A full council meeting was held on 17 April 2014. Apologies were received from Mayor Kempthorne and Crs King and Norris.
The meeting considered the following agenda items: (1) disestablishment of the communications subcommittee, (2) portable seating policy, (3) report from the joint nelson and tasman regional transport committee, (4) mayor’s report, (5) chief executive’s activity report, (6) machinery resolutions report, and (7) action items – previous council meetings. I intend to summarise the main issues below.
The disestablishment of communications subcommittee was discussed in an earlier post (and was passed unanimously by council with little debate) so I will not re-litigate the merits of disestablishing this committee. This was a good decision. However, in my opinion a working group needs to be established to review (and reduce) councils publishing costs. Especially if some publishing decisions are been driven by political, rather than regulatory, requirements.
In 2007, the council purchased 3000 portable seats as part of its commitment to upgrading the Trafalgar Park (as part of a number of rugby world cup initiatives). Interestingly the Trafalgar Park upgrade also included removing the cycle velodrome (located on the edges of the rugby field) and shifting it to Saxton field as part of improving the park for rugby viewing. To pay the $449,369 cost of the portable seats, $322,369 was taken from the regional facilities budget (ie the shared facilities rate) with the remaining $127,000 taken out on a 40 year loan. The balance on the loan balance is currently $106,500.
Unfortunately, the seats have been poorly managed, and during their use at the rugby world cup, parts were mixed with another supplier’s parts, resulting in the council having a number of inferior parts. Before the council could obtain the parts back, the supplier went bankrupt and any claim to the parts was not pursued further. Flooring planks are now delaminating and an estimate for their replacement is approximately $10,810. Unfortunately, due to parts being mixed it is unlikely a valid warranty claim could be made. However, community groups have provided their time for free in fixing the seats as well as assembling (and removing) them for major rugby events.
Since acquisition the council has spent a further $69,136 (including another $45,136 on replacement parts, $3,500 on maintenance, and $20,500 on loan payments). Over the same period the portable seats have raised $22,838 in income. In effect, an overall loss of around $40k.
Community organisations continue to seek use of the portable seats. However, there remains a tension in the council continuing to supply portable seats and the costs of providing those seats. Given the ongoing pressures the council has to confront increasing cost recovery for the use of the seats against their disposal. In effect leaving the community to hire the seats from a private vendor for higher charges.
Council decided in the short term to retain the seating (given hire interest from the Mako’s and the world cup cricket), but increase the charges and bonds for their use. Given much of the replacement costs had already been incurred, there seemed little merit in disposing of the assets.
Regional transport committee
On 10 February 2014, the NZ transport Agency (NZTA) asked the regional councils to support a joint transport committee. Council authorised the Mayor and the Chair of the engineering committee to advance a joint regional transport committee.
A number of items were raised in this report (including the training and travel budget, currently $17,000 for the 2013-14 year). Of interest to me was a proposal to establish an economic development advisory forum that would comprise business leaders and selected council representatives (p 30).
Chief executives report
The following summary is based on the contents of the chief executive’s report to the full council and the subsequent finance report to the corporate services committee (on 24 April 2014).
Councils net financial position (as at 28 February 2014) has been a good one and there appears to be a good chance that their might be a surplus at the end of the financial year against the planned annual budget for 2013-14. The year to date accounting income (against plan) was $4.4 million ahead of budget and expenditure was $440,000 below budget. The net position is an accounting surplus of $8 million achieved against the year to date budgeted surplus of $3.1 million. The underlying position was a surplus of $0.58 million.
The significant positive variance is mainly due to a $2.5 million gain on unrealised interest swaps, the sale of $110,000 of property and vehicles, vested assets of $2.2 million being lower than the budgeted year to date figure of $3.1 million, a positive variance of $850,000 in development contributions due to recent land development activity in Richmond, and the early arrival of some grant funds.
Capital expenditure at $12.4 million was below the year to date budget. However, this is mainly a timing issue that will be corrected as the richmond water treatment plant begins construction.
As at 31 January 2014, TDC’s working capital position was $5 million, compared to the year end projection of $4.4 million.
As at 31 March 2014, council debt was $151 million, paying a weighted average interest rate of 5.173%. TDC’s cost of funds (including interest rate swaps, bank margins and line fees) is 5.411%. A simple calculation suggests we are roughly paying $8 million in interest payments. Thats several community facilities (or one water treatment plant).
Agenda and minutes
The agenda and minutes for this meeting are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2014/2014-04-17.