Agenda of Risk and Assurance Committee - Wednesday, 16 August 2023

Notice is hereby given that an ordinary meeting of the Horowhenua District Risk and Assurance Committee will be held on:

Date:

Time:

Meeting Room:

Venue:

Wednesday 16 August 2023

1:00pm

Council Chambers
126-148 Oxford St
Levin

Risk and Assurance Committee

OPEN AGENDA

MEMBERSHIP

Chairperson	Cr Sam Jennings
Deputy Chairperson	Cr Paul Olsen
Members	Cr Alan Young
	Cr Clint Grimstone
	Cr Jonathan Procter
	Cr Piri-Hira Tukapua
	Mayor Bernie Wanden
	Jenny Livschitz	Independent Member
	Sarah Everton	Independent Member

Contact Telephone: 06 366 0999

Postal Address: Private Bag 4002, Levin 5540

Email: enquiries@horowhenua.govt.nz

Website: www.horowhenua.govt.nz

Full Agendas are available on Council’s website

www.horowhenua.govt.nz

Full Agendas are also available to be collected from:

Horowhenua District Council Service Centre, 126 Oxford Street, Levin

Te Awahou Nieuwe Stroom, Foxton,

Shannon Service Centre/Library, Plimmer Terrace, Shannon

and Te Takeretanga o Kura-hau-pō, Bath Street, Levin

Risk and Assurance Committee

16 August 2023

ITEM TABLE OF CONTENTS PAGE

KARAKIA

PROCEDURAL

1 Apologies 5

2 Public Participation 5

3 Late Items 5

4 Declarations of Interest 5

5 Confirmation of Minutes 5

REPORTS

6 Reports for Noting

6.1 PWC Tax Governance Presentation 7

6.2 Risk Management Status Quarterly Report - August 2023 21

6.3 Treasury Report for the June 2023 Quarter 89

6.4 Health, Safety and Wellbeing Quarterly Report - August 2023 99

6.5 Legislative Compliance Programme 117

6.6 Standard and Poor's Report 121

6.7 LGFA Statement of Intent 2023-2026 131

6.8 Annual Insurance Renewal Process Update 149

6.9 Continuous Improvement and Audit Actions Monitoring Report 157

6.10 Risk and Assurance Committee Work Programme 185

7 Proceedings of Committees

IN COMMITTEE

8 Procedural motion to exclude the public 189

C1 Health and Safety Investigation 189

Karakia

Whakataka te hau ki te uru

Whakataka te hau ki te tonga

Kia mākinakina ki uta

Kia mātaratara ki tai

E hī ake ana te atakura

He tio, he huka, he hau hū

Tīhei mauri ora!

Cease the winds from the west

Cease the winds from the south

Let the breeze blow over the land

Let the breeze blow over the ocean

Let the red-tipped dawn come with a sharpened air.

A touch of frost, a promise of a glorious day.

1 Apologies

2 Public Participation

Notification of a request to speak is required by 12 noon on the day before the meeting by phoning 06 366 0999 or emailing public.participation@horowhenua.govt.nz.

3 Late 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.

4 Declarations of Interest

Members are reminded of their obligation to declare any conflicts of interest they might have in respect of the items on this Agenda.

5 Confirmation of Minutes

5.1 Meeting minutes Risk and Assurance Committee, 7 June 2023

5.2 Meeting minutes In Committee Meeting of Risk and Assurance Committee, 7 June 2023

Recommendations

That the meeting minutes of Risk and Assurance Committee, 7 June 2023 be accepted as a true and correct record.

That the meeting minutes of the In-committee Risk and Assurance Committee, 7 June 2023 be accepted as a true and correct record.

Risk and Assurance Committee

16 August 2023

6.1 PWC Tax Governance Presentation

File No.: 23/504

1. Purpose

1.1 To present to the Risk and Assurance Committee the PricewaterhouseCoopers (PwC) annual tax update for the Horowhenua District Council, as part of the tax governance framework programme.

2. Recommendation

2.1 That Report 23/504 PWC Tax Governance Presentation be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

3. Background/Previous Council Decisions

3.1 Council has a high public profile and as such, must maintain exemplary governance and tax compliance standards.

3.2 Although Council does not pay corporate income tax, it is required to correctly account for Goods and Services Tax (GST), Fringe Benefit Tax (FBT), Pay as you Earn (PAYE) and a range of other withholding taxes.

3.3 Inland Revenue Department (IRD) has signalled its expectation that all large organisations should have tax risk management incorporated within their governance framework.

3.4 Council has an obligation to fulfil its tax compliance obligations as required by tax legislation, including the Income Tax Act 2007, Goods and Services Tax Act 1985, and Tax Administration Act 1994.

4. Issues for Consideration

4.1 Proactive tax risk management can facilitate mitigation of operational risk, financial risk and compliance risk. Given the high profile and public nature of Council, there is a need to adopt a conservative approach towards tax compliance. Accordingly, Council adopts a “LOW” tax risk profile such that it has an open and honest working relationship with the IRD through PwC.

4.2 A tax risk governance framework was adopted by the Council as a proactive step towards identifying and managing tax risk to maintain the Council’s low risk profile. As part of the tax governance framework, PwC have prepared an annual tax update as a report to this Committee.

4.3 For financial year ended 30 June 2022, a PAYE independent tax evaluation was completed by PwC. For financial year ended 30 June 2023, a GST independent tax evaluation was completed by PwC. Recommendations resulting from both evaluations are reported to this Committee through the Monitoring Report.

4.4 For the 2023/24 financial year we are planning a review of Fringe Benefit Tax (FBT),

Attachments

No.	Title	Page
a ⇩	Horowhenua District Council Annual Tax Update by PwC - July 2023	9

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Pei Shan Gan

Financial Controller

Approved by

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

6.2 Risk Management Status Quarterly Report - August 2023

File No.: 23/536

1. Purpose

1.1 The purpose of this paper is to report to the Risk and Assurance Committee an update of the risk landscape, risk management work in progress and to ignite discussion with the committee about risk.

2. Recommendation

2.1 That Report 23/536 Risk Management Status Quarterly Report - August 2023 be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

2.3 That the Risk and Assurance Committee endorse the Draft Insurance Strategy & Workplan.

2.4 That the Risk and Assurance Committee endorse the Draft Council Insurance Renewal - Valuation Methodology & Asset Selection Policy 2023v3.

2.5 That the D23/103663 Council Natural Disaster Risk Assessment – 2023 be received.

3. Discussion & Progress

3.1 2023-24 is the first time we have focussed resources to ensuring our Insurance Renewal Process is accurate in the information we provide to our brokers and underwriters. As with any risk, quantifiable information is necessary in supporting our ability to make better decisions. As part of our continuous improvement and the previously established insurance renewal workplan, key workstreams continue to focus in allowing Council to evolve to a point of complete confidence that ensures each renewal process and annual submissions are professionally articulated and accurate in risk transfer. Two key pieces of work that support that business improvement are the Council Insurance Strategy & Workplan, and the Valuation Methodology and Asset Selection Policy. A draft copy of these two documents are attached for your perusal and feedback.

Insurance Strategy & Workplan (Draft)

3.2 A per previous Insurance Renewal Updates, the insurance renewal process has thrown up a number of challenges as we have aimed to provide a renewal submission that accurately and appropriately transfers risk for high valued assets. Also explained during status updates, the renewal process is complex and required a focus on providing an overarching document that assists in consistently updating our asset data collection, risk analysis and coverage information when determining the total amount of risk we transfer to insurance. Subsequently a draft Insurance Strategy & Workplan has been developed in stipulating guiding principles and business rules that provide clear understanding of key steps taken during the renewal process on an annual basis.

3.3 The Strategy is supported by the Insurance Strategy Workplan that lists a number of workstreams. These workstreams will take place over the next 5-7 months as we continuously enhance our Insurance Renewal Process.

Valuation Methodology & Asset Selection Policy (Draft)

3.4 As insurance premiums continue to skyrocket, every Local Government Agency have had to undertake a deep dive into assets that they are high value, or critical to the service we provide to our community i.e. water services in determining selection for insurance coverage or not. In 2021 Auckland Council had selected assets that represented 19% of the total asset value to be excluded for coverage, this doesn’t include Water Services Ltd (Auckland Council subsidiary) which excludes 41% of its assets covered by. This year Council removed approximately 4.7% in its total value of assets.

3.5 Subsequently an Asset Valuation Methodology & Selection Policy has been drafted, this will provide the criteria and principles that will assist in the asset selection process for annual Insurance Renewal submission. This draft will be submitted to the Executive and Risk & Assurance Committee for feedback in August 2023. This document is important from governance perspective as it sets out a criteria and process for excluding assets selected for insurance coverage. The criteria and process that excludes assets from selection for insurance coverage needs to be well understood by the executive and elected members as selection will inform the amount of risk transferred.

Council Natural Disaster Risk Assessment – 2023

3.6 Insurers look favourably on organisations when evaluating a submission who have under taken a comprehensive Loss Modelling Programme. Such modelling would include an increased focus on improved underwriting information i.e. Construction, Occupancy, Protection and Exposure (COPE - risk characteristics an underwriter reviews when evaluating a submission for property insurance). To provide accurate data as part of Council’s Insurance Renewal, we need to undertake a qualitative or quantitative approach to determine the nature and extent of any disaster risk. Council does this by analysing potential hazards and evaluating existing conditions of exposure and vulnerability that together could harm people, property, services, livelihoods and the environment on which they depend.

3.7 Natural Hazards are defined in section 2(1) of the RMA as: “any atmospheric or earth or water related occurrence (including earthquake, tsunami, erosion, volcanic and geothermal activity, landslip, subsidence, sedimentation, wind, drought, fire or flooding) the action of which adversely affects or may affect human life, property, or other aspects of the environment.”

3.8 Annotation: Disaster risk assessments include: the identification of hazards; a review of the technical characteristics of hazards such as their location, intensity, frequency and probability; the analysis of exposure and vulnerability, including the physical, social, health, environmental and economic dimensions; and the evaluation of the effectiveness of prevailing and alternative coping capacities with respect to likely risk scenarios.

3.9 This will allow us an organisation to improve the accuracy when choosing to transfer or retain a level of risk when determining the appropriate policy coverage and details for Material Damage & Business Interruption (MD&BI).

Attachments

No.	Title	Page
a ⇩	Risk Assurance Quarterly Report 2023 - August 2023	24
b ⇩	HDC Top Organisational Risks - 16 August 2023	39
c ⇩	HDC Top Operational Risks - 16 August 2023	43
d ⇩	HDC Insurance Strategy Workplan 2023-25	47
e ⇩	HDC Insurance Renewal - Valuation Asset Selection Policy 2023	61
f ⇩	HDC Natural Disaster Risk Assessment 2023	72

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Rob Benefield

Risk Manager

Approved by

Ashley Huria

Business Performance Manager

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

6.3 Treasury Report for the June 2023 Quarter

File No.: 23/511

1. Purpose

1.1 To present to the Risk and Assurance Committee the Bancorp Treasury Reporting Dashboard for the June 2023 quarter.

2. Recommendation

2.1 That Report 23/511 Treasury Report for the June 2023 Quarter be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

3. Background/Previous Council Decisions

3.1 This quarterly Treasury Reporting Dashboard is produced by Council’s treasury advisors, Bancorp Treasury Services Limited, for the benefit of Executive Leadership Team, Council and the Risk and Assurance Committee.

4. Issues for Consideration

4.1 Council had $165m of current external debt as at 30 June 2023, comprised of Commercial Paper (CP), Fixed Rates Bonds (FRBs) and Floating Rates Notes (FRNs), all sourced from the Local Government Funding Agency (LGFA). Current % of debt fixed is 57% ($94m) and current % of debt floating is 43% ($71m).

4.2 In addition, Council has a $7m BNZ credit facility with a maturity date of 20 December 2024. As at 30 June 2023, $3m was drawn upon with the intention to be repaid in August 2023. The interest rate at the time of writing this report for the BNZ facility is 6.86%.

4.3 Council’s net debt to total operating revenue as at 30 June 2023 is 193%. This is depicted in the following graph:

4.4 Cost of funds as at 30 June 2023 was 4.49%. Stubbornly high core inflation, tight labour markets, and wage inflation continue to impact the developed economies, which has seen several central banks continue to hike interest rates.

4.5 Since the last meeting, Council has entered into two new interest rate agreements with Westpac in June for 1) $7m starting 20 March 2026 and finishing on 20 April 2029 at 4.05%, and 2) $8m starting 19 May 2025 and finishing on 15 April 2030 at 4.125%. This has been done to ensure an increased level of fixed rate debt based on Council’s policy bands set out in the Liability Management Policy.

Attachments

No.	Title	Page
a ⇩	Horowhenua Treasury Dashboard as at 30 June 23	91

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Pei Shan Gan

Financial Controller

Approved by

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

6.4 Health, Safety and Wellbeing Quarterly Report - August 2023

File No.: 23/505

1. Purpose

1.1 To provide the Committee with health, safety and wellbeing information and insight from 1 May to 28 July 2023 and to update the Committee on key health and safety critical risks and initiatives.

2. Recommendation

2.1 That Report 23/505 Health, Safety and Wellbeing Quarterly Report - August 2023 be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

3. Issues for Consideration

3.1 The Health, Safety and Wellbeing (HSW) Dashboard report gives a broad overview of lead and lag reporting across all of Council. It is designed to give Elected Members assurance that HSW is being managed for all staff through worker engagement, risk management and leadership. The variety of reporting captures multiple aspects of data available to Council and allows the story of HSW across the three month reporting period to be told. Any issues highlighted in the dashboard will be discussed as part of the presentation of the report.

3.2 Alongside the HSW Dashboard report this month is a deep dive into Footpaths. This report was requested at the last Risk and Assurance Committee meeting and was completed with the collaboration of the Land Transport team and health and safety. The report focuses on the Council health and safety responsibilities of footpaths, including contractor management, overlapping duties, due diligence and support of officers and contractors when incidents occur involving footpaths.

Attachments

No.	Title	Page
a ⇩	HDC Risk and Assurance Committee HS&W Dashboard - August 2023 Final	101
b ⇩	Deep Dive - Footpaths - August 2023	107

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Tanya Glavas

Health & Safety Lead

Approved by

Ashley Huria

Business Performance Manager

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

6.5 Legislative Compliance Programme

File No.: 23/542

1. Purpose

1.1 This report familiarises the Risk and Assurance Committee with Council officers' suggestions around advancing and implementing a Legislative Compliance Programme. This program is designed with the Council's Risk Management Policy and Framework. The programme includes policy update, the identification of relevant legislation, and the reporting of key legislation to promote effective risk management and compliance practices.

2. Recommendation

2.1 That Report 23/542 Legislative Compliance Programme be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

3. Background/Previous Council Decisions

3.1 The last Legislative Compliance Report that came to the Risk and Assurance Committee provided information around good practice, what legislative compliance refers to and the benefit of reporting against it.

3.2 The below acts were a suggestion of the ‘key acts’ to report on in the short term:

· Local Government Act 2002

· Local Authorities (Members’ Interests) Act 1968

· Local Government (Rating) Act 2002

· Local Government (Financial Reporting and Prudence) Regulations 2014

· Building Act 2004

· Resource Management Act 1991

3.3 We asked officers working with the Acts listed to assess the level of compliance for each legislation to the best of their knowledge, and to identify any immediate areas of non-compliance.

3.4 Officers found one example of statutory non-compliance since 1 January 2023. This was the Long Term Plan Amendment 2021-2041 adopted by Council on where Council received a lawful adverse audit opinion due to the inclusion of three waters information in the Long Term Plan Amendment beyond July 2024. This was not compliant with Local Government Act 2022.

3.5 We have not completed a comprehensive review, and so our confidence in this data is moderate until the full review is completed; this review will commence soon.

4. Discussion

4.1 Following the previous report, additional thought has been given to this programme. It is now proposed that we approach it as a cohesive programme, given the critical aspects to ensure comprehensive reporting.

4.2 Noting the link between risk management and legislative compliance is important as it forms the foundation for the sustainable and responsible operation of organisation.

4.3 By integrating risk management and compliance, officers can identify, assess, and mitigate potential risks associated with non-compliance with acts, bylaws and regulations. This proactive approach not only safeguards against legal repercussions and financial losses but also helps in maintaining our reputation and credibility.

4.4 The proposed Legislative Compliance Programme is to include the following;

(a) Legislative Compliance Policy Update – Update and develop the Legislative Compliance Policy so that is aligned with the existing Council Risk Management Policy and Framework.

(b) Identification of all Relevant Legislation – Identification of all legislation that Council has to comply with.

(c) Identification of Key Legal Risks in relation to legislation - The identification of the Key Legal Risks facing the Council as an organisation. Included in this will be developing an understanding of differing perspectives on Legal Risk.

(d) Training and Development – A training programme to ensure all relevant are trained as required to ensure they have the necessary knowledge.

(e) Continuous Improvement – Where examples of non-compliance or incomplete compliance are identified, a process to ensure systems are modified and/or training undertaken as appropriate and as part of business improvement programme.

(f) Complaints Handling – creation of procedures to be in place to record and respond to complaints from either staff, ratepayers or customers.

(g) Monitoring and measuring – Creation of reporting templates and schedule.

5. Next Steps

5.1 As the program advances, the committee can expect to receive regular reports regarding the progress and the compliance with relevant legislation. These reports will serve as essential updates to keep the committee informed about the program's development and its legal requirements.

Attachments

There are no attachments for this report.

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Ashley Huria

Business Performance Manager

Approved by

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

6.6 Standard and Poor's Report

File No.: 23/506

1. Purpose

1.1 To formally inform the Risk and Assurance Committee of the Horowhenua District Council’s credit rating affirmed by Standard and Poor’s (S&P) Global Ratings in June 2023.

2. Recommendation

2.1 That Report 23/506 Standard and Poor's Report be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

3. Background/Previous Council Decisions

3.1 On June 1, 2023, S&P Global Ratings affirmed its 'AA-' long-term foreign- and local-currency, and 'A-1+' short-term issuer credit ratings on Horowhenua District Council. The outlook on the long-term rating is stable.

3.2 The ratings are based on S&P Global Ratings' assessment of Council's financial management, New Zealand’s institutional settings and the district’s economic profile.

3.3 S&P Global is an internationally recognised organisation that provides credit ratings for over one million government, corporate, financial sector and structured finance entities and securities worldwide.

3.4 An AA-/A-1+ rating means that Council is considered to have a strong capacity to meet its financial commitments. It should also reassure our community and ratepayers that our books are in order, that Council is financially well-managed, and that the district is on the right track. A stable outlook means that Council's financial position will remain strong over the medium term.

4. Issues for Consideration

4.1 This rating can be important for Council's ability to borrow money, as lenders may be more willing to lend to an entity with a strong credit rating. Council's rating confirms our strong financial management and assures lenders that any debt carried comes with very low credit risk. We also have a strong capacity to repay any future debt needed for significant infrastructure or unplanned events.

4.2 The report states that strong financial management and New Zealand's excellent institutional settings support Council's credit profile. This framework is one of the strongest and most predictable globally, as it promotes a robust management culture and fiscal discipline with high transparency and disclosure.

4.3 This report from S&P confirms our forward-looking approach to financial management. The fact that Council prepares long-term plans every three years and annual plans in the intervening years set the foundation for prudent financial management and are an essential baseline for Council's operating and capex requirements.

4.4 The report also outlines that Horowhenua has a relatively balanced economy. Economic risks to the region include inflation, rising interest rates and supply chain disruptions. These factors also affect economic growth nationally and not only in the Horowhenua district.

4.5 S&P also highlights the potential benefit of the Wellington Northern Corridor Expressway to accelerate economic development and population growth in the future by cutting the travel times and freight costs between Horowhenua and Wellington. Council is in the midst of a large capital program, which is needed to address the needs of a growing population. S&P expects Council’s liquidity position to be stronger than that of domestic peers. The affirmed ratings reassure the Council’s ability to borrow funds for Horowhenua's infrastructure pipeline

Attachments

No.	Title	Page
a ⇩	S&P Global Ratings release June 2023	123

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Pei Shan Gan

Financial Controller

Approved by

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

6.7 LGFA Statement of Intent 2023-2026

File No.: 23/509

1. Purpose

1.1 To update the Risk and Assurance Committee on the Statement of Intent (SOI) 2023-2026 prepared by the New Zealand Local Government Funding Agency (LGFA).

2. Recommendation

2.1 That Report 23/509 LGFA Statement of Intent 2023-2026 be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

3. Background/Previous Council Decisions

3.1 LGFA is enabled under the Local Government Borrowing Act 2011 and is a council-controlled organisation (CCO) for the purposes of the Local Government Act 2002. It is owned by the Government (30%) and 30 local authorities (80%). Horowhenua District Council has an ownership stake of 0.4% as at 31 December 2022.

3.2 This Statement of Intent (SOI) sets out the nature and scope of the activities, objectives and performance targets for the New Zealand Local Government Funding Agency Limited (LGFA) for the three-year period 1 July 2023 to 30 June 2026. The SOI is prepared in accordance with section 64(1) of the Local Government Act 2002.

4. Issues for Consideration

The following points regarding the LGFA 2023-26 SOI are worth noting:

4.1 The SOI performance targets are the same as the targets in the prior year SOI except for Climate Action Loans (“CALs”) that was included into the Environmental and Social Responsibility section.

4.2 There is a forecast increase in Net Operating Profit compared to prior years. This is due to an increase in forecast Net Interest Income arising from a larger amount of lending to Councils and CCOs. An additional $1 billion of council and CCO borrowing in each of the next three financial years compared to the Draft SOI forecasts was assumed.

4.3 Base on-lending margins are unchanged.

4.4 There remains some uncertainty within the SOI forecasts relating to the amount of both council loans and LGFA bonds outstanding as this depends upon the magnitude and timing of council borrowing. LGFA have based their forecasts on the Long-Term Plans (“LTPs”) of the seventy-seven council and three CCO members and the LTPs forecast a significant increase in borrowing in each of the next three years. The actual amount of borrowing will be influenced by the ability of councils to deliver on the capex projections in their LTPs, any cost increases as we well as the amount of Central Government assistance in funded capex delivery.

4.5 The Affordable Waters Reform programme has assumed the establishment of the ten new Water Services Entities (“WSE”) will take place from 1 July 2024 and be concluded by 1 July 2026. This period covers the second and third years of LGFA SOI forecast period and at this point in time it is unsure as to :

· Any role by LGFA in lending to the WSEs once they have been established

· How the transition of debt and assets between the councils and WSEs will occur

· The borrowing behaviour by councils ahead of, and during the transition period.

4.6 LGFA’s financial forecasts for the three years to 30 June 2026:

Attachments

No.	Title	Page
a ⇩	LGFA Letter re Statement of Intent 2023-2026	134
b ⇩	LGFA Statement Of Intent 2023-2026 Final	136

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Pei Shan Gan

Financial Controller

Approved by

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

6.8 Annual Insurance Renewal Process Update

File No.: 23/556

1. Purpose

1.1 This memo has been submitted to the RAC agenda for the Committee’s information.

2. Recommendation

2.1 That Annual Insurance Renewal Process Update be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

3. Background/Previous Council Decisions

3.1 As previously reported the Insurance Renewal Review and Submission for 2023, has identified a number of challenges. They are associated with the renewal process such as deductibles, asset registers, valuations, LASS membership insurance benefits, natural hazard risk, insurance brokerage, risk transfer through insurance of assets, policy extension layers and external party coverage through HDC Insurance Policies. This Memo provides a summary insight to these challenges in offering solutions and opportunities in accepting or mitigating any associated risks as part of the renewal process

4. Issues for Consideration

4.1 The renewal process is complex and still requires a significant amount work, to ensure we have a seamless renewal submission document that provides accurate data and information to determine the total amount of risk to transfer to insurance. This work will continue over the next several months as we look to establish a comprehensive Insurance Renewal Strategy stipulating guiding principles and business rules that provide clear understanding key steps taken on an annual basis.

4.2 This memorandum is presented for the committee’s information

Attachments

No.	Title	Page
a ⇩	Memo To CEO - Insurance Renewal Submission 2023-24	151

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Rob Benefield

Risk Manager

Approved by

Ashley Huria

Business Performance Manager

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

6.9 Continuous Improvement and Audit Actions Monitoring Report

File No.: 23/507

1. Purpose

1.1 To report to the Risk and Assurance Committee on progress of the action items from previous resolutions.

2. Recommendation

2.1 That Report 23/507 Continuous Improvement and Audit Actions Monitoring Report be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

2.3 That the Risk & Assurance Committee notes the Risk & Assurance Committee resolution and actions monitoring report.

3. Background/Previous Council Decisions

3.1 This paper reports on actions generated from Committee resolutions, and any requests noted through the minutes, or requested for action accepted by the Chair.

3.2 This paper is provided for information. Much like the Committee Work Programme, the Resolution Monitoring Report will be standing item, and reported through at each committee meeting.

3.3 The monitoring actions have been carried over from the Finance, Audit and Risk Committee from the previous Triennium.

4. Issues for Consideration

4.1 Good progress had been made on some monitoring actions and Council officers have noted the progress of each action in the column “Officer Comment”.

4.2 Where progress had not eventuated as scheduled for some actions, these are also noted.

4.3 Completed monitoring actions had not been removed since the last report and will continue to show until the Committee agrees for them to be removed.

Attachments

No.	Title	Page
a ⇩	Continuous Improvement and Audit Actions Monitoring Report - August 2023	159

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Pei Shan Gan

Financial Controller

Approved by

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

6.10 Risk and Assurance Committee Work Programme

File No.: 23/541

1. Purpose

The purpose of this report is to provide the Risk and Assurance Committee with an outline of a Draft Work Programme.

2. Recommendation

2.1 That Report 23/541 Risk and Assurance Committee Work Programme be received.

2.2 That this matter or decision be recognised as not significant in terms of s76 of the Local Government Act 2002.

2.3 That the Risk and Assurance Committee notes the Finance, Audit and Risk Committee Work Programme.

3. Issues for Consideration

The Risk and Assurance Committee work programme is attached for consideration.

Attachments

No.	Title	Page
a ⇩	Risk and Assurance Committee Work Programme 2023/24	187

Confirmation of statutory compliance

In accordance with section 76 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their benefits and costs, bearing in mind the significance of the decisions; and,

b. is based on adequate knowledge about, and adequate consideration of, the views and preferences of affected and interested parties bearing in mind the significance of the decision.

Signatories

Author(s)

Ashley Huria

Business Performance Manager

Approved by

Jacinta Straker

Group Manager Organisation Performance

Monique Davidson

Chief Executive Officer

Risk and Assurance Committee

16 August 2023

Exclusion of the Public : Local Government Official Information and Meetings Act 1987

The following motion is submitted for consideration:

That the public be excluded from the following part(s) of the proceedings of this meeting.

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

This resolution is made in reliance on section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or section 7 of that Act which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public, as follows:

C1 Health and Safety Investigation

Reason for passing this resolution in relation to each matter

Particular interest(s) protected (where applicable)

Ground(s) under section 48(1) for the passing of this resolution

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.

s7(2)(a) - The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

s48(1)(a)

The public conduct of the part of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists under section 7.