Corporate services meeting (11 February)

The corporate services committee meeting was held on 11 February 2016. A workshop on the Rabbit Island Management plan followed. As well as a discussion of Richmond’s RFC (reserve financial contributions) spending. Apologies were received from Cr Mirfin, with the mayor appearing late. Some councillors subsequently left early.

The agenda comprised two items: (1) corporate services activity report, and (2) treasury report. Three presentations were received in public forum.

Public forum

Tim Hawthorne (accompanied by John and Alana) spoke about their concerns over the disposal of the Mapua causeway. An information pack accompanied their presentation including: a letter from the Mapua & District Community Association (MDCA) dated 16 December 2015 outlining their concerns, an article by David Mitchel on the causeway that appeared in the Mapua & Ruby Bay Coastal News, and a summary memo on public access issues by Nelson lawyer Kate Mitchell. A copy of the information pack and memo can be obtained by emailing <wetland@mapua.gen.nz>.

Council were advised that a number of issues were being examined and that this had caused a delay in actioning the Councils earlier resolution to enter into public consultation over disposal of the causeway. Staff anticipated a report would be coming back, updating council on the issues.

Corporate services activity report

The manager’s report included:

  • Department finances. While IT spending is above budget this is considered to be a timing issue that should be within budget by year end. Bank charges are under budget. Budgeted capital expenditure is lower than expected due to reduced (and delayed) earthquake strengthening work.
  • Property services. Best Island access discussions are anticipated to continue after valuation analysis is completed. Earthquake strengthening work projects (including Richmond town hall, Motueka Memorial hall, and Bainham hall) have come under budget, due to a change in the legislation (ie now 34% of building standard, rather than 67%). Planning for the Takaka service centre strengthening and refurbishment has started. The Waimea community dam project focus is on provision of alternative legal and practical access to properties. Staff advised that negotiations are progressing (within one ongoing). A full briefing will be provided to full council. The Golden bay community facility has finalised the design. The Golden Bay A&P Assoc has donated land for the new netball courts. The Motueka aerodrome has received a request to erect an additional hangar at the southern end.
  • Information services. The strategic plan will be updated in March. It will focus on using technology and digitisation to improve functions and processes for better customer experiences. TDC’s online submissions system (developed in-house) for the Long Term Plan will be shared with Nelson council from February (live March) – at no cost to TDC. In my opinion, this is a big endorsement of the system by another council. And the team should be congratulated for outstanding work. Hopefully this is also the beginning of more shared IT services between both councils (and perhaps with other councils, as part of a wider Local Government shared IT services initiative).
  • Nelson seafood cluster. This group is being wound up and the remaining funds ($10,253) will be dispersed to a Marine museum and education centre initiative. TDC contributed 1.9% of the start up funds.
  • Service requests. Generally these peak around quarterly rates invoicing. Cr Edgar reinforced the need to post FAQ’s (frequently asked questions) online – to reduce service requests. Something I have been pushing with all service requests, since coming onboard.
  • Commercial property. The $1.4 million Shed 4 development was opened in Mapua. In my opinion, it is disappointing that the development (and landscaping) has taken up so much open space – that might have been used for night or day markets. Something that has proved extremely popular in Wellington. New parking initiatives in the Mapua precinct are expected to come online around mid-2016. I still believe a container development would have not only been cheaper (and more affordable for tenants), but would have provided more open space for seating and walking – as well as being a more exciting destination.
  • Forestry. Tendering for forestry management has begun. Olsen’s is the current provider. Health and Safety issues for recreational activities near forestry are ongoing. In my opinion, council need to acknowledge that some forestry areas will be used for both commercial and recreational activities – which requires smart management of the areas as use changes.
  • Port Tarakohe. Freight volumes are now being measured (see table below). Storage occupancy is averaging at 73%.

Corp-20160211-p13

Treasury report

As at 21 January 2016, council debt was $142 million, with an average interest rate of 5.261%. The council’s total cost of funds (including swaps and bank charges) is 5.307% (compared to budgeted interest of 5.70%). Debt is forecast to be $164 million by 31 December 2016.

Council have $144.78 million held in interest rate swaps (or 102% debt coverage), with an additional $3 million of forward swaps yet to start. The slight over-coverage of debt is due to council retiring debt faster than forecasted at this time. Swaps are expected to equal 100% of debt by March 2016.

Council’s cash investments total $4.52 million held at an average interest rate of 3.01%.

Funding mix

Bank debt $22 million 15.50%
Private placement $30 million 21.10%
LGFA debt $90 million 63.40%
Total $142 million 100.00%

Treasury compliance

Bank Cash Swaps Credit exposure Compliance
Westpac $1.20M $63.05M $14.09M Within policy
ASB $3.77M $41.73M $13.59M Within policy
ANZ $0.00M $43.00M $11.44M Within policy

RFC spending

The reserve financial contributions (RFC) account for Richmond had budgeted spending on a number of projects within the Richmond ward’s parks and reserves. The amounts listed below took into account funds brought forward from earlier years and reflected the amount actually available to be spent (rather than the funds staff wanted to spend). For example, the Long term plan (LTP) had budgeted $115,000 be spent on the Ben Cooper park toilets, yet the funds available in the RFC account had only reached $112,530 by the end of the 2015-16 year. This is because of the new regime of allocating RFC funds (ie the previous year’s income becomes the budget allocated to projects).

Richmond Ward Projects

Budget 2015-16 (available funds)

Richmond – Waimea River Park

$10,240

Transfer to District fund

$16,959

Richmond – Security Cam

0

Richmond – Playground Equipment

$15,345

Saxton Velodrome

$100,000

Toilets Ben Cooper

$112,530

Gardens General Capital

$10,000

Loan principal repaid

$905,653

Loan ASB Aquatic Centre

0

Loan Sutton Land

0

Loan Avery Land Development

0

Loan Cycle Trail 2012

0

Loan Sutton Land

0

Total

$1,170,727

Importantly, all debt within the account had now been repaid, about to be repaid, or removed to its proper account. When I first joined council I ensured all loans still operating within this budget were paid off first, and funds not related to the Richmond ward were transferred out to the correct accounts (hence some transfers). Before this, the accounts were a bit of a muddle and spending was based on forecasted income, rather than income received.

A debate then occurred over spending some of the budgeted funds on the lane next to the Richmond Library. Essentially Cr Edgar wanted to replace the lane with a garden walk way. Her argument, was the project had been put on hold, but given the funds were now available, council should finish the job. All very pretty, but in my opinion, unnecessary at this time. The lane was not unpleasant and still provided access. And I had received no mention of this need from my walk-about visits to the general public in Richmond. Remaining as it was also allowed council to contemplate reopening the lane for parking or access should it need it in the future. Digging it up for a walk-way garden would remove these options.

In my opinion, funds could be better spent on other activities if they had to be spent at all. Rather than frittering away funds on small “gardening” projects, councillors should be thinking about building up funds for larger strategic assets that provided more substantial benefits to the community.

For example, exercise equipment (rather than just more children’s playground equipment), possibly in Wilkes reserve, a large destination playground (similar to one in Masterton’s Queens gardens), a decent sized skateboard park (similar to the one in Nelson visible from Queens drive), or a bmx track. Unfortunately, funds have to be used in the Richmond ward, which rules out use on Saxons field. However, land near the aquatic centre might be a viable site for any of the above suggestions.

In the end, Cr Higgins supported Cr Edgar in a compromise. Whereby some funds were spent on a library lane garden ($5,000), and some funds were spent on public exercise equipment for the not so young ($5,000) – as a trial. As they say, the art of politics is compromise?

I also raised some other suggestions from the public, including using RFC funds for: (1) fencing toddler playgrounds, and (2) fencing areas for dogs to roam freely (ie dog exercise areas). Dog exercise areas have been quite successful in Wellington.

I also suggested that council explore using low cost containers for toilets, rather than spend the budgeted $115,000 on a separate toilet facility in Ben Cooper park. In my opinion, a container toilet could be purchased for $15-25,000 from Boxman (see www.boxman.co.nz/_boxman/Library/Modification/07_Modification_ScarbroCons.pdf). These can be clad in timber, steel mesh for climbing foliage, or painted. Alternatively, the council could work with the existing Darts club at Ben Cooper park and develop a shared public toilet facility. A shared facility would be much cheaper than building a new separate toilet building and would enable the club to benefit also. A win-win option in my opinion. Any remaining savings could then be used for additional toilets or saved towards a larger project.

[Update. Given my concern that the $115,000 budget might be authorised by other councillors I began subsequent discussions with the Morepork Dart’s club. The end result is that TDC has decided to work with the club on a shared public toilet, at a substantially lower cost than the budgeted $115,000.]

Agenda and minutes

The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/corporate-services-committee-meetings/?path=/EDMS/Public/Meetings/CorporateServicesCommittee/2016/2016-02-11.

My new books

I thought I would take this opportunity to promote my new book – Tax Administration Law Made Easy, together with two other books in the series that I have also been involved with – namely, Goods and Services Law Made Easy and Income Tax Law Made Easy.

All books can be purchased online from LexisNexis in hardcopy or eBook format.

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