to Council that it amend the Bylaw in time for the next summer season. 

The proposed amendment

8       On 29 June 2017, staff presented the amendment that was proposed by the CDA, to the Regulatory and Consents Committee (the Committee). The Committee endorsed the Statement of Proposal (see Appendix A), and agreed to release the proposed amendment to the Bylaw for consultation, using the special consultative procedure, to further ascertain community views on the matter.

9       The proposed amendment is outlined in the Statement of Proposal. The proposal would continue to permit self-contained camping anywhere that is shaded pink on the map (excluding the prohibited areas, and only on Council controlled land), for a maximum of 3 days in any 30 day period. 

10     The proposal would create a new defined area for tents to the east of the railway station, and prohibit tents from other designated freedom camping areas.

11     The proposal would allow self-contained and non-self-contained freedom camping vehicles in the areas marked in green around the railway station. Three areas are being added, two behind the railway station, and one behind Buzz Café. The effect of these additional areas would be to legally enlarge the area where non-self-contained freedom campers could camp, and allowing self-contained freedom campers to stay in those areas longer (as the current Bylaw allows self-contained freedom campers in the railway station area for 3 days in a 30 day period).  Camping in the green areas is proposed to be for a maximum of 7 nights. 

12     It is proposed that the playground and particular car parks near the main street, are designated as camping ‘prohibited’. Playgrounds are outlined as a prohibited area in the current Bylaw. It is proposed to have the car parks as prohibited areas so people visiting the town, can park their cars and access the shops and other town facilities.

Other proposed rules and planned work

13     The CDA plans to encourage self-contained freedom campers to park in designated areas outside of the immediate railway station area, by guiding campers there through on-site signage. This would allow more capacity around the immediate railway station area for non-self-contained campers (so they can use the toilet and wash facilities), and it may increase the number of non-self-contained freedom campers who can stay at the site (as self-contained campers may park elsewhere).

14     The Committee has suggested that the following rules are appropriate for non-contained freedom campers who visit the site:

·    No washing hung on trains, playground, fences or trees

·    Tents only between hours of 5.00 pm and 10.00 am

·    Clean teeth in bathroom

·    Wash dishes at provided sink

·    Vehicles off grassed areas

·    Dogs must be on a leash.

15     Council’s legal advisor recommends that these rules do not form part of the Bylaw, however they can still be informal rules displayed on signage. 

16     Subject to funding, the CDA has resolved to complete works to mitigate any adverse effects from freedom camping. This work is:

·    Installing bollards to prevent vehicles using the area proposed for tents

·    Installing visual screening at the area proposed for tents

·    Sealing of the vehicle parking area

·    Marking camp sites.

Issues

Legal Considerations

17     Section 10 of the Freedom Camping Act 2011 states that freedom camping is permitted in any local authority area unless it is restricted or prohibited in accordance with a bylaw or under any other enactment.

18     Section 11(2)(a) provides that a local authority may only place restrictions on freedom camping by way of a bylaw if it is satisfied that the bylaw is needed:

·    To protect the area

·    To protect the health and safety of people who may visit the area

·    To protect access to the area.

19     The Council also needs to be satisfied, section 11(2)(b), that the bylaw is the most appropriate way of addressing the perceived problems and that it is not inconsistent, section 11(2)(c), with the New Zealand Bill of Rights Act 1990. Placing a restriction on where people can enter and camp using the bylaw, could be seen as being in breach of the “freedom of movement” Right under the Bill of Rights Act 1990. Section 5 of the Bill of Rights Act allows for restrictions on Rights to be imposed, however, where there is a reasonable justification.

20     The Freedom Camping Act 2011 is a permissive piece of legislation and sets a tight framework within which any restrictions placed on where people can freedom camp must be managed. Council must be satisfied that any restrictions that it does want to impose can be reasonably justified in accordance with the provisions in the Act. 

21      The current Freedom Camping Bylaw 2015 allows, and aims to control, freedom camping in Lumsden in accordance with the statutory provisions. The proposed amendment is to tighten up restrictions on freedom camping in Lumsden and to establish greater controls to enable the ‘adverse effects’ of the activity to be managed. The amendment before the Council is not about whether there is freedom camping in Lumsden at all.

22      Following the hearing of submissions, the Council will need to make a decision, and would have discretion as to which aspects of the proposed amendment it wishes to approve- for example the proposed tenting site as discussed in more detail below.

Community Views / Submissions Received

23     Overall 150 submissions were received on the proposed amendment. One hundred and fourteen of the submissions were made by local people (people who live in Lumsden, Balfour, Mossburn and Athol). Most of the responses were received through an online form (95 responses) and the remainder were received by email, through the post, or at a Council office. Eleven submissions were received from people who gave their home address as being overseas.

24     Officers did receive feedback that some people experienced problems submitting through Council’s online process. When staff were aware someone was experiencing a problem, staff worked with the person to ensure they managed to submit successfully.

25     Twenty three people requested to speak to their submission at a hearing. Table 1 below outlines the submitters who will be presenting at the hearing, and the timetable for the session.

 

Table 1: Submission hearing timetable (Thursday 28th September)

Time

No

Submitter

Page No in Submission Booklet

9.00 am

1

New Zealand Motor Caravan Association

(Mr James Imlach)

Via Web Meeting

511-512

9.15 am

2

Hospitality New Zealand

(Mr Nigel Humphries)

444-446

9.30 am

3

Honorine Orchard

115-117

9.40 am

4

Russell G Smith

436-439

9.50 - 10.30 am

 

Morning Tea

10.30 am

5

Kevin Skoropada

215-217

10.40 am

6

Tony Paterson

252-254

10.50 am

7

Trish and Mike Gill

270-273

11.00 am

8

Lyall Hopcroft

Via teleconference

31-33

11.10 am

9

Chris Henderson

367-372

11.20 am

10

Ethel Barnes

415-419

11.30 am

11

Morris Williams – additional handout

560-563

11.40 am

12

Chris Palmer

373-378

11.50 am

13

 

 

11.50 - 12.50 pm

 

Lunch

12.50 pm

14

Jenny Campbell

463-465

1.00 pm

15

Brian Ross

359-362

1.10 pm

16

Tracy Ross

546-552

1.20 pm

17

Michael Neville Ellis

497-506

1.30 pm

18

Midge Tuffley

507-510

1.40 pm

19

Wallace Drummond

564-568

1.50 pm

20

Ali Timms

324-329

2.00 pm

21

Lynne Dickie

479-488

2.10 pm

22

Lumsden CDA

(Mr Rob Scott)

316-323

2.25 pm

23

Graeme Wall

296-298

 

26     Most of the submissions were made by respondents completing a form. Council staff made a form that asked submitters a series of questions and that gave submitters the opportunity to provide further comments. All submissions have been loaded in full onto the ‘hub’ for councillors’ consideration. They have also been made publically available on Council’s website at http://www.southlanddc.govt.nz/my-council-/bylaws-and-policies-/under-review/amendment-to-the-freedom-camping-bylaw-lumsden/ .

The Tent Site

27     The first question on the form asked submitters their view on having a designated tent site. Sixty percent of submitters support there being a designated tent site, and 35% are opposed. Three percent of submitters neither support nor oppose the tent site, and for 2% of submitters, their view on the tent site is unclear from their submission. How submitters responded to the question on having a designated tent site, is shown in Figure 1 below.

 

                 

 

28      When only the responses from local submitters are considered (this includes responses from submitters who live in Lumsden, Mossburn, Athol and Balfour), there is less support for having a designated tent site. Of the submitters who live locally, 52.6% support a designated tent site, and 42.9% are opposed. How local submitters responded to the question on having a designated tent site, is shown in Figure 2 below.

 

                      

 

29      In the form, submitters were also asked their view on the location and size of proposed tent site. Fifty eight percent of submitters support the location of the tent site, and 55% support the size. Thirty seven percent of submitters oppose both the location and size of the tent site. The remaining submitters did not state their view on these issues, or neither support nor oppose the location and size of the tent site.

30      Submitters gave a number of reasons why they support or oppose the tent site. Key points raised by people who support the proposed tent site included;

·    It is the most appropriate location

·    The proposed site would accommodate current numbers and be manageable

·    It would be good to have tents in one place

·    The site would be more accommodating, which would attract more visitors and have associated economic benefits

·    It would stop people tenting elsewhere

·    That the tents are not doing any harm (as they are put up in the evening and taken down early in the morning).

31      Key points raised by people who oppose the tent site included:

·    That tents should be at the camping ground

·    That camping related activities (such as brushing teeth) are not appropriate in the centre of a small town

·    That the proposal is not respectful to other accommodation providers in Lumsden

·    That the space in the centre of town should be available for local people to use

·    That there needs to be better/more amenities

·    That the tent site should not be near a children’s playground

·    That tents are unsightly

·    That the proposed tent site is too close to private residences and the Lumsden Motel

·    Concerns about monitoring and enforcement.

32      Table 2 below provides a more indepth overview of points raised in support and in opposition to the tent site (including having a tent site, and the proposed location and size of the tent site). The third column also outlines some of the other suggestions and comments that were made, regarding a tent site.

 

Table 2 – Points raised about tent site

Support

Oppose

Suggestions/comments

·   The proposed site is in the most appropriate location as:

On grass

Sheltered

Away from vehicles and roads

Close to amenities

Close to local people

Close to railway area, where it is nice to gather

Close to shops

Close to the i-site

Nice central location

Easy to find

Close to wifi

Away from people

Far enough from main street/highway

·   Appropriate size based on last years visitor numbers

·   good to have tents in one place, will keep site organised and clean and tidy

·   The proposed size is manageable

·   It has been shown that the grass does not suffer

·   The tent site will bring more visitors to the town, which will have associated economic benefits

·   Good advertising for town

·   Site is close to camp host which will make it easier for him to manage the site

·   The size seems reasonable

·   Being more accommodating improves the experience for tourists

·   Large enough space for people in tents to have privacy

·   Will stop people tenting elsewhere (rivers, sides of roads etc), so will help ensure rubbish ends up in bins

·   Good for guests to be near a playground

·   Space was previously unused

·   People in tents are not doing any harm

·   As tents go up in the evening and are taken down promptly in the morning, the tents do not impact the area during the day

·   The people in tents will feel safer if they are together

· Tents should be at a camping ground

· The tent site would be related to behaviour that is inappropriate for town centre (particularly around children/a children’s’ playground). The inappropriately behaviour outlined included:

nudity (washing, sunbathing, dressing)

tooth brushing/spitting

toileting on grass/trees/buildings etc

cooking on fires

hanging washing over trees and other objects

drinking alcohol

drugs

sexual behaviour

· Not respectful to Lumsden Motel owners and other accommodation providers

· The proposed site is too close to the private residences on Hero St and to the Lumsden Motel – it would be right by their windows, invading their privacy. Too noisy for nearby houses at night, rubbish blows into their properties

· The tent site needs to be bigger

· The space is for locals to use, picnic, play and enjoy.

· Having a tent site here would ruin the green space

· There needs to be better/more amenities (rubbish bins, toilets, washing facilities etc) - especially if there are larger numbers of freedom campers, as the toilet facility is already being overused/not looked after by users

· Other potential sites are more appropriate as they are away from central town area, and will accommodate the increasing numbers of freedom campers who will come

· The tents are unsightly (they lower the visual appeal of Lumsden, make it appear unwelcoming, make it look like a slum, the tents are an eye sore, unsightly for other visitors to the town).

· The site is operating well as it is

· Not appropriate to have near a children’s playground, especially as playground is between the site and the toilets

· No tents

· Only self-contained

· Length of permitted stay should be reduced

· Not sheltered enough

· Concerns about monitoring and enforcement – keeping it under control. Fines for not adhering

· Health and safety hazards - associated with people not using the toilets (and suggestions they are too far away), tooth brushing and washing in inappropriate places, the dangers associated with tripping on guy ropes

·   Keep the tent site restricted so it is manageable

·   Tent site is likely to be increasingly popular, you wouldn’t want to make it any smaller

·   There should be screening/plantings, especially between playground and tent site

·   Campers should not be able to hang up washing

·   Tents should have to be put down promptly in the morning

·   If the tent site is too large, it will take up too much of the park

·   The tent site shouldn’t block access for the camp host

·   Tents should be far enough away from the roads/carparks so as to ensure camper safety

·   The tent site should be adjacent to a vehicle parking area

·   There may need to be an over-flow space, to use when the main site is full

·   It should be the whole grass area

·   It should be further south, behind the Bafe

·   When the site is full, people wanting to tent should be made to go elsewhere

 

 

Having a Larger Area for Vehicles

33     The submission form also asked submitters if they support or oppose there being an overall increase space for freedom camping vehicles in Lumsden. This question relates to the additional three green areas that have been proposed, where self-contained and non-self-contained vehicles would be permitted to stay for up to 7 nights around the railway station.

34     Out of all of the submissions received, 52% of submitters support an overall increase in space for freedom camping vehicles and 39% of submitters are in opposition. Seven percent of submitters neither support nor oppose the larger area for vehicles, and 2% of submitters did not give a clear view on this issue. How submitters responded to the question on having a larger area for vehicles around the railway station, is shown in Figure 3 below.

         

 

35      When only the responses from local submitters are considered (submissions from Lumsden, Mossburn, Balfour and Athol), the number of people who support having a larger area for vehicles, drops down to 44.7%.  A larger proportion of submissions from local people oppose having a larger area for vehicles (47.4%). In the other submissions from local residents, 6.1% of submitters neither support nor oppose having a larger area for vehicles, and 1.8% of submitters did not give a clear view on the larger area for vehicles. How local submitters responded to the question on having a larger area for vehicles, is shown in Figure 3 below.


36      In the form, submitters were also asked their view on the proposed locations for freedom camping vehicles around the railway station (the areas marked in green on the proposed amendment). Fifty three percent of submitters support all of the proposed locations and 14% of submitters support some/at least one of the locations but do not support them all. Twenty seven percent of submitters oppose all of the proposed locations, and 3% neither support nor oppose the locations. Three percent of submitters did not clearly answer this question.


 

37      Submitters gave a number of reasons why they support or oppose the larger area for vehicles, and the location of the vehicle areas. Key points raised by people who support the proposed locations included:

·    It will allow current numbers

·    It will allow for better management, organisation and control

·    There may be more visitors which would have associated economic benefit

·    The sites are the most appropriate as they are close to local businesses, local people and amenities

·    The sites will mean that there is parking for other visitors, and they will keep the main street clear

·    It shows that Lumsden is welcoming, and it will help expand Lumsden as a tourist stop-over

38      Key points raised by people who oppose the proposed locations included:

·    The campers should be using the camping ground

·    The area is too congested so locals cannot use/access the town centre, and the proposal would make it worse

·    Concerns about the impact on other accommodation providers

·    That the area behind Buzz café should not be for campers, and that it should be for the public and for people using the playground

·    The number of vehicles should be restricted/limited

·    The need for better/more amenities

·    That there shouldn’t be camping near the trains or playground.

39      Table below provides a more indepth overview of some points raised in support and in opposition to the proposed vehicle areas. The third column also outlines some of the other suggestions and comments that were made.

 

Table 3 – Points raised about proposed vehicle areas (marked in green on the map in the Statement of Proposal)

Support

Oppose

Suggestions/comments

·  This will allow current numbers, it is busy in summer, there is definitely a demand, it is necessary

·  Will allow for better management, organisation and control

·  Will lead to associated economic benefits

·  These freedom campers (in contrast to the people tenting) are more likely to spend money at the local businesses

·  More people should be able to access the site, the bigger the better

·  The larger size will help expand Lumsden as a tourist stopover

·  The proposed areas are the most suitable locations

·  Appropriate at Lumsden is a prime location

·  There is lots of space available, so plenty of space should be made available

·  Good sites, close to local people and shops etc

·  This shows that Lumsden are welcoming to visitors

·  Will free up the main street area

·  Will help stop people camping down by the river or on the side of roads

·  Having more space for vehicles will make it safer for the people in tents

·  Support as most vehicles will be behind the railway station

·  Parking still available for local

·  Great locations

·  These campers should be using the camping ground

·  The area is too congested, and this would make it more congested

·  Local people cannot get car parks, and are having to walk further to get to the shops

·  It is taking over the central area of town, locals cannot use it

·  Due to the impact on other accommodation providers

·  There is insufficient space for the Inter City bus, and elderly people cannot easily access this bus easily because there is no nearby parking

· These areas are related to behaviour that is inappropriate for town centre (particularly around children/a children’s’ playground). The inappropriately behaviour outlined included:

nudity (washing, sunbathing, dressing)

tooth brushing/spitting

toileting on grass/trees/buildings etc

cooking on fires

hanging washing over trees and other objects

drinking alcohol

drugs

sexual behaviour

noise

·  There needs to be better/more amenities (rubbish bins, toilets, washing facilities etc) – pressure on infrastructure

·  Might not be large enough

·  The number of vehicles should be restricted/limited – a suggestion that limit to about 30 vehicles, needs to be less locations

·  The area behind Buzz café should not be for campers, should be for the public and for people using the playground

·  Should pay a fee

·  Too close to playground, and vehicles block parents’ visual line to the playground. Should be a space for people to use the playground

·  More vehicles would detract from the look of the town, and it is already looking scruffy

·  Degrades the historical value of the railway station area

·  The vehicles are stopping/deterring people from stopping in Lumsden

·  The number legally allowed now is an appropriate number, it means locals can share the central area with the visitors at the site

·  Self-contained vehicles have no need to be near the railway station

·  Not appropriate having designated areas close to the trains, enthusiasts cannot access or photograph the trains

·  Would prefer the parks to be behind the railway station, out of sight

·  Would prefer to having vehicle areas near the tent site

·  People shouldn’t park by back door to craft shop

·  The areas need to be properly marked

·  The areas need to be monitored and enforced

·  Vehicles that do not comply should be clamped

·  The number of vehicles should be capped per night – set what is capacity

·  Large camping vehicles should be going to the camping ground or the campervan site

·  Suggestions of alternative sites, such as near the Emergency rooms, at the old cricket field at the Rec ground, by the hall

 

 

 

Prohibited Areas

40        Submitters were also asked if they had any views on the prohibited areas, which are places where freedom camping is prohibited. Generally submitters were supportive of the proposed prohibited areas, although some submitters wanted more prohibited areas, and some submitters were concerned about how the areas would be enforced. Table 4 below, further outlines some points raised in relation to prohibited areas.

 

Table 4 – Points raised about prohibited areas

Support

Oppose

Comments

·  Good to keep parks free for other visitors and playground users

·  General statements of support

 

·  All railway area should be prohibited

·  Should be more prohibited areas or they should be extended

·  There should be more prohibited areas around the playground

 

·  Car parks opposite hotel should be prohibited too

·  That the prohibited areas will only make a difference if they are enforced

·  The areas need to be signposted clearly

·  The area around Buzz Café should be prohibited also

·  These areas should have been discussed more in the Statement of Proposal

·  Other than the area around the playground, it would be fine to use the prohibited areas late at night, if the campers needed more space

·  These areas will still be used by the campers

 

 

 

Other general comments that were made

41      Submitters also raised a number of general comments about freedom camping. Table 5 below outlines some of the general comments that were made.

 

Table 5 – General Comments made about Freedom Camping in Lumsden

·  The visitors at the site a good sort of people

·  Would be good to have arrows on the road to ensure people drive on the correct side of the road

·  People are respectful of the privilege to be at the site – they’re clean, tidy and polite

·  Comments of appreciation - thank you for making the visitors feel welcome

·  This site entices travellers to town, and they wouldn’t come to Lumsden if it wasn’t for the freedom camping site, puts Lumsden on the map

·  Comments about the economic benefits associated with freedom camping

·  That freedom camping allows people to travel, especially young people

·  If the site was out of town, people would probably not spend money at the local businesses

·  People enjoy having the presence of other cultures

·  It makes the town vibrant, and provides for a thriving future if the town

·  People are reluctant to use (due to the crowding and congestion), and have trouble accessing, the library

·  Freedom camping should not be allowed altogether

·  Appropriate infrastructure should be set up to support the site (including trees, shielding, tracks etc)

·  Lumsden needs its main street back

·  This change won’t restrict the campers, it will encourage more to come

·  Council should be following the Camping Grounds Regulations Act 1985

·  The costs should be borne by those who benefit

·  The camping has not caused any major issues

·  Should negotiate with camping ground to establish free camping there.

·  The business that prosper through freedom camping are acknowledged, but the ones that are disadvantaged are not acknowledged

·  Feelings that the freedom campers are intimidating, and that it is no longer a safe place for children to be, stranger danger etc

·  Only a couple of people are benefitting, no benefit to most locals

·  Good to cater to a wide range of tourists, not just the wealthy

·  Playground area should be locked at night

·  Have separate toilets just for the freedom campers

·  Conflicts of interest regarding local business owners

·  Increased safety by having more people in town

·  Staying for 7 nights is too long, could make the time length longer in the area outside the railway station area (shown in pink)

·  It is great that visitors feel safe in Lumsden

·  Concerns about ratepayers funding the campers

·  Problems with toilets, not being looked after, locals and other visitors can’t access them or no longer want to

·  People other than campers no longer want to stop in Lumsden when they pass through

·  Cars/vans should be parking 3 meters apart

·  Fears the site will continue to get bigger

·  There should have been a transparent process developing the Bylaw from the outset, where locals can give their views and be heard

·  Discussion of approach being taken by other Councils around New Zealand, regarding freedom camping

·  Questioning why Council is deviating from the New Zealand Government’s tourism strategy of attracting higher paying tourists

·  Fears for safety of the volunteer who administers the site

·  There should be a liquor ban

·  The campers use all the picnic tables

·   Town centre should be for self-contained freedom campers only

·   Clear signage is required, including giving guidance on washing and showering

·   Screened clothes lines should be supplied

·   Shower and wash facilities could be built, utilise railway station, for gold coin donation

·   There should be a donation tin

·   There is a need for more lighting

·   There should be clear recycling and landfill bins

·   There should be more information on websites about the site

 

 

Late Submission

42      One submissions on the proposed amendment came through after submissions has closed (please see Attachment C). This submitter experienced problems submitting online. Officers have included in the recommendation for this report, for Council to accept this late submission. This submission has not been included in the analysis of submissions. The submitter is a Lumsden resident who is generally in favour of the proposed amendment. It is considered that no party will be disadvantaged by the receipt of the late submission.

Assessment of Significance

43      The recommendations being proposed in this report have been assessed as not being significant in relation to Council’s Significance and Engagement Policy, and staff do not believe there will be significant impact on the public under Section 156 of the Act.  Staff do not believe the decision is significant as freedom camping is already permitted in Lumsden, and the proposed amendments align the rules with how the site is currently being used.

Next Steps

44      After Council has heard submitters, Council will meet again at a later date (which is yet to be finalised) to further deliberate on the proposed amendment.

 

Attachments

a         Statement of Proposal - Amendment to Freedom Camping Bylaw for Lumsden

b         Current Freedom Camping Bylaw for Lumsden

c         Late Submission from Julian Adams    

 


Council

27 September 2017

 

STATEMENT OF PROPOSAL – Amending the Freedom Camping Bylaw for Lumsden

 

The Current Freedom Camping Rules in Lumsden

The current Freedom Camping rules in Lumsden permit self-contained camping anywhere within the town boundary (on Council controlled land), for a maximum of three days in any 30 day period. The rules also permit both self-contained and non-self-contained camping in two designated areas around the Railway Station, and they do not differentiate between vehicles and tents. 

Proposed Amendments

The proposed amendment to the Bylaw will continue to legally allow self-contained camping anywhere within the town boundary (on Council controlled land), for a maximum of three days in any 30 day period. Self-contained and non-self-contained freedom camping will also be lawful in the areas around the Railway Station that are marked in green on the proposed amendment. It is proposed that this area will be larger to enable more vehicles to stay there. The Lumsden Community Development Area Subcommittee (CDA) plans to encourage self-contained freedom campers to park in designated areas further away from the Railway Station, by guiding campers there through the use of on-site signage. Self-contained campers are going to be encouraged to move to different areas to allow more capacity (around the immediate railway station area) for non-self-contained campers in the areas around the toilet and wash facilities.

The proposed amendment would also create a defined new area solely for tents, and prohibit tents from other designated freedom camping areas.

Reasons for the Proposal

The Lumsden CDA has requested that Council make this amendment to the Bylaw. The amendment would mean the site could legally accommodate the number of campers who currently use the site, and it would restrict where they camp. 

 

Making a Submission

Submissions are invited on the draft amendment to the Freedom Camping Bylaw from 8 July 2017, and submissions must be received by 8.00 pm on 8 August 2017. Submissions can be made:

 

·           through the Council’s website (https://consult.southlanddc.govt.nz)

·           via post (Southland District Council, Submissions, PO Box 903, Invercargill 9840)

·           in writing at your local Southland District Council office.

 

Written submissions must state that the submission relates to the freedom camping rules in Lumsden, and give the submitter’s name and contact details.

 

Submitters who make a written submission can also elect to make an oral submission to the Regulatory and Consents Committee. This can be indicated through the online submission process, or by the submitter raising that they would like to make an oral submission, in their written submission. Oral submissions are likely to be heard on the morning of the 28th of September. Council staff will be in touch to confirm a time.

 

All submissions received by Southland District Council will be made available to the public.

 

 

 

 

Options

For this decision, Council has identified all reasonably practicable options regarding Freedom Camping in Lumsden. The options and analysis are presented below.

 

Option 1 – Not endorsing the draft Bylaw and continuing with the current freedom camping rules in Lumsden.

Advantages

Disadvantages

·          Avoids the minor costs associated with amending the Bylaw (staff time, advertising etc).

 

·       This would not be in accordance with the wishes of the Lumsden CDA.

·       The current rules do not reflect current usage.

·       This would not take into account that tourism and freedom camping is expected to increase.

·       People may continue to freedom camp in areas where they are not legally permitted to do so.

·       If there is an increasing number of freedom campers visiting the site, they may park vehicles or put tents in undesirable locations, rather than the suitable places proposed in the amendment.

Option 2 – Not endorsing the draft Bylaw, and instead endorsing a bylaw discontinuing or, or placing restrictions on, non-self-contained freedom camping in Lumsden.

Advantages

Disadvantages

·        This would decrease or largely eliminate the challenges associated with freedom camping.

·        Some support from locals.

 

·        This may decrease or largely eliminate the benefits associated with non-self-contained freedom campers.

·       Some locals would oppose this option. 

·        Contrary to the direction decided upon by the Subcommittee during the making of the Freedom Camping Bylaw 2015, and lawfully made by Council with little opposition from locals at that time.

·        May be hard to administer.

 

Option 3 – Endorsing the proposed amendment to the bylaw and releasing the draft bylaw for public consultation

Advantages

Disadvantages

·        Consistent with the wishes of the Lumsden CDA.

·        This amount of freedom camping may result in an optimal level of benefit for Lumsden.

·        Support from locals.

·        Takes into account the projected growth of the tourism sector and freedom campers.

·        This option is more in accordance with current usage.

·       Some locals would oppose this option.

·        An increase in the number of campers may increase problems from freedom campers, unless effective mitigation measures are put in place.

 



 

 

Relevant Determinations

 

Council has determined that the amendment to the Bylaw is necessary to protect the area, and to protect the health and safety of the people who may visit the area, and to protect access to the area. For example, Council believes the amendment will protect the health and safety of people who may visit the area, as the location of the freedom camping sites will help ensure that proper toilets are used, and that rubbish is placed in nearby receptacles. 

Under Section 155 of the Local Government Act, Council has determined that the proposed Bylaw is the most appropriate way to address the perceived problem and the most appropriate form of Bylaw. Bylaws have become the typical method of addressing issues associated with freedom camping, and the Freedom Camping Act allows bylaws of this nature.

In relation to amending the Bylaw, Council has also considered any implications under the New Zealand Bill of Rights Act 1990. The New Zealand Bill of Rights Act 1990 confers certain civil and political rights to people in New Zealand. Council is satisfied that the proposed Bylaw will not be inconsistent with the Act, that is, it imposes reasonable limits that can be reasonably justified in a free and democratic society. Case law supports that managing the adverse effects of freedom camping is considered a sufficiently important purpose to justify a limitation to peoples’ rights.


 

 

Appendices

 

Appendix A – Current freedom camping Bylaw for Lumsden

 

 

Appendix B – Proposed amendment to Freedom Camping Bylaw for Lumsden


Council

27 September 2017

 

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Council

27 September 2017

 


 


 


 


 

 


Council

27 September 2017

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Delegation to Approve Lease of Council Land - 48 York Road, Riversdale

Record No:        R/17/8/20281

Author:                 Virginia Dillon, Property Officer

Approved by:       Ian Marshall, Group Manager Services and Assets

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        The purpose of the report is to consider a recommendation to delegate authority to the
Chief Executive to enter into a lease of part of the Council community housing land at 48 York Road, Riversdale.

Executive Summary

2        A privately owned unit is sited on part of Council community housing land at 48 York Road, Riversdale.  The dwelling is for sale as the owner has recently passed away.  

3        In terms of the lease over the land the lessee’s executors or administrators have six months to remove or dispose of the relocatable house and all other improvements effected by the lessee.

4        If it is to remain on-site any purchaser must be approved by Council, be in receipt of Government National Superannuation and be occupied by the purchaser themselves for residential purposes. 

5        A lease will be required to be entered into by the purchaser to secure their occupation of the land.

6        No current delegation exists for issuing a new lease.  It is recommended that the Chief Executive be delegated authority to approve the intended purchaser and to execute any lease agreement if required.

 

Recommendation

That the Council:

a)         Receives the report titled “Delegation to Approve Lease of Council Land - 48 York Road, Riversdale” dated 17 September 2017.

b)         Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Delegates to the Chief Executive the authority to approve and execute an agreement to lease the Council land located at 48C York Road, Riversdale and described as part of Section 1279, Block XXXII, Hokonui Survey District.

e)         Determines that the initial annual rental payable under the lease be set at $700 plus GST for the five year term from commencement.  

 

Content

Background

7        Council owns land at 48 York Road, Riversdale which is described as Section 1279, Block XXXII, Hokonui Survey District and is comprised in Certificate of Title SL6B/7.  The parcel contains 1,214 m2 and is used as a site for community housing.  Council owns two of the units sited on the land (A and B on the plan attached) and the third one is privately owned (shown as C). 

8        A lease was issued to the current owner of the private unit in 2010 and contains a provision that should the owner vacate the unit, then within six months the unit must be sold (to a person approved by Council) or it must be removed.   This lease will be surrendered upon sale or removal of the dwelling.

9        If the dwelling is to remain on-site it must be occupied as a place of residence by the Purchaser/Lessee. The Purchaser must be in receipt of Government National Superannuation.

10      The current annual rental is $700 plus GST and it is proposed that the rental remain at this figure. It is also suggested that a lease be issued for a term of five years with a right of renewal for a term of five years.

11      There is no delegation to deal with the lease approval therefore it is proposed that the Chief Executive be delegated authority to execute the necessary documentation.

Issues

12      There is a need to find a pragmatic way to allow for a new lease to be entered into should the property be sold.

Factors to Consider

Legal and Statutory Requirements

13      A lease of the land is required if the private dwelling is to remain on site.

Community Views

14      Not considered a matter that requires community input.

Costs and Funding

15      Costs to deal with the lease are met by current budgets.

Policy Implications

16      No policy implications.

Analysis

Options Considered

17      There are two options to consider:

•        Delegate authority to the Chief Executive to execute a lease of the land;

•        Decline to delegate authority to the Chief Executive to execute a lease of the land.

Analysis of Options

Option 1 - Delegate authority to the Chief Execute to approve and execute the agreement to lease

Advantages

Disadvantages

·        No waiting for full Council meeting to approve lease.

·        No disadvantages identified.

Option 2 - Decline to delegate authority to the Chief Executive to approve and execute the lease agreement

Advantages

Disadvantages

·        No advantages.

·        Lease approval will have to be dealt with by the full Council which may delay the process and add additional administrative cost to the process.

Assessment of Significance

18      In terms of Council’s Significance and Engagement Policy this matter is not considered significant.

Recommended Option

19      Delegate authority to the Chief Executive to approve and execute the agreement to lease.

Next Steps

20      Solicitor for the Lessee will be advised when the Council will be in a position to execute the lease of land.

 

Attachments

a         Image 48 York Road, Riversdale    

 


Council

27 September 2017

 

 

 



Council

27 September 2017

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Southland Museum and Art Gallery Fourth Quarter Report for the 2016/2017 Financial Year

Record No:        R/17/8/20551

Author:                 Bruce Halligan, Group Manager Environmental Services

Approved by:       Steve Ruru, Chief Executive

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1       The Invercargill City Council has supplied the attached report relating to the operations of the Southland Museum and Art Gallery Trust Board Incorporated (hereafter SMAG) for the fourth quarter of the 2016/2017 financial year, ending 30 June 2017. 

2       The report outlines status of performance in relation to the projects and service levels outlined in the 2016/2017 SMAG Statement of Intent.  It also provides additional information on levels of use of the museum itself, and exhibitions which have occurred or are occurring.

3       The Trust is incorporated under the Charitable Trusts Act 1957.

4       Council appoints two representatives to the Trust in terms of the Trust Deed, with these being Councillors Macpherson and Patterson.

5       It is also worth noting that Page 3 of the report highlights the importance of ongoing work on “improved storage and cataloguing to protect and conserve the collection”, and the associated financial support which has been provided to progress this work.

6       This Quarterly Report is hence presented for Council’s information only.

 

Recommendation

That the Council:

a)         Receives the report titled “Southland Museum and Art Gallery Fourth Quarter Report for the 2016/2017 Financial Year” dated 18 September 2017.

 

Attachments

a         Quarterly Report - Southland Museum and Art Gallery - Fourth Quarter of the 2016/2017 financial year    

 


Council

27 September 2017

 

TO:                                         SOUTHLAND REGIONAL HERITAGE COMMITTEE SOUTHLAND DISTRICT COUNCIL

                                                GORE DISTRICT COUNCIL

                                               

 

FROM:                                   THE CHAIRMAN

                                                SOUTHLAND MUSEUM AND ART GALLERY TRUST BOARD

 

 

DATE:                                    18 August 2017

 

quarterly report - southland museum and art gallery

 

Report Prepared by:            Paul Horner - Manager, Building Assets and Museum

 

 

Summary

 

Report about the operation of the Southland Museum and Art Gallery for the Fourth Quarter of the 2016 - 2017 financial year.

 

 

Recommendations

 

That the report be received.

 

 

Financial Implications

 

Ø   Expenditure variance is ($9,495) at the end of the fourth quarter / 2016-17 Financial Year.  Positive variance of +$100,000 reported during the year proved to be a reporting error and capital expenditure to use the expected surplus had fortunately not been authorised before the error was recognised.

Ø   An increase of operational funding for the 2017-18 financial year (but not beyond), has been approved by the Invercargill City Council and the Southland District Council.

 

Level of Performance

 

Target Levels of Performance Required by the Statement of Intent are:

 

Service Level

Achievement, Third Quarter

Prepare for building refurbishment and extension to enable internal environmental conditions to meet national/international guidelines.

The Redevelopment plan completed and approved by the Trust Board will have to be reconsidered following release of the Southland Regional Development Strategy Report.

No irreparable loss or damage is caused to collections or objects on loan.

No loss detected

100% of objects acquired entered into Vernon database and verified

10% of new acquisitions entered.

100% records on Vernon database maintained

100% maintained

Project planned to review, update and verify records on database

 

Work has begun on this project, assisted by the Collections Technician who is funded by Regional Heritage rates provided by SDC and ICC:

This project is dependent on achieving a $600,000 p.a. increase of funding

 

Stage 1: Full documentation:

1,617 objects completed

Stage 2: Stage 1 +Packaging for storage:

941 objects completed

Stage 3: Stage 1 & 2 +Digital imaging

150 objects completed

 

Three semi-permanent exhibitions are delivered.

A minimum of 12 short-term exhibitions, including 8 in the community access gallery, are presented annually.

3 semi-permanent exhibitions delivered.

 

13 short term exhibitions opened by fourth quarter including 8 in the Community Access gallery.

Over 25 education programmes delivered to 4000 school students, including curriculum-linked and exhibition-related programmes.

LEOTC programmes delivered to 3,913 pupils by fourth quarter

Iwi Liaison Komiti (representing the four Southland Runanga), meets four times a year.

 

Three by fourth quarter.

Annual visitor numbers exceed 210,000/annum

232,580 by fourth quarter.

 

 

Operational Comments

 

Exhibitions which have been held in the Community Access gallery this year have been:

 

Ø  Hokonui Fashion Awards / Venom Hair Design

Ø  Polyfest - 2016 (schools).

Ø  Together We Travel - Day Activity Centre clients of SDHB

Ø  Inspired 2016  - LEOTC students

Ø  Tamatea - (touring exhibition) installed in Galleries 1, 2 and 3.

Ø  Bodyscapes - Corey Varcoe

Ø  Weavers - local weavers, Te Rau Aroha Marae.

Ø  Helen Back - sculptor

 

Art exhibitions which have been held in the main galleries this year have been:

 

Ø   In Residence - SAF and SMAG collection, Jo Torr and Lorraine Webb.

Ø   Epiphany - (local artist) installed in Dusky Gallery.

Ø   Tamatea - (touring exhibition) installed in Galleries 1, 2 and 3

Ø   Painting the Painter - Euan Macleod

Ø   Full Noise - SMAG and SAF collection exhibition, salon hang style.

 

Exhibitions which have been held in the minor galleries this year have been:

 

Ø   Something Borrowed, Something Blue, SMAG collection.

Ø   Our Children - photographic exhibition from the Campbell’s Collection, Dusky Gallery

Ø   Our Entertainers - photographic exhibition from the Campbell’s Collection, Dusky Gallery

 

 

The semi-permanent exhibitions at present are:

 

Ø   Roaring 40’s

Ø   History Gallery

Ø   Maori Gallery

Ø   Natural History Gallery

Ø   Victoriana Gallery

Ø   World War 1 Exhibition (re-opened after mid-war progression to the Western Front)

Ø   Burt Munro replica motorbike

 

Staff

 

Ø  A new Educator began work on 23 January 2017.

Ø  A Collection Technician began work on 30 January 2017.  This position is funded by the increased contribution from the Regional Heritage Rate by SDC for the current year.  The position is a fixed term role until the end of the financial year (as the funding is only available until then) and will be dedicated to collection management work.  See progress made on reviewing, updating and verifying records in the collection management system (CMS) in the Service Level Achievements table above.

 

Future Issues

 

The Southland Museum and Art Gallery is important to Southland.  It is the first museum to be developed in Southland and the only one to hold a significant collection of the natural and human history of the province.  The collection includes about 14,000 geology, flora and fauna objects, over 900 archaeology objects and over 4,000 taonga Māori objects.  The core exhibitions of SMAG are the geology, geography and natural history of Southland, southern Maori history (pre-European contact), Sub-Antarctic Islands, early coastal and nautical history and the history of Invercargill.

 

An increase of funding of $170,000 for the current and next financial years has been fundamental to enabling the commencement of improved storage and cataloguing to protect and conserve the collection, see the table of Service Level Achievements above.  The staff and manager are extremely grateful for this funding and look forward to its continuation so that the improvement of the catalogue information and improvement of storage of the collection can be sustained. 

 

It is expected that this work can be progressed and managed in co-operation with the proposal to catalogue all Southland’s material heritage which is being investigated at the request of the Southland Regional Heritage Committee.

 

 

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Council

27 September 2017

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Tokanui Rising Wastewater Main Renewal

Record No:        R/17/9/21647

Author:                 Matthew Keil, Operations/Project Engineer-Water and Waste Services

Approved by:       Ian Marshall, Group Manager Services and Assets

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        The purpose of this report is to outline current environmental risks and to seek approval to incur unbudgeted expenditure for the proposal to undertake a full pipeline renewal of the existing rising wastewater main between the wastewater pump station (WWPS) and oxidation pond site at Tokanui.

Executive Summary

2        This report outlines the urgent requirement to undertake an unplanned wastewater pipeline renewal between the wastewater pump station and the Tokanui oxidation pond inlet.

 

Recommendation

That the Council:

a)         Receives the report titled “Tokanui Rising Wastewater Main Renewal” dated 17 September 2017.

b)         Determines that this matter or decision be recognised not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Notes the high risks of environmental damage and Resource Management Act 1991 infringement if no action is taken.

e)         Approves the unplanned expenditure to undertake ‘Tokanui Rising Wastewater Main Renewal’ for a total district funded amount of $90,678.17 including contingency, to be funded by a loan through the District Sewerage Rate.

 


 

Content

Background

3        The wastewater pumping station at Tokanui pumps untreated wastewater 336 lineal/metres from the town reticulation, across the Tokanui River to the oxidation pond to the west of the Tokanui Township.

4        This current pipeline is 100 mm PVC and was installed in 1972 giving it an asset age of 45 years.

5        On 6 August 2017 Council Water and Waste Engineers received an after-hours phone-call outlining a significant pipeline failure of the existing PVC rising main at the pipe bridge where the pipeline crosses the Tokanui River.  An emergency ‘night works repair’ was undertaken and the pipeline was recommissioned.

6        Council’s Water and Waste staff met both the contractor and Environment Southland staff to inspect the pipeline repair where samples were undertaken and a permanent resolution was discussed.

7        The underlying cause of failure was clearly identified as riverbank erosion. In order to secure long term security of service it is clear an alternative means of conveying wastewater at this location is required. Please refer to the attached report outlining a formal series of events relating to the reactive pipeline failure and the events undertaken.

8        Water and waste staff have undertaken an engineering design to install a new DN110 HDPE pipeline under the Tokanui River. It is proposed this pipeline is installed via a horizontal directional drilling (HDD) methodology.  This would put the pipeline under the river bed and so prevent the need for an aerial pipeline bridge.

9        Staff have also confirmed on-site that the existing PVC is not fit for purpose, this is due to a number of on-site factors that engineers have confirmed.

10      Exploratory test-holes have been undertaken by Downer under the direction of Council Engineers to establish ground conditions for an HDD methodology to occur. Engineers have confirmed this is a viable option at Tokanui where ground conditions were excellent to an invert depth of 4.0 m. This has been confirmed by local directional drilling specialists Wilson Contractors.

11      Although test-holes looked favourable regarding an HDD methodology no guarantee is given to ground conditions under the stream until it is drilled. Should difficulties arise during this methodology a ‘back-up’ plan will include installing a new pipe bridge, which at this stage is not anticipated to be required.

12      Council Engineers have applied for and been granted a Certificate of Compliance by Environment Southland to undertake such activity under the Tokanui River under the current Regional Land Plan.

Issues

13      The current PVC pipeline crosses an 18 metre span approximately of the Tokanui River attached to a pipe bridge. The western embankment of the Tokanui River collapsed resulting in a completely broken pipeline, which resulted in a brief discharge to the Tokanui River.

14      Water and Waste staff see significant risk in the current pipeline failing again given the eroded and unstable embankments of this area of the Tokanui River. This elevates environmental and health and safety risk, given the current situation with the river embankments.

15      Staff would also like to highlight the infringement/reputation risks associated with doing nothing on this pipeline at Tokanui as the current PVC pipeline is not fit for purpose.

Factors to Consider

Legal and Statutory Requirements

16      Certificate of compliance has already been issued by Environment Southland to undertake a pipeline renewal under the Tokanui Stream. This is a permitted activity under current and proposed regional legislation.

17      The existing 100 mm PVC pipeline is positioned on private property under current legal easement dated October 1972.

18      Both private property owners have been consulted with by Council, regarding the proposed pipeline renewal within their respective properties. Both property owners are in approval with the proposed project. Please refer to the attached formal easement of the current pipeline.

Community Views

19      The proposed pipeline renewal project at Tokanui is unplanned and has not been programmed to occur in either the current Long term Plan or Council Annual Plan.

20      Affected property owners have been spoken to by Water and Waste staff.

Costs and Funding

21      It is proposed the Tokanui pipeline renewal project is funded by a loan repaid through the district sewerage rate.

22      Due to the urgent and reactive nature of this project - this report seeks the approval for the total unplanned expenditure amount of $90,678.17 excluding GST to complete this project.

Tokanui Rising Sewer Main Renewal

Item

Unit

Total

Reactive costs incurred to date (including Environment Southland Fees and Humes costs)

LS

$16,125.87

Pipeline Renewal Quote - Downers

LS

$22,002.30

HDD Pipe install quote-under Tokanui Stream - Wilson Contractors

LS

$17,550.00

Contingency

LS

$20,000.00

Council’s Water and Waste Fees

$15,000.00

Project Total (excluding GST)

$90,678.17

 

Policy Implications

23      Due to the speed of critical failure on this pipeline, the proposed project has not been consulted with to the public.

Analysis                                                  

Options Considered

24      The following options have been considered and are as per Options 1-3.

Analysis of Options

Option 1 – A full pipeline renewal as outlined (preferred option)

Advantages

Disadvantages

·        The significant reduction in risk of future pipeline failure.

·        Removal of health and safety risk with staff working around this area.

·        The elimination of potential infringement from Environment Southland- on future failure at this location.

·        A robust engineering design.

·        A renewed durable and robust HDPE pipeline.

·        Reduced maintenance/operating costs.

·        Reduced risk to the natural environment.

·        Responsible asset management of Council infrastructure.

·        The current availability of specialist contractors to undertake this project- given current busy market conditions.

·      Will need to be funded as unbudgeted expenditure.

 

Option 2 – Complete a partial pipeline renewal

Advantages

Disadvantages

·        Only addresses current need.

·        The intermittent disruption to farmers during the construction phase of the project.

·        Poor engineering design.

·        A high level of risk regarding pipeline failure.

·        A high level of risk regarding potential action from regulator.

·        Increased operating and maintenance costs to maintain the pipeline.

·        Environmental risk due to a potential pipeline failure.

·        The additional requirements of further sampling to ensure further failures are not occurring.

 


 

Option 3 – Do nothing

Advantages

Disadvantages

·        None.

·        A high level of risk regarding potential environmental contamination.

·        A high level of risk regarding potential action from regulator.

·        Elevated level of health and safety risk as a PCBU under the revised health and safety act.

·        Increased operating and maintenance costs to maintain the pipeline-should a failure occur.

·        Elevated financial costs with sampling/testing, due to a potential pipeline failure.

·        Poor asset management.

Assessment of Significance

25      The proposed Tokanui Rising Wastewater Main Renewal project is not of significance as per Council’s Significance Policy.

Recommended Option

26      Council’s Water and Waste department recommend a full pipeline renewal as outlined within Option 1 of paragraph 22.

Next Steps

27      Council to approve the unbudgeted expenditure and the commencement of the Tokanui Rising Wastewater Main Renewal project for the amount of $90,678.17 ex GST (including contingency).

 

Attachments

a         Tokanui Rising Wastewater Main Renewal - Attachments    

 


Council

27 September 2017

 


 


 


 


 


Council

27 September 2017

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Te Anau Wastewater Business Case Development

Record No:        R/17/9/22112

Author:                 Ian Evans, Strategic Manager Water and Waste

Approved by:       Steve Ruru, Chief Executive

 

  Decision                              Recommendation                         Information

 

  

 

Purpose

1        To seek Council approval of the Problem Statement, Investment Objectives and Constraints being used to progress development of the Te Anau Wastewater Business Case.

Executive Summary

2       At its meeting on 17 May 2017 Council asked officers to proceed with development of a business case for the upgrading of the Te Anau Wastewater Scheme. It also asked that officers develop selection criteria and a process via which possible alternative disposal sites might be identified.

3       This report provides an upgrade on the progress being made with development of the business case and seeks formal endorsement of the proposed Problem Statement, Investment Objectives and Constraints to be used in developing the draft business case. It may be appropriate to review these depending on the outcome of the alternative site selection process but this is a decision that can be made by Council at a later date.

4       Council has also called for expressions of interest for possible alternative disposal sites based on a set of criteria that were approved by the Project Committee. These are due to be lodged with Council by 11 October. 

 

Recommendation

That the Council:

a)         Receives the report titled “Te Anau Wastewater Business Case Development” dated 19 September 2017.

b)         Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c)         Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

d)         Note the process that is being followed to develop a Business Case for the Te Anau Wastewater Project.

e)         Approves the Problem Statement, Investment Objectives and Constraints as identified in Attachment A and asks officers to use these in the continued development of the Business Case for the Te Anau Wastewater Project.

 

f)          Notes that it could be appropriate for it to further review the Problem Statement, Investment Objectives and Constraints as identified in Attachment A if a decision is subsequently made to investigate an alternative disposal site.

 

 

Content

Background

5       At its meeting on 17 May 2017 Council asked officers to proceed with development of a business case for upgrading of the Te Anau Wastewater Scheme using the consented Kepler option. It also asked that officers develop selection criteria and a process via which possible alternative disposal sites might be identified. This report provides an upgrade on the progress being made with development of the Kepler business case and seeks formal endorsement of the proposed Problem Statement, Investment Objectives and Constraints.

6       The Wastewater Project Committee have previously been advised of the following high level timetable for the development of the business case. The dates in this table represent targeted dates and there is likely to be movement in them as work is progressed and particularly as drafts of the business case are reviewed:

Task

Due By

Completed by

Provide TAWC a copy of the business case project problem definition, investment objectives, constraints.

31/8/17

Complete

Advertise alternative site criteria

1/9/17

Complete

Report to Council on business case project problem definition, investment objectives, constraints.

27/9/17

 

Provide to Council the initial business case draft on the Kepler options - as these are the ones that are currently known.

30/9/17

 

TAWC meeting to discuss the initial business case draft and get comments.

13/10/17

 

Meeting with Finance and Audit Committee to discuss the initial business case draft and get comments.

13/10/17

 

Close off date for expressing interest in providing an alternative site.

11/10/17

 

Consideration of the alternative sites identified.

25/10/17

 

Meeting with TAWC to discuss alternative sites and process from here.

3/11/17

 

Report to Council on the outcome of the alternative site process.

15/11/17

 

Business case report to Council  

13/12/17

 

7       The detailed business case is being developed following the models used by both Treasury and NZTA in support of development of significant infrastructure investment decisions, albeit somewhat modified to reflect the scale of investment and the relatively advanced nature of the project.

8       Typically the business case is a multi-stage process based on the following assessments:

·                      Strategic assessment - what is the need?

·                      Economic assessment - generally to demonstrate value for money against any viable alternatives.

·                      Commercial assessment - can it be delivered and what are the options in terms of procurement/delivery models?

·                      Financial assessment - is it affordable and what are the funding sources (loans, contributions etc) referenced through the LTP?

·                      Management assessment - can it be successfully delivered including any further consenting requirements?

9       Any business case should clearly identify the problem or issue that is being addressed, the reasons why investment is necessary and the assumptions around what realistic options are available to address the issue/problem. 

10     Three key components of the strategic/economic assessments of the process are the problem statement, investment objectives and constraints. The definition of these will affect selection and subsequent assessment of identified viable options.

Assessment Components

 

Problem Statement

11     This outlines the reason for undertaking the project, in essence ‘the need’. Any potential solution should be able to be clearly tracked back to the issue/problem as documented.

12     In this instance the need for undertaking the work boils down to the requirement to have a viable and consented long term wastewater disposal system for Te Anau. The current consent for the Upukerora River discharge expires in December 2020 and in order to operate lawfully Council must have a new consented discharge in place and operational prior to December 2020.

13     In order to enable the investment to proceed Council must have a high degree of confidence that it can achieve a long term consent (25 years plus) and a high degree of confidence in gaining further consent.  From discussions with stakeholders there is a high level of risk that this will not be achieved if Council retains a direct discharge to water.

14     The Problem Statement acts as the starting point for justification of the capital expenditure as outlined in Long Term Planning documents. The problem statement is included in Attachment A.

Investment Objectives

15     These are essentially the reasons behind ‘the need’ and what the resolution of the problem statement will deliver.  These objectives also start to set some of the ‘ground rules’ around how the investment will be undertaken and the reasons why it will proceed. In the case of Te Anau five key objectives have been identified.

Objective One

16     The overall solution must have the ability to achieve a long term consent of at least 25 years with a high likelihood that a further consent can be achieved at the end of the initial consent term.

Objective Two

17     The overall solution is flexible and can be adapted to meet higher quality discharge standards which may be required in the future.

Objective Three

18     The solution must be able to manage any increases in flow and load which may result from growth within the community.

Objective Four

19     The solution meets the social and cultural aspirations of tangata whenua, the Te Anau and wider Southland communities.

Objective Five

20     The solution is cost effective and in line with current budgeted costs in the Long Term Plan.

21     A copy of the investment objectives and business needs is contained within Attachment A.

22     Following the Business Case approach three different levels of investment are typically considered with only those options within this range assessed further.

·              A minimum scope required to deliver the essential or core service requirements (the must haves). In the current instance the proposal as consented would meet this scope, but be capable of being upgraded to meet future standards as outlined by Investment Objective 2.

·              An intermediate scope is required to deliver essential and desirable service requirements (essential plus nice to have but not essential for core service delivery).

·              A maximum scope required to deliver essential, desirable and aspirational service requirements.

23     Desirable requirements might typically be considered if they represent good value for money while aspirational requirements are only considered further if affordable.

24     The revised requirement statements are included in Attachment A. It is important that they are read within the context of the Investment Objectives.

Constraints

25     Developing the problem statement and investment objectives gives a clearer picture as to what options are available to address the needs of the project.  Initially this should involve a high level review of all alternatives with a set of constraints developed to help narrow this long list down to a more manageable short list.

26     In order for it to be considered for scoring any option must first be assessed against a set of constraints that will determine if it reaches the threshold for scoring, with the constraints aligning themselves to one or more of the key investment objectives.  This in effect is used to reduce a long list of alternatives to address the problem statement, down to a more realistic short list.  The relative merits of each shortlisted alternative are then evaluated using an agreed scoring methodology.  The constraints identified for this project are included in Attachment A.

Issues

27      There is a need for Council to confirm the Problem Statement, Investment Objectives and Constraints being used to guide development of the Te Anau Wastewater Business Case.

Factors to Consider

Legal and Statutory Requirements

28      It is noted that all decisions of the Council are subject to the decision-making provisions detailed in Part 6 of the Local Government Act 2002. In broad terms, these provisions require that the Council assess the advantages and disadvantages of each reasonably practicable option. The extent of consideration given should have regard to the level of significance of the proposed decision.

29      Under section 14 of the Local Government Act 2002 Council is required to undertake commercial transactions in accordance with sound business practice. A decision on a significant capital investment, such as that involved with the upgrading of the Te Anau Wastewater scheme would fall within this definition.

Community Views

30      There are a number of different groups or sections of the community whose views need to be considered as Council proceeds through the process of making a decision on which option to pursue. These include:

·              The residents and communities of Te Anau and Manapouri. FSO is an organisation that purports to represent the views of a number within these communities.

·              The district wastewater user community who will be collectively required to fund the final solution through a targeted rate.

·              All district ratepayers who ultimately carry a level of responsibility and risk for all Council activities.

·              Tangata whenua. Note that under section 77(1)(c) there is a requirement for the Council to take into account the relationship of Maori with their ancestral land and waters if the decision being made is considered to be significant. It is clear that a decision about how to dispose of wastewater for Te Anau would be such a decision given that the Lake is a natural state waterbody and statutory acknowledgement area.

·              Stakeholder groups and organisations with an interest in the Te Anau Catchment. These include Fish and Game NZ, Guardians of the Lakes and Department of Conservation.

31      In making the decision to proceed with the development of a business case for the Kepler option Council has taken the views of these stakeholders into account. These include recognition of the fact that there are a number of people within the Te Anau and Manapouri communities who are concerned about the current Kepler consented option.

32      It is relevant that Council continue to consider the full range of views that exist as it considers the appropriateness of the criteria proposed through this report.

Costs and Funding

33      At this stage the assumption is being made that the project will need to be progressed in accordance with the existing Long Term Plan budget of approximately $12 million. This is the rough order cost estimate that was included in the 2015 LTP for the Kepler option.

34      The appropriateness of this cost estimate, and the current LTP budget assumptions, will need to be considered further once the financial costs and risks associated with development of the Kepler option, and any others that Council may want to consider further, have been reviewed as part of the current business case process and decisions are made about whether Council has a desire to investigate an alternative disposal site. It is likely that investigation of any alternative would need to be undertaken concurrently with the development of the Kepler option if the December 2020 deadline is not able to be moved.

35      A decision to investigate an alternative site will have a number of significant budget implications that will need to be considered as part of the 2018 LTP.

Policy Implication

36      There is no existing policy relating to the development of business cases.

 

Project Committee Feedback

37      The draft Problem Statement, Investment Objectives and Constraints were distributed to the Te Anau Wastewater Project Committee members for comment prior to this report being drafted. The feedback provided by members is included in Attachment B. The criteria included in Attachment A have been revised to reflect the comments received from the Committee where considered appropriate. 

38      Other comments made by the Committee, and officer comments on them are outlined in the table below. As noted below a number of these will be addressed through the relevant sections of the overall business case.

Committee Feedback

Officer Comment

Impact of Kepler option on operation of and future expansion of Te Anau Manapouri Airport should be considered.

Operational issues were addressed as part of resource consent process.

There is a need for a strategic review of the development potential of the Te Anau Airport to be completed. The timing and scope of such work is, however, outside of the scope of the Te Anau Wastewater Project.

Risks associated with return from baleage sales being used to reduce operational costs need to be assessed. 

Agreed. This will be considered as part of risk assessment process in the business case.

Understand current consent limits relative to those proposed through Water and Land Plan. 

Not directly relevant to current business case as Kepler consent granted for 25 years.

A ‘full assessment’ cannot be made without lodging a new consent application but officers will look to provide comment on notified pSWLP, changes sought via joint Southland TLAs submission and what they might mean for future consent applications. 

Important to note that any consent will be assessed based on the planning provisions applying at the time consent lodged. At present the notified pSWLP rules would apply. The decisions version of pSWLP is not expected to be released until May 2018 with catchment limits to follow by 2021.

Disregard health and wellbeing of Manapouri and residents affected by Kepler scheme.

Issues were considered as part of resource consent process.

No guarantee that Kepler scheme will get a new consented at expiry of current 25 year consent.

Agreed. This risk will exist with all options. Comment will be provided on current expectations in regard to future planning document expectations.

Council should be investigating rapid infiltration option with higher quality treatment.

Would require new resource consent and potentially new site.

 

 

Council should focus on finding an alternative site so that investment in reticulation system can be invested in improving treatment.

Alternative site identification process underway.

Why is Manapouri consent expiry mentioned?

Council will need to find a suitable treatment and disposal option for Manapouri before expiry of its current resource consent.

Growth assumptions used in 2013 need to be revisited.

Revised flow and load assumptions are being used and will be documented in the business case.

How will PDP peer review be included in business case.

Information provided is relevant background. Estimates may also be able to be used depending on options eventually explored.

Further peer review of aspects of the draft business case may also be appropriate. This is a decision to be made at a later stage of process.

Business case needs to address why water discharge is not an option based on higher quality of treatment.

Project scope and constraints would need to be changed to allow for a formal evaluation of direct water discharge at a particular site to be included in this business case process.

Legal advice has been that any alternative would need to at least need to have better environmental outcomes than current consented Kepler option. This will require a higher quality of treatment than NI schemes visited and options considered in PDP peer review.

Projected capital cost of $12.1 million included in current LTP budgets needs to be reviewed. 

Agreed. Project capex and opex estimates will be updated and risk assessment provided for the costs along with estimate confidence intervals.

Projected budget requirements will then need to be assessed as part of broader LTP Financial Strategy and overall funding requirements.

 


 

Alternative Site Options

39     Following the 17 May Council decision a set of criteria and process for identification of possible alternative disposal sites were developed and subsequently approved by the Project Committee.

40     Council has advertised for expressions of interest for alternative sites that people may wish to sell to Council. A number of criteria have been developed based on the type and area of land Council would require if it was to look at land availability for any new wastewater discharge. The criteria were initially advertised on 1 September 2017 with any expressions of interest required to be with Council by 11 October.

41     If potentially suitable site(s) are identified there will be a need for Council to make a decision on whether to proceed with a detailed investigation programme for that site. This work would likely need to proceed in parallel with work on the consented Kepler option.

Analysis

Options Considered

42     The options considered are to either endorse the Problem Definition, Investment Objectives and Constraints (Criteria) proposed with any amendments that Council may consider appropriate (Option 1) or Do Nothing (Option 2). Under the Do Nothing option officers would continue to draft business case using the criteria as proposed.  

Analysis of Options

Option 1 – Endorse Proposed Criteria

Advantages

Disadvantages

·        Will allow progress to be made with development of the business case.

·        The criteria are considered appropriate based on current knowledge of available options.

·      Criteria may need to change once a decision is made on whether an alternative site is to be investigated.

 

Option 2 – Do Nothing

Advantages

Disadvantages

·        None identified.

·      Criteria as drafted may not reflect Council wishes leading to business case needing to be changed at a later stage.

 

Assessment of Significance

43      The decisions that Council is making on how to proceed with the development of a new long term solution for the disposal of Te Anau Wastewater is significant. It involves a significant capital investment in an important piece of Council infrastructure.

44      Through this report the Council is being asked to confirm the Problem Definition, Investment Objectives and Constraints that will be used to inform the selection of suitable options to be short listed for assessment in the business case that is currently under development. These criterion largely reflect the steps that Council has taken to date in investigating the options available. There will, however, also be the opportunity for Council to review these when they receive the draft business case and when it becomes clear about whether there are any alternative sites that would warrant further investigation. 

45      Given the current stage of development, and the potential for these criteria to be reviewed at a later stage of the business case process it seems reasonable for Council to conclude that the decision that it is being asked to make through this report is not significant.

Recommended Option

46      It is recommended that Council Endorse the Criteria (Option 1) so that work can continue with drafting of the business case. 

Next Steps

47      Work will continue with drafting of business case using the approved criteria.

 

Attachments

a         Problem Statement, Objectives and Investment Objectives

b         Feedback from Te Anau Wastewater Discharge Project Committee    

 


Council

27 September 2017

 

1.1.1    Problem Statement

Taking an understanding of the context described above, the problem to be addressed can be identified as follows.

Table 2.2: Problem Statement

No

Problem

Benefit if addressed

1

SDC must have a sustainable long term solution for managing the treatment and disposal of wastewater for Te Anau.  In developing a solution SDC must be able to operate within the appropriate regulatory framework.

 

This requires the Te Anau WW scheme to be consented.

SDC meets legal/statutory requirements

 

Te Anau has a sustainable long term wastewater treatment and disposal solution.

2

For SDC to invest with confidence in a solution they must be able to get a long-term consent for wastewater treatment and disposal, with a degree of certainty it can be reconsented at the end of that period.

A long-term consent will enable investment in an upgraded scheme. 

 

This longer term certainty will enable continued growth in Te Anau.

3

The existing discharge to the Upukerora River is unacceptable to Iwi and contrary to the objectives, policies and outcomes specified in Te Tangi a Tauira and Ngai Tahu’s Freshwater Policy Statement.  It is also contrary to the current and proposed policies and objectives of Environment Southland’s relevant regional plans.

 

A direct discharge to surface water will likely be difficult to obtain unless reasonable options for discharge to land are exhausted.

Removes existing discharge which is inconsistent with Ngai Tahu policy documents.

 

Consistent with section 77 LGA obligation.

 

Te Anau has a sustainable wastewater treatment and disposal scheme consented by ES.

 

 

4

Social and environmental values and objectives of the community and key stakeholders (DoC, Fish and Game, Guardians of the Lakes Manapouri, Monowai and Te Anau), are not met.  They see that the current discharge reduces the scientific and recreation values of the receiving water and margins.

 

This means that even if the current scheme was capable of being reconsented then, at best, only short term consents might be possible. The challenges associated with obtaining short term consents for the existing discharge have increased with the latest amendments to the Freshwater NPS.

Social and environmental values of the community and key stakeholders, DOC, Southland Fish and Game Council and Guardians of the Lakes Manapouri, Monowai and Te Anau are met.

 

 

5

There is a lot of pressure from a number of stakeholders for the cumulative effect of nutrient loadings to surface water to be reduced. 

 

Nitrogen and phosphorus loadings are not sufficiently reduced by the present discharge, even if they comply with ES water quality guidelines.

SDC meets the objectives and policies of ES Regional and Proposed Plans aimed at reducing nutrient loadings to surface water bodies across the region, including the Upukerora River and Lake Te Anau.

 

Water quality of Upukerora River improved.

6

Discharge is into a river that leads to a Natural State waterbody and Statutory Acknowledgement Area, Lake Te Anau, where no degradation of physical or chemical properties are accepted.

SDC meets appropriate environmental standards.   SDC’s reputation benefits from meeting the standard that the community aspires to.

 

 

 

Investment Objectives, Existing Arrangements and Business Needs

.……

Investment Objectives

The Better Business Case framework and terminology was not in use by SDC in the period 2005 – 2007 when the long term Te Anau wastewater strategy was developed, but the principles agreed at that time align with the investment objectives outlined below. 

·      Investment objective one: A solution with the ability to achieve a long term resource consent (35 year, 25yr as a minimum), for wastewater treatment and disposal for the Te Anau community, with a high likelihood that a further consent can be achieved at the end of the initial consent term. 

·      Investment objective two: A solution with treatment and disposal processes that are adaptable to being efficiently upgraded to achieve higher environmental standards in a cost effective way, should future discharge standards tighten.  Refer s2.2.2 (and Table 2.4) for intermediate and maximum standards.

·      Investment objective three:  A solution that has treatment and disposal processes that are adaptable to being efficiently upgraded, as future discharge flows and loads increase.  Refer to the 2013 MWH Te Anau Wastewater Flows Report for the envelope of possible flow quantities.

·      Investment objective four:  A solution that meets the cultural and social aspirations of tangata whenua, the Te Anau and wider Southland communities.

·      Investment objective five.  A cost effective solution that is in line with budgeted costs in the Long Term Plan. 


 

Existing Arrangements and Business Needs

Table 2.3: Summary of the existing arrangements and business needs (including SMART measures):

Investment Objective One

Meet current environmental standards to obtain a long term consent

Existing Arrangements

It will be difficult to obtain even short term consents for the current discharge. The challenges associated with this have been increased with the recent 2017 amendments to the NPS-FM.  

 

The expiry date of the present consent to discharge to the Upukerora River is 30 November 2020 (Discharge Permit 20157778-01).

 

Business Needs

An upgraded or new scheme to meet environmental standards acceptable for a long term consent.  This needs to be in place by the expiry date of the present consent to discharge to the Upukerora River.

 

Note.  It is important that a new scheme has a high likelihood of being readily reconsented in 25+ years’ time. 

 

Investment Objective Two

A solution that is adaptable to being efficiently upgraded in the future to achieve higher environmental standards

Existing Arrangements

Existing treatment facility is unlikely to be of sufficiently high quality to allow future long term discharge to water.

 

The existing treatment facility has limited ability to be adapted to improve environmental performance but existing infrastructure has the potential to be reused as part of the overall solution if appropriate.

 

Business Needs

An upgraded scheme that reduces nutrient contributions to the environment and can be further enhanced to meet possible higher standards in the future.

 

Investment Objective Three

A solution that is adaptable to being efficiently upgraded in the future to accept higher flows and loads

Existing Arrangements

The existing scheme can cope with higher flows and loads without any major loss of performance, with only minor upgrades needed.  However, such upgrades will not improve performance to a level that would allow a long term consent for discharge to water to be granted.

 

Therefore, the existing facility has potential value as an element of a new treatment and disposal scheme.

 

Business Needs

Any existing or new processes, or process units, must have capacity to adapt, in a reasonably cost effective way, to higher flows and loads.

 

Latest flow and load reports detail the range of predictions for flows up until 2048.  As a minimum the worse-case projected flows must be able to be accommodated.

 

 

Investment Objective Four

A solution that meets the cultural and social aspiration of Iwi and the community

Existing Arrangements

Iwi, Fish and Game, DoC, Guardians of the Lake and other stakeholders have formally expressed, through the 2004 re-consenting process, their objection to the discharge in its current form and expressed a preference for a direct discharge to water to cease in the future. 

Business Needs

A scheme that sufficiently takes into account the requirements of the community as well as the key stakeholders.  This includes recognising the two key themes of Iwi, being removing direct discharges to water, and continuous improvement.

 

Any new scheme should have upgrade options to further reduce nutrient contribution to the Waiau Catchment, beyond whatever limit is consented for the initial long-term consent.

 

Recognition of the views on affordability of the scheme for the wider Southland District Community should be taken into account.

 

Investment Objective Five

A cost effective solution

Existing Arrangements

The present wastewater scheme is commonly used around the world as a cost effective solution for wastewater treatment.

Business Needs

A cost efficient solution that takes into account capital and operating expenditure, and the likely cost, if required, of upgrades signalled in Investment Objectives 2 and 3.  Cost effectiveness will be measured by comparing the capex and NPV of the various options. 

 

The present LTP budget is $12.1Million capex, and solutions are sought that are aligned to this.

 

It should also be noted that the consent for the Manapouri wastewater discharge to Home Creek expires in 2023 and that the consented Kepler scheme may also be suitable as one of a number of potential solutions for upgrading the Manapouri discharge. Following changes to the National Policy Statement for Freshwater Management which come into effect from 6 September 2017 requiring consenting authorities to have regard to the health of people and communities affected by their contact with water it is apparent that the current arrangement for Manapouri would not likely be reconsented. It is therefore important that a number of viable alternatives preferably involving disposal to land are available for consideration.

 

 


 

Potential Business Scope and Key Service Requirements

The purpose of this section is to describe the degree or scale of change required for the project to be considered successful. Three different levels of investment are typically considered and only those options within this range are assessed further in the economic case:

·      The minimum scope required to deliver the essential or core service requirements (the must haves)

·      The intermediate scope required to deliver essential and desirable service requirements, and

·      The maximum scope required to deliver the essential, desirable and aspirational service requirements.

Desirable requirements may typically be considered if they represent good marginal value for money. The aspirational requirements (or “nice to haves”) are generally only considered further if they are affordable.

The potential business scope and key service requirements, in the table below, were identified and assessed by Stantecs’s principal environmental scientist who was involved in developing and agreeing the consent limits for the Kepler Block land discharge consent.  These values were then discussed and approved by SDC and their advisors in workshops held on 15 June 2017 and 21 August 2017.

While many parameters are able to be measured, the particular parameters were selected as being those that are of primary significance to both the consenting authority and the community.


Table 2.4: Potential business scope and key service requirements 

*Service Requirements (in decreasing order of relevance compared to the investment objectives)

Scope Assessment

Minimum Scope

Intermediate Scope

Maximum Scope

Out of Scope

**Total Nitrogen loss to ground or surface water

(average values)

7,730kgN/yr

3,865kgN/yr

1,930kgN/yr

<1,930kgN/yr

Odour

Valid confirmed complaints*** detectable very occasionally (eg less than 3 per year) for short durations (eg 6hrs max)

As per minimum but complaints only once a year.

No complaints except if plant malfunction.

Never detectable

E.coli

(in ground water)

not detectable at any existing water supply bore

not detectable at any existing water supply bore

not detectable at any existing water supply bore

No minimum

E.coli

(at point of mixing with surface water)

<1,000/100ml DD after zone of mixing (ES existing Water Plan standard for stock drinking water)

<100/100ml after zone of mixing

(‘swimmable’)

<1/100ml after zone of mixing

(‘drinking’)

No minimum

Phosphorus

(at point of mixing with surface water)

8mgP/l

3mgP/l

0.5mgP/l